[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]
TREASURY, POSTAL SERVICE, AND GENERAL
GOVERNMENT APPROPRIATIONS FOR
FISCAL YEAR 2001
_______________________________________________________________________
HEARINGS
BEFORE A
SUBCOMMITTEE OF THE
COMMITTEE ON APPROPRIATIONS
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
SECOND SESSION
________
SUBCOMMITTEE ON THE TREASURY, POSTAL SERVICE, AND GENERAL GOVERNMENT
APPROPRIATIONS
JIM KOLBE, Arizona, Chairman
FRANK R. WOLF, Virginia STENY H. HOYER, Maryland
ANNE M. NORTHUP, Kentucky CARRIE P. MEEK, Florida
JO ANN EMERSON, Missouri DAVID E. PRICE, North Carolina
JOHN E. SUNUNU, New Hampshire LUCILLE ROYBAL-ALLARD, California
JOHN E. PETERSON, Pennsylvania
VIRGIL H. GOODE, Jr., Virginia
NOTE: Under Committee Rules, Mr. Young, as Chairman of the Full
Committee, and Mr. Obey, as Ranking Minority Member of the Full
Committee, are authorized to sit as Members of all Subcommittees.
Michelle Mrdeza, Jeff Ashford, Kurt Dodd, and Tammy Hughes,
Staff Assistants
________
PART 3
EXECUTIVE OFFICE OF THE PRESIDENT AND
FUNDS APPROPRIATED TO THE PRESIDENT
________
Printed for the use of the Committee on Appropriations
________
U.S. GOVERNMENT PRINTING OFFICE
64-690 WASHINGTON : 2000
COMMITTEE ON APPROPRIATIONS
C. W. BILL YOUNG, Florida, Chairman
RALPH REGULA, Ohio DAVID R. OBEY, Wisconsin
JERRY LEWIS, California JOHN P. MURTHA, Pennsylvania
JOHN EDWARD PORTER, Illinois NORMAN D. DICKS, Washington
HAROLD ROGERS, Kentucky MARTIN OLAV SABO, Minnesota
JOE SKEEN, New Mexico JULIAN C. DIXON, California
FRANK R. WOLF, Virginia STENY H. HOYER, Maryland
TOM DeLAY, Texas ALAN B. MOLLOHAN, West Virginia
JIM KOLBE, Arizona MARCY KAPTUR, Ohio
RON PACKARD, California NANCY PELOSI, California
SONNY CALLAHAN, Alabama PETER J. VISCLOSKY, Indiana
JAMES T. WALSH, New York NITA M. LOWEY, New York
CHARLES H. TAYLOR, North Carolina JOSE E. SERRANO, New York
DAVID L. HOBSON, Ohio ROSA L. DeLAURO, Connecticut
ERNEST J. ISTOOK, Jr., Oklahoma JAMES P. MORAN, Virginia
HENRY BONILLA, Texas JOHN W. OLVER, Massachusetts
JOE KNOLLENBERG, Michigan ED PASTOR, Arizona
DAN MILLER, Florida CARRIE P. MEEK, Florida
JAY DICKEY, Arkansas DAVID E. PRICE, North Carolina
JACK KINGSTON, Georgia MICHAEL P. FORBES, New York
RODNEY P. FRELINGHUYSEN, New Jersey CHET EDWARDS, Texas
ROGER F. WICKER, Mississippi ROBERT E. ``BUD'' CRAMER, Jr.,
GEORGE R. NETHERCUTT, Jr., Alabama
Washington MAURICE D. HINCHEY, New York
RANDY ``DUKE'' CUNNINGHAM, LUCILLE ROYBAL-ALLARD, California
California SAM FARR, California
TODD TIAHRT, Kansas JESSE L. JACKSON, Jr., Illinois
ZACH WAMP, Tennessee CAROLYN C. KILPATRICK, Michigan
TOM LATHAM, Iowa ALLEN BOYD, Florida
ANNE M. NORTHUP, Kentucky
ROBERT B. ADERHOLT, Alabama
JO ANN EMERSON, Missouri
JOHN E. SUNUNU, New Hampshire
KAY GRANGER, Texas
JOHN E. PETERSON, Pennsylvania
VIRGIL H. GOODE, Jr., Virginia
James W. Dyer, Clerk and Staff Director
(ii)
TREASURY, POSTAL SERVICE, AND GENERAL GOVERNMENT APPROPRIATIONS FOR
2001
----------
Thursday, March 23, 2000.
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF ADMINISTRATION
WITNESS
MICHAEL J. LYLE, DIRECTOR
Mr. Kolbe. The subcommittee on Treasury, Postal, and
General Government will come to order. We resume this
afternoon's hearing, the second one today, and welcome Mr.
Michael Lyle. I believe, Mr. Lyle, this is your first
appearance before this subcommittee.
Mr. Lyle. Yes, sir, Mr. Chairman, it is, and I thank you
for your welcome.
Mr. Kolbe. We look forward to hearing your testimony on
behalf of the operations of the Executive Office of the
President, and we look forward to working with you during the
coming fiscal year 2001 appropriations cycle.
Given our anticipated fiscal restraints, it may be that
expectations for the coming year are a bit high. The President
is asking for an increase of 5.7 percent above the current
year, and that does not include $2.5 million as a grant to
Puerto Rico, which really has nothing to do with White House
operations and, of course, the increase in the President's
salary, which is mandated by law.
I have some specific concerns about the proposed funding
levels, the additional staff within the Office of
Administration, the tremendous construction project that is
being proposed within the Executive Residence and some of the
costs associated with the transition. But I have a few other
observations about some of the current events that I would like
to just make here at the outset.
First, I am enormously concerned by reports that the
electronic mail messages within the White House have not been
properly captured by the Records Management System. This
Committee has worked hard at ensuring that the White House not
only has sufficient appropriations to accommodate all of its
information technology requirements, but also to ensure that
the appropriate management tools are in place to develop and
maintain these systems. I am particularly concerned about the
implications this problem may have in terms of the White House
compliance with the requirements of the Armstrong resolution.
Second, and I am sure this comes as no surprise to others,
since the First Lady has announced her intention of running for
the United States Senate in New York, the phones in our
subcommittee have certainly been ringing off the hook with
concerned citizens calling to inquire about how the First
Lady's travel is paid for. Clearly, the First Lady is
authorized to use government aircraft, as well as government
vehicles. In fact, during a 7-month period in 1999, according
to the White House, she took 26 trips to New York on government
aircraft. Twenty of these trips had some political component
and 14 were 100 percent political in nature. All together,
these totaled about 50 flight hours, at a cost to the
Department of Defense of $3,705 per hour. That is the cost to
operate a C-20. Although we do not know which aircraft was
used, we assumed the smallest aircraft and the lowest cost. The
total cost then, assuming they were all on C-20s, was $182,471.
Based on the most recent information we have, her campaign was
billed for $36,685 and, as of March 1st, $32,878 of the amount
owed had actually been paid.
So, in other words, the taxpayer has paid $145,000-plus to
support the First Lady's use of government aircraft for a
political campaign--for her political campaign, not a
presidential campaign. Although the White House states that the
Secret Service requires the First Lady to use government
aircraft, this is not a factual statement. The subcommittee is
in a good position to know the facts in this matter, since the
Secret Service does fall under the jurisdiction of this
subcommittee. The fact is the Secret Service prefers and
recommends the First Lady travel on government aircraft, but it
is, by no means, a requirement. It is my understanding the
First Lady used private aircraft while she was promoting her
book several years ago. Clearly, there is a discrepancy between
what the White House is saying in regards to any Secret Service
requirements and the types of aircraft that have historically
been used in the past.
I am well aware that First Ladies have traveled on
government aircraft for political purposes in the past. But we
are in new waters and charting new ground here today because
the difference is that it is unprecedented that a First Lady is
using a government aircraft for her own political purposes, for
a political campaign that is regulated by the Federal Elections
Commission and by Senate rules.
The First Lady has both official and political obligations
and I recognize that the First Lady wear several hats. She has
official obligations, she has political obligations, not only
in her own right, but in support of the President as he carries
out his official and political responsibilities. We recognize
that the President of the United States is also the leader of
his party. So he has those responsibilities.
But what we are talking about here has nothing to do with
the First Lady's political or official obligations. She is
wearing a hat that we have never seen before, and I think that
is why her travel on government aircraft is a legitimate issue
to be raised and discussed here today. By the way, on the issue
of travel, it is not new for us to be asking about travel. This
is just one of many hearings in the last couple of years where
this subcommittee has highlighted some of the practices about
travel. So it is an issue that has been legitimately talked
about for a long time in this subcommittee.
From all indications, the formula being used by the White
House to seek reimbursement for political travel is the same
formula that has been used by past Administrations. But I do
have some concerns in regards to the billing procedures that
are used.
First, in some instances, it took up to 6 months for the
White House to bill the campaign for this travel.
Second, as I mentioned before, as of March 1st, there were
outstanding balances due in the amount of $3,800. This is not a
significant amount in regards to political activities
undertaken by the White House, whether it is the President or
the First Lady, but I think this subcommittee, and I think the
American people, would remain adamant that appropriated dollars
are used only for authorized purposes, that there are
accounting mechanisms in place to capture total expenditures,
and that there are timely reimbursements from political sources
when payment is due. The fact is, this really, constitutes a
loan from the government to the Senate campaign of Mrs.
Clinton. These procedures that I mentioned are simply a matter
of good government.
Finally, as we begin our transition from this
Administration to a new one, Mr. Lyle, I think the burden is on
you to ensure that there is a smooth transition within the
Executive Office of the President. That includes a process to
ensure that the basic operations of the White House continue
during the transition, as well as a process to ensure that all
of the Presidential and Federal records now held in the White
House are moved to their authorized repositories in an
efficient and appropriate manner. We certainly will be
interested in talking about some of that as well today.
So, Mr. Lyle, I look forward to hearing your testimony. But
before we take your statement and begin the questions, let me
turn to my distinguished ranking member, Mr. Hoyer, for his
comments.
Mr. Hoyer.
Mr. Hoyer. Thank you very much, Mr. Chairman.
Mr. Lyle, I am pleased to welcome you to our committee for
this your first hearing. This will perhaps be the first hearing
that you have been in of this type.
Mr. Lyle. Yes, sir.
Mr. Hoyer. I regret to say it is not mine. We have been
down this political road before. This is a political hearing,
Mr. Lyle. We will talk something about budgets, but this is a
political hearing, make no mistake about it. This is a hearing
to make political points. This is an extension of the Giuliani
campaign, where Mr. Giuliani, obviously very concerned about
his opponent, has made wild, inaccurate and erroneous
statements about travel.
Now, you are going to defend the travel. We do not, of
course, appropriate these funds. They are out of DoD. But we
are going to incorporate it in this hearing and let me tell you
why, Mr. Lyle, so you will understand the context.
In April of 1996, Mr. Walker and Mr. Nussle, two of Mr.
Gingrich's henchmen, wrote to every appropriations subcommittee
chairman, that ``On behalf of the House leadership, Mr.
Gingrich, we want you to cull all committees' information on
three subjects listed below. We are compiling information for
packaging and presentation.'' That is interpreted ``spin'' in
Washington.
``You are a tremendous source of this project,'' a partisan
political project. ``One of the things you will look at,
examples of dishonesty or ethical lapses in the Clinton
administration.''
Now, we went through that with respect to the White House,
and we determined whether or not maybe Chelsea had two people
over for an overnight, and we may have had to do some extra
laundry in the White House. At that point in time, I observed
to the chairman that I really never did segregate costs with my
three daughters when they had somebody over for an overnight
stay to see whether it cost me a little more to wash the sheets
for an extra day.
But we went through those hearings, long and extended, and
we had the television cameras here, which is, of course, the
purpose of this hearing. How do I know that? This is an RNC
news release yesterday. This is a coordinated effort, Mr. Lyle,
so you understand, but the public needs to understand it too.
Mr. Nicholson put out a campaign release for the Giuliani
campaign. He wants to see Mr. Giuliani elected. I do not blame
him for that. But he is using this committee, Mr. Lyle, to try
to accomplish that objective. By attacking a practice, as my
distinguished chairman and good friend has already admitted,
has been followed by every First Family since 1982.
I have a memorandum here, as you do as well, signed by Jim
Baker, chief of staff of the White House, that says, This
process is exactly the way we ought to do it, not because the
Secret Service told us to do it, but because the Secret Service
said we ought to do it.
Now, maybe some people want to expose the First Lady to
risks. I do not want to do that, Republican or Democrat. ``Air
Hillary Costs to be Unveiled, Finally.'' Everybody knows what
the costs are and everybody knows the reimbursement. The
figures that the chairman referred to are not secret.
These figures that the committee has put out, I just saw
these, total up the total cost of flying Air Force One or one a
C-20, or a Gulfstreams. Everybody knows that is not the cost to
be reimbursed because that cost is at the suggestion of the
Secret Service. But I will tell the chairman, as he well knows,
that you cannot drive on Pennsylvania Avenue now, not because
the Secret Service told us to do it, but because they
suggested, for security purposes, that you close off that
portion of Pennsylvania Avenue--as a matter of fact, told this
committee that as well.
I am very sorry that we are having this kind of hearing,
this kind of circus, this kind of political politicization of,
once again, the White House budget. Now, very frankly, when
there are not political points to make, there are nobody in the
chairs, there are no cameras here. We talk about the White
House budget, which has been fairly stable has not increased
much, and as a matter of fact, decreased in some respects.
I am sorry, Mr. Lyle, that you have to come here for a
hearing of this type because it does not relate to your
responsibilities. I know how you are going to testify. You are
going to testify that these expenditures were made properly,
consistent with policies pursued since 1982, and reimbursed.
Now, I think you have been a little late in reimbursing. You
will explain why that has happened. But the fact of the matter
is we know that you are reimbursing consistent with policies
that are not new to the Clinton administration.
Now, it is unique that we have a First Lady running
foroffice. She is an American citizen. She has that right to do it. I,
frankly, support her in that effort. I hope she is elected Senator of
New York City because I think she will be a great United States
Senator, but that is irrelevant. What is relevant however, is she doing
what is legal and proper and has been established as operating policy
for first families at least since 1982 under Ronald Reagan? The answer
to that I think is a clear, indisputable yes, and I guarantee you and
everybody who is watching this hearing that 6 months from now or 2
months from now or 2 years from now, that will be the result, just as
it was the result in the previous camera-laden hearings that we have
had about the White House budget.
I welcome you, Mr. Lyle. I know that they are having a
contemporaneous hearing on the e-mail. I know you are going to
have some discussions about that in terms of ``fencing'' of
dollars, so you did not have the proper personnel to pursue
that as vigorously as you might. I will await those hearings.
Mr. Chairman, I have great respect for you, as I know, but
I do not have great respect for this process and this
politicization by Jim Nicholson, the chairman of the Republican
Party, directing us, in effect, in what kind of hearings to
have.
Thank you, Mr. Chairman.
Mr. Kolbe. Mr. Lyle, we will certainly take your statement.
The whole statement will, of course, be placed into the record.
If you want to summarize it, we would be happy to hear from you
now.
SUMMARY STATEMENT OF MICHAEL J. LYLE
Mr. Lyle. Yes, sir. Thank you, Mr. Chairman, Mr. Hoyer,
members of the subcommittee. I appreciate the opportunity to be
here. This is my first hearing as the Director of the Office of
Administration. I took on that role in February of this year,
and I am proud to be here.
You have raised a number of issues, and I look forward to
addressing those with you during the hearing. The good news in
the areas of concern that you have raised is that we do adhere
to all of the applicable rules and regulations with respect to
travel and that we do manage those in accordance with all of
the applicable laws that are applicable in this matter.
I am also happy to tell you that the transition concerns
that you have addressed are already being taken care of in the
Office of Administration. We have already begun our planning,
in that regard, to ensure a smooth transition, and I will be
happy to explain that to you as well.
The e-mail issue that you have raised, there are a number
of issues which are being pursued, as I understand it, in Mr.
Burton's hearing. I will be happy to answer questions that you
have for me. But I did come here from a management perspective
to talk to you about our appropriations budget, and I am proud
of what we have been able to put together in terms of our
submission.
I testify, as you know, on behalf of a number of accounts:
Compensation of the President, the White House Office, the
Special Assistants to the President, the Official Residence of
the Vice President, Office of Administration, Office of Policy
Development, the National Security Council, Council of Economic
Advisers and the Unanticipated Needs Account. I came here to
testify and build on the partnership that the White House has
been able to establish with this subcommittee in making
improvements in critical areas within the Office of
Administration.
One of the prime tasks that we undertook last year, when
Mr. Lindsay sat here before you to testify, was the Y2K
challenge. The White House, along with the rest of the country,
and in fact the rest of the world, faced the Y2K crisis, and we
met it straight on, and we were very successful. I am pleased
to report to you that 100 percent of our Y2K compliance was
made in advance of the year 2000, that all of our mission-
critical systems were Y2K compliant and modernized, and that
our mission support systems also were Y2K compliant. When the
year 2000 approached and came, we had not a single glitch
within the White House office.
That ability to turn what was, at the time, an antiquated,
unreliable system into a modern, Y2K-compliant computer system,
was achieved in partnership with this subcommittee, and I look
forward to working with this subcommittee going forward. The
Y2K effort that we undertook allowed us to achieve the goal of
Y2K compliance and the goal of turning what can only be
described as an unreliable computer system into a modern
system, as I mentioned.
Mr. Lindsay, and Ms. Posey before him, sat before this
subcommittee telling you of the difficulties that were
experienced in the Office of Administration in the computer
system that serviced the Executive Office of the President. The
Executive Office of the President experienced system outages,
computer failures, system failures, and it was a function of
the difficulties and the problems that existed in the state of
the computer equipment at the time.
We have taken that challenge on, and we have made use of
the Y2K crisis to make the EOP computer system into a modern,
reliable system. We have embarked on improvements to the system
where we were able to install faster PCs. We were able to
upgrade our common software package that we offer to our
customers so that we can see to it that the best tools are
available to service the President.
We have switched from customized software that was
difficult to maintain and manage to off-the-shelf products. All
of these types of improvements were done in order to better
manage and facilitate the EOP computer systems. Our old main
frame computer that was prone to failure was replaced by an
entirely new enterprise system computer, which became reliable,
fast, and secure. It was the type of equipment that needed to
be in place so that we can continue building, and that is
exactly what we have been able to do in conjunction with this
subcommittee.
We have instituted and continue to see to it that the
Information Technology Management Team, which is the
centralized, institutionalized management of our IT
investments, is in the hands of career people who serve from
one administration to the next, to see to it that the plans
that we have in place for information technology are carried
forward so that we can continue on this road.
We have made a lot of progress. I am happy to report to you
that during this year, Fiscal Year 2000, we are continuing to
work in the right direction. We have upgraded our financial
management system so that we can provide up-to-date, desktop
reference materials for our fund managers. Those are the types
of tools that are utilized in areas such as human resources
management, procurement, travel information and related
information that fund managers need to know on a real-time
basis. We have done that.
We have taken our Help Desk, which can only be described as
arcane, into a modernized Network Operations Center. In the
past, we were required to dispatch a technician any time we had
a computer failure. When you are servicing over 2,000
customers, you have a lot of computer issues to deal with. If
you dispatch a technician to do that, it takes valuable time
and resources. We have instituted a method now where you can
remotely solve most of the problems. Actually, 80 percent of
the problems are handled in our Network Operation Center.
All of these initiatives that we are currently doing
represent the funds that you appropriated to us last year. We
are here this year to carry on with the progress that we have
made. Our network infrastructure needs to carry on. We need to
continue with the upgrades to the cabling and the wiring and
all of the systems and the servers that connect the computers
together and allow us to communicate within the Executive
Office of the President. That is what our budget focuses on.
The other component of our budget submission is to
implement and carry forward the Chief Financial Officer Act,
which is a congressionally mandated statute that will become
effective in the next administration. We are trying to stay
ahead of that. We are planning for it. We have asked for
additional employees within the Office of Administration to see
to it that the appropriate personnel and resources are
available to implement that legislation. Those are the two
prime areas that we have been focusing on in the Office of
Administration, and that is the thrust of our budget
submission.
I am pleased to say to you that my staff worked very, very
hard. My career staff worked extremely hard to solve the Y2K
challenge. We have stepped up to the plate and delivered, as
Mr. Lindsay promised you he would do last year. We would like
to keep moving in the right direction and keep working with
this subcommittee and improving what we have available in the
Executive Office of the President.
I appreciate the opportunity to be here, and I look forward
to answering any questions that you might have. Thank you.
[The information follows:]
FIRST LADY TRAVEL
Mr. Kolbe. Thank you very much, Mr. Lyle. Let me just say
at the outset, before I get into questions, in response to the
comments that Mr. Hoyer made, I regret that he believes that
this is an extension of Mayor Giuliani's campaign, and that was
certainly what he said. And, frankly, I resent that
implication.
I want to make it clear there has been no discussion by me
or anybody on my staff with Mr. Giuliani or anybody on his
campaign, nor with anybody in the Republican National
Committee. And, in fact, yesterday when the RNC called and
asked for information, knowing this hearing was coming up, we
said, no, we were not going to share that kind of information
with them.
Now, a press release is going to be put out. The Democratic
Senatorial Campaign Committee has been putting out press
releases on the same subject here. So who cares whether the RNC
or the DNC is putting out press releases. The fact of the
matter is this is a subject of legitimate investigation or
information gathering. This is not an investigation, it is
information gathering by this committee.
Now, the ranking member said that the money for the air
travel comes from the Air Force budget, and that is correct.
But funds for official travel by members of the staff come out
of this budget; is that not correct, Mr. Lyle?
Mr. Lyle. White House----
Mr. Kolbe. White House members traveling on official
business with the First Lady.
Mr. Lyle. Official travelers from the White House----
Mr. Kolbe. Official travelers, even when it is on a
political trip.
Mr. Lyle [continuing]. Are paid from White House
appropriations.
Mr. Kolbe. Even when it is on a political trip are paid out
of this budget.
Mr. Lyle. Official travelers, yes, sir.
Mr. Kolbe. Right. All I am trying to establish, is that
there is an issue here in this budget, and that is all that I
am talking about.
Now, I understand that the procedures that are being used
by the White House to make distinctions between the political
and official travel are, for all practical purposes, the same
procedures that have been used in previous Administrations. And
I acknowledged that in my opening statement, and I appreciate
that. But, Mr. Lyle, is it not true that we have never had a
First Lady that has been running as a candidate for political
office herself while she was First Lady; is that not correct?
Mr. Lyle. This is the first time that a First Lady----
Mr. Kolbe. Yes, and it is breaking new ground. Would you
not say, in a sense, we are on new territory here?
Mr. Lyle. First Ladies in the past have traveled in support
of campaigns.
Mr. Kolbe. Her husband's campaign or other political
campaigns.
Mr. Lyle. Or of others, yes, sir.
Mr. Kolbe. As part of the role of the wife or spouse of the
President, yes, correct. We will come back to that and why I
think there is a distinction here.
Because it is the first time that a First Lady has been a
candidate herself, subject to the filings of the FEC,
separately, I think we are into new territory here. And I think
it is legitimate for us to gather some information about this.
There have certainly been enough questions raised that I think
we can at least gather this information. And I appreciate your
help in doing so and helping us get this information.
Now, specifically, we requested, in our discussions with
your office, reimbursement data for both political and official
travel for fiscal year 1999. Although there were a total of 29
trips taken by the First Lady to New York in 1999, the White
House provided data for 16 of these trips and data for 9 of the
trips taken in fiscal year 2000; in other words, since October
1st.
Why did the White House begin the data they gave to us with
June 9th, 1999, instead of the entire fiscal year? Why did you
not give us the data for the entire fiscal year?
Mr. Lyle. The request that we received, Mr. Kolbe,
requested that time period. That was the request that your
staff submitted to the White House, and we endeavored, under
that request, to provide that information. So that is why we
provided it.
Mr. Kolbe. We made a request that said beginning June 9th
give us the data? I think we said for fiscal year 1999.
Mr. Lyle. There were two requests, Mr. Kolbe. One of them
asked for all of the travel of the First Lady and the
President, which we provided in writing to you and your staff.
The other request that we received was in connection with June
1999; in the sense that that was the time that the First Lady
was looking, in an exploratory fashion. So that was the
operative date that we were provided, and we provided it as of
the request, which was in December of 1999. That is why we
provided you with the 20 trips that you requested. That was the
information that we had available, and we had not received a
supplemental request.
Mr. Kolbe. Let me just say that that was not what we asked
for, and I am sorry if there was a miscommunication. But would
you please go back and give us the information, as we
requested, for fiscal year 1999. The same information that you
provided from June 9th forward, would you give us that
information for all of fiscal year 1999.
Mr. Lyle. I would be happy to go back and obtain that
information.
Mr. Kolbe. What we would like to have, specifically what we
have asked for, just so it is very clear, I am going to put it
on the record here, we are interested in getting information
about the trip date, the invoice date, the payment date, the
destination, the designation of the trip, the number of
official passengers, the number of political passengers, the
flight time, the type of aircraft, the official reimbursement
and the political reimbursement. That is the information that
we have been seeking.
Can you give us that information?
Mr. Lyle. I would be happy to take that question back, for
the record, sir, and do what we can.
Mr. Kolbe. Current law requires that the cost of campaign
travel using government aircraft be reimbursed at the first
class rate and that political travel be reimbursed at the
commercial rate. That is obviously a pretty good deal,
considering that it costs $3,705 to operate a C-20 and $13,900
an hour to operate a C-32. Those are the aircraft that are in
question here. But that is the formula, and we understand the
formula is the formula, and that is the procedure, and that is
what has been used, and I have no problem with that, as good a
deal as it is.
When there is a mixed purpose, for instance a trip is
official and political, who within the White House determines
which portions of the trip are political and which parts are
official and the subsequent rate of reimbursement?
Mr. Lyle. As you stated, Mr. Kolbe, we adhere to the law,
the rules and regulations that apply in every instance. Each
trip goes through a deliberate review each and every time a
trip takes place. There are a variety of steps in that process.
There is a management legal review. Staff members in the
office----
Mr. Kolbe. Is that in your office, the management legal
review?
Mr. Lyle. No. I am the Director of the Office of
Administration. The White House Office of Management and
Administration, which is currently headed up by Mr. Lindsay,
the Assistant to the President, staff in that office work in
concert with the White House Counsel's Office to do a thorough
review of each and every trip, to take care of that exact
concern that you are raising, which is to ensure that official
funds are used to pay for official travel. We labor to make
sure that 100 percent of official trips are paid with
appropriated official funds, 100-percent political trips are
paid by the political entities.
The issue that you are raising is the mixed-trip concern
and that is why we have a very deliberate review process that
takes place. Staff review the trips and calculations are
determined all in accordance with the Federal laws that apply
in these instances and allocations are made in accordance with
the letter of the law. That is how it is done.
Mr. Kolbe. But your office, the Office of Administration,
has nothing to do with that review. You are a clerk,
essentially, forwarding the information once you get it.
Mr. Lyle. Well, I think my Financial Management Division
people would take exception to being called clerks.
Mr. Kolbe. Well, all right. That was not a demeaning term.
It is a clerical function. All you are saying is your office
provides only a clerical function.
Mr. Lyle. No. When the Office of Administration gets
involved, we handle official travel. So once the determination
has been made that appropriated funds are to be used, then the
Office of Administration, which I head up, is brought in to pay
the funds out of the appropriated funds. And we see to it that
the appropriate accounts are accessed and that the funds are
disbursed in a timely fashion within the Office of
Administration. That is our contribution to the overall
process, which is a multi-level process, multi-tiered process,
to make sure that official funds are being used for official
purposes.
The staff that I have in the Financial Management Division
are career staff, who work very, very hard at doing that and
adhere to all the rules and regulations. These are the same
types of rules and regulations that have been in place since
prior Administrations, going back to the Bush Administration,
and Reagan Administration and so on. They monitor those rules
carefully. They watch for those things, and they see to it that
we are doing what we can to ensure that the concern that you
are raising is addressed.
And I am happy to say that some of the improvements that we
have made within our budget submission, in the Office of
Administration, in the Financial Management Division and its
automation, which we are currently doing, have been very
successful. We continue to work on those so that we can better
automate and see to it that we handle those disbursements in an
appropriate fashion.
Mr. Kolbe. I noticed on almost all of the trips, no matter
how they are designated, there are one or two people traveling
with the First Lady in an official capacity. I think one of
those usually is a trip coordinator and the other is often the
White House photographer. Can you tell me why, on a trip that
is classified, as are many in that chart there, as 100-percent
political, what purpose does an official White House
photographer have on a 100-percent political trip?
Mr. Lyle. I have not seen this chart.
Mr. Kolbe. Well, it is all information you gave us. Itis
just a compilation of all of the information you gave us of trips.
Mr. Lyle. If it is based on the information that I provided
to you, then there are errors in this chart.
Mr. Kolbe. Well, there may be in the compilation.
The only thing we removed from this is the classified
Secret Service information. Everything else here is information
that you gave us.
Mr. Lyle. From what?
Mr. Kolbe. My question is there are political trips, yes?
And there people that travel in an official capacity. We had
that discussion a minute ago.
Mr. Lyle. Yes, there are.
Mr. Kolbe. What purpose does a White House photographer
have or is there never a White House photographer traveling in
an official capacity?
Mr. Lyle. From the White House appropriation, there is, as
you mentioned, a trip coordinator, who travels with the First
Lady. The First Lady of the United States is the First Lady 24
hours a day, seven days a week. As such, there are official
staff who travel with her in support of her in that capacity.
That would be the trip coordinator that we are referring to.
The costs associated with that one person are always official.
That is the law. Those are the rules, those are the
regulations, that is what it says. So that comes out of the
White House appropriation.
The photographer that you are referring to is not a White
House person. The photographer is a DoD, Department of Defense,
employee. So it is not out of this appropriation, which I
testify----
Mr. Kolbe. Okay. Well, then you have answered my question.
I was under the impression it was a White House photographer.
When there is more than one, who would be the other that would
be the official person traveling?
Mr. Lyle. The only official travelers from the White House
who travels----
Mr. Kolbe. On a political trip.
Mr. Lyle. The only official traveler from the White House
who travels with the First Lady is the trip coordinator. There
is one official traveler, and that is the information that I
provided, or that the White House provided, in the chart that
you are referring to, which is the Military Aircraft Airlift
Operations Chart. The number on this chart appears to show that
there are two official travelers. I do not know the source of
that information on this chart. I have not seen this chart
before.
Mr. Kolbe. It is on the document that you gave us. The
document we have not released because there is some information
that is classified, but at the bottom there is a note that
says, ``Official staff includes trip coordinator, Secret
Service detail, and White House photographer.''
Mr. Lyle. The number, if you will look, under the column
number of official staff, all of the ones, that refers to the
trip coordinator. That is it.
Mr. Kolbe. That document was never provided to us. This is
the document we are dealing with here.
Mr. Lyle. Well, I can tell you that the answer to your
question is one official traveler from the White House. The
United States Secret Service, as you know, is from another
appropriation.
Mr. Kolbe. Yes, I understand. So there is never more than
one official traveler on a trip that is designated as
political.
Mr. Lyle. That travels with the First Lady, that is
correct.
Mr. Kolbe. I have some more questions in this area and also
in the e-mail area, but I have obviously used some more of my
time, and we will give latitude to Mr. Hoyer for his questions
here.
Mr. Hoyer.
Mr. Hoyer. Thank you very much, Mr. Chairman.
Mr. Lyle, first of all, let me thank you for your, I
thought, very effective presentation with respect to the
management of the White House accounts. That kind of
presentation and the accuracy with which it is delivered is
usually why our hearings are pretty low key on this budget,
unless there is a political point to be made.
Mr. Lyle. Thank you, sir.
Mr. Hoyer. First of all, you have reviewed the records, I
take it. I have been on this committee since 1983. I never
recall any questions being asked of Mrs. Reagan or the White
House with reference to Mrs. Reagan's travel or Mrs. Bush's
travel. In your review of the records, has there ever been any
question of this procedure before?
Mr. Lyle. I am aware of no question into the procedure, Mr.
Hoyer.
Mr. Hoyer. Mr. Lyle, are you aware of the memorandum, dated
June 16, 1981, from Edward Hickey to Jim Baker and Michael
Deaver, with reference to First Lady travel by military
aircraft?
Mr. Lyle. Yes, sir.
Mr. Hoyer. Mr. Chairman, I would like to submit that
memorandum for the record, at this time, if I might.
Mr. Kolbe. Without objection.
Mr. Hoyer. Thank you.
In that memorandum, which is signed as approved by Jim
Baker, III--JAB, III.
Mr. Kolbe. Would you share that with us. We have not seen
that.
Mr. Hoyer. Sure. Oh, I am sorry.
Mr. Kolbe. I thought you were referring to an earlier
memorandum there at first from the Secret Service in 1977 on
this.
Mr. Hoyer. I have that one, too.
Mr. Kolbe. That is the only one I have.
Mr. Hoyer. In any event, the Chairman refers to a 1977
memorandum from H.S. Knight, who was then the Director of the
U.S. Secret Service to Marvin Beman, who was the Director of
the White House Military Office, in which they say, and the
Chairman is correct, that this is not under orders from the
Secret Service. First of all, the Secret Service does not have
the power to order the President of the United States or the
White House to do anything.
Mr. Lyle. I think that is right, sir.
Mr. Hoyer. Yes, I think that is right. Our democracy is
glad it is right. The KGB may have had that right at some point
in time, but our Secret Service does not. But as they said,
with respect to closing down Pennsylvania Avenue for the
security of the White House and the First Family, ``But our
preference is military aircraft for the following reasons.''
And now I am reading, Mr. Chairman, from that memorandum,
and I would submit that for the record as well.
Mr. Kolbe. Without objection.
Mr. Hoyer. Thank you, sir.
[The information follows:]
Mr. Hoyer. ``Assurance that the protectees will be
utilizing an aircraft subjected to the highest standards of
maintenance, eliminates the necessity of being confined to a
set schedule, eliminates unnecessary exposure of the protectee
to unknown persons, provide the necessary communications
capabilities with Secret Service and military installations
during flight.'' And it then goes on to say from the Secret
Service perspective, ``This Agency has difficulty obtaining
access to a commercial aircraft for security and technical
searches.'' In other words, with a commercial U.S. Air, Delta,
or United aircraft, they could not get access to the plane in a
timely fashion to make sure that there is not a bomb on it or
there is not some malfunction.
The memorandum then to which I referred March 20, 1981,
outlines this and puts five options for Mr. Baker: ``Continue
to provide military aircraft without further action is a matter
of traditional White House policy. Forward Director Knight's
1977 memo to Baker and Deaver, with recommendations for the
reasons stated, and which are still valid, that traditional
policy be continued. Request Director Knight to submit another
letter similar,'' et cetera, et cetera.
The memorandum is then--excuse me. I have mixed up the
second page. ``Allow for emergency evacuation--''
``What it does is it allows for evacuation of the protectee
if there would be an attack and known crew levelof--known as
security purposes and for flight efficiency.'' And that memorandum is
then signed by Mr. Baker. You are aware of that memorandum.
Mr. Lyle. Yes, sir.
Mr. Hoyer. Now, my question is: Are we deviating in any
way--``we'' being the White House and the First Lady--deviating
in any way from the policy approved by Mr. Baker in 1981?
Mr. Lyle. Absolutely not.
Mr. Hoyer. Now, you are familiar, I take it, with a
memorandum that was, in 1989, sent to Mr. Sununu, are you not?
Mr. Lyle. Yes, sir.
Mr. Hoyer. That was dated January 24th from Antonio Lopez
to Mr. Sununu, who was then Governor Sununu, whose son
ironically serves on this committee now, also respecting First
Lady travel by military aircraft in which the memorandum says,
``It has been the policy of the last several administrations to
routinely provide--'' the ``last several'' being the Reagan
administration immediately preceding it--by the First Lady.
There are a number of reasons for this. It is obviously of
great assistance in meeting tight schedules. So apparently that
was all right for Mrs. Bush to make sure that she could meet
tight schedules. It was obviously of great assistance, also, of
course, it provides an ability to work with members of her
staff, which would not be possible aboard commercial aircraft.
Apparently they thought that was very important for Mrs. Bush.
``Paramount, however,'' they said, ``are security
considerations.'' And then they outlined that it assured the
First Lady will be utilizing aircraft which has been subjected
to the highest standards of maintenance. This was not for what
the purpose of the trip was, it was for the purpose of making
sure that the First Lady was secure. ``Usage of military
aircraft eliminates the necessity of being confined to a set
schedule known to many persons.'' It goes on to have the same
reasons I have outlined from the Secret Service memorandum back
in 1977.
Now, this memorandum is not initialed by Mr. Sununu. But
notwithstanding that, am I correct that from 1989 through 1993,
January of 1993, that this policy was followed by the Bush
White House, to your knowledge?
Mr. Lyle. Yes, sir.
Mr. Hoyer. Now, I know this has nothing to do with Mr.
Giuliani. I know this press release from the RNC just happened
to announce that we were having this hearing and announce that
we were going to, for the first time, expose the costs of these
trips, which, of course, are the same kind of costs that have
been incurred by others in the past. Mr. Giuliani, of course,
mentions in his press release, with reference to this matter
that probably is not related in any way, I understand, that
this kind of travel has disrupted other commercial travel.
Now, are you aware of that allegation?
Mr. Lyle. I have read reports of that, yes.
Mr. Hoyer. Are you aware of the fact that Director Ronald
Morgan of the FAA's Air Traffic Services declares, and I quote,
``E1F''--Am I correct that E1F is the aircraft in which the
First Lady is flying?
Mr. Lyle. Yes, sir.
Mr. Hoyer. ``That E1F is not routinely provided priority
over other aircraft, contrary to Mr. Giuliani's assertion, and
does not receive the same handling as Air Force One.'' Morgan
adds, ``The aircraft E1F has never caused a systemwide delay of
any kind, contrary to Mr. Giuliani's assertion.''
Am I correct, therefore, that notwithstanding the political
attack by Mr. Giuliani on this, that the only reason for all of
this interest is that, according to the chairman, this is
unique that the First Lady is running for office, not, and the
chairman has observed correctly, agrees with us, not because
there is any deviation from previous practice?
Mr. Lyle. That is correct. There is no deviation from
previous practice. The Clinton Administration follows the
recommendations in this area from the Secret Service to protect
the First Lady.
Mr. Hoyer. Now let me clear up one additional question
because, apparently, the chairman and I have different forms--I
showed it to our very distinguished counsel of the committee
who does an excellent job for us all--the form that you had
given to me and apparently it was not the same; is that
correct?
Mr. Kolbe. Would you yield?
Mr. Hoyer. Certainly. All of us yield to the chairman.
Mr. Kolbe. No, we were given this document, which is the
same. The problem is there is information on here that is
classified, and we had to extrapolate from it to get to that.
Mr. Hoyer. I understand that.
Mr. Kolbe. We are not allowed to say how many Secret
Service travel with the First lady.
Mr. Hoyer. I understand that. So, in effect, the document I
have, I suppose, is the nonclassified document.
Mr. Lyle. Yes. That is the document that we provided.
Mr. Hoyer. And it indicates that the number of official
staff, as you indicated, was one.
Mr. Lyle. Yes, sir. And I would like to be clear. We did
not produce classified documents in an inappropriate fashion. I
do not understand what Mr. Kolbe is referring to. I want to be
very clear.
Mr. Hoyer. Let me tell you the confusion, and we ought to
clear it up. In the note on the document that I have, which is
I presume the same one you have, which has number of official
staff, which is the next-to-the-last column, ``one'' straight
down the line.
Mr. Lyle. Yes.
Mr. Hoyer. And then the times of the flights.
Mr. Lyle. Correct.
Mr. Hoyer. On that document there is, and I think this is
the confusion and you ought to clear it up, the number of
official staff includes trip coordinator, Secret Service detail
and a White House photographer. Now, the Secret Service detail,
I presume, is eliminated from that column so as not to reflect
how many Secret Service agents may be on any given trip.
Mr. Lyle. Exactly.
Mr. Hoyer. And that is the classified part of this.
Mr. Lyle. Yes.
Mr. Hoyer. Which is absolutely correct to have done.
However, if the trip coordinator is along and a White House
photographer is along, then one seems to be inaccurate, which
is I think what the chairman was getting at. Your response, as
I understand it, to that was that this--there actually isno
White House photographer that goes on purely political trips with the
First Lady. It is a DoD photographer; is that correct?
Mr. Lyle. The photographer is referred to as the White
House photographer, but it is a DoD employee who is paid for by
DoD and, therefore, is not paid out of the White House
appropriations.
Mr. Hoyer. And they go on all trips irrespective of the
purpose of the trip.
Mr. Lyle. They have been on trips in the past, and to the
extent that they travel with the First Lady when they have, it
is in that official capacity, taking official records,
maintaining the White House records. Those are White House
official photographs.
Mr. Hoyer. Now, if Mrs. Bush or Mrs. Reagan happen to go to
an event on behalf of a Republican candidate for the Senate,
House or any other office, would the same practice have been
pursued?
Mr. Lyle. It is my understanding that that is exactly what
would have happened.
Mr. Hoyer. Mr. Chairman, I do not know if my time has----
Mr. Kolbe. Go ahead.
Mr. Hoyer. Fine. Thank you, Mr. Chairman.
Let me simply conclude this part of it, and I think the
relevant part, Mr. Lyle, that you have quoted is, and
apparently the chairman agrees, that the same policy is being
pursued. Let me suggest then to you the problem here is that it
is not the character, it is not the legality, it is not the
appropriateness, it is the fact that the First Lady is doing a
lot of traveling because she is pursuing something that she is,
as a American citizen, able to pursue.
The problem she has is she is the First Lady, and she
cannot ``unbecome'' the First Lady. And as a result, the Secret
Service, as was recommended in 1977, wants her to travel in a
certain mode to serve their purposes. The observations about
convenience certainly are true, and they applied to Mrs. Bush,
Mrs. Reagan, Mrs. Carter, and Mrs. Nixon, presumably. The
memorandum says, ``Several administrations prior to the Reagan
administration.'' So I presume those are Carter, Ford and
Nixon. But that that is done not to accommodate the First Lady,
but to accommodate the security interests we have in not the
person, but the position, of First Lady.
Mr. Lyle. Yes. The paramount, overriding concern is the
protection of the First Lady.
Mr. Hoyer. Thank you. One additional question, and then I
will cease. If you could expand somewhat on the e-mail, I know
that Mr. Lindsay was primarily responsible for that. I know
that he is before Mr. Burton's committee this morning. Is he
still there? So that I know that that will be presumably fully
investigated and will maybe have the same results that previous
hearings Mr. Burton has conducted over the years. Do we have
the chart on the expenses of Mr. Burton's committee hearings?
Mr. Hoyer. We do not have that. I am sure it exceeds that
figure by a substantial amount.
Mr. Lyle, that is not my question to you though. On the e-
mail----
Mr. Lyle. Yes, sir?
IMPACT OF FENCED FUNDS
Mr. Hoyer. Would you explain, because you and I have had
some discussions, about the ``fenced'' White House money.
Mr. Lyle. Yes.
Mr. Hoyer. Did that have an effect on your ability to
respond to the myriad requests for information that came from
Mr. Burton or from anybody else?
Mr. Lyle. Yes, sir, it did, in the following manner: The
``fenced'' fundings that you are referring to precluded,
prevented, prohibited, the Executive Office of the President,
Office of Administration, from expending any money with respect
to information technology. That was the impact. As a result,
our computer systems began to erode, and we were actually
forced into situations where system failures occurred, and we
had to cannibalize computer equipment to repair other damaged
equipment to stay up and running.
The effect was tremendous on our information technology
area. It was devastating to the equipment, and it forced our
staff to become very creative in the ways that they were able
to go forward without any money. You could not spend a nickel
to buy a computer chip. That caused the system to deteriorate
over time to the point where we were back in 1997-1998,
struggling with a computer system that had those outages and
system failures in place. It was that condition that we were
confronted with when we were trying to correct the Y2K
challenge. We had to turn that system into a modern system. If
we did not do that, we would not have solved the Y2K crisis.
And in that instance, the systems would have failed because of
the Y2K bug.
It was in that sense that we were unable to undertake
efforts in terms of any reconstruction of any of the back-up
tapes that contained the e-mails that Mr. Burton's Committee is
focusing on.
Mr. Hoyer. Let me ask you a question. There has been some
discussion about violation of the Armstrong bill and two other
provisions of law.
Mr. Lyle. Yes, sir.
Mr. Hoyer. Am I correct that all of the information
required to be kept by those three provisions was, in fact,
kept?
Mr. Lyle. Yes, sir.
Mr. Hoyer. It was kept on a tape, and you simply could not
get to it in the time frame because you were doing the Y2K
conversion.
Mr. Lyle. Correct.
Mr. Hoyer. So while there was a delay in producing it that
was consistent with all three of those provisions, the
information was retained for archives or for other purposes.
Mr. Lyle. Yes, sir.
Mr. Hoyer. Thank you, sir.
Thank you very much, Mr. Chairman.
Mr. Kolbe. Well, I have some questions on that area, but I
want to----
Mr. Peterson. Go ahead.
Mr. Kolbe. No. Frankly, I would just as soon get the
questions out, come back to that and get the questions out of
the way here on the travel.
Mr. Peterson.
Mr. Peterson. Good afternoon, Mike. It is good to see you
again. I want to thank you for your candor and your composure
here today. I think you are handling yourself well and
compliment you.
Mr. Lyle. Thank you very much, sir.
Mr. Peterson. This does not have to be a political fight.
This does not have to be political at all. Those who say that
we are not on uncharted waters are not looking atthe facts. No
manager of the White House has had to deal with what you are dealing
with. No First Lady has visited the same State 38 times in less than a
year, probably not 38 times in a full 8-year term--or two 4-year terms.
So we are on uncharted waters. We have never had a member of the White
House run for one of the highest political offices in the land. So your
job has been made very difficult. But let me tell you what I think can
rise above.
I guess my first question is: The public is concerned about
this. My questions did not come from the RNC. They have come
from people in my district. I have had letters. I have had
calls--``What is happening here?''--local news reporters. So I
guess the first question I have, and this is not being critical
of you because you did not make this decision, why has it been
difficult to get this information? I mean, the committee I
think has worked for weeks to put this chart together. It seems
to me this ought to be readily available to the public.
We all know, and I, in no way, question compromising any
member of the First Family's safety. I am not going to make
those decisions. And I know that the taxpayers are going to
have a huge cost, had 38 visits to one State already, it is
going to be more intense throughout the summer and fall, that
is without question, and the taxpayers will, because she is a
special person. She is the First Lady of this country. I do not
have any quarrel with that. But they have a right to know what
it is, how much does it cost, and who is involved, and what are
they paying for, and what percentage of it is her campaign
reimbursing. I think that is a fair, legitimate discussion
because you are setting the standard from this day forward in
this country of how a member of the White House who runs for
political office is handled. This is new territory. It is not
comparable to Nancy Reagan, it is not comparable to Mrs. Bush,
it is not comparable to Mrs. Carter because they have never
been there. They have never done this. This is new.
So why has information been difficult to get?
Mr. Lyle. Mr. Peterson, we have worked very closely with
the subcommittee to provide timely responses to requests for
information that we've received.
Prior to the hearing, we received written requests and oral
requests for the information that was presented. I received
written requests, a total of four requests, separate requests,
and dozens of questions--about 27 questions--which we responded
to in a timely fashion. Also, Mr. Lindsay received oral
requests, which we also endeavored to respond to in a timely
fashion.
We are working to be cooperative and to carry on the
partnership, which really moved in the right direction under
Mr. Lindsay's leadership. I think considerable strides were
made with him at the helm, and he is still actively involved. I
had the pleasure of working with him, and we are responsive, as
best we can, with the information that we have.
Some of the information, as we're discussing these issues,
is in other agencies. I can't comment on this chart because I
haven't seen it before. I would be happy to look at it. We
would be happy to answer the questions that we're getting, and
that's really what we're trying to do.
It's particularly important from a management point of
view. I'm the Director of the Office of Administration, and
what I do is manage. I provide common administrative support
that needs to be there for the President of the United States.
The best way to manage is to have suitable funds, which means I
need to come before this Committee in a cooperative fashion,
and that's what we do.
So I don't know how it has come to the perception that you
seem to have, but I assure you that we're trying to be
responsive and cooperative in every way that we can.
Mr. Peterson. I appreciate that.
Did you not have some sort of a strategy session at the
White House that says, you know, this is going to raise
questions, this is uncharted territory, how are we going to
handle it, how are we going to report it to the public, how are
we going to furnish that information?
Mr. Lyle. In terms of the First Lady travel issues?
Mr. Peterson. Yes.
Mr. Lyle. Very early on--in fact, when we first were
confronted with the First Lady as a person who is running for
office, an analysis was performed. It had to be performed
because it was a situation that we needed to make sure that we
followed all the applicable rules and laws that would be
applied to her. Just like we endeavored to see to it that all
of the rules and regulations that regulate travel are adhered
to. So in the White House we did look into that early on. We
continue to make sure that we are following all of those rules
going forward.
Mr. Peterson. Let me just share with you my thoughts on
that.
I think the law is probably not written for the situation
because nobody ever anticipated it. Like I say, it's kind of
unexpected for somebody in the White House to run for high
office and having to utilize White House services to do that.
So I would say that just following the letter of the law might
cause you problems in the public. I think you need to be very
clear. You need to set a standard of what percentage of her
costs are going to be paid for by the campaign and demand that
of the campaign, and what percentage are going to be paid for
by the taxpayers because she's the First Lady and you have to
protect her and keep her safe and so on. So I think following
the letter of the law, because the laws probably were not
written to outline this case or any case such as this,
anticipating it.
So I think my advice to you is to come up with a plan of
here's how we're going to do it, because it's probably going to
happen day by day the rest of the year. The American taxpayers
and voters are interested in how this will happen and how
you're going to handle it. You're setting the bar. I guess I'm
urging you to set it high.
But the question I get asked is what is a fair percentage
of her travel that should be paid for, will be paid for by the
taxpayer, and what percentage will be paid for by the campaign.
Mr. Lyle. Again going back to what I said earlier, in
response to some of the questions I received, the regulations,
rules and laws are, in their current form, followed in seeing
to it that official funds are used for official purposes, and
that political activities are paid for by political entities.
That's what we do in this area. That's our guide. That's
what we have currently. From a management point of view, I have
learned along the way that you follow the law. That's good
advice that I adhere to very carefully. A lot of time is spent,
a considerable amount of effort, a very deliberate review
process is in place to do that. That's howwe've been operating,
and that's what we endeavor to do.
Mr. Peterson. Of course, I think the law was implemented to
deal with incidental trips that a First Lady takes. We're not
in that situation. It's a campaign and it's very intense from
now on. It's very intense and there will be lots of travel. I
think that you ought to set a guideline of what the White House
wants in reimbursement for all travel.
I mean, there should be a standard set. I think the public
will buy that. They may argue with the percentage; they may
argue because of, you know, the Secret Service are separate
costs. But I think it needs to be more definitive than that. I
don't think the law was written to deal with this issue, but I
think you can deal with it on behalf of the taxpayers, that
what is done is fair, and that whatever travel is done on our
aircraft that here's what it's going to cost. Here's the
percentage you're going to have to pay that we'll reimburse the
taxpayers. I guess I would urge you to develop that plan.
Let me ask you a question. Would it be unfair to ask you to
report weekly or every two weeks on here's the travel, to
furnish it to this committee, and those who are interested
would have the travel, here's the cost, and here's what the
reimbursement is going to be, just keep it right up on the
table. Don't make anybody dig and scratch and look for it. Just
put it right up here.
Mr. Lyle. You've made a couple of observations. We have a
process in place that we use to handle the First Lady's travel
in these areas. It is the process that we have used, and other
Administrations have used. It is the one that works. It is what
is dictated by the law, which is our best guide as far as how
we should proceed.
I think it would be burdensome to report on a weekly basis.
It causes additional management challenges in the process. As I
said before, our attorneys in the Counsel's Office are very
capable people, who are there to handle these efforts. If you
were to impose this type of thing, I think it would be
burdensome.
Mr. Peterson. Well, I guess I don't understand. If there
were four trips taken this week at ``x'' cost, it's one sheet
of paper, the reimbursement request is such. That's not
burdensome paperwork. I mean, you would develop a simple little
system in one computer, where you would pump it out each week
and pass it out and the public knows.
You see, this is not like it was with other Presidents. Let
me finish. This is not the same. This is one of the most
intense campaigns, a national Senate campaign, that anybody
ever entered into. They're absolutely intense campaigns. Travel
is constant.
I just think that reporting the trips that were taken and
the reimbursements, and taking that issue off the table, is
just smart politically to do. It's right for the taxpayers to
know what portion of the travel or campaign they're paying for.
Because I think they will accept that, knowing that the First
Lady needs to travel. I'm not going to question that, that
she's the First Lady, the First Lady of this land, and she
needs to travel in the most secure and safest way possible. I
just have no quarrel with that. But I do feel it's not
comparable to what has been historic of the First Lady's
travel. It's a Senate campaign for the United States Senate,
one of the most intense political things you could ever get
involved in. The public needs more information than they're
already getting, in my view.
Mr. Kolbe. Miss Meek.
Ms. Meek. Thank you, Mr. Chairman. And welcome, Mr. Lyle,
and your company today.
This is about my third year on this subcommittee. Before I
came to this subcommittee, I served on governmental reform and
oversight. It sometimes pains me about our focus, or maybe I
should say foci, on these committees, and that we waste a lot
of the taxpayers' time with extraneous, peripheral issues, when
we can really get at the things that are hurting our government
and hurting our people. We could strengthen them if we were to
look more at those things.
There are so many things that the people of this wonderful
country need to worry about other than the First Lady's travel.
Now, I know we must be what we call fiscally secure, and
that we must be able to answer questions. But I think we have
spent too much time on the First Lady's travel in New York. I
think it's important that we look at her travel vouchers, but
not to the extent that we spend a hearing, this hearing, on
that. It gets to be ad nauseam by the time we finish looking.
You could go on and on and on with this. It could be extended
forever.
Just as a person who has sat on these committees listening
to this kind of thing, I can think of so many other things we
could do. I know that each of you has mentioned the fact that
this is uncharted territory, and I know it is. But it didn't
take us this long to chart the North Pole. This took longer
than it did to go to the North Pole and back. So in terms of
relativity and importance to this country, I think we should
have taken a little bit more time to sort this situation out
before we came in, and then we could have structured our
questions more, in such a way that it wouldn't look political
at all, that it would look more substantive in terms of
government accountability instead of political inquisition.
Mr. Lyle--I must commend you on the way you have conducted
yourself here today, and the way you've answered questions, in
a forthright way.
Mr. Lyle. Thank you, ma'am.
Ms. Meek. And since you've done that, and you've shown that
some of the terminology is hard to gather, like the mixed
travel, the unmixed travel, the procedures that go back to the
early Eighties to the other presidential wives and to the other
presidents. But I just think that so often in appropriations we
spend a whole lot of time on these extraneous issues when we
could spend the people's money for the real things that are
needed in this country.
Anyway, as far as your budget is concerned, I'm wondering,
as I read the chart, it appears to me that the number of days
required to process invoices of so-called mixed trips has
decreased considerably.
Am I reading the chart correctly? In fact, the December
14th trip was processed in 16 days. Is that correct, Mr. Lyle?
Mr. Lyle. Yes, ma'am.
Ms. Meek. How long does it usually take to process mixed
trips for the President or Vice President?
Mr. Lyle. If you look on that chart, you're looking in
terms of a variety of different times. The average times we're
looking at are consistent with what we've seen as far as
processing the Vice President or the President's travel. Those
numbers we are looking at are consistent.
Ms. Meek. Thank you.
I also want to commend you for----
Mr. Kolbe. If the gentlelady would yield for a minute?
Ms. Meek. Yes.
Mr. Kolbe. Is that the document that has been given to the
committee? I don't believe it is. Would you submit it to the
committee for the record?
Mr. Lyle. I believe it is the document that's been given to
the committee. It's the chart that you said had the information
on it.
Mr. Kolbe. Oh, you're referring to that one?
Mr. Lyle. Yes, sir.
Mr. Kolbe. From your answer, it sounded like you were
referring to a different document.
Mr. Lyle. No, it's the one that's marked ``Air Lift
Operations, Military.'' That's what this is.
Ms. Meek. Would you mind commenting, Mr. Lyle, on your Y2K
efforts--well, it's obvious that it was effective, in that you
did a very good job getting ready for Y2K. That was quite a bit
in itself to do that.
Critics of government and of theagencies in government,
including the Executive, Judicial and the Legislative branches, are
saying we're still living in dinosaur-like age, in terms of information
technology. What is your vision for the future of information
technology for the Office of the President?
INFORMATION TECHNOLOGY VISION
Mr. Lyle. The vision that we have is for our information
technology to become standardized, to become centralized, to be
centrally managed. The management of our information technology
resources are really being strategically planned, in connection
with a solid infrastructure plan that we have in place. We seek
to institutionalize, as I mentioned, the management of our
projects by having the Information Technology Management Team,
which was created under guidance that we received from the
subcommittee. It has been very effective, and we look forward
for that to continue.
Our goal is to make it so that we have an architecture
planning that drives, anticipates and sees to it that the
technology that is available is brought to bear for demands
that the Executive Office of the President faces.
We have been pretty fortunate in that we know that the
demands, the business issues, the business solutions, the
processes that occur within the Executive Office of the
President have remained static for a very, very long time. It's
information technology, it's information management, it's data
in and information and data out. It's word processing,
financial reports and so on.
Then there are some unique things in terms of some of the
budget systems that exist. What we're looking to do is make
sure that we are able to plan in advance so that the costs are
strategically developed going forward. We can then see to it
that we have a centralized architecture that really works.
That's what our vision is.
Ms. Meek. Thank you so much, and thank you, Mr. Chairman.
Mr. Kolbe. Mr. Goode.
PUERTO RICO REFERENDUM
Mr. Goode. Mr. Lyle, on the last page of your FY 2001
budget request, you ask for $2.5 million, and I also note the
chairman of the subcommittee commented for Puerto Rico, is that
not correct?
Mr. Lyle. Yes, there is a request in the Unanticipated
Needs Account for a Puerto Rico referendum.
Mr. Goode. It is said to be used for citizens education.
Mr. Lyle. Part of the funds will be utilized for education
purposes, in connection with the referendum. There are other
costs--the total cost for the referendum is going to be $10
million. $2.5 million is being included under this proposed
budget by the United States. The remainder will be handled
through the Election Commission in Puerto Rico.
Mr. Goode. Why do you think the U.S. taxpayers should pay
for ``citizens education'' on an election of that nature,
because you've got at least two, and maybe three, sides down
there. Why don't you just let them--That's almost like public
funding of an election campaign.
Mr. Lyle. The reason that some of the funds will be
utilized for education purposes is because there was
substantial confusion in terms of the referendum itself, what
the issues are, what the questions were. As you mentioned,
there were three different groups that are involved there.
The Acting Governor of Puerto Rico wrote to the committee
supporting the initiative, so that we can see to it that they
have a referendum that works. Puerto Rico had a couple of
referendums that the United States did not contribute to, where
they were unable to come to a resolution.
Mr. Goode. Let me ask you this.
If you have a congressional campaign down in my district,
and there's a lot of confusion among the issues, do you think
the taxpayers ought to send down some money to ``straighten out
the confusion''?
Mr. Lyle. What the Administration is trying to do is see to
it that we follow through with the commitment to have a
suitable referendum. This is consistent with, I think, a
presidential directive issued by President Bush--where from
time to time we would ascertain periodically, by means of a
general right of referendum, sponsored either by the United
States Government or the legislature of Puerto Rico.
The referendum we are seeking will carry forward with the
commitment that we made with Puerto Rico in that regard. So
we're trying to do it in such a way that it makes sense, that
we can get a useful determination so that we can fulfill that
commitment.
Mr. Goode. All right. Will you give the Commonwealth of
Virginia $2.5 million to help run their elections?
All right. Let me ask you this. In connection with that
request, it is supposed to be, is it not, according to your own
words, in furtherance of the national interest, security or
defense?
Mr. Lyle. Yes.
Mr. Goode. And you think that $2.5 million comports with
that requirement?
Mr. Lyle. Yes, sir. It is in the national interest.
Mr. Goode. Your definition of the national interest.
Mr. Lyle. Well, I happen to agree, but we do believe it's
in furtherance of the national interest to do that.
FIRST LADY TRAVEL
Mr. Goode. I don't know much about White House travel here,
but what is the formula you use to decide the amount of
reimbursement on a particular trip--in this instance, the First
Lady's campaign?
Mr. Lyle. The rules, regulations and laws that we're
talking about provide for two types of formulas. There is a
hypothetical formula that's utilized and a hard time formula
that is utilized.
Mr. Goode. Which are you utilizing?
Mr. Lyle. They are all utilized, depending on the nature of
the trip. The exact ins and outs of how that formula is applied
for the----
Mr. Goode. Who decides the nature of the trip? You?
Mr. Lyle. No, I do not.
Mr. Goode. Who does?
Mr. Lyle. The nature of the trip is determined by the
management legal review that I referred to earlier, in response
to Mr. Kolbe.
Mr. Goode. Who are the determinors of the management legal
review?
Mr. Lyle. The staff in the Office of Management and
Administration, and White House Counsel.
Mr. Goode. And how are the staff people that--It's White
House Counsel and the staff of----
Mr. Lyle. Management and Administration, and the
appropriate other offices. I want to be clear that certain
other offices are also consulted. There are other entitiesthat
you need to look at. For example, if you're looking at the White House,
or the Vice President's office, there are other steps.
Mr. Goode. Let's just take the First Lady's trips, so I can
understand. Who are the deciders?
Mr. Lyle. The names of the individuals?
Mr. Goode. Yes.
Mr. Lyle. We have a staff in the Office of Management and
Administration. The lead person would be Chris Szymanski. Don't
ask me how to spell the last name. I'm just happy to pronounce
it. He works very, very hard. He's a diligent staff worker.
Mr. Goode. Go ahead and tell me.
Mr. Lyle. The person in the White House Counsel, I don't
know exactly the attorneys that work on it. I know one attorney
is Dawn Chirwa, who has been with the Administration for a
very, very long time, and is very, very adept at making these
determinations.
Mr. Goode. Would you say it's a very objective decision in
determining which formula you use, whether you use the hard
formula or the first formula you mentioned?
Mr. Lyle. I don't want to try to speculate on that.
Mr. Goode. But would you think some subjectivity could come
into play on it?
Mr. Lyle. There is an analysis that's done in accordance
with what the formula requires, and it is legally dictated.
Those are the things that go into it. The ins and outs of it or
the precise steps that are utilized, I couldn't begin to tell
you.
Mr. Goode. You're not willing to say, though, there is no
subjectivity in it?
Mr. Lyle. I don't want to say one way or the other, sir,
because I don't want to provide inaccurate information. I would
have to say that I would have to ask or find out what the----
Mr. Goode. Who are you going to ask?
Mr. Lyle. I would return to the White House and ask----
Mr. Goode. Chris Szymanski, or Dawn Chirwa, or are you
going to go above them?
Mr. Lyle. I could start there. I would be happy to find
that out.
Mr. Goode. You're going to ask them whether it's subjective
or objective; is that what you're going to ask?
Mr. Lyle. Well, I'm trying to help with the question that
you're asking. I'm doing the best I can to answer your
question. What I'm trying to tell you is that it is a process
that they employ, that I don't employ. I know that they do it,
that they're very good people, because I know them. They work
very hard, are very diligent. The exact formulas and the ins
and outs of that I don't want to try to characterize because I
don't want to provide you with inaccurate information.
Mr. Goode. Let me ask you this. You have so many full time
persons that are paid that work at the White House Executive
Office, right?
Mr. Lyle. Yes.
Mr. Goode. And you also have a lot of volunteers over
there, right, interns?
Mr. Lyle. Yes, there are interns and volunteers.
Mr. Goode. What if you got a few volunteers on the
Democratic side and the Republican side to work with these
people, on any issues that might be subjective, and then that
way it would be open to the public, would it not?
Mr. Lyle. The volunteers typically work in the
correspondence----
Mr. Goode. No, I'm not saying volunteers you pick
necessarily. You could pick two and maybe the other side pick
two and look at it, and offer advice and suggestions, in
openness.
Mr. Lyle. As far as the process?
Mr. Goode. Right. The bottom line is deciding how much
you're going to pay for each trip.
Mr. Lyle. I would say that--I think that your question is
similar to what Mr. Peterson and I were discussing, which is we
are doing the very best that we can with those staff to adhere
to the rules and regulations that are applicable to travel.
That's what we do. My office, the Office of Administration,
once that process is in place and utilized, we see to it that
the appropriate disbursements are made. That is our process.
We have been forthright in providing the information that
was asked of us by the subcommittee on that area, and that is
what we do.
Mr. Goode. Would you submit, if you find out this to be the
case, after talking to Chris Szymanski and Dawn and the White
House Counsel, that if it's totally objective in arriving at
the dollar figure, could you just send a letter saying that's
how we do it?
Mr. Lyle. I would be happy to try to make the inquiry that
you're asking for.
Mr. Goode. With a letter follow-up?
Mr. Lyle. I would be happy to provide you--a letter from
me?
Mr. Goode. Or from them, I don't care.
Mr. Lyle. Certainly.
Mr. Goode. All right. Thank you.
Mr. Kolbe. Thank you.
Mr. Lyle, I am still trying to get to the bottom of this. I
have other questions and I don't want to dwell on this, but I'm
trying to get to the bottom of this issue here, of the
documents you provided to us entitled, ``Air Lift Operations--
Exploratory Payment History'' and sanitized by the Secret
Service, blacked out, the version which Mr. Hoyer referred to.
The document you provided for the Committee on March 1st
shows--and I'm not going to give the number because that's in
question. That's the issue here we don't want to give it out.
But it shows the number of official staff. We know the number
of Secret Service that travel with the First Lady. And at the
bottom it says, of the document you provided, ``Note: Number of
official staff includes Trip Coordinator, Secret Service
detail, and White House photographer.''
Mr. Lyle. Yes, sir.
Mr. Kolbe. Now, when you back out the Secret Service, that
is where these numbers are that we came up with, the number of
official people traveling with her, two, two, and in some
cases, one. In most cases it is two.
The document you have given Mr. Hoyer and did not give to
us has ``one'' in every single case. What is the discrepancy?
Mr. Lyle. The answer is--I understood you were provided the
chart that shows----
Mr. Kolbe. Just tell me what the discrepancy is.
Mr. Lyle. I don't have an explanation for thediscrepancy. I
can tell you that the number that you have on the chart, where it says
one--whatever chart you're looking at--it's the one that Mr. Hoyer----
Mr. Kolbe. The one you faxed us on March 1st shows a
different number. I'm not going to read that because it
includes the Secret Service. But you back that number out, and
it is the number two, two, two, one, two, official people
traveling with the First Lady.
Mr. Lyle. To make a clarification so that we all understand
what we're talking about, I think you've apparently got two
versions. I have the one that has ones on it.
Mr. Kolbe. The one I'm talking about came from you.
Mr. Lyle. No, it was provided by the Management and
Administration Office.
Mr. Kolbe. Oh, I'm sorry. Not the White House. Okay.
Mr. Lyle. No, no. It's in the White House. It's just not my
office.
Mr. Kolbe. I see. Can you----
Mr. Lyle. Now, I can tell you what I think happened, that
if you include Secret Service and White House photographer,
you're talking about appropriations that are not White House
appropriations.
Mr. Kolbe. All right. Let me get to the bottom of that now.
The White House photographer is part of the Office of White
House Communications, is that not correct?
Mr. Lyle. No, the White House photographer is a DOD
employee.
Mr. Kolbe. The White House Communications office is part of
DOD, but it's appropriated by funds in this bill.
Mr. Lyle. The photographers are employees of the Department
of Defense, but the White House photographers report to Mr.
Lindsay.
Mr. Kolbe. So the question is, who paid for the White House
photographer, whether his salary comes out of the Defense
Department or otherwise? Who paid for the White House
photographer on those trips?
Mr. Lyle. The Department of Defense.
Mr. Kolbe. So my question is do you have any idea what the
purpose of the official photographer on a political trip is?
Mr. Lyle. The purpose of the official photographer is--I
was going to say----take official photographs, but you need
more information than that.
The photographers are there to document history. That's
what the photographers do. They are official photographs that
become part of the presidential record. When the First Lady is
traveling abroad, she's making history, just like when the
President travels and the Vice President. The photographers are
there to capture that. That's their function. Each of the
photos taken are official White House photographs.
Mr. Kolbe. And they're not provided to the campaign in any
way?
Mr. Lyle. Oh, no, no. Those are official photos.
Mr. Kolbe. Well, I think there are some real questions
involved in that. But let me go back now to the question of the
aircraft.
The White House has stated--and I accept this--the Secret
Service certainly prefers that the First Lady use government
aircraft. It prefers. It is not a requirement. Would you agree
with that?
Mr. Lyle. The Secret Service, as Mr. Hoyer pointed out,
cannot require--What we do is like prior Administrations. The
protection of the First Lady is of paramount concern.
Mr. Kolbe. Of course. I assume the protection of the First
Lady would be a paramount concern when she's doing a book tour,
when she uses a plane provided by Simon & Shuster; is that not
correct?
Mr. Lyle. I don't know, sir.
Mr. Kolbe. Well, she did.
Mr. Lyle. I don't know the answer to your question. I can
tell you that we adhere to the recommendations of the Secret
Service when it comes to issues of security. We follow their
advice, like prior Administrations have done.
Mr. Kolbe. Mr. Peterson, I think, hit it exactly on the
head. We're in uncharted territory here. It's not true that she
and other First Ladies have not used other aircraft, and she
did on a book tour. She used another aircraft for a number of
trips.
So I guess my question would be, of all the things, it
would seem to me you would want to err on the side, or the
political campaign would want to err on the side of being the
most cautious, and the White House would want to err on the
side of being the most cautious, when it comes to a political
campaign that the First Lady is running on her own behalf. And
yet, here government aircraft is being used.
There's no question about it, that it is an advantage to
the campaign to be able to have that paid for by the taxpayers.
I don't think there's any doubt about that.
So I guess my question would be--and you apparently can't
shed any light--as to why it was deemed acceptable on a book
tour to use a privately chartered aircraft but not for the
political campaign.
Mr. Lyle. As has been done in prior Administrations, back
through the Bush Administration, back through the Reagan
Administration, and even before that, we adhere to the advice
that we receive from the United States Secret Service when it
comes to the safety of the First Lady. That's true for any of
the other principals--the President, the Vice President. That's
what we do. As it has been put by prior Administrations, it is
of paramount importance.
Mr. Kolbe. Maybe this was answered by an earlier question,
but on one occasion here in this document that the Office of
Management provided to us, the reimbursable amount for two
official travelers, is shown as $494. In another case, where
there's one official traveler, it is shown also as $494. I'm
sorry, it's two nonofficial travelers. That wouldn't have
anything to do with the White House photographer?
Can you explain why in one instance, for different numbers
of people traveling, there's the exact same amount
reimbursement shown? Specifically I'm referring to the trip on
November 8th, where there was one nonofficial traveler, with a
total cost of $494, and two weeks later, two non-official
travelers, at a cost of $494, the First Lady and one other
person, a total cost of $494?
Mr. Lyle. I don't have the answer at my fingertips, but I
would be happy to take that for the record and provide you a
written response at a later time.
Mr. Kolbe. Okay. I would like to get the answer to that.
Mr. Kolbe. A final question in this area, and then I'll
come back in my last round on e-mail, because I think those are
extraordinarily important.
CAMPAIGN TRAVEL
My final concern has to do with the length of time it took
to submit invoices. Your documents indicate it took an average
of 28 days for the political party to reimburse for the cost of
the trip. I would say that it's been a fairly timely
reimbursement. But I notice that it took up to six months to
send the invoice to the political party.
Eight of the 22 political trips taken that you provided us
information on were not billed for at least three months, and
14 of the billings didn't happen until after staff had
requested this information on December 15th. You will note
looking down the list there the date of the invoices here,
December 29th, December 22nd, December 29th, December 29th,
January 1st and so on down there for the invoices.
Can you give me some idea as to why there is this
tremendous discrepancy in the length of time for these
invoices?
Mr. Lyle. The lengthy numbers are certainly more than we
would have preferred. As you noted, and as Ms. Meek also
pointed out, the time frame has improved significantly. We have
been working very hard to make sure that we continue to see
that that improvement is realized.
The billing time frame that we are currently within is
consistent with what we've seen with political travel in past
years, so we're comfortable that we've come in the right
direction. But your concern is absolutely correct. The time
frame when we first got started was longer than we would have
preferred.
Mr. Kolbe. I see that we've just started a vote here, and I
do have a few questions on the e-mail that are really very
relevant, because it's relevant to your budget here. I will ask
them after our vote.
We have a few minutes, so would you like to proceed, Mr.
Hoyer, with some questions?
Mr. Hoyer. Thank you very much, Mr. Chairman.
PUERTO RICO REFERENDUM
Let me clarify, because I happen to support the $2.5
million for Puerto Rico because I think that, unlike Virginia,
which is an independent commonwealth, the great State of
Virginia, it is not an independent state in many ways, and we,
of course, make their national laws. We need to clarify that.
My presumption is that, as a result of discussions with the
parties, including the Governor, but other parties as well,
that in order to clarify what the Congress has voted and
authorized, would be done in a fashion that would presumably
come up with a clear result.
I think the important thing is that the education referred
to is, in fact, analogous to public expenditures that are made
by the State of Virginia and made by the State of Maryland.
That is to say, notification of the questions that will be on
the ballot, so that they're fully disseminated and everybody
knows what the questions are. We do that in our State, and I
presume that you do that in your State, furthermore clarifying
when the election will be held, where it will be held, things
of that nature. It is not any information of ``education''
which would have the effect of favoring one view or another; am
I correct? I think the gentleman from Virginia raised an
appropriate concern. We certainly wouldn't want to appropriate
public moneys for the purposes of advocating any position that
the voters in Puerto Rico ought to take, but educating the
voters as to what the questions will be that they will have to
decide upon is another matter.
Mr. Lyle. Precisely. That is the intent of what the funds
will be utilized for.
Mr. Hoyer. Am I correct that--and the most important
question--that none of the dollars included in this request of
$2.5 million would be spent for the purposes of advocating any
position to the voter of Puerto Rico?
Mr. Lyle. That's correct. I apologize, Mr. Goode, if I did
not understand the question.
Mr. Hoyer. Mr. Warner, in particular, would be shocked,
chagrinned and deeply disappointed if the Federal Government
didn't send Virginia far more than $2.5 million. [Laughter.]
CAPITAL INVESTMENT PLAN
I think you have spoken to this, but I would like for you
to repeat it. You have requested $9.9 million for your
continuing computer upgrades. What would be the consequences of
straightlining funding for your capital investment program?
Mr. Lyle. The consequences would be severe. We have sought
to carry on the improvements that we started in partnership
with this subcommittee last year. That's what we're seeking to
do with our $9.9 million capital improvement plan. We want to
carry on the network infrastructure improvements that we had
begun last year. This will take us further along the line, and
if we continue along this path, by next year we will be where
we should be, in terms of our network infrastructure.
We need to improve our data center. There are a number of
issues in that area. There's equipment that's old, that is
important to our power supply, that's unreliable, and it's
becoming difficult to find replacement parts. We need to make
sure we have funds to replace that.
Our flooring, some of it is 20 years old. It needs to be
replaced to continue to support and protect the equipment and
the people that work in there. It's a special raised flooring
for wiring and it needs to be replaced with flooring and
equipment that sees to it there is no danger of static
electricity and so on. Those are the kinds of examples that we
see in our capital investment program.
If we didn't get the $9.9 million, all of the steps that we
took last year would be for naught, because we would not have
followed through on the plan that we put in place under this
subcommittee's guidance.
Mr. Hoyer. Thank you.
E-MAIL
The last question would be on the e-mail. You testified
that all of the information required to be kept by the records
act, the archives act, the Armstrong Act--and what's the third
one I'm groping for?
Mr. Lyle. The Federal Records Act.
Mr. Hoyer. The Federal Records Act--were, in fact, kept.
The only problem was retrieving them immediately because you
were focused on the Y2K issue and did not have the resources to
go back after the computers were transferred.
Mr. Lyle. Exactly.
Mr. Hoyer. Mr. Chairman, I guess I answered my own
question. I wanted to clarify that because I think that's an
important point. The observation you made was that there was a
question as to whether or not these three provisions had been
complied with, and it's my understanding they have, although
they did not retrieve the information immediately, for the
reasons stated.
Mr. Lyle. Yes, sir. The information is on back-up tapes,
secure in the data center, in the New Executive Office
Building, which has restricted access. They're all there on the
back-up tapes, all the information that we captured on the
back-up tapes.
Mr. Hoyer. And I'm sure Mr. Lindsay is being asked a lot of
questions about that and is responding in the same fashion.
Mr. Lyle. Yes, sir.
Mr. Hoyer. Thank you.
Thank you, Mr. Chairman.
Mr. Kolbe. Thank you.
I'm going to have a few questions on the budget aspects of
the automated records management system, so we will come back
here after this one vote, which I understand is on a motion to
rise.
Mr. Peterson, would you like to try to get in a question
here before we come back?
CAMPAIGN TRAVEL
Mr. Peterson. Yeah.
Mike, if a person is running for the United States Senate
or Congress, the FEC rules require a candidate to pay in
advance either the cost of a first-class ticket, if there's a
scheduled flight, or comparable charter fares if there is no
scheduled flight. That has to be paid in advance to the person
entering the plane, or it's considered a loan to that
committee. It's considered a contribution to that committee,
which corporations cannot do that.
Mr. Lyle. I believe what you're referring to is the
hypothetical formula that's utilized and applied by the White
House Counsel's Office, in conjunction with the analysis that
I've been talking about, the management legal analysis.
I think that's what you're referring to.
Mr. Peterson. You have a hypothetical formula. So you're
doing the same thing as the FEC, only you're not doing it prior
to the flight? You're doing it after the flight.
Mr. Lyle. I want to answer your question. I don't know what
the specific nuances are--I was trying to answer Mr. Goode's
question--with respect to the applications of those rules.
Those are matters that are handled by the White House Counsel's
Office and we rely on their determinations in that regard.
Mr. Peterson. Of course, if it's not done that way, it's
considered that a corporation made a loan, and in this
situation it could be considered equal, that the taxpayers have
made a loan to a campaign committee because they furnished
travel that will be reimbursed at a later date.
Mr. Lyle. Again, Mr. Peterson, I don't want to comment in
that area because those are matters that are handled by the
lawyers in the White House Counsel's Office.
Mr. Peterson. Just one specific on the charts you gave us.
On July the 7th, the exploratory trip was $46,000, the cost of
an USAF C-20. There were four political people which reimbursed
$3,662, which would be about $900 a person. Then there were two
official people who reimbursed $417.
Why is one reimbursed at a different rate than the other?
Mr. Lyle. I'm sorry. Which document are you referring to? I
don't have that.
Mr. Peterson. June 9th, December 14th, it's the one I just
received at 2:00 o'clock. The July 7th date, where there was
Binghamton----
Mr. Kolbe. It's second on the list.
Mr. Peterson. The cost of the trip was $46,000 for the
plane. The four political people reimbursed $3,662, which I
guess would have been paid for by the political campaign for
the Senate, and then two official people that traveled
reimbursed $417. I guess I didn't understand why the
difference.
Mr. Lyle. This chart that you're referring to was built on
information that I don't have, and that I didn't provide to the
subcommittee. I cannot comment on--I can't answer your
question.
Mr. Peterson. Will you give us that in writing?
Mr. Lyle. That I don't have this chart?
Mr. Peterson. No, no. You'll be given the chart, I'm sure.
Mr. Lyle. If I get the chart, we would be happy to try to
look at that.
Mr. Kolbe. If the gentleman would yield, Mr. Lyle, don't
you represent the Office of Management here today?
Mr. Lyle. The Office of Administration.
Mr. Kolbe. The Office of Administration?
Mr. Lyle. Yes, sir.
Mr. Kolbe. That's in the information they provided us. It's
been faxed right here.
Mr. Lyle. I don't believe that----
Mr. Kolbe. The letter is signed by you. ``I am attaching
materials in response to the questions.'' This is one of the
documents you----
Mr. Lyle. I have not seen this exhibit.
Mr. Kolbe. You sent it to us, signed----
Mr. Lyle. No. I'm sorry, Mr. Chairman I don't know what
else to say on that. If we get a copy of this chart, I would be
happy to look at that and do what I can. I will take that
question for the record and we'll get something back to you.
[Clerk's Note--The information used to construct the chart
referred to was provided by the EOP and is displayed as
Exhibits 2 and 3.]
Mr. Peterson. Thank you.
Mr. Kolbe. We will stand in recess until we return here.
[Recess.]
Mr. Kolbe. The subcommittee will resume.
Mr. Lyle, my apologies for the delay. I don't think any of
us anticipated that the Speaker was going to choose this moment
to try to announce his resolution of the Chaplain's issue here.
But I apologize for that.
I have just one other area of questioning. We have already
touched on it some, and Mr. Hoyer has, and there has been some
discussion here of the question of e-mails. Obviously, today's
hearing in Government Operations with Mr. Lindsay is going into
this in considerable detail, far deeper than anything I'm going
to attempt to do here today. But I do want to touch on what I
think are a couple of the budget issues that are related to
this.
THE AUTOMATED RECORDS MANAGEMENT SYSTEM
Just for the record, so that we can clarify here, the
current Automated Records Management System, called ARMS--and
we'll use that acronym--was installed in 1994, and was used to
collect and sort electronic messages by the Executive Office
agency; is that correct?
Mr. Lyle. Yes. It is used to collect and manage e-mails.
Mr. Kolbe. Is this the system that's used to comply with
the requirements of the Armstrong resolution?
Mr. Lyle. It is one of the elements that was required in
connection with the Armstrong litigation. The opinion required
a variety of steps. Guidance and schedules needed to be issued,
which we did, and we were required to develop a suitable
records management system that conformed with the Armstrong
decision. It was our decision to create the Automated Records
Management System, known as ARMS.
Mr. Kolbe. Is it this system, the ARMS system, that had the
glitch that we've been hearing about in the press reports?
Mr. Lyle. Yes, sir.
Mr. Kolbe. What has been the cost of developing and
deploying this ARMS, do you know?
Mr. Lyle. I know that we have provided, in response to some
written materials, the total budget that was utilized, and in
some cases the breakdowns. I can locate that for you and give
you that number.
Mr. Kolbe. The cost of developing and deploying, and I also
would like to annual operating and maintenance cost, what we're
spending on it annually just to keep it up.
Mr. Lyle. The total operating budget was $13,115,000. It
related to a variety of areas, including transportation, GSA
rent, communications and utilities, contractual services and
supplies and materials, and equipment.
The total expenditure was $10,129,333.49. The current
available balance, as of this report, which is dated March----
Mr. Kolbe. I think you're referring to the Armstrong
account.
Mr. Lyle. That's the Armstrong resolution account.
Mr. Kolbe. That's the account, but that's not necessarily
the exact amount that was used on developing the system.
Mr. Lyle. I believe the equipment line of the account is
the number that would include that. Whether that equipment line
includes just the ARMS system or other components, I would have
to check for you.
Mr. Kolbe. What I would like to know is the amount that was
used to develop this ARM system.
Mr. Lyle. I would be happy to provide that, sir.
Mr. Kolbe. And, as I said, the annual costs of the
operation and maintenance of it.
FENCED FUNDS
Now, in response to some questions from Mr. Hoyer, you said
that the fencing of some of the funds that the Subcommittee had
provided you in 1997, the funds for information technology,
resulted in some of the problems that you had. You said that
clearly that fencing has led to some of these problems that
have occurred, the glitches that have occurred.
Mr. Lyle. It was a contributing factor.
Mr. Kolbe. Well, as you know, with the figure you just
gave, in 1994 there was a supplemental appropriation of $13.1
million for funds associated with the Armstrong resolution, to
implement the Armstrong resolution.
To your knowledge, are there restrictions on your use of
those funds?
Mr. Lyle. Yes.
Mr. Kolbe. And what are those restrictions?
Mr. Lyle. The restrictions are that the funds are to be
used for the necessary expenses--this is in the March 20th
letter that was submitted to you by Mr. Lindsay. The
appropriations language requires that it needs to be for the
necessary expenses for electronic communications, records
management activities, for compliance with and resolution of
Armstrong versus the Executive Office of the President.
Mr. Kolbe. So that would include the ARM system, right, to
maintain and operate the ARMS, right?
Mr. Lyle. Yes, sir.
Mr. Kolbe. So that's what the money was there for.
Mr. Lyle. Yes.
Mr. Kolbe. The $966,000, wasn't part of that $13.1 million,
this was $966,000 to develop your new system. We had concerns,
as you know, that for three years running we were having
difficulty getting a management plan in place at the White
House. And while Mr. Hoyer and I sparred a little bit over
that, in the end I think we both agreed that the White House
needed to have an architectural system in place before we let
those funds go.
But how does that relate to this? You have $13 million in
an account specifically to deal with this.
Mr. Lyle. The way that it relates is as follows: the ARMS
system does not stand alone. It is connected to a variety of
other systems. For example, the Lotus notes system, which is
the e-mail system, is not part of ARMS. It's connected, and
there's an interface that has to be in place. That's one
component. ARMS is part of our overall electronics management
effort within the Executive Office of the President.
There are a whole variety of servers and components to that
huge electronic e-mails management system, or communication
management systems--that interface with ARMS. It doesn't stand
by itself. When you have the funds that you need to access, to
make improvements or to correct or to repair and maintain,
there are other systems that are connected to it, that's where
you run into other problems.
That is when you have the fenced fundings issue as a
contributing factor. Those other systems that it connects to,
if they're unreliable and they're malfunctioning and they're
having difficulties processing the information, ARMS is
affected. And if ARMS is affected, you will run into glitches.
Mr. Kolbe. Mr. Lyle, I think that's just a little
disingenuous for you to say that it's because of the fencing
and----
Mr. Lyle. I'm not saying that it's solely because of the
fencing. I'm saying that it's a contributing factor.
Mr. Kolbe. I know. Solely, partly, primarily, possibly, in
some degree, because of that fencing. I think it's just a
little disingenuous to suggest that. Those funds were fenced
because we didn't believe--and ultimately I think we got
agreement with you on this--that we had an architectural plan
in place for using those funds.
If those funds had not been fenced, are you saying there
would have been no problems with the e-mail management?
Mr. Lyle. I don't believe that the Subcommittee fenced the
funds to purposely sabotage the ARMS system.
Mr. Kolbe. No, or to purposely sabotage anything in the
White House.
Mr. Lyle. The effect of what was done is what I'm
discussing. The intention and the reasons behind the fencing of
the funds were because of difficulties that had existed earlier
in the Executive Office of the President.
Mr. Kolbe. Right.
Mr. Lyle. Certainly prior to my tenure, and Mr. Lindsay's
tenure.
Mr. Kolbe. Right. I acknowledge that.
Mr. Lyle. What we have been able to do is forge the type of
partnership that we should have with the Subcommittee to
continue with our improvements.
Mr. Kolbe. And I agree. I think we're on the right track on
that. But I just----
Mr. Lyle. I understand that the intent certainly was not to
cause difficulties, but that is the effect. As a result, you
had these systems that were, as I described, in very poor
functioning condition. There were network failures; there were
eroded levels of protection; and security issues. All of these
things were occurring in the EOP, because you couldn't spend
any money to buy information technology.
REQUEST TO USE ARMSTRONG FUNDING
Mr. Kolbe. Well, again, I just would suggest that itseems
to me--I'm looking here at a letter dated March 20th in which Mr.
Lindsay is requesting us to release the last $1.7 million from the
Armstrong account. So there's been money in this account, and if it was
needed to make sure we maintained the ARMS system, we've always been
ready there to release this money and provide it for you.
Mr. Lyle. Yes, and that's why we sent the letter, because
it's an available funding source. We have a situation where we
had e-mails on our backup tapes. We need to reconstruct those
backup tapes so that we can place them back into the ARMS
system.
Mr. Kolbe. This occurred in '98, didn't it?
Mr. Lyle. It was discovered in 1998. It actually occurred
in 1996 and was effective until November of 1998, until it was
fixed.
Mr. Kolbe. So it was discovered long after the fencing of
the funds.
Mr. Lyle. It was discovered between that time, between 1996
and November of 1998. The records that were affected by the
anomaly that you're referring to, there were 526 total accounts
that were involved. The e-mails that were involved were White
House e-mails. Those are presidential records, not Federal
records. The Armstrong decision only construed and related to
Federal records.
So, in order for us to access funds from the Armstrong
account to reconstruct presidential records, we need to come to
you for permission. That was why the March 20th letter was
submitted to you. Because the Armstrong case, in which it says
in resolution of Armstrong versus the Executive Office of the
President, that was the litigation which only dealt with
Federal records. We're talking about White House records, with
four exceptions, on the account that are presidential records.
But, in any event, if we want to do a reconstruction, we need
to ask your permission, which is the safest course in terms of
what we want to do.
Mr. Kolbe. You're asking for the money for the
reconstruction two years after you discovered the glitch, the
problem?
Mr. Lyle. Yes.
Mr. Kolbe. Would you call that timely?
Y2K CRISIS
Mr. Lyle. Under the circumstances that we found ourselves
in, I believe it was. Back in November of 1998, that's when we
were looking squarely into the eyes of the Y2K crisis that I've
been talking about in the hearing. We had to make some
decisions. We had to come up with a plan, which is exactly what
we did. We had to prioritize projects. What we did as the
number one priority, pursuant to the plan, was simple: make
sure that you are Y2K compliant; all of your mission-critical
systems first, and then, after that, your mission support
systems.
This e-mail reconstruction paled in comparison to the Y2K
issue, like a variety of other projects that we had to defer.
Management deferred the Network Operation Center and the
financial management automation projects that I have been
talking about. We deferred our introduction of an intranet and
a whole host of other important information technology
projects, because our singular purpose at that time was to
bring every resource to bear to fix our Y2K problems.
Mr. Kolbe. Understandably, and----
Mr. Lyle. And we knew that we had the e-mails securely
located in the room, in the data center. We knew that they
would be there, and we knew that they would be there after the
Y2K crisis had passed. So, we made a decision to defer that
project, like we deferred a variety of other important
projects, until the Y2K crisis had passed.
Mr. Kolbe. Mr. Lyle, it wouldn't have been that difficult
for you to have at least notified the Committee, since we had
provided the money the Armstrong resolution, knowing that there
was going to need to be a substantial expenditure of funds to
reconstruct the e-mail.
Did it ever occur to the White House to notify the
Subcommittee that had jurisdiction over the funding for this
problem, that there was a problem that had occurred?
Mr. Lyle. Yes, and that's why we're coming to you now.
Mr. Kolbe. I mean in 1998.
Mr. Lyle. In 1998, the scope of the problem was difficult
to understand. We knew we had the backup tapes, so we knew we
had the data that was available on the backup tapes. We had
asked Northrup Grumman, the contractor, to provide us with a
plan on a reconstruction. They told us at the time that it
would cost somewhere on the order of $602,000 just to figure
out how to do the reconstruction.
The information technology professionals that work in the
Office of Administration said that we're not sure that that is
a sensible way to proceed. We need to look at this, but we
can't at this stage because we have to focus on Y2K.
So we said we would defer it, and I asked my information
technology staff, after we had done that, to reevaluate the
situation--and this is on my watch now--in the February time
frame. In January I was the Acting Director, and now I'm the
Director, in February of this year.
Once we had the Y2K problems behind us, our information
technology staff could tackle the problem. As it turns out, my
information technology staff spent time, in the January and
February time frame, looking at this issue. We were able to
save ourselves $602,000 because they figured out a way to fix
it themselves.
The reason we're coming before the subcommittee now is that
we have done what we should do. We have come out with cost
assessments and we have asked our information technology people
to put together a plan of reconstruction that we can pass on to
contractors, for them to give us proposals for the costs
associated with a reconstruction. Once I had that, I could come
to you and say to you, ``I have a request for money of a
particular amount to try and tackle this problem.''
The first questions I think you would ask, appropriately,
would be: ``Have you done a cost assessment? Have you done an
analysis? Can the $602,000 be saved? Do you really need to do
that?'' Those are the questions we wanted to be able to answer.
We are in that position today, and that's why we have asked for
the money.
Mr. Kolbe. Mr. Lyle, I have a whole series of other
questions that I'm going to submit, specific questions about
where we are with the fix and how many messages were effected,
and we will submit all those questions for the record.
But I do have to say that I'm disappointed with your
answers, because you have said here, just in response to my
question, that your first priority was Y2K. I understand that
you needed to deal with that.
But in response to another question, you said it was
because this Subcommittee fenced the money. That was at amuch
earlier time, not before the Y2K issue came up. So I think you're
trying to have it both ways, to say that we fenced the money and caused
the problem, and we had the Y2K issue, and that was really the cause of
the problem. I just think you're not being entirely forthright with us
here. I have to tell you that.
Mr. Lyle. I'm endeavoring, sir, to be as forthright as I
can.
Mr. Kolbe. Mr. Hoyer, do you have other questions?
Mr. Hoyer. I would just ask one question.
Am I correct, that what you are saying is that, because the
Y2K problem was a priority problem, you had to deploy all the
resources available to you at that time to confront it, so that
we did not come up with the time, particularly with mission
critical systems that were unable to cope with the Y2K
transfer; and that as a result of using all your resources
there, and the fact that fencing occurred, you did not have
additional resources at that point in time to maintain or to
upgrade systems that were necessary to deal with the ARMS
question?
Mr. Lyle. Yes. The fencing of the funds was a contributing
cause to the difficulties that we were having.
Mr. Hoyer. Thank you, Mr. Chairman.
Before we close, let me say, Mr. Lyle, that I think your
presentation has been excellent, very straightforward, and I
congratulate you for the job you're doing.
I might say that the Chairman and I have both been
concerned by the gaps that exist in payments. We dealt with
this, as you probably recall--and it wasn't on your watch--with
respect to activities that went on in the White House, and then
organizations simply didn't pay. In fact, what the taxpayer, in
effect, was doing was giving a loan to good organizations--I
think we weren't critical of them for having events in the
White House--but that simply didn't pay their bills on time.
The chairman and the staff were critical of that, and I shared
their view. That has been fixed, to a large extent, and I
congratulate the White House for doing that.
I think Mr. Peterson raised a question. I think the public
does deserve to know what's going on. It's their money. I think
you're following, as I have indicated, procedures which are
time-honored. The situation is different because the First Lady
is a candidate. But she's not different to the extent that she
is the First Lady and she travels, and we're treating that
travel the same as we treat, as I understand it, any other
travel that a First Lady undertook.
But to the extent that we facilitate the disclosure of
information on a timely basis, I think we will dissipate some
of the controversy that might exist and, frankly, be able to
respond to the use of such information for political purposes,
by whoever wants to use that, much more effectively.
Mr. Chairman, thank you very much.
Mr. Kolbe. Thank you.
Mr. Lyle, let me amend my earlier remark to say, rather
than I don't think you're being candid, I think you have tried
to be candid. But I don't think you're being fair, in my
opinion, to try to blame both the Y2K and the fencing issue
simultaneously for the e-mail problem.
With that, let me say thank you for your appearance here
today. We appreciate your testimony. The Subcommittee will
stand adjourned.
Thursday, March 23, 2000.
OFFICE OF NATIONAL DRUG CONTROL POLICY
WITNESS
BARRY R. McCAFFREY, DIRECTOR
Mr. Kolbe. The Subcommittee on Treasury, Postal Service and
General Government will come to order this morning.
We are very pleased this morning to welcome General Barry
McCaffrey, the Director of the Office of National Drug Control
Policy, as he testifies on his 2001 request for the ONDCP
office, as well as the National Drug Control budget, the entire
budget for all the areas that deal with drugs.
Director, I congratulate you as you begin your fifth year
as Director of this agency, and you have been our most visible
spokesman against the danger that drug use poses to our
children, our institutions, national and international
security. In Aldous Huxley's nightmarish novel, ``Brave New
World,'' the Government provided its citizens with a fictitious
drug called ``soma'' to control them. Of course, what we try to
do, the reality of today is the opposite: We aim to free people
from the tyranny of drugs and the criminal organizations that
profit from them. And, yet, for all of that, drugs seem as
prevalent here as in Huxley's dark vision. After tens of
billions of dollars and untold human efforts, we still seem to
be running hard just to stay put.
On the domestic side, emergency room mentions of heroin and
cocaine use have grown 100 percent since 1990, while those for
ecstasy are absolutely off the charts. Drug induced deaths have
risen by 60 percent, prices for cocaine and heroin are down and
purity remains at record levels. Seizures of ecstasy and
methamphetamine labs have risen dramatically and youth drug use
rates--while not growing as rapidly as in recent years--are
higher for the ``any drug use'' category, for all age groups
covered in the 1999 Monitoring the Future Study, that you have
done. When Americans spend $63 billion a year to buy illicit
drugs, we have to question what dents we have made in this
plague.
On the international side, the story is also a grim one.
Initial successes in Peru and Bolivia have been offset by a
disaster in Colombia, one that you have been very much in the
forefront of challenging the American people to deal with. It
may be worsening again in the other countries. We are
considering enormous supplemental funding to address what has
become a perpetual crisis. It is not only cocaine, of course,
that poses a security threat. It is reported that Osama Bin
Laden and other terrorists financed their campaigns against the
U.S. using the proceeds from heroin grown in Afghanistan and in
other places.
We have thirteen different subcommittees that review the
crazy quilt of Federal drug programs but you and OMB have to
get your arms around the combined budget of a size that begs
comparison. The $19.2 billion--that is your figure for the
total drug program--exceeds the entire payroll of the U.S. Navy
or the U.S. Air Force; it exceeds the entire Federal civilian
R&D program; it is 50 percent larger than the
entirediscretionary appropriation for this particular subcommittee.
This Federal drug budget comprises everything from foreign aid to Coast
Guard cutters to Customs inspectors, prisons, hospitals, schools,
universities. And it sometimes seems like we are off-kilter in that
budget. While it supports changing Customs approaches to fast boat
trafficking, there is nothing that is going to Customs' marine program,
and that is the principal defense against smuggling along our
coastline. With trade doubling in five years, no technology investment
has been made since 1999 to deal with the rapid growth of cargo and
passengers crossing our borders. And as for sea ports, a major vector
for drug smuggling, there is no word of action yet from the
Administration's Port Security Study.
On top of this, General, you are responsible for ONDCP's
half billion dollar program that ranges from R&D and technology
aid, to intelligence, the HIDTAs, the youth media campaign,
community coalitions, and a demonstration treatment project for
prisoners that you will discuss in more detail this morning.
Last year, you requested additional staff to meet some of your
rising work load and Congress agreed with your priorities but
not with the additional staff. Based on your priorities and
with an eye to reducing overhead costs when program management
is critical, Congress directed that the new positions should
come from Office of National Drug Control Policy overhead.
I am concerned that in your realignment you apparently seem
to disregard at least to some extent those directions and I
will have some questions about that this morning.
General, I fervently hope that we are going to succeed in
our efforts, during your tenure, to give a true, as you know, a
left-hook to our drug problems. I am encouraged by your
commitment to getting measurable results through initiatives
such as the performance measures of effectiveness and hope that
these measures of effectiveness can be developed and assessed
to bring accountability to the Government's wide-ranging and
sometimes uncoordinated efforts to end drug use--even if the
news that we get from that is sometimes unpleasant, sometimes
unwelcome.
This will help us to do our job better by focusing our
scarce resources on policies and programs that really produce
results. So, I commend your dedication to new efforts such as
the Youth Media Campaign. I think we all have high hopes and
expectations that it will bear some fruit over the course of
the years. I especially support your campaign against the
disingenuous and I think very often dishonest efforts of some
who seek to legalize and normalize the use of illicit and
dangerous drugs and other substances that are so destructive to
our society.
We may sometimes disagree on tactics and details, but we
are unanimous, we are here together this morning, unanimous in
our desire to use every means at our disposal to stop the
production, trafficking and ultimately the use of drugs. And I
think if we all keep our mind on that goal, we will have a
greater success.
Let me recognize my very distinguished ranking minority
member and my good friend, Steny Hoyer, for comments he might
have before we take your statement, General.
Mr. Hoyer. Thank you, Mr. Chairman, and General, I want to
welcome you to the Committee again.
I continue to be impressed with the job that you and ONDCP
are doing to coordinate this Administration's needed anti-drug
program. I think you have one of the toughest jobs in the
Government. I also think you have one of the jobs in which the
American public have the highest expectations and hopes.
I look forward to hearing your testimony today regarding
your almost half a billion dollar budget request and your
update on the National Drug Control Strategy, which I see we
have here on our desk.
General, we are all too familiar with the heinous effects
drugs can have and are having in many places in our society.
The Federal Government is now spending approximately $19
billion per year to ensure that society is protected from the
devastation that illegal drugs inflict upon our children,
adults and families and in our work places.
The ONDCP has a daunting task, indeed, General. You are not
inexperienced in daunting tasks, however, which is, of course,
why the President chose you. The bottom line is that too many
Americans are being arrested for illegal drug use, too many
Americans are using drugs to their detriment, too many
communities are drug infested.
In your written testimony you mention that 1.6 million
Americans were arrested for drug-law violations in 1998. That
was down slightly but still, obviously, way, way, way too high
and we, therefore, need to do more. I also think too many
Americans, General, are forgotten when it comes to receiving
treatment for drug use. Clearly, one of the reasons demand
remains high is because recidivism to the extent of continuing
ongoing drug use of abusers remains high.
Recent estimates from organizations such as the National
Household Survey on Drug Abuse and the Uniform Facility Data
Set, concluded that roughly 5 million drug users needed
immediate treatment in 1998, while only 2.1 million received
it; approximately 40 percent. What that means, therefore, is
that 60 percent of those who are addicts remain untreated and,
therefore, remain as high-demand centers spending perhaps money
they have but more frequently stealing money that is others to
feed their habit.
We know that treatment works. I think you make that message
clear. Some people don't believe that but the fact is treatment
does work. We need to ensure that those who need it, receive
it.
I know that you are a big supporter of treatment, General,
and you have talked about it a lot. You supported programs for
drug abusers and I look forward to hearing more about the
status of drug treatment as a part of our national strategy.
Let me also mention, if I might, General, a few words about
the HIDTAs, the High Intensity Drug Trafficking Areas. That
program started out in five areas, then a sixth was added
shortly thereafter and has now been expanded to many areas of
our country. As you know, I am an enthusiastic supporter of the
HIDTAs. The HIDTAs not only put money into areas but they do
what your principle job is and your principle job, as I see it
and I think you see it, is to coordinate efforts that are being
made in many different areas and by many different agencies of
Government to make sure that we are maximizing the
effectiveness of that $19 billion. HIDTAs are doing the same
thing. As a matter of fact, my local law enforcement officials
believe that HIDTA's major contribution is facilitating
cooperationbetween Federal, State and local law enforcement.
In addition, as you know, the University of Maryland is
involved in our local HIDTA, in the treatment component that is
associated with our local HIDTA. I want to point out to you
that we have had a local success story.
I don't know that I have talked to you about it personally
and I don't know whether you saw in on the media, but as you
recall we put a half a million dollars, $500,000, into the
local HIDTA in the supplemental last year. That $500,000 was
put into a cross-border initiative between the District of
Columbia and Maryland and has just recently resulted in the
largest drug seizure that any of our law enforcement officials
can remember which resulted as a direct result from HIDTA
activity. And that resulted in a $8 million value seizure of
cocaine, which if converted into crack would have been a $30
million street value; $547,000 in cash from these dealers; and
over 15 high-powered weapons and high-capacity clips for those
weapons which, obviously, visited great damage to our
community.
General, the American people, as I said, have great and
high expectations for what you are doing, and the job that you
have. You are not unused to being in such positions. We have
confidence in you and look forward to hearing from you and look
forward to working with you to make America a more drug-free
country and our communities much safer places and much
healthier places.
Thank you, Mr. Chairman.
Mr. Kolbe. Thank you very much.
General, as always, your full statement can be placed in
the record if you would like to summarize that and, so, that we
can get to questions for the members of the Subcommittee, let
me just say I understand that about 10 minutes from now there
will be a general vote and, so, we will go as long as we can,
we will break and then we will resume as quickly as possible.
General McCaffrey.
General McCaffrey. Mr. Chairman, thank you for the
opportunity to come over here and lay out what we are doing and
seek your own advice and guidance. I thank both of you quite
sincerely for your leadership and the energy you have brought
to bear in this process. I personally believe that we are
better off today by far because of what the two of you and this
Committee have done.
You put real resources to work. I am going to walk through
them point-by-point, but at the end of the day $496 million
directly out of this Committee is having an enormous impact on
drug abuse in America and its consequences.
I also appreciated the opportunity, when I come to this
Committee, to use this as the only body I have to talk to the
overall drug problem, which is nine appropriations bills, 14
Cabinet Officers, and $19.2 billion. I very much appreciate the
chance to lay out on the record some oversight comments.
As usual, I am very grateful to be joined at this hearing
today by the team that actually is making the difference.
Behind me are the representatives of literally more than 100
million people who are actively involved in this effort. I
start with arguably the most important: Art Dean, from the
Community Anti-Drug Coalitions of America and Sue Thau. Four
years ago we had about 4,000 community coalitions and they were
doing well, but today there are more than 5,000 and there are
an additional 213 that you funded in the Drug Free Communities
Act. It is moving in the right direction.
Dr. Linda Wolf Jones is here from Therapeutic Communities
of America. As Congressman Hoyer mentioned, we have 5 million
chronic addicts. We simply have got to organize effective drug
treatment for those people. Kathleen Sheehan is here from
NASADAD; Jim McGivney is here from DARE, the biggest anti-drug
prevention program in the country with 26 million kids, 9
million overseas, a science-based program that I think is
paying off. Sarah Kayson from NCADD; Katherine Wingfield from
the National Drug Prevention Network; Liz Carter from the YMCA.
People ask me about drug prevention: it is the Boys and Girls
Clubs, the YMCA, the Junior ROTC, community coalition activity.
Dick Bonnette, of the Partnership for a Drug Free America
is here. They are the co-equal partner in designing what is
arguably one of the most sophisticated public health campaigns
in the nation's history and I thank he and Jim Burke for their
leadership.
Donna Feiner is here from the Ad Council. I am going to
show one of their tapes. At the end of the day it is that pro
bono match, it is the law that said I have to produce at least
100 percent match and the Ad Council is the one brokering most
of this public work. We are going to talk about what they are
trying to achieve.
Tom Carr is here from the Baltimore-Washington HIDTA,
representing the 31 HIDTAs and the $192 million program which
has been so well received around the country. Finally, we have
Judge Jeff Tauber here from the Drug Court Institute. I think
they have done a brilliant piece of work. Five years ago there
were a dozen drug courts. Today, as we are sitting here, there
are about 700 either on-line or coming on-line. This concept is
now becoming institutionalized and documented. He has training
systems. It also seems to be spreading in the international
community. I thank all of them for their leadership.
I welcome the chance to put into the record our written
statement. We have put a tremendous amount of effort into that
as well as some of the associated materials that we have.
Mr. Kolbe. It will be placed in the record.
General McCaffrey. Mr. Chairman, if I may, I am going to
just hold up some documents so that you see them. There are 154
of us in ONDCP. We are literally a sixth of 1 percent of the
national counter drug budget [Clerk's note.--Agency amends this
to refer to a tenth of a percent.] Many of us are working 18
hour days, 7 days a week. What you have gotten out of us is
primarily conceptual organization at the local, State and
Federal level.
We have also tried to act as the quarterback for the
resources of the 9 appropriations bills. We are releasing today
to your Committee, with the permission of the President--this
is the forum we elected--the first annual drug report which was
mandated by Congress. We said we were going to have a long-term
strategy which we would adjust as the environment changes. Each
year whoever is in my position would come down here and explain
what we allege we have achieved with the resources you
entrusted us with. This is the first such report and we think
that there is some good news and it also articulates some of
the concerns that you have already laid out in your opening
remarks.
Mr. Kolbe. It will.
General McCaffrey. We have also produced the third annual
five-year ``Budget Summary.'' The document is getting better.
It is starting to reflect the intellectual underpinnings that
are in the ``Strategy.'' We are moving in the right direction.
We state that we have a 52 percent increase in prevention
funding since fiscal year 1996 in this document. There is a 32
percent increase in treatment dollars. Those are the facts.
Thanks to bipartisan support in Congress, this budget is moving
in the right direction.
We also have the 2000 ``Annual Report on Performance
Measures of Effectiveness.'' Over time, it seems to us, we must
be able to tell you in concrete terms what are we achieving. We
have 12 target outcomes, we have 87 intervening variables. We
are trying to measure where we are going, what we are actually
doing in reducing drug abuse in America.
Dr. Al Brandenstein has his 2000 ``Annual Report on
Counter-Drug Research and Development Update.'' We have some
organization. NIDA, NIH does an A-plus job organizing the kinds
of research they do. But we have tried to pull together the
interagency approach: Who else is doing research, and producing
technology that assists in the drug effort. That is our update.
What we have not yet completed for the year 2000 is the
classified annex to the ``National Drug Strategy.'' Probably in
April, we will have the update for 2000 done. It is going to be
even more useful than the one produced in 1999. It is an
attempt to give the intelligence communities, the Departments
of Defense, Treasury, and Justice, law enforcement-sensitive
guidance on how their actions relate to the overall strategy
and we are asking them to participate in designing it. Once it
goes to the President it is their justification for programs
and budgets.
Finally, at long last, I am proud, Mr. Chairman, to tell
you we have the General Counter-Drug Intelligence Plan done. We
ended up with nine Cabinet Officers--maybe it is the first and
last time in history it ever happened--wrote their name one
document and said, we agree, here is how we will pull together
all the information in the Federal Government to better support
the counter-drug mission. Primarily, to be blunt, that means
how do we better support domestic law enforcement.
We were always pretty well organized and getting more so in
the international community with George Tenet being essentially
the quarterback of that effort, but we had some very complex
things to sort through to try to ensure that we comply with and
are respectful of Federal law but we still get sheriffs and
police chiefs and border patrol sector commanders and Customs
inspectors intelligence in a timely manner to confront drug
crime.
That is really the centerpiece of the planning
organizational effort that ONDCP has done. I have some brief
slides, Mr. Chairman, if I may run through them and I have one
video that is really a treat to see.
There is the ``report.'' We went on ABC and CBS this
morning to make sure they heard I would table it to your
Committee this morning. Behind it, obviously, is the
``Strategy'' and we keep going back to this. There cannot be
brownian molecular movement in the drug effort. There has to be
five goals, 31 objectives, and agencies have to explain to me
how what they are doing contributes to that. Then they have to
have some data collection so they can demonstrate that what
they are doing makes a difference.
Arguably the heart and soul of our strategy is bullet
number one: Educate and enable America's youth to reject
illegal drugs, as well as alcohol and tobacco. I will talk
about how your media campaign is contributing to under-age
drinking reduction.
Next chart. Just a quick point. It almost does not need to
be made. But sometimes I have to remind people that drugs are
related to crime. And it is not just the obvious percentage of
male arrestees who test positive for a drug. In 1998 in cities
across America, DAWN data, DUF data, in hospital rooms it is
related to illness. It is also data that is pretty conclusive
that says, if you are an adolescent smoking pot, you are
extremely likely to be involved in dysfunctional behavior, to
include criminal behavior. We say that drugs relate to other
malignant human activity; when you take away the drugs things
get better.
Next chart. Mr. Chairman, I think it needs to be
underscored that when you put resources to work intelligently
you should expect to get a payoff and you have put more
resources to work. I have been privileged to work with you,
essentially from fiscal year 1996 on. There have been
substantial increases in prevention, education, treatment,
domestic law enforcement and the international arena. I think I
can give you the arguments on why that is starting to make a
tremendous payoff.
Next chart. Our budget is just under a half billion
dollars, and I think, makes a tremendous contribution. I hate
to get down in the weeds. I will occasionally make a couple of
plugs as we go through this of things that I would ask for your
consideration. The Special Forfeiture Fund, which I regret is
the name of it, bags up those programs at the bottom. I have a
chart that talks to each one. That is an accounting measure
that I will never understand why we do it this way but that The
Fund contains the National Youth, the Anti-Drug Media Campaign,
The Drug Free Communities Program, the National Drug Court
Institute, General Counter-Drug Intelligence Plan and the $25
million Criminal Justice Treatment Demonstration Program.
Then we will also talk to HIDTAs. To the 154 people who
work with us I am asking for one additional slot to work on
this Counter-drug Intelligence Secretariat. Finally, I will
speak to a very important program that you are well aware of,
CTAC, and the equipment and technology transfer that we are
doing.
Next chart. We are going to be fully staffed-up this year.
I would respectfully ask your consideration on full funding on
Salaries and Expenses. We are going to be right up to our FTE
ceiling and now we have basically no flexibility.
The Media Campaign, if you would allow me to just table a
concern. We are worried about expenses. We had a 40 percent
increase in the cost of advertising in the network television
industry in the last several years since we did our planning
figures. If you look over two-and-a-half year span, we are a
little over $300 million and there is a total of literally a
couple of hundred billion worth of advertising. These costs are
having an impact on us.
Thankfully, because of Partnership for a Drug-Free America,
we are insulated from much of it. We are not paying actors'
fees; we are paying only production costs. Then you have the
match component which gives us huge leverage. But we are
concerned that we get full funding on$195 million, primarily
because we don't want to see our presence, our reach, affected in
advertising.
But, Mr. Chairman, it is working. We are out there right
now talking essentially eight times per week to 95 percent of
the target audience. They hear the message; it is believed to
be credible. They phone in to the Drug Clearinghouse, the 1-800
numbers. We are beginning to get our ethnic outreach put
together, 11 foreign languages, Native American dialects,
Chinese, Vietnamese, Korean, and Spanish. Obviously, 16 million
of us listen to media on radio or TV in Spanish.
We have ethnic home pages and, obviously, most of them are
in English, but we now have one in Spanish. We are putting
together ones in Vietnamese, Korean, and Chinese. We are really
getting that communication effort focused. And youth attitudes
are starting to change. PDFA has some pretty decent evidence
that it is already starting to pay off. Kids who are really
cool don't use drugs. In my school, marijuana users are not
popular.
This is the kind of data--by the way, Westat Corporation
has a $9.5 million formal evaluation of this, so, we have
scientifically credible data. We think it is absolutely
affecting youth attitudes in America. And as we suggest, if you
want to see chronic abuse in America 10 years from now, watch
the middle school kids. That is what your program is talking
to.
Next chart. Let me, if I can, show a video----
Mr. Kolbe. General, I think that we are going to have to
hold that. How long is the video?
General McCaffrey. Four minutes.
Mr. Kolbe. Yes. We are going to have to hold that and we
will go vote and we will finish your statement and begin with
questions as soon as we get back here.
General McCaffrey. Okay.
[Recess.]
Mr. Kolbe. The Subcommittee will resume. We have
approximately one hour until the next vote, so, we are going to
see, because of our time, if we can't get it done before noon
here as much testimony and questions as possible, because I
don't think it is to be possible to come back again.
General, as rapidly as possible, then we will get to
questions.
General McCaffrey. I do appreciate the chance to lay these
things out. We have been working on this hearing for a couple
of weeks. It is unbelievable the complexity of the issues. We
are really proud to be able to lay them out. Just a few more
charts. On the High Intensity Drug Trafficking Areas Program:
$192 million. It has gone up, as you know, dramatically. I
think Congressman Hoyer's notion that it is coordination is the
heart and soul of it.
One of the challenges that I think the Committee needs to
think about is we now have 31 HIDTAs. I have six new
applications active. I have eight expansions active. I have a
bunch more who have seen me, including in one case, an entire
State's Congressional Delegation, plus the governor and they
made a good argument. I think this is politically attractive.
One of the challenges you and I will have is I would argue
the law makes sense where you ask me to use discretionary
management authority to allocate money. That you let me
recommend which HIDTAs should be articulated and then move
money as we have successes or failures.
I am in a little bit of a difficult situation in that the
law in the last couple of years has said, continue funding at
exactly last year's level. So, really there is no flexibility.
Over time I think that the program is going to have trouble if
we don't change that.
I would ask for your consideration to let me run this
program with your oversight.
Next chart. Drug Free Communities Program, we have a
crackerjack person, thank God we hired, to run this. It is
really starting to come on board. Lots of people around the
country are involved in this. Just look at the 213 coalitions
in 45 states. We will use that significantly this coming year.
I think you will see us end up with more than 400 community
coalitions by the time the next grants are awarded.
We have a good evaluation going. Interim reports are in,
that I could discuss in greater detail, and are saying this is
paying off. We are getting young people involved and we are
getting more people to join the coalitions. We are getting a
lot of them into the rural communities and small towns. We are
very carefully focused on ensuring we address Native American
populations and especially vulnerable populations. I think it
is moving in the right direction.
Next chart. I think there are some tremendous payoffs,
potentially, Mr. Chairman, out of this. Janet Reno, Donna
Shalala and I brought together more than 800 officials from
around America. We called it a National Assembly on Drug
Treatment and the Criminal Offender. There are 200 million of
us currently behind bars. Columbia University data would argue
as many as 85 percent of them have a chronic poly-drug abuse
problem, alcohol and drugs. If we don't get them into
treatment, if we don't provide a drug-free prison environment,
if we don't have a follow-on program we can't break this cycle
of crime and addiction. That $25 million will give us 15
demonstration areas to do just that and will provide a modest
amount of money to evaluate it and then study how we can spin
these lessons off to others. I would ask you to look at that
and I think there is a great benefit potentially out of that
program.
Mr. Kolbe. Director, how many? You said 200 million.
General McCaffrey. Excuse me, two million.
Mr. Kolbe. I thought that was so.
General McCaffrey. Yes, two million people of which
probably 85 percent are poly-drug abuse problems: Alcohol and
other drugs.
Mr. Hoyer. How many on the latter?
General McCaffrey. Pick a study. It ranges from a low of 50
percent to a high of 85 percent. Personally, when I listen to
faith leaders who work with the lifers, they will tell you it
is 100 percent of them. Clearly the dominant reason why you
will end up behind bars is you started using drugs as at
teenager and ended up with an alcohol and heroin problem, or
pick any other combination, by age 30 you will have been
arrested 100 times and you will end up serving time. If we
don't do something about you, if we let you go--and we let a
half million prisoners go a year--and if we send you back to
Baltimore with no drug treatment or follow-on, you go right
back to using drugs. Recidivism rates are astonishing.
If you participate in drug treatment, the recidivism rate
drops dramatically. You have given us funds through the
Department of Justice to deal with that, something calledBreak
the Cycle. We are now in five demonstration areas. We started in
Birmingham, Alabama. We no longer have Birmingham, Alabama, trying to
build a new county jail. They have dropped the prisoner population from
something like 1,100 back to 900 because of the program. I think from a
taxpayer argument it works.
Next chart. The Counterdrug Technology Assessment Center is
doing a tremendous piece of work. That is a very modest
request, that $20 million. Arguably it should be higher. A lot
of good comes out of it. We have transferred over 1,000 items
of equipment just in the past two years. There are 18 different
programs where we are transferring equipment. Law enforcement
is grateful, is using it, and can document the payoff. So, I
think Dr. Brandenstein's research program and the technology
transfer are helping the American people.
Next chart. The Counterdrug Intelligence Plan, essentially
George Tenet, Janet Reno and I pulled this together in a year-
and-a-half of work. We studied the worldwide information
systems and how intelligence impacts on the drug issues. We
complied with the law and we are establishing a secretariat, a
small one, about 30 people. We will have priorities and
taskings and an established structure that looks like the NSC
process. I think this is going to work and I would ask you for
one FTE and $3 million to get this thing going in 2001.
Next chart. This is a surprising success, Mr. Chairman. I
have a team right now in Lausanne, Switzerland, Dr. Don Vereen,
my Deputy, Rob Housman and others. We have been working the
athletic piece, coaches and young people and doping for a
couple of years in a serious way. The U.S. Olympic Committee
has been a big help to us. They have established their own
independent drug testing agency. Initially it will, of course,
be Olympic sports, also NCAA, and I think you will see
professional athletes who wish to compete in the Olympics drawn
into it. We will set national standards. We have to worry about
it, not just because of a elite athletes. We had a half million
kids using steroids the last time we had accurate data. For the
first time ever, we have more girls than boys using steriods.
We are not talking college basketball, we are talking Little
League baseball, high school swimming et cetera. I would ask
you for that modest amount of money.
I would like to show a tape to the Committee, Mr. Chairman,
if you could roll it. It is in three different segments and I
will talk to you about its significance.
The first is four of the new public service ads that come
out of PDFA and our contractors.
[Video tape shown.]
General McCaffrey. That shows you some of the television
work. Obviously, it goes beyond that. We are on radios. I
mentioned the five Internet home pages. Print media is very
heavily involved in it. You will see in May a Road Block, the
first ever in a public health campaign. 90 million Americans,
through 61 publications that month will see a coordinated anti-
drug campaign. It will be both paid material and also
advertorials done by, in a matching sense, magazines. We are
very excited about that.
Two other things you should be aware of, Mr. Chairman. We
are now in the final stages of finishing up new statements on
National Youth Anti-Drug Media Campaign Pro Bono Match Program
and Guidelines. Both for Ad Council and the creative industry,
this will be the published document. We will put it in the
Federal Register. We are going to consult with the industry and
make sure they get their fingerprints on it and feel
comfortable with it. We will have this out and send it down to
Congress for your review.
We also have in the final stages of a corporate sponsorship
and participation plan which you expect from us, correctly, on
the National Youth Anti-Drug Media Campaign. The chart that I
put in front of each of you talks about not just our 108
percent match which we have achieved, which we are delighted
with, but also the $72 millions we have got from in-kind
support by industry.
Mr. Chairman, that is a quick overview and I look forward
to responding to your questions.
Mr. Kolbe. Thank you very much, General McCaffrey and we
appreciate getting that overview.
We are going to start the questioning, and let me just say
that I will be hard on myself and all of you on trying to keep
the time limit because I think the vote which we are going to
have will have to end the hearing this morning.
So, we will stick to the five-minute rule here. Let me just
begin with some practical questions about the budget here and I
alluded in my opening remarks to the concerns we have about the
number of FTEs and where they had come from this last year.
Of the 124 permanent FTEs that you have authorized, how
many are now in place?
General McCaffrey. I better provide that for the record.
The bottom line is we are essentially fully staffed. There may
be some shortfalls in military detailees, but----
Mr. Kolbe. No, no. I don't mean detailees. I mean FTEs.
General McCaffrey. Right.
Mr. Kolbe. I think your chart at the end of February showed
you had 115 on board out of 124.
General McCaffrey. I think given the new hires who are
coming in, my personnel people before I came over here told me
that we will be at full capacity this year.
Mr. Kolbe. Okay. You had 117 at the beginning of January of
last year and you dropped down to at the end of this fiscal
year to 107 and you have come back up. So, you are back where
you were essentially before. But it has apparently taken some
effort.
I notice you have a total of 44 separations and 44 arrivals
during the course of these 13 months. And that means a turnover
of a third. I don't know, just in a professional organization
like that, does that concern you?
General McCaffrey. I do not know if that includes the
military people.
Mr. Kolbe. No. This is just FTEs.
General McCaffrey. They come and go.
Mr. Kolbe. This is just FTEs.
General McCaffrey. We are a small agency and we have had a
huge promotion rate, which I suppose is attractive. We have
very little capacity to, increase people's pay grades. I think
that is primarily what has happened.
We have very few people that have been fired in four years.
Primarily people will leave when they get increased
opportunities, which we encourage.
Mr. Kolbe. Well, obviously, you want them to have increased
opportunities but as I said, it would concern me alittle bit in
a professional organization like this that consists of high
professionals that you have a one-third turnover in a year.
Let me ask about the FTEs last year. You asked for four
additional FTEs; two for the ONDCP budget office, two for the
HIDTA program office. But since you hadn't been able to fully
utilize the FTEs, the appropriation bill didn't really give you
more and instead directed you to realign within existing FTEs.
In fact, we were fairly specific in directing that you take
them from ONDCP's overhead office, as public affairs,
legislative affairs and directors offices. Only two of those
actually were realigned as directed. I think one from public
affairs and one from legislative affairs.
And then the other two----
General McCaffrey. I think there are three. I think there
is one from public affairs, one from legislative affairs and--
--
Mr. Kolbe. Well, you took two out of State and local
programs. But that wasn't what we had said to do.
General McCaffrey. We already had things in movement when
that hearing took place. But we----
Mr. Kolbe. When the law went into effect?
General McCaffrey. Right. Where it came out was we do have
two more in BSLA [Clerks Note.--Bureau of State and Local
Affairs.], two more in Financial Management. I believe one came
from my office, one from public affairs, one from legislative
affairs and one from some place else.
That is where it came out.
Mr. Kolbe. Okay.
General McCaffrey. We ended up essentially getting the
enhancements in place. We have completed that.
Mr. Kolbe. Okay.
General McCaffrey. We are asking for an additional FTE for
the General Counter Drug Intelligence Plan, one FTE, and full
support for ONDCP's alaries expenses account.
Mr. Kolbe. General, let me switch gears here. Last year,
Congress provided--in fact, in the last three years, I think it
is, fiscal years, Congress provided about $13 million for the
CTAC program, the Counter Drug Technology Assessment Center for
the transfer of technologies being developed under the auspices
of the State and local enforcement agencies.
In fact, you alluded to this on the chart there. You said
that this may be low; maybe we need more. You have only
requested $3.7 million for this transfer program. I have to
tell you it is popular among members, and I think it is
enormously successful. Last year you responded on the record
that you expected the fiscal year 1999 request to exceed the
supply by $25 million. In other words, more than the $13
million, more than double or almost double the $13 million that
was being provided.
And isn't it true that those requests for technology
transfers are rising even more rapidly?
General McCaffrey. Mr. Chairman, I made what we thought was
a pretty compelling argument to OMB. We are obviously part of
the Government operating within balanced budget guidelines.
Mr. Kolbe. I understand. That is what I am trying to get
it. It was--you did ask for more and OMB----
General McCaffrey. Absolutely. I think this----
Mr. Kolbe. Do you have any idea why they thought this
program was----
General McCaffrey. I do not really think there is any
argument against the program. I do not believe that is it. I
think they have tough choices to make on tradeoffs, but we have
good evaluation and tremendous feedback from real life law
enforcement around America on this.
Mr. Kolbe. Last question, to stay within my time. How much
would you need in order to meet unfulfilled requests that exist
at present?
General McCaffrey. Mr. Chairman, I could give you the
argument we presented to OMB. Essentially we went after $20
million.
Mr. Kolbe. Okay. Thank you very much.
Mr. Hoyer.
Mr. Hoyer. And that was a $5 million reduction from the
previous year.
General McCaffrey. It is hard to keep track of this. What
has happened is that we request a level, you enact a higher
level--if you look at what we have requested, the request has
been going up for four years. But it bares no relationship. It
is way under what you enact.
This is a good program that I am proud to support.
Mr. Kolbe. Good. I am glad to hear that because both the
Chairman and I, I think, share the view that it is a very
effective program.
Let me ask you, General, I mentioned in my statement about
treatment. And I think you agree that treatment is a very
important component. Dr. Allen Leshner, Director of NIDA,
recently testified that treating drug users while under
criminal justice control, dramatically reduces recidivism,
which you discussed also; that is both later drug use and later
criminality by 50 to 70 percent. That is Dr. Leshner.
General McCaffrey. Right.
Mr. Hoyer. Now, if that is the case, let me ask you
something, to relate that to the $1.7 billion request for
assistance to Colombia. As you know, part of the debate in the
Appropriations Committee when we marked up that supplemental
was about treatment and the treatment component. However, not a
great deal, if any, in that particular request was made for
treatment. Can you comment on that?
General McCaffrey. First of all, I think that you are
entirely correct. The treatment component may be, at the end of
the day, the biggest payoff we have. But you have these two
million people behind bars. If you effectively engage them in
drug treatment, crime goes down in America, as will health
costs, welfare costs, and general misery. It is a huge payoff.
Donna Shalala, in the budget we sent you, put $3.15 billion
in treatment. If you look back over the five budget years,
there is a 32 percent increase. And that is not taking into
account the other related Department of Justice and Education
programs that are prevention-based, which are up 52 percent.
So, I think we have put our money where there's strategy.
I would argue the Andean Ridge Plan, I would argue is also
critical but it is noncompetitive. We have a huge problem with
Colombia. There are 38 million people, most of them have
nothing to do with drugs; a million internal refugees; a half
million of them have fled the country in the last two years.
They have lost probably a third to a half of the land area of
the country to their own sovereign control. Peru and Bolivia
used to be number one and number two on cocaine production and
now cut the rug out from under drug production. It is an
unbelievable success. Peru is down by 66 percent; Bolivia by55
percent. If you look at Colombia, it is a disaster.
We have argued that we have to stand with a democratic
regime, we have money in that request that goes to Peru and
Bolivia, Ecuador, Venezuela, and probably Panama. 85 percent of
it goes to Colombia; half of that is a mobility package. It is
63 helicopters to get the police and the armed forces of
Colombia into the Southern two provinces and cut down the
drugs, which have gone up 140 percent in two years.
If you are in downtown Baltimore with cocaine and heroin
problems, we should be aware that essentially 90 percent of the
cocaine in America originated in Colombia or came through it.
And over 70 percent of the DEA/Customs seizures last year were
Colombian heroin, which is skyrocketing also. I think that is a
sound program and I think that Congress needs to give it its
support.
Mr. Hoyer. Let me ask you about HIDTA. Of the HIDTA dollars
that we are spending how much, what percentage, or how many
dollars are being spent on prevention?
Do you know, off the top of your head?
General McCaffrey. I do not. It depends on the HIDTA. In
the Baltimore/Washington and the State of Washington and some
others--it may be higher. I have tried to focus their attention
carefully to make sure they do not forget that in our view,
according to the law, this is a law enforcement program. I
would like to see it used as connecting linkage to prevention,
treatment, law enforcement, but not forget we have huge new
resources in the drug court program and the COPS program, Byrne
grant, et cetera.
Mr. Hoyer. General, you mentioned Washington State. Is it
Washington State you had mentioned?
Is one of the HIDTA requests that you have pending--I know
I have talked with Congressman Baird about it--a HIDTA request
from the Southwest coast of Washington State; if you recall?
General McCaffrey. I do not think that is one of the formal
ones. There is a bunch of them that are just beyond the line
and that may well be one of them. But six formal ones have done
a lot of work and more are coming.
Mr. Hoyer. Okay.
General McCaffrey. Basically, law enforcement people and
prosecutors all over the country are already doing this. They
like the idea of task forces. When we provide a modest amount
of Federal money--compared to the budgets of local police and
sheriff's departments--$3 million, $9 million, what happens is
that you end up with blue-on-blue deconfliction, intelligence
centers, methamphetamine training centers, improved methods for
cops to deal with methamphetamine lab clean up, et cetera, a
lot of good comes out of it.
You integrate their communications systems, and I think it
is just a good program.
Mr. Hoyer. My time is up but the methamphetamine concern,
as I know, is great in that area.
Thank you, Mr. Chairman.
Mr. Kolbe. Thank you.
Mrs. Emerson.
Mrs. Emerson. Speaking of methamphetamine, welcome,
General. That is exactly what I wanted to talk about. I
represent a real rural area in Southeast and Southern Missouri
which not only has an incredible methamphetamine problem but a
lack of resources in our area to deal with them. For example,
we have 3.2 million acres of the Mark Twain National Forest. We
have only about 7 Forest Service law enforcement agents who
cover that entire territory. That is what, about 430 thousand
acres per agent. And the problem seems to be escalating rather
than decreasing.
Can you tell me what oversight or what relationship you
have at the ONDCP with the Forest Service to help coordinate
efforts on not only finding these dealers but helping the
Forest Service and others to eradicate the problem in their
National Forests?
General McCaffrey. There is no question that Federal law
enforcement outside of the principle agencies that we think of:
ATF, IRS, Customs, DEA, Coast Guard, there are also other very
important agencies and the Forest Service is one of them. They
are part of our weekly law enforcement coordination meeting,
chaired by Mr. Joe Peters.
They are part of the Attorney General's monthly convocation
of all the senior Federal law enforcement officials. I do not
think that they have enough resources. They are aware of this
problem. They are determined to do something about it. The
Department of Agriculture has another heavy responsibility as
well as the whole parks program.
I think your point is a good one and it deserves better
resourcing and examination on how to enable these people to do
their job.
Mrs. Emerson. Yes. Let me just ask a question. According to
the Forest Service and what they have told me, they are saying
that there are more drugs seized in our National Forests lands
or in our forests lands, generally, than at our port of entry
points; is that correct?
General McCaffrey. I had not heard that. Let me go verify
that. It doesn't sound realistic, but what is realistic is that
there is a huge amount of high-THC-content marijuana grown on
Forest Service lands.
Mrs. Emerson. Right.
General McCaffrey. That is what is causing problems with
our youngsters.
Mrs. Emerson. Well, and, you know, just getting back to the
whole issue of methamphetamine, I am really, really very
nervous about this as now high school kids are starting to use
this, at least, in my district to keep skinny, particularly the
girls as, you know, speed as a diet drug, if you will, and as
the mother of two daughters and I have six additional
stepchildren, it is really something that I pay very close
attention to.
And Missouri has been known to be one of the leading
producers of methamphetamine. Would you also characterize
Missouri as being a leading producer of methamphetamine?
General McCaffrey. There is no question. As you move around
the country the data is soft. Possibly half the meth in America
comes out of Mexico, possibly half of it is produced
domestically. The overwhelming majority of the big labs are
still in Southern California, but there are hundreds of labs
all across that rural Midwest, Idaho, Arizona, Hawaii, now,
they are in Georgia--Beavis and Butthead operations. Arguably
even though they are not producing pounds, they are doing
ounces, they are doing ferocious damage to the environment,
they are almost always children around these sites. They blow
up, they burn.
Dr. Allen Leshner, NIDA Director, is now developing studies
that indicate that a modest exposure to methamphetamine may do
permanent grossneuro-chemical damage to brain function. I think
your concerns are entirely on track.
Our prevention and education message has to focus on this
and persuade our young kids. This is the first drug in the
history of America, as far as I can see, where in some areas
more women than men are using the drug.
Mrs. Emerson. Well, would you characterize it as, at least
our problem in Missouri and perhaps throughout the rest of the
country, as being a crisis or an epidemic?
General McCaffrey. Sure, absolutely. It is what the law
enforcement people are outraged about. We do not have adequate
treatment protocols yet. There is no therapeutic medication we
can use on methamphetamine abuse. It is the dominant drug
problem in the rural Midwest, Southern California, and Hawaii.
Mrs. Emerson. Yes. And, you know, I think one of the things
then that concerns me, just following on that, is the fact that
there is virtual flat-line funding for the high-intensity drug
trafficking areas in your budget. And I am wondering was the
increase or did you all make an increase that OMB might have
cut back, or since we have added a few new HIDTAs to the budget
this year, as well?
General McCaffrey. There is, of course, enormously
increased funding on methamphetamines as a drug threat. You
will see that if you look at the whole program and DEA and our
prevention budget. There is a lot of attention being paid to
that problem. The HIDTA funding, though, essentially we are--
our request was $214 million and we came out of there with $192
million.
Mrs. Emerson. You did request $214 million? Okay.
I appreciate that, just because I have had calls from more
sheriffs than I can tell you in all of my 26 counties who just
need even more help. So, perhaps, Mr. Chairman, I will stop and
if we have time for a second round?
Mr. Kolbe. Mr. Peterson?
Mr. Peterson. Good morning, General, and welcome to the
Committee and I want to commend you on the supreme efforts you
make but I wanted to ask you if you were surprised at the
recent announcement or news stories that said rural America is
now higher drug use than urban/suburban America?
General McCaffrey. I think that Mr. Califano's study was a
good one and I think that it focuses attention on the denial
that a lot of us would like to have that drug abuse in America
is a city problem, a minority problem, poor people. It is
anything but that. Indeed, in some ways it is not that rural
America has a higher rate that is so bad, but it is still bad.
The difficulty of organizing prevention and treatment and even
supporting law enforcement is so much tougher and I think the
suffering is more intense because of that.
Mr. Peterson. Yes. I think, at least, the young people I
talk to--periodically I will talk to a high school where it is
an absolute epidemic, where it seems in some rural areas when
it becomes the in-thing, it just almost takes over. And it is
the minority that do not participate instead of, you know, the
majority who do not participate. And, so, in rural areas,
sometimes it just sort of catches on.
Do you think we adequately warn young people of the dangers
of marijuana? It is my opinion from talking to them that they
don't fear marijuana. It is not harmful. It is just a fun thing
to do and there is no downside. And I spoke with a man who has
been in this business for a number of years and he gave me a
very sad story two weeks ago over dinner. He said, I lost--I
call marijuana a thief in the night. He said, my brightest,
best young son, who had the most brains of anyone in our
family, who had the most aggressiveness and who I had the
highest hopes for, he said, marijuana stole all that from him.
And my brightest and best young son is my least successful son
now because of marijuana. It stole his edge.
And I guess young people do not realize. Do you think we
are adequately warning young people about the dangers of
marijuana?
General McCaffrey. That may be one of the biggest
contributions that we are going to make out of this media
campaign and also some of the related work that is going on in
the Department of Education. I don't know of anybody in
Washington who is more adamantly anti-marijuana use than Donna
Shalala. This is primarily because she is a teacher at heart. I
think you would hear her say that the biggest threat to young
people's development is pot, and beer in combination. You end
up with sexual assaults, criminal behavior, failure to learn.
I would argue the most dangerous drug in America are middle
school kids smoking pot on weekends. They get involved in a lot
of that behavior and suddenly this bright person playing
sports, wonderful to be around, turns into a loser. I think
that the media campaign is trying to make that argument.
We have also had a very clever campaign by drug
legalization forces to soften the impact of this ``mild'' drug,
less dangerous than alcohol, so-called, and to say that it is
just not something we ought to focus on.
We think it is a huge threat to the future of American kids
and we ought to oppose it, it ought to be illegal, we ought to
make a strong social argument against it and that that
leadership ought to come from the community and not from me,
but from moms and dads, and local law enforcement and educators
and coaches.
Mr. Peterson. Shifting gears, you spoke of the need for a
drug free prison environment because of the two million we
have. It is my observation that the military more than a decade
ago had a huge drug problem. The only way they successfully
dealt with it was testing. The work place problems of today,
corporate America and even small companies in my district are
solving that problem with drug testing. Prisons that I have
worked with in the State, those who have a drug free
environment or close to it, are drug testing.
Why have you been unwilling to embrace that in our schools
because there is no more important place to have a drug free
place than in our schools? And drug testing would do it. I know
there are legal ramifications but if the States have choices,
if the schools have choices and the parents have the choice to
opt out, it could be done and I would like to ask you why you
have not embraced it?
General McCaffrey. Let me characterize it slightly
differently. I do not object to drug testing anywhere. My last
official act before leaving the armed forces was to have the
Command Sergeant Major and I take a drug test, get a field test
done and go on television to explain why we were proud of being
part of a drug free institution.
I do believe that for drug testing to be successful in a
corporation, whether it is Fortune 500 or 12 employees in an
insurance office or in a high school football team, you have to
sell it to the group and have them embrace the idea of living
and working in a drug free environment. Basicallythat is what
we want to do, all of us, young people as well as employees. I do not
like top-down directed activities and I think that if management does
not sell it to their employees it fails.
I feel the same way about schools systems. If schools want
to have a drug testing environment--lots of private schools
do--so be it. Now, having said that, one day--and I will not
tell you where--I talked to a drug riddled high school, one of
the wealthiest schools in America, a public school, BMWs in the
parking lot, terrible drug problems. The same afternoon I flew
to another city and talked to a faith-based school, a girls'
school, I might add, where they were in uniform, which was
almost drug free. In neither school system is drug testing a
tool. I do remind parents and educators and employers that the
heart and soul of a drug free environment is not the testing--
it maybe a useful tool--it is creating a culture, an
environment where you say in our family, in our school, we do
not use drugs. That is certainly what happened in the armed
forces. It was not discipline imposed through court martial, it
was sergeants saying in this squad we do not use drugs.
Mr. Peterson. But if young people know----
Mr. Kolbe. Mr. Peterson----
Mr. Peterson. Okay. I just have one more----
Mr. Kolbe. Very quick follow-up.
Mr. Peterson. If young people know that there is a chance
of getting caught I think that gives the young people that
don't have the family backup a reason to say, no.
General McCaffrey. I think that is what the Columbia
University studies indicate. The primary reason to not use
drugs is I do not want my mom and dad to be disappointed in me
or I do not know what they will do to me if I am caught.
Mr. Kolbe. Ms. Roybal-Allard.
Ms. Roybal-Allard. Thank you, Mr. Chairman.
As you know, underage drinking is a big concern of mine and
I know it is a concern of you, as well, although we may not
necessarily always agree on how to approach the problem.
Just to make the Committee aware of how alarming the
underage drinking problem is, let me just cite some statistics:
60 percent of teenagers drink alcohol and kids are starting to
drink at a much younger age--the average age is now 13.
According to a recent Harvard University study, binge drinking
on college campuses is actually on the rise. Also, a recent
report by the Department of Justice found that underage
drinking costs society more than $589 billion per year. But I
think the statistic that is the most alarming is that underage
drinking kills six times more young people than all other drugs
combined. Everything that we have been talking about here:
Heroin, methamphetamines, all of these illegal drugs--alcohol
kills six times more young people than those drugs combined.
Now, in response to a question that I submitted last year
to the record, you stated that a pro bono match ads dedicated
to underage drinking were about 6 percent of the total pro bono
match. Has this percentage increased over the last year?
General McCaffrey. I think your analysis of the problem is
entirely correct. I think that when this drug is legal, cheap,
and readily available for adults, its spillover into the youth
population clearly makes it the worst drug of abuse our young
people face.
Our pro bono match this year of the PSAs is up to 8 percent
of the total, about 380,000 radio and TV time slots. It is a
huge success. Concerning the TV programming match, more than 15
percent of the total was underage alcohol use. Right now, I
would suggest that the principle limiting factor we will
address this coming year is new NIAAA ads. We lack the ads to
use.
We have to make sure that we get science-based tested ads
and do not just throw material out in public. I think you are
right on target; this is a huge problem for us.
Ms. Roybal-Allard. Also, this again was in response to a
question that I submitted for the record, you mentioned that
you didn't feel that you were receiving enough quality PSAs on
underage drinking from both Governmental and non-Governmental
sources. And noted that the Department of Health and Human
Services was developing some ads on this issue.
Could you tell me if those ads are completed?
General McCaffrey. They are coming this year. NIAAA has
been tasked to do that work and I think we are going to see
some top quality material coming out of them. Also, of course,
the tobacco program is another one that is spinning up now and
there are huge amounts of money behind that. We are working
with those State Attorneys General to try and make sure the
anti-under-age tobacco use is also part of this public health
campaign.
Ms. Roybal-Allard. Do you think working with other agencies
is a good way to increase the number of available ads on
underage drinking?
General McCaffrey. I think NIAAA has it in their legal
mandate to do this kind of work. That is probably the
appropriate place. CDC has been very helpful, as well as the
Surgeon General. We have a new president of Mothers Against
Drunk Driving, a very impressive woman, and she is coming to
see me and we are going to try to continue to be supportive of
her work.
Ms. Roybal-Allard. I just have one more question. Do I have
the time?
Mr. Kolbe. Yes.
Ms. Roybal-Allard. Okay. And this has to do with the
Arellano-Felix Cartel, which is probably one of the most
notorious drug operations and is responsible for a large share
of the drug related violence in Mexico and along the U.S.
border. When I visited the U.S./Mexico border, down in San
Diego, the DEA said that this cartel was really their biggest
concern. On January 24, 2000, the Baltimore Sun said, and this
is a quote, ``U.S. and Mexican authorities have made little
progress against this ruthless cartel which profits from
virtually every load of drugs crossing San Ysidro.''
Now, my understanding is that the Arellano-Felix brothers
have been indicted. And that they have been on the FBI's Most
Wanted List for the past two years, but they keep evading
arrest. Are you getting the kind of cooperation that you need
from Mexico in order to apprehend these brothers?
General McCaffrey. I think of all of the criminal groups
that we face, the two gangs in that part of Mexico, the
Arellano-Felix and the Amezcua organization, are certainly the
most lethal groups. They are unbelievably murderous. They just
assassinated the second police chief in ten years on the same
stretch of highway, a man gunned down, more than 100 rounds of
gun fire. They are incredibly dangerous people.
The Arellano-Felix brothers, themselves, turned over most
of the direct control of the gang to their operations officer.
I am very proud of the DEA and other U.S. agencies who worked
in full cooperation with Mexico's Attorney General. We did
apprehend the operations officer about ten days ago, in day
light. He is under arrest. He is back in Mexico City. That was
a tremendous display of courage and commitment by the Mexicans.
I say that because to be blunt, some of these major
criminal figures in Tiajuana are moving around the city guarded
by law enforcement officers in uniform and carrying automatic
weapons. It is unbelievable. We find the same thing
occasionally in other parts of the border. But the most brazen
violence and corruption arguably has been those two gangs that
I just cited.
I think the Attorney General is committed to doing
something about it and so is Minister Cervantes, who has
military people up there cooperating as part of this effort.
Mr. Kolbe. Thank you very much, Ms. Roybal-Allard.
Mr. Goode.
Mr. Goode. Thank you, Mr. Chairman.
General, in your previous statement, I think that you said
that 90 percent of the cocaine in this country was either
produced in or went through Colombia; is that correct?
General McCaffrey. Yes, sir.
Mr. Goode. To break it down further, how much, just ball
park percentages, would you say comes in by flight from
Colombia or that region in South America?
General McCaffrey. Let me give you for the record an
unclassified cocaine flow analysis that we just updated. It is
done--it is a splendid piece of work--by the Defense
Intelligence Agency. In the last three years I have had them
working on rationalizing that process. If I remember the figure
it is very little of it but that is still a lot of cocaine. It
strikes me that 15 percent of the total is direct commercial
flight out of Colombia to the United States, primarily into two
airports, Miami and New York. The Customs and the DEA people
have done a phenomenal job of confronting that piece of it.
Mr. Goode. And just a ball park percentage, if you can,
that comes in by boat from that area?
General McCaffrey. Directly from Colombia, very little of
it. I will not say none of it, but it is approaching that.
Basically what you have is 520 metric tons of cocaine produced
in Colombia last year; the principal way into the United States
is in the Eastern Pacific into Central America or Mexico and
then over our 2,000-mile border at one of our 39 ports of
entry. That is maybe 50, 60 percent of the cocaine, and a good
bit of the heroin. The second major route is the Western
Caribbean trying to get into Central America. The third, is a
huge increase, a big change of drugs coming out of Colombia,
headed out to Haiti, the Dominican Republic as well but
primarily Haiti, and now landing light aircraft in Haiti and
discharging drugs, where it then goes into the Dominican
Republic or on boats or planes into the U.S.
We have a fairly good view of it, and some pieces of it
were confronting fairly effectively. We have some more work to
do. We need a way to confront the Eastern Pacific dimension.
The U.S. Coast Guard, Navy P-3s, Air Force AWACS, and Mexican
cooperation. Mexico is about to spend $520 million to help us
in that process to confront those maritime smuggling routes.
Mr. Goode. If you broke it down between air, land and
water. And by land, I mean if you brought the drugs up through
Mexico into the U.S., just straight from Colombia or the
adjacent countries, and then if it was flown from, say,
Colombia to Haiti. Just in general on those three, can you give
a ball park on that?
General McCaffrey. When it leaves Colombia I would say the
overwhelming majority of it now by tonnage is in non-commercial
maritime smuggling. Fishing boats, cargo containers, fast
boats, probably the majority of it off the Western Coast of
Colombia, again, in Central America or Mexico.
A good bit of fast boats in the Caribbean into, in the
Western Caribbean or trying to get out to the islands. By the
way not all of it is coming into the United States. A huge
amount of it is now going to Europe into Spain and Amsterdam.
So, non-commercial maritime is the principal way; the big cargo
flights have stopped. We brought that to a halt. Small aircraft
flying directly into the United States, pretty much at a halt.
Mr. Goode. What about direct traffic up through Central
America through Mexico and right across our border?
General McCaffrey. It is a big problem and it is growing
and it has terrified El Salvador. There is almost nowhere that
it is not existing.
It is boats or planes getting into Central America and then
onto 18-wheeler trucks or cars and up the Pan American Highway
and then across the ports of entry. The problem for the poor
Central Americans is that while it is there it corrupts their
institutions of government and their police; it creates
violence, it is a huge problem in Panama, it is a huge problem
in Nicaragua.
Mr. Goode. What I am getting down to if we use some of this
$19.2 billion with much tighter control of the Mexican/U.S.
border, would that be a substantial help?
General McCaffrey. Absolutely. I think also tighter
controls of the Southern part of Mexico would help. I spent
about a week down in Southern Mexico looking at their three
Southern States and the Mexican Navy and Army and PGR programs.
They bought 10 of these giant X-ray machines with mixed
results. I think they are very determined to try to keep it out
of Mexico, which is better for us, than having them fight it
inside Mexico.
Mr. Goode. Just ball park, on the drugs that come into
the--well, the cocaine that comes into the country, what
portion of it would come through the Mexican/U.S. border?
General McCaffrey. Depending on the analysis you believe,
50 to 60 percent of it. The majority of the cocaine coming into
America comes--we are like a giant engine, sucking cocaine
through Mexico from non-commercial maritime and air and the Pan
American Highway.
Mr. Goode. All right. Thank you.
Mr. Kolbe. Mr. Price.
Mr. Price. Thank you, Mr. Chairman.
General, I would like to welcome you back to the
Subcommittee. And I would like to start out this morning by
taking a minute to thank you and your staff, particularly Joe
Peters, Kurt Schmid, and Michele Manatt, who have worked with
us and with the State of North Carolina in exploring the
possibility of a HIDTA designation for our State.
I know you have put a lot of energy and time into revamping
the application process for new HIDTAs to ensurethat national
objectives are being met. This was envisioned originally as a way to
help Federal and State and local law enforcement work together to crack
down on targeted, identified drug trafficking threats that have a broad
national impact. Congressional earmarks have not always been in keeping
with that vision, I think it is fair to say. And I applaud your efforts
to bring a greater measure of quality control, so to speak, to this
program.
Now, moving from new HIDTAs, I would like to know what you
are doing to oversee the existing HIDTAs. This Committee has
expressed an interest in assuring that existing HIDTAs are held
to specific performance measures of effectiveness. We have some
report language to that effect in the fiscal 2000 conference
report. We also had language stipulating that existing HIDTAs
be funded at prior year levels.
Now, as you mentioned in your opening statement, those two
directives are in some tension with each other, at least
potentially, and they may not allow you the flexibility you
need to exercise appropriate oversight over existing HIDTAs.
So, I have two specific questions. First, your fiscal year
2001 budget requests $1.8 million for ongoing internal review
and for a new independent auditing effort of the HIDTA program.
Is there more that you would like to tell us, either here today
or for the record about that effort and how it would facilitate
oversight of existing HIDTAs?
And secondly, your budget proposes $190.2 million for the
HIDTA program. I understand you just clarified that you
requested $215 million and it was reduced to $190 million in
the pass back. That is an increase of just half a million over
the fiscal year 2000 level. Given that you have some six new
HIDTA applications pending, and given the requirement that
existing funding levels be maintained, how is this going to
work out? How will this funding level enable you to incorporate
any new HIDTAs into the program or will it so permit?
General McCaffrey. First of all, I am enormously grateful
for the $1.8 million. I believe that this program is going to
collapse along with other programs if I am not allowed to take
funds and conduct audits and inspections. The HIDTA program--
$192 million in 31 different areas--I need to audit the
program. I am extremely grateful and mindful of the confidence
you have placed in me giving me that authority.
While I am at it I might add that Drug Free Communities
program has a cap on it of 3 percent for ``administrative''
costs. Mr. Chairman, I am asking you to increase that cap to 7
percent or we are facing potential problems as we have ramped
up from 30 coalitions to the 400 we will probably have in the
coming year. I am just concerned that I maintain not only an
evaluation but an oversight role over those dollars.
I think that money is going to be well-spent and I think
that we are really getting focused on the HIDTA program. Joe
Peters has done a brilliant job.
You asked about the impact of level funding restrictions by
Congress of targeted new HIDTAs and the appropriations process.
Mr. Price. Well, I am talking about your own request of
$190.2 million for next year.
General McCaffrey. Right. I think if there is going to be
no money for new HIDTAs, period. There will be no way for me to
adjust to reinforce excess and to take away money from programs
that do not demonstrate effectiveness. I think this is the
wrong way to go about it. I would ask the Committee for
consideration of giving me the responsibility and holding me
accountable for moving this money to where I can best support
U.S. interests.
Mr. Price. Your original request of $215 million to OMB
would have let you do both the maintenance and the existing
efforts.
General McCaffrey. Possibly.
Mr. Price. And made room for some new programs.
General McCaffrey. Right.
Mr. Price. All right. I think we understand what you are
saying on that very well. Now, let me switch to a question
regarding the Forest Service and its involvement in drug
control efforts. You, of course, are responsible for overseeing
the entire drug control response and I wonder if we are taking
into account the domestic as opposed to the international
interdiction challenge. I understand Mrs. Emerson got into this
with respect to methamphetamines.
The seizure numbers that I have seen are as follows: We
heard from Commissioner Kelly last week that the Customs
Service seized 1.5 million pounds of narcotics at various
points of entry in fiscal year 1999. And last year, with total
law enforcement personnel of just 600 agents overseeing some
191 million acres of national forests, the U.S. Forest Service
destroyed the equivalent of 1 million pounds of marijuana being
cultivated on public lands.
North Carolina was one of the top four states in terms of
seizures, with about 15,000 pounds, but we came nowhere close,
I must say, to California and Kentucky, where over 400,000
pounds were seized.
Now, we may debate logging in the national forests and all
sorts of other national forest issues. I don't think anybody
believes that these lands were set aside for drug production.
So, I would like to know what ONDCP is doing to work with the
Forest Service to target additional resources at this serious
domestic production problem?
General McCaffrey. Clearly, they are part of the HIDTA
program, particularly the marijuana production focus of the
HIDTA that involves West Virginia, Tennessee and Kentucky. They
were level funded between fiscal year 2000 and 01 at $6.8
million. I think it is worth the Committee scrutinizing whether
that is an adequate level of support. I think they are probably
under-resourced to do this very critical job.
I think you are quite right. There is a tradeoff there.
When you talk about the overall internal interdiction now, we
have put serious effort into that between the National Guard.
Thank God for the National Guard support of this program. But
also the Department of Justice grants, the State of California
and others; we put a lot of money in internal interdiction with
great success.
Mr. Price. Thank you. Thank you, Mr. Chairman.
Mr. Kolbe. Mrs. Meek.
Mrs. Meek. Thank you and welcome, General.
The General and I, we came to Congress together and he has
done an exceptional job. He is one of the best tacticians in
the business. We are happy that you are working as the Drug
Czar.
I am concerned about your written testimony, paragraph 34,
it is alittle confusing to me, General. I want to quote it just
as you said it. At point B, on page 34 of your testimony, you state:
``ONDCP is also requesting restoration of personnel compensation to
allow funding for a full component of staff, additionally, ONDCP
requests one FTE to meet increased workload requirements. We have
internally reviewed our staffing allocation in an attempt to reorganize
to satisfy this requirement. However, we are unable to do so since all
positions are in some process of being filled. Therefore, we are
requesting one additional FTE.''
That part is confusing to me. General, what does that mean?
Does it say that all positions are filled or in some process of
being filled?
General McCaffrey. It does. We think we have hiring
processes underway where every FTE will be utilized fully. We
are grateful that we have been able to identify high-caliber
people to do that. Having said that, the General Counter-Drug
Intelligence Plan which is now established, it is already
there, a 30-person secretariat, CDX. We are asking for one
position to have an ONDCP person on that committee. And that
is, of course, run by the Attorney General and the Director of
the CIA, with representatives from throughout Government and we
want to make sure ONDCP stays engaged with that.
But all the rest of the positions you have given us will be
filled and we are hopeful to get your support on salaries to
pay those people.
Mrs. Meek. So, then, you still are asking for one
additional FTE?
General McCaffrey. One more, yes, Ma'am.
Mrs. Meek. My other question, General, your critics have
been very hard on you. They say that your performance-based
measures of effectiveness are illusionary. That is that it is
impossible to speak of targeted reductions in drug demand and
supply or use, when you acknowledge that your data has not
allowed you to establish baselines. Would you mind commenting
on that?
General McCaffrey. I think that it is a huge challenge,
clearly, establishing scientifically valid data on drug abuse.
There is no question about it. I have to very carefully
categorize my statements based on explaining to people in
footnotes, normally in our statements, why did I say what I
said.
But having said that, as I back off it and look at the work
that NIDA does at a half billion dollars a year, which is what
you funded NIDA at last year, and then look at some of the
funding that NIDA and SAMHSA have given to the University of
Michigan, Columbia University, Johns Hopkins, et cetera, it is
astonishing what we do know. Most of these studies tend to
cluster around the same conclusions.
I almost never see two studies that draw diametrically
opposite conclusions. I think we do understand who in America
is using drugs among adolescents, why they use them, why some
populations not use them, as well as risk and protective
factors. I think a lot is known about this issue.
Mrs. Meek. How can we develop good science to back your
programs?
General McCaffrey. I think you have put a lot of money into
it, and you have a world-class scientist, Allen Leshner running
it, and he has very high NIH standards and the work you see
coming out of the academic community is first-rate. Some of it
is hard science. We are about to--I hope in the coming years--
finally give the drug treatment community some tools they have
lacked. Buprenorphine for heroin addiction. I think you are
going to find some tools for cocaine addiction as well.
I think this research is paying off, and not just in
understanding the problem and organizing drug treatment
protocols, and prevention guidelines. There are now published
documents that say if you do it this way, you should expect the
following results.
Mrs. Meek. Thank you. I just want to mention my other
concern which I think has been covered by other members of the
Committee. That is my concern about drug treatment and
prevention.
I think we can do a lot more, General, particularly in
terms of treatment and prevention, and I am sure you have taken
that into consideration in your initiatives.
General McCaffrey. I agree, Mrs. Meek.
Mrs. Meek. Thank you, General.
Thank you, Mr. Chairman.
Mr. Kolbe. Thank you, Mrs. Meek.
We are running close to the end of our time here, but let
me just ask one question and see if anybody else has one. I
want to ask something about the criminal justice demonstration
project. You have asked for $25 million from the Special
Forfeiture Fund for the National Criminal Justice Treatment
Demonstration Project. This is for people within the criminal
justice system: probation, prisons, and so forth, I think.
But that is only a quarter of the program. There is another
$75 million that is covered by the Office of Justice Programs,
OJP. And I think your proposal would include up to 15 grants of
a million dollars each for communities to demonstrate the best
practices in dealing with drug treatment for criminal
offenders.
My question, General, is why are you asking for this
program that is being split between the Office of Justice and
ONDCP and why isn't it being entirely funded within OJP?
Normally you do things that other agencies can't do or it is
coordination, not this kind of direct program. I am not sure I
understand why this $25 million program is being asked for?
General McCaffrey. I asked the same question.
Mr. Kolbe. But you asked--no? It is in your budget.
General McCaffrey. Mr. Chairman, let me tell you where I
think we are. First of all, we have had a hard time explaining
this program to people. It does not get supported. It is going
to have a huge payoff across America. I am hopeful, this
Committee has listened to logic in the past, and if you give me
the $25 million I will go and get 15 communities. It will work.
We already know that. You will have a modest amount of money
for me to transfer this knowledge into other communities.
You are right, it looks like the $75 million in the
Department of Justice. They have got some heavy lifting to do
with their $75 million. They are going to do reentry courts,
which is a big deal. Hopefully it is going to primarily
satellite right on the existing drug court system. They are
going to try to get a justice system to move people back into
communities.
Mr. Kolbe. Did you anticipate with your grants that there
would be local partnering or matches from local?
General McCaffrey. We did not write that in there. That
ought to be a criteria for awarding the grant. I amundoubtedly
going to have to go to the Department of Justice and ask them to do the
work for me.
Mr. Kolbe. You have got $25 million and they are going to
have $75 million and you are going to duplicate the
administrative top costs?
General McCaffrey. I do not think so. I think we are going
to end up really with the Department of Justice doing it but I
am going to make sure my 15 communities work this year. I think
next year I am going to be in a position to tell you this made
a huge contribution.
Mr. Kolbe. What is your time frame for this?
General McCaffrey. I think we have to study it. We will
have to put a few hundred thousand bucks in these 15
communities once we identify them, make sure they put together
a plan, look at their plan and then give them the money. It
sounds to me like a couple of years to get this going.
Mr. Kolbe. Thank you.
Mr. Hoyer.
Mr. Hoyer. Thank you, Mr. Chairman.
Just one question. I have got a lot but I will submit
those.
Mr. Hoyer. General, we participated in doing your website
some time ago. Obviously, we spent a lot of money on
television, radio, print. Tell me how the website is doing and
how many hits we are getting, what effectiveness we are having
with communicating with young people who are on the website all
the time?
General McCaffrey. I need to send you a report. I do not
think we have adequately conveyed this information--we need to
get that back out to the American people, too. It has been an
unbelievable payoff. Fleishman Hillard does a lot of our work
in this area, but we have had a great amount of cooperation
around the Government. The NASA site was the start. Now that
has spread throughout Federal agencies. The numbers are simply
beyond belief. The ONDCP sites, the athletic initiative, for
example, has been ``hit'' a couple of hundred thousand times.
STATEMENT TO ONDCP STAFF
There have been 86,000 hits on school zone. Our own home
page, a couple of hundred thousand-plus hits. Media Campaign, a
half million hits. Then you get into some of the work of--what
we do not have here now is Ogilvy Mather figures, but you are
literally talking--the number that stuck in my mind was a
couple of hundred million impressions. What we have done is
wrap-around advertising in all media. It is batched up by
message platform. They are in flights four weeks, six weeks
flights. If you are an African American teenager, last week, we
talked to you almost 12 times with a scientifically credible
message.
You go on the Internet now, you can do Chinese language and
if you are a 36-year old mom, you can get drug feedback in
Chinese or Vietnamese or Spanish; I think in the long run the
payoff is going to be simply astonishing.
It is interactive. We are learning from and accepting
involvement. We are asking them to join community coalitions
through the Web.
Mr. Hoyer. Our time is up, General, but I remember
participating with you on the announcement of the website in
conjunction with the other sponsors. And it seems to me that
that can be a very--as you have just indicated--a very, very
powerful adjunct and perhaps primary route of communication
with an awful lot of young people.
General McCaffrey. Yes. Eighth graders, ninth graders.
Mr. Hoyer. Yes. Exactly. I have a granddaughter who is on
the Internet all the time. She is in junior high school. And it
seems to me that to the extent that our website is kept up and
is an attractive website that young people will want to use
because it has a lot of entertaining aspects to it, that the
educational impact will be very, very substantial.
General McCaffrey. Let me pull together a better response
to that question. Mr. Chairman, I will make sure that the
Committee members get a feedback because it is good news.
Mr. Hoyer. General, thank you very much and thank you,
again, for all you are doing to lead and coordinate this
incredibly important effort that we are about.
Thank you, Mr. Chairman.
Mr. Kolbe. Mr. Peterson, you have one?
Mr. Peterson. Yes. General, Drug Free Pennsylvania came to
my office recently looking for help with their media program.
To what extent do you work with existing State programs that
are already in the business of informing youth?
General McCaffrey. I think we are happy to do so. The two
contractors do most of the work with their 11 subcontractors
for us. We do talk to State authorities: California, Florida,
and I will go find out what we are doing with Pennsylvania and
make sure that we are receptive to their approaches.
Mr. Peterson. One other quick one. Somebody working in the
field told me that there are some really great concerns with
some new compounds being manufactured locally. The recipe is on
the Internet, very dangerous drugs. And I am not sure we even
have tests for them yet. Do you have anything to comment on
that?
General McCaffrey. I think this whole notion of young
people on the--sort of a boutique drugs, rave parties,
ingesting substances that you do not know what it is you are
taking is a huge threat to young people. They are not only
manufacturing drugs locally, regionally, but sometimes they go
look at the Methamphetamines Control Act and manufacture
something that is not illegal under the law but still has some
psychoactive impact and we have to counter that.
A lot of these kids do not believe that this stuff can kill
them instantaneously.
Mr. Peterson. Okay. Thank you. Keep up the good work.
Mr. Kolbe. Mrs. Meek, do you have a final question?
Mrs. Meek. Not if it takes a long time.
Mr. Kolbe. If it is a short one, that is even better.
Mrs. Meek. You made reference, General, in your testimony
regarding a branding strategy for your ad campaign. And can you
explain the rationale behind this?
General McCaffrey. It is not a brand new strategy. The
existing strategy, the communications strategy we have
submitted to Congress only now Ogilvy Mather, working with
Partnership for a Drug Free America and the Ad Council are
trying to use the concept of branding to leverage these
messages.
What I showed you was the beginnings of that branding
campaign. For adults, the anti-drug is the heart and soul of
the branding concept. For the younger group, we are now going
to use also my anti-drug. The message will tend to be positive
that soccer, relationships, Boys and Girls Clubs, these are
anti-drugs because I, a young person, have chosen them. We are
going to measure this pretty carefully, but we are excited
about it. I think what you will see is greater impact per
dollar advertising using a branding concept.
Mr. Kolbe. Thank you, Mrs. Meek.
Mrs. Meek. Thank you, Mr. Chairman.
Mr. Kolbe. General McCaffrey, let me just say that on
behalf, I think, of all the members of this Subcommittee we
appreciate the efforts you and your staff are doing. It is
obviously extraordinarily important work. And I hope you know
that you have the strong support of this Subcommittee. We may
disagree with you from time-to-time but we try to do it in a
constructive way. We want to be constructive. We share the same
goals, we want to win this fight.
General McCaffrey. Yes, sir. I very much appreciate your
leadership.
Mr. Kolbe. Well, we appreciate yours as well.
This Subcommittee will stand in recess until this
afternoon's hearing.
Tuesday, March 28, 2000.
OFFICE OF MANAGEMENT AND BUDGET
WITNESS
JACOB J. LEW, DIRECTOR
Mr. Kolbe. The subcommittee on Treasury, Postal Service and
General Government will come to order. We are very pleased this
morning to welcome the Director of the Office of Management and
Budget, Jack Lew.
Mr. Lew, we have had a chance to review your appropriation
request for fiscal year 2001 and want to commend you and your
staff for the level of detail you have provided us. I guess,
actually, we should expect that coming from OMB for their own
budget. More specifically, I commend the careful way in which
you have addressed the specific Subcommittee concerns regarding
OMB staff training and the strategic role played by OMB's
communication office.
This is the first time in 8 years that OMB has requested an
increase in their, full-time employment levels. Given the
potential spending allocation this subcommittee is likely to
get this year, this may have not been the right time to have
asked for that increase, but nonetheless, I am certainly
receptive to hearing more about the request and specifically
how this additional staff is going to help OMB meet its
statutory obligations.
Before we begin, I want to make one general observation.
Mr. Director, over the years we have had a number of
interesting hearings with you, not so much focused on the OMB
appropriation request, but rather on priorities that this
Administration establishes as it relates to Treasury law
enforcement and Federal law enforcement.
In the past, when I have asked you why Treasury law
enforcement has not fared as well as enforcement efforts that
come under the Justice Department in the President's budget
request, you have, at least in a general way, I think,
responded by saying that the recommendations reflect the
Administration's priorities and that you have always said you
believe the numbers are adequate to allow the agencies within
Treasury to do their job.
Obviously, I have not agreed with you on this point.
Actually the Subcommittee has not really agreed on this point
and we have fought fairly furiously for additional funding.
There continues to be some serious gaps in both funding and
personnel, particularly as it relates to the U.S. Customs
Service and I don't think the requests have been adequate. Now,
I know you would be very disappointed if I didn't have some
charts for this hearing to reflect some of that. So I have got
a couple of charts here to show what I once again am talking
about. This first one is on the employment, the FTE numbers
within Justice and Treasury. We show a 5 percent increase in
the number of FTEs in Treasury and a 48 percent increase in
Justice going all the way from FY 1994 up through FY 1999. So 6
years of funding.
The second chart looks at the total law enforcement
employment FTEs within Treasury and with Justice. Now we are
looking here just at taking the two major components of law
enforcement, at least as it relates to our borders, and that is
the INS versus Customs. Here we also see, in the way of
personnel, a 73 percent increase in INS and a 6 percent
increase in Customs.
So once again, over the same length of time, you see an
even greater disparity there in the personnel numbers for INS
and Customs. I really wanted to bring those along because I
didn't want to disappoint you by not having a chart or two to
share with you here today. As you can see, we really haven't
changed a lot of the story in the last several years. Hopefully
as Secret Service brings new agents on board during the year,
we will see a boost in some of these numbers, but I do remain
very concerned about the budget and FTE numbers for the Customs
Service.
As we go forward here today, I will have some more direct
questions regarding the funding for Customs, and, given my
responsibilities as Chairman of this Subcommittee, I am all too
familiar with the resource constraints that are before us, very
similar to the ones you faced during preparation of the
President's budget. It is a difficult job, and the choices have
to be paid, but I still remain convinced that no matter how you
cut it, how small the piece of the pie is, the Treasury part is
clearly inadequate as its share of that law enforcement pie.
Mr. Director, in many ways our two jobs are very similar,
not only because we have to make difficult choices given the
spending constraints that we have, but also in the way that we
go about making these decisions. They can't be made in a vacuum
and they need to be based on information and knowledge. I am
sure it comes as no surprise to you, but unfortunately agencies
are often very reluctant to share information with this
Subcommittee, and I dare say that is true of all the
Appropriations Subcommittees.
This is really one of our greatest frustrations. We need
information to make decisions, information that hopefully
reflects your priorities, but also we can use to make what we
regard, from the national standpoint, information the
congressional views of what the priorities should be. It is
very frustrating when we ask for comprehensive reviews of
specific issues such as the Customs Air and Marine Program. We
get absolutely nothing back in return. It makes our job very,
very difficult, and I frankly feel like I am getting to the end
of our rope on this. I am also beginning to have some concerns
that the information void that this Subcommittee has
experienced may not be isolated, as I suggested, but may be a
chronic problem. I am curious about OMB's experiences in this
regard as you try to get the information from agencies in
preparing the President's request; I hope as we proceed here
today, we can have a candid and honest dialogue about this
subject, which I think is absolutely critical.
I'm looking forward to your testimony, but before I call on
you for your statement, let me turn to my Ranking Member, Mr.
Hoyer, the distinguished Ranking Member, and ask him for his
views.
[The statement of Mr. Kolbe follows:]
Mr. Hoyer. Thank you very much, Mr. Chairman. As usual, on
most matters you reflect my view as well. I think these charts
you have presented continue to be a very telling statement as
to the need to ensure that we are focused on Treasury law
enforcement, and the important objectives that they pursue and
I am very pleased at the Fiscal Year 2001 budget proposal that
comes from OMB. I want to welcome you, Mr. Director. Jack Lew,
as everyone knows, has been honed and refined through his
service in the Congress of the United States. Mr. Lew did an
outstanding job for Speaker Foley and Speaker O'Neill, and he
is someone that I greatly admire and appreciate his work.
Mr. Director, I also want to commend you on the role that
you have played in this Administration's very successful
policies which have resulted in, from my perspective, such a
thriving successful growing job producing inflation-tamping
economy. We probably have the best economy in the adult lives
of any of us in the Congress of the United States and any of
us, period.
So to the extent that you have played a very significant
role in that, I congratulate you and thank you. I also want to
commend you for the budget that you are presenting today which
includes the necessary FTE and technology funding increases to
keep up with myriad new duties placed on OMB since 1993. I
understand that theseincreases will make OMB a more effective
tool for the next President, whoever that may be. OMB's role in this
government's policy development and determination is evident throughout
the Federal budget.
It is ironic that the agency that oversees all of the
discretionary dollars and has an impact on the policies related
to the mandatory expenditures as well has one of the least
controversial of hearings. I presume that is because all of the
agencies that you have disappointed choose not to show up, but
in any event, you are obviously the executive department's way
of overseeing the management of our Federal Government and the
people at OMB do an extraordinary job, given the limited
numbers that you have to oversee a very large executive
establishment.
Now, having said all those very nice things, let me say
that I am unhappy to note that one of the exceptions in your
budget's presentation appears to be OMB's courtroom-sharing
policy reflected in the GSA courthouse construction request,
which I believe the courtroom sharing proposal is premature and
not grounded, as far as I can tell, in hard data and analysis.
We will discuss that later in a little more depth.
OMB, under your leadership, has played a central role in
turning the Federal budget deficit into surpluses, as I have
said, and I understand that it is necessary to have cost-saving
effects, and we will discuss the courthouse issues in the
question period.
Ms. Roybal, who is very concerned about it, and Mrs. Meek
could not be here, but both of them are extraordinarily
concerned as I know you know at the impact that the proposal
will have on both the Miami courthouse and the Los Angeles
courthouse, an impact that they believe will undermine, as the
judiciary believes, the effectiveness and efficiency of the
operations of those facilities. But as I said, we will talk a
little bit about that. I want to, again, congratulate you, say
how pleased I am at your service and leadership in OMB and how
much I personally appreciate your close working relationship
with the chairman, with myself, with this committee, and with
the Congress. It has led to a very positive relationship. Thank
you.
Mr. Kolbe. Thank you. The black helicopter is coming here.
[Laughter.]
Mr. Lew, we will put your entire statement in the record of
course as always, and if you would like to summarize, then we
will go to questions.
Mr. Lew.
OPENING REMARKS
Mr. Lew. Thank you, Mr. Chairman, distinguished Ranking
Member and Members of the committee. It is a pleasure to be
here. One of the honors of being OMB Director is to have the
opportunity to come before the Committee every year and talk
about the things that OMB does and what we need to do our job
well, because I am very proud of the work that OMB does. I
would like to take a few minutes as we open to talk about the
OMB budget. I know as we go through the question period, we
tend to talk about a lot of subjects, but I want to make sure I
cover the OMB issues.
The increase that we have requested this year, as you noted
Mr. Chairman, comes at a time when there are very difficult
decisions. One of the very difficult decisions we had to make
was on our own budget. The timing is opportune because as Mr.
Hoyer noted, we are looking at a transition and the question
is, what do we do by way of the institution of OMB--regardless
of the outcome of the next election--to make sure that OMB can
serve the President well and can work effectively with the
Congress.
Over my years at OMB, I have enjoyed working with the
Congress generally, and with this Subcommittee in particular,
because we have had, even when we disagree, a very good working
relationship, and that is something we want to continue. And
one of the points that I am going to make is we need the
resources to do that effectively.
I think that working with the Congress, this Administration
set out to create a government that works better, costs less,
and gets results that the American people care about. OMB
played an essential role in maintaining the fiscal discipline
that has produced budget surpluses for three straight years and
making government work better. In addition, OMB has significant
management responsibilities, as you know. For example, OMB
monitors and provides advice, support, and leadership in
addressing our 24 priority management objectives described in
the budget, and working with agencies on myriad other issues on
a daily basis. OMB will continue to provide leadership and
analytic support to address many other priorities, including
modernizing student aid delivery, completing the restructuring
of the Internal Revenue Service, and strengthening the Federal
statistical system.
Despite staffing levels that have actually decreased since
1993, OMB continues to carry out what is an expanding range of
missions. I say this not by way of criticism. We have worked
with the Congress in many cases to create these new
responsibilities and new requirements. When one looks at the
Government Performance and Results Act, the Clinger Cohen Act,
and a number of other new laws that are noted in detail in my
testimony, these are very good management tools. But in order
to use the tools, it does require the proper resources.
If OMB is to continue to serve the Administration and the
American people well, I think what we need to do is propose
what we think are the right levels of resources and work with
you to try and persuade you that they are, in fact, correct.
We try, as we ask other agencies to do, to use our
resources efficiently and effectively, and it is with some
reluctance that we ask for more resources. If anything, we hold
ourselves to a tougher standard than we hold others to. I think
the increase that we have asked for this year is very much
justifiable and necessary. We have requested $68.8 million,
which is an increase of $5.5 million over the 2000 enacted
level. Roughly 70 percent of the requested increase is simply
to maintain current operating levels. The remaining $1.7
million is requested to address increased workload demands by
investing in staff, training, and new information technologies.
I would like to talk for a few minutes about the investment
in our people. In FY 2001, OMB requests an increase of $613,000
to fund 9 new FTEs. This is to oversee a wide variety of
management initiatives and to support some of the core
functions on the budget side as well. It would bring our total
FTE level to 527. Two of theadditional staff positions are for
the Office Of Federal Financial Management, and this would support the
review and implementation of financial systems as required by the
Federal Financial Management Improvement Act. Two of the additional
staff positions are for the Office of Information and Regulatory
Affairs to support information technology issues ranging from capital
planning, where I think we have made real progress, to computer
security, where we share the Committee's concerns that we need to put
even more resources.
One additional staff each for several of our resource
management offices, the national security and international
affairs division, natural resources, energy and science
division and the health and personnel division. This is really
in recognition of the very extraordinary pace of effort there
and the fact that the workload burden on the staff in those
divisions needs to be reduced in order for us to maintain both
the morale and the retention of good experienced staff, because
there is simply more work than current staff can do on an
ongoing basis.
One of the additional positions is a financial economist to
provide expertise on issues ranging from financial institutions
to improvements in handling of government-held debts as
required by the Debt Collection Improvement Act. The final
position is to assist in preparation of the Federal budget and
the many reports required of OMB, to try and improve the
timeliness and the presentation of those documents. In addition
to the staffing increase described above, OMB requests an
increase of $85,000 for training to ensure that our staff have
the tools to do their jobs effectively.
OMB is requesting $1,030,000 for remediation improvements
of our information systems. The FY 2001 IT request is an
investment in a 5-year plan, which would really bring us into
the modern computer era. We're working with computers that are,
in computer terms, several generations old. Our request would
correct network infrastructure deficiencies, improve the speed
of remote access, modernize our correspondence system, provide
classified communications--which we do not how have the
computer capacity to deal with, modernize our report writing
software, improve the A 11 data collection technology and
increase in general our IT support capacity.
I would like to conclude just by saying that after what is
now many years at OMB, I couldn't be prouder to work at an
institution where the career staff are as fine a set of public
servants as they are. I have never had the pleasure to work
with a better group of committed career Federal officials. They
deserve the resources do their job well. I know this Committee
cares that they have the resources to do their job well and I
would be delighted to work with you through this hearing and
try to work on a budget that helps get OMB where it needs to be
in the new century. If I could make one comment on a non-OMB
issue, and I know you will have questions in this area. On the
general question of Treasury-justice funding, as you noted, Mr.
Chairman, in your opening, I quite predictably will repeat that
I think we have to look at each of the agencies on their own,
and I think these charts do make a certain set of points quite
clearly, as they always do. But we tend to look at the agencies
each internally. As it turns out this year, the percentage of
increase in Treasury is much greater than the percentage
increase in Justice, in the law enforcement area.
In dollar levels, we have never held them to a standard
where they need to have parity. We look at functions, we look
at people who are working together in comparable positions, we
look at can they do the jobs that they are doing, and I would
love to go into these issues in more detail in the questions
and answers. I hope as we discuss issues, it can be in the
context of finite resources where we have to constantly be
asking the question--are we getting the most of each of the
dollars we are putting in. That is how most of our decision-
making process at OMB is driven. I couldn't agree with you
more. This Committee, and OMB are probably the two places in
government that have the most need to ask those questions and
we need the best information to do it. I share many of the
frustrations that you have in terms of our ability to get good
timely accurate information. We have to do it in a fairly
constrained period of time between November and January. You
have a little bit more time. We, as always, look forward to
working with you to make sure you have the information you need
to make good decisions.
[The statement of Mr. Lew follows:]
USE OF DETAILEES BY THE OFFICE OF MANAGEMENT AND BUDGET
Mr. Kolbe. Well, thank you very much and I appreciate your
comments. We will obviously have an opportunity to discuss
this. Let me just say that I agree with you. I will go into
some other questions first, but we do need to talk about this
in terms of the finite amount of resources. We should look at
it in a way of dollars, how can we best spend the dollars. I
can tell you from serving on the Subcommittee also that funds
the INS, which I think holds the title of the most mismanaged
agency in the Federal Government, that I don't think anybody
could possibly argue the dollars are being well spent in INS.
So I still think the question actually rises to a higher level
when you make that kind of comment.
Let me start with asking some questions about your budget
and the FTE increase that you have asked for. As you have
noted, this is the first increase that you have asked for since
President Clinton took office. In fact, nobody can complain
about this. OMB may be the only area of government that hasn't
been growing consistently over the last several years. Your FTE
I think in 1993 was 573, and you are at 518 FTE right now.
My first question is, in all these years, how have you been
making up for that? Do you use detailees and, if so, how many
do you have on board?
Mr. Lew. We both use detailees and we provide detailees.
The exact number of detailees I think I have here.
Mr. Kolbe. This isn't a got-you question.
Mr. Lew. I actually do have it here. I just need to--I
can't say I remember it off the top of my head. First, let me
say what we use detailees, for the most part, seasonally. One
of the truly impressive management functions within OMB is
peaking to produce the President's budget in a very short
period of time. Rather than keeping full-year personnel that we
really need for a three-month period, we use detailees, we call
them temps, to assist in the preparation of the budget. OMB
had----
Mr. Kolbe. What part of the year that you use them?
Mr. Lew. It is in the November-to-January period.
Mr. Kolbe. If you are using a detailee from Interior to
help prepare the Interior budget, do you have any concerns
about this being a little bit of the fox guarding the chicken
coop?
Mr. Lew. I actually did when I began working at OMB. After
watching the process for a number of years, I don't anymore. I
actually make it my business to go and visit with some of the
detailees to see how it is operating. It is a very impressive
system where they form quite an esprit de corps. They learn
very quickly what they need to do to prepare the budget tables.
They are working under the supervision of OMB managers, to
implement thepolicies that OMB officials have made. They are
not making policy. What they are doing is the technical work necessary
to produce the many books that we put out.
Mr. Kolbe. Can these detailees learn the ropes quickly
enough? The work you do in budget is incredibly sophisticated
and detailed, and requires an enormous amount of experience.
Can a detailee really pick that up?
Mr. Lew. I actually think the answer is yes, and it is
largely due to the middle management supervision they get. It
is extraordinary what some of our career middle managers do to
bring these people together and have them very quickly up to
speed. Producing a budget table is tough, but it is a learnable
skill, and the attention to detail to make sure they are
accurate depends on the esprit de corps and commitment. They
quickly learn the skills and they have a great spirit. It does
work very well. The alternative would be to have many , many
more year-round OMB officials, career staff, and I think we
would end up having a larger FTE load, which was not targeted
with the skills we needed in the rest of the year.
Mr. Kolbe. For the record, would you give us a table that
shows the OMB divisions and the number of FTE and other
government employees for each of those from 1993 to today so we
can see where you have used those people?
Mr. Lew. Sure.
[The information follows:]
NEED FOR ADDITIONAL ECONOMIST POSITION
Mr. Kolbe. You are asking for another full-time economist.
How many do you have on board right now?
Mr. Lew. Let me check. In our Office of Economic Policy, we
have eight people.
Mr. Kolbe. Are all your economists within that office?
Mr. Lew. We have economists in other divisions. Let me
describe what the Office of Economic Policy does.
Mr. Kolbe. Is this additional in that office?
Mr. Lew. Yes. It provides analytic support, not just in the
preparation of the economic assumptions in the President's
budget, but on many of the complex issues that come up, whether
it is related to insurance policy or complex financial
transactions. It provides analytic rigor that we couldn't
duplicate in each of the branches and the divisions, just
because it takes a certain kind of experience, economic
analytic skills which may not be the same. You need to do the
program evaluation and the management work.
What we have got, I think now, is a team that works very
well together where the divisions call on the Office of
Economic Policy, just as I do when I am doing my macroeconomic
work in the preparation of the budget. They work with our
Budget Resources Division, which has many people who have very
technical skills and people work as teams so that we don't have
to duplicate analytic skills that we need on a periodic basis
in each of the divisions. I think if we had one more economist,
it would very much enable us to have the relationships be on
more and more issues, which would improve the quality of
analysis that we do and the work product that we put out.
BASIS FOR PROPOSED INCREASE IN STAFFING
Mr. Kolbe. Last question because my time is up. Would it be
safe to say in looking at where you have asked for people--two
in ORIA and Office of Financial Management, one in national
security, one in national resources, one in health personnel,
one in OMB-wide offices. Would it be safe to say these requests
are because of workload or more because they reflect the
philosophical views of the Administration that these are the
areas that should have additional personnel?
Mr. Lew. Mr. Chairman, I think there is certainly an extent
to which those divisions have higher workload because of the
policies that we work on. We have been very active in the
health area. We have been very active with international
policies. I think that where we need the resources right now
reflects the policies that Congress is working on. Let me give
you an example. The environmental riders that we fight about
every fall. That puts an enormous burden on our Interior Branch
just to analyze them and understand them. Some of those things
that we create, some of it are issues that the Congress
creates.
I think that it is fair to say with a new administration
coming in, the mix of policies that people are working on will
change. It may end up being that the next OMB Director says I
don't really need another person in the International Branch. I
need the extra person in the Defense Branch. But that is a
decision they can make. They can move the FTEs around. I think
what is clear is that we have real, real crunches in divisions
that are at the peak of demand in terms of the work that they
produce, and we are at the limit of our ability to manage
within the 518.
Mr. Kolbe. That was my thinking, even if these reflect your
priorities, with a new Administration, they could move these
people.
Mr. Hoyer.
FEDERAL EMPLOYEE PAY COMPARABILITY
Mr. Hoyer. Thank you very much, Mr. Chairman. Mr. Lew, one
of the things I did not mention in my opening statement but I
want to reference is, I think this budget is as good a budget
vis-a-vis Federal employees who are obviously a great concern
of mine as I have seen since I have been in the Congress. You
indicated your people were excellent, that you needed to shore
policies that would allow you to retain your excellent people
and then to fill vacancies by recruiting equally motivated and
skilled people. Obviously to do that, we need to compensate
them and protect their benefits appropriately.
This budget, I think, does that. Let me, however, ask you
the question which I generally do with reference to FEPCA
comparability, the law as it relates to--relating the Federal
pay to the private sector analogues. Can you comment on that
and where are we with respect to OMB's agreement that we have a
formula, a process which comes up with a fair figure for
adjusting Federal pay?
Mr. Lew. Mr. Hoyer, as you and I have discussed, this is a
very complicated issue that is going to require our continuing
to work together in the process, and the process is one that is
frustrating to all of us because it isn't a faster one. I think
what we have done while working on a longer-term policy in this
area is to make real progress towards narrowing the gap,
shifting from policies that have adjustments below the
employment cost index to policies that have adjustments above
the employment cost index.
I would emphasize that there are a number of things in our
budget which are not specifically pay issues where we have done
an awful lot to try to increase and improve the benefit package
that Federal workers have made available to them. Some of them
involve going back and reversing some policies. For example, we
proposed reversing the pay delay that was in last year's bill.
Reversing some of the retirement contribution changes that were
made in the Balanced BudgetAct of 1997, which were necessary at
the time but are no longer necessary. And we have a range of new
proposals, some of which are administrative, some of which are
legislative. For example, in the Federal employees health program, to
take advantage of the opportunities in current law for the Federal
Government to offer a modern set of before-tax benefits for health
insurance.
Mr. Hoyer. My understanding that can be done
administratively?
Mr. Lew. Yes, sir. And we have proposed a new buyout
authority. I think if you look overall at the items in our
budget, many of the things move us closer to comparability in
ways that you wouldn't see necessarily just looking at the cost
of living adjustment alone. The overall pay and benefits
package that Federal workers have made available to them, I
think, with the proposals we have made, would be a much more
modern package that competes more favorably with the kinds of
opportunities that people in the private sector have to take
advantage of both pay and non-pay benefits.
Mr. Hoyer. We will keep discussing the first half or the
first tenth of the answer, because I think nine-tenths are very
positive. I agree with you, you have addressed both pay and
non-pay issues, which have an impact on the net worth of the
compensation received by the employee. I will work with the
chairman between now and when we mark up to perhaps address the
pay comparability issue.
COURTHOUSE CONSTRUCTION
You and I have discussed the courthouse issue briefly. I am
concerned about a number of things, number one, that there is a
priority list of 19 courthouses that are ready to go. The
budget includes seven. That is both the good news and bad news
because we didn't have any last year. The last time we included
money was in the fiscal year 1999 budget.
But the $488 million figure is obviously far short of what
would be necessary to do the 19 that are apparently on-line,
ready to go, and needed. Obviously we don't want to spend money
if we don't need it, but it is my understanding we do need it.
In addition, I am very concerned as I have expressed with
you privately and briefly in my statement, about the proposal
to have shared courtrooms which, as you well know, the
judiciary is very concerned about that in terms of the
efficiency of dealing with courtroom dockets and the ability or
the inability to manage the flow of business. Would you comment
on the 12 courthouses that are not included in this budget and
the courtroom sharing proposal which, as I understand it, has
not been made on the basis of any particular study, but is an
assumption made that this can be effected without harming the
administration of justice.
Mr. Lew. I would be happy to respond to both. In terms of
the overall budget, we are obviously operating within
constraints in each of the budgets we have put together. This
year we proposed easing the constraints somewhat, but we are
very mindful of what the overall aggregate amount of
discretionary spending could be and within that, we had to make
tough choices. We didn't have the ability in any area to put
100 percent of what might be desirable with unlimited
resources.
What we did in terms of trying to determine an amount for
courthouses--and I must make note as an aside that this is a
substantial change from our recent policies as you noted where
we are proposing a fairly aggressive policy compared to a no-
new construction policy--in each of the areas we try to make
judgments based on what would be achievable in the short run
and where the decisions could be made later without delaying
construction. For example, we funded all of the construction
projects that are ready for bid in 2001. Those were the ready-
to-go projects--Seattle, Gulfport, Mississippi, Washington,
D.C., Miami, Florida, are in that category. If we had unlimited
resources, we could have done new site acquisition and design,
but that sets in motion demand for more resources on an ongoing
basis, and we felt that we couldn't go and put the entire list
in, given the constraints that we had.
I think if you look at the courthouses that are not on the
list, they are largely in the category of projects that weren't
ready for construction or where we just didn't have the
resources to do the additional design projects. In terms of
courthouse sharing, I would take issue a little bit with the
characterization that it is not based on a study. There have
been a lot of studies on the efficiency of courthouse use and I
would be happy to provide for the record our staff's analysis
of those, which would show that courthouses in general are used
a fairly low percentage of time. By ``low'' I don't mean 10
percent but 50, 60 percent, not 100 percent.
In order to maximize the number of projects we can
undertake, we have to try and do each of the projects in the
most efficient manner possible. We have had differences of
views with the judicial branch on courtroom sharing. I must say
it is a little bit of a frustration that we can't get all of
the information that we would like to be able to make
considered judgments on a court-by-court basis, so the part of
your statement that I would agree with is that we don't
necessarily have the best possible information to make these
judgments. But frankly, that is in part because the judicial
branch doesn't provide that data to us. When one looks at the
specific projects, I think you have to look at whether the
courtroom utilization really would be a problem or not.
One can look at the room we are in. It is a shared room for
subcommittees. Subcommittees schedule the use of the room. At
the White House, we have shared rooms. Federal agencies have
shared rooms. I don't think anyone is suggesting that judges
should share their personal chambers. No one is suggesting they
shouldn't have their private offices and their staff offices.
The question is with the courtroom that they use, can we afford
a couple of million dollars a courtroom for rooms that are used
50, 60 percent of the time, or should we have a scheduling
system where they share them. I might note, one of the judicial
regions, Seattle, actually chose courtroom sharing in its own
plan for its own region. That will give us a chance to see a
little bit better how it works.
One of the issues we deal with is whether retired judges
who are no longer fully active need their own courtroom. I
think there has been some movement from the judicial branch on
this issue, but in order to really make a determination on a
court-by-court basis, one really needs to know what is the
workload of the judges who are no longer fully active. Are they
hearing half a load or 90 percent of a load. And that, I would
agree with you, we don't have the detailed information on.
I would make the following observation. RepresentativeMeek,
I am sure, will have questions of this. In the case of Miami, we really
did endeavor to make the courthouse fit into the budget because we
think it is an important project. We want to continue to work with the
judiciary and with the representatives from the area. If there is
better information available to suggest that the design that is
anticipated could be improved, we are not rigid on this issue. We did
the best we could with the data that was available to us and we think
it is a good plan and I would be happy to go into more detail on it.
STUDIES OF COURTROOM UTILIZATION
A 1997 GAO study found that, on average, trial courtrooms in seven
courthouses were in use (for trial or non-trial purposes) about 54
percent of the all the days that they could have been used. Within the
scope of its review, GAO found no courtrooms with a utilization rate
above 61 percent. In addition, GAO found that
courtrooms were used for actual trials less than
one-third of the available days--with the highest average trial
usage rate calculated at 32 percent and the lowest at 13
percent;
on most of the non-trial days, courtrooms were used
for two hours or less; and
there was at least one unused courtroom on almost
every workday of the year at all of the locations included in
the report where there was more than one courtroom.
Mr. Hoyer. Thank you very much. I think my time has expired
on this round. I will ask some more questions later on. Just an
observation. I think the judiciary does, in fact, believe the
senior judges fall under a different category, and they do not
expect to have senior judges have courtrooms and share those
courtrooms that are available which will use some of that down
time or dark time of the courthouses.
So the judiciary is in sync with that part of your
thoughts.
Thank you, Mr. Chairman.
Mr. Kolbe. Mrs. Northup.
REDUCING THE BURDEN OF PAPERWORK ON THE PUBLIC
Mrs. Northup. Thank you. Welcome, Mr. Lew. I look forward
to discussing several issues with you. Primarily, I want to
discuss with you the Paperwork Reduction Act and the burdens
and preface my remarks by saying I think that the results of
the bill that was passed in 1995 have been discouraging.
Certainly, the community that works with the burdens feels that
there has been very little reduction, very little progress on
that area. I didn't know whether they were just complaining.
Most people do when they are being regulated, but I notice that
recently GAO has just issued a very critical look at both EPA
and their paperwork, and also OMB's failure to meet their
statutory requirements, particularly--let me just say that,
first of all, they said that GAO noted that 14 major
regulations accounted for the vast majority of EPA's paperwork.
And I just wondered whether or not you have denied any agency--
I know you didn't deny them--a proposed collection of
information? Did you deny proposed paperwork for any agency
that wanted to propose a new regulation or did you deny the
paperwork burden for any significant regulation or are you all
merely just a rubber stamp?
Mr. Lew. We are not merely a rubber stamp. I think our
reputation with the agencies is, if anything, that they wish we
were a rubber stamp. I think the deniable versus non-denial,
most of the regulations that are issued are issued pursuant to
laws that require regulations. So the question isn't will there
or won't there be paperwork burdens. Many of the burdens are
because there are changes in tax law. There are changes in
environmental law.
Mrs. Northup. Excuse me. Weren't some of EPA's regulations
proposed with no changes in the law, just their interpretation
of the law?
Mr. Lew. In terms of the volume of the paperwork burden
changes over the last few years, a large number of them are due
to changes in the law. I would have to go back and figure out
which were due to changes in law and which were due to actions
taken by agencies. We endeavor to work with the agencies as
they put together new paperwork requirements to have them be
both as understandable as possible in plain English and as
unburdensome as possible. And I think that the measure of our
success is not so much in denial versus approval, but are they
better when they are finally issued than they were when they
were proposed. And I would be happy to go back and pull some
examples for you of things that changed in the course of the
process.
I can't say I brought with me today a lot of examples, but
in terms of our role with the agencies, our role is not to say
don't issue anything that requires new paperwork. It is to make
sure that the burdens are reasonable and as unburdensome as
possible. With regard to not meeting the reduction targets, the
5 percent annual reduction targets, I would argue that you
really would have to look at statutory requirements that have
changed as much as regulatory policies that have changed to
understand the pattern.
Mrs. Northup. Let me ask you, also it says specifically the
Paperwork Reduction Act, that agencies are not supposed to
collect information unless it has been authorized by OMB and
the GAO report said that EPA alone has imposed at least $3
billion in unauthorized paperwork burdens since the passage of
this Act. I just wondered if you have sought--if you have
requested that the agencies seek approval for these
unauthorized activities, and if you notify the public, if you
make sure that either the agency or you notify the public of
any unauthorized collections because, of course, the public is
not required to comply with the regulations if there is an
unauthorized collection of data.
Mr. Lew. I would have to go back and review the specific
GAO report you are referring to. I would be happy to do that
and respond to you more fully. I am not aware of the specific
instances in which there might have been unauthorized
requirements. I am aware of a number of cases in which there
have been regulations that required the sort of public right-
to-know policies which may be part of that. But that is not
unauthorized. That was part of very, very detailed process
working through it.
Mrs. Northup. I'm surprised. Maybe you haven't gotten this.
It was just released in March 2000, and I have an extra copy,
but I would tell you that GAO says that you alldeclined to
comment when they invited you to comment. And I would ask you to
comment on the record for this committee. I will include that question
with my submission, but clearly they felt that you were not complying
with the law. They were very critical of OMB, and I thought you would
at least be aware of the fact that you all decided not to comment.
Mr. Lew. I don't have the date on that report. There are
many--we are still in March of this year. It could have been a
few days ago or a few weeks ago. I'm not sure of the date of
the report. I would be happy to take a look at it. I take these
things very seriously. They come to me. They don't always come
to me the day they are issued. There are hundreds and hundreds
of GAO reports, so they do take a little bit of time to make
their way to my office. I would be happy to take a look at it.
Mrs. Northup. Let me ask you. I know that--I assume as I
look at rulemaking, my thought about OMB is that you all are
supposed to judge whether the regulation is one, legally sound,
economically sensitive as well as necessary, that it is
meaningful, that it is useful. Would you agree with that
evaluation that your agency does on rulemaking?
Mr. Lew. We have a number of functions that we play in
reviewing rules. Obviously, the law requires rules. Part of our
function is make sure the rules get implemented in a timely
manner. In cases where agencies are undertaking policies, we
have the responsibility to work with them to make sure they
have done the kind of analysis to make sure that they have
considered the views, both of other agencies, of other parties
outside of the government, and the analysis in terms of--in
case of major rules, the cost and benefits.
Mrs. Northup. Do you also, though, judge a rule by whether
or not it is legally sound?
Mr. Lew. We do review whether there is a legal basis. That
is one of many factors that we consider. I think that it is
always our intention to make sure that we are doing things that
are mandated by law or within the authorities we have under the
law. That is not typically the area of greatest controversy.
The area of greatest controversy is usually whether they are in
the least burdensome way possible or whether or not they have
taken account of cost as well we benefits, and we have very
active processes on major rules in that area.
Mrs. Northup. I'm going to submit the rest of my questions
but I would be very eager, as we go through this process, to
have your response as to what sort of the level, what sort of
rules you have, apply those criteria to and some specific
questions. Thank you.
Mr. Kolbe. Thank you, Mrs. Northup. If you are able to
remain, there will be time for a second round of questioning.
Mrs. Emerson.
IMPROVING DATA QUALITY
Mrs. Emerson. Thanks, Mr. Chairman. Director Lew, I want to
ask you, if I could, about some action that was urged by this
Congress in the FY 1999 Omnibus Appropriations Act,
specifically as it related to regulations for data quality. We
had stated that the Committee expected OMB to issue rules by
September 30, 1999, with regard to data quality, and as far as
I can tell, you all haven't done anything to date. Do you have
any idea when these data quality regs might be issued?
Mr. Lew. My recollection is that it was something that was
in the House report, but we worked with the Committee over the
conference period on it. I am not aware of a requirement.
Mr. Kolbe. If the gentlelady would yield, the language does
say ``urge,'' but we certainly urge very strongly.
Mrs. Emerson. And if I may just say in the joint
explanatory statement, it did, in fact, say something to that
effect. You are right, Mr. Chairman, urging very strongly. So
can I take it then because we only urged and didn't mandate
that you all have not gotten around to doing that yet?
Mr. Lew. Let me, if I may, respond on the substance of the
matter and our concern. We have been concerned in the
discussion of this policy that right now there are private
rights of action in cases where there are consequences. We are
concerned about a change of policy that would create rights of
action where there aren't consequences. That is a tremendous
expansion of potential litigation. It is the kind of issue we
have worked with the Congress on over the years when we
discussed regulatory reform generally, and it is a very, very
serious matter. I don't want to suggest that this is a small
issue. There may be real differences between us. I was just
handed a letter that we received on March 27, which I haven't
had a chance to read yet, where you have asked questions on
this. I would be happy to read this and respond to it.
Mrs. Emerson. My reason for asking this isn't to trick you
or to get caught up in anything, but rather a lot of the
information if, in fact, the public goes to the website of the
EPA just, for example, they would see EPA's take on a
particular policy as opposed to oftentimes perhaps a more
objective viewpoint or the other side not having an opportunity
to respond. So it is not the legal action part I am concerned
about; it is the ability to get the straight skinny on things,
if you will.
Mr. Lew. The problem is--and this is not unique to this
particular proposal--there are many proposals where when you
change the administrative process to create rights. There are
also opportunities for review and delay. I don't think we
disagree on the basic premise that rules should be based on the
best quality of information. That is not an issue we disagree
on. The question on what constitutes the right quality, who
makes the determination how, those are obviously very
complicated questions. I would be happy to pursue this with you
and have John Spotila, the head of our Office of Information
and Regulatory Affairs, work with you on it. I don't want to
suggest we don't have very serious concerns.
Mrs. Emerson. I appreciate that and I know that the Center
for Regulatory Effectiveness, which I believe is composed of a
lot of ex-OMB officials, they put together some sort of a
suggested policy that I would appreciate your at least taking a
look at it and getting back to me about that.
Mr. Lew. Be happy to.
[The information follows:]
FUNDING FOR HIGH INTENSITY DRUG TRAFFICKING AREAS
Mrs. Emerson. Let me ask you another question with regard
to the budget in general, and decisions that OMB makes as
opposed to an agency's request for something more, and I am
specifically referring to the Office of Drug--the Drug Czar's
Office, who proposed a larger request for high intensity drug
trafficking areas than OMB gave them, if you will. I think you
all agreed to a $700 thousand increase as opposed to their
request for $23 million. This is a great program, and since I
represent a very rural area where thereis a high intensity of
drug trafficking as well as manufacturing, my concern is that with
adding 5 new HIDAs, if you will, you only increase their budget $700
thousand, but yet added new programs, if you will, not that I don't
agree with those programs, but did not reflect--I think it is important
to continue funding programs that work as opposed to starting new ones
and just leaving these be.
Mr. Lew. Let me answer the question generally and then
specifically. I think that it is more the rule than the
exception that we have put in increases that are less than
agencies' requested. If we put in the request that agencies'
requested, our budget would probably be $70 billion bigger than
it is. It is almost the rule that this is the case. To the
extent that HIDTAs are effective, we obviously are supportive
of them. The increase reflects that. We do have some questions
as to whether all the HIDTAs have been as effective. There is a
need for evaluation, the process of designation has not been,
in all cases, competitive designation. I think we need to work
together to evaluate the HIDTAs and make sure that the
resources that we are putting into the program all are used
effectively, and we would like to work with you on that.
Mrs. Emerson. I can tell you that the one in my area is
particularly good. My real question with regard to this is you
have to decide that, but yet you took $25 million and put that
into a new treatment program in the ONDCP's office. I thought
that office was more of a strategic office as opposed to a
policy treatment. I want to argue about treatment because I
think it is very critical, but that is a new request, and there
are other agencies in the government that do have
responsibility for those types of treatment programs. I am just
curious why you would make a decision like that.
Mr. Lew. Obviously, we think the area of treatment needs
additional work and we need the resources to support that work.
As to the division of responsibilities between ONDCP and other
agencies, ONDCP is in a role where what they do tends to
overlap with what a lot of other agencies do. So if we had the
basic decision rule to only have ONDCP work on things no one
else works on, we probably wouldn't have HIDTAs. We would have
programs run out of Justice and other agencies. So I think the
notion that treatment is important, is one that I appreciate
that you agree with us on. I think the balance of resources is
one we will have to work together over the course of the
process to persuade you that this is a good proposal. I would
hope that it doesn't have to be a choice between HIDTAs and
treatment, but if there is a case to be made that the treatment
program is--or the function that we put into ONDCP is
duplicative, we would like to know that, obviously. We didn't
think so or we wouldn't have put it in.
Mrs. Emerson. I understand that. Just so that you know, I
do not disagree with the need for treatment, nor the amount of
money put in the treatment. My concern is more with not funding
the--actually adding five new HIDTAs, and I correct myself, I
meant to say that you only increased their budget $700,000. You
have got five new areas in there. So obviously that means the
others will get less. I am just real concerned about something
that's working well, and I hope that it won't take very long
for you do some sort of cost benefit analysis to determine
whether or not the HIDTAs need to be improved and/or the
concept changed or what have you.
Mr. Lew. I think we would very much appreciate your help as
we try to work on the evaluation, and this is not the easiest
area to do program evaluation. It is something that we think is
very important.
Mrs. Emerson. Thank you.
Mr. Kolbe. Mrs. Meek.
OMB STAFFING REQUIREMENTS
Mrs. Meek. Thank you, Mr. Chairman. Welcome, Mr. Lew. First
of all, I want to commend you for the work you have done and
the fiscal discipline you have shown, and I am glad--I was
happy when I heard you tell Mr. Hoyer that you are going to
work with us as you go along on the courthouse situation. If I
have had one thing bedevilling me since I have been here, it
has been the courthouse in the Southern District of Florida. I
don't think I need to tell you nor the committee that the
Southern District of Florida is the busiest trial court in the
entire Federal system, and it has not changed a lot since 1970
in terms of the needs there.
So I am glad to know that you will continue to work with us
on it. Of course we will continue to send you any new data
which might help you in your decision-making relative to the
need there in southern Florida. The drug trade directly affects
the criminal court caseloads there, and of course, the civil
court cases are very, very high. So there is a need in South
Florida as shown in the Judiciary's analysis, and if they are
not giving you enough information, we should be sure that you
get what you need to make the kind of decisions that are fair
to all concerned. So I am happy to know that.
Mr. Hoyer asked you some questions about caseload, the load
that your staff has, and I want to specifically get to my
question on that. Last year at this hearing, I asked you about
OMB's ability to handle its large burgeoning workload and
whether you were stretching the agency's people a little bit
too thin, and you indicated that you were concerned that you
were reaching the limit of what the existing staff could do.
Now you seek an additional 9 FTEs in fiscal year 2001. And your
budget request identifies areas in which these additional FTEs
would be deployed, but it does not specifically quantify the
extent of the workload increases in these particular areas.
Are these--FTE increases principally designed to fill
skills gaps, or are they workload-driven or have you just
reached a breaking point as to what you think you can get out
of your existing staff without compromising their
effectiveness? Would you comment on that?
Mr. Lew. I would be delighted to. I actually think the
answer is a little bit of each. The request for additional FTEs
is partially to provide specific skills on financial
management, economics, and regulations. That is related to both
new requirements, many of them good requirements in terms of
laws that are designed to improve the management of the Federal
Government, and the fact that people are overworked to begin
with. Three of the positions are for resource management
offices that work in specific policy areas, and we have
allocated those positions where the workload is the greatest
and, frankly, where I fear that if we don't provide some
additional resources, we are either going to have to reduce
what we ask of people or the level of exhaustion and fatigue
will become a problem.
I commented earlier to Chairman Kolbe that another
administration may find that they don't need those positionsin
the exact areas where we have put them, but what I think I can say with
great confidence is that at the 518 FTE level, we don't have the
flexibility to put an additional person in the place where the workload
hits that point, that limit where you just can't manage anymore. I know
that I have designated the three areas where the current workload is
the greatest. A year from now someone else sitting here for a new
administration may see that problem somewhere else. I know they don't
have the flexibility to address it. What I think we would do is get the
resources in place where the current workload is, and then, as we have
managed over the years, future OMB directors will move resources around
to reflect changing policy burdens.
One of the things that I think you are very well aware of
is the year-round nature of this budget process has a real toll
on the people here and the executive branch. There used to be
months of the year when you were between cycles. We don't have
those breaks anymore. We go right from a budget negotiation
with a day break to preparing the next year's budget. We
literally had one day between the final agreement on the fiscal
year 2000 appropriations, and going full-bore into preparation
of the 2001 budget. We sent it up to Congress the first week of
February, and we have been working with Congress on
supplementals ever since.
At the point when we hopefully reach agreement on
supplementals, we will be deep into the process of working on
FY 2001 appropriations. This leaves very little room for all of
the things that come up day to day where we try to help
agencies solve their management problems and work through
difficult analytical problems. This is where OMB has done an
enormous amount to advance the quality of policy analysis in
the executive branch, and I might add, helping committees
responding to questions that come from the Congress as you work
through tough problems.
I think these are modest requests that will very much
ameliorate the very difficult pressure that we now have, and I
would note coming as it does at the end of an administration,
it is not a change that we will personally benefit from but it
is something the institution will benefit from, and the next
president will benefit from.
NEW USER FEE FOR THE CUSTOMS SERVICE
Mrs. Meek. If I may quickly ask another question, Mr.
Chairman. You made a decision to ask for $210 million as a user
fee to offset the costs of the automated commercial environment
system. Did you involve Customs in that decision?
Mr. Lew. We are working with the Treasury Department on the
policy, and actually I think the proposal very much reflects
concerns that Treasury had in the design of some earlier
versions. It was designed very much to reflect the new costs
associated with the improvements. Frankly, we think it is the
right policy and we wanted to have the strongest policy to come
up here and be able to say we are not raising the fees beyond
the costs associated with the new system. Obviously, there are
fees already. The fees currently support the Customs operations
without the new changes. We have sized the fee so that in 2001
and beyond, it will support the improvements which we think is
the right way to answer the questions we have had in the past,
about whether or not we were overcharging. I think that there
were good arguments to defend some past proposals, but there is
a stronger proposal and it is a result of having worked closely
with Treasury.
Mrs. Meek. Thank you. Thank you, Mr. Chairman.
Mr. Kolbe. Thank you, Mrs. Meek.
Mr. Goode.
SIZE OF RECENT BUDGET SURPLUSES
Mr. Goode. Thank you, Mr. Chairman. Mr. Lew, in your
statement, you indicate that we have had three straight years
of budget surpluses. Just to refresh my memory, what was the FY
1998 surplus?
Mr. Lew. $69 billion.
Mr. Goode. What was the 1999 surplus?
Mr. Lew. $124 billion. I am just checking my memory here.
Mr. Goode. What do you think it will be in 2000?
Mr. Lew. These are not numbers that I reviewed before
coming in here today, so I have to go from the narrow numbers
to the big numbers. Let me just grab a table. The current
service surplus for 2000 is projected before policy to be $179
billion. Obviously, the lion's share of it is the Social
Security surplus, $148 billion. We have--
Mr. Goode. 1999, all of it was a Social Security surplus.
Mr. Lew. Actually, I think the reestimate was a tiny non-
Social Security surplus as well.
Mr. Goode. What was it?
Mr. Lew. I think it was less than a billion dollars. That
was the final estimate as opposed to the end of year numbers.
Mr. Goode. 1999, of course, it was all Social Security
surplus. Now, with your 2001 budget, what is your surplus going
to be?
Mr. Lew. With our 2001 budget, we are obviously proposing
to save the entire Social Security surplus and with all of our
policies, we show a remaining non-Social Security surplus of $9
billion.
Mr. Goode. That, of course, includes the tax--the number of
tax law changes that was----
Mr. Lew. It is all of our policies, both things that reduce
the deficit, things that raise the deficit, the net position is
$9 billion of surplus.
Mr. Goode. Does that include the Medicare?
Mr. Lew. That is everything.
Mr. Goode. No, I mean, do you include Medicare like Social
Security? You roll that in?
Mr. Lew. Medicare is not off-budget, so it is part of the
on-budget calculations for all purposes.
Mr. Goode. I understand that, but so is Medicare A.
Mr. Lew. Medicare part A and part B are both in the on-
budget portion of the budget, so the $9 billion reflects the
flows associated with both part A and part B.
Mr. Goode. In your statement, you have indicated that OMB
has played an essential role in maintaining fiscal discipline.
Wouldn't you also concur that the House and Senate has played a
big role in maintaining that surplus?
Mr. Lew. I think that we are very pleased to have worked
well with Congress throughout our time here. Obviously in 1993,
it was more of a partisan decision. In 1997, it was quite
bipartisan. That is the right way to do it. So we have worked
with Congress consistently. I think the President's proposals
have been very strong starting points, and we have worked with
the Congress to implement very good policies.
Mr. Goode. As I recall, though, in 1999 when you have about
a billion dollar surplus, not using Social Security, that
Congress pushed for that concept first. Would you not agree
with that?
Mr. Lew. I think that the results that we see in 1999 are
more closely connected to the 1993 decisions than anything we
did in 1997 or 1998 because those policies take some years to
kick in.
Mr. Goode. I know, but my question was, didn't Congress
raise the point first about Social Security, and make it the
Flagstaff of the ship, so to speak, and you all followed suit.
Is that not true, regardless of whether the policy of 1993 was
good or not?
Mr. Lew. If we are going to get into 1999 policies, I think
there was more than a little bit of luck that the 1999
decisions did not end up spending the Social Security surplus.
Based on the projections we were looking at, all of us thought
that actions Congress was taken would have spent the surplus.
It was only later estimates that proved that to be incorrect.
So I think what I learned from this is we should all be quite
careful in how we project and live within the projections. If
the projections go the wrong way, we easily could end up being
somewhere we don't want to be. So I think that caution has been
most important to us. We have used conservative economic
assumptions. We have lived within those, and we have been
consistently greeted by better economic news than we projected.
If that were the opposite, I don't think we would be discussing
who is responsible for the good results. We would be looking
for who to pin the bad results on. I worry a bit as we look
forward to an economic debate where there is a desire to
exaggerate the amount of surplus, that we won't--that we
shouldn't go down that road.
In the area of discretionary spending, the issues we are
discussing here are all about what are the additional resource
needs. If you look at the budget resolution, the budget
resolution I think, has quite an unrealistic assumption in
terms of what the level of discretionary resources will be. I
don't think this Committee is going to have an easy time living
with the totals in that resolution. I would just be cautious
about a plan that pretends to be constrained when, in fact,
reality will drive it to larger levels.
Mr. Goode. Medicare A, of course, has a surplus of more
than $9 billion for FY 2000, does it not?
Mr. Lew. I don't have the part A numbers year by year in
front of me, but until--I forget the year, we start drawing
down--we have reserves until 2015. The question is what year do
we start drawing from the reserves?
Mr. Goode. Do you have more than $9 billion----
Mr. Lew. 2015 is----
Mr. Goode. In 2000, for----
Mr. Lew. I don't have the year-to-year numbers, but I can
get them for you.
Mr. Goode. Thank you.
[The information follows:]
WOULD PROPOSED CUSTOMS USER FEE VIOLATE TRADE AGREEMENTS?
Mr. Kolbe. Thank you very much, Mr. Goode. Director, Mrs.
Meek asked a question about the development of the ACE user
fee, but I want to spend a little more time trying to ask some
questions which I think are extraordinarily important. You
submitted earlier this month a letter to the Committee in
support of the new Customs user fee as a mechanism for funding
Customs modernization in fiscal year 2001. The Administration
proposes that it be implemented by amending the Consolidated
Omnibus Budget Reconciliation Act of 1995 known as COBRA, which
provided for collection of certain fees such as those for
processing passengers and conveyances.
In addition to the COBRA fees, Customs also collects a
merchandise processing fee, or MPF, as it is called. That is an
ad valorem tax based on the cost of providing Customs
processing services. As you know, there was, more than a dozen
years ago, a GATT panel finding that the MPF the merchandise
processing fee, in effect, precluded Customs from assessing
other charges for cargo inspection, except for those authorized
under COBRA. In other words, they basically found that if it
was not being used entirely for cargo inspection and processing
of conveyances, then it was in violation of GATT. Let me ask
you, is it your view that the new fee that is being proposed
for ACE, the Automated Customs Environment, would violate the
understanding of the GATT panel and be regarded possibly as a
new and illegal tariff?
Mr. Lew. It is my understanding that it would not.
Mr. Kolbe. What basis do you come to that conclusion?
Mr. Lew. We have worked with Treasury's General Counsel in
evaluating proposals. For example, the automation modernization
user fee is structured very similar and that is one they view
as being GATT-consistent. There are benefits here in terms of
increased speed of cargo processing, account-based transaction
tracking, paperless processing that we believe the fee is GATT
consistent and based on our consultations with Treasury, they
concur on that.
Mr. Kolbe. Well, if you collect this fee, and not all of it
ultimately gets spent for ACE, I think you would be right in
the same boat, wouldn't you?
Mr. Lew. The proposal we put forward would all be spent on
ACE. It was sized to be the amount needed for the improvements.
If we are wrong in our estimate, then we might need to go back
and reevaluate the size of the fee. But I think that that is
something that you will decide as you size the ACE program--
what the fee needs to be to support it. We sized it
appropriately to support the proposal we put forward. If it is
a smaller proposal, then you might very well want a smaller
fee.
Mr. Kolbe. But I think your proposal is to do it as an ad
valorem tax, is it not?
Mr. Lew. No. The level of the fee is sized to raise the
revenue consistent with the cost of the ACE program.
Mr. Kolbe. I am incorrect. Your proposal, this one is not
to do it as an ad valorem, but as a service base. If you add
this on top, things have been quiet in this area for a dozen
years, simply because we put a cap on the MPF, but if you add
this on top of it, I think you are going to pull that scab away
and you now have another cost on top of the current MPF. I
would dare say you are going to trigger some kind of reaction
on the MPF. Are you confident that the merchandise processing
fee is GATT compliant? You are collecting money and we are not
using it. It is basically another tax. We are not using it for
merchandising processing. I think you would agree to that? It
doesn't all go to that.
Mr. Lew. I am not sure we would agree with that.
Mr. Kolbe. Clearly, it doesn't go all to merchandising
processing and furthermore, how can it possibly be if it is
based on an ad valorem tax. It is not related to the service
being provided. It is related to the value of the good that is
coming in, so it is clearly not a service processing fee.
Mr. Lew. That would only be the case if the ad valorem
amount exceeded what it cost to cover the services. The fact
that it is levied on an ad valorem basis doesn't necessarily
prove the point that you are arguing that it is greater than
the cost of the manufacturing processing servicing.
Mr. Kolbe. It doesn't prove that it is greater but it does
prove that it has no relationship to the service being
provided.
Mr. Lew. Unless it was sized properly to raise the amount
that it costs to run the manufacturing processing or less. My
understanding, and I would be happy to go back and ask these
questions again, is that it was designed to cover the cost or
less which would, I think, prove the point that it didn't
create the GATT problems you are concerned about.
Mr. Kolbe. Can you tell me how much you collect with the
MPF?
Mr. Lew. I would have to check.
Mr. Kolbe. I think it is in the neighborhood of $900
million.
Mr. Lew. $953 million.
Mr. Kolbe. How much does Customs use in processing of
conveyances? You will find it is a fraction of that amount.
Mr. Lew. You are asking questions at a level of distinction
that I am not familiar with. I would be happy to go back and
try and separate them. We look at commercial operations and
manufacturing processing as a combined class, and I think that
that is appropriate in terms of covering the costs associated
with the Customs Service. To break it out for merchandising
processing versus commercial services, I would have to go back
and ask.
Mr. Kolbe. Well, if you go back and review the 1987 finding
you will find that the GATT panel said that a new fee had to
fit into existing COBRA categories. This requires a change to
COBRA, so we are now changing COBRA. And I think you will find
that the panel, while reserving action against the MPF,
indicated at that time that they would entertain challenges to
it. I would say that you will have, in the blink of an eyelash
if we add this new fee, a challenge.
Mr. Lew. I guess, I don't have the expertise to evaluate
whether or not there would be a challenge, but if there is a
challenge--
Mr. Kolbe. Based on the 1987 decision, which said it had to
fit into existing----
Mr. Lew. But that doesn't mean that there isn't another way
to levy a fee that would be GATT-consistent. I can't argue with
you that there might be questions raised, and there might even
be a challenge, but if it is GATT-consistent, that ought not to
be necessarily the obstacle. If we only made policies based on
no challenges, it very much constrains our collective decision-
making flexibility.
Mr. Kolbe. I understand but I think you are begging for a
challenge here. I think it has been made clear that there would
be. I think you are overlooking the GATT problems you have with
this fee. I think you have completely underestimated them and
have just decided to brush them under the rug.
Mr. Lew. I will be delighted to go back and ask some more
questions on this. We certainly didn't intend to do that.
Mr. Kolbe. I don't think you did. I don't think you thought
about it frankly.
Mr. Lew. We actually did have discussions----
Mr. Kolbe. Treasury was totally blank on the issue when
they were here.
Mr. Lew. I can only speak for the conversations I have had
with my staff. This is something people thought about, and in
fact, had conversations at a technical level with Treasury
about in general, if not on the specific details. With that
said, I am delighted to go back and consult with the people who
are more expert in GATT and the likelihood of action and get
back to you in terms of our view after taking another look at
it. I don't believe there is a GATT problem, but if there is,
it is something we need to take seriously.
Mr. Kolbe. Thank you. I am going to try to get a couple
more questions on the courthouses if I get another round here.
Mr. Hoyer.
IMPACT OF LARGE TAX CUTS ON PROJECTED SURPLUSES
Mr. Hoyer. Thank you, Mr. Chairman. Mr. Lew, my friend from
Virginia asked some questions about responsibility. I don't
know whether you have these projections, but perhaps you can
get them for the record. In 1999, of course the President
vetoed a gargantuan tax decrease, a tax cut giving the people
back their money so they can use it for themself. Do you have
the projections on the consequences of that cut with respect to
the surpluses that you indicated existed.
Mr. Lew. My recollection is over the 10-year period, it was
on the order of $750 billion, so the projections we have of
surpluses would be that much less if the tax cut had been
enacted. As you know, we have proposed a tax cut, but it is
considerably smaller and part of a balanced approach that would
enable us to deal with Medicare and prescription drugs and a
number of other very important things.
Mr. Hoyer. The $792 billion tax cut did not take into
consideration the consequential interest, additional interest
that we would have paid.
Mr. Lew. That is correct.
Mr. Hoyer. It was essentially over $900 billion.
Mr. Lew. With the interest, it was over.
Mr. Hoyer. The President vetoed the bill and the Republican
leadership chose not to bring it to the House for override,
presumably because they thought that it wouldn't be overridden
and the American public didn't support it. In your opinion,
would that have put our ability to extend the fiscal life of
Social Security and the fiscal viability of Medicare?
Mr. Lew. I think it would have. I think it is also
important to note it was based on the assumption that we would
adhere to the discretionary caps with very modest changes,
which we saw in practice last year was not the case. What we
tried to do this year is have the most realistic assessment of
what the surplus would be so we could have an open debate about
how not to get into the position where we said we were
protecting the Social Security surplus, but in fact, we were
forcing ourselves into the position of spending it.
I think if the tax cut had been enacted or if a tax cut,
the size of which we are hearing debated this year, is to be
enacted, we would find ourselves fairly quickly butting up
against what do you do? Do you make unacceptable cuts in
programs like law enforcement or do you spend the Social
Security surplus?
We think the right time to ask those questions is before,
not after, you enact permanent policy. And to make sure we can
provide for adequate levels of law enforcement, which is what
we are discussing in this hearing today, and many other areas--
education, health policy. It is kind of putting your head in
the sand to pretend that we can have deep cuts in areas like
law enforcement when the kind of debate we are having here,
which I think is the right debate to have, is are the funding
levels enough to serve the needs of the American people?
DO TREASURY AND JUSTICE LAW ENFORCEMENT PERSONNEL HAVE COMPARABLE PAY?
Mr. Hoyer. On that particular issue, let me ask you a
question about Treasury versus Justice law enforcement, FBI,
DEA and INS. Am I correct the principal continuing discrepancy
in staffing is the comparable grade level of employees between
the two?
Mr. Lew. Well, there is a continuing discrepancy. I think
that I could answer the question perhaps in two parts.
We don't, in general, try and make everything at Treasury
and Justice be exactly the same. You have to look at what
people are doing, whether they are performing the same
functions, whether retention requires it and recruitment
requires it.
I think INS and Customs is kind of a unique situation,
where you have people working, often at 5:00 in the morning,
side by side at the same post, where they are very aware of
each other's compensation; and there is a real morale issue,
and a retention and recruitment issue. INS has been, in terms
of the overall compensation package, paying its people less
than Customs. The split between base pay and overtime pay and
benefits is different, partially because of laws that are
different, partially because of collective bargaining
agreements that are different.
We have endeavored over the years to try and bring them
into some kind of parity not because we think, because of a
broad principle, that Treasury and Justice should always be
treated the same, but because of the fact when two people are
doing jobs that require comparable skills in the same place,
the right policy is to have parity.
I think this year's proposals would help correct that. It
has the kind of ironic appearance that it looks like we are
paying INS more than Customs because of the difference in grade
scale, but if you look at the overall compensation package,
which I am quite confident that the people in the field are
very aware of, it actually would bring us closer to parity.
Mr. Hoyer. Could you discuss either now or for the record
the disparity that also exists in the number of authorized SES
slots, for instance, in ATF versus FBI, which is causing, from
the Director's testimony that we heard previously, a problem as
it relates to supervision.
Mr. Lew. I have looked at that issue and it is a tough one,
because I think the arguments that they have made amount to
comparisons that may or may not be the right comparisons. They
are very different SES to FTE ratios in a number of different
law enforcement functions.
What the right place for Customs to be is not an obvious
matter. I think the comparison to INS is obviously one where it
is favorable. The comparison to FBI is different; you have to
look at what people are doing, what the job functions are.
I think that within the constraints that are available, the
question is, how do you get the job done? We obviously worked
with them to give them more SES last year. I think we have to
see how that is working. If there is a need for more SES, the
argument ought to be made in terms of the Customs plan, why did
they need more, not how do we get their ratio to some level
that might not be relevant to the work that Customs does.
Mr. Hoyer. We will discuss that further.
DID RECENT CHANGES TO CIRCULAR A-110 IMPACT FEDERALLY FUNDED RESEARCH
Last question and then I will have to leave, Mr. Director.
I apologize for that.
You published in the Federal Register last year a notice of
proposed revision OMB circular A-110, Uniform Administrative
Requirements for Grants and Agreements With Institutions of
Higher Education, Hospitals, and Nonprofit Organizations. I did
not support that, as you probably know, when it was raised last
year because I thought the burden it would place on medical, as
well as other research institutions, was both unnecessary and
unwarranted.
Can you update us on the status of the A-110 revision?
Mr. Lew. As you know----
Mr. Hoyer. Also whether there has been a negative impact,
which some of us feared.
Mr. Lew. As you know and as I testified last year, Mr.
Hoyer, I shared some of the concerns about the basic
requirement. It wasn't of our design. It was a legislative
requirement.
I am very pleased that the work that my staff did working
this issue through has been greeted with as close to support
from all parties as I think one can imagine, in terms of having
worked through some very difficult issues, where the research
community and the business community really had very
complimentary things to say about how we dealt with this
requirement that we didn't ask for.
I must say that I have not had an opportunity since it was
issued to get updated on the impact. It is very early in the
implementation. I don't know that we have data yet. But I think
that our underlying concerns about the policy remain true, even
though I think we did an excellent job implementing the rule.
I would be delighted to go back and ask. I am not sure the
data exists yet. I have talked with a number of university
presidents who have thanked us for the way the rule was
prepared, but didn't particularly offer any views as to what
the impact was. I suspect it is a little early to do an
evaluation, but I will go back and ask.
[The information follows:]
UPDATE ON THE IMPLEMENTATION OF THE A-110 PROVISION: IMPACT ON
FEDERALLY-FUNDED RESEARCH
On March 16, 2000, 15 agencies published notice in the
Federal Register that they have amended their regulations to
reflect the Circular A-110 revision OMB issued last fall, as
required by Public Law 105-277. The agencies' notice of interim
final revision is effective on April 17, 2000, and includes the
opportunity for interested members of the public to again
comment on this issue.
Implementation of the revised Circular is still in its
initial phase. At this point, we are not aware of any negative
impact on Federally-funded research. When the revision was
issued last fall, the research community let us know that while
they disagreed with the original statutory requirement, they
believed we had crafted a revision that addressed most of their
concerns about its potential negative impact on research.
Mr. Hoyer. Thank you.
Thank you, Mr. Chairman.
Mr. Kolbe. Thank you, Mr. Hoyer.
Mrs. Meek.
MIAMI COURTHOUSE CONSTRUCTION
Mrs. Meek. Thank you.
Mr. Lew, I would like to go back again to the Miami
Courthouse. As you know the design for the courthouse has
already been approved. It is about 50 percent complete, and it
was scheduled to be 100 percent completed this month. GSA
estimates that the cost of a complete redesign of this project
would cost about $2.3 million and result in a 1-year delay in
the project. According to GSA, such a delay would perhaps cost
an additional $4 million.
This project is currently on schedule to break ground in
March of 2001. Isn't a redesign, at this point, fiscally
irresponsible? I am sure the answer to that would be yes.
Won't further delays in this project just simply drive up
the cost? It is in a very high-cost area.
Mr. Lew. There is no doubt it is in a high-cost area. I am
not sure that the estimates are correct. I will go back and
check. The analysis that we have done is that the design
changes would save roughly $9 million in construction, and when
I was discussing this right as you came in, we were talking
about senior judges.
One of the things that didn't conform to the design guidein
the original plan was three courtrooms for judges with senior status
over 10 years. They had a courtroom for visiting judges and a second
special proceedings room. Courtrooms--each of the courtrooms are very
expensive. To build courtrooms that are not immediately needed may or
may not make sense if there is a predicted need for more courtrooms in
the future. But we have to evaluate based on current needs, and the
current needs certainly don't support those courtrooms in our view.
The analysis that we have seen on redesign may not be the
same as you have gotten, but we thought the redesign was more
in the $1 to $2 million range. Obviously, if it is $9 million
less in cost and 1-1/2 or 2 million more in redesign, net, it
is a good economic decision to do.
I think that the challenge in doing things quickly is the
burden. We agree with you, we should move quickly. We wouldn't
have put the courthouse in the budget if we didn't think it was
needed. We wouldn't have put it in the budget if we didn't
think construction could begin this year. So we want to work
towards getting the money appropriated, completing design and
beginning construction this year. We think that is possible.
These issues on courtroom sharing are very, very difficult
and I think that there are tensions between the branches that I
wish we could reduce. I don't think it is a good thing when we
have to make recommendations and you have to make
appropriations based on less than perfect information. I don't
think we had complete information on some aspects of the Miami
courthouse. If we can work together and understand it better,
you may be able to persuade us, but we had to work with the
data we had.
Mrs. Meek. Doesn't the very process hurt this project in
that you are going to take the limited data which you have
currently before the authorizing committee; isn't that correct?
Mr. Lew. We only can present the data that we have. To the
extent there are other data that we don't have, we probably
would benefit from getting it. But there has been a little bit
of a struggle to get information on some of these issues.
Mrs. Meek. So then are you saying that you have been able
to accumulate certain data, and this data will go to the
authorizing committee; and that this data that you submit will
determine what will happen in the Miami courthouse project? So
if I send you new additional data, will that data have any kind
of impact on your final decision-making?
Is there still room in this process to try and take the
consideration of constitutionality of what is going on there in
decision-making; is there still room for that?
Mr. Lew. I don't think it is a constitutional issue. I
think there may be others who think it is a constitutional
issue.
Mrs. Meek. But judges do, and they are sort of good on the
Constitution.
Mr. Lew. I think the question of whether or not decisions
can be changed, obviously, we have made a recommendation. We
are open--as we work with the authorizers, with you, the
appropriators--to consider new information; and we are not
rigid in terms of saying, we will never change our view.
I misspoke. The $9 million is net of the redesign. We think
$9 million is--it is an amount of resources that make it is
possible for us to proceed with other projects. If we were to
decide to do a larger, more expensive Miami Courthouse, it
means there would be less resources for others.
I have heard from a lot of members who are concerned that
there are projects that we didn't put in that we should have.
The very first question, in fact, I got: Why didn't we do the
whole list? We are either going to have to provide more money
or do less projects.
The reason I say it is not a constitutional issue is that
this is a question of how much Congress appropriates and how
many projects are undertaken. Congress has to make a judgment
based on the best information available, and if you decide to
increase substantially the resources that are put into
courthouses, it will make it very difficult to be where I think
you want to be on Treasury law enforcement and other important
areas. We have to make these tough tradeoffs.
I think it kind of does all of us a disservice to suggest
that we ought to just assume that there is only one possible
position on what the cost of a courthouse is and how many you
need, because it competes for resources with everything else. I
certainly have tried, in putting this budget together, to work
with the judicial branch. I think it is the best situation for
each of us, as branches and collectively as a government, to
work cooperatively on this. I hope we can do so.
If the answer turns out to be, we didn't have information
that would have led us to believe that more courtrooms in Miami
is the right answer, we will work with you. We based our
judgment, based on the best information we had. As I told you,
when we spoke several weeks ago, we thought we were doing
something that would be considered very positive in Miami.
I am not sure that I understand exactly what the problems
are. I understand it is a smaller courthouse, but I don't
understand, with the detail that I know I would want to, what
the real consequences would be. Based on our analysis, we
obviously didn't think that was the case; and as I say, we
remain open.
Mrs. Meek. I would like to talk to you further about this.
I have lots of information; whether or not it is empirical or
not, I would like for you to consider it. Thank you.
[The information follows:]
MIAMI COURTHOUSE CONSTRUCTION
GSA estimates the redesign costs for the Miami Courthouse
to be $1.5 million, which will take three months to complete.
The construction cost savings achieved by removing departures
from the U.S. Courthouse Design Guide and sharing courtrooms is
approximately $12.5 million. The total net savings for the
Miami Courthouse will be $11 million.
Mr. Kolbe. Thank you, Mrs. Meek.
Mr. Goode.
IMPACT OF TAX CUT
Mr. Goode. Thank you, Mr. Chairman.
To follow up on what Congressman Hoyer was asking you
about, I believe that you--two of your observations about the
$792 million tax cut were you would cut law enforcement and
other necessaries. Law enforcement was exactly--let me go on; I
am not through asking the question. And that interest payments
would increase, is that not what you said? That is what you
said?
Mr. Lew. Well, the interest payments associated with a tax
cut, meaning that we would have to borrow more money were not
included in the $792 billion.
Mr. Goode. You remember in the tax cut bill that the most
significant part, by far, of the tax cut did not take effect
unless interest payments were going down. Do you recall that
part of the bill?
Mr. Lew. I recall that there was a section of the bill, the
workability of which we had our questions about.
Mr. Goode. You recall that section, right?
Mr. Lew. I am not sure that it worked. I am going back now
a year in my memory, but I remember we had serious concerns
about the design.
Mr. Goode. The largest part of the tax cut that would be
phased in over a period of time would not have taken effect
unless the interest payments were going down on public and
national debt.
Mr. Lew. I think our view of what the real effects of that
tax cut were was that it was putting in place a structure for
massive tax reductions which would be very difficult to stop in
the future. I would have to go back and refresh my memory of
the details.
Mr. Goode. Let me ask you this: is $15 billion in foreign
aid law enforcement?
Mr. Lew. Obviously, you can go through function by function
in the budget. I based my statement a moment ago on a budget
resolution that passed the House last week, where the level for
law enforcement was 2.4 percent below the baseline. So that
means reducing the actual amount of resources because you can't
pay people if you don't have money for the cost-of-living
adjustments. And it was 15 percent below our request. I think
that in the debate----
Mr. Goode. Foreign aid, you don't consider that law
enforcement, do you?
Mr. Lew. I consider a lot of our foreign aid necessary
towards maintaining the national security of the United States.
Mr. Goode. I asked you, do you consider it law enforcement?
Mr. Lew. It is not law enforcement.
Mr. Goode. Is AmeriCorps, half a billion dollars, law
enforcement?
Mr. Lew. There is some public safety work at AmeriCorps.
Mr. Goode. And the foreign aid to the OPEC nations, you
don't consider that law enforcement, do you?
Mr. Lew. No.
Mr. Goode. Thank you, Mr. Chairman.
ADEQUACY OF RESOURCES FOR THE CUSTOMS MARINE PROGRAM
Mr. Kolbe. Thank you very much. Let me go back. I have two
things I want to ask some questions about--and I will submit
some others for the record.
Director, as you know, I have been very concerned--and we
have actually talked about this here already--about Treasury
law enforcement, and my view is that it hasn't been getting
what it deserves over the past decade. We got a good, practical
example of that when I was down in Miami in December looking at
the problems there. We saw the very dedicated but very ill-
equipped Marine Division that is part of Customs. In fact,
while we were on a boat that evening, one of the boats lost one
of their engines.
I think, due to a lack of resources, the marine mission has
become reactive--and not proactive. We certainly saw that with
the cutting, almost in half, about 5 years ago of the Marine
Division, putting it over in the Office of Investigations.
There is no clear direction for its transition coming out from
under the Office of Investigations.
And I also understand that the modernization plan that
Customs prepared last year still hasn't been approved by
Treasury or OMB. We heard from Customs just a couple of weeks
ago that, nationwide, there are only 85 operational boats in
the marine program.
We have thought that these resources are inadequate. We
have looked to guidance from Treasury in developing a marine
interdiction modernization program. Have you seen this
modernization strategic plan for the Marine Division?
Mr. Lew. I think part of the basic problem is that we
haven't seen the strategic modernization plan. It is sort of
frustrating that we haven't had more. I think something was
submitted very recently that is at a staff level of discussion,
but I don't think it yet constitutes a strategic plan.
Mr. Kolbe. It is not even at the level yet of being
approved by you.
Mr. Lew. Just to contrast it, perhaps, with the air side
where we were presented with a good case for upgrades, we
approved that. On the marine side, we just didn't have a plan.
Mr. Kolbe. So you--perhaps then you can't even answer this
question, which is, do you think that the marine assets that
are in Customs are sufficient to maintain a viable drug
interdiction program?
Mr. Lew. I think we have an effective program. Whether
there is a need for more assets to do more is something that I
think is really the issue, and I think that we are waiting to
review some material which would enable me to answer your
question in more detail.
Mr. Kolbe. I am reluctant to pass judgment on your
recommendation to provide no additional resources for the
marine program, based on what you just told me, that you
haven't received it. Would you say then that the failure to
give those additional resources, at least in part, has to be
because you haven't been given the information on which to make
the evaluation?
Mr. Lew. In 1999, Customs submitted a draft to us. That was
in November 1999. We commented on that. We, to my knowledge,
have not received a revised set of----
Mr. Kolbe. November 1999, you commented and sent it back to
Customs and still haven't received anything. So, in essence,
you do not have the information you need to make a decision
about the resources?
Mr. Lew. The expanded resources.
Mr. Kolbe. Expanded resources for the Marine Division.
Mr. Lew. I don't want to comment on the merits of a
proposal that we haven't had a chance to review.
Mr. Kolbe. Can you tell me what kind of date and background
materials you would need in order to make an evaluation?
Mr. Lew. Typically, we look at a range of things from what
the workload is, what the missions are, what the age and
effectiveness of the equipment are, what the cost of
maintaining it versus replacing are.
We also look at whether there is a tail, whether the
increase in short-term capital will require more resources in
the future. We try to have a plan over the years where we don't
create a need for resources that perhaps is beyond what is
realistic to budget for on a permanent basis.
So we ask a whole host of questions, and it is not just
with Customs. We have those kinds of proposals in many, many
areas, and we try not to send you proposals that would explode
on you in the second or third year. We try to make sure we
understand what they are and they fit into along-term plan.
Mr. Kolbe. All right. I may have a couple more questions.
Mr. Lew. I may not be entirely up to date, because we were
expecting something to come from them; I will check on that. I
don't believe it came though.
Mr. Kolbe. I think you will find that is correct, that you
don't have it.
PRIORITY RANKING OF PROPOSED COURTHOUSE CONSTRUCTION PROJECTS
Let me ask you a couple of questions--and then I will
conclude here--about courthouse construction. We are going to
have GSA and the judges up tomorrow. I am perhaps a little more
sympathetic than Mr. Hoyer and Mrs. Meek would be to your
plight, and appreciate in particular the comments you made
about we have tough choices to make.
I think we all need to be reminded that there are not
infinite resources, and I think the concept of sharing of
courtrooms is one that I don't believe the judges have yet
looked at in an objective enough or realistic enough light, as
a realistic way to deal with the rapidly rising costs of
courthouses.
First, before I get into the sharing issue, though, I want
to ask a couple of questions on the priorities here.
As you know, this Subcommittee, since I have been Chairman
of it, has adhered very religiously to the priority list that
has been given to us. I will not tamper with that. I don't want
to get into the business of making political decisions about
which courthouse should go next. We have just basically gone
right down the line.
But my confidence gets a little shaken when I see the list
get changed, and I know you have responsibilities too, but the
list that was submitted by GSA and the Judicial Conference was
changed. I am wondering if you can tell me on what basis OMB
made changes in the priorities for courthouse construction. For
example, Little Rock, which was sixteenth on the GSA list, gets
considerably higher ranking than either Buffalo which is number
seven or El Paso, number ten.
Mr. Lew. I believe we actually went in priority order. We
just looked at it perhaps a little bit differently.
We separated their requests into categories. In the
category of construction projects where they could proceed this
year, we approved all of them. In the category of new site
acquisition design projects, we approved their two top
priorities. Frankly, it was resource constraints that kept us
from going down the list.
In the case of Little Rock, it was completing the funding
of an ongoing project, and it was the only one in that
category; and since the funding has been initiated already, it
by definition was a project that was higher on their list at
another point.
I think if you go down the list in order, one could
challenge our approach, I guess, by saying we shouldn't have
tried to fund the courthouses that could be built immediately
first. That was our first objective, to try and take the
projects that were farthest down the track--and frankly, going
down the new site acquisition, we look at projects to see
whether or not they meet the criteria--and then we went right
down the list.
Mr. Kolbe. I think Little Rock is for design, so I think
you jumped over a whole bunch of others that were ready.
Mr. Lew. Little Rock was not new. Little Rock was to
complete the design. That is why it was a different case.
Mr. Kolbe. We will go into this in a lot more detail
tomorrow, but I think that the statement you just made about
following the list really is not accurate. We will try to get
into some more detail with GSA on that tomorrow.
Does your office have any discussion, when you go through
this and before you make your submission, do you confer only
with GSA, or do you have any discussion with the Judicial
Conference? Do you have any contact at all with them?
Mr. Lew. We met with the Judicial Conference this year and
last year, and listened, not just on construction, but on other
matters related to the judiciary's budget. I think that we
shared with them many of the comments that I have shared with
you today, so I don't think I have said anything that they
would be surprised by.
The challenge we have of working with them, getting
information, is much better than it was a few years ago. I
think we are getting closer to where we should be. I think this
Committee has helped that process by having studies that had to
be conducted. I don't think that it rises to the level of
constitutional crisis if one branch of government asks another
to explain what the nature of the funding requirements for a
construction project are.
Mr. Kolbe. I would certainly agree with that.
Mr. Lew. I fear by raising these levels to constitutional
levels, it kind of blurs the issue.
Mr. Kolbe. I would agree.
Let me come to that sharing issue. Did you rely on some
studies that you did in order to make this decision?
Mr. Lew. We were relying on GAO's studies, actually. All
the statistics that I cited in terms of the use of courtrooms
were based on that. I can't swear that those are 100 percent
accurate. There should probably be more work done in this area.
It is the kind of area we need to work with the Judiciary to
better understand the information.
Mr. Kolbe. This is the May 1997 courthouse construction
issue?
Mr. Lew. We have no desire to undersize courthouses. Our
goal is to have courtrooms available for speedy administration
of justice. I think the line between what you need for speedy
administration of justice and a kind of understandable
preference to have a space that you control 100 percent of the
time, there is a little bit of a conflict there.
Judges certainly have an extraordinary need to have a
courtroom available when they have an arraignment, when they
have various things come up that they didn't plan on. It is a
different question whether they need to be in Courtroom 1
versus Courtroom 2, 3, or 4. As long as a courtroom is
available when it is needed, that I think addresses the
administration of justice concerns.
To the extent that the desire is to have a single courtroom
always be available, it will force us into more expensive
courthouse construction projects which I fear will mean fewer
courtrooms and fewer courthouses.
Mr. Kolbe. And not a good administration of justice in the
long run. I quite agree with you.
I think it is important to recognize, especially when we
are talking about larger courthouses where we have a large
number of judges that are involved, say you have 10 or 12
judges, when you factor in datesof illness and vacations and so
forth, it is just not realistic to assume every courtroom would be in
use at any one time. So a good system of time management of those
courtrooms seems to me to be a realistic way, as you said, to spread
our resources further and to make it possible to have more courthouses
built.
The judges have been in my office, and I have heard all
their arguments. But as you are, I am still not persuaded.
Mr. Lew. I am sympathetic to their needs. They need to have
courtrooms available. There is no doubt about that. The
question is, what is the most efficient and effective way to
provide for these.
Mr. Kolbe. Exactly.
Mr. Price, you haven't had a chance to ask questions. Would
you like to ask some?
Mr. Price. Thank you, Mr. Chairman.
HURRICANE FLOYD FUNDING REQUEST
Mr. Lew, welcome to the Subcommittee. Good to see you this
morning. I have a couple of questions, but I also have a couple
of comments. Let me lead with those because I do not want to
neglect, this morning, to thank you and your staff for the fine
work you have done on North Carolina's disaster relief and
recovery needs. Elgie Holstein, Wesley Warren, a lot of your
people worked long and hard on that, getting the numbers shaped
up, getting a credible request together, and helping advocate
for our relief needs. So we are very grateful to you.
North Carolina was hit by three major hurricanes in a few
weeks' time, Floyd being the most powerful; and the damage from
these storms and the subsequent flooding simply devastated the
eastern part of the State. We will be recovering for some time
to come. Fortunately, the Federal disaster response has been
very heartening. OMB has worked with our governor, with our
congressional delegation, and members from both parties very
closely to provide funding for the most pressing needs and
incorporate evolving damage estimates into the administration's
request.
I particularly appreciate the way you revisited the matter
as the supplemental appropriations bill was prepared this
winter, and we are committed to working with you to pass that
supplemental request. So I do want to thank you for that
excellent cooperation.
Mr. Lew. I appreciate the kind remarks.
FEDERALLY FUNDED RESEARCH--AVAILABILITY OF DATA
Mr. Price. I also want to turn briefly to Circular A-110. I
understand Mr. Hoyer already raised this.
This is something that took much of your time and the
subcommittee's time last year. The mandated revision of
Circular A-110 was aimed at making raw research data available
under the Freedom of Information Act. As you know, I had a lot
of concerns about the Shelby language, its potential to open up
private medical data, its jeopardizing of public/private
collaborations and so forth. And I know you worked very hard to
develop a rule that would expand public access to federally
funded research data, as of course legitimately needs to be
done, so that results can be replicated but without having a
chilling effect.
Mr. Hoyer has raised the matter, so I will move on to other
questions, but I do want to commend you for careful work on
that rule. And I want to echo his request that you keep the
committee informed about what is going on in the individual
departments as they respond to your rule, and the kind of
feedback you are getting as to how well these changes are
working.
Mr. Lew. Mr. Price, one thing I think I neglected to say in
my response to Mr. Hoyer, as we designed the final rule, we
tried to build in the need to review the policy to see if it
worked and to make clear that we didn't view it as being a
permanent and unchangeable policy. What I have not yet seen
since we issued the final rule at the end of September is what
the results are.
We made every effort to make what we didn't think was a
particularly desirable requirement as workable as possible, and
from what I have heard informally from academic institutions,
they certainly feel that, within limits, we did achieve that.
But I don't know, with that, whether it really works. I think
we have to wait a little while to get the reports in from
experience.
Mr. Price. I know that was your intention and it does bear,
I think, careful watching.
FEDERAL GRANTS INVENTORY
Now let me ask a couple of questions, one having to do with
the inventory of current Federal grant programs that is under
preparation at OMB; and finally I would like to raise a
question about the broader issue of biennial budgeting.
In our fiscal 2000 bill, this committee directed OMB to
prepare an inventory of current Federal grant programs,
basically an update of the Catalogue of Federal Domestic
Assistance, along with some other information. This inventory
was due 6 months after the date of the enactment of the fiscal
2000 bill, which, in other words, is tomorrow.
What is your timeline on that? Will you be able to submit
this grants inventory by tomorrow, and if not, when do we
expect that to be completed?
Mr. Lew. I don't believe tomorrow, but I believe very
shortly. I am told within a week or so.
Mr. Price. Good. So we can expect that in a matter of days.
Mr. Lew. Yes. My recollection is that it is circulating for
comment internally now, and the process ought to be completed
in the next week or so.
Mr. Price. I do think we have a responsibility to provide
better and more user-friendly information about grant
opportunities to potential applicants. Every organization that
meets the eligibility criteria should have the opportunity to
compete for this funding.
Is there anything you would like to say about what follows
the inventory, what the next steps are? Is there agency
guidance that OMB is going to be issuing, or may be under
development, to standardize the process by which notices of
funding availability are published to ensure equal access to
that information?
Mr. Lew. Being at the end of the clearance chain
internally, I am about 4 days premature from having a view on
that. I expect to see it by Friday, and I would be happy to
discuss it with you after I review it.
Mr. Price. Perhaps you could submit for the record----.
Mr. Lew. I haven't seen the response to the amendment. I
know it is going through the organization on its way to me.
Mr. Price. Of course, this next step will be issued in a
matter of days.
We do, I think, have a further responsibility in terms of
agency guidance and standardization so that NOFAs are published
in a comprehensible way.
BIENNIAL BUDGETING
Finally, let me take up this issue of biennial budgeting.
Of course, this is a big issue. It is one that the
administration has expressed its support for, this planned2-
year budget/appropriations cycle. I think here on the Hill biennial
budgeting is often supported as a kind of response to the frustration
we feel with the budget process and the end-of-session train wrecks
that we have had all too often. But I wonder about biennial budgeting
and how well the remedy fits the problem.
I understand that biennial budgeting would, in all
likelihood, strengthen the hand of the President. I don't think
it is any accident that President Clinton, as well as
Presidents Reagan and Bush, expressed support for biennial
budgeting because it would no doubt shift a good deal of power
and control and authority to the executive branch for reasons
that we can go into, but I think that is pretty well accepted.
So it may be understandable in terms of presidential power.
It seems to me less understandable in terms of budgetary
discipline and budgetary control. After all, surely biennial
budgeting would lead to more frequent supplementals. Surely it
would lead to a less orderly, less predictable, probably less
disciplined process. Our experience here is that supplementals
are where the emergency is declared. That is where the caps get
broken. That is where the regular order breaks down. Why on
earth, in terms of budget discipline and budget control, would
we want to move toward a biennial process when really the most
orderly oversight Congress performs is in these annual
appropriations bills; and moreover, it is oversight that has
some teeth, it has some authority.
Why would we want to go to a biennial process in terms,
now, of your responsibility as a budget officer and a proponent
of budget discipline?
Mr. Lew. Mr. Price, I reviewed your testimony in
preparation for my own testimony, just a couple of weeks ago,
and I think you raise some very important questions.
Respectfully, I think I come to a different conclusion, and
that is what I testified in front of the Rules Committee about.
I think that as far as supplementals and budget discipline
goes, it is not the fact of a biennial budget or an annual
budget that determines that. It is the decisions that you and
we make when we make those judgments. I think it is kind of
unrealistic to think that within the annual appropriations
cycle we need supplementals, but that in a biennial process we
wouldn't need supplementals.
I think the question is, do we do those in an orderly way?
Do we do the supplementals to deal with changing circumstances?
Do we have proposals from the executive branch that come in an
organized way and are reviewed by the Appropriations Committee
in an organized way? If that is the case, I believe that the
year when we were in between the 13-bill cycle would take much
less of this Committee's time, which would actually give this
committee more time for the oversight that I think is so
important.
What you call oversight we call management. It is a
constant frustration to me that we have to struggle with a
calendar to find time to have a series of meetings on a
management topic because they are so buffeted by the budget
schedule. I think we all, you and we both have a lot of good
that we can do if we had some islands of time when we weren't
fully engaged in making new budget decisions to do management
and oversight.
I think the question of enhancing the power of the
executive versus the legislative branch is a complicated one. I
don't believe the biennial budget intrinsically enhances
executive branch power. I actually think one can make an
argument that this Committee, if it ended up having expanded
review of reprogrammings, would have substantially greater
power than we in the executive branch would want.
I think it requires a balance, and if there is going to be
a biennial system that works, it is going to have to anticipate
midcourse corrections, some of which require reprogramming,
some of which require supplementals; and frankly it is going to
require somewhat more comity in the branches than we have seen.
I don't think any process can create comity between the
branches. These year-end negotiations, no one is more familiar
with them than I am. I don't think it is a particularly good
way to make policy for years and years and years. I think the
biennial process would permit the kind of orderly review of
budget needs, updates as appropriate, with a greatly expanded
opportunity for oversight and management, which is why we
supported--since 1993, the Administration has supported it.
I don't think that any system will wave a magic wand and
make it right. I think it ultimately boils down to how well we
do our job and how well you do your jobs and whether we can
work together. I think it is a challenge which the biennial
process would help us with.
Mr. Price. This is a longer discussion than we could have
here. I think we can certainly agree on that latter point, that
what the budget process needs is not endless tinkering, annual
or biennial, but the political will and responsibility to make
it work as intended. And of course, any budget process will
require supplementals and require midcourse corrections.
I think the point is, though, with the far longer timeline
of biennial budgeting and the far greater uncertainty, there
simply would be a lot more supplementals. It seems to be our
experience with supplementals, that they are not the friends of
budget discipline and budget accountability and responsibility,
but often are the opposite.
Finally, on your oversight point, you know, after the first
round, after an election, we would be fiscal lame ducks up
here, and it seems to me the yearly process we go through is
about as good as oversight gets in the Congress; and the notion
that, as fiscal lame ducks, we would be rushing in to do more
responsible and more intensive oversight, I just think is
highly unrealistic.
Mr. Kolbe. Mr. Price, thank you very much.
Mr. Lew, thank you. We appreciate this hearing today. I
think it has been one of the better and more constructive ones
we have had in a long time with you. I think--we have gotten
into a number of topics, which I think has been very valuable
in helping this committee do its work. We thank you very much
for coming.
Mr. Lew. Thank you very much for having me.
Mr. Kolbe. The Subcommittee will stand in recess until this
afternoon.
W I T N E S S E S
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Page
Lew, J.J......................................................... 451
Lyle, M.J........................................................ 1
McCaffrey, B.R................................................... 231
I N D E X
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Executive Office of the President:
Page
Armstrong Funding, Request to Use............................42, 49
Automated Records Management System, the.............40, 47, 52, 75
Campaign Travel..............................................36, 38
Capital Investment Plan...................7, 10, 37, 58, 62, 67, 68
Chief Financial Officer Act, Implementation of..7, 11, 54, 161, 177
Committee, Questions Submitted by the........................ 47
Council of Economic Advisors................................. 210
E-mail.......................................................38, 47
Executive Residence/National Park Service.................... 68
Fenced Funds, Impact of..................................24, 41, 48
Fisal Year 2000 Achievements................................. 6, 8
Fiscal Year 2001 Budget Submission........................... 109
First Lady Travel................................13, 25, 31, 57, 76
Information Technology Architecture.......................... 55
Information Technology, Future Vision of..................... 30
Knight, Memorandum on First Lady Travel...................... 19
Lyle, Michael J., Prepared Statement of...................... 8
Lyle, Michael J., Summary Statement of....................... 5
National Security Council.................................... 197
Office of Administration..................................... 156
Office of Policy Development................................. 184
Personnel Requirements..............................7, 10, 161, 176
President, Compensation of................................... 112
President, Special Assistance to............................. 133
Puerto Rico Referendum.........................30, 37, 63, 224, 226
Transition Costs........................................65, 74, 107
Unanticipated Needs........................................105, 222
Vice President, Official Residence of........................ 145
White House Office........................................... 120
Year 2000..................................................6, 8, 43
Office of National Drug Control Policy:
Emerson, Congresswoman, Questions Submitted by............... 353
Hoyer, Congressman, Opening Statement of..................... 233
Kolbe, Chairman, Opening Statement of........................ 231
McCaffrey, Director, Opening Statement of.................... 234
ONDCP, FY 01 Congressional Budget Submission................. 376
Questions Submitted by House Committee on Appropriations..... 260
Roybal-Allard, Congresswoman, Questions Submitted by......... 364
Office of Management and Budget:
Adequacy of Resources for the Customs Marine Program......... 495
Basis for Proposed Increase in Staffing...................... 471
Biennial Budgeting........................................... 501
Courthouse Construction...................................... 473
Did Recent Changes to Circular A-110 Impact Federally Funded
Research?.................................................. 491
Do Treasury and Justice Law Enforcement Personnel Have
Comparable Pay?............................................ 490
Emerson, Questions Submitted by Congresswoman................ 558
Federal Employee Pay Comparability........................... 472
Federal Grants Inventory..................................... 500
Federally Funded Research--Availability of Data.............. 500
Funding for High Intensity Drug Trafficking Areas............ 480
Hoyer, Questions Submitted by Congressman.................... 555
Hurricane Floyd Funding Request.............................. 499
Impact of Large Tax Cut on Projected Surpluses............... 489
Impact on Tax Cut............................................ 494
Improving Data Quality....................................... 477
Koble, Opening Statement of the Honorable Mr................. 454
Kolbe, Questions Submitted by Chairman....................... 504
Lew, Opening remarks of Mr................................... 457
Lew, Prepared Statement of Mr................................ 460
Miami Courthouse Construction................................ 492
Need for Additional Economist Position....................... 471
New User Fee for the Custom Service.......................... 483
Northup, Questions Submitted by Congresswoman................ 532
OMB Staffing Requirements.................................... 481
Peterson, Questions Submitted by Congressman................. 551
Price, Questions Submitted by Congressman.................... 542
Priority Ranking of Proposed Courthouse Construction Projects 497
Reducing the Burden of Paperwork on the Public............... 475
Roybal-Allard, Questions Submitted by Congresswoman.......... 529
Size of Recent Budget Surpluses.............................. 483
Use of Detailees by the Office of Management and Budget...... 467
Would Proposed Customs User Fee Violate Trade Agreements..... 487