- DEPARTMENTS OF VETERANS AFFAIRS AND HOUSING AND URBAN DEVELOPMENT AND INDEPENDENT AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2002

[Senate Hearing 107-442]
[From the U.S. Government Publishing Office]

S. Hrg. 107-442

DEPARTMENTS OF VETERANS AFFAIRS AND HOUSING AND URBAN DEVELOPMENT AND
INDEPENDENT AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2002

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

HEARINGS

before a

SUBCOMMITTEE OF THE

COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

ONE HUNDRED SEVENTH CONGRESS

FIRST SESSION

H.R. 2620/S. 1216

AN ACT MAKING APPROPRIATIONS FOR THE DEPARTMENTS OF VETERANS AFFAIRS
AND HOUSING AND URBAN DEVELOPMENT, AND FOR SUNDRY INDEPENDENT AGENCIES,
BOARDS, COMMISSIONS, CORPORATIONS, AND OFFICES FOR THE FISCAL YEAR
ENDING SEPTEMBER 30, 2002, AND FOR OTHER PURPOSES

__________

Corporation for National and Community Service
Department of Housing and Urban Development
Department of Veterans Affairs
Environmental Protection Agency
Federal Emergency Management Agency
National Aeronautics and Space Administration
National Science Foundation
Neighborhood Reinvestment Corporation
Nondepartmental witnesses

__________

Printed for the use of the Committee on Appropriations

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

U.S. GOVERNMENT PRINTING OFFICE
70-873 WASHINGTON : 2002
____________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512-1800
Fax: (202) 512-2250 Mail: Stop SSOP, Washington, DC 20402-0001

COMMITTEE ON APPROPRIATIONS \1\

TED STEVENS, Alaska, Chairman
THAD COCHRAN, Mississippi ROBERT C. BYRD, West Virginia
ARLEN SPECTER, Pennsylvania DANIEL K. INOUYE, Hawaii
PETE V. DOMENICI, New Mexico ERNEST F. HOLLINGS, South Carolina
CHRISTOPHER S. BOND, Missouri PATRICK J. LEAHY, Vermont
MITCH McCONNELL, Kentucky TOM HARKIN, Iowa
CONRAD BURNS, Montana BARBARA A. MIKULSKI, Maryland
RICHARD C. SHELBY, Alabama HARRY REID, Nevada
JUDD GREGG, New Hampshire HERB KOHL, Wisconsin
ROBERT F. BENNETT, Utah PATTY MURRAY, Washington
BEN NIGHTHORSE CAMPBELL, Colorado BYRON L. DORGAN, North Dakota
LARRY CRAIG, Idaho DIANNE FEINSTEIN, California
KAY BAILEY HUTCHISON, Texas RICHARD J. DURBIN, Illinois
MIKE DeWINE, Ohio TIM JOHNSON, South Dakota
MARY L. LANDRIEU, Louisiana
Steven J. Cortese, Staff Director
Lisa Sutherland, Deputy Staff Director
Terrence E. Sauvain, Minority Staff Director
------

Subcommittee on VA, HUD, and Independent Agencies

CHRISTOPHER S. BOND, Missouri, Chairman
CONRAD BURNS, Montana BARBARA A. MIKULSKI, Maryland
RICHARD C. SHELBY, Alabama PATRICK J. LEAHY, Vermont
LARRY CRAIG, Idaho TOM HARKIN, Iowa
PETE V. DOMENICI, New Mexico ROBERT C. BYRD, West Virginia
MIKE DeWINE, Ohio HERB KOHL, Wisconsin
TED STEVENS, Alaska (ex officio) TIM JOHNSON, South Dakota

Professional Staff

Jon Kamarck
Carolyn E. Apostolou
Cheh Kim
Paul Carliner (Minority)
Gabrielle A. Batkin (Minority)

Administrative Support

Isaac Green
Nancy Olkewicz (Minority)

\1\ Committee and subcommittee memberships--January 25, 2001 to
June 6, 2001.

Note.--From January 3 to January 20, 2001 the Democrats held the
majority, thanks to the deciding vote of outgoing Democratic Vice
President Al Gore. Senator Thomas A. Daschle became majority leader at
that time. Starting January 20, 2001, the incoming Republican Vice
President Richard Cheney held the deciding vote, giving the majority to
the Republicans. Senator Trent Lott resumed his position as majority
leader. On May 24, 2001, Senator James Jeffords of Vermont announced
his switch from Republican to Independent status, effective June 6,
2001. Jeffords announced that he would caucus with the Democrats,
changing control of the evenly divided Senate from the Republicans to
the Democrats. Senator Thomas A. Daschle became majority leader once
again on June 6, 2001.

COMMITTEE ON APPROPRIATIONS \2\

ROBERT C. BYRD, West Virginia, Chairman
DANIEL K. INOUYE, Hawaii TED STEVENS, Alaska
ERNEST F. HOLLINGS, South Carolina THAD COCHRAN, Mississippi
PATRICK J. LEAHY, Vermont ARLEN SPECTER, Pennsylvania
TOM HARKIN, Iowa PETE V. DOMENICI, New Mexico
BARBARA A. MIKULSKI, Maryland CHRISTOPHER S. BOND, Missouri
HARRY REID, Nevada MITCH McCONNELL, Kentucky
HERB KOHL, Wisconsin CONRAD BURNS, Montana
PATTY MURRAY, Washington RICHARD C. SHELBY, Alabama
BYRON L. DORGAN, North Dakota JUDD GREGG, New Hampshire
DIANNE FEINSTEIN, California ROBERT F. BENNETT, Utah
RICHARD J. DURBIN, Illinois BEN NIGHTHORSE CAMPBELL, Colorado
LARRY CRAIG, Idaho
KAY BAILEY HUTCHISON, Texas
JON KYL, Arizona
Terrence E. Sauvain, Staff Director
Charles Kieffer, Deputy Staff Director
Steven J. Cortese, Minority Staff Director
Lisa Sutherland, Minority Deputy Staff Director
------

Subcommittee on VA, HUD, and Independent Agencies

BARBARA A. MIKULSKI, Maryland, Chairman
PATRICK J. LEAHY, Vermont CHRISTOPHER S. BOND, Missouri
TOM HARKIN, Iowa CONRAD BURNS, Montana
ROBERT C. BYRD, West Virginia RICHARD C. SHELBY, Alabama
LARRY CRAIG, Idaho
KAY BAILEY HUTCHISON, Texas
JON KYL, Arizona
TED STEVENS, Alaska
(ex officio)

Professional Staff

Paul Carliner
Gabrielle A. Batkin
Jon Kamarck (Minority)
Cheh Kim (Minority)

Professional Staff

Nancy Olkewicz
Isaac Green (Minority)

\2\ Committee and subcommittee memberships--June 6, 2001 to July
10, 2001.

C O N T E N T S

----------
Page

Wednesday, April 25, 2001

Corporation for National and Community Service................... 1
Neighborhood Reinvestment Corporation............................ 43

Wednesday, May 2, 2001

Department of Veterans Affairs................................... 65

Wednesday, May 9, 2001

National Aeronautics and Space Administration.................... 179

Wednesday, May 16, 2001

Federal Emergency Management Agency.............................. 237

Wednesday, June 6, 2001

National Science Foundation...................................... 275

Wednesday, June 13, 2001

Environmental Protection Agency.................................. 357

Wednesday, June 14, 2001

Department of Housing and Urban Development...................... 449

NONDEPARTMENTAL WITNESSES

Department of Housing and Urban Development...................... 553
Environmental Protection Agency.................................. 493
National Science Foundation...................................... 581
National Aeronautics and Space Administration.................... 627
Department of Veterans Affairs................................... 637

DEPARTMENTS OF VETERANS AFFAIRS AND HOUSING AND URBAN DEVELOPMENT AND
INDEPENDENT AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2002

----------

WEDNESDAY, APRIL 25, 2001

U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 10:15 a.m., in room SD-138, Dirksen
Senate Office Building, Hon. Christopher S. Bond (chairman)
presiding.
Present: Senators Bond, Mikulski, and Johnson.

CORPORATION FOR NATIONAL AND COMMUNITY SERVICE

STATEMENT OF WENDY ZENKER, ACTING CHIEF EXECUTIVE
OFFICER
ACCOMPANIED BY:
WILLIAM ANDERSON, DEPUTY CHIEF FINANCIAL OFFICER
GARY KOWALCZYK, COORDINATOR, NATIONAL SERVICE PROGRAMS

opening statement of senator christopher s. bond

Senator Bond. Good morning. The Subcommittee of VA, HUD,
and Independent Agencies will come to order.
This morning, our subcommittee will begin its first hearing
of the fiscal year 2002 budget. We begin with two independent
agencies, the Corporation for National and Community Service
and the Neighborhood Reinvestment Corporation. We will hear,
first, from the Corporation's Acting Executive Officer and
Chief Operating Officer, Ms. Wendy Zenker. The subcommittee
will then hear from the NRC.
We are beginning a new era under a new Administration. And
with a new Administration, there are new and different spending
and policy priorities. However, despite a balanced budget and
the availability of surplus funds, there are many demands on
the amount of funds that are available for discretionary
spending under the Federal budget. Moreover, the VA/HUD
Subcommittee, in particular, expects to face another year of
difficult budget decisions due to the continually growing
funding needs for VA medical care, Section 8 housing assistance
contract renewals, and FEMA disaster assistance.
For the Corporation for National and Community Service, the
President has requested a slight decrease of funding.
Specifically, $416.5 million has been requested, which is a
decrease of $46 million from the $462.5 million provided in
fiscal year 2001. The decrease is mainly due to a reduction in
needed funds for the National Service Trust Fund due to surplus
funds accumulated from previously appropriated funds.
Under the President's budget request, the Corporation's
AmeriCorps program would be maintained at its current
membership level of 50,000 participants. In addition, the
President has proposed two new initiatives under the AmeriCorps
program to expand service to senior citizens and veterans.
Further, the President expects the Corporation to be heavily
involved with his new faith-based initiative.
Before I delve into the policy and program issues, I
commend the Corporation for turning the corner on its long-
standing management problems. The Corporation received its
first clean opinion on its fiscal year 2000 financial
statements and reduced its material weaknesses from six to two.
The former head of the Corporation, our former colleague,
Harris Wofford, and you, Ms. Zenker, and the rest of the
management team deserve a great deal of credit.
We have criticized to you in the past, and now I think it
is appropriate that we commend you for your success. Further, I
would be remiss in--in not mentioning the vigilance and hard
work of the Inspector General, Ms. Luise Jordan, and her
auditing team, including Ms. Karyn Molnar of KPMG. I do not
think that all of this could have happened without your good
work. And we sincerely appreciate your efforts.
Before we declare victory, however, we need to ensure that
the Corporation continues its management reform efforts under
the new Administration. This means ensuring that the
Administration select a new CEO and CFO, who are truly
sensitive to the Corporation's management history and capable
of resolving, fully, its systemic problems.
I remain concerned about the Corporation's grant management
system that continues to be identified as a material weakness.
I understand that a lot of progress in the area has been made,
but clearly more needs to be done. Accountability for the use
of funds is critical to the future credibility and viability of
the Corporation. I look forward to working with and assisting
the new leadership on this important matter.
Now, in regards to policy matters, the President's budget
proposal includes a more significant role for the Corporation
in the President's faith-based initiative. As part of this
effort, President Bush has asked Stephen Goldsmith to serve on
the Corporation's board. I had the pleasure of discussing some
issues yesterday with Mr. Goldsmith, and I am interested in
learning more about the faith-based initiative as the details
are developed.
As we mentioned earlier, the President's budget also
includes two new tutoring and mentoring programs. The new
seniors program, called Silver Scholarships, would be funded at
$10 million per year with an additional $10 million annually to
pay for volunteer support.
The second initiative would fund a new Veterans program
to--at the tune of $15 million per year.
While both of these programs have merit, I need to know
more about how they would be administered by the Corporation
and what sort of outcomes the Corporation expects from these
programs. I strongly support the Corporation's current efforts,
such as America Reads to promote literacy and mentoring
programs. I would like to learn how these new initiatives
complement existing programs. Also, as a new member of the
authorizing committee for the Corporation, I will be interested
in how these programs are handled through the reauthorization
of the Corporation.
I believe that child literacy should be a major function of
the Corporation, and I was very troubled to read the results of
the 2000 National Assessment of Educational Progress, known as
the ``Nation's report card,'' which showed that the reading
performance of fourth graders in our country have not improved
significantly. I was disturbed to learn, also, the gap in
reading scores between the highest-and lowest-achieving
students grew in many States, including my home State of
Missouri.
I appreciate the efforts of the Corporation to improve
child literacy. More needs to be done, because failure to
ensure the literacy of our children exacts a staggering cost,
not only for the child who is unable to read or read well, but
for the community and our entire society. In this country 21
percent of the adult population--more than 40 million Americans
over the age of 16--have only rudimentary reading and writing
skills. Children who cannot read become adults who cannot read.
Soon I will be introducing a bill I call VITAL--Volunteers
Interested in Taking Action for Literacy, a proposal aimed at
increasing the involvement of parents, youth, and communities
in locally driven literacy initiatives. Organizations, such as
the Girl Scouts, the local Y, 4-H clubs, and Parents as
Teachers, would have access to resources from the Corporation
to assist in youth-to-youth mentoring activities and the
Parents as Teachers National Literacy initiative.
I would note, parenthetically, that as bad as the scores
are for fourth grade reading in my State of Missouri, where
200,000 children, age zero to three, are in the Parents as
Teachers program, our literacy failure rate is 12 percent below
the national average. And I think that working with those
children at an early level has probably had a great deal to do
with it.
Now, it is a pleasure to turn to my ranking member, Senator
Mikulski for her statement and comments.

statement of senator barbara a. mikulski

Senator Mikulski. Thank you very much, Mr. Chairman. First
of all, it is wonderful that we are starting our hearings. I
know it is April 25, but it was the best that we could do,
given the transition, which I felt was a very excellent
transition in the Administration. And--but I feel like I am
going to burst into that old cowboy/cowgirl song, ``Back in the
Saddle, Again.''
Senator Bond. Oh, please, I will play drums, if you want to
sing. I will accompany you.
Senator Mikulski. And we will look forward, once again, to
working with you in the tradition of bipartisanship that this
subcommittee has enjoyed, because I do believe that we will be
facing budgetary challenges as we go through this.
I want to also note that we are joined by a new member of
our subcommittee, Mr. Tim Johnson. And Senator Johnson we
really welcome you and look forward to your participation.
I want to, moving on to the hearing, welcome Wendy Zenker,
the Acting CEO of National Service and look forward to her
testimony as we move ahead.
My priorities, both in the hearing and also as we work on
our appropriations, are two-fold. One, I want to ensure that we
keep National Service strong, and that we continue to be
committed to that as we, perhaps, even take a step back and
look at where we are and where we should go, so we can continue
to create the habits of the heart in young people, help them
reduce their student debt, and yet provide very vital services
at the local level.
I am sorry that we do not have a new CEO, but I believe
that the President will give us a good person. And we think you
have been doing a very good job in the interim.
The appointment of Mr. Goldsmith to the board, I think, is
also going to give us a very refreshing member, with his
background; first of all, hands-on as a mayor, and I
understand, quite a reformer in Indianapolis, and at the same
time, we will be taking the initiative on faith-based
organizations.
But we want to keep National Service strong. And the other
is--two specific aspects I will be looking at is how National
Service will participate with education and other programs to
ensure that we do not have a digital divide in this country,
meaning not only access to technology, but access to those who
know how to teach technology.
I am not looking for National Service to provide
technology, but I am looking for National Service to see how we
can play an important role in communities, in constituencies
left out and left behind on how to move them ahead.
The other will be the integration of faith-based
organizations into the work of National Service. I have been a
long-time supporter of faith-based organizations. At one point
in my career, I worked for one, Associated Catholic Charities.
I know, in our work with HUD and others, that faith-based
linkages with the Federal Government can meet constitutional
compliance and at the same time bring a great deal of
compassionate service to our communities.
So, Mr. Chairman, I mean, we can--I am going to ask
unanimous consent that my full statement be placed in the
record, but a couple of flashing yellow lights. When we look at
keeping National Service strong, we need to make sure that we
maintain--I know that the Bush Administration does not want to
expand the number of volunteers. For the purposes of this year,
I am not going to challenge that assumption. I think what we
need to do is be able to stay the course, examine the new
programs and also perhaps see how we could expand the others.
But I am concerned that in order to keep National Service
strong, that there are certain budget shifts going on within
AmeriCorps, itself, that could weaken it. And I will have
specific questions for you in that, Ms. Zenker.
In terms of the E-Corps, last year I did an earmark
encouraging National Service to really look at how we could
establish an E-Corps or digital opportunity funding to be able
to go into our communities.
I want to hear more about it. I note that President Bush's
budget eliminated that as an earmark. Well, I do not know if we
will do an earmark or not, but I do not want to eliminate the
concept, because I think every private sector person I meet
talks about a worker shortage. I do not believe we have a
worker shortage. I believe we have a skill shortage and an
opportunity shortage in teaching young people, and even
retraining adults, for the digital world.
Faith-based initiative, I have already said, my commitment
to really working with the President in this. As long as we
meet constitutional compliance and do not have mission creep
over into evangelism, I think we are going to be fine, and look
forward to hearing more about it.
But today I came not to listen to myself talk, but Ms.
Zenker.
Senator Bond. And I assure you that when we and Congress
have legitimate needs that need to be designated, I do not
necessarily agree with the Administration that Congress has no
role in determining appropriate objects for spending or
particular programs that need to be included.
So, we will--we will--I expect we will be working on that
one. And we will----
Senator Mikulski. Well, I need your commitment to digital
opportunity.
Senator Bond. Yes. And we are going to--we are going to
make sure that we provide appropriate guidance where it is
necessary.
I join with you in welcoming Senator Johnson. And we are
delighted to have you with us. And I call on you for any
opening remarks that you wish to make, Senator.

statement of senator tim johnson

Senator Johnson. Thank you, Mr. Chairman. Just--very
briefly, as a new member of the committee, it is an
extraordinary honor for me to have this opportunity to serve on
this subcommittee. And I cannot think of two better people than
Senator Bond and Senator Mikulski to have leading this
subcommittee.
My role as a new member is primarily one of learning and
listening, but I do appreciate this opportunity to participate
in the deliberations. I look forward to the testimony from Ms.
Zenker.
Obviously, the Corporation for National Service has a
constructive and positive consequence in every State in the
Nation. Although a lot of the attention has been given to
volunteerism and youth--in my State--the Corporation for
National Service is best known for its senior service programs;
particularly RSVP.
I am looking forward to the analysis from the
Administration and the leadership here. It is my understanding
that the budget requests for 2002 involves a decrease in
funding of about $46 million below 2001, yet with two new
initiatives being proposed at a cost of around $35 million.
I look forward to the discussion here today about how that
works and what trade-offs are entailed. I also look forward to
discussion on the faith-based aspects. Again, we have a number
of organizations in this Nation that have long provided quality
social services, partnering with the Federal Government. I want
to see that continue. And there may be ways that we can expand
on that foundation, but yet, at the same time, obviously,
within the restrictions of the church and State divisions
mandated by our Constitution.
So, I look forward to that discussion, and look forward to
working very closely with the leadership of this subcommittee.
Thank you, Mr. Chairman.
Senator Bond. Thank you very much, Senator.
And now, I would call on Ms. Zenker. As you know, as our
normal practice, we will make your full statement a part of the
record and ask that you summarize those parts of it which you
think are--are appropriate and ask that you keep that summary
to about 10 minutes.

statement of wendy zenker

Ms. Zenker. Good morning. Thank you, Mr. Chairman, Senator
Mikulski, and Senator Johnson.
My name is Wendy Zenker. And I am now the Acting Chief
Executive Officer of the Corporation for National Service. It
is my honor to testify before you today on the Administration's
budget request for the Corporation and the programs authorized
under the National and Community Service Act. As you know, Mr.
Chairman, I previously appeared before this subcommittee in my
capacity as the Corporation's Chief Operating Officer.
Thank you for placing my written statement into the record.
Appearing with me today are Gary Kowalczyk, who is the
Coordinator for National Service Programs, and Bill Anderson,
who is the Corporation's Deputy Chief Financial Officer.
Mr. Chairman, in this budget, President Bush has affirmed
this Nation's long commitment to helping individuals, families,
and communities. Volunteerism and service have played a vital
role in defining America. And the President has made the
promotion of volunteerism and service one of the fundamental
goals of his Administration. This budget request supports the
Corporation's important contributions towards this goal.
The President has announced his intention to expand the
role of faith-based and small community organizations in
addressing the Nation's needs. The Corporation has a long
history of working with faith-based organizations. Of the
50,000 AmeriCorps members who are now serving, more than 6,000
are serving with faith-based organizations.
Whether it's the 600 AmeriCorps members that made it
possible for Habitat for Humanity to build 2,000 more houses
than it otherwise could, or the 2,000 AmeriCorps members that
recruited 35,000 volunteers for organizations affiliated with
the Catholic Network of Volunteer Service, AmeriCorps members
help expand the capacity and effectiveness of these groups in
meeting critical needs in their communities.
Mr. Chairman, I know you have a special interest in
literacy. You will be pleased to know that literacy is the
number one focus of AmeriCorps. We estimate that we will
provide a total of $85 million under the AmeriCorps State and
National Program for direct tutoring.
An independent evaluation attached to my written statement
documents the effectiveness of AmeriCorps tutoring programs in
helping children learn to read. We look forward to continuing
our work with you on this issue.
On another front, AmeriCorps is bridging the digital
divide. In fiscal year 2000----
Senator Mikulski. How can I follow your testimony? I mean--
--
Ms. Zenker. I'm sorry.
Senator Mikulski. No. Please, I just wonder--and I am glad
we submitted it all, but I do not know how to follow the
testimony.
Ms. Zenker. I have--if I may, I can provide, right now, a
copy of my oral statement for you. I think we can grab enough
copies----
Senator Mikulski. It would be easier for me----
Ms. Zenker [continuing]. For everyone.
Senator Mikulski [continuing]. Than trying to go through
this to figure it out. I do not mean to be abrupt, but I am
thumbing through. We all have revised and extended----
Ms. Zenker. Sure.
Senator Mikulski [continuing]. Ms. Zenker----
Ms. Zenker. Thank you. And my apologies, Senator.
Senator Mikulski. Please. I am sorry if I interrupted.
Ms. Zenker. Okay. Thank you.
On another front, AmeriCorps is bridging the digital
divide. In fiscal 2000, we made $12.5 million in grants to over
30 organizations as a down payment on Senator Mikulski's E-
Corps. This year, we will be awarding up to $25 million to
support computer technology initiatives, and the budget request
for 2002 continues this commitment.
As our programs have continued their successes, our
organization has grown stronger. For the first time, the
Corporation has received an unqualified or clean opinion on its
fiscal 2000 audit. This subcommittee has supported our
management reforms through appropriations over the past several
years, making this success possible. And we thank you for that
support.
As we move forward, the Corporation continues its strong
commitment to management improvement. We are using technology
to improve our systems and better serve our members and
grantees. We are currently developing a new integrated grants
management system that will provide comprehensive management
information for all grants and cooperative agreements.
The budget request before this subcommittee totals more
than $411 million. This funding level, while $46 million below
the fiscal 2001 budget, will allow the Corporation to maintain
its current program commitments and support two new
initiatives.
The budget supports 50,000 AmeriCorps members by providing
nearly $237 million for the AmeriCorps State and National Grant
Program and $21 million for their National Civilian Community
Corps. The Learn and Serve Program that effectively links
education and service is continued at $43 million.
The overall budget reduction results from the fact that we
do not need new resources in the National Service Trust to
support the next class of AmeriCorps members.
Two new initiatives in the budget request were announced by
President Bush during the campaign, and will expand service
opportunities for America's seniors. There is $20 million for a
Silver Scholarships Program to expand the involvement of
seniors in tutoring and mentoring. In exchange for 500 hours of
service, seniors will receive a scholarship that they can
transfer to a child, grandchild, or other deserving young
person.
The second initiative is a $15 million program called the
Veterans' Mission for Youth, and it is aimed at tapping the
vast experience of America's veterans as mentors and tutors.
The budget also continues support for the Points of Light
Foundation and America's Promise. We have very successful
partnerships with these two organizations and will continue
these efforts in the future.

prepared statement

Mr. Chairman, again, I would like to thank you and the
subcommittee for your support of the Corporation for National
Service and our programs. We are available to answer your
questions.
[The statement follows:]

Prepared Statement of Wendy Zenker

introduction
Mr. Chairman, Ranking Member Mikulski, members of the Subcommittee,
my name is Wendy Zenker and I am the Acting Chief Executive Officer of
the Corporation for National Service. Thank you very much for inviting
us to testify on the President's fiscal year 2002 budget request for
the Corporation for National Service and the programs funded by this
Subcommittee: AmeriCorps, including the National Civilian Community
Corps (NCCC), the service-learning activities supported under Learn and
Serve America, and two new senior initiatives that we will discuss
today. As you know, I have appeared before the Committee previously in
my role as Chief Operating Officer for the Corporation. Joining me on
the panel today are William Anderson, the Corporation's Acting Chief
Financial Officer, and Gary Kowalczyk, the Coordinator of National
Service Programs for the Corporation.
The President's Budget Blueprint reaffirms our nation's long and
honorable commitment to helping individuals, families, and communities
that have not fully shared in America's prosperity. Volunteerism is an
integral part of this commitment and the President has made the
promotion of volunteerism one of the fundamental goals of his
Administration. The Blueprint notes:
``Volunteerism and community service have been a strong and
important tradition in America ever since its founding. Across the
country, faith-based groups, national and local nonprofit organizations
are on the front lines, working to improve lives in some of the hardest
pressed communities in America.''
The President's commitment to promoting volunteerism and national
service goes back to his time as Governor of Texas. As governor, the
President supported the Texas Commission on Volunteerism and Community
Service, the state agency responsible for administering the
AmeriCorps*State grants in Texas. He also joined 48 of his fellow
governors and the governors of three U.S. territories in signing a
letter in support of the reauthorization of the National and Community
Service Act and the Domestic Volunteer Service Act, the authorizing
legislation for the Corporation for National Service. Governor Marc
Racicot of Montana, a member of our Board of Directors and recently
appointed Chairman of the Board of Directors of America's Promise,
spearheaded the governors' letter effort. The governors' letter is
attached.
The President has indicated his support for service and
volunteerism not only in terms of the budget and his experience as
governor, but also by the recent nomination of Stephen Goldsmith,
former Mayor of Indianapolis, to the Corporation's Board of Directors.
Mr. Goldsmith was the President's domestic policy advisor during the
campaign. As Mayor, Mr. Goldsmith instituted the ``Front Porch
Alliance'' initiative, a cooperative effort among city government,
churches, synagogues and neighborhood organizations to enhance the
community building work of these organizations. The Alliance is still
at work in Indianapolis. A community outreach team was created as part
of this initiative. The team met with local pastors, neighborhood
leaders, and residents to determine how private and public resources
could be matched with program needs. He has already met with many
members of the national service community and we look forward to having
the benefit of his experience on our Board of Directors once he is
confirmed.
The Congress knows that, as part of his overall agenda, President
Bush has announced plans to support the role of faith-based and
community groups in their efforts to save and change lives. These
organizations are making positive changes from the bottom up--one
person, one family, one neighborhood at a time. Under this vision,
these organizations will not replace Government, but will partner with
government to make life better for those in need.
The Corporation supports this larger agenda through all of our
programs, including those funded by this Subcommittee. We already have
extensive experience working with faith-based organizations such as
Habitat for Humanity, Lutheran Services in America, the Catholic
Network for Volunteer Services, and the National Jewish Coalition for
Literacy. In the days preceding this hearing, we brought together
faith-based organizations--some currently receiving Corporation funding
and some that are not--to discuss their relationships with the
Corporation and how the Corporation can do a better job reaching those
organizations that don't currently participate in national service. We
look forward to continuing our work with the faith community as an
integral part of the Administration's initiative.
Mr. Chairman, the Corporation and the national service programs
under this Subcommittee's jurisdiction continue to meet the four
strategic goals set by our bipartisan Board of Directors--solving the
nation's critical needs, strengthening communities through service,
improving the lives of those who serve through their experience, and
developing a sound innovative organization that strengthens the service
field. I'd like to highlight several accomplishments in these areas
over the last year, all of which have been verified by independent
reviews.
Solving critical needs.--AmeriCorps members are contributing to
solving the critical need for literacy. A just-completed independent
evaluation of AmeriCorps by Abt Associates found that the tutoring
efforts supported by AmeriCorps members resulted in improved test
scores for the tutored students. We are making the complete study
available to the Subcommittee.
Strengthening communities through service.--According to an
independent study, AmeriCorps members are helping strengthen
communities by providing needed services, strengthening nonprofit
organizations, and getting children, families, and others more involved
in solving local problems. Several weeks ago, NCCC members helped lead
2,000 student volunteers during spring break working on Habitat for
Humanity Collegiate Challenge projects building homes for low-income
families. AmeriCorps Promise Fellows, a special leadership cadre of
talented AmeriCorps members, have provided leadership in hundreds of
communities' efforts to expand, enhance, and improve the delivery of
the resources needed by all young people as identified at the
Presidents' Summit for America's Future in April 1997.
Improving the lives of service participants.--Evaluations of our
Learn and Serve program continue to demonstrate the positive benefits
of service-learning on students. All Learn and Serve America programs--
K-12 school- and community-based and higher education--integrate
community service with academic curriculum or with out-of-school time
and extracurricular learning opportunities. Student participants in
these programs have demonstrated increased civic responsibility and
academic achievement when their programs effectively link theoretical
with practical knowledge to serve the educational, public safety,
environmental and other human needs in their communities. The programs
in which students serve over an extended period of time and in which
effective connections are made to classroom curriculum have the
greatest positive effects on student outcomes. In addition, Learn and
Serve America programs encourage and foster collaboration among key
societal sectors--schools, community-based organizations, institutions
of higher education, and others--to meet community needs and to
strengthen the fabric of local communities.
Creating a sound and innovative organization that strengthens the
service field.--Mr. Chairman, I am also pleased to report that in March
of this year the Corporation received an unqualified, or ``clean''
opinion on its fiscal year 2000 financial statement audit. We also
reduced the number of material weaknesses from five to one. This is a
tremendous accomplishment, the product of sustained management
attention on the improvement of operational systems and the successful
implementation of new technologies.
This Subcommittee has supported the Corporation's efforts in
achieving a clean opinion, and I would like publicly to thank the
Chairman, Senator Mikulski and all of the Members for the consistent,
strong support that you and your staffs have given us as we worked to
achieve this goal. The Subcommittee provided crucial funding for the
Corporation's program administration budget during the past three years
that was instrumental in producing the good result that we are sharing
with you today.
I also want to acknowledge Harris Wofford, the Corporation's former
Chief Executive Officer (CEO), and the contribution of his vision and
leadership, and Tony Musick, our former Chief Financial Officer, who
brought his extensive financial expertise to the Corporation and
actively led our management improvement initiative. Our Board of
Directors took an active role in monitoring our progress and advising
us on where to focus our energies. The Corporation's Inspector General,
Luise Jordan, and the outside auditors, KPMG, worked closely with us in
achieving this result. Most of all, the credit for our success goes to
the Corporation's staff whose hard work and dedication brought us to
our goal. With the clean opinion, the Corporation is on sound footing
to support future national service opportunities and the priorities
outlined in our budget request.
budget request summary
The 2002 budget request for the programs and administration
authorized under the National and Community Service Act totals
$411,480,000; this represents a decrease of $46,011,000 below the
comparable level in 2001. In addition, the budget includes a $5 million
request for the Corporation's Office of the Inspector General.
Two new presidential initiatives totaling $35 million are also
contained in this request, the Silver Scholarship Program and the
Veterans' Mission for Youth Initiative. Reductions in funding from
fiscal year 2001 are shown under: the National Service Trust,
reflecting the fact that we do not need new budget authority to cover
the education award costs of members supported by the 2002 budget; and
the elimination of earmarks in the 2001 bill.
In total, the fiscal year 2002 budget supports 50,000 AmeriCorps
members, including the members funded through AmeriCorps*VISTA. We also
continue support for service-learning activities under the Learn and
Serve America Program. Additional details are provided below.
New Initiatives to Expand Senior Service
The budget requests $35 million in funding for two new programs to
expand service by our nation's seniors: the Silver Scholarship program
and the Veterans' Mission for Youth program. These new presidential
initiatives will further the contribution of older Americans to
national service.
Silver Scholarships
Under the Silver Scholarship program, seniors age 55 and older, who
participate in 500 hours of service in a year will be eligible to
receive a $1,000 scholarship that can be deposited in an education
savings account for use by their children, grandchildren, or another
child in need. The scholarship could only be used to pay tuition and
fees and will be tax exempt. We have submitted the appropriations
language necessary to establish the transferability and the tax-exempt
status of the scholarship.
The Silver Scholarships will expand senior service opportunities
for the rapidly growing population of older adults. With the aging of
the baby boomers, the number of people aged 65 or older is estimated to
double. The baby-boomers represent the best-educated, wealthiest, and
healthiest group of older adults in history. Many will explore
challenging opportunities following retirement, including volunteer
service opportunities. Silver Scholarships will harness this resource
in our efforts to solve pressing community needs.
The Corporation has extensive experience with senior service.
Through the National Senior Service Corps we have seen the results of
senior service demonstration programs funded by the Corporation and
other organizations that provide strong evidence that seniors in
retirement will commit to serving ten hours per week in well-run, well-
structured projects that are getting important things done in
communities. The demonstrations have also found that modest incentives
to cover out-of-pocket costs work as an incentive for seniors to serve.
The Silver Scholarship Program will build on these experiences and
successes.
We anticipate making approximately 60 grants of approximately
$325,000 each (including the funds reserved for the scholarships) for
this purpose. It is anticipated that these grantees will make subgrants
to local groups. A wide variety of organizations will be eligible to
receive these grants, including consortia of small and faith-based
nonprofit groups; national organizations, including faith-based groups,
that operate in multiple states; and Indian Tribes and Territories. All
organizations currently participating in any of our streams of service,
including those currently funded through the Corporation's National
Senior Service Corps, will be eligible to compete for these funds so
long as they meet the requirements of the Silver Scholarship Program.
The budget request makes $20 million available for the program: $10
million will be appropriated to the National Service Trust to cover the
cost of the scholarships, and $10 million for grants to cover the
support costs for the volunteers. I have attached a more detailed
description of the Silver Scholarships Program.
Veterans' Mission for Youth Program
The budget request also contains $15 million for a new program that
will provide matching grants to community organizations that connect
veterans and retired military personnel with America's youth through
mentoring and tutoring programs. Approximately 15,000 veterans and
retired military personnel will participate annually under the program
to tutor and mentor about 50,000 youth.
Mr. Chairman, you have had an active interest in veterans' issues
for quite some time. You know what veterans have to offer young people
considering their experience in serving their country. Service in the
armed forces can instill discipline, respect for others, a sense of the
importance of teamwork, and comradeship. All of these qualities make
veterans excellent mentors. Further, the Department of Defense supports
significant community service opportunities for active duty personnel,
and extending such opportunities to individuals after they leave
military service will take advantage of their well-developed skills and
interests.
In fiscal year 2002, the Corporation anticipates making
approximately 100 grants, averaging approximately $150,000 for the
Veterans' Mission for Youth program. The Corporation anticipates making
these grants on a competitive basis to consortia of organizations
within states, including consortia of small, faith-based, and veteran
nonprofit groups; national nonprofit organizations, including veterans
organizations, that operate in multiple states; and Indian Tribes and
Territories.
The Veterans' Mission for Youth program is consistent with the
Corporation's current program authority. We have discussed this
initiative with officials at the Veterans' Administration and they are
supportive of the Corporation's efforts. We have even begun to do
outreach to nonprofit organizations that work with veterans and
veterans' organizations for their input on recruiting and program
design.
The Faith Community and National Service
Americans have often turned to their churches, synagogues, temples,
and mosques for spiritual guidance, leadership, fellowship, and a
helping hand during good times and bad in our nation's history. Across
the country, faith-based and small community-based organizations are on
the front lines working to improve lives in places that face tremendous
social and economic difficulty. They are often dealing with these
crises in innovative and creative ways.
President Bush proposes to use federal resources as a means to
bring the commitment, creativity and innovation of community-based and
faith-based organizations to scale. Mr. Chairman, AmeriCorps members
and volunteers funded through the Corporation for National Service have
been putting this model to work in some of the hardest pressed
communities in our country. The National and Community Service Act
(NCSA) broadly defines eligible grantees to include private nonprofit
organizations, and explicitly defines a private nonprofit organization
to include ``a church or religious entity.'' Of the 50,000 AmeriCorps
member positions in the current program year, more than 6,000 serve or
will serve in faith-based organizations. In the 2000-2001 Program Year,
AmeriCorps members, including AmeriCorps*VISTA and AmeriCorps*Promise
Fellows, worked in 214 faith-based organizations--an investment of more
than $27 million. This service hasn't replaced the important work of
local volunteer efforts. AmeriCorps service enhances these efforts.
AmeriCorps members provide value-added service to faith-based community
assistance programs.
Let me illustrate with two examples. More than 600 AmeriCorps
members, including VISTA, work with Habitat for Humanity to help build
homes for low-income families across the nation. These members provide
leadership on building projects, serving 1.3 million hours directly
supervising 241,000 Habitat volunteers and helping recruit additional
volunteers. Service by these AmeriCorps members multiplies what Habitat
can do. They have made it possible for Habitat to build more than 2,000
additional houses that otherwise would not have been built.
Last year the Catholic Network for Volunteer Service placed over
2,000 AmeriCorps members through 120 national, state, and local faith-
based organizations, including Jesuit Volunteer Corps, the Christian
Appalachian Project, Lutheran Volunteer Corps, and Holy Cross
Associates. These AmeriCorps members recruited an additional 35,000
volunteers, assisted over 30,000 homeless people, taught and/or tutored
thousands of school children, and helped more than 8,000 low-income
pregnant women access pre-natal care and other services. In many cases,
these members worked in small organizations that have limited
resources. With AmeriCorps assistance, a small church or community-
based organization can make those limited resources go farther.
In all of our service activities with faith-based organizations,
AmeriCorps members may not get involved in any religious activities.
The National and Community Service Act recognizes a distinction between
the religious activities of a faith-based organization and a non-
religious national service program operated by such an organization. To
ensure that Federal aid is not used impermissibly to advance religion,
the law prohibits the use of Corporation assistance for religious
instruction, worship service, or any form of proselytization.
AmeriCorps members may not give religious instruction, conduct worship
services, provide instruction as part of a program that includes
mandatory religious education or worship, proselytize, or construct or
operate facilities devoted to religious instruction or worship. In
addition, national service programs operated by faith-based
organizations must be open to participants regardless of their
religion.
Mr. Chairman, AmeriCorps and the Corporation for National Service
figured prominently in the President's faith-based initiative
announcement. We have experience with a model that works. We are
looking forward to continuing our work with the faith community and
local community-based organizations.
AmeriCorps*State/National
Since 1993, more than 200,000 Americans have joined AmeriCorps
serving with local, community-based nonprofit organizations in a
variety of ways, from tutoring children to serving in community
policing projects to building or rehabilitating housing for the
homeless. Members receive a living allowance and are eligible to
receive an education award for the successful completion of their
service.
For fiscal year 2002, the Administration is requesting nearly $237
million for the AmeriCorps*State/National grant program, an increase of
$6.5 million. The AmeriCorps*State program which provides grants to
governor-appointed State Commissions will receive $190 million and $47
million will go to national nonprofit organizations conducting service
programs in more than one state.
Literacy
Mr. Chairman, we appreciate that literacy has been an important
issue to you and you have been a leader in Congress in this area. With
the recent media attention on the education issue and knowing of your
interest, the Corporation contracted with Abt Associates for a
comprehensive study of the AmeriCorps*State/National program and its
efforts in literacy. The study had two parts and was conducted between
the spring of 1998 and the summer of 2000. The first phase of this
project was a Descriptive Study of what was going on among our
grantees. We knew that a large number of AmeriCorps members were
serving in educational programs, but the Descriptive Study would give
us a much more detailed picture of this activity. The second phase was
a Reading Outcomes Study to measure what impact AmeriCorps service was
having on those receiving the service.
The Descriptive Study made some very important findings about the
size and scope of our commitment to literacy. Of the 961 total State/
National programs, more than half (517 programs) were education-related
programs, the majority of which (360 programs) involved direct literacy
and tutoring. Sixty-one percent of the sponsoring agencies were
community-based organization and 29 percent of the sponsors were
educational institutions. The study also found that firmly established
and experienced agencies are sponsoring AmeriCorps programs. The vast
majority, 83 percent, have been operating for five or more years. The
Descriptive Study also found that:
--AmeriCorps literacy service reached 260,000 individuals; 90 percent
were children from infants and toddlers to elementary and high
school children. Across all programs nationwide, the majority
of students receiving literacy services were concentrated in
grades 1 through 6.
--Over 10,000 AmeriCorps members were involved in literacy and they
had recruited 40,000 volunteers to help provide literacy
service.
--Almost all literacy programs provided training to members and
volunteers in literacy instruction and in working with
children. Typically, about 16 hours of training were provided
before, and 20 hours were provided during, the delivery of
literacy services.
AmeriCorps members in the 360 literacy and tutoring programs
identified in the Descriptive Study are conducting a wide range of
activities with their students, encompassing the full range of reading
subskills: reading aloud, reading comprehension, and vocabulary
development. Almost half of the tutoring programs used well-known and
widely used instructional models. And most of the tutoring programs
incorporated some of what educators and researchers believe are the
most valuable strategies for achieving positive reading outcomes such
as coordinating tutoring with classroom curricula; allowing adequate
time for tutoring (1.5 hours/week); and providing training to tutors.
These strategies helped produce improvements in test scores found in
the follow-up Reading Outcomes Study.
After receiving the results of the Descriptive Study, the
Corporation commissioned Abt to conduct a Reading Outcomes Study to
measure the effect of AmeriCorps on student reading skills as measured
by the Woodcock-Johnson Tests of Achievement. Data for the study were
collected pre-test in the fall of 1999 and early winter of 2000, and
post-test during the spring of 2000. The study found that students in
AmeriCorps tutoring programs made impressive gains:
--The tutored students at all grade levels improved their reading
performance from pre-test to post-test more than the gain
expected for the typical child at their grade level.
--Reading comprehension and reading skills started out below grade
level; by year's end students closed the gap and were reading
at or near the grade-level expectation.
Mr. Chairman, the Abt studies confirm that AmeriCorps' literacy and
tutoring programs are working, improving the reading abilities of
children. I have attached the full Descriptive Study and the Reading
Outcomes Study.
Digital Divide
In September 2000, the Corporation made grants to 32 programs
designed to bridge the digital divide. This was a down payment on the
E-Corps, Senator Mikulski's initiative to expand the digital knowledge
of teachers and their students. More than 1,100 AmeriCorps members are
working for a diverse range of local and national community based
organizations, schools, community centers, and YMCA's helping children
and adults succeed and thrive in the digital age. Most of these grant
awards were only recently finalized and these programs are just
beginning to get going with their projects.
We have received a number of very innovative digital divide grant
proposals for the 2001 appropriations. The proposals have ranged from
those using AmeriCorps members to assist in delivering technology
access to low-income individuals and families or helping to train
school teachers and staff in community organizations so that they will
become adept at using technology in their work with young people, to
programs that build the technology skills of those Americans,
especially children, who have not yet been exposed to computers and
programs that use technology to meet the needs of communities. We will
devote up to $25 million to this emphasis area under the
AmeriCorps*State and National activity.
In addition to these grants, the Corporation has a number of
partnerships with leading technology companies and nonprofits such as
America Online, IBM, the United Way, and America's Promise to bring
these resources to bear on the problem. Our recent public service
announcement campaign focuses on the digital divide.
Education Awards Program and AmeriCorps*Promise Fellows
In 2002, for the first time, the State/National grants budget
request includes the costs of the Education Awards program and the
AmeriCorps*Promise Fellows program. These programs, previously funded
under Subtitle H of the Act, are proposed to be funded under Subtitle C
in order to integrate the funding of all AmeriCorps activities and to
continue to increase the types of programs and organizations in which
AmeriCorps members serve while minimizing the cost to the Corporation.
We have proposed appropriations language to accomplish this transfer,
including provisions that exempt grantee organizations from the
administration cost, matching requirements, and participant benefit
requirements that do not exist under subtitle H of the National and
Community Service Act. These requirements have never been part of the
Education Awards program or the Promise Fellows program. The new
language will ensure that the Promise Fellows and the Education Awards
program will maintain their current structures.
The Education Awards program has played a key role in reducing the
Corporation's per member costs to below $15,000, as called for by
agreement with Congress. Under this initiative, the Corporation
provides education awards to national, state, and local community
service organizations that can support most or all of the costs
associated with AmeriCorps members from sources other than the
Corporation. AmeriCorps members serving in these projects are eligible
to receive education awards, but do not receive federally-supported
living allowances paid by the Corporation. Up to $7 million to support
15,000 slots will be available for Education Awards program under the
budget request.
The Promise Fellows is a major joint initiative with America's
Promise--the Alliance for Youth, the national mobilization for youth
launched by Presidents Clinton, Bush, Carter, Ford, and Mrs. Reagan
representing her husband, at the Presidents' Summit for America's
Future. The five promises for youth declared at the Presidents' summit
are: (1) an ongoing relationship with a caring adult--parent, mentor,
tutor or coach; (2) a safe place with structured activities during non-
school hours; (3) a healthy start; (4) an effective education that
yields marketable skills; and (5) an opportunity to give back to their
communities through service. AmeriCorps Promise Fellows serve with and
are selected and administered by national, state, and local nonprofit
organizations that are developing and coordinating large-scale
activities intended to support children and youth. They do not serve
with the America's Promise organization. The budget request makes up to
$7 million available for the Promise Fellows program.
National Service Trust
The budget request for fiscal year 2002 will support an additional
50,000 AmeriCorps members; of which approximately 48,000 will enroll in
the Trust. In preparing this year's budget for the Trust, we have
determined that no new budget authority is required for the Trust Fund
costs associated with the new AmeriCorps members. The $10 million
included in the Trust supports the scholarship portion of the Silver
Scholarships initiative. This determination reflects several factors,
including: a change in estimating procedures to recognize future
interest earnings in determining current, as opposed to future, budget
requirements; and a program budget that is based on a static number of
AmeriCorps members in 2002 and beyond. As in previous years, the
appropriations request contains language allowing the Corporation to
use up to $7.5 million for the President's Student Service Scholarship
Program. The addition of 50,000 new members added by this budget will
bring the total Trust enrollments to more than 335,000 since the
beginning of the AmeriCorps program.
AmeriCorps*NCCC
The administration's budget submission requests $21 million for the
NCCC, the same funding level as in fiscal year 2001, to support 1,100
NCCC members. NCCC is a residential service program. Members live on
five campuses nationwide and are deployed to areas of greatest need.
Each year, the Corporation routinely receives approximately four
applications for each available NCCC position.
In addition to addressing pressing community needs in the areas of
education, public safety, and the environment, NCCC members provide
assistance to the Red Cross and the Federal Emergency Management Agency
in locations struck by natural disasters. Approximately 16 percent of
NCCC members have been certified to provide fire-fighting support to
the U.S. Forest Services and Parks Services and 50 members (the largest
deployment ever) served on initial attack fire fighting teams in the
western states in August and September 2000. In fiscal year 2000, NCCC
responded to 34 disasters.
For fiscal year 2001, Congress increased the NCCC appropriation by
$3 million to increase NCCC enrollment by 10 percent and to cover the
costs of moving the San Diego Campus from its present site, a former
Naval Training Center. The Department of the Navy is conveying the site
to the City of San Diego, which plans to redevelop the area. Plans for
the site change are moving forward. We recently completed a temporary
move to the naval facility across the street from the current campus to
allow the class to graduate in San Diego in July. The next phase of the
move will either be a local move to another site in San Diego or to a
new location. The final decision will be made in May 2001 and the move
should occur in August. The move will result in certain leasing cost
increases, and one-time moving and staff relocation costs
Learn and Serve America
The budget requests level funding, $43 million, for the Learn and
Serve America program in fiscal year 2002. Mr. Chairman, the use of
service-learning continues to grow as more and more school systems
adopt this innovative strategy that combines community service with
academic and civic education. In 1984, nine percent of all schools
offered service-learning. By 1999, that figured had jumped to 32
percent of schools, including half of all high schools. Learn and Serve
America programs engaged 1.18 million students in service-learning
activities in 2000.
Service-learning offers tremendous benefits to students, schools,
and communities. It gives students the opportunity to be active,
positive contributors to society and contributes to greater civic
engagement by students. Students become more active in school and
develop greater beliefs in their ability to make a difference in their
communities. Studies have found that service-learning contributes to
increases in core GPA and in Math. Students in service-learning are
less likely to engage in risky behaviors than their peers and
contribute more than twice as many volunteer hours in the community
than students who are not part of service-learning do.
Schools benefit from service-learning through greater integration
with community-based organizations, energized curriculums, and by
expanding connections between students and school personnel. Ninety-
five percent of teachers believe students should be encouraged to
participate in service. Finally, service-learning forges partnerships
between schools or colleges and community organizations and
institutions, providing additional resources to meet shared community
and neighborhood challenges.
Learn and Serve America makes grants to state government entities,
Indian tribes, U.S. territories, and national nonprofit organizations.
They in turn make subgrants for local service-learning projects. In
addition, Learn and Serve America provides grants directly to
institutions of higher education. State education agencies receive
funds from Learn and Serve through a population-based formula.
Nonprofit organizations, State Commissions, Indian tribes, U.S.
territories, and institutions of higher education receive funds through
a national competitive process, which includes set-aside funding for
Indian tribes. And Learn and Serve America encourages sustainability
and growth of service-learning through its funding match requirements.
All school- and community-based grantees must demonstrate an increasing
level of matching funds to qualify for continued federal support,
rising to dollar-for-dollar by year four. Higher education grantees
must provide a dollar-for-dollar match from outset of the grant.
While most often service-learning is sponsored by schools and
colleges, it also takes place in community organizations such as 4-H,
YMCA, as well as through the governor-appointed State Commissions on
service that administer AmeriCorps grants. Community organizations and
nonprofits must develop programs with civic or academic knowledge links
to the service in order to qualify for Corporation funds
Innovation, Demonstration, And Assistance Activities
The fiscal year 2002 budget request for the Innovation and
Demonstration activities authorized under Subtitle H of the National
and Community Service Act is $22 million, a reduction of $6.4 million
below last year. Most of the reduction represents a transfer from
Subtitle H to the AmeriCorps*State/National grants under Subtitle C of
the costs of the Education Awards and the AmeriCorps*Promise Fellows
programs. This funding level will allow the Corporation to continue its
mission under Subtitle H to build the ethic of service among all
Americans, provide training and technical support to the national
service field, and to foster high quality programs with real community
impacts. The Corporation also funds a number of special initiatives in
its Innovation and Demonstration authority, including:
Recruitment.--The Corporation recently went on-line with our new
web-based recruitment system at www.americorps.org to help us reach our
goal of recruiting 50,000 new AmeriCorps members. The Corporation
developed and implemented this new web-based recruiting system in
fiscal year 2001 to assist State Commissions and local nonprofits with
recruiting members. The system provides information on service
opportunities, and permits a person to search for those opportunities
that meet his or her interests and qualifications. You can then apply
on-line directly to the nonprofit or faith-based organization. Whether
a service opportunity is across state lines, or merely around the
corner, putting the program in touch with the applicant is the first
step that ultimately results in a member signing up to provide service
in a community and help to solve critical needs. The recruitment
system, found at www.americorps.org, has already generated 8,000
applications to programs.
Disability Programs.--In fiscal year 2002, organizations that were
granted funds to provide outreach and recruitment activities to people
with disabilities for national service programs will complete their
two-year grant. Grantees will present their accomplishments and best
practices at the 2002 National and Community Service Conference. Based
on the information learned from these grant activities, the Corporation
will hold discussions with the grantee organizations, State
Commissions, programs, and the Training and Technical Assistance
provider to determine the best use of new disability grants.
The President's Student Service Challenge.--In 2002, the
Corporation expects to award 15,000 matched President's Student Service
Scholarships and 50,000 President's Student Service Awards to reward
outstanding service by young people.
Dr. Martin Luther King, Jr. Day.--This initiative is authorized
under the National and Community Service Act and is intended to make
this day an opportunity for all Americans to provide service to their
community in honor of the legacy of Dr. King.
Evaluation
The budget request for the Corporation's evaluation activities for
fiscal year 2002 is level funded at $5 million. Evaluations determine
the impact of Corporation programs in achieving the goals set forth in
the National and Community Service Act. They also help the Corporation
identify successful service activities and best practices that can
serve as models for future program development.
In fiscal year 2002, the Corporation will support a variety of
studies and activities designed to track the performance of our
programs, as required by the Government Performance and Results Act,
and to provide customer feedback. Those activities include customer
satisfaction surveys, and accomplishments tracking. Long-term studies
will continue to absorb a significant proportion of the evaluation
budget in fiscal year 2002. The Corporation now anticipates having to
fund the first follow-up of the member longitudinal study from the
fiscal year 2002 appropriation. We will also begin planning for the
establishment of program outcome standards at the grantee and
subgrantee level. Working in cooperation with the AmeriCorps program
staff and State Commissions, Evaluation staff will design and implement
a system of quantitative standards for grantee and sub-grantee
performance in the areas of member enrollment, retention, and
completion.
Program Administration
The budget request contains $31 million for program administration
in fiscal year 2002, essentially level funding from the previous year.
Consistent with the Act, the Corporation's overall program
administration funding includes a 40 percent allocation of $12.4
million to State Commissions to fund their fiscal management and
program support activities. The remaining $18.6 million will be used
for the Corporation's direct program administration expenses, including
the technology enhancements that were so critical to the Corporation's
ability to obtain a clean opinion on its financial statements. Although
the cost of supporting even a level program activity level will include
increased program support costs due to inflation and cost of living
increases, the Corporation is not requesting an increase in its 2002
Program Administration funding levels. The current request level will
enable the Corporation to maintain its 2001 FTE level and to staff
critical program positions.
fiscal year 2000 audit
The Corporation is pleased to report that for the first time it has
received an unqualified, or ``clean'' opinion on its fiscal year 2000
financial statements. Operational areas deemed materially weak were
reduced from five in fiscal year 1999 to one for fiscal year 2000.
These achievements were the result of a concerted effort to reduce
the number of material weaknesses and reportable conditions identified
in the audits, beginning in fiscal year 1996 when ten operational areas
were deemed materially weak. We reduced our material weaknesses by
developing a comprehensive Action Plan that identified tasks that
needed to be accomplished to improve management and to control material
weaknesses. We continually updated the Plan to incorporate new tasks,
including those identified by the Office of the Inspector General, and
documented the Corporation's progress toward completing existing tasks.
In the past two years, as part of the Action Plan, the Corporation
implemented a new financial management system, created a web-based
reporting system for the National Service Trust that improved record
keeping and accuracy of Trust data, and put in place numerous
improvements to our control environment, fiscal management, and
information technology. As the full impact of these systems began to be
felt throughout our organization, our audit results improved as
illustrated below.

CORPORATION AUDIT RESULTS--FISCAL 1996 THROUGH 2000
------------------------------------------------------------------------
Type of Opinion 1996 1997 1998 1999 2000
------------------------------------------------------------------------
Unqualified.......................... X
Unqualified Balance Sheet only \1\... X X
Qualified Balance Sheet only \2\..... X
Financial Statements Not Auditable... X
------------------------------------------------------------------------
\1\ The financial statements were fully auditable, the auditors issued
an unqualified opinion on the Statement of Financial Position and
disclaimed on the Statement of Operations and Statement of Cash Flows.

\2\ Only the Statement of Financial Position was auditable.

continued management improvements
The Corporation continues to emphasize financial and grants
management improvements. The Subcommittee's Conference Report for the
current fiscal year instructed the Corporation to implement a cost
accounting system, an integrated grants management system, and to
establish a central archive for Corporation grant records. Funding was
provided for these activities. The Subcommittee also instructed the
Corporation to report on our procedures for handling ``troubled''
grantees. I would like to report on these areas.
Cost Accounting System
We will use our new financial management system, Momentum, to
report costs in statements, so the system infrastructure for the cost
accounting system is currently in place. Utilizing Momentum, we are
developing a cost model to allocate expenses by program according to an
appropriate cost driver in accordance with federal accounting
standards. We plan to contract with an independent public accounting
firm this year to assess our cost model. Our goal is to be able to
generate comparative information on costs between programs and to link
costs to program outcomes.
Grants Management System
The work on the integrated grants management system began in fiscal
year 2000. This long-term project is going very well, and we expect to
begin to implement the system next April. The design work on the system
was completed in December 2000, and is now undergoing final review
prior to the actual programming work. When completed, we will have an
integrated grants management system that provides comprehensive
financial management information for all grants and cooperative
agreements. The design meets the Grants Financial System Requirements
of the JFMIP and the requirements of the Government Paperwork
Elimination Act and the Federal Financial Assistance Management
Improvement Act. On February 2, the Corporation provided the design
documentation, including functional hierarchies, entity diagrams, and
initial mock-ups of all forms and reports to the Inspector General for
comment.
We are very excited about the potential of this new grants system.
Like our web-based reporting system for the National Service Trust, the
grants system will use the Internet for many functions. Potential
grantees will be able to apply for Corporation grants, using a common
electronic form 424 on the Internet. The Corporation will also be able
to perform peer reviews of grant proposals over the Internet. All
employees of the Corporation will be able to do their assigned tasks in
one system. Both financial and progress reporting will be done over the
Internet. The system will be linked to the Corporation's Momentum
financial management system so that all financial data will be in sync.
Much of the current labor intensive tracking and notifying will be
automated. And all of the Corporation's grant activity, with
appropriate audit trails, will be done in one place.
Central Records Archive
The Corporation plans to consolidate its grant and program files in
a central archive for grants issued from the Corporation's
headquarters. Files for grants issued by our five service centers will
remain at the location servicing the grant.
As part of this effort, the Corporation will close out expired
grants and send the files to the Federal Records Center. We will also
contract with a qualified vendor to perform grant file reviews, grant
award reconciliations, and perform an analysis of financial and related
reports to determine that all requirements have been met. The
Corporation issued a notice of the contract for this work on February
5, 2001. We expect that a contractor will begin work on the project
soon.
In the longer term, the Corporation believes that the archive will
not be needed. As previously discussed, the Corporation is building a
new grants management system that will handle all aspects the of the
grant process from accepting applications, to peer review, to award and
eventual close out. We estimate that within five years the entire grant
process will be paperless eliminating the need for an archive.
Improving Grantee Performance
The Fiscal Year 2001 Conference Report also instructed the
Corporation to examine the use of receivership in addressing
``troubled'' grantees. Our primary tool for monitoring State
Commissions is our State Administrative Standards project. Under the
Standards, a review team spends five days on site assessing the
Commissions in five statute-based areas: (1) proper grant processes,
(2) monitoring of service programs, (3) member record keeping, (4)
filing of Corporation reports, and (5) financial management. In
addition, the Standards evaluate the Commissions' planning and
assessment processes, personnel management, systems for training and
technical assistance, as well as service promotion within states. To
date, Corporation staff has performed 15 State Commissions site visits
using the Standards and has issued 11 final reports. An additional 14
site visits will be conducted in fiscal year 2001.
In addition to visiting State Commissions, as part of the Standards
review process, Corporation staff also conducts site visits to
individual program sites that are receiving funding from Commissions to
ensure that the Commissions are conducting proper program oversight.
State Commissions are instructed to obtain technical assistance and
training to correct any deficiencies identified by the Standards and
must establish policies and procedures to remedy the problems.
The Corporation has ample authority under current law to impose
sanctions on troubled grantees. These sanctions include requiring
reimbursement for misused funds, the suspension or termination of
assistance, or the automatic recovery of disallowed Federal grant funds
through administrative offset of other Federal funds. Unlike the
Department of Housing and Urban Development, the Corporation does not
have authority to appoint a receiver to step in and run a State
Commission. Given the wide range of currently available sanctions, such
authority does not appear to be necessary. So far, we have not found
any Commissions with problems so significant that we would need to
resort to such a remedy. The current sanctions are effective tools for
insuring proper State Commission management.
Program Administration--Additional Priorities
Mr. Chairman, Senator Mikulski, as I mentioned previously, this
Subcommittee has been very supportive of the Corporation as we have
used our funding to improve our operational and financial systems.
While we worked to improve our systems, the responsibilities and
activity of the Corporation have grown substantially. The addition of
50,000 new members added by this budget will bring the total Trust
enrollments to more than 335,000 since the beginning of the AmeriCorps
program. There are more than 3,000 programs, sponsors, and sites that
receive Corporation support and assistance.
All of this growth has placed greater demands on the National
Service Trust and its staff. All member information from when they
enroll in AmeriCorps or AmeriCorps*VISTA to when they exit is recorded
in the Trust. If information about the member changes--change of
address, change of program site--during the course of a member's
service, that change is also kept by Trust data. Indeed after a member
successfully completes his or her service, the Trust is responsible for
receiving and processing requests for payment of education awards. As
the Trust's on-going responsibilities have grown with each group of new
members, there has been an increased workload of continuing inquiries
from this increasing member population. The Trust is actively using
technology to assist in the management of this workload, but it is
important to recognize that this is a growing workload and that
continuing improvements are needed to the Trust's capacity to respond
to member requirements in a timely manner.
points of light foundation
The Corporation has enjoyed successful collaborations with the
Points of Light Foundation and America's Promise--the Alliance for
Youth. These organizations bring special expertise and resources to the
national service field. Both organizations, along with the Corporation,
are the co-hosts and primary organizers of the National Community
Service Conference. Last year's conference brought more than 5,000
members of the national service field together to exchange ideas and
best practices for delivering service.
The budget request for the Points of Light Foundation is sustained
at last year's level of $10 million. The funding will be used by the
Foundation to carry out its fundamental purposes:
--Encouraging every American and every American institution to help
solve the nation's most critical social problems by
volunteering their time, energies, and services through
community service projects and initiatives.
--Identifying successful and promising community service projects and
initiatives with nonprofit organizations, corporations,
families, and youth, and disseminating information concerning
such projects and initiatives to other communities in order to
promote their adoption nationwide.
--Building the capacity of institutions to support volunteer service,
and developing individuals as leaders to serve as strong
examples of a commitment to serving others and to convince all
Americans that a successful life includes serving others.
The Points of Light Foundation supports a network of hundreds of
Volunteer Centers nationwide. An increasing number of AmeriCorps
members and AmeriCorps*VISTA members are working directly with, and
under the leadership of, these centers for volunteer service. In fiscal
year 2002, the Foundation will develop programming and support
institutions that offer volunteer opportunities and resources to low-
income people. The Foundation has expanded its programming to reach and
serve more communities of faith and family-based volunteer initiatives,
two key strategies to strengthen communities. The Foundation will also
work to build the capacity, visibility, and sustainability of a unified
nationwide network of local Volunteer Centers.
america's promise
In April 1997, America's Promise was launched at an unprecedented
gathering in Philadelphia called the Presidents' Summit for America's
Future. In Philadelphia every living President, with Former First Lady
Nancy Reagan representing President Reagan, along with 38 Governors,
100 Mayors, and delegations of Americans representing 140 communities
joined together behind an overall mission of building and strengthening
the character and competence of today's youth.
At that gathering, a set of five basic promises was made to every
child in America. To point them in the right direction, to help them
grow up strong and ready to take their place as successful adults,
these five promises must be fulfilled for all children and young
people:
--An ongoing relationship with a caring adult--parent, mentor, tutor
or coach.
--A safe place with structured activities during non-school hours.
--A healthy start.
--A marketable skill through effective education.
--An opportunity to give back through community service.
The fiscal year 2002 budget proposes $7.5 million as a second grant
to America's Promise for the purpose of fulfilling its mission. The
grant will support the operational costs of the organization, as well
as activities consistent with the mission described above. It is
anticipated that these funds will supplement other ongoing activities
and contributions toward the goals and objectives of America's Promise.
In 2002, America's Promise will continue to support programs and
partnerships that develop the character and competence of the nation's
youth. A key priority will be the development of collaborations across
the public, private, and independent sectors around the common mission
of fulfilling the Five Promises. These collaborations make the best use
of scarce resources and ensure more young people are reached. Another
priority will be the generation of resources, including in-kind
contributions in the form of the time and talent of individuals and
their employers, as well as donation of funds to support positive youth
development activities in communities. Resources can be combined and
delivered to children where they live, learn, and play through `Sites
of Promise' such as schools, public housing, libraries, and
recreational facilities. These ultimately culminate in the full-scale
mobilization of Communities of Promise.
conclusion
Mr. Chairman, Americans can be proud of the work of Corporation for
National Service. They see the change that individuals bring to
communities with pressing needs. As we look to the future, we are not
resting on our accomplishments. Over the next year the Corporation will
continue to review and improve its operations and programs. We will
also seek to identify innovative ways to strengthen the Corporation's
contributions to the Administration's overall agenda to support faith-
based service groups and the efforts of communities and families in
providing vigorous and thorough support for those in need, while
preserving the dignity of the individual and fostering personal
responsibility. This Subcommittee has been tremendously supportive of
our work and we look forward to your continued support.

AMERICORPS LITERACY ACHIEVEMENTS

Senator Bond. Thank you very much, Ms. Zenker. Let me now
turn to questions.
Speaking on the literacy front, and I appreciate your
comments about it, how much funding support currently goes to
the Corporation's literacy initiatives? What kinds of results
are we seeing? And how do you envision this Silver Scholarship
and Veterans' Mission complementing the Corporation's current
literacy activities?
Ms. Zenker. We are estimating about $85 million this year
will go towards our literacy efforts. One of the things we did
over the past 2 years was contract for an evaluation assessment
of our literacy efforts. And we have an evaluation report that
was prepared by Abt Associates, which has been attached to my
fuller statement, and which we can talk about, briefly.
That report is both a descriptive study of AmeriCorps
literacy efforts, as well as an evaluation outcome of the
results that we are getting. What we are seeing, in terms of
results, is that AmeriCorps members are making a difference in
the communities that they serve; that grades are going up by
more than would--reading levels, excuse me, are going up by
more than would be expected if the AmeriCorps members were not
there tutoring.
What we do, in terms of tutoring, are several different
kinds of activities. We do tutor directly, as well as have
AmeriCorps members who recruit tutors to come into the schools.
Our two new initiatives, both the Silver Scholarship
Program and the Veterans' Mission for Youth, both draw on this
literacy expertise and seek to have more volunteers helping
more young people learn to read.
Senator Bond. Well, one of the things that--that I am
interested in is how we can make the--how we can expand the--
the reach and the effectiveness by making sure that we
emphasize the wholesale nature, rather than retail.
I know that if we have an AmeriCorps volunteer tutoring a
student, that student probably is going to do better and
increase his or her reading level. But if we have the--that
AmeriCorps volunteer who is mobilizing a group of 10 or 15 or
20 mentors, then we--then we can hope that we get 10 or 15 or
20 more students involved, and--and raise them up.
So, I very much want to see us multiplying that effort, and
using the resources of the Corporation to the extent possible
to get as many non-Corporation volunteers in the field. And I
hope that that will work.
How will the Silver Scholarship/Veterans' Mission work with
the literacy efforts?
Ms. Zenker. Both of those programs are directed towards
mentoring/tutoring young people. The Silver Scholarships will
permit seniors 55 and older, who provide 500 hours of service,
to receive a $1,000 scholarship that they can pass on to a
child, a grandchild, or another person in need, including the
person they are tutoring or mentoring.
The Veteran's Mission for Youth is a very similar program.
It seeks to take veterans, retired military personnel, and have
them tutor and mentor within their communities.

GRANTS MANAGEMENT AND COST ACCOUNTING

Senator Bond. All right. The Corporation's Inspector
General and KPMG have reported most of the Corporation's
financial problems have been cleared up, but they continue to
report deficiencies in grants management, including systems
deficiency and problems in day-to-day management and oversight.
We provided the Corporation $2 million targeted for the
acquisition of a cost accounting system, a grants management
system, and the establishment of central archives.
What--what is being done to address these deficiencies? Who
is responsible for correcting them? What progress have we seen
to date? And do you expect any additional funds needed to
complete the effort?
Ms. Zenker. First, let me say thank you. We really
appreciate the $2 million that we received in 2001 that was
specifically focused on where we see our current top internal
management priority, which is to improve our grants management
system.
Where we stand with the grants management initiative--and
if I may speak about that first, simply because it is taking
the largest portion of that money. We have awarded a contract--
we have done the systems analysis. We have done the
requirements definition. We have a contractor on board. And we
are actually starting, right now, to program the system. We
expect that it will be initially operational in April of 2002;
this time next year.
With respect to the cost accounting system, we have a new
accounting system that has a cost accounting module. In our
annual report this year, we did our first cost accounting
allocation module method. What we want to do is bring in a
public accounting firm, right now, to take a look at what we
did and see if they have recommendations on how we can do it
better. And we are also following your advice, in terms of
getting and putting in place a central archive for our
headquarters grants.
Senator Bond. I would like to ask the Inspector General,
Ms. Jordan, to come forward. Do you have any comments on this
or any suggestions on--on this general area?
Ms. Jordan. The grants management?
Senator Bond. Yes.
Ms. Jordan. The systems part----
Senator Bond. You might pull that mic over.
Ms. Jordan. The Corporation's plans to improve the system
go a long way toward working out some of the recording
problems, but the problems are also in the day-to-day oversight
of the grants.
We--I testified approximately 2 years ago that we were
going to be doing work at the State Commissions. And Senator
Mikulski, you asked us to issue reports after we did each.
In each of the reports, we have made recommendations, as
far as improving the oversight and the monitoring of the grants
at the sub-sites and where the members are doing the service.
There are a number of issues that remain to be resolved in
those areas. A system will not address those problems. Those
are management issues. And that is where emphasis has to be
placed.
There was some cost accounting done for the financial
statements, but the Corporation, in my mind, still cannot cost-
out its programs, including what it costs to put a member down
on the ground and how much a specific program, itself, costs.
That will require getting some information from the grantees.
And I am not aware that the Corporation has made efforts to get
that specific actual information from the grantees, rather than
using budget, as it has in the past.
And I am not aware, as far as the archiving, of a great
deal of progress that has been made in the area. We still have
issues finding documents.
Senator Bond. Do you think the Corporation needs more funds
to complete the grants management system?
Ms. Jordan. I----
Senator Bond. That is just a management challenge.
Ms. Jordan. I am not aware that acquisition of the system
will require more funds than they have now. I believe that what
we need is more emphasis on management.

GRANTEE OVERSIGHT

Senator Bond. Well, this is one--and I was going to turn
for my--turn back to Ms. Zenker and let her comment on that.
But I wanted to follow-up on the grantee oversight, because we
have seen the--the questions raised and the Inspector General
has--as--it says that in its grantee surveys, very few State
Commissions have good systems for tracking grants.
And what actions does the Corporation take when it finds a
grantee is troubled or not performing? And what actions has the
Corporation taken when the IG reports problems with a grantee?
Ms. Zenker. We have got a couple of different mechanisms
that we use. One, the Inspector General is indeed conducting
pre-audit surveys, at, I believe, now, about 37 of our State
Commissions. Reports are issued with recommendations. And we
follow-up with the State Commission to make sure that those
recommendations that they agree with are implemented. We have
our program staff that are working very closely with State
Commissions to make sure that they put improvements in place.
We also have what I would describe as our own internal
monitoring program, which is referred to as the State
Commission Administrative Standards. And this is a series of 11
standards, where we send a team out for a 5-day period,
composed of both Federal and non-Federal experts, to go in,
take a look at what State Commissions are doing in terms of
their recordkeeping and program management, and provide a
report back to us, again, with recommendations on where there
are weaknesses and other areas where they need improvement.
So, we follow-up when we know that there are weaknesses.
Generally, though, we think that the State Commissions are
doing an adequate job. And there are many that are doing a good
to excellent job. I think we need to keep that in mind, as we
talk about some of the problems in some of the State
Commissions that have weaknesses.
I do not want us to lose sight of the fact that, by far,
almost all Commissions are running good programs. Again, almost
all Commissions can probably make improvements, but for the
most part, we believe that they are performing what we would
consider to be a minimal and even adequate level of attention
and oversight to their grant programs.
You asked whether or not--and I know that there were
several questions, and I am sorry if I do not get to all of
them, but one that is serious to us, of course, is always the
money question; whether we would continue to need money in
fiscal 2002 for these improvements. And I have to say that we
do.
As we build systems, we have, minimally, the cost to
maintain them, to do the next version, to make improvements, to
make it better, and to expand its scope, in terms of the
activities that it performs.
We are bringing up, initially, the system in 2002. We will
have a continuing work in 2003.
Finally, there was a question on whether or not we know the
actual cost of AmeriCorps members on the street. And that is
information that we do not, right now, know the actual cost. We
do talk to you, in terms of budgeted costs, and what we are
aware of, in terms of what is going on out there.
We have every intention, and we will try, over the next
year or two, to comply with the requirement to have actual
costs for members, but that is going to be driven by putting
these systems in place that will bring the data forward and
permit us to report it back to you on an actual basis.
Senator Bond. Well, thank you very much, Ms. Zenker. I will
submit the rest of my questions for the record.
I now turn to Senator Mikulski for her questions.

ADEQUACY OF NATIONAL SERVICE TRUST FUNDING

Senator Mikulski. Thank you very much, Mr. Chairman.
Well, this is one of the first, at an Appropriations
hearing, Ms. Zenker, when I refer to page five of your oral
testimony, in which you say, ``The overall budget reductions
result from the fact we don't need new resources in the
National Service Trust to support the next class of AmeriCorps,
and also the two new initiatives proposed by the President.''
Could you tell me why that is so?
Ms. Zenker. I think, in terms of looking at the Trust, I--I
talk about three different issues. One, there is a change in
what our future estimates are, in terms of growth of the
AmeriCorps Program.
As you mentioned in your opening remarks, Senator, we are
looking, right now, at level funding for 2002, and we, at some
point, will engage with our new CEO and the President, in terms
of discussions for 2003, but right now, we are looking at level
funding and level growth within the AmeriCorps Program in the
out years. So, that has a significant impact on what we would
request for the Trust.
The second issue is, as has been discussed with this
committee in years past, there is somewhat of a reserve that is
in the Trust right now, and we would use that reserve. It is--
it is not the number that I know has been floated around.
Senator Mikulski. Why do we have a reserve?
Ms. Zenker. We have a reserve because we have estimates as
to what kind of usage we are going to have of the education
awards. How many members enroll? How many members complete
service? Of those members who complete service, how many use
it?
Senator Mikulski. I want to come back to that, then----
Ms. Zenker. Okay.
Senator Mikulski [continuing]. Because I want to move my
questions along.
First of all, one, I am pleased to hear your analysis. And
we wanted to hear both from you and the very important issues
raised by the IG.
Here is where we are: One, we have--Senator Bond and I have
really big challenges ahead for all of the agencies facing us.
Stay the course in National Service and really use this to get
our act together and get volunteers into the community. That is
my goal and some new thinking.
But we have a reauthorization to do, as well as a new CEO.
When we get to the reauthorization in the Jeffords-Kennedy
committee, they are going to turn to us to--about whether this
program means anything to--at the local level and at what cost,
which goes to the IG question about the per capita. It is not
the proper word, but just for linguistic purposes here.
So, one, we really do need to know--first of all, we
acknowledge this for this year, but it could be very important
when we show our benefits both to our colleagues in
approprations and also in the reauthorization, it could be
conceivable that the Bush Administration would want to expand a
program.
So, I take no position on what is the further view of the
President. I presume the President, knowing him, just
beginning, as I do, he is a results-oriented guy. And he is
going to want to know what have been our results, at what
price, for there to be an administrative--Administration
policy, which then goes to this: Could you--first of all, I
really want to insist that there be a sense of urgency in
identifying how much does it cost to place a volunteer in the
community. We are depending on the community. It might be the
Conservation Corps is a different price for public safety, than
ongoing tutors. So, even if we have a range, I think it is very
important, so we know what does it cost to put a volunteer in
the community.

USE OF AMERICORPS EDUCATION AWARDS

Second, can you tell me what is--how--what has been the use
of the stipend? Now, because the whole thing was to get--when
we were going through the me-generation and all of that, the
whole idea of National Service was help kids reduce student
debt, which is pretty considerable, with hands-on experience.
And then at the end of it, they would--it reduce their
student debt or homeowners--and then come back and that we
would have Alumni Associations. So, I want to know: Have we
really used the stipend or--and number two, have you formed
Alumni Associations, and what have those--been those results?
So, that they would keep on keeping on; that this was kind of a
pump primer, not for money, but a pump primer for being
involved in the community?
Ms. Zenker. In terms of those who have completed service
and earned an education award, 50-56 percent of them are using
it to pay for their education out on a future basis. Thirty-
four percent have used it to pay off their student loans. And 9
percent use it for a combination of both of those activities.
Senator Mikulski. So, some use it for student debt and
others use it to continue education.
Ms. Zenker. Yes.
Senator Mikulski. So, that--so, it is working.
Ms. Zenker. Yes. Absolutely.
Senator Mikulski. Okay.

AMERICORPS ALUMNI ORGANIZATION

Ms. Zenker. Absolutely. And with respect to an Alumni
Association, there is an independent--not a Corporation
activity, but an independent Alumni Association that has been
formed of AmeriCorps members. And it is headed by an
individual, Mike Meneer, who is its Executive Director. And it
seeks to stay in touch with and broaden the involvement of
AmeriCorps members after their service, in continuing to give
back to their community.
Senator Mikulski. Like the Peace Corps Volunteer----
Ms. Zenker. Absolutely.
Senator Mikulski [continuing]. Association?
Ms. Zenker. Just like it.
Senator Mikulski. It is modeled on that.
Ms. Zenker. It is--it is modeled on that, but it is much
smaller. And it is seeking and trying to reach out to
AmeriCorps----
Senator Mikulski. Why do not--why does not--why does not
National Service help be the organizers of that?
Ms. Zenker. We have done--we have tried to do a little bit
of work this year in helping to pump up that association.
Senator Mikulski. Well, I would like to hear more about
that.
Ms. Zenker. Okay.
Senator Mikulski. I am sure we will be talking more, but
what--again, what we are looking for is value. Value to the
taxpayer. And that the value continue long after you have left
the program; that this was not a Government agency, where we
are not creating a bureaucracy.
You know, having worked in social agencies, I mean, we talk
to guys and gals who have been in the Marines. They say, ``Once
a Marine, a Marine Corps forever.'' Talk to a Peace Corps
volunteer. Many in our own office. Jim Walsh, our counterpart,
in the House, ``Once a Peace Corps volunteer, a Peace Corps
volunteer forever.'' They talk about it. They wear buttons.
They want to be part of an ongoing organization. Just like our
veterans.
This is what we wanted from National Service, and that
there would be a continuation of this. And so, I am going to be
looking for that.

DIGITAL DIVIDE

I--can you talk to me about digital--what you have done
with the digital money?
Ms. Zenker. First of all, as I said, we made a down
payment. We did $12.5 million in digital divide----
Senator Mikulski. Tell me what you bought for it and what
you hope to buy for it.
Ms. Zenker. Oh, we have--what we are----
Senator Mikulski. In other words, what did the money buy
for people?
Ms. Zenker. What it is buying? One, it is buying is--is
teacher training. Teaching teachers how to use technology in
the classrooms. There are also some direct tutoring activities
that go on in terms of teaching children or--or people of all
ages how to use the computer, how to access the Internet.
We build computer labs. We help refurbish old computers, so
that they can be used by new people. I think you know, many
people throw computers out when they go and buy a new one. So,
what we want to do is take that old computer, help refurbish
it, and put it into an active environment for--for many more
years.
Our activities are varied. We help set up technology
centers in communities, so that low income children can be
exposed to the digital divide activities.
We have also, if I may, just--our public service
announcement this year was focused on the digital divide. And
we have had some great play on that public service
announcement. Over 18,000 stations have chosen to air it,
giving us----
Senator Mikulski. What was--what was the point of the
public service announcement?
Ms. Zenker. The public service announcement, it is our
recruitment tool. We try to get the fact that AmeriCorps is out
there; that people have an opportunity to serve; and to draw
them to our website, so they can learn about service
opportunities around the country.
Senator Mikulski. Well, that is terrific, because that is
what our intent was. But you need to know, it was not to
provide actual--it was to train the trainers and to upgrade two
constituencies; one, teachers, but the other is often the--the
Executive Director of a Boys and Girls Club in a neighborhood
might be great with the kids, but themselves, have never had
these opportunities. And so, that was that.
The other--but here is the last question: can you
specialize in E-Corps, or is it that so many of our volunteers
are so computer or technology--beyond computer--technology
proficient that every AmeriCorps volunteer is a potential E-
Corps person?
Ms. Zenker. They--these members who were funded in
technology activities are working in technology programs. Many
of our members, as you say, do become----
Senator Mikulski. Is there an E-Corps within AmeriCorps?
Ms. Zenker. There--there is----
Senator Mikulski. Is there a subset Corps?
Ms. Zenker. There is not something that we call an E-Corps,
but there are members whose activities are completely focused
on digital divide--on digital divide efforts and technology
improvement efforts, but they do not call themselves an E-
Corps, no.
Senator Mikulski. Why not?
Ms. Zenker. One of the reasons, I--and--and it becomes a
difficult issue for us, but it is in terms of letting people
know what it is that is out there. It is a challenge to get
people to know what AmeriCorps is and to want to volunteer to
come and be AmeriCorps members and know something about the
program.
We have tried to limit it the--the--the different ways that
we talk about AmeriCorps, so that we can get our words----
Senator Mikulski. Sure.
Ms. Zenker [continuing]. To the most numbers of people.
Senator Mikulski. Well, that is helpful to understand that.
I would like to know--again, we will be talking more about
that. I know we want to move on to Senator Johnson and to--and
to our testimony on Neighborhood Reinvestment.
But first of all, I am pleased that it got started. I am
just pleased that it got started and that we are making wise
use of these funds. We will be looking forward to seeing what
the next half will be, and then Senator Bond and I will be
discussing, you know, how best to promote these digital--
because we are looking for digital opportunity.
Mr. Chairman, one other comment, just to you.
Senator Bond. Yes, ma'am.

SILVER SCHOLARSHIP TAX EXEMPTION

Senator Mikulski. This goes to the Silver--the Silver
Service----
Ms. Zenker. Silver Scholarships.
Senator Mikulski. Silver Scholarships. No. The Silver
Service, I think, is on display at the Metropolitan, with
Jackie, so--the----
Senator Bond. Is that not the one that disappeared from Air
Force One?
Senator Mikulski. No. Come on, now.
Senator Bond. Okay.
Senator Mikulski. Under what Administration?
I note that the Administration wants that to be tax exempt,
and is, in a sense, trying to set up an--I am concerned that we
are going to get involved with the Finance Committee. And I
would like for us to perhaps have our own conversation about
that.
I know what the President is doing--and I think we are all
in alignment--which is to really use seniors in a way that is
creative and that their sweat equity translate into value for
another generation.
So, I think that is exciting. We have got an--we have got a
group in Baltimore called Experience Corps, which is a subset
of AmeriCorps. So, I would like to work with you.
Senator Bond. Sure.
Senator Mikulski. But I would like to avoid the Finance
Committee on this one. Okay?
Senator Bond. Yes. Do not tell them that we are--we will
see if we can just slip by them.
If you will not tell them, we will not. Okay?
Senator Mikulski. And then we are going to be members of
the Intelligence Committee, as well. So----
Senator Bond. Right.
Senator Mikulski. Thank you very much. And look forward to
further comments.
Senator Bond. Thank you, Senator Mikulski.
Senator Johnson.
Senator Johnson. Well, thank you, Mr. Chairman.
Just a couple of brief observations and one question. One
is that I share Senator Bond's enthusiasm for trying to ramp up
the tutorial access and activity that goes on in the country.
We have the ESEA on the floor of the Senate, perhaps, this
week. And one of the components is likely to be under the
Department of Education is an effort to expand opportunities
for tutoring. And I would hope, at some point, that there might
be a linkage of some sort between our volunteer efforts and
what we are trying to do through the Department of Education.
Second, on the digital divide issues that Senator Mikulski
has brought up, I applaud the work that you are doing. It does
come to mind that there are a number of States, no doubt,
including my home State of South Dakota, where there is a
teacher training program and there is a program going on.
And I do have some interest in whether there is any effort
ever to coordinate these efforts, relative to computer
capabilities. And that is a question that comes to mind.
The larger question--is--and Senator Mikulski alluded to
it. I am new to this subcommittee, new to the committee, and I
may be a little slow here, but I need a little bit of a walk-
through here. Your budget was reduced by $46 million.
You have another $35 million committed to two new programs,
for a total of $81 million. We are being told that is of no
consequence, because of the zero growth in the out-years, and
you are going to draw down on reserved trust dollars.
I need you to walk through it in a little more detail what
it is that is being done with the $81 million. And
particularly, enlighten me a little bit about the nature of
this reserve fund. I also have a little bit of--a red flag goes
up in the back of my mind when people talk about drawing down
reserve funds.
In some cases, that might be a very appropriate and
necessary thing to do, but in others, it is sort of a short-
term stopgap funding strategy that may not be of long-term
wisdom.
And so, I would like you to walk through a little bit more
for me, as a new member, why it is that we can take an $81
million drain out of your Corps programs and--have no
consequence.

DETAILED EXPLANATION OF TRUST FUND FINANCING

Ms. Zenker. First, I do want to provide some additional
detail, but may I also offer that we will come up and brief you
and your staff, and--as well as Senator Mikulski and Bond, in
terms of the details of this.
We have a lot of data that supports the proposal that we
are making in this budget. And it backs up the number of
members that we have and who have served--completed servers who
are drawing down their award. And we now have 6 or 7 years of
history that permit us to make some better estimates going
forward, but that's my first offer.
We would very much appreciate the opportunity to come up
and share with you, in detail, what these numbers look like.
But in terms of a little bit more information, right now, the
Congress has appropriated, in years past, money that
specifically goes into a trust fund. And that trust fund pays
for the education awards of AmeriCorps members who complete
their term of service, and then have 7 years after the end of
their term of service to draw down that education money.
Many--most--you know, 78 percent of them, we expect, will
use that money that they have earned through their AmeriCorps
service, but there are a percentage that will not use that
money. At some point, we will have a full 7-year history of
that first class, and then we will have the 7-year history of
the second class, that will permit us to much more accurately
give you a final number that says, ``We expect 78 percent or 79
percent or 75 percent of members to use their education award
money.''
But based on that final actual number, there is somewhat of
a reserve that exists in the trust that says, you know, if it
is 92 percent that use it, versus 70 percent, we can have a
swing that goes this way or that way. So, that reserve is one
piece of the estimate.
The second piece is, indeed, this change and what our out-
year projections look like. Right now, we are looking at 50,000
members for the next 10-year period. That is how the budget is
built. In years past, we have come before you and we have been
proposing a 62,000 corps size, leading up to and 85,000 corps
size, to ultimately 100,000 members per year. That change in
future growth patterns has an impact on our needs.
There is a third aspect, and that is how we credit the
interest that would be earned on that principal amount that is
in the trust. In years past, we credited that interest that
would be earned in the year in which we were going to come to
you and ask for an appropriation.
In looking closely at the trust this past year, we went to
OMB, and we asked them to look at our methodology and we asked
them to look at our model, and they came back and told us that
there was a better way for us to do that and a more appropriate
way. And that is to say that the interest on monies that you
have already appropriated to us, should be credited in the
current year, so that if we were to earn $10 million in
interest on an appropriated amount, already appropriated,
instead of popping that $10 million into each of the out-years,
we are grabbing it all now and putting it into this current
year, which is why we do not need a new--for those three
reasons, why we do not need new appropriations this year.
When we come to you next year, and if the President is
proposing an AmeriCorps program next year, in the 2003 budget,
of whatever size, we will be asking for a new appropriation for
the trust at that time. This is not--this is a correction that
we are making now, but not one that would continue, obviously,
for years into the future.
So, next year, if we come with AmeriCorps members, we will
be asking for an appropriation for the trust.
I do--I know that there is a lot of information there. And
I am not, by far, the best person to necessarily explain it,
but we are more than happy to come up with the data that backs
up these statements and share it with you.
Senator Johnson. I appreciate those observations and I look
forward to working with you and your staff. And I am on a steep
learning curve in my own part and so is my staff. We look
forward to working with you on your budget numbers.
Thank you.

ADDITIONAL COMMITTEE QUESTIONS

Senator Bond. Thank you very much, Senator Johnson. And
thank you, Ms. Zenker. And we will now move to the second
panel.
Ms. Zenker. Thank you, Senator Bond.
[The following questions were not asked at the hearing, but
were submitted to the Corporation for response subsequent to
the hearing:]

Questions Submitted by Senator Christopher S. Bond

coordination with other organizations
Question. The Corporation funds a number of different organizations
that serve at-risk youth. I am concerned, however, that there may be
some duplication and would like to hear any thoughts you may have on
how to better coordinate these activities and how we can address this
issue in appropriations and the reauthorization process.
Answer. Within the Corporation programs in each state, we do not
believe that there is any overlap. The National and Community Service
Act of 1993 that authorized the Corporation for National Service gave
it a decentralized and devolved structure for administering the
AmeriCorps program. In the AmeriCorps*State program, governor-appointed
state commissions select local nonprofits and small community-based
organizations, including faith-based organizations, for participation
in AmeriCorps. This structure allows states to target AmeriCorps
resources to the areas of greatest need in the state or to select the
best organizations in the state to receive funding. A state commission
stands in a better position to make that determination than a Federal
agency in Washington.
The commission structure ensures against the duplication of efforts
in program selection. States face so many demands in a number of areas
that can be addressed by AmeriCorps service that as a commission
reviews applications, it is often in the state's best interest to
spread Corporation resources to address as many community needs as
possible. Commissions often choose one organization statewide to
provide at-risk youth mentoring and another organization to focus on
literacy.
Commissions also have the flexibility to target resources at one
particular community need. A governor may decide to make helping at-
risk youth the focus of AmeriCorps in the state. The state commission
would choose a number of nonprofits in the state to provide those
services as part of AmeriCorps, but it can distribute those
organizations throughout the state so that no organizations overlap in
the same city or geographical region of the state. We have found that
the commission structure has successfully avoided the duplication of
efforts across a state.
The Corporation also has the National Direct grant program that
provides funding to national nonprofits to operate AmeriCorps programs
in more than one state. These national nonprofits, such as Habitat for
Humanity, the American Red Cross, and the United States Veterans
Initiative have the expertise and the ability to administer large
service projects.
National Direct grantees, like state commissions, work to avoid
duplication of efforts as well. For example, the Habitat for Humanity
parent organization is a National Direct grantee, sending AmeriCorps
members to Habitat projects in more than one state. At the same time,
local or state-based Habitat affiliates may receive AmeriCorps*State
funding through a state commission. The parent organization does not
operate sites in states where the state commissions have given a grant
to a local Habitat affiliate. And, National Direct applicants are
required to share their applications with the state commissions in
which they are planning to operate. This gives the state commissions
notice about what National Direct grantee affiliates will not need
AmeriCorps*State funding.
Again, the Corporation's structure and internal procedures help to
avoid duplication of programmatic efforts for grantees in a given
state. If the question is more concerned with the programs affecting
at-risk youth across the federal government, we would be happy to enter
into a dialogue with the Subcommittee about any perceived overlap and
duplication. In general, we are the only federal agency funding service
activities, as authorized under national service legislation, that
involve at-risk youth. Other federal funding is often provided to these
nonprofit and public organizations for other purposes.
national service trust
Question. In the past, the Corporation has argued against proposals
to rescind funds from the National Service Trust. Now the Corporation
is stating that no new authority is needed to fund Trust Fund costs
associated with new AmeriCorps members.
What assumptions is the Corporation using to request funding on an
annual basis and what is their reliability? Has there been an
independent review of these assumptions? Have the auditors looked at
these assumptions?
Answer. In the past, the Corporation's budget request for the
National Service Trust, and the AmeriCorps program as a whole,
reflected a proposal for significant growth in the number of members,
both in the year of the budget request and in the succeeding fiscal
years. The current budget proposal supports the same level as in the
prior year. There is no anticipated growth in the out years.
In determining annual funding requirements for the Trust, the
Corporation reviews and considers:
--The size of the AmeriCorps program approved by Congress in prior
years and the program request in the current budget year.
--The anticipated enrollment levels in the programs in which
AmeriCorps members serve.
--The anticipated completion rates of members who enroll.
--The anticipated education award amounts earned by members who
complete service.
--The anticipated amounts used by members who earned awards.
In addition to these program data, the Corporation reviews the
balances in the Trust and the anticipated interest earnings in the
Trust over the period during which members may use earned awards.
These data, and other information, are incorporated into a model
that examines the impact of these variables on Trust Fund requirements.
The data used to produce the estimates for these variables are based on
historical experience. For many of these variables--specifically
enrollment, completion rates, and amounts earned--the historical
experience has proven to be reliable for estimating future
requirements. The Corporation reports on these historical data in its
annual performance report as required by the Government Performance and
Results Act. For example, in the latest performance report the
Corporation showed historical data over a six-year period concerning
enrollments, completion rates, and amounts earned by members. Further,
total outlays projected in the model have been very consistent with
actual experience. In general, interest earnings have also tracked well
with estimates.
There is one major factor used in developing estimates for which
the historical experience is incomplete. AmeriCorps members have seven
years from completion of service in which to use their award. All
members in the first class have yet to complete this seven-year period;
in fact, the first class will not complete this period until the end of
fiscal year 2002. Therefore, the Corporation's estimates of amounts
used are based on behavior over a five-year period and assumptions of
future behavior in years six and seven. The Corporation has estimated
that an additional ten percent of awards earned will be used in years
six and seven beyond the period of service, bringing the total usage of
awards earned by the first class to 78 percent. The original estimates
of use for years 1 through 5 have proven reliable. There is also
remarkable consistency in actual usage in the initial years across
several classes of AmeriCorps members. Nevertheless, the unique nature
of the AmeriCorps program and the period of availability of the award
means that the estimates for years six and seven may well require
changing once we have the benefit of an additional two years of actual
experience.
Occasionally, the Corporation performs sensitivity analyses to
determine the impact on the Trust in behaviors that vary from the
estimates in the model. The results of these sensitivity analyses show
that the variable with the largest impact on Trust Fund requirements is
the amount of the earned awards that is used by members for education
purposes. Other variables, such as enrollments, completion rates, and
interest rates, have less of an impact.
Concerning an independent review of the model, last year we asked
staff in the Office of Management and Budget (OMB) to review the model
and the basis for developing budget requirements under the National
Service Trust. After conducting that review, OMB staff suggested a
change to the budgeting approach. They recommended that the Corporation
include future interest earnings over the period when the education
award will be used by members to determine the requirements for new
budget authority to cover the cost of members included in the program
budget for fiscal year 2002. This is done by estimating the amount to
be paid out in each of the seven years the award is available and
discounting it to its net present value. In the past, the Corporation
had applied those future interest earnings to program requirements in
future years. The Corporation made this change, as recommended by the
Office of Management and Budget, in determining requirements for the
fiscal year 2002 budget. This change is another reason the estimates of
need are reduced from the estimates made in prior years.
In addition, the auditors have reviewed the Trust Fund on an annual
basis for purposes related to the audit of the Corporation's financial
statements. Included in those statements is the liability associated
with anticipated amounts earned and used by members who have either
completed or entered service. This liability estimate is determined
using the same variables and estimating model that are used for
estimating future budget needs. The auditors have opined that the
Corporation's liability estimate is fairly stated for the past three
fiscal years. To the best of our knowledge the auditors have not
reviewed these factors from the perspective of setting future budget
requirements for the National Service Trust. The Committee has asked
the Office of the Inspector General to conduct such a review and to
report back to the Committee.
We will continue to update the historical information used to
estimate future requirements for the Trust. We also welcome independent
reviews that will help strengthen the ability to predict requirements.
We have reviewed our requirements for 2002 and have determined that
no new authority is needed for the class of AmeriCorps members that is
being supported in the 2002 program budget. Future Trust Fund
appropriations will be needed in fiscal year 2003 and beyond, but exact
amounts are dependent on Congressional and Executive Branch decisions
about the size of the AmeriCorps program and further adjustments to the
data in the model resulting from additional year(s) of historical
experience.
new initiatives
Question. The new Silver Scholarships and Veterans Mission for
Youth programs would be administered by the Corporation as competitive
grants.
Do you have the program capacity to run these two new programs on
top of the Corporation's current responsibilities? What sort of outcome
measures will the Corporation establish to ensure that these programs
are performing?
Answer. The addition of approximately 150 new grants will be easily
managed. When compared to the total grants and agreements managed by
the Corporation, these 150 new grants represent an increase of less
than five percent. The task will be further facilitated by the new
grants management system scheduled to be launched in the spring of
2002. The new grants management system will allow the Corporation to
review and award grants online, significantly enhancing the
administration of all grants.
Consistent with all of its programmatic activities, the Corporation
has established preliminary outcome indicators to serve as measures of
success for the Silver Scholarships and the Veterans' Mission for Youth
Program. The Corporation will monitor its progress toward these outcome
measures, and the results will be reported to the Congress as part of
the Corporation's annual Performance Plan, as required by the
Government Performance and Results Act (GPRA), beginning in 2002.
The outcome measures as proposed in the Corporation's fiscal year
2002 Budget Proposal are as follows:
Silver Scholarship Program
Indicator 1: The number of senior volunteers earning scholarships.
Target: 10,000 senior volunteers.
Indicator 2: Number of Silver Scholarship grants funded. Target: 60
grants.
Indicator 3: Benefits to children tutored and mentored, in improved
reading skills and reductions in risk behaviors. Target: To plan a
research agenda focused on measuring these benefits to children.
Veteran's Mission for Youth Program
Indicator 1: The number of veterans or retired military personnel
enrolled. Target: 15,000 veterans or retired military personnel.
Indicator 2: Number of Veteran's Mission for Youth Program grants
funded. Target: 100 grants.
Indicator 3: Benefits to children tutored and mentored, in improved
reading skills and reductions in risk behaviors. Target: To plan a
research agenda focused on measuring these benefits to children.
In addition, the Corporation may adopt short-term accomplishment
measures that could include the following: (A) Number of children
tutored and/or mentored; (C) Number of Silver Scholarships earned; (D)
Number of schools, community-based organizations, or other service
agencies able to expand resources available to help children through
the Silver Scholarship and Veteran's Mission for Youth Programs.
faith-based initiative
Question. President Bush has emphasized a vision of government
where this Administration will expand opportunities to faith-based
organizations, charities and community groups to help people in need.
National Service already looks to these types of organizations to
partner with in helping people in states and localities.
Are you looking to further emphasize partnering with faith-based
organizations and in what way?
Answer. Since its inception, the Corporation for National Service
has partnered with faith-based organizations, charities and community
groups to help people in need. In response to the President's vision,
the Corporation is exploring ways to expand its outreach to faith-based
and small community-based organizations informing them of the existing
resources and opportunities available. The Corporation recently held a
focus-group discussion with 16 diverse leaders of faith-based and small
community-based organizations from across the country to identify
existing barriers and to facilitate access to Corporation resources.
In the next 90 days, the Corporation plans to create a technical
assistance/resource capacity designed to provide support to faith-based
and community-based organizations seeking resources to meet community
needs. The Corporation further anticipates that state and local
entities that receive Corporation funds will continue to partner with
and involve small community and faith-based organizations in helping to
meet needs in local communities, and that these entities will pursue
opportunities to expand such involvement. We intend to help promote
these developments.
reporting the full cost of cncs programs
Question. GAO reports have indicated that the Corporation lacks
reliable cost information for some of its programs which hampers
analysis of the true cost of its programs.
Do the Corporation's efforts in developing cost accounting
information extend to gathering the information from its grantees that
would provide reliable expenditure and cost data for all of its
programs and operations?
Answer. Momentum Financials, the financial management system
implemented at the end of fiscal 1999 and in use by the Corporation,
has the capability to capture information on the full cost of
Corporation programs, including grantee information by program. During
fiscal 2000, the Corporation developed a cost accounting application
that is integrated with Momentum in order to utilize Momentum data to
determine the full cost of its major programs.
The Corporation oversees three national service programs:
--AmeriCorps is the national service program that engages thousands
of Americans of all ages and backgrounds in full-time and
sustained part-time community service and provides education
awards in return for such service.
--The National Senior Service Corps is a network of more than 500,000
people age 55 and older who participate in the Foster
Grandparent Program, the Senior Companion Program, and the
Retired and Senior Volunteer Program. These programs tap the
experience, skills, talents, and creativity of America's
seniors.
--Service-Learning supports and promotes service learning in schools,
universities, and communities. Through structured service
activities that help meet community needs, more than 750,000
students improve their academic learning, develop personal
skills, and practice responsible citizenship.
In accordance with federal cost accounting standards, these
programs have been designated as the Corporation's ``responsibility
segments.'' Cost information by grantee for each of the above programs
is captured through the use of individual grant numbers and grantee
names and codes. Every Momentum cost entry by grantee (whether based on
a financial status report or an electronic drawdown through the Health
and Human Services Payment Management System) includes the program or
purpose of the expenditure; this information is captured through the
use of three digit purpose codes. This information, coupled with a
reasonable allocation of program operation costs, allows the
Corporation to provide the full cost by major program. Beginning with
fiscal 2000, information on cost by major program is included in the
Corporation's annual report.
We believe that the new grants system, when fully developed, will
facilitate the reporting of financial information from grantees for all
programs.
In addition to these expenditure data, the Corporation provides
information on an ongoing basis to the Congress on the budgeted costs
of members in all national service programs, including AmeriCorps. The
General Accounting Office has reviewed and verified these data, and
reported them most recently to the Congress in a February 2000 report
entitled ``National Service Programs Two AmeriCorps Programs' Funding
and Benefits.'' In that report, the General Accounting Office reported
the Corporation's budgeted funds per AmeriCorps*State National
Participant for Program Year 1998-99 as $14,857 (p. 9). The report also
noted that ``Job Corps CCC Is More Costly Than AmeriCorps*NCCC'' (p.
11), and that ``military enlistees receive higher benefits than
AmeriCorps participants'' (p. 13).
In the Corporation's response to that report, we noted that the
General Accounting Office documented reductions in budgeted funds per
participant. GAO further found that the budgeted cost per member in the
state and national programs to be in line with, and indeed ahead of,
the schedule to meet an overall AmeriCorps target of $15,000 in average
budgeted cost for the program year 1999-2000. Since that report, the
Corporation has met the target established for fiscal year 1999.
performance reporting
Question. The Corporation's GPRA report includes an impressive
amount of data. Your report indicates that the Corporation has a
strategy for monitoring coverage that includes site visits, program
evaluations and audits.
I am curious to know, however, how reliable this information is at
this point. Please provide additional information on your strategy and
what was done in fiscal year 2000 to ensure that the information was
reliable.
Answer. The monitoring strategy employed by the Corporation has
four components: (1) the State Administrative Standards Project, (2) a
national monitoring plan and procedures followed by the program office,
(3) pre-audit surveys of State Commissions by the Office of the
Inspector General, and (4) reviews of additional information sources.
State Standards Project
In fiscal 2000, the Corporation continued and expanded its
initiative to set administrative standards for state commissions on
service. The State Administrative Standards Project helps the
Corporation assess and expand the capacity of state commissions to
administer federal funds in a responsible manner. The Corporation
awards funds to state commissions for developing and supporting
national service within the state. The state commissions must
administer statewide grant processes, monitor programs, provide
training and technical assistance, and serve as liaison between the
Corporation and the local programs. The State Administrative Standards
seek to communicate what the Corporation expects of state commissions.
The standards were developed to serve as an effective and consistent
tool for the Corporation to assess state commission administrative
systems.
The first four of the 11 standards cover issues related to
monitoring of sub-grantees: 1. Conducts proper grant processes; 2.
properly monitors programs and ensures compliance; 3. properly monitors
member records; and 4. reports properly to the Corporation for National
Service.
The standards review process has three stages. First, a state
commission completes a self-assessment using the Standards tool. The
self-assessment helps the commission gain a realistic view of its own
administrative systems. Second, a six-person review team spends one
week at the commission conducting the formal standards assessment. When
the review is complete, there are two products. One product is a
technical assistance plan created in collaboration with the state
commission and supported with financial resources from the Corporation.
The plan will help the state commission meet any standards it has not
yet met. The second product is an assessment by Corporation staff that,
along with other considerations, determines eligibility for competitive
and special initiative money and similar discretionary resources.
To date Corporation staff have performed 15 State Commission site
visits using the State Administrative Standards and have issued 11
final reports. The current schedule calls for 14 reviews in fiscal
2001. Over the next two years, the remaining states will participate in
a State Administrative Standards assessment. The Corporation is
committed to helping all state commissions reach the level of operation
described in the State Administrative Standards. The Standards will
help the Corporation devolve more of the implementation of national
service to the state level as the administrative capacity of state
commissions increases.
National Monitoring Plan and Procedures
The AmeriCorps*State and National program office developed a formal
monitoring plan for program year 1999-2000 (corresponds approximately
to fiscal 2000) to apply to national direct grantees and state
commissions. The plan consists of a risk assessment based on previous
experiences with the grantees and certain risk factors. Priorities are
assigned based on the risk assessment assigned to each grantee. The
formal plan is an extensively detailed document. We welcome the
opportunity to brief Subcommittee staff on this material.
Pre-Audit Surveys of State Commissions by the Office of the Inspector
General
To date, the Corporation's Office of the Inspector General has
conducted 37 pre-audit surveys of the state commissions. These pre-
audits cover the Commissions' systems for administering their
AmeriCorps grants, including these factors: (a) the process followed
for selecting subgrantees, (b) control processes for administering
grant funds, (c) controls for monitoring and evaluating subgrantees,
and (d) controls on training and technical assistance. The results of
these audits are shared with the CEO, the head of AmeriCorps, and the
state commission.
Review of Additional Information Sources
In addition to the Standards Assessments and monitoring visits, the
program office reviews grantee progress reports and financial status
reports on a regular basis, noting anomalies and conditions that might
result in the assessed risk of a grantee. Also, program officers are to
be alerted by the Corporation's technical assistance providers and
evaluation research contractors if they identify cases of waste, fraud,
or abuse during the conduct of their work assisting and researching the
AmeriCorps programs.
Question. Just what does it mean (and how reliable are the numbers)
when the Corporation reports
--that close to 500,000 students were taught? Taught what and for how
long--hours, days, a full year? [See page 13 of the CNS fiscal
year 2000 Performance Report]
--that the NCCC assisted 55,000 veterans and senior citizens?
Assisted how? [page 25]
Answer.
500,000 Students
The Corporation collects information about program activities and
results from a variety of sources, using many methodologies. The
statistic ``500,000 students were taught'' comes from the 1999-2000
Annual Accomplishments Review of AmeriCorps State/National. The
response rate to the survey is 80 percent.
Accomplishment review data are self-report data collected by the
local AmeriCorps programs during the course of their program year and,
in 1999-2000, reported to the Corporation via either paper or
electronic forms. The programs are provided with lists of potential
accomplishments from which they select those that best describe their
effort during the program year. For each accomplishment category, the
program indicates the beneficiary and the accomplishment type (for
example, students taught, students tutored, adults provided job
counseling, etc.) and provides a quantitative measure of their
activity.
Over the four AmeriCorps issue areas there are about 125 separate
categories of accomplishments, including open-ended categories that
permit programs to report accomplishments not currently enumerated.
Regarding direct services in education, for example, the form
distinguishes between student taught, students tutored, students
mentored, students counseled, students provided other enrichment
activities, and several others. Consequently, programs are able to
report a type of accomplishment that accurately describes their
efforts.
An independent research firm, under contract to the Corporation,
reviews the data. Once report forms are received they are subjected to
a variety of data checks to determine that the data reported are within
reasonable ranges, for example, that the number of AmeriCorps members
serving could have reasonably provided the extent of services being
reported. Programs that report out-of-range data are contacted and the
contractor assists the program in reporting their information more
accurately. Typically, mathematical and typographic errors account for
out-of-range reports.
Requesting details of all the accomplishments reported would
constitute an unreasonable reporting burden in the Corporation's view.
In the case of the accomplishment to which the Senator referred, we
have the following additional details. Two-hundred twenty-two
AmeriCorps State/National programs reported teaching in kindergarten,
Head Start, or grades 1-12. This category is distinct from tutoring.
About 80 percent of responses indicated teaching in multiple grade
levels, although two-thirds reported some teaching in kindergarten and
Head Start.
About one-third of those reporting indicated the subject matter
they taught. Multiple subject matter responses were permitted. Of those
reporting, 45 percent reported teaching reading, almost a third
indicated mathematics instruction and roughly a fifth, science. Other
subjects taught included music, art, social studies, and the
environment. Details regarding the intensity or duration of instruction
were not requested.
Beginning in 2000-2001, accomplishment data will no longer be
collected via a separate data collection, but will be incorporated into
the semi-annual progress reports provided electronically by the
Corporation's grantees. This revision to the data collection process
should permit the agency to determine further details about specific
accomplishments from particular grantees.
AmeriCorps*NCCC assisted 55,000 veterans and senior citizens
Every project completed by AmeriCorps*NCCC teams has a Project
Completion Report, which is signed by the NCCC Campus Director and the
project sponsor, who is usually a community member associated with the
organization sponsoring the service activity with NCCC. The Project
Completion Report details the work accomplished in the course of the
project. This report is filed with headquarters in hardcopy at the same
time that the campus enters the accomplishment data into the
AmeriCorps*NCCC Project Database. Aggregate statistics on
accomplishments are prepared in Washington. The database has a coding
system that permits the quantification of every area of service in
which NCCC members engage. In the case of the assistance to 55,000
veterans and senior citizens, this datum was the aggregate results of
19 service projects in fiscal 2000. The members painted and made other
repairs to senior citizens' homes and other senior service facilities.
They also distributed clothing and meals and provided job training,
medical care, and other services to homeless veterans.
Question. What are the five most important performance measures
that the Corporation reports?
Answer. Taking into consideration that we have several components
in our performance measuring system, we can address your question in
two ways.
First, the Corporation believes and states in its annual
performance report that the most important measures of program
performance are those determined through independent program
evaluations and through our accomplishment reports. It is through these
studies that the results of service by AmeriCorps members in terms of
benefits to the American people are being documented. In 2000, we have
learned that:
--Students participating in AmeriCorps tutoring programs improved
their reading performance from pretest to post-test more than
the gain expected for the typical child at their grade level.
The executive summary of this report is attached (Abt
Associates 2001).
--AmeriCorps members (1) recruited or trained 32,900 tutors, (2)
placed 14,000 homeless people in transitional or permanent
housing, (3) engaged 72,200 students in violence avoidance
activities after school (Aguirre International 2000).
Second, looking only at the performance indicator portion of our
performance measurement system, we would identify the following as the
``most important'' indicators for fiscal 2000:
1. Number of members enrolled in AmeriCorps*State and National.--
This measure shows enrollment levels in the largest component of
AmeriCorps, the State and National Program. In program year 1999, which
corresponds generally with fiscal 2000, AmeriCorps*State and National
programs enrolled 35,319 members.
2. Percent of [AmeriCorps*State and National Members] members who
complete a term of service and become eligible to receive an education
award.--This measure shows how AmeriCorps is expanding educational
opportunity. It is the rate at which members successfully earn the
education award. Three out of four members ending their term of service
in fiscal 2000, 75.4 percent, qualified for an education award; thus
the Corporation's 75 percent goal was met. In the six years of full
program operation, 1995-2000, the completion rates for AmeriCorps*State
and National have ranged between 74 percent and 78 percent.
3. Number of State Commissions reviewed for compliance with the
national state administrative standards.--This measure is discussed
earlier, in the response to the question concerning monitoring
strategies.
4. Number of students in projects supported by Learn and Serve
America.--In fiscal 2000, the Corporation funded 106 school-based and
community-based programs and 68 higher education programs. Service-
learning programs supported by the Corporation with the fiscal 1999
appropriation enrolled approximately 1,188,000 participants in fiscal
2000.
5. Audit opinion for fiscal year financial statements.--Fiscal 2000
was a landmark year for the Corporation--for the first time it received
an unqualified opinion on its consolidated financial statements. This
achievement resulted from a commitment to strong management control and
accountability for financial resources.
procurement
Question. In the past, the Inspector General has added an
additional material weakness to the list when she has testified before
this Subcommittee. It is my understanding that once again in fiscal
year 2000, the OIG assessed the Corporation's procurement operations
and concluded that they remained materially weak and vulnerable to
fraud and mismanagement.
What actions has the Corporation taken to correct this situation?
Who is being held accountable for the lack of progress is resolving
these conditions?
Answer. In June 2000, the OIG completed work on a follow-up audit
of the Corporation's Procurement Operations. The report noted that many
improvements had been made in the Corporation's procurement operations,
but also identified several instances where an error had been made in
some aspect of the procurement process. While these types of procedural
errors are not unusual in procurement offices that must deal with over
1,500 pages of guidance in the Federal Acquisition Regulation (FAR)
alone, they are neither egregious nor indicative of fraud, waste, or
abuse. They are, simply, mistakes. None of the errors found, taken
alone or in the aggregate, could result in a material loss to the
Corporation. It is also important to note that the auditors found no
instances of fraud, waste, or abuse.
The Corporation agrees that the errors identified in the audit
report warrant management's attention and corrective action, which it
has taken action to improve the procurement operation. However, they
simply do not rise to the level of significance that the procurement
operation should be deemed materially weak.
______

Questions Submitted by Senator Barbara A. Mikulski

keeping national service strong under the new administration
Question. Please explain the rationale for not maintaining the
previous Administration's goal of 100,000 AmeriCorps slots per year by
2004?
Answer. Among the 15 priorities listed in the President's Budget,
as described in A Blueprint for New Beginnings, is the promotion of
service and volunteerism. The President has allocated additional
resources in support of this goal, particularly to promote additional
opportunities for service by the Nation's seniors.
With respect to AmeriCorps, the budget maintains support for 50,000
members, the same level as in the prior year. We believe this to be a
significant commitment to national service, continuing a level approved
by Congress on a bipartisan basis in fiscal years 2000 and 2001.
The President's overall budget for fiscal year 2002 does set limits
on the growth of overall discretionary spending. Growth is moderated
from the recent trend of more than six percent to four percent. It is
within that context that the budget for AmeriCorps was determined.
Decisions on the size of AmeriCorps in subsequent years will be
determined in future budgets.
Question. How can the 2002 AmeriCorps request, which is only $7
million above last year's level, maintain the commitment to existing
AmeriCorps State and National programs while also funding Education
Award Grants and AmeriCorps Promise Fellowships at $14 million as
proposed in the budget request?
Answer. The AmeriCorps grants budget is a $7 million increase above
the prior year level. As you point out, that amount includes the
transfer of two programs from the Innovation and Assistance category--
Education Award grants and AmeriCorps Promise Fellowships. We are
proposing these transfers because these programs are part of
AmeriCorps, and the transfer will enable state commissions and national
direct organizations to make decisions about which component of
AmeriCorps works best for them. Under the current arrangement, where
components of AmeriCorps are funded under different activities, the
Corporation must restrict the ability of state commissions and national
direct organizations to choose among the different components of
AmeriCorps.
A critical part of the budget is the appropriations language that
will permit the transfer of these programs while continuing the
flexibility necessary to carry them out. Specifically, the
appropriations language transfers the authority of these programs to
subtitle C of the National and Community Service Act without subjecting
organizations to the administration cost, matching fund, and
participant benefit requirements of this subtitle. AmeriCorps Promise
Fellows and Education Award programs will continue to operate exactly
as they do today.
We are currently spending approximately $11 million in those
programs--$6 million for Promise Fellows and $5 million for the
Education Award program. Our 2002 budget proposes up to $14 million,
because we thought it important to give states and communities some
flexibility in which part of AmeriCorps they wish to use. For example,
under this approach a state commission will be able to allocate
additional funds for the Education Award program while reducing amounts
requested in the other components.
You are right when you say that we are only transferring
approximately $7 million to cover the costs of these two programs while
we are currently spending about $11 million. However, we think that the
national service field can absorb about $4 million between fiscal
years. Each year some programs do not spend up to their full budget
amount, and that carry-over is available in the next year. We believe
that the $4 million will be available from carry-over, and therefore
there will not be any negative program impact.
Question. Will this require cut-backs in existing AmeriCorps
programs?
Answer. No. Cut-backs in existing AmeriCorps programs are not
required.
Question. If so, does the Corporation intend for these cuts to be
in State or National programs?
Answer. As noted above, we do not believe that any cut-backs in
existing AmeriCorps programs are required under the President's Budget.
In total, the President's Budget for fiscal year 2002 will support
50,000 AmeriCorps members, the same level as in the prior fiscal year.
digital divide/e-corps
Question. How will the Corporation spend the $25 million provided
in fiscal year 2001 for E-Corps?
Answer. The Corporation has not yet concluded its grant cycles for
fiscal year 2001 and would be pleased to provide a full report once all
grant decisions have been made. To date, the competitive grants
submitted by state commissions resulted in $10 million being approved
for activities to address the digital divide. This amount does not
include AmeriCorps*State formula submissions and AmeriCorps*National
Direct grants, which are under review. We expect all three categories
of grants to support activities to address the digital divide.
The following represent some of the current activities being
conducted to address the digital divide:
--Train teachers on the identification, integration and use of
technology in their curriculum, and provide technical
assistance to teachers in the classroom.
--Train youth in computer skills and Internet usage for education,
communication, and career development.
--Train adults and community residents in technology so that they may
find employment.
--Assist in developing technology plans for schools and community
centers.
--Provide training and technical support to nonprofit organizations
in the use of technology.
In addition to these activities and those supported under Learn and
Serve America, Corporation resources in support of activities to
address the digital divide include:
--AmeriCorps*VISTA.--Involved in assessing technology needs,
developing and implementing technology plans, mobilizing and
securing resources, designing training programs, and providing
technical assistance. Projects include Team TECH, Next Day,
NetDay, LATTICE, and PowerUP. With the exception of NetDay,
most of the projects are community-based.
--AmeriCorps*NCCC.--The NCCC is currently working in schools, YMCAs,
and Boys and Girls Clubs across the country performing tasks
related to bridging the digital divide. NCCC support includes
assisting in the wiring and rehabilitation of sites for the use
of computers, teaching students how to use computers,
contributing to the technology training of teachers, tutoring
students in various subjects on computers, and conducting
outreach for volunteers in the community to assist the program
following the departure of the team. NCCC is able to adjust its
schedule to meet the needs of the community and can provide
assistance before and after school, during school hours and on
the weekends.
--Senior Corps.--Senior Corps programs are engaged in assisting other
older adults with understanding and using technology; helping
projects build their capacity to utilize technology, e.g.,
listservs; and training volunteers on computers to help
children.
--DigitalConnections.--DigitalConnections is a cross-stream national
service discussion forum for programs addressing and narrowing
the digital divide. It is provided to this new and growing
category of programs to enable their staff and members to share
information and seek advice from their peers. The purpose of
this listserv is to exchange ideas, information, and resources
related to implementing technology-based service projects.
Question. Can the Corporation quantify how many volunteers we've
had in digital divide programs?
Answer. Once the fiscal year 2001 grant cycles are completed, we
will be able to identify the number of AmeriCorps members supporting
digital divide activities. We will also be able to determine the number
of uncompensated community volunteers recruited by the AmeriCorps
members to assist in digital divide activities. Under Learn and Serve
America, for grants made specifically for that purpose, we will
quantify the number of student volunteers.
In fiscal year 2000 the Corporation conducted a specific Notice of
Funds Availability (NOFA) for digital divide programs and funded 30
AmeriCorps*State and National programs at an aggregate of $9 million to
support over 1,100 members. Learn and Serve America made eight grants
totaling approximately $2,925,000 for K-12 School-based digital divide
grants awards from fiscal year 1999 and fiscal year 2000 grant funds.
At the time of award, the 8 Learn and Serve America applicants planned
to make 41 subgrants that would involve 4,603 student participants. We
will have the totals for fiscal year 2001 grants by September of this
year.
Question. Can the Corporation quantify digital divide awards and
what they usually pay for--teacher training, student training,
equipment, etc? How much in each category?
Answer. Grantees have identified the primary activities they will
undertake in order to address the digital divide. They are not
required, however, to report financial information against each
individual activity.
Once the fiscal year 2001 grant cycles are completed, we will
analyze the activities and budgets and estimate amounts by category, if
feasible.
Question. What criteria does the Corporation use when deciding
which digital divide programs to fund?
Answer. The Corporation uses the criteria adopted by its Board of
Directors that has three major categories: Program Design,
Organizational Capacity, and Budget/Cost-Effectiveness. Under Program
Design, the criteria include getting things done, strengthening
communities, and member development. Detailed expectations are provided
under each of these subcategories. The NOFA also provided explanatory
language and examples of activities.
Question. Does the Corporation place a high emphasis on programs
that teach teachers technology, specifically those that will
``institutionalize'' technology, so that we are creating a legacy of
technology empowerment that lasts long after E-Corps members move on?
Answer. A major component of all national service programming is
institutionalization and sustainability. This is an explicit criteria
used to evaluate applications, and it is of major importance in our
digital divide programming. There are many ways to accomplish
sustainability; one of them is the teaching of technology to teachers,
and that is part of our programming strategy.
Question. What percentage of digital divide proposals submitted to
the Corporation are: actually funded? are worthy of support but are
declined due to lack of funds?
Answer. In fiscal year 2000, we received 44 applications for
AmeriCorps*State/National and 23 applications for Learn and Serve
requesting over $27 million in funds. Thirty AmeriCorps*State/National
programs and 8 Learn and Serve programs received funding, totaling $12
million. Hence, we funded 57 percent of the organizations requesting
funds and 44 percent of the amounts requested.
In general, throughout our history, including the digital divide
competitions, we are unable to fund all programs worthy of support. It
is not possible, however, to provide a specific percentage of
applicants that are worthy of funding but are declined due to lack of
funds. In some cases, the Corporation does not receive an application
because the state commission has responsibility to select programs
competitively within available resources provided on a formula basis.
Under Learn and Serve America, State education agencies receive funds
in part on a formula basis and determine which applicants within the
state are funded.
For fiscal year 2001, we are currently in the midst of the
AmeriCorps grant cycle. Most grantees are in the second or third year
of a three-year grant. With available funds, Learn and Serve America
cannot make new grants in any category, including bridging the digital
divide, in 2001 and 2002. Fiscal year 2000 grants and activities are
expected to continue for three years.
Question. Can the Corporation quantify the ``success rate'' of the
Corporation's digital divide programs? How many teachers have been
trained? How many students have become computer-literate as a result of
these programs?
Answer. It is still too early in the implementation of these
programs to provide such specificity. Most of the digital divide
programs approved at the end of fiscal year 2000 have just begun. We
will have better accomplishment data later this fall. As with other
national service programming, it is our intent to evaluate the success
of these programs in meeting their objectives. Evaluation of these
programs will require determining the nature of their outputs, that is,
what service was performed, as well as determining what, if any,
changes in service recipients occurred as a consequence of the service
provided. Typically we will begin to collect descriptive data about
programs' outputs after their first year of operation, and we will have
data about many of these programs at the end of the current program
year. Standards for data reporting vary somewhat between programs,
which increases the challenge of collecting these data across all
program streams.
Insights about the effect of programs are generally best captured
after they have been operating for several grant cycles. Frequently, so
much is learned by both grantee and grantor during the first
operational year that program changes occur. Once the programs have
stabilized their service model, evaluation of outcomes can begin. Based
on experience, we would anticipate beginning to conduct outcome
evaluation of the digital divide programs in the 2001-2002 program
year. Even at that time, we will devote considerable attention to
questions of implementation. By 2002-2003 we can be confident that
outcome research will reflect a relatively mature program and its
effects.
We will assess outcomes using a combination of quantitative survey
research and qualitative case studies to assess how the programs were
implemented, how successfully they have been able to deliver services,
what occurred as a consequence of their service, and what changes have
occurred.
Question. The National Science Foundation is also a major player in
teacher training in math and science. Is the Corporation aware of what
NSF is doing in this area?
Answer. We have worked closely with the Department of Education on
a number of initiatives, but to date have not had conversations with
the National Science Foundation about their activities. The Corporation
will begin discussions with the National Science Foundation to see what
activities they support, what they have learned, and how we can
coordinate our support.
Question. Have AmeriCorps and NSF cooperated on the digital divide
issue?
Answer. The Corporation researched a number of sources and
contacted numerous organizations prior to beginning the digital divide
programming. However, we had not contacted the National Science
Foundation, and will do so in the immediate future.
faith-based initiatives
Question. Is the Administration relying on the experience and
expertise of the Corporation as the White House Office on Faith-Based
Initiatives develops its plans?
Answer. The White House Office of Faith-based and Community
Initiatives has consulted with the Corporation on our experience with
faith-based and other community-based organizations. Under the
leadership of newly appointed Corporation Board member and Board Chair-
elect Stephen Goldsmith, the Corporation will continue to explore ways
to build upon its on-going work with faith-based and other community-
based organizations.
Question. Is the Corporation providing guidance to the White House
on how it maintains important safeguards to protect against
discrimination with government funds?
Answer. Since its inception, the Corporation for National Service
has provided a level playing field to all eligible applicant
organizations, including faith-based organizations. We have also
applied the safeguards included in the national service legislation to
ensure that federal funds are not used to support religious worship,
religious instruction, or religious proselytization. We have provided
information about these safeguards to the White House Office of Faith-
based and Community Initiatives.
Question. To what extent have the agencies that are establishing
centers for faith-based programs (HUD, HHS, Education, Justice, and
Labor), as directed by President Bush's executive order, reached out to
the Corporation's staff for advice?
Answer. At this time, there has been no formal communication
between the Corporation for National Service and the centers for faith-
based programs established by five agencies (HUD, HHS, Education,
Justice, Labor) under Executive Order 13198. The White House Office of
Faith-based and Community Initiatives has consulted with the
Corporation and we would welcome the opportunity to provide any
assistance to the faith-based centers at the other Federal agencies.
Question. Is the Corporation regularly consulted by the White House
and the other agencies so that you can give them the benefit of your
experiences in this issue?
Answer. Through Board member Stephen Goldsmith, the Corporation
continues to update the White House on its activities. We welcome the
opportunity to consult with other agencies about our experience with
small community-based and faith-based organizations.
Question. What guidelines are followed when the Corporation, or
State Commissions, make decisions between competing proposals,
particularly when there are competing proposals that seem to be equally
responsive to the program's objectives--and one application is from a
faith-based group and one is from a secular group?
Answer. The Corporation for National Service and the State
Commissions operate under clear guidelines in making decisions on
competing proposals. Upon review of proposals, decisions are made on
the merits of the organization's ability to meet the programmatic
guidelines regardless of the secular or faith-based nature of the
organization.
Question. Does the Corporation consult with outside experts
consisting of both religious and secular organizational representatives
to give staff advice on the most promising proposals?
Answer. Reviewers are selected based on their expertise, work
experience, education, and knowledge of national service, volunteerism,
nonprofit management, grants management and specific technical subject
areas. These reviewers are representative of the national service field
and include both secular and faith-based organizations to review
proposals.
silver scholarships
Question. Why did the Corporation decide to award these new
scholarships to individuals who are age 55 and older, as opposed to
those who are eligible to receive Social Security benefits (age 62 and
older)?
Answer. Eligibility at age 55 is consistent with existing or
proposed law for the three existing senior service programs
administered by the Corporation: the Retired and Senior Volunteer
Program (RSVP), the Senior Companion Program, and the Foster
Grandparent Program. These programs receive their appropriations
through the Labor-HHS Subcommittee. RSVP currently enrolls persons aged
55 and older. Previous reauthorization proposals called for lowering
the eligibility from 60 to 55 for the Foster Grandparent and Senior
Companion Programs.
Question. Are any other scholarships or educational awards made by
the Corporation tax free?
Answer. No.
Question. If not, why the special treatment for the Silver
Scholarships?
Answer. We do not believe that this constitutes special treatment.
There are a number of other comparable scholarships that are supported
by federal and state governments that are treated for tax purposes in a
similar fashion. The tax treatment of other benefits provided by the
Corporation, including education awards, is an issue that can be
explored along with other legislative proposals for the Corporation.
Question. Why should senior volunteers receive a benefit that
younger volunteers don't?
Answer. The scholarship will give the healthiest and best-educated
generation of seniors in history an incentive to volunteer as tutors
and mentors. And while the scholarship is based on the service of
senior volunteers, they must transfer it to a child who will in turn
use it for educational purposes. The tax treatment of the education
awards for the Corporation's other programs can be addressed as part of
the larger reauthorization of national service legislation.
baltimore experience corps
Question. Has the Corporation evaluated this demonstration program
to determine its effectiveness?
Answer. No, the Corporation has not evaluated the Baltimore
Experience Corps specifically. However, we have evaluated other
Experience Corps and Seniors for Schools projects that are similar to
the Baltimore Experience Corps. Evaluation reports reflect that all
projects have been very successful, had a positive impact on students'
reading abilities, and had a positive impact on schools. For example,
ninety-two percent of students' pre- and post-tested in the Seniors for
Schools program demonstrated improved reading skills during the project
year.
Question. If the data shows that the program has had a positive
impact, should it be expanded?
Answer. The data shows that the Experience Corps and Seniors for
Schools programs have been very successful. However, in fiscal year
2000, the Congress, in the Consolidated Appropriations Act, directed
the Corporation to end the payment of monetary incentives to
individuals not meeting income guidelines as prescribed in the Domestic
Volunteer Service Act. The Experience Corps projects provide monetary
incentives to all volunteers serving fifteen or more hours a week
regardless of income. Therefore, the Corporation is no longer able to
fund Experience Corps and Senior for Schools Demonstration projects
under appropriations provided for the Domestic Volunteer Service Act
through the Subcommittee on Labor, Health and Human Services,
Education, and Related Agencies.
NEIGHBORHOOD REINVESTMENT CORPORATION

STATEMENT OF ELLEN LAZAR, EXECUTIVE DIRECTOR
ACCOMPANIED BY:
MARGARET H. KELLY, DEPUTY EXECUTIVE DIRECTOR
CLARENCE J. SNUGS, DEPUTY EXECUTIVE DIRECTOR/TREASURER

STATEMENT OF SENATOR CHRISTOPHER S. BOND

Senator Bond. Welcome, Ms. Lazar. And we will now hear
from--we will now hear from the Neighborhood Reinvestment
Corporation. It has been about 5 years since we last had an NRC
hearing. So, I am very pleased to welcome Ms. Ellen Lazar, who,
ironically, is no stranger to the subcommittee. We welcomed her
here last year as head of CDFI. And I am very happy to see that
Ms. Lazar has made a smooth transition from the previous
Administration. Welcome.
The Administration's budget request for the NRC is for an
increase of $5 million; from $90 million for fiscal year 2001
to $95 million for fiscal year 2002.
Neighborhood Reinvestment and its network of local
Neighborhood Housing Services have performed a number of very
valuable housing and economic development activities that I
think really do not get enough recognition and credit.
In my home State of Missouri, affiliates in St. Louis and
Kansas City have been working in some of the most distressed
communities, and have been instrumental in revitalizing these
neighborhoods. I am very proud of the work they do. And I say
here, publicly, a sincere thanks to you and to all of the--the
people throughout the country who are working in Neighborhood
Housing Services.
We welcome you here, and now would be glad to have your
testimony to hear about NRC's activities, and especially the
Affordable Housing Programs.
I--this is a high priority for me to stimulate the
production of more affordable housing. And I am also interested
to hear how NRC has been involved in helping HUD dispose of its
single-family assets and administer its new Section 8 Home
Ownership Program.
So, we have lots--lots of questions. And we look forward to
having your testimony.

STATEMENT OF ELLEN LAZAR

Ms. Lazar. Thank you, Senator--Chairman Bond, Ranking
Member Mikulski, Senator Johnson, and members of the
subcommittee.
I am Ellen Lazar. I joined Neighborhood Reinvestment as its
Executive Director in October of 2000.
It is a pleasure to be here today to testify on behalf of
the Neighborhood Reinvestment Corporation and the 215 members
of its NeighborWorks network.
Our Board Vice Chair, Governor Edward Gramlich is in the
audience today. I would like to acknowledge the Governor.
I am joined today by our two Deputy Directors, Margo Kelly
and Clarence Snuggs.
I would like to request that my full testimony be included
for the record today.
Senator Bond. Without objection, it will be so included.
Ms. Lazar. Thank you. As the new Executive Director of
Neighborhood Reinvestment, it has been gratifying to learn of
the great dedication to improving distressed communities in
America this subcommittee has shown through its support of our
work.
I thank the subcommittee for supporting Neighborhood
Reinvestment through the fiscal year 2001 budget appropriation
of $90 million.

FISCAL YEAR 2002 BUDGET REQUEST

Neighborhood Reinvestment's fiscal year 2002 budget
justification outlines proposed activities at a $95 million
budget level. This includes a core budget level of $85 million,
to continue our community revitalization efforts in urban,
suburban, and rural communities, and $10 million to expand a
groundbreaking pilot effort to utilize the HUD Section 8
program in support of home ownership for low income families.
I would now like to discuss a few of the proven successes
of the NeighborWorks network, and touch on a couple
of new initiatives now being undertaken that keep the
Corporation and the NeighborWorks network at the
cutting edge of changes and improvements in community
revitalization.

CAMPAIGN FOR HOME OWNERSHIP

The Campaign for Home Ownership was launched by
Neighborhood Reinvestment and members of the
NeighborWorks network to increase home ownership
rates in their communities, particularly among families of
modest means.
The outcomes of the first campaign greatly exceeded
expectations. Over 15,000 families purchased homes and more
than $1.1 billion in total investment was generated. The
NeighborWorks Campaign for Home Ownership 2002 has
passed its mid-point, and is on-target to surpass all of its
goals for production and leveraged investment.
Since the campaign began in January 1998, nearly 27,000
families have purchased homes in their communities for a total
of $2.3 billion. Of the families assisted, more than 95 percent
of them are first-time home buyers; 90 percent have low or
moderate incomes; 52 percent are minorities; and 41 percent are
female-headed households.
In addition, more than 161,000 families have received
homebuyer education and counseling services and are on the path
to home ownership.

SECTION 8 HOME OWNERSHIP

We continually seek innovative solutions to help transform
communities through home ownership. In the late 1990's, changes
to the HUD Section 8 program statute permitted its vouchers to
be used for the first time toward the costs of home ownership.
Families served by NeighborWorks organizations under
the Section 8 homeownership option have incomes as low as 30
percent of area median income, and we continue to see the
Federal funds used for this effort leverage private sector
investments.
In fiscal year 2000, Congress recognized the
NeighborWorks network approach to the Section 8
homeownership option and provided Neighborhood Reinvestment
with a $5 million set-aside to test it further.
One of the benefits offered by Neighborhood Reinvestment is
the ability to bring economies of scale, a diverse testing
ground, and sound evaluation methods to efforts like the
Section 8 homeownership option.

NEIGHBORWORKS MULTIFAMILY INITIATIVE

While home ownership is a central strategy toward achieving
community revitalization, nearly all NeighborWorks
neighborhoods have multifamily housing needs, as well.
Currently, NeighborWorks organizations own or manage
more than 25,000 high-quality multifamily units.
In response to the growth in multifamily activity,
Neighborhood Reinvestment launched the NeighborWorks
Multifamily Initiative in 1999. This initiative has provided 43
NeighborWorks organizations with technical
assistance, asset management training, and training in best
practices in multifamily property development and management,
thereby positioning them to be at the forefront of efforts to
strength neighborhoods by providing affordable, well-managed
rental housing.
The NeighborWorks network has proven that when
multifamily properties are financed, built, and managed for the
long-term benefit of the community, the impact can be broad and
positive. Well-maintained, these properties help improve the
physical character of the community and support the values of
the surrounding properties. Combine physical strength with
ongoing affordability, and the result is lengthened resident
tenure and a more stable and positive environment for families.
One example of a successful multifamily strategy is the
successful adaptation and expansion of the Mutual Housing
Association concept from its west European roots. Mutual
Housing is one of the innovations that continue to produce
units, as well as creative strategies for developing
sustainable, affordable housing.
Initiated in the eighties at the request of Congress,
Neighborhood Reinvestment engaged in a multiyear demonstration
of Mutual Housing Associations. This demonstration resulted in
the creation of 10 Mutual Housing Associations that have
produced more than 6,400 units of quality housing. The units
continue to operate in great physical and strong economic
condition, even after 10 to 20 years.
With resident leadership actively promoted as part of the
operating plan, Mutual Housing residents stand out as community
leaders, both within their own property and within their larger
neighborhoods.
Mixing of incomes, ranging from 30 percent of median to 100
percent of median family income, creates healthy, dynamic
communities in which the cycle of property is broken. The
stigma of low income housing is overcome in the eyes of the
community. And the long-term economic viability of the property
is improved.
One of our network members, Rocky Mountain Mutual Housing
Association in Colorado, has been able to serve very low income
families by maintaining no or little debt on its properties to
keep rents affordable. Rocky Mountain Mutual acquired two FHA
foreclosed properties at little cost, and rehabilitated the
properties, using, among other sources, two Hope II grants.
Through resident services, such as a staffed computer lab
and community center, and through active resident participation
in management of the properties, residents and neighborhood
members, alike, consider these properties a neighborhood asset
and a cornerstone in revitalizing a community on the edge.
The network and Neighborhood Reinvestment's multifamily
activities demonstrate sustainable excellence and positive
impact over an extended period of time.

PREDATORY LENDING

I would like to take a moment to talk about predatory
lending. Predatory lending is a very real threat to the great
work NeighborWorks organizations and their lender and
Government partners have done in distressed communities.
As predatory lending practices have proliferated and
affected increasing numbers of families and communities,
NeighborWorks organizations and others look to
Neighborhood Reinvestment to provide a forum for discussion and
a mechanism for coordinating efforts to combat these abusive
lending practices at the local level.
In response, Neighborhood Reinvestment has worked to
understand the impact of predatory lending through sponsorship
of research symposia and public education.
In addition, Neighborhood Reinvestment has developed a
significant partnership with Freddie Mac to develop a loan
product for families that find themselves with a loan that has
the hallmarks of a predatory loan. This program, which has an
extensive counseling requirement, offers an opportunity for
families to refinance and thereby retain their homes.
We also believe that financial literacy training and post-
purchase education are effective strategies to combating the
proliferation of predatory loans. Neighborhood Reinvestment is
actively engaged in developing additional tools for this kind
of training.

VISION FOR NEIGHBORHOOD REINVESTMENT

This year, we are requesting an appropriation of $95
million, which includes $10 million to further Neighborhood
Reinvestment's and the NeighborWorks network's
pioneering efforts in using Section 8 vouchers to purchase a
home. At this funding level, Neighborhood Reinvestment will be
able to maintain its current level of services to the
NeighborWorks network with modest increases to the
outputs and measures.
Your support for our efforts has allowed us to play a
critical role in revitalizing America's communities. Since
Congress created the Neighborhood Reinvestment Corporation in
1978, this organization has served as an essential and unique
laboratory for cutting-edge strategies in the community
development field.
Your support has enabled us to make critical initial
investments in a host of innovative strategies that have
brought to the table public and private sector interests that
would never otherwise have been assembled.
Examples include our Home Ownership Campaign, Multifamily
Initiative, our Mutual Housing activities, the Apartment
Improvement Program, the predatory lending pilot with Freddie
Mac, and more recently, the Section 8 homeownership initiative,
and a new venture to create an equity assurance program to
stimulate activity in soft markets.
Seating these promising ventures with very modest, very
flexible public funds, combined with intensive facilitation and
staff support, has made all the difference. The benefits of
those innovations have touched thousands of families and have
provided extensive training opportunities and widely
disseminated winning strategies to benefit the entire community
development industry.
This is an exciting and challenging time, as Neighborhood
Reinvestment and the NeighborWorks network continue
to build upon the strength of the past, while looking ahead to
confront the problems and opportunities of the future.

PREPARED STATEMENT

I am very eager to lead this organization along its well-
chosen route, while scouting ahead for new ways we can be
successful in our work and add value to the field of community-
based development.
Thank you for your time today. And I am happy to entertain
any questions.
[The statement follows:]

Prepared Statement of Ellen Lazar

Chairman Bond, Ranking Member Mikulski and Members of the
Subcommittee: I am Ellen Lazar, and I joined the Neighborhood
Reinvestment Corporation (Neighborhood Reinvestment) as executive
director in October 2000. It is a pleasure to be here today to testify
on behalf of the Neighborhood Reinvestment Corporation and the 215
members of its NeighborWorksnetwork.
As the new executive director of Neighborhood Reinvestment, it has
been gratifying to learn of the great dedication to improving
distressed communities in America you have shown through your support
of our work. This level of commitment, evidenced over more than 25
years, extends beyond funding and can be seen in the involvement and
interest many of you have shown through your visits to local
NeighborWorks organizations, where you have witnessed and
celebrated their successes. This in turn has boosted local partners'
confidence in being able to achieve our shared mission of stimulating
reinvestment in communities of great need.
I thank the Subcommittee for supporting Neighborhood Reinvestment
through the fiscal year 2001 budget appropriation of $90 million.
Neighborhood Reinvestment's Fiscal Year 2002 Budget Justification
outlines proposed activities at a $95 million budget level. This
includes a core budget level of $85 million to continue our community
revitalization efforts and $10 million to expand a groundbreaking pilot
effort to utilize the HUD Section 8 program in support of home
ownership for low-income families.
By way of background, the NeighborWorks system comprises:
--Neighborhood Reinvestment Corporation is a Congressionally
chartered, public nonprofit corporation, headquartered in
Washington, D.C., and staffed in nine regional offices.
Neighborhood Reinvestment:
--provides funding (that gets leveraged many times over), technical
assistance, training and other resources to its network
members and the community-based development industry as a
whole;
--coalesces public and private support for local, regional and
national community reinvestment efforts;
--contributes to policy decisions concerning housing and other
means of transforming neighborhoods and improving the lives
of lower-income families; and
--monitors changes in the field, assesses the need for new
approaches, and initiates research or programs to address
those needs.
--The NeighborWorks network was founded by Neighborhood
Reinvestment and has evolved from 34 local pilot organizations
operating in about a dozen states in the 1970s to an impressive
215-member network of locally-run nonprofit organizations
working to expand affordable housing opportunities and support
neighborhood revitalization in nearly 1,700 communities in 48
states, the District of Columbia and the Commonwealth of Puerto
Rico. Network members operate in our nation's largest cities
and in some of its smallest rural communities. Regardless of
their target communities, NeighborWorks organizations
function as partnerships among local residents, business
leaders and local government representatives, with strategies
to share, best practices that get replicated and financing
mechanisms that are flexible.
--Neighborhood Housing Services of America (NHSA) is a secondary
market funded by social investors and purchases loans from
NeighborWorks organizations, thus replenishing their
revolving loan funds and enabling them to finance even more
homeownership, rehabilitation and multifamily housing. The
services NHSA provides benefit lower income borrowers; the
median borrower income is $24,652.
The NeighborWorks system is the only coordinated effort
of its type in the nation. It is unique in that it
--Provides a national delivery system--built on a national network of
locally-directed, community-based partnerships;
--Fosters local and regional leveraging of national resources;
--Serves as a laboratory for testing creative solutions to problems
that impede affordable housing production and neighborhood
revitalization;
--Provides a strenuous review process in order to be admitted to the
NeighborWorks network, as well as on-going program
reviews to improve organizational efficiency while reducing
programmatic risk; and
--Facilitates a learning environment for benchmarking and expanding
best practices in the field.
Through the guidance of the Corporation's Board of Directors, the
experience of Neighborhood Reinvestment staff, and the willingness of
NeighborWorks organizations to share the fruits of their
labors, the NeighborWorks system will, with your support,
continue to enhance neighborhoods and improve lives throughout America
in the year ahead.
I would now like to discuss:
--the Shared Vision of the NeighborWorks system;
--the Proven Successes that have made the Corporation and the network
the respected institutions they are today;
--the Exciting New Initiatives now being undertaken that keep the
Corporation and the network at the cutting edge of changes and
improvements in the community revitalization field; and
--the NeighborWorks system's Outcomes and Achievements over
the last two years and those anticipated for the next fiscal
year.
inspired leadership and the neighborworks vision
One of the most significant changes to the NeighborWorks
system in fiscal year 2000 was the retirement of Executive Director
George Knight. For 10 years Mr. Knight shared the network's and
Neighborhood Reinvestment Corporation's vision of ``Transforming
Communities Together.'' By encouraging cooperative relationships both
within and outside the NeighborWorks network, he was able to
foster an expanded and ever more efficient and effective network. His
guidance of the Corporation led to significant growth within the
NeighborWorks network.
During the past ten years, the number of communities served by the
network grew from 270 to 1,559--a 477 percent increase. Likewise, the
number of families who benefited from the network's products and
services increased 488 percent--from 5,788 families in 1990 to more
than 34,000 families in 2000. Most importantly, the Neighborhood
Reinvestment's Congressional appropriation was leveraged very
successfully by the NeighborWorks network. In 1990, each
federal dollar leveraged $5.30 from other sources; by 2000, that figure
had grown to $16.90.
I have been familiar with the impressive work of Neighborhood
Reinvestment for many years, and I am fully committed and prepared to
continue to foster an environment that stimulates innovation and
creative responses to the needs of families being served by the
network. The increased productivity of the NeighborWorks
Campaign for Home Ownership, and our work using Section 8 vouchers for
home purchase are just two current examples of how the
NeighborWorks network is providing innovations for the
community development field. Our work to grow resident leaders, through
Community Leadership Institutes, continues to reap great benefits for
communities. Our Training Institute is helping to grow a cadre of
leaders for the community development field. I look forward to working
with you, our NeighborWorks network, residents and public and
private sector partners to further enhance and transform communities.
proven successes
During fiscal year 2000, the NeighborWorks system
accomplished much through its core programs, which are the foundation
of the NeighborWorks system. Among these are:
--Locally-Controlled Revolving Loan Funds.--Locally directed
revolving loan funds are the basis of much of the success of
the network. Revolving loan funds are controlled by the local
NeighborWorks organizations and are used to provide
flexible funding for community priorities, such as home
ownership, rehabilitation, multifamily housing, and commercial
and economic development. The liquidity of the local revolving
loan fund is in many cases assisted by selling loans to NHSA.
Neighborhood Reinvestment Corporation supports these revolving
loan funds through technical expertise, training, and funding.
Most of the funding for revolving loan funds comes from local
sources--loans and grants made by banks, insurance companies,
foundations, local governments and other local investors. Most
of those who benefit from the revolving loan funds are hard-
working families who are typically under-served. For example,
70 percent of loans made through a NeighborWorks
revolving loan fund are made to very low- or low-income
households, 63 percent are made to minority-headed households,
while 43 percent are made to female-headed households.
--NeighborWorks Campaign for Home Ownership.--In 1993, the
first NeighborWorks Campaign for Home Ownership was
launched by Neighborhood Reinvestment and members of the
network to increase home-ownership rates in their communities,
particularly among families of modest means. The outcomes of
the first Campaign greatly exceeded expectations: 15,880
families purchased homes, and more than $1.1 billion in total
investment was generated.
This success led to the Campaign for Home Ownership 2002, which has
more aggressive goals: to create 40,000 new homeowners, provide housing
counseling to 270,000 families, and generate $2.9 billion in investment
in struggling neighborhoods, over a five-year period from 1998 to 2002.
The NeighborWorks Campaign for Home Ownership 2002 has
passed its mid-point and is on target to surpass all of its goals for
production and leveraged investment. Since the Campaign began in
January 1998, nearly 27,000 families have purchased homes in their
communities, for a total investment of $2.3 billion. Of the families
assisted:
--More than 95 percent are first-time buyers;
--90 percent have low- or moderate-incomes;
--52 percent are minorities; and
--41 percent are female-headed households.
In addition, more than 161,000 families have received homebuyer
education and counseling services and are on the path to home-
ownership.
In addition to achieving these impressive goals, the Campaign for
Home Ownership has helped refine and create more effective mechanisms
for service delivery, raised the degree of professionalism of home-
ownership activities, and helped increase organizational capacity at
the local level. Out of the collaborative efforts of the members of the
Campaign, the NeighborWorks network has developed major
innovations in the way community residents are assisted, not only to
become, but to remain, successful homeowners. These innovations
include:
--Full-Cycle Lending^SM--which provides education and
counseling that covers needs from pre-purchase credit repair,
through post-purchase home repair and foreclosure prevention;
--the creation of 55 NeighborWorks HomeOwnership Centers--
where assistance on all aspects of buying and maintaining a
home are provided under one roof;
--an intensive Homebuyer Education curriculum offered at the
Neighborhood Reinvestment Training Institute;
--being on the forefront of identifying predatory lending practices
and providing a forum for local practitioners to discuss this
emerging issue;
--foreclosure-prevention strategies and strategies to address
predatory lending; and
--a financial literacy curriculum.
Neighborhood Reinvestment was recently notified that it has been
selected as a semi-finalist in the 2001 Innovations in American
Government Award by the Harvard University's Kennedy School of
Government and The Ford Foundation for the development of 55
NeighborWorks HomeOwnership Centers across the nation.
--The NeighborWorks Multifamily Initiative.--While home
ownership is a central strategy towards achieving community
revitalization, nearly all NeighborWorks
neighborhoods have multifamily housing needs as well.
Currently, network members own or manage more than 25,000 high-
quality multifamily units. In response to the growth in
multifamily activity, Neighborhood Reinvestment launched the
NeighborWorks Multifamily Initiative in 1999. This
initiative has provided 43 NeighborWorks
organizations with technical assistance, asset management
training, and training in best practices in multifamily
property development and management, thereby positioning them
to be at the forefront of efforts to strengthen neighborhoods
by providing affordable, well-managed rental housing. The goal
of the Multifamily Initiative is to strengthen neighborhoods by
promoting multifamily housing that have the following
characteristics:
--permanent affordability for low-income families;
--long-term economic viability;
--physical soundness--good maintenance, adequate capital replacements
and improvements; and
--positive social fabric--a culture of opportunity and leadership
where school success, homeownership preparation, employment
advancement, and neighborhood leadership are the norm, while
drugs, truancy and destructive social behavior are not
tolerated.
The network, through its Mutual Housing model and the work of other
NeighborWorks nonprofits, has proven that when multifamily
properties are financed, built and managed for the long-term benefit of
the community, the impact can be broad and positive. Well maintained,
these properties help improve the physical character of the community
and support the values of the surrounding properties. Combine physical
strength with ongoing affordability, and the result is lengthened
resident tenure and a more stable and positive environment for
families.
One strategy used by a number of properties owned by
NeighborWorks members is to provide on-site computer learning
centers, which allow residents access to technology, as well as the
staff resources to ensure that the residents are able to take full
advantage of this opportunity. We recognize that the end goal of this
approach to technology is not just providing computers to those with
limited resources. Technology is viewed as a means to achieving broader
network and community goals--such as increasing the stability of
neighborhoods, increasing academic success, expanding employment and
economic opportunities, and attaining homeownership.
However, the availability of such housing is dependent upon owners
who recognize that the ownership of these properties involves the
stewardship of both the property and the community.
NeighborWorks organizations view affordable housing in
exactly this way and have captured their commitment to this approach to
housing in the NeighborWorks Multifamily Initiative.
Neighborhood Reinvestment's successful adaptation and expansion of
the Mutual Housing Association (MHA) concept from its West European
roots is one of the innovations that continues to produce units as well
as creative strategies for developing sustainable affordable housing.
In the 1980s, at the request of Congress, the Corporation engaged in a
multiyear demonstration of Mutual Housing Associations. The founding
principles of this model were threefold:
--Affordable housing is a critical need for many lower-income
families who are not yet prepared for single family
homeownership; therefore it should be produced as a perpetual
asset.
--Active resident leadership will produce a positive social impact in
the lives of families, as well as in the operation of the
properties and the character of neighborhoods. Therefore
residents should serve on boards and property councils,
establishing a mutual form of ownership that supports not only
the social success of the community but also the financial
success of the property, by improving collections, reducing
maintenance and security costs, and slowing resident turnover.
--A financial equity position in the units will enable the
NeighborWorks organization to be a strong owner, that
is prepared to continue to produce additional housing to meet
the need in its market area.
This Mutual Housing demonstration resulted in ten Mutual Housing
Associations across the country, that have produced more than 6,400
units of quality housing. The lessons of this demonstration have been
dramatic.
--The units continue to operate in great physical and strong economic
condition, even after 10 to 20 years.
--With resident leadership actively promoted as part of the operating
plan, Mutual Housing Association residents stand out as
community leaders, both within their own property and within
their larger neighborhood.
--Mixing of incomes (ranging from 30 percent median family income to
100 percent median family income) creates healthy, dynamic
communities, in which the cycle of poverty is broken, the
stigma of ``low income housing'' is overcome in the eyes of the
community, and the long term economic viability of the property
is improved.
--Mutual Housing Associations, given their strong capital positions
and fee structures that support the depth of professional staff
needed by an ongoing developer/owner, are also ongoing
producers of additional housing. Mutual Housing Associations
accounted for over 900 of the 1,520 multifamily units produced
by the NeighborWorks network in fiscal year 2000.
The Mutual Housing properties merit particular attention, because
they demonstrate sustainable excellence and positive impact over an
extended period, 10-15 years. Though the Mutual Housing model continues
to grow in some markets, many of the NeighborWorks
organizations that produce affordable housing are not structured as
Mutual Housing Associations. Through the NeighborWorks
Multifamily Initiative, though, the best elements of Mutual Housing
along with the lessons learned are now being promoted as ``best
practices'' throughout the NeighborWorks network.
The Multifamily Initiative became the catalyst for creating the
Neighborhood Capital Corporation (NCC), which provides affordable,
short-term financing to acquire multifamily properties that are at risk
of deterioration or of being lost as affordable units available in a
community. Private owners of rental properties regularly approach
NeighborWorks organizations about purchasing these
properties. Sometimes the owner is no longer interested in maintaining
the property. In other instances, subsidies are expiring and the owner
has no interest in investing additional capital or in maintaining the
property as affordable. Thus, very often the best solution for
residents, owners and neighborhoods is for a nonprofit organization to
acquire the property and commit it to long-term affordability. Many of
these properties house elderly tenants, families below 30 percent of
area median income, and families who have few options for relocation.
The Multifamily Initiative explored approaches and obstacles to
such purchases and found the primary obstacle is flexible pre-
development and acquisition financing that allows an organization to
respond quickly when a property becomes available. Neighborhood
Reinvestment responded to this problem by making an initial investment
of $1.8 million in NCC. NCC's board of directors is composed of
executive directors of some of the most successful development
corporations in the network. NCC is creating a capital fund that will
meet the needs of qualified NeighborWorks members and allow
them to effectively and efficiently address the interests of
multifamily owners, their tenants and our neighborhoods. In its first
full year of operation, NCC projects that it will provide approximately
$1 million in loans, while leveraging $6 million from other sources,
thus impacting 500 units of multifamily housing.
Against the national backdrop, the NeighborWorks
Multifamily Initiative seeks to preserve affordable housing resources
as community assets, while improving the physical properties of the
housing and the quality of life for families with a range of incomes.
--The NeighborWorks Rural Initiative.--
NeighborWorks organizations serving rural communities
comprise the fastest growing segment within the network. In
1995, six NeighborWorks organizations were serving
rural communities; by 2000, this figure grew to 49 network
organizations. We anticipate this trend will continue.
NeighborWorks organizations in rural areas help
confront problems caused by a deteriorating housing stock, low
incomes, and of rapidly increasing land prices. The rural
network members are engaged in areas that historically have
been difficult to serve, such as American Indian reservations,
the Southwest border Colonias, and the Mississippi Delta.
Several years ago, our rural NeighborWorks members
elected to establish a formal identity and to call themselves the RNA
Community Builders, as a means of eliciting support from foundations
and other entities with a particular interest in rural issues. The RNA
has become a highly effective institution, attracting program related
investments from the philanthropic funders, and others, in order to
make short-term loans to its members. More recently the RNA has also
been designated as a certified Community Development Financial
Institution intermediary. Neighborhood Reinvestment has provided
significant support to the start-up of the RNA and to its ongoing
activity. In fiscal year 2000 Neighborhood Reinvestment hired a
national rural coordinator to concentrate on our rural interests and
activities and to serve as a liaison with the RNA. Since its creation,
RNA has made 30 loans to rural network members, creating 220 units of
affordable housing and leveraging over $18 million in permanent
financing.
--Neighborhood Reinvestment Training Institute.--The Neighborhood
Reinvestment Training Institute is one of the primary venues
for the Corporation's outreach to the broader community
development field and increases the capacity of local
neighborhood revitalization organizations. Neighborhood
Reinvestment sponsors five national training events each year,
serving an average of 800 participants at each Institute, which
lasts a week. The Neighborhood Reinvestment Training Institute
is recognized as a national leader in providing high-quality,
practitioner-focused training to community development
professionals. During fiscal year 2001, the Training Institute
will provide more than 160,000 training hours.
The Training Institute has developed several focused efforts to
build the skills of local practitioners and focus efforts of local
organizations so that they build capacity. These include:
--Eight Programs of Study that guide participants through a subject-
specific curriculum, culminating in a professional certificate
that recognizes their accomplishments. Candidates in a Program
of Study must successfully complete up to four weeks of courses
and exams, and take a comprehensive exam at the end of all
coursework.
--The development of an Advanced Training Platform, a new, intensive,
interactive and advanced practicum for seasoned practitioners.
This will initially be offered in early fiscal year 2002. This
practicum will draw and expand on negotiation skills, economic
analysis, leadership development, management skills, and policy
application.
--Resident leadership development continues to be a core value in the
NeighborWorks network's approach to community
revitalization. To respond to a need for enhanced resident
leadership development, the Training Institute is intensifying
its efforts by sponsoring regional Community Leadership
Institutes. This will enable resident leaders to share their
experiences, hone their leadership skills and bring innovative
ideas back to their communities. This reflects the
Corporation's conviction that while new homeowners, improved
housing and increased investment are essential to
revitalization, the most essential ingredient for long-term
success is informed, effective and motivated resident leaders.
--In recognition of Neighborhood Reinvestment's former Executive
Director George Knight, who retired at the end of fiscal year
2000, the VA, HUD and Independent Agencies Conference Committee
set aside $2.5 million of Neighborhood Reinvestment's fiscal
year 2001 appropriation to establish the George Knight
Scholarship Fund. Established as an endowment, this Scholarship
Fund will assist often-fledgling community development
organizations and professionals as they seek to develop the
capacity to address community needs. This fund will enable the
Training Institute to more than double the number of tuition
scholarships granted to staff of nonprofit organizations across
the country.
The George Knight Scholarships were offered for the first time at
the Neighborhood Reinvestment Training Institute in Chicago during the
week of April 16. Thirty-three professionals received more than $16,000
in scholarships that enabled them to attend a week of training. Because
of this Subcommittee's commitment to top-quality training, the
Corporation anticipates being able to provide approximately 250
scholarships, totaling $125,000 annually.
In addition, the Subcommittee's set aside has been and will
continue to be leveraged with private contributions. A large savings
bank has begun this trend with a recent contribution of $550,000. The
Corporation will continue to seek other private contributions to this
scholarship endowment.
--National Insurance Task Force.--Since 1994, Neighborhood
Reinvestment, members of the NeighborWorks network
and members of the insurance industry have worked together to
develop strategies that improve the availability and pricing of
property and casualty insurance in low- and moderate-income
neighborhoods. Known as the National Insurance Task Force, this
group includes representatives the insurance industry's top
property and casualty insurance carriers, as well as insurance
industry trade associations, insurance regulators, educational
institutions, Neighborhood Reinvestment and the members of the
network. The purpose of the Task Force is ``To develop
partnerships between the insurance industry and community-based
organizations to better market the products and services of
both, for the benefit of the customers and communities they
serve.''
The Task Force continues to develop cutting-edge products and tools
that help facilitate the creation of local collaborations between the
insurance industry and NeighborWorks organizations across the
country. Over the last two years the Task Force has piloted a ``Loss
Prevention Partnership'' program. Selecting cities with insurance
perils--Chicago, Charleston, SC, and Denver--the Task Force is
experimenting with strategies to reduce the likelihood of damage from
perils such as fire, wind and water. Education, special programs,
prevention tools and a local loan fund all play a role in these local
pilots. Once again, the NeighborWorks network is serving as
an appropriate and exciting laboratory to test innovative new
approaches to intransigent problems.
--NHSA.--NHSA nearly doubled its loan purchases from local
NeighborWorks organizations in fiscal year 2000--from
$46.2 million in the prior year to $83.3 million. NHSA's
investors were the key to making this extraordinary increase
possible. In fiscal year 2000, the investor base increased to
more than 120 investors and lenders, which included two new $10
million investors. Members of the NHSA Board of Trustees have
begun discussion of a $500 million social investment initiative
for the period 2001 through 2006 in response to increased need
for liquidity for the NeighborWorks loans from
revolving loan funds. Other philanthropic and corporate funding
sources are being explored to meet these goals.
exciting new initiatives
Neighborhood Reinvestment continually seeks innovative solutions to
help transform communities. What follows are just some of the areas in
which the Corporation has recently expanded its focus.
--HUD's Section 8 Home Ownership Program.--In the late-1990s, changes
to the HUD Section 8 Program statute permitted its vouchers to
be used for the first time toward the costs of home ownership.
However, few housing authorities are prepared to accommodate
this opportunity, since most lack formal homebuyer counseling
or lending experience. In addition, most private lenders have
no experience with the Section 8 program and, since it is re-
appropriated on an annual basis, are unwilling to accept
Section 8 vouchers toward a mortgage payment. In 1999 and 2000,
HUD approved 15 demonstration sites for Section 8 homeownership
programs. Four of these demonstration sites involved
partnerships between a public housing authority and a
NeighborWorks organization. These effective and
unique partnerships were formed in Syracuse, New York; Long
Island, New York; Nashville, Tennessee; and Burlington,
Vermont. The early success of these sites made the network a
national leader in effectively using the Section 8 program to
help qualified low-income Section 8 families become first-time
homeowners and make progress on the road to self-sufficiency.
While the actual number of families who have purchased a home is
small, the efforts of this small group of organizations have truly been
pioneering, and the families who have been successful represent the
largest number of families served under this option in the country.
Families served by NeighborWorks organizations under the home
ownership option have incomes as low as 30 percent of area median
income. Table 1 summarizes these efforts in Syracuse, Long Island,
Nashville and Burlington.

TABLE 1.--CLOSINGS UNDER THE FOUR NEIGHBORWORKS PILOT PROGRAMS IN THE SECTION 8 HOMEOWNERSHIP OPTION
----------------------------------------------------------------------------------------------------------------
Long
All Syracuse Island Nashville Burlington
----------------------------------------------------------------------------------------------------------------
Buyers to Date...................................... 23 7 2 4 10
3 Year Pipeline..................................... 266 89 60 60 57
Minority-Headed Households (percent)................ 53 71 50 100 100
Female-Headed Households (percent).................. 74 71 100 100 70
First Time Buyers (percent)......................... 100 100 100 100 100
Median Income....................................... $24,900 $23,798 $22,945 $22,896 $29,529
Median House Price.................................. $85,000 $43,750 $82,500 $86,900 $115,500
Average Family Size................................. 3.4 3.1 3.0 3.0 3.8
Average 1st Mortgage................................ $60,922 $42,327 $41,457 $52,187 $81,327
Average 2nd Mortgage................................ $7,128 $4,980 $18,737 $16,825 2,430
----------------------------------------------------------------------------------------------------------------
Source: Neighborhood Reinvestment Corporation; February 2001.

I would like to tell you about one buyer under the Section 8 home
ownership option in Burlington, Vermont. This family's story is typical
of many buyers that we have seen in the Section 8 home ownership
program--working families, dedicated to the American dream of owning a
home and getting off public assistance.
One of Burlington's first customers to close on a home using the
Section 8 program had been working with the Burlington Community Land
Trust's NeighborWorks HomeOwnership Center since January
1997. As an African American, single mother raising two children on one
income, it was difficult for her to save for a downpayment and
impossible to qualify for a mortgage that would afford a home in
Burlington, which is the 27th most expensive housing market in the
country and where the median home price is $204,400.\1\ Over the next
several years, this woman continued to work with the
NeighborWorks HomeOwnership Center on budgeting and took a
second job that allowed her to save for a downpayment at a faster rate.
---------------------------------------------------------------------------
\1\ National Association of Realtors; fourth quarter, 2000.
---------------------------------------------------------------------------
In April 2000, the Burlington Community Land Trust rehabilitated a
vacant and distressed four-bedroom home, which the family was able to
purchase for $102,700. The Burlington Community Land Trust provided a
lower interest second mortgage for $30,000. Through additional
assistance, from local and state programs, the first mortgage was
brought down to $52,700, which was manageable for the single-parent
household.
For fiscal year 2001, Congress recognized the
NeighborWorks network's approach to the Section 8 home
ownership option and provided Neighborhood Reinvestment with a $5
million set aside to test it further.
The NeighborWorks network is uniquely suited to respond
to the exceptional opportunity provided by this change to the Section 8
Program. Its Campaign for Homeownership has finely tuned the tools and
activities that make home ownership possible for low- and moderate-
income families, including high quality pre- and post-purchase
counseling and second mortgage loans. Several network organizations
responded to the Section 8 challenge by developing a strategy that
includes a conventionally generated first mortgage based solely on the
family's income, and a second mortgage, originated by the
NeighborWorks organization, to fill the gap between what the
family can afford and the price of the house. This second mortgage is
repaid by the Section 8 voucher, thereby freeing the private lender
from having to interact with the voucher system at all.
The $5 million set-aside is helping Neighborhood Reinvestment
create additional partnerships between NeighborWorks
organizations and housing authorities implement this home ownership
strategy. The set-aside is being used to fund two activities:
--$4.25 million has been awarded as grants to local
NeighborWorks organizations, with more than two-
thirds of this funding used for capital that will fund local
second mortgage pools. These funds will be leveraged by
private-sector investments, thus helping to stretch federal
funding further. The remaining funds will be used for operating
grants. These are critical since many very low-income, welfare-
dependent families have significant pre-purchase counseling
needs beyond those of the typical NeighborWorks
client. While families who qualify for Section 8 vouchers must
be employed in order to take advantage of the home ownership
option, many face real barriers (such as severe credit
impairment) that can be addressed only through time-intensive,
one-on-one counseling that can be provided with enhanced
operating funds.
--Approximately $750,000 of the set-aside will be used to provide
technical assistance, training, peer-to-peer learning
opportunities, and research about the NeighborWorks
organizations' efforts utilizing this option. One of the
benefits offered by Neighborhood Reinvestment is the ability to
bring economies of scale, a diverse testing ground and sound
evaluation methods to efforts like the Section 8 home ownership
option. In addition, the expertise developed under the
NeighborWorks Campaign for Home Ownership 2002 allows
the Corporation to provide assistance that cannot be found
elsewhere.
In early April 2001, the Corporation reviewed applications from
interested network members and made decisions on which
NeighborWorks organizations would receive funding under the
set-aside. Although the Corporation anticipated being able to use the
$5 million set-aside to expand this pilot effort from four
NeighborWorks organizations to 10 to 14 organizations the
Corporation will actually fund 11 applications for 21
NeighborWorks organizations serving more than 25 communities.
Funding under the set-aside is being used to assist public housing
authority and NeighborWorks organization partnerships in the
following communities: Nashville, Tenn.; Toledo, Ohio; Lafayette, Ind;
Oak Ridge, Tenn; Ravenna, Ohio; Hamilton, Ohio; Chattanooga, Tenn;
Burlington, Vt; Newport, Vt; Springfield, Vt; West Rutland, Vt; Barre,
Vt; Chicago; Centereach, N.Y.; Syracuse, N.Y.; San Bernadino, Calif.;
Sacramento, Calif.; Allentown, Pa.; Pueblo, Colo.; and Hugo, Okla. We
expect to help as many as 680 families purchase a home over the next
three years and to recruit nearly 6,800 families to consider the home
ownership option.
I will keep you informed about the progress of our work and the
impact of your funding in this area. To that end, we have contracted
with a well-respected research firm that will monitor the progress of
the Section 8 home ownership option within the network and produce
regular reports. Recognizing the great demand for practical information
about this program and acknowledging the NeighborWorks
network's leadership on this effort, we will offer an on-going course
at the Neighborhood Reinvestment Training Institute on the Section 8
home ownership option.
Building on the network's success, the Corporation requests $10
million for fiscal year 2002 to expand the Section 8 homeownership
initiative, strengthening partnerships with housing authorities to
reach 300 communities and 3,500 potential homebuyers.
--Predatory Lending.--Research has shown that predatory lending is a
very real threat to the great work NeighborWorks
organizations and other nonprofits and their lender and
government partners have done in distressed communities. As
predatory lending practices have proliferated and affected
increasing numbers of families and communities,
NeighborWorks organizations and others looked to
Neighborhood Reinvestment to provide a forum for discussion and
a mechanism for coordinating efforts to combat these abusive
lending practices at the local level.
In response, Neighborhood Reinvestment has:
--sponsored symposia on predatory lending;
--shared information across the network about education efforts and
other measures to stem this tide;
--sponsored a study of predatory practices with the Joint Center for
Housing Studies of Harvard University;
--commissioned two studies on the growth of sub-prime lending in
Boston and Atlanta that have attracted significant attention;
--worked to define the difference between sub-prime and predatory
lending practices;
--developed materials to alert consumers to the dangers of high debt
loans and predatory lenders; and
--convened a task force of seasoned practitioners on the topic.
In addition, Neighborhood Reinvestment has developed a significant
partnership with Freddie Mac to develop a loan product for families
that find themselves with a loan that has the hallmarks of a predatory
loan. This program, which has an extensive counseling requirement,
offers an opportunity for families to refinance--and thereby retain--
their homes. We also believe that financial literacy training and post-
purchase education are effective strategies to combating the
proliferation of predatory loans. Neighborhood Reinvestment is actively
engaged in developing additional tools for this kind of training.
--HUD Demonstration Program--Secondary Market for Non-Conforming
Loans to Low Wealth Borrowers.--NHSA is a participant in a HUD
Demonstration Program to develop and sustain a secondary market
for non-conforming loans to very low-income borrowers. NHSA has
made a strong start in assembling loan pools that will be
studied over a seven-year period. HUD's support is allowing
NHSA to purchase loans with eased credit qualifications through
the extraordinary cooperation of investors and lenders, backed
by NHSA's increased capacity to provide needed credit
enhancements for the special loan pools. Lessons learned will
help to guide NHSA's product development as well as inform the
Department and the major secondary markets with regard to the
nature of the changing product needs and creditworthiness of
challenging groups and markets.
vision for fiscal year 2002: building on the neighborworks
network's strength
This year we are requesting an appropriation of $95 million, which
includes $10 million to further Neighborhood Reinvestment's and the
network's pioneering efforts in using Section 8 vouchers to purchase a
home. At this funding level, Neighborhood Reinvestment will be able to
maintain its current level of services to the NeighborWorks
network with modest increases to the outputs and measures.
A $95 million appropriation in fiscal year 2002 will assist the
NeighborWorks network to:
--Leverage more than $1.5 billion in direct total investment into
distressed rural, suburban and urban communities;
--Assist more than 38,000 families to purchase or maintain their
homes;
--Assist more than 500 families through the Section 8 home ownership
initiative, resulting in their purchase of a home;
--Own or manage over 29,000 affordable rental or mutual housing
units; and
--Provide pre- and post-purchase home ownership counseling to nearly
70,000 families.
To support and expand these significant accomplishments, the
Neighborhood Reinvestment Corporation and NHSA expect to:
--Add 10 new organizations to the network, increasing the
NeighborWorks network to 240 organizations serving
over 1,700 communities;
--Conduct 210 reviews of member organizations and review 240 audits;
--Provide over 160,000 training contact hours to community
development leaders and practitioners, not only through the
Neighborhood Reinvestment Training Institute but also through
local and district training opportunities; and
--Purchase $60 million in loans from NeighborWorks
organizations, bringing the total number of loans owned by NHSA
to 7,350 totaling $312 million.
To be certain that we are making best use of our Congressional
appropriation this coming year and beyond, especially as the network
continues to expand, we are undertaking a corporate-wide strategic
planning process. This will ensure the continued relevancy and vibrancy
of our services to the NeighborWorks network and its
constituents. The strategic planning process:
--will help us understand the significant changes in our work
environment and context;
--ensure that the Corporation responds to our constituents' changing
interests and needs;
--formulate budget submissions for the coming fiscal year and beyond
based on priority needs; and
--articulate a clear direction for Neighborhood Reinvestment services
and activities over the next three to five years.
As a result of the strategic planning process, Neighborhood
Reinvestment will articulate its vision for executing our statutory
mission and define and communicate the guiding principles of our work
in a contemporary context, enabling the Corporation and its partners to
provide even more effective service to communities across the United
States.
outcomes and achievements
The last two fiscal years have shown increased growth in nearly all
areas of the NeighborWorks system. I have full confidence
that with an approval of the Corporation's fiscal year 2002 budget
request, Neighborhood Reinvestment and the network will meet or exceed
all of the anticipated outcomes and achievements. The following table
summarizes the outcomes from fiscal year 2000, projected results for
fiscal year 2001 and the expected results based on a $95 million
appropriation for fiscal year 2002.

TABLE 2.--OUTCOMES AND ACHIEVEMENTS
----------------------------------------------------------------------------------------------------------------
Fiscal Year--
-----------------------------------------------
2001 2002 (Budget
2000 (Projected) Request)
----------------------------------------------------------------------------------------------------------------
Congressional Appropriation (millions).......................... $75 $90 $95
Resultant Total Direct Investment (billions).................... $1.3 $1.4 $1.5
Organizations Added to NeighborWorks Network \1\...... 16 (215 total) 12 (230 total) 10 (240 total)
Families Assisted in Purchase or Rehabilitation of their Homes.. 34,000 36,100 \2\ 38,100
Families Counseled Pre- and Post-Purchase....................... 60,280 63,900 \3\ 66,000
Rental Units Owned or Managed by NeighborWorks 24,935 27,450 29,450
Organizations..................................................
Communities Served.............................................. 1,559 1,723 1,780
NHSA Purchases \4\ (millions)................................... $83.3 $50 $60
Number of Loans............................................. 12,375 6,600 7,350
Value of Loans (millions)................................... $408 $276 $312
Program Reviews................................................. 159 200 210
Audits Reviewed................................................. 199 220 240
----------------------------------------------------------------------------------------------------------------
\1\ For fiscal year 2002 we have projected very modest increases in the increase of member organizations for two
reasons. First, while the demand for affiliation continues to grow, we want to insure that important efforts
like the Section 8 home ownership pilot succeeds and NeighborWorks network members continue to have
access to the basic levels of training, financial and technical resources that are critical to their long term
health and productivity. Second, existing NeighborWorks members are rapidly expanding their efforts
to serve much broader geographies. The number of communities served has increased from 825 communities to
1,659 communities since fiscal year 1998, while the number of organizations has increased by 29 organizations.
The ability and willingness of NeighborWorks organizations to reach out to other organizations, to
new communities and to additional neighborhoods has been exceptionally well-received in sites like Montana,
New Mexico, Baltimore and many others. We anticipate that this is a trend that will continue into the future.
\2\ Plus 500 Section 8 Buyers.
\3\ Plus 3,500 Section 8 clients.
\4\ The objective of NHSA and Neighborhood Reinvestment Corporation is not to use federal funding to supplant
private funding, but rather to attract it. The lower volume of loans purchased by NHSA indicates the
willingness of the private sector--specifically private lenders--to engage in lending activities in distressed
neighborhoods.

conclusion
This is an exciting and challenging time, as Neighborhood
Reinvestment and the NeighborWorks network continue to build
upon the strengths of the past while looking ahead--to confront the
problems and opportunities of the future. I am very eager to lead this
organization along its well-chosen route while scouting ahead for new
ways we can be successful in our work and add value to the field of
community-based development.

AFFORDABLE MULTIFAMILY DEVELOPMENTS

Senator Bond. Well, that was a well-timed presentation. You
landed right on the money.
Throughout the country, and in my own State of Missouri,
there is a real shortage of affordable rental housing for low
income families. I am very concerned that not enough affordable
housing is being produced, especially for those that we would
consider extremely low income.
We are going to be working on developing an affordable
housing production bill in the next few weeks, and any input
you can give us would be most appreciated.
My first question to you would be: What lessons have NRC
and NeighborWorks organizations learned about
providing rental housing for extremely low income families,
while maintaining the properties' long-term viability? That has
been a real problem in some--in some areas in the past. What
have you learned? What is your experience?
Ms. Lazar. We have learned a number of things. One is that
you want to make sure that the operating costs for the
properties are really adequate to fund all the necessary
reserves, particularly, if you are dealing with older
properties; that all of the necessary physical work that needs
to get done, gets done well through the rehabilitation; and
that reserves are set aside to maintain those properties.
To that end, you want to be able to make sure that the
operating costs are sustainable by the rents and that you
manage the properties with as little debt as possible.
We talked earlier about the FHA Disposition Program. I
think it is very, very important that we spend some time
studying what we can do with the housing stock that now exists
and how those properties could be acquired for as little money
as possible, so that they can be maintained as affordable
housing stock and be maintained for the future in an
economically viable way.
We have found, in low cost communities, that we are able to
push the envelope a bit and are able to acquire properties and
then bring in folks at a variety of incomes and help cross-
subsidize the project, so that we have some tenants paying
higher rent, and other tenants paying lower rent. This allows
us to bring in more lower income tenants through the cross-
subsidy of the higher rent.
Higher cost areas are more of a challenge. What we have
seen is that the Section 8 subsidy has worked well there. There
are other ways of looking at other types of operating subsidies
that may be able to keep rents affordable by reducing the debt
considerably, by being able to acquire properties at low or no
cost, and by subsidizing the development costs up-front.

EXAMPLES OF SERVING EXTREMELY LOW-INCOME RENTERS

Senator Bond. Well, we are going to be looking at a number
of those things. And I have heard stories about charitable,
not-for-profit organizations having to get Federal grants to
buy distressed properties for FHA--from FHA. And I am saying,
what are we--where does that make--where does that make any
sense? I mean, there ought to be--we ought not to be--we ought
not to be doing that.
Can you give us some examples of properties owned by
NeighborWorks organizations that serve families with
incomes below 30 percent of poverty and--and how they approach
serving this population?
Ms. Lazar. Sure. I am happy to.
We have properties in Cambridge, Massachusetts, that are
serving families with incomes below 30 percent of area median.
They are able to do it by relying upon Section 8 to reach these
extremely low-income residents. In Cambridge, Massachusetts,
you have very high development costs and operating expenses. It
really makes any other approach infeasible. You have old
housing stock, as well, which costs that much more to maintain
and retrofit.
In Sacramento, we use a combination of Section 8 and very
low debt levels to reach extremely low income residents. We
blended a couple of techniques.
In North Dallas, we have been able to acquire properties
with very low debt levels at zero percent interest, and a
higher income mix, which allows for the internal cross-
subsidization, and allows us to reach extremely low income
people.
Senator Bond. How much money is NRC dedicating to its
multifamily activities, and what other resources do you use, I
guess, in addition to Section 8?
Ms. Lazar. That is a good question. Our organizations get a
limited amount of funding from us, directly, for multifamily
activities. We provide expendable grants to them and capital
grants to them. They average somewhere in the neighborhood of
$70,000 for the expendable grants; $100,000 for the capital
grants.
We do not have a lot of money right now to put into
developing multifamily properties. It would be nice to be able
to look to other grant sources to fund these potential
projects.
We have a tremendous need for flexible dollars that could
be used to acquire properties as they become available. We tend
to lose properties because the deal is not fully funded and
nobody has any money to acquire properties that are on the
market.
Often, it takes 10 to 12 months to acquire a project for
multifamily housing and to put all the financing pieces
together. A buyer might be very anxious to sell, and the groups
that we work with do not necessarily have the equity or a
source of flexible grant funds that can be repaid later to do
the acquisition. This type of money would be very useful.

SECTION 8 HOME OWNERSHIP

Senator Bond. With respect to Section 8, you have received
a $5 million set-aside to expand the partnerships between
NeighborWorks and PHAs in implementing the Section 8.
And you have asked for $10 million.
Could you give us an update on how the--how it is working,
and if you have any suggestions on improving the program?
Ms. Lazar. Sure. I will be glad to.
This, as you might guess, is a very labor-intensive effort.
The lenders who are often providing the first mortgages do not
really understand Section 8 as a potential tool for repayment.
They have not necessarily worked with this population before,
so we have to do education on that end.
On the other end, we have PHAs, who really do not have very
much experience with lending, mortgage origination, and
servicing. So, we have a lot of pieces that we have to put
together, in terms of the education of the organizations we are
working with.
This year, with the $5 million, we have awarded 11 grants
to about 21 NeighborWorks organizations working in 25
communities around the country. We anticipate that this is
going to create home ownership opportunities for about 680
families and we will have an opportunity to counsel about 6,800
families through this process.
We have been working all around the country. We have been
doing very intensive training with the prospective buyers, many
of whom have already been through some family self-sufficiency
programs and other pre- and post-purchase counseling programs.
We are finding that the time it takes to really groom these
folks for home ownership takes about three times the amount of
time that it takes other people.
It is very labor-intensive, but ultimately, I see the pay-
off as really wonderful, in terms of putting families in homes
and giving them the opportunity to grow their assets and come
up into the mainstream of American economic life.
Senator Bond. Thank you very much, Ms. Lazar. And as I--I
will submit further questions for the record.
Now, I turn to Senator Mikulski for her questions.
Senator Mikulski. Thank you very much.
And, Mr. Chairman, I just want to put my opening statement
into the record, please. Thank you.
[The statement follows:]

Opening Statement of Senator Barbara A. Mikulski

I want to welcome Neighborhood Reinvestment Corporation Executive
Director Ellen Lazar.
The Neighborhood Reinvestment Corporation and its NeighborWorks
organizations have extremely impressive records.
It has a mission of providing an opportunity structure that helps
those who practice self-help.
The Neighborhood Reinvestment Corporation really maximizes the
taxpayer's ``bang-for-the-buck''--it leverages 14 private dollars for
$1 of public investment.
On a local level, in my hometown of Baltimore, the NeighborWorks
organization is extremely effective in assisting neighborhoods facing
shortages of decent, affordable housing.
Unfortunately, we live in a world with distressed communities that
are underserved by the mainline private financial institutions.
People living in these communities want to move up the ladder of
opportunity--but they can't access the help they need to reach to own a
safe, decent, affordable home.
I believe there are 3 types of neighborhoods--stable, stressed, and
siege.
NeighborWorks organizations help keep stable neighborhoods stay
that way and ensure that stressed neighborhoods don't become sieged by
empowering residents to rehabilitate and purchase homes.
I think that our other Federal agencies with the mission of
promoting the American Dream of homeownership can learn from the
Corporation's experience preventing predatory lending--a despicable
practice where scam artists gouge the poor.

Senator Bond. Without objection. I apologize for not
calling on you at the time.
Senator Mikulski. No. No. No. No. No. No.
Senator Bond. It is my fault.
Senator Mikulski. I had to step outside for a moment.
Ms. Lazar, we just think it is great that you are the
Executive Director of Neighborhood Reinvestment. Neighborhood
Reinvestment has been one of these quiet, often overlooked
agencies. And it has had good stewardship in the past.
When I first came to this subcommittee and worked, then,
with my colleague, Senator Garn, it was like--something like a
$19 million appropriation. And this has always had strong
Congressional support, even though it is not always in the
public eye.
You bringing your background from CDFI, I think, is just
going to be terrific, because you understand, essentially,
housing financing, and at the same time, strong grassroots
support. So, we think you are the right Director for this new
century.

PREDATORY LENDING

I want to go to predatory lending. And you might or might
not know that--with the cooperation of the chairman, we have
really tried to do something about predatory lending--flipping,
as it is called in Baltimore. We were a--we were one of the
worst places in America, particularly for FHA--the use of FHA
to gouge the poor and defraud the taxpayer. We are working on
that. And I want to thank Secretary Martinez for really staying
the course of this.
Could you tell me, though, what you are doing in predatory
lending? And I know that there are two issues; one, FHA, which
we have concentrated on, here; then there is the sub-prime
issues, which were really beyond the scope of an Appropriations
Committee. But I know Housing and Banking is looking at it.
And could you tell us, though, how you are involved, and
what tools or other things that you might need to help with it?
And I would like to, if we could, concentrate on the FHA. And I
will then tell you why.
In Baltimore, after the poor were gouged and they went into
default or bankruptcy because of these gimmicks--17 percent
interest--I mean, I will not even--I will not take you through
the melancholy anecdotes.
But then there was FHA--and in deteriorating neighborhoods,
it contributed to decay. So, they went from deterioration to
decay. Then we had teeter-totter neighborhoods, meaning that
they--they had been through blockbusting; they had been through
trauma, aging in place, kids moving out, speculators coming,
and the gougers. Very stressed neighborhoods.
And then there is an FHA house standing abandoned, which
then contributes more to the totter, when we are trying to move
stressed neighborhoods to stable.
What--what--what have you been doing? What more would you
like to do, that we could help you do, both in terms of helping
the poor not be gouged, sticking it to the predatory lenders
through proper law enforcement, and third, the FHA disposition?
Ms. Lazar. Okay.
Senator Mikulski. Even suggestions you might have for us to
take to Mr. Martinez.
Ms. Lazar. Okay. I am happy to do that.
There are a number of areas that we have been working in on
the predatory lending front; primarily in education. We have
been the convener of a lot of symposia.
Senator Mikulski. For who?
Ms. Lazar. For people in the community development field
and government in order that they may educate residents. Our
research is widely disseminated for the field. I could share
some of that with you. I think it would be interesting for you
to have.
We worked, most recently, down in Georgia. We had, at one
of our training institutes in Atlanta, a day-long discussion on
predatory lending in Georgia.
We have done things all over the country to bring together
folks to talk about predatory lending, but there is more than
talking about it that needs to get done.
In our pre- and post-purchase counseling modules, we are
making people very aware of the issues around predatory
lending.
In addition, when we have loans that come in to us to
refinance, where we are holding the second note and the loans
have been subordinated to us, we have an opportunity to really
look and evaluate those prospective loans and may be able to
stop predatory loans from going forward.
Where families have already gotten stuck with what looks
like an egregious loan, we have worked with Freddie Mac to put
together a loan program called the Home Equity Loss Prevention
Program--HELP. The HELP Program basically provides an
opportunity for a family to refinance a loan with this Freddie
Mac product, which would allow them to take some cash out for
home improvements or other financial needs, but still maintain
their equity in their home.
We are also working closely with Freddie Mac on their
``Don't Borrow Trouble'' campaign around the country.
Personally, I have been a great advocate at finding more
dollars for public education and advertising in this arena. I
think that public service announcements are key to reaching the
folks that are the targets and the victims of predatory lending
practices. I think more resources in that area would be very,
very useful.
I also think more funding for the Federal Trade Commission
and the Justice Department's enforcement activities here would
be very helpful. There is so much activity out there and if
they do not have the ability to go after it and make it stick,
it makes it that much harder to enforce.
I would be very enthusiastic about looking at more
enforcement tools, as well as more broader public education
tools through the media.
Senator Mikulski. Well, I think some of this can be done.
And really, we can recruit the private sector, particularly
Freddie Mac, Fannie Mae. I believe the mortgage bankers really
want to participate in this.
And we will be talking about predatory lending with
Secretary Martinez and continuing our Baltimore effort, but one
of the things I would like you to think about, and if it is an
appropriate role for Neighborhood Reinvestment--you are the
home for a lot of the nonprofits in this country that are
involved in housing.
And one of the important things--and this goes to faith-
based--okay--et cetera, which is pre-counseling for home
ownership, whether it is to avoid flipping, whether it is--even
if you are getting into Section 8, it is not buying a home. We
all know this. It is keeping a home. And really, for
Neighborhood Reinvestment to be training the trainers.
The other is--and we are just brainstorming here for a
moment, but we would need to know more about this. As we look
at faith-based initiatives--I am sure my colleague has
experienced what I have--every little church, some even with
storefronts, want to come in to get in on it. They think there
is this big pot of money that we are going to give out there in
the community.
What we find is they do not know what a community
development corporation is. They--and even if there is a large
church, like in the AME tradition, which has always been
excellent, in terms of community involvement. Capacity
building, you know.
And I would like--which also, for many people in the Latino
community, the African-American community, the faith-based
organizations are where they are going to learn the most; not
through some government person coming to an improvement
association meeting that has got seven people coming to it,
when Reverend Reid has got 10,000 people in the AME Church on
Sunday.
Ms. Lazar. Yes.
Senator Mikulski. So, my point is that capacity building,
as well as public information on home ownership, of which
avoiding predatory lending would be one component, and then
perhaps a linkage to the faith-based, as we are gearing up on
faith-based, but even to make highest and best use of faith-
based, one of which is their incredible ability to communicate
with their congregations.
Ms. Lazar. Yes. I understand what you are saying, Senator.
Senator Mikulski. And the trust involved there. And many of
them have credit unions.
Ms. Lazar. Yes. We do a huge amount of training.
Senator Mikulski. Is that beyond your scope or----
Ms. Lazar. We do a lot of training for trainers, and a lot
of training through our Home Ownership Campaign.
We have begun some dialogs with a number of faith-based
organizations, the National Council of Black Churches and other
organizations to see how we can work together to serve
communities.
We will continue fostering those relationships and get back
to you about how we are doing and where we are able to make
some inroads.
A lot of our organizations already have strong
relationships with their faith-based congregations. We can see
how and document for you how they are working together on this
issue.
Senator Mikulski. Mr. Chairman, I know my time is up. One
of the things I would like Ms. Lazar--if she could suggest to
both you and I, the recommendations of Neighborhood
Reinvestment for HUD, if you think--on what to do with this FHA
disposition area.
Senator Bond. I think that is a----
Senator Mikulski. Really. Really.
Senator Bond. That is a--that is something that I keep
hearing things that----
Senator Mikulski. Me, too.
Senator Bond [continuing]. Make me scratch my head and
wonder what is--what is happening.
Senator Mikulski. Yes. And where HUD, FHA--homes
languishing, as I just said, in our communities--not only
predatory, are then--really help destroy the neighborhood--and
somewhat--so----
Senator Bond. That--we would--as I have--we have asked
for--we have asked for advice and guidance in a number of
areas. And we look forward to hearing your suggestions. And
obviously, we will continue to be in touch with you and----
Ms. Lazar. Well, we are happy to do it.
Senator Bond [continuing]. Thank you very much for--for
your good work and--and for your wise counsel, which I assume
we will be receiving shortly.
Thank you very much.
Senator Mikulski. Yes. Thank you for all the great things
in Baltimore and Salisbury.
Ms. Lazar. Great. Glad you are happy.
Senator Mikulski. Thank you.

SUBCOMMITTEE RECESS

Senator Bond. And with that, the hearing is recessed. Thank
you very much.
Ms. Lazar. Thank you very much.
[Whereupon, at 11:30 a.m., Thursday, April 25, the
subcommittee was recessed, to reconvene subject to the call of
the Chair.]

DEPARTMENT OF VETERANS AFFAIRS AND HOUSING AND URBAN DEVELOPMENT AND
INDEPENDENT AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2002

----------

WEDNESDAY, MAY 2, 2001

U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 10 a.m., in room SD-138, Dirksen
Senate Office Building, Hon. Christopher S. Bond (chairman)
presiding.
Present: Senators Bond, Craig, Mikulski, Leahy, and
Johnson.

DEPARTMENT OF VETERANS AFFAIRS

STATEMENT OF HON. ANTHONY PRINCIPI, SECRETARY OF
VETERANS AFFAIRS
ACCOMPANIED BY:
NORA E. EGAN, CHIEF OF STAFF, OFFICE OF THE SECRETARY
THOMAS L. GARTHWAITE, M.D., UNDER SECRETARY FOR HEALTH,
VETERANS HEALTH ADMINISTRATION
FRANCES M. MURPHY, M.D. MPH, DEPUTY UNDER SECRETARY FOR HEALTH,
VETERANS HEALTH ADMINISTRATION
JOHN R. FEUSSNER, M.D., CHIEF RESEARCH AND DEVELOPMENT OFFICER,
VETERANS HEALTH ADMINISTRATION
CHARLES V. YARBROUGH, CHIEF FACILITIES MANAGEMENT OFFICER
JIMMY NORRIS, CHIEF FINANCIAL OFFICER
ART KLEIN, DIRECTOR OF BUDGET OFFICE, VETERANS BENEFITS
ADMINISTRATION
JOSEPH THOMPSON, UNDER SECRETARY FOR BENEFITS, VETERANS
BENEFITS ADMINISTRATION
PATRICK NAPPI, DEPUTY UNDER SECRETARY FOR BENEFITS, VETERANS
BENEFITS ADMINISTRATION
ROBERT J. EPLEY, ASSOCIATE DEPUTY UNDER SECRETARY FOR POLICY
AND PROGRAM MANAGEMENT, VETERANS BENEFITS ADMINISTRATION
JAMES W. BOHMBACH, CHIEF FINANCIAL OFFICER, VETERANS BENEFITS
ADMINISTRATION
ROGER RAPP, ACTING UNDER SECRETARY FOR MEMORIAL AFFAIRS,
NATIONAL CEMETERY ADMINISTRATION
VINCENT L. BARILE, DEPUTY UNDER SECRETARY FOR MANAGEMENT,
NATIONAL CEMETERY ADMINISTRATION
DANIEL TUCKER, DIRECTOR, BUDGET AND PLANNING SERVICE,
DEPARTMENTAL ADMINISTRATION
TIM S. McCLAIN, GENERAL COUNSEL, OFFICE OF THE SECRETARY
JOHN H. THOMPSON, DEPUTY GENERAL COUNSEL
RICHARD J. GRIFFIN, INSPECTOR GENERAL, OFFICE OF THE SECRETARY
ELIGAH D. CLARK, CHAIRMAN, BOARD OF VETERANS' APPEALS, OFFICE
OF THE SECRETARY
GUY H. McMICHAEL III, ACTING PRINCIPAL DEPUTY ASSISTANT
SECRETARY, ASSISTANT SECRETARY FOR INFORMATION AND
TECHNOLOGY
D. MARK CATLETT, ACTING PRINCIPAL DEPUTY ASSISTANT SECRETARY
FOR MANAGEMENT
DENNIS M. DUFFY, PRINCIPAL DEPUTY ASSISTANT SECRETARY,
ASSISTANT SECRETARY FOR POLICY AND PLANNING
ROBERT W. SCHULTZ, DEPUTY ASSISTANT SECRETARY FOR
ADMINISTRATION, ASSISTANT SECRETARY FOR HUMAN RESOURCES AND
ADMINISTRATION
E. PHILLIP RIGGIN, DEPUTY ASSISTANT SECRETARY, ASSISTANT
SECRETARY FOR CONGRESSIONAL AFFAIRS
CLAUDE M. KICKLIGHTER, DIRECTOR FOR SPECIAL EVENTS, ASSISTANT
SECRETARY FOR PUBLIC AND INTERGOVERNMENTAL AFFAIRS

OPENING STATEMENT OF SENATOR CHRISTOPHER S. BOND

Senator Bond. Good morning. The Subcommittee on Veterans
Affairs, HUD and Independent Agencies will come to order.
This morning we will be hearing testimony from the
Department of Veterans Affairs on its fiscal year 2002 budget
request. We are delighted to be able to welcome this morning
Secretary Tony Principi for his first appearance under the new
administration before the subcommittee.
Tony is an old hand at VA, having served under the last
Bush administration as Deputy Administrator, and then as Acting
Secretary. Tony, your wealth of knowledge and expertise about
the issues confronting the Department are a mixed blessing. On
the one hand, it has not taken you long to get up to speed. On
the other hand, I do not think you expect much of a honeymoon.
We are expecting that you will be able to address quickly and
effectively the myriad of significant challenges before you
and, as we all know, there are more than just a few.
VA's budget proposal totals $51 billion, including $23.4
billion in discretionary spending, an increase of $1 billion
over the current fiscal year. In addition, VA's medical
collections are expected to increase significantly to a total
of $896 million next year. Coupled with collections, medical
care for veterans would total a record amount of nearly $22
billion. This increase demonstrates the President's commitment
to veterans' health care. It is one of the largest increases we
have seen requested for medical care.
Now, some have questioned whether this budget is enough to
provide high quality, accessible care to all veterans who seek
it. I think the President's budget is a very good start. We
look forward to discussing it with you and working with you
when there are other areas of the budget that need fine-tuning.
Frankly, this year's budget is a more honest budget than we
have seen from VA in quite sometime. The reason is, VA has
acknowledged its spending patterns have not matched up with its
budget as requested in three key areas and has adjusted its
budget accordingly. Improving the VA budget process is critical
to ensure there is accountability for the funds provided.

VA'S MEDICAL CARE PROGRAM

For example, I am very troubled that spending has not
matched VA's plans, particularly in the area of hepatitis C. We
need to understand better why this has happened. There are many
different explanations I have heard. The reasons may be, there
was not adequate attention paid to hepatitis C, but in any
event, the amount of money spent on hepatitis C was totally
different from what was requested for it.
Mr. Secretary, as you found upon your return to VA the
Veterans Health Administration has made some tremendous changes
over the past 6 years. A number of initiatives begun under
former Secretary for Health Dr. Kenneth Kizer have resulted in
moving VA from primarily a hospice system to a comprehensive
care outpatient system.
I think that is a real success story, that the VA has been
able to increase significantly the total number of veterans
served by VA medical care. One million people, or 36 percent
more veterans today are getting VA care compared to 1995. That
is a huge number, and at the same time I think VA has been able
dramatically to be able to improve the quality of patient care,
and the accessibility of its services.
Today, VA has tripled the number of community-based
outpatient clinics it had in 1995, making care available closer
to home for thousands of veterans nationwide. I can tell you,
in Missouri it has been very warmly received, and it has been a
badly needed improvement in the care, but there is a lot more
to be done, and some of the really tough issues have not yet
been tackled, especially the need to restructure VA's capital
assets to make better use of health care resources and
eliminate wasteful expenditures on outmoded and unneeded
buildings, and there were about 4,700 in VA's inventory last
time we checked, total buildings. Not all of them are needed,
but I am sure some of them are.
According to the GAO, VA is wasting $1 million a day to
maintain unneeded buildings, and that could be a conservative
estimate. We look forward to getting an update on the capital
asset realignment for enhanced services, or CARES initiative.
As I understand it, VA should be concluded phase 1 of CARES,
which is basically a review of VISN 12 in Chicago.
Tony, you probably know we have been studying since at
least 1995 whether we really need four VA hospitals in Chicago.
We need to be sure that CARES, which, if it works properly,
should result in a comprehensive long-term strategic plan for
the Veteran Health Administration, is on track and working the
way it should.
I am pleased that you have included significant resources,
$115 million, in your budget for CARES-related infrastructure
projects which emerge from this planning process. This should
reassure everyone we have every intention of moving forward
with the infrastructure improvements that will be recommended
out of the CARES process.
Also, VHA must adapt further to address the declining and
aging veteran population, including the implementation of new
programs which will help aging veterans get long-term care in
noninstitutional settings wherever possible, such as the
Millennium Act, which was enacted in 1999 to better meet aging
veterans' needs, and we hope that we can see progress, but it
has been slow in implementing the requirements of the act, and
we need to understand why.
So the issue of access, while great advances have been made
improving the accessibility of services, is a work in progress.
About 13 percent of veterans who currently use VA must travel
more than 30 miles to reach VA medical care. GAO has done some
work for us which will be included in testimony for the record
today which identifies significant disparities across the
system.
VHA also must consider the increasing number of so-called
Priority 7's. These are folks who formerly were not able to get
to VA medical care. In the past several years, VA has increased
the number of higher-income, nonservice-connected veterans to
about 20 percent of all its users from less than 4 percent in
1996. We should be proud that this deserving population is able
to get care today. However, we need to consider whether they
should bear a greater level of the cost, as the current level
of collections from their insurance and copayments covers only
about 10 percent of the cost of their care, and that care
provided to them is not coming at the expense of low-income
service-connected veterans who often rely exclusively on VA for
their care.
These are but a few of the issues before the Veterans
Health Administration.

VETERANS BENEFITS ADMINISTRATION

With respect to the Veterans Benefits Administration, the
budget includes almost $1.1 billion for VBA, $133 million, or
13 percent increase over the current year. This increase again
signifies the administration's strong commitment to veterans'
programs.
Mr. Secretary, you have indicated that addressing the
backlog is your highest priority, and have announced a goal of
processing regional disability claims within 100 days by the
summer of 2003. We are getting the backlog down to 250,000.
This is an admirable goal, cutting both those in half. The
question is, is it achievable? Good luck.
VBA is currently taking more than 200 days to process a
claim, and the backlog is about 500,000. While VBA is making
some progress in timeliness and claims processing, progress has
been hindered by the duty to assist legislation enacted last
year, and then the former Secretary's decision to grant
disability compensation for Vietnam veterans with Type II
diabetes.
It seems VBA's problems never end. Last year, VBA claimed
its failure to reach its 1999 goals were the result of
organizational and cultural shifts in VBA, along with the
increased difficulty and complexity of the workload. This year,
it is the duty to assist and diabetes.
While I understand the latest crisis resulted from
legislation which greatly expands VBA's requirements, and which
was not fully supported by VBA, duty to assist was not
unanticipated. Also, many improvements which have been
suggested over the years, such as moving case management,
centralizing certain functions, and holding managers
accountable for their performance, still have not been fully
implemented.
Mr. Secretary, your efforts to take a fresh look at this
through the task force you have created are greatly appreciated
and absolutely necessary. We want to work with you to provide
the resources you need to implement these needed reforms. It is
my view that you must have a long-term strategy, not just more
Band-Aids to address the immediate crises, that will take VBA
well beyond the current problems.
We look forward to seeing your detailed plan, including
resources requirements, later this summer. We hope when you
return next year to testify on the fiscal year 2003 budget,
there will be some good news.

NATIONAL CEMETERY ADMINISTRATION

Finally, for the National Cemetery Administration, VA is
requesting a 11-percent increase, for a total of $121 million.
This includes $10 million for the National Shrine commitment,
which ensures that the backlog of deferred maintenance needs be
addressed and the resting places of our fallen heroes may be
maintained in an appropriately dignified manner.
Also, construction funding totalling $87 million is
requested for seven cemetery projects.
In conclusion, as I stated at the outset, I believe this is
a robust budget for VA which targets some critical needs. I
look forward to discussing with you and my colleagues whether
additional funds might be needed to ensure the important goals
you have set forth for the coming year can be met.
Before closing, let me raise an additional issue. During
last year's hearing, I raised some concerns about the quality
of care our Nation's veterans received in nursing homes. In the
aftermath of that hearing, we focused whether policies and
procedures were in place to coordinate the oversight efforts of
all Federal and State regulatory agencies when monitoring
problem nursing homes.
Since then, we have worked with the General Accounting
Office in examining the VA's policy for overseeing the quality
of care provided to veterans. We look forward to the final
results of the GAO study and sharing the findings with the VA.
We have a series of questions about the VA's current and
proposed policies which will address the goal of enhancing and
encouraging the VA's rigorous oversight of nursing homes that
care for our veterans across the United States.
[The Information follows:]

VA Health Care--Community-Based Clinics Improve Primary Care Access
(GAO-01-678T)

(By Cynthia Bascetta)

Chairman Bond, Ranking Member Mikulski, and Members of the
Subcommittee: We are pleased to contribute this statement for the
record of the Subcommittee's deliberations on the President's fiscal
year 2002 budget request for the Department of Veterans Affairs (VA).
This budget proposes $22.3 billion for health care system expenditures
by the Veterans Health Administration (VHA) to serve an estimated 4.1
million veterans and other beneficiaries.\1\ This system comprises 22
health care networks, which operate over 700 medical facilities, most
of which are community-based outpatient clinics (CBOC).
---------------------------------------------------------------------------
\1\ About 9 percent of VHA's patients nationwide are nonveterans,
for example, dependents of veterans who died of service-connected
disabilities, patients provided humanitarian care, employees given
preventive immunizations, and beneficiaries seen through sharing
agreements with the Department of Defense.
---------------------------------------------------------------------------
As you know, VHA launched a major initiative in February 1995 to
expand its network of CBOCs. Before 1995, VHA operated about 175
community-based clinics, as well as 172 hospitals, which also offered
outpatient services. Since VHA launched its initiative, about 400 CBOCs
have opened and another 145 CBOCs are currently planned. These newly
opened and planned clinics, hereafter referred to as Initiative CBOCs,
were to operate essentially as physicians' offices focusing on primary
care and were to be located in close proximity to VHA's patients.
VHA's stated goals for its Initiative CBOCs emphasized making
access to care more convenient for its existing users, especially those
with compensable service-connected disabilities or incomes below
established thresholds.\2\ For these high priority veterans--VHA's
traditional population--Initiative CBOCs were expected to improve
access, for example, by reducing the need to travel long distances or
to travel in congested urban traffic.
---------------------------------------------------------------------------
\2\ VHA uses a sliding scale of income thresholds, depending on
number of dependents.
---------------------------------------------------------------------------
My comments focus on (1) the accessibility of VHA primary care for
patients who used VHA health care in the past, including the potential
improvements that would result from opening planned Initiative CBOCs,
and (2) the characteristics of Initiative CBOC users. To conduct our
work, we surveyed VHA's 22 networks concerning their existing and
planned CBOCs, analyzed VHA's outpatient care database for use patterns
and demographic information, and analyzed information in a VHA database
that identifies the geographic location of VHA's patients to determine
the effect of recently opened and planned CBOCs on their proximity to
VHA's health care facilities.
In summary, Initiative CBOCs have contributed to improved
accessibility of VHA primary care for patients who used VHA facilities
in the past; however, access remains unevenly distributed across the
networks. Planned CBOCs should help to further improve access, although
network variation is not likely to be diminished much. While 87 percent
of VHA's patients systemwide live in reasonable proximity to primary
care clinics,\3\ 13 percent--about 432,000 patients concentrated in 6
networks--still live more than 30 miles from a VHA primary care clinic.
VHA's currently planned CBOCs could provide reasonable proximity to
primary care for an additional 68,000 patients, but the majority of
those who live more than 30 miles from a primary care clinic would
still reside in 6 of the 22 networks. The difficulties in providing
cost-effective VHA-staffed CBOCs or contract care in areas with few
patients make it hard to improve accessibility, according to network
managers.
---------------------------------------------------------------------------
\3\ VHA's primary care clinics include Initiative CBOCs, hospital-
based clinics, and pre-existing community outpatient clinics.
---------------------------------------------------------------------------
Although Initiative CBOCs largely serve patients who have received
VHA health care in the past, they have also facilitated access for new
patients.\4\ In fiscal year 2000, for example, about 135,000 Initiative
CBOC users were new patients, including 56,000 higher-income veterans.
During the same year, 158,000 new higher-income patients used other VHA
outpatient facilities, but not Initiative CBOCs. Although their numbers
are growing, new higher-income patients remain a relatively small
segment of both patients using Initiative CBOCs and patients using any
VHA outpatient health care.
---------------------------------------------------------------------------
\4\ New patients are defined as those who did not obtain health
care through VA for 3 fiscal years before a visit. Past patients, in
contrast, are those who did receive VA health care at any time during
the 3 preceding fiscal years.
---------------------------------------------------------------------------
background
Regional directors of VHA's 22 health care networks (known as
Veterans Integrated Service Networks, or VISNs) \5\ were given
responsibility for CBOC planning. VHA guidance stated that attracting
new patients should not be the sole or primary goal of a new CBOC. This
guidance instead noted that planners should exercise caution because
any new patients attracted to CBOCs must be accommodated within
existing resource constraints.
---------------------------------------------------------------------------
\5\ In 1995, VHA created 22 VISNs, a new management structure to
coordinate the activities of and allocate funds to VHA medical
facilities in each region. See appendix I for a list of these networks.
---------------------------------------------------------------------------
Since VHA's CBOC initiative was launched in February 1995, the
number of CBOCs has more than tripled. As of February 28, 2001, VHA had
573 operating CBOCs, including nearly 400 Initiative CBOCs. According
to network officials, firm plans for another 100 CBOCs have already
been authorized by the Congress or have been submitted to VHA
headquarters or the Congress for consideration.\6\ Tentative plans for
45 CBOCs are in the development phase.\7\ Network managers expect most
of these plans to be implemented within the next 3 years. Networks vary
in their numbers of existing and planned CBOCs, as figure 1 shows.
---------------------------------------------------------------------------
\6\ Of these planned CBOCs, 12 have already opened. Because they
opened after our reference date of February 28, 2001, we counted them
among the firmly planned CBOCs.
\7\ Network managers also indicated that an additional 70 locations
are being considered. Because the plan development phase has not begun,
we excluded them from our analyses.

Although new CBOCs continue to open, the peak of expansion seems to
have passed. From March 1998 through February 1999, 124 Initiative
CBOCs opened. Fewer have opened each year since. If networks implement
all planned CBOCs within the next 3 years, then new openings will
average about 50 CBOCs annually.
Existing CBOCs (including both Initiative and pre-existing CBOCs)
differ somewhat in the services they provide. The vast majority--more
than 90 percent--offer primary care, and about half offer mental health
services.\8\ In addition, one-third offer other services as well.\9\
---------------------------------------------------------------------------
\8\ The Veterans Health Care Eligibility Reform Act (Public Law
104-262) authorized VHA to provide preventive care. Consistent with
this, more than 97 percent of Initiative and planned CBOCs offer
primary care, compared to 82 percent of pre-existing CBOCs. In
contrast, more than 80 percent of pre-existing CBOCs offer mental
health services, compared to 45 percent of Initiative CBOCs.
\9\ These other services typically include ancillary or preventive
services (such as laboratory testing or nutritional counseling),
although some CBOCs offer limited specialty care as well.
---------------------------------------------------------------------------
Systemwide, VHA staff operate about 75 percent of VHA's current
CBOCs using VA-owned or leased space. Contract arrangements are,
however, becoming increasingly common. Contractors operated only about
1 in 25 CBOCs opened before February 1995. In contrast, one in three
Initiative CBOCs are contract-run, and one in two of VHA's planned
CBOCs are expected to involve contracted staff and space.
VHA's initiative to expand CBOCs was one component of a broader set
of changes intended to improve veterans' access to health care.
Notably, the Veterans Health Care Eligibility Reform Act of 1996
authorized a uniform package of health care benefits for all veterans.
As a result, VHA's traditional veteran patients became eligible for a
broader array of services (including preventive care) than was
previously available. In addition, veterans with incomes higher than
established thresholds could also receive the same uniform benefit
package if VHA determines that it has more resources than it needs to
serve traditional patients.
Over the last 6 years, VHA's patient base has increased
dramatically. For example, VHA served 2.8 million patients in fiscal
year 1995 compared to 3.8 million in fiscal year 2000, a 36 percent
increase. VHA's fiscal year 2002 budget projects that about 4.1 million
patients will be served, representing an increase of almost 50 percent
since 1995.
CBOCs are Improving Primary Care Access, but Results Vary Among
Networks
As the number of Initiative CBOCs has increased, the percentage of
VHA's patients who live in reasonable proximity to a VHA primary care
facility has increased to 87 percent. In 1995, we found that about two-
thirds of VHA patients had reasonable proximity to VHA health care
facilities, which we then measured as living within 25 miles of an
outpatient clinic.\10\ After we recommended that VHA establish a time
or distance standard for CBOCs,\11\ VHA began to report the number of
patients who lived within 30 miles of its facilities.
---------------------------------------------------------------------------
\10\ VA Health Care: How Distance From VA Facilities Affects
Veterans' Use of VA Services (GAO/HEHS-96-31, Dec. 20, 1995).
\11\ VA Health Care: Improving Veterans' Access Poses Financial and
Mission-Related Challenges (GAO/HEHS-97-7, Oct. 25, 1996).
---------------------------------------------------------------------------
VHA's most recent report \12\ showed that about 86 percent of its
total fiscal year 1999 patient population, 3.4 million patients, lived
within 30 miles of a VHA outpatient facility. Since that time, VHA has
opened about 100 additional Initiative CBOCs, and we estimate that the
percentage of those patients living within 30 miles of a VHA primary
care clinic has increased to 87 percent.\13\
---------------------------------------------------------------------------
\12\ Geographic Access to Veterans Health Administration (VHA)
Services in fiscal year 1999: A National and Network Perspective,
report by the planning systems support group, a field unit of the VHA
Office of Policy & Planning (April 2000).
\13\ Overall, 88 percent of VHA's patients live within 30 miles of
a VHA outpatient facility, but not all of these facilities offer
primary care.
---------------------------------------------------------------------------
However, the percentage of the patients who live 30 miles or less
from a primary care clinic is not evenly distributed among VHA's
networks. As figure 2 shows, the percentage of patients who are within
30 miles of VHA primary care ranges from less than 70 percent in some
largely rural networks, such as the VHA Upper Midwest Health Care
Network (VISN 13), to nearly 100 percent in largely urban networks,
such as the Veterans Integrated Service Network--Bronx (VISN 3).

Moreover, approximately 432,000 patients--or about 13 percent of
VHA's patient population--live more than 30 miles from a VHA primary
care clinic. As figure 3 shows, almost 60 percent of these 432,000
patients live in six networks.

If networks implement all firm plans for 100 new CBOCs, then more
than 50,000 additional patients will be within reasonable proximity to
VHA primary care. In addition, another 18,000 patients will have
reasonable proximity to primary care if the tentative plans for 45 more
CBOCs are also implemented.\14\
---------------------------------------------------------------------------
\14\ If all plans for CBOCs were implemented, about 89 percent of
VA's patients would live within 30 miles of a VA primary care clinic,
an increase of about 2 percentage points over current levels.
---------------------------------------------------------------------------
However, opening all planned CBOCs would not eliminate uneven
access across the networks. Specifically, we estimate that 364,000
patients would remain more than 30 miles from VHA primary care, and the
same six networks would still account for the majority (60 percent) of
these patients. Moreover, more than 68,000 patients (19 percent) live
in one network--the Veterans Integrated Service Network--Jackson (VISN
16)--and more than 148,000 patients (41 percent) live in the other five
networks.
Managers in these networks noted challenges to improving the
proximity of VHA primary care to their patients. In some areas, there
are not enough VHA patients to support a cost-effective VHA-run CBOC.
Even where there are enough patients, network managers reported that
there can be difficulties recruiting VHA medical personnel to staff
CBOCs or obtaining appropriate, affordable space. They also noted
obstacles to arranging contract care. For example, some network
managers mentioned difficulties in finding local providers who were
willing to enter into contracts to provide primary care to veterans at
reasonable costs.
Network managers nationwide noted that reducing the number of
patients who live more than 30 miles from a VHA health care facility is
not their only goal when planning CBOCs. Many, for example, mentioned
reducing veterans' travel time to 30 minutes or less--whether because
of distance, congested urban traffic, or other factors. VHA is in the
process of estimating the time its patients must spend traveling to VHA
health care facilities, an endeavor made possible by recent advances in
computer mapping software. Because many patients who are within a 30-
mile radius of a health care facility may need to travel more than 30
minutes to reach it, switching to a time-based measure of access will
likely reduce the number of patients considered to have reasonable
access. As a result, the uneven accessibility across networks portrayed
in figure 2 is likely to change once VHA begins measuring access in
terms of travel time rather than distance.
CBOCs and Other Outpatient Facilities Serving a Relatively Small, but
Growing Number of New, Higher-Income Veterans
New VHA patients have represented about 30 percent of Initiative
CBOC users in each of the last 4 years, although their numbers are
growing. In fiscal year 2000, for example, 454,000 patients used
Initiative CBOCs,\15\ including 135,000 who were new patients to the
VHA system. In contrast, less than 10,000 new VHA patients were
Initiative CBOCs users in fiscal year 1997. As figure 4 shows, each
year since 1998 VHA has experienced significant increases in the use of
Initiative CBOCs by both new patients and patients who had previously
used other VHA outpatient facilities.
---------------------------------------------------------------------------
\15\ Most patients who used Initiative CBOCs also used VHA's other
facilities to obtain health care services.

The percentage of Initiative CBOC patients who were new to VHA
varied across networks. In fiscal year 2000, for example, new VHA
patients who used CBOCs ranged from 16 to 42 percent, as table 1
shows.\16\
---------------------------------------------------------------------------
\16\ These analyses are based on the network in which patients
reside, rather than the location of the Initiative CBOC used. That is,
our numbers describe patients who live within a network, rather than
patients who use the facilities within that network. For example,
patients who live in VISN 6 may have used Initiative CBOCs in a
neighboring network, such as VISN 5. Such patients would be included
only in the data reported for VISN 6.
---------------------------------------------------------------------------

Table 1.--Percentage of Initiative CBOC Patients Who Were New VHA
Patients in Fiscal Year 2000

Number of
Percent networks
16-20............................................................. 3
21-25............................................................. 4
26-30............................................................. 8
31-35............................................................. 3
36-40............................................................. 2
40-42............................................................. 2

Note: These analyses are based on the network in which patients reside,
rather than the location of the Initiative CBOC used.

Source: GAO analysis of information provided by VHA.

Of the 135,000 new VHA patients using Initiative CBOCs in fiscal
year 2000, about 56,000 were higher-income veterans, up from 1,300 in
fiscal year 1997.\17\ Moreover, higher-income veterans as a share of
new patients who use Initiative CBOCs have risen from 14 to 41 percent
from fiscal year 1997 through fiscal year 2000 (see figure 5).\18\
---------------------------------------------------------------------------
\17\ In fiscal year 2000, a total of about 100,000 higher-income
veterans used Initiative CBOCs; however, 44,000 had previously obtained
outpatient health care from VHA.
\18\ A small percentage of Initiative CBOC patients do not fall
into either the traditional veteran population (those with compensable
service-connected disabilities or low income) or the higher-income
veteran population. These patients include nonveterans, veterans whose
eligibility for benefits was being assessed, and veterans whose
disability and income status were not identified in the outpatient
database. They accounted for about 5 percent of Initiative CBOC
patients in fiscal year 1997, but less than 4 percent of Initiative
CBOC patients in fiscal years 1998 through 2000.

Like the percentage of new patients, the percentage of new higher-
income patients using Initiative CBOCs varied across networks. In
fiscal year 2000, for example, new higher-income veterans who used
Initiative CBOCs ranged from 15 to 62 percent, as table 2 shows.

Table 2.--Percentage of New Initiative CBOC Patients Who Were Higher-
Income Veterans in fiscal year 2000

Number of
Percent networks
15-24............................................................. 2
25-34............................................................. 7
35-44............................................................. 5
45-54............................................................. 6
55-62............................................................. 2

Note: These analyses are based on the network in which patients reside,
rather than the location of the Initiative CBOC used.

Source: GAO analysis of information provided by VHA.

Systemwide, most new higher-income veterans do not use Initiative
CBOCs, but instead use only other VHA outpatient facilities.
Nevertheless, the number and share of new higher-income patients using
Initiative CBOCs have increased dramatically. The proportion of new
higher-income veterans who use Initiative CBOCs has grown from 2
percent in fiscal year 1997 to 26 percent in fiscal year 2000.\19\ As
previously discussed, the number of these new higher-income patients
has increased from 1,300 in fiscal year 1997 to 56,000 in fiscal year
2000. To put this in perspective, during the same period, the number of
new higher-income veterans using other VHA outpatient facilities
exclusively grew from 57,000 to 158,000, as shown in figure 6.
---------------------------------------------------------------------------
\19\ This is consistent with CBOCs growing share of total higher-
income veterans (new and past users) using Initiative CBOCs; from
fiscal year 1997 through fiscal year 2000, the percentage of higher-
income veterans using CBOCs grew from 2 percent to 21 percent.

Nonetheless, new higher-income veterans remained a small segment--
about 6 percent--of all patients using VHA's outpatient facilities in
fiscal year 2000, up from 2 percent in fiscal year 1997.
concluding observations
Overall, through its Initiative CBOCs, VHA is steadily making
primary care more available within reasonable proximity of patients who
have used VHA's system in the past. However, the uneven distribution of
patients living more than 30 miles from a VHA primary care facility
suggests that access inequities across networks may exist. Also, the
improvements likely to result from VHA's planned CBOCs indicate that
achieving equity of access may be difficult. Nonetheless, we believe
VHA's effort to assess the time it takes patients to reach a VHA
outpatient clinic could provide a better measure and, therefore, a
clearer understanding of access differences among networks.
In addition, our assessment suggests that new CBOCs may have
contributed to, but are not primarily responsible for, the marked
increase in the number of higher-income patients who have sought health
care through VHA over the past few years. While Initiative CBOCs have
undoubtedly attracted some new patients to VHA, our analysis suggests
that new patients would have sought care at other VHA facilities in the
absence of Initiative CBOCs. In that regard, enhanced benefits and
access improvements afforded by eligibility reform may have attracted
more new patients, including those with higher incomes, than VHA's
Initiative CBOCs.
GAO Contacts and Staff Acknowledgements
For more information about this statement, please call Cynthia A.
Bascetta, Director, Health Care--Veterans' Health and Benefits Issues,
at (202) 512-7101, or Paul Reynolds, Assistant Director, at (202) 512-
7109. Key contributors to this statement include Kristen Joan Anderson,
Deborah Edwards, Michael O'Dell, Peter Schmidt, Thomas Walke, and
Connie Wilson.

STATEMENT OF SENATOR BARBARA A. MIKULSKI

Senator Bond. Now, it is my pleasure to turn to my ranking
member, Senator Mikulski.
Senator Mikulski. Thank you very much, Mr. Chairman, and I
am very pleased to welcome our new VA Secretary, Mr. Anthony
Principi.
I had the real pleasure of working with Mr. Principi during
the previous Bush administration when he was Deputy Secretary.
I got to know him and got to appreciate his commitment to the
core mission of the Department of Veterans Affairs, as well as,
I think, bringing to the table significant management skills,
and I believe those skills have only been even more finely
honed and developed during this stint in the private sector.
So we really welcome you back to this, and we know that as
you return to the Department of Veterans Affairs there are many
challenges, budget management, the crises that all health care
in America is facing, as well as the changing demography of the
United States of America, which impacts benefits and health
care in the larger community, but also is particularly focused
also in the Department of Veterans Affairs.
So we look forward to working with you not only on the
appropriations for actual health care, but to deal with issues
like the nursing shortage that I want to hear more about in our
questions and answers, to how we are going to deal with an
aging population, from our World War II moving to frail
elderly, the Korean War veterans, the anticipated aging of the
Vietnam population, which is so significant in number and yet
hard to evaluate where the permanent wounds of war will
manifest themselves once these vets hit 50. Many battle-related
conditions will only manifest themselves as one gets older.
So we look forward to having these discussions with you. As
you know, in the last 2 years, this committee has worked on a
bipartisan basis to provide large increases for veterans'
medical care, and to encourage more veterans to enroll in the
VA system. At the time when high private health insurance and
prescription drugs are really straining the elderly, we can
only expect that this subcommittee will be urged to continue
these increases.
Many veterans will be shifting to VA medical care because
they do not have anywhere else to go. Particularly I am looking
at a population who are in their fifties. They might now be
working in businesses where they do not have health insurance.
Anyway, they are more to be talked about.
So it is also about increasing our funding.
The issue also will be about long-term care, and our
ability to really look at how we will implement the Millennium
Act, and we go forward to your advice. We cannot do it all in 1
year, but I believe that if we look ahead to the changing and
the anticipated boom that the boomers are going to put on the
system, specifically the Vietnam vets, if we look now under
your stewardship that each year we really focus on getting
systems and finances in place, that we do not try to do
everything immediately but really develop this continuing care,
I think that we are going to have something to be proud of over
the next 2 or 3 years.
So we look forward to what you want to do, and how you
would recommend that it be paced from both a managerial and
fiscal standpoint, because I think we all have the same goal.
If we have the right pacing, I believe we can help you get the
right money, so let us think about those.
Also, as you know, the issue of quality has come up. The
Cleveland Plain Dealer has written some scathing articles. I
take no position on the accuracy, nor am I here to finger-
point. I am here to pinpoint, to see really how we can ensure
the highest quality of services, but also know that quality is
directly impacted by staff shortages, a bidding war I would
presume you are in for good nurses and lab technicians and so
on, and then also the improvement of the use of technology,
information systems, fiscal management systems, going after
dead-beat insurance companies to reimburse you so that you have
the tools of the trade, if you will, to really be able to put
the management systems in to improve the quality.
The other thing I want to emphasize is, I am deeply
troubled about hepatitis C. I am deeply troubled about it. The
medical and public health community in Maryland--and as you
know, we have two great academic centers, the University of
Maryland, which has its excellent relationship with our VA
hospital as well as Hopkins in infectious disease, tells me
this hepatitis C is as dangerous, if not more so, to spreading
in the larger community than probably any of the other
infectious disease we could face, and there is no cure for it,
so we have really got to get a handle on hepatitis C.
We also, as I said, come back to the system of collecting
what our veterans and taxpayers are owed from private insurance
companies.

PREPARED STATEMENT

Last, but not at all least, of course, Mr. Thompson, I am
going to ask about the reduction of the processing time for
benefits, and I know it is a high priority of the President. I
know it is a high priority with you, and it is a high priority
with me, so having said that, I would ask unanimous consent
that my full statement go in the record, and look forward to
not only hearing your testimony, but really working hands-on
with you.
Senator Bond. Thank you very much, Senator Mikulski. Your
statement will be included in the record, and we appreciate
your perceptive comments.
[The statement follows:]
Prepared Statement of Senator Barbara A. Mikulski
Mr. Chairman, I am very pleased to welcome our new VA Secretary,
Mr. Principi, to the Subcommittee this morning. Secretary Principi has
a great deal of experience, having served as the Deputy Secretary from
1989 to 1992, and as the Acting Secretary from 1992 to 1993. I look
forward to working with him and his team on the issues facing our
veterans.
My goals for this hearing are two-fold. First, we must ensure that
the new Administration's budget keeps the promises we made to our
veterans. And second, we must make sure the VA is a good steward of
taxpayer dollars--so that our veterans and the American people get the
most for their hard earned money.
The budget requests $51.7 billion for veterans' benefits and
services: $28.3 billion for entitlements, and $23.4 billion for
discretionary programs that are under this Subcommittee's
jurisdiction--a $1 billion increase.
Promises made must be promises kept. Our veterans must have access
to the quality medical care and benefits they deserve--in a timely
manner.
This year's request for medical care is $22.3 billion. This is a $1
billion increase over 2001, and includes $896 million that will be
collected from third-party health insurance and co-payments from
veterans.
In the last 2 years, we have provided large increases for medical
care--$1.7 billion in 2000 and $1.3 billion in 2001--to encourage more
veterans to enroll in the VA system, and to provide them with the
medical care they deserve. At a time when high private health insurance
and prescription drug costs are really straining our elderly on fixed
incomes, we can only expect that the Subcommittee will be urged to
continue these increases.
As medical care funding increases to meet demand, we must not loose
sight of quality. The VA has made great progress on quality control
issues. In fact, a recent New England Journal of Medicine report shows
that heart attack patients treated in VA hospitals receive the same
quality of care as Medicare patients receive in private hospitals.
But I am concerned about a series of recent negative articles in
the Cleveland Plain Dealer that really question the VA's ability to
deliver safe, quality, medical care. I would like to hear from
Secretary Principi about these articles. Are these stories largely
anecdotal, and what has VA done to address these problems?
And while many groups say we need more for medical care, we must
also make sure that the VA can spend what it gets in an efficient way.
We must make highest and best use of tax dollars.
I am troubled that the VA now tells us it can't spend much of the
funding we provided for Hepatitis C. I understand that the treatment
for this disease is very complicated, but this contagious threat should
be a priority. I want to hear from the VA about the proposed
adjustments that result in a $168 million cut to this program.
It is good news that the VA is making progress in collecting what
our veterans and taxpayers are owed from private insurance companies.
The VA will collect almost $100 million more in 2002. But we need to do
more, and I want to know what the VA is doing to ensure that our
veterans and taxpayers get what they are owed.
Collections from veterans will also increase--largely because the
prescription drug co-payment will rise from $2 to $7. I would like to
know how the VA decided on $7, and if there are plans to make further
changes the co-payment.
More money can't solve every problem. Veterans still have to wait
too long to see a doctor. This problem is not just about funding. It is
also about management. The VA must have adequate systems in place to
evaluate this problem, its causes, and develop strategies to reduce
waiting times.
And on the benefits side, while the VA has made progress in
reducing its claims processing time, 173 days is still unacceptable. I
know Secretary Principi wants to reduce processing time to 100 days by
2003, and I am interested in learning how he plans to do this.
Research is an area of the budget that gives taxpayers a great
return on their investment. This budget would fund VA medical research
at $360 million. VA research doesn't just help veterans. It contributes
to the public health by sending new innovations to the marketplace.
So many important medical technologies have their roots in VA
research--including the pacemaker and the CT scan. The budget request
is only about one-third of the funding that will go toward VA
research--the rest will come from the private sector, NIH, and other
areas of the VA. But the budget request proposes to cut 79 employees
from the VA's medical research program, and I'd like to know why.
Finally, I am very proud of the VA facilities in Maryland--Fort
Howard, Perry Point, and the hospital, extended rehabilitation, and
long term care facilities in Baltimore, as well as 7 outpatient clinics
around the state. These clinics make the best use of our resources to
deliver quality care to veterans where they live.
Fort Howard is slated to become a ``continuum of care'' campus for
veterans. It will serve as a national model for how we can provide
quality medical services to veterans at all levels of need, while
allowing them to maintain their quality of life. This is particularly
important as our veterans population ages.
The Fort Howard project is not just important to our veterans. It
is also critical because our taxpayers want to see the VA make highest
and best use of this grand facility that is on prime real estate. I
hope to hear from Secretary Principi about the new Administration's
views on Fort Howard and how he will work to keep this project moving
in the right direction.
Again, I welcome Secretary Principi to the Subcommittee, and I look
forward to hearing his testimony.

Senator Bond. Now we turn to a newer member of our
subcommittee, Senator Johnson.

STATEMENT OF SENATOR TIM JOHNSON

Senator Johnson. Well, thank you, Mr. Chairman. I, too,
would ask consent for my full statement be received into the
record.
Senator Bond. Without objection, and with great pleasure.
Senator Johnson. I want to thank Chairman Bond and Ranking
Member Mikulski for scheduling this important hearing and
welcome, of course, VA Secretary Tony Principi to our
committee.
I was very pleased that he went out of his way to meet with
me prior to his confirmation, and that it is my understanding
that tomorrow he is going to be traveling to South Dakota, to
Sioux Falls to meet with veterans' leaders there in our
community, and not least of all dedicate the new Rough Rider
Cafe at the VA hospital there, and we look forward to----
Senator Mikulski. The VA has a new flair, as well as a new
Secretary.
Senator Johnson. That is right. This is not your father's
VA.
But we welcome him to South Dakota for that purpose, and to
meet with our veteran's leaders in the State. I know that Gene
Murphy is looking forward to meeting you there as well.
I will be very brief about this because we need to move on
to the testimony, obviously, but there are a number of areas
that are of great concern to me. I am pleased in a way that we
are looking at an $800 or $900 million increase in veterans'
health benefits on the heels of what had been some flat line
budgets in the past for VA health care.
On the other hand, it has been called to my attention that
the Secretary's request to the OMB was more in the $1.9 billion
range, and we all know that the independent budget put together
by a coalition of veterans organizations in this country called
for $2.6 billion in veterans health care over last year's
levels, and so I am concerned whether even the best management
can do what it needs to do with resources that may fall short.
I look forward to the testimony today about veterans health
care funding. Having just come from the opening of a VA
outpatient clinic in Aberdeen, South Dakota, I am impressed
with what these outpatient clinics are doing to make high-
quality health care available and accessible to veterans in
rural areas in particular. I hope that we can follow on with
the development of more of these.
I am very concerned about the future of the Montgomery GI
bill. Senator Collins and I have joined forces in sponsorship
of legislation which would create a benchmark level of
education benefits. Currently roughly half of our vets, even
though they have contributed their $1,200 pay into the program
simply do not use the benefits that have fallen far short of
what the contemporary cost for higher education area, and our
proposal, I think, is congruent with what Secretary Principi
looked at as chairman of the Congressional Commission on
Service Members and Veterans Transition Assistance Commission,
and I am concerned about the current receipt issues as well as
claims processing.

PREPARED STATEMENT

I am pleased that you have promised a top-to-bottom review
of the VA benefits claims processing efforts, and I look
forward again to where you feel you can make progress in all of
these areas, given the financial resources that currently are
being made available. I was pleased that we were able to wrap
up VA benefits within the context of the budget resolution, but
also recognize that the budget resolution is not cash in hand.
So I look forward to the Secretary's testimony on all of
these issues.
Thank you, Mr. Chairman.
[The statement follows:]
Prepared Statement of Senator Tim Johnson
I would like to thank Chairman Bond and Ranking Member Mikulski for
scheduling this important hearing on veterans budget issues. Their
leadership on veterans issues over the past few years has been
instrumental in restoring critical benefits and programs for our
nation's heroes. As a new member to the Senate VA-HUD Appropriations
Committee, I look forward to working with the Committee and learning
from their collective experience on these issues.
I would also like to thank VA Secretary Tony Principi for appearing
before the Committee this morning. Secretary Principi was kind enough
to meet with me the day before his confirmation in the Senate Veterans
Affairs Committee, and we had a good discussion on several issues of
importance to South Dakota veterans, including veterans health care
funding and veterans education benefits. I took that opportunity to
invite him to my state of South Dakota to meet with veterans and tour
our first-rate veterans health care facilities. I am pleased that
Secretary Principi took me up on my offer and will be traveling to
Sioux Falls, South Dakota, tomorrow to help dedicate the Rough Rider
Cafe at the VA Hospital there. Unfortunately, I will be unable to join
Secretary Principi in Sioux Falls, so I wish him a safe trip and hope
that we can see each other in the state at some other time. Secretary
Principi has already earned the trust and respect of those in Congress,
and I look forward to working with him on veterans issues.
Mr. Chairman, as I travel my state of South Dakota and meet with
veterans, I am reminded of the very core of what the Founding Fathers
meant when they talked about America's citizen soldiers who serve as
the bulwark of defending our democracy and freedom. The sacrifices of
the men and women who served this nation in time of war are a dramatic
story that we need to tell to future generations.
We all know the history: for decades, men and women who joined the
military were promised educational benefits and lifetime health care
coverage for themselves and their families. Many of the veterans were
told, in effect, ``If you disrupt your family, if you work for low pay,
if you endanger your life and limb, our nation will in turn guarantee
an opportunity for an education and lifetime health benefits.''
Those promises have too often not been kept and that is threatening
our national security. Veterans are our nation's most effective
recruiters. However, inadequate education benefits and poor health care
options make it difficult for these men and women to encourage the
younger generation to serve in today's voluntary service. We are
blessed to have unprecedented federal budget surpluses, and the only
question is whether veterans health care and educational benefits
should be a priority instead of an afterthought.
As a member of the Senate VA-HUD Appropriations Subcommittee, I
plan to do all I can to work with my colleagues to honor our country's
commitments made to veterans. Specifically, I would like to highlight
the following areas:
Veterans Health Care Funding.--Recently, I attended the grand
opening of a new VA outpatient clinic in Aberdeen, South Dakota, and
had the chance to see firsthand how the VA is reaching out into rural
areas to provide veterans with the health care they need. VA outpatient
clinics in my state are a huge success and compliment the work done at
our three VA hospitals. However, I would like to see additional
outpatient clinics to provide services for those veterans who still
must travel long distances, often in difficult weather conditions. That
requires increased funding for veterans health care. Veterans from
around the nation have been calling on Congress to provide the VA with
adequate funding to meet the health care needs for all veterans.
Without additional funding, VA facilities will be unable to deliver the
necessary health care services to our veterans population.
For a number of years, I have worked with veterans and members of
this committee to increase flat-line appropriations for veterans'
health care. We were successful two years ago in getting a historic
$1.7 billion increase for VA medical care. We fought last year for
another $1.4 billion increase. While these increases will help relieve
some of the VA's budgetary constraints, I believe that more needs to be
done to make up for those years of budgetary neglect, as well as to
keep pace with rising costs of health care.
While I am pleased that the Administration has proposed an increase
in veterans health care funding for fiscal year 2002, additional
funding is needed to address rising health care costs, treatment of
Hepatitis C, emergency medical services, and long-term care
initiatives. During consideration of the Senate Budget Resolution, I
was pleased to see bipartisan support for my effort to increase
veterans health care funding by an additional $1.718 billion and
unanimous support for Chairman Bond's amendment to add $967 million for
veterans health care.
The Senate has once again sent a message that additional funds are
needed to address veterans health care needs, and I look forward to
working with this Committee to turn that message into a reality.
Montgomery GI Bill.--Another priority for me this year will be to
continue to improve educational benefits for veterans. The Montgomery
GI Bill has been one of the most effective tools in recruiting and
retaining the best and the brightest in the military. It has also been
a critical component in the transition of veterans to civilian life.
Unfortunately, the current GI Bill fails to keep pace with the
rising costs of higher education. On the first day of this legislative
year, I joined Senator Susan Collins in introducing legislation to
bring the GI Bill in the 21st Century by creating a benchmark level of
education benefits that automatically covers inflation to meet the
increasing costs of higher education. Our concept is a very simple one:
at the very least, GI Bill benefits should be equal to the average cost
of a commuter student attending a four-year university. Currently, less
than one-half of the men and women who contribute $1,200 of their pay
to qualify for the GI Bill actually use these benefits.
During consideration of the Senate Budget Resolution, Senator
Collins and I offered an amendment to create a Reserve Fund
specifically for GI Bill improvements. With the support of members of
this Committee, our amendment passed unanimously, and now gives the
Senate Veterans Affairs Committee budget authority to act this year on
legislation to bring the GI Bill benefits more in-line with the costs
of higher education.
In 1999, Secretary Principi served as chairman of the Congressional
Commission on Servicemembers and Veterans Transition Assistance. The
commission, established by law in 1996, reviewed programs that provide
benefits and services to veterans and to servicemembers making the
transition to civilian life. The commission's review of benefits and
services was the most comprehensive since 1956, and the commission
offered more than 100 recommendations addressing issues including
veterans education. I look forward to hearing Secretary Principi's
insight on this issue and how our bipartisan effort in the Senate fits
in the Administration's plan for improving Montgomery GI Bill benefits.
Concurrent Receipt.--An issue that needs to be addressed this year
is concurrent receipt. I find it indefensible that our government
forces men and women who fought for our country and are disabled as a
result of it to choose between retirement pay and disability
compensation. This nickel-and-diming of our country's heroes must stop,
and I am part of the bipartisan group of Senators supporting the
Retired Pay Restoration Act of 2001, S. 170, and the Reserve Fund in
the Senate Budget Resolution creating budget authority for this act. I
am hopeful that we will be able to continue on the progress made last
year on Concurrent Receipt and finally make this long-overdue
correction for 437,000 disabled veterans nationwide.
Claims Processing.--Finally, I am pleased that the Administration
has promised a top-to-bottom review of the VA's benefits claims
processing. Redtape and staggering delays have plagued the claims
process and given many veterans reason to doubt the effectiveness of
the VA. I fully support efforts to decrease the current claims
processing backlog and prepare for projected workload increases due to
several legislative initiatives, including ``duty to assist.'' I know
that addressing the claims processing issue will not be an easy task
for Secretary Principi, but I pledge to work with him and other members
of Congress to help restore veterans' faith in this system.
Veterans are our country's heroes, and their selfless actions will
inspire generations of Americans yet to come. Our country must honor
its commitments to veterans, not only because it's the right thing to
do, but also because it's the smart thing to do.
I am honored to be a member of the Senate VA-HUD Appropriations
Subcommittee and look forward to working with Chairman Bond, Ranking
Member Mikulski, other Committee members, and Secretary Principi in
realizing many of these goals.
Thank you for the opportunity to share some of my thoughts with you
today, and I submit a list of questions for Secretary Principi.

STATEMENT OF ANTHONY PRINCIPI

Senator Bond. Thank you very much, Senator Johnson. Now,
Secretary Principi.
Secretary Principi. Thank you, Mr. Chairman, Senator
Mikulski, Senator Johnson. It is such a pleasure to be here. I
am honored to have the opportunity to be back as head of the
VA, this time not in an acting capacity and, very importantly,
as you pointed out, to work closely with this committee in the
interest of our Nation's veterans, and clearly you all have
been such strong advocates and been so very helpful to our
Department over the years.
I have submitted my statement for the record and, at risk
of not reading some summary words here, I would like to offer
some thoughts and comments based upon what I heard you say this
morning.
Senator Bond. Mr. Secretary, we will make your full
statement a part of the record.
Secretary Principi. Thank you very much. I am pleased to be
accompanied by Roger Rapp, our Acting Under Secretary for
Memorial Affairs, to my immediate right, Dr. Garthwaite, our
Under Secretary of Health, Mark Catlett, who is our Acting
Principal Deputy Assistant Secretary for Management and really
handles our finance, our CFO functions, and to my far left,
Joseph Thompson, our Under Secretary for Benefits.
I am honored to head the VA, because the VA has such a
noble and extraordinary mission to really care for people who
are deserving of our Nation's gratitude. I am very honored to
head a Department that has such committed people, who have
devoted their lives to caring for these people. Although we
have significant challenges before us, I want to point out that
where we have failed, or not done as well as we should to
address these challenges, these people at the VA do not fail.
It is the systems that fail, and systems put in place by
leaders.
So as we address these challenges I want my remarks and my
answers to your questions to reflect the fact that I do believe
that we have some of the most dedicated people in Government. I
have been around Government a long time, both on the Hill and
in the executive branch, and I think we are one of the
fortunate departments to have those people, but, indeed, we do
have challenges.
Let me start with the Veterans Benefits Administration. You
have all heard me speak about my concerns about the claims
backlog and some of the steps we have taken and need to take, I
believe, to bring this backlog down. It is my objective to have
an inventory that is workable and allows us to achieve very,
very ambitious goals of an inventory of around 250,000 claims,
a timeliness of about 3, 3\1/2\ months. Those are, indeed,
ambitious goals.
Clearly, some of the problems are outside the VA's control.
I think we need to start with that, a new mandated service
connection for things like diabetes, myelitis. We will add
100,000 claims, and that is a good change. We should be
providing a presumptive service connection where the science
clearly shows the disease is associated with military service.
The duty to assist legislation, the Veterans Claims
Assistance Act, are good legislation. We should never have
stopped duty to assist in the first place. But it happened, and
now we have this new requirement that will add an additional
340,000 claims to our backlog. That creates more work.
So clearly, some of it is outside of our control and
perhaps some of the funding that was requested last year to
assist with that workload was not there, but that is water
under the bridge. We live with that. We live with the law the
way the Congress has written it.
But there are things that we need to do, too, internally.
We have had a very worthwhile quest to have unassailable
accuracy. It is absolutely important that when we adjudicate
claims, that our decisions are accurate. But that accuracy, and
that quest for accuracy have come at the cost of timeliness,
which I believe is almost as important as accuracy, because
both comprise quality.
Accuracy is one component; timeliness is another component,
and unless you have both, you do not have quality. Today we do
not have quality, because it is taking too darned long to
adjudicate claims. I think some of the systems we put in place,
while strategic in thinking, and visionary, may have caused
some of the productivity standards to drop to a level that is
unacceptable. Steps are being taken to change that, to suspend
some of those changes, and at the same time trying to sustain a
high level of accuracy. We need to do better.
I have always said that the claims issue is not a VBA
issue. It is a medical VHA issue, it is an IT issue, it is a
General Counsel issue. All of the components of the VA are
brought to bear to assure that we have the right systems to
adjudicate claims. Although we are making progress in these
areas, we do not have those systems in place to properly and
accurately adjudicate claims. That is something we need to do,
and do it quickly.
Education processing has been slow. We need to improve upon
that. As Senator Johnson said, the transition commission, which
I was fortunate enough to chair, made some worthwhile
recommendations to the Congress.
I believe the opportunity for young men and women in
uniform today to get the best education possible, to conform
educational programs and VA programs to the needs and to the
ways current education is delivered in the private sector, are
things we need to address. I think it is a very, very important
program, so that people can build successes in their life. We
want veterans to come to us not out of necessity, because they
need a pension, because they are poor--this is very important,
but rather we want them to be successful in life and come to us
out of choice and not necessity for the programs that they
need.
On the health care side of the house, we have made enormous
improvements on the one hand in quality and patient safety. I
agree with you, Senator Mikulski, about the anecdotes in the
Cleveland Plain Dealer. I do not think they are representative
of our VA health care system.
However, I take anecdotes seriously. I expect the Veterans
Health Administration to take them seriously. I expect them to
be investigated seriously, and reports made to ensure that that
is not a system problem, or a problem around the country, or
even if it is just isolated at one location, that we take
corrective action on each and every anecdote that the Cleveland
Plain Dealer or any other periodical or GAO report or IG report
provide to us. That is our responsibility to do so.
But clearly, we have seen enormous improvements in quality
and customer satisfaction recently. I believe the $1 billion
increase in discretionary spending this year, much of which
goes to VHA, coupled with, hopefully, increased medical care
collections funds, will give us an overall 5.4 percent increase
in our health care budget.
I believe that is a good foundation, and yes, Senator
Johnson, I did request more, but I am grateful that we have
received the $1 billion increase in discretionary spending to
allow us to do some of the things that we believe are very,
very important to provide high quality health care.
I am concerned, as you have indicated, as all of the
members of this committee have indicated, the lack of
uniformity, and the lack of clear standards in some of our
systems and programs. Financial systems standards, information
technology standards, billing and collection standards, uniform
access to health care--not based upon where you live, but based
upon need--and status, or what category do you fall into. Those
are all important policy issues, policy decisions that must
emanate from Washington and be carried out uniformly, and
people held accountable for compliance with those standards. I
think that is terribly important.
On the other hand, I also believe equally strongly that the
people in the field, the people in the trenches closest to the
patients, closest to the beneficiaries, should have the
flexibility to manage within those directions and within those
standards, to make the day-to-day decisions that they need to
make to deliver care, to provide benefits.
CARES is an important initiative. I support CARES. I
support the goal of CARES to rationalize our infrastructure to
the veterans of today and the veterans of tomorrow, and taking
into account the demand for care. However, I absolutely insist
that as we go forward with the CARES process, that the data is
unassailable, that the voices of the stakeholders are heard
throughout the process, and that the models for the veteran
population and the demand for care are the correct ones.
I think those are very, very important, because we are
undertaking a mission of realigning assets that may change the
mission, may result in the closure of a hospital. Before we do
that, we need to ensure that the data is absolutely the right
data for this process.

PREPARED STATEMENT

I think that about covers some of my highest concerns, and
now I will take your questions. I thank you very much for the
opportunity to express some of these issues, and I look forward
to working with the committee.
[The statement follows:]

Prepared Statement of Hon. Anthony J. Principi

Mr. Chairman, and members of the Committee, good morning. Thank you
for inviting me here today to discuss the President's fiscal year 2002
budget proposal for the Department of Veterans Affairs.
We are requesting more than $51 billion for veterans' benefits and
services: $28.1 billion for entitlement programs and $23.4 billion for
discretionary programs, such as medical care, burial services, and the
administration of veterans' benefits. Our budget increases VA's
discretionary funding by $1 billion or 4.5 percent over the fiscal year
2001 level. With an increase in medical care collections of
approximately $200 million, this brings the total increase to $1.2
billion or 5.3 percent.
The budget ensures veterans will receive high-quality health care,
that we will keep our commitment to maintain veterans' cemeteries as
national shrines, and that we will have the resources to tackle the
challenge of providing veterans more timely and accurate benefits
claims determinations.
The President promised a top-to-bottom review of our benefits
claims processing. He has designated this area as a key budget
initiative and I have made it one of my top priorities. I know you
share this Administration's commitment to restore the confidence of
many veterans who have lost faith in VA's ability to fairly and
promptly decide their benefits claims.
For the administration of veterans' benefits, we are requesting
$1.1 billion, an increase of $132 million over last year's level. Mr.
Chairman, as we all know, VA is not completing work on benefits claims
in as timely a manner as our veterans deserve. I am proud to say this
budget will rejuvenate VA's efforts to process compensation claims
promptly and accurately.
An additional 890 employees will allow VA to handle the projected
workload triggered by several key pieces of legislation enacted last
year. This request fully implements new legislation that strengthens
VA's ``duty to assist'' role in helping veterans prepare their claims.
The new law will require VA to review 98,000 cases that were denied
previously, plus another 244,000 cases that were pending when the
legislation passed. In addition, our request enables us to carry out
the new policy of adding diabetes to a list of presumptive conditions
associated with exposure to herbicides. About 105,000 applications for
disability compensation are expected in fiscal year 2002 under the new
rule on diabetes.
Because of additional workload, VA predicts an increase in the time
needed to process these applications. In fiscal year 2002, the average
claim is projected to take 273 days to complete, compared to 202 days
this year. However, I have begun immediate efforts to address the
claims processing backlog.
Additional resources will be coupled with a proactive approach to
solving problems. On April 16, 2001, we held a preliminary meeting of
the special Claims Processing Task Force that will address claims
processing and develop hands-on, practical solutions to the challenges
we face. The 10-person task force, headed by retired Vice Admiral
Daniel L. Cooper, will examine a wide range of issues affecting the
processing of claims, from medical examinations and information
technology, to efforts to shrink the backlog and increase the accuracy
of decisions. The panel's final report is due to me in approximately
120 days.
For veterans' health care, we are requesting $21.9 billion,
including nearly $900 million collected from third-party health
insurance and co-payments from veterans. This reflects an increase of
$1 billion over last year's level.
The budget request reaffirms our primary commitment to provide
high-quality medical care to veterans with service-connected
disabilities or low incomes. VA provides comprehensive specialty care
that other health care providers do not offer, such as services related
to spinal cord injury, Post Traumatic Stress Disorder, prosthetics and
addiction programs. I am proud of our unique accomplishments and our
request provides full funding to continue our leadership role in these
areas.
Our budget proposal for medical care includes an additional $196
million for long-term care and an additional $164 million to improve
patient access. VA's goal is for patients to receive appointments for
primary care and non-urgent care in 30 days or less, while being seen
within 20 minutes of a scheduled appointment. The budget also supports
the President's new health care task force, which will make
recommendations for improvements. The task force will be comprised of
representatives from VA and the Department of Defense (DOD), service
organizations, and the health care industry.
The budget includes $121 million for the operation of our National
Cemeteries--an increase of $12 million over last year's level. Our
request ensures that VA's cemeteries will be maintained as National
shrines, dedicated to preserving our Nation's history, nurturing
patriotism, and honoring the service and sacrifice of our veterans. It
provides $10 million--twice the amount included in fiscal year 2001--to
renovate gravesites and to clean, raise and realign headstones and
markers.
The request also includes funding for land acquisitions for new
cemeteries in the Detroit, Pittsburgh and Sacramento areas; development
of a new cemetery in Atlanta; and design of a new cemetery in Miami. In
addition, funds are provided for columbaria expansion and improvements
at the Massachusetts National Cemetery in Bourne, and the Tahoma
National Cemetery in Kent, Washington.
Mr. Chairman, our 2002 budget is not simply a petition for
additional funding. It also reflects opportunities for cost savings and
reform. VA will do its part to ensure the most efficient use of limited
resources, while maintaining the highest standards of care and service
delivery.
The National Defense Authorization Act for Fiscal Year 2001
established a new DOD benefit for military retirees over age 64 who
have Medicare coverage. These retirees will be able to use their own
private doctors for free care and receive a generous drug benefit.
Currently, 240 thousand of these retirees are enrolled in VA's health
care system. Our budget assumes that 27 percent of them will switch to
the DOD benefit in 2002, which shifts $235 million in VA medical
liabilities to DOD.
This recent legislative change underscores a critical need for
better coordination between VA and DOD. The Administration is seeking
legislation to ensure DOD beneficiaries who are eligible for VA medical
care enroll with only one of these agencies as their health care
provider. We will work with DOD to avoid duplication of services and
enhance the quality and continuity of care.
Restructuring efforts in our health care system will continue in
2002. VA has begun an infrastructure reform initiative that will
enhance our ability to provide health care to eligible veterans living
in underserved geographic areas. Savings from this effort will allow us
to redirect funds from the maintenance of underused facilities to
patient care. As we await the results of this assessment--referred to
as ``CARES''--we will continue to expand sharing agreements and
contracting authorities with other health care providers. The budget
includes $115 million to begin implementing CARES recommendations.
The budget request also includes legislation for several proposals
that will yield mandatory savings totaling $2.6 billion over the next
ten years. One proposal would eliminate the vendee loan program and the
other proposals would extend previously enacted mandatory savings
authorities that would otherwise expire over the next several years.
Finally, we will continue to reform our information technology. New
technology offers VA opportunities for innovation. It also offers a
means to break down the bureaucratic barriers that impede service
delivery to veterans, divide VA from other Federal government
departments, and create inefficiencies within VA itself.
I wish to restate my pledge that we will not initiate any new
technology-related activities until we have defined an Enterprise
Architecture that ends ``stove pipe'' systems design, incompatible
systems development, and the collection of data that do not yield
useful information. I have instructed my staff to convene a panel of
world experts in the area of systems architecture to team with our
Administrations and staff offices to develop a comprehensive Integrated
Enterprise Architecture Plan. I expect to be able to deliver this plan
to Congress in a matter of months. We will implement a technology plan
that serves veterans first.
Mr. Chairman, that concludes my formal remarks. I thank you and the
members of this Committee for your dedication to our Nation's veterans.
I look forward to working with you. My staff and I would be pleased to
answer any questions.

CLAIMS PROCESSING TASK FORCE

Senator Bond. Mr. Secretary, you have already answered some
of the really good questions I was going to ask, but I very
much appreciate that, and you said that improving claims
processing for disability compensation is one of your highest
priorities. Sometime ago, I asked to have explained to me how
you process these claims, and I could not understand it, so GAO
put out a little chart to show how the process works, and now I
understand why I did not understand the process. If this were
not such a serious business, this could be a laugh line on a
late-night TV show.
You talk about the system being difficult for the people in
VA, and for the people who hope to receive the benefits. There
has got to be some way that you can make it simpler for the
people to administer it and for the people who apply, so there
have been lots of studies in the past. You set up a task force.
How is this task force going to be different?
Secretary Principi. Well, this task force is going to be
different because they are going to address things like that
chart. Other task forces and commissions, although they looked
at process, they looked at management, they looked at
organization, they also looked at changes in laws, abstract the
roles of veterans benefits.
What I have asked for is precisely that, some practical,
hands-on solutions that I as Secretary can implement to
streamline the process, to see what changes need to take place.
Do we need to consolidate in some areas? How can we do it
differently? How can we have cycle time reduction? What expert
systems are available in the private sector?
I know there are expert systems available in the private
sector that can be brought to bear to make the job of the
ratings specialist easier. It is precisely that chart, and
trying to improve the processing where possible; that is what
my goal is.
I do not know what will come out of the commission, but I
have tried to appoint a chairman who I have confidence in. He
is a retired Navy Admiral. You might say, why? I appointed him
because he is head of our Navy's nuclear power submarine force.
He is on the board of one of our Nation's most prestigious
insurance companies. He brings a real discipline and
engineering mind and focus to the process. If he could run and
manage nuclear-powered submarines and a fleet of them, I
believe he is the type of individual that will devote his time
to this effort because he feels it is important. I am hopeful
that under his leadership we are going to have some concrete
suggestions for us to take a serious look at.
Senator Bond. He may want to go back to running nuclear
submarines after this, but I would be happy to lend you this so
you have the before.
You already mentioned consolidating operations. One of the
controversial things that has been offered up with the task
force study, the possibility of seeking legislation to offer
lump sum payments to certain veterans. I know that some
veterans applied 12 or more times, and there is possibly some
radical solutions. Will they be looking at all of those
aspects?
Secretary Principi. I did not ask the task force to look at
finality or lump sum payments. I know those issues, those ideas
have been highlighted, illustrated in several reports to the
Congress. I know they are very controversial. I felt that this
was not the right time. I wanted the task force to look at the
law as we currently have it, and to see what recommendations I
could implement right away so we did not go there, sir.

BENEFITS BACKLOG

Senator Bond. All right. Recently, VBA headquarters told
its 57 regional offices that certain changes which have been
underway such as transitioning to the new software program
called RBA 2000 and fully implementing case management could be
put on hold for now in order to concentrate fully on working
cases.
I am a little concerned that while you are striving to make
this drastic reduction, cutting in half the processing claims
time and the backlog, that we may be sending a mixed message to
the field that immediate gains are more important than long-
term improvements. Do you not think we need to stay on the path
to the long-term solution to the VBA backlog, rather than
chucking it for a scramble to cut in half?
Secretary Principi. No, I do not think so, not at all. I
visited several regional offices over the past couple of
months. Not as many as I would like, but I am absolutely
convinced that the actions to suspend RBA 2000 was a correct
one. It was not ready to be implemented in my mind. Other
people take a different view, and I welcome that view.
I am not forsaking long-term goals to have the right
software in place so that you do not have to always rebuild
cases from the beginning. But any time you have productivity
drops as we have experienced with RBA 2000, then I do not
believe that this is the right time to launch it or to continue
it. That is not a statement or act of discarding the software.
This software holds great promise, but we will have to wait
until we get out from under this situation.
Senator Bond. All right, sir. You have already answered my
question on management and the need for uniform standards
throughout the field, so now I will turn to my ranking member
for her first round of questions.

DISABILITY COMPENSATION FOR TYPE II DIABETES

Senator Mikulski. Thank you very much, Mr. Chairman. Well,
I will not duplicate the questions that Senator Bond did on
processing, but Secretary Principi, and to your team, even
going back to when I initially chaired this committee and you
were Under Secretary and then Acting Secretary, as we know, the
processing times has been a problem, and I think we have now
gone from a problem to a crisis, also because of the expanded
workload, so we look forward to the solutions.
I want to just raise one issue, though, that I would like
your task force to consider. As you face the challenges,
particularly with the addition of Type II diabetes, that you
think about this, and I just want you to think about it--we can
hear later what you think--is that if, in fact, in the
processing of a claim where there is a chronic but manageable
condition like diabetes, high blood pressure, but particularly
now in diabetes Type II, that as part of the claim
adjudication, that there be a health management plan that asks
how this Type II diabetic--and Dr. Garthwaite, I think you
would support this concept--would go into some type of diabetic
management plan.
I worked very closely with Senator Sue Collins on the issue
of diabetes, and it is a chronic condition across the United
States of America that offers really significant ways that we
can intervene, because Type II diabetes, if not dealt with,
leads to a very severe set of circumstances, from increased
heart disease, kidney problems, et cetera, so think about that.
If you are going to get a benefit, not that we mandate that
you have got to have a health plan, but we really do strong
intervention at the time of adjudication that says, let us get
you the help you need so what you have got is a managed plan,
and think about that as part of the adjudication process, that
we really look at that and really maybe even stay in touch with
them. It would be a great opportunity. we could really do
prevention intervention here, so think about that.
Secretary Principi. I think that is an excellent
suggestion. I think it points out the need for the two
administrations to work closely in these cases where we are, in
fact, providing service-connected disability compensation to
someone with this diabetes, to ensure that we get the medical
side of the house to provide the outreach, or the plan, if you
will, the health plan to keep that disability in check.

NURSING SHORTAGES

Senator Mikulski. Exactly, so as we look at also where VA
is going, it is not unlike where Medicare is going, which is--
once, Medicare's original purpose was to help pay the bills for
acute care. Now, its purpose is to manage chronic conditions,
and that is not unlike what you are facing, but let us go,
though, to really what you are doing in your primary care, in
these excellent primary care facilities as well as in the
hospitals. Are you facing a nursing shortage and, if so, what
is the magnitude of the shortage that you are facing, and have
you done any recommendations on how we can help you?
Secretary Principi. It is serious. Again, I am new at this,
but at the hospitals I visited, it is a national problem. We
are large, so we feel it, but we have significant nursing
shortages on our wards and in our clinics. Every nurse I have
spoken to, every nurse-manager I have spoken to have looked at
me a little bit afraid at times, but yes, we are short nurses.
We have nurses who are double shifting in some cases
because we do not have enough, and patient safety, patient
quality, if this--and we are taking decisive steps, and Dr.
Garthwaite I hope can answer those questions, but this is a
major issue that our society faces, as well as the VA in
particular in this case.
Dr. Garthwaite. We have made a small dent in the number of
nurses, in the first 6 months of this fiscal year we have
brought in over 600 nurses net.
Our approach is fairly comprehensive. We have recently
increased salary rates. We have some loan forgiveness programs.
We have student fellowships during the summer that brings
nurses in to get them involved in our care. We continue to look
at educational opportunities, as we find students who are
trained in the VA, like to stay in the VA. We have other
educational opportunities to allow them to advance in their
careers into nurse-practitioner roles or nurse-anesthetists and
other kinds of roles.
So it is a fairly comprehensive look, but it is really
dependent on how well society is at getting people to choose
nursing as a profession.
Senator Mikulski. But that is my question to you, what are
you doing about it, and how many vacancies do you have, and
then is the VA also working, also to help make this an
attractive profession?
I mean, Senator Tim Hutchinson and I worked on a bill in
terms of the larger community. It is an education bill, so it
is a down payment on the shortage. It does not deal with the
respect or the pay issues.
Dr. Garthwaite. One thing we have done is an attempt to
bring the nurses into the system and to provide them an
opportunity to move on to baccalaureate and beyond where they
have potentially, a higher salary down the road and can make
more contributions. We put $50 million into a training program
over 5 years to advance their education. We think that helps
us, and it helps them, and we hope that it provides an
attractant. We have signed an MOA with a community colleges
organization, an associate degree nursing organization.
Senator Mikulski. Well, I am so glad to hear that, Dr.
Garthwaite. I know my time has expired and it is time to move
on to Senator Johnson, but I believe nursing comes at different
skill levels. The nurse practitioner is a whole different skill
level than really bedside care and acute care.
The use of community college nursing I think is a great
way, and for many men and women who would like to enter nursing
the community college is an affordable gateway, and also offers
for many of them flex time to move up.
I would also like you to think about looking within your
own ranks, where there are people working now in VA who love
working in VA, and perhaps in other areas, but would love the
opportunity to go to a community college, and therefore they
would do lattice work, kind of instead of a ladder of
opportunity, a lattice of opportunity where they can move up
the system.
We look forward to working with you, and I now will wait
for my next round of questions.
Senator Bond. Thank you, Senator Mikulski. I certainly
agree with you on the community colleges. I am going to turn to
Senator Craig, who has joined us, for any opening statement
and/or questions he wishes to ask at this point.

STATEMENT OF SENATOR LARRY E. CRAIG

Senator Craig. Thank you, Mr. Chairman. I welcome you
before the committee. I guess this is the first time you have
been before the committee. I welcomed you before the full
Veterans Committee, but we appreciate you being here now where
the rubber hits the road, and the budgets that we will work
with you on are really going to provide and/or not provide the
kinds of services that our veterans expect, and I think all of
us in this committee believe they deserve.
I will not go into it today, but I wish we could schedule a
time with you and the appropriate folks on your staff to deal
with the benefits and claims processes. We spend a lot of time
with that out in my offices, primarily in Idaho and in Boise,
and we have got some questions and some concerns, and just kind
of want to walk through them with you, that are kind of
repetitive. We see them quite often, and we think there are
some ways to deal with them, and that is important, because
that is really the underpinnings of what our veterans deal
with.
I guess my greatest frustration comes in a rural
environment, and I know we are struggling to do some outreach
in some small clinics, but the question of equal access for
rural veterans versus urban veterans, the distances involved,
and clearly in States like mine several hundred miles is not
unusual to have to travel one-way.
Senator Mikulski. How many miles, Senator?
Senator Craig. Several hundred.
Senator Mikulski. I thought you said 700.
Senator Craig. In one instance they traveled 351 miles one
way, veterans from one area to the Salt Lake Hospital, and for
elderly, or older people--it is a daunting challenge for the
young. It is an even greater problem for the old. We are doing
some clinics. We will be working with you to see how we can
make that a more functional kind of thing, I think, to deal
with.

REGULATIONS TO IMPLEMENT THE MILLENNIUM ACT

But the question I guess I would have of you, and the
Senator from Maryland broached it, with diabetes in the
Millennium Health Care and Benefits Act, I think we are now
just beginning to realize what it is all about. However, I do
not think the VA has yet developed the policies necessary to
deal with such issues as emergency care and hepatitis C and
diabetes. Can you tell me where we are, or where you are, where
the administration is at this point with that?
Secretary Principi. Yes. We have been terribly slow in
having our regulations finalized and submitted to OMB and then
published in the Federal Register. This has been a major issue
at VA for many, many years. We are beginning to take steps to
address it.
Some of the regulations you just cited, Senator Craig, with
regard to the emergency care, and other millennium care
provisions are now in the final stages. Some of them are at OMB
for clearance, and future publication. Of course with the start
of a new administration, a number of the regulations were
pulled back for review and need to be resubmitted, but with
regard to those mentioned, we are very close. However we do
have some lingering issues about how we process regulations in
the Department.
Senator Craig. Well, we anxiously await--when do you think
we will actually see those out and operable, or to a point of
being implemented?
Secretary Principi. I expect them all to be implemented by
this fall, all of the ones that you mentioned, certainly by the
end of the year, but I believe we can expedite some of them. I
think we have a provision that could shorten the publication
time in the Federal Register to 60 days. I believe that this is
the case, and so there are steps we could take to get some
relief to the veterans who have been waiting for reimbursement
for the emergency care regulations.

TRICARE FOR LIFE

Senator Craig. We have another interesting problem in
Idaho, and I think it is largely because of--well, I do not
know whether it is hostility, or just nonacceptance of HMO's
largely in the medical profession, but I am talking TRICARE.
Veterans who are military retirees are really medically
underserved in Idaho, and partly rural, but also as it relates
to the acceptance of TRICARE.
I think you are going to have to work with the Department
of Defense. We are making some advances there, there is no
question about it, and we have got the Department of Defense
and the Secretary of the Air Force's focus, because I am
talking air base type retirees predominantly.
At the same time, they fall under two categories, one is
retired and can be eligible in both instances, but I guess what
I am going to want to do is sit down with you to look at that,
because we are beginning to get those reactions now, the
combination of military retiree/veteran and TRICARE.
Secretary Principi. High priority issue. I have a letter
going over to Secretary Rumsfeld today. We have spoken on
several occasions. The President has directed that we both get
together.
Senator Craig. Well then, it is an issue nationwide.
Secretary Principi. There are too many issues between DOD
and VA which do not help beneficiaries of either system, and
certainly in our delivery of benefits, especially we have to
wait months upon months to get a letter from DOD to adjudicate
so that VA can pay claims and it is unnecessary. I hope we are
going to announce an interagency commission, or a blue ribbon
commission to look at both health care systems.

PREPARED STATEMENT

Senator Craig. Well, we will watch that very closely.
Thank you, Mr. Chairman.
Senator Bond. Thank you very much, Senator Craig, for
raising some very important questions.
[The statement follows:]
Prepared Statement of Senator Larry E. Craig
Mr. Chairman, it is indeed a pleasure to welcome our new Veterans
Administration (VA) Secretary, Tony Principi and members of his staff.
Secretary Principi's prior experience working in the VA will be
invaluable and ensure our government honors our commitments to veterans
while implementing the most beneficial and cost effective programs. To
do this, we must look for opportunities to reform the VA health care
system, while maintaining as our number one priority, our combat
veterans with disabilities or veterans with low incomes who often rely
exclusively on the VA for their care.
The VA's budget proposal totals $51.7 billion for veterans'
benefits and services, including $23.4 billion in discretionary
spending, for medical care, burial services, and the administration of
veterans' benefits. This is an increase of $1 billion over last years
budget. In addition, with an increase in medical care collections,
medical care for veterans would total a record amount of nearly $22
billion. This is a total increase of 5.3 percent, and demonstrates the
President's commitment to veterans health care.
The President has promised a top-to-bottom review of how the VA
processes benefits claims. I don't want to take up time during this
hearing, but would like to invite Secretary Principi to meet with me at
a later time to talk about the veterans benefit claim process and the
dire need of reform. We must work together to restore the confidence of
many veterans who have lost faith in the VA's ability to fairly and
promptly process their benefit claims .
I strongly support a VA which is committed to providing accessible
high quality medical care and other veterans benefits and services in a
timely and effective manner. However, we must expand and improve the
delivery of services and benefits so that all veterans have equal
access to, and quality of, medical care, particularly in under served
rural areas such as Idaho. In southern Idaho, the initial steps were
taken and clinics were provided in Pocatello and Twin Falls. But we
must not forget the large population of veterans in the north who must
drive over 350 miles to a clinic. A third clinic in Lewiston would
provide desperately needed access to essential services.
Another concern is the long list of veterans waiting to receive
various services, especially medical care. In recent years there were
tremendous staff reductions that resulted in reduced services. The
necessary steps must be taken to reverse this trend.
The benefits of the Millennium Health Care Act have just begun to
be realized; however, the VA has not yet developed the policies
necessary to deal with issues such as emergency care, hepatitis ``C'',
and diabetes. I look forward to working with Secretary Principi to deal
with these issues of major concern.
I also realize there are several additional issues that are a
concern to America's heroes. The National Defense Authorization Act for
Fiscal Year 2001 established a new Department of Defense (DOD) benefit
for military retirees over age 64 who have medicare coverage. Veterans
who are also military retirees are medically under served in Idaho and
other rural areas. Secretary Principi must work with the DOD to provide
medical services to TRICARE dependent military retirees in VA
facilities to ensure our veterans are properly served.
In closing, Mr. Chairman, there is no way to over emphasize the
honor and respect this nation owes the military men and women who
sacrificed so much to accomplish a strong national defense. I believe
that this proposed budget is a good beginning for ensuring our veterans
will receive high-quality health care, that we keep our commitment to
maintain veterans' cemeteries as national shrines, and we have the
resources to process veteran benefit claims in a more timely and
accurate manner. I look forward to working with Secretary Principi to
meet the many challenges that the VA will face in the coming years.

LONG TERM CARE

Senator Bond. Now it is my pleasure to turn to Senator
Johnson.
Senator Johnson. Well, thank you, Mr. Chairman. I am
heartened by Senator Craig's concerns and your response on
greater coordination and reaching out between our VA and our
DOD facilities. I think this is something that has been needed
for a long time, and I appreciate your work on that. While
there is greater emphasis on outpatient care at the VA as well
as health care providers overall in the Nation, VA also faces a
demographic reality of large numbers of World War II and Korean
War era veterans with increasing needs for long term care.
Under 1999's Millennium Act, we attempted to address long-
term health care issues, but could you update me on where do
you see the VA going relative to the long-term care needs of
increasingly large numbers of veterans?
Secretary Principi. Yes, sir. The good news first. We are
making tremendous strides in addressing the extended care needs
of veterans. Particularly either on an outpatient basis or in
the community were trying to keep the veteran home as long as
possible with the right support base, whether it be hospital-
based home care, or the opportunity for respite care, which
gives the caregiver a break. I talked to a couple of veterans
in the hospital in Denver who were quite invalid. They were
there for a couple of weeks while their caregiver got some
rest.
On adult day care programs, I visited great programs in our
health care system in New York, and so I think we are doing a
great deal on that score.
The State veterans home program is an excellent program. We
have made great strides in working with the States in sharing
the cost of construction, providing a per diem payment. We have
had a good success there.
The only area where we have failed is in VA nursing home
beds. We are about 1,200 beds short of our mandate, of the law,
for nursing home care beds, and that is unacceptable. A
direction has to go out indicating that we will, in fact, open
and staff VA nursing home beds, to be at least in compliance
with the law, and to make a policy decision as to whether or
not we need more beds because of the aging veteran population.
World War II veterans are now very frail and dying. As Senator
Mikulski indicated, we have my generation--well, the Korean
generation and my generation from Vietnam are now approaching
60, and these programs become more important.
So I think we are doing some wonderful things, great
success. We have now established a uniform policy that says
thou shalt have so many nursing home beds that are open and
staffed to be in compliance with the Millennium Care Act.
Senator Johnson. Well, I appreciate your trying to address
the whole spectrum of long-term care needs rather than focusing
exclusively on nursing home beds. You are right that home
health care and assisted living and the whole array that the
private sector has taken on makes sense within the context of
the VA, but I am concerned about the shortage of the nursing
home beds, and also aware that the condition of some of our
older VA hospitals are not conducive to an easy conversion to
nursing home facilities, that oftentimes that is not seen as an
appropriate step, but I look forward to working with you on
that particular issue.

MEDICAL RESEARCH

One last thing I just want to touch base very quickly with.
All the concern about physical plant, trying to catch up with
the backlog on case filings and all the things you are doing,
an area that I have some concern about is whether we are
maintaining the resources and the attention of VA research that
needs to be there, and I wonder, as we get in an increasingly
difficult crunch financially on the resources available to the
VA, do you feel that this is an area that is being squeezed out
of the VA agenda?
Secretary Principi. I will allow the experts to perhaps
give a more detailed response, but from my perspective,
research is very, very important to VA's core mission of caring
for veterans. I think that some of the recent changes that have
taken place in our research program, technology transfer and
intellectual property, where the VA really receives the credit
for this research, a research that is focused on our veteran
population, are all things we can be very proud of.
The budget goes up $10 million, it keeps pace with
inflation, and I think it gives us a good base to continue to
seek grants from NIH, which we have been very successful at. We
take a significant amount of money out of the medical care
appropriation and combine it with the $1.2 billion research
program.
I think we have a lot to be proud of, and I hope we will
see more discoveries for which the VA will be the beneficiary
both in terms of our patients who may have lost limbs, have a
spinal cord injury, or a traumatic brain injury. And that VA
will get the credit and some of the money to improve the
research at the facility as well as rewarding the research.
Those are the goals, and I think we are doing very well.
Senator Johnson. I would yield back. My time has about
expired.
Senator Bond. Thank you very much, Senator.

MEDICAL CARE FUNDING LEVEL

Mr. Secretary, the VA budget for medical care represents an
increase of $971 million over the current fiscal year,
including collections, for a total of $21.9 billion. Are you
confident that is sufficient to meet the needs of all veterans
who seek VA health care with the best quality and in a timely
fashion?
Secretary Principi. I feel like I am on Regis. How do I
answer that question?
Again, I am pleased, very pleased with the budget that we
have received from the President. I think it reflects a real
commitment. What concerns me is, that we do have a lot of needs
and a lot of different areas. We have allowed ourselves, and
not maliciously, to back ourselves into policies that I am
concerned about.
We talk about category 7's, for example. We have got the
CBOC's out there. A lot of people are coming to us. HMO's, as
you said, Senator, are closing down, and I am not sure we have
really addressed this issue as all the stars in the universe,
you touch one, they all get hit. What does this mean for our
overall system? Where are we going? Who do we provide care to?
What care do we provide? It impacts on the CARES process, on
how many category 7's come in, and what kind of copayments do
we collect from 7's. We are not collecting very much now, as
you said, 10 percent, and these are people who are nonservice-
connected, and have higher income. They are deserving because
they served their country. They may have scaled the walls of
Normandy and never filed a claim for benefits.
So they are nonservice connected, and they have higher
income, but I am not saying they are low priority because of
what they did during World War II and Korea. These are the
issues that we have to grapple with, and certainly with the
committee, we need to determine where we are going, because
there are 25 million men and women out there. We see about 4
million. We get $22 billion. If you extrapolate that, that
leaves probably about $180 billion to care for everybody.
So we have to determine what does this mean to the system
as we increase access points. Do we allow everybody to be
enrolled, and can we provide high-quality care and what will it
take? Those are the issues that need to be discussed up front
rather than saying the way I think we have done it.

MEDICAL CARE COLLECTIONS

Senator Bond. Well, I have got a whole bunch of questions
that I am going to give you lots of opportunities for answers.
Let me try to run through them. The VA collections you say are
going to increase by about $200 million. In the past, the
collections have always fallen short of projections. They have
remained relatively stable to just around $570 million. Why do
you think collections can be projected to increase so
significantly this year and next?
Secretary Principi. I think a couple of reasons, first,
reasonable charges. We have seen the results of imposing
reasonable charges now on third party, and we have already
collected $355 million in total medical care collections in the
first half of the year. That is a record, so I am pleased with
the trend.
Second, I think we will see some adjustment in copayments
in pharmaceutical benefits. All of those dollars, of course,
stay with the system, so we will see an increase in first party
reimbursements in 2002, and I am hopeful that we will continue
to improve our processing. I am not convinced that we do it as
well as we can.
Our accounts receivable are high, the amounts we recover
are low, and the cost of collecting is too high. We need to
find out what are the best practices out there, export those
best practices uniformly around the system, and have a uniform
standard. Rather than allowing everybody to do their own thing
their own way. We need to have more uniformity.
Senator Bond. I understand a large percentage of the cost
of the VA bills could never be recovered. They cannot recover
from an HMO or receive full cost from a medigap policy, but
clearly there is an opportunity to do better. What do you think
is the maximum amount of additional reimbursements that you
believe VA could be recovering, and what do you see as your
plans down the road to improve the collections program to
recover fully all of those costs so we can increase the
resources that we devote to veterans health care?
Secretary Principi. I do not know. You know, we cannot
collect from Medicare. You know, the big insurers of the
private sector collect from Medicare. That is unavailable to
us, so we have to go after the HMO's, unless they have a
provision that allows reimbursement--most do not. That puts us
at a disadvantage, because we have to go after the small
insurance companies, but I do believe it is higher than we are
now. I think we may be able to break $1 billion in collections.
Certainly, as we look at the issue of category 7's, that is
something that we have to address.
Dr. Garthwaite. Just one comment. One of our challenges is
identifying insurance, and we are working with Medicare to see
if they have a data file that would allow us to know that the
veterans had insurance.
Secretary Principi. And also being a TRICARE provider will
be very important.
Senator Bond. That is a possibility. Budget accountability
is something I mentioned earlier. More than $700 million this
year was identified in spending that will not meet original
budget plans for fiscal year 2001. I hope you will work with us
to develop a system that links the budget development with the
budget execution. If you tell us what you are going to spend it
on, we can appropriate that rather than having a mismatch
between what is requested and how you account for it, and that
is frustrating for us, and it is not effective.
Quickly, what else can be done to identify insurance for
veterans who have private insurance?
Secretary Principi. Well, certainly I have directed--I do
not know if it has gone out yet, but I have directed that when
we register or preregister an individual, that the individual
signs a form. The individual then has to sign that the
information provided is true and correct, that it is a
violation of Federal law if they do not write down their
insurance company. I mean, DOD does it in every case. We need
to do more to identify insurance at preregistration before any
veteran comes to the medical center for care.
Perhaps Dr. Garthwaite has some other ideas, but clearly we
are not getting the information we should be getting, and as a
result we cannot bill an insurance company for the cost of
care.

Need For Medicare Reform

Senator Bond. I will return to that after Senator
Mikulski's next round of questions. Thanks.
Senator Mikulski. Thank you very much, Mr. Chairman. I just
want to amplify the point that had been made related to
priority 7.
I believe that you are seeing a growth in the priority 7
cases because of the failure to do real Medicare reform, and I
would really encourage you at the highest level within the Bush
administration to really press that Medicare reform, which I
know the President does want to do, be really accelerated.
It is actually even more of an impending crisis, I think,
than social security. Social security is a demographic money
problem. This is a whole other issue. I have such confidence in
Governor Tommy Thompson that I believe that we could really
make progress on this, but the Medicare HMO is a disaster.
I have had the closures downs just first in my rural areas
and then $75 premiums because you lived in Salisbury instead of
Baltimore. What does that mean if you are 65 years old, the VBA
give-backs that I know we have worked with on a bipartisan
basis for training and for home health care.
So really the need for Medicare reform--and I truly believe
a prescription drug benefit would really help alleviate the
pressure on you. They are coming to you not because of part A,
because they want to come into your great hospitals, but they
are coming to you because of part B. They want to see the
doctor, specialist, and have access to prescription drugs, and
they feel, they could pay for medigap and maybe get additional
help there, so I think this is where it is intertwined. So
enough said.

GERIATRIC EVALUATIONS

Long-term care is, again, facing the entire population and
if we could get the implementation of the Millennium Act, I
think the Millennium Act is an outstanding act, but the
question is how to do this, and here is my question. First of
all you say, Dr. Garthwaite, you need 1,200 beds. One of the
issues is appropriate evaluation so that people go in the right
place at the right time.
My dear father died of Alzheimer's, but because we had
geriatric evaluation at Hopkins, we could use adult day care
and that kept him at home with us, and I believe stretched out
his cognitive ability. But we needed to have the right
evaluation and where he was in this situation before we looked
at this.
So my question is threefold. Number one, are you building
geriatric evaluation into it? Number two, by geriatricians,
okay, because the other people that my father saw before I got
him to the Hopkins geriatric evaluation just said, oh, it is
old age, and wanted to give him tranquilizers, because he was
starting to live the 36-hour day that I know you are familiar
with.
So the question is, number one, appropriate evaluation,
number two, how are you going to pace this? This is really
significant. And number three, the issue of assisted living in
all of this, because often it is a family collapse rather than
a health collapse that requires long-term care, and a different
type of facility might be more suitable.
Dr. Garthwaite. I could not agree more. My father also died
of Alzheimer's, so I know personally the challenge of caring
for someone with that disease. I am sure you are aware of our
geriatric research education and clinical centers. We actually
have 21 across the United States, and these are dedicated to
research and understanding of the challenges and diseases and
difficulties with aging, and the education of other geriatric
providers throughout the system.
I think geriatrics owes its birth, really, to those
facilities and other programs such as geriatric evaluation
units that the VA has put forward. In the Millennium Act we see
several related things. One is that there is a proposal for a
new covered benefit which would include alternatives to nursing
care so that we can provide services that really are not
provided by most health care systems.
We have efforts underway at providing uniform screening and
comprehensive evaluation of patients for those services. We
have authority to conduct one pilot in assisted living, and
that has been awarded. It has been awarded in VISN 20, and it
is starting up shortly. I think we totally agree with you with
the significant emphasis on alternatives to nursing care,
because frankly that is better for the patients and more cost
effective.
Senator Mikulski. I know my time is up, but do you have a
sense of how you will pace this implementation of the
Millennium Act? You do not have these facilities. You have a
few scattered through the entire United States of America.
Secretary Principi. Well, I know we are talking about the
one at Fort Howard as a possible assisted living facility, but
we do not have a clear policy, Senator, and we need to get the
policy in place, and then from that point make the
determination of how we are going to proceed.

FORT HOWARD

Senator Mikulski. Yes, and also new ways of being able to
do this, not only the assisted living but the adult day care,
and are there going to be public-private partnerships, and
creativity, I mean really creative and resourceful.
Yes, Fort Howard, as you know, is closing. We are looking
at a way of providing some continuing care for this also, not
to be the assisted living demonstration project, but I think
what we have at Fort Howard is an opportunity, and could I have
you take a look at Fort Howard? I want to be sure you are
satisfied with what we are doing at Fort Howard, talk with me,
so that the veterans of Maryland are satisfied and that we can
move forward on it.
Secretary Principi. I would be happy to. I was out there
many, many years ago, and need to do a return visit to assess
that, but I have talked to my people about it. Dr. Garthwaite
has a good site for that, but we will take a look at it, and I
will get back to you, Senator.
Senator Mikulski. Thank you. Thank you, Mr. Chairman.
Senator Bond. Thank you, Senator Mikulski.
Senator Leahy, are you prepared to offer a statement and/or
ask questions?
Senator Leahy. Thank you, Mr. Chairman. I will submit
questions for the record, but as I was upstairs in another
matter on Judiciary, I am glad to see the Secretary here. He
and I have known each other for almost 25 years, and I am very
pleased to see him, and I look forward sometime to having him
come up to Vermont to see how the VA operates there. There are
a number of success stories there.
Secretary Principi. It is great to be back, Senator, and I
look forward to working with you on the various programs. We
are making progress. We have some more to do.
Senator Leahy. I would, with full disclosure, Mr.
Chairman--because my mother and all her family are from Italy,
I will only be half as tough on the Secretary as I would be
otherwise.
Secretary Principi. You have reminded me of that over the
25 years.
Senator Leahy. I find I do not have to remind you any more.
Senator Bond. Do not bet on it, Tony, but it is nice to
have out there just in case.
Secretary Principi. That is the better half, his mother.
Senator Leahy. When my mom was alive somebody before one of
our committees, obviously an Italian name, man about 50, and
was somewhat nervous coming before the committee--it was a
controversial thing--and my mother called and said, don't you
give that nice boy a rough time, or that nice young man a rough
time.

TAMPA STUDY--AUTOMATIC CLINICAL GUIDANCE

I have pushed the VA in the past few years to test new
software that might automate clinical guidance for veterans.
There is so much data out there that can be picked up.
The VA, as you know, has been a great spot to detect trends
on a lot of things, heart condition, diabetes and so on, and if
you have the right software, as I see it, you would end up
increasing the quality of care, but you could also save a lot
of money, too.
Now, I understand that a test of these tools at the Tampa
VA Hospital did show, as Senator Mikulski brought out, the
dramatic improvement in the care of diabetes patients, but I
have not read an actual copy of the report. I do not know if
you have heard of the Tampa study yourself. Do you have any
thoughts about how this kind of software could improve health
care across the veterans' health care system, and do you have a
copy of the study?
Secretary Principi. I have not seen the study. I know of
the study, and I know the work there has been successful, and I
need to read the study, but you are absolutely right, I do
believe that we need to look at the expert systems that are
available, the solutions that are available to allow us to do
our work better and with higher quality and quicker, and I know
in the benefits claims area as well, there are systems out
there that perhaps can be imported to assist us.
We have an aggressive look now. I know the Under Secretary
for Benefits, Mr. Thompson, to my far left, is doing that and
we hope to be working with the private sector in looking at a
procurement for a system or systems very soon that will help us
get this enormous backlog down.
Senator Leahy. I think you would find a lot of support on
this committee on both sides of the aisle for ways to help you,
and to help the veterans through the kinds of software, through
information that if you got--and the obvious thing, when you
see a sudden spike in a particular age category of an illness
or a result, and that is happening nationwide, the sooner you
know it the better, because it may well change treatment, and
the effect for the civilian population just to know this.
Again, so many advances in the medical science have come
from the VA system partly because you can look nationwide, so
let us continue to work together on that, and Mr. Chairman, you
do not have an easy job on this part of the budget because
there is always more demands that we never have the resources
for. I commend you for over the years your deft hand at trying
to balance how best to do that, and I have enjoyed working with
you on it. Thank you very much.

PRIORITY 7'S

Senator Bond. Thank you very much, Senator Leahy. That is
what makes the job so much fun and rewarding, but that is why
they call it a budget, because there are always more priorities
than there are resources to meet them, and we appreciate your
work on those.
Speaking of priorities, over the last 5 to 6 years,
priority 7 veterans have risen to about 27 percent. Your budget
projects a slight drop, and I would like to know the philosophy
on the sevens. We want to make sure that they are not being
provided expansive care for the service-connected low-income
veterans. Are there other ways that you are considering of
increasing the cost share for the sevens on the kind of care
that they receive?
Secretary Principi. A critical issue, Mr. Chairman. Thus
far, there has been no change in policy with regard to sevens.
Again, I would certainly like to continue to be able to enroll
sevens, but at the same time, the impact they are having on the
system--whether it is going to have an adverse impact on the
service connected to the poor--I am not sure we know quite yet,
because they are still coming in, in relatively large numbers.
I do believe that if we continue to have unrestricted
enrollment, that we need to look at the copayment issue and
getting reimbursement from insurance companies. Because
collecting 10 cents on the dollar, spending $1.5 billion on
sevens and only collecting about $150 million, of which 22 to
23 percent is for overhead to collect the $150 million, the
system is finitely budgeted. We only have so much money to go
around, and we heard about all the needs for long-term care,
and hepatitis C and other programs. We have to make some
decisions.
But I am hopeful through an increased copayment and
increased reimbursement from insurance companies, we can
continue to enroll sevens and continue to have a full spectrum
health care system.
Senator Bond. I notice that there is a projected slight
drop in 2002. What do you see for the long term? Are we going
to see a drop, or is this just 2002, just a 1-year time? Is it
going to continue to go up? There are lots of other--TRICARE
and things like that--is it likely to impact the number of
sevens?
Secretary Principi. I think it is hard to predict. I think
with an increasing copayment you will see a drop-off,
certainly, in veterans. I think with TRICARE for Life, where
military retirees age 65 can now enroll, and enroll their
spouses in the TRICARE program, will drive some away from our
system. I do not know what percentage of the military retirees
will choose to go to TRICARE. We have projected 25 percent, or
27 percent in 2002, so $235 million of our budget has been
transferred to DOD to pick up that liability.
That may be high, that may be low. I think we have to wait
a year.
As Senator Mikulski said, if Medicare has a more attractive
prescription benefit, and Medicare reform, that could have an
impact on our system.
There are a lot of variables, a lot of unknowns.

COMMUNITY-BASED OUTPATIENT CLINICS

Senator Bond. Let us turn to community-based outpatient
clinics. That has been something that I think all the members
of the committee, and I have been certainly most appreciate of
the new service that is being provided. We have tripled the
number of CBOC's since February 1995, but GAO tells us 13
percent of the VA users, 432,000 veterans, are not within 30
miles of VA medical facility.
They found the majority of patients who lack reasonable
access are concentrated in six networks, including VISN 15,
which encompasses most of Missouri. Is there something inherent
in the networks that makes improving access for veterans more
difficult?
Secretary Principi. I believe we need national policy
guidelines with regards to the CBOC's. I believe that is in the
works, and due to me any day now so that we can take a look at
the shortfall before we send a new list up to you to activate
new CBOC's. Therefore, no new list will be sent up until we
have a uniform policy. Dr. Garthwaite and I will discuss the
policy, and hopefully continue to make sure that our coverage
is where it should be.
Senator Bond. Well, I know that Senator Craig is going to
be very interested in that, and we are looking forward to
seeing it. I realize in some areas veterans are just too widely
dispersed to be within the 30-mile range, but we do look for
your best recommendations on how to handle those situations.

HEPATITIS C

Let me turn to hepatitis C. A couple of years ago we were
estimating $500 million in actual spending. It was only $50
million last year on screening in the antiviral drug therapy.
Last year, the agency stated VA believes the surge of patient
workload is likely to occur in fiscal year 2001 due to
increasing veterans awareness, education, and training of
staff, and to VA's promotional efforts. Why haven't these
projections been realized?
Secretary Principi. Dr. Garthwaite can answer some of the
details of this, but from my perspective, I want to point out
that I believe the Department is committed to screening,
testing, and providing treatment to as many veterans who have
inflicted this hepatitis C virus. I think we are plowing new
ground here. Our estimates were not accurate, because this is
relatively new to us, and perhaps we did not have the data
systems in place by which we could truly monitor what was going
on in the field, and then again, only 20 percent of those with
hepatitis C actually go into the treatment.
We found of that percentage, 50 percent complete the
treatment because of the toxicity of the drugs, and so veterans
do not complete the treatment, and of those that do complete
the treatment, 50 percent, I guess, go into remission. I do
believe however, we have made an effort to outreach and screen
and provide treatment to a great many veterans.
Dr. Garthwaite. All I would add is that we started this
making estimates where everything was an assumption. We have no
empirical data to use, and so we are rapidly enhancing our
understanding.
We believe we have tested--we have certainly done over
600,000 tests, significantly more than that in 1999 and 2000,
and identified 75,000 unique individuals who are positive for
hepatitis C and are actively managing their cases and providing
them a lot of health care.
The key is, we do not quite know how many people we have
screened, because it is in each individual chart, but we did
recently implement a reminder system that electronically
captures the screening, so we believe over the next couple of
years we will be able to document that we have screened every
veteran at least with the questions that decide whether they
should have the tests done.
Senator Bond. So this may be a question of just inadequate
information, but still it is a management system that you need
to put into place to make sure that everybody understands the
need for a screening, so that you will communicate to the
hospitals that this is a priority to screen for this, and you
will assure that there is information technology in place to
assure that follow-up?
Dr. Garthwaite. We have communicated the importance, but
you need to remind providers at every visit, at each time there
is a visit. People are busy. There are a lot of things going
on, and we need to document it so that we know it actually has
happened.
In addition, we are sending out 3\1/2\ million fliers, with
the help of the American Liver Foundation, to encourage people
to come be tested.
Senator Bond. The number for fiscal year 2002 is $172
million. Is that a reasonable estimate?
Dr. Garthwaite. We think it is, based upon currently
updated information, and I think I would beg your indulgence.
We are trying to get smarter and better as we go, and we will
share all the information we get with the committee.
Senator Bond. Well, we will look forward to seeing the
performance measures when you get those in place so we know
that it is working.

CARES SYSTEM

Let us turn now to CARES. I have been very supportive of
this process. It took too long to get off the ground. We want
to make sure it does not fall behind. We have heard that,
quote, if the integrity of the model and data is proven, we
will continue this process throughout the system.
What does that mean, and what is your assessment of the
CARES system, and are you committed to it?
Secretary Principi. Yes, I am committed to it, because I do
think we need to rationalize this infrastructure and bring it
in line with the demographics, and changes in the health care
delivery. But, I do think the data needs to be unassailable. I
think it needs to have a great deal of integrity that the books
have not been cooked, and we are taking into consideration
suppressed demand and all of the other factors, so that people
have credibility in what we have done when we have to make the
hard decisions.
So I am committed to it. I am not backing away from it.
But, I know that it is going to involve some tough decisions in
every State, and I want to get on with it as quickly as
possible, and make the changes. We are not in the real estate
business, we are in the health care business, and if we can
demonstrate that we can enhance health care by changing the
mission of a facility, then I think that is important.
Senator Bond. Do you support a moratorium on major medical
projects, pending the completion of the CARES study?
Secretary Principi. I am sorry, sir.
Senator Bond. Do you support a moratorium on major medical
projects, pending the completion of the CARES process?
Secretary Principi. Sir, no, I do not. We have a large
health care system in America, and it is deteriorating in some
areas, and I think we need to make investments in those areas
where we know there will be no change in mission.
I can assure this committee, the chairman, that I would not
invest dollars in a facility that had even the most remote
probability or possibility of a mission change. But, we cannot
afford to allow our system to deteriorate and impact on the
quality and patient safety, and there are some things that we
need to get on with. So, I urge the committee that certain
additions, certain renovations, carefully prescribed in consult
with this committee, should go on and keeping in mind that this
process is taking place, but look what happens.
Look what has happened to the DOD health care system. It
has deteriorated, equipment past its useful life, and I think
we need to be very, very careful that that does not happen to
the VA.
But again, I know about CARES. I know about putting money
into the facilities. At the same time, we need to watch our
capital asset management as well, because we are making
decisions with regard to licenses, leases, contracts that are
binding our hands for many years, and that is an issue of
concern to me as well.
Senator Bond. Well, we certainly agree with you on the
safety aspects and other things, but I think it is important
there be some standard that you have, because I have heard in
Government there are such things as politically popular
investments. The proponent always calls them a strategic
investment. There are those who call them pork-barreling, and
one of the objectives of CARES was to establish a clear line to
determine what is a sound investment.
To the extent that there must be some standards--for
example, one of the things that I think the seismic risk--VA
has 69 facilities, most of them on the West Coast. We do
earthquakes along the New Madrid Fault as well, but how much of
an emergency is this, and will CARES process impact this? Are
there other areas where there are critical needs, for which you
have standards that you would want to move forward?
Secretary Principi. Well, clearly, seismic is an important
area. You never know whether or when the next one is going to
hit. Clearly, some are in more active seismic areas than
others. We need to take a look at that.
Electrical, water type of infrastructure repairs that need
to go on, and facilities that we know will remain with a highly
unlikely mission change or expansion, I think it is those
areas, but we need standards. You are right, you need to know
what we are basing the request on, and we will provide that to
you, but I do think we need to get on with some minor and major
construction to keep the system at a high state of quality.
Senator Bond. Give me a quick update on the pilot project
in VISN 12, and have you learned any lessons, and will we get
all phases completed by 2003?
Secretary Principi. Yes. I am hopeful that we will have the
options to me in June, later this month, in June. There are
some draft options now which are being linked to the data, to
the criteria, and as soon as that work is done we can get into
the decision-making process.
Have we learned anything? There was some concern on the
part of some of the leaders of the veterans service
organizations that although they were kept informed, they
really did not feel like they were part of the process. So, we
are holding a 1-day workshop with them to alleviate their
concerns and make sure that they are read into it, and have a
voice in that process.

ST. LOUIS VAMC PARKING NEEDS

Senator Bond. Finally, speaking of strategic sound
investments, VA has identified a number of projects validated
by VA's Capital Investment Board in the past few years that
have not made it into the President's budget. One of those
happens to be a parking garage at the St. Louis Hospital, where
parking is very limited for patients and staff. Are there any
innovative solutions you might look at for addressing the
problem in St. Louis, and could you work with us to come up
with some solutions to it?
Secretary Principi. Yes. The project had been approved by
the Capital Investment Board for advanced planning funds, but
it did not hit that priority. However, because of its
importance we are looking at enhanced use, and will have an
enhanced use assessment within 30 days. We will get back to you
with the results of that assessment, but I believe going the
enhanced use route is a viable option to meet the parking care
needs, which is very important and very critical.

ADDITIONAL COMMITTEE QUESTIONS

Senator Bond. Mr. Secretary, thank you very much for your
answers. Believe it or not, I still have a bunch of questions
for the record, but I will submit those to you by staff, that
we will keep the record open for any questions, and we would
appreciate your answers.
We thank you very much for your testimony. Is there
anything further you wish to add?
Secretary Principi. No, sir, thank you.
Senator Bond. Thank you very much.
[The following questions were not asked at the hearing, but
were submitted to the Department for response subsequent to the
hearing:]
Questions Submitted by Senator Christopher S. Bond
veterans benefits administration issues
Question. A few years ago, VBA organized its 59 Regional Offices
into ``service delivery networks.'' What improvements, if any, are
attributable to the SDNs?
Answer. The reorganization to nine Service Delivery Networks (SDNs)
has resulted in more open and honest communication between operating
elements within the Veterans Benefits Administration (VBA). In addition
to improved communication, the reorganization has been successful in
promoting cooperation and eliminating destructive competition. This is
reinforced through VBA's Executive Performance Appraisal System. A part
of every facility director's performance appraisal is based on the
successful achievement of SDN and VBA performance goals, as well as
local goals. This has resulted in stations within SDNs being more
willing to share resources in the interest of SDN performance gains.
Several SDNs have created shared budget web sites to facilitate the
tracking and sharing of resources at that level. SDNs frequently meet
to discuss SDN-specific issues and five have created SDN-specific web
sites. This level of cooperation and participation is unprecedented in
VBA. The SDN reorganization has opened up formal channels of
communication that did not exist in VBA previously.
Communication within the SDN has resulted in improved service to
veterans. In some cases, directors have adjusted traditional geographic
barriers in the interest of providing enhanced service to veterans.
Many SDNs participate in inter-SDN brokering arrangements initiated at
the SDN level. Several SDN 1 stations share the processing of
overpayment waiver requests by their Committees on Waivers. SDN 1 also
utilizes shared resources for conducting local Systematic Technical
Accuracy Review (STAR) quality reviews. This fosters uniformity in
decision-making and error identification within the SDN. SDNs 1, 8, and
9 have developed community Web sites for the sharing of best practices.
SDN 6 has consolidated burial flag processing at the St. Paul Regional
Office to increase efficiencies within the SDN. SDN 9 developed an
electronic system for marketing and selling VA-acquired properties
across all Regional Offices within the SDN. This initiative has been
exported nation-wide and has resulted in significant cost savings to
the government. These are only a few examples of cooperation among SDN
members resulting in improved service to veterans.
Question. Performance varies considerably amongst the 59 VBA
Regional Offices and there seems to be no accountability. How will you
improve accountability for performance?
Answer. The restructuring of VBA's field organization into SDNs was
designed to increase the responsibility and accountability of field
managers for performance. Through the SDN structure, decision-making
authority is pushed down to lower levels of the VBA organization. This
allows VBA to hold managers accountable for their decisions and their
performance and for identifying and effectuating the changes needed to
improve performance.
The Regional Offices are organized under nine SDNs. Directors and
program managers in each SDN function as a team, jointly responsible
for the delivery of benefits and services within the SDNs' geographic
boundaries. The SDNs operate with a practical degree of autonomy;
however, there are systems in place to ensure accountability and
measure performance on the basis of improvement and outcomes.
Performance measures are tied to VBA's Balanced Scorecard and strategic
goals.
In restructuring the VBA organization, direct line authority over
field organizations was maintained. Ensuring a direct line of authority
was particularly critical during the initial stages of team-based SDN
development. This line of authority is provided through the Deputy
Under Secretary for Operations and the two Associate Deputies. The
Associate Deputies are responsible for overseeing the operations of the
SDNs, including monitoring performance against goals and standards and
assuring progress in the implementation of national policies and
initiatives.
Variations in performance among the Regional Offices occur because
of a variety of factors, including workload, resources, and staff
experience levels. Our target setting process, designed to achieve
performance targets at the national level, assures that individual
station-specific targets are as appropriate as possible. In order to
make sure targets are challenging--yet achievable for all Regional
Offices--and to hold managers accountable for performance, targets are
individualized for each station in each Balanced Scorecard measure. It
is with these performance targets that the foundation of accountability
is set.
Accountability is established through the performance briefings and
discussions that are conducted within the SDNs and at VBA leadership
meetings. These discussions include detailed explanations about
workload issues at each station. Directors and SDN representatives are
responsible for explaining to each other their progress in achieving
national, SDN, and station targets; identifying current performance
problems; citing solutions that are being implemented; and sharing best
practices.
Formal accountability is maintained through our performance
management system. Element 1 of the Directors' performance standards
measures the achievement of the Balanced Scorecard targets. A weighted
composite score is developed to assess how each station and SDN are
performing overall based on their business lines' performance on the
Balanced Scorecard. The performance standard element itself weights the
national score at 15 percent, the SDN score at 50 percent, and the
station score at 35 percent. Directors must achieve 85 percent of the
composite performance target. Thus, the directors are held accountable
for how their stations perform and contribute to the SDN and national
performance. Directors are provided feedback at the mid-year review, as
well as during their annual performance appraisal.
Question. Have SDNs helped in improving accountability?
Answer. As discussed in response to the preceding question, the SDN
structure has significantly improved accountability. An additional
aspect of accountability is provided in element 2 of the Directors'
performance standards. Under this element, his/her SDN directors rate
each other on teamwork and cooperation. The rating is done using a web-
based questionnaire. Directors are provided with written feedback
developed from the input of the other directors. That feedback is
discussed in a closed session of the SDN directors in consultation with
the appropriate Associate Deputy Under Secretary for Operations. Each
director is responsible to the group of SDN members, thus strengthening
overall individual accountability.
Question. VBA expects to improve its accuracy rate from 59 percent
in 2000 to 72 percent this year. What specific efforts will result in
such a large increase?
Answer. VBA has placed an increased emphasis on the timeliness and
accuracy of the claims process. In the past few years, VBA implemented
a number of initiatives designed to improve the accuracy of claims
processing. VBA established Quality Countermeasures Teams to identify
processing errors and focus resources on corrective actions. The STAR
program identifies specific errors. Countermeasures are developed to
address the most prevalent errors, and ``Just in Time'' training is
provided to mitigate the most frequent errors.
The Decision Review Officers (DRO) program provides a level of
review to ensure that accurate decisions are made and that the decision
is fully explained to the veteran. Feedback from the DROs is used to
improve accuracy. The Training and Performance Support Systems (TPSS)
initiative provides comprehensive training for the core claims
processing work. TPSS and the Systematic Individual Performance
Assessment (SIPA) initiative will provide accountability and uniformity
to the claims process and result in improved accuracy.
These initiatives and capitalizing on the information technology
investments will provide VBA with the opportunity to make significant
strides in our efforts to improve the accuracy of the claims process.
Question. VBA is requesting an additional 890 FTE for fiscal year
2002. What workforce analysis or data was used to support the need for
these additional FTE? Do you foresee the need for additional increases
in VBA staff in fiscal year 2003? Has VBA done any analysis showing
exactly how many employees and what skill mix are needed in each
regional office to support the expected disability claims workloads?
Has VBA developed a formal workforce succession plan?
Answer. In 1998, as VBA began development of the fiscal year 2000
budget request, we identified a number of critical management
challenges that would adversely impact the VBA organization in the
near-term and long-term future. The workload was becoming increasingly
more complex and would increase in direct proportion to that
complexity. A significant percentage of the experienced workforce was
approaching retirement age.
The organizational structure did not lend itself to providing
quality veteran/customer service. In the fiscal year 2000 plan and
budget formulation process, VBA outlined an ambitious, multi-year
approach to address these management challenges.
VBA began addressing the human capital challenge in their fiscal
year 2000 budget submission; further efforts to resolve the challenge
were included in the fiscal year 2001 and fiscal year 2002 submissions.
VBA developed a workforce plan that includes succession planning.
Staffing needs of each regional office are assessed, and a matrix that
assesses employee skill levels is currently under development. A
comprehensive VBA training program (TPSS) is addressing the training
needs of new and current employees.
Analysis is underway to determine whether VBA has successfully
addressed the human capital challenge by the end of fiscal year 2002.
The results of this analysis will determine whether VBA will request
additional FTE in fiscal year 2003.
Question. VBA expects duty-to-assist requirements and diabetes
claims to increase the pending workload dramatically in fiscal year
2001 and fiscal year 2002. What is VBA's forecast of the pending
workloads in fiscal year 2003 and fiscal year 2004? Do these forecasts
show the workload will decrease? When will it begin decreasing?
Answer. The legislation regarding these issues not only resulted in
an influx of new claims, but essentially changed VA's procedures for
processing both. The new duty-to-assist law requires additional wait
time be built into the claims process as part of the development. Added
development is also required prior to making a decision. As a result,
we do not anticipate that the increase in workload resulting from this
change will dramatically decrease in the coming years. Similarly, the
change to the law involving diabetes also changed the fundamental work
process involved in adjudicating this type of claim. While the initial
flood of claims will gradually dissipate, we expect a steady stream to
continue.
We do anticipate an overall decrease in workload by late 2003 or
early 2004. We have seen a downward trend in number of claims received,
and barring any new legislation, we expect this trend to continue.
Question. In processing initial compensation claims, how long on
average do Regional Offices wait to receive evidence needed from
external sources? Other than establishing predischarge sites, what has
VBA done to reduce waiting times and what else can be done?
Answer. VBA has analyzed the delays encountered in obtaining
evidence from its primary information providers. This analysis shows
that, depending on the sources, it takes 2-166 days to obtain evidence
necessary to adjudicate claims. The chart below shows the number of
days it takes to receive evidence from the major providers of this
information.

Access to Evidence

Days to
Evidence Source Receive

CURR (U.S. Army Center for Unit Records Research)................. 166
National Personnel Records Center................................. 100
Private Medical Records........................................... 50
VA Physical Exams................................................. 35
VHA Records....................................................... 31
Records Management Center......................................... 2

In the past, VBA had difficulty in obtaining service medical
records to process compensation claims. In 1992, VA entered into an
agreement with the Department of Defense (DOD) to resolve this issue.
Now, DOD sends the veteran's service medical records to the VA Records
Management Center at the time the veteran is discharged. This process
has reduced access time to this information to 2 days. VBA initiated
several efforts to improve the timeliness of its evidence-gathering
efforts. The National Personnel Records Center is the major source of
information to process compensation claims. VBA developed an automated
system to requests veterans' service medical records (veterans
discharged prior to 1992) and military service records from the
National Personnel Records Center in St. Louis. The Personnel
Information Exchange System (PIES) was fully implemented in fiscal year
2000. In addition, VBA has placed VA staff at the National Personnel
Records Center to assist in alleviating the backlog of requests for
information.
VBA and VHA have partnered to create a joint exam office that will
improve the timeliness of processing initial claims. A Compensation and
Pension Records Interchange (CAPRI) was developed in order to improve
VBA's access to VHA medical records.
VBA continues to work closely with the United States Army Center
for Unit Records Research (CURR) to reduce the delays encountered with
stressor verification requests required in the processing of PTSD
claims. The Compensation and Pension (C&P) Service has issued a
Statement of Work for an electronic data exchange system similar to
PIES to improve the timeliness of those requests.
Question. What is VBA doing to identify, evaluate and disseminate
best practices to the field?
Answer. In recent years VBA has developed systems and mechanisms
for evaluating practices used by its field facilities. A prime example
is the establishment of the Business Process Reengineering (BPR) case
management demonstration sites. These sites by their very nature are
test beds for best practices. Within the six identified sites
initiatives designed to improve claims processing are tested prior to
implementation nationwide.
These demonstration sites are modeling the case management service
process to include: defining and implementing this process; testing PC-
based case management tools; and developing and utilizing a series of
reader-focused writing letters that provide customers with process
expectations, evidence needs, and claims status. The sites are also
measuring the impact of this approach on claims processing by tracking
a number of processes and service indicators including timeliness,
accuracy, customer satisfaction, employee satisfaction, pending
workload, and telephone service. After careful testing and evaluation,
the initiatives, which are considered best practices, are rolled out to
other stations.
The following represents a number of initiatives that were
developed and tested locally in the field. Based on the merits of these
local efforts, the concepts were developed, evaluated and are being (or
about to be) implemented nationally.
--Training Responsibility Involvement in the Preparation of Claims
(TRIP)
--Personnel Information Exchange System (PIES)
--Social Security Administration (SSA) Link
--Center for Unit Records Research (CURR) Link
--Compensation and Pension Record Interchange (CAPRI)
--Expectation Letter
--Case Management
--Veterans Service Representative (VSR) Position
--Veterans Service Center (VSC)
--National Automated Responses System (NARS)
--Reader Focused Writing (RFW)
--Decision Review Officer (DRO)
--Skills Matrix
--Claims Adjudication Processing System (CAPS)
--Balanced Scorecard Utilization
Another initiative designed to evaluate and report on best
practices is VBA's Virtual VBA lab at its Regional Office in
Washington, DC. This lab is testing a paperless claims folder process
that will result ultimately in a controlled rollout to other stations.
Other initiatives aimed at evaluating and disseminating best
practices include VBA's telephone strategy, which is described in
detail in VBA's semi-annual BPR report, and quality improvement plans
and best practices.
As new initiatives are implemented, their impact is measured
through the monthly Balanced Scorecard. The scorecard is also used to
monitor performance nationwide through on-going VBA Leadership
meetings. The Office of Field Operations holds regular conference calls
with each of the SDNs to discuss quality improvement efforts, to
include any best practices.
Earlier this year, VBA developed a process for the dissemination
and implementation of best practices that stem from efforts at the
local level, i.e., grass roots initiatives. Further development of the
associated evaluation process at the local and national levels is
underway. The focus of the process is to evaluate and disseminate for
implementation locally developed initiatives that can demonstrate real
improvements.
The best practice evaluation process will begin at the local level
where the initiative is initially implemented. Applying an appropriate
evaluation methodology, the Regional Office will assess the
effectiveness of the practice on improving business operations.
A defined format will be utilized for reporting best practices to
include a description of the practice, operation impacts (scorecard),
policy and procedure impacts, cost, resource requirements, and lessons
learned.
Upon review and approval as a best practice, the initiative will be
posted on VBA's Intranet site. Best practices will be publicized
further on the field operation's hotline calls. Initiatives
demonstrating high impacts may be evaluated further via the BPR
demonstration sites and adopted as a mandatory practice nationwide.
Question. What are your views on consolidating disability claims
processing operations?
Answer. We believe consolidation of some specific types of claims
processing to be appropriate. We are developing plans that would
consolidate the processing of our means-tested programs, as well as
small programs such as the Spina Bifida Allowance for children of
Vietnam veterans.
Question. What benefits could be gained from such consolidation?
Answer. Consolidation of our means tested pension and very small
``specialty'' programs will enable us to focus a highly trained staff
on these complex programs and thereby improve the timeliness and
accuracy of claims processing and reduce overpayments. It will also
minimize the complexity of the Veterans Service Representatives (VSR)
position, allowing the Regional Offices to focus on the compensation
benefits programs. We will be able to provide better oversight of the
means-tested programs and stage the workload throughout the year,
evening out the processing cycles and avoiding surges in pension claims
workload. Consolidation will also provide opportunities for enhancing
the effectiveness of our training and employee development programs.
Question. Could the predischarge initiative have any implications
for future Regional Office structure?
Answer. Expansion of our presence at military separation centers is
an integral part of our current and future plans for delivery of VA
benefits and services. Original compensation claims filed at
predischarge sites currently represent approximately 14 percent of the
total claims received. We expect this volume to increase as more sites
become fully staffed and operational. At the same time, our data
indicates that veterans today file claims for increased disability
benefits more frequently than veterans in past years. The major portion
of our claims receipts are from veterans who are either reopening their
claims or are filing claims for increased benefits, and we expect that
trend to continue. Our future structure therefore needs to be flexible
to respond to the changing needs of both separating service members and
veterans. We recognize that there are many factors that will change our
organization and influence our future field structure. Our goal is to
create an organization that can quickly and efficiently respond to our
rapidly changing world.
Question. What percentage of the original claims workload does VBA
forecast that the predischarge sites will ultimately receive?
Answer. Based on the claims filed in the first half of fiscal year
2001, we believe that about 25,000 claims will be filed at our Benefits
Delivery at Discharge sites this year. This represents 31 percent of
the 80,000 claims we expect to receive from veterans during their first
year after separation from active duty. We would like to expand the
predischarge program to 100 percent of all service members who wish to
file claims for disability compensation. However, it may be difficult
because of the remote assignments of some service members, such as on
ships at sea, in small military bases not near VA medical facilities,
or in some foreign locations such as U.S. Embassies.
Question. Despite recent efforts to improve service at the
Washington, DC Regional Office, their performance still lags well
behind all other offices. Average number of days for rating-related
actions in March was 297, compared to the national average of 185 days.
Why is this, and what specific actions does VBA take to address the
worst performing offices, other than shifting their workload to other
offices in the SDN?
The Washington Regional Office has made significant progress over
the last 24 months in workload management. With assistance from other
Regional Offices within SDN 3, the number of pending claims has been
reduced by 40 percent (from 12,712 claims in July 1999 to 7,480 in June
2001). The number of claims pending in excess of 180 days has been cut
in half (from 7,691 to 3,458). It should be recognized that this
reduction has been accomplished at the same time that the pending
inventories have been climbing nationwide as a result of the duty-to-
assist legislation and other regulatory changes. The Washington
Regional Office still has a much higher than average percentage of
claims pending in excess of 180 days. As the office continues to work
through these older claims, the average days to complete a rating-
related claim will remain significantly above the national average.
Additionally, the Washington Regional Office has jurisdictional
responsibility for claims from veterans residing in foreign countries.
Foreign claims currently represent about 30 percent of the offices
pending rating workload. Due to the complexities of foreign mail and
correspondence and the need to coordinate medical examinations through
the U.S. Embassies, the time required to process these cases is far
greater than that of domestic cases. This is a factor that must also be
considered when assessing the performance of the Washington Regional
Office. The average days to complete foreign rating claims exceeded
domestic claims by 83 days for the month of May 2001. The average days
pending for foreign rating claims currently exceeds domestic by 64
days.
The Washington Regional Office has historically experienced more
difficulty than any other Regional Office in attracting and retaining a
highly trained workforce. This has a significant impact on performance.
The fact that VA's headquarters organization is in the same location
and offers job opportunities within a significantly higher-grade
structure provides unique challenges that are difficult to overcome.
There is also intense competition for federal employees from other
agencies in the Washington, DC metropolitan area at all grade levels,
and entry-level salaries in the Veterans Service Center (VSC) are not
competitive with similar opportunities in the area.
We have developed a proposal to realign workload within SDN 3 that
we believe offers great potential for improving the operations of the
Washington Regional Office. We will be expanding the predischarge
program into the Washington, DC Military District, which is one of the
most highly visible points of separation for the military services. The
Washington Regional Office will be responsible for this program. At the
same time, we will transfer responsibility for claims from veterans
residing in the Northern Virginia area from Washington to the Roanoke
Regional Office, and claims from veterans residing in the Maryland
counties of Prince Georges and Montgomery from Washington to the
Baltimore Regional Office. This plan will decrease the complexity of
C&P claims processing at the Washington Regional Office, as the tenets
of service connection are easier to apply in original disability
compensation claims when continuity is not an issue and claims are
typically ``cleaner.'' The proposal will reduce some of the workload
volume and complexity in the rating activity, which is the area that
the office has the greatest difficulty in maintaining the necessary
levels of expertise.
In addition to the workload and the performance challenges of the
Washington Regional Office, this question also asks how we address
other offices experiencing performance difficulties. In order to
monitor performance in all SDNs and Regional Offices, we have
established bimonthly Leadership Meetings with Headquarters staff
(including top management staff from the Office of Field Operations and
all Services) and the SDN team representatives. These meetings provide
opportunities to discuss performance, establish clear goals and build
organizational accountability. The meetings also enable us to gain a
better understanding of our business and the tools available to manage
performance, and to share best practices and new ideas.
Accountability for performance is emphasized through these
Leadership meetings. At every meeting, we make it a practice to analyze
VBA performance across all business lines and in all SDNs. Each team
representative is responsible for identifying significant gaps in
performance for each office within the SDN, and discussing actions the
SDN has taken to remedy those gaps. We review the success of
interventions undertaken to improve performance in offices with more
difficult workload situations. This process ensures that we are
constantly assessing the level of service delivery in all program areas
and in all regional offices, sharing best practices and working
together to correct deficiencies and improve performance, and
appropriately holding top managers accountable for performance
achievements (or lack thereof). The Service Directors frequently
participate in these performance reviews.
Regional Offices not performing well against critical scorecard
measures must develop a ``wellness plan'' that outlines actions to be
taken to address performance deficiencies. These plans are monitored
against monthly goals. This process dovetails with performance reviews
conducted by the Associate Deputy Under Secretaries on regularly
scheduled conference calls with each SDN and top managers from the C&P
Service.
We are committed to instituting and evaluating performance measures
that will ensure accountability and drive our future success in
benefits delivery. With the Balanced Scorecard approach, goals are
clearly defined at the national, SDN and local levels that identify
where we are and where we need to go. Management is focused on
performance achievement, and scorecard information is used to develop
workable plans for improvement at all levels of the organization. Since
instituting the Balanced Scorecard, we have identified both strengths
and weaknesses in our performance and we are learning how we can
improve our service to veterans.
In addition, the directors of all of our Regional Offices have a
complete set of performance standards that clearly identify performance
expectations. Performance on the Balanced Scorecard measures is the
first element of the standard, and is identified as a critical element.
As such, it weighs heavily in the assignment of annual performance
ratings and any bonuses that may be awarded to senior managers.
medical services
Question. VA's budget assumes that 65,000 military retirees (27
percent of age 65 and over military retirees using VA) will leave the
VA, reducing VA medical costs by $235 million. Are you confident that
there will be a net decrease of this many or more military retirees as
a result of TRICARE for Life? On what basis was this estimate made?
Answer. The Administration estimated that approximately 27 percent
of military retirees who are age 65 or older and currently enrolled in
the VA health care system would voluntarily choose to shift their
medical care to the TRICARE system. This estimated shift is based on
convenience (retirees can go to any Medicare provider) and new out-of-
pocket co-payments for medicare services. Military retirees will have
to evaluate which system serves their needs best taking into
consideration such things as cost, convenience, location and quality of
health care. The following figures were used in the calculations:
64,540 enrollees at an average cost of $3,705 per enrollee equals $239
million. This amount is then reduced by the nearly $4 million in
collections that would otherwise have been anticipated for those
enrollees. The net savings is, thus, approximately $235 million.
Question. According to GAO, 13 percent of VA users (432,000
veterans) are not within 30 miles of a VA medical facility. GAO found
that the majority of patients who lack reasonable access are
concentrated in six networks. Do these networks have management or
financial issues that need to be addressed?
Answer. The General Accounting Office (GAO) study limited its
definition to distance, which can disadvantage the Veterans Integrated
Service Network (VISN) with large geographic areas and urban veteran
populations in terms of assessing need. For more urban settings, some
Networks assess access in terms of travel time rather than distance.
Nationally, a VHA taskforce proposes the use of 30 minutes or 30 miles
as a measure for adequate access. Also, when there is an insufficient
population to support a viable Community Based Outpatient Clinic
(CBOC), i.e., a panel size of approximately 1,000 users per provider,
other options are made available to veterans.
Management in VISN 6 is aware of the need to improve veteran access
and has done an analysis of veteran population data to justify the
already established clinics and areas for potential future expansion.
CBOCs are established in a phased manner determined by need, budget,
staff, etc. VISN 6 has CBOCs in: Greenville, North Carolina; Tazewell,
Virginia; Winston Salem, North Carolina (Satellite Outpatient Clinic);
Charlotte, North Carolina; Raleigh, North Carolina; Braxton, West
Virginia; Fredericksburg, Virginia; and Danville, Virginia.
The Raleigh and Fredericksburg clinics were opened in fiscal year
2001. The Wilmington, North Carolina CBOC has a scheduled opening date
for later this year. An additional site at Havelock/Morehead City,
North Carolina received Congressional approval in May 2001 and will be
activated over the next few months. Additional potential CBOC sites are
examined via an analysis of veteran population density, remoteness of a
veteran's residence from care, and a local medical center's ability to
support the CBOC. Possible sites for fiscal year 2002 are: Lynchburg,
Virginia; Norfolk, Virginia; Franklin/Cherokee, North Carolina;
Hickory, North Carolina; Lewisburg, West Virginia; and Charlottesville,
Virginia.
Sites considered for fiscal year 2003 through fiscal year 2006 are:
Goldsboro, North Carolina; Greensboro, North Carolina; Galax, Virginia;
Tidewater, Virginia; Staunton, Virginia; Williamsburg, Virginia; and
Elizabeth City, North Carolina.
The possible CBOC sites for fiscal year 2002 and fiscal year 2003
are under consideration and may change. VISN 6 management continues to
analyze veteran population shifts with the intent of establishing
community clinics in areas where veteran population justifies the need.
In fiscal year 2000, VISN 7 set aside $10 million as start-up funds
for its six recently approved CBOCs. Two of the six are fully
implemented, and the goal is to have the remaining four implemented by
the end of this fiscal year. When there is an insufficient population
to support a viable CBOC (panel size of approximately 1,000 users per
provider) other options are made available to veterans.
VISN 9 continues to support the further development of community-
based primary care services for our Nation's veterans. Currently, 18
CBOCs are operational within the Network. While this has improved
access to primary care, gaps still remain. Strategic planning for this
Network is based on a 3 to 5 year cycle, and their planning for
community-based clinics was developed with assistance from a consultant
using weighted criteria to assess potential sites (a two-phase approach
with a high priority and secondary list of potential sites.)
Stakeholder input was sought and incorporated into the planning
process. With over a million veterans residing in this service area,
the VA mid-South Healthcare Network is committed to improving access
and has aggressively developed community based clinics during the past
3 years. This network will continue to move forward in the planning and
implementation of these services.
VISN 13 Medical Center management continues to financially support
improved access to VA health care due to the rural nature of the upper
Midwest. Prior to 1997, VISN 13 treated veterans at 4 VA off-site
clinics and used 12 traveling health care teams. Since then, VISN 13
has opened nine new CBOCs and will open two more this summer. CBOC
business plans will soon be submitted to VA Central Office for three
more sites. VISN 13 continues to support improving access to veterans
through CBOCs while maintaining cost-effective operations at the core
VA medical centers.
VISN 15 has established 36 CBOCs since 1995. These new points of
care have decreased the average distance a veteran must travel to
receive medical care from approximately 75 miles to less than 20 miles.
The geography and demographics of the veteran population in VISN 15
prevent all veterans from being within 30 miles of care, e.g., in
western Kansas there are a small number of veterans spread across a
vast area.
VISN 16 reviews management and financial issues on a regular basis
through performance measures such as the ones noted in the paragraph
above.
Question. Is there something inherent in these networks that make
improving access for veterans more difficult?
Answer. As stated previously, a distance measure may not be
appropriate in all cases. The geography and veteran demographics of the
network make providing access in some parts of a Network much more
difficult than others. Difficulties in improving access for veterans in
certain geographic areas can be caused by: insufficient number of
patients to support a cost-effective CBOC; difficulties recruiting
medical personnel to staff CBOCs; lack of appropriate, affordable space
to house CBOCs; and difficulty in arranging cost-effective contract
care with local health care providers.
VISN 6 has a widespread geographic area covering 90,000 square
miles, 222 counties, four states, and 1.2 million veterans. VISN 6
contains significant mountainous terrain, an area of low population
density along the coast where veterans are widely dispersed. Many of
these areas do not contain adequate numbers of patients to be cost
effective for a CBOC, we will continue to monitor for future needs. In
other areas where the veteran population does justify the need for a
CBOC, there have been a few cases where it was difficult to arrange
local health care due to lack of providers (contract or staff), and
cost negotiations. These challenges were overcome, with time, and
approved CBOCs opened as planned.
VISN 7 has experienced difficulties in finding qualified
contractors able to provide quality health care at a reasonable cost.
The VISN has opted, in spite of the difficulties associated with
establishing a VA-staffed model CBOC, to pursue the VA-staffed model in
order to better ensure consistency and quality service for veterans.
VISN 9 strategic plan includes creating a distributed system of
multi-site models including CBOCs, hospital based primary care
services, and primary care clinics (owned and contracted), and
developing new sites in high priority areas to increase access to
eligible veterans and enhance quality. Linkages between CBOCs and
medical centers will be strengthened to ensure standardization and
continuity of care delivery.
VISN 13 operates 25 CBOCs at 41 locations in a very large urban and
rural geographic area over 700 miles wide. The Network encompasses all
or portions of eight states: Iowa, Minnesota, Montana, Nebraska, North
Dakota, South Dakota, Wisconsin, and Wyoming. Even though such a large
number of CBOCs provide services to veterans, pockets of veterans
reside in rural areas further than 30 miles from VA health care. VISN
13 reduced veterans' average travel time from 31.35 miles in fiscal
year 1998 to 28.2 miles in fiscal year 1999 according to a VA study by
the Planning and Systems Support Group.
For VISN 15, the geography and veteran demographics of the network
make providing access in some parts of the network much more difficult
than others. The small number of veterans spread across large distances
makes the placement of a CBOC in many areas not economically viable. It
is difficult to recruit staff, particularly physicians, for remote
areas.
VISN 16 serves the largest veteran population in VHA encompassing
170,000 square miles in Arkansas, Louisiana, Mississippi, Oklahoma, and
portions of Texas, Missouri, Alabama, and Florida. Since 1995, the VISN
has opened 16 new CBOCs targeting areas with large numbers of medically
underserved veterans. Network 16 has 28 operating CBOCs, 2 pending
activation and 4 recently approved. VISN 16 has many rural, poor, and
sparsely populated areas that pose great difficulties in staffing CBOCs
(whether contract or VA-staffed) and has re-emphasized its primary goal
of improving access to care via CBOCS in fiscal year 2000. A CBOC
Steering Committee was established and, in conjunction with the VISN
Business Office, developed a process for evaluating CBOC proposals.
Travel time, veteran age, and waiting times are criteria used to
evaluate the impact a CBOC will have on improving veteran access to
primary care. This process allowed the Steering Committee to identify
four additional sites as potential CBOC locations. These sites were
approved by the Executive Leadership Council and will be submitted for
approval, based on available resources. The VISN is continually
analyzing data to strategically meet the access needs of veterans
within their service area.
Question. Should there be more consistency among Networks?
Answer. The local VISNs plan CBOCs within the context of national
policies and procedures. There are often unique circumstances in local
market areas that impact CBOC planning and decision-making, including
veteran demographics, availability of health care providers, community
resources, travel issues, veteran preferences, etc. VHA is in the
process of enhancing its National CBOC policy and developing a national
strategy to ensure that CBOC planning is focused on a consistent set of
evaluation factors and that CBOC proposals are evaluated consistently
at the Network and National levels.
Question. What is VA's goal with respect to increasing
accessibility of service, and when will it have been achieved?
Answer. Providing easy access to medical care is one of VHA's
strategic ``6 for 2006'' goals. The strategic target goals are:

[In percent]

Strategic
Performance Measure Target

Increase the percent of enrolled veterans who will be able to
obtain a non-urgent patient appointment with their primary
care provider or other appropriate provider within 30 days.... 90
Increase the percent of patients who will be able to obtain a non-
urgent appointment with a specialist within 30 days of the
date of referral.............................................. 90
Increase the percentage of patients who report being seen within
20 minutes of their scheduled appointments at VA health care
facilities.................................................... 90

VHA measures performance in terms of waiting times for care and
evaluates the percentage of veterans who travel more than 30 miles to
reach VA primary care services. In fiscal year 2000, 69.9 percent of
our patients were within 15 miles and 87.4 percent were within 30
miles, with a national overall average distance of 13.4 miles compared
to 14.1 miles in fiscal year 1999. Since 1995, the average distance
decreased 42 percent from 23.1 miles to 13.4 miles. The decrease in
average distance and increase in access is partially attributable to
the increased number of service sites that have become operational
since 1995.
Question. How many more CBOCs are needed to meet your goal, and
over what time period?
Answer. CBOC planning is Network-based. Networks strategic plans
include projections for additional CBOCs. A recent GAO survey of
Networks found that if all planned CBOCs were implemented within the
next 3 years, new openings would average about 50 CBOCs annually. This
includes CBOCs that have already gone through the Congressional review
process, as well as new proposals. The actual number of CBOCs is
dependent upon the annual development of Network strategic plans and
their constant modification to meet changing veteran demands.
Question. In some CBOCs, 50 percent of the patients are Priority
7s. What is VA doing to manage the utilization of these patients to
ensure that services are not diminished for traditional patients--those
with service-connected disabilities or lower incomes?
Answer. GAO found that new CBOCs are not primarily responsible for
the marked increase in the number of higher income patients who have
sought health care through VHA over the past few years. On a national
level, Priority 7 patients make up a relatively small percentage of
total health care expenditures. In fiscal year 2000, 15 percent of our
patients were Priority 7s and exhibited the lowest expenditure per
patient than for any other priority grouping of patients (source: Table
2 September Enrollment Report). The cost per enrollee per month, a
common yardstick in the health care sector, shows that Priority 7
veterans cost relatively little to treat.

------------------------------------------------------------------------
Fiscal Year
2000 Market Cost per
Share (Percent Enrollee per
Description Veteran Month (as of
Population February 26,
Enrolled) 2001)
------------------------------------------------------------------------
Priorities 1 through 4.................. 70 $511
Priorities 5 and 6...................... 29 $271
Priority 7.............................. 8 $89
------------------------------------------------------------------------

In terms of access, nationally the Priority 7 patients are the same
average distance to the closest VHA service site as other priorities.
The VHA CBOC policy specifically states that clinics shall not be
established for the purpose of attracting new VA patients and that any
new users must be accommodated within existing allocations and
treatment priorities. The local health care system manages utilization
of services within the context of eligibility rules, patient needs and
resources.
Question. VA has identified 69 facilities as ``exceptionally high
risk'' for seismicity and in need of repair. What is VA's plan to
address seismic needs, and how will the CARES process impact this?
Answer. With VA having identified 67 facilities as ``exceptionally
high risk (EHR),'' the Under Secretary for Health, in a letter to VISNs
19, 20, 21, and 22, directed the development of project applications
for these buildings in a multi-year program to identify detailed
projects for consideration in the Capital Investment Board (CIB)
project selection process for major projects and/or the VISN approval
process for minor projects.
Phase II of the CARES studies includes VISN 21 and VISN 22 where a
majority of highest priority EHR buildings are sited. The $85 million
proposed for the CARES Fund (construction, major) and CARES Activities
(construction, minor) will allow VHA to initiate design through
construction for any major and/or minor seismic capital initiative
stemming from CARES recommendations.
The absence of a completed CARES study should not prohibit funding
of a major project, but certainly careful analysis must be accomplished
before making such a proposal. There are facilities that require
seismic safety improvements where it is extremely unlikely that CARES
will conclude VHA does not need the building in question. Examples
include the main hospital buildings at Los Angeles, San Francisco, and
San Diego. Criteria would include importance of the facility to
veterans' health care, seismic risk, current condition of building
infrastructure and compliance to current national codes and VA facility
criteria.
Question. Are there other areas in which critical infrastructure
needs exists, and how does VA propose to address such needs pending
completion of CARES?
Answer. A system as large as VHA's cannot maintain quality and
productivity over time without appropriate recognition of the need for
infrastructure improvements. The pace of change in health care delivery
has been an impediment to supporting major construction. Implementing
CARES options will no doubt require major construction funding in many
instances. However, the absence of a completed CARES study should not
prohibit funding of a major project, but certainly careful analysis
must be accomplished before making such a proposal.
special needs populations
Question. VA has an important responsibility to take care of its
``special needs'' population--spinal cord injury, blind rehabilitation,
mentally ill, PTSD, homeless, and substance abuse. In all but one area,
VA has increased the number of patients treated since 1996, but I'm
very concerned that in the area of substance abuse, VA has decreased
the numbers of patients treated over the last five years by 12
percent--about 10,000 veterans. Why is this and what is being done to
ensure this critical need is met?
Answer. The number of patients treated for substance abuse has
decreased, especially between fiscal year 1999 and fiscal year 2000.
Early this year, as authorized by the Veterans Millennium Health Care
and Benefits Act, we provided over $9 million in funding to 31
facilities to expand substance abuse treatment capacity. We expect this
increased funding to affect an increase in treatment capacity this
year. However, we are working to better understand the reasons for this
decrease in use of specialized substance abuse treatment programs, and
to ensure access to substance abuse programs in our clinics as well as
in our larger facilities. To this end, VHA plans to establish a
National Mental Health Improvement Program (NMHIP). This program will
be modeled after a number of well-established VA data-driven
improvement programs, such as the Continuous Improvement in Cardiac
Surgery Program (CICSP), the National Surgical Quality Improvement
Program (NSQIP), the VA Diabetes Program, the Pharmacy Benefits
Management Program (PBM), and the Spinal Cord Injury/Dysfunction
National Program. This new program will use validated collection,
expert analysis, and active intervention by an oversight team to
continuously improve the access, outcomes, and function of patients in
need of our mental health programs. These programs include those for
patients who are Seriously Chronically Mentally Ill, or who suffer from
Post Traumatic Stress Disorder, Substance Abuse, or Homelessness. This
program will draw upon existing resources in our Health Services
Research and Development Service (HSR&D) including existing initiatives
in our Quality Enhancement Research Initiative (QUERI) and our Mental
Health Strategic Health Care Group (MHSHG) including the Northeast
Program Evaluation Center (NEPEC).
department of defense/department of veterans affairs (dod/va) sharing
Question. Currently, services shared between VA and DOD's health
systems amount to only $65 million. What ideas do you have to improve
collaboration, and how much money might be saved?
Answer. VA and DOD are working closely to improve collaboration. On
May 28, 2001, the President announced the formation of the ``Task Force
to Improve Health Care Delivery for the Nation's Veterans'' comprised
of health care experts, officials familiar with Department of Veterans
Affairs and Department of Defense (DOD) health systems, and
representatives from veteran and military service organizations. This
group will identify ways to improve benefits and services for veterans
and for DOD military retirees who are also eligible for VA benefits;
review barriers that impede coordination; and, identify opportunities
to maximize use of resources and infrastructure to include buildings,
information technology and procurement of supplies.
An over-riding goal in all of these activities is to obtain more
value from the federal dollar spent. However, it would be premature to
make cost savings estimates at this time.
Question. What specific steps does VA plan to take to improve not
only sharing of services, but also opportunities to maximize joint
purchasing power, such as in the area of pharmaceuticals and supplies?
Answer. VA entered into a December 1999 Memorandum of Agreement
(MOA) with DOD to combine the purchasing power of the two Departments
and eliminate redundancies. The MOA has three appendices
(pharmaceuticals; medical and surgical supplies; and high-tech medical
equipment).
A major breakthrough occurred in late calendar year 2000, when DOD
agreed to eliminate their Distribution and Purchasing Agreements
(DAPAs) for pharmaceuticals and instead rely upon the Federal Supply
Schedule (FSS) for pharmaceuticals. As a result, DOD's Distribution and
Purchasing Agreements were eliminated in January 2001, for all
pharmaceuticals that are available in the FSS.
A joint VA/DOD Data Management Group is developing data gathering
and assessment plans for medical/surgical items. However, a major
impediment towards standardizing and consolidating medical/surgical
supply items is the lack of a Universal Product Numbering (UPN) system.
VA is currently taking the lead by developing requisite cost-benefit
analyses to support requiring federal contractors to provide UPNs for
medical/surgical commodities. This proposed requirement will undergo
scrutiny at the Office of Management and Budget (OMB) under the
auspices of the Office of Information and Regulatory Affairs (OIRA).
As of March 1, 2001, there are 33 joint DOD/VA contracts for
pharmaceuticals. The estimated cost savings in fiscal year 2000 for
both Departments from these contracts totaled $42.5 million ($30.8
million for VA; $11.7 million for DOD). These savings were realized
from 24 contracts. To date in fiscal year 2001, an additional eight
contracts have been awarded with discounts off the lowest Federal
Supply Schedule price ranging from 0.19 percent to 53.75 percent. Once
purchase/utilization data is available for these eight new contracts,
cost savings data will be updated. Also as of March 1, 2001, 24
additional joint contracts are pending award; four joint contracts were
not awarded due to lack of savings afforded the government through
their award. It is difficult to project how much additional savings
will be achieved due to the dynamics of the pharmaceutical market
place, i.e. branded products going generic and the clinical strategies
employed by both Departments in the provision of their drug benefit. It
should be noted that VA alone would accrue an estimated $745.7 million
in cost avoidance, i.e. cost avoided through contract prices lower than
the Federal Ceiling Price, for the period 1996-2002 through national
contracts for high volume/high dollar pharmaceuticals. Many of these
contracts will be considered for joint DOD/VA contracting activity when
individual contracts expire.
The next major phase of the MOA implementation is underway,
converting Distribution and Purchasing Agreements to FSS for medical/
surgical products, and identifying joint opportunities for
standardization that would promote even greater savings.
co-payments
Question. When will the new co-payments for prescriptions and
outpatient care be in place?
Answer. Medication co-payment proposed regulations were published
in the Federal Register for public notice and comment on July 16, 2001.
We anticipate implementing increased co-payment for pharmacy by
December 1, 2001.
The outpatient co-payment regulations are still being developed.
These proposed regulations would follow the regulatory process as we
described for the medication co-payment regulations; however, we expect
to have them in place by May 1, 2002.
Question. What are some of the issues currently being considered
with respect to changing the current outpatient co-pay from $50.80?
Answer. VHA is reviewing several options regarding proposing
changes to the outpatient co-payment. Some of the options include a
combination of co-pays, coinsurance and an out-of-pocket maximum.
Another possible option may involve establishing a tiered outpatient
co-payment. This would be based upon the level of service provided,
such as one co-payment rate for primary care services and another co-
payment rate for specialty care services.
Question. The Inspector General recommended a co-pay increase for
prescriptions to $10. Why does VA believe $7 is more appropriate?
Answer. Language contained in Public Law 101-508 states that VA
cannot charge a co-payment amount that would exceed VA's cost of the
medication. The VHA Office of Finance completed an extensive review of
the fiscal year 2000 costs associated with the administration of
outpatient prescriptions. A VHA Co-payment Work Group, assisted by a
contractor, also conducted a literature review of medication co-payment
industry practices. The outcome of these reviews assisted the VHA
Office of Finance in determining the proposed medication co-payment
amount.
emergency room care
Question. VA estimates it will spend $138 million next year for
emergency room care, the same amount estimated in fiscal year 2001. It
is my understanding that costs eventually could go as high as $400
million or more annually. By what year do you anticipate this will
occur?
Answer. VA cannot start paying for the costs of emergency care
covered by the emergency care provisions of the Veterans Millennium
Health Care and Benefits Act until final regulations are published. VA
hopes that these regulations will become effective before the end of
fiscal year 2001. VA will begin paying these costs as soon after that
as possible including retroactive payments to May 2000. There will be a
start up period during which time eligible veterans and providers must
be given information concerning the emergency care benefits and the
process for payment. For this reason, we estimate that fiscal year 2002
costs will be $138 million. The fiscal year 2003 budget will provide an
updated estimate of the full year impact of the emergency care
provisions. That estimate will reflect actual experience and projected
demand. Initial estimates from the actuary have indicated that full
implementation could result in costs above $400 million.
hepatitis c screening
Question. Do you agree with GAO that it would be helpful to
establish performance goals for hepatitis C screening--such as a target
percentage of enrolled veterans to be screened each year? If so, why
have none been established and when will such goals be put in place?
Answer. VHA agrees that establishing feasible and measurable
performance measures for hepatitis C screening is helpful. Therefore,
for the purpose of fiscal year 2002, performance goals for hepatitis C,
screening for hepatitis C risk factor is included as follows:
Hepatitis C Screening.--Percent of veterans screened for hepatitis
C risk factors: Measurement will be External Peer Review Program (EPRP)
until the hepatitis C Clinical Reminder System is fully implemented and
reporting data. Fiscal year 2001 EPRP data will be used as a baseline.
Hepatitis C Testing.--Percent of veterans who get tested for
hepatitis C subsequent to a positive hepatitis C risk factor screening:
Measurement will be EPRP until the hepatitis C Clinical Reminder System
is fully implemented and reporting data. Fiscal year 2001 EPRP data
will be used as a baseline.
recovery audit program
Question. The fiscal year 2000 VA-HUD bill required VA to conduct a
recovery audit program for its fee-basis care. What is the status of
the program?
Answer. The contract has been awarded and the government and the
contractor continue to work together to begin operations. Collections
are expected to begin in mid-summer.
Question. How effective do you think this program will be,
considering the initial lessons learned during the start-up phase?
Answer. We anticipate that the program can recover funds and
provide valuable operational lessons in the way the VA pays for non-VA
care.
Question. To date, what is the percentage on overpayments
discovered? What is the percentage of overpayments recovered? What has
VA learned from seeing the differences/similarities between those
overpayments identified and those collected that will improve the level
of collections and also help VA avoid these problems in the future?
Answer. The contractor began operations in February 2001. Since
that time, the contractor has retrieved the necessary data from the VA
medical center and the Health Administration Center to begin their
screening or payments. This screening has begun and potential
collections are being identified. However, to comply with various laws,
the providers are given a series of appeals and notifications. We have
not yet completed this entire process so there has been no collection
of funds to the VA at this time. Some lessons learned are being
developed but we are still in the learning phase.
This phase of the contract is not expected to begin until later
this summer.
national cemetery administration
Question. What is VA's policy with respect to establishing
additional national cemeteries? What is the current backlog of
maintenance and repair needs in VA cemeteries nationwide, and what are
VA's plans to eliminate the backlog?
Answer. One of the National Cemetery Administration's (NCA)
strategic objectives is to ensure that the burial needs of veterans and
eligible family members are met. In order to achieve this objective,
NCA needs to increase access by developing additional national
cemeteries in unserved areas, expand existing national cemeteries where
appropriate, develop more effective use of available burial space, and
encourage individual states to develop state veterans cemeteries
through the State Cemetery Grants Program.
NCA is planning for the development of new national cemeteries to
serve veterans in the areas of Atlanta, Georgia; Detroit, Michigan;
Miami, Florida; Oklahoma City (Fort Sill), Oklahoma; Pittsburgh,
Pennsylvania; and Sacramento, California. These locations were
identified in a May 2000 report to Congress as the six areas most in
need of a new national cemetery, based on demographic studies. When
open, these cemeteries will provide a burial option to nearly two
million veterans who are not currently served. The President's 2002
budget provides $48 million to build, design, or acquire land for the
establishment of new national cemeteries and $25 million for the State
Cemetery Grant Program. NCA anticipates that these national cemetery
projects and additional state construction will increase to 88 percent
the number of veterans served by a burial option in a national or state
cemetery within 75 miles of their residence by the year 2006.
The Veterans Millennium Health Care and Benefits Act of 1999
directed VA to contract for an independent demographic study to
identify those areas of the country where veterans will not have
reasonable access to a burial option in a national or state veterans
cemetery, and the number of additional cemeteries required to meet
veterans' burial needs through 2020. The contractor's report is due in
October 2001. The Department will evaluate its policy of establishing
additional national cemeteries when the data from this report is
available.
Another of NCA's strategic objectives is to ensure that national
cemeteries are shrines dedicated to preserving our Nation's history,
nurturing patriotism, and honoring the service and sacrifice that
veterans have made. In order to achieve this objective, NCA must
maintain occupied graves and developed acreage in a manner befitting
national shrines. NCA has an initiative called the National Shine
Commitment. Its purpose is to improve the appearance of burial grounds
and historic structures of our national cemeteries by addressing
deferred maintenance needs.
The fiscal year 2001 appropriation contained $5 million to
initially address the needs of the National Shine Commitment. The
President's 2002 Budget requested an increase in the amount of funding
for this initiative by another $5 million, bringing the total requested
amount in fiscal year 2002 to $10 million.
To begin the process, NCA has identified deficiencies in the
appearance of headstones and markers and the condition of some
gravesites at a number of its national cemeteries. Repair of these
deficiencies is estimated at about $40 million. The $5 million provided
in the 2001 appropriation will be utilized at Long Island National
Cemetery, the Willamette National Cemetery, the Golden Gate National
Cemetery, and the Fort Sam Houston National Cemetery.
When the study directed by Section 613 of the Veterans Millennium
Health Care and Benefits Act is completed this fall, NCA will be
provided with an assessment of required one-time repairs at each
national cemetery. This data will be used in the budget and planning
processes to help NCA keep its commitment to maintain our cemeteries as
national shrines.
state home program
Question. VA's budget proposes to cut in half the budget for the
state home grant program, yet the backlog of need going into fiscal
year 2002 will be at least $241 million. Why isn't this program a
higher priority?
Answer. The State Home Program is very important in meeting VA's
overall responsibilities to veterans. During this past year,
significant strides have been made in improving the management of the
program and preparing for future challenges.
The Veterans Millennium Health Care and Benefits Act (Public Law
106-117) requires VA to revise the State Home Construction Grant
regulations. Due to delays in revision of regulations, as well as
instituting some management improvements, this program has experienced
a backlog. However, the revision reflects guidance that will have a
positive impact on the program and our stakeholders. An interim final
rule was published in the Federal Register on June 26, 2001, and the
revised regulations will be in place for the fiscal year 2002 Priority
List and funding cycle. The Revised Priority List of Pending State Home
Construction Grant Applications for Fiscal Year 2000/2001 identified 61
projects, with a total value of $228,321,000 (federal portion). The
funding request in 2002, when combined with unobligated funding from
previous years' appropriations, represents a continued commitment to
support VA-sponsored nursing home care through less expensive State and
community programs.
Program improvements and additional staffing are helping VA
aggressively address future program needs. This program is a high
priority for VA and we are continuing to make improvements in the
system.
compensation for children of vietnam veterans
Question. The Secretary has announced his support for providing
compensation to children of Vietnam veterans with myelogenous leukemia.
When will legislation be submitted to Congress?
Answer. Our announcement on April 20th of this year to create
benefits for certain sick children of agent orange-exposed Vietnam
veterans was based on a recent report by the National Academy of
Sciences Institute of Medicine (IOM). The report concluded that there
is ``limited/suggestive'' evidence of an association between herbicide
exposure and the occurrence of acute myelogenous leukemia (AML) in the
children of exposed persons. The IOM's finding relied on evidence from
three studies, including a study of the offspring of Australian Vietnam
veterans. However, the Australian Institute of Health and Welfare
(AIHW) has recently issued corrected information indicating that the
study's findings concerning AML are not statistically significant. At
this time, it is unclear how the revised findings of the AIHW might
have affected the IOM's conclusion's regarding AML. We believe it is
necessary to seek further guidance from the IOM regarding the impact,
if any, of the revised AIHW findings on its conclusion with respect to
AML. We are presently discussing with the IOM the prospect of such
further review. As soon as this review is completed, we will be in a
better position to provide our views on this issue.
Question. What is the estimated number of recipients and the
associated cost?
Answer. Initially we had estimated the costs for paying benefits to
certain sick children of agent orange-exposed Vietnam veterans based on
the IOM report that concluded there are ``limited/suggestive'' evidence
of an association between herbicide exposure and the occurrence of
acute myelogenous leukemia (AML) in the children of exposed persons. We
believe it is necessary to seek further guidance from the IOM regarding
the impact, if any, of the revised AIHW findings on its conclusion with
respect to AML. We are presently discussing with the IOM the prospect
of such further review. As soon as this review is completed, we will be
in a better position to provide, if necessary, a cost estimate.
community nursing homes
Question. I have asked the GAO to review VA's processes to assure
nursing home care provided to veterans is adequate and safe. The GAO
has briefed my staff and reported that their examination of selected VA
Medical Center records indicates that required annual inspections of
community nursing homes, and visits to veterans in these homes, have
not regularly been conducted at all locations. Further, VA managers at
headquarters do not know where and when the required oversight has been
conducted. In other words, no one really knows which medical centers
have been making inspections and visits and which have not. Can you
provide the Committee with the number of Community Nursing Homes under
contract to VA that should have been inspected in 2000 and the actual
number that were inspected?
Answer. At the present time, VHA cannot provide information on the
number of Community Nursing Homes (CNH) inspected in 2000. Based on
survey information, VHA estimates that 2,500 nursing homes have local
VA contracts. The recording of this information is inconsistent between
sites. VHA is in the process of developing guidance to the field for
the record and transmission of the information. VHA is also
revitalizing the system that collects the CNH information and expects
the revised system to be operational in the first quarter, fiscal year
2002.
For the Regional CNH contracts, all 900 nursing homes were assessed
before approval.
Question. For those that did not receive the appropriate
inspection, please explain what prevented VA from conducting the
inspections.
Answer. VHA needs more information on local VA Medical Center
(VAMC) program operations before reaching an overall conclusion on non-
compliance with the CNH inspection policy. The General Accounting
Office (GAO) concluded the VAMCs that chose not to follow published
policy did so for a variety of reasons, mostly linked to local
management priorities.
VHA's own assessment of non-compliance with VHA policy on local CNH
evaluations will follow from information collected. VHA expects to
complete its review in the second quarter, fiscal year 2002.
Question. Similarly, for the same period, please provide the
Committee with the number of veterans that VA should have visited on a
monthly basis in all its community nursing homes, and, for those that
it failed to visit as required, please provide the reasons for its lack
of compliance.
Answer. At the present time, VHA cannot provide data on the
timeliness of monthly visits. VHA collects information on the number of
VAMC staff visits to veterans in CNHs. Another data system tracks days
of care by veteran. Currently, VHA is working to integrate these two
systems to generate a report on monthly monitoring compliance. Analysis
of this new report will be completed in the fourth quarter, fiscal year
2002.
The assessment of non-compliance with VHA policy on CNH monthly
monitoring will follow the resolution of data system integration. VHA
expects to complete its review in fiscal year 2002.
Question. I understand that VA is proposing a new policy regarding
its oversight of Community Nursing Homes, and that under the new policy
VA will no longer inspect the homes annually but will rather use the
results of HCFA-sponsored inspections and other data to determine the
homes' adequacy for veterans. Can you provide an estimate of the
possible savings to VA if it discontinues the requirement for
inspections of these homes?
Answer. VHA does not envision any savings by limiting on-site CNH
inspections. The CNH teams will assume the responsibilities of
reviewing the Health Care Financing Administration's (HCFA) expansive
nursing home reports, consulting with State Survey Agencies and
implementing the improved monthly monitoring and re-hospitalization
review protocols.
Question. There appears to have been no attempt by VA to ensure
that medical centers were using consistent methods of overseeing
community nursing homes. As a result, VA's current nursing home program
is highly decentralized, with each medical center left to its own
devices to determine how best to conduct an effective nursing home
inspection program. In the future, what training or guidance does VA
plan to provide (both initially and on an ongoing basis) to medical
centers for conducting inspections, evaluating HCFA data, visiting
veterans, or using other oversight tools?
Answer. VHA is planning a training effort for CNH team members in
fiscal year 2002. The training will include guidelines for: monitoring
care in CNHs and HCFA's databases; appropriate interpretation of State
Survey Agencies' findings; organizing re-hospitalization reviews;
assessing patient and family satisfaction; and improving relationships
with State Survey Agencies and HCFA staffs. VHA began training on HCFA
databases in fiscal year 2001.
Question. Regardless of the policies and the potential for their
revision, what steps is VA planning to take to (1) keep informed about
medical centers' oversight activities, and (2) ensure that all Medical
Centers follow oversight policies?
Answer. VHA is introducing a new collection process to determine
the timeliness of CNH assessments, prior to contract execution or
renewal. VHA will also integrate existing data systems to determine the
timeliness of monthly monitoring.
As a result of the two initiatives described earlier, VHA will
identify out-of-compliance situations and will work with the VISNs and
VAMCs to develop a plan of correction.
Question. I understand that VA's community nursing home program is
essentially composed of two parts: those community nursing homes that
have contracted with local VA medical centers in the field, and a
headquarters-based regional community nursing home program that
centrally acquires the services of regional and national nursing home
chains at national rates. The Committee is also concerned that annual
inspections are not required of these multi-state homes and that VA
performs little oversight of these homes once they are under contract.
Why are these homes not subject to the same inspection and review
policies as those under local contract with medical centers?
Answer. The inspection process for regional CNH and local CNH
contracts differ more in style than in substance. VHA believed that
initial decisions on CNH quality could be made solely on a review of
State Survey Agencies'(SSA) results. Both regional and local contracts
processes use SSA reports as their base. The monthly monitoring
standard and re-hospitalization reviews apply to both regional and
local CNHs.
Regional CNH contracts and its predecessor, Multi-State Contracts
(MSC), were designed without annual VA on-site inspections. VHA
reasoned that this streamlined process would improve veterans' access
to CNHs without adding to VAMC administrative cost and would be
attractive to the nursing home industry. The regional CNH design
assumed the VAMCs' on-site inspections were of dubious use, based on
field reports. A 1997 Health Services Research & Development Service
review of the first year of MSC operations found no overall differences
in quality between local contracts and MSCs. On a number of variables,
MSC homes had better quality scores.
Regional CNH rates are not national but state-specific, with
different prices for urban and rural areas in each state.
Question. How will VA ensure that centrally contracted nursing
homes are reviewed in the future with appropriate frequency?
Answer. At the present time, 60 percent of all regional CNH
contracts are reviewed for quality on an annual basis. Recently, VHA
has taken steps to ensure that all regional CNHs are evaluated each
year.
Question. What oversight has VA conducted in the last year to
assure that each centrally contracted community nursing home meets the
minimum quality standards required of all its community nursing homes?
Answer. Seventy-two percent of all MSCs were reviewed for quality
in the year ending November 30, 2000. In addition to this effort,
nursing home companies removed 4 percent of their homes for quality
reasons prior to a formal decision by VHA. VHA denied approval to 29
percent of the homes that applied for MSC status.
state veterans homes
Question. It is my understanding that nearly half of the State
Veterans Homes are inspected by HCFA through state inspection agencies.
If VA plans to rely more heavily on the results of HCFA inspections of
Community Nursing Homes, could VA discontinue its own inspections of
state veterans' homes that have had HCFA reviews, as long as VA has
evidence that the reviews were thorough?
Answer. By law, VA is responsible for the oversight of State
Veterans Homes and is required to establish VA standards for annual
survey review. As a grant-in-aid program to States, the State Veterans
Home Program requires consistent national standards across all homes.
The State Veterans Home grant requirements are broader than the HCFA
requirements. In addition, VA conducts recognition surveys at the time
the home becomes operational and admits the first patients. Surveyors
are required to have knowledge of the laws and regulations related to
the grant program. Thus, VA would not discontinue the recognition and
annual survey process for State Veterans Homes.
Question. What are your future plans for VA inspections of State
Nursing Homes and how do they differ from those envisioned for VA's
Community Nursing Homes?
Answer. VA provides training for VA State Nursing Home inspection
team members. Web-based assessments will be implemented to assure
ongoing competency in the inspection process. In June 2001, inspection
results were entered into a Web-based format and transmitted to
headquarters electronically. The data repository is an Access database
that will be used to compare findings among state nursing homes,
including over time. VA will continue to dialogue with VA staff and
state home constituents about evolving quality issues.
The role of VA oversight in the two nursing home programs is quite
different. In State Homes, VA is the lead agency in assuring that
quality care is provided and that standards are met. This is a major
regulatory function. Most State Veterans Homes are not certified under
Medicare/Medicaid and are not inspected by SSA. This factor highlights
the significance of VA inspections. In the Community Nursing Home (CNH)
program, VA acts as an informed purchaser of care. It relies heavily on
SSA reports, in addition to its own monitoring, to determine whether VA
should initiate or continue a contract with the CNH. VA performs no
regulatory function in the CNH program, although that authority still
resides with the Secretary.
______

Questions Submitted by Senator Larry E. Craig
vha staff shortages
Question. In recent years there have been staff reductions which
have compromised the Veterans Health Administration's ability to
provide much needed services. What are you doing to deal with staff
shortages to ensure the highest quality of health care for our Nation's
veterans?
Answer. The Veterans Health Administration (VHA) has achieved
remarkable efficiencies in the restructuring of its workforce from an
inpatient-based hospital system to an outpatient-based system of
clinics. During the last five years, VHA expanded access to 500,000
additional veterans for health care, improved quality as assessed by
performance measurement and patient satisfaction, and reduced the cost
of care per veteran served by more than 20 percent. VA is now seen as a
leader in many health care areas including patient safety, computerized
patient records, telehealth, surgical quality assessment,
rehabilitation, mental health care, and clinical and health services
research.
During this same period, VHA's total full-time employment has
declined. VHA was able to manage this decline by shifting resources
through improvements in health care service delivery and efficiencies
gained through program and organizational restructuring, technology
improvements, and business process reengineering.
When VHA encounters difficulties at specific locations recruiting
for a particular clinical discipline or specialty, there are a number
of options available to ensure the quality of care. Among the options
VHA can use are aggressive recruitment and retention efforts, including
bonuses; use of temporary employment agencies, contract personnel, and
fee basis; and redeployment of current staff on a temporary basis.
military retirees benefits
Question. How are you planning on developing the relationship
between the VA and DOD in order to best implement the National Defense
Authorization Act of Fiscal Year 2001 and provide the necessary
benefits for military retirees over age 64 who have Medicare coverage?
Answer. As you know, Public Law 106-398 expands TRICARE benefits to
all military retirees, spouses and survivors ages 65 and older who are
eligible for Medicare Part A, and enrolled in Medicare Part B. This new
benefit for Medicare-eligible military beneficiaries, TRICARE for Life,
is scheduled to take effect on October 1, 2001.
The DOD implementation plan for TRICARE for Life is particularly
important since VA medical centers do not currently qualify for
Medicare payments. VHA has asked DOD for clarification of VA's role in
TRICARE for Life. Additionally, the VA/DOD Executive Council has
established new work groups specifically charged with addressing
various aspects of VA's role in relation to TRICARE. These work groups,
which are required to make monthly reports to the Executive Council,
will examine collaboration opportunities for geriatric care, assess the
impact of TRICARE on current sharing agreements between VA and DOD,
recommend coordinated delivery of VA and TRICARE benefits, and suggest
improved reimbursement policies. It is my hope that these actions,
combined with the commitment DOD has made to include VA in future
TRICARE negotiations, will ensure that VA can provide necessary
benefits for military retirees over age 64.
community based outpatient clinics
Question. Do you plan to provide more Community Based Outpatient
Clinics (CBOC) and expand services in the existing facilities?
Answer. In keeping with its commitment to improve access to care,
VHA will continue to plan additional CBOCs. Planning for CBOC services
is Network-based, taking into account local market areas, demographics,
resources and veteran preferences. Local health care systems
continually evaluate the services available at their CBOCs and expand
or modify services, based on veteran needs, utilization and resources,
among other factors. In an effort to improve the consistency in how VA
plans and operates CBOCs, VHA is developing new standards and criteria
for CBOC planning, operations and service delivery.
travel rates
Question. Are you considering the rising gas prices and will you
adjust the travel reimbursement rates?
Answer. Each year, the Department conducts an analysis of the
actual cost of travel to beneficiaries, taking into consideration a
number of factors, including gasoline and oil costs. This issue is
currently under review and we anticipate a decision by December 2001.
information technology
Question. In general terms, how are you planning on reducing the
bureaucracy and incorporating the latest information technology in
order to eliminate problems and reduce administrative costs?
Answer. A panel of experts in the area of systems architecture has
been meeting with key VA decision makers to develop the VA Integrated
Enterprise Architecture. The VHA Chief Information Officer is an active
participant in these meetings and is dedicated to the success of these
efforts.
Following this direction, VHA has defined an ``ideal'' Health and
Health Information approach. Under this methodology, all new IT
projects will be developed by working with VHA health care providers to
examine the current work environment and identify areas where IT can
enhance the current business practices. Additionally, VHA stakeholders
provide direct input and help VHA to identify and prioritize potential
new solutions.
In addition, VA has implemented a stringent IT Capital Investment
Process. Through this process, VA IT decision makers assess and
prioritize current and proposed IT projects that have high investment
costs. All major VHA IT acquisitions meeting the capital investment
threshold ($10 million acquisition costs or $30 million life-cycle
cost) or projects with high visibility must go though this process to
ensure that VA selects those IT projects that best support our mission.
______

Questions Submitted by Senator Pete V. Domenici
Mr. Secretary, I appreciate the many challenges that you are faced
with in heading the Veterans Administration. Considering your
significant experience, I am confident that you will successfully meet
those challenges.
Fully implementing a one-VA, improving claims processing, and
ensuring that all veterans have access to quality health care are among
your agency's priorities. And even with all of that, and much more on
your plate, we, in Congress continue to pass legislation expanding your
responsibilities.
Veterans are an educated and active constituency who understand
your mandate and realize that improvements do not happen overnight. For
example, an article in the veterans' publication, ``The Stars &
Stripes'' noted the VA's challenging mission in implementing the
Veterans Claims Assistance Act. The author, retired Colonel John
Howell, said that there is always an initial delay whenever a law is
implemented, and that everyone should do their part to help during the
transition.
As you know, I introduced a $1.4 billion bill to fully fund the
Department of Defense's health care plan for military retirees, known
as TRICARE for Life. We all recognize that this program will require a
transition phase, and that Defense and the VA are still working out a
Memorandum of Understanding on how implementation between the two
agencies will occur.
I wanted to follow up on our earlier discussions about that program
and other issues facing veterans in New Mexico and the rest of the
nation.
albuquerque vamc
Question. The VA Medical Facility in Albuquerque is a joint venture
between the VA and the Department of Defense. This unique relationship
has been widely regarded as a success to be emulated. Considering
TRICARE for Life, what assurances can you give that successful joint
ventures, like the one in Albuquerque, are allowed to continue
functioning?
Answer. As you know, the new benefit for Medicare-eligible military
beneficiaries, TRICARE for Life, is scheduled to take effect on October
1, 2001. Determining the impact of TRICARE for Life on VA-DOD joint
ventures, such as Albuquerque, as well as on VA facilities as a whole
is a priority for the Department of Veterans Affairs. The DOD
implementation plan for TRICARE for Life is particularly important
since VA medical centers do not currently qualify for Medicare
payments. The Veterans Health Administration (VHA) has asked DOD for
clarification of VA's role in TRICARE for Life. Additionally, the VA/
DOD Executive Council has established new work groups specifically
charged with addressing various aspects of VA's role in relation to
TRICARE. These work groups, which are required to make monthly reports
to the Executive Council, will examine collaboration opportunities for
geriatric care, assess the impact of TRICARE on current sharing
agreements between VA and DOD, recommend coordinated delivery of VA and
TRICARE benefits, and suggest improved reimbursement policies. It is my
hope that these actions, combined with the commitment DOD has made to
include VA in future TRICARE negotiations, will ensure that successful
joint ventures such as Albuquerque will continue to thrive and expand.
Question. We are experiencing a national shortage of health care
professionals, particularly with respect to nurses and doctors. This
shortage has forced many VA health care facilities to close beds. Due
to insufficient staff, the Albuquerque facility has had to cut about
fifty of its 211 beds. What steps are you taking, in the long and
short-term, to address this shortage of health care professionals to
make sure that our nation's veterans get the health care they deserve?
Answer. New Mexico, like many other regions of the country, faces a
shortage of registered nurses. In Albuquerque, the shortage is
impacting both VA and private facilities. Over the past twelve months
the medical center has been unable to operate a full complement of beds
due to the nursing shortage. Currently about 60 beds are not being
utilized because of the lack of nurses.
The Albuquerque facility is dealing with the shortage by delaying
admissions and deferring some elective surgery, and obtaining care in
the community.
Nurse recruitment continues to be a problem in Albuquerque, despite
recent pay increases of 16.8 percent. The efforts at Albuquerque
include a variety of bonuses, including sign-on, relocation, and
headhunter bonuses.
VHA is taking steps on a national basis to address shortages in
health care occupations on both a short-term and long-term basis.
Short-term steps include salary increases, bonuses, aggressive
recruitment, and focused efforts to retain current employees. Long-
term, VHA is ``growing our own'' through education programs like the
National Nursing Education Initiative and the VA Learning Opportunities
Residency Program (VALOR). The National Nursing Education Initiative
provides scholarships to current VA employees to obtain baccalaureate
and higher degrees in nursing. The VALOR program provides training and
work experience to nursing students in return for financial support and
special employment consideration upon graduation. VA is also conducting
an all-employee survey to learn employees' issues. The results of this
survey will help VHA identify and address areas of concern to improve
the work environment and make VHA an ``Employer of Choice.''
Question. New Mexico is a large rural state, which means that
distributing services and benefits to everyone can be especially
challenging. The VA's opening of health care clinics is remedying
veterans' access to health care to some degree. What is your plan to
ensure that all of our nation's veterans have access to quality health
care and other benefits that they earned by serving our country?
Answer. As noted in the report ``Geographic Access to VHA Services
in fiscal year 1999: A National Perspective'' 85 percent of the fiscal
year 1999 patients were within 30 miles of the closest VHA service
site. A recent analysis finds that access to the closest VHA service
site has improved over the past year. Looking at the fiscal year 2000
patients, 69.9 percent of our patients are within 15 miles and 87.4
percent within 30 miles with a national overall average distance of
13.4 miles compared to 14.1 miles in fiscal year 1999.
This decrease in average distance and increase in access is
partially attributable to the increased number of service sites that
have become operational since February 1995. Since 1995, VHA has
approved 471 new CBOCs (includes multiple-site contracts); 82 percent
of these CBOCs are activated and 18 percent are in the development
phase.
VHA will continue to operate existing VA medical centers and CBOCs,
and look for opportunities to partner with other government agencies or
local community agencies to expand access to high-quality care. Every
year, in the development of their strategic and financial plans, all
VHA Networks assess veteran preferences, demographics, and market
areas, and develop plans for service expansion and/or enhancements. In
addition, VA continues to work with DOD on their TRICARE for Life
initiative as well as other sharing opportunities.
______

Questions Submitted by Senator Mike DeWine
cares
Question. The Veterans Health Administration (VHA) is undergoing a
significant process of reviewing and realigning VA capital assets to
enhance the overall health care services provided to our nation's
veterans. It is my understanding that the Ohio network, VISN 10, will
be incorporated in Phase II of the CARES initiative. During this
assessment, I anticipate the absence of inpatient care for veterans in
the Central Ohio area will be identified. Although Columbus is the
largest city in Ohio, and the 15th largest U.S. city, veterans and
their families must travel at least an hour and a half to receive
inpatient treatment.
While I recognize the VA has been shifting its attention from
inpatient to outpatient care, I would like to know what consideration
has been given to contracting out for private hospital services in the
Columbus area. For example, a partnership between the VA and a local
facility such as Doctors Hospital could be beneficial for the entire
community. Funding resources for such a partnership could be tied in
with ongoing CARES efforts.
Answer. The VA Healthcare System of Ohio (VISN 10) anticipates
participating in the second round of CARES studies to be conducted
within VA. VISN 10 has undertaken a number of activities in preparation
for the CARES study, including an ongoing analysis and internal
assessment of the challenges within the Central Ohio area. There are
numerous complex inter-related issues within this market. The CARES
process will provide for a comprehensive assessment of needs and
options, including a review of options for contracting for inpatient
medical services. It is anticipated this study will be completed within
the next six months.
The Central Ohio ``market'' includes both the Columbus Independent
Outpatient Clinic (IOC) and the Chillicothe VA Medical Center (VAMC),
which is located approximately 50 miles south of Columbus. VAMC
Chillicothe provides basic inpatient support to the Columbus IOC. In
addition, VAMC Dayton provides a full array of tertiary inpatient
support to both of the Central Ohio VA medical facilities. The CARES
process will provide for a complete assessment of the complex
relationship among these three facilities. This will include the impact
of decreasing the referral workload from the immediate Columbus area to
VAMCs Chillicothe and Dayton. Workload volume is critical within health
care to ensure appropriate clinical competencies and to support a
variety of capital-intensive specialty medical services. A change in
any one market area has the potential to dramatically impact the
viability of specific programs and services at the other two VA medical
facilities. Until the CARES study is completed, VISN 10 will continue
to undertake appropriate actions to ensure the full continuum of care
is provided in the Central Ohio area.
Emergent inpatient care for veterans is provided within the
immediate Columbus area via a longstanding contractual arrangement with
the Ohio State University (OSU). The OSU East medical facility is
located only a short distance from the Columbus IOC. This successful
partnership has allowed for the expansion of complex specialty medical
services at the Columbus IOC, and has served to reduce the amount of
travel required to provide the full continuum of care to veterans
residing in Central Ohio. In addition, VA's Fee Basis Program provides
a high degree of flexibility in terms of procuring medical services
from the private sector within the Central Ohio area. This program is
utilized to provide a wide variety of specialty services to veterans
residing within and outside the immediate Columbus area.
A project has been developed to expand the capacity of the Columbus
IOC by approximately 6,000 square feet through converting existing
warehouse space for clinical functions. Construction will begin within
the next six months. CBOCs have been opened in Grove City and
Zanesville. VISN 10 plans to seek approval to open additional CBOC
sites in Marion and Newark. The CARES process has not delayed or
impeded efforts to improve access to services in the immediate Columbus
area.
vera
Question. It is my understanding that the Veterans Millennium
Health Care and Benefits Act has placed a sizeable financial burden on
the VISN 10 budget. For example, the Ohio network is expecting to spend
approximately $5 million to pay for emergency room visits that are now
mandated as a covered service. While I fully support the important
health care advancements which took effect last year, it is critical
that these additional services do not come at the expense of existing
VA programs. What consideration has been given to restoring current
VISN operating expenses? I hope appropriate attention has been given to
ensure adequate funding of all VHA initiatives.
Answer. Since 1997, VHA has used the Veterans Equitable Resource
Allocation (VERA) model, a capitation-based resource allocation system,
to equitably distribute medical care resources to the 22 Veterans
Integrated Service Networks. Budgeted and appropriated funding for
emergency care claims payments is included in the VERA allocation.
VISNs expect to have sufficient resources to continue to deliver high-
quality and cost-effective health care to all veterans who enroll in
the VA health care system and receive treatment. They will operate
within their appropriated medical care resources and will continue to
enhance those resources through effective collection of alternative
revenues. All VHA initiatives should be funded with these resources.
In the event that networks cannot operate within their workload-
based allocated budget and maintain their current level of patient
care, VA will continue to maintain a National Reserve Fund (NRF). VA
has a process for networks to request additional funding from the NRF.
If a VISN requires additional supplemental funding during the fiscal
year, a request is submitted to Headquarters, and it will be reviewed
using that process.
______

Questions Submitted by Senator Barbara A. Mikulski
fort howard
Question. Are you familiar with the Mission Change and Enhanced Use
project underway at Fort Howard?
Answer. In June 2000, the former VA Secretary approved the plans to
revise the mission at the Fort Howard Medical Center. This plan
includes:
--Relocation of Fort Howard inpatient beds and administrative
functions to other sites in the VA Maryland Health Care System
(VAMHCS).
--A proposed continuum of care retirement community perhaps to be
accomplished through the use of enhanced-use authority if that
is determined to be the best means of achieving the change.
--A primary care outpatient clinic to remain on the Fort Howard
campus.
Question. Will the new Administration continue to move forward with
this project?
Answer. The Administration supports this project. The Fort Howard
project has the potential to become a model for implementation at other
VA sites.
Question. What changes can veterans, their families, and VA
employees expect in the coming months?
Answer. Changes in the upcoming months are:

----------------------------------------------------------------------------------------------------------------
Date Description
----------------------------------------------------------------------------------------------------------------
December 2001/January 2002.......... Move 12-bed Ventilator/Respiratory unit to Perry Point
May 2002............................ Relocate administrative functions to Perry Point
September 2002...................... Relocate remaining inpatient functions to the Loch Raven campus
September 2002...................... Relocate the current Fort Howard primary care outpatient clinic to
building 249 (located behind the existing hospital building and adjacent
to the main parking lot)
January 2003........................ Contract award for enhanced-use project, if approved as best means of
achieving Mission Change.
----------------------------------------------------------------------------------------------------------------

Question. Is the new Administration committed to maintaining
outpatient services at the Fort Howard campus throughout the entire
transition?
Answer. Yes. The current outpatient clinic will remain intact with
no break in operations on the Fort Howard campus. As noted in answer to
question number 68, a relocation of the primary outpatient clinic will
be made to more suitable accommodations. During the process of
redeveloping the campus, a new primary care clinic building will be
built perhaps by utilizing VA's enhanced-use authority.
Question. Will the VA stick to the current timetable that calls for
the mission change to be complete by September 2002, and for the
enhanced use to be complete by January 2003?
Answer. The VAMHCS is doing everything possible to assure the
timelines presented to date are maintained. As has been previously
presented, all of the mission change relocations are dependent on
completion of various construction projects. The mission change is
scheduled for completion by September 2002. A contract award for an
enhanced-use project, if approved as the best means of achieving the
mission change, is scheduled in January 2003.
Question. Will the VA be ready to bid the enhanced use portion of
the project in January 2002 as planned?
Answer. The schedule for considering and developing an enhanced-use
lease for this project is as follows:

----------------------------------------------------------------------------------------------------------------
Date Description
----------------------------------------------------------------------------------------------------------------
January 2002........................ VA Medical Center develops a Business Plan. Business/Concept Plan is the
first step in the formal process leading to execution of an Enhanced-Use
project.
February 2002 thru May 2002......... Plan initial consideration and possible approval
Public Hearing
Notification to Congress of the Department's designation of the site for
possible Enhanced-Use lease
June 2002........................... Solicitation of bids
July 2002 thru December 2002........ Evaluation
VA Capital Investment Board review and recommendation
Secretary's review and determination
OMB review
Congressional notification of the Department's intent to execute the
contract, if approved
January 2003........................ Award of Enhanced-Use lease, if approved
----------------------------------------------------------------------------------------------------------------

Question. If the State does not authorize a new State Veterans Home
at Fort Howard, what impact will it have on the Enhanced Use plan?
Answer. If the State of Maryland chooses not to authorize a new
State Veterans Home, the impact would be minimal to a possible
Enhanced-Use project. Without a State Veterans Home, it is anticipated
that substantial nursing home beds will be included with the
development of the Fort Howard campus. The greater loss of not having a
State Veterans Home at the Fort Howard campus is to the local veterans
(40 percent of Maryland State veterans reside in the surrounding
Baltimore area).
Question. Could the Fort Howard project be a national model for
changing the way we deliver care to our veterans so that we can better
meet their needs as they age?
Answer. Presently, the Fort Howard project is too early in its
development to ascertain whether a national model is in the offing. The
concept has promise and potential. VA is encouraged by the interest of
the State of Maryland.
long-term care
Question. What is the status of the long-term care regulations?
Answer. The regulation that adds non-institutional extended care
services to the medical benefits package is currently under review in
the Office of Management and Budget. This regulation adds non-
institutional geriatric evaluation, non-institutional respite care, and
adult day health care to the benefits package.
Question. What is the timetable for implementation of these
regulations?
Answer. VA plans to publish the proposed long-term care benefit and
co-payment regulation on October 4, 2001. Following public comment and
possible changes to the regulation, based on the comments, VA
anticipates a March 2002 implementation date.
Question. How much funding will VA spend to implement long-term
care in 2002?
Answer. VA estimates it will spend $3.4 billion in 2002 to
implement long-term care.
Question. CBO tells us that long-term care will cost at least $400
million per year. Why does the budget request show a $79 million
reduction for long-term care?
Answer. The budget does not show a $79 million reduction for long-
term care. Due to delays in implementing the Veterans Millennium Health
Care and Benefits Act, the 2002 President's Budget shows a $228 million
increase in 2002 and a base adjustment of (-$334 million) in 2001 from
the 2001 budget estimate versus 2001 current estimate for long-term
care.

$228 MILLION INCREASE IN 2002
[In millions]
------------------------------------------------------------------------
Fiscal Year 2002 President's Budget
--------------------------------------
2001 2002
Estimate Estimate Increase
------------------------------------------------------------------------
Obligations...................... $3,134 $3,362 +$228
------------------------------------------------------------------------

BASE ADJUSTMENT OF (-$334 MILLION) FROM FISCAL YEAR 2001 PRESIDENT'S
BUDGET, 2001 BUDGET ESTIMATE TO FISCAL YEAR 2002 PRESIDENT'S BUDGET, AND
2001 CURRENT ESTIMATE
[In millions]
------------------------------------------------------------------------
Fiscal Year Fiscal Year
2001 2002
President's President's
Budget 2001 Budget 2001 Decrease
Budget Current
Estimate Estimate
------------------------------------------------------------------------
Obligations \1\.................. $3,123 \2\ $2,789 ($334)
------------------------------------------------------------------------
\1\ Excludes Subacute Care.
\2\ Adjusted for correction in accounting for Geriatric Evaluation and
Management (GEM) programs.

cleveland plain dealer articles
Question. Are the incidents described in these articles largely
anecdotal? Or are they symptoms of a larger problem? What is VA doing
to respond to the issues raised by these articles?
Answer. The articles written by Ms. Mazzolini were factual to some
extent but not representative of all sides of the issue and were taken
out of context. Despite the bias of the articles, VHA has taken the
allegations seriously and had already dealt with much of the substance
prior to any of the incidents being chronicled in the press. In those
instances where care was deemed to be substandard, action was taken
including separation and reports filed to the State Licensing Board
and/or National Practitioner Data Bank. Tort Claims were filed in three
of the six cases. Cases were peer reviewed at the facility level with
corrective actions taken where quality of care issues were raised.
Processes were improved, such as better coordination among the
inpatient ward staff, gastroenterology service, and the testing
laboratory; notification of abnormal x-ray findings; and scheduling
staff surgeon to be in-house during working hours when surgery is
taking place.
Many of the patient incidents pre-dated our revised national
patient safety policy which emphasizes a systems approach focused on
prevention, not punishment, as the most effective way to improve care
for our patients. Incorporation of a widely understood methodology for
dealing with these safety-related issues allows for a clear and more
rapid communication of information within the organization.
Several of the incidents raised by Ms. Mazzolini involved the
supervision of residents. VHA policies and procedural requirements for
the supervision of residents are established in VHA Handbook 1400.1,
Resident Supervision (http://vaww.va.gov/publ/direc/health/handbook/
1400-1hk.html). The Handbook describes responsibilities for monitoring
resident supervision at VA facilities, and is being updated to clarify
policy in areas such as consultation and supervision on weekends and
holidays. Options for the collection and analysis of resident
supervision data are under development. The developed tools will be
applied across medicine, surgery and psychiatry bed services, as well
as ambulatory care settings in all affiliated centers. VHA is currently
designing tools that will be used to assess the adequacy of resident
supervision. We also plan to develop an external monitoring process
devised to assess compliance with VHA policies on resident supervision
in areas involving diverse aspects of inpatient and outpatient care.
Question. Do VA doctors routinely supervise surgery over the phone?
Answer. No.
Question. What is the VA's resident supervision policy?
Answer. Resident supervision is the process through which clinical
care is provided to patients in this educational context. Supervision
refers to the dual responsibility that a staff practitioner has to
enhance the knowledge of the resident and to ensure the quality of care
delivered to each patient by any resident.
Policies governing resident supervision in VA were recently
reviewed. ``Resident Supervision, VHA Handbook'' published in March
2000 clearly outlines the requirements for attending supervision of
residents in all VA facilities. The handbook is currently being updated
to clarify policy in areas such as supervision on weekends and holidays
and consultation. The overriding consideration must be ``safe and
effective care of the patient that is the personal responsibility of
the staff practitioner.'' Supervision may be provided in a variety of
ways. The specific level of supervision is generally left to the
discretion of the staff practitioner and requires judgment of the
experience and competence of the resident and the complexity of the
particular medical situation. The overwhelming consideration is the
safe and effective care of the patient.
Question. What is the VA's policy for hiring foreign trained
doctors?
Answer. A VHA facility may hire a foreign trained non-citizen
physician in the absence of qualified citizens. Appointments of non-
citizen physicians are temporary in nature and each must meet the same
qualifications standard which is applied to all VHA physicians.
Additionally, some non-citizen physicians hired by VHA are admitted to
the United States for residency training in accordance with the
requirements of the Exchange Visitor Program administered by the
Department of State. Therefore, while educated outside of the United
States, the Exchange Visitor physicians are trained in the United
States, many in the VHA Healthcare System. Citizens, who complete their
medical education and/or training in a foreign country, may be hired on
a permanent appointment, provided they meet the qualifications
requirements.
collections
Question. How confident is VA that it will actually collect $896
million in 2002?
Answer. VA is confident that it will collect the $896 million in
fiscal year 2002. The $896 million is composed of:
--$775 million for first- and third-party collections ($207 million
first-party and $568 million third-party).
--$120 million for pharmacy co-payments.
--$1 million for enhanced use-lease.
The Veterans Millennium Health Care and Benefits Act authorized the
Secretary to increase the $2 medication co-payment. In addition, VA
plans to collect $24 million in first party-collections for long-term
care.
Question. Billing third parties is a new mission for VA. How is the
process going?
Answer. Actually, VA has been billing third parties since 1986,
though not on the same basis or with the same sophistication as occurs
today. Public Law 99-272 (April 7, 1986) authorized VA to implement
third party billings. Major improvements have been implemented
throughout the years in the third-party billing process and collections
have steadily increased since 1986. The first full year of collections
was accomplished in fiscal year 1987 and totaled $23 million. In
September 1999, we implemented a new billing rate structure called
reasonable charges which resulted in fiscal year 2000 Medical Care Cost
Fund (MCCF) third-party collections of $394 million. For fiscal year
2001, we are projecting over $472 million in third-party collections.
As facilities improve their documentation, coding, and billing
processes, we expect a continuing increase in collections.
Question. What efforts is the VA taking to increase collections
from third parties?
Answer.
Compliance.--One objective of this initiative is to improve coding
accuracy for billing and medical record purposes and to conform with
insurance industry standards enabling VA to maximize payments on claims
submitted to third-party carriers.
Reasonable Charges.--The implementation of reasonable charges in
September 1999 allowed VA to bill health care insurance companies using
rates that approximate community charges. This has increased the dollar
value of VA bills and should therefore increase revenue. VA is
continuing to adjust this new billing structure by adding charges for
new Current Procedural Terminology (CPT) codes and updating all charges
to Year 2001 levels.
Medicare Remittance Advice (MRA).--This initiative will enable VA
to receive a Medicare equivalent explanation of benefits document that
will be used by Medicare supplemental payers to determine their
appropriate payment to VA.
Electronic Data Interchange (EDI).--EDI will enable VA nationally
to transmit data through a clearinghouse to third-party payers. This
should result in more timely payments by ensuring that bills are
transmitted electronically to the payer. This initiative deals with
cost savings as opposed to increased collections.
Treasury Offset Program (TOP).--VA is utilizing TOP to recover
first-party debts that are over $25. The TOP has a number of different
options for withholding money owed to an individual by the Government
if the individual has any outstanding debts owed to the Government. In
addition, the TOP will send two additional notices to an individual
prior to offset of the individual's tax refunds or social security
payments.
Lock Box.--This initiative nationally consolidates the collection
of first-party medical payments to a Treasury-designated lockbox
provider and automates the posting of payments to the patients'
accounts at individual medical centers-with cost savings to VA.
Outsourcing.--The VA is considering a number of alternative
business concepts to enhance its ability to collect health care
revenue. Outsourcing various revenue collection activities is one
alternative that is being evaluated by several pilot tests currently
underway. In addition, VISN 5 is designing a new pilot test at selected
medical centers within the VISN that will focus on specific billing
(e.g., bill ``scrubbing,'' code verification, and claim submission) and
collection (e.g., claims follow-up, explanation of benefits (EOB)
analysis, and decreasing adjustments) activities. Other billing
functions will remain in-house; e.g., verifying non-service connected
treatment, validating coding and medical documentation, and assembling
billing information from various components of the VA information
system, VistA. The decision to keep these functions in-house was based
on issues relating to VA-to-vendor IT interfacing, and assuring system
security, data integrity and confidentiality.
Revenue Office Improvement Plan.--The CFO Revenue Office has
recently completed a study of the Revenue Program as requested by the
Secretary of Veterans Affairs. The plan outlines recommended actions
required to improve the core business process areas: patient intake,
documentation, coding, billing, and accounts receivable. Twenty-four
major recommendations have been made to improve the revenue program.
Additionally, this plans proposes eight primary performance measures to
track the improvement of the Revenue Program. The plan also identifies
a number of critical improvement factors (i.e., leadership commitment,
accountability and standardization, training and education,
standardized policies, and information systems that support the revenue
cycle) to areas to determine which areas could be immediately
centralized and/or consolidated within VA or outside VA (e.g.,
contracted out).
Additionally, VA is reviewing the entire revenue process to
identify areas that need improvement. Subsequent to the study, we will
develop an action plan to effect the needed improvements. We expect to
complete that study in late summer.
Question. Why has the VA chosen to keep billing in-house, rather
than contracting it out to the private sector, which has more
experience in billing issues?
Answer. VA is considering a number of alternative business concepts
to enhance its ability to collect health care revenue. Outsourcing
various revenue collection activities is one alternative being
evaluated by several pilot tests currently underway. In addition, VISN
5 is designing a new pilot test at selected medical centers within the
VISN that will focus on specific billing (e.g., bill ``scrubbing,''
code verification, and claim submission) and collection (e.g., claims
follow-up, explanation of benefits (EOB) analysis, and decreasing
adjustments) activities. Other billing functions will remain in-house;
e.g., verifying non-service-connected treatment, validating coding and
medical documentation, and assembling billing information from various
components of VA information system, VistA. The decision to keep these
functions in-house was based on issues relating to VA-to-vendor IT
interfacing, and assuring system security, data integrity and
confidentiality.
Question. Has VA been able to develop a list of ``lessons learned''
to maximize collections?
Answer. VA did a review in April 1999 of existing process
procedures and organizational configurations at various VA medical
centers with successful collections programs. The purpose of the review
was to determine if there was any relationship of organizational
alignment relative to the overall success of billing and collections.
In an attempt to identify the key factors that may influence the
process, VA turned to the Diagnostic Measures, based upon industry
standards that have been successfully utilized in identifying areas
with opportunity for improvement as well as ``best practices'' or
``lessons learned.''
Upon completion of the review, we could not find a common link to
explain the success of individual MCCF programs. What worked at some
facilities did not or was not utilized at other facilities. Most of the
successful programs maximize the use of software, maintain a high level
of compliance, provide formalized training and, at some facilities,
benefit from strong leadership. Some facilities also benefit from
strong TRIAD (director, associate director, and chief of staff) support
and physician buy-in into the MCCF program.
It should be noted that almost all of the facilities reviewed were
located in rural or small metropolitan areas. It also appeared that
most medical center staff had been with the MCCF program for a number
of years. When interviewed, the MCCF program coordinators at these
sites stated that the employees were very much interested in the
success of the program. It should also be noted that at a number of
these facilities, the staff was cross-trained for other jobs within
MCCF.
The results of this review have been shared with all MCCF program
coordinators. In June 2001, we will distribute new and improved
Diagnostic Measures. The new measures will provide reports that give a
more comprehensive snapshot of individual and VISN-level facility
performances.
Question. Does the VA know to what extent it is owed by deadbeat
third parties? Is VA able to estimate how much?
Answer. Currently, third-party active claims over 60 days old
secondary to Medicare, have a total billed amount of $394.6 million,
with an estimated collectable of approximately $78.9 million. Those
active claims not secondary to Medicare over 60 days old have a total
billed amount of $113.4 million with an estimated collectable of $68
million.
The recording of the amount to bill the health insurance company is
based on the dollar value of the medical treatment that is provided to
an individual. In most instances, that amount is greater than the
expected payment to be received for the treatment rendered. An example
is: the VA will bill a Medicare supplemental plan for the full value
for the service provided even though the plan is a secondary payer to
Medicare, as the VA does not have authority to bill Medicare.
Therefore, the Medicare supplement plan will pay only for the Medicare
deductible and a percentage of the professional fees assessed for the
treatment provided. This inflates the value of our outstanding
receivables because approximately 70 percent of VA's billings are
secondary to Medicare.
The problem of our overstated receivables for Medicare supplemental
claims will be remedied when the Medicare Remittance Advice software
development project is completed and released in the winter of 2002.
This software will record the receivable to the secondary payer at the
anticipated value for the service provided.
Question. How did the VA arrive at the prescription co-pay increase
from $2 to $7?
Answer. Language contained in Public Law 101-508 states that VA
cannot charge a co-payment amount that would exceed VA's cost of the
medication. VA completed an extensive review of the fiscal year 2000
costs associated with the administration of outpatient prescriptions. A
VHA Co-payment Work Group, assisted by a contractor, conducted a
literature review of medication co-payment industry practices. The
outcome of these reviews assisted the VHA Office of Finance in
determining the proposed medication co-payment amount. This proposal is
now undergoing internal VHA review prior to submission to the Secretary
for review and approval.
Question. Does the VA plan further increases or adjustments to the
co-pay?
Answer. Under the proposal now being considered by VA, the co-
payment amount will be reviewed on an annual basis, and recommendations
for increases or adjustments will be made as appropriate.
Question. What process will be used to determine any future changes
to the co-pay?
Answer. Under the proposal now being considered by VA, VHA will
monitor the medication co-payment amount and will refer to the pharmacy
component of the medical consumer price index (CPI) as an index that
would establish future medication co-payment increases. This is the
indicator that is most specific to pharmaceuticals.
medical research
Question. Veterans Service Organizations are recommending $395
million for medical and prosthetic research. The Administration's
budget request is $360 million. Have you reviewed the organizations'
request?
Answer. VA personnel attended the Independent Budget release
presentation and closely reviewed the document.
Question. Can you explain the reason for the difference?
Answer. The differences between the two budgets are shown in the
following table.

[In thousands of dollars]
------------------------------------------------------------------------
2002 Appropriation
-------------------------
Description Independent President's
Budget Budget
------------------------------------------------------------------------
Personnel Compensation........................ 161,581 192,650
Employee Travel............................... 2,162 3,737
Communications, Utilities and Misc. Charges... 1,081 1,227
Printing and Reproduction..................... 2,087 198
Research and Development Contracts............ 164,734 106,507
Supplies and Materials........................ 42,228 34,666
Equipment..................................... 21,530 21,252
-------------------------
Total................................... 395,403 360,237
------------------------------------------------------------------------

Question. The VA expects about $151 million in private
contributions to VA medical research. What efforts has VA undertaken to
maximize private contributions?
Answer. Non-governmental entities represent an inconsistent source
of funding for VA research. VA maximizes funding from private sources
through active contacts, advising field researchers of funding
announcements, and closely monitoring updates on developmental drugs.
Virtually all private-sector contributions are directed to support
specific research projects, not to general support of the VA research
program.
Question. Why does the budget request cut 79 employees from the
medical research program?
Answer. The increase in the fiscal year 2002 budget is less than
current services. The FTE level is reduced in an effort to maintain the
number of new projects funded in fiscal year 2002.
Question. How will these cuts effect current research efforts? New
research projects?
Answer. The cuts will not affect current research efforts. The FTE
level is reduced in an effort to maintain the number of new projects
funded in fiscal year 2002. On-going, multi-year projects will continue
to be funded.
waiting times
Question. What can the VA tell us about current waiting times? How
long do veterans wait to get a doctor's appointment?
Answer. The average waiting time (days) for ``next available''
clinic appointments has greatly improved over the past year. (See the
following table.)

AVERAGE NUMBER OF DAYS FOR ``NEXT AVAILABLE'' APPOINTMENT
------------------------------------------------------------------------
Description April 2000 March 2001 Difference
------------------------------------------------------------------------
Primary Care..................... 65.1 44.4 -20.7
Eye Care......................... 101.0 72.9 -28.1
Audiology........................ 49.9 39.7 -10.2
Cardiology....................... 51.7 40.4 -11.3
Orthopedics...................... 44.6 39.7 -4.9
Urology.......................... 80.7 52.7 -28.0
------------------------------------------------------------------------

Similarly, the percentage of patients who reported waiting greater
than 20 minutes to see their provider has decreased significantly.

Percent of Outpatient Respondents Waiting >20 Minutes to See Provider

Percent

1995.............................................................. 55.33
1996.............................................................. 48.69
1997.............................................................. 43.63
1998.............................................................. 33.43
1999.............................................................. 31.02
2000.............................................................. 30.20
March 2001........................................................ 28.39

Question. How long do they sit in the waiting room?
Answer. In the most recent VHA Veterans Customer Satisfaction
Survey (patients who received care between March 24, 2000 and September
24, 2000), veterans were asked, ``How long after the time when your
appointment was scheduled to begin did you wait to be seen?'' The
responses were:

Percent of
Response Respondents

No wait........................................................... 11.33
1 to 10 minutes................................................... 33.02
11 to 20 minutes.................................................. 26.05
21 to 30 minutes.................................................. 14.67
31 to 60 minutes.................................................. 8.44
More than 1 hour.................................................. 5.28
Cannot Remember................................................... 1.20

These data demonstrate that 70.4 percent of patients report waiting
20 minutes or less.
Question. What are the goals for patient waiting time?
Answer. The goals for patient waiting time are:
--90 percent of enrolled veterans who will be able to obtain a non-
urgent patient appointment with their primary care provider or
other appropriate provider within 30 days.
--90 percent of patients who will be able to obtain a non-urgent
appointment with a specialist within 30 days of the date of
referral.
--90 percent of patients who report being seen within 20 minutes of
their scheduled appointments at VA health care facilities.
Question. How were these goals developed?
Answer. In the late 1990s, VHA recognized through its own analyses
that access remained a critical concern. In response to these concerns,
VHA began work to establish system-wide goals.
It is the perception of direct care providers, administrators and
Veteran Service Organizations that the single most common concern with
VA care is access. While VA has made tremendous strides in geographic
access improvement, waits for non-emergency, non-urgent care are
considered to be excessive.
In order to develop a data-driven approach, community benchmarks
were sought. One of the more robust sources for related data was
Healthcare Benchmarking Systems International (HBSI). HBSI benchmarks
hospitals for ``15th next available appointment.'' (``Fifteenth next
available'' reduces the effect of appointment cancellation.
Cancellations can affect the validity of ``next available'' measures by
creating an artificial appearance of timely availability of
appointments. They are in fact, not really usable because of their
last-minute nature). A significant limitation of HBSI data is that they
are based on self-report. Further, a recent survey of university
medical centers addressed the expected availability of non-urgent
primary and specialty care appointments. The study found no consistent
definition of acceptable waiting times and no consistent mechanism of
validating the relationship between expectations and actual practice.
Given the lack of standard methodology or benchmarks, VHA
established the 30/30/20 (90 percent of requested next available non-
urgent primary care appointments should be scheduled within 30 days; 90
percent of requested next available non-urgent specialty (eye care,
audiology, orthopedics, cardiology, urology) appointments should be
scheduled within 30 days; and 90 percent of patients should be seen
within 20 minutes of the scheduled appointment time) goals based on
their perception of veterans' expectations. Implicit in these goals is
an understanding that providers clinically ``triage'' all patients
requesting urgent care and provide care on a more urgent basis if
clinically appropriate. The ultimate objective for reduction of waiting
times is to care for the patient within a timeframe that is both
clinically valid and meets the patient's expectations.
Question. What is the VA doing to develop a system to accurately
quantify the current situation?
Answer. In support of the 30/30 strategic goals, VHA established a
process to measure the average waiting time for a requested
appointment. Both fiscal year 2000 and fiscal year 2001 performance
plans require the measurement of the average waiting time for primary
care and five high-demand specialty clinics. Data issues have been
addressed; software continues to be enhanced; and training is being
implemented to enhance data accuracy.
The ability to collect other data on patient appointment waiting
times is currently being evaluated. A new scheduling software patch was
released to VHA field stations on January 31, 2001. This patch was
designed to collect information on the percentage of patients receiving
next available appointments within 30 days of their request. Field
stations installed the patch in late April 2001, and that data was
available for further evaluation of reliability. Data will continue to
be scrutinized for reliability, validity, reproducibility and
usefulness, and the data collection process will be modified as
necessary.
The ``20'' of the 30/30/20 is measured through patient surveys.
Patient surveys are an accurate assessment of the patient's perception,
at that point in time, of their waiting time. The data is exceptionally
stable over time. The survey is a well-validated instrument,
fundamentally developed by the Picker Group. All VHA clinics are
reviewed. Each outpatient survey includes approximately 110,000
patients, and in seeking to propel improvement in satisfaction by more
tightly linking actions with results, two surveys were administered
this year encompassing a total of about 220,000 patients. For the 2000
(wave2) survey, 108,007 patients were sampled and 75,939 patients
responded. This represented patients who received care in the primary
care clinics during August 2000 at 22 VISNs, including 136 medical
centers, and 637 clinics. The overall response rate to the survey is
consistently and remarkably high at 70 percent. The results from the
national surveys indicate that younger patients are under represented
in the results. VA survey response rates are among the highest known in
the health care industry, perhaps a benefit of military service
history.
Question. How much funding does VA anticipate devoting to quantify
this problem in 2002?
Answer. VA requested an additional $164 million in 2002 for
improvements to access and service delivery.
Question. VA planned to spend $400 million for this effort in 2001.
How is this funding being spent? Has VA developed a reliable system?
Answer. Between fiscal year 2000 and fiscal year 2001, the total of
yearly planned additional investments in improvements to access and
service delivery is estimated to be $346 million. The networks reported
their planned progress in investments and performance for 2000 and 2001
in their January 2001 submission to VHA's financial plan. The following
table shows the areas receiving additional investment.

[In millions of dollars]
------------------------------------------------------------------------
Additional Investment
Per Year
-------------------------
2000 2001
------------------------------------------------------------------------
Timeliness:
CBOCs..................................... 37 74
Improvements to Work Processes............ 68 130
Infrastructure............................ 2 7
Telephone Care: Ensure all veterans have 2 8
access, 24/7.................................
Timely Access to Clinical Information:
Telemedicine.............................. 3 2
Information Technology.................... 6 7
-------------------------
Total................................... 118 228
------------------------------------------------------------------------

The system is designed consistent with the Government Performance
and Results Act (GPRA) to monitor the overall objective being the
targeted goals of 30/30/20. Although $346 million has been identified
for Access and Service Delivery, the appropriation specifically
provided for this initiative totaled $77 million in fiscal year 2001.
The remaining dollars must be absorbed from within existing funding
levels.
claims processing times
Question. What is the current processing time for claims and what
is the goal?
Answer. At the beginning of each fiscal year, performance targets
are established for each of the performance measures contained on the
balanced scorecard. The fiscal year 2001 national performance for
Compensation and Pension claims processing timeliness is as follows:

[In days]
------------------------------------------------------------------------
Fiscal Year
2001 Actual fiscal Year Fiscal Year
Timeliness Measure (through 2001 Target 2002 Target
March 2001)
------------------------------------------------------------------------
Rating-Related Actions 176.5 195 210
(completed).....................
Non-Rating-Related Actions 50.9 54 52
(completed).....................
------------------------------------------------------------------------

Question. What lessons has the VA learned from past efforts to
improve processing times?
Answer. Past efforts to improve claims processing timeliness and
accuracy have resulted in valuable learning experiences. One of the
most constructive lessons has been in pilot testing major processing
changes before national implementation. For example, VBA tested the
case management approach to claims processing before national
implementation. Customer surveys were also conducted at the test sites.
As a result of both of these measures, improvements were made to the
implementation plan before all stations made the transition to case
management. In addition, VBA recognizes that a moderate amount of
specialization can help improve timeliness. VBA will be consolidating
pension claims processing and creating resource centers to concentrate
on specialized claims work. Finally, enhanced partnerships with
information resources are critical to improving claims processing
timeliness. VBA is working to enhance access to VHA medical records,
establish joint C&P/VHA exam offices, and hire additional employees for
the St. Louis Records Management Center.
Question. How much funding does VA anticipate devoting to improving
claims processing time in 2002? How many employees?
Answer. VBA has requested over $732 million to fund the
administration of the Compensation and Pension programs. The funding in
the fiscal year 2002 budget submission, as in past submissions, is
devoted to improving the timeliness and accuracy of VBA claims
processing. It is not possible to separate specific dollar amounts or
FTE resources that will impact only one performance measure,
timeliness. VBA expects to have 2,000 Rating Veterans Service
Representatives (RVSRs) and 3,500 Veterans Service Representatives
(VSRs) on board by the end of fiscal year 2001.
Question. How will VA train new employees so they will be able to
make a real difference?
Answer. The Compensation and Pension Service (C&P) launched a
national recruitment initiative, Challenge 2001, for RVSRs and VSRs to
assist in succession planning.
In order to meet this need, C&P Service has created an initial
twelve week training program that will provide RVSRs and VSRs the
foundations of technical training. The major goal of this training is
to ensure RVSRs and VSRs can be productive as soon as possible while
still learning the basic job responsibilities.
The initial 16 weeks of RVSR training incorporates an intense six
weeks of classroom instruction along with ten weeks of practical
application at the student's home office. This is accomplished using
the Training and Performance Support System (TPSS), which is a computer
assisted, cooperative learning, and case study tool. This will be
followed by another twelve weeks of classroom instruction and practical
application at the student's home station.
The initial 12 weeks of VSR training incorporates an intense four
weeks of classroom instruction along with eight weeks of practical
application at the student's home office. This is accomplished using
the award winning Field Guide to VSR Training, which is a web-based
repository of training instruction and materials. There will another
thirty-six weeks of classroom instruction and practical application
conducted at the student's home station.
Question. How will the VA's new ``duty-to-assist'' requirements
impact processing times?
Answer. The number of pending claims decreased each year from
fiscal year 1998 to fiscal year 2000. In addition, the appeals workload
showed significant improvement over the same time period. VBA began to
see the effects of the recent legislative changes on our workload.
Since the implementation of the duty to assist legislation, our pending
claims and appellate workload have increased significantly since the
start of fiscal year 2001. During the same period, the timeliness of
claims processing remained relatively study, with some improvement in
the timeliness of appeals. The impact of duty to assist requirement has
had a significant negative impact on processing time. The fiscal year
2002 projections for rating related processing times is 100 days higher
than the actual performance achieved in fiscal year 2000.
Question. Is the VA developing safeguards to ensure times won't get
worse as it does more to help veterans develop their claims?
Answer. VBA has developed countermeasures that will minimize the
potential negative impact on workload and timeliness created by ``duty
to assist'' and diabetes legislation. The Secretary of Veterans Affairs
has initiated a comprehensive plan to expedite the processing of our
oldest pending claims, with priority given to those claims filed by
veterans age 70 or older. This plan incorporates a three-pronged
approach:
--Establish a special processing unit.
--Revise the mission for the SDN Resource Centers.
--Provide Level III case management service at all ROs for veterans
age 70 and older, and for any customer whose claim has been
pending more than 1 year.
Work on all three approaches is now in progress, with full
implementation by November 1, 2001. Additionally, efforts are underway
to investigate and develop modifications to legislation and regulations
that will improve claims processing timelines. These proposals will
allow oral evidence gathering, simplify issues pertaining to effective
dates and simplify certain pension program adjustments. Among other
countermeasures planned, VBA will consolidate pension claims process
and enhance the accessibility of records from VHA and the St. Louis
Record Management Center. Further recommendations from the VA Claims
Processing Task Force report are anticipated to advance VBA's potential
to process claims promptly.
hepatitis c
Question. The budget request is $168 million below the 2001
appropriated level for hepatitis C. Can you please explain the reason
for this cut?
Answer. Since initiation of the tracking of hepatitis C-specific
utilization and expenditures, VA has increased the number of patients
screened, tested and treated every year. VA expenditures for hepatitis
C have risen every year, reflecting this increased activity.
Hepatitis C is a new disease. The virus that causes this disease
was identified in 1988. The blood test for it began in 1992 and the
first treatments were approved in 1997. VA's previous budget estimates
were based on assumptions because no reliable data on hepatitis
screening, testing and treatment existed. Based on VA's actual
experience in testing for and treating veterans with hepatitis C, we
are now better able to understand where those early best guess'
assumptions were inaccurate. This is why there are significant
differences between appropriated and reported budgets for fiscal year
2001. Specifically, areas of large discrepancy between the earlier
estimates and our actual experience involve: Number of patients who
agreed to be tested for hepatitis C; actual number of people who test
positive (prevalence); and number who agree to treatment for hepatitis
C.
It is important to point out the continuing medical uncertainty
surrounding some aspects of hepatitis C treatment, including, for many
patients with minimal clinical disease, the value of treatment versus
the risk of treatment side effects. Since hepatitis C infection may
persist for decades without clinical symptoms or signs of liver damage,
some patient and their providers opt to defer therapy until more
effective and better-tolerated therapies are available.
The magnitude of difference between previous models and actual
experience justifies a reexamination of the models and assumptions
currently used to project hepatitis C expenditures. As a preliminary
step in this direction, the Department has revised the projections for
fiscal year 2002 to $171.6 million. The budget planning process for
fiscal year 2003 will include a more comprehensive revision of the
hepatitis C model.
Question. VA requested $340 million for hepatitis C in 2001, but
now tells us it will only spend $152 million. Why has VA been unable to
spend as much hepatitis C funding as it previously requested?
Answer. See response to above question.
Question. What guidance does the VA provide to Regional Offices on
the testing of hepatitis C? What guidance is provided on treatment?
Answer. VA's hepatitis C program ensures that all VA clinicians are
provided the most up-to-date scientific information about the disease
in order to deliver the highest quality care to veterans, and ensures
that they receive appropriate information about hepatitis C screening
and testing. This is based on the Under Secretary for Health's
Information Letter (IL 10-98-013), dated June 11, 1998, which
establishes the criteria for provider evaluation, screening and testing
for hepatitis C. As stated in the Information Letter, providers are to
evaluate patients with respect to risk factors for hepatitis C and
document the assessment. Based upon the hepatitis C risk assessment or
patient request, antibody testing is offered based on an algorithm (see
attachment, Hepatitis C Virus Antibody Screening for the Veteran
Population). In addition, VA Hepatitis C Centers of Excellence maintain
a Web page, www.va.gov/hepatitisc, (for both clinicians and patients)
as a guide for hepatitis C screening and testing.
Several national educational conferences have also been conducted
to ensure that VA clinicians are provided with the most up-to-date
scientific information about hepatitis C in order to deliver the
highest quality care to veterans with the disease. These programs were
designed to assist providers in identifying those at risk, provide
testing and prevent them from becoming infected with the virus that
causes hepatitis C, as well as to provide the most current scientific
information about treatment. These conferences which included updating
hepatitis C, also provided special emphasis on:
--March 2000--Pre- and post-test counseling for nurses, pharmacists
and counselors.
--August 2000--Psychiatric evaluation of patients and treatment of
complex patients.
--December 2000--Psychosocial needs of the patient with hepatitis C
and his/her family.
To ensure that VA health care is state-of-the-art for hepatitis C,
treatment guidelines first issued in August 1998 were updated in
January 2000 (see attached). They are currently being updated again.

______

Questions Submitted by Senator Robert C. Byrd
outpatient clinic in charleston, west virginia
Question. In the late 1990's, the reports accompanying several VA-
HUD Appropriations Bills included, at my request, language urging the
Department of Veterans Affairs (VA) to accelerate the establishment of
community-based outpatient clinics in Charleston, Logan, Petersburg,
and Franklin, West Virginia.
Do some of our veterans forego medical care they need because they
find travel too difficult?
Answer. Prior to the opening of Community Based Outpatient Clinics
(CBOC) in Charleston, Logan, Petersburg, and Franklin, many veterans
cited distance and time required to travel as reasons for not going to
a VA facility.
Question. Are outpatient clinics a solution to this barrier?
Yes. Outpatient clinics appear to be one solution.
Question. Before the opening of these clinics, what health care
options were available to veterans of the above-mentioned West Virginia
cities?
Answer.

----------------------------------------------------------------------------------------------------------------
CBOCs Type of Care Description of Health Care
----------------------------------------------------------------------------------------------------------------
Charleston.................... Non-Emergent............... 29 Independent Physician Clinics in Charleston area
Emergent................... Major Hospitals include Highland, St. Francis, and
Thomas Memorial
Franklin...................... Non-Emergent............... Two local medical doctors within the county
Emergent................... 1 hour to the west at Rockingham Memorial Hospital,
Harrisonburg, VA
45 minutes to the north at Grant Memorial Hospital
in Petersburg, WV
Logan......................... Non-Emergent............... 5 Independent physician clinics in Logan area
Emergent................... Logan General Hospital
Petersburg.................... Non-Emergent............... Providers in Grant, Hardy, Pendleton, and Mineral
counties
Emergent................... Grant Memorial Hospital
----------------------------------------------------------------------------------------------------------------

Question. On average, how far did a veteran have to travel from
each city for VA health care?
Answer.

----------------------------------------------------------------------------------------------------------------
Description Nearest VA Facility Prior to CBOC Opening
----------------------------------------------------------------------------------------------------------------
Charleston.................................. Huntington VA Medical Center--50 miles one way
Franklin.................................... Martinsburg VA Medical Center--150 miles one way
Logan....................................... Huntington VA Medical Center--75 miles one way
Petersburg.................................. Martinsburg VA Medical Center--130 miles one way
----------------------------------------------------------------------------------------------------------------

Question. How many veterans received health care at each of the new
outpatient clinics in fiscal year 2000? Have these numbers increased
since fiscal year 1999? By how much? Is usage of these clinics
surpassing expectations, particularly in such a relatively short time
period? Are they providing better health to more veterans in West
Virginia? Do you anticipate the numbers of visitors to increase even
more?
Answer.

Veterans at CBOCs receive the same level of care as provided in
primary care clinics at VA medical centers. This is monitored through
the External Peer Review Program (EPRP) Program. Likewise, each veteran
at a CBOC has the same access to specialty care as a veteran seen at a
medical center.
Question. Are there any additional areas in West Virginia where
there are unmet needs with respect to veterans health care?
Answer. The four VISNs serving the state of West Virginia review
the unmet needs of veterans on a regular basis and react accordingly.
For example, we plan to activate a new, contracted CBOC in Williamson,
West Virginia, and is anticipated to open in February 2002.
nursing home care unit at the beckley veterans affairs medical center
Question. The fiscal year 2001 VA-HUD Appropriations Bill included,
at my request, an amount of $1 million over the budget request for
design of a 120-bed VA Nursing Home construction project on thirteen
acres of available space owned by the Beckley VA Medical Center.
What is the status of the $1 million design work for the nursing
home?
Answer. An Architect/Engineer (A/E) contract for design/build
documents was awarded August 2001.
Question. When will the nursing home project be ready to go to
construction?
Answer. If construction funds were available, an award could be
made by February 2002.
Question. I understand that this project must first pass muster
with the so-called Capital Asset Realignment for Enhanced Services
initiative, which is a prerequisite for any new major construction
project throughout the VA system. Please tell me more about this
process and how the Beckley project fits into this process. Will this
new process delay construction beyond the point it would otherwise be
eligible to go to bid? If so, what is the rationale for holding up this
project and causing delays that can only increase the costs of the
construction of the project?
Answer. CARES is a process being undertaken by VA to evaluate
health care delivery needs of veterans through 2010. Once the preferred
option(s) for clinical service delivery are decided for each VISN, an
appropriate alignment of capital assets, in which those services will
be delivered, can be made.
Because VA health care facility capital asset sizing is dependent
on clinical workload, most investment initiatives are being reevaluated
as the CARES projections are made. Initiatives underway prior to fiscal
year 2000 were allowed to continue. However, those still in the
development or design stage are being further reviewed. VA is on record
that we cannot stop investing in our aging infrastructure and
addressing new program needs before the CARES process is completed. VA
is aware of the need for continued investments, and will consider this
nursing home care unit project along with other nationwide priorities
when developing future budgets.
An AE contract award for design/build was awarded in August 2001 in
accordance with the fiscal year 2001 VA-HUD Appropriations Bill.
Pending Congressional authorization and construction funding for this
nursing home project, VA cannot proceed with a construction contract.
Consequently, we are completing as much of the process as authorized to
do.
Question. What other advice can you give me that would accelerate
this project, which is designed to provide much needed long-term care
for our veterans in Southern West Virginia?
Answer. Utilizing the design/build method of construction and using
the design funds appropriated in our fiscal year 2001 budget have
accelerated the design schedule.
demonstration project--clarksburg va medical center and ruby memorial
hospital
Question. VA supports amendments for initiating, continuing, and
enhancing the demonstration project involving the Clarksburg VA Medical
Center, Ruby Memorial Hospital, and West Virginia University (WVU). The
pilot demonstration project allows Ruby Memorial Hospital to provide
specialized treatment to veterans in the Clarksburg/Morgantown areas,
rather than requiring them to travel out of state to receive care at
other VA hospitals.
Has this project greatly improved the access of veterans to a
number of specialized services? In what particular areas?
Answer. Yes, the Ruby Memorial Project has greatly improved the
access of veterans for a variety of specialized services. The major
referral to Ruby Memorial is ophthalmology. This service includes
evaluations and testing but also cataract surgery, glaucoma surgery,
laser treatments for retina disorders and other eye surgeries. Imaging
is another area for which many veterans receive referrals to Ruby
Memorial. Services include mammograms, dexa scans (bone density studies
for women, as well as male/female veterans having chronic obstructive
pulmonary disease who are treated with steroids/prednisone), Magnetic
Resonance Imaging (when timeliness or urgency of the study is a
priority) and arteriograms (when the service is not available at
Clarksburg and is urgent in nature. Other imaging referrals, especially
for our women veterans, include ultrasounds of the breasts and pelvic
area.
Ruby Memorial Hospital also performs gastrointestinal tests,
including pH monitoring and enterclysis, which are not performed at
Clarksburg or at Pittsburgh.
Referrals are also made to Ruby Memorial for gynecology surgeries
and sentinal node biopsies for melanoma (the standard of practice in
the work-up of this disease).
Cardiac patients also benefit from referrals to Ruby Memorial. Two
services not available within VA include a congestive heart failure
clinic and enhanced external counter pulsation treatment. Both of these
services are for veterans with end-stage congestive heart failure or
inoperable cardiac disease. Several veterans have benefited from the
treatments, and quality of life has been improved.
Finally, patients with emergent medical conditions are transferred
to Ruby Memorial when Clarksburg VA does not provide the needed service
and services are not available at Pittsburgh. Such transfers can
include: cardiac, respiratory, vascular, neurosurgery, or orthopedic
conditions.
Question. What are the most common health conditions found in
veterans at the Clarksburg VA Medical Center? Are there other areas of
specialized care that WVU could be providing to veterans in these
areas?
Answer. The most general health problems treated at Clarksburg VA
include chronic ischemic heart disease, diabetes, chronic obstructive
lung disease, and hypertension.
As noted above, most specialty services are used at Ruby Memorial
currently. Referrals to Ruby are based on service not available at
Clarksburg or Pittsburgh, urgency or timeliness of the referral, and
hardship (when travel to Pittsburgh is not in the interest of the
veteran).
Question. Is there potential for similar demonstrations between
other VA Medical Centers in West Virginia with other West Virginia
medical facilities, such as the Huntington VAMC and Marshall
University?
Answer. Currently, there are plans to locate an eastern panhandle
campus of the West Virginia University (WVU) School of Medicine in the
Eastern Panhandle. Once this program is established, the potential
exists for clinical opportunities between the Medical Center, the CBOCs
and WVU. The Beckley VAMC is not affiliated with a nearby medical
school, so collaboration as described is not foreseen. In addition,
Beckley has no contractual agreements with the two local community
facilities; however, as with most VAMCs, they do have cooperative
arrangements to refer patients when the need arises. Most typically,
this would be for patients requiring emergency/critical care beyond the
scope of the Beckley VAMC capabilities for which transfer to Salem/
Richmond is neither practical nor safe.
Question. Is there merit to constructing a VA Research Center on
the campus of the West Virginia University Health Sciences Center in
Morgantown?
Answer. VA Research and Development is an intramural program:
appropriated research funds are allocated to VA facilities to conduct
research on the high priority health care needs of veterans under the
supervision of VA employees. Unlike the NIH and Department of Defense,
VA does not make research grants to colleges or universities, cities or
states, or any other non-VA entity. Moreover, more than 70 percent of
VA researchers are also clinicians requiring proximity to their
patients. Accordingly, VA opened a new research building at the
Huntington VAMC in 1998. An additional research facility at Morgantown
would place VA investigators 205 miles from the Huntington VAMC and 150
miles from the Martinsburg VAMC. Researchers at the Clarksburg VAMC
would still be 40 miles from the proposed center, and to date, that
medical center has no active VA research funding.
We believe that funding construction to improve existing VA
research facilities would best serve America's veterans.
va healthcare information security
Question. I am awaiting a report from the VA regarding a
constituent proposal I sent to the agency on March 1, 2001, regarding
ways in which to improve the security of health records of our nation's
veterans. I understand that these computerized records are very
accessible to hackers, and that there have been numerous reported
incidents of stolen records, stolen identities, changed results, and
denial of insurance and/or employment.
What is the VA's current plan to protect the privacy,
confidentiality, and integrity of the sensitive medical records of the
VA patient population, as recommended by a recent GAO report?
Answer. VA uses both physical and electronic controls to safeguard
patient information in the Veterans Health Information System and
Technology Architecture (VistA). Access to computer rooms at health
care facilities is limited by appropriate locking devices and
restricted to authorized VA employees and vendor personnel. Computer
peripheral devices are placed in secure areas or are otherwise
protected. Access to file information within VistA, for authorized
staff, is controlled at two levels. The system recognizes authorized
employees by a series of individually unique passwords and access via
menu assignment. Security keys within the Patient Sensitivity function
of VistA control access to restricted or sensitive computerized
records. Sensitive record access logs are available through VistA to
track user access to information on employees, volunteers, and specific
patients. Paper records are kept in physically controlled areas. VA
file areas are locked after normal duty hours, and the Federal
Protective Service or other security personnel protect the facilities
from outside access.
In November 2000, VA established a department-level information
security program, led by an executive-level official. This plan
provides the framework for addressing department-wide information
security on a near- and long-term basis. The plan addresses security
problems, and responds to risks documented in a department-wide risk
assessment that VA completed in June 2000.
VA's information security management plan emphasizes accelerated
enterprise-wide improvements that are directed primarily at improving
access controls. The plan identifies near-term actions including:
--Requiring more secure passwords on computer workstations.
--Removing unsecured dial-in connections.
--Conducting focused reviews of access and personnel controls.
--Requiring incident reporting as a standard practice.
--Implementing configuration standards for external electronic
connections.
--Conducting a total workforce review of VA standard security
awareness curriculum.
--Implementing personnel controls.
--Performing penetration tests at selected VA locations.
These near-term actions have been completed.
VA's plan also identified a number of longer-term actions that
emphasize broader assessments and proposed measures to improve
information security on a more comprehensive basis. These actions
include establishing a regular cycle to test the Department's
compliance with established security requirements and certifying and
accrediting general support systems and major applications.
VHA is fully supporting this plan. Based on monthly status reports,
VHA is in compliance and on schedule with implementation of all phases
of the Department's information security program.
Question. Does the President's fiscal year 2002 Budget contain
sufficient funding to implement such a plan? If not, what level of
funding would be required?
Answer. The department-wide information security plan is defined in
an approved Capital Investment Proposal. Funding for this initiative is
identified and supported in the fiscal year 2002 budget submission.
______

Questions Submitted by Senator Tim Johnson
veterans education
Question. Given your history of strong support for a dramatically
improved GI Bill, what are your current plans for enhancing this
important legislation during the next year or two, especially within
the context of the President's proposed budget for fiscal year 2002?
Answer. Veterans no longer are well represented in the top
leadership positions in business, industry, or government because
graduates of schools that most veterans cannot afford to attend
disproportionately fill these positions. Further, entry or advancement
into positions in our Nation's increasingly high-tech business
environment often demands completion of high-cost, short-term courses
that lead to advanced degrees, certification, or licensure. To begin to
address these realities for veterans, we believe MGIB improvements,
within the current budget context, should focus on reasonable rate
increases and a benefit payment option that permits acceleration of
benefit usage, in that order.
Question. As you may be aware, bi-partisan GI Bill related
legislation has been introduced in the Senate to help fulfill the
promise to those who serve in the defense of our nation. The Johnson/
Collins bill (S. 131), not only enjoys the support of the leadership of
the Senate, but also has indirectly received the endorsement of the
Senate as a whole through the creation of a reserve fund amendment to
the Senate Budget resolution. Since this bill is similar in nature to
the recommendation of the Servicemembers and Veterans Transition
Commission in that it links the GI Bill to the cost of education, what
support can you and the Administration provide to assist with the
enactment of this important legislation?
Answer. Indexing the basic MGIB benefit to the annual cost of
attending a 4-year public college certainly is a worthwhile goal.
However, we believe the significant tiered rate increases proposed in
S. 1114 would, to the extent the increases can be accommodated within
the overall budget guidelines agreed to by the President and Congress,
represent an important first step toward such goal. We note that
identical tiered increases are contained in H.R. 1291, which already
has passed the House.
veterans health care
Question. Of the Administration's requested $1 billion increase,
only approximately $800 million of that discretionary amount would be
available for health care--for routine increased costs as well as new
initiatives such as emergency care and implementation of the long-term
care provisions in the Millennium Act. Specifically, please explain how
this increased funding would address these programs.
Answer. With the $1 billion increase. VA intends to address the
following:

[In thousands of dollars]

Description

Pharmaceuticals--New patients accessing the system for their
pharmaceuticals coupled with the increased treatment of
enrolled patients in the ambulatory care environment...... 259,002
Long-Term Care--Moves VA towards satisfying the requirements
of the Veterans Millennium Health Care and Benefits Act... 196,000
Access and Service Delivery--VA's overall service and access
goal is to provide medical care when and where it is
needed in ways that are timely, convenient and cost-
effective................................................. 164,000
Prosthetics--Increase due to the continuing impact of mandated
eligibility reform, advances in technology, as well as the
effects of aging on the veteran population................ 57,338
Compensation & Pension (C&P) Exams--Expansion of the past
practice of using Veterans Health Administration (VHA)
resources to obtain medical opinions, which results in
increased workload........................................ 50,000
Core Financial and Logistics System (coreFLS)--CoreFLS is
expected to reduce operation and maintenance costs, as
well as improve the data integrity, timeliness, and
reliability of financial data within the VA............... 38,676
Capital Asset Realignment for Enhanced Studies (CARES): Non-
Recurring Maintenance (NRM) Enhancement--In anticipation
of implementing the outcome of the Phase I and Phase II
CARES studies............................................. 30,000
CHAMPVA Workload and Regulatory Changes--Increase necessary to
support the anticipated increase in workload based on past
experience and expanded CHAMPVA coverage to ensure
dependents eligible under VA's program receive comparable
benefits as those provided to dependents under the TRICARE
program................................................... 29,782
Child Care Supplement--Public Law 106-58 authorizes Federal
agencies to use appropriated funds from the salary account
to assist Federal employees with childcare tuition costs.. 22,226
Entry Pay Increase for Information Technology--Special pay
rates targeted to entry-level and mid-level technology
jobs, because Federal agencies reported they had trouble
hiring and retaining these types of employees............. 20,738
Hepatitis C--Cost is expected to increase recognizing both a
new VERA allocation format and an increasing number of
treatments................................................ 20,000
Special Salary Rates for Pharmacists--Allow VA to improve
retention of the most senior members of the current
pharmacy workforce and will improve its competitiveness in
recruiting new pharmacists................................ 16,852
Dentist Special Pay--Public Law 106-419 provides for medical
center directors to utilize the full range of pay
increases authorized to optimize dentist recruitment and
retention efforts......................................... 14,326
State Home Changes--VA currently has a legislative obligation
to pay states for care provided to eligible VA patients... 13,817
Nurse Special Pay--Public Law 106-419 provides the guarantee
that VA nurses receive a national comparability increase
equivalent to the amount provided to other federal
employees................................................. 13,726

Other budgeted adjustments including changes in medical
collections, predicted changes in enrollment associated with TRICAARE
for Life program and a reduction to correct for under spending in three
specific programs budgeted in prior years result in an overall increase
of $1 billion in medical care obligations.
Question. I understand that OMB rejected your first budget
submission which was $1.9 billion. Obviously you felt you needed more
than what OMB was willing to provide. Obviously, as well, the Senate
felt you needed more than that when they approved my amendment to the
Budget Resolution called for a $2.6 billion increase--the amount
recommended by the Independent Budget. What is the Administration's
plan for bringing veterans' health care funding more in-line with that
proposed by the Independent Budget?
Answer. We are confident the President's Budget is sufficient to
support the VA health care system and provide needed services to our
veterans. The Administration will continue to provide a high level of
resources to veterans' health care programs based upon the demand for
health services by these dedicated men and women who have sacrificed so
much. VA appreciates the work of the Veterans Service Organizations
that develop the Independent Budget and how it focuses public debate
upon services and resources should be provided to those whom have
served the call to defend freedom. VA and Congress are fortunate to
have the Independent Budget provide a detailed alternative view of
where the federal government should allocate limited resources.
Question. With the rising cost of health care, demands of an older
veteran population, and increasing responsibilities of new mandates,
please explain how the VA plans to maintain current services at the
level recommended by the Administration's budget.
Answer. The total budgetary resources provide enough to fund
uncontrollable cost increases (payroll and inflation) and initiative
increases contained in the fiscal year 2002 budget request. To account
for a greater volume of services provided and an aging population, VA
realizes the need to provide sufficient resources for hepatitis C,
long-term care, increased access, which will be addressed within the
budgetary resources requested.
Question. Your statement indicates that you place a priority on the
specialized services the VA provides related to spinal cord injury,
mental health, and prosthetics. The Congress recognized the importance
of these core missions of the VA health care system by mandating in
Public Law 101-262 that the VA maintain its capacity to provide these
services. However, in the area of mental health, the VA has already
lost a major portion of its service capacity since the law was enacted.
What actions are being taken to restore capacity in mental health
programs?
Answer. From fiscal year 1996 to fiscal year 2000, VA has
maintained or increased capacity to treat veterans in both the
Seriously Mentally Ill (SMI) and Post-Traumatic Stress Disorder (PTSD)
categories in terms of patients served. However, there has been a
decrease in the number of veterans with substance abuse served in
specialized programs by the system as a whole, from 107,074 in fiscal
year 1996 to 94,603 in fiscal year 2000. In addition to this apparent
loss of treatment capacity for substance abuse, there are also system-
wide variations in the capacity to provide specialized treatment
services to veterans for the other categories as well as in substance
abuse. VHA is currently conducting a detailed review of specialized
mental health treatment programs. This review is being conducted to
determine if the apparent loss of substance abuse treatment capacity is
due to counting errors or to actual loss of services. The quality of
care provided to patients with the target diagnoses (e.g., PTSD,
Substance Abuse Disorders) both within specialized VHA treatment
programs and outside of these programs will also be addressed. Results
of this review are expected in April 2002.
Public Law 106-117 required that VHA dedicate not less than $15
million for new specialized PTSD and Substance Use Disorder treatment
programs. Because of a loss of capacity for specialized Substance Use
Disorder care in VHA between 1996 and 1999, $5.5 million of these
monies were targeted for PTSD care while $9.5 million were allocated to
new Substance Use Disorders programs. A total of 31 new Substance Use
Disorder programs in 19 networks were funded through this process.
Similarly, 18 new PTSD specialized programs in 17 networks were
initiated.
In October 2000, VHA Directive 2000-034 encouraged the development
of Intensive Case Management programs for severely mentally ill
veterans. As of June 2001, VA had 54 active Mental Health Intensive
Case Management (MHICM) programs with another 10-12 in various stages
of development. Further, VACO has initiated a planning process through
which VISNs are encouraged to implement these programs as needed. All
VISNs have submitted plans for expansion of MHICM teams. These plans
are currently under review.
VA's fiscal year 2000 budget increased funding for specialized
services for homeless veterans by $50 million. Of this increase, $39.6
million was included in medical care appropriations. Sixty-six new
programs were established with 120 new FTEE. In addition, four
demonstration projects were initiated to evaluate new approaches to
outreach to homeless female veterans, facilitate employment, provide
dental care for homeless veterans and to support hospitalized homeless
veterans through their transition to community life. $2.3 million was
committed to the activation of new CWT programs and other therapeutic
work initiatives for homeless veterans. When these programs are fully
operational, it is expected they will serve an additional 1,600
veterans annually. $3 million was utilized to establish 11 programs
dedicated to homeless women veterans. These programs are expected to
serve 1,500 homeless women veterans per year when they are fully
operational. VA committed $18.8 million to the expansion of the Health
Care for Homeless Veterans (HCHV) program in fiscal year 2000. The
program offers extensive outreach, physical and psychiatric health
exams, treatment, referrals, and ongoing case management to homeless
veterans with mental health problems, including substance abuse. When
all new staff and new programs are fully operational, it is expected
that 12,000 additional homeless veterans will be treated. Approximately
one-fourth of these veterans will be provided contract residential
treatment.
The remainder of these new monies was made available to guarantee
loans made under the Multifamily Transitional Housing for Homeless
Veterans Program. This program will allow VA to guarantee loans made by
lenders to help non-VA organizations develop transitional housing for
homeless veterans. VA plans to guarantee 5 loans in the next two years,
with a total of 15 loans guaranteed over the next 4 years. The Homeless
Providers Grant and Per Diem Program provide grants and per diem
payments to assist public and nonprofit organizations to establish and
operate new supportive housing and service centers for homeless
veterans. Grant funds may also be used to assist organizations in
purchasing vans to conduct outreach or provide transportation for
homeless veterans. VA announced a new round of grants in April 2001,
and has committed $10 million for the 8th round of funding. With the
new Loan Guarantee for Multifamily Transitional Housing for Homeless
Veterans Program and additional grant awards under the Grant and Per
Diem Program, VA expects to help community service providers develop
approximately 6,000 more transitional beds for homeless veterans over
the next 4 years.
VA recently announced the creation of VA Advisory Council on
Homelessness Among Veterans with the mission of providing advice and
making recommendations on the nature and scope of programs and services
within VA. This Committee will greatly assist VA in improving the
effectiveness of our programs and will allow a strong voice to be heard
within the Department from those who work closely with us in providing
service to these veterans.
Question. While there has been progress to restore beds and
staffing in spinal cord injury centers, I understand overall VA is
still far below directed levels, particularly for SCI long-term
capacity. What actions are being taken to restore capacity in spinal
cord injury programs?
Answer. Significant progress has been accomplished in restoring
capacity to the spinal cord injury centers. A recent June 2001 survey
indicated that 93 percent of the 949-staffed beds required by VHA
Directive 2000-022 were staffed. VHA Directive 2000-022 established the
minimal number of available and staffed SCI Center beds, the minimal
number of staff for certain aspects of the SCI program, and the need to
identify additional extended care beds for this population. There has
been considerable progress made in meeting the requirements of this
directive. Active recruitment for nurses, physicians, psychologists,
and SCI therapists is ongoing, within the SCI Centers. One of the most
challenging areas is nurse recruitment. To assist in this effort, many
of our facilities are using or considering recruitment and retention
incentives. Working with the Paralyzed Veterans of America (PVA), an
additional focus at this time is the designation of 68 extended care
beds. VA is committed to meeting the specialty and extended care needs
of this population.
Question. Please update me on the VA's progress with implementation
of several important initiatives contained in the 1999's Millennium
Act, including provisions dealing with long-term health care.
Answer. A number of provisions that did not require regulations
have been implemented, as follows:
--Section 101(a)--Priority for Nursing Home Care for Service-
Connected (SC) conditions and 70 percent or greater SC
veterans. Directive issued in February 2000.
--Sections 102 and 103--Sites selected for long-term care pilot and
assisted living pilot. Two sites are currently operating and
the other two are expected to come on line in the next few
weeks.
--Section 112--Eligibility for Combat Injured veterans (Purple Heart
recipients). Directive issued in February 2000.
--Section 115--Sexual Trauma Counseling. Directive implementing new
program requirements issued in February 2000.
--Section 116--PTSD and Substance Use Disorder Programs--$15 million
was distributed to new Substance Use Disorder and Post-
Traumatic Stress Disorder (PTSD) program initiatives on January
26, 2001. A full report to Congress was submitted on February
15, 2001.
--Section 208--Enhanced Use Lease Authority--Directive revised to
include provision that allows networks to retain proceeds from
enhanced use leases after expenses was issued March 24, 2000.
--Section 303--Chiropractic Treatment--National policy directive
issued in May 2000.
A number of provisions require significant policy development and
publication of regulations to fully implement:
--Section 101(b)--Expanding non-institutional and extended care
services--VA determined benefits package services. Regulations
on the provisions of non-institutional extended care in the
enrollment medical benefits package expands the definition of
``medical'' to include extended care services, and specifically
defines the expanded non-institutional services to include non-
institutional geriatric evaluation, non-institutional respite
care and adult day health care. The Long-Term Care regulation
has been combined with the Extended Care Co-Pay regulation. VA
approved a revised package in July 2001 and has forwarded it to
OMB. VA is working with OMB on final set of revenue estimates.
--Section 101(c)(1)(c)--Co-payments required for long term care
services from most NSC vets and SC vets. Proposed regulations
being reviewed by OMB should be published soon, with an
estimated effective date of March 2002.
--Section 111--Emergency Care--VA authorized to reimburse certain
vets as payor of last resort for emergency care in non-VA
facilities. On July 12, 2001, VA published an Interim final
rule titled, ``Payment or Reimbursement for Emergency Treatment
Furnished at Non-VA Facilities'' in volume 66, Number 134 of
the Federal Register. This interim final rule set forth the
regulatory requirements for reimbursing claimants the lesser of
the amount for which the veteran is personally liable or 70
percent of the applicable Medicare fee schedule for treatment.
VA facilities will begin processing these claims during August
2001, with an effective retroactive date of May 1, 2000.
--Section 201--Medication Co-Payments--VA to increase the amount of
the Pharmacy Co-Pay and to establish maximum monthly and annual
pharmacy co-pay amounts for individual veterans. Proposed
regulations were published in the Federal Register, 60-day
comment period on July 16, 2001. VA expects this regulation to
be implemented before the end of the year.
--Section 207--State Home Construction Grants--The new regulations on
grants to States for construction or acquisition of State Home
facilities change the priorities for awarding these grants to
give higher priority to renovation and life safety projects. In
addition, the new criteria include definitions of need for
additional beds, by State. Regulations were published in the
Federal Register on Tuesday, June 26, 2001 and were issued as
an interim final rule to apply to the fiscal year 2002 State
Home construction funding cycle (grants due August 15, 2001).
--Section 201--Outpatient Co-Payments--VA to set the outpatient co-
pay for each visit. VHA is considering lowering the outpatient
co-payment and regulations are expected to be sent to OMB in
August 2001, with an expected effective date in early 2002.
va research
Question. How does the VA intend to use the $10 million increase
called for in the Administration's budget? Could the VA effectively
spend an additional $20-$30 million for research? If yes, please
provide me with some idea as to the priority areas where VA needs to
increase its research efforts?
Answer. VA will use the Administration's proposed $10 million
increase to maintain current services. We believe the President's
Budget sufficiently funds VA's research efforts. However, an additional
$20-$30 million would be used to expand high priority research in the
areas of:
--Neurodegenerative diseases of the brain such as Alzheimer's
disease, Parkinson's disease, brain tumors and genetic diseases
of the nervous system, and Amyotrophic Lateral Sclerosis (Lou
Gehrig's disease).
--Special population needs such as spinal cord injury, multiple
sclerosis, low vision. Enhancement through development of an
artificial retina, and upper extremity prostheses using
nanotechnology.
--Treatment of chronic diseases such as AIDS treatment and compliance
studies, PTSD in women, heart surgery (arteries for grafts and
heart bypass pump), and stroke prevention.
--Quality of care studies that will enable VA to exploit advances in
clinical practices including the treatment of cerebrovascular
diseases (stroke), and lung, prostate, and colon cancer.
--New National Centers of Excellence to include minority health and
rehabilitation outcome assessment.
Question. It is my understanding that there is a critical need for
improvements in the VA research infrastructure (laboratory and other
research facility upgrades, local oversight for human studies, etc.).
How does VA plan to address these needs?
Answer. VA has several mechanisms with which it is addressing
research infrastructure needs. First, the Veterans Equitable Resource
Allocation (VERA) funding that is distributed to VA medical facilities
includes a component for research and development. In fiscal year 2001,
the Research and Development component totaled $331 million and was
allocated based on the level of research activity that each medical
facility conducts. The medical facility uses these funds in part for
equipment purchases, renovation and maintenance of research space, and
local oversight of human studies.
Second, the Office of Research and Development (ORD) also helps
medical facilities improve their infrastructure by providing funding
for local facility research support offices and for research equipment
(the medical and prosthetic budget may not be used to fund capital
improvements). In addition, ORD has funded the field offices of the
Office of Research Compliance and Assurance, the VA's watchdog
organization for ensuring the safety of human subjects.
Third, ORD identifies construction requirements necessary to
support the physical infrastructure of VA's research enterprise. Based
on an evaluation of the individual research programs the ORD has
compiled a list of 30 priority sites that would benefit from
infrastructure improvements. These needed improvements range from
construction or renovation of ``wet'' laboratories, construction of new
research structures, and other capital improvements. Three sites (Ann
Arbor, MI; San Antonio, TX; and Palo Alto, CA) have renovation and/or
construction projects underway, all of which is classified as minor,
and the remaining projects are being planned for the future.
Question. What is the VA system doing to ensure patient safety in
clinical trials?
Answer. VA is constantly reassessing patient safety protocols to
ensure that the well being of our veterans is not compromised in any
way, both in clinical trials and in all other aspects of health care
delivery. Innovations include the establishment of the Office of
Research Compliance and Assurance (ORCA), as well as initiating a
groundbreaking program to accredit the VA Institutional Review Boards
(IRB) by an external non-government accrediting agency that reviews and
monitors human research projects (National Committee for Quality
Assurance).
ORCA verifies that VA researchers comply with patient protection
protocols and standard operating procedures, and it also serves as the
Department's interface with the Office of Human Research Protection
(OHRP), in the Department of Health and Human Services. The effort to
accredit IRBs reinforces efforts to enhance patient protections through
improved oversight at the facility level. VA is working closely with
the National Committee for Quality Assurance to make this initiative
the benchmark for non-VA research programs to follow.
The Office of Research and Development (ORD) has required its
investigators to receive training and certification on human subject
protection. Moreover, ORD is updating the policy handbooks that govern
the protection of human subjects in VA research projects.
Multi-center clinical trials funded by VA receive at least four
levels of patient safety review: Human Rights Committee; Institutional
Review Boards; Research and Development Committee; and the Data Safety
and Monitoring Committee.
In addition, ORD and when applicable, the Food and Drug
Administration may conduct inspections during clinical trials.
Question. What recent research advances have been supported by VA
research funds?
Answer. VA's research portfolio of more than 2,000 projects has
produced numerous discoveries that have improved the quality of health
care for veterans and the American public. The attached document
``Impacts 2001'' details 45 recent advances. Some of the more
significant research results include:
--VA researchers have identified a promising new treatment for kidney
cancer. Using a laboratory-developed analog of a hormone that
inhibits the release of growth hormone, scientists were able to
reverse cancer growth. Nobel Prize winner Andrew V. Schally,
Ph.D., M.D.H.C, of the New Orleans VA Medical Center, leader of
the research group, described the compound as ``a magic
bullet'' that scientists have been seeking for 100 years.
--VA researchers in Seattle are developing new prosthetic limbs that
will provide unprecedented mobility for veteran amputees. The
resulting powered prosthetic limb is expected to reduce patient
fatigue and produce greater propulsive forces for walking.
--Researchers have opened the door to the development of novel
therapies for treating severe pain in bone cancer patients.
They showed that osteoprotegerin, a substance that inhibits
activity of bone-destroying osteoclast cells, also blocks pain
in mice with bone cancer. Existing treatments for bone cancer
pain can be ineffective, burdensome to administer, and
accompanied by numerous side effects.
--Researchers found that some apparently healthy people showed signs
of colon cancer. Using colonoscopy to examine the entire lining
of the colon in seemingly healthy people aged 50-75, 10 percent
were found to have colon cancer or serious precancerous
growths. At least one-third of these lesions would have been
missed by sigmoidoscopy; a more commonly used screening
technique. Colon cancer usually can be cured if detected early.
--A VA team established that memory is made up of many systems, each
supporting a different type of memory. This revolutionary
concept may lead to treatments for learning disabilities,
Alzheimer's disease, and other neurological problems.
--In a major breakthrough for understanding and treating
schizophrenia, VA researchers have discovered a gene that plays
a major role in schizophrenia and is linked to two
physiological defects found in schizophrenics and their family
members. Using a variety of genetic techniques, the researchers
traced the chromosomal location of the defective gene to the
site of a specific nicotine receptor.
--Researchers have identified a previously unknown dysfunction in
neurons involved in multiple sclerosis (MS). They found that a
specific sodium channel, the molecular ``battery'' that
produces electrical impulses in nerve cells, occurs in cells of
brains affected by MS but not in those without neurological
disease. Their work could revolutionize the treatment of MS.
--VA scientists have identified a gene that plays a key role in
development of Alzheimer's disease. More recently, a multi-
center team of VA researchers found that a gene associated with
the body's regulation of immune response might trigger earlier
onset of Alzheimer's symptoms. VA investigators also identified
a gene that causes a form of dementia characterized by tangles
of long, string-like filaments identical to those found in the
brains of Alzheimer's patients.
--VA researchers in San Diego have discovered a cellular pathway that
may offer a way to encourage liver cell growth in people with
liver damage or to block the growth of liver tumors. This
finding may also point the way to better artificial livers for
people needing a transplant and may even suggest ways to
restore lost cells in the brain and other tissues.
attachment--impacts 2001
department of veterans affairs, veterans health administration, office
of research & development, may 2001
a message from the chief research and development officer
The Office of Research and Development (ORD) focuses on health
problems prevalent among veterans. This highly accomplished program
spans the range of biomedical, clinical, health services,
rehabilitation, and epidemiologic research. The mission of the VA
research program is to discover knowledge and create innovations that
advance the health and care of veterans and the nation. VA scientists
are leaders in the development of cutting-edge health-care technology
and are dedicated to their commitment in providing the best possible
care for our veterans.
While pursuing the common goal of improving health care for
veterans and the nation, the four services of VA research each bring
unique strengths to our endeavor.
The Cooperative Studies Program, that I have the privilege of
directing, is one of the most recognized large-scale clinical trial
programs in the world. This program determines the effectiveness of new
therapies through multi-center clinical trials. Investigators
collaborate with colleagues across the nation and around the world to
test new treatments that benefit veterans as well as the general
population. Ongoing efforts range from testing the effectiveness of a
vaccine against shingles in the elderly to determining whether
intensified blood-sugar control can prevent major vascular
complications in type II diabetes.
The Medical Research Service (MRS) is led by Paul Hoffman, M.D.,
and has a major role in serving veterans from its achievements in basic
and clinical research. Major advances and contributions as a result of
MRS include the successful treatment of tuberculosis, the first
successful liver transplant, the concept that led to development of CAT
scan, drugs for treatment of mental illness, and development of the
cardiac pacemaker. New research is focusing on unraveling further the
mysteries of cancer, multiple sclerosis, depression, stroke,
Alzheimer's disease, Parkinson's disease, and diabetes.
The Health Services Research and Development Service (HSR&D) is led
by John Demakis, M.D., and is a leader in identifying effective and
efficient ways to organize and deliver health care. There are eleven
HSR&D centers of excellence that focus on linking research to patient
care. In addition, the HSR&D Quality Enhancement Research Initiative
(QUERI) is translating research results into improved patient care. It
targets conditions common among veterans, including chronic heart
failure, diabetes, stroke, and spinal cord injury.
The Rehabilitation Research and Development Service (RR&D), led by
Mindy Aisen, M.D., conducts research designed to maximize independence
for patients by restoring lost function or decreasing the impact of
disability. Research achievements range from new technology in the
areas of amputation, spinal cord injury, vision impairment, and hearing
loss to disabilities associated with aging. Recently, RR&D enhanced
stroke therapy by being the first to demonstrate robot-assisted
neurorehabilitation is more effective than the conventional treatment.
VA continues to focus its mission of providing excellent health
care for America's veterans. VA researchers have long played key roles
in developing important health care innovations and are dedicated to
keeping VA at the forefront of science and medicine. I am pleased to
present this document highlighting some of their major recent
achievements.

John R. Feussner, M.D., M.P.H.
designated research areas
Aging and Age-Related Changes
Normal age-related changes
Aging syndromes (frailty, immobility, falls)
Compound problems and comorbidities (coexisting diabetes and
coronary artery disease, dementia, hip fracture)
Care of elderly veterans
End of life issues
Acute Illness and Traumatic Injury
Amputation (injury or disease)
Bone fractures and joint injuries (repair and replacement)
(Traumatic) brain injury
Multi-organ failure
Shock (sepsis)
Military and Environmental Exposures
Emerging pathogens
Post-traumatic stress disorder (PTSD)
Psychological stress (violence, sexual abuse)
Thermal exposure (burns, hypothermia)
Toxins and irritants (dermal, reproductive, respiratory)
Chronic Diseases
Bone and joint disorders (chronic low back pain, osteoarthritis,
osteoporosis)
Cancers (adult leukemia/lymphoma, solid tissue tumors, cancer pain)
Cardiovascular, cerebrovascular, and peripheral vascular diseases
(related acute events: myocardial infarction, stroke, heart failure)
Chronic infectious diseases (HIV/AIDS, hepatitis)
Chronic lung disease
Chronic renal disease
Dementia & neuronal dysfunction (Alzheimer's and Parkinson's
disease)
Diabetes & major complications
Gastrointestinal disorders (bowel and liver disorders)
Spinal cord injury & regeneration
Sensory Disorders and Loss
Hearing disorders
Vision disorders
Disorders of taste and smell
Mental Illness
Anxiety disorders
Behavioral disorders
Depression and mood disorders
Schizophrenia
Specialized VA mental health services (behavioral and medical
interventions)
Substance Abuse
Alcohol
Drug
Tobacco
Dual diagnosis (alcohol and drugs)
Specialized substance abuse services (behavioral and medical
interventions)
Special (underserved, high risk) Populations
Veterans with permanent disabilities (blind and paralyzed)
Veteran cohorts defined by shared military experience (prisoners of
war, Persian Gulf veterans)
Historically underserved veterans (women, racial, ethnic, cultural
minorities, rural veterans)
Veterans whose living arrangements pose challenges to their health
(homeless, homebound)
Health Services and Systems
Supply and organization of resources & services
Delivery /coordination of resources & services
Outcomes of care
aging and age-related changes
Research in this area represents VA's efforts to identify the
unique characteristics of the aging process and develop strategies to
treat or prevent age-related health problems. Scientists have focused,
for example, on the special nutritional needs of older adults;
treatment and prevention of frailty, immobility and falls; and end-of-
life issues. Following are a few examples of our recent research
achievements in this area.
Post-stroke rehabilitation guidelines improve patient outcome
Stroke is one of the most costly, disabling, and deadly diseases.
Stroke guidelines have been created to assist clinicians in providing
standards for acute and post-acute care. These guidelines, however,
have never been evaluated for their effect on patient outcomes. This
observational study of nearly 300 patients for six months showed that
complying with post-stroke guidelines has a positive effect on
functional outcomes and patient satisfaction. Study results also show
that guideline compliance was significantly higher for veteran patients
who received inpatient post-acute rehabilitation in VA rehab units or
non-VA acute rehabilitation settings compared to patients who received
post-acute care in nursing homes. These findings support the use of
guidelines to assess quality of care and improve outcomes. Health
Services Research and Development
Hoenig H, Sloane R, Horner RD, Zolkewitz M, Duncan PW, Hamilton BB.
A taxonomy for classification of stroke rehabilitation services.
Archives of Physiology and Rehabilitation, 81(7):853-62, July 2000.
Reker DM, Hoenig H, Zolkewitz MA, Sloane R, Homer RD, Hamilton BB,
Duncan PW. The structure and structural effects of VA rehabilitation
bed service care for stroke. Journal of Rehabilitation Research and
Development, 37(4):483-91, Jul-Aug 2000.
Age-associated memory loss may be reversible
A VA team and colleagues have identified a process by which the
normal primate brain degenerates with aging and showed that this
degeneration can be reversed by gene therapy. In a study of normal
monkeys, the researchers found that aging was accompanied by
significant shrinkage and loss of function in nerve cells of the
brain's cholinergic system, which regulates the brain's cortex and
hippocampus, allowing the cortex to process information. Equally
important, these nerve cells were not dead, only atrophied, and
returned to nearly normal function and appearance after gene therapy
that delivered nerve growth factor to the impaired cells. In addition
to implications for cognitive function in normal aging, the findings
also may offer a new approach against the cognitive decline in
conditions such as Alzheimer's disease, in which this same system of
cells degenerates and dies. Medical Research Service
Smith DE, Roberts J, Gage FH, Tuszynski MH. Age-associated neuronal
atrophy occurs in the primate brain and is reversible by growth factor
gene therapy. Proceedings of the National Academy of Sciences, USA,
96(19):10893-8, 1999.
Patients' preferences for life-sustaining treatment in advance
directives
An HSR&D project demonstrated the critical need for more informed
advance care directives that accurately reflect patient preferences
regarding life-sustaining treatment and inform provider decisions.
Studies show that physicians may undervalue patient quality of life
when compared with the patient's own perceptions. In addition,
physicians, nurses and spouses generally were unable to judge
accurately what, in the patient's opinion, would constitute ``futile
treatment.''
This HSR&D research resulted in the publication of an advance care
planning workbook entitled Your Life, Your Choices, which is now
available on the internet at http://www.va.gov/resdev/programs/hsrd/
ylyc.htm. This comprehensive workbook can be used to educate patients
about advance care planning outside of the clinical setting. Exercises
and other aspects of the workbook can promote meaningful communication
between patients and proxies, facilitate efficient discussions between
clinicians and patients, and guide future medical care in the event of
decisional incapacity. Recommendations from this research have been
distributed throughout the VA by the National Center for Clinical
Ethics and at national meetings and conferences. The workbook's use in
the VA health care system should improve the advance care planning
process and advance directive completion rate in the VA. Health
Services Research and Development
Pearlman RA, Starks HE, Cain KC, Rosengren D, Patrick DL. Your
life, your choices--planning for future medical decisions: how to
prepare a personalized living will. In: Pearlman RA, Starks HE, Cain
KC, Rosengren D, Patrick DL, eds. Department of Veterans Affairs:
Washington, DC, 1997.
Evaluation of geriatric evaluation and management (GEM) units
The proportion of veterans over age 65 will increase from 26
percent in 1990 to 46 percent in 2020, and VA must be prepared to serve
the needs of this growing population. A large, multi-outcome study will
determine whether specialized inpatient and outpatient units are the
best way for VA to care for elderly patients. The impact of this study
will extend far beyond VA, as millions of older Americans come under
managed care. No other study is likely to provide the conclusive and
incontrovertible evidence needed to guide policy in this critical area.
Cooperative Studies Program
Evaluation of Geriatric and Management (GEM) Units and Geriatric
Follow-up. CSP#6. Palo Alto.
Hospice study helps VHA improve end-of-life care
Increasing access to high-quality hospice services is an important
element of VA's comprehensive strategy to improve care for terminally
ill veterans. The Veterans Hospice Care Study provides important
information on how to achieve this goal. The final report, which was
submitted to Congress, highlights the different programs through which
hospice care is delivered in the VHA, describes patient and family
satisfaction with care, and identifies barriers to obtaining hospice
care. These results are serving as the focal point for efforts to
improve end-of-life care throughout the VA delivery system. Health
Services Research and Development
Hickey EC, Berlowitz, DR, Anderson, J, Hankin C, Hendricks, A,
Lehner L. The veterans hospice care study: an evaluation of VA hospice
programs. Final Report. February, 1998. Report Number MRR 97-004.
New resource guide provides information on VA's long-term care services
A new, three-volume Guide to Long-Term Care Data in the VA is
helping clinicians, researchers and policymakers plan care and services
for those veterans who need long-term care. Now available through
HSR&D's Veterans Information Resource Center web at http://
www.virec.research.med.va.gov/DATABASES/LTCRGUID/EXPAGE.HTM, this guide
was developed after researchers conducted a thorough review of VA
databases for long-term care. It identifies sources of data for
research, as well as clinical use, and documents the limitations of
these data. Health Services Research and Development
acute illness and traumatic injury
The field of acute and traumatic injury centers on injuries due to
blunt force, temperature extremes, electric shock, pressure, or
diseases such as diabetes and cancer. Specific focus areas within this
field include amputation, bone fractures, brain injury, multi-organ
failure, stroke, and shock. Researchers are also investigating the
physical, psychological, cognitive and behavioral effects of acute and
traumatic injuries, and the health services and procedures required to
treat them.
VA and non-VA hospitals comparable for heart attack care
This study found care for acute myocardial infarction to be
comparable among patients in VA and non-VA facilities. Despite the fact
that VA patients were significantly more likely to have other chronic
complications, such as hypertension, chronic obstructive pulmonary
disease (COPD) or asthma, diabetes, stroke or dementia, there were no
significant differences in 30-day or one-year mortality for those
receiving VA and non-VA hospital care. These data suggest a similar
quality of care for acute myocardial infarction for patients in VA and
non-VA institutions. Health Services Research and Development
Petersen LA, Normand SLT, Daley J, McNeil, B. Outcomes of
myocardial infarction in Veterans Health Administration patients
compared with medicare patients. The New England Journal of Medicine,
343:1934-41, December 28, 2000.
Improving amputee mobility and independence
VA researchers in Seattle are developing new prosthetic limbs that
will provide unprecedented mobility for veteran amputees. Many
individuals with amputations across the shin or thigh lack endurance
because of the extreme effort simply to walk with today's prosthetic
limbs. To combat this problem, researchers developed an artificial
muscle and tendon to replace the lost musculature of the lower limb.
The resulting powered prosthetic limb is expected to reduce patient
fatigue and produce greater propulsive forces for walking.
Rehabilitation Research and Development
Kllute GK, Hannaford B. Fatigue characteristics of McKibben
artificial muscle actuators. Proceedings of the IEEEIRS7 1998
International conference on Intelligent Robotic Systems (IROS 1998),
Victoria BC, Canada, 776-1781, 1998.
Popular arthritis drugs proven dangerous for ulcer sufferers
A new class of painkillers, COX-2 inhibitors, used to treat
arthritis may prove dangerous for some individuals. These drugs differ
from conventional nonsteroidal anti-inflammatory drugs (NSAIDs) in that
they block the enzyme involved in pain and inflammation (COX-2) and do
not harm COX-1, which protects the stomach. However, recent VA research
shows that these drugs may block the body's natural ability to heal
stomach ulcers by inhibiting angiogenesis, the formation of tiny blood
vessels essential to wound and ulcer healing. Researchers treated rat
and human cells with indomethacin, a conventional NSAID or NS-398, a
COX-2 inhibitor. Results showed a significant decrease in angiogenesis
with the COX-2 inhibitor. Medical Research Service
Jones MK, Wang H, Peskar BM, Levin E, Itani RM, Sarfeh IJ,
Tarnawski AS. Inhibition of angiogenesis by nonsteroidal anti-
inflammatory drugs: insight into mechanisms and implications for cancer
growth and ulcer healing. Nature Medicine, 5(12):1418-23, December
1999.
Improved design and function of upper limb prostheses
A VA research initiative involving microcomputer technology will
modernize the design of electric-powered upper limb prostheses. VA
researchers have developed a position-sensitive controller that will
improve functional performance, fitting flexibility, and ease of
operation. The new controller provides sensory feedback from the
prosthesis to the amputee, thus giving the amputee a better ``feel''
for the position of his prosthetic limb in space. This important
research by VA will help assure better prostheses and better
controllers for all upper-limb amputees. Rehabilitation Research and
Development
Weir RF, Childress DS, Heckatborne CW. Towards achieving the goal
of meaningful, coordinated, subconscious, multi-functional control of
prostheses. Proceedings of the VA Rehabilitation Research & Development
Service 1st Annual Meeting, ``Enabling Veterans: Meeting the Challenge
of Rehabilitation in the Next Millennium,'' Washington, DC, 1998.
Bertos YA. The design and development of an embedded
microcontroller system for an E.P.P. based position controller for
upper-limb prostheses. Master's Thesis, Department of Electrical
Engineering, Northwestern University, 1999
military and environmental exposures
Military and environmental exposures are a unique concern to
veterans. Researchers working in this field are investigating the
chronic health effects of events veterans experience during military
service. This includes contact with foreign substances, such as toxins,
irritants, or emerging pathogens, extreme temperatures, and post-
traumatic stress disorder (PTSD). Gulf War veterans are a particular
focus as we learn more about their special health concerns. Following
are descriptions of selected studies in the areas of Gulf War veterans'
illnesses, PTSD, and infectious agents.
Amyotrophic lateral sclerosis (ALS) among Gulf War veterans
The Durham Epidemiologic Resource and Information Center is
conducting an epidemiological investigation of the incidence of ALS
(Lou Gehrig's disease) among veterans of the Gulf War. The study is
focusing in particular on three areas: defining the natural history of
ALS; determining whether there is a higher-than-expected occurrence of
ALS among Gulf War veterans; and ascertaining the possible or probable
cause(s) of ALS if above normal event rates are determined.
Through a national survey of veterans and follow-up examinations,
the study will increase the understanding of ALS among Gulf War
veterans by developing descriptive epidemiology of cases. It will also
compare the rate of ALS among Gulf War veterans with that of military
personnel on simultaneous active duty but not deployed to the Gulf.
Researchers are also investigating possible etiologic factors (with
focus on environmental factors) in the Gulf and possible genetic-based
susceptibilities to neurodegenerative disorders. Cooperative Studies
Program
An investigation into the occurrence of ALS among veterans of the
Gulf War. CSP# 500, Durham.
Testing antibiotic treatment for patients with Gulf War illnesses
VA researchers are testing a possible treatment for Gulf War
illnesses (GWI). Although the cause of GWI is unknown, one explanation
that has received fairly wide attention holds that infection with the
microorganism Mycoplasma fermentans may be responsible. The purpose of
this study is to determine the effectiveness of a one-year course of an
antibiotic called doxycycline in patients with GWI who test positive
for mycoplasma species. If doxycycline is shown to be effective, this
relatively inexpensive and easily delivered drug could improve symptoms
and possibly cure many veterans with GWI. Cooperative Studies Program
Collaborator: Pfizer Pharmaceuticals
Antibiotic treatment of Gulf War illnesses. CSP#475, Perry Point
Multi-modal therapy in veterans with Gulf War illnesses
There is no definitive therapy for treating patients with Gulf War
illnesses (GWI), and veterans suffering from this symptom complex are
frequently frustrated by continued pain, fatigue or cognitive
difficulties. VA researchers are trying to determine whether cognitive
behavioral therapy and aerobic exercise, two approaches that have
provided relief for people with fibromyalgia and chronic fatigue
syndrome, can be used to help veterans with GWI. The study has enrolled
more than 1,000 veteran patients in one of four treatment groups:
cognitive behavioral therapy plus aerobic exercise, aerobic exercise
alone, cognitive behavioral therapy alone, and usual and customary
care. This research may provide needed answers for veterans who suffer
from these mysterious and often disabling illnesses. Cooperative
Studies Program
A randomized, multi-center, controlled trial of multi-modal therapy
in veterans with Gulf War illness. CSP#470, West Haven
Group-treatment model for PTSD
Despite the often devastating effects of post-traumatic stress
disorder (PTSD) on veterans, there is no proven, effective method to
treat this condition. This randomized clinical trial will test what VA
considers to be the most promising approach for treating PTSD, trauma
focus group therapy (TFGT). This study is evaluating the efficacy of
TFGT for treating PTSD symptoms and its effect on other psychiatric
symptoms, functional impairment, physical health and utilization of
medical and mental health services. If this intervention is found to be
effective and feasible, VA will have at least one proven therapy for
veterans with this debilitating combat-related illness. Cooperative
Studies Program
Group treatment of PTSD. CSP#420, Palo Alto
Flesh-eating bacteria studies point to better treatments
VA researchers have conducted landmark studies on the so-called
``flesh-eating'' group A streptococcal bacteria that can destroy body
tissues and trigger fatal shock and organ failure. This team was the
first to describe a group of patients who had suffered toxic shock
syndrome caused by these strains of streptococci, the bacteria best
known as the cause of strep throat. The researchers showed that toxins
produced by these virulent strains cause the release of body chemicals
that trigger the shock and organ failure. The team has also done
critical work showing that penicillin, the antibiotic traditionally
used to treat group A streptococcal infections, is ineffective against
the flesh-eating strains and that patients must be treated with
antibiotics that suppress toxin production. Medical Research Service
Stevens DL, Bryant AE, Hackett SP, Chang A, Peer S, Kosanke S,
Emerson T, Hinshaw L. Group A Streptococcal bacteremia: the role of
tumor necrosis factor in shock and organ failure. Journal of Infectious
Diseases, 173(3):619-26, March 1996.
Stevens DL. The flesh-eating bacterium: what's next? Journal of
Infectious Diseases, 179;Suppl 2:S366-74, March 1999.
chronic diseases
VA research focuses on the range of chronic diseases and conditions
that are highly prevalent among veterans, including life-threatening
conditions and less severe problems that affect quality of life and the
need for health services. The disease may be a primary ailment or a
complication resulting from another disease. Specific areas of emphasis
include bone and joint disorders, cancer, vascular diseases, chronic
infectious diseases, lung and renal diseases, dementias, diabetes,
gastrointestinal disorders, and spinal cord dysfunction. Below are
short descriptions of VA research studies in some of these areas.
Optimal management of patients with HIV infection (OPTIMA)
VA's Cooperative Studies Program (CSP) has started a collaboration
with the national health-research agencies for the United Kingdom and
Canada, the UK Medical Research Council and the Canadian Institutes for
Health Research.
The first study under the new partnership is a multi-drug strategy
study designed to compare a ``standard'' treatment of three or four
antiretroviral drugs to a ``mega'' treatment of five or more drugs in
patients who have failed at least two ``highly active'' antiretroviral
regimens. It is the first large-scale, multicenter, randomized
controlled trial to compare the relative efficacy of the different
therapeutic strategies. The overall goal is to prevent new or recurrent
AIDS-related health events, such as pneumonia or death, through an
optimal combination of drugs. A total of 1,700 patients will be
randomized over a 2\1/2\ year period at 75 medical centers in three
countries. The use of multiple settings in different therapeutic
cultures' will allow for generalizability of the findings and provide
evidence that will facilitate management of HIV disease in this group.
The study will be coordinated by the VA West Haven CSP Coordinating
Center and is set to begin in 2001. Lead investigators are located at
the Bronx and Palo Alto VA medical centers, the University of British
Columbia, Canada, and the London School of Hygiene and Tropical
Medicine, U.K. Cooperative Studies Program
Major trial testing new vaccine against shingles
Shingles in older people is extremely painful and can be disabling.
Shingles is caused by the herpes-zoster virus that causes chickenpox in
young people. After chickenpox is treated, the virus remains dormant in
the body until late adulthood, when it may reactivate and cause
shingles. There is no effective treatment for people who suffer from
shingles lasting more than a month, nor is there an effective method to
prevent shingles.
This study is testing a promising new vaccine for its ability to
prevent shingles or reduce its severity and complications. This
randomized, controlled trial will enroll 37,000 older veterans for a
minimum of three years. If the vaccine proves successful, it will
supply a safe and cost-effective means for reducing the severe impact
of shingles and its complications on the health of older veterans.
Cooperative Studies Program
Collaborator. Merck Pharmaceuticals
Trial of Varicella vaccine for the prevention of Herpes Zoster and
its complications. CSP#403 West Haven.
Effect of custom orthosis on foot kinematics and forefoot pressure
distribution
Foot ulcers related to conditions such as diabetes pose significant
problems to patients and a vexing challenge to health care providers.
Gaining an understanding of potential causes of foot ulcers, including
increased pressures across the forefoot, bony malalignment, and changes
in relative motions between bones can lead to a more systematic
approach to treatment and prevention of this problem. An experimental
flatfoot model is being used to determine the effects of rigid and
compliant (flexible) orthoses on the movement of the foot. Computerized
scans delineate the bone architecture of each foot and are used to
create three-dimensional images for design of customized orthoses.
Early results show that the rigid orthosis can correct eversion
(outward turning) of three foot bones. Rehabilitation Research and
Development
Sangeorzan BJ, Czerniecki JM. Rehabilitation Research and
Development Center for Amputation, Prosthetics, Limb Loss Prevention,
2000.

Heart Disease

Rise in ``good'' HDL cholesterol vs. heart disease and stroke
The health benefits of reducing high levels of ``bad'' low-density
lipoproteins (LDL) are widely known. VA researchers, however, have
completed the first large-scale clinical trial to show that raising
``good'' HDL cholesterol levels (high-density lipoproteins) reduces the
risk of heart disease and stroke. A VA Cooperative Study involving
2,531 men at 20 VA medical centers found that the drug gemfibrozil
caused a 6 percent increase in ``good'' HDL cholesterol in comparison
to a placebo. In addition, the medication reduced coronary heart
disease death by 22 percent, nonfatal heart attacks by 23 percent, and
stroke by 29 percent.
The finding is particularly encouraging because gemfibrozil is
safe, economical, and available as a generic drug. The study results
offer a new therapy for the 20 to 30 percent of coronary heart disease
patients who do not have elevated ``bad'' LDL levels but do have low
levels of HDL. Results indicating the benefit of gemfibrozil are being
considered for inclusion within the Joint VA/DOD Clinical Practice
Guidelines for the management of lipidemia in the subset of patients
with this lipid profile. Cooperative Studies Program
Robins SJ, Collins D, Wittes JT, Papademetriou V, Deedwania PC,
Schaefer EJ, McNamara JR, Kashyap ML, Hershman JM, Wexler LF, Rubins
HB. Relation of gemfibrozil treatment and lipid levels with major
coronary events, VA-HIT: a randomized controlled trial. Journal of the
American Medical Association, 285(12):1585-91, March 28, 2001.
Rubins HB, Robins SJ, Collins D, Fye CL, et al. Gemfibrozil for the
secondary prevention of coronary heart disease in men with low levels
of high-density lipoprotein cholesterol. The New England Journal of
Medicine, 5:341(6):410-8, August 5, 2000.
VA compares favorably with private sector in coronary angioplasty study
This quality-of-care evaluation showed that VA's tiered health care
system produces excellent outcomes from high-tech cardiac procedures,
compared with the private sector. In this study of coronary angioplasty
patients, VA patients experienced no difference in hospital--or 30-day
mortality compared with private-sector patients, even though the VA
patients had more complicated conditions. In addition, VA patients
underwent less bypass surgery (sometimes a complication of angioplasty)
within 30 days of the angioplasty procedure. Health Services Research
and Development
Ritchie JL, Maynard C, Chapko MK, Every NR, Martin DC. A comparison
of percutaneous transluminal angioplasty in the Department of Veterans
Affairs and in the private sector in the State of Washington. Journal
of the American College of Cardiology, 81(9):1094-9, May 1, 1998.
Heart attack response findings offer hope for new treatments
Researchers from the VA San Diego Medical Center and the University
of California at San Diego (UCSD) have discovered new information about
the body's molecular response to hypoxia, a condition characterized by
decreased oxygen levels in blood or tissue resulting from heart attack
or closing of cardiac blood vessels. They successfully mapped the basic
response period to these cardiac events, starting with the release of a
protein (HIF-1) that stimulates the activation of blood-vessel-
developing genes, and the progress of those genes in reparation of
damaged tissue. The findings may lead to the development of new
therapeutic treatments that could diminish the severity of heart
attacks. Possible therapeutic implications may include the development
of new treatments in emergency cardiac care.
The researchers are now planning to evaluate whether doctors can
decrease heart attack severity and the damage done to heart tissue by
increasing HIF-1 levels in cardiac patients, either pharmacologically
or by gene therapy. Other researchers are investigating the effect of
decreasing HIF-1 levels in cancer patients, with the intention of
diminishing oxygen supply to cancer cells thereby prohibiting their
growth and proliferation. Medical Research Service
Lee SH, Wolf PL, Escudero R, Deutsch R, Jamieson SW, Thistlethwaite
PA. Early expression of angiogenesis factors in acute myocardial
ischemia and infarction. The New England Journal of Medicine, March 2,
2000.

Cancer

New study results may lead to cancer pain treatment
Researchers have opened the door to the development of novel
therapies for treating severe pain in bone cancer patients. They showed
that osteoprotegerin, a secreted decoy receptor that inhibits activity
of bone-destroying osteoclast cells, also blocks behaviors indicative
of pain in mice with bone cancer. Osteoprotegerin actions seem to
result from inhibition of tumor-induced bone destruction that in turn
inhibits the neurochemical changes in the spinal cord, possibly
involved in generating and maintaining cancer pain.
Although advances in cancer detection and therapy have increased
the life expectancy of cancer patients, more than one million patients
suffer from cancer-related pain each year. Pain is the first symptom of
cancer in 20-50 percent of all cancer patients and 75-90 percent in
advanced or terminal cancer patients. Bone cancer most frequently
results from breast, ovarian, prostate, or lung cancer spreading to the
bone. Progress in understanding and treating bone cancer pain will also
provide insights into potential therapies for pains arising from soft
tissue cancers.
Existing treatments for bone cancer pain can be ineffective,
burdensome to administer, and accompanied by numerous side effects.
Therapy for severe bone cancer pain nearly always involves morphine
which, when given at doses required to the pain, induces unwanted side
effects resulting in significant reduction in the patient's quality of
life. Medical Research Service
Honore P, Luger NM, Sabino MA, et al. Osteoprotegerin blocks bone
cancer-induced skeletal destruction, skeletal pain, and pain-related
neurochemical reorganization of the spinal cord. Nature Medicine,
6(7):838, May 2000.
Colonoscopy may be best way to screen for colon cancer
Researchers at 13 VA medical centers found that a significant
segment of an apparently healthy population showed signs of colon
cancer. Using colonoscopy to examine the entire lining of the colon in
3,121 seemingly healthy people aged 50-75, 10 percent were found to
have colon cancer or serious precancerous growths. In addition, at
least one-third of these lesions would have been missed by
sigmoidoscopy, a commonly used screening technique that reveals only
the lower (distal) part of the colon's lining. The study is the first
to directly compare exams limited to the distal colon with exams of the
entire colon to determine possible additional benefits of colonoscopy
screening in an asymptomatic group of patients. Researchers also found
that colonoscopy appeared reasonably safe with few complications such
as bleeding or reactions to sedation used to make patients more
comfortable during the procedure.
Colorectal cancer is the second leading cause of cancer deaths in
North America. It is marked by a premalignant phase in which growths
called polyps develop in the colon lining. Not all polyps become
cancerous, but those that progress to cancer typically develop
abnormalities that flag them as dangerous. In the United States alone,
it is now estimated that 138,000 men and women will be diagnosed with
colorectal cancer each year and about 55,000 will die from the disease.
The findings from this study provide the basis for a more sensitive
colon cancer screening test and earlier detection and treatment.
Cooperative Studies Program
Lieberman DA, Weiss DG, Bond JH, Ahnen DJ, Garewal H, Chejfec G.
Use of colonoscopy to screen asymptomatic adults for colorectal cancer.
The New England Journal of Medicine, 343(3):162-8, July 20, 2000.
VA research suggests path to more effective breast cancer treatment
Retinoic acid, a radioactive iodide currently used in fighting
thyroid cancer, may have a role in the fight against breast cancer.
Researchers and colleagues from the Molecular Endocrinology Laboratory,
VA Greater Los Angeles Healthcare System, suggest that there is a
potential for retinoic acid to increase the uptake of radioiodine into
certain breast cancers. They found that retinoic acid stimulated the
production of a specific protein, the sodium/iodide transporter,
responsible for the increased uptake.
Findings to date are specific only for breast cancer cells that
were capable of reacting to estrogen. However, retinoic acid may also
be useful in the diagnosis and treatment of other types of breast
cancer. Medical Research Service
Kogai T, Schultz JJ, Johnson LS, Huang M, Brent GA. Retinoic acid
induces sodium/iodide symporter gene expression and radioiodide uptake
in the MCF-7 breast cancer cell line. Proceedings of the National
Academy of Sciences USA, 97(15):8519-24, July 18, 2000.
Landmark prostate cancer trial will illuminate treatment options
The management of localized prostate cancer in older men has
generated considerable debate due to the risks and potential benefits
associated with different treatment options. Prostate cancer is the
second most frequent cause of cancer deaths in men. Research shows
patients' treatment preferences vary significantly, depending on the
risk associated with surgery, life expectancy, symptoms and tolerance
for their symptoms. As a result, patient preference and experience are
critical factors in making treatment decisions for prostate cancer.
Important questions remain concerning long-term outcomes for
prostate cancer treatment. VA, in collaboration with the National
Cancer Institute (NCI) and the Agency for Healthcare Research and
Quality (AHRQ), is addressing these questions through a landmark study
that compares the two most widely used treatment methods: radical
prostatectomy, in which the prostate is surgically removed, and
``watchful waiting'' in which only the disease symptoms are treated.
The Prostate Cancer Intervention Versus Observation Trial (PIVOT) is a
15-year randomized study involving 2,000 men from approximately 80 VA
and NCI medical centers throughout the country. All patients will be
followed for at least 12 years. The results will supply information on
treatment-specific survival rates, complications and quality of life.
When completed, this study will provide more definitive answers on
the best treatment for early-stage prostate cancer. If watchful waiting
is as effective as surgery, millions of health care dollars could be
saved every year by avoiding unnecessary surgery. On the other hand,
results favoring surgery would highlight the need for early detection
and treatment of this disease. Cooperative Studies Program
Collaborator. National Cancer Institute; Agency for Healthcare
Research and Quality. Wilt TI, Brawer MK The prostate cancer
intervention versus observation trial (PIVOT). Oncology, 11(8):1133-43,
1997.

Neurological Disorders

Award-winning research breaks important ground on human memory
Pioneering research by Larry R. Squire, Ph.D., winner of the 1994
Middleton Award, has shed new light on the nature and processes of
memory, generating knowledge that may lead to treatments for learning
disabilities, Alzheimer's disease, and other neurological problems.
Among the key questions for which Dr. Squire and his colleagues are
providing critical answers are: What is memory? Where is it stored in
the brain and how does it work? What happens to memory during normal
aging and in disease or brain injury?
The research team's studies established that memory is made up of
many systems, each supporting a different type of memory. This
revolutionary concept has changed the direction of research in this
field. Through a series of animal experiments, VA researchers
discovered the medial temporal lobe system that controls one form of
memory. Their research also provided the first proof that the human
hippocampus is a critical component of the medial temporal lobe memory
system and is essential for human memory.
In another recent study, Dr. Squire and his colleagues focused on
how the human brain files information. Using functional magnetic
resonance imaging, a scanning technique that measures activity in
different parts of the brain, they found that the brain structures
associated with categorization are different from those necessary for
simple rote memory. Medical Research Service
Knowlton BJ, Mangels JA, Squire LR. A neostriatal habit learning
system in humans. Science, 273(5280):1399-402, September 6, 1996.
Reber PJ, Stark CE, Squire LR. Cortical areas supporting category
learning identified using functional MR1. Proceedings of the National
Academy of Sciences, USA;95 (2):747-50, 1998.
Clark RE, Squire LR. Classical conditioning and brain systems: the
role of awareness. Science, 280(5360):77-81, 1998.
Larry R. Squire, Ph.D., VA San Diego Health Care System VA Merit
Review, Medical Research Service
Robot-assisted arm movement helps stroke patients
Rehabilitation researchers are investigating the use of robot-
assisted arm movement to promote neurologic recovery in persons weak on
one side following a stroke. The new robotic system can assist shoulder
and elbow movements in 3-dimensional patterns encompassing a large
portion of the person's range of motion. The user can guide movement of
his/her weak arm by moving the opposite arm in the mirror-image
pattern. A clinical trial with chronic stroke subjects compared an
eight-week intervention of robot-assisted movement with a control
intervention of equal intensity consisting of conventional therapy.
The results indicate that robot therapy is as effective as
conventional therapy, and may even have advantages over conventional
therapy. Persons who trained with the robot had greater strength gains
than persons who received conventional therapy. Robots can potentially
implement highly repetitive, labor-intensive exercises more efficiently
than currently possible. This is especially relevant given recent
evidence that highly repetitive exercises may promote neurologic
recovery. Robots can also potentially provide new exercise modes not
currently possible. The advanced sensor technology on the mirror-image
motion enabler allow precise measurement of interaction forces and
movement patterns during therapy. This data will lead to a better
understanding of the role of therapy in promoting neurologic recovery
following stroke. Rehabilitation Research and Development
Burgar CG, Lum PS, Shor P, Van der Loos HFM: Development of robots
for rehabilitation therapy: the Palo Alto VA/Stanford experience.
Journal of Rehabilitation Research and Development, 37(6):663-73,
November/December 2000.
Electromyographic imaging of muscle architecture
Understanding the way in which particular muscles produce force
requires accurate knowledge of muscle architecture. Investigators in
Palo Alto have developed a technique to study motor-unit architecture
by analyzing electromyographic signals. Signals recorded, using a
needle electrode during a moderate voluntary contraction, are processed
to identify the action potential of each active motor unit in the
vicinity of the electrode. Action-potential landmarks are then used to
estimate the relative locations of each motor unit's neuromuscular and
musculotendinous junctions.
The analysis of different muscles reveals a variety of
architectural organizations, including different muscle-fiber lengths,
single and multiple innvervation zones, pennation, and intramuscular
aponeuroses. This type of analysis promises to be useful for studying
muscle structure in normal subjects and structural changes in aging and
disease. Rehabilitation Research and Development
Lateva ZC, McGill KC. Estimating motor-unit architectural
properties by analyzing motor-unit action potential morphology.
Clinical Neurophysiology, 112(1):127-35, January 2001.
Narcolepsy may be due to loss of brain cells
A loss of brain cells that make a chemical called ``hypocretin' may
be responsible for narcolepsy, a debilitating, lifelong disease that
causes patients to fall asleep uncontrollably during the day.
Researchers at the Sepulveda VAMC found that human brains from
narcoleptics had up to 95 percent fewer hypocretin neurons compared
with normal brains. Although hypocretin has been linked by scientists
to narcolepsy in animals, the causes of human narcolepsy remains
unclear. Researchers believe the loss of hypocretin neurons may stem
from an autoimmune attack by the body, or a sensitivity of the cells to
certain environmental or biological toxins.
Current treatments focus on the use of amphetamines and other
stimulant drugs to keep narcoleptics awake during the day. These
treatments to not completely reverse symptoms and produce unwanted side
effects. This research confirms the potential for new therapies aimed
at restoring the hypocretin messaging system in the brain. Medical
Research Service
Thannickal TC, Moore RY, Nienhuis R, Ramanathan L, Gulyani S,
Aldrich M, Cornford M, Siegel JM. Reduced number of hypocretin neurons
in human narcolepsy. Neuron, 27(3):469-74, September 2000.
Sodium channels in multiple sclerosis and pain
Rehabilitations researchers have identified a previously unknown
dysfunction in neurons involved in multiple sclerosis (MS). They found
that a specific sodium channel, the molecular ``battery'' that produces
electrical impulses in nerve cells, occurs in cells of brains affected
by MS but not in those without neurological disease. Their work could
revolutionize the treatment of MS.
In related work, the researchers recently discovered that two
molecules control the expression of sodium channels involved in the
hyperexcitability of pain-signaling neurons that occurs following nerve
and spinal cord injury. The researchers have found that particular
sodium channels are prevalent in spinal sensory neurons and not present
in significant levels in other types of nerve cells. Increased
understanding of the roles of these channels may lead to improved
treatments for chronic pain disorders of the nervous system.
Rehabilitation Research and Development
Black JA, Dib-Hajj S, Baker D, Newcombe J, Cuzner ML, Waxman SG.
Sensory neuron-specific sodium channel SNS is abnormally expressed in
the brains of mice with experimental allergic encephalomyelitis and
humans with multiple sclerosis. Proceedings of the National Academy of
Science, USA; 97(21):11598-602, October 10, 2000.
Fjell J, Cummins TR, Fried K, Black JA, Waxman, SG. In vivo NGF
deprivation reduces SNS express and TTSX-R currents in IB4-negative DRG
neurons. Journal of Neurophysiology, 81:803-11, February 1999.
Fjell J, Cummins TR, Davis BM, Albers KM, Fried K, Waxman SG, Black
JA. Sodium channel expression in NGF-overexpressing transgenic mice.
Journal of Neuroscience Research, 57:39-47, July 1, 1999.
FES and gait function after stroke
Investigators at the Cleveland Functional Electrical Stimulation
(FES) Center are studying functional neuromuscular stimulation (FNS) to
improve gait following stroke. Investigators found that stroke patients
with sensation tolerate implanted FNS treatment with no discomfort.
Preliminary findings show that acute stroke patients treated with
implanted FNS have improvements in muscle function, coordination, and
gait function. In a companion study, stroke patients who had completed
conventional rehabilitation and had reached a functional plateau were
treated with FNS twice weekly for nine months, achieving significant
improvement in muscle function and gait deficits over their pre-FNS
status. Rehabilitation Research and Development
Daly JJ, Ruff RL, Haycook K, Strasshofer B, Marsolais EB, Dobos L.
Feasibility of gait training for acute stroke patients using FNS with
implanted electrodes. Journal of Neurological Sciences, 179(1-2):102-7,
October 1, 2000.
Daly JJ, Ruff RL. Electrically induced recovery of gait components
for older patients with chronic stroke. American Journal of Physical
and Medical Rehabilitation, 79(4):349-60, July-August 2000.
Daly JJ, Debogorski A, Strasshofer B, Scheiner A, Kollar K,
Marsolais EB, Ruff RL, Snyder S. Percutaneous electrode performance and
use for restoration of gait in patients with stroke. Journal of
Rehabilitation Research and Development, in press.
Seeking better treatments for Parkinson's disease
A landmark VA Cooperative Study clinical trial will assess the
effectiveness of surgical implantation of deep brain stimulation (DBS)
to reduce the symptoms of Parkinson's disease. DBS is a new promising
alternative therapy for Parkinson's disease. It will be compared to the
current standard surgical treatment, pallidotomy, where a small lesion
is made in a portion of the brain called the globus pallidus. The goal
of this project is to compare these two treatments and determine the
most effective brain site for DBS surgical intervention.
This study will be conducted at VA's six new Parkinson's Disease
Research, Education, and Clinical Centers (PADRECCs) in Houston,
Philadelphia, Portland, Richmond, San Francisco, and West Los Angeles.
These centers will enable top VA researchers, clinicians, and educators
to better understand Parkinson's disease, develop more effective
treatments and clinical care strategies for patients, and improve
education for caregivers. The study will begin in 2001 and will be a
prospective, randomized, multi-center trial. While treatments exist,
there is no cure for this debilitating disease that is becoming a
serious health problem in the United States. VA medical centers treat
at least 20,000 Parkinson's disease patients each year. Cooperative
Studies Program
VA researchers discover genes involved in aging and Alzheimer's disease
VA is at the cutting edge of genetic research in human aging and
Alzheimer's disease, the devastating brain disorder that afflicts some
4 million elderly Americans. VA researchers were part of an
international team that discovered the first human gene associated with
aging, a major advance in efforts to understand aging and age-related
diseases. In addition, VA researchers identified the gene that causes
Werner's Syndrome, a rare inherited disorder marked by premature aging.
They also found that this gene normally directs the production of
enzymes called helicases, which cells need to uncoil and reproduce DNA
and perform other cell functions. The team's findings indicate that
mutations affecting DNA are key to the aging process.
VA researchers have also identified a gene that plays a key role in
development of Alzheimer's disease. This discovery may allow them to
better understand how the disorder develops in people who carry this
gene. More recently, a multi-center team of VA researchers found that a
gene associated with the body's regulation of immune response may
trigger earlier onset of Alzheimer's symptoms.
VA investigators also identified a gene that causes a form of
dementia characterized by tangles of long, string-like filaments
identical to those found in the brains of Alzheimer's patients.
Previously, these filaments were thought to be a consequence of
Alzheimer's rather than a factor in the disease's progress. The
investigators found that a mutated form of the so-called ``tau'' gene
produces these long filaments and causes nerve cell death in patients
with frontotemporal dementia. These findings point to the tau gene as a
potential target for new Alzheimer's disease treatments. Medical
Research Service
Yu CE, Oshima J, Fu YH, Wijsman EM, Hisama F, Alisch R, Matthews S,
Nakura J, Miki T, Ouais S, Martin GM, Mulligan J, Schellenberg GD.
Positional cloning of the Werner's syndrome gene. Science,
272(5259):258-62, April 12, 1996.
Payami H, Schellenberg GD, Zareparsi S, Kaye J, Sexton GJ, Head MA,
Matsuyama SS, Jarvik LF Miller B, McManus DQ, Bird TD, Katzman R,
Heston L, Norman A, Small GW. Evidence for association of HLA-A2 allele
with onset age of Alzheimer's disease. Neurology, 49(2):512-8, August
1997.

Osteoporosis/Osteoarthritis

Working to understand and prevent osteoporosis
Researchers at the Little Rock VA Medical Center, supported under
the Research Enhancement Awards Program (REAP), are advancing
understanding of osteoporosis, a bone disease affecting more than 28
million Americans. Specifically, the multidisciplinary effort focuses
on identifying the mechanisms of bone loss in patients with metabolic,
orthopedic, and cancer-related diseases, and the development of novel
therapies for their management. Six VA investigators, led by Stavros C.
Manolagas, M.D., Ph.D., are combining expertise in geriatrics,
orthopedics, surgery, biochemistry and pharmacology. The REAP funds
will also be used to create new training opportunities and to launch
novel research initiatives that will translate basic research findings
into clinical applications. Medical Research Service
Jilka PL, Weinstein RS, Bellido T, Roberson P, Parfuitt AM,
Manolagas SC. Increased bone formation by prevention of osteoblast
apoptosis with parathyroid hormone. Journal of Clinical Investigations,
104(4):439-46, August 1999.
Defective cartilage cells linked to osteoarthritis
Researchers have found that nitric oxide, a potentially harmful
free-radical gas found in the body, can significantly disturb the
ability of mitochondria to breathe and produce energy. Their data
suggests that a cartilage cell's mitochondria (structures within cells
that produce most of the energy necessary for general health and well-
being) go through a type of power failure where they no longer produce
energy to generate healthy cartilage. Therefore, calcium deposits are
formed and the joints deteriorate. Little is known about the biological
causes of the disease. Since osteoarthritic cartilage is chemically
different from normal aged cartilage, the disease does not appear to be
a result of aging itself.
Current VA research suggests the potential for new drugs aimed at
preserving mitochondrial function in cartilage cells, thereby stemming
joint deterioration. Osteoarthritis, also known as degenerative joint
disease, is the most common form of arthritis. Symptoms include pain,
stiffness, and inflammation in the joints. Treatment typically involves
pain-relieving and anti-inflammatory drugs along with heat-therapy and
exercise. This treatment alleviates symptoms but does not address the
cause of the disease. Medical Research Service
Johnson K, Jung A, Murphy A, Andreyev A, Dykens J, Terkeltaub R.
Mitochondrial oxidative phosphorylation is a downstream regulator of
nitric oxide effects on chondrocyte matrix synthesis and
mineralization. Arthritis and Rheumatism, 43(7):1560-70, July 2000.
Mechanical stimulation gives human arthritic cartilage cells a boost
toward health
Research at the VA Palo Alto Rehabilitation Research and
Development Center has yielded new insights into the response of human
osteoarthritic cartilage cells to physical force or pressure. As a
joint surface is damaged by disease, a specialized form of the
structural protein, collagen, is lost from the cartilage, exposing the
bone surface, causing pain and reducing freedom of movement.
Researchers at the Palo Alto Rehabilitation Research Center showed that
a short daily application of hydrostatic pressure, followed by a period
with no pressure, increased expression of molecules essential to
formation of collagen. Future studies will try to determine which
loading conditions produce the best responsiveness and to assess
whether mechanical stimulation will provide a viable way to regenerate
health cartilage in diseased joints. Rehabilitation Research and
Development
Smith RL, Lin J, Kajiyama G, Shida J, Trindade MCD, Yerby S, van
der Meulen MCH, Vu T, Hoffman AR, Schurman DJ, Beaupre GS, Carter DR.
Hydrostatic pressure and cartilage repair--analysis of chondrocyte
collagen gene expression. Transactions of the 18th Annual Meeting of
the Society for Physical Regulation in Biology and Medicine, 1998.
New methods for analyzing densitometry results can improve osteoporosis
diagnosis
Dual-energy X-ray Absorptiometry (DXA) is currently the method of
choice for measuring bone density and identifying individuals with low
bone mass and osteoporosis. Results can be misleading, however, because
different-sized bones of the same density can produce different
readings. Researchers at the VA Palo Alto Rehabilitation R&D Center
have developed a simple method for adjusting DXA scans of the heel bone
for bone size.
This new method provides an accurate determination of volumetric
bone density. In addition, this group of researchers has developed a
new DXA-based index for estimating fracture risk in normal and
osteoporotic patients. These new methods have immediate clinical
applicability in helping to identify individuals at risk for
osteoporotic fractures. Rehabilitation Research and Development
Wren TAL, Yerby SA, Beaupre GS, Carter DR. Interpretation of
calcaneus dual-energy X-ray absorptiometry measurements in the
assessment of osteopenia and fracture risk. Journal of Bone and Mineral
Research, 15(8):1573-8, August 2000.

Liver/Kidney Disease

Study launched for severe diabetes complications
A large-scale clinical trial may determine whether intensified
blood-sugar control can prevent the major vascular complications that
lead to most deaths, illnesses, and treatment costs for patients with
type II diabetes. This is a seven-year VA study in collaboration with
the American Diabetes Association and several pharmaceutical companies,
including SmithKline Beecham, Novo-Nordisk, Aventis, KOS, and Roche
Diagnostics. The study will be conducted at 20 VA medical centers and
will enroll 1,700 patients with type II diabetes for whom standard drug
therapy is no longer adequate. Patients will be followed for five years
to assess rates of major macrovascular events, including heart attack,
heart failure, stroke, amputations due to ischemia, surgery for
coronary artery or peripheral vascular disease, and cardiovascular
death.
Participants will receive either standard therapy or an intensive
therapy that would involve higher doses of the same drugs. Standard
therapy for type II diabetes includes sulfonylurea and insulin-
sensitizing medications designed to lower blood-sugar levels and
sensitize the body to naturally produced insulin. The intensive therapy
will include medications, along with other antihyperglycemic drugs and
insulin that will be added in steps. The risk for type II diabetes
increases with age, with most cases developing after age 40. More than
18 percent of Americans over age 65 and more than one-fourth of the VA
patient population have type II diabetes. Cooperative Studies Program
Cellular on-off switch provides new tactics against liver disease
VA researchers in San Diego have discovered a cellular pathway that
may offer a way to encourage liver cell growth in people with liver
damage or to block the growth of liver tumors. They found that a gene
cloned in the laboratory was a powerful regulator of development when
they stimulated mouse liver cells with a hormone known to trigger cell
growth. The key step was a single change in the protein product of that
gene.
This finding may also point the way to better artificial livers for
people needing a transplant and may even suggest ways to restore lost
cells in the brain and other tissues. The researchers now hope to learn
more about the mechanics of the protein change so they can use it as an
``on-off'' switch for cell growth, possibly developing drugs or other
techniques to flip that switch. Medical Research Service
Buck M, Poli V, van der Geer P, Chojkier M, Hunter T.
Phosphorylation of rate serine 105 or mouse threonine 217 in C/EBP beta
is required for hepatocyte proliferation induced by TGF alpha.
Molecular Cell, 4(6):1087-92, December 1999.
VA researchers identify potential new kidney cancer treatment
VA researchers have identified a promising new treatment for kidney
cancer. Using a laboratory-developed analog of somatostatin, a
hypothalamic hormone that inhibits the release of growth hormone,
scientists were able to target specific receptors on tumor sites and
reverse cancer growth. Nobel Prize winner Andrew V. Schally, Ph.D.,
M.D.H.C, of the New Orleans VA Medical Center, leader of the research
group, described the compound as ``a magic bullet'' that scientists
have been seeking for 100 years.
Researchers implanted two types of human renal cell carcinoma (RCC)
tumors in mice, and injected them with an analog, AN-238, previously
shown to be effective in the treatment of prostate cancer, breast
cancer, and brain tumors. After five weeks of treatment, the volume of
the two types of tumors had decreased 67.2 percent and 78.3 percent.
The analog works by targeting receptors on the surface of RCC tumors,
inhibiting and even reversing tumor growth.
This is the first application of the cytotoxic (cell-destroying)
compound in RCC, the most common form of kidney cancer. RCC is
diagnosed in an estimated 28,000 Americans each year and nearly 12,000
people died from the disease in 1999. These latest findings represent a
great stride toward treatment of a cancer that has been resistant to
both chemotherapy and radiation and has a very low survival rate.
Medical Research Service
Plonowski A, Schally AV, Nagy A, Kiaris H, Hebert F, Halmos G.
Inhibition of metastatic renal cell carcinomas expressing somatostatin
receptors by a targeted cytotoxic analogue of somatostatin AN-238.
Cancer Research, 1;60(11):2996-3001, June 2000.
Anti-anemia drug for dialysis patients may be administered
subcutaneously
More than 90 percent of hemodialysis patients experience severe
anemia. A new drug, recombinant human erythropoietin, is very effective
at combating this anemia, but its cost is $5,000 to $10,000 per patient
annually when administered intravenously. However, a randomized, multi-
center trial by VA found that recombinant human erythropoietin can be
administered just as effectively subcutaneously (under the skin), with
a dosage reduction of 32 percent and no substantial increase in patient
pain or discomfort. The Cooperative Studies Program is working with the
Health Care Finance Administration to estimate potential savings to
Medicare from this subcutaneous administration. Cooperative Studies
Program Collaborator: AMGEN Pharmaceuticals
Kaufman JS, Reda DJ, Fye CL, Goldfarb DS, Henderson WG, Kleinman
JG, Vaamonde CA. Subcutaneous compared with intravenous epoetin in
patients receiving hemodialysis. Department of Veterans Affairs
Cooperative Study Group on Erythropoietin in Hemodialysis Patients. New
England Journal of Medicine; 339(9):578-83, August 27, 1998. CSP#392,
Hines.
Transgene treatment for diabetes
Type I diabetes mellitus is usually followed by autoimmune
destruction of cells in the pancreas, leading to insufficient insulin
production. Diabetes is a natural candidate for treatment by gene
therapy since clinical symptoms are caused by a decreased production of
a single protein. Numerous studies have demonstrated that functional
gene transfer is successful both in animals and in cell cultures.
Attempts to regulate transgenic insulin production, however, have
proven inadequate as the insulin secretion has been insufficient to
normalize blood glucose or it has produced lethal hypoglycemia. This
study has resulted in the design of a system where insulin gene therapy
utilizes transcription to regulate hepatic production of transgenic
insulin.
Effective and safe insulin gene therapy will require regulation of
transgenic insulin secretion. Researchers at the Atlanta VA Medical
Center have created a liver-targeted insulin transgene by engineering
glucose responsive elements into a hepatic promotor containing an
inhibitory insulin response sequence. They demonstrated the
applications of this transgene for the treatment of diabetes mellitus
in mice by administering a genetically recombined virus. Blood sugar
levels were reduced and maintained after a substantial glucose load.
Medical Research Service
Thule PM, Liu JM. Regulated hepatic insulin gene therapy of STZ-
diabetic rats. Gene Therapy, 7:1744-52, October 2000.
sensory disorders
Humans rely on sensory perceptions to interact with and interpret
their surrounding environment. Loss or impairment of a sense, such as
sight or hearing, can be a traumatic event, causing mental and
emotional anguish. VA researchers are working toward understanding the
biological causes of sensory loss, restoring or improving lost function
for affected individuals, and improving the health services and
rehabilitation aids that are available. Below are examples of our
research in vision, hearing, and neurologic recoveries.
Outcome measurement system for blind rehabilitation services
The measures developed in two VA Merit Review projects form the
basis of the national database implemented by VA Blind Rehabilitation
Service and Information Technology Service on Jan. 1, 2001. Items from
the Satisfaction Survey and the Functional Outcomes instruments are
being used by VA headquarters to evaluate rehabilitation outcomes for
Blind Rehabilitation Service. Reports on these measures are provided on
a quarterly basis to all VA Blind Rehabilitation Centers and VA
headquarters for purposes of program evaluation. Rehabilitation
Research and Development
De l'Aune W, Welsh RL, Williams MD. Outcome assessment of the
rehabilitation of people with visual impairment: a national project in
the United States. Journal of Visual Impairment and Blindness,
95(5):281-91, 2000.
Improvement of visual function evaluations
The procedures developed in two VA projects using the scanning
laser ophthalmoscope have challenged the prevailing clinical lore about
preferred retinal locus (PRLs) characteristics (exact location of the
retina) and scotoma characteristics (a blind spot or blind area within
the normal bounds of vision). The results from these projects have been
incorporated into practice plans for vision rehabilitation.
The scanning laser ophthalmoscope has improved evaluation of visual
function in people with impaired vision. In particular, it has enhanced
the assessments including the relationship between basic eye movements
and the ability to carry out complex tasks, the ability to find
information in a visual field, and face recognition ability. Defining
the relationship between visual function as assessed by the scanning
laser ophthalmoscope and activities of daily living is refining
diagnostic and training methods used in vision rehabilitation services.
Rehabilitation Research and Development
Schuchard RA, Fletcher D. Preferred retinal loci and the scanning
laser ophthalmoscope, in ``principles and practice of ophthalmology,
Section: optics and low vision rehab'', Kraut J, Azar D, section ed.
Albert D, Jakobiec F ed. Saunders, Philadelphia, 2000.
Schuchard RA. Evaluation of visual function, in ``Self study
series: adult low vision rehabilitation,'' M. Warren ed., American
Occupational Therapy Association Publications, Washington DC, 2000.
Popular hearing aids undergo scientific evaluation
Although they have been in use for decades, three popular types of
hearing aids--accounting for 70 percent of the market--underwent their
first rigorous scientific testing in a clinical trial by VA's
Cooperative Studies Program and the National Institute on Deafness and
Other Communication Disorders (NIDCD). Results of the study, conducted
at eight VA medical centers, may enable doctors to help millions of
Americans deal more effectively with hearing loss. The report shows
that hearing aids substantially help users in both quiet and noisy
situations.
Hearing loss is particularly prevalent among veterans, in part due
to increased occupational exposure to loud noise on military bases. In
1999, 85,000 veterans were fitted for hearing aids at VA medical
centers. Due to its expertise in audiology, the VA healthcare system
was chosen as a partner in hearing-aid research by NIDCD, part of the
National Institutes of Health (NIH).
Up to 28 million Americans--including about a third of those age 65
or older--have nerve-related hearing loss, which can often be helped by
hearing aids. But only about 20 percent of those who can benefit from
hearing aids wear them. One reason is that many primary-care doctors
may not be fully informed on the benefits of hearing aids. Primary-care
doctors will benefit from knowing that hearing aids are an effective
treatment for many patients, especially those with mild to moderate
hearing loss. Cooperative Studies Program
Larson VD, Williams DW, Henderson WG, Luethke LE, Beck LB, et al.
Efficacy of 3 commonly used hearing aid circuits: A crossover trial.
Journal of the American Medical Association, 284(14):1806-13, October
11, 2000.
mental illness
VA research in mental illness focuses on cognitive conditions, from
anxiety disorders and depression to advanced schizophrenia.
Investigators have made great strides toward identifying the underlying
causes of these disorders and are currently working to identify
improved treatment methods and better health service systems to care
for those with mental illness. Following are brief descriptions of
important studies that illustrate VA's research in this important area.
Team management improves depression care
Depression is the second most prevalent medical condition in the VA
and has an impact on function and quality of life that is worse than
many other chronic physical conditions. Most depression treatment takes
place in primary care where it continues to be under-detected and
under-treated. This study of depression treatment adapted the
collaborative care model for managing chronic illness to the VA primary
care setting and compared the team care approach with traditional
consult-liaison treatment. In the team model, psychiatrists,
psychologists and social workers were assigned to a team that developed
a treatment plan based on the initial assessment and provided the plan
to the primary care provider. Primary care provider efforts were
reinforced by patient education materials and brief social work phone
calls to support patient adherence, address treatment barriers and
monitor symptomatology.
Team care resulted in significantly greater improvement in
depressive symptomatology and psychosocial function than the more
traditional consult-liaison treatment without increasing outpatient
visits. As more chronic conditions are treated in the primary care
setting, using this model may improve patient outcomes at a reasonable
cost. Its potential impact on care and outcomes for depression and
other chronic conditions could be great. Health Services Research and
Development
Hedrick SC, Chaney EF, Liu CF, Felker BL, Bagala R, Paden GR.
Process of care in innovative and traditional treatments for depression
in VA primary care: reallocating resources. Presented at VA Health
Services Research and Development Service Annual Meeting, Washington,
DC, February 15, 2001.
Chaney EF, Hedrick SC, Felker BL, Liu CF, Paden GR, Hasenberg NM.
Improving treatment for depression in primary care: alternate
strategies. Presented at Society of Behavioral Medicine Annual
Scientific Sessions, Seattle, WA. March 23, 2001.
Screening tool helps to identify depression
Major depression can have serious consequences, yet it often goes
undiagnosed and untreated. VA physicians now have an effective two-
question screening tool they can use in outpatient settings to help
identify veterans with major depression. They also have a new awareness
of the scope of the problem. Recent research shows that depression is
prevalent among 14 percent of VA outpatients (excluding those with
substance abuse problems, mania and/or psychosis). These findings have
been widely disseminated to increase screening. Health Services
Research and Development
Whooley MA, Avins Al, Miranda J, et al. Case-finding instruments
for depression: two questions are as good as many. Journal of General
Internal Medicine, 12(7):439-45, July 1997.
Award winning sleep studies may help mentally ill
Eminent sleep researcher Robert McCarley, M.D., Deputy Chief of
Staff for Mental Health Services at the Brockton/West Roxbury VA
Medical Center, won the 1998 William S. Middleton Award, one of VA's
highest scientific honors. Recognized as an authority on REM (rapid eye
movement) sleep, Dr. McCarley was honored for his important
contributions to our understanding of sleep and dreaming. For example,
he was the first to systematically develop quantitative methods for
testing hypotheses on cellular control of sleep states. He and his
colleagues have identified control mechanisms for non-REM sleep and
demonstrated that certain brain stem cells that use the
neurotransmitter (chemical messenger between nerve cells) acetylcholine
are critical for promoting REM sleep. In contrast, they found that
other brain cells using the neurotransmitters serotonin and
norepinephrine act to inhibit REM sleep. McCarley's work has helped set
the stage for new approaches to sleep abnormalities, including sleep
disruptions in psychiatric disorders. Medical Research Service
Porkka-Heiskanen T, Strecker RE, Thakkar M, Bjorkumm AA, Greene RW,
McCarley RW. Adenosine: a mediator of the sleep-inducing effects of
prolonged wakefulness. Science, 276(5316):1265-8, May 23, 1997.
Discovery of schizophrenia-associated gene
In a major breakthrough for understanding and treating
schizophrenia, VA researchers have discovered a gene that plays a major
role in schizophrenia and is linked to two physiological defects found
in schizophrenics and their family members. In studies of nine families
with multiple cases of schizophrenia, scientists learned that an
inability to screen out irrelevant background noise, a common defect in
schizophrenics, is linked to a specific gene that codes for a brain
receptor activated by nicotine. This discovery may help explain why
schizophrenics tend to be heavy smokers. Although well documented, the
high incidence of smoking among schizophrenics had been overlooked as a
possible link to the root of schizophrenia.
VA researchers tested subjects for the defect by subjecting them to
repeated sounds while recording brain waves. Results showed that the
defect is hereditary and is present in non-schizophrenic as well as
schizophrenic family members. Using a variety of genetic techniques,
the researchers traced the chromosomal location of the defective gene
to the site of a specific nicotine receptor.
More recently, these investigators found that a defect in eye
movement tracking is linked to the same receptor. These findings of
sensory defects linked to a specific neurotransmitter receptor could
have major ramifications for schizophrenia treatment. Although inhaling
nicotine activates the receptor and provides short-term relief for
schizophrenics, the effect is too short-lived to be of treatment value.
Researchers are now investigating the cause of the genetic malfunction
and are collaborating with drug companies to identify potential drugs
to bind the receptors. Medical Research Service
Freedman R, Coon H, Myles-Worsley M, Orr-Urtreger A, Olincy A,
Davis A, Polymeropoulos M, Holik J, Hopkins J, Hoff M, Rosenthal J,
Waldo MC, Reimherr F Wender P, Yaw J, Young DA, Breese CR, Adams C,
Patterson D, Adler LE, Kruglyak L, Leonard S, Byerley W. Linkage of a
neurophysiological deficit in schizophrenia to a chromosome 15 locus.
Proceedings of the National Academy of Sciences, USA, 94(2):587-92,
1997.
Study contributes to medication guidelines for schizophrenia management
Antipsychotic medication is an essential component of treatment for
schizophrenia, the second most common discharge diagnosis in VA.
Researchers studied the relationship between patient outcomes and the
management of medication for schizophrenia. Results showed that 49
percent of patients receiving care through a VAMC or state psychiatric
hospital were prescribed doses outside the range recommended by
practice guidelines for schizophrenia. This study also showed that
patients who were prescribed medication within practice guidelines had
significantly less severe symptoms. Findings from this study have
contributed to the selection of national performance measures for the
VA that will improve the quality of medication management and better
patient outcomes. Health Services Research and Development
Kirchner JE, Owen RR, Nordquist C, Fischer EP. Diagnosis and
management of substance use disorders among inpatients with
schizophrenia. Psychiatric Services, 49(1):82-5, January 1998.
substance abuse
Research on substance abuse encompasses all types of addiction,
including alcohol, nicotine, and other drugs. VA scientists are working
to identify the underlying causes of abuse and addiction, and the
subsequent treatment and rehabilitation methods that prove most
effective. Research also includes efforts to understand the
ramifications of substance abuse throughout the body, such as the liver
disease resulting from alcohol abuse. Below are two examples of
progress in this critical area.
Probing the genetics of alcoholism
VA researchers are among leaders in research devoted to teasing out
the complex interplay between heredity and alcoholism. For example, one
VA team recently reported that genetically engineered mice without a
certain cell receptor consumed less alcohol than unaltered mice. Mice
without the dopamine D2 receptor, a cellular docking site for the brain
chemical dopamine, consumed half as much alcohol as ``wild type'' mice.
The study illustrates a technique in which particular genes influence
substance abuse. Researchers use molecular methods to delete, or
``knock out'', a suspect gene and then study the effect in the ``knock
out'' mice. In an earlier study, the VA researchers discovered that
mice without a gene containing the receptor for serotonin, consumed
twice as much alcohol as unaltered mice.
Although they are just beginning to understand the role played by
receptor subtypes in alcohol consumption, VA researchers indicate these
studies may ultimately lead to new pharmacological treatments or gene
therapies. The researchers caution scientists who study how genes
affect behavior that genetically identical mice behave differently in
seemingly identical tests at three separate laboratories. They
emphasize that genetic manipulation and effects should be replicated
cautiously before drawing conclusions, especially when there are slight
results in behavioral differences. Medical Research Service
Crabbe JC, Wahlsten D, Dudek BC. Genetics of mouse behavior:
interactions with laboratory environment. Science, 284(5420):1670-
2,1999, June 4, 1999.
Phillips TJ, Brown KJ, Burkhart-Kasch S, Wenger CD, Kelly MA,
Rubinstein M, Grandy DK, Low MJ. Alcohol preference and sensitivity are
markedly reduced in mice lacking dopamine D2 receptors. Nature
Neuroscience, 1(7):610-5, November 1998.
Youthful drinking linked to alcoholism in later years
Marc A. Schuckit, M.D., a world leader in the study of alcoholism,
won the 1997 Middleton Award for more than 20 years of pioneering
research on the importance of genetic influence in alcohol dependence.
His innovative population studies have set the stage for exciting
progress in efforts to identify genes that play a role in alcoholism.
In a landmark investigation, Dr. Schuckit and his colleagues
tracked 453 men, starting when they were college students, for 10 years
to determine the relationship between the initial effect of alcohol on
a person and later alcoholism. The research team found that men who
showed little reaction to alcohol as students were far more likely to
become alcoholics 10 years later. Thus, being able to ``hold one's
liquor'' at age 20 was a warning sign for risk and clearly raising the
possibility that genes controlling a person's initial reaction to
alcohol may contribute to later alcoholism.
These findings were instrumental in a decision by the National
Institute on Alcohol Abuse and Alcoholism to invest almost $5 million a
year over 10 years in the six-center Collaborative Study on the
Genetics of Alcoholism. Dr. Schuckit is among the principal
investigators for this project, which is yielding important advances in
the search for genes related to alcohol dependence. Medical Research
Service
Schuckit MA, Smith TL. An 8-year follow-up of 450 sons of alcoholic
and control subjects. Archives of General Psychiatry, 53(3):202-10,
March 1996. Marc A. Schuckit, M.D., VA San Diego Health Care System and
the National Institute on Alcohol Abuse and Alcoholism.
Combination treatment helps smokers kick the habit
Smoking is a major problem among veterans, contributing to a
variety of health problems, including arterial disease, heart disease,
chronic lung disease, lung cancer, and other disorders. VA researchers
have found that smokers who took mecamylamine orally and used a
nicotine patch were more successful at quitting than smokers who used
only a patch. In one study, participants who used the combination
approach had a 40 percent smoking-abstinence rate after six months,
compared with 15 percent among those who used a patch alone. In another
study, 40 percent of subjects who used the combination before trying to
quit were successful, compared with success rates of 10 to 20 percent
among those who used a patch only, mecamylamine only, or a placebo.
When used with a nicotine patch, mecamylamine destroys the taste of
tobacco and blocks brain receptors that help nicotine produce its
pleasurable and addictive effects. The approach offers a new strategy
against smoking addiction and its related health impacts. Medical
Research Service
Rose JE, Behm FM, Westman EC. Nicotine-mecamylamine treatment for
smoking cessation: the role of pre-cessation therapy. Experimental and
Clinical Psychopharmacology, 6(3):331-43, August 1998.
Jed E. Rose, Ph.D., VAMC Durham, NC American Cancer Society
New pharmaceuticals to treat addictive disorders
The VA Cooperative Studies Program and the National Institute on
Drug Abuse (NIDA) are working together to clinically test medications
for substance abuse, alcohol abuse, and mental illness. The goal of
this program is to support the development and subsequent marketing of
new pharmaceutical entities to treat addictive disorders and certain
mental illnesses. These are areas of research that have been under-
represented in the pharmaceutical development and for which a high
national priority has been set by the Congress.
This collaboration will consist of several projects, including
seven recent, completed, or current studies. Three of the seven studies
involve the drug buprenorphine for the treatment of opiate-dependent
patients. One of these studies tested the efficacy of a liquid
formulation, while another studies the safety and efficacy of the
combination drug buprenorphine/naloxone. Successful results of these
studies are now being reviewed by the FDA. If the buprenorphine/
naloxone combination is approved, it would allow a formulation that
could be given in a take-home dosing form by physicians experienced in
the treatment of opiate dependence, thus resulting in a third study in
this area. There are currently 583 patients in their last year of
follow-up at 38 test sites in six states, including New York, Florida,
Illinois, Texas, California, and Washington. Cooperative Studies
Program
special populations
Demographic, socioeconomic, and health risk factors distinguish
some groups of veterans from the general population. The VA Office of
Research and Development is ensuring that these groups are fairly
represented in the research program. Veteran populations identified for
special attention include veterans with permanent disabilities, veteran
cohorts defined by shared military experience, minority veterans, and
homeless, institutionalized or homebound veterans. Examples of VA's
research in this area follow.
Teledermatology benefits veterans with limited access to health-care
delivery
Digital images of visual information can be transmitted within
telemedicine networks. This study compared the reliability for the
diagnoses and management plans given by clinic-based examiners to those
of consultants using digital imagery. Preliminary results show that
dermatologists agree on their diagnoses of skin lesions equally well
whether evaluating the patient in person or reviewing the digital
image. In addition, investigators found diagnostic accuracy to be
comparable among clinic-based and digital image examiners. This study
suggests that the clinical use of digital imaging is an appropriate
alternative for patients with limited access to adequate clinical care.
Health Services Research and Development
Whited JD, Hall RP, Simel DL, Foy ME, Stechuchak KM, Drugge RJ, et
al. Reliability and accuracy of dermatologists' clinic-based and
digital image consultations. Journal of the American Academy of
Dermatology, 41(5 Pt 1):693-702, November 1999.
Services needed for women veterans differ from those of men
Findings from an HSR&D study on the health status of women veterans
who use VA ambulatory care services is helping VA plan more
comprehensive and appropriate services for this growing service
population. Study results strongly suggest that resources needed to
care for women veterans differ greatly from those needed to care for
male veterans. As the number of women veterans seeking VA care
continues to increase, this information is critically important for
providing high quality care for this special population of VA users.
Health Services Research and Development
Skinner KM, Furey J. The focus on women veterans who use Veterans
Administration health care: the Veterans Administration women's health
project. Military Medicine, 163(11):761-6, November 1998.
Case management expands access to services for homeless veterans
Case managed residential care for homeless veterans with substance
abuse tended to shift service delivery from inpatient settings to less
expensive outpatient settings, this HSR&D study found. This approach
improved patients' access to care. It also improved short-term outcomes
that were measured in terms of health care, employment, and housing,
although these gains tended to diminish during the year following
treatment. This information will inform VA administrators and
clinicians about the need for ongoing community care to maintain gains
achieved in the residential setting. Health Services Research and
Development
Conrad KJ, Hultman CI, Pope AR, et al. Case managed residential
care for homeless addicted veterans: results of a true experiment.
Medical Care, 36:40-53, January 1998.
Functional electrical stimulation may assist patients with paraplegia
Functional Electrical Stimulation (FES) uses surgically implanted
electrodes to activate paralyzed muscles. A consortium including the
Cleveland VA Medical Center, Case Western Reserve University and
MetroHealth Medical Center is producing promising results that have led
to new applications and many advances in restoring function to
paralyzed individuals. Advances by VA in the implantation and control
of functional electrical stimulation (FES) walking systems hold great
promise for patients with paraplegia. A research participant with
paraplegia is now testing a new 16-channel system that allows him to
exercise and walk in a limited area around his wheelchair. An implanted
neuroprosthesis is helping individuals with high chest or low neck
injuries to exercise their legs, stand, and perform standing transfers.
Another FES device offers promise for improved bladder and bowel
control for individuals with spinal cord injuries, giving them greater
freedom and reducing the costs and inconvenience of bladder and bowel
care.
FES is also helping patients with tetraplegia due to spinal cord
injury to grasp and release objects with paralyzed hands. Researchers
are developing and testing new hand-grasp systems that offer finer
control and extend function to the elbow and forearm. Another type of
implant stimulates the triceps muscle so that individuals with
tetraplegia can reach overhead and grasp objects. These and other
advances in FES may allow persons with paraplegia and tetraplegia to
expand employment opportunities and work more independently.
Rehabilitation Research and Development
Kobeti R, Triolo RJ, Uhlir J, Bier C, Wibowo M, Polando G,
Marsolais EB, Davis JA, Ferguson Y, Sharma M. Implanted functional
electrical stimulation system for mobility in paraplegia: a follow-up
case report. IEEE Transactions on Rehabilitation Engineering (in
press).
Triolo RJ, Bogie K. Lower extremity applications of functional
neuromuscular stimulation after spinal cord injury. Topics in SCI
Rehabilitation 5(1):44-65, 1999.
Wuolle KS, Van Doren CL, Bryden AM, Peckham PH, Keith MW, Kilgore
KL. Satisfaction and usage of a hand neuroprosthesis. Archives of
Physical Medicine and Rehabilitation, 80:206-13, 1999.
Peckham PH, Keith MW, Kilgore KL. Restoration of upper extremity
function in tetraplegia. Topics in SCI Rehabilitation, 5(1):33-43,
1999.
Early treatment with corticosteroids reduces damage from SCI
More than 1 million Americans live with disabilities resulting from
spinal cord injury. Crushing injuries of the spinal cord trigger a
cascade of biochemical events that may cause more damage than the
initial trauma. To counter this destructive cascade, VA investigators
tested two corticosteroids, methylprenisolone and trilizad, in animals
with spinal cord injuries. The results: animals that received either
drug within eight hours following injury could regain up to 25 percent
of their lost neurological function. Subsequent clinical trials in
patients with acute spinal cord injury established that this early
intervention can help reduce permanent damage, setting the standard for
treatment of acute compression spinal cord injury. Further research by
VA is underway on newer compounds that may further reduce the
disability and medical care costs of these injuries. Medical Research
Service
Giovanini MA, Reier PJ, Eskin TA, Wirth E, Anderson DK.
Characteristics of human fetal spinal cord grafts in the adult rat
spinal cord: influences of lesion and grafting conditions. Experimental
Neurology, 148(2):523-43, 1997.
Tissue engineering to replace lost nerves
Tissue engineering, combining living cells with synthetic
materials, holds promise for repair and regeneration of skin, bone,
cartilage, nerve and essential organs. Researchers at the VA Palo Alto
Rehabilitation R&D Center are recruiting patients who require grafting
of nerves in the hand, arm or leg. Rather than performing a whole-nerve
autograft, the investigators will repair the damage with an artificial
graft seeded with the patient's own cells from the sheath surrounding
the nerve fibers. New biomaterials and techniques now being tested for
reconstructing peripheral nerves may be applied to the more difficult
problem of regeneration of the central nervous system after stroke or
spinal cord injury. Rehabilitation Research and Development
Sabelman EE, Hu M. 3-Dimensional collagen strands promote Schwann
cell proliferation & orientation. Proceedings of the Biomedical
Engineering Society 1998 Annual Fall Meeting, Cleveland, OH, Oct 10-1
3, 1998, paper no. TE. 14, Annals of Biomedical Engineering v. 26 suppl
1, p. S-137, Sept/Oct, 1998.
Transplantation of myelin-forming cells to the injured CNS
Researchers in West Haven are studying the transplantation of
Schwann cells as a treatment for injury to the central nervous system
(CNS). Using magnetic resonance imaging, the investigators hope to
establish whether cells transplanted into the primate CNS can produce
myelin, the complex protein that makes up the sheath. Myelinated nerves
conduct impulses more rapidly than those without myelin.
These studies serve as a necessary prelude to human studies that
may lead to successful use of cell transplantation. Investigators have
also successfully developed cell harvesting and preservation techniques
that will further research on transplantation of myelin-forming cells.
Rehabilitation Research and Development
Kato T, Honmou 0, Uede T, Hashi Y, Kocsis JD. Transplantation of
human olfactory ensheathing cells elicits remyelination of demyelinated
rat spinal cord. GLIA (in press).
Imaizumi T, Lankford AL, Kocsis JD. Transplantation of olfactory
ensheathing cells or Schwann cells restores rapid and secure conduction
across the transected spinal cord. Brain Research, 854(1-2):70-8,
January 31, 2000.
Waxman SG, Kocsis JD. Experimental approaches to restoration of
function of ascending and descending axons in spinal cord injury. The
Neurobiology of spinal cord injury. Kalb RG, Strittmatter SM, ed.
Humana Press, 2000.
health services and systems
Health Services and Systems is a research effort focused on
improving the health care provided to our nation's veterans, whether it
be for a specific disease or a broad category of care, such as primary
or mental health care. Research in Health Services and Systems
addresses supply and organization of resources and services, evaluation
of treatment methods, health and safety of research participants,
application of research findings to standard practice, and outcomes of
care. The studies described below are part of our effort to ensure that
our veterans receive the best possible care.
VA home health care increases satisfaction for patients and caregivers
An innovative model of home health care used by Department of
Veterans Affairs (VA) hospitals--featuring a greater hands-on role for
doctors and close cooperation among nurses, social workers and other
team members--was found to yield more satisfaction for patients and
family caregivers than private-sector home care.
In a study of nearly 2,000 home-care patients, most of them
severely disabled or terminally ill, researchers from VA, the
University of Illinois at Chicago, and Northwestern University tested
VA's ``Team-Managed Home-Based Primary Care'' model against non-VA
home-care at 16 sites. While death rate and physical functioning did
not differ between the two groups of patients, VA patients and their
caregivers overall expressed more satisfaction with their care.
Terminally ill patients in the VA sample gave higher marks to their
care in six of eight quality-of-life measures, including emotional
functioning, bodily pain and mental health. Caregivers in the VA group
reported less ``burden,'' translating into reduced caregiver stress and
burnout.
The study is among the first large-scale evaluations of home care
to consider the burden on family members and their emotional well-
being. Previous research has shown that informal home-based family
caregiving costs the nation nearly $200 billion per year, compared to
around $30 billion for formal home health care. Cooperative Studies
Program
Hughes SL, Weaver FM, Giobbie-Hurder A, Manheim L, Henderson W,
Kubal JD, Ulasevich A, Cummings J. Effectiveness of team-managed home-
based primary care. Journal of the American Medical Association,
284(22):2877-85, December 13, 2000.
Enhancing the quality of informed consent (EQUIC)
Informed consent is the keystone of the protection of human rights
in medical research, along with careful review of proposed projects.
EQUIC is a Cooperative Studies program-wide project aimed at
systematically improving the quality of informed consent, by testing
and measuring the results of innovative approaches to informed consent.
Practitioners of clinical trials must ensure that patients'
participation in research is informed and voluntary. This
responsibility suggests that researchers should strive continuously to
improve the effectiveness of methods for informing prospective research
volunteers about experimental studies, thereby enhancing the protection
of their interests.
EQUIC will test a method to assess the capacity of a research
volunteer to understand and consent to a study; a method for
``tailoring'' an informed consent encounter to the vulnerabilities
uncovered by that assessment; and a direct assessment of the success of
an informed consent process at producing a good result, defined in
terms of the successful protection of the patient's rights. Once these
are fielded and tested, it will be possible to study a wide range of
innovations in informed consent in the full variety of patients studied
in the Cooperative Studies Program. An important side benefit will be
the ability to assess the true results of current practice in the VA
CSP, and, potentially, other systems. Cooperative Studies Program
Enhancing the Quality of Informed Consent (EQUIC)CSP# 476, Palo
Alto.
VA utilization and survival rates
An observational study focusing on nine medical conditions examined
patient utilization and survival rates during a three-year period that
included a major VA organizational shift from inpatient care to
ambulatory care. Results of the study indicate improved access to
outpatient services. While inpatient care dramatically declined and
utilization of outpatient care increased (except urgent care), survival
rates improved or remained the same. Thus, the major reorganization of
the VA health care system during the 1990s does not appear to be
associated with any deterioration in patient survival rates. Study
findings also showed an unexplained geographic variation in both
utilization and outcome rates across all 22 VA health care networks
that warrants further research to ensure equal care and accessibility
for veteran patients across the country. Health Services Research and
Development
Ashton C, Petersen N, Souchek J, Menke T, Collins T, Wray N.
Changes in mortality, utilization, and quality in the Veterans Health
Administration 1995-97, HCQCUS Technical Report 00-01. January 2000.
Community-based outpatient clinics provide equal care
Between 1995 and 2000 VA opened 242 new Community Based Outpatient
Clinics (CBOCs) to allow more convenient access to care for veteran
patients. A CBOC may be a VA operated clinic or VA-funded/reimbursed
health care facility that is separate from the main VA medical
facility. A study evaluated the performance of CBOCs including the
provision of preventive and other health care, as well as patient
access to care, utilization, cost and satisfaction.
Findings showed that on most measures CBOCs' performance was
equivalent to their affiliated VA medical center, while on average, the
total cost of health care was considerably lower for CBOC patients.
Study results also indicate a few areas that warrant attention, such as
CBOCs having fewer eye examinations for patients with diabetes and
higher cost per primary visit, fewer specialty visits, and fewer
hospitalizations on average for all patients. This study will help VA
continue to develop more effective, inclusive and accessible health
care at the many CBOCs located across the country. Health Services
Research and Development
Chapko MK, Hedeen A, Maciejewski M, Fortney J, Borowsky SJ
(Management Decision and Research Center, HSR&D, Dept. of Veterans
Affairs). CBOC Performance Evaluation: Program Implications and Future
Performance Measures. Report No.1. March 1, 2000.
Maciejewski M, Hedeen A, Chapko MK, Fortney J, Borowsky SJ.
(Management Decision and Research Center, HSR&D, Dept. of Veterans
Affairs). CBOC Performance Evaluation: Performance Report 2: Cost and
Access Measures. Report No.2. March 1, 2000.
Clinical guidelines reduce pressure ulcer rates in nursing homes
Pressure ulcers are a common medical problem associated with
considerable morbidity, particularly for patients with long-term care
needs such as those in nursing homes. Practice guidelines on the
prevention of pressure ulcers have been widely disseminated, and these
guidelines have been successfully implemented in some VA nursing homes.
Investigators studied 36 VA nursing homes to identify how these
facilities accomplished successful implementation so that pressure
ulcer care may be improved system-wide. Findings show that
organizational features that promote the implementation of clinical
guidelines include a culture that promotes innovation and teamwork. A
trend toward lower rates of pressure ulcer development was associated
with quality improvement implementation. Information from this report
assists VA in taking the appropriate actions to increase the adoption
of clinical guidelines that result in improved patient care. Health
Services Research and Development
Berlowitz DR, Bezerra HQ, Brandeis GH, Kader B, Anderson JJ. Are we
improving the quality of nursing home care? the case of pressure
ulcers. Journal of the American Geriatrics Society, 48(1):59-62,
January 2000.
Berlowitz DR, Hickey EC, Young G, et al. Improving nursing home
care: importance of organizational culture and continuous quality
improvement implementation. Abstract presented at the HSR&D Service
18th Annual Meeting, March, 2000. Washington, D.C.
Computerized reminders improve physicians compliance with care
standards
VA researchers have found that computer prompts improve physician
compliance with outpatient care standards. This large-scale study
examined the effects to prompt physicians to follow a specified
standard of care. Records were examined from 275 resident physicians at
12 VA Medical Centers with a total of 12,989 patients. Overall, doctors
who received computerized reminders (CRs) had higher rates of
compliance for all standards of care.
Researchers selected 13 standards of care that would be widely
accepted and could be implemented using the existing hospital database.
Standards of care focused on patient conditions, such as coronary
artery disease, hypertension, diabetes, atrial fibrillation, myocardial
infarction, and gastrointestinal bleeding. A computerized software
program was developed to download the information obtained from
patients' visits during this study and compared it to the hospitals'
prescribed treatments and prescriptions. The program then determined
whether the participants received proper care.
Although the study indicates the computer reminders improve
compliance with multiple standards of care, enthusiasm and use of the
CRs declined during the study. The authors noted that one possible
explanation for this decrease may be that competing demands on the
residents' time in busy clinics lead to neglect of CRs over time.
Further research is needed to study causes of the physicians' decrease
in use of the computerized reminders and ways to keep compliance at a
high level. Health Services Research and Development
Demakis JG, Beauchamp C, Cull WL, Denwood R, Eisen SA, Lofgren R,
Nichol K, Woolliscroft J, Henderson WG. Improving residents' compliance
with standards of ambulatory care: results from the VA Cooperative
Study on computerized reminders. Journal of the American Medical
Association, 283(11):1411-6, September 20, 2000.
Surgical quality at VA improves since implementation of NSQIP
The quality of surgical care at VA hospitals has improved
significantly since the inception of the National VA Surgical Quality
Improvement Program (NSQIP), a collaborative effort of HSR&D and VA's
Office of Quality Management. The 30-day mortality rate after major
surgery was found to decline by nearly 10 percent. The rate of
postoperative complications decreased by 30 percent.
Better surgical and anesthesia techniques, improved supervision of
residents in surgical training, and improvements in technology and
equipment have contributed to VA's progress in surgical care. The NSQIP
has been instrumental in identifying ways to improve surgical care. The
project researchers gathered data from 123 VA medical centers on
patient-specific factors that affected post-surgical mortality and
morbidity. These data enable the researchers to differentiate high-
quality from low-quality facilities and to identify best practices to
improve care. NSQIP researchers also studied functional outcomes of
veterans who undergo major surgery in urology and orthopedics in 14 VA
medical centers. They also collaborated with four affiliated academic
health centers to implement the NSQIP at non-VA hospitals. Health
Services Research and Development
Daley J, Forbes M, Young G. et al. Validating risk-adjusted
surgical outcomes: site visit assessments of process and structure.
Journal of the American College of Surgeons, 185(4):341-51, October
1997.
Khuri SF, Daley J, Henderson W, et al. The National Veterans
Surgical Risk Study: a risk adjustment for the comparative assessment
of the quality of surgical care. Journal of the American College of
Surgeons, 180(5):519-31, May 1995.
Study shows black patients admitted to VA hospitals have lower
mortality rates
Study results indicate that black patients admitted to VA hospitals
with common medical diagnoses have lower mortality rates than white
patients. This study, using data provided by VA's Health Services
Research and Development Service Center for Quality of Care and
Utilization Studies in Houston, examined racial differences in
mortality among more than 35,000 patients admitted to 147 VA hospitals.
Thirty-day mortality rates for patients who were admitted with one of
six common medical diagnoses (pneumonia, angina, congestive heart
failure, chronic obstructive pulmonary disease, diabetes, and chronic
renal failure) were compared. Study findings show that 30-day mortality
was lower among blacks than whites for each of the six medical
diagnoses, and that black patients also had lower in-hospital and 6-
month mortality rates. This survival advantage is not readily
explained, however it may reflect the benefits of equal access to
health care and the quality of inpatient treatment at VA medical
centers. Health Services Research and Development
Jha AK, Shlipak MG, Hosmer W, Frances CD, Browner MS. Racial
differences in mortality among men hospitalized in the Veterans Affairs
Health Care System. Journal of the American Medical Association,
285(3):297-303, January 17, 2001.

Question. What is the success rate of VA research applications? How
does the VA success rate compare to other federally supported
biomedical research programs?
Answer. In fiscal year 2000, VA approved for funding 25.8 percent
of all research proposals. The overall approval rate for research
grants at the 27 institutes and centers of the National Institutes of
Health was 32 percent in fiscal year 2000. The National Science
Foundation approved for funding 29 percent of all research proposals
for biological sciences.
va construction
Question. The Independent Budget (IB) has made a major issue this
year of the steep decline in Major and Minor Construction budgets. The
IB notes that despite the ongoing efforts to realign VA facilities
through the CARES process, the need for maintenance and renovation has
steadily grown. The IB states, ``The poor condition of many VA
properties limits the options available for constructive realignment
and devalues assets that might otherwise be converted to more effective
uses.'' If you could set your own level of construction dollars, where
would you begin to make your investments in the infrastructure of the
system?
Answer. The VA health care system will require larger construction
budget requests in the future to not only implement CARES decisions,
but to correct seismic safety concerns, and provide for an orderly
reinvestment in the system's infrastructure. These investment decisions
will come after careful consideration of the options available to meet
VHA's several missions. A system as large as VHA's cannot maintain
quality and productivity over time without appropriate recognition of
the need for infrastructure improvements. While the pace of change has
slowed somewhat as an impediment to supporting major construction, VHA
is now beginning the CARES process. CARES studies will bring another
set of changes but will also provide a more settled picture of the
future need for VHA facilities. The CARES studies are underway and are
expected to identify options for reengineering VHA's physical
infrastructure. Implementing these options will require major
construction funding in many instances. However, VA has ongoing
infrastructure needs that cannot be ignored, such as major seismic
corrections and safety issues (e.g., Miami, Florida--electrical and
hurricane deficiencies). The absence of a completed CARES study should
not prohibit funding of a major project, but certainly careful analysis
must be accomplished before making such a proposal. VA has significant
seismic and life safety deficiencies that must be addressed. Many of
those projects are at facilities that will not be affected by CARES
studies.
Question. What are your most immediate needs? What would be your
long-term goals?
Answer. The attached report is submitted in accordance with Title
38 USC, Section 8107 (d)(1), (2), and (3). The report identifies the
major medical construction projects that have the highest priority
within the Department of Veterans Affairs (VA). The report was sent on
April 26, 2001 to the following: Honorable C.W. Bill Young, Honorable
David Obey, Honorable Arlen Specter, Honorable Barbara A. Mikulski,
Honorable Alan B. Mollohan, Honorable John D. Rockefeller, IV,
Honorable James T. Walsh, Honorable Robert C. Byrd, Honorable
Christopher S. (Kit) Bond, Honorable Lane Evans, Honorable Christopher
H. Smith, Honorable Bob Filner, Honorable Jerry Moran, Honorable Ted
Stevens.

DEPARTMENT OF VETERANS AFFAIRS PRIORITY MAJOR MEDICAL CONSTRUCTION PROJECTS--FISCAL YEAR 2001 PRIORITIES
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Construction Non-Recurring Recurring
Medical Center Project Title Project Category Score Costs Costs Annual Costs
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Miami, FL \1\...................... Hurricane and Flood Addition....................................... General....................... .270 $28,000,000 $7,100,000 $177,250,000
Palo Alto, CA...................... Seismic Improvements (NHCU)........................................ Seismic....................... 628 26,600,000 1,200,000 14,500,000
San Diego, CA...................... Seismic Corrections, Building 1.................................... Seismic....................... 504 35,600,000 N/A 238,000,000
West LA, CA........................ Seismic Correction................................................. Seismic....................... 503 27,600,000 1,300,000 89,310,000
San Francisco, CA.................. Seismic Correction................................................. Seismic....................... 497 29,400,000 1,900,000 77,500,000
VISN 6 \2\......................... Special Emphasis Beds.............................................. Patient Environment........... 455 28,900,000 1,800,000 46,300,000
Palo Alto, CA...................... Seismic Correction, Bldg. 2........................................ Seismic....................... 437 11,100,000 N/A 17,400,000
Cleveland, OH...................... Brecksville--Renovate Buildings for Special Emphasis Programs...... Patient Environment........... 419 43,000,000 7,400,000 19,900,000
Dallas, TX......................... Mental Health Enhancement.......................................... Ambulatory Care............... 395 27,600,000 3,200,000 16,000,000
Lebanon, PA........................ Patient Care Renovation............................................ Patient Environment........... 286 10,600,000 N/A 2,600,000
Pittsburgh, PA..................... Ambulatory Care/Research/Parking................................... Ambulatory Care/Research...... 280 52,600,000 N/A N/A
Butler, PA......................... Extended Care & Rehabilitation..................................... Ambulatory Care............... 268 36,900,000 1,500,000 12,100,000
Atlanta, GA........................ Modernize Patient Wards............................................ Patient Environment........... 264 12,800,000 12,275,000 50,000,000
Long Beach, CA..................... Seismic Correction/Clinical........................................ Seismic....................... 255 51,700,000 3,700,000 4,000,000
Syracuse, NY....................... Clinical Expansion & MRI........................................... Ambulatory Care............... 232 4,700,000 5,600,000 N/A
St. Louis, MO...................... Raised Parking Structure........................................... Parking....................... 208 6,844,000 N/A 220,000
Tampa, FL.......................... Parking Structure.................................................. Parking....................... 205 13,900,000 30,000 610,000
Charlotte, NC...................... Satellite Outpatient Clinic........................................ Ambulatory Care............... 193 17,449,000 1,500,000 5,100,000
Tampa, FL.......................... Ambulatory Care Expansion.......................................... Ambulatory Care............... 189 12,000,000 3,300,000 N/A
Washington, DC..................... Clinic Expansion................................................... Ambulatory Care............... 181 20,800,000 3,415,000 21,913,000
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ The Miami project is an emergency, caused by an accident that destroyed major switchgear and is considered VHA's top priority.
\2\ The VISN 6 project represents a new approach to accomplish environmental improvements on special emphasis program wards within the Network. The Department supports this Network-wide
strategy and the project follows the General Accounting Office's (GAO) recommendation on market-based planning. Addressing the work as minor and non-recurring maintenance category projects
would require ten minor and twenty NRM projects, would cost approximately $45 million, and would encumber the Network's minor/NRM budget for 17 years. The consolidated approach saves
approximately $16 million and obviates a long period of disruption for the Network and VAMCs. The improvements are based on Network-wide assessment and on systematic distribution of
workload.

veterans claims
Question. Do you have sufficient resources and funding to contend
with the enormous claims backlog and the additional claims processing
burden resulting from the ``duty to assist'' legislation and the recent
decision on diabetes?
Answer. Recent legislation, especially the expanded duty-to-assist
threshold resulting from the Veterans Claims Assistance Act of 2000
(VCAA), has had a significant impact on our work processes. The impact
reaches far beyond the 98,000 claims previously denied under the
provisions established in the Morton v. West case. All 250,000 claims
for disability benefits that were pending as of the date of VCAA
enactment (November 9, 2000), as well as any new claims for disability
benefits, must be developed and evaluated under the expanded procedures
required under the law. We estimate that the time to develop and
evaluate a case has increased by 25 percent as a result of this
legislation. The expanded presumptive provisions for Agent Orange
related disabilities to include service connection for diabetes is also
having a significant impact on VBA workloads. Approximately 35,000 of
these claims were pending at the time of the regulatory change, which
became effective July 9th. VBA projected 125,000 additional claims
during fiscal year 2001 and fiscal year 2002 as a result of this
regulatory change.
VBA is addressing these workload challenges by authorizing field
stations to hire significantly above their fiscal year 2001 funding
levels. VBA hired 800 additional employees this fiscal year in response
to these challenges. VBA will use the $19 million transfer from the
Medical Care account to support this hiring and training initiative by
restoring funding to initiatives that had previously been suspended to
support the hiring.
While the impact of these legislative and regulatory changes
continues to affect VBA inventories, the supplemental funding has
allowed VBA to hire resources earlier than previously would have been
possible. The fiscal year 2002 funding level will support these
increased staffing levels and allow VBA to continue the progress it has
started. It is currently projected that inventories will continue to
climb until the newly hired employees complete training and begin to
attain minimal levels of productivity.

SUBCOMMITTEE RECESS

Senator Bond. The hearing is recessed.
[Whereupon, at 11:40 a.m., Wednesday, May 2, the
subcommittee was recessed, to reconvene subject to the call of
the Chair.]

DEPARTMENTS OF VETERANS AFFAIRS AND HOUSING AND URBAN DEVELOPMENT AND
INDEPENDENT AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2002

----------

WEDNESDAY, MAY 9, 2001

U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 10:05 a.m., in room SD-138, Dirksen
Senate Office Building, Hon. Christopher S. Bond (chairman)
presiding.
Present: Senators Bond, Burns, Shelby, DeWine, Mikulski,
and Johnson.

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

STATEMENT OF DANIEL S. GOLDIN, ADMINISTRATOR
ACCOMPANIED BY:
MALCOLM L. PETERSON, COMPTROLLER
SAM VENNERI, ASSOCIATE ADMINISTRATOR FOR AEROSPACE TECHNOLOGY

opening statement of senator christopher s. Bond

Senator Bond. Ladies and gentlemen the hearing of the
Senate VA, HUD, and Independent Agencies Appropriations
Subcommittee will come to order.
My colleague and essential partner in this effort, Senator
Mikulski, is on the floor working a vote on her amendment. She
has asked that we go ahead. She did give me a promise she will
read my statement, and I promised I would read hers. But we
will proceed because of the time constraints.
The subcommittee meets today to review the fiscal year 2002
budget request of the National Aeronautics and Space
Administration. It is a pleasure to welcome Daniel Goldin,
NASA's Administrator, and his staff.
Normally I would talk about how much I look forward to the
annual NASA budget hearing because I am struck by the wonder of
the universe for which NASA is our gatekeeper and guide and by
the heroic astronauts who are leading us in the exploration of
the last true frontier--the universe. I am excited about NASA,
its mission, its people, and the wonders of the universe.
Unfortunately, I am also very disturbed by the massive cost
overruns that have characterized the International Space
Station, as well as a number of other NASA missions and
activities. I am discouraged particularly by the Space Station
which has grown in cost from an initial cost estimate of some
$17.4 billion to a current assembly cost of more than $26
billion and growing. The overall cost, when you include
operational costs and associated shuttle costs, could approach
$100 billion.
These funding overruns are a decision making problem which
could be characterized as a matter of substantial
mismanagement. However, I believe the problem can be more
accurately described as management by optimism. I believe and I
know that NASA means well and wants and believes it can deliver
its missions and activities both on time and on budget.
Unfortunately, management by optimism is founded on flawed
assumptions.
Nevertheless, even management by optimism is no excuse for
the sudden disclosure by NASA in February of another $4 billion
in cost growth and cost overruns for the International Space
Station. NASA needs to get control of this program and be in a
position to advise and warn the Congress of both problems in
the program and any costs associated with these problems. Not
only has the ISS grown astronomically to a current cost of some
$26 billion plus, but these additional costs of $4 billion have
resulted in the suspension of certain key elements that must be
considered critical to the success of the station as a world-
class on-orbit science platform.
At a minimum, the decision by the administration to suspend
the Habitation Module and the Crew Return Vehicle because of
these costs overruns means that no science research can be
effectively conducted on the International Space Station. The
lack of either the Habitation Module or the Crew Return Vehicle
will mean that only three crew members can be housed on the
station at any one time. Even NASA admits it takes two-and-one-
half crew members to operate the station. Moreover, each of the
suspended ISS elements have left the United States and the
other partner nations at the mercy of Russia, which now
controls the availability of emergency escape vehicles through
the Soyuz escape vehicle.
Russia has already demonstrated its willingness to act
unilaterally without the support of the other partner nations
in making decisions with regard to the ISS by demanding, just
in the last few weeks, that the United States and the other
partner nations accept the presence of a paying tourist to the
station. Russia made this demand despite the inherent risk that
this tourist poses to the current crew who are even now
assembling the station while living in a very hostile and
deadly environment.
I want to be clear that I support the decision of the
administration to suspend these ISS elements until we gain
control of the costs associated with the International Space
Station and NASA is able to provide a real budget by which it
can live. We cannot afford to let NASA programs grow unchecked.
Now is the time for NASA to get control of the budget for all
its missions and research projects. NASA needs to move beyond
management by optimism. I know that NASA wants to do the right
thing. It believes that it can succeed in making the ISS and
its many other missions and activities a success.
Unfortunately, management by optimism has not worked and I
urge you to look to management through credibility and
realistic cost projections. If the United States ever wants to
go to the moon again, to Mars, and to the stars, NASA needs to
provide us with a road map that makes sense and is one that we
know we can afford. This is, after all, rocket science and NASA
needs to find a way to inform Congress of the real costs of a
mission, including a realistic reserve. Again, that cannot be
done through management by optimism.
I have a number of questions on the ISS and the nature of
the station overruns, as well as the options for completing the
station as a working science lab. I also have questions about
the reports about computer programming glitches, loud noise
levels, vibrations aboard the station, and I am also concerned
about the status of the Space Launch Initiative which I believe
is critical to the development of new space launch technologies
for cheaper access to space.
With that, let me turn to my colleagues for their opening
statement, on this side of the podium, Senator Johnson.

statement of senator tim Johnson

Senator Johnson. Well, thank you, Mr. Chairman. I know that
our ranking member was tied up on the floor with a vote on ESEA
this morning.
I would simply welcome Mr. Goldin and thank him for his
some 9 years of service to NASA. I appreciate his testimony
today. I look forward to his testimony and the questions from
the committee.

prepared statement

I will simply submit my opening statement for the record,
Mr. Chairman.
Senator Bond. Without objection, it will be so accepted.
[The statement follows:]

Prepared Statement of Senator Tim Johnson

Chairman Bond, Ranking Member Mikulski, and other members of the
subcommittee, I want to thank Daniel Goldin for his outstanding service
throughout his nine years as director of the National Aeronautics and
Space Administration (NASA). When you think of NASA activities, South
Dakota does not necessarily jump off the map, as does Florida,
California, or Texas. We do however have a few NASA projects and
aerospace related programs in South Dakota that I would like to briefly
touch upon this morning.
I was pleased to note in Mr. Goldin's testimony that there is an
effort to improve space related education and training programs. These
programs will encourage today's youth in pursuing opportunities in the
ever changing space fields. South Dakota for one has been changing to
meet the demands of tomorrow's science and technology agenda.
skill--scientific knowledge for indian leadership and learning
The South Dakota School of Mines and Technology in Rapid City
houses the Scientific Knowledge for Indian Leadership and Learning
(SKILL) Program. Rapid City is home to the largest Native American
population per capita, then any other city in the United States with a
population of over 30,000. This program is vitally important to the
shape of tomorrow's Native American Leaders.
In a time when it is extremely difficult to retain and recruit
Native American students to mainstream institutions of higher learning,
South Dakota School of Mines and Technology is quite successful. Of the
29 Native students currently enrolled in this program, 18 students are
pursuing degrees in Science, Mathematics or Engineering. These are
fields where there is an enormous dearth of Native American leadership.
Additionally, of the 74 students who have participated in the SKILL
program the average grade point average was an extraordinary 3.75, and
ACT scores were more then double the national average of 9 for American
Indians at an estimated 18.7.
This program has demonstrated year after year that they are
providing Native American students the access to the sciences and space
related academics they would have ordinarily not have the means to
study in great depth.
epscor
South Dakota's major research institutions, technology firms, and
governmental agencies have collectively been working on ways in which
to make South Dakota a more attractive and competitive area for space
research and technology development. Over the past two years,
scientists and researchers have been working on approaches to promote
the space science research and made technology improvements to ensure
that South Dakota is a viable candidate for space science research and
development.
eros data center
Rapid City is not only connected to Sioux Falls by Interstate 90,
but it is also connected by the stream of technology shared by both
cities. Sioux Falls, South Dakota is home to the Earth Resources
Observation Systems (EROS) Data Center. The Data Center has been
directly involved with the NASA-EPSCoR Program. This Data Center is a
part of the U.S. Geological Survey within the Department of the
Interior. However, I feel that it is worth mentioning in this forum, as
it is intimately involved in the planning and development of South
Dakota as a haven for space science research.
The EROS Data Center houses most of the mapping data that exists in
the United States. Additionally, the United Nations Environmental
Programme is looking to use this world-wide data as a source of land
use survey data in developing nations or less reliable in data
collection and dissemination. This is vitally important to many of the
endangered species, as well as, the overall health of the world.
When the general public thinks of NASA and its functions, it
generally thinks of the Human Flight Program, or the Mars Mission. This
is an important part of NASA's mission, however, it is not NASA's only
function. I would hope that you would continue to support all of the
functions NASA has, especially the research, training, education, and
data collection programs.
I look forward to receiving Mr. Goldin's testimony, and especially
look forward a productive relationship in the future. Thank you Mr.
Chairman, and members of this committee.

statement of senator conrad Burns

Senator Bond. Senator Burns.
Senator Burns. Thank you, Mr. Chairman. I am going to put
my statement in the record also.
Senator Bond. Without objection, it will be accepted.
Senator Burns. I just want to make a couple of points.
We hear the clamor and the din on overruns and this type
thing, but I think when you compare what NASA has done, the
impact that it has had on this country, I would probably say
that the overruns percentage-wise are not any more in NASA than
they are in any other sector of Government that has less risk
or deals with more of the unknown. After all, we are talking
about a frontier and we are talking about a lot of unknowns out
there. Of course, it lends itself naturally to cost more in
some places and less in others.
So, I am still very hopeful that we can continue the
reusables of our X-33, the shuttle fleet. I think the reusables
are necessary because we have got to lighten our expense in
that area. But I sometimes think we fall under a lot of
criticism because this is a science and we are dealing with
unknowns, and so the costs sometimes is hard to understand and
to justify.
But nonetheless, from what I have seen in NASA, since I
have been in the Congress, has been forward-looking. Sure, they
have made some mistakes along the way, but anytime that you
deal with an unknown, I want to see somebody that has got a
perfect record.
Thank you.
Senator Bond. Thank you very much, Senator Burns.
We will now turn to Senator Shelby.

statement of senator richard c. Shelby

Senator Shelby. Mr. Chairman, I ask that my entire written
statement be made part of the record.
Senator Bond. Without objection, it will be.
Senator Shelby. I just want to welcome Mr. Goldin and look
forward to his testimony. I will have a number of questions.
Thank you.
Senator Bond. Senator DeWine.

statement of senator mike Dewine

Senator DeWine. Mr. Chairman, thank you very much. Let me
thank you for holding this hearing.
As one of the newest members of the subcommittee, Mr.
Goldin, I welcome you here. Good to be here with you.
Over the past 60 years, the Glenn Research Center, along
with its industry partners, have taken small investments by
NASA and turned them into huge developments, yielding billions
of dollars in benefits for our U.S. economy. This work is
really getting to be recognized. In fact, last September, the
R&D Magazine named three research teams based at Glenn as
winners of its R&D 100 Award. According to an article published
in the March 2001 edition of Continental magazine, the R&D 100
Award is ``known with in the industry as the `Nobel Prize' of
applied research.'' Moreover, since the early 1960's, Glenn
researchers have claimed nearly 80 of the 110 R&D 100 Awards
given to NASA projects.
Federal involvement has been key to getting things done at
NASA Glenn. Their activities are high-risk, high-reward, long-
term research projects that private industry simply does not
have the wherewithal nor the funding in which to engage. The
fact is that the investments that our Federal Government makes
in this research yield billions of dollars to the economy
through new employment opportunities and spin-offs.
Mr. Chairman, let me just make this a part of the record. I
know we want to get to the questions of Mr. Goldin. I just want
to say that we appreciate his being here. I look forward to
having the opportunity to ask questions. I would ask unanimous
consent, Mr. Chairman, that my full statement be made a part of
the record.
Senator Bond. I would be happy to do so.
[The statement follows:]

Prepared Statement of Senator Mike DeWine

Thank you Chairman Bond and Ranking Member Mikulski for holding
this important hearing today. And, thank you, Administrator Goldin, for
joining us to discuss NASA's fiscal year 2002 budget proposal. As one
of the newest members of this Subcommittee, I welcome you to this
hearing and look forward to discussing the important issues facing the
NASA budget, and in particular, the vital work being done in my home
state of Ohio at the Glenn Research Center (GRC) at Lewis Field in
Cleveland.
Over the past 60 years, the Glenn Research Center, along with its
industry partners, have taken small investments by NASA and turned them
into huge developments, yielding billions of dollars in benefits for
our U.S. economy. GRC's work is getting recognized.
In fact, last September, R&D Magazine named three research teams
based at Glenn as winners of its ``R&D 100 Award.'' According to an
article published in the March 2001 edition of Continental magazine,
the R&D 100 Award is ``known within the industry as the `Nobel Prize'
of applied research.'' Moreover, since the early 1960's, ``Glenn
researchers have claimed nearly 80 of the 110 R&D 100 Awards given to
NASA projects.''
Federal involvement has been key to getting things done at NASA
Glenn. Their activities are high-risk, high-reward, long-term research
projects that private industry simply does not have the wherewithal nor
the funding in which to engage. The fact is that the investments our
federal government makes in this research yield billions of dollars to
the economy through new employment opportunities and spin offs. But,
despite the considerable payoffs, over the past decade, NASA seems to
have lost sight of its role in this regard.
Part of the problem are the overruns in the cost of construction on
the International Space Station (ISS). As a result, the ISS now
threatens to erode the U.S. technological edge in the aerospace
industry. What is happening is that vital, long-term research done at
NASA centers, such as the Glenn Center, is being ignored because of
short-term funding problems with the ISS. If I may use a euphemism from
my agricultural background, NASA is essentially ``eating its seed
corn.''
Mr. Chairman, I want to focus my opening statement on the ISS
example, though candidly, there are many other examples I could cite.
In 1984, when the Space Station program was initiated, it was supposed
to be built within ten years, at a cost of $8 billion. By 1993,
however, the United States had spent a total of $10 billion on the
Space Station. Eventually, the first hardware for ISS was launched, and
we are beginning to see some progress. This progress has not come
without increased costs. In 1996, NASA estimated that the Space
Station's total cost would rise to $17.4 billion with a completion date
in 2002. Last year, the total cost estimate increased to $24 billion
with a completion date in 2005. This year, the cost increased to $28
billion.
Over the years, Mr. Chairman, I have consistently supported the
Space Station because I recognize the importance of research in the
microgravity environment. I believed in and shared Administrator
Goldin's vision for performing break-through research in basic
fundamental sciences, such as combustion science, fluid physics,
materials, and others. But, this year's budget threatens to end the
combustion program and cripple the fluids research program. This could
have a very real and a very devastating impact on NASA Glenn.
According to the International Space Station Research Plan, the
combustion research program is critical to understanding basic
fundamental aspects of combustion. This research has tremendous
potential benefits to fire safety, transportation, energy production,
and a variety of other industrial processes. Given the current energy
situation in the United States, it would seem prudent that we place a
greater emphasis on combustion research--not eliminate it.
My point is this--after 18 years of building the Space Station--
something we were promised would provide breakthrough research--we are
finally ready to realize the promise. The ISS Destiny Lab Module, which
was to accept the Fluids and Combustion facility as one of its first
payloads, sits empty, waiting for research hardware. The irony is that
the facility, itself, is now being threatened by budget cuts so that
construction can continue on the Space Station.
What makes matters even worse is that the Fluids and Combustion
facility has great promise for our nation. The fluid and combustion
research programs are very far along in the design of their hardware.
The facility has won numerous prestigious awards from NASA, including
the NASA Software of the Year Award in 1998, the R&D 100 Award in 1999,
the Award for Excellence in Technology Transfer in 2000, and NASA's
Continuous Improvement Award in 2000.
I understand that NASA must prioritize its budget. However, it is
absolutely incomprehensible to me that NASA would even consider
eliminating the Fluids and Combustion facility--a facility that is
performing research vital to our nation--a facility whose research has
broad-based applications to many areas of science and our economy--a
facility that is performing the type of research that NASA promised
when the Space Station was sold to Congress and the American people--
and finally, a facility that has an award-winning design that is, and
this is rare for NASA and particularly the Space Station, on-budget and
on-schedule. This just doesn't make sense to me.
I look forward to hearing from Administrator Goldin about this.
And, I am hopeful that he can explain to me the reasoning behind its
proposed budget cuts affecting NASA Glenn.
Again, thank you for holding this hearing and being here today.

introductory of Senn high school students

Senator Bond. I have been advised by staff that we should
welcome students from the Senn High School in Chicago,
Illinois. The students are accompanied by Ms. Kathy Khoshaba,
their instructor and the sister of Mary D. Kerwin, who is our
primary legislative liaison with NASA and who always goes the
extra mile to do a good job. Like the partners of the
International Space Station, these students represent the
international community, having come from Mexico, Morocco,
Vietnam, Kosovo, Ecuador, and Romania. Would you all please
hold up your hands in the back?
We are delighted to welcome you here and hope that you find
this of interest and of use.
With that, I will now turn to the opening statement of Mr.
Goldin. Welcome, Dan.

statement of administrator daniel Goldin

Mr. Goldin. Thank you, Mr. Chairman. I am pleased to appear
before the subcommittee to outline NASA's 2002 budget request.
With your permission, I would like to share with you a
brief video that depicts NASA's recent achievements and a look
at where we believe technology will take us in the not too
distant future.
Senator Bond. I would be happy to do so.
[Video shown.]
Mr. Goldin. Mr. Chairman, I would like to say what a
privilege it is to lead NASA. Our work is filled with
challenges and opportunities to achieve truly remarkable goals.
Although problems make headlines, NASA can point with pride to
improving shuttle safety while routinely meeting 5-minute
shuttle launch windows and reducing shuttle operating costs 30
to 40 percent. Since 1992, NASA has launched 59 spacecraft, 58
payloads, and 51 shuttles, for a total of 168 missions. Of
that, 158 were successes, 10 were failures. It represents a $22
billion investment in spacecraft and payloads with only a half
billion dollar loss due to failures. Not bad. We have shorter
cycle times, spacecraft that cost a fraction of previous
missions, a bright future with Space Station as a new star in
the sky, and an amazing array of at least 60 spacecraft to be
launched in the upcoming years.
The NASA team has turned budget pressures to an advantage,
and to them I say, job well done. They are one of the few
agencies in Government who have lived with a flat budget for
almost a decade. And we intend to apply that same can-do
attitude to resolving your concerns about the Space Station
budget challenge.
The administration's fiscal year 2002 request for NASA is a
solid and business-like budget. The request of $14.5 billion
equates to an increase of 2 percent, or $258 million, over the
fiscal year 2001 enacted level. It represents a deliberate
prioritization of efforts within each of our five strategic
enterprises so as to live within our means.
It provides a disciplined budget plan for station
development and operations, consistent with a strategy of
offsetting cost growth through budget reductions in station
hardware and other human space flight programs. I will expand
upon significant management reforms and budget restructuring
underway to bring station costs under control in a moment. The
budget also provides ongoing support to fly the shuttle safely,
while calling for a prioritization of safety upgrades and
infrastructure improvements and further privatization of Space
Shuttle activities.
It is noteworthy that the budget reflects a NASA investment
in science and technology that is 42 percent of the total
budget, up from 31 percent in 1991, and targeted to reach 51
percent by 2006. This investment in the future not only allows
us to open up the space frontier, but also helps fuel our
economy and maintain U.S. leadership and competitiveness in the
global economy.
In space science the budget contains additional funds for a
more robust Mars robotic exploration program and advanced in-
space transportation technologies. It continues the ``Living
With a Star'' Program and solves development funding problems
in SIRTF and Gravity Probe-B through elimination of several
lower priority programs.
In earth science, the budget provides for the completion of
the first series of 12 Earth Observing Systems and Earth Probe
missions and 8 next-generation missions. The development of
EOSDIS is nearly complete and it performed spectacularly. After
1 year of operation, the EOS satellites launched thus far have
doubled our holdings on earth science data. Saying it another
way, we have collected more data in the past year than in the
whole history of the space program due to the outstanding
performance of EOSDIS.
In aerospace technology, we are designing programs that
address public needs and revolutionary leap-frog technologies.
The public needs include improvements in aviation safety, noise
reduction, emission reduction, mobility of people and goods,
increased capacity of our airspace, and greatly improved
reliability and safety for earth-to-orbit launch vehicles,
coupled with improved mission effectiveness, which will yield
dramatically reduced costs for space launch systems. The
revolutionary leap-frog technologies we are focusing on include
information systems, nanoscale materials, and biologically-
inspired systems, all vital to our future, as you saw in that
video.
This budget fully funds the Space Launch Initiative. Our
challenge is clear: by developing technologies to be realized
in new launch vehicles, the improved safety and lower cost of
access to space could enable new civil and defense applications
and commercial markets for space, hopefully justifying U.S.
commercial investment in developing future launch systems.
Finally, let me bring you up-to-date on our process of
rebaselining the Space Station. We are moving methodically to
address the budget and configuration issues and to ensure the
criteria of the President's budget blueprint are met. The
program level review of management and budget actions will come
to closure near the end of this month. We will soon issue an
ISS program management action plan that will describe
management actions already implemented, including the temporary
assignment of program management responsibility from the
Johnson Space Center to NASA headquarters, and actions to be
implemented in the near term to improve cost projection and
management. We anticipate that the agency assessment will be
complete by mid-summer. Then we will be positioned to initiate
an external review of our budget reassessment. Our research
reassessment is ongoing, the results of which will be vetted
with external bodies by late summer.
Consistent with the committee's recent guidance, the agency
has processes in place and is planning near-term changes that,
even after the program management is returned to Johnson, will
permanently enhance the visibility of NASA headquarters into
the station costs such as: approval of all significant
additions to the program content and significant upgrades will
be retained at NASA headquarters; and decisions to commit
reserves will be made at NASA headquarters, by a joint
headquarters/JSC review board.
NASA, in compliance with your request, will modify its
quarterly Space Station reports to the committee to include
greater cost detail and is prepared to update the committee on
a monthly basis as the rebaselining proceeds.
The President's fiscal year 2002 budget fully supports
requirements for U.S. Core Complete. It allows for the
possibility of enhancements beyond U.S. Core Complete, but lays
out conditions before any option is considered. The Space
Station partnership has time to carefully consider decisions on
any option for enhancement over the next several months or even
years. We will continue to work with the administration and the
Congress to determine the course that can be afforded within
the budgetary guidance the administration has firmly
articulated.
And let me say I fully support the tough approach that
President Bush has asked us to undertake here and we are going
to do exactly what he asked us to do.

prepared statement

Let me conclude by emphasizing that NASA remains committed
to enabling the commercial development of space and the ISS. I
have asked NASA's Chief of Staff, Courtney Stadd, to coordinate
an agency-wide evaluation of commercial activities for the
purpose of creating an enhanced commercialization strategy for
the agency and America.
Thank you. I will be pleased to take your questions.
[The statement follows:]

Prepared Statement of Daniel S. Goldin

Mr. Chairman and Members of the Subcommittee: I am pleased to be
here today to present to you NASA's budget request for fiscal year
2002.
As I look back at the year that has just concluded, I am filled
with pride at what the NASA team has accomplished and with excitement
for the many challenges that still lay ahead. What a year we have had!
NASA flew the Shuttle Radar Topography Mission, the data from which is
now being used to produce the most accurate digital elevation model
ever of the Earth's land surface. The Hubble Space Telescope continued
to provide the world with breathtaking images as it unlocks the secrets
of the universe and rewrite astronomy textbooks. The Mars Global
Surveyor brought us detailed pictures of the surface of Mars, providing
more clues and compelling evidence that suggests water once flowed
freely on the planet's surface. Back on Earth, NASA researchers brought
a pulse of light to a complete stop, held it in place, and then were
able to activate the light pulse again; this achievement has
significant ramifications for new technologies in computing and
communications. Space Station assembly and outfitting continued on
schedule with 4 Shuttle flights, including the delivery of the
Expedition One crew, which established continuous human presence in
space, and the deployment of the U.S. laboratory. The NASA team also
coordinated the successful launch of 6 ELV missions, including the
Geostationary Operational Environmental Satellite-L, the Tracking and
Data Relay Satellite-H, the Imager for Magnetopause-to-Aurora Global
Exploration mission, the NOAA-L weather satellite, the Earth Observing-
1 satellite, and the Satellite de Applicaciones Cientificas-C mission.
The Administration's fiscal year 2002 request for NASA is a solid
and businesslike budget plan. The proposed funding level of $14.5
billion reflects an increase of 2 percent, or $258 million over the
fiscal year 2001 enacted level, and a 7 percent increase over fiscal
year 2000. The budget plan represents a deliberate prioritization of
efforts within each Enterprise, to ensure that we live within our
means. It provides a disciplined budget plan for International Space
Station development and operations, consistent with a strategy of
constraining Space Station cost growth, by offsetting growth through
budget reductions in Station hardware and other Human Space Flight
programs. NASA will undertake significant management reforms and budget
restructuring to bring Space Station costs under control. The
President's fiscal year 2002 budget provides ongoing support to fly the
Space Shuttle safely while calling for a prioritization of Shuttle
safety upgrades and infrastructure improvements within the proposed
budget runout. The President's budget also calls for advancing the
privatization of Space Shuttle activities. It reflects a strong
commitment to continued execution of the Space Launch Initiative,
reflecting NASA's commitment to provide commercial industry the
opportunity to meet NASA's future launch needs and to dramatically
reduce space transportation costs while improving space transportation
safety and reliability. It funds a more robust Mars Exploration Program
by redirecting funding from lower priority Space Science efforts. It
provides increased funding for science-driven, prioritized, follow-on
missions for second-generation Earth Observing System measurements that
will provide greater understanding of how the Earth and its climate are
changing; this increase is accomplished by identifying offsets within
lower priority elements of the Earth Science program.
The President's budget also recognizes that the difficult decisions
lie ahead. NASA is developing an integrated, long-term Agency plan that
ensures a national capability to support NASA's mission. We will
accomplish this by: (1) identifying NASA's critical capabilities and,
through the use of external reviews, determining which capabilities
must be retained by NASA and which can be discontinued or led outside
the Agency; (2) expanding collaboration with industry, universities and
other agencies and outsourcing appropriate activities to fully leverage
outside expertise; and (3) pursuing civil service reforms for
capabilities that NASA must retain, to ensure recruitment and retention
of top science, engineering and management talent at NASA. NASA will
also address the Agency backlog of facilities revitalization and
deferred maintenance by repairing necessary and affordable facilities
and by carefully phasing down the remainder. All of these tough
decisions on the relevance of programs and facilities will require
realistic, responsible decisions on priorities and financial
supportability.
It is noteworthy that the President's budget reflects a NASA
investment in science and technology that is 42 percent of the total
Agency budget, up from 31 percent in fiscal year 1991, and targeted to
reach 51 percent by fiscal year 2006. Funding for NASA science and
technology is an investment in the future and an important factor that
helps fuel the U.S. economy and maintain U.S. leadership and
competitiveness in the global economy. The science priorities that
support the objectives behind the near- and long-term missions being
pursued by our 5 Enterprises are fully consistent with NASA's Strategic
Plan. Those priorities are identified by working with the National
Research Council (NRC) and the NASA Advisory Committees, which make
recommendations to NASA in critical areas of science research and
technology development. These recommendations represent the highest
priorities of the science community. NASA continues to coordinate its
science programs with other Federal agencies through multiple
mechanisms, both formal and informal.
overview of the fiscal year 2002 budget
The fiscal year 2002 budget takes actions to address cost growth in
the Space Station. To ensure that the Station program remains within
the 5-year budget plan, the President's fiscal year 2002 budget
redirects funding for certain elements of the program while preserving
the highest priority goals of a permanent human presence in space,
world-class research in space, and accommodation of international
partner elements. The U.S. core will be complete once the Space Station
is ready to accept major international hardware elements. The cost
growth is offset in part by redirecting funding from remaining U.S.
elements, particularly high-risk elements including the Habitation
Module, Crew Return Vehicle and Propulsion Module, avoiding more than
$2 billion in costs. In addition, funding for U.S. research equipment
and associated support will be realigned with the on-orbit capabilities
of the Space Station.
The President's fiscal year 2002 budget takes action to ensure that
the Space Station program will be within the $25 billion statutory cost
cap when U.S. Core Complete is achieved in fiscal year 2004. How the
cap language should apply to elements that are considered enhancements
is an issue that we must work with the Congress. The President's budget
also proposes a total authorization for the Space Station over a 5-year
period as a further means to cap Station spending; this amount may be
adjusted upward if efficiencies and offsets are found in other Human
Space Flight programs and institutions. NASA has initiated management
reforms for the ISS program, including transferring program reporting
from the Johnson Space Center to NASA Headquarters until a management
plan has been developed.
The scope of the 104 Space Shuttle missions flown to date has
demonstrated that the Shuttle is the most versatile launch vehicle ever
built. This budget includes funding for safety investments, including
additional safety upgrades and infrastructure needs that will improve
reliability and ensure continued safe operations of the system. The
Space Flight Operations Contract performed by Shuttle prime contractor
continues to comprise almost one-half of the Space Shuttle budget and
will increase in size as more contracts are consolidated.
The fiscal year 2002 budget includes a significant increase in
funding for the Space Launch Initiative. The Space Launch Initiative is
a focused investment of $4.9 billion dollars between fiscal year 2001
and fiscal year 2006 for risk reduction and technology development
efforts for at least two competing architectures with dramatically
lower costs and improved reliability and safety. Through this
initiative, NASA will reduce technical and programmatic risks to
acceptable levels to enable a competition for full scale development of
one or more 2nd Generation Reusable Launch Vehicles around the middle
of this decade.
This budget also includes funding to begin to develop the
technologies needed to realize our vision for a 21st century aerospace
vehicle. This vision is one in which aerospace vehicles can smoothly
change shape, or morph, in flight like birds to optimize performance
during complex maneuvers in complete safety, and be capable of self-
repair when damaged. These vehicles will employ intelligent systems
made of smart sensors, micro processors, and adaptive control systems
to enable the vehicles to monitor their own performance, their
environment, and their human operators in order to avoid crashes,
mishaps, and incidents. They will also serve as the means for sensing
any damage or impending failure long before it becomes a problem. The
research into the technology to make this vision a reality--
nanotechnology, biotechnology and information technology--will result
in leapfrog capabilities compared to today's state-of-the-art vehicles.
Also included in the Aerospace Technology fiscal year 2002 budget
is funding to establish 5 university-based Research, Education, and
Training Institutes (RETIs). This effort will strengthen NASA's ties to
the academic community through long-term sustained investment in areas
of innovative, new technology critical to NASA's future and to broaden
the capabilities of the Nation's universities to meet the goals and
objectives of NASA's future science missions and technology programs.
These RETI's will be openly competed at regular intervals and will
inched a mandatory sunset date.
The fiscal year 2002 budget integrates NASA's investments in bio-
nanotechnology computing and electronics which can provide capabilities
orders of magnitude better than the best of today's electronics.
Developed as detectors and sensors, they could enable spacecraft
systems to be much smaller, with higher performance and lower power-
consumption than possible with today's technology. Biologically
inspired materials will have multi-functional capability and overall
performance far greater than current materials. Key capabilities of
these systems will be the ability to adapt to changing conditions and
Agency mission needs and to detect damage or degradation before it
becomes serious and reconfigure or repair themselves.
This budget funds the newly restructured Mars Exploration Program
(MEP) and sets in place basic technology investments for the next
decade of robotic Mars exploration. The MEP strategy is linked to
NASA's experience in exploring Earth, and uses Mars as a natural
laboratory for understanding life and climate on Earth-like planets.
The 2001 Mars Odyssey orbiter was launched on April 7, and two Mars
Exploration Rovers are being prepared for launch in 2003. Following
that, NASA is planning for a Mars Reconnaissance Orbiter mission in
2005, and a competitively selected Mars Scout mission. In addition,
science definition and technology development for a next-generation,
mobile surface laboratory in 2007 is underway that will pave the way
for a potential sample return mission early in the next decade. Also
funded in the Space Science budget is the Living With a Star program,
which address aspects of the Sun-Earth system that affect life and
society. Its program elements include a space-weather research network;
a theory, modeling and data analysis program; and space environment
test-beds. The fiscal year 2002 budget includes funding to support the
launch of 9 space science missions by the end of fiscal year 2002.
In NASA's Earth Science Enterprise, the fiscal year 2002 budget
enables both the present and the future of scientific discovery leading
to improved climate, weather and natural hazard prediction. In the
present, it funds the continued deployment of the Earth Observing
System (EOS) and related research to achieve the world's first
integrated, detailed look at the interactions of land, atmosphere,
oceans, ice and life. It is these interactions that drive variability
and change in the Earth system, including regional weather, El Nino,
large-scale floods, and volcanic activity. For the future, this budget
initiates the next generation of observing satellites beyond EOS, as
well as funds the advanced technology development that will make those
missions less expensive and more capable. It also funds a program of
applications research that will demonstrate the practical use of Earth
science data.
Also included in the fiscal year 2002 budget is an increase of $10
million to provide a significant number of scholarships in science and
engineering to enhance our student and faculty programs, including the
development of a scholarship program in disciplines critical to NASA's
future workforce needs. NASA will be seeking legislative authority to
make these investments in our future scientists and engineers through a
scholarship for service program. We will link these scholarship
students to our current summer student and faculty programs, so that
the students can work at our field Centers, side-by-side with our
scientists and engineers.
The President has challenged NASA to ensure that we fully tap the
R&D capabilities of academia and industry so our workforce and
institutions are most effectively focused and to ensure a national
capability to support NASA's mission. We face some difficult decisions
and will take a close look at program priorities, capabilities outside
NASA and the capabilities at our NASA field installations. We will
continue to review the need for certain NASA facilities where the
continuing cost of maintaining an aging infrastructure should yield to
other priorities more closely tied to advancing technology.
Beginning with this fiscal year 2002 budget request, and consistent
with statutory direction provided in the fiscal year 2001 VA-HUD-
Independent Agencies Appropriations Act (Public Law 106-377), NASA is
implementing a two-appropriation budget (excluding the Inspector
General account)--Human Space Flight (HSF) and Science, Aeronautics and
Technology (SAT). This is NASA's first step in transitioning to a full-
cost budget. While full cost will ultimately integrate institutional
and programmatic funds into a single budget, that integration is done
in a step-wise manner, by providing for an Institutional Support budget
line under each Enterprise and eliminating the present Mission Support
appropriation. This initial step will begin to recognize, budget, and
track direct full time equivalent (FTE) employees associated at the
Enterprise level and then use this FTE data to distribute institutional
costs (Research and Program Management and non-programmatic
Construction of Facilities) using the relative percentages of direct
FTE's by Enterprise. Taking this step will help managers and decision
makers begin to understand the potential magnitude of institutional
funds that are associated with each Enterprise in preparation for the
day when full cost budgeting will distribute these funds to the project
level via the appropriate cost/service pools.
NASA is an Agency about the future, and it is critical that we, as
a Nation, invest in the future of science and engineering--as
represented by the President's fiscal year 2002 budget request--if we
are to continue to press the boundaries of the future.
The following information provides detail, with funding delineated
under the new budget structure presented in the fiscal year 2002 budget
request, concerning plans for NASA's Strategic Enterprises and major
program areas. Appended to this statement are several charts depicting
the funding proposals reflected in the President's fiscal year 2002
budget request.
nasa enterprise detail
Human Exploration and Development of Space (HEDS) Enterprise
International Space Station
ISS is funded at $2.087.4 billion. This budget represents continued
support for the ISS program, enabling the high priority goals of
permanent human presence in space, world-class research in space, and
accommodation of international partner elements. In response to the
recent estimated ISS budget cost growth projections of $4 billion
between fiscal year 2002-2006, NASA is undertaking reforms to curtail
cost growth and identify savings. Because the cost to operate and
utilize existing ISS elements and to continue the integration and
launch of the 3-year inventory of hardware already at KSC is
essentially committed, NASA's strategy is to redirect funding from
projects with significant development activity remaining. Redirecting
funding for the Propulsion Module, the Habitation Module and the Crew
Return Vehicle avoids over $2 billion in costs. Restoration of these
projects will be contingent on the quality of NASA's future cost
estimates, the resolution of technical issues, the success of
management reforms and other cost-control actions underway, and the
ability to fund enhancements within the 5-year runout for Human Space
Flight. Funding for U.S. research equipment and associated support will
be realigned in accordance with the resulting on-orbit capabilities,
but will maintain support for research considered most promising and
crucial. While providing a clear call to NASA for fiscal restraint,
this budget nonetheless maintains a commitment to launch the hardware
that NASA has already built and maintains the current assembly schedule
until at least 2004.
In addition to the redirected funds, NASA is preparing an action
plan for management reform, and several management initiatives at
NASA's space flight Centers to reduce costs by improving our cost-
estimating ability, improving management efficiencies, refocusing civil
servants, developing a plan for competition, and seeking greater
participation from international partners.
With regard to Space Station research, we are fully committed to
deliver to orbit all of the research equipment planned for the next 2
years. It goes without saying that there are many in the research
communities who have very legitimate concerns about the impacts of the
research funding reductions and crew resource limitations necessary to
address cost growth. We are developing a post-2004 research utilization
strategy that will be reviewed by our research community.
This budget continues our commitment to ISS commercialization. We
will continue to seek commercial investment in infrastructure and ISS
operations that may reduce Government costs, and we are continuing to
assess Non-Government Organization (NGO) concepts for ISS utilization.
Space Shuttle
The President's fiscal year 2002 budget includes $3.284 billion for
the Space Shuttle Program. In April, the Space Shuttle celebrated the
20th Anniversary of the launch of STS-1. Over the past two decades, the
Space Shuttle has proven itself to be the safest and most versatile
launch vehicle ever built. During the past year, the Space Shuttle has
continued to perform the critical function of providing access to
support the assembly and resupply of the ISS. The Space Shuttle also
provides a space-based laboratory for conducting human supported Earth
science missions, and will continue to maintain the Hubble Space
Telescope and fly biological and physical research missions.
To sustain safety and support the Shuttle manifest, the Space
Shuttle program will continue to invest in the Space Shuttle system to
lessen the impacts of obsolescence and maintainability issues and to
achieve lower operating risk by making safety investments, including
upgrading the system. The Space Shuttle will need to be capable of
supporting the critical human space transportation requirements for
Space Station assembly and operations through at least this decade.
NASA has determined that investing in upgrades provides not only a
safer vehicle, but also one that is more reliable and one that is
easier to maintain. NASA is continuing to assess the Space Shuttle
programs aging infrastructure to determine how these needs--
particularly safety-related needs--can be addressed within the Agency's
budget priorities. For fiscal year 2001, 7 scheduled missions will
support the assembly and resupply of the ISS. In fiscal year 2002, NASA
is planning to launch 7 missions--5 ISS assembly and resupply flights,
the Hubble Space Telescope's 3A servicing mission, and a research
utilization flight (STS-107).
NASA plans to aggressively pursue Space Shuttle privatization
opportunities that improve the Shuttle's safety and operational
efficiency. This reform will include continued implementation of
planned and new privatization efforts through the Space Shuttle prime
contractor and further efforts to safely and effectively transfer civil
service positions and responsibilities to the Space Shuttle prime
contractor.
Space Access
Recent market stagnation threatens the viability of new,
commercially-developed launch systems. NASA continues to work with this
industry segment to seek ways to enable an opportunity for them to
compete with the major launch companies, to ensure reliable cost
effective U.S. launch services to meet Agency requirements.
Space Operations
On-orbit checkout of the TDRS-H spacecraft was conducted in July-
September 2000, at which time the Multiple Access Return (MAR) service
exhibited out of specification problems. An investigation of the MAR
anomaly began in September 2000. The root cause of the anomaly has been
determined, and changes to the TDRS-I and -J spacecraft flight hardware
will be implemented prior to their launch. NASA is evaluating its
contract options relative to accepting or rejecting the TDRS-H
spacecraft. Additionally, in attaining the separate goals of responsive
services at the lowest possible cost and of transitioning to commercial
service providers, the Space Operations and Maintenance Organization
(SOMO) faces several challenges, namely, evolving to a fee-for-service
approach to operations, and meeting an aggressive cost reduction target
while assuring mission safety.
Advanced Programs
In order to better align with current Agency budget priorities, in
fiscal year 2002 the Human Exploration and Development of Space (HEDS)
Technology Commercialization Initiative (HTCI) is focused largely on
nearer-term goals within the overall strategic framework that has been
defined for HEDS. The HTCI is considering commercialization in a
broader context than the more focused efforts to date involving
commercialization of the ISS or the Space Shuttle. Through HTCI, NASA
intends to examine architectures that take advantage of a potentially
robust future commercial infrastructures that could dramatically lower
the cost of future space activities.
Space Science Enterprise
NASA's Space Science Enterprise (SSE) is focused on exploring the
near and far reaches of our Universe the planets, stars, galaxies and
other phenomena in an attempt to answer these fundamental questions:
How did the Universe begin and evolve? How did we get here? Are we
alone?
Through its various research programs and diverse missions, the
Space Science Enterprise has already made great strides to begin to
answer these questions. The scientific discoveries and insights gained
through the Space Science Enterprise programs and missions have
literally changed the way we view the Universe and our place in it.
NASA's Space Science fiscal year 2002 budget request is $2.786 billion.
Space Science had many important successes over the past year,
several of which were related to our closest neighboring planet, Mars.
On April 7, NASA began a return to Mars with the successful launch of
the Mars Odyssey spacecraft, which will arrive at Mars in October 2001.
Once there, the spacecraft will use its suite of scientific instruments
to map the chemical elements and minerals that make up the Martian
surface, look for signs of water, and analyze the Martian radiation
environment. The Mars Global Surveyor is continuing its in-depth
imaging mission and has revealed features suggesting the possibility of
current sources of liquid water at or near the Martian surface.
Surveyor has also imaged layers of sedimentary rock, which suggest that
long ago Mars may have had numerous lakes and shallow seas. Since most
scientists consider water to be one of the key ingredients for life,
these findings are particularly compelling. NASA is anxious to continue
exploring the Red Planet, and the new Mars Exploration Program unveiled
last October will ensure that we do exactly that. Through a series of
orbiters, landers, rovers, and sample return missions that will take us
through the next decade and beyond, NASA is committed to unraveling the
secrets of Mars' past environment and geology and to discovering the
role that water played. Once we begin understanding some of these
parameters, we will be better able to determine whether life ever
arose, or is still present, on Mars.
Further out in the solar system, NASA landed a spacecraft on an
asteroid for the first time. Though never intended to be a lander, the
Near Earth Asteroid Rendezvous (NEAR) spacecraft touched down on
asteroid 433 Eros in February 2001. NEAR completed a very successful
prime mission of orbiting Eros at different altitudes and sending back
dramatic images of the asteroid's surface. With ``nothing to lose,''
project scientists decided to attempt a ``controlled crash'' onto the
surface in hopes of getting close-up images during the descent phase.
Not only did we obtain spectacular images, but also NEAR actually
continued to send signals after it landed. The spacecraft returned
readings from its magnetometer and gamma-ray spectrometer from the
surface of Eros before it was shut off at the end of February.
NASA has long supported the scientific study of the phenomena and
fundamental physical processes involved in solar-terrestrial physics
and has launched numerous spacecraft to study the dynamics of our Sun.
A suite of NASA spacecraft continues to study the Sun now, in the
maximum phase of its 11-year solar cycle. The volatility of the Sun
during this phase was at one time only of concern to solar physicists;
however, with humankind's increasing dependence on satellite systems,
energy grids, and air travel, learning more about the Sun and its
effects on the Earth has become an important area for scientific
research. Just recently Solar and Heliospheric Observatory (SOHO)
scientists were able to image a solar storm on the far side of the Sun
(not facing Earth) for the first time. This allowed them to provide a
week's advance warning about the bad weather in space, which enabled
commercial and government entities to take measures against system
damage.
After more than a decade in space, the Hubble Space Telescope (HST)
is still delivering cutting-edge science and amazing images. A HST
census found that the mass of a supermassive black hole is directly
related to the size of the galaxy's nuclear bulge of stars. This
suggests that the evolution of galaxies and their host black holes is
intimately linked.
Using the Chandra X-Ray Observatory's superior resolution,
astronomers have also discovered a new type of black hole in the galaxy
M82. This black hole may represent the missing link between smaller
stellar black holes and the supermassive variety found at the centers
of most galaxies. Just recently, scientists captured the deepest
exposure yet made by any telescope using Chandra. This image,
comparable to the famous Hubble Deep Field, found black holes
dominating the Universe at the faintest and farthest distances. The
fact that black holes were such a dominant feature of the early
Universe came, as somewhat of a surprise, since they are not nearly as
common today.
NASA's Space Science Enterprise has made major contributions to the
scientific world over the years. By making hard decisions to cancel
lower-priority missions with significant cost growth or schedule
slippage, including the Pluto-Kuiper Express and Solar Probe missions,
the President's fiscal year 2002 budget request paves the way for more
capable missions and increasing scientific discoveries and revelations
in the years ahead. In addition to a robust Mars Exploration Program
for the next decade, the proposed budget also focuses on new technology
development in space propulsion systems that could support faster, more
capable planetary missions, such as a potential Pluto ``sprint''
mission, and supports critical technology investments for future
decisions on high-energy astrophysics missions.
Space Science continues to develop integrated programs of missions
that have delivered and will deliver a hearty and diverse abundance of
new scientific understanding about the universe and our place within it
to the American people.
Earth Science Enterprise
The President's budget for fiscal year 2002 is $1.515 billion. It
reflects the net change in funding for Earth Observing Systems (EOS) as
peak funding for the first series of EOS declines and funding for
formulation of next decade missions ramps up. NASA's Earth Science
Enterprise is our Nation's investment in improving climate, weather and
natural hazard prediction using the vantage point of space. Our ability
to view the Earth from space is what enables today's weather forecasts,
and what will help enable tomorrow's capability to predict El Nino,
decadal climate change, and even volcanic eruptions. Earth science is
cutting edge science, exploring changes taking place on our home planet
that are little understood today. And Earth science is also science in
the national interest, providing new tools for decision-making by
businesses, state & local governments, and other Federal agencies.
Fiscal year 2000 was the best year yet for NASA's Earth Science
program, as measured by our contribution to the list top science
discoveries worldwide, published by Science News. We mapped the pattern
of thinning and thickening of the Greenland ice sheet, published a 20
year record of North and South polar sea ice extent, and observed a
Connecticut-size iceberg break off from the Antarctic ice sheet. We
demonstrated the capability for 2-day prediction of storm formation,
and showed that air pollutants inhibit rainfall. We discovered that the
mysterious ``Chandler wobble'' of the Earth on its axis is caused by
changes in deep ocean circulation, and created a consistent global land
cover data set for use as a baseline for measurement of future changes.
Much of this work was made possible by NASA-sponsored scientific
research and the first elements of the EOS series of satellites now
being deployed. Landsat 7, QuikSCAT, Terra, and ACRIMsat were all
successfully launched in 1999, and are delivering science data to
millions of users today. In February 2000, we flew the Shuttle Radar
Topography Mission, and are using the data to produce the most accurate
digital elevation model of the Earth's land surface between 60 deg.N
and 56 deg.S. This will be of great use not only to scientists but also
to civil engineers who are working to improve aviation safety in
mountainous areas and to manage potential flood hazards. Late in 2000,
we successfully launched the New Millennium Program Earth Observer-1 to
test several new remote sensing instruments. One instrument is
demonstrating the capability to make Landsat-type measurements at one-
fifth the size and one-fourth the cost. Another instrument is
demonstrating the first hyperspectral imager flown in space, paving the
way for the next big advance in commercial remote sensing.
Over the next 3 years, we will complete the deployment of the EOS
System. Later this year, we will launch the Aqua spacecraft to make the
most accurate measurements yet of atmospheric temperature and
humidity--the kind of data that will enable scientific discoveries
leading to weather prediction to be extended from 3 to 5 days out to 7
days. ICEsat will make the first detailed topographic maps of the
world's great ice sheets. Other missions will extend key data records
of ocean topography and solar irradiance that are essential to seasonal
and decadal climate prediction. Smaller, complementary missions will
study Earth system phenomena never before studied globally from space,
such as the Gravity Recovery and Climate Experiment (GRACE) which will
provide a precise map of the Earth's mass distribution and changes in
the Earth's gravity field, including changes in large underground fresh
water reserves (aquifers). The development of the EOS Data and
Information System (EOSDIS) is nearly complete, and is already doing
the job of operating EOS satellites now in orbit and processing their
data. In fiscal year 2000, EOSDIS provided over 8 million data products
in response to 1.5 million requests. We have already begun to plan how
data and information system services should evolve to meet the needs of
Earth science and applications over the next decade.
Planning for the next decade of Earth science has been in full
swing over the past year. NASA's Earth Science Enterprise has a new
Research Strategy for 2000-2010 that has been positively reviewed by
the National Research Council and endorsed by the NASA Advisory Council
committee advising the Office of Earth Science.
Five EOS successor missions are planned as part of the fiscal year
2002 budget. A Global Precipitation Mission will build on the success
of TRMM, and provide the first global observations of rainfall. This
will provide data essential to future assessments of fresh water
availability, and to answering some of the highest priority questions
in the Research Strategy. Ocean topography and ocean surface winds
missions will succeed the EOS-era Jason and SeaWinds, respectively,
providing continuity of measurements that are proving essential to
forecasting and monitoring El Nino and hurricanes. Atmospheric ozone/
aerosol and solar irradiance missions will extend EOS-era measurements
of two key factors (atmospheric chemistry and incoming solar energy)
that help distinguish natural from human influences on climate change.
In addition, this budget provides essential funding for future
Earth exploratory missions to probe least understood Earth system
processes, which will be awarded competitively.
This budget request also adequately funds research to use these
observations to begin to answer the questions in the Research Strategy,
to demonstrate practical applications of these data to society
described in the Applications Strategy, and to develop advanced
technology to make such observations better and cheaper in the future,
as described in the Technology Strategy. It is this investment in Earth
science from space that will enable the future of climate, weather, and
natural hazard forecasting to serve national needs and maintain U.S.
global leadership in space-based Earth observations in the decades
Biological and Physical Research Enterprise
NASA's Office of Biological and Physical Research (OBPR) Enterprise
was established this past year to affirm NASA's commitment to the
essential role biology will play in the 21st century and establish the
core of biological and physical sciences research needed to support
Agency strategic objectives. OBPR was established under the premise
that revolutionary solutions to science and technology problems are
likely to emerge from scientists, clinicians, and engineers who are
working at the frontiers of their respective disciplines and are also
engaged in dynamic interdisciplinary interactions.
Funded at $360.9 million in fiscal year 2002, OBPR uses the space
environment as a laboratory to test the fundamental principles of
physics, chemistry and biology; conducts research to enable the safe
and productive human habitation of space; and enables commercial
research in space. OBPR includes programs in Physical Sciences
Research, Fundamental Space Biology research, and Biomedical and Human
Support research. OBPR conducts research activities in conjunction with
four other major Federal agencies through approximately 30 partner
agreements. OBPR also manages 12 Commercial Space Centers across the
country.
OBPR is preparing for the transition to a new era in human space
flight. The ISS will provide a growing capability as a research
platform. OBPR will work to extract the maximum scientific and
commercial return from this premier research facility while conducting
research to ensure the health and safety of space travelers in the near
term and into the future.
NASA is on track to deliver the first 10 research equipment racks
to ISS as planned. In addition, we have already selected more than 100
specific experiments planned for the first 6 ISS increments. During
Expedition 1, from October 2000 through February 2001, the crew
conducted several research activities in the areas of educational seed
growth experiments, crystal growth of biological macromolecules, motion
and vibration technology and human research. Eighteen NASA experiments
are scheduled to become operational during Expedition 2 (March through
July of 2001), including important biomedical experiments in the areas
of radiation dosimetry, psychosocial factors, sleep physiology, drug
absorption, and sensorimotor coordination. Those experiments will
continue into Expedition 3 (July through October of 2001), and
additional OBPR experiments will be added to study renal stone
prevention, spatial orientation, and pulmonary function. Consistent
with the current baseline assembly sequence, the permanent Space
Station crew size will be limited to 3 crew due to cost growth. Crew
size will be a major limiting factor for research activities and
reduced funding support for completing state-of-the-art research
facilities will have an impact on the planned research program.
NASA is restructuring the ISS research budget to align it with the
on-orbit capabilities and fiscal resources available. This
restructuring activity is taking place over the next few months. OBPR
is prioritizing and time-phasing research plans for internal lab-based
research as well as external truss and exposed platform Fundamental
Physics, Earth and Space Sciences research. OBPR is engaging the
scientific community as part of this process. We have proposed a
framework of priorities to ensure a world-class research program,
consistent with NASA's commitment to safety, to serve as the basis of
discussion with the scientific community.
During Space Station construction, OBPR is aggressively pursuing
opportunities to maximize research within the availability of the Space
Shuttle missions, through the use of mid-deck lockers on planned ISS
assembly flights, and ISS utilization flights.
Aerospace Technology
The budget request for the Office of Aerospace Technology
Enterprise is $2,375.7 million. We are funding the highest priority
aeronautical and space technologies while maintaining an active base
research program that will enable revolutionary advances in the way we
design and operate the aerospace vehicles of the 21st Century. We have
terminated projects that have either delivered on most of their
promised technology or do not offer a leap in technology commensurate
with their funding. Included in those terminated are Intelligent
Synthesis Environment (ISE), High Performance Computing and
Communication (HPCC), Rotorcraft and other aircraft activities focused
on near-term military applications. We are placing additional emphasis,
and dollars, on 21st Century Aerospace Vehicles, Computing, Information
& Communication Technology (CICT), Virtual Airspace Modeling and
nanotechnology. These increased investments reflect where we need to
focus our efforts to expand knowledge and to advance the state of the
art in revolutionary new aircraft and air traffic management
technology.
Aerospace Technology Programs
To reflect our new emphasis on innovation, as well as reflect the
technical progress gained in recent years, we have reformulated our
Enterprise goals--Revolutionize Aviation, Advance Space Transportation,
Pioneer Technology Innovation, and Commercialize Technology.
Goal One, Revolutionize Aviation.--Without a revolution in the
aviation system, it will be impossible to accommodate the projected
tripling of air travel within two decades in a safe and environmentally
friendly manner. Revolutionizing the aviation system to meet the
demands for growth means we must provide a distributed flexible and
adaptable network of airways--within the physical and environmental
constraints of today's system. We must and will address the civil
aviation system's fundamental, systemic issues to ensure its continued
growth and development, thereby giving backbone to the global
transportation system and assuring global economic and cultural success
and vitality.
We have restructured our Base Research and Technology investments
to focus on revolutionary 21st Century Vehicle technologies. The design
and fabrication of 21st Century aerospace vehicles will not be
accomplished by the traditional methods of multiple mechanically
connected parts and systems. It will employ fully integrated embedded
``smart'' materials that will endow the vehicle with unprecedented
levels of aerodynamic efficiency and control. Proposed 21st Century
Aerospace Vehicles will be able to monitor their own performance,
environment, and even their operators in order to improve safety and
fuel efficiency, and minimize airframe noise.
Goal Two, Advance Space Transportation.--I am very excited about
the Agency's vision to revolutionize the Nation's space transportation
systems. I believe this is the most important initiative of this
Enterprise and one of the most important to our Nation. NASA's vision
for space transportation is being pursued through a phased approach
embodied within the Integrated Space Transportation Plan and the Space
Launch Initiative. We recognize that privately owned and operated
launch vehicles lofting NASA payloads on a regular basis is the right
strategy to free up the agency's resources for scientific pursuit on
the new frontier.
Last month we reached a major milestone in the 2nd Generation
Reusable Launch Vehicle program when we selected a number of companies
to enter into negotiations to participate in the Space Launch
Initiative. Following an exhaustive series of evaluations, we concluded
that the X-33 and X-34 projects would not receive Space Launch
Initiative funds. This difficult decision was based upon the
determination that the benefits to be derived from continuing these
programs did not justify the cost. We plan to announce the results of
the ongoing Space Launch initiative negotiations in May.
Goal Three, Pioneer Technology Innovation.--We aim to revolutionize
the developmental processes, tools, and capabilities of the aerospace
industry. To create the aerospace transportation systems of the future,
we need to develop a new approach to engineering that puts safety,
reliability and mission assurance first. Collaborative tools and human-
like intuitive environments are critical to allowing us to
``virtually'' build and test vehicles and systems before we spend money
on expensive hardware. System characteristics such as intelligence,
rapid self-repair, and adaptability will come about through innovation
and integration of leading-edge technologies, such as biotechnology,
nanotechnology, and intelligent systems. The unique goal to Pioneer
Technology Innovation focuses on both the specific technology
innovations and the processes, which drive them.
To strengthen our ties with the academic community we are
implementing five University-based Research, Education and Training
Institutes (RETIs). The role of the RETIs will be to research and
utilize innovative, cutting-edge opportunities for science and
technology that can have a revolutionary impact on NASA's future
missions. These RETI's will be openly competed at regular intervals and
will include a mandatory sunset date.
We have combined existing programs with new activities to create
the Computing, Information & Communications Technology (CICT) research
program to concentrate our core expertise in critical technologies
Goal Four, Commercialize Technology.--Since its inception in 1958,
NASA has been charged with ensuring that the technology it develops is
transferred to the U.S. industrial community, thereby improving the
Nation's competitive position in the world market. The fiscal year 2002
budget request of $146.9 million continues this important aspect of our
mission. The Agency's commercialization effort encompasses all
technologies created at NASA centers by civil servants, as well as
innovations produced by NASA contractors. About 75 percent of the
amount requested for NASA's Commercial Technology Program effort is for
NASA's Small Business Innovation Research (SBIR) Program. The NASA SBIR
program has clearly contributed to the U.S. economy, fostering the
establishment and growth of over 1,100 small, high technology
businesses.
In addition to NASA's Commercial Technology Program, we are also
working to transfer commercial technology across the entire aerospace
program. For example, the need for data dissemination within a high-
integrity wireless broadband network has been identified as one of the
major technical barriers to providing an order of magnitude increase in
aviation system capacity and safety. NASA's work in wireless broadband
networking illustrates a huge commercial success. We have demonstrated
real-time data link technology to move and distribute unique and
distinct flight data to multiple sites in real-time while addressing
multi-level priorities in a secure, high integrity data sharing
environment serving safety and capacity needs of the National Airspace
System. This broadband technology demonstrated a phased array antenna
technology that achieves data rates 100x greater than what is
operational in today's National Airspace System, greatly increasing the
capacity of the NAS, reducing aviation system delays and saving
billions of dollars in air travel operations cost. In April 2000,
Boeing unveiled a high-speed global communications service offering
live in-flight Internet, e-mail, and TV to be available next year.
While anticipated revenues have not been announced, analysts project
the addressable market to be about $70 billion over the next 10 years.
other key initiatives
Institutional Support
NASA has conducted a review of its facilities infrastructure,
finding that the deteriorating plant condition warrants an increased
revitalization rate to avoid safety hazards to personnel, facilities,
equipment and mission. Some facilities have deteriorated to the point
that they need to be replaced. The President's fiscal year 2002 budget
request includes facilities funding to address some of these needs, but
the backlog of revitalization requirements continues to grow and will
be addressed as part of NASA's Critical Capabilities Review.
NASA plans to address the considerable Agency backlog of facilities
revitalization and deferred maintenance, by repairing those facilities
necessary to take us into the future and that are affordable to keep,
and by carefully phasing down the remainder. This requires tough
decisions on the relevance of each facility as well as realistic,
responsible determinations on the financial supportability of them.
These decisions will be made as part of the Strategic Resources
Planning activity that NASA will undertake as part of its Critical
Capabilities Review over the next several months. This effort will
fully integrate facilities planning with program planning, consistent
with NASA's Strategic Plan and Center implementation plans. In fact,
this Strategic Resources Planning effort will become an integral and
ongoing part of NASA's facilities planning and management processes.
Performance Plans
NASA is fully committed to the Government Performance Results Act
(GPRA). Each year, we believe we make further progress in portraying
our goals and commitments towards performance in terms that are
relevant to the American people. We appreciate the heightened level of
accountability GPRA affords. The NASA Performance Plan has been
significantly improved for fiscal year 2002 in several key areas:
--Public Benefit Statements will be included to more effectively
communicate the relevance of targeted performance.
--Each Enterprise/Crosscut Process will provide a description of the
means that will be used to verify and validate measured
performance.
--A Multi-year Performance Chart (fiscal year 1999-2002) will be
included for each Enterprise/crosscut process to demonstrate
cumulative progress towards the achievement of strategic goals
and objectives.
--Comments from the NASA Advisory Council regarding the development
of metrics will be incorporated in the Plan.
NASA is in the process of modifying how we measure NASA R&D so as
to better recognize the achievements of our long-term research missions
to benefit the American public. Measuring multi-year, incremental
efforts on an annual basis; quantifying and predicting the timing of
research results; and adjusting metrics to reflect gains in knowledge
and experience are new approaches that we believe would be useful in
assessing NASA's program performance and measuring R&D efforts in
general under GPRA.
conclusion
Mr. Chairman, I am proud of the budget I am presenting to the
Committee. It is essential that the Congress fully fund this budget. It
will enable NASA to continue to fly the Shuttle safely, continue
development of the Space Launch Initiative that will revolutionize our
launch capability, continue construction of the ISS, and accomplish
cutting-edge science research and technology. While the difficulties of
cost growth on the ISS program present challenges, we are committed to
completing the ISS with our International partners so that we will have
a world-class research laboratory in space that will provide
unprecedented opportunity for a host of science discoveries not yet
imagined.
I look forward to working with the Subcommittee to make this budget
a reality.

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION FISCAL YEAR 2002 ESTIMATES
[In millions of real year dollars]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Full Cost Structure 2000 \1\ 2001 \1\ 2002 Pres Budget 2003 2004 2005 2006
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL SPACE STATION....................................... 2,323.1 2,112.9 2,087.4 1,817.5 1,509.1 1,394.3 1,389.0
SPACE SHUTTLE..................................................... 2,999.7 3,118.8 3,283.8 3,218.9 3,253.3 3,213.5 3,228.0
PAYLOAD AND ELV SUPPORT........................................... 79.9 90.0 91.3 92.5 100.0 104.7 111.6
INVESTMENTS & SUPPORT............................................. 1,112.2 1,272.5 1,303.5 1,333.5 1,348.1 1,381.7 1,420.6
SPACE OPERATIONS.................................................. 496.0 521.8 482.2 370.8 286.5 296.8 296.8
SAFETY, MISSION ASSURANCE, & ENGINEERING.......................... 43.0 47.4 47.8 47.8 48.0 48.0 48.0
-----------------------------------------------------------------------------------------------------------------------------
HUMAN SPACE FLIGHT.......................................... 7,053.9 7,163.4 7,296.0 6,881.0 6,545.0 6,439.0 6,494.0
=============================================================================================================================
SPACE SCIENCE..................................................... 2,524.1 2,624.7 2,786.4 3,144.2 3,560.5 3,897.5 4,008.1
BIOLOGICAL & PHYSICAL RESEARCH.................................... 340.3 378.8 360.9 380.7 402.6 405.6 419.4
EARTH SCIENCE..................................................... 1,690.3 1,716.2 1,515.0 1,587.4 1,571.0 1,572.9 1,578.7
AEROSPACE TECHNOLOGY.............................................. 1,834.4 2,214.5 2,375.7 2,823.8 3,135.1 3,174.2 3,402.1
ACADEMIC PROGRAMS................................................. 138.8 132.7 153.7 143.7 143.7 143.7 143.7
-----------------------------------------------------------------------------------------------------------------------------
SCIENCE, AERONAUTICS AND TECHNOLOGY............................... 6,527.9 7,066.9 7,191.7 8,079.8 8,812.9 9,193.9 9,552.0
=============================================================================================================================
INSPECTOR GENERAL................................................. 20.0 22.9 23.7 24.6 25.5 26.5 27.4
-----------------------------------------------------------------------------------------------------------------------------
Total....................................................... 13,601.8 14,253.2 14,511.4 14,985.4 15,383.4 15,659.4 16,073.4
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Fiscal year 2000 and fiscal year 2001 restructured to reflect new fiscal year 2002 Full Cost Structure.

Senator Bond. Thank you very much, Mr. Goldin.
Let me turn to my ranking member, Senator Mikulski, for her
opening statement and then for questions she may wish to ask.

statement of senator barbara a. Mikulski

Senator Mikulski. Thank you very much, Mr. Chairman. As you
know, I had an amendment on the floor to establish 1,000
community tech centers. And it passed 50-49.
I know that my colleagues are waiting and we want to move
quickly into the questions.
Mr. Goldin, first of all, I want to welcome you. I know
this is your ninth appearance before this subcommittee, and you
are also now serving your third President. So, first of all, I
want to start out by thanking you for your service to the
Nation in navigating NASA through some very tough budget times
while still pushing the envelope of science and technology. So,
I want to say thank you. I think you're also trying to change
the culture of NASA, particularly in science programs, to do it
faster, quicker, better, as well as cheaper.
But as we move into this hearing, I am very troubled about
what is happening to the Space Station. I want to make sure
that the problems with the Space Station do not threaten NASA's
science programs. The Space Station cannot impact on the NASA
science programs, nor do I want, having to deal with these cost
overruns, to end up where NASA has to forage for funds and rob
other very important programs. I think we are at a very
critical junction.
Senator Bond and I have led continuous battles on the floor
to ensure the continuity and the continuation of the Space
Station. But I am concerned that my colleagues, who are not
involved in this as deeply as we are, are going to lose faith
in this program, and I think we could end up maybe even losing
the program. That is not a threat, but this is really pretty
serious. And it does not get better. It just does not get
better.
In your testimony, I must confess I did not understand what
you said in your last paragraph about ``I fully support the
enhancement of Core Complete,'' et cetera. I hope in the
questions that we can go into it.
Despite the problems, though, with the Space Station, I
know it has also been a good year for NASA, and that is why I
am so excited about these science programs. Thanks to the John
Hopkins Applied Physics Lab, look at how the NEAR probe landed
on the asteroid Eros and sent back these incredible photographs
and, more importantly, scientific data. The Hubble Space
Telescope continues to rewrite science textbooks every year,
most recently discovering a mass of a supermassive black hole.
So, I think the science is moving along.
We are concerned, of course, in Maryland about the Wallops
Island with the decline of the commercial space launch
business. There is an impact on Wallops. I, again, will go into
that in my questions. I am concerned about their viability. I
hope that we can come up with a new approach for Wallops.
In the area of earth science, we are seeing the benefits of
Mission to Planet Earth, a program that we have fought for for
almost a decade. What I like about Mission to Planet Earth is
that we are now really getting back the kind of information we
hoped would help the people on this planet with weather and
storm predictions, urban and suburban planning, agricultural
and precision farming advice. In my own State, where we would
have an outbreak of pfisteria, we could be able to pinpoint
solutions rather than fingerpoint at each other.
So, we could go on about it, but I must say the $4 billion
in cost growth, which I guess means cost overruns, associated
with the International Space Station has negative impacts. This
tourist in space, courtesy of the Russians, was outrageous--was
outrageous. And the American people do not pay our astronauts
to babysit tourists. Our astronauts are skilled, trained, and
willing to put their lives on the line, and they are not paid
to babysit tourists. It is not Disney World. If Disney wants to
have a Space Station, let them build it and pay for it. Let
them try. But I think this was outrageous.
The Russians have continually reneged on the deals with us.
They do not pay their own people. They are still selling their
technology and know-how to Iran. I mean, I am very cranky with
the Russians. And then this is like being pimps. I just think
it is outrageous, and I think it is demeaning to the
professionals at NASA and I think certainly for our astronauts
to have to spend 1 week so this guy could have the flight of
his life is outrageous.
I know you spoke sharply about it, but let me tell you, it
really cast in doubt the ability to have scientific
collaboration with the Russians. They do not deliver, and what
they then deliver is some guy for $20 million who is having a
mid-life crisis.
Senator Mikulski. With that, I think I will just conclude.
I ask that my full statement be in the record.
Senator Bond. Well, I tell you, that was a good start,
Senator Mikulski. I am looking forward to reading the rest of
your statement. We will accept that for the record.
Senator Mikulski. I am just warmed up now.
Senator Bond. Would you like to ask some questions while
you are on a roll?
Senator Mikulski. No. You go right ahead.

Space station cost overruns

Senator Bond. Following up on the Space Station cost
overruns, the initial cost estimate of $17.4 billion, then to
$26 billion, and then the February revelation, another $4
billion in cost overruns. It seems to me there should have been
a decision making review process to track the costs and the
problems.
What I found even more troubling is we were advised by
staff that the cost review and planning process in Houston that
said, hey, we are $4 billion short, actually was comprised of
contractors and ISS staff meeting, developing a wish list of
their needs and the desired payments to cover those. They just
sent it in and said, this is what we would like to have. How
did this $4 billion figure come about? Did you not hear about
it in Washington until December? How can we avoid having this
kind of unpleasant surprise in the future?
Mr. Goldin. I believe that the issue had to do with a
process we call threats and liens, and for a number of years,
we had discounted them because they were out in the future.
After we launched this Zvezda module, we had slipped, slipped,
slipped, so we had a couple years where we could not get
traction and get it baselined.
After we launched this Zvezda module, the program manager,
Tommy Holloway, who I do have faith in, took a look at the
monthly charges, and they were not coming down. He then took a
look at the threats and liens, and there were a number of
additions put in. They started doing a bottoms-up cost estimate
sometime in late summer, September, October, the results of
which we had in January.
I was briefed, I think December 12, and I was told of this.
I advised them to just openly talk about it. Do not go back and
beat people up and get them to be quiet, but let all the data
come out so we understand it.
The basic issue is there are a lot of things we did not
understand about space operations. Optimism. I will accept that
criticism. The dilemma was it is the continual operation in
space that we had never undertaken. The operational tempo, the
number of missions we had. We underestimated the logistics. We
underestimated the operating costs. We had a lot of software
integration problems, which is not uncommon with the rest of
the industry, and the software/hardware integration probably is
a place where we need to be able to develop better cost
estimating tools. That is how it happened. Saying that, when we
presented it to the administration, they were very clear, and
they said, we will not have a $4 billion cost overrun. The
guidance we got was to define a core vehicle that we could
deliver that will meet three principal needs: world-class
research, permanent presence of humans in space, and satisfy
our international partners in terms of the hardware they have
to deliver to orbit. We put together such a program. We went
back and we scrubbed a number of elements.
They also went on to say that what they wanted us to do is
to see where we could have reforms and efficiencies, be more
crisp in our cost definition, and then as we get better cost
confidence, retire the technical risks, and through these
efficiencies, have money available, to start reinstituting the
Habitation and the Crew Return Vehicle.
In essence, what we have done is we have put on temporary
hold the remaining high-risk, high-cost consuming elements
until we get that station up, and then we can bring on other
approaches. In addition, they gave us permission to go out and
talk to some of our international partners and seek more
international involvement in building some of this equipment.
This is all ongoing now.
And finally, I believe I outlined some of the cost
approaches we have taken in getting better visibility, and we
will be briefing your staff on a monthly basis based upon these
meetings that Mr. Rothenberg will be holding here in
Washington.
Senator Bond. I appreciate that. I trust you will be
looking elsewhere than Moscow for those additional elements.
Mr. Goldin. I think those additional elements might come
west of Moscow.

Habitation module/crew return vehicle

Senator Bond. You mentioned the basic mission of the
station. As I said, I understand that you had to get certain
things under control and cut back. But the decision by the
administration to suspend the Habitation Module and Crew Return
Vehicle because of the cost overruns concerns me that it will
preclude, for a long time, the effective utilization of the
station for science research. The lack of either the Habitation
Module or Crew Return Vehicle, as I understand it, means that
only three crew members can be on the station at any one time,
and with two-and-a-half members to operate it, you have got a
half a crew member doing all the science.
How are we going to get back to the place where we can be a
world-class in-orbit science platform with the ISS?
Mr. Goldin. First let me say we made a commitment through
2002 to deliver 10 of our 27 research racks to orbit. They will
be there. We plan through 2004 to have only three crew on board
to do world-class research, so we have time to go work the
problem. That is the important point I think you ought to note.
So, we are on track through 2004 to being able to do what we
said we are going to do on research.
Senator Bond. So, that one-half a crew member can do the
research that is needed in this time frame?
Mr. Goldin. In this time frame. That was planned.
We are now looking at other approaches. We are developing
the X-38 to try and retire the technical risk and see how much
it is going to cost, do we understand it? Are the Europeans
willing to put significant money into the X-38 and perhaps take
a leadership role? We are going to be doing this over the next
2 years. Within about 2 weeks, we are going to announce an
award of a contractor that we will be asking to start making
cost estimates on the CRV based on the X-38 work. It will be a
low-level contract. So, we believe within a year or 2, we may
have a solution to the CRV, and we have time to work on it.
Now, the one thing that would be beneficial, but at the
present time inappropriate, to get extra crew on board that
vehicle because we can do temporary habitation with what we
have, would be to use the Soyuz vehicle. But at the present
time, in good conscience, I could not recommend to this
committee or to the President of the United States until I see
a change in the Russian behavior that we should even consider
that Soyuz vehicle.
Senator Bond. I will have a CRV question. Let me turn now
to Senator Mikulski.

Crew return vehicle

Senator Mikulski. Well, I think many of Senator Bond's
questions were my own.
I am going to pick up on the CRV. As you indicated,
deferring the Crew Return Vehicle is going to limit the number
to three of the astronauts who are going be on the station. I
thought it took, again, two-and-a-half people to do the
operations of the station. That leaves a half a person to do
research. I do not understand how a half a person can keep us
on our research line. Does this not have a tremendous reduction
in biological and physical science research that is done? The
University Space Research Association has a lot of raised
eyebrows about this.
Mr. Goldin. Again, let me say we only planned on having
three people through at least 2004. That has not changed, and
we have selected the experiments in that time frame,
prioritizing biomedical research as our first priority. That
was in the basic plan. The 10 racks we had talked about taking
up are on schedule to get up there. What we are trying to do
now with the time we have available is see what alternate
possibilities we have. We are looking at a variety of things
such as perhaps an extended duration orbiter (EDO) that will
have crew up there.
But the real problem we have is we need to see how we could
reconnect with the Russians because, under some conditions,
being able to have an additional Soyuz or two could give us
that additional three people. But right now that is the only
other vehicle to get up there, and I could not recommend to
this committee that we should do that.
Senator Mikulski. Well, we always, of course, have to be
concerned about the safety of our astronauts and their ability
to leave quickly. I know the CRV was meant to be like a large-
scale lifeboat.
Am I right in thinking that Mr. Tito returned in a Soyuz?
Is that what he came back in?
Mr. Goldin. The space tourist came back in a Soyuz vehicle.
Senator Mikulski. Because there is another Tito that died
and created a lot of problems. At one time it was called
Yugoslavia.
But he came back in a Soyuz.
You know how frustrated I have been with the Russians for
many years in this. But I think we really do have to explore
what they could offer and in some ways begin to make it up to
us. I think the way they work their way back home is to start
doing very specific things to make it up to us.
The other thing I have been concerned about is if we only
have one vehicle to return--I am thinking of a ship. You always
have more than one lifeboat in a ship. You do not have one
lifeboat to get everybody off. You have several lifeboats. My
question would be, during this time while you are working on
the CRV--and I do not know this and we can talk about it in
another forum--but where you would have more than one Soyuz
there.
Mr. Goldin. The answer is before this stress built up, that
was the direction we were looking at. We had an issue that we
had to undertake and we needed to explore the possibilities
with the administration and the Congress because of H.R. 1883,
the Iran Non-Proliferation Act of 2000. However, we did not
expect the CRV, under the best conditions, until 2005-2006
anyhow and we were exploring that possibility.
But let me provide a little context to this so you
understand what has happened with the space tourist going up on
a schedule that he demanded, not what we recommended from a
safety standpoint.
Senator Mikulski. No, not on my time. The Russians have
already ruined a lot of things for me.
Mr. Goldin. No, but I wanted to say there is a stress, and
we are now in the process of trying to reconnect with the
Russians, reestablish credibility and explore possibilities
like you are suggesting. But until we do some team-building and
get confidence, we cannot talk about buying a Soyuz.
Senator Mikulski. No, I understand it. I am just throwing
out a conceptual idea. Oh, no. I do not think they understand
the consequences of this.
However, let me ask about the Space Station before I move
on to earth science. We have had so many redesigns, replans,
and reconfigurations. Can we truly say to our colleagues, as we
take our appropriations bill to the floor, is this really it,
or is it going to be a series of continuous surprises under
every rock? Really. I do not know how many redesigns and so on
I have been through.
This is not a woodshed conversation, Mr. Goldin, but I
think you can understand how troubled we are. Really, it is
Bond and Mikulski who have to explain this to our colleagues.
Mr. Goldin. Let me present a few pieces of information to
you. Since 1994, if you take a look at the budget, we have had
a 12-percent increase while we built 90 percent of the hardware
for the station. The way we calculate the cost of the station
is we take a look at the schedule. So, because the schedule has
slipped out, it has driven a lot of costs up. We have gone
through it and we have taken some very tough steps saying we
are going to stop the remaining high-risk development tasks and
will not restart them until we have confidence in those
numbers.
Senator Mikulski. So, you do not know if this is it.
Mr. Goldin. I think we have a good idea this is it, but we
will not start those tasks unless we know we really have the
costs under control. There are estimates on the CRV that say
they could save us an enormous amount of money, but we are
reluctant to say that until we understand what those costs are.

Earth science

Senator Mikulski. I think the station is an ongoing
conversation. I am just looking at my yellow light here.
Let us go to earth science. As I understand the 2002
budget, it proposes to cut NASA's earth science by $200
million, or 12 percent. Could you go into that in more detail
and what this would mean for EOS activities and what impact
this would have on Goddard?
Mr. Goldin. Well, to the first order, this budget now
contains, in a 5-year run-out, the second phase of EOS. So, if
you take a look at the run-out, we have added $1.4 billion of a
whole new set of starts. Seven new spacecraft are in that
budget.
The drop in this year's budget was a combination of
effects. One is EOS phase 1 is beginning to come down, and we
are starting the EOS phase 2, starting to come up. I think that
is the biggest impact.
In terms of the impact on Goddard, I think it has an
unbelievable future because of the commitment to start the
second phase of EOS. So, I think there is a rosy future, not
just for your constituents at Goddard, but researchers around
the country.
Senator Mikulski. Yes. Well, that is what we are also
interested in.
I note that my time is up, and I know Senator DeWine has
been waiting patiently.
Senator Bond. Thank you, Senator Mikulski.
Senator DeWine.

Combustion and fluid physics research program

Senator DeWine. Mr. Chairman, thank you very much.
Administrator Goldin, I want to talk a little bit about
combustion and fluid physics research programs. This is,
frankly, the type of research that has caused me to support the
Space Station program in the past. It is cutting edge. It has
such promise for benefits here on earth at a time when gasoline
prices are soaring, the public is increasingly concerned about
air pollution, global warming.
Beyond that, it is my understanding it is on time, on
budget, has won awards and recognition, both NASA and outside
experts, and the Destiny module is simply waiting for these
payloads.
Yet, because of problems, the combustion program is being
eliminated, the fluid research program is being crippled. I am
concerned, frankly, that if NASA is doing this to these
programs, it does not have its priorities correct. I wonder if
you could comment on that and tell us a little bit about how
you set priorities and maybe comment about my criticism of what
you all are doing. Or else, tell me you are not doing it.
Mr. Goldin. What I could say to you is you have every right
to be concerned, and I do not take it as a negative comment.
The dilemma we have is we have over the years had to live with
a fixed budget. I want to show you one chart for the big
context. Then I will come back and answer your specific
question. Could we put up that budget chart?
We constantly have to work on priorities. NASA does
wonderful things, but here is what I would like you to consider
is the dilemma that NASA has that I do not think any other
high-risk agency has had to face. If you look at the blue line
at the bottom, that is the NASA budget normalized to fiscal
year 1993. So, fiscal year 1993 is 1.0. So, after about a
decade, we are just about where we started.
Senator DeWine. I get it. I understand what you are saying.
Mr. Goldin. What I want you to understand, we have learned
to prioritize. Our priorities in Space Station research are
biomedical, biotechnical, and physical research.
Now, saying that, those are the priorities we set up. We
are having the Academy look at those priorities. It is not just
going to be NASA. We are bringing outside review.
Senator DeWine. And I appreciate that. Just for the record
I have this concern. I wanted you to understand that.
Mr. Goldin. But I also want to say we have not made the
final decisions on the research, and we have about another 2
months of going through this process to see, given the budgets
we have, what can we do.
Senator DeWine. I appreciate that.
Mr. Goldin. By the way, the combustion research is
important to us in space because if a fire breaks out, we have
to know how to contain it in zero gravity.
So, we agree with what you are saying, but it comes down to
priorities. I do not want to say it is dead; I do not want to
say it is alive. I want to wait until we are done with the
study.

Glenn research center (GRC)

Senator DeWine. Here is one vote for alive.
Last fall, Director Venneri came to my office in Cleveland
and promised to augment the Glenn Research Center's budget by
$250 million over 5 years. This so-called ``get well'' package,
as it was termed, was to include $31 million above and beyond
Glenn's 2001 budget. According to my information, prior to my
meeting with him, Glenn's overall aerospace technology code R
budget was to have been $278 million. After September, Glenn's
overall aerospace technology budget was $285 million. The
funding that was promised at that meeting, $8 million for the
RLV air-breathing propulsion design program, $10 million for
the revolutionary aerotech concepts and $13 million for
advanced energy systems, did certainly come about.
However, I am concerned that $8 million was taken from
Glenn under the innovative third generation propulsion, $1.2
million was taken from other propulsion and power systems,
another $13 million was taken from other space-based research.
I wonder if you can explain this. Frankly, it is important
to me because you all represented to me and came to my office
prior to the release of the administration's budget and
indicated that, while Glenn would lose around $52 million from
its, for lack of a better term, baseline budget, headquarters
was planning to augment that by $40 million. What is the deal?
Mr. Venneri. Yes, Senator, everything you said, the
statements and facts are correct. So, I am not going to repeat
your comments.
Senator DeWine. But you agree with the facts, though. We
have got our facts straight.
Mr. Venneri. Yes. The work that we defined in the fall that
added to the $250 million increase is still in the budget. That
work is still there. Unfortunately, other reductions occurred
in our 2002 budget that did not stop what we added, but other
things were pulled out. The reduction in the overall Glenn
budget is approximately $51 million from 2001 to 2002. About
$34 million of that is associated with my enterprise. The other
activity is projected to be the microgravity work you were
referring to. We are in the process now of dealing with things
in the aerospace technology that mitigate and minimize that
impact. Some of those reductions, though, extend into other
activities at universities. One, University of Maryland, in
Alabama. These are things that have us troubled because----
Senator DeWine. Excuse me. I am going to run out of time
here, but I was talking about the 2001 budget. You are not
talking about the 2001 budget.
Mr. Venneri. No. In the 2001 budget, we did what we said we
were going to do. It is the 2002 budget where the problems are
coming up.
Senator DeWine. So, you agree with the facts that I
recited.
Mr. Venneri. Yes.

Polymer energy rechargeable system/glenn microsystems initiative

Senator DeWine. I will follow up with you. Let me move on
because I am going to run out of time.
Let me say I was dismayed at two of the programs that were
terminated by NASA that involved collaboration between Wright-
Patterson Air Force Base and NASA Glenn. The polymer energy
rechargeable systems and the Glenn microsystems initiative are
providing benefits to NASA, DOD, and have great promise,
frankly, for the public at large.
In an era of tight budgets, these programs allow NASA to
leverage other agency dollars, other facilities and research
areas, and yet NASA is not supporting these programs to their
planned completion. Again, I wonder if you could comment on
that.
Mr. Goldin. That was carrying straight out administration
policy of not extending from fiscal year 2001 to fiscal year
2002 any earmarks that were in the program or space mandates.
That was mandated policy and we did exactly what the
administration asked us to do. And it is not just NASA; it was
across the whole administration. That was not done with
prejudice. We believe those programs are good programs, but we
are carrying out administration policy.
Senator DeWine. I see my time is up. Thank you, Mr.
Chairman.

Crew return vehicle

Senator Bond. Thank you very much, Senator DeWine.
Going back to the Crew Return Vehicle, before the cost
overruns, I understand NASA was looking to spend upwards of $1
billion for a Crew Return Vehicle using the X-38 technology
test bed. That seems awfully expensive to me. The Soyuz has
some problems but it seems to be a lot cheaper.
Can NASA not develop a CRV, a plain vanilla escape vehicle,
based on current technologies and what we know about the Soyuz?
You have done everything else. Why can we not get it for less
than $1 billion?
Mr. Goldin. First, let me say the cost of the Soyuz is a
recurring cost now, and they are not amortizing the development
cost. That figure includes development plus building of four
vehicles. So, I do not think we are comparing apples to apples.
The second thing is the Soyuz has to be replaced every 6
months, and that is a huge logistics. Our vehicle is good for 3
years.
Third, to be able to buy the Soyuz is not the right thing
to do right now. So, we felt we needed an independent vehicle.
We think there is a chance of doing it for less, but it could
be more. That is why we want to hold off and make sure we
understand the costs before we commit.
Finally, the Soyuz does not meet the medical requirements
that we set up. In case there is an astronaut that is hurt on
orbit or very, very sick, we wanted a very low g when they
land. The Soyuz has a very high shock. So, we collaborated with
the medical community to develop a vehicle that had a much
lower shock level. Again, every country does it differently,
but we put a very high emphasis on safety of the crew members.
Senator Bond. I certainly was not implying that we needed
to be putting more money in the Soyuz.
Mr. Goldin. I am just a little nervous about that subject
right now.

Space tourism

Senator Bond. It would seem to me that if we are going to
have to make sure that we can conduct our space missions and
our science missions, that we are going to have to have a
dependable vehicle that meets our standards.
Again, we are at the mercy of Russia because of the
emergency escape vehicles, and I am very troubled that Russia
has already indicated its willingness to act unilaterally. We
have gone the extra mile to keep Russia in the ISS program,
including providing $800 million to help support Russia for its
Space Station cooperation. But then Russia's actions in
demanding a space tourist and stating that they were going to
launch when, I understood it, we did not feel it was
appropriate to launch. They wanted Russia to take care of their
tourist schedule. That certainly runs counter to the spirit and
intent of the entire partnership agreement. In my mind, it
undermines the whole rationale for the station as a world-
class, international cooperation, on-orbit science platform.
I know there is supposed to be a new agreement process to
review any requests for paying tourists, but what guarantees do
we have that the Russians will not pull this kind of stunt
again, either with a tourist or something else, or make any
other unilateral demands? Is there a way we can get a handle on
this partnership?
Mr. Goldin. We had some very frank and candid discussions
over the last few months, and I saw a distinct change when the
Russians agreed to go through the formal process that we set up
almost 6-7 years ago on how to handle it. Then when the
Russians wanted to launch the Soyuz and we had a safety
concern, I spent the evening talking to my counterpart, Uri
Kopchev, who was very gracious and resolved the issue so we
would not have a potential safety problem.
I think both of us have to back off from rhetoric. We are
going to be working together for a number of years, and we are
beginning a number of team-building efforts to pull back from
the stress that built up over this activity. But the Russians,
over the last few weeks, have shown every indication they want
to work with us in a calm, professional manner, and I think--I
cannot guarantee it--we will be over it, and only the next 2-3
months will tell whether we are there.
Senator Bond. I understood that the Russians went ahead,
despite our objections, in launching, without delaying the Tito
trip for several days. Are you indicating that the questions
you had about the safety, in terms of timing of the launch, had
been resolved to NASA's satisfaction prior to the launch?
Mr. Goldin. Yes, sir. What I had talked to Mr. Kopchev
about was the fact that they had a variety of reasons for
launching, some of them technical, but not all. Mr. Kopchev
agreed that the Soyuz vehicle would not dock with the Space
Station until the shuttle pulled away. That I felt was an
adequate and realistic safety compromise, and I congratulated
him for his leadership. There was some communication problem
and some of the operators were not aware of it, but we got back
together and we resolved the issues. So, I think we are on the
road to solving this problem.

Computer software/loud noise/vibration problems

Senator Bond. Another area. I am disturbed by the anecdotal
reports that the station has serious computer software
problems, consistent loud noise, continuous vibrations. How
serious are these problems? Do they pose a risk to the crew and
the station? What are you doing to address these problems?
Mr. Goldin. First, we have mapped the noise in the station.
The laboratory and the node are quiet, very quiet. The service
module is noisy. The Russians are taking steps to put noise
suppression into the service module.
There were vibration problems in some of the fans that the
Russians provided, and they are taking steps to reduce the
vibrations from the fans.
Finally, with regard to software, that I believe--I was
asked a question about cost. That is one of the areas that we
are on the cutting edge. When we went to Mars with Pathfinder,
we had 160,000 lines of code. We have 3 million lines of code
in the Space Station. This is probably the toughest problem not
just for NASA, but for the whole industry. The overall high-
tech industry could tolerate software failures. You know, your
phone clicks off, you turn it back on. Your computer locks up,
you turn it back on. NASA could allow zero failures.
We just had what I consider to be a very serious failure on
board the station just when the crew was ready to pull away. We
have three computers. It is called dual fault tolerance. What
happened, we had one failure that cascaded, so all three
computers shut off. There should not be a cross coupling and we
do not understand it. We have a whole team of people going at
it.
However, this is the kind of problem that we have to deal
with, and towards that end, after the Mars failures, we
recognized that we would have bigger and bigger software
problems. So, at NASA Ames we set up a high dependability
software consortium and we are working with the top software
firms in America, Carnegie-Mellon University, University of
California to try and get at these things. I have to tell you
the software industry is just delighted to be working with us
because these are problems common to all, and NASA is on the
cutting edge. So, this is the approach we are taking, but I
have got to tell you we are going to have more and more of
these problems as we go to digital systems, and we will have to
grin and bear it.
Senator Bond. Thank you, Mr. Goldin.
Senator Mikulski.

Space tourist

Senator Mikulski. Thank you, Mr. Chairman.
Chairman Bond really followed a line of commentary and
questions on the space tourist, but I just want to say this.
When this happened, I was pretty volcanic, but I held my fire
because of two things. One, we have a new president, and he is
establishing his foreign policy and his relationship with
foreign leaders. Russia is very important in this geopolitical
new world order, and it was not the time to be a unilateral
Secretary of State for Space. If it happens again, I intend to
go to the President of the United States about this because I
think it is demeaning to our space program and I think it does
place threats and stress. So, the Russians need to know this.
I think we were all caught by surprise. They acted
unilaterally. We are creating a climate here, and I think our
President has to do more than find his footing in foreign
policy and I look forward to working with him on it. The Space
Station was a concept of Ronald Reagan, and President Bush's
dad pulled us together to find a revenue stream for the
station. There would not have been a Space Station without
President Bush I, if I might say.
So, I am a team player here, and I will never jeopardize
America's foreign policy, but I am just not going to be silent
or tepid about this should it happen again. I am speaking
really to the Russians through you in this hearing.
So, that is where I am on this. So, let us hope it does not
happen again.
Have you received assurances they are not going to do it
again?
Mr. Goldin. I have had discussions with my colleague. The
good news is after we got over this unilateral approach, due to
a variety of stresses, some induced by the space tourist, the
Russians sat down with our people and we went to the formal
process through the----
Senator Mikulski. But, Mr. Goldin, did they or did they not
give you assurances that they would never do this again, acting
unilaterally?
Mr. Goldin. Yes, they did. Now, there is a difference
between a desire to do something and the ability to make it
happen. So, what we have to do is work to see how we go in the
near term. I can tell you have been monitoring the press
reports. I have been monitoring the meetings we have been
having with our Russian partners, and there has been a very
cooperative spirit in working with them lately. I cannot
guarantee what is going to happen in the future.

Earth science budget

Senator Mikulski. But they need to know this. I believe we
would be really operating on a bipartisan basis on this.
But let me move on here. Let me go back to the earth
science budget, Mr. Goldin. I note that it is being reduced
this year while space science goes up. That is where the
confusion was for a moment.
But why does the budget run-out over the next 5 years show
flat funding for earth science? In other words, is that where
we are going to be, flat funding for earth science?
Mr. Goldin. What it reflects is the phase-down of the EOS
phase 1, the phase-up of EOS phase 2, which is at about the
same level of funding, and it reflects administration policy as
to the level that earth science ought to be funded at.
We have seven spacecraft in there, and there are four other
measurements that we would like to make. Those measurements are
not mature enough to be put into the program, and I believe we
will be exploring those possibilities for other new starts in
the phase 2 program in the fiscal year 2003-2004 budget.

Space launch initiatives (SLI)

Senator Mikulski. I would like to turn now, if I could, to
the Space Launch Initiative. I know that NASA spent about $1
billion on the X-33, and then it had to be canceled for obvious
reasons. And I am not disputing the decision. But where do you
see yourself going now in terms of the Space Launch Initiative
in which we would be developing a next-generation reusable
launch vehicle?
There are concerns that when the SLI program selects one or
more candidate designs in 2005, the industry will not be able
to raise sufficient money to develop the reusable launch. I
think we all would agree this is a very important program. I
wonder where are we going from here with the cancellation of X-
33, and then there are concerns in the private sector about how
we can again get ourselves underway.
Mr. Goldin. There has been an enormous change in the
marketplace in launch. Just 3-4 years ago, there was the
expectation of thousands of launches to low earth orbit, and at
that time, the private sector was saying, Government, just kind
of reduce the technical risk for us and we will go develop the
systems. The commercial market fell out.
We now are taking a good, hard look at it, and in the Space
Launch Initiative, which is almost $5 billion over the next 5
years we are saying we do not want the contractors to spend a
nickel of their money. It needs to be Government funded. It is
a modest program that is going to go at the 10 critical
technical areas. It is not a vehicle. It is trying to retire
the technical risks so that by the middle of this decade, the
industry and the Government can make a calculated decision. If
the commercial marketplace comes back, then they could go
develop it. If it does not, mid-decade the United States
Government to meet NASA's unique needs--we want to make the
vehicles 100 percent safer for the astronauts at one-tenth the
cost. I believe mid-decade, if the commercial market does not
return, we are going to have to put in a significant addition
to the money to pay for the full development of these systems.
All we are doing now is saying, over the next 5 years, we are
going to not have industry put in so we can share the data with
everyone, small companies, big companies, and jointly make a
decision mid-decade.
Senator Mikulski. So, you are laying the groundwork for a
decision.
Mr. Goldin. We are laying the rails down now.
Senator Mikulski. Well, with the collapse--or let us say
the downsizing of the commercial launch industry, even some
would say the collapse, this brings me to a question about
Wallops. You worked very hard with Senator Warner and myself to
develop a vision for Wallops. It was to be a new partnership
with private industry to promote commercial launch services.
Well, your assumptions and predictions did not materialize
because the marketplace changed. What have you thought about
for Wallops, and if you have not, will you do so so that we
could talk about it, say, between now and the end of June?
Mr. Goldin. First, let me say your word ``collapse'' is
absolutely correct. I do not think that Boeing and McDonnell-
Douglas are going to be making money on their huge investments
in the Atlas 5 and the Delta 4. It breaks my heart. I was out
there with you at Wallops and we put together this Vision 2000,
and we were going forward.
We have a plan, which I am going to submit for the record,
talking about how we are going to now look at Vision 2005.
Wallops has incredible skills. For example, we are going to see
if we can have this ultra-long duration balloon technology
applied to perhaps a balloon mission on Mars. So, we are
talking about having them work with the Jet Propulsion
Laboratory (JPL) on future missions.
Senator Mikulski. Well, I can assure you at Wallops they do
know metric.
Mr. Goldin. Yes.
Senator Mikulski. Sorry. Well, no, I am not really sorry
about that.
Mr. Goldin. There are some other tasks. Wallops is
developing some incredible new advance range technology. They
have a system that they proved on a sounding rocket that has
the rocket call home through commercial communication
satellites that may greatly reduce the cost of launch. So, we
are looking at bringing them into the Space Launch Initiative
not as an operating center, but as a technology development
center.
Senator Mikulski. So, you do have a plan that you want me
to look at?
Mr. Goldin. Yes, and we would like to submit that for the
record.
Senator Mikulski. Submit it for the record.
Senator Bond. Without objection, it will be accepted.
[The information follows:]

Aeronautics Vision for the 21st Century

aeronautics is vital to the nation
Aeronautics is a key to National security, transportation mobility
and freedom, and quality of life. Air superiority and the ability to
globally deploy our forces are vital to National interest. The role of
air power in winning the Gulf War is a clear reminder of the importance
of aircraft in major conflicts. Aviation is a unique, indispensable
part of our Nation's transportation system, providing unequaled speed
and distance, mobility and freedom of movement for our Nation. Air
carriers enplane over 500 million passengers and fly over 500 billion
passenger miles, accounting for 25 percent of all individual trips over
500 miles, 50 percent over 1,000 miles and 75 percent over 2,000 miles.
Air freight carries 27 percent of the value of the Nation's exports and
imports and is growing at over 10 percent annually. Global
communications, commerce and tourism have driven international growth
in aviation to 5 to 6 percent annually, well beyond annual Gross
Domestic Product (GDP) growth.
Aviation employs 800,000 Americans in high quality jobs, second
only to trucking in the transportation sector. Driven by technology,
annual growth in aviation labor productivity over the past 40 years has
averaged 4.6 percent, compared to 2 percent for U.S. industry as a
whole. For example, technological advances over the past 40 years, many
of them first pioneered by NASA, have enabled a ten-fold improvement in
aviation safety, a doubling of fuel efficiency with reductions in
emissions per operation, a 50 percent reduction in cost and an order of
magnitude reduction in noise.
Aviation manufacturing is a consistent net exporter, adding tens of
billions of dollars annually to the Nation's balance of trade. Aviation
produces and uses a broad base of technologies--from computing and
simulation to advanced materials--supporting the high technology
industrial base of the country. Defense aviation provides fast,
flexible force projection for the U.S. It is unparalleled globally
because it employs the most advanced technology.
Aviation is central to personal freedom, security of the citizens
and the global movement of people and goods in the new economy.
Mobility is synonymous with freedom. The ability to move freely and
efficiently from place to place is a right highly valued by U.S.
citizens. Mobility requires transportation that is inherently safe,
available on-demand, and affordable. National security and the economic
health of the country are heavily dependent on aerospace systems.
The U.S. is the global leader in aviation. From every aspect--
technology, products, services, aviation standards and procedures, and
National defense--the U.S. sets the mark.
major challenges to overcome
A new revolution in air travel is far from assured. Unless we act
decisively to overcome major barriers, the future can be one of
disintegration and decline. Any plan for progress must be based on a
sober realism about the current status of the aerospace system, as well
as the Government and commercial stakeholders associated with it.
Both military aerospace research and development (R&D) and
procurement have declined, reducing the ``technology pull'' from the
military sector. In past decades, the motivation for advances in
aerospace technologies was dominated by military needs. The partnership
among NASA, DOD and industry rapidly advanced, matured and integrated
aerospace technologies. These technologies were then appropriated for
commercial use, with great success. Examples of this process abound.
The turbine engine introduced on the B-707 was originally designed for
military aircraft. The Pratt & Whitney J-57 and the General Electric J-
79 engines were also originally developed for military use before
leading to commercial derivatives. Beyond this, the B-707 airframe was
developed jointly for a commercial transport and for a military tanker.
The DC-10, L-1011, and B-747 were developed based on research into
wide-body aircraft, while competing for what became the C-5A military
transport contract. In an additional significant development,
revolutionary fly-by-wire flight controls were developed and first
adopted for U.S. military aircraft, and Boeing is now incorporating
fly-by-wire into its newest commercial aircraft.
Although the increasingly competitive marketplace demands an
accelerating pace of technological innovation, the opportunity for
commercial industry to draw on defense-related R&D is decreasing.
Military aerospace sector is a much smaller share of the overall
aerospace market. Furthermore, military spending has been focused on
sustaining the current fleet at the expense of research and technology.
In 1971, the military accounted for 55 percent of the overall market
and by 1997 it was down to 34 percent. For turbojet engines, the
decline is even more dramatic. For example, General Electric Aircraft
Engines shifted from 70 percent of their business being military to
about 20 percent. And for Pratt & Whitney the situation is very
similar.
Furthermore, during the 1950's there were 45 aircraft development
programs--during the 1990's there were only six. Far fewer developments
with protracted design and acquisition schedules--an 80 percent
increase in the development time for major DOD systems from 5.2 years
during 1965-69 to 9.3 years during 1990-94--are the result of
increasing system complexity and inefficiencies in design, development
and manufacturing. After the Joint Strike Fighter program, no major new
military aircraft development programs are on the drawing board. With
fewer aircraft developments, there are fewer opportunities for the
declining engineering experience base to develop design and production
skills, crucial in light of the increasing complexity of the systems.
The decline in exciting aerospace developments has also contributed to
the sharp decline in the enrollment in our universities' aerospace
engineering departments, further exacerbating the loss of engineering
talent.
The market shift from the military to the commercial sector as the
major buyer of aerospace products dictates a corresponding shift in R&D
strategy. Industry consolidation--from 25 aerospace corporations two
decades ago to four today--has contributed to the substantial reduction
in the infrastructure that supports aeronautics research and
technology. Driven to the near term, industry has reduced research to
three percent of sales, down from 5.5 percent just two years prior.
Therefore, at NASA, we shifted our technology development toward
revolutionary long-term, high-risk civil needs, while maintaining a
strong partnership with DOD to ensure the sharing and application of
technologies across military and commercial requirements.
Commercial markets are projected to be extremely large over the
next decade. These projections are based on the assumption that the
current aviation system can support unconstrained growth. But, just as
the Nation (and the world) becomes more dependent on moving people and
goods faster and more efficiently via air, important obstacles have
emerged. The air traffic and airport systems in both the U.S. and
overseas are reaching full capacity. Delays are increasing. Each year,
airlines must add more ``padding'' to their schedules to maintain on-
time performance and the integrity of their scheduling systems, while
facing more congestion in the system. At the same time, legitimate
concerns over environmental issues (e.g., noise and emissions) are
preventing additions to physical capacity. In 1998, airline delays in
the U.S. cost industry and passengers $4.5 billion--the equivalent of a
7 percent tax on every dollar collected by all the domestic airlines
combined. Several key airports are unable to gain approval for projects
to expand infrastructure because they are in non-attainment areas,
where National objectives to reduce emissions have not been met.
Therefore, we are seeing constraints to growth that could threaten the
commercial prospects of our aerospace industry as well as impact the
integrity of our transportation system.
Today, these problems are even more acute than in the past.
Shortfalls in capacity (i.e., airports, air traffic control and vehicle
capability) and problems with the environment are not easily addressed
in the private sector. The resulting delays, and noise and emissions
pollution are not even priced in the market place. These problems are
termed ``externalities'' since, unlike other costs, no market
participant pays directly for them. As a result, the private sector has
inadequate incentives to address the very real problems imposed by
aviation on third parties.
As the long-haul jet transport has in effect become a commodity in
the marketplace, commercial operating margins have become razor-thin.
And, although the dollar value of the U.S. share of the world aerospace
market has been increasing, the size of the U.S. share of that market
has been markedly declining. From about 70 percent in the mid-1980's,
it is about 50 percent today, in part because of the development of new
programs overseas. Future market share could decline even further as
European competition becomes more aggressive. In this environment, U.S.
industry has developed an increasing number of international
partnerships, both in technology and product development. And while
there may be positive aspects of this trend, failure to manage it
appropriately may in the long run place at risk a technology base
critical to our National defense and quality of life.
America should not be lulled into the false security that the U.S.
will continue to be the leader in aeronautics. The Europeans have
reached parity in civil transports, and are on a path to forge ahead of
the U.S. The Japanese have shown significant interest in supersonic
transports, an area that the U.S. has stopped twice over the last four
decades. If we lack the vision, not only will we lose the civil
industry, but also we will be fighting battles with out-dated F-18s and
joint strike fighters, and taking our vacations on foreign transports.
The confluence of challenges facing aviation is serious. Overcoming
these challenges will require leadership and a long-term perspective to
shift to a new paradigm that will enable renewed growth and benefit.
The vehicle possibilities defined by the technology horizon are
exciting, but will require intensive, long-term research programs to
achieve.
a new vision for continued vitality
All the improvements made over the last 40 years have given us the
most modern aviation fleet operating in the safest aviation system in
the world. NASA has been a major contributor to these improvements. The
Federal Aviation Administration's National Airspace Modernization plan
had its roots in the far thinkers of NASA's research centers. NASA
demonstrated, despite many doubters, that wind shear could be detected
with sufficient warning to safely avoid the weather phenomena that
resulted in many aviation fatalities. Today, wind shear warning is a
standard on all commercial transports. We have been a major participant
in all military aircraft developments and provide technical expertise
for resolution of in-service problems. The F-18 E/F was in jeopardy of
being canceled due to the difficulty posed by severe uncommanded
aircraft maneuvers caused by massive separated flow over the wing until
our engineers devised a porous fairing that acted as an ``air dam'' and
prevented the problem. The NASA-led Advanced General Aviation
Technology Experiments (AGATE) consortium resulted in the development
of many pre-competitive technologies and provided part of the impetus
behind the revitalization of the general aviation industry.
However, the emergence of the revolution in biotechnology,
nanotechnology, and information technology represents the dawning of a
new era. This new era has the potential to enable revolutionary changes
in aviation. We stand on the verge of a totally new paradigm for
aeronautics--a new ``golden age of aviation.''
Today most passengers pass through only one percent of our Nation's
airports on aircraft that weigh twice as much, use 75 percent more
fuel, and create four times the noise than what is possible. For these
aircraft, in which routine, scheduled maintenance is the current
practice to ``catch'' problems that develop in service. Our vision is
on-board ``intelligence'' to monitor their health and to predict when
maintenance needs to be accomplished prior to problems occurring. In
some cases, aircraft could even have the ability to conduct self-
repair, providing orders of magnitude increases in safety and
reliability while vastly lowering operating costs.
The aircraft of the future will not be built from multiple,
mechanically connected parts. The aircraft will have ``smart''
materials with embedded sensors and actuators. Sensors--like the
``nerves'' of a bird--will measure the pressure over the entire surface
of the wing and direct the response of the actuators--the ``muscles.''
These actuators will smoothly change the shape of the wing for optimal
flying conditions. The control surface will be integrated with, instead
of an appendage of, the wing, as they are today. Intelligent systems
made of these smart sensors, micro processors, and adaptive control
systems will enable vehicles to monitor their own performance, their
environment, and their human operators in order to avoid crashes,
mishaps, and incidents. Distributed as a network throughout the
structure they will provide the means for imbedding a ``nervous
system'' in the structure and stimulating it to create physical
response and even change shape. They will also serve as the means for
sensing any damage or impending failure long before it becomes a
problem.
These future structures rely on an emerging technology that builds
the systems from the molecular, or nano-scale--known as nanotechnology.
Revolutionary new nanotechnology composites have the promise to be 100
times stronger than steel and only \1/6\ the weight. We are at the
leading-edge of this technology, transitioning from fundamental physics
to building actual macroscopic materials. Much work remains to be
accomplished. If we are successful, an aircraft made from this material
could weigh as little as half a conventional aircraft manufactured with
today's materials and be extremely flexible allowing the wing to re-
form to optimal shapes, remain extremely resistant to damage, and
potentially ``self-heal.'' The high strength-to-weight ratio of these
nano-materials could enable new vehicle designs that can withstand
crashes and protect the passengers against injury.
The application of high temperature nano-scale materials to
aircraft engines may be equally dramatic. Through successful
application of these advanced lightweight materials in combination with
intelligent flow control and active cooling, thrust-to-weight ratio
increases of up to 50 percent and fuel savings of 25 percent are
possible for conventional engines. Further advances in integrating
these technologies might result in novel engine concepts that simplify
the highly, complex rotating turbomachinery. Other future concepts
include alternative combustion approaches and the potential to move
toward hybrid engines that employ innovations such as pulse-detonation
engine core. Combined with intelligent engine control capability, such
an approach could able integrated internal flow management and
combustion control. It also has the potential to integrate both the
airframe and engine systems for unprecedented efficiency and
directional control capability.
To take full advantage of nano-materials, new computational tools
using the advances in information technology are required. Tools that
take advantage of high-speed computing will enable us to develop large-
scale models and simulations for the next generation of vehicles. High-
fidelity collaborative, engineering environments with human interfaces
will enable industry to accurately simulate an entire product life
cycle, dramatically cutting development costs and schedules. The
increasing performance demands and system complexity require new tools
to adequately predict the risk and life cycle costs of new aircraft.
New computing techniques and capabilities can be exploited to develop
robust designs by capturing knowledge and identifying trends to
anticipate problems and develop solutions during design rather than
after development. These simulations require tools that deal with the
increasing complexity of future systems and could offset the
diminishing design team experience base in this country. No longer will
we design the engine and airframe independently, but rather the
computational tools could allow fully integrated vehicle-engine design,
integrated health management, and management of the total vehicle air
flow both inside the engine and outside the aircraft. These new
integrated propulsion and vehicle technology advancements could not
only optimize subsonic flight regimes, with twice the thrust-to-weight
ratios, but also enable sustained supersonic flight with minimal impact
due to sonic booms or other environmental concerns for both civilian
and military applications.
In the very long term, comparable advances in electrical energy
storage and generation technology, such as fuel cells, could completely
change the manner in which we propel aircraft. Future aircraft might be
powered entirely electrically. In one concept, thrust may be produced
by a fan driven by highly efficient, compact electric motors powered by
advanced hydrogen-oxygen fuel cells. However, several significant
technological issues must still be resolved to use hydrogen as a fuel,
such as efficient generation and storage of hydrogen fuel and an
adequate infrastructure necessary for delivering the fuel to vehicles.
Success in this effort could end the Nation's dependence on foreign
sources of energy for transportation. Revolutionary technologies such
as these are prime areas for significant university involvement.
If we are successful, what will the vehicle of the 21st Century
look like? It will be radically different from the commercial transport
of today whose basic configuration has not changed since the
introduction of the Boeing 707 and turbojet engines in the late 1950's.
The design flexibility that the revolution in materials and computing
technologies provides could enable aircraft whose shape could change to
meet a range of performance requirements, for example, range,
maneuverability and radar cross-section. With new fuel cell power
systems, zero emissions may be possible, and the only noise would be
that generated by the air flowing over the vehicle. The wing shape may
be changed during flight to control the vehicle, eliminating the need
for the weight and complexity of flaps and conventional control
surfaces. These aircraft could be flown in an air transportation system
that allows hassle-free, on-demand travel to any location. The
beneficial variations are potentially limitless--truly revolutionizing
air vehicles, not only commercial and military aircraft, but also
personal air vehicles and the utilization of more of the 5,400 airports
thus providing service to small communities and rural regions that
today do not have easy access to air travel.
critical issues
We must reverse the decline in expertise.--There is a looming
crisis in U.S. expertise--from relatively inexperienced design teams to
reductions in research and development to reduced enrollments at
universities. Leadership is required to reverse this trend. We, in
partnership with the academic community, must begin developing a new
generation of scientists and engineers that blend traditional
competencies, such as aerodynamics, material and structures, and
guidance and controls, with the emerging competencies in
nanotechnology, biotechnology and information technology. We must also
develop the design tools and environments that will allow us to
integrate fewer and more specialized scientists and engineers into
effective teams capable of designing highly complex integrated
aerospace systems.
A plan for our National facilities is required.--Over the past
several years many reviews have been performed relative to our National
aeronautical facilities. There have been some closures and changes. The
real outcome of these studies has been the perpetuation of marginal
facilities through small, evolutionary change. As a result, we have
maintained the status quo instead of investing in the future. We must
finally put in place a plan that defines the facilities and
infrastructure that we need and deliver on this vision.
The high-risk, long-term vision requires reinvestment of government
resources.--The government's role is not to subsidize industry.
However, it is unreasonable to expect the private sector to make all
the necessary high-risk, long-term investments to achieve the vision.
Government will need to reinvest existing aeronautics research and
development resources in the basic research necessary to enable a 21st
Century aeronautics vision. Government aeronautics research should not
have a vista of less than 10 years. At the same time we must
restructure the public-private partnership to ensure the appropriate
cooperation and technology transfer.
blueprint for the future of aeronautics
NASA will deliver, by September 2001, a Visionary Blueprint for
National Aviation for the 21st Century. This blueprint will, within the
Administration's vision for the role of the Federal government,
establish:
--Clear National objectives for the future of U.S. aviation.
--Reinvestment of existing research and technology into revolutionary
new vehicle technologies.
--A plan for the infrastructure necessary to support the blueprint.
--A plan for working with universities to train a new generation of
scientists and engineers with the necessary multi-competency
skills.
--A plan for development of public-private partnerships required
ensuring the success of the blueprint.
The realignment of the fiscal year 2002 NASA aerospace research and
technology program is the beginning of this vision. The blueprint will
be prepared in concert with the development of the fiscal year 2003
budget.
We look forward to working together to develop the right
aeronautics program for the continued benefit of U.S. National security
and transportation mobility.

Senator Mikulski. Also I know that we could also look at
perhaps launching small payloads to the Space Station on a
short notice, particularly for an emergency resupply mission.
But I want to discuss it with you, and I also know that
Senator Warner and I am sure Senator Allen, as a former
Governor, would be interested. Wallops is in Virginia, but as
you know it is a Maryland-Virginia workforce. Senator Warner is
very keen about the viability of Wallops.
Mr. Goldin. We will come and present the plan to you before
the end of June.
Senator Mikulski. I think that would be good, and we could
again work on a bipartisan basis on this.
Senator Bond. Thank you very much, Senator Mikulski.
Senator Shelby.

In-space propulsion

Senator Shelby. Thank you, Mr. Chairman. I had to go to
another meeting, as we all do, and I apologize. I may have
missed some of these questions and also I missed some of Mr.
Goldin's testimony.
Mr. Goldin, travel times in space currently limit NASA's
mission of exploration. We have talked about this before. What
is NASA doing in terms of in-space propulsion technologies to
address these limitations, given budget limitations?
Mr. Goldin. We made a very hard decision in this year's
budget to add $310 million to in-space propulsion. We want to
go to the outer planets. It takes too long to get there. There
is fabulous science out there. Ultimately we are going to want
to send people to Mars. We do not want to spend 9 months to get
there, 9 months to a year. We want to get there in months. So,
we have reprogrammed about $310 million to take a look at this
very, very critical technology.
Senator Shelby. Is Marshall not central to this mission?
Mr. Goldin. Yes, it is.

Propulsion research infrastructure

Senator Shelby. Mr. Goldin, revolutionary advances in
propulsion will be required if NASA is serious--I say serious--
about its mission of exploring and developing space. I believe
NASA has to be serious.
What has NASA invested in its propulsion research
infrastructure, specifically facilities and equipment to enable
future, cutting-edge propulsion technology breakthroughs? You
alluded to that a minute ago.
Mr. Goldin. Yes. There is $8 million that we are going to
be spending this year and I believe another $2 million next
year. There is one issue that I would like to bring up here
because we have a good Senator from Ohio and a good Senator
from Alabama.
Senator Bond. We had a metal detector screening device set
up before we came in. We have taken appropriate precautions.
Mr. Goldin. My life is living hell.
Senator Shelby. But we are all friends.
Mr. Goldin. We need to get the Alabama and Ohio delegation
together. I spoke with Mr. Hobson from Ohio in Dayton. There is
a stress that I think especially in this area that if we could
have the help of both delegations, NASA would like to meet with
you, and then sort out the right place to do the right things
so our people will see the leadership working together. I think
that could do wonders in accelerating the pace at which we
could work. I would like to propose that before the end of June
NASA does the homework, we get our two center directors
together, and then we come and present to both delegations. It
will make my life so much nicer.
Senator Shelby. Would it make the mission stronger?
Mr. Goldin. Yes, it would. Yes, sir.

advanced Health monitoring system

Senator Shelby. We will work with you, as you know.
Mr. Goldin, could you explain how the advanced health
monitoring system for the Space Shuttle main engines will
improve shuttle safety?
Mr. Goldin. Yes. One of the issues we have today is we find
out that we have problems in the engines when we have a real
contingency in space and could not do anything or when we take
the engines apart on the ground and then we find the problem.
This is a revolutionary breakthrough where we are going to
monitor critical functions to predict incipient problems rather
than letting them happen. We are counting on this advanced
health monitoring system to go into the Space Shuttle main
engines to improve the reliability so when those astronauts go
to space, they will go with a much safer launch.

Microgravity research program

Senator Shelby. I want to get into microgravity research
that we have talked about on many occasions. It has been
reorganized and so forth. It seems that the low gravity in
space provides our Nation with an opportunity for significant
advances in materials processing on earth. It is crucial to our
manufacturing industry among other things.
What kind of assurance can we get from you today regarding
NASA's commitment to our Nation's manufacturing sector through
a vigorous materials research microgravity program?
Mr. Goldin. I wish on that one I could look you in the eye
and tell you we could do it. We have some very strict operating
instructions from our administration, our President.
Senator Shelby. I know that.
Mr. Goldin. And we have to go through this. We are going to
go through a process on the research over the next 2 to 3
months, come up with a plan, do the prioritization, see how
much money we could find. I will tell you that anything that is
not essential in the human space flight account--and by the
way, Senator Mikulski, we put a hard boundary. No money will
come from any science account, outside the Human Space Flight
account, to fund the problems we are having in the Space
Station. But within the human space flight account, we are
looking at shutting down facilities, shutting down advanced
programs to see how much money we could gather up to do this.
I cannot guarantee the results of this, but what I can
guarantee you is we will show you the resources we have
available. We are going to ask an external review panel at the
National Academy to take a look at it, and after they review
it, we will share the results with you. I agree with this
research.
Senator Shelby. It could be some of the most important
research, could it not, because of our manufacturing?
Mr. Goldin. For manufacturing. But again, we have a lot of
things to do. So, all I could say is we will work with you and
tell you the results of what we get within the budget that we
have.
Senator Shelby. Do you consult in any way with the U.S.
manufacturing community on any of this?
Mr. Goldin. Yes, we do.

privatization of remaining Space Shuttle tasks

Senator Shelby. In your testimony, Mr. Goldin, you refer to
the President's call ``for advancing the privatization of Space
Shuttle activities.'' Has NASA conducted or will you conduct a
cost-benefit analysis on the privatization of remaining Space
Shuttle tasks?
Mr. Goldin. We are taking a look at a broad range of
issues, some of which are cost-driven, others are policy-
driven. It will not only be a cost decision. We have
consolidated all the contracts except three, the external tank,
the Space Shuttle main engines, and the RSRM's, the solid
rocket motors.
We are trying to work with Boeing and Lockheed and the
United Space Alliance in seeing how we could get the safest
system possible at the lowest cost. We just do not have an
answer to that question just yet.
Senator Shelby. Do you think you will in months to come?
Mr. Goldin. I met with the CEO of USA. I met with the
leadership of Boeing and Lockheed. We hope, in the next 3 to 6
months, to see if we could get at it. The first item we are
looking at is the external tank.

NASA's space transportation mission

Senator Shelby. Mr. Goldin, this is in the area of NASA and
military space transportation synergy. For years, air
superiority has been critical for our military. Just yesterday,
the big news from DOD was that the U.S. military is now
developing a strategy to establish space superiority. I believe
the U.S. military is reliant, to a very large extent, on the
success of NASA's space transportation program.
How would you characterize the importance of NASA's space
transportation mission to our military?
Mr. Goldin. It is very important. I have been meeting on a
periodic basis and frequent basis with CINCSPACE. General
Eberhart and I are scheduled to have a meeting on June 7. We
have told CINCSPACE, we have told air staff that as far as we
are concerned, this is U.S. taxpayer money. There is almost $5
billion in the Space Launch Initiative. We want them to be our
partners. To have two separate programs that would be criminal
to the American taxpayer.
We are working jointly with them on the X-37, which is a
space maneuvering vehicle. It is a joint program office. They
are putting funds in; we are putting funds in. So, it will be
the same vehicle that satisfies our needs and their needs. That
is the only way I know how to go.
Senator Shelby. Senator Bond, thank you. I might have some
questions for the record, but thank you for your indulgence.
Senator Bond. Thank you very much, Senator Shelby. I can
assure you there will be lots of questions for the record
because we are not going to be here till dark, and there are
lots of interesting things on which we need to follow up. We
appreciate your questions both in person and for the record.
I now turn to Senator DeWine.
Senator DeWine. Mr. Chairman, thank you very much.
Mr. Goldin, let me just state that Ohio is more than
willing to participate in this Alabama/Ohio summit, and we will
get that worked out.
Mr. Goldin. Thank you, sir.
Senator Bond. We can have it in Missouri.

Aeronautics program

Senator DeWine. That might be all right. We could do that.
The chairman would be a good host, I am sure.
Let me ask you one more question. In a recent document,
entitled European Aeronautics: A Vision for 2020, the European
Aeronautics Commissioner for Research articulated a vision, a
vision for Europe to secure global leadership in aeronautics,
specifically--and I quote--``winning more than a 50 percent
share of world markets for aircraft, engines, and equipment by
the year 2020.''
A government-industry-academia partnership is working to
bring that vision to a reality, including the required $100
billion over the next 20 years.
Given this threat to one of our vital industries, why is
NASA reducing its investment in aeronautics research? The
aeronautics budget is being decimated, frankly, in an apparent
attempt to help solve some of the other budget problems,
specifically in regard to the Space Station. The Space Station
is important, but maintaining leadership and preeminence in
commercial aviation is a necessity I think. I am just
concerned. You and I have talked about this before. I am just
concerned with where we are going as we look at where we are
going to be 10 years from now, 20 years from now, 30 years from
now. I just think we are making a very, very serious mistake.
Mr. Goldin. This is a major problem that is bigger than
NASA. This is a problem, that is, the fact that we have only
one long-haul jet transport manufacturer in America and only
two jet engine manufacturers in America. That is point number
one.
There has been a shifting demographic over the years
whereby Defense used to cover the large share of the engines.
They used to buy, I think, 70 percent of the engines just 20
years ago. They are now buying 20 percent and within 5-6 years,
they will buy 11 percent.
There used to be 46 aeronautics programs in Defense. There
is now one, and that may not be there. It may just be an
unmanned vehicle.
It is hard to train young engineers. The dilemma we have at
NASA, not having competition in that field, not having Defense
working on a brand new engine with us, we are alone.
In addition, there are members of the American community
who have lobbied very hard saying NASA should not be involved
in working with the commercial U.S. aircraft industry. They
have brought unbelievable pressure on this issue, saying it is
subsidy.
So, what we have done this year in the budget is made a
very clear, bright line distinction so there is no ambiguity.
We showed this video, and I showed that video for a reason. We
have an aeronautics program that is not corporate subsidy,
unlike what is going on in other parts of the world. In this
program, we are going to take a look at the leap-frog, high-
risk, high-payoff research that no one company could undertake
themselves and to form a partnership with them.
But the dilemma is in space, we could conceive a vehicle
and then we build it and fly it. In aeronautics, we do not
build anything except technology. For us to tell the Boeing
company what to do or the Pratt-Whitney company or GE company
what to do is very, very difficult.
So, to get at it, we need a Team America. So, what we are
doing, under the leadership of Sam Venneri, is we are going to
put together a blueprint and have it done by September. I went
to the Secretary of Defense, Mr. Rumsfeld. I asked for some
help, and they have assigned someone from the DOD to work with
us. We are going to work with the industry. We are going to
work with academia, and we hope to come up with a blueprint to
get an agreement in America. What is NASA's role in this? How
far should we go, and what should the industry do?
Now, I have to tell you, whatever is going to happen in the
next 5 or 10 years, the industry is going to have to do by
themselves. Otherwise, it will be subsidy.
But what we have to do is take a look at what are the
national defense needs 10 and 20 years from now, and why is
America not developing a new generation of plane and engine?
What are the commercial needs 10-20 years from now, and what is
the kind of research we ought to be doing that is high-risk--
some will fail--high-payoff? And getting that vision I think is
the right way to go instead of having NASA do the near-term
tasks and then we end up getting accused of subsidy.
I got to tell you it has been a very tough task. I am very
disappointed, and I intend to meet with those in the outside
community that want NASA's aeronautics budget to go to zero.
Let me put it point blank. They almost did it in 1980. Under
David Stockman, who was head of OMB, the NASA aeronautics
budget was zeroed out for the same reason, and thank God,
during the Cold War where there was a recognition that we were
late to the defense of the Nation, it got put back.
I think we all need to not just look at putting dollars in,
but we need to take a look at Team America. We put together a
blueprint. For the record, I would like to submit the white
paper, not just for aeronautics, but how do we solve the air
space problems. I have shared with Secretary Minetta and we
have a partnership going there. But I will submit both those
white papers for the record to give you a sense of where we
think we ought to go.
Senator DeWine. Thank you very much. Thank you, Mr.
Chairman.
Senator Bond. Thank you very much, Senator DeWine.
Senator DeWine did raise the question that is of great
interest to me.
Senator Mikulski. Me too.
Senator Bond. I know the Europeans have European Aerospace
Vision 2020. I am delighted to hear your discussion of the
steps you are taking. We will accept for the record the
information you are going to submit because it is very
important.
[The information follows:]

A Technological Revolution for the National Airspace System

today's air transportation system
As we approach the centennial of flight, the size and scope of the
Nation's air transportation system are truly impressive. Today, 75
percent of all passenger trips over 2,000 miles and 50 percent over
1,000 miles are made using air transportation. Furthermore, air freight
carries 27 percent of the value of the Nation's exports and imports.
Air transportation is vital to this Nation's economy and quality of
life. Since 1978, when the airline industry was deregulated, the
inflation adjusted gross domestic product (GDP) has increased by 62
percent, while total output of scheduled passenger air transportation
(as measured by Revenue Passenger Miles, or RPM's) has increased by 190
percent and total air freight ton miles have increased even more, by
289 percent. Both passenger and freight growth continue to outstrip the
growth in GDP. In many ways, the U.S. has only begun to tap what is
possible in air transportation. The U.S. has 5,400 airports, but the
vast majority of passengers pass through a little more than one percent
of those airports and only about 10 percent are used to any degree.
Technological advances over the past 30 years, many of them first
pioneered by the National Aeronautics and Space Administration (NASA),
have enabled a ten-fold improvement in aviation safety, a doubling of
fuel efficiency with reductions in emissions per operation, a 50
percent reduction in cost, and an order of magnitude reduction in noise
generation. In large part, the gains we have enjoyed have been due to
the efficient transfer of the benefits of technology to consumers via
competitive air transportation markets.
air traffic control
The U.S. Air Traffic Control (ATC) System controls the movements
and ensures the separation of aircraft within the U.S. and coordinates
the departure and arrival of aircraft leaving or entering the U.S. This
is an enormous system operated by the Federal Aviation Administration
(FAA). It safely handles 63 million aircraft operations carrying 544
million passengers traveling over 537 billion revenue passenger miles
annually.
The U.S. system is the largest and most complex system in the
world. The U.S. system is staffed by 17,000 air traffic controllers in
476 towers, 194 Terminal Radar Approach Control (TRACON) Facilities, 21
Air Route Traffic Control Centers (ARTCCs) and one Command Center. A
typical flight crosses 7 ATC centers and communicates with over 25 air
traffic controllers. By comparison, the European system, the second
largest, is about half the size measured in total operations.
Unfortunately, the system has grown in size and complexity overtime
in a reactive manner in response to serious accidents and to safely
keep up with demand that resulted from deregulation, especially at the
huge hubs. Moreover, the system has not fundamentally changed since the
1960s and is based on technology that had its origins in WWII--radar
surveillance of aircraft by air traffic controllers, radio navigation
along air corridors and voice communication between pilots and air
traffic controllers to maintain safe separation between aircraft.
the system is reaching saturation
Serious constraints to the growth of the air transportation system
are now emerging. The air traffic and airport systems in the U.S. are
reaching full capacity. Delays are increasing. Experts agree that the
congestion and delay problems experienced throughout the U.S. last
summer will only get worse unless drastic action is taken. Each year,
airlines must add more ``padding'' to their schedules to maintain on-
time performance as well as the integrity of their scheduling systems,
while facing more congestion in the system. At the same time,
environmental issues (e.g., noise and emissions) are preventing
expansions to airport infrastructure, such as additional runways.
In 1998, airline delays in the U.S. cost industry and passengers
$4.5 billion--the equivalent of a 7 percent tax on every dollar
collected by all the domestic airlines combined. With demand projected
to double over the next decade, NASA estimates, based on a computer
model of operations at the Nation's top 64 airports (80 percent of
enplanements), that in the absence of change, annual delay costs will
grow to $13.8 billion by 2007 and $47.9 billion by 2017. But growth in
airport infrastructure that might offset this problem is not likely in
the foreseeable future. Several key airports are unable to gain
approval for projects to expand infrastructure because they are in
areas where National objectives to reduce emissions have not been met.
Noise concerns are also preventing the extension or addition of new
runways at many airports. Therefore, we are seeing constraints to
growth that could threaten the integrity of our transportation system.
Beyond these numbers is another serious problem. Because the
networked nature of air transportation, as the system gets closer to
its capacity limits it becomes more ``chaotic''. This chaos manifests
itself such that an isolated problem within the system, such as a
thunderstorm, creates missed connections, severe delays and canceled
flights throughout the system. This chaotic behavior cuts to the heart
of the National imperative to have a dependable transportation system.
As the figure below demonstrates, even in good weather many of our
major airports are at or will exceed capacity within the next ten
years, and in poor weather demand is well beyond capacity for most of
these airports.
what is needed
To solve these problems a balanced approach of aggressively
developing and implementing current ATC modernization efforts must be
coupled with an aggressive effort to develop a new, high-capacity
architecture. This will provide essential relief to ever worsening
delays in the near-term while fundamentally resolving the air
transportation challenges for the long-term.
current atc modernization efforts
While the addition of new airport infrastructure will be limited
and costly, the existing system can be improved by leveraging
technology advances in digital communications, precision navigation,
and computers. Currently the FAA is replacing aging computer, display
and navigation equipment in an effort to modernize the infrastructure
upon which the ATC architecture operates. Within that architecture, air
traffic controllers need improved computer aids to help them plan and
manage air traffic more efficiently. As an example, through the FAA
Free Flight Program, the FAA implemented the NASA developed Center-
TRACON Automation System (CTAS) at the world's busiest airport, Dallas-
Fort Worth, to support daily operations in all weather conditions, 24
hours a day, 7 days a week. CTAS provides computer intelligence and
graphical user interfaces to assist air traffic controllers in the
efficient management and control of air traffic. The system has allowed
a 10 percent increase in landing rate during critical traffic rushes.
These improvements have translated into an estimated annual savings of
$9M in operations cost.
In fact, NASA and the FAA have a long-standing partnership on air
traffic management systems. NASA uses its unique technical expertise
and facilities to develop advanced air traffic decision support tools,
improve training efficiency and cockpit safety through human factors
research, and develop advanced communications, navigation and
surveillance systems. The FAA defines system requirements and applies
its operational expertise to ensure that the technically advanced
airborne and ground equipment, software and procedures developed by
NASA are operationally useful, efficient, safe and cost effective. The
FAA performs complementary research in the application of new
technologies in addressing airborne and ground-based communications,
navigation, and surveillance needs and in new decision support tools
for strategic management of the system.
Overall, NASA is currently working on a suite of 16 technologies,
of which CTAS is a subset, to improve gate-to-gate air traffic
management to increase capacity and flexibility and to overcome airport
capacity constraints due to weather. Most of these are Decision Support
Tools that increase the efficiency of operations within the current
infrastructure. And while these tools will add critical capacity and
improved flexibility over the next several years, the capacity
increases they provide will soon be outstripped by increasing demand.
They will not fundamentally solve the capacity crisis, reverse the rise
in delays or prevent the disruptive, chaotic behavior of the system.
The remaining technologies that NASA is working on add new
capability beyond the current system for the worst delay problem:
airport delay in adverse weather. These technologies rely on
transitioning to satellite-based surveillance and navigation utilizing
the National Airspace System (NAS) implementation of DOD's Global
Positioning System (GPS). This implementation is under development but
has not yet been achieved for full system operation. A critical element
of this deployment is implementing a Wide Area Augmentation System
(WAAS) to ensure reliable signal availability over the entire U.S.
Realistically, however, it will be several more years before the
current issues associated with FAA's required WAAS can be solved.
Therefore, this suite of tools will not be available until GPS/WAAS is
available.
NASA models indicate that these technologies fully implemented
across the system would increase operational capacity by about 30
percent and reduce future predicted delays by about 50 percent. (Note:
Full implementation of the entire suite of technologies is not within
the scope of the FAA Free Flight Program.)
Therefore, given the lack of sufficient infrastructure growth, it
is absolutely critical to aggressively pursue this approach in the near
term.
a revolutionary approach to air traffic management
The current system structure, where most passengers and cargo are
carried by tens of air carriers through tens of airports, must be
revised to permit the continued long-term growth of the system. The
thousands of airports distributed across this country are a true
National asset that can be tapped with the right technology and the
right Air Traffic Management (ATM) system. Also, ``airspace,'' one of
the nation's most valuable national resources, is significantly
underutilized due to the way it is managed and allocated. Therefore,
the airspace architecture of the future must increase the capacity of
the Nation's major airports, fully tie together all of our Nation's
airports into a more distributed system, and create the freedom to fly
in a safe, controlled environment throughout all of the airspace.
One thing that will remain constant is that free market forces will
drive the air transportation system. Therefore, the future system
architecture must be flexible to respond to various transportation
system possibilities. The airline industry must have the flexibility to
move and expand operations to be responsive to transportation demands.
This is the highest level guiding principle for the future ATM system.
The next tier of system requirements are robustness (a system that can
safely tolerate equipment failures and events such as severe weather)
and scalability (the ATM system automatically scales with the traffic
volume). One possibility for achieving scalability would be achieved by
building the ATM system into the aircraft, so that as you add aircraft
to the fleet the ATM system would automatically scale to accommodate
them.
The system will be built on global systems, such as GPS, to allow
precision approach to every runway in the Nation without reliance on
installing expensive ground-based equipment, such as Instrument Landing
Systems (ILS) at every airport. However, the robustness of the global
communication, navigation and surveillance (CNS) systems must be such
that the system can tolerate multiple failures and still be safe. This
is a significant challenge upon which the new architecture depends.
If we are successful at meeting the challenge of a robust global
CNS, then with precise knowledge of position and trajectory known for
every aircraft, it will no longer be necessary to restrict flying along
predetermined ``corridors''. Optimal flight paths will be determined in
advance and adjusted along the way for weather and other aircraft
traffic. This fundamental shift will allow entirely new transportation
models to occur. For example, with precision approach to every airport
in the U.S. and a new generation of smart, efficient small aircraft,
the current trend of small jet aircraft serving small communities in a
point-to-point mode could be greatly extended.
Airborne self-separation will become the dominant method of
operation. Each aircraft will become capable of coordinating and
avoiding traffic. They will have full knowledge of all aircraft in
their area and will be able to coordinate through direct digital
communication with other aircraft. The pilot will be able to look at
his flight path at different scales--from a strategic view of the
entire origin to destination route showing other aircraft and weather
systems, to a tactical view showing the immediate surroundings and
flight path over the next few minutes. Aircraft will employ synthetic
vision--which uses advanced sensors, digital terrain databases,
accurate geopositioning, and digital processing--to provide a perfectly
clear three dimensional picture of terrain, obstacles, runway, and
traffic.
By empowering the pilots to control their own flight paths, the
system can operate at maximum efficiency and will change the role of
the air traffic controller to more of an airspace manager who will
manage the traffic flows and system demand. The air traffic ``manager''
will have a full three dimensional picture of all aspects of the
airspace system. The highly compartmentalized ``sectorization'' of the
airspace would be largely eliminated. Through direct interaction with
the three dimensional, high-fidelity representation of the system, they
will dynamically reconfigure the airspace based on weather systems,
equipment failures, runway outages, or other real-time problems.
Intelligent systems will provide expert support to such decision
making. This real-time airspace redesign will be uplinked to aircraft
to recompute flight trajectories. They will also manage the allocation
of scarce resources, such as runways when there are conflicts that
cannot be resolved between aircraft directly.
Eventually, the entire system will be fully monitored for faults
and other risks. The system will move from a paradigm of being
``statistically safe'' to real-time knowledge of risk and safety. In
addition, with pilots and air traffic managers having full data and
situational awareness of the system, a new level of collaboration can
occur allowing them to work together to correct anomalous situations.
An air traffic manager or backup ``ground'' pilot with the ability to
move between top level strategic views of the system down to seeing the
view from a single airplane perspective could ``virtually'' sit next to
and aid a pilot experiencing an emergency situation.
The future system will truly be ``revolutionary'' in scope and
performance, but it must also be implemented in a mode that allows
continuous safe operations to occur, even in the face of unpredicted
events. In designing the future airspace system, a systems engineering
approach must be used to define requirements, formulate total
operational concepts, evaluate these operational concepts, and then
launch goal-oriented technology activities to meet requirements and
support the operational concept.
This is an extremely complex problem. The system is dynamic and
real-time. At the same time, system integrity is absolutely essential.
It can't be turned off and it is highly interconnected. At the present
time, we believe it will take a substantial public-private partnership
to tackle such a large and difficult problem. And yet the payoff from a
capacity, efficiency and safety perspective is absolutely enormous.
proposed national objectives
Given the strong partnership that is in place today, it is possible
to move quickly to begin developing a new airspace system. At the same
time, we must continue along an evolutionary path of upgrades within
the current architecture to obtain the maximum capacity of the system
and continue to ensure safe operations.
Five Year Objective \1\.--(1) Support evolutionary upgrades to the
current NAS; (2) Define new high-capacity architecture and
implementation pathway, including development and operational costs.
---------------------------------------------------------------------------
\1\ This five year objective would require an augmentation to
current efforts to achieve.
---------------------------------------------------------------------------
Benefit.--Increases overall capacity up to 30 percent and reduce
future predicted delays up to 50 percent and postures Nation for new
high-capacity architecture.
--Continued development and deployment of decision support tools, GPS
based navigation and information sharing technologies to
maximize capacity of the current NAS architecture;
--Detailed definition of a new high-capacity airspace system
architecture to meet the increasing demand for air
transportation including the business case for the Nation and
individual stakeholders;
--Develop a detailed system modeling and simulation capability to
provide real time quantitative assessments of the performance
benefits of new tools and architectures to provide a rational
basis for evaluation.
--Systems engineering, preliminary testing and evaluation of the key
elements of the proposed architecture and integrated evaluation
using large-scale, high fidelity, real-time simulation of the
new airspace system;
--Evaluate and quantify the risk of satellite-based CNS systems for
the future airspace system architecture.
--A risk mitigation plan with all required technology components
defined;
--A National public-private transition plan, including benefits and
costs, to move from the current NAS architecture to the high
capacity architecture.
Ten Year Objective \2\.--Implement the major elements of the new
high capacity architecture.
---------------------------------------------------------------------------
\2\ The ten year objective requires FAA leadership and would
require a change in National policy to implement a new architecture.
---------------------------------------------------------------------------
Benefit.--Achieve a 60 percent increase in the all weather capacity
at the major airports and the mobility/capacity benefits of opening a
fully distributed air transportation system.
--Utilizing highly accurate, global navigation systems, achieve
precision approach to every runway in the Nation;
--Implement aircraft onboard systems and a communications
infrastructure for strategic flight path management, self-
separation and coordination, and synthetic vision;
--Implement integrated, strategic management of the airspace system
to manage traffic flows and demand and the ability to
dynamically redesign the airspace system.
Fifteen to Twenty Year Objective.--Complete the transition to the
high capacity, distributed system architecture.
Benefit.--A fully integrated, dynamic, distributed system at twice
the all weather capacity at major airports and 10 times current levels
at small airports.
--Procedures for very precise operations at ``all-weather''
operational rates greater than today's clear weather rates;
--Real-time, distributed intelligent automated aviation system-wide
monitoring with safety and operational advisories.
critical issues
Leadership is required.--The air transportation system is fast
approaching a crisis. The system is becoming increasingly unpredictable
and frustrating for travelers. Problems of delays, missed connections,
canceled flights and air rage are being reported almost daily in our
Nation's press. In this environment, strong leadership will be
absolutely required if the Nation is going to come together to fix this
problem.
A New National policy must be developed.--While this paper has
focused on technology and a new approach to air traffic management, we
recognize that this must fit within an overall National policy that
blends near-term actions with the type of long-term fundamental
solutions addressed here. Today, however, there is no comprehensive
policy to ensure the long-term health of our air transportation system.
A roadmap for a cost-sharing public-private partnership is
needed.--The air transportation system has critical public and private
roles and responsibilities. The only way to effectively change the
system is through investment and change by all parties, government and
industry. However, in the absence of a clear roadmap and policy that
lays out the costs and benefits of such change, it has been difficult
to achieve this partnership. As we move forward, such a roadmap must be
negotiated and developed.
conclusions
NASA is a key partner in the future of the air transportation
system. Through the unique talents and history of the Agency, we have
become the National leader for research and technology for air traffic
management. NASA is prepared to continue this leadership and to be a
catalyst for positive change. We believe it is absolutely essential
that the Nation take a long-term perspective and begin now to enable
the high capacity, distributed system we need for the future. We look
forward to supporting the Secretary of Transportation and the FAA
Administrator in developing the future National Airspace System.

Qualified scientist/engineers

Senator Bond. Let me ask you a related question. We are
hearing about acute shortages of qualified scientists,
researchers, and technicians for aerospace, aeronautics, and
all the other tech industries. Many foreign-born, U.S.-trained
scientists are returning to their own country.
How do you see the supply of scientists? Is there anything
that NASA is doing, can do, or we should do to get qualified
scientists here in the United States?
Mr. Goldin. I view this as the single biggest long-range
challenge to the vitality of the American economy and its
national defense. I have been giving speeches around the
country on this subject. Let me give you a few statistics.
In the next decade, 2 million scientists and engineers will
retire, 2 million scientists and engineers will come into the
workforce, for a net gain of 0.
A recent study was done, through the auspices of the
National Science Foundation, and that indicated that we need a
50-percent increase in the number of scientists and engineers
over the next decade to be able to meet the economic growth
that we need to maintain our economy. So, we are way, way off.
Then you take a look at the statistics. The scientist and
engineering degrees are going down. The number of foreign
people entering are going down, and those that get degrees are
going back home. So, it has become a real crisis. I have talked
about this subject at the Council on Competitiveness.
But there is another part to it. If you look at the
demographics, only 9 percent of the women are scientists and
engineers. If we got to parity with women in science and
engineering, we have almost got the problem whipped. If you
look at minorities, only 7 percent of minorities, who make up
24 percent of the population, are scientists and engineers. If
you take a look at minority enrollment in universities, it is
going down.
And here is a statistic that really gets me: In 1986, we
produced 25,000 electrical engineers and 10,000 people with
degrees in parks and recreation. By 1996, we were at a
crossover point of 14,000, and now we are producing more people
in parks and recreation than electrical engineers. You would
want to cry. Are we going to do the parks and recreation and
the books and litigation for the world?
So, what are we doing at NASA?
Senator Bond. That is the question.
Mr. Goldin. I had to get that off my chest.
Senator Bond. I appreciate the buildup. I understand that.
Mr. Goldin. In this year's budget, we have started a
program where we want to provide scholarships to promising
young engineers in return for service, summer jobs, and then
they come to work for NASA for a few years. Next year we have
to hire 700 engineers. So, 300 to 500 scholarships are going to
be awarded for this next year. That is a pilot program. If that
is successful, we would like to ramp it up.
Second, I met with John Hennessey, the President of
Stanford University, and I said, why does Stanford not apply
for research grants at NASA? He says, we cannot hire faculty or
students on these 50-100K grants.
So, we are going to start a new program called Research and
Education Technical Institutes (RETI), where we are going to
fund $3 million to $5 million a year on open, peer-reviewed
competition five of these institutes that will go for 10 years.
You win a competition, you go for 5 years, and then you get a
peer review, then you go for 5 more years. This way you can
hire faculty, engage students, work with industry. We are going
to do it in nanotechnology, biotechnology, information
technology, the fusion of those four technologies, power and
propulsion. We believe that this is going to really help
American universities attract American kids into science and
engineering. If this is successful, we hope to expand that
program.
Senator Bond. This is something that is of interest to me.
How much are you going to commit to that?
Mr. Goldin. $18 million a year for the next 10 years.
Senator Mikulski. Mr. Chairman, I have to go to another
committee.
Mr. Goldin, let us keep in touch.
Mr. Goldin. Yes, ma'am. I will be there.
Senator Bond. Thank you very much, Senator Mikulski.
Senator Mikulski. Thank you, Mr. Chairman.
Senator Bond. We thank you.
Senator Mikulski. Actually it is interesting. We all had
pretty much the same line of questions.
Senator Bond. Oh, I know. There is so much to cover and we
thank you very much for your good leadership on it.
Please go ahead.
Mr. Goldin. Then we are funding a very significant amount
of work at universities like Hispanic-Serving Institutions
(HSI) and Historically Black Colleges and Universities (HBCU).
We started an Administrator's fellowship program where we
select some of the top researchers at NASA and send them to
some of these disadvantaged universities to teach them how to
do research grants so they could then come back and be funded
at NASA. In fact, we are really pressing hard in all these
areas.
Then we are looking at feeder programs.
We are involved in the first competition, which you saw in
that video. That is a nationwide competition and we get
students from around the country, 400 teams. NASA is the
biggest sponsor. We sponsor one-quarter of all teams in the
country. And these kids design and compete robots, and usually
the NASA team wins. We are getting kids from across the country
to get interested in math and science. It is like going to a
football game.
So, we have a broad range of these programs. All of them
are pilot and experimental, and what we would like to do is,
over the next few years, work with this committee and get some
metrics from the program.
Finally, I met a gentleman named Paul Romer, who is a
professor at Stanford University, who is an expert in these
areas. He is an economist. He is going to develop metrics for
us and he is going to work with us to see the effectiveness of
these programs. But this, in my mind, is not exciting like a
mission to Mars, but it is only about the future of NASA and
the country.

manned mission to Mars

Senator Bond. Speaking about a mission to Mars, I
understand you made an announcement yesterday about a manned
mission to Mars by 2020. What are your plans for that? What are
you looking at there?
Mr. Goldin. First, let me say I came to NASA April 1, 1992,
to follow a vision of George H.W. Bush who said we are going to
get to Mars by 2018. I reconfirmed the fact that I believe we
are going to do it. We are doing all the right things to get
there.
First, we are building the Space Station and we are going
to solve the horrendous biomedical problems that have to be
overcome in going to Mars.
Also, on the station, we are going to figure out how to
live and work in space. I do not know if you saw those awesome
pictures of those astronauts doing space walks. How do you
assemble things in space? That is going to get done.
Second, this budget has the most aggressive Mars program
for robotic exploration that this Nation has ever undertaken.
We have a series of progressively difficult missions that will
allow us to develop the technology to do precision, high
reliability landing on Mars. We are going to develop
reconnaissance pictures of Mars with the accuracy of the size
of a basketball. We are going to be putting mobile laboratories
on Mars, searching for water, doing drilling. All this is
necessary to build up.
Finally, with the Space Launch Initiative, I think we are
going to take out the biggest barrier. And this is not a
commercial need. NASA needs to get to low earth orbit with high
reliability. We need to improve the reliability for people by a
factor of 100, and we need to cut the cost by a factor of 10.
As a result, instead of taking a couple of million pounds at
10,000 a pound to low earth orbit, if we could do it with 1,000
a pound, each mission will not be $20 billion to get to low
earth orbit, but $1 billion. Doing those things and with the
in-space propulsion that Senator Shelby talked about, I believe
that this Nation will be able to meet the goal of getting there
by 2018.
Senator Bond. 2018. All right, we will hold you to that.
Mr. Goldin. I would love to do it. That is my life.
Senator Bond. Thank you very much.
I turn to Senator Shelby.
Senator Shelby. I have no other comments. I do want to
thank Mr. Goldin. This is your 10th year, is it not? That is a
long tenure. We want to continue to work with you and make a
lot of these things happen. Thank you, Mr. Chairman.

increasing cost of Energy

Senator Bond. Thank you, Senator Shelby.
Mr. Goldin, increasing costs of energy have become a
critical issue throughout the country and very especially in
California. NASA has a significant investment in facilities in
California. There are a number of these, Ames, Dryden, JPL. Do
you see the energy costs in California making a substantial hit
on your budget? How big an impact are these energy costs going
to be?
Mr. Goldin. Right now at just our three laboratories, not
at our contractors, we are seeing $36 million. That is under
the best conditions, negotiating with DOD and GSA, and the
summer has not even begun. So, if you just look at our
facilities, the numbers are going to go up.
But then if you consider the fact that about a quarter of
our budget is in California, we could be looking at an energy
bill that is very, very serious. We have no way right now of
getting the costs from our contractors, but we are working on
it. But my concern is it is going to get even worse as we go
into the summer. So, I think we have just hit a small number
right now. I think it is going to be a lot worse.
Senator Bond. We need to be talking with you about that
because that is a concern clearly for your own facilities and
the contractors.
Mr. Goldin. By the way, Mal Peterson just sent me a note.
At Dryden, we are reprogramming funds for energy just to keep
the facility open. I view this for this year as a real problem.
We are worried about costs on the shuttle. We are worried about
costs on the station. These are things that are just well
beyond our control.

NASA contract management

Senator Bond. One final tough area. GAO continues to
identify NASA contract management as a high-risk area. They
indicated that some progress has been made to address its
contract management weakness with a new system for measuring
procurement-related activities. But still, GAO in its 2001
high-risk review reported that NASA needed to rely less on the
use of undefinitized contract actions--undefinitized. Is that
the same as undefined? What is the difference between
undefinitized and undefined?
Mr. Kamarck. The spell-check could not find it.
Senator Bond. How about rely less on certain uncertain
contract actions, namely unnegotiated contract changes, as a
way of doing business since the practice could result in
contract cost overruns and cost growth.
What is NASA doing to deal with this problem?
Mr. Peterson. Let me give you an example because one of the
key issues on Space Station several years ago was we had a very
large backlog of undefinitized contract changes.
Senator Bond. What the heck is the difference between an
undefinitized and an undefined?
Mr. Peterson. Undefinitized means simply that you have a
proposal for a contract change, and in order to definitize it,
what you must do is agree with the contractor on a price. That
negotiation process requires you to get pricing data from the
contractor, exercise due diligence in making sure they are
going to be doing exactly the right thing. That process can,
particularly when there are a lot of changes, take an
inordinate amount of time. Some people see it, in fact, as
being sort of busy work, not getting the engineering done,
instead sitting at a negotiating table with the contractor.
Several years ago, we became very alarmed at the backlog of
undefinitized changes in the Space Station and the amount,
knowing that that backlog impeded our ability to have a good
baseline for contract assessments. We took a concerted effort
to reduce that, working with the Boeing company, and in fact,
have done so.
It remains an issue. It in part has to do with the number
of procurement personnel that are available to work these
changes, and with the series of downsizings that we have gone
through in some areas, we have cut personnel in the procurement
organization and we have perhaps induced a problem that we now
are struggling with. On the other hand, we are committed to
working this to expedite the negotiation process and to enlist
the Department of Defense audit agency support to try to get a
quicker turnaround on the validation of the contractor cost
estimates.
Senator Bond. Are we going to get off the high-risk list?
Mr. Goldin. Yes, sir.
Senator Bond. When do you hope to achieve that?
Mr. Goldin. Within a year.
Senator Bond. That is a little easier to follow up on than
the 2018.
Mr. Goldin. We should only all be around for that.
Senator Bond. Administrator Goldin, thank you very much.
There is much, much more, obviously, that my colleagues and I
would like to ask you. But I think the attendance that you have
had today from members of the subcommittee indicates the great
interest and commitment this subcommittee has to the work of
NASA. We thank you for your strong leadership and your visions,
and we appreciate your good efforts to answer the toughest
questions we can come up with. We look forward to working with
you.

subcommittee recess

With that, the hearing is recessed.
[Whereupon, at 11:47 a.m., Wednesday, May 9, the
subcommittee was recessed, to reconvene subject to the call of
the Chair.]

DEPARTMENTS OF VETERANS AFFAIRS AND HOUSING AND URBAN DEVELOPMENT AND
INDEPENDENT AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2002

----------

WEDNESDAY, MAY 16, 2001

U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 10:12 a.m., in room SD-138, Dirksen
Senate Office Building, Hon. Christopher S. Bond (chairman)
presiding.
Present: Senators Bond, Domenici, Stevens, Mikulski, and
Johnson.

FEDERAL EMERGENCY MANAGEMENT AGENCY

STATEMENT OF JOE M. ALLBAUGH, DIRECTOR
ACCOMPANIED BY:
JOHN MAGAW, ACTING DEPUTY DIRECTOR
PATRICIA ENGLISH, ACTING CHIEF FINANCIAL OFFICER

opening statement of senator christopher s. Bond

Senator Bond. Good morning. The Subcommittee of VA, HUD,
and Independent Agencies hearing will come to order.
Today we meet to take testimony from the Federal Emergency
Management Agency on its fiscal year 2002 budget request. It is
a pleasure to welcome for the first time before this
subcommittee FEMA's new Director, Joe Allbaugh. Mr. Allbaugh is
no stranger to the needs of natural disaster response, having
managed for President Bush, when he was Governor of Texas,
disaster response coordination in Texas for nine presidentially
declared disasters. As one who has served as Governor and
presided over quite a few disasters, I know how significant and
how difficult the position is to be the person actually
responsible for coordinating that work, and I cannot think of
better on-the-job training for the current position he holds as
Director of FEMA. There he will be responsible for one of the
most critical responsibilities in the Federal Government,
namely preparing for and responding to the devastation of
natural and other disasters throughout the Nation.
FEMA is an agency that the American people depend upon
following a disaster event. They depend upon FEMA to help come
in and pick up the pieces and get their lives back together. It
is an agency that has been performing this task admirably over
the last several years with a strong focus on customer service.
But make no mistake. There is plenty more to be done at
FEMA. We must improve accountability for disaster relief
expenditures. We have to revamp the flood insurance program. We
must streamline disaster field operations, and we must improve
the management of mitigation programs.
Joe, you have gotten off to a great start at FEMA with a
quick-paced and very effective response to the Seattle
earthquake in February. You have been mired in plenty of flood
events in the Midwest. Soon it will be, sad to say, hurricane
season, and perhaps with a few fires and a plague or two thrown
in, you will be able to round out your experience in no time.

Disaster reforms

You have initiated some very important debates about
preparedness and mitigation, which we look forward to
discussing this morning. I am glad you are willing to take on
the much-needed, albeit it very controversial, reforms to
FEMA's current Federal disaster assistance programs. I have
been pushing for these reforms for several years, and I can
tell you that there are a lot more pleasant things that you can
do than to tell people that we have to have guidelines and
safeguards and limits on disaster assistance. People do not
want to hear that, but if you are willing to work with us, we
think, for the good of the Nation, we must clearly move down
that path.

Flood insurance reforms

It is clear to me that you recognize where improvements are
needed and we look forward to working with you to do all we can
to support your efforts. In particular, I am very interested in
pursuing a dialogue with you on ways to reform the National
Flood Insurance Program. It must be made actuarially sound. We
must increase participation. I share your concerns about the
costs to the American taxpayer of continuing to pay for
repetitive flood loss properties at a subsidized rate. That
cannot go on. If people continue to live in areas where they
are exposed to flood damages, if they will not mitigate or move
out, then at some point we have to say enough is enough. And
that is truly not popular.
We also need to encourage people with homes at risk of
flooding to participate in the National Flood Insurance
Program, as well as to encourage people in communities to take
all necessary steps to minimize the risks of floods,
earthquakes, and hurricanes. It is not an easy task, but it is
a necessary task.

2002 budget

FEMA's fiscal year 2002 budget requests $2.1 billion,
including roughly $1.4 billion for disaster relief, $140
million for the emergency food and shelter program, and roughly
the current level of spending for FEMA's operating accounts.
This is a responsible budget which will ensure that critical
disaster and emergency needs will be met.

funds for Disasters

At this time, it appears there is plenty of money currently
in the disaster relief fund to meet disaster needs for the rest
of the year, including those associated with the Seattle
earthquake and the Midwest flooding, so long as we do not have
any truly catastrophic events later this year. Including
contingency funds, as of the end of March, there was almost
$2.3 billion in unobligated disaster relief funds.
FEMA's budget assumes the creation of an emergency reserve
for extraordinary disaster events. The budget resolution passed
by the Congress does not provide for this reserve. This means
that we will need to provide at least another $1 billion in
your budget, consistent with historic costs of disasters, and
perhaps depending upon an emergency declaration from the
President.
But in any event, we look forward to working with you and
the Office of Management and Budget on these fiscal issues and,
most of all, working with you on reform of the programs to
ensure that people who are in need are served, but that the
taxpayer is not unnecessarily assisting people who have played
out their string or providing funds that are not absolutely
needed.
Before hearing your comments, Mr. Director, it is my
pleasure now to turn to the distinguished ranking member,
Senator Mikulski.

statement of senator barbara a. Mikulski

Senator Mikulski. Good morning, Mr. Allbaugh.
Mr. Allbaugh. Good morning, Senator.
Senator Mikulski. Again, I would like to most cordially
welcome you for your first appearance as the FEMA Director
before this subcommittee. I most enjoyed our conversations both
in my office, when you first came to your post, and the very
informative, instructive testimony that you gave in our 3 days
of hearings on America's ability to respond to terrorism. Later
in the questions and answers, I want to go into this.
You know, FEMA has truly become the Nation's 911 agency.
Unfortunately, that 911 could be called a hurricane, a flood,
or a terrorist attack from either a foreign or domestic thug.
That is why I believe that FEMA must truly be an all-hazards
agency and would like to discuss that with you. It must be
ready to respond to anything at any time that the President so
designates.

FEMA's terrorism role

I want to hear about FEMA's plan for taking on an expanded
role in terms of the presidential announcement last week. I
have long believed that FEMA, with its ties to State and local
emergency response units, should be a major force in this area,
particularly to coordinate consequence management for these
acts. Terrorist acts, though, are not the same as natural
disasters. There will be a whole host of national security and
law enforcement issues mixed in as well. I know the President
had asked you to undertake a review, and I will be talking with
you about it. But I see that part as a work in progress and
that we will need to have further conversations and, even later
in the year, an additional hearing. But we will get into that
in the Q&A.

FEMA as all-hazards agency

I used the term ``all-hazards'' agency because FEMA, when
it really modernized itself and professionalized itself during
the last 8 years, followed the three R's: readiness, response,
and recovery. What we see is that, in preparing for the cost of
any disaster that could affect an American community in which
there would be a presidential declaration--the reason I use
``all-hazards'' agency is that a chemical explosion in, say,
one of my chemical plants in Baltimore, could either happen
because of an accident or a malevolent act. We could have an
outbreak of a disease because of West Nile, and at the same
time, there could be a bio-attack. It could be domestic, as
well as foreign. We had Oklahoma City which was domestic. We
had the World Trade Center which was foreign. But either way,
there was a response to these, and it is something that we
should really consider in our training particularly for
readiness and response the concept of all-hazards.

2002 budget reductions

As Senator Bond has indicated in his testimony, going now
directly to the budget, I am concerned about the cuts in
prevention and preparedness programs when it comes to natural
disasters. There are flashing yellow lights in terms of the
reduction of the Federal costs for State hazard mitigation
programs, I would like to talk about what you anticipate as the
consequence of that. The elimination of the Project Impact
program is troubling to me because it is where we would hope to
lower costs in the future, which I know you are trying very
hard to look ahead to do. So, we need to know the consequences
of these cuts not only to State and local government, but often
for the very impact on the communities themselves.
The changes we are making could be, inadvertently, at odds
with the theory of helping those who help themselves,
encouraging State and local governments on how best to handle
the insurance.
I also want to talk about this proposal along with the
phase out flood insurance of repetitive loss properties. It is
an issue that I have been troubled about for some time. How
then do we best address that and what would be the criteria?
Because very often repetitive loss properties, particularly for
a Senator like me with my rivers and my bay, tend to be older,
poorer people who built along the river long before it was the
Gucci thing to do.
I say Gucci because waterfront property in Maryland used to
be what working men and women could afford, and now it is very
pricey. Mr. Magaw knows what I am talking about. But we need to
look at that.

Fire programs

The other, again, focusing on the risk that American people
face, was the commission report on America Burning. It outlines
pretty clearly what we need to do in terms of helping at the
local level with a partnership through the National Fire
Academy and others on how we can prevent fires. You know the
grim nature of what it is.
Also, there has been a new program instituted in terms of
helping our fire fighters with equipment, protective gear, and
so on. I think what we are concerned about is how can we
support those communities, particularly those that are
stretched thin with trying to buy the new equipment, and they
cannot do it with tip jars and bingo, but that we do not create
a whole new entitlement or a whole new block of earmark
potentials in this appropriation. So, I think that can be dealt
with with good management and clear criteria.
Again, we look forward to your testimony. I regard this
hearing as part of our work in progress as we get ready to do
our work. Thank you very much.
Mr. Allbaugh. Thank you.
Senator Bond. Thank you very much, Senator Mikulski.
We are pleased to be joined by the chairman of the full
committee, Senator Stevens.

rising sea levels in Alaska

Senator Stevens. Good morning, Mr. Allbaugh. It is nice to
see you again. I have but one question I think. I read over
your statement.
I have got a strange circumstance in my State, and that is
the ever-increasing level of the water table along the ocean. I
am going up in this coming recess to look at Point Barrow where
the water level is so high now, it is starting to flood the
periphery of the city of Point Barrow. It looks like it is
going to threaten the sewage lagoon and particularly some
facilities that were built by the Federal Government along the
coastline.
The same thing is happening on the west coast of Alaska
where there are at least three villages I can think of right
now where the level of the ocean is coming up and in one
instance has started to flood the airport and in another
instance has started to flood the city itself. These are small
villages really. They are incorporated cities under Alaska law,
but they are basically native villages along the coastline.
As we examine it, it appears--and, Mr. Chairman, you may be
interested in this--that they are not covered by disaster laws
because it is an ever-encroaching sea that is coming slowly but
surely higher every year. I do not think I am going to ask you
any questions about it, but I am going to ask if you will come
join me sometime to go take a look at this.
Mr. Allbaugh. I sure will.
Senator Stevens. I am going to have hearings in Fairbanks
this next recess, Mr. Chairman, on the global climate change
and how it is affecting the Arctic. We think there is, in fact,
an increasing possibility that this sea level is rising because
of global climate change and that we need to find a way to deal
with it.
All of these areas were basically built with Federal funds
because of the indigenous population that is there. Point
Barrow was basically built by the Navy during the days when the
Navy was controlling Naval Petroleum Reserve No. 4. We have got
to find some way to deal with this.
To my knowledge, it has not happened anywhere else in the
country. Are you aware of anywhere else where the encroaching
sea is inundating the coastline?
Mr. Allbaugh. I am not aware of anything in the coastal
areas, but I am aware of a couple of inland basins, one in
North Dakota and one in South Dakota. I have not had the
opportunity to visit the lake outside of Watertown, South
Dakota--I believe that's where it is--but I have visited
Devil's Lake in North Dakota. I am somewhat familiar with those
areas in Alaska, but I would love to have the opportunity to
join you on a trip.
Senator Stevens. I am familiar with those areas. They are
basically a result of increasing rainfall and probably
increasing diversions from other rivers.
In this instance, this is complicated by the fact that it
is reported to me that the pack ice, the ice that is just from
year to year in the Arctic, is 8 inches thinner this year than
it was last year. We have got some complications coming and I
want to try to find a way to see if we can understand.
But in any event, I think it would be important. One of
these days we are going to have to call on you to see if you
can help us deal with moving those villages back from the sea.
They certainly cannot continue to live as they are because a
good storm, with the wind and sea conditions right, would drive
the water right through the villages today.
But I appreciate seeing you and look forward to getting an
opportunity sometime to have you come up and take a look around
and to become acquainted with that and see if, together, we can
work with you and other agencies to devise a plan to help these
people avoid the consequences of being flooded out.
Mr. Allbaugh. Yes, sir. Thank you. I always look for
opportunities to become better educated and better acquainted
with areas around our country.
Senator Stevens. Thank you. We will arrange a convenient
time so we might do a little marine research along the way.
Mr. Allbaugh. Yes, sir.
Senator Stevens. Thank you.
Senator Bond. Thank you very much, Mr. Chairman. I assure
you that we will join Director Allbaugh as he seeks to learn
more about this. This sounds like a very important matter upon
which to follow up. I believe my ranking member and I are very
much interested in that. Is that correct, Senator?
Senator Mikulski. Absolutely.
Senator Bond. I thought we would have bipartisan agreement
on it.
Turning now to Senator Johnson.

statement of senator tim Johnson

Senator Johnson. Well, thank you, Mr. Chairman.
I want to welcome, of course, Director Mr. Allbaugh to the
subcommittee today and look forward to the testimony.
I, in the past month or so, have spent a fair amount of
time home in my State inspecting flood damage in the Watertown
area, and I want to commend Director Allbaugh for his immediate
personal attention to the issues that we have there in South
Dakota with the enclosed basin, but also problems we have on a
couple of our rivers. This is the Prairie Pothole region where
we have had a very wet year. Unfortunately, it is a part of the
country that is prone to volatile swings of the weather and the
damage that it can cause.
I am very appreciative of your contact with me and also
your willingness to work closely with Governor Janklow.
Governor Janklow in our State has done just an extraordinary
job in dealing with a string of natural disasters that we have
had, and the partnership that we have had with FEMA has been an
important partnership for our State.
There was a time many years ago where FEMA's reputation was
not all that it really needed to be. But over the past decade,
it has become a very high quality, very professional
organization. I commend James Lee Witt on his work as your
predecessor, and I know that Mr. Allbaugh is going to continue
to build on the strengths of what has gone before him here over
the last number of years to really continue to build FEMA into
the key agency that it needs to be.
Governor Janklow submitted a formal request late last week
for Federal disaster assistance for 11 counties, and it is our
hope and our confidence that FEMA will be examining that
request in a very expeditious fashion.

Preparedness initiatives

I have some concerns about the preparedness initiatives,
and I appreciate that there is more than one way to approach
this preparedness concern. Project Impact may not be a perfect
program and if the administration has ways to improve upon a
whole range of preparedness issues, I respect that, and I look
forward to working with the administration.
But for what it is worth, I do want to convey to the
Director that Project Impact has been a very popular program in
my State. I have some copies of letters I have received from
Project Impact communities in my State, and with the chairman's
consent, I would submit them for the record.
Senator Bond. Without objection, they will be accepted.
[The information follows:]

Letter From Mary A. Person

City of Huron,
Huron, South Dakota, May 9, 2001.
Senator Tim Johnson,
324 Hart Senate Office Bldg.,
Washington, DC.
Dear Senator Johnson: I was glad to see that you were elected to
serve on a subcommittee that will be addressing Project Impact's
viability. We were selected as a Project Impact Community in 1999 and
there are not enough words to express our gratitude for this FEMA
program. I would like to share with you and the rest of the committee
why the City of Huron strongly supports the continuation of this
program.
We were awarded $302,609.00 in order to make our community a
disaster resistant one after the 1997 flood. The City of Huron spent
$45,750.00 in cash towards our matching portion, along with $44,792.00
worth of in-kind services and used $37,714.00 from other sources of
funding in order to make our projects a reality.
We purchased new outdoor warning sirens, flood-proofed Jersey
Avenue lift station, completed drainage projects at 15th Street SE and
20th Street SW, installed an EPN/Reverse 911 multi-media warning
system, provided adjacent community warning systems in Wessington,
Wolsey, Cavour, Yale and Hitchcock), installed county-wide two way
radio system and will be distributing community education brochures to
each household.
We would not have been able to accomplish the above projects
without securing the necessary funds from Project Impact. I would like
to encourage you to do everything in your power to convince the current
administration that the continued funding of this project is vital.
Please let me know if I can be of further assistance to you and the
efforts of this committee to make sure the right decision is made four
all concerned.
Sincerely,
Mary A. Person,
Mayor.
______

Letter From Brenda S. Barger

City of Watertown,
Watertown, South Dakota, May 14, 2001.
Senator Tim Johnson,
324 Hart Senate Office Bldg.,
Washington, DC.
Dear Senator Johnson: I understand that the future of Project
Impact is being reviewed. As Mayor of a city with 20,000 residents, I
wish to express my views on what Project Impact has meant to our
community.
In 1997, Watertown was one of many cities in the Midwest to suffer
severe flood damages. Since then we have taken many progressive steps
to mitigate the impacts of future flooding. Help from Project Impact
has allowed us to broaden our efforts to become, not only more disaster
resistant but, more disaster-ready.
Project Impact has provided the help we needed to accomplish such
things as public tornado shelters, equipping a hazardous material
response team, providing early warning devices for schools, day cares,
nursing homes and other public locations, equipping and training our
local search & dive rescue team and, of course, flood damage
mitigation.
To date, we have leveraged $94,000 of Project Impact funds into a
total investment in these improvements of nearly $325,000. In other
words, every $1 in Project Impact money has resulted in $3.46 in
disaster damage mitigation. This is the result of partnerships fostered
by Project Impact between our community, local and national businesses
and the federal government. These partnerships continue and we're not
done yet!
Project Impact has made this possible. With this vital help, our
community has learned first hand what can be accomplished by working
together. Personal experience has convinced the community of Watertown
that it is much more effective and far less expensive in the long run
to be better prepared before disaster strikes. This is true in both
financial costs and in terms of human suffering.
Thank you very much for your attention to this important matter.
Sincerely,
Brenda S. Barger,
Mayor.
______

Letter From Thomas L. Hopper

City of Aberdeen,
Aberdeen, South Dakota.
Senator Tim Johnson,
U.S. Senate,
Washington DC.
Dear Senator Johnson: It is my understanding that the program,
Project Impact, may be eliminated from the federal Appropriations
budget. The elimination of Project Impact would be a devastating blow
to communities around this country. Aberdeen was the first community in
South Dakota to participate in Project Impact. As Mayor of this
community, I can personally say that Project Impact was a godsend.
Project Impact was extremely beneficial, not purely from the
financial aspect ($500,000); but from the standpoint of identifying and
working to eliminate the risks facing this community from natural as
well as manmade disasters. The potential from these risks are high and
it is our duty as elected officials to do all we can to prevent
catastrophe from affecting our citizens. The total elimination of
disaster is not possible; however, the ability to prepare and lessen
those risks are possible.
Project Impact allowed Aberdeen to identify and proceed on 17 major
projects. Project Impact allowed us to become acquainted with and
maintain communication with Federal and state officials who were able
to keep our ``feet to the fire.'' Projects completed through Project
Impact totaled $1,400,000, with assistance through federal and state
grants, partnerships, in-kind and, of course, local government share.
Future projects identified with Project Impact have a total budget cost
of $4,100,000.
Projects identified through Project Impact included:
--Area-wide Contour Mapping;
--Area-wide Drainage Studies;
--Outdoor Warning System;
--Wastewater Treatment Plant Flood Protection;
--Water Treatment Plant Flood Protection;
--Stream Gaging Improvements;
--Public Education and Awareness Campaigns;
--Moccasin Creek Dredging Study;
--Kline Street Storm Sewer Improvements;
--Business Preparedness and Recovery Planning;
--City Watch Program;
--Goodrich and Grand Streets Holding Pond (storm-water retention);
--Flood Control Structures; and,
--NOAA Weather Radios Distribution Program.
Some of the future projects initiated through Project Impact
include:
--Southwest Aberdeen Drainage Improvements;
--Noah Aberdeen Drainage Improvements; and,
--Royal Road and Dick Drive holding Pond (storm-water retention).
Project Impact fulfilled its obligation as outlined in the federal
regulations. Aberdeen was indeed, and still is, very fortunate to have
participated in Project Impact. Project Impact is a program that needs
to be continued in order to provide assistance to other communities
around the country. As I mentioned at the beginning of this letter, the
elimination of Project Impact would, in itself; be a catastrophe.
Senator Johnson, I urge you to do all possible to secure funding
for Project Impact.
Thank you for your time on this issue.
Sincerely,
Thomas L. Hopper,
Mayor.

Senator Johnson. As I look at the President's proposals to
eliminate Project Impact, double the local match requirements
for hazard mitigation projects, and require public facilities
to purchase disaster insurance, this does cause me some
concern. I look forward to working with Mr. Allbaugh and FEMA
on ways then that we can be proactive in terms of helping our
communities prepare for the kinds of disasters that in some
instances we know are likely to occur.
I commend the President for his work to establish the
Office of National Preparedness at FEMA.
I again look forward to Mr. Allbaugh's testimony and to
working with him and express my appreciation again for his very
hands-on approach to the problems we have had in my State
already this year.
Mr. Allbaugh. Thank you, Senator.
Senator Bond. Thank you very much, Senator Johnson.
Now we welcome back to this committee a good friend, the
chairman of the Budget Committee and the Senator from New
Mexico, Senator Domenici.
Senator Domenici. Thank you very much, Mr. Chairman.
Where are we in the process? Is it time to ask questions?
Senator Bond. We are at opening statements and the Director
has not yet presented his initial statement.
Senator Domenici. I think I will just let him do that.

statement of joe. m. Allbaugh

Senator Bond. All right, with that, Director Allbaugh, if
you will proceed.
Mr. Allbaugh. Thank you, Mr. Chairman. Good morning, Mr.
Chairman, members. I appreciate the opportunity to appear
before the subcommittee today to discuss our goals and
priorities for fiscal year 2002. I welcome this opportunity to
have a conversation with you on our vision for FEMA.
Mr. Chairman and members, I appreciate the time that you
and your staffs have spent with me in preparation for this
hearing. I am pleased that we are developing working
relationships that will serve our country well both in dealing
with future emergencies and in setting emergency management
policies. I look forward to working closely with you as we
address the critical issues that are facing us all in emergency
management.
My senior staff is also here to listen to what you have to
say today so that they can continue to make FEMA a better
agency. FEMA is made up of great folks who entered public
service to help others, and it is my great honor and privilege
to join ranks with not only our FEMA employees and disaster
reservists, but State, tribal, and local emergency response
professionals, and volunteers as well. They provide speedy,
appropriate help to our fellow citizens in time of need.
I want to introduce John Magaw, former Director of the U.S.
Secret Service and Bureau of Alcohol, Tobacco, and Firearms.
John has served as Acting Director of FEMA before my
confirmation and is currently serving as the Acting Deputy
Director. In addition, John is our resident expert on
interagency coordination of terrorism related efforts.
I especially want to recognize Patricia English. She is
sitting to my left. Pat has been serving as FEMA's Acting Chief
Financial Officer, to whom I have turned frequently in these
first couple of months of my tenure as the FEMA Director. I
know that Pat, along with our congressional affairs office, has
worked to give you and your staff a clear picture of FEMA's
spending priorities and historical financial records.
If I could, Mr. Chairman, I would like to mention another
important person to FEMA, your departing staff member, Carrie
Apostolou. She has been exemplary in every aspect of her
professional task. She took the time to look inside FEMA and
question the what, when, where, why, and how of every issue,
always fair and constructively critical, while at the same time
displaying a caring, helpful attitude. We will miss Carrie's
input.
In recent decades, we have seen Federal emergency
management swing from a set of prescriptive preparedness
programs and a single focus on response and recovery to a more
comprehensive approach that incorporates mitigation by taking
prudent, protective measures to reduce losses. At the same
time, we have seen soaring disaster relief costs that need to
be managed more effectively.

responsibility and accountability in Budget

The administration's budget request for FEMA in 2002 will
build on this progress by emphasizing responsibility and
accountability. This budget request asks individuals,
communities, States, and FEMA to take on an appropriate degree
of responsibility in resisting and responding to disasters. We
at FEMA will continue to work with our customers to empower
them with the tools to accept this greater responsibility.
Internally, we will be working toward a greater accountability
to the members of this committee, the Congress, the President,
and ultimately the American people.
As President Bush said in his February address to the joint
session of Congress, our new governing vision says Government
should be active but limited, engaged but not overbearing. We
believe you can see that the budget proposal for FEMA truly
reflects the President's goal of restoring a proper balance,
moving away from the expectation that the Federal Government is
the option of first resort to the option of last resort.
Recently, I met with the Executive Board of the National
Emergency Management Association representing the Nation's
State emergency management directors, and we agreed that there
is a definite need to restore proper balance. Local communities
have historically been the first line of defense against
disasters, and Federal disaster assistance has always been
designed to supplement the efforts of local and State
governments. Even though we have spent many years working in
partnership to be prepared for disasters, we have also focused
many of our efforts on simply responding to and recovering from
disasters. In recent years, we have been emphasizing the need
for pre-disaster mitigation.

importance of Pre-disaster mitigation

Most recently, I saw this firsthand. I visited community
after community on both sides of the Red River in North Dakota
and Minnesota as the river was rising. As Governor Hoeven,
Senator Dorgan, Senator Dayton, Congressman Pomeroy, and I
toured the areas, the story was the same. In almost every
community, they had learned the critical value of pre-disaster
mitigation. Communities as large as Fargo, North Dakota, and as
small as Breckenridge, Minnesota took seriously their flood
threat and acted to minimize the impacts of this year's event.
It worked. Levees and dikes held and temporary levees erected
by the Corps of Engineers did their job. In areas where FEMA
and the State and local governments had conducted buy-outs of
neighborhoods and businesses, the water came up again, but this
time there were no people nor houses to be impacted. There was
less suffering. Pre-disaster, community-based mitigation works.
Although I have been only on the job as FEMA Director for a
short while, it has been an active period in which I have dealt
with a wide range of disaster activities. I have seen firsthand
the responsibilities that fall within my stewardship.
On day 12 of my tenure, February 28 as has been noted, the
Nisqually earthquake hit, shaking major areas of Washington
State. I have visited the Pacific Northwest twice since the
earthquake, once to see the immediate damage and the second
time to check on recovery efforts. To date, more than $72
million in disaster assistance has been dispersed to disaster
victims.
I have also seen the devastation, in some ways greater,
caused by an F4 tornado that devastated Hoisington, Kansas, on
April 21. FEMA has been active in that community, supporting
the rebuilding efforts and urging residents to consider
building safe rooms and to take other tornado mitigation
efforts.
In Cerro Grande, New Mexico, where terrible fires last year
destroyed many homes, I have visited twice to assure the
residents of that community, Los Alamos County, that FEMA was
doing all it could do to expedite their recovery. On my second
visit, I was pleased to present Los Alamos County with about
$13 million to help make the community more fire resistant.
Given the huge issue of wildfires in recent years and the
terrible destruction that those fires bring, I made it a
priority to visit in April the National Interagency Fire Center
in Boise, Idaho, where I was briefed on how FEMA and that
center will work together and what risks lay ahead for this
upcoming fire season.
In addition, I hosted a conference in Florida on the issue
of drought management, and visited 3 of our 10 regional
offices. These visits have allowed me to quickly get a feel for
FEMA, its important mission, its successes, its challenges.
There is no substitute, quite frankly, as you all know, for
getting out of Washington, DC, and seeing what is happening
around the country. I will continue to be on the scene.

Project impact

Part of my challenge is to review ongoing programs. One, in
particular, as has been mentioned this morning, that I am
currently reviewing is Project Impact. I believe it is time to
take Project Impact to the next level and not have our pre-
disaster mitigation efforts limited by a $25 million grant
program that was largely designed to raise public awareness
about mitigation. We are accomplishing that and seeing results.
We need to build on the success of Project Impact's marketing
strategy by working to continue access for communities to
private resources and all the various resources in FEMA's
mitigation tool kit. At the same time, we need to move toward
achieving results by implementing our mitigation programs. The
awareness is there. What we need now are the results.

mitigation in Iowa

I received some coverage on my recent remarks about the
Mississippi River and its awesome desire to flood. I think it
is important to note that the State of Iowa and the city of
Davenport have done a great job with their pre-disaster
mitigation funds--I saw that firsthand on my visit--and in the
way they have implemented those dollars. The results of their
efforts will substantially reduce physical and financial losses
during this flooding season. This is what mitigation is all
about and it is what we need to focus on in the future.

FEMA's terrorism role

FEMA is now tasked, as has been noted, with
responsibilities in other areas in addition to natural
disasters. It is clear that there is an important Federal role
regarding acts of terrorism and the use of weapons of mass
destruction. President Bush is concerned that the efforts to
address terrorism by various agencies in the Federal Government
are not well coordinated. We have a responsibility to the
American people to be as prepared as possible to deal with
these events, and we need greater accountability to avoid
duplication in these efforts.
As you know, the President has directed me to establish the
Office of National Preparedness at FEMA, which will serve as
the focal point for the coordination and implementation of
preparedness and consequence management programs for dealing
with the threat of weapons of mass destruction. This office
will work closely with the State and local governments to
ensure their input into those programs and activities as it
seeks to improve the quality of Federal support for State and
local emergency management personnel and our first responders.
While this is a new assignment for FEMA, this role of
coordinator and facilitator is not. FEMA is recognized and
supported as the Federal coordinator of assistance to State,
tribal, and local governments and individuals in all types of
disasters, whether they are natural, technological, or national
security events.
I appreciate the support you have provided this agency over
the years. My appreciation comes from the fact and
understanding that each year you are faced with tough choices.
With your support, we will make FEMA an even more responsible
and accountable national resource in preparing for and
responding to all types of disasters and an agency that will
continue to be an international model for disaster response,
mitigation, and recovery.
Thank you for the opportunity to appear before the
committee this morning, and if you have any questions, I will
be happy to try and answer them. Thank you very much.
[The statement follows:]

Prepared Statement Joe M. Allbaugh

Good Morning Mr. Chairman, Senator Mikulski, and other Members of
the Subcommittee. I appreciate the opportunity to appear before the
Subcommittee today to discuss my goals and priorities for fiscal year
2002. I welcome this opportunity to have a conversation with you on my
vision for FEMA.
Mr. Chairman and Committee Members, I appreciate the time you and
your staffs have spent with me in preparation for this hearing. I am
pleased we are developing working relationships that will serve the
country well, both in dealing with future emergencies and in setting
emergency management policies.
FEMA is made up of people who entered public service to help
others. I consider it a great honor and a privilege to join ranks with
the FEMA employees including disaster reservists, and State, Tribal and
local emergency response professionals and volunteers. There can be no
higher calling than providing speedy, appropriate help to our fellow
citizens in their time of need.
This morning several senior officials accompany me from FEMA.
Sitting next to me is Patricia English, FEMA's Acting Chief Financial
Officer, who I have turned to frequently in my first few months as FEMA
Director. I know that Pat, along with my Office of Congressional and
Legislative Affairs, have worked to give you and your staff a clear
picture of FEMA's spending priorities and historical financial records.
I'd also like to take the opportunity to introduce John Magaw,
former Director of the United States Secret Service and the Bureau of
Alcohol, Tobacco and Firearms. John served as the Acting Director of
the FEMA prior to my confirmation and is currently serving as the
Acting Deputy Director. In addition, John is our resident expert on
interagency coordination of terrorism-related efforts.
I'd especially like to introduce my first addition to the FEMA
team, our new General Counsel, Michael Brown.
Also with me today are:
--Lacy Suiter, Executive Associate Director for Response and
Recovery.
--Margaret Lawless, Acting Associate Director for Mitigation.
--Ken Burris, our Chief Operating Officer of the U.S. Fire
Administration.
--Trey Reid, our Acting Associate Director for Preparedness,
Training, and Exercise.
--Howard Leiken, the Acting Administrator of the Federal Insurance
Administration.
Less than a hundred days ago, I told the Committee members at my
confirmation hearing that I am a ``doer'' and that I viewed FEMA as a
``doing'' Agency. I laid out six goals I wanted to achieve. Neither the
employees nor I have wasted any time addressing these goals since I
became Director.
During my tenure in this position of public trust, we will:
--Enhance responsiveness to Governors and local leaders because
effective and immediate response is critical in disasters;
--Implement pre-disaster mitigation programs that encourage the
building of disaster resistant communities;
--Guide the Federal Insurance Administration to implement policies
encouraging the purchase of flood insurance and reducing the
costs of flood related disasters;
--Enhance the capabilities of the U.S. Fire Administration, which has
a new opportunity to make a real difference in the firefighting
community;
--Pay special attention and strengthen those volunteer and non-
governmental organizations responding to disasters; and
--Take great care to foster and support the professional, experienced
workforce at FEMA through enhanced training and creation of a
business-like culture within the Agency.
In addition, President Bush has asked me to establish the Office of
National Preparedness at FEMA, which will serve as the focal point for
the Federal coordination and implementation of preparedness, training,
exercise and consequence management programs for dealing with the
threat of weapons of mass destruction.
I consider these initiatives the foundation of an improved system
of emergency management that focuses on saving lives and protecting
property through responsibility and accountability. In recent decades,
we have seen Federal emergency management swing from overly
prescriptive preparedness programs and a single focus on response and
recovery, to a more comprehensive approach that incorporates
mitigation, by taking prudent protective measures to reduce losses. At
the same time, we have seen soaring disaster relief costs that need to
be managed more effectively.
The Administration's budget request for FEMA this year will build
on this progress by emphasizing Responsibility and Accountability. This
budget request asks individuals, communities, States, and FEMA to take
on an appropriate degree of responsibility while empowering them with
the tools to accept greater responsibility. Built into this budget
request are sound public policy tools to ensure greater accountability
to each other and the American taxpayer. We can enhance responsiveness
to our State partners by enforcing our current policies and developing
meaningful and objective criteria for disaster declarations that are
applied consistently. We need to eliminate the ``guesswork'' and focus
on fundamental needs for disaster declarations by examining all
relevant factors and not just dollars. I am developing a process to
accomplish this goal.
Almost immediately following the release of the Budget Blueprint, I
was on my way to tour the earthquake damaged Seattle area. This tour
gave me an opportunity to see personally the value of mitigation. The
National Earthquake Hazard Reduction Program (NEHRP)--a joint venture
among FEMA, USGS, NSF, and NIST--has been studying earthquakes,
developing guidance, and helping implement the most current earthquake
mitigation methods for almost 20 years.
Taking my lead from Congress' enactment of the 2000 Stafford Act
amendments, we will focus on implementing pre-disaster mitigation
programs that encourage the building of disaster resistant communities.
FEMA has made solid progress in this area, but more can be done to
limit the human and financial toll of disasters. As we work to develop
regulations implementing the Disaster Mitigation Act of 2000, we will
identify and codify those elements of pre-disaster mitigation that work
effectively. FEMA will capture the suggestions from our customers in
State and local government on how we can better help them to minimize
losses before a disaster strikes.
I want to take the ``concept'' of Project Impact and fold it in to
the program of mitigation. Project Impact is not mitigation. It is an
initiative to get ``consumer buy-in.'' In many communities it became
the catch-phrase to get local leaders together to look at ways to do
mitigation.
Project Impact was a successful initiative to get local leaders
together to look at ways to do mitigation. Now we move forward from the
buy-in to doing the work of mitigation.
I am here to tell you that mitigation works. The Seattle-Tacoma
area did not suffer significant losses because 20 to 30 years ago local
leaders invested in its future by passing building codes and issuing
municipal bonds that implemented solid protective measures.
FEMA has provided nearly $2.5 billion in Hazard Mitigation Grant
Program (HMGP) dollars since 1989 and only $105 million in Project
Impact dollars since 1998. The HMGP dollars have gone to build, rebuild
and have become the underpinning of community recovery. In the States
of the members of this Committee alone, more than $864 million in HMGP
funds are available. More than $691 million of which has already been
spent on mitigation projects.
Project Impact has accomplished its objective of raising awareness,
understanding and ``buy-in'' for mitigation. We need to refocus our
efforts from marketing to implementing. I am here to reassure you that
mitigation will not stop. Working with communities, businesses, and
associations will not stop.
I am convinced that locally initiated mitigation activities can be
effective. The technical assistance offered by FEMA employees in our
Headquarters and the Regional Offices advances the positive effects of
community-based mitigation. Locally initiated mitigation activities
make sense and, in fact, should be the rubber band holding together all
of our various mitigation programs. However, we must better quantify
the cost-benefit of the Federal dollars spent in this effort.
We must take time to complete our efforts to quantify the cost-
effectiveness of mitigation before FEMA seeks any additional funding
for Project Impact. We also need to complete the regulations
implementing the Disaster Mitigation Act of 2000. Likewise we need to
complete our analysis of the cost-benefits of other activities under
this initiative. This important information will guide our decision
making process. I want to make sure that the Federal taxpayer, FEMA,
and the State and local governments are getting the biggest bang for
their buck. Over the next year, grants already awarded will continue to
be distributed and the technical assistance offered by our Headquarters
and Regional Offices will continue to support communities in their
efforts to become disaster-resistant.
Disaster mitigation and prevention activities are inherently
grassroots. These activities involve local decision-making about
zoning, building codes, and strategy planning to meet a community's
unique needs. It is not the role of the Federal Government to tell a
community what it needs to do to protect its citizens and
infrastructure. I saw this first hand most recently when I visited
community after community on both sides of the Red River in North
Dakota and Minnesota as the river was rising. As Governor Hoeven,
Senator Dorgan, Senator Dayton, Congressman Pomeroy and I toured the
areas, the story was the same. In every community, they had learned.
Communities as large as Fargo, North Dakota, and as small as
Breckenridge, Minnesota, took their flood threat seriously and acted to
minimize the impacts of this year's event. It worked--levees held--and
temporary levees erected by the Corps of Engineers did their job. In
areas where FEMA and the State and local governments had conducted
buyouts of neighborhoods, the water came up again but there were no
people or houses impacted. Pre-disaster, community-based mitigation
works!
At the same time we are giving more control to State and local
governments through the Managing State concept of the Hazard Mitigation
Grant Program and other initiatives, we are asking that they take a
more appropriate degree of fiscal responsibility to protect themselves.
The original intent of Federal disaster assistance is to supplement
State and local response efforts. Many are concerned that Federal
disaster assistance may have evolved into both an oversized entitlement
program and a disincentive to effective State and local risk
management. Expectations of when the Federal Government should be
involved and the degree of involvement may have ballooned beyond what
is an appropriate level. We must restore the predominant role of State
and local response to most disasters. Federal assistance needs to
supplement, not supplant, State and local efforts.
Having Federal assistance supplement, not supplant State and local
efforts is, most likely, going to be one of the more difficult measures
aimed at responsibility and accountability that this Administration
will have to work through.
FEMA is looking at ways to develop meaningful and objective
criteria for disaster declarations that can be applied consistently.
These criteria will not preclude the President's discretion but will
help States better understand when they can reasonably turn to the
Federal government for assistance and when it would be more appropriate
for the State to handle the disaster itself.
Developing disaster criteria is not a new initiative and there is a
wide range of options. FEMA staff has been working on some
possibilities and we have been discussing some preliminary ideas with
the States. Just this past week, I met with several National Emergency
Management Association members to discuss the disaster declaration
criteria issue. All are in agreement that something needs to be done to
take the guesswork out of the declaration process. The hard part is
going to be the solution.
This is an effort that will require a strong partnership among the
State leadership, the Congress, and the Administration to make it
happen. I will be spending a lot of time with the State emergency
management directors, the Governors, members of Congress, and others to
work on disaster declaration criteria.
This Administration wants to make a real attempt to budget for
disasters up front rather than using ``emergency'' supplemental
appropriations. The Disaster Relief Fund request of $1.4 billion and
the establishment of a National Emergency Reserve of $5.6 billion, for
FEMA and other Departments and Agencies to tap into when needed,
represent a request based on realistic averages for disaster
expenditures. We consider these steps necessary to lead to
responsibility, accountability, and stewardship of tax dollars.
We can do this through the new Disaster Mitigation Act 2000 and
through the new disaster declaration criteria. And, we want to make
this a State and local initiative. FEMA should not be the cheerleaders
and the event planners. We should instead be providing the tools to
make the communities strong self-starters.
I also look forward to working with the Federal Insurance
Administration, the single national source of flood insurance. We will
design policies to effectively balance the insurance and mitigation
risk management strategies by creating incentives for the purchase of
flood insurance and reducing the costs of flood-related disasters. This
Administration is proposing that flood insurance coverage at subsidized
premium rates for vacation homes, rental properties, and other non-
primary residences and businesses be phased out. I understand it has
been the practice of charging many of these policyholders less than
actuarial rates. This practice undermines financial stability of the
program. We will also work to address the problem of ``repetitive
loss'' properties that are a disproportionate burden on this important
program.
I intend to place special emphasis on enhancing the capabilities of
the U.S. Fire Administration, which I believe has a new opportunity to
make a real difference in the firefighting community. Firefighters lay
their life on the line regularly. They have been advocating prevention
and mitigating hazards long before FEMA was in existence. That is why
President Bush and I fought hard to continue the FIRE grant program in
this budget. Firefighters and first responders are critical to the
public safety of our communities and we must support them.
We will pay special attention to volunteers and non-governmental
organizations responding to disasters. Disasters hit hardest in
communities and neighborhoods, and our solutions to disaster problems
rely on local solutions. Faith-based groups at the community level,
like the Salvation Army and the Mennonite Disaster Service, play
critical roles in disaster relief, as does the American Red Cross. The
power of neighbors helping neighbors should never be underestimated.
These people make a vital difference without any expectation of thanks
or recognition. Our Community and Family Preparedness, and Emergency
Preparedness Information programs focus on building effective self-
help, self-reliance capability targeted to all members of a community.
On a recent visit to Hoisington, Kansas, to view the effects of a
tornado that ripped through the center of the commercial and
residential heart of that small prairie town, I viewed firsthand the
role of voluntary and faith-based organizations. The Baptist Church
mobile feeding kitchen was preparing hot meals for displaced disaster
victims. The Salvation Army had leased a warehouse for donations and
was providing feeding vans for workers helping to clear away the
debris. The Adventist Disaster Services had organized volunteers from
around the region to help with arduous clean-up tasks. The American Red
Cross was providing vouchers for emergency lodging, clothing and other
essentials. I learned later that other groups, such as the Lutheran
Disaster Services and the United Methodist Committee on Relief, had
mobilized to begin doing case-work to identify and help with un-met
needs. Faith-based and voluntary groups such as these, drawing heavily
from people who live and work in the affected communities, bring out
the best of our society. These folks play critical roles in disaster
relief at the community level.
President Bush's compassionate conservatism is a hallmark of his
core philosophy. The President is promoting faith-based organizations
as a way to achieve compassionate conservatism. Not only does FEMA work
with the faith-based organizations that I mentioned, but FEMA's
Emergency Food and Shelter Program is the original faith-based
initiative and is a perfect fit with President Bush's new approach to
helping the poor, homeless and disadvantaged. Through this program,
FEMA works with organizations that are based in the communities where
people need help the most.
I would like to address the events of the past two weeks regarding
FEMA's role in Federal consequence management efforts. As you know, the
President has directed me to establish the Office of National
Preparedness at FEMA, which will serve as the focal point for the
coordination and implementation of preparedness, training, exercise and
consequence management programs for dealing with the threat of weapons
of mass destruction.
This Office will work with other Departments and Agencies to
coordinate Federal programs and assistance in support of an integrated
local, State and Federal preparedness and consequence management
response capability. This Office will also work closely with the States
and local governments to ensure their input into those programs and
activities as it seeks to improve the quality of Federal support for
State and local emergency management personnel and our first
responders.
I am committed to working closely with Attorney General John
Ashcroft to ensure that the Department of Justice's lead Federal role
for crisis management programs and FEMA's lead Federal role for
consequence management efforts are seamless and thoroughly integrated.
The role of coordinator and facilitator is not new to FEMA. FEMA has
developed its reputation as the Federal coordinator of assistance to
State and local governments and individuals in times of disaster. As
the President's Director for emergency management, I am also aware of
the expectations of our citizens that their government protect their
lives and property when an emergency or disaster occurs, whether it is
a hurricane, earthquake, flood, tornado, or as the result of an act of
terrorism.
As we implement criteria empowering State and local governments to
assume greater responsibility for people and property, we need to equip
them to do this. Developing State and local capabilities can only be
accomplished through effective training. Training must be a cornerstone
of our goal of increasing responsibility and accountability.
In the same way FEMA is harnessing new technologies to revamp the
response and recovery operations and to expedite disaster claims
processing, we need to maximize and multiply delivery of quality
training to our State and local customers. We will accomplish this
through e-learning, distance education, video teleconferencing and
computer simulations.
We must utilize the technologies that allow sharing of knowledge
and resources among various communities and states. FEMA can be the
leader in helping experts in the field assist each other instead of
immediately turning to the Federal Government for assistance.
We will take great care to foster and support the professional,
experienced workforce at FEMA. This Administration wants to make sure
the internal infrastructure of FEMA is retrofitted and prepared to
excel well into the next century. We intend to focus on new, innovative
ways to promote professional development opportunities and training. It
is of critical national importance for us to continue recruiting top-
notch people while finding ways to retain the talented and experienced
emergency managers who coordinate our nation's disaster program. FEMA
has many dedicated, long-term employees, who perform their duties day-
in and day-out, steadily and competently. They are truly the ``Cal
Ripkens'' of the Federal Government who get the job done when it
matters.
Today, FEMA is being called a model of government success due to
the hard work and dedication of the career employees. With all of its
success, however, FEMA is not free from problems. I have a respectful
appreciation for the role of the Inspector General at FEMA and am
pleased to report that I have established a very good working
relationship with the Office. In testimony delivered on March 15, 2001,
Mr. Richard Skinner, Deputy Inspector General, outlined a number of
areas that FEMA needs to focus on improving. I am committed to
tightening the internal controls and improving the Agency's processes
to ensure responsibility and accountability at all levels within FEMA.
In order to do so, adequate funding and resources are required. Without
the resources requested in this budget, we will be unable to start the
many improvements recommended by the Inspector General.
In addition to ensuring the internal controls and processes are
improved, I plan to realign some functions within the Agency in order
to fine tune the organization.
As President Bush said in his February address to the Joint Session
of Congress, ``Our new governing vision says government should be
active, but limited; engaged, but not overbearing.'' We think you will
see that the budget proposal for FEMA truly reflects the President's
goal of restoring a proper balance--moving away from the expectation
that the Federal Government is the option of first resort to the option
of last resort.
My team at FEMA wants to meet these goals and design and implement
sound public policy. But we need your assistance to meet these goals
without undermining public health and safety. We want to make certain
FEMA continues to be a shining example of good government. We will
carry out our mission responsibly and, will be accountable to the
members of this committee, the Congress, and the American people.
I appreciate the support you have provided to this Agency. My
appreciation comes from the understanding that each year you are faced
with tough choices.
With your support, I will make FEMA an even more responsible and
accountable national resource in preparing for and responding to all
types of disasters, and an agency that will continue to be an
international model for disaster mitigation, preparedness, response and
recovery.
Thank you for the opportunity to appear before this Subcommittee. I
am happy to answer any questions that you may have.

Senator Bond. Thank you very much, Joe.
I think we would certainly agree with you, number one, on
the need to get out of D.C. and go visit firsthand the areas
with which you are dealing and to listen to the people we
serve. That is, I think, absolutely essential for effective
service.
Second, regarding your kind words about Carrie Apostolou,
she has been an invaluable aide to this subcommittee, and we
wish her well as she assists other subcommittees. But it is a
significant loss for us.
I am going to defer my first round of questions and ask
Senator Domenici if he would like to take the first round since
he was kind enough to pass on the opening remarks.

Cerro grande fire

Senator Domenici. Thank you, Mr. Chairman. I first want to
say that I do have before me a Cerro Grande booklet. It has
been put together by people in the area who have given of their
time and by Los Alamos National Laboratory. It has scenes like
this one. There are some that are even worse. It was at the
peak of this fire which destroyed 400 residences when many of
these photographs were made, and we are going to make sure you
get one so you will have a constant reminder of how it was.
Mr. Allbaugh. Thank you, sir.
Senator Domenici. Obviously, you have done a wonderful job
in helping us streamline this operation.
Mr. Chairman and ranking member, I think you know we took a
chance in terms of this disaster as to how we were going to pay
for the damages and who was going to manage the losses. We
decided that since the fire was started by the Interior
Department, that we should not let them manage the aftermath. I
guess some people had strange feelings that might not sit
right. So, you all and many others agreed to put in the
emergency law which was drawn for this fire alone and to give
to FEMA the sole responsibility for managing the money,
handling the literally thousands of claims.
I must tell you it was not easy to get that started. It was
obviously in a state of disrepair for quite some time, but I do
think we can say today that it is being managed very well.
There are many claims yet to be handled, but we appreciate your
management directions to those running that operation.
Now I want to ask about the $150 million in the original
presidential budget concepts that were going to be rescinded
from the Cerro Grande fire claims fund. I understand that when
the administration and you found out about the large remaining
needs to solve these claims, that money was put back and it is
in the base of the President's budget now that is before us. Is
that correct?
Mr. Allbaugh. That is my understanding, sir.

Emergency reserve in 2002

Senator Domenici. Senator, Mr. Chairman, and ranking
member, I wanted to note, as a matter information--I think your
staff probably knows this but when we put this year's budget
together with your assistance, Mr. Chairman, we did not give
the President and OMB their request that there be a $5.6
billion fund set up for disasters during this year. Rather, we
said we are going to handle them the old-fashioned way, which
means as they come up, we will have to fund them. That
permitted us to spend that money on other programs. I think
there is over $700 million in this budget of yours that comes
within that purview that you will not have to charge against
your allocation.
Senator Bond. Mr. Chairman, is it your understanding that
for emergencies such as FEMA, that we can handle those as an
emergency subject to the President's declaration of an
emergency?
Senator Domenici. That is correct.
Senator Bond. He can choose not to sign it, but if he signs
it, then it is not scored against our budget allocation.
Senator Domenici. I think the fair way to say it is that--
--
Senator Mikulski. It is an important point.
Senator Domenici. It is a very important point. It is $5.6
billion that will be available for the rest of the budget. This
was one of the reasons we got an agreement. Let us just put it
in simple terms. Current law will govern how we fund and pay
for fires. There will not be a new regulation, a new budget
manner. It will be handled the way we always did. There will be
emergencies and they will not be counted against your
allocation, as I understand it.
Senator Mikulski. Seeking further clarification from a
brother appropriator and, of course, the chairman of the Budget
Committee, you used the term ``fires.''
Senator Domenici. Oh, excuse me.
Senator Mikulski. But you really meant disasters. Am I
correct?
Senator Domenici. Wherever I used ``fires,'' fire was on my
mind, but it is disasters.
Senator Bond. We do floods.
Senator Domenici. You do floods, yes, indeed. You do
tornadoes, earthquakes, all of them.
Senator Mikulski. In the President's budget, there was an
average that was placed in the budget based on a 5-year
historic average of disasters. Last year we got a breather. It
was a bit lower and there was some carryover money. And then
the President was calling for a reserve fund, which is not in
the budget.
But what you are saying is let us not worry about it.
Essentially we would use the money that we currently have, but
should there be a series of things, then the chairman of the
Budget Committee would agree that these would be funded as
emergencies because Senator Bond and I both endured paying for
emergencies that came from other parts of VA-HUD, and quite
frankly, we are going to be stretched this year.
Senator Domenici. I think what we ought to do, so that
there is no misunderstanding, because there are a number of
subcommittees that fund disasters, not just this one, I think
maybe we will get a letter and clear it with Chairman Stevens
and give it to the subcommittees as to what does not count
against their allocation. And this is a very big one. In this
particular one, there is $700 million already that seems to us
to be not allocable. You will not be bound by that in your
allocation because it is a disaster already declared, a reserve
fund for a disaster.
Senator Bond. Mr. Chairman, we very much appreciate that
clarification. As you have so generously noted, in recent
years, the budget allocation for HUD has been used as a
reservoir to fund disasters, and this has left the budget of
this committee, as it relates to HUD, in difficult shape. But I
understand we will still need to appropriate the funding
subject to the emergency designation, and we thank you very
much for that clarification.

Teleregistration

Senator Domenici. Just four or five quick ones. You have a
program that you call Tele-registration. That is for people
with small claims. Your system would allow the claimants to
register their claims over the phone, allowing more customer
service representatives to handle claimants with larger claims.
That is your goal and objective. Is that going to be carried
out?
Mr. Allbaugh. That is correct. That is in operation as we
speak.
Senator Domenici. Is it working somewhat?
Mr. Allbaugh. It is working fabulously. We have an 800
number where individuals call. They receive a live operator on
the other end, they give all the pertinent information over the
phone and their claim is processed right after that phone call
is completed.

Project recovery

Senator Domenici. I understand there is also a help network
referred to as Project Recovery. My understanding is that FEMA
established that with Stafford Act funds after the fire in Los
Alamos. This is useful because it provides anonymous counseling
to many victims. Are you committed to continuing that
beneficial service that we are aware of?
Mr. Allbaugh. Absolutely. Oftentimes the scars from any
type of disaster are not those that are physical or at the
scene of the loss. They are emotional. They are traumatic. And
it is important that we provide counseling for those
individuals who have suffered.

personal property claims from Cerro grande

Senator Domenici. With reference to that series of claims
which make you get involved in all method and manner of
evaluating property claims, they are having difficulty in some
instances with their personal property claims. That would mean
the inventory of what was in their dresser drawers, what kind
of jewelry they owned, and all that went up in flames.
Mr. Allbaugh. Right.
Senator Domenici. Are you going to continue to help them
fill these out and to extend time, if necessary, which is one
of your current statements to the Los Alamos----
Mr. Allbaugh. Absolutely. I think we have even instituted a
process just recently where there is a certain amount of self-
certification, if you are speaking specifically about the Cerro
Grande claims.
Senator Domenici. Yes.
Mr. Allbaugh. There is a self-certification to help
expedite this process, and that has been in place for 4 months.
We have processed 11,000 claims. I would tell you that in the
last 35 to 45 days, we received over 6,300 claims on this
point.
Senator Mikulski. Who processes those claims? Is it the Red
Cross or who at the local----
Mr. Allbaugh. No, ma'am. Right now, with regard to Cerro
Grande, FEMA processes those claims.
Senator Mikulski. But in any other disaster, who processes
those?
Mr. Allbaugh. Initially, there are other individuals who
are involved. Ultimately, if the President declares a
particular event a presidential disaster, we take over that
responsibility.
Senator Domenici. I am going to hold the rest of my
questions.
Actually for the first time in the history of FEMA in the
Cerro Grande legislation, which was sui generis--it was just
for it--we did say that they would process the claims. They
would be the people that would pay the claims, as I indicated,
because the option was to give it to Interior, and that did not
seem right to many people. They probably would have done a good
job.
But I wanted the committee to know that given this onerous
job, they are handling it in a very good way, especially since
his arrival on the scene, and I want to thank him for that and
thank the committee.
Senator Mikulski. Mr. Chairman, I think there are a lot of
lessons learned from the terrible experience in New Mexico. As
we move forward on some of our continued reforms, we are going
to learn a lot from what happened in that very horrific
situation.
Senator Domenici. I reserve any time for a second round,
Mr. Chairman.
Senator Bond. Senator Mikulski.

office of National Preparedness

Senator Mikulski. Thank you very much, Mr. Chairman, and to
the other chairman. It really answered one of the areas of
questions that I wanted to direct to Mr. Allbaugh, which was
how would we pay for disasters because it is not even
predictable. But I think we have now got clarification
particularly on this scoring as an emergency upon presidential
declaration.
Before I go to our regular activity, I would like to
discuss the new responsibility that President Bush has asked of
you, Mr. Allbaugh. As I understand, in the President's
statement he has directed you to do a review and to establish
something called the Office of National Preparedness at FEMA.
What I would like to know is what did the President ask you to
do? When will it be done regarding this, again, as a work in
progress, as we discussed last week? And is the Office of
National Domestic Preparedness being moved from the FBI to you?
Mr. Allbaugh. This is a new office at FEMA the President
asked me to establish. I am taking over our proposal for its
creation to the White House this afternoon to make sure that we
have their input. This office will, first and foremost, find
out what the lay of the land is in this area of terrorism and
weapons of mass destruction. As has been noted in other
committee hearings, there are somewhere between 40 and 50
agencies that are involved in this arena. I asked for a grid as
to what agencies were involved and what they were doing, and to
my knowledge that grid and matrix has never been produced.
Senator Mikulski. I know we had it at our hearings.
Mr. Allbaugh. First and foremost, this office will find out
exactly what the picture is currently of this world of
terrorism and weapons of mass destruction with regard to what
the Federal Government is doing. I think that over the last
several years we have spent in excess of $12 billion and we
still do not have a national preparedness plan.
Senator Mikulski. Are you doing the review of--as I
understand it, number one, President Bush is not changing PD-
39, which says FBI does crisis management, FEMA does
consequence management.
Mr. Allbaugh. That is correct. PD-39 will still be in
existence.

review of Consequence management

Senator Mikulski. And are you undertaking a review of both
crisis management and consequence management, or the 46
different agencies involved in consequence management.
Mr. Allbaugh. My focus will be the 40 or so agencies in
consequence management first and foremost.
Senator Mikulski. I see.
When do you expect the review to be done?
Mr. Allbaugh. I do not exactly know when. This is going to
require the Vice President's request oversight, and he has
willingly agreed, at the President's to oversee this process. I
am hoping that over the next several months--and I would hate
to tie anyone's hands inappropriately--that we should have
something to talk about by early fall or the middle of the
fall. That is kind of my own personal time frame.
Senator Mikulski. Well, first of all, I just want to say
this. Number one, I really pledge my support to work with the
President, the Vice President, Dick Cheney, and you on this
because those 3 days of hearings last week really show that our
consequence management and even aspects of crisis management is
often quite disjointed and that there are several issues to be
addressed.
President Clinton, through former Attorney General Reno,
did establish something called the National Domestic
Preparedness Office, and it was to look exactly at those
agencies that you talked about. And it was over at Justice. It
was Defense and HHS and the National Guard and first
responders, and it was to assist State and local emergency
responders. That is why I asked is this moving from the FBI to
you.
Mr. Allbaugh. I think it is premature to make that
decision. I know that is a subject that the President, Vice
President, and I have discussed. I think we need to complete
this review first before any decisions like that are
undertaken.
Senator Mikulski. I understand that. I think that the
intention in mission established at Justice was excellent, an
open, interdisciplinary, interagency forum to coordinate all
this. They also had a State and local advisory board, which was
also good.
I would just ask you to review this, see what is the best
place to do it. I do not prejudge it either. I believe that you
are an extraordinarily competent person, and I believe the
President has been clear on what he wants. In this matter, what
President Bush wants, so does Barb Mikulski. We look forward to
hearing this. I think, Mr. Chairman, when we get to the fall or
even ongoing, we can talk about what we need to do in this
area.
Mr. Allbaugh. Thank you, ma'am.

cost share of Hazard mitigation

Senator Mikulski. In terms of hazard mitigation, this then
goes to the whole issue of changing the Federal share from 75
to 50 percent, actually doubling the cost of State and local
governments. Also, I note in your testimony bringing Project
Impact into hazard mitigation. Am I correct in that?
Mr. Allbaugh. That is correct.
Senator Mikulski. Now, could you tell us what would be the
consequence of this on State and local governments? And the
whole point of disaster mitigation was to really encourage them
to look ahead, plan, and be prepared. We took FEMA from often
an inept response agency and focused on recovery, at which they
were not very good, to readiness, response, recovery, and of
course, prevention early on. What would be the consequence of
this? Do you think we are going to undo the gains for
preparedness by this change?
Mr. Allbaugh. Well, I certainly hope not, and I do have
some concerns in this area of moving the share from 75/25 to
50/50. I am not sure that that is fair to the States, quite
frankly, and it is something that I want to look closely at. I
have some deep concerns about it. I think ultimately we need to
be designing, overall disaster criteria so all the States know
exactly what we are faced with regardless of whether it is a
small disaster, a medium disaster, or hopefully not a
catastrophic disaster, but at the same time couple some pre-
mitigation efforts that States are doing right now, maybe
rewarding those States for taking those efforts and
initiatives. We have started this process internally, which at
some point I hope to share with members of the committee. We
need to have a comprehensive plan to look at the entire
mitigation area. In my world, I would prefer not to have 15
different programs--excuse me?
Senator Mikulski. Well, I agree with you. First of all, I
would hope in any formula change, knowing of your previous life
experience, that there will be really rigorous consultation
with the National Governors Association----
Mr. Allbaugh. Absolutely.

Project impact

Senator Mikulski [continuing]. And with the National
Association of Counties, which would be crucial.
And then second, Project Impact was meant to be prevention,
it was not meant to be a new form of pork in Maryland. When we
looked at what we needed to do to stop disasters in western
Maryland, the Speaker of the House and also the Army Corps of
Engineers did a review for us so that when we moved, we could
see what the State needed to do and what the Feds needed to do.
Perhaps that type of prevention should come through their State
plan when they are applying to you.
Mr. Allbaugh. I could not agree with you more.
Senator Mikulski. This is not about pork. This is about
prevention.
Mr. Allbaugh. I could not agree with you more. I think
oftentimes we possibly have left out those local communities,
the State emergency managers who ought to have a say in
implementing these programs particularly when it comes to
mitigation efforts. They need to be seated at the table
figuring out the right game plan for that particular State.
Senator Mikulski. Well, my time is up. I will come back.
The chairman has been waiting.

self-certification for Cerro grande claims

Senator Bond. Thank you very much, Senator Mikulski.
Just to follow up on a discussion you were having
previously, you were talking about self-certification. We know
the importance of moving forward. Self-certification speeds up
the process, but I am concerned that there be standards,
processes, or post-audits to make sure that fraud and abuse
does not creep into the system. We assume that 95 percent of
the people are honest. Is there a system set up to catch the 1
or 2 percent?
Mr. Allbaugh. Absolutely, sir. This is not just walk in the
door, make something up, and jot it down on a newspaper. There
has to be follow-up after the fact.
Senator Bond. Do you do that? Are you doing the follow-up?
Mr. Allbaugh. We have not started that yet, sir. We have a
couple of people who have, unfortunately, been found out
through their misdeeds, and I think prosecuted to the fullest
extent of the law.
Senator Bond. There is criminal prosecution for deliberate
fraud.
Mr. Allbaugh. Absolutely. There are 22 cases pending in New
Mexico right now, if I remember correctly.

coordination of Mitigation programs

Senator Bond. I think a couple of good prosecutions may be
the healthiest antidote or actually preventive medicine for
that in the future and not just remedying the past.
Let me turn now to the hazard mitigation grant program
because you have touched on it. This is so important. Funds are
made available under the disaster relief fund through section
406 for mitigation, and FEMA has been provided funds in the
past for buy-outs. But I am concerned whether there is adequate
coordination among these programs and other FEMA programs.
Can you outline for us what steps you intend to take to
assure better coordination of the mitigation activities or what
kind of overhaul you might make generally of the mitigation
program in FEMA?
Mr. Allbaugh. Well, first and foremost, I think we are in
the process of a systematic review internally of what programs
exist in the mitigation arena. With regard to Project Impact,
one particular pet peeve that I have, which may be not fair,
but it seems to me that that particular program--right now
there are 250 communities that participate out of roughly
25,000 nationwide. I think whatever program we devise needs to
be encouraging for all communities to participate when it comes
to pre-disaster mitigation as opposed to meeting some very
strict and confining criteria.
So, I think it is first and foremost incumbent upon the
agency to review programs internally. My goal is to devise a
program that is easily understood by everyone and applicable to
everyone. I have a basic theorem in life: what is fair for one
is fair for all. We should not devise programs that may be
operable in one State and not operable in another State. I
think we can do this review in short order, sir.

National mitigation plan

Senator Bond. As you may recall, former FEMA Director James
Lee Witt was a big supporter of buy-outs of properties in the
flood plain, and we had I think some very successful examples
in Missouri. But unfortunately, despite some massive dollars
provided by Congress for the buy-outs, FEMA still does not seem
to me to have a coordinated, cohesive buy-out program with
clear rules and procedures.
I would like to know your view of the role of Federal buy-
outs in terms of the national mitigation plan. What should the
role of States be in the national mitigation plan in terms of
decision making and what I believe must go along with it,
funding responsibilities?
Mr. Allbaugh. Well, my opinion is that we probably ought to
be almost equal partners in that process. If there is not
common agreement on any mitigation plan, then it will not be
effectively carried out. It is my goal, as a part of reviewing
all the mitigation efforts, that we more clearly define in
short order what the national plan should be. I would like to
share that with you at my next opportunity.

unspent Hazard mitigation dollars

Senator Bond. We will be interested to find that out.
Under the hazard mitigation program, the FEMA Inspector
General has found some significant problems and reported it
appears that grants are being awarded, but a significant number
of the projects are not being completed. As of last fall, 57
percent, or $1.2 billion, of HMGP dollars, remain obligated but
unspent.
Can you tell us why this is happening and does it suggest
that maybe the States or somebody does not have the plans in
place to spend the dollars effectively? What can you do about
it?
Mr. Allbaugh. I have asked that same question, sir. When I
showed up, I noticed that in some cases some of these grants
have been on the books for 3, 4, and 5 years. I have asked for
everyone to take a close look at that. In fact, we have already
shaved back some programs with respect to the amount of time
that is available to communities to take advantage of these
grants. I think 5 years is too much. I think possibly 4 years
is too much. Three years might be a good average. I am not
sure. I think it requires us to sit down with those communities
to find out what is a reasonable time period. We just have too
much money that we are carrying on the books.

Hazard mitigation grants as a discretionary program

Senator Bond. Director Allbaugh, generally I am a big fan
of block grants and not having a lot of Federal strings
attached to funds that we send out to State and local
governments. But I am a little concerned the hazard mitigation
program works almost like an entitlement program and funds are
automatically made available as a set percentage of total
disaster cost.
Last year, during consideration of the Stafford Act
amendments, I suggested the possibility of turning HMGP into a
competitive grant program to make funds available up front for
pre-disaster mitigation activities, most addressing national
priorities to those States and communities that are really
doing all they can. I would be interested in your thoughts on
converting the hazard mitigation program into a discretionary
program so the money does not automatically fall into the laps
of somebody who has had a disaster, but goes to those places
where they are willing, able, and ready to take on the
significant obligations.
Mr. Allbaugh. I would like to take a look at that, Senator.
What I worry most about, quite honestly, is that sometimes we
have the proclivity of not addressing items that should be
addressed until after an event takes place. Oftentimes, once an
event takes place, that gets everyone's attention in the
community or that county or State's, and I would hate to throw
that particular part of the program out the door because it may
be the one incentive to bring those folks to the table to do
something.
I will cite you a specific example, sir. As you all know,
we have been talking about Davenport most recently. The city
council has before it now an issue to go forward with not only
their own engineering study, but to go back and revisit a Corps
of Engineers study that was done in the early 1980's. They
probably would not have been thinking about that, quite
frankly, until this water started rising on the Mississippi.
So, I would like to take a look at what you are suggesting.
I do not know enough to really have a firm idea at this point.
Senator Bond. Well, I can tell you that it is not my normal
procedure to suggest moving away from block grants, but I am
delighted to hear that Davenport is really focused in on it.
Certainly they would rank highly on a competitive grant
program. But apparently there are some communities in some
States that just do not get it and are not able to move
forward. So, we look forward to discussing it with you.
Now, Senator Johnson, thank you for your patience.

Mitigation

Senator Johnson. Thank you, Mr. Chairman. I will just very
briefly move along, building on the questions that you and
Senator Mikulski have asked relative to mitigation, which is an
area of some concern of mine. I appreciate that Mr. Allbaugh
has talked about moving on to the next level relative to
mitigation efforts.
But it does concern me if we are going to eliminate Project
Impact, rather than developing better and more thorough-going
criteria, to address the pork issue that Senator Mikulski
raised, if we are going to do that and at the same time double
the local costs on mitigation programs. I just am concerned
whether the funding is going to be there to move to that next
level, or if in fact we are going to see a retreat on the part
of communities and their ability to prepare for serious
problems of the future, which in the long term then cost us
still more.
So, on the one hand, we do not want this to become an
irresponsible use of the taxpayers' money. I think that you are
absolutely right that what we are doing now is just barely
scratching the surface of the numbers of communities that
really ought to be involved in an aggressive mitigation
strategy. But on the other hand, it is hard to do something
with nothing. I worry about the overall level of funding
available in your tool box to come up with a broader, more
aggressive strategy.
Mr. Allbaugh. You have put the finger on my major concern
about moving from 75/25 to 50/50. We have to be partners with
State and local communities. I do not want to be in a position
of penalizing those communities for something that they would
like to do. I just met recently, as I alluded in my remarks,
with the board members of NEMA who are very concerned about
this funding shift. It is a concern to me. I am not so sure
that I am there, quite frankly, but I would like to study it
further without getting myself in too much more hot water.
Senator Johnson. I appreciate your observations, and I
would share again the comments of my colleagues that I would
hope that on these mitigation issues, that you would work in
close communication with the Governors and the mayors and the
counties, the local government officials who oftentimes are
dealing with very thin budgets themselves and yet are on the
front line of trying to think ahead prior to disasters. And
sometimes at the local level, that is very difficult to do. You
have got all kinds of urgent crises of one kind or another
going on, and we need to do more, I think, to encourage them to
be fixing the roof before it rains.
Mr. Allbaugh. Absolutely.
Senator Johnson. So, thank you again, Mr. Allbaugh.
Mr. Allbaugh. Thank you, Senator.
Senator Johnson. I yield back.
Senator Bond. Thank you very much, Senator Johnson.
We have just had a vote called. Senator Mikulski and I are
going to try to play tag team and keep this going as best we
can. Now we turn to Senator Domenici for his questions.

Consequence management

Senator Domenici. Thank you very much, Mr. Chairman.
Mr. Director, let me say that many of us have been part of
the establishment of the first responder system in the country.
You know, the big one is 120 American cities. There are only 16
that remain to be done under the first responder preparation.
I think while we are sitting here today saying it is good
that the President moved the terrorism function to you, I think
you should know that there will be some opposition to that up
here because the Department of Justice has a lot already going
on and then the FBI has been in charge of crisis management.
You are going to be in charge of the crisis consequences I
think.
But when will we have a description of how you are going to
do this and when? Is this the one that the Vice President is
going to supervise?
Mr. Allbaugh. Yes, sir. As far as the structure of the
office, you will have that very soon. Insofar as the overall
plan, which incorporates the involvement of the President and
Vice President, I think that is several months down the road.
Senator Domenici. I wanted to suggest to you that with
reference to terrorism, that there is a great deal of
information, scientific and otherwise, that has been
accumulated by the two national laboratories, Sandia and Los
Alamos--and Livermore, the three that do nuclear weaponry --
with reference to many of the facts that surround what can
happen, what detection processes, chemical analysis processes.
They have a lot of that going on, and I hope that you make note
of it as you put your process together because right now I do
not think there is a direct line from anyone. But they are just
supplying the information. I think when you get into it, you
will find it is a very valuable asset.
Mr. Allbaugh. I appreciate your pointing that out.

claims and settlements for Cerro grande

Senator Domenici. I am going to ask for the record, at your
earliest convenience, you supply this subcommittee with the
current facts regarding claims, settlements, and the like of
the fire at Los Alamos.
Mr. Allbaugh. I will be happy to do that.
Senator Domenici. Bring us current and also give us your
best assessment of how many remain, how many that you know
about that are filed and not yet settled, and somebody has an
estimate of those who still have not filed. If you would give
us a summary.
I think we took a chance in saying let you run this, and I
think my good friend, the chairman, was kind of worried about
day-to-day management by FEMA, and we want to make sure that we
were right and that those things you have worried about are not
going to come to fruition at Los Alamos. Will you do that for
us?
Mr. Allbaugh. We will do that. You will have it before the
week is out.
Senator Domenici. Thank you.

FEMA's ever expanding assignments

Senator Bond. Thank you, Mr. Chairman. I a budgeteer at
heart, and I just hate to see things that are spent without
control. I am trying to reflect the discipline that you have--
--
Senator Domenici. What is not wasted is there under our
system to use for better programs that are not getting funded.
Senator Bond. Thank you very much, Senator Domenici.
Director Allbaugh, I have been concerned over the years
about mission creep at FEMA. For example, a few years ago, the
former Director was named to head up a task force on the
District of Columbia snow removal problems. I mean, snow does
happen in the District of Columbia. In my view that is not an
unexpected emergency. Last year for the first time, FEMA
declared a public health emergency in two States and awarded
funds for prevention of West Nile virus. Now, I understand FEMA
has been asked to coordinate plans in the event foot and mouth
disease enters into the United States.
I have some concerns about why FEMA should be involved in
such problems which have little to do with FEMA's principal
role of natural disaster preparation and response for
activities which would seem to be more logically in the purview
of the Department of Health and Human Services or U.S.
Department of Agriculture, even for those activities which are
truly above and beyond the capacity of State and locals to
respond. I know if you have a big snowfall, everybody would
like to have the Federal Government come in and plow the snow.
But are you taking a look at the scope of FEMA with respect
to these new activities?
Mr. Allbaugh. I am concerned about mission creep as you
are. I believe that we should do what we are charged with doing
and do it well. FEMA has a great reputation and it is because
it is a can-do agency. The reservists, the 2,600 or so
employees, all the volunteers have worked hard to earn that
reputation. They deserve that reputation. At the same time, we
suffer from the success of that reputation; if you want
something done and you want it done right, you give it to FEMA.
I am hoping that mission creep will slow to a crawl, quite
frankly.
With regard to the foot and mouth disease and the West Nile
virus, we have been asked to participate in those responses
primarily because we are one of the agencies that has the
closest, most active relationships with the first responders,
the local responders, the State and local emergency managers.
These are relationships that have grown over the years and
because of those relationships, some other agencies are not as
fortunate as we. They have invited us, particularly Agriculture
with regard to foot and mouth disease, to participate in a task
force. Agriculture still has the lead with regard to foot and
mouth and we are there as a resource.
With regard to snowfall, I think the Stafford Act limits us
to participating in snowfalls that are the record snowfalls.
So, it is not every snowfall that we are involved in now, even
though over the last several months, it seems as if that is the
case.
But your point about mission creep is well taken.

West nile virus

Senator Bond. With respect to the West Nile virus, what
about the Centers for Disease Control? Who is going to handle
that? What is the administration's policy? I mentioned plagues
in my opening comments, but who is going to handle those kinds
of things? Is that FEMA's job or somebody else?
Mr. Allbaugh. I know we are in discussions with HHS and CDC
right now insofar as who will ultimately take the lead. We
believe there are defined lines of authority and
responsibility, and unless there is an absolute need for FEMA's
participation, I would suggest that those responsibilities lie
with those two agencies.

state and local preparedness for Disasters

Senator Bond. When you were in Davenport recently, you
raised the issue of the need for communities to take the steps
necessary to protect themselves against the risks they face
rather than relying on American taxpayer time, and again for
natural disasters which can be reasonably anticipated.
What specifically do you intend to do to improve State and
local government accountability for disaster preparedness and
mitigation?
Mr. Allbaugh. FEMA has a great relationship with the State
emergency managers, with regard to pre-disaster mitigation and
mitigation as a whole. It is my desire, quite frankly, to meet
more often with those individual managers who are responsible
for that implementation, making sure that they are a full
partner in this effort.
Davenport is a community that has taken several steps over
the past several years in the area of buy-outs. That is one of
the reasons their damage is less this time around than it was
in previous years, 1997 or even 1993, and I commend Davenport
for having taken those steps. Many communities up and down the
Mississippi have done exactly the same thing. What I worry
about are not the communities so much that have taken those
steps, but more so those communities that have not taken the
steps to prevent future disasters.

measurement of State and local capabilities

Senator Bond. That actually leads into my second question.
The Inspector General said one of the top challenges facing
FEMA is developing a method of assessing State and local
capability and developing a reliable basis to implement risk
based funding in the allocations to the State. FEMA instituted
a process called Capability Assessment for Readiness. The IG
seemed to suggest it is basically a self-assessment by States,
and according to the IG, there is apathy at both the State and
local level because of concerns that responses to the
assessment may have an impact on funding.
Do you think that FEMA needs to improve its measurement of
State and local capabilities? And if you have plans to do so,
do you believe that the State funding for pre-disaster
preparedness activities, $135 million this year, should better
align with risk?
Mr. Allbaugh. We have a great relationship with the
Inspector General, and I appreciate their comments. I happen to
believe that we have a pretty good system for making
assessments right now.
My feeling is that this is more in the area of determining
the benefits of pre-disaster mitigation; we need some ability
to measure those benefits. We could do a better job in that
arena. That seems to be a nebulous area that almost relies upon
seeing it with the naked eye as opposed to any concrete,
tangible evidence that is proven.
Senator Bond. We need to work on that.
Mr. Allbaugh. We do need to work on that.
Senator Bond. Mr. Director, if you will excuse me, we are
going to call a temporary recessed. The hearing will resume at
the call of the chair when we have a chair, and we trust that
members of the committee will be returning shortly. But I have
to go vote. The hearing is temporarily recess.
[A brief recess was taken.]
Senator Mikulski [presiding]. I know I saw Senator Bond
dashing for the vote as well.
Mr. Allbaugh, let me pick up on the Project Impact issue
for just a moment. Project Impact was my idea, but it is not my
pet rock. So, know that I am wedded to the outcome, which is
prevention.

state plans for disaster prevention in Maryland

Mr. Allbaugh. I agree.
Senator Mikulski. Prevention of disaster, the consequences
to families, the consequences to taxpayers we want to prevent.
So, therefore, we are looking at other models to accomplish
our policy objectives. In my mind, where there are repetitive
situations that exacerbate the consequence, that some are just
in flood plains, beach plains, a variety of things. So, we look
forward to that.
I just want to share with you a Maryland model, if I could,
just for your observation. We were hit pretty badly by floods
and ice storms a couple of years ago with terrible consequences
to the community. There was one whole street along the Potomac
River where we had four automobile dealerships under water. You
understand what I am talking about.
We did have the response of FEMA. It was excellent, but
Governor Glendening and I put our heads together and said how
could we avoid this again. And that is when we created
something called the Western Maryland Task Force, and it was
co-chaired by the head of the Baltimore Corps of Engineers, as
well as the Speaker of the House of the Maryland General
Assembly who lived in western Maryland. The Corps told us what
the problems were, using flood maps and all the things that
Corps of Engineers have at their disposal.
Then we did an inventory of what the Feds should do, also
what the local government should do, and also the private
sector because there was a bridge that would fill up on the
Potomac with debris and it acted like a dam which caused the
flooding.
So, you see when we went to FEMA for this new program that
I essentially created, we were on solid ground because we had
had solid engineering and community participation. It was not
to get a couple of bucks to buy out something we wanted to do
anyway.
The reason I say this is that is why I go to State plans
for disaster mitigation. Also, when we look at the cost
sharing, and the concept of authentic in-kind contributions, I
am not talking about desks and phones that they would have
anywhere. But, for example, if you ask a railroad to help pay
for the cost of improving a bridge that is functioning as a
dam, those are expenditures that should count in my mind. The
Governor says, we are going to take care of XYZ because the
engineers say, if we do our share along the Potomac with
certain kinds of levees, it will help. In other words, where
the State is already going to put its own money in, that should
also count.
So, I am just offering that as a model and then also the
consequences to that.
Then the other was, we do not want this to be like
Superfund sites that go on forever, and we do not solve the
problem. We eat the money up. I do not know where the cleanup
sometimes is.
So, I just lay that out for you as we ponder this and
analyze it because we are about to embark upon a very serious,
new Federal policy. To date, we have been doing it piecemeal
and I would acknowledge that--Project Impact here, et cetera.
So, I am looking forward to further conversations on this and
hope that we could do a rigorous analysis of Project Impact,
what worked well and what did not.
Do you have any comments on that?
Mr. Allbaugh. Yes, I do. Your model may be something that
we need to look closely at. I am a firm believer of
periodically analyzing all programs, figuring out what works
and what does not work, and getting rid of the part that does
not work or making sure it evolves into something that does
work. We are about to do that in the entire mitigation arena.
If we do not have our act together, there is no way that we can
go to a State to promote the pre-disaster mitigation. Again, I
feel that those individuals at the State level, and even at the
local level, have to become our partners, and 9 times out of
10, they view that the same way.
Senator Mikulski. They say all politics is local, but all
disasters are local.

Flood mapping

Mr. Allbaugh. Sure.
Senator Mikulski. So, I am not looking for cookie cutter
approaches. Ours was a model. I do not say it should be the
only model because I think one of the places where you and I
will actually agree, because it is where I have such a great
relationship with my colleague, is we are not government
people. We are local people. We are problem solvers. So, we do
not believe that one size fits all, or one plan will fit all.
So, we will look for your good management skills.
Where are we on the flood mapping, though? That is an
important tool for a lot of things that you want to do.
Mr. Allbaugh. This is the never-ending story.
Senator Mikulski. There are a lot of things you want to do,
including the flood insurance, et cetera. Could we talk about
flood mapping and how we can get it done?
Mr. Allbaugh. Well, it is a matter of money. I believe the
figure is somewhere around $1.1 billion. We make a little money
over a 7-year program. We make a little money from policyholder
fees and off of sales of the maps, but not much. So, basically
you reduce the unfunded cost by $750 million or $800 million
over 7 years. Once you start that process, by the time you end
that 7 years down the road, those current maps are already
outdated.
There are some communities who have taken it upon
themselves, because of growth pressures, construction, and
development, to update their own flood maps.
Senator Mikulski. Which could count as their in-kind
contribution.
Mr. Allbaugh. Absolutely. I think we ought to take a close
look at----
Senator Mikulski. In other words, give help to those who
practice self-help.
Mr. Allbaugh. I am sorry?
Senator Mikulski. Let us give credit to those who practice
self-help.
Mr. Allbaugh. Absolutely. I am not sure how many
communities we are talking about, but we ought to take a look
at those communities that have taken that initiative and see if
those maps meet our criteria and then adopt those maps. But
this is, as I said earlier, the never-ending story. And it is
so important because it drives development, it drives pre-
disaster mitigation, it drives overall mitigation and planning
for these communities.
Senator Mikulski. Well, I do not know why it should cost $1
billion, but I am not disputing that. But I do know this that
there are new technologies that are developing called
geographic remote sensing, in which we can map our own planet,
and there are now technological ways, new ways of simulation. I
am not sure of all the technology, but I have seen some of the
demonstrations tied in with NASA and even the private sector. I
wonder if maybe there needs to be an assessment of how we can
do flood mapping using some of the new technologies that would
both reduce the cost and the time.
Mr. Allbaugh. I am open to that. I ask that same question
almost daily. I think some folks are getting tired of me asking
that question. I am assured that we are as technologically
current as we possibly can be. But it never does hurt to review
an ongoing program and we will do that.
Senator Mikulski. Again, I do not want to over-dwell on
this, but----
Mr. Allbaugh. Another vote.
Senator Mikulski. I think it is a quorum, or it is the
Office of National Preparedness at the FBI doing a drill while
you are testifying.
I am going to leave it there, but I do know NASA had a
program called Landsat where it took pictures year after year
after year after year. One of the things Senator Bond and I are
so hot on is we love data, but we do not like data mortuaries.
Again, I offer perhaps a suggestion to talk to Dan Goldin to
see what is it that we have already.
Mr. Allbaugh. I agree with that.

Repetitive loss properties

Senator Mikulski. Again, we have been collecting lots of
data through civilian means. We are talking civilian data.
Let us go to the flood insurance. I know you are talking
about phasing out the insurance coverage for repetitive loss
properties. It sounds reasonable, but I am concerned about
unintended negative consequences and also the grandfathering or
grandmothering in where there have already been properties
built, longstanding, et cetera, even whole communities.
Mr. Allbaugh. I would agree with that.
Senator Mikulski. Particularly along those coastal areas.
Mr. Allbaugh. Yes, ma'am. This is an area we need to take a
close look at. I know there is a proposal to reduce flood
insurance to one additional claim and then you are out if you
do not relocate. There is a part of that that causes me a
little heartburn. I know there are several bills in both houses
right now, some of which really appeal to me insofar as a way
to address this situation.
Senator Mikulski. Well, will you be able to alter the
program without an authorization and do it through a budget
appropriations process?
Mr. Allbaugh. I am not sure of the answer to that question,
ma'am.
Senator Mikulski. I would strongly recommend that the
authorizing committees be involved. This is a significant
change, and the Stafford Act has given us enormous
responsibility. But I do believe committees of jurisdiction
would get prickly if we did anything new and dramatic without
an authorization. The very process of an authorization enables
congressional review hearings, et cetera. So, before we make
changes in repetitive loss, I really think the authorizing
committees need to be involved in some way.
Mr. Allbaugh. Interestingly enough, when I started asking
questions about repetitive loss, I learned that essentially
what we are talking about is 10,000 properties nationwide that
are the problematic properties year in and year out. I really
thought that was a smaller amount than I had anticipated, to
tell the truth.
Senator Mikulski. Here is what I envision. People are not
going to be happy about any changes we would do.
Mr. Allbaugh. Of course.
Senator Mikulski. And we get to where we have to move our
bill, and then they are going to come running to us and say,
how can you do this without an authorization? We are going to
have such a complex bill this year, and I do not think we are
going to have the appropriations that even a tight wad like
Senator Bond will like. So, I think we really need to
understand both the policy and the politics of this.
I have just one last area. First of all, just a comment.
The emergency food and shelter program is a terrific one.
Mr. Allbaugh. Yes, ma'am.

support for Fire programs

Senator Mikulski. And God bless all those groups that do
it. It is another area where FEMA gets high marks.
The second is the fire prevention and training. In your
testimony, you talk about a new involvement of the Fire
Administration. Could you elaborate on that and what resources
you think you would need?
Mr. Allbaugh. Well, first, thanks for recognizing that very
important program. I think it has been in existence since 1983,
if I am correct, providing emergency food, shelter, clothing.
It is probably the original faith-based program in the Federal
Government, if you think about it for a minute.
Second, to answer your question directly about the Fire
Administration. I have, for a long time, been an admirer of
those men and women out there who put their lives on the line
day in and day out. I am not so sure that I could do what they
do. They not only fight fires, they respond to automobile
accidents. They protect our infrastructure. I think it is
important that we properly train and equip with the latest
technology those individuals who are protecting our country.
They are the ones, along with the men and women in blue, who
will respond to the 911 phone calls when there is a disaster,
regardless of where it is. We can never say thank you enough
for what they do.
In exchange for what we ask of them day in and day out, I
think we ought to fully support them to the best of our
ability, and I think the Fire Administration will have no finer
friend than myself during the coming years. It is important to
highlight what they do. It is important to educate the American
public that they do a lot more than fight fires, and it is
important that we support them to the best of our ability.

Fire grant program

Senator Mikulski. Well, Mr. Chairman, I know we want to
return to your questions.
I know there was a blue ribbon panel, commissioned by James
Lee Witt, for people involved in the fire first responder
community to give candid assessments of both the Fire
Administration, as well as the Fire Academy in my home State in
Emmitsburg. I would commend you to look at these. Again, I am
not wedded to the recommendations, but that we really see where
we are going.
On the fire grant program, I know that this is a new
program, and my strong hope is that we could have a very clear
agreement between the House and the Senate that these be
competitive grants based on criteria you are developing. I hope
this does not become an earmarked program because I think if we
go down that road, it will be terrible. In other words, have
very clear criteria, competitive grants, et cetera because if
we get into earmarking in this Congress who gets what fire
truck, I do not think the Nation's needs will be served.
Mr. Allbaugh. I understand.
Senator Mikulski. We all have to kind of shake hands. We
are in it.
Senator Bond [presiding]. I wholeheartedly concur with my
ranking member.
Now, let me finish up with just a couple of quick questions
as the newly designated tight wad in the appropriations
process.
Senator Mikulski. Tight fisted.
Mr. Allbaugh. Mr. Chairman, if I may before Senator
Mikulski leaves, I would just like to make sure she knows that
I am not wearing Guccis. These are Naconas. There is a big
difference.
Senator Mikulski. Are you talking about those boots?
Mr. Allbaugh. Yes, ma'am. [Laughter.]
Senator Mikulski. My idea of Gucci boots is what Senator
Kay Bailey wore to the inaugural ball. We are still teasing her
about that.

Flood insurance program

Senator Bond. Or Jack Oliver.
In any event, Mr. Director, I am very much concerned about
the abysmal performance of the flood insurance program. There
are some inherent disconnects. It encourages construction in
high risk flood plains in coastal areas, and I understand that
2 percent of the properties in the program account for about
one-third of the program's claims over the lifetime of the
program. I think that FEMA's management of this program has
been a failure. It viewed its role primarily as a marketing
agent, but according to GAO testimony, which we will be
submitting today for the record and we will obviously make
available to you, if you have not seen it, FEMA does not even
have data on participation rates, the percentage of structures
in flood prone areas that are insured.
Senator Bond. How are we going to overhaul the program? How
can FEMA implement the GAO recommendations to collect data on
participation rates in order to gauge the success of the
program? Where do you see us going on this thing?
Mr. Allbaugh. Actually, Mr. Chairman, I am not really
equipped to answer that question very well. This is day 90 for
me. What I would like to do is study the GAO report, study our
recommendations internally, and report back to you.
Senator Bond. I would appreciate a well-considered answer
for the record because I think this is vitally important.
Mr. Allbaugh. I appreciate that.
Senator Bond. We are going down the wrong road. Something
is not working, and I think we owe the taxpayers better.
On counter-terrorism, I know that we have had some
discussions about this, and the members of the committee are
very much interested. In past hearings, I discussed with your
predecessor the confusion of the roles and responsibility. We
are very pleased that the President has now focused on this,
and it is gratifying there is significant attention to this.
After 3 days of hearings last week, I do not want you to
recreate those, but I would like a 90-second summary of what
the task force is and what the mandate is and whether there
will be funding requirements that we need to address in this
appropriations cycle.
Mr. Allbaugh. For the balance of this fiscal year, sir, I
believe we have enough fudge room to absorb the office getting
up and running.
Senator Bond. Just be honest. Do not let it out of this
room. If you know what you need, it might be easier to get for
this year than for next year.
Mr. Allbaugh. Well, that is interesting. I will take $25
million.
Senator Bond. Okay. Document it, designate it, prorate it,
applicate it, justify it, and get it approved by OMB, and we
will take a look at it.
Mr. Allbaugh. Well, I think we can do that in short order.
Senator Bond. Seriously, we will work with you on it.
Mr. Allbaugh. Actually that is what I was going to suggest
for 2002, but upon the chairman's suggestion, we will make a
run at it for this year.
Senator Bond. Okay. It is called budgeting out of the hip
pocket. But we will move forward.
A 90-second view of where are you doing, what are you going
to do with this? You are like the dog that caught the
Volkswagen. We caught it. We have been chasing it. This
committee has been chasing it for years. We caught it. What are
we going to do with it?
Mr. Allbaugh. Well, our forte is coordination and
facilitation. That is what FEMA does best. I am going to take a
proposal this afternoon of what the office will look like, what
its requirements will be, how we are going to draw upon other
agencies for that information to provide to the Vice President,
and he will craft in short order a calendar. During that time,
we will review all the various programs from all the Federal
agencies that are involved in terrorism and weapons of mass
destruction. Then at some point in the future, I hope early to
mid-fall, we will present to the President a plan insofar as
how the national strategy should look, should work in the
future for our country.
Senator Bond. Thank you, sir. Obviously, we will look
forward to working with you on that and all the other
challenging issues before you. If you have further information
on the report that you are going to make on the flood insurance
program after reviewing the GAO report, we will hold the record
open.

SUBCOMMITTEE RECESS

There being no further business to come before the
subcommittee today, the hearing is recessed.
[Whereupon, at 11:57 a.m., Wednesday, May 16, the
subcommittee was recessed, to reconvene subject to the call of
the Chair.]

DEPARTMENTS OF VETERANS AFFAIRS AND HOUSING AND URBAN DEVELOPMENT AND
INDEPENDENT AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2002

----------

WEDNESDAY, JUNE 6, 2001

U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 10:07 a.m., in room SD-138, Dirksen
Senate Office Building, Hon. Barbara A. Mikulski (chairman)
presiding.
Present: Senators Mikulski, Johnson, Bond, and Domenici.

NATIONAL SCIENCE FOUNDATION

STATEMENTS OF:
DR. RITA R. COLWELL, DIRECTOR
DR. CHRISTINE C. BOESZ, INSPECTOR GENERAL
DR. EAMON M. KELLY, CHAIRMAN, NATIONAL SCIENCE BOARD
ACCOMPANIED BY ROBERT EISENSTEIN, ASSISTANT DIRECTOR FOR MATHEMATICAL
AND PHYSICAL SCIENCES

opening statement of senator barbara a. Mikulski

Senator Mikulski. The VA, HUD Subcommittee will now come to
order. This committee convenes the hearing on the
appropriations for the National Science Foundation.
Before I welcome our witnesses, I would like to say a few
words about this auspicious moment. I would like to say to my
colleague, Senator Bond, that I assume this chairmanship in the
spirit of bipartisanship that has always characterized this
subcommittee. Senator Bond has a well established reputation
for being a leader and being effective in the U.S. Senate and
also in his chairmanship of this committee, he has always
operated under a spirit of bipartisanship, courtesy, and
collegiality. That is why this subcommittee has been a very
successful subcommittee in doing the Nation's business. Our
staffs have worked well together.
I really say here today that in assuming the chairmanship,
we are going to keep the spirit and the operations of the
committee. Again, working on a bipartisan basis, Senator Bond
and I will have a very clear and, I believe, agreed-upon
schedule.
First of all, in the area of veterans health care, on this
day that commemorates the landing at Normandy, we continue to
pledge our support to make sure that promises made will be
promises kept to America's veterans.
In the area of housing, we have a bipartisan agenda that
focuses on empowerment. We believe that public housing programs
should not be a way of life, but a way to a better life, and we
intend to pursue that course.
On the environment, I will work to fund programs to ensure
clean air, clean water, and of course, the ongoing effect of
cleaning up the Chesapeake Bay.
In the area of science and technology, we have really again
focused on a bipartisan basis. Senator Bond and I believe that
science is about ideas, not about ideology. We have supported
our space program where we have taken it to the stars and seen
untold discoveries.
And in the area of the National Science Foundation, on
which we are holding today's hearing, we have an agreed-upon
plan in which we want to double the National Science Foundation
budget over the next 5 years. We believe that science is about
new ideas that lead to new products, that lead to new jobs.
So, it is in that spirit of keeping America forward,
working together to create a better future in this new century
that I open this hearing today and welcome Dr. Rita Colwell.
Dr. Colwell, we welcome you as the very able Director of the
National Science Foundation; Dr. Kelly, the Chairman of the
National Science Board; and also the National Science
Foundation's very able Inspector General, Dr. Christine Boesz.
It is fitting today the hearing should be on the National
Science Foundation. This is an agency which we support
wholeheartedly increasing its budget. Dr. Colwell, you are in
the third year at the National Science Foundation as the
Director. You come from a distinguished academic career,
leading the biotech initiatives in the University of Maryland.
So, you bring sound science, remarkable scholarship, and yet a
spirit of entrepreneurship.
So, we are interested in hearing what your thoughts are on
the appropriations because we believe the NSF funds research
and education in the critical fields of basic science and
engineering. Because of the National Science Foundation
research, we now have MRI's that are so widely used to detect
disease and provide early detection. The NSF played a vital
role in getting the Internet where it is today, and we are also
now on the cutting edge views in biotechnology, nanotechnology,
which offers whole new breakthroughs. Yet, I know that each
year the National Science Foundation receives 30,000 proposals
for great new ideas to be pursued and yet we can fund 9,000 of
them at our academic centers of excellence.
Before I go on with my statement, however, and we turn to
you, I would like to turn to my distinguished and most esteemed
colleague, Senator Bond, and thank him for his long-term
interest in science and for the really outstanding way he
chaired this committee. I look forward to working with him in
that spirit.

statement of senator christopher s. Bond

Senator Bond. Thank you very much, Madam Chair. I welcome
you and congratulate you and say that the spirit of
bipartisanship, cooperation, and collegiality of this
committee, which you described, was a spirit that you instilled
before I got here. Being smart enough to look around and find
out what works, I followed the Mikulski path, and it has worked
extremely well. Now we have Senator Mikulski as chair, leading
us back along the Mikulski path. I would say that we have
probably had the best working relationship of any ranking
member and chair, and I am extremely pleased to be here.
Now, I have been fat and I have been thin. I have been in
the majority, and I have been in the minority. I would rather
be thin and in the majority.
Senator Mikulski. So would I, Senator.
Senator Bond. But I have neither one. So, we are moving on.
I am pleased to be able to play the hand I have been dealt
with because Senator Mikulski has laid out, I think extremely
well, the list of priorities on which we have agreed.
I welcome Senator Johnson to the committee.
We know that when we get this steamroller going, it is on
the basis of bipartisan cooperation, thoroughly working out how
to resolve the many very important and difficult issues we have
to face whether it be assuring adequate veterans' health care,
or making sure that housing programs work. And I have always
said that one of my highest priorities is cleaning up the
Chesapeake Bay.
I am so happy that we are going to continue to work on that
priority. Madam Chair, I have some comments about NSF. Do you
want to make your comments about the NSF?
Senator Mikulski. Well, Senator Bond, I think it is clear
that we truly have bonded. I just wanted to say in terms of the
actual NSF, this whole issue of doubling is something not only
that you and I agree upon, but it is really something that Dr.
Harold Varmus, the Nobel Prize winner, the former head of NIH,
has called for, as well as Dr. Bromley, the advisor to
President George Bush in another era. Even Alan Greenspan has
warned that if we do not maintain strong investment in
university based research, this country could fall behind.
We are concerned, however, in this particular appropriation
that the overall R&D in the NSF proposal is being reduced. We
want to pursue this conversation. I am concerned that the
administration has recommended cutting R&D at the NSF, and we
need to really be able to take a look at that.
I support the government-wide increase in nanotechnology,
but at the same time, I am concerned that we could lose our
cutting edge in information technology. We need to be focusing
on the R&D budget and what we can really do to move this
forward.
I want to hear from the director about the new partnership
for math and science. I want to hear about, if we work to
double the funding of the National Science Foundation, what you
would recommend that it be spent on, how we can not only be
able to do the research, but how do we create the farm team for
the next generation of science?
I believe the farm team for science is like the farm team
in baseball. Being an Orioles fan and supporter, I know it
starts with the little leagues, and those little leagues are K
through 12 where you develop a passion for the game, a passion
for discovery, a passion for engaging in the world around you.
So, we want to hear about those initiatives and then how
can we support the people at the undergraduate level and the
graduate level and at the same time make sure that those young
people in our own country, though we welcome others who wish to
come here to learn, really have the opportunity to pursue
doctorates and at the same time be able to have opportunities
for this stunning new research.
If there had not been the National Science Foundation of 50
years ago, I do not believe we would have the infotech and the
new economy for the new century. So, we are looking ahead on
how to create the farm team for the scientists for the next
generation, as well as where we can pursue this. We need to be
stewards of the taxpayers' funds. Yet, at the same time, we
need to be investors in America's future.
Senator Bond.
Senator Bond. Thank you very much, Madam Chair. I am with
you all the way, except I am a Royals fan and always will be a
Royals fan. I wish your Orioles well.
I want to second what the chair has said about doubling the
NSF budget. We are committed. We believe the scientific
community understands the importance of a significant increase
in the amount of funding we put into basic research. Doctors in
Missouri and throughout the country have told me about the
importance of it, and Harold Varmus has said, ``Scientists can
wage an effective war on disease only if we, as a Nation and as
a scientific community, harness the energies of many
disciplines, not just biology and medicine.'' Simply put, that
means for NIH to do its job, NSF has to be adequately funded.
I am excited about many, many of the things that NSF does.
I am going to ask my full statement be submitted as part of the
record, but I do want to focus just a moment on biotechnology,
specifically, the plant genome research which is critical in
maintaining the long-term sustainability and competitiveness of
our Nation's agricultural interests, improving the human
condition, and improving the environment by limiting the amount
of chemical pesticides that we have to use.
A good example of the benefits of biotechnology is a recent
vaccine created through a genetically engineered potato.
Scientists from Cornell University and the University of
Maryland School of Medicine in Baltimore reported the success
of this plant-based virus that would provide humans with
immunity from the pervasive Norwalk virus, the leading cause of
food-borne illness in the United States and much of the
developed world.
I am saddened that hysteria and fear, instead of reason,
often seem to be the driving forces behind the discussion about
biotechnology and the benefits it brings. We need to publicize
those benefits. We also need to have the scientists who are
willing to stand up and speak out when people make unfounded
criticisms and charges against the technology. I appreciate the
efforts of the Office of Science and Technology Policy and NSF
in educating the public about biotechnology, but clearly more
needs to be done.
Senator Mikulski and I look forward to working with the
administration to increase funding for NSF and keep us on a
path of doubling the NSF budget by 2005. But I must say that
while auditors have not identified any significant financial or
management problems with NSF and congratulate it on its clean
opinion, I just want to make sure that NSF is not taking on
more responsibilities, especially when its staffing resources
have remained flat over the past years, than it can handle.
I have no criticisms about the NSF or its management about
the ``Major Research Equipment'' account or other management
issues that have drawn my attention. I believe that the
problems that have been raised can be resolved with the
constructive assistance from the Inspector General and the
guidance and wisdom of the National Science Board. But I do
think that we ought to take swift and vigorous action because,
as we ramp up what I hope will be an escalating curve upward of
funding, we want to make sure that everything is in place.
One final point concerns me. I am still not convinced we
are providing enough support for smaller research institutions.
The smaller schools and their students, I am afraid, are not
being caught up, and I am disappointed the administration did
not request funding for the Office of Innovation Partnerships,
which is an important priority of mine.
A recent report by NAPA on the merit review process found
that NSF was supposed to add a new element to broaden the
participation of under-represented groups. NAPA said it is too
soon to make valid judgments about the impact, but it found
that NSF lacked the quantitative measurements and performance
indicators to track the new criteria. The NAPA report suggests
there is validity to some of the criticisms that NSF's merit
review process is too much confined to the ``good old boys,''
the ``haves,'' in the business who have been successful, and as
a result, the ``have nots'' or the ``want to haves,'' many of
whom come from States that are represented on this
subcommittee, are not adequately represented. We look forward
to continuing constructive discussion on that issue.
Senator Mikulski.Well, without objection, Senator, your
full statement will be in the record.
[The statement follows:]

Prepared Statement of Senator Christopher S. Bond

Thank you, Chairperson Mikulski. These are strange times but I look
forward to continuing our good relationship in meeting the needs of the
Nation and especially, in the area of science and technology, a
priority that we both share deeply. I also want to welcome Drs.
Colwell, Kelly, and Boesz to the hearing today.
Unfortunately, since there is no Science Advisor in place, the
White House Office of Science and Technology Policy is not here to
testify. However, I am very pleased that the White House recently
selected Floyd Kvamme to be co-chair of the President's Council of
Advisors on Science and Technology. Floyd brings a lot of experience
and expertise on science and tech issues and will be a valuable
resource to the Administration and this Committee.
Before I get into some specific issues, I want to highlight the
importance of supporting NSF. NSF plays an important and unique role in
stimulating core disciplines of science, mathematics, and engineering
and according to many economists, over the past half century, advances
in science and engineering have stimulated at least half of the
Nation's economic growth.
That is why my good friend and colleague Senator Mikulski and I
have led the effort to double NSF's budget and have received such wide
bi-partisan support. I think we can all agree that investing in
research and development is positive and critical for the economic and
intellectual growth and well-being of our Nation.
Support for NSF is also vital to the research being conducted in
the biomedical field. I have heard from doctors throughout Missouri and
the country who are alarmed by the disparity in Federal funding between
the National Institutes of Health and the physical sciences that NSF
mainly supports. Many medical advances could not have occurred without
NSF-supported research. Medical technologies such as magnetic resonance
imaging, ultrasound, digital mammography and genomic mapping could not
have occurred, and cannot now improve to the next level of proficiency,
without underlying knowledge from NSF-supported work in biology,
physics, chemistry, mathematics, engineering, and computer sciences.
Thus, the biomedical work that NIH currently supports will be hampered
without the underpinning research supported by NSF. But don't just take
it from me, take it from the medical experts. In the words of former
NIH Director Harold Varmus, ``Scientists can wage an effective war on
disease only if we--as a nation and as a scientific community--harness
the energies of many disciplines, not just biology and medicine.''
Simply put: supporting NSF supports NIH.
I have also spoken to many experts in the high-tech industry who
have voiced their concern about the federal government's support of the
physical sciences. According to the American Association of Engineering
Societies, the number of bachelor degrees in engineering has declined
by almost 20 percent since 1986 while the overall number of bachelor
degrees have increased by 18.3 percent!!! This decline has put our
Nation's capabilities for scientific innovation at risk and, equally
important, at risk of falling behind other industrial nations. In the
past decade, growth in the number of Asian and European students
earning degrees in the natural sciences and engineering has gone up on
average by four percent per year. During the same time, the rate for
U.S. students declined on average by nearly one percent each year.
Thus, it is no surprise that many in the high-tech industry
struggle to find qualified engineers and scientists and have become
more reliant on foreign nationals to fill their positions. Further, it
has limited the growth potential of the high-tech industries and
allowed foreign competitors to catch up to US industry. I hope that
people take this as a serious wake up call and recognize that our
future economic health and competitiveness are at stake if we do not
provide more support to NSF and other federal agencies that support the
physical sciences.
I am excited by the many research areas that NSF supports but my
biggest interest is plant biotechnology. I strongly believe that
biotechnology and namely, plant genome research is critical in
maintaining the long-term sustainability and competitiveness of our
Nation's agriculture industries. Plant genome research also has
exciting possibilities for improving human health and nutrition and can
be a very powerful tool of addressing hunger in many third world
developing countries. I have already seen first-hand some of the
promises of plant biotechnology in Southeast Asia and am encouraged by
its future applications.
A good example of the benefits of biotechnology is a recent vaccine
created through a genetically engineered potato. Scientists from
Cornell University and the University of Maryland School of Medicine in
Baltimore reported the success of this plant-based vaccine that would
provide humans with immunity from the pervasive Norwalk virus--the
leading cause of food-borne illness in the U.S. and much of the
developed world.
It is sad though that hysteria and fear instead of reason often
seem to be driving the discussion around biotechnology and the benefits
of biotechnology such as the potato example I just cited are not being
publicized adequately. We cannot afford to have the experts sit in
their ivory towers. I appreciate the recent efforts of the Office of
Science and Technology Policy and NSF in educating the public about
biotechnology but clearly, more needs to be done.
In terms of the budget, the Administration has requested $4.47
billion for fiscal year 2002, an increase of $56 million or 1.3 percent
over the fiscal year 2001 enacted level of $4.416 billion. It is my
hope and desire that we can work with the Administration to increase
funding for NSF and keep us on the path of doubling NSF's budget by
2005. This is a priority of both myself and Senator Mikulski.
Notwithstanding our budgetary issues, I continue to have questions
about the Foundation's management capabilities, especially as its
budget grows and it continues to handle a number of new complex program
responsibilities. While auditors have not identified any significant
financial or management problems with NSF, I am concerned about NSF
taking on more responsibilities especially when its staffing resources
have remained flat over the past several years.
I congratulate NSF and its leadership for receiving a clean opinion
on its financial statements audit for the third year in a row. The
auditors also did not find any significant internal control
deficiencies for the first time in NSF's history. Nevertheless, there
is always room for improvement and, as the auditors found recently, NSF
expended funds from its Research and Related Activities appropriations
account to fund shortfalls in its Major Research Equipment
appropriations account for the Gemini Telescope Project.
Let me be clear: I am not here to criticize NSF or its management
about the MRE account issue or other management issues that have drawn
my attention. Again, in context of the overall performance of the
Foundation, these are not major problems and I believe that we can
resolve these problems with constructive assistance from the Inspector
General and the National Science Board. But, I do want to stress today
that it is critical that swift and vigorous actions are taken by the
agency to prevent these problems from occurring again. This includes
ensuring that an adequate corrective action plan is developed and
implemented.
The last point I would like to raise is the Foundation's failure to
provide adequate support for smaller research institutions. As I have
said over and over again, the federal government must be an active
supporter to help level the playing field and ensure that these smaller
schools and their students are not left behind. I am disappointed in
the Administration for not requesting any funds for the Office of
Innovation Partnerships, which is an important initiative to me.
I am also concerned about a recent report issued this past February
by the National Academy of Public Administration on the Foundation's
merit review process. NSF changed its merit review criteria in 1997,
which added a new element on broadening the participation of
underrepresented groups including minorities and smaller research
institutions. While NAPA stated that it was too soon to make valid
judgments about the impact and effectiveness of the new merit review
criteria, it found that NSF lacked quantitative measures and
performance indicators to track the new merit review criteria. In other
words, NSF cannot determine whether the merit review process is
addressing the need to broaden the participation of underrepresented
groups. This report, instead, appears to validate the impression that
NSF's merit review process is a ``good old boys'' network. I hope that
this is not the case and NSF can assure us that the process is open and
fair to all groups, large or small. I hope that Dr. Colwell and Dr.
Kelly will help me in addressing this issue.

Senator Mikulski. Senator Johnson.

statement of senator tim Johnson

Senator Johnson. Well, thank you, Chairwoman Mikulski. With
consent, I will submit a full statement, but I do want to just
quickly make a couple observations.
First of all, of course, I congratulate Senator Mikulski on
assuming the leadership of this important subcommittee, and
also I commend Senator Bond, whose leadership on this
subcommittee has been extraordinary, not only substantively in
terms of their work in that regard, but also with the tone that
they have adopted for this subcommittee. It really has been a
bipartisan effort, and I think that is something to be
commended.
I want to welcome Dr. Rita Colwell and Dr. Tina Boesz and
Dr. Eamon Kelly to the subcommittee today.
I am proud and pleased to have been a cosponsor of the
Bond-Mikulski amendment to double funding for the NSF over 5
years. I have also been an enthusiastic supporter of increases
at the National Institutes of Health, and I applaud the
progress we have made there. However, it seems to me that we
have not matched that effort with the same kind of commitment
on the other side of our science agenda in the United States. I
am hopeful that we can, in fact, do some serious catch-up with
the NSF over the coming years.
I say that as an individual who actually secured a graduate
degree at the University of South Dakota with an NSF grant many
years ago.
In the State of South Dakota, looking at things from our
narrower perspective, the NSF is most known for two things.
One, of course, is its EPSCoR program which has been a very key
component of our efforts to promote research at our smaller
institutions. And second and more recently has been the
Underground Laboratory Committee of the NSF selecting Homestake
Mine in Lead, South Dakota, as the premier site for a national
underground laboratory with a focus on neutrino research, in
particular.
Senator Daschle and I have a great concern about this. The
Homestake Mine is in the process of terminating the mining at
that site, leaving an 8,000-foot shaft, and with plans to fill
the shaft with water if no continued maintenance or alternative
uses are found. So, this is fortuitous timing that the NSF
would determine that this is a premier site for neutrino
research. It is my hope that we can work with the NSF to, in
fact, utilize the world's most extraordinary site for
underground science and accomplish that in the course of this
coming year.

prepared statement

So, with that, Madam Chairman, I appreciate again the
leadership that you and Senator Bond have both provided for the
subcommittee. I look forward to working with you.
[The statement follows:]

Prepared Statement of Senator Tim Johnson

Chairwoman Mikulski, Ranking Member Bond, and other members of the
subcommittee, I want to thank Dr. Rita Colwell, Director of the
National Science Foundation, Dr. Tina Boesz, Inspector General,
National Science Foundation, and Dr. Eamon Kelly, Chairman, National
Science Board for appearing today to testify on the Budget of the
National Science Foundation (NSF).
As you know, I was a proud supporter of the Bond-Mikulski amendment
which would double funding for the NSF over the next five years.
Without continued excellence in scientific research, the United States
most certainly will not be able to compete in the ever changing,
technology driven world market.
The NSF continues to play a major role in South Dakota in countless
ways. NSF EPSCoR seeks to identify, develop, and utilize the state's
academic science and technology resources in order to increase
university research capabilities, provide student research experiences
and support selected science and technology development. EPSCoR
contributes to the educational experience for students, helps faculty
develop and maintain expertise in their fields, builds research
expertise in my state, and often supports economic development efforts.
EPSCoR is improving our nation's science and technology capability
by funding merit-reviewed research activities of talented researchers
at universities and non-profit organizations in 18 states and Puerto
Rico. EPSCoR helps researchers, institutions, and states improve their
research capabilities and quality in order to compete more effectively
for non-EPSCoR research funds. Because of intensive state involvement
and the significant leveraging of non-federal funds, EPSCoR is
considered a model federal/state partnership.
Additionally, the Homestake mine in Lead, South Dakota has been
selected as the premier site for a National underground laboratory.
Over a year ago, NSF established an Underground Laboratory Committee to
evaluate the potential of various North American sites to address the
need for specialized research.
However, I am concerned that the Homestake Company intends on
leaving on December 31, 2001. If left unattended, the mine will
naturally be effected by the elements, and will assuredly fill with
water if there is no continued maintenance. We should take
responsibility to provide resources to preserve and protect the
integrity of the mine so it can be used as a national research
laboratory. I want to work with NSF and my colleagues in Congress to
ensure that this opportunity is not lost.
The unique nature of the preexisting construction of the mine is an
advantage to tax payers. However, this advantage also places the mine
on a strict timeline. I would encourage the NSF to develop an interim
plan to maintain the integrity while specific comprehensive details of
the project are developed.
Additionally, the NSF should recognize the existing skilled
workforce operating at the mine, and they would be costly and difficult
to replace. Any effort to retain services locally would be an added
benefit to the tax payers.
I look forward to receiving the testimony of our witnesses, and
especially look forward a productive relationship with the NSF in the
future. Thank you Madam Chairman, and members of this committee.

Senator Mikulski. Thank you very much, Senator.
Now we turn to Dr. Rita Colwell, the Director of the
National Science Foundation, and ask her to proceed. Then I
understand after that, Dr. Kelly, you wish to also have a
statement. Of course, we have always looked forward to hearing
from our Inspector General. Dr. Colwell, why do you not just
proceed.
Dr. Colwell. Madam Chair, Senator Bond, members of the
subcommittee, Senator Johnson, it is an honor to be here today
as Director of the National Science Foundation, and I welcome
this opportunity to discuss the NSF budget request for fiscal
year 2002. I deeply appreciate your comments of support. It is
much appreciated.
Let me also, just in a quick aside, say that if I look a
little pained, it is not because of your questions. I had a
minor back injury a few days ago, and it was either come here
sedated and comfortable or pained and alert. I decided the
latter was the better.
Before I begin my testimony, let me first turn to Dr. Eamon
Kelly, Chairman of the National Science Board, for his comments
on our budget request. Dr. Kelly.

statement of dr. eamon m. Kelly

Dr. Kelly. Thank you, Dr. Colwell. I came pained and
sedated. Madam Chair and members of the subcommittee, I
appreciate the opportunity to testify before you. On behalf of
the National Science Board, I thank the subcommittee for its
commitment to long-term investments in science, engineering,
mathematics, and technology. Your support has enabled the
scientific community to provide a broad base of research and
education activities that have contributed to our Nation's
well-being.
The National Science Board has two roles. It serves as the
governing board of the National Science Foundation, and by law
it advises the President and Congress on national policy issues
for science and engineering research and education.
First I would like to comment on the National Science
Foundation's fiscal year 2002 budget request, and then in the
second role, highlight some critical policy issues affecting
the health of the science and engineering enterprise.
The National Science Board has approved and endorses the
National Science Foundation's budget request for fiscal year
2002. Adequate funding for the foundation's priority areas will
allow the foundation to do what it does best: Nurture the
people, ideas, and tools needed to generate new knowledge and
new technologies. The National Science Foundation Director, Dr.
Rita Colwell, will discuss the specifics of that budget request
in her testimony. I commend my colleague for her far-sighted
and energetic leadership of the broad scope of activities in
the National Science Foundation's portfolio.
As a policy advisory body, the National Science Board is
also looking at the broader context for Federal investment in
basic research and education. Critical issues that the board
has addressed recently in that capacity include research,
education, and assessment on the environment, the U.S. role in
international science and engineering, the quality of K through
16 education, and the allocation of Federal resources for
research.
We have just begun two important new studies: One on the
national science and engineering infrastructure, and a second
on national workforce policies. The latter study is examining
the collection of policies and practices, including immigration
and admission to higher education, that affect the composition
and adequacy of our science and technology workforce.
After the phenomenal 1990's, the public is increasingly
aware that science and technology contribute to economic
growth. Americans recognize that innovations improve the
quality of life and that the benefits accrue to the entire
society not just a few industries or entrepreneurs.
It has been said that future historians will label the 21st
century the science and technology century. Clearly we are on
the edge of exciting discoveries and radically new technologies
in many scientific fields. To turn this potential into reality
requires substantial and sustained Federal investment in basic
research.
The new knowledge and technologies emerging today are a
tribute to Federal research investment made years ago with
bipartisan support. When those investments began, no one could
foresee their future impact. Revolutionary advances, such as
those in information technology, geographic information
systems, genetics, and medical technologies, to mention just a
few, remind us that although science and engineering require
long-term, high-risk investments, they also hold great promise
of high payoffs to the economy, the environment, and our
national security.
Of our $10 trillion gross domestic product, the Federal
Government budgets $23.3 billion for basic research, which
represents only two-thousandths of 1 percent of the gross
domestic product. The President, the Members of Congress, both
the Republican and Democratic Parties, even the media speak out
in favor of investing in basic research. The support appears
everywhere except in the budget numbers.
Achieving a balanced portfolio investment in the basic
sciences is also important. As the former NIH Director, Harold
Varmus, and congressional leaders have pointed out, the success
of the National Institute of Health's efforts to cure deadly
diseases such as cancer depend heavily on the underpinning of
basic research supported by the National Science Foundation.
In addition, Federal investment in the basic sciences is
critical for the development of the science and engineering
workforce on which our society and economy depend. The measure
of our success will not be just the research we support, but
also the trained and talented workforce we develop. We need to
produce more scientists and engineers, certainly. But even
future workers who are not directly engaged in scientific
endeavors will need to be scientifically literate to perform
their tasks. And to be an informed voter will require a basic
appreciation for scientific knowledge and method. Today we are
losing many of our best and brightest science students to other
fields, and our record of attracting minorities and women to
science and engineering is poor.
The level of Federal investment is key to the health of the
science and engineering enterprise. But even if Federal
investments were to increase substantially, the difficult issue
of how to allocate the funds would remain. For the past 2
years, at the request of the Congress and OMB, the Board has
grappled with how the Federal Government should set priorities
in allocating its approximately $90 billion annual budget for
defense and nondefense research and development. That question
is critically important, given the growing opportunities for
discovery and the inevitable limits on Federal spending.
On May 21 and 22, the Board's Committee on Strategic
Science and Engineering Policy Issues hosted a stakeholders'
symposium to discuss our preliminary findings and
recommendations concerning priority setting. The symposium was
highly productive and we are in the process of incorporating
the stakeholders' views into our report, which will be
provided, of course, to the committee at the appropriate time.

prepared statement

Madam Chair, at this point, I would like to close my formal
remarks. I thank the subcommittee for its long-time support of
the science community, especially the National Science
Foundation, and for allowing me to comment on critical national
policy concerns, as well as on the Foundation's budget request.
I look forward to future opportunities for discussion of these
highly important national issues. Thank you.
[The statement follows:]

Prepared Statement of Dr. Eamon M. Kelly

Madam Chair and members of the Subcommittee, I appreciate the
opportunity to testify before you. I am Eamon Kelly, Chairman of the
National Science Board and President Emeritus and Professor in the
Payson Center for International Development & Technology Transfer at
Tulane University.
On behalf of the National Science Board, I thank the Subcommittee
for its commitment to long-term investments in science, engineering,
mathematics, and technology. Your support has enabled the scientific
community to provide a broad base of research and education activities
that have contributed to our Nation's well-being. The public is
increasingly aware that science and technology contribute to growth of
the economy after the phenomenal 1990s. People seem to recognize that
innovations improve the quality of life and that benefits accrue to the
entire society, not just to a few industries or entrepreneurs.
The President affirmed the importance of science and technology on
March 28, stating that ``Science and technology have never been more
essential to the defense of the nation and the health of our economy.''
In agreement with the President's statement, I would like to
comment on the National Science Foundation's fiscal year 2002 budget
request and then highlight some critical policy issues affecting the
health of the science and engineering enterprise.
the national science foundation's budget request
First, in its role as governing board of the Foundation, the
National Science Board has approved and supports the National Science
Foundation's budget request for fiscal year 2002 and endorses the
submission. Adequate funding for the Foundation's priority areas in
fiscal year 2002 will allow the National Science Foundation to do what
it does best: provide the Nation with the people, ideas, and tools
needed to generate new knowledge and new technologies. Dr. Rita Colwell
will discuss the specifics of that budget request in her testimony. I
commend my colleague for her far-sighted and energetic leadership of
the broad scope of activities in the National Science Foundation's
portfolio.
the health of the science and engineering enterprise: some issues
I also want to touch briefly on the broader context for the
National Science Foundation's activities and contributions. In addition
to serving as the governing board of the Foundation, the National
Science Board, by law, advises the President and Congress on science
and engineering policy, and is responsible for assessing and making
recommendations on national policy issues for research and education.
In that capacity, the National Science Board has recently addressed and
made recommendations on some critical issues affecting U.S. science and
engineering. These include research, education, and assessment of the
environment, the U.S. role in international science and engineering,
and the quality of K-16 education.
Recently, we have begun two important new studies: one on the
national science and engineering infrastructure; a second on national
workforce policies. The latter study is examining the collection of
policies and practices, including immigration and higher education,
that affect the composition and adequacy of our science and technology
workforce.
Now if I might turn from that broad context to a significant policy
issue, I'd like to draw your attention to a particular Board effort,
that is, the issue of the adequacy of our Nation's investment in
science and engineering and the process within the Federal government
for allocating resources to research.
(a) Federal Investment in Science and Engineering
It has been said that future historians will label the 21st century
the ``science and technology century.'' Clearly we are on the edge of
exciting discoveries and radically new technologies in many scientific
fields. To turn this potential into reality requires substantial and
sustained Federal investment in basic research.
The new knowledge and technologies emerging today are a tribute to
Federal research investments made years ago in a spirit of
bipartisanship. When those investments began, no one could foresee
their future impact. Revolutionary advances in these--fields such as
those in information technology, geographic information systems,
genetics, and medical technologies such as MRI, ultrasound, and digital
mammography, to mention just a few--remind us that although science and
engineering require long-term, high-risk investments, they also hold
great promise of high payoffs. These payoffs affect all aspects of
American life: our economy, the workforce, our educational systems, the
environment, and our national security.
Despite the recognition of the widespread benefits that result from
Federally supported scientific research, we are seriously under-
investing in basic research. Of our $10 trillion Gross Domestic
Product, the Federal government budgets $5 billion to basic research
and general science, which represents only five-ten thousandths of one
percent of the Nation's Gross Domestic Product. The President, members
of Congress, and both the Republican and Democratic parties speak in
favor of investing in basic research.
Balance among investments in the basic sciences through the
National Science Foundation and other agencies is also important. As
Congressional leaders have pointed out, the success of the National
Institutes of Health's efforts to cure deadly diseases such as cancer
depends heavily on the underpinning of basic research supported by the
National Science Foundation.
In a speech before the American Association for the Advancement of
Science on May 3, Larry Lindsey stated that ``the average annual real
rate of return on corporate investment in America is about 9 percent.''
Compare that to a conservative estimate that the return on Federal
investment in basic research is about 30 percent.
The recently issued report by the U.S. Commission on National
Security for the 21st Century, led by Gary Hart and Warren Rudman,
clearly states the importance(and the current condition(of scientific
research and education to America's world leadership. I quote:

``Our systems of basic scientific research and education are in
serious crisis . . . If we do not invest heavily and wisely in
rebuilding these two core strengths, America will be incapable of
maintaining its global position long into the 21st century.''

As this Committee recognizes, the National Science Foundation is a
major contributor both to scientific research and science education. In
fact, the Foundation accounts for 54 percent of Federal funding for
basic research and general science.
Federal investment in the basic sciences through the Foundation
have produced
--New industries, such as E-commerce and biotechnology,
--New medical technologies, such as MRI and genetic mapping,
--New discoveries with great future promise in areas such as
nanoscale science, cognitive neuroscience, and biocomplexity.
In addition, the National Science Foundation supports innovative
education programs from kindergarten through graduate school, educating
the next generation of scientists and engineers and contributing to a
more scientifically literate workforce and society.
The link between our education system and the science and
technology workforce is critical. Today we are losing many of our best
and brightest science students to other fields. The science,
mathematics, engineering, and technology education system needs to
change, first by recognizing that the measure of success is the quality
and quantity of the education people we produce--and not just the
number of research papers published. Also, the pool of potential
science and engineering students will increasingly reflect the growing
diversity in American society. Population trends indicate that by 2010
about two-thirds of students will be female or minority. Our future
scientists and engineers must be drawn from this diverse pool.
But science and technology education has a wider responsibility.
Even our future workers who are not directly engaged in scientific
endeavors will need to be scientifically literate to perform their
tasks. And simply to be an informed voter will require a basic
appreciation for scientific knowledge and method.
Clearly, there is an important link between Federal investment in
basic research and education through the National Science Foundation,
the vitality of our K-12 and higher education systems in math and
science, the talent available for the workforce, and the achievement of
national goals that depend on a strong science and technology
enterprise.
(b) Allocation of Federal Resources
But even if Federal investment were to increase substantially, the
difficult issue of how to allocate the funds would remain. For the past
two years, at the request of national policy makers, the Board has
grappled with how the Federal government should set priorities and
allocate its approximately $90 billion annual budget for defense and
non-defense research and development. That question is critically
important, given the growing opportunities for discovery and the
inevitable limits on Federal spending.
On May 21 and 22, the Board's Committee on Strategic Science and
Engineering Policy Issues, which I chair, hosted a stakeholders'
symposium to discuss our findings to date and evaluate potential
approaches to Federal budget coordination and priority setting. The
symposium was highly productive, and we are in the process of
incorporating the stakeholders' views into our analysis and
recommendations.
At this stage of our analysis, based on our discussion with
Executive branch representatives and Congressional staff, the Board
suggests that the Federal budget process in both the Executive branch
and the Congress would benefit from instituting a continuing advisory
mechanism for considering U.S. research needs and opportunities within
the framework of the broad Federal research portfolio.
A possible process would include an evaluation of the current
Federal portfolio for research in light of national goals and would
draw on systematic, independent expert advice, studies of the costs and
benefits of research investments, and analyses of available data. The
process would identify areas ready to benefit from greater investment,
address long-term needs and opportunities for Federal missions and
responsibilities, and ensure world-class fundamental science and
engineering capabilities.
In addition to an improved process, a strategy is needed to ensure
commitment by departments, agencies, and programs to gather timely,
accessible data that could be used to monitor and evaluate Federal
investments. The Federal government would need to invest in the
research necessary to build the intellectual infrastructure in the
higher education sector (1) to analyze substantive effects on the
economy and quality of life of Federal support for science and
technology and (2) to improve methods for measuring returns on public
investments in research.
The appropriate level of Federal investment and the allocation of
Federal funds are keystone issues for the science and engineering
enterprise. They are also extremely difficult, complex issues for
policy makers.
Madam Chair, at this point I would like to close my formal remarks.
I thank the Subcommittee for its long-time support of the science
community, especially the National Science Foundation, and for allowing
me to comment on critical national policy concerns, as well as on the
Foundation's budget request. I look forward to future opportunities for
discussion of these highly important national issues.

Senator Mikulski. Thank you very much, Dr. Kelly, for that
very cogent testimony, and we will be coming back for some
questions.
Dr. Colwell.

statement of dr. rita r. Colwell

Dr. Colwell. Before I turn to the budget, Madam Chair, I
would like to commend you and Senator Bond and the members of
the subcommittee for your commitment to investing in research
and education. It is very clear that without your sustained
support and vision, NSF and the Nation would not be enjoying
the prosperity that we have today. Every day we see the
benefits of these investments and the promise they hold for our
future.
A very good example is the Mid-Atlantic Center for
Mathematics Teaching and Learning, which is coordinated through
the University of Maryland. This consortium of university
mathematicians and educators, along with the local K-12 school
districts, is making significant strides in addressing the
shortage of mathematics teachers in Maryland, Pennsylvania, and
Delaware. Moreover, this effort is a model for other NSF
centers of learning and teaching across the country.
Similarly, we are now realizing the benefits of
collaborations across disciplines, the interdisciplinary
research areas. Late last year, an international team of
biologists, computer scientists, and many others sequenced a
complete plant genome for the first time. Now, this did not
generate the same headlines as the human genome project, but
its potential impact is just as profound. The major concern for
the world's future is how to protect our planet while feeding a
growing population and raising the standard of living. These
are not mutually exclusive goals. Plant sciences can help us
find the solutions that we seek.
These examples reflect the overall NSF investment strategy:
Providing the Nation with the people, the tools, the ideas that
are needed to fuel innovation and economic growth. And with
these opportunities, however, come responsibilities.
Madam Chair, I would like to commend you for inviting Dr.
Boesz to testify today. The NSF management has long worked in a
close and productive relationship and partnership with the
Inspector General to ensure the highest standards of
stewardship, accountability, and management.
Turning to the budget, NSF is requesting $4.47 billion.
That is $56 million more than last year. This includes an 11
percent increase for education and human resources and some
solid increases for management and oversight. The research and
related activities account will basically maintain its current
level, and support for major research equipment will drop by a
fifth with the conclusion of several projects in fiscal year
2001.
In fiscal year 2002, NSF is proud to launch the Math and
Science Partnerships. This is part of President Bush's
education plan, No Child Left Behind. It is a $200 million
initiative. It will join States and local school districts with
institutions of higher learning to strengthen K-12 math and
science education. These activities, under the competitive
awards program, will address some very important areas: Teacher
quality, math and science curricula, enrollment in advanced
math and science courses, and assessment.
The fiscal year 2002 request will also help to ensure that
adequate numbers of U.S. students pursue higher degrees in
science and engineering. A survey of recent science and
engineering bachelor's recipients finds that more than one-
third do not consider graduate studies because of financial
reasons. Although enrollment in U.S. science and engineering
graduate programs did increase in 1999, after a 5-year decline,
the students with temporary visas accounted for the entire
upswing.
I believe that raising stipends is one of the most
important actions that NSF can take to invest in our Nation's
future. Accordingly, we are seeking $8 million to increase
graduate stipends in our key programs, from $18,000 a year to
$20,500.
As for our core investments, a centerpiece of fiscal year
2002 is the $20 million interdisciplinary mathematics research
program. Mathematics has a critical and a growing role in all
of science and engineering, but funding for mathematics has not
kept pace with the promise. We expect an increased emphasis on
mathematics and statistics to spur new discoveries in diverse
areas from how our brains function, to the prediction of
hurricanes, to understanding our economy.
The fiscal year 2002 request also continues our emphasis on
four priority areas. These are familiar to you. Biocomplexity
in the environment, information technology research, nanoscale
science and engineering, nanotechnology, and learning for the
21st century. Although all of these areas hold exceptional
promise, I just have time for one example, and this is from
nanotechnology.
Researchers at Stanford University have developed a tiny
silicon chip that responds to nerve impulses. It simulates the
firing of a normal neuron. It is a meeting of microelectronics
and neurobiology because it holds great promise for developing
prosthetic devices for artificial limbs, and it is quite
possible that with these advances, Christopher Reeve might,
indeed, walk again in the future. So, this emerging field could
change the way almost everything is designed, from medicine, to
computers, to automobiles.
Given the great potential of nanotechnology and the three
other priority areas that I have mentioned, we are requesting
increased funding for each of these in fiscal year 2002.
In closing, the budget lays the foundation for sustained
increases over the long term. We know that our workforce and
our economy depend on scientific and technological knowledge
more than at any other time in our history. This gives us the
responsibility but also the opportunity to demonstrate the
impact of investments in science and engineering.

prepared statement

So, Madam Chair, we look forward to working with the
subcommittee on the grander challenge, and I thank you once
again for the opportunity to appear today. Thank you.
Senator Mikulski. Thank you very much, Dr. Colwell. Those
examples are really quite compelling.
[The statement follows:]

Prepared Statement of Dr. Rita R. Colwell

Chairwoman Mikulski, Senator Bond, members of the Subcommittee, it
is an honor to be here today as Director of the National Science
Foundation. I welcome the opportunity to discuss the NSF budget request
for fiscal year 2002.
Before I begin with the budget, Madam Chairwoman, I would like to
commend you and Senator Bond for your many years of dedication to sound
investments in research and science education. You and the members of
the Subcommittee have shown strong leadership in stressing the
importance of basic research to the economic wellbeing of our nation.
Without this sustained support and vision, NSF would not be where it is
today. I am deeply appreciative of your efforts and your wisdom.
Now let me first lay out the big picture of what's being proposed
for fiscal year 2002. NSF is requesting a total of $4.47 billion--
that's $56 million more, or a 1.3 percent increase, above fiscal year
2001. The highlight is the request for Education and Human Resources
(EHR), which receives an 11 percent increase. We have also provided
solid increases for administrative accounts, which are very important
in insuring wise stewardship of tax dollars. In other areas, the
Research and Related Activities account will basically maintain its
current level of support, and the Major Research Equipment account will
drop by one-fifth.
Let me put these numbers in a different context. The fiscal year
2002 Budget Request reflects the strength of the Foundation--a broad
base of research and education activities that provides the nation with
the people, the ideas, and the tools needed to fuel innovation and
economic growth.
In our fiscal year 2002 request, investments in people are up 13
percent from last year. We cover kindergarten to career development.
This investment encompasses much of our Education and Human Resources
Directorate as well as many activities funded across the Foundation.
NSF directly supports about 200,000 people--including teachers,
students, researchers, postdocs, and others. Moreover, the benefits of
NSF programs are felt throughout the population in terms of new
discoveries, scientific and technological advances, and improved math
and science educational opportunities that affect all of our lives.
Now, let's look at the highlights.
math and science partnerships initiative
We are particularly pleased that the President's budget has
designated NSF to lead the Math and Science Partnerships element of the
No Child Left Behind education initiative. At the center of the fiscal
year 2002 request is an initial $200 million of a planned $1 billion
over 5 years which will be used to improve K-12 science and math
education through partnerships. NSF will provide funds for states and
local school districts to join with institutions of higher education--
mathematics, science, and engineering departments of local colleges and
universities--to strengthen K-12 math and science education. The
request includes $90 million in new funds and a redirection of $110
million from existing EHR programs with similar strategies and goals.
This investment will provide K-12 students with enhanced
opportunities to perform to high standards. This important component of
the President's education initiative will help states address teacher
quality; math and science curricula and textbooks; enrollment numbers
in advanced science and math courses; and assessment.
graduate student stipends
The second key opportunity this request addresses is something that
is long overdue: increasing graduate student stipends. The fiscal year
2002 Budget provides $8 million to increase stipends for the Graduate
Research Fellowships, the Graduate Teaching Fellowships in K-12
Education, and the Integrative Graduate Education and Research
Traineeship programs. Stipends will increase from $18,000 to $20,500
for academic year 2002-2003.
This increase is extremely important. According to an NSF survey of
recent S&E bachelor's recipients, more than one-third stated that they
would not pursue graduate studies because of financial reasons. We must
work to ensure that adequate numbers of students are willing and able
to enter graduate S&E programs.
Although graduate student enrollment in U.S. science and
engineering programs increased in 1999 after five consecutive annual
decreases, students with temporary visas accounted for the entire
upswing. If we do not boost the number of skilled U.S. workers the
nation will certainly suffer.
interdisciplinary mathematics
A centerpiece of NSF's core investments in fiscal year 2002 is the
Interdisciplinary Mathematics Research program funded at $20 million.
Our total investment in mathematical sciences will increase 16.5
percent. Mathematics is a powerful tool for insight and a common
language for science and engineering. This emphasis on the mathematical
sciences recognizes its increasingly critical role in advancing
interdisciplinary research. This investment will bring cutting-edge
mathematics and statistics to address problems in the physical,
biological, and social sciences. Some examples include studies of brain
function, communication networks, modern economic behaviors, and the
modeling and prediction of major weather events, such as tornadoes or
hurricanes.
priority areas
In addition to investments in core research and education, NSF
identifies and supports emerging opportunities in priority areas that
hold exceptional promise to advance knowledge. The fiscal year 2002
Budget emphasizes four priority areas--Biocomplexity in the
Environment, Information Technology Research, Nanoscale Science and
Engineering, and Learning for the 21st Century. All of these areas
receive increased investment over last year's amounts.
biocomplexity and the environment
The fiscal year 2002 budget request builds on past investments in
our Biocomplexity in the Environment portfolio and increases funds by
nearly 6 percent, to $58 million. Computational and information
technologies, real time sensing techniques, and genomics are providing
insight into the interactions among ecological, social, and physical
earth systems. For example, recently investigators have been studying
contaminant flux of the lower Mississippi River, dynamics of an
invasive non-native species on the Pacific Coast, and marine mammal
abundance in the western Arctic Ocean. Developing new research
instruments and software that advance cross-disciplinary studies in the
environment will continue to improve our understanding of the planet
and its systems.
information technology research
The Information Technology Research budget request expands
fundamental research in another multidisciplinary area. Our requested
$273 million investment, 5 percent over last year, allows us to explore
ways of making large-scale networking, software, and systems more
reliable, stable, and secure. This will permit diverse applications
from telemedicine, to interactive education, to the remote operation of
experimental apparatus--such as the telescope at the South Pole. Other
research will improve our understanding of human-computer interactions
and investigate the impact of IT on our society, on our economy, and on
our educational system. Because the information technology sector has
contributed significantly to recent U.S. economic growth, these
investments remain a top priority.
nanoscale science and engineering
In nanoscale science and engineering--colloquially known as
nanotechnology--activities range from investigation of biologically
based systems that exhibit novel properties to the study of nanoscale
control of the structure and composition of new materials. Recognizing
the importance of this emerging discipline, NSF is increasing its
investment by 16.1 percent to $174 million in fiscal year 2002.
Fundamental research programs will investigate biosystems at the
nanoscale--such as nanoscale sensors to detect cancer. Research will
focus on system architectures, nanoscale processes in the environment--
for instance, the trapping and release of contaminants--multi-scale
modeling, and large-scale computer simulation of processes at the
molecular or atomic level. Grand challenges include major long-term
research objectives in nanoscale electronics, nano-based manufacturing,
and nanostructured materials by design.
learning for the 21st century
Learning for the 21st Century addresses two interrelated
challenges: understanding how we learn; and transferring that knowledge
for use in schools, homes and other learning environments. Research,
development, and testing of educational tools incorporating information
technology will give us a much better understanding of how they can be
used effectively in the classroom. Accordingly, the NSF request for
these activities, $126 million, is a 3.3 percent increase over last
year.
A key component of this priority area is the Centers for Learning
and Teaching program. Like the Math and Science Partnerships, these
link K-12 and higher education. They allow opportunities for teachers
to gain new skills in the use of information technology in education,
new knowledge in science and mathematics, and--most importantly--allow
them to integrate these with new research on learning. Applications of
research results will increase opportunities for higher achievement
and, ultimately, produce a workforce able to meet the challenges of
rapid scientific and technological change.
other fiscal year 2002 highlights
I'd like to bring this overview to a close by noting some other
highlights.
I am a firm believer in the Experimental Program to Stimulate
Competitive Research, or EPSCoR--which enables researchers to
participate more fully in NSF research activities. Fiscal year 2002
funding for EPSCoR will total nearly $100 million. This includes about
$75 million provided through the EHR appropriation and another $25
million provided through NSF's Research and Related Activities account.
The fiscal year 2002 budget provides about $65 million to support
ongoing research on the genomics of plants that have major economic
importance. The long-term goal of this program is to understand the
structure, organization, and function of plant genomes that are very
important to agriculture, the environment, and health.
Along that same line, the 2010 project will support research to
determine the functions of the 20,000 to 25,000 genes in the recently
sequenced Arabidopsis genome.
On another front, the fiscal year 2002 budget provides about $26
million to initiate a new cohort of Science and Technology Centers in
areas that span the range of disciplines supported by NSF.
As provided in recent legislation to strengthen the technology
workforce, approximately $144 million is anticipated from H-1B
nonimmigrant visa application fees. These funds support Computer
Science, Engineering and Mathematics (CSEM) Scholarships and Private-
Public Partnerships in K-12.
The budget request also includes $26 million for the GK-12 program.
That will put hundreds of graduate students in K-12 classrooms to learn
the art of teaching. They will share their research with younger
students and serve as role models that are so important, especially in
inner-city schools.
major research equipment
Finally, the Major Research Equipment account for fiscal year 2002
will fund three continuing projects:
First, $24.4 million is requested for the George E. Brown, Jr.
Network for Earthquake Engineering Simulation. This is a national
collaboration of approximately 20 geographically-distributed, shared-
use experimental research equipment sites that seeks to improve the
seismic design and performance of U.S. civil and mechanical
infrastructure systems.
We will invest $16.9 million to continue funding the Large Hadron
Collider, the internationally supported collaboration at CERN. This
superconducting particle accelerator will advance our fundamental
understanding of matter.
Additionally, $55 million is requested to support the
infrastructure to allow access to terascale computing systems. This
will enable all researchers and engineers access to leading-edge
computing capabilities.
conclusion
We know from past experience that NSF funding should cover a broad
base of disciplines to insure constant sources of innovation. NSF
should open the potential for every field to be connected and to
contribute. Science and engineering today are integrated and answer
each other's questions, and inspire future generations.
In order for the nation to be able to use new knowledge for
economic and social progress, we have to make a national commitment to
support these efforts. In the current fiscal climate, this budget lays
the foundation for sustained increases over the long term while also
providing opportunities in all fields of science and engineering.
We all have a responsibility to convince the public that long-term
investments in science and engineering make our economy stronger and
our lives easier and more rewarding. As we work more efficiently within
budget constraints, we must plan for the future--ensuring a steady
stream of investments. Working together, we can set the stage for
increased investments over the long haul. Thank you.

Senator Mikulski. Dr. Boesz.

statement of dr. christine c. Boesz

Dr. Boesz. Madam Chair, Senator Bond, and members of the
subcommittee, Senator Johnson, I appreciate the opportunity to
appear before you today.
The National Science Foundation, NSF, is an innovative
agency dedicated to maintaining American leadership in
discovery and the development of new technologies across the
frontiers of science and engineering knowledge. As the
scientific enterprise changes and research evolves, new
challenges arise. Consequently, my office has worked closely
with NSF management to identify and begin to address issues
that are important to the success of NSF achieving its mission
in the future. I believe that the National Science Board and
NSF should pay particular attention over the next year to three
areas involving the management of NSF awards.
The first area involves basic award administration. NSF's
mission is to promote the progress of science and advance the
national health, prosperity, and welfare, which it carries out
by funding science, engineering, and mathematics research and
education. Assessing scientific progress and ensuring effective
financial and administrative management are critical elements
in administering NSF's grant programs. Program officers in each
of NSF's seven science directorates are responsible for
monitoring scientific progress, while staff within the Office
of Budget, Finance, and Awards Management oversees the
financial management.
At any given time, NSF is administering as many as 30,000
ongoing awards, relying on a staff of about 1,150 employees to
carry out this oversight responsibility. This is in addition to
the responsibility of soliciting approximately 10,000 grants
and cooperative agreements annually, amounting to over $3.5
billion.
Given this sizable workload, NSF is challenged to
adequately monitor its awards for scientific accomplishments
and compliance with the award agreement and Federal laws and
regulations. For the most part, NSF receives a variety of
financial and programmatic reports from grantees to monitor
progress that could lead to improved award administration.
Thus, it is important that NSF focus on the interactions
between its program officers and its grant and contract
officers. Better coordination between them should lead to more
effective management. Consequently, NSF needs improved
procedures with more staff targeting this focus.
As NSF extends its scope of research and education at the
frontiers of science and engineering, some awards are made to
institutions and organizations that increase the risks of
compliance or performance. For example, NSF is making more and
more awards to school districts, community colleges, and
nonprofit organizations which may not be familiar with managing
federally funded projects. Such awards should be identified
early on and accorded closer oversight so that the intended
outcomes can be achieved.
The second area focuses on NSF's management of large
infrastructure projects. NSF is increasing its investments in
projects such as accelerators, telescopes, research vessels,
supercomputing databases, and earthquake simulators. Currently
NSF spends approximately $1 billion per year for such cutting
edge projects, some of which cost hundreds of millions of
dollars. Many of these are large in scale, require complex
instrumentation, and involve partnerships with other Federal
agencies and international science organizations. Some, such as
the new South Pole Station, present additional challenges
because they are sited in harsh environments. Successful
management of these projects and programs requires a more
disciplined project management approach.
My office recently conducted an audit of NSF's oversight of
one of these large projects and has made several
recommendations for improvement. NSF has developed a corrective
action plan to respond to our recommendations and we will be
monitoring their progress toward meeting that plan. Further, as
part of its plan for improved management, NSF is developing and
implementing changes to its policies and procedures for
managing all large infrastructure facilities and projects. We
are pleased to have been given the opportunity to provide
comments to NSF on these, and we expect to see implementation
in the coming year.
Finally, NSF needs to focus on overseeing awards requiring
cost sharing. In accordance with congressional requirements,
all of NSF's grantees submitting unsolicited proposals must
share in the cost of their research projects. In addition to
the statutory requirement, NSF sometimes requires cost sharing
on solicited proposals. This usually occurs when NSF believes
there is a tangible benefit to its award recipient such as
infrastructure development or the potential for income or
profit. When cost sharing is required for a specific award, it
is presumed that such resources are necessary to accomplish the
objectives of the award. The commitment to share in the costs
becomes a condition of the award and is subject to audit. If
promised cost sharing is not realized, then the awardee has not
fulfilled its obligation. In such cases, NSF should have at
least a portion of its funds returned to it.
Our audits are increasingly finding awardees who are
failing to meet their cost sharing obligations. Frequently we
find that awardees lack adequate policies and procedures, they
overvalue contributions or fail to report or certify cost
sharing amounts.
We are now conducting more focused audits in this area,
covering awards at numerous institutions. But post-awards
audits should supplement, not substitute for, an appropriate
compliance effort undertaken at NSF.
The challenge for NSF is to increase its oversight of cost
sharing requirements during the life of the awards. Cost
sharing is an important contribution from the research and
education communities. Therefore, when it is not met, NSF
program objectives may not be met. Consequently, improving its
administration of awards requiring cost sharing is among the
most important priorities for NSF management. We will continue
through our audit efforts to work with NSF to address this
challenge as well.

prepared statement

Madam Chairman, that concludes my statement. Thank you for
the opportunity to share this information with you. I would be
pleased to answer any questions that you may have.
[The statement follows:]

Prepared Statement of Dr. Christine C. Boesz

Madame Chair, Senator Bond, and members of the Subcommittee, I
appreciate the opportunity to appear before you today. The National
Science Foundation (NSF) is an innovative agency dedicated to
maintaining American leadership in discovery and the development of new
technologies across the frontiers of scientific and engineering
knowledge. As the scientific enterprise changes and research evolves,
new challenges arise. Consequently, my office has worked closely with
NSF management to identify and begin to address issues that are
important to the success of NSF achieving its mission. I believe that
the National Science Board and the NSF should pay particular attention
over the next year to three areas involving the management of its
awards.
basic award administration
The first area involves basic award administration. NSF's mission
is to promote the progress of science and advance the national health,
prosperity, and welfare, which it carries out by funding science,
engineering and mathematics research and education. Assessing
scientific progress and ensuring effective financial and administrative
management are critical elements in administering NSF's grant programs.
Program officers in each of NSF's seven science Directorates are
responsible for monitoring scientific progress, while staff within the
Office of Budget, Finance, and Award Management oversees awardees'
financial management.
At any given time, NSF is administering as many as 30,000 ongoing
awards. NSF relies on a staff of about 1,150 employees to carry out
this oversight responsibility. This is in addition to their
responsibility of soliciting and awarding approximately 10,000 grants
and cooperative agreements annually amounting to over $3.5 billion.
Given this sizable workload, NSF is challenged to adequately monitor
its awards for scientific accomplishments and compliance with the award
agreement and Federal laws and regulations. For the most part, NSF
receives a variety of financial and programmatic reports from grantees
to monitor progress that could be used to improve award administration.
Thus, it is important that NSF focus on the interactions between its
program officers and its grant and contract officers. Better
coordination between them should lead to more effective management.
Consequently, NSF needs improved procedures with more staff targeting
this focus.
As NSF extends its scope of research and education at the frontiers
of science and engineering, some awards are made to institutions and
organizations that increase the risks of compliance or performance. For
example, NSF is making more and more awards to school districts,
community colleges and non-profit organizations, which may be
unfamiliar with managing Federally funded projects. Such awards should
be identified early on and accorded closer oversight so that the
intended outcomes can be achieved. Moreover, in addition to the risks
involved with new awardee organizations, some of NSF's awards have
unique management issues.
management of large infrastructure projects
The second area focuses on NSF's management of large infrastructure
projects. NSF is increasing its investments in large infrastructure
projects such as accelerators, telescopes, research vessels,
supercomputing databases, and earthquake simulators. Currently, NSF
spends approximately $1 billion per year for such cutting-edge
projects, some of which cost hundreds of millions of dollars. Many of
these projects are large in scale, require complex instrumentation, and
involve partnerships with other Federal agencies and international
science organizations. Some, such as the new South Pole Station,
present additional challenges because they are sited in harsh
environments. Successful management of these projects and programs
requires a more disciplined project management approach.
My office recently conducted an audit of NSF's management of one of
these large projects and made several recommendations for oversight
improvement. NSF has developed a corrective action plan to respond to
our recommendations and we will be monitoring their progress toward
meeting this plan. Further, as part of its plan for improved
management, NSF is developing and implementing changes to its policies
and procedures for managing large infrastructure projects. We are
pleased to have been given the opportunity to provide comments to NSF
on these, and expect to see implementation in the coming year.
cost sharing
Finally, NSF needs to focus on overseeing awards requiring cost
sharing. In accordance with Congressional requirements, all of NSF's
grantees submitting unsolicited proposals must share in the cost of
NSF-funded research projects. In addition to this statutory
requirement, NSF sometimes requires cost sharing on solicited
proposals. This usually occurs when NSF believes there is tangible
benefit to the award recipient, such as infrastructure development or
the potential for income or profit. When cost sharing is required for a
specific award, it is presumed such resources are necessary to
accomplish the objectives of the award. The commitment to share in the
costs becomes a condition of the award and is subject to audit. If
promised cost sharing is not realized, then the awardee has not
fulfilled its obligation. In such cases, NSF should have at least a
portion of its funds returned to it.
Our audits are increasingly finding awardees who are failing to
meet their cost sharing obligations. Frequently we find that awardees
lack adequate policies and procedures, overvalue contributions, or fail
to report or certify cost sharing amounts annually to NSF. We are now
conducting more focused audits in this area, covering awards at
numerous institutions. But post-award audits should supplement, not
substitute for, an appropriate compliance effort undertaken by NSF. The
challenge for NSF is to increase its oversight of cost sharing
requirements during the life of these awards. Cost sharing is an
important contribution from the research community. Therefore, when it
is not met, NSF program objectives may not be met. Consequently,
improving its administration of awards requiring cost sharing is among
the most important priorities for NSF management. We will continue,
through our audit efforts, to work with NSF to address this challenge.
conclusion
Madame Chair, that concludes my statement. Thank you for the
opportunity to share this information with you. I would be pleased to
answer any questions that you may have.

Funding needs

Senator Mikulski. Thank you very much, Dr. Boesz.
Dr. Colwell, though the gavel has passed to a Democratic
chair, we still have the same budget. I think there is an
expectation, first of all, because of the tremendous support
that Senator Bond and I both share for the National Science
Foundation, that there is a tremendous cornucopia of
opportunity out there. Really, our own resources are quite
spartan as we look at the allocation we are going to get.
But let me get to my point. I was very concerned that this
is the first NSF budget that cuts research, and it is the first
time in 50 years that research has been cut.
Second, the increase is about $56 million. Now, that is not
loose change, but as part of a doubling effort, it would have
been $600 million, or 15 percent. We would need to be able to
increase this at 15 percent. That would be $600 million.
So, here is my question. Number one, what do you really
need? In other words, is this what you wanted or is this what
you got?
Dr. Colwell. Senator, I view this as a transition year
budget. And our discussions with the administration have been
very, very positive.
I have pointed out that there are four areas that really do
need attention. Graduate student stipends. We must really
address that. It is a very critical area. We do have $8 million
in the budget to raise the stipend to $20,500, and I would hope
that in the future we can raise it to $25,000. We are raising
the stipend for our graduate research fellows, for our GK-12
fellows and for our----
Senator Mikulski. What are the other three areas?
Dr. Colwell. The other areas would be to be able to
address:
1. Mathematics investment. We have a $20 million
investment, but I would hope that in the future that this could
be significantly increased because mathematics is fundamental
to our being able to maintain leadership in all of science and
engineering.
2. I think we need to address grant size and duration, and
the administration has requested that we look at that and we
are in the process of doing a study.
Senator Mikulski. I am sorry. I could not hear you.
Dr. Colwell. Grant size and duration, the size of the
grants and how long they are in effect, because we have a
feeling that our principal investigators are on a treadmill.
And we have a study underway to look at that issue.
3. Then there are tools that we need to provide our
investigators, the high performance aircraft is one that I
think is badly needed, and there are other investments in
tools.
So, there are areas that we are looking to the future,
indeed, for investment.

NSF funding needs and priorities

Senator Mikulski. Well, let me, though, ask the question.
Do you think that the $56 million covers what you need to do?
Are we running a shortfall? I am concerned again about the cut
in research and development. I am concerned about the cuts in
the research equipment grants. As you know, for many of our
colleges, this is a very crucial program, particularly to
modernize laboratories. Some are quite dated, some even built
in the 1970's. You know that as a scientist. Again, I am
talking about keeping to basics while we expand.
When you went to OMB, what did you think you needed to be
able to do to be able to stay the course on these four
priorities? Or do you not want to answer that? If you do not
want to answer it--and I am not trying to make you feel
awkward. I am trying to get a picture of what you need as the
Director of the National Science Foundation.
Dr. Kelly. Madam Chair, I would be happy to take the----
Senator Mikulski. Dr. Kelly, maybe that is a better way.
Dr. Kelly (continuing). Opportunity to respond to your
question. Both sides of the aisle have clearly come forward
recommending a doubling of the NSF budget and our basic
research budgets. Newt Gingrich publicly came out at an NSF
symposium for tripling it.
Senator Mikulski. There you go.
Senator Bond. Can I sign you up as a Newt Gingrich devotee?
Senator Mikulski. Well, he is another one who has been fat
and has been thin. And been in and been out.

importance of Basic research

Dr. Kelly. But the fact of the matter, if you look at how
important basic research and science is to the economy, to our
medical life, to even solving of the social problems like the
expansion in prisons and the way we can monitor prisoners with
new scientific devices, the entire range, the most important
investments this Government can make are in basic research.
They have the highest single payoff. At the same time, we
constantly underfund basic research because of the time lag and
the lack of the immediate payoff.

Fiscal year 2002 budget guidance

Senator Mikulski. Doctor, we understand that. What was the
recommendation? We are under a 15-minute rule.
Dr. Kelly. We really did not give a recommendation. But we
are substantially underfunding all of the core disciplines, all
of the priority areas, and several of the major facilities that
we would have recommended were simply not feasible to recommend
because of the guidance we had received. So, we did not try and
come in above guidance. But that was the guidance we received.
We lived within that, but it clearly does not meet this
subcommittee's requirements of doubling or this Nation's
requirement for investments in basic science.
Dr. Colwell. Senator, as you know, doubling was important
to us, remains important to us, and you can infer much from
that.

Budget doubling goal and oversight goals

Senator Mikulski. Well, Doctor, I think we can safely
agree--and I think my colleague would agree--that it would be
very hard to increase this by $600 million, which is part of
the doubling. Doubling is a goal and that is why each year we
need to be able to advance it.
I want to, first of all, acknowledge also the commentary of
Dr. Boesz. As we increase funds, we also want to increase the
infrastructure, make sure we have the proper infrastructure to
make wise use of the funds and provide the administrative
oversight. In her testimony, she indicated the great
cooperation that has come from the NSF. So, let us stick to the
basics, and I think that is what your four tools are.
We would like to have further conversations with you. My
time has expired, but I am going to come back too. Let me just
conclude with this. When we talk about the increase in
research, because it has been cut, would you see that going in
the areas of stipend increases, or is that in another area, or
in grant sizes?
Dr. Colwell. Senator, actually we are moving in the
direction of both. The stipend increase generally increases the
funding for the core disciplines because it is the students who
are doing the work. But we are also, in the area of information
technology, beginning to provide larger grants and longer
periods of time. I think ultimately we are able to move in this
direction.
But I do feel that, yes, graduate student stipends,
attracting the best and brightest into the field is primary.
Let me give some quick facts. In the last decade, 10 percent of
all the patents in Silicon Valley were issued to citizens of
India who graduated from one of the Indian institutes of
technology. Another is that in Eli Lilly's main pharmaceutical
research laboratory, Mandarin is the primary language. We are
not educating American citizens, and we have got to attract
students into science and engineering. We are only able to fund
about 10 or 12 percent of deserving proposals that come in
because of the demand.
We are very pleased with the support you and Senator Bond
indicate for NSF.
Senator Mikulski. My time is expired.
Senator Bond. First, Dr. Colwell, I am very sorry to hear
about your back injury. I know how painful those can be. I
would tell you after hand surgery at the end of January, the
first week of February I attended all the budget hearings under
heavy sedation. You know, that is not a bad way to do it.

NSF's vision

It was about the least painful budget hearings I had ever
been through. So, pop a few and you come in and, hey, sitting
there all day is not that bad.
I would say on a very serious note that your table and this
table strongly agree that the budget is inadequate. I have
spoken to the Director of OMB and reemphasized to him again
that when they have an opportunity to review the budget, as I
do not believe they had an adequate time in the short
transition to prepare a budget, I would hope to see an
administration recommendation to put us back on the doubling
path. If they do not, I will be much more critical then than I
am now.
But I raised a point in my opening statement. It came
essentially from the Inspector General. If we are to get back
on this doubling path, we need to have the management skills,
the staff, the resources, to make sure we know what we are
getting, to make sure there is adequate review. That is very
important.
But let me ask you and then Dr. Kelly a much more important
question that we would ask back home if we were back in the
heartland of Missouri. You want to double the amount of money
you are spending. What do we get for it? What I need to hear
more clearly from you is not a discussion of stipends and
researchers and infrastructure, but what is your vision for
what the Foundation can achieve in the long term? Can you give
us some clear-cut policy goals? I want to have some goals, some
standards, how can we measure. Before we give you that final
blast in the fifth year to double it, we want to see progress,
measurable, identifiable progress, on mutually agreed upon
goals. I would like your and Dr. Kelly's views on what that
vision is. What are those goals?
Dr. Colwell. The vision includes being absolutely the
leaders in high speed, high terascale computation, having our
civilian scientists with access to the best and the fastest
computing capacity in order to be able to solve problems of
weather, the environment, understanding earthquakes.
I would like to see the future hold a rich promise
fulfilled in biotechnology, in plant genomics----
Senator Bond. Good, good. I was hoping that might be in
there.
Dr. Colwell. And I would like to see us understanding the
complexity of the environment so that we can make wise
decisions and have science-based decisions on how we utilize
our resources, whether it is locating a highway or whether it
is locating a new city, or investing in the infrastructure of a
city; in other words, bringing science and engineering to
improve the health and welfare of the entire Nation and
maintaining strong economic strength of the Nation and national
security of our Nation.
I do agree with the report, National Security in the 21st
Century, the Rudman-Hart report, which says, second only to
warfare in an American city or an outbreak of strife, the
greatest danger our Nation faces is losing leadership in
science and math research and science and math education. I can
go on, Senator, but I think you get the gist.

Nanotechnology, information technology and math and science education

Senator Bond. Yes. And nanotechnology----
Dr. Colwell. In nanotechnology we must be a leader. The
Japanese are investing $400 million in nanotechnology alone, so
we must really take leadership in this area.
Senator Bond. That is what I want to hear. But as we work
along, I want to see some milestones and some guidelines. We
would like to know from a management standpoint how we are
getting there.
Dr. Kelly, would you care to expand upon that and maybe
fill in some areas that you see?
Dr. Kelly. Yes, Senator. I think the Director has outlined
them ably.
In the next 5 years, the world is going to change
dramatically. Things as we know them now are not going to be
the same, and the rate of change is going to increase even more
rapidly in the future. Say, in information technology, we are
looking at the equivalent of infinite bandwidth and infinite
processing power within 10 years. I really believe it is going
to be less than that. Nanotechnology will be state of the art
in a few years, and we will be moving on to something brand new
that we do not even understand now.
The miniaturization that is going to take place there is
going to change the way we deliver medicine. It is going to
change the way we deliver food. It is going to change the way
we deliver information. It is going to change the nature of the
world.
This process is going to continue. So, that is one point
that we can deliver in terms of what is going to happen to
society.
The second part is we as a society cannot in the long term
rely on the scientific enterprise. Any field you take, 30 to 50
percent of the scientists in that field are from a different
country. We have to provide graduate stipends to attract our
best and brightest students into science. We have to attract
minorities and women, especially given the changing demographic
composition of the workforce, into science and engineering, and
we are not doing that.
We also need to revitalize science and math education in
public schools. There has to be a systemic change in all of
public education.
In the future, all of the other countries of the world are
moving in this direction. The important wars that are going to
be won are not conventional wars, but they are the wars of
infotech, nanotech, and education. The countries that win those
wars are going to be the countries that will maintain
leadership in the future. We are talking impacts of what we do
today that will not be evident next year or 2 years from now
but in 30 years.
But make no mistake about it. Right now we are eating our
seed corn. We are not making those investments in people. We
are not making those investments in basic research, and 30
years from now, our great, great grandchildren are going to pay
a very high price for that.
Senator Bond. Thank you, Dr. Kelly, for a very compelling
statement.

Math and science partnerships

Senator Mikulski. This then, of course, brings us back to
education. We talked about the farm team and the little
leagues, acknowledging the validity of Dr. Kelly's comments.
But I note in the request to the committee, there is a $200
million request for a new partnership in K through 12 math and
science education to be run by NSF. This new program gives NSF
$90 million in new funds, but redirects $110 million in
existing NSF funds to start this program. Now, I understand
that this is to make grants to State and local districts to
join with institutions of higher education to strengthen K
through 12 math and science education.
Now, that sounds good. I think we all agree on the goals. I
am into not only what are the goals and the vision, but the
how's, and is it really going to happen? From my observation,
this is the latest in a long line of new programs to improve K
through 12. With all due respect, just about every year I hear
about a new program to improve K through 12, but K through 12
does not really improve.
We have just gone through a wrenching effort, very strongly
bipartisan, to reauthorize the Elementary and Secondary
Education Act. In that reauthorization, it was so clear that we
are falling behind in science and math education and what
could, and the need for certified teachers. I will not go
through the laundry list, but ranging from Senator Pat Roberts
of Kansas, a strong leader in armed services, decrying this to
Senator Hillary Rodham Clinton both agreeing on how we could
move to improve K through 12 science education and have the
right teachers.
Now, here is my question to you, Dr. Colwell. Is this just
yet one more rearrangement of funds, and are we going to be in
exactly the same place next year as we are this year? And how
will this make a difference? Because it seems that we have a
lot of starts and stops in these areas. I do not know if you
are conducting an internal evaluation of what really works,
what are the lessons learned.
But quite frankly, I do not want to waste any more time on
K through 12, and I really do not want to see more starts, more
stops, and at the same time, we are still falling behind in the
need to have not only the improvement of the students, but the
single most important thing, Senator Bond, that we agreed upon
was teacher recruitment and teacher training.
So, could you tell me why this is going to be different
than the others?

building on Education program results

Dr. Colwell. Yes, Madam Chair. We are building on the
programs that we have been running, and we are building on what
we are learning from them. The programs in the math and science
partnerships are building on the K-12 programs that we have
been funding.
The important point is bringing together higher education,
the community, and the school system. The GK-12 program, which
I described to you in a previous testimony here, is working. We
are now getting some very good results, based on early returns
and discussions with institutions where these efforts are in
effect. We are linking higher education through graduate
students who are working up to 20 hours a week teaching in
primary, middle, and high schools.
We also need to focus on developing centers focused on the
science of learning, centers that bring together the kinds of
information that is being gathered in research laboratories at
NIH on how children learn. In discussions with Secretary Paige
just a few days ago, we both agreed that we need to work on how
children learn about numbers, how they do mathematics. It is
not yet understood how children learn mathematics. We need to
bring the research, good research, directly into the classroom.
We have talked about technology transfer for industry, but we
need now to focus on the technology transfer from the research
laboratory into the classroom.
Senator Mikulski. Dr. Colwell, are you telling me that has
not been done?
Dr. Colwell. Well, it needs to be done in a focused way
that NSF can then provide transfer to math and science
education.
Senator Mikulski. But this has not been done at NIH in its
neuroscience area and in its particular area of child
development?
Dr. Colwell. But again, the area of child development is
also a component of the research that I have mentioned we would
bring together.
I think the best example would be our systemic reform
efforts. We have had some successes in our urban, and rural,
and inner city systemic reform programs that are underway.

redirection of Funds and evolution of education programs

Senator Mikulski. I agree but in this new partnership, it
cuts it by $50 million. It also redirects money. The $110
million comes out of cutting the programs for existing teacher
training. So, you see?
Dr. Colwell. Yes, but what we are trying to do is evolve
from what we have learned in those programs and to shape them
into more effective programs. We are in the process of
evaluating the results of our systemic initiatives, learning
what are the factors that correlate with success and those with
not such good success, and go to the next step embodied in the
No Child Left Behind partnerships.
Senator Mikulski. So, what are we saying here? Are we
saying that we had these programs in the past and now President
Bush in the No Child Left Behind--and, of course, I take the
position no child left behind and no child left out of the
appropriations process. Essentially where these programs
existed, are they being cut, or are you now kind of mining them
for lessons learned and incorporating them in the new program?
In other words, it is like a rocket ship. This one kind of
falls off, but it keeps the momentum going.
Dr. Colwell. Those that are in place are being retained. We
are just not making any new starts in the old programs, but we
are taking what we have learned from them to shape the new
programs, the new partnerships that the schools can participate
in along with schools of higher education.
Senator Mikulski. Well, I really want to work with
President Bush on this. I believe again looking at our work on
the Education Committee, of which Senator Bond is a member--
remember those exchanges and particularly Pat Roberts; you were
an active participant--how can we really now operationalize
these goals? I would like to have a more detailed description
of what is this new program and what does it mean in terms of
the other programs. Are they just being eliminated? Are they
just being redirected? Or are they now evolving into this? If
we could really get a picture of this. Again, it is not only
the Appropriations Committee. When we go to the floor, we
really have to demonstrate----
Dr. Colwell. It is genuinely an evolving scenario; that is,
we are taking that which we have learned from the programs that
have worked and we are shaping them in the partnerships
program.
Senator Mikulski. Senator Bond, I note that Senator
Domenici is here. Would you like to go another round or defer
to him?
Senator Bond. I would certainly defer to Senator Domenici.
Senator Mikulski. I think it is in our interest.
Senator Bond. I believe when he had a shot at it, he cut us
a better deal than OMB did.
Senator Mikulski. Absolutely.
Senator Bond. We are looking for friends. Would you like
some coffee, Senator Domenici?
Senator Mikulski. We are glad to see you.
Senator Bond. Can we fix you anything here?

very large Array telescope

Senator Domenici. I brought my own.
Incidentally, we did get about $7 billion more than the
President for our kind of programs. There, obviously, are many
who do not think it is enough, but we will see where it all
comes out.
Thank you for permitting me to ask a few questions.
Dr. Colwell, I first want to thank you for responding to a
question that has nothing to do with these hearings with
reference to one of our rivers. You took of your time to go
find out what the authentic answer was, and I appreciate
knowing that. I was just hearing some rumbles and rumors, not
something official.
It is my understanding and I am quite pleased by the fact
that funding for the expansion efforts of the very large array
has been included in the Foundation's budget for 2002, with
continued support expected in the future. We are all very proud
of that array, not just New Mexicans, but it is there as one of
the truly magnificent science achievements. And it is time to
spend some more money there.
What are we going to do? Do you have a quick summary of how
we are going to spend this money?
Dr. Colwell. The very large array is a very important part
of the astronomy effort. What I would like to do is ask Bob
Eisenstein to make some comments because I think this is really
critical.
Senator Domenici. I think it would just take a minute.
Could he testify please, Madam Chair?
Senator Mikulski. Certainly. Sir, would you come on up and
take the microphone so we can hear and it also can be
appropriately recorded?
Dr. Eisenstein. I'm Robert Eisenstein. I'm Assistant
Director for Mathematical and Physical Sciences at NSF, and the
Astronomy Division is one of the divisions in my directorate.
We have plans to expand the VLA, as you indicated, Senator.
The first outlay will be for an R&D effort to do phase one, and
upon successful conclusion of that R&D effort, we will
entertain a proposal for the larger project under the major
research equipment account at the due time.
Senator Domenici. So, even though portions of that have
been there for a long time, it is still a very integral part of
astronomy in the world. Is that correct?
Dr. Eisenstein. Absolutely. I would say that the VLA is the
world's leading radio telescope.

ALMA

Senator Domenici. Maybe this next question is in your
domain also. I only have one other.
Could you speak a moment about ALMA, the Atacama Large
Millimeter Array? It is my understanding that something is
happening with that also that affects New Mexico.
Dr. Eisenstein. Yes. The Atacama Large Millimeter Array
currently is in its fourth year of R&D in 2001. We have entered
what we think will be a very productive partnership with the
Chilean government where the antennas will be hosted, also with
several European nations operating through the European
Southern Observatory. Now more recently we are entering
negotiations with the Japanese, hoping to involve them in a
full tripartite project to build what will be the world's first
truly international radio telescope of unprecedented power.
Senator Domenici. Now, does the 2002 budget request funding
specifically for the construction of this project? I do not
think it does.
Dr. Eisenstein. No, it does not.
Senator Domenici. Does that mean we are still committed to
it, or what would we be considering as a subcommittee?
Dr. Eisenstein. Well, we are committed to this project in
the sense of continuing the research and development activity
in 2002. As you know, the major research equipment account in
the President's budget was not allowed any new starts for
construction activity, and so we are waiting until 2003 to see
what happens there.
Senator Domenici. But if we have the money, the project is
on go?
Dr. Eisenstein. The project is prepared to commence
construction, yes, sir.

WIPP versus homestake

Senator Domenici. My last one has to do with National
Science Foundation and WIPP, the Waste Isolation Pilot Project,
in New Mexico. I understand that the advisory committee which
met in New Mexico and also met in the Majority Leader's State
with reference to an underground mine versus using the Waste
Isolation Pilot Project underground mine. The decision was to
go with the old marketplace mine rather than the Federal
Government site. Are there other research activities of a
similar type that might be considered for the Waste Isolation
Pilot Project underground mine?
Dr. Colwell. I would say yes, but I will again ask Dr.
Eisenstein if there are any immediately under consideration. I
am not sure that there are.
Dr. Eisenstein. I actually do not know what the Department
of Energy's plans are with respect to that, sir.
Senator Domenici. So, there are no plans for any kind of
projects from NSF.
Dr. Colwell. Not at the moment.
Dr. Eisenstein. Not from the National Science Foundation,
no.
Senator Domenici. I thank you very much. Thank you, Madam
Chairman.
Senator Mikulski. Thank you.
Senator Bond.

Peer review system

Senator Bond. Thank you very much, Madam Chair.
We are under an approaching deadline. There are supposed to
be votes at 11:30. I would like to ask you four bullet
questions in hopes of four bullet answers of perhaps 60 seconds
with the promise and expectation that you can expand upon those
in writing because I believe they are important. I want to
bring them up but we do not have time fully to discuss them
today.
Number one, the peer review system. I mentioned before NAPA
recommended that NSF should broaden bringing in more
participants, wider range of institutions, disciplines,
including the ``have nots'' and under-represented minorities.
How are you responding to NAPA's findings and recommendations?
Dr. Colwell. In a word, we are responding. We are taking
those recommendations into account and we are taking action to
ensure the advisory committees include these individuals.

High-tech education

Senator Bond. Thank you. We will look forward to seeing
that information.
Number two, high tech workers. How is NSF working with the
private sector to deal with this shortage? The question of how
you educate is a broad one. Senator Mikulski has raised the
question. What specifically are we doing, can we help the
private sector meet its needs and get the students that the
scientific community needs?
Dr. Colwell. We have several programs--and I can give them
in detail to you--that train students in 2-year colleges and 4-
year colleges in advanced technology. We have programs in
computer science and a variety of other programs, and I would
be very happy to provide details, sir.
[The information follows:]

NSF Programs: High Tech Workforce

The National Science Foundation's (NSF's) GPRA Strategic Plan
(2001-2006) indicates that ``in pursuit of its mission, NSF invests in
people to develop a diverse, internationally competitive and globally-
engaged workforce of scientists, engineers and well-prepared
citizens.'' Investments at the undergraduate level are critically
important in the attainment of this outcome goal. NSF has a
comprehensive suite of programs that prepare undergraduate students for
entry into the workforce and entry into graduate programs. These
programs are conducted via three strategies: (1) direct preparation of
specific elements of the science and engineering workforce, (2)
attention to broadening participation in the science and engineering
workforce by groups that are currently underrepresented, and (3)
strengthening the curricular and instructional infrastructure for
providing high quality science, mathematics, engineering, and
technology education to all students.
Across the set of NSF's programs for undergraduates, a balance is
struck between providing students with the practical skills needed to
perform at a high level in the workplace and providing the firm
theoretical foundations in math and science required as preparation for
study at more advanced levels.
The text which follows summarizes NSF's programs which either
target or contribute to high quality education at the undergraduate
level. Unless otherwise noted, all of the programs cited below are
supported primarily by the Directorate for Education and Human
Resources.
direct preparation of specific elements of the science and engineering
workforce

Advanced Technological Education

[In millions of dollars]

Fiscal Year 2001 Current Plan..................................... 39.16
Fiscal Year 2002 Request.......................................... 39.16

The Advanced Technological Education (ATE) Program is managed
jointly by the Division of Undergraduate Education (DUE) and the
Division of Elementary, Secondary, and Informal Education. The program
promotes improvement in the education of technicians in science- and
engineering-related fields at the undergraduate and secondary school
levels. It particularly targets two-year colleges and encourages
collaboration among two-year colleges, four-year colleges,
universities, secondary schools, business, industry, and government.
Proposals are solicited in the following three tracks:
--Projects.--Activities may include the development of educational
materials, courses, curricula, and laboratories; the
preparation and professional development of college faculty and
secondary school teachers; internships and field experiences
for students and educators; or the dissemination of exemplary
educational materials, curricula, and pedagogical practices
designed by previously funded ATE centers and projects.
--Centers.--ATE centers are comprehensive national or regional
resources that provide models and leadership for other projects
and act as clearinghouses for educational materials and
methods. National Centers of Excellence engage in the full
range of activities described above for projects. Regional
Centers for manufacturing or information technology education
pursue comprehensive approaches that focus on reforming
academic programs, departments, and systems to produce a highly
qualified workforce to meet industry's needs within a
particular geographic region.
--Articulation Partnerships.--These projects focus on enhancing
either of two important educational pathways for students
between two-year colleges and four-year colleges and
universities. One type of Articulation Partnership focuses on
strengthening the science, mathematics, and technology
preparation of prospective K-12 teachers who are enrolled in
pre-professional programs at two-year colleges. The other type
of partnership targets two-year college programs for students
to continue their education in four-year science, mathematics,
engineering, and technology programs, especially programs that
have a strong technological basis.
Proposals in all three tracks must evidence a coherent vision of
technological education--a vision that recognizes the needs of the
modern workplace, the needs of students as lifelong learners, and the
need for articulation of educational programs at different levels.
Whenever feasible, projects are expected to utilize and innovatively
build from successful educational materials, courses, curricula, and
methods that have been developed through other ATE grants, as well as
other exemplary resources that can be adapted to technological
education.
For More Information: http://www.ehr.nsf.gov/EHR/DUE/programs/ate/.

Federal Cyber Service: Scholarship for Service

[In millions of dollars]

Fiscal Year 2001 Current Plan..................................... 11.18
Fiscal Year 2002 Request.......................................... 11.18

The Scholarship For Service (SFS) program seeks to increase the
number of qualified students entering the fields of information
assurance and computer security and to increase the capacity of the
United States higher education enterprise to continue to produce
professionals in these fields. The program consists of scholarship and
capacity building tracks:
--The Scholarship Track provides funding to colleges and universities
to award scholarships in information assurance and computer
security fields. Scholarship recipients will become part of the
Federal Cyber Service of information technology specialists who
ensure the protection of the U.S. Government's information
infrastructure. After their two-year scholarships, the
recipients will be required to work for a federal agency for
two years as their Federal Cyber Service commitment.
--The Capacity Building Track seeks to increase the national capacity
for producing trained information assurance professionals by
providing support to colleges and universities interested in
building programs, individually or in partnership.
For More Information: http://www.ehr.nsf.gov/EHR/DUE/programs/sfs/

NSF Computer Science, Engineering, and Mathematics Scholarships

[In millions of dollars]

Fiscal Year 2001 Current Plan (est.).............................. 71.95
Fiscal Year 2002 (est.)........................................... 85.68

Funds allocated from H-1B Visa petitioner fee receipts.

The NSF Computer Science, Engineering, and Mathematics Scholarships
(CSEMS) Program provides institutions with funds to support
scholarships for talented but financially disadvantaged students in
computer science, computer technology, engineering, engineering
technology, or mathematics degree programs. Through support from this
program, grantee institutions establish scholarships that promote full-
time enrollment and completion of degrees in higher education in the
above fields. NSF established the program in accordance with the
American Competitiveness and Workforce Improvement Act of 1998 (Public
Law 105-277). The Act reflects the Nation's need to increase
substantially the number of graduates from associate, baccalaureate,
and graduate degree programs in these fields. The goals of this program
are to:
--improve education for students in the stated disciplines;
--increase retention of students to degree completion;
--improve professional development, employment, and further higher
education placement of participating students; and
--strengthen partnerships between institutions of higher education
and related employment sectors.
The eligibility criteria for a CSEMS scholarship recipient include
the following:
--status as a U.S. citizen, national, refugee alien, or permanent
resident alien at the time of application;
--full-time enrollment in computer science, computer technology,
engineering, engineering technology, and/or mathematics degree
programs at the associate, baccalaureate, or graduate level;
--demonstrated academic potential or ability; and
--demonstrated financial need, defined for undergraduates as
financial eligibility under U.S. Department of Education rules
for Federal financial aid, and defined for graduate students as
eligibility for Graduate Assistance in Areas of National Need.
CSEMS institutional proposers must be institutions of higher
education that grant degrees in computer science, computer technology,
engineering, engineering technology, or mathematics.
For More Information: http://www.ehr.nsf.gov/EHR/DUE/programs/
csems/csems.htm.

Science, Technology, Engineering, and Mathematics Teacher Preparation

[In millions of dollars]

Fiscal Year 2001 Current Plan..................................... 14.52
Fiscal Year 2002 Request.......................................... 6.52

The Science, Technology, Engineering, and Mathematics Teacher
Preparation (STEMTP) Program supports efforts to develop exemplary
science and mathematics pre-K-12 teacher preparation models through
partnerships involving science, mathematics, engineering, technology,
and education faculty at two- and four-year institutions of higher
education and local school districts. The goals of the program are to:
--increase significantly the number of pre-K-12 teachers who are
certified and well-qualified to teach mathematics and science,
and
--improve the quality of preservice education, induction, and
continued professional growth in mathematics and science for
pre-K-12 teachers.
Projects must address local needs for increased numbers of teachers
who are well qualified to teach mathematics and science by providing
strategies for recruiting and retaining teachers in the workforce. The
STEMTP program offers two areas of focus:
--Baccalaureate and Five-Year Programs.--Projects are expected to
include strategies for ensuring that preservice students
acquire SMET content and pedagogical knowledge and skills for
successful teaching.
--Alternative Pathways to Teaching.--Projects design and implement
alternative credentialing programs for SMET professionals and
recent SMET graduates to facilitate their entry into the
teaching profession.
For more information: http://www.ehr.nsf.gov/EHR/DUE/programs/
stemtp/.
attention to broadening participation in the science and engineering
workforce by groups that are currently underrepresented

Historically Black Colleges and Universities-Undergraduate Program

[In millions of dollars]

Fiscal Year 2001 Current Plan..................................\1\ 14.97
Fiscal Year 2002 Request.......................................\1\ 14.97

\1\ Includes $1M in support from the Research & Related Activities
appropriation.

This program seeks to enhance the quality of undergraduate science,
mathematics, engineering, and technology (SMET) education at
Historically Black Colleges and Universities as a means to broaden
participation in the Nation's SMET workforce. The program provides
support for the implementation of comprehensive institutional
strategies to strengthen SMET teaching and learning in ways that will
improve the access and retention of underrepresented groups in SMET.
Typical project implementation strategies include SMET course and
curricular reform and enhancement; faculty professional development;
supervised research and other active learning experiences for SMET
undergraduates; student support; scientific instrumentation to improve
SMET instruction; and other activities that meet institutional needs.
Eligibility Requirements
Historically Black Colleges and Universities that currently offer
associate, baccalaureate or master's degrees in science, mathematics,
engineering and technology (SMET) fields, but do not offer doctoral
degrees in SMET disciplines.
For More Information: http://www.ehr.nsf.gov/EHR/HRD/hbcu.asp

Louis Stokes Alliances for Minority Participation

[In millions of dollars]

Fiscal Year 2001 Current Plan..................................... 26.78
Fiscal Year 2002 Request.......................................... 26.53

The Louis Stokes Alliances for Minority Participation (LSAMP)
Program is designed to develop the comprehensive strategies necessary
to strengthen the preparation of minority students and increase the
number of minority students who successfully complete baccalaureates in
science, mathematics, engineering, and technology (SMET) fields. This
objective facilitates the long-term goal of increasing the production
of Ph.D.'s in SMET fields, with an emphasis on entry into faculty
positions.
The LSAMP Program requires each awardee to establish meaningful
partnerships among academic institutions, and encourages the inclusion
of Government agencies and laboratories, industry, and professional
organizations. It is expected that successful partnerships will enable
the development of approaches tailored to the institutional setting for
achievement of program goals in SMET undergraduate education.
Activities supported include student enrichment, such as collaborative
learning, skill development, and mentoring; academic enrichment, such
as curricular and instructional improvement; and direct student
support, such as summer activities.
Eligibility Requirements
Academic institutions with a track record of educating minority and
other students in SMET disciplines are eligible to apply to the LSAMP
Program. Nonprofit organizations serve as members of the alliance or
partnership.
For More Information: http://www.ehr.nsf.gov/EHR/HRD/amp.asp

Alliances for Graduate Education and the Professoriate

[In millions of dollars]

Fiscal Year 2001 Current Plan..................................... 11.80
Fiscal Year 2002 Request.......................................... 11.80

The Alliances for Graduate Education and the Professoriate (AGEP)
Program seeks to significantly increase the number of American Indian/
Alaskan Native (Native American), African American, Hispanic American,
and Native Pacific Islander students receiving doctoral degrees in the
physical and life sciences, mathematics, and engineering (SME). The
lack of role models and mentors in the professoriate constitutes a
significant barrier to producing minority SME doctoral graduates, and
NSF is particularly interested in increasing the number of minorities
who will enter the professoriate in these disciplines.
Specific objectives of the AGEP Program are (1) to develop and
implement innovative models for recruiting, mentoring, and retaining
minority students in SME doctoral programs; and (2) to develop
effective strategies for identifying and supporting underrepresented
minorities who want to pursue academic careers.
The AGEP Program also supports a research effort to identify major
factors that promote the successful transition of minority students
from (1) undergraduate through graduate study; (2) course-taking in the
early years of the graduate experience to independent research required
for completion of a dissertation; and (3) the academic environment to
the SME workplace. To accomplish this objective, the research component
will be informed by a portfolio of Federal and private efforts in this
arena in order to identify factors underlying exemplary as well as
unsuccessful efforts.
Eligibility Requirements for AGEP
Alliances consisting of SME doctoral degree-granting institutions
are eligible to apply to the program. One institution must be
designated as the lead institution for the project. Institutions in the
United States and its territories that have documented success in
graduating minority students at the Ph.D. level are strongly encouraged
to participate. Alliances are encouraged to establish partnerships with
minority serving undergraduate institutions to enhance recruitment
efforts, where appropriate.
For More Information: http://www.ehr.nsf.gov/EHR/HRD/agep.asp

Centers of Research Excellence in Science and Technology

[In millions of dollars]

Fiscal Year 2001 Current Plan..................................... 8.88
Fiscal Year 2002 Request.......................................... 8.88

NSF recognizes that academic institutions with significant minority
student enrollments play a vital role in conducting the research that
contributes to our knowledge base in all disciplines and in educating
minority students who go on to careers in the fields of science,
mathematics, engineering, and technology (SMET).
The Centers of Research Excellence in Science and Technology
(CREST) Program makes substantial resources available to upgrade the
capabilities of the most research-productive minority institutions. It
develops outstanding research centers through the integration of
education and research. Additionally, it serves to promote the
production of new knowledge; increase the research productivity of
individual faculty; and expand a diverse student presence in SMET
disciplines. CREST centers enhance the effectiveness of related science
and engineering activities within the project's area of research focus.
Eligibility Requirements for CREST
Institutions eligible to participate in CREST Research
Infrastructure Improvement (RII) awards must have:
--Enrollments of 50 percent or more members of minority groups that
are underrepresented among those holding advanced degrees in
science and engineering, e.g., Alaskan Natives (Eskimo or
Aleut), American Indian, African American, Native Pacific
Islanders (Polynesian or Micronesian), Hispanic or Latino;
--Graduate programs in NSF-supported fields of science or
engineering;
--Demonstrated strengths in NSF-supported fields, as evidenced by an
existing or developing capacity to offer doctoral degrees in
one or more science and engineering disciplines;
--A willingness and capacity to serve as a resource center in one or
more research thrust areas;
--A demonstrated commitment and track record in enrolling and
graduating minority scientists and engineers; and
--Strong collaborations in the proposed field of research.
For More Information: http://www.ehr.nsf.gov/EHR/HRD/crest.asp

Tribal Colleges and Universities Program (TCUP)

[In millions of dollars]

Fiscal Year 2001 Current Plan..................................... 9.98
Fiscal Year 2002 Request.......................................... 9.98

This program provides awards to enhance the quality of science,
mathematics, engineering and technology (SMET) instructional and
outreach programs, with an emphasis on the leveraged use of information
technologies at Tribal Colleges and Universities, Alaskan Native-
serving Institutions and Native Hawaiian-serving institutions. Support
is available for the implementation of comprehensive institutional
approaches to strengthen SMET teaching and learning in ways that
improve access to, retention within, and graduation from SMET programs,
particularly those that have a strong technological foundation. Through
this program, assistance is provided to eligible institutions in their
efforts to bridge the digital divide and prepare students for careers
in information technology, science, mathematics and engineering fields.
Proposed activities should be the result of a careful analysis of
institutional needs, address institutional and NSF goals, and have the
potential to result in significant, sustainable improvements in SMET
program offerings. Typical project implementation strategies include
curriculum enhancement, faculty professional development, undergraduate
research and community service, academic enrichment, infusion of
technology to enhance SMET instruction, collaborations, and, other
activities that meet institutional and community needs.
Eligibility Requirements for TCUP
Organizations eligible include Tribal Colleges and Universities,
Alaskan Native-serving institutions and Native Hawaiian-serving
institutions.
For More Information: http://www.ehr.nsf.gov/EHR/HRD/tcup.asp

Model Institutions for Excellence (MIE)

[In millions of dollars]

Fiscal Year 2001 Current Plan..................................\1\ 10.02
Fiscal Year 2002 Request.......................................\1\ 10.02

\1\ EHR funding is $2.52M.

This program, administered by the Office of Integrative Activities
is a joint venture between the National Science Foundation, the
National Aeronautics and Space Administration, and the U.S. Departments
of Agriculture and Interior. The MIE Program aims to increase the
number and quality of underrepresented minorities in science,
engineering, and mathematics (SEM) education in the nation's higher
education institutions and particularly targets institutions that have
a history of awarding SEM degrees to African Americans, Hispanics, and
Native Americans. The program provides funds and technical assistance
to help improve institution facilities and provide technical support.
MIE-awarded schools concentrate on recruiting and retaining SEM
students; pay special attention to counseling and academic enrichment;
offer research opportunities; and will encourage students to attend
graduate school. The success of these institutions will serve as models
for high-quality SEM education that can be replicated at colleges and
universities nationwide.

Program for Gender Equity in Science, Mathematics, Engineering, and
Technology

[In millions of dollars]

Fiscal Year 2001 Current Plan..................................... 11.19
Fiscal Year 2002 Request.......................................... 11.19

The program supports research on focused interventions that are
specifically directed toward increasing the number of women as full
participants in the mainstream of the Nation's scientific and
technological enterprise. The Program for Gender Equity in Science,
Mathematics, Engineering, and Technology supports the following
activities:
--Research.--This area seeks to enhance the multidisciplinary
understanding of gender differences in human learning--
behavioral, cognitive, affective and social aspects--through
socio-psychological, ethnographic, statistical,
anthropological, economic, and organizational studies. The
efforts in this area provide a research foundation for
educational approaches, curriculum materials, and technological
tools that are already developed or can be developed in the
future, bridging research and educational practice in settings
such as classrooms, informal learning sites, and technological
learning environments. The research aims to produce cumulative,
reproducible, sustainable and scalable results, supporting
sustained improvement in educational practice.
--Demonstration or ``Model'' Projects.--This area employs evaluation
methods to determine the effectiveness of new learning tools,
pedagogies, professional development programs, or student
programs and services in order to produce outcomes.
Demonstration projects apply research findings about girls'
learning preferences in the design of new curriculum materials,
services, pedagogy, or instructor development programs, which
can be institutionalized and replicated if they are proven
successful. In particular, teacher and faculty development
demonstrations test new ways to integrate the understanding and
awareness of gender-inclusive practices into pre-service and
in-service professional development programs and into
professional standards and policies. It is anticipated that
direct participants in demonstration projects will benefit from
the learning experience and assimilate new behaviors.
--Information Dissemination Activities.--This area supports projects
that focus on the dissemination of research results or the
dissemination of strategies for reducing the barriers for women
and girls in these fields. Activities supported include media
(e.g., videotapes and brochures), conferences, teleconferences,
symposia, and workshops that bring together experts to discuss
issues, projects, policies, and research related to the
participation and achievement of women and girls in science,
engineering, and mathematics. Dissemination projects take
material or model approaches or information to a significant
national audience.
For More Information: http://www.ehr.nsf.gov/EHR/HRD/pge.asp

Program for Persons with Disabilities

[In millions of dollars]

Fiscal Year 2001 Current Plan..................................... 5.28
Fiscal Year 2002 Request.......................................... 5.28

This program is dedicated to increasing the number of people with
disabilities employed in the nation's science, engineering, and
technology work force. To accomplish this end, PPD supports projects
designed to:
--bring about needed changes in academic and professional climates,
--increase the awareness and recognition of the needs and
capabilities of students with disabilities,
--promote the accessibility and appropriateness of instructional
materials, media, and educational technologies, and
--increase the availability of student enrichment resources including
mentoring activities.
In short, efforts are dedicated to changing the factors wherein
neglect, paucity, and indirection historically restricted the study of
science and mathematics by students with disabilities, and impeded the
advancement of these individuals as they prepared themselves for
careers in SMET fields. In support of the goals, and in recognition of
findings from past activities, PPD is initiating support for regional
alliances.
For More Information: http://www.ehr.nsf.gov/ehr/hrd/ppd/.

Presidential Awards for Excellence in Science, Mathematics, and
Engineering Mentoring

[In millions of dollars]

Fiscal Year 2001 Current Plan..................................... 0.29
Fiscal Year 2002 Request.......................................... 0.29

The White House established the Presidential Awards for Excellence
in Science, Mathematics, and Engineering Mentoring (PAESMEM) to
recognize the importance of role models and mentors in the academic,
professional, and personal development of students from groups that are
underrepresented in these fields. The PAESMEM Program identifies
outstanding mentors and mentoring programs that enhance the experiences
of underrepresented students in the sciences, mathematics, and
engineering. At the individual and the institutional levels, recipients
of the PAESMEM award have been exemplary in their demonstration of the
idea that the Nation must develop its human resources in these
disciplines to the fullest extent possible through supporting increased
access by diverse populations.
strengthening the curricular and instructional infrastructure for
providing high quality science, mathematics, engineering, and
technology education to all students

Assessment of Student Achievement in Undergraduate Education (ASA)

[In millions of dollars]

Fiscal Year 2001 Current Plan..................................... 3.0
Fiscal Year 2002 Request.......................................... 3.0
The Assessment of Student Achievement in Undergraduate Education
(ASA) program supports the development and dissemination of assessment
practices, materials (tools), and measures to guide efforts that
improve the effectiveness of courses, curricula, programs of study, and
academic institutions in promoting student learning in science,
mathematics, engineering, and technology (SMET). ASA seeks to support
the use of assessment practices by SMET faculty, SMET departments, and
institutional administrators seeking to measure student achievement in
courses, curricula, programs of study, and the cumulative undergraduate
experience embodying some SMET learning.
To help ensure that project results will effectively serve the SMET
community, at least one investigator (PI or co-PI) in a project must be
a SMET faculty member.
Projects can focus on one or more of the following broad areas:
--Developing new and adapting extant assessment materials that can be
used to improve SMET courses and curricula to achieve explicit
learning objectives,
--Developing methods for assessing student achievement resulting from
a group of courses constituting a minor or major field of
study,
--Assessing the impact on student achievement of interdisciplinary
learning experiences, student teams, co-curricular activities
(e.g. service learning), increased laboratory and field
experiences, and other forms of learning enrichment, and
--Developing indicators of student learning within certain domains,
and measures of institutional program quality.
For More Information: http://www.ehr.nsf.gov/EHR/DUE/programs/asa/

Course, Curriculum, and Laboratory Improvement

[In millions of dollars]

Fiscal Year 2001 Current Plan..................................... 46.63
Fiscal Year 2002 Request.......................................... 46.63

The Course, Curriculum, and Laboratory Improvement (CCLI) Program
supports projects that are expected to improve undergraduate science,
mathematics, engineering, and technology education (SMETE) by
increasing the availability and use of high-quality educational
materials and the employment of effective pedagogical strategies.
Proposals that address all levels of undergraduate education are
encouraged; proposals to improve introductory-level courses, curricula,
and laboratories are especially welcome.
The CCLI Program invites proposals to improve undergraduate SMETE
in a broad spectrum of institutions, including 2-year colleges, 4-year
colleges, and universities. Projects may involve a single institution,
a collaborative effort among several institutions, or a collaboration
with business and industry partners. The CCLI Program has three major
tracks:
--Educational Materials Development.--Projects are expected to
produce innovative materials that incorporate effective
educational practices to improve student learning of SMET.
Projects to develop textbooks, software, or laboratory
materials for commercial distribution are appropriate. Two
types of projects will be supported: (1) those that intend to
demonstrate the scientific and educational feasibility of an
idea, a ``proof of concept,'' or a prototype; and (2) those
that are based on prior experience with a prototype that intend
to fully develop the product or practice. Such materials are
expected to be disseminated nationally for adoption and
adaptation.
--Adaptation and Implementation.--Projects are expected to result in
improved education in SMET at academic institutions through the
adaptation and implementation of exemplary materials,
laboratory experiences, and/or educational practices that have
been developed and tested at other institutions. Proposers may
request funds in any category normally supported by NSF, or
funds only to purchase instrumentation.
--National Dissemination.--Projects are expected to provide faculty
with professional development opportunities to enable them to
introduce new content into undergraduate courses and
laboratories; and to explore effective educational practices.
Projects should be designed to offer workshops, short courses,
or similar activities on a national scale in single or multiple
disciplines.
For More Information: http://www.ehr.nsf.gov/EHR/DUE/programs/
ccli/.

NSF Director's Award for Distinguished Teaching Scholars

[In millions of dollars]

Fiscal Year 2001 Current Plan..................................... 1.51
Fiscal Year 2002 Request.......................................... 1.51

The purpose of the NSF Director's Award for Distinguished Teaching
Scholars (DTS) Program is to recognize individuals with demonstrated
excellence and promise of future success in both scientific research
and the education of undergraduates in science, mathematics,
engineering, and technology (SMET). The program promotes the continued
and expanded efforts of individuals with a history of impact on both:
(a) the research in a SMET discipline or on SMET educational research;
and (b) the SMET education of undergraduates, including those who are
not SMET majors. The Director's Award is the highest honor bestowed by
the NSF for excellence in both teaching and research in SMET fields, or
in educational research related to these disciplines.
For More Information: http://www.ehr.nsf.gov/EHR/DUE/programs/dts/

National Science, Mathematics, Engineering, and Technology Education
Digital Library

[In millions of dollars]

Fiscal Year 2001 Current Plan..................................... 24.95
Fiscal Year 2002 Request.......................................... 24.95

The goal of the National Science, Mathematics, Engineering, and
Technology Education Digital Library (NSDL) Program is to support the
creation and development of a national digital library for science,
mathematics, engineering, and technology education (SMETE). The
resulting virtual facility--learning environments and resources network
for SMETE--is intended to meet the needs of students and teachers at
all levels: K-12, undergraduate, graduate, and lifelong learning, in
both individual and collaborative settings. The NSDL Program builds on
work supported under the multi-agency Digital Libraries Initiative (see
http://www.dli2.nsf.gov/) and represents a synergistic collaboration of
research and education efforts.
The NSDL Program is currently supporting a Core Integration effort
that coordinates and manages the digital library's holdings and
services. To complement and further expand this Core Integration
capacity the NSDL Program accepts proposals in the following tracks:
--Collections.--Projects are expected to aggregate and manage a
subset of the library's content within a coherent theme or
specialty.
--Services.--Projects are expected to develop services that will
support users, collection providers, and the Core Integration
effort, as well as enhance the impact, efficiency, and value of
the library.
--Targeted Research.--Projects are expected to explore specific
topics that have immediate applicability to one of the other
two tracks, or the Core Integration effort above.
For More Information: http://www.ehr.nsf.gov/EHR/DUE/programs/nsdl/
training programs--research directorates
Although most of the programs are within EHR, NSF does have
investments in training in the Engineering (ENG) and Computer
Information and Science Engineering Directorates (CISE). ENG's
Engineering Research Centers which train graduate and undergraduate
students in the latest cutting edge research areas plus prepare them
for jobs which require ability to work in teams, on multidisciplinary
topics. In addition, ENG's Engineering Education Coalitions stimulate
reform of undergraduate engineering education to enhance the quality
and quantity of students who earn engineering degrees. Both require
matching funds from industry and active participation by companies to
assure relevance.
ENG's Action Agenda for Engineering Curriculum Innovation Program
supports the implementation of new approaches to educate engineers and
encourage outstanding students--particularly from underrepresented
groups--to enter the field. The Program builds on successful
innovations from the NSF Engineering Education Coalitions and other new
concepts for the reform and improvement of engineering education and
seeks to involve research-active scholars more actively in education
innovation.
Through its Educational Innovation program, CISE supports
educational activities at the undergraduate level in computer and
information science and engineering that transfer research results into
the undergraduate curriculum. Projects supported are expected to show
promise as a national model of excellence by acting as a prototype for
use by a broader segment of the CISE community. Proposals may address a
variety of educational activities, including the development of
courses, instructional technologies, software, and other educational
materials. A related program, Combined Research and Curriculum
Development, in cooperation with the Engineering Directorate, supports
multidisciplinary projects in upper level undergraduate and
introductory graduate level curricula.
CISE and ENG cooperate in the Course, Curriculum, and Laboratory
Improvement (CCLI) program that improves and adds excitement to
engineering and CS education by transferring the results of research
into curriculum--classes, books, simulations, web pages and other
materials. CCLI targets upper division college and beginning graduate
level courses and has an important element of involving industry.
The Information Technology Workforce program (http://www.nsf.gov/
pubs/2001/nsf0133/nsf0133.htm) supports research to understand the
reasons for low rates of participation in education and career paths in
IT for under-represented groups, particularly women and minorities.
This understanding will develop the basis for future actions to improve
participation rates.
CISE's Minority Institutions Infrastructure program provides awards
to aid efforts that might significantly expand the numbers of minority
students attracted to and retained in computer and information science
and engineering disciplines. Eligible institutions must be minority
institutions (defined by significant percentages of minority students).
The program considers a variety of activities, including research
programs involving minority students, curriculum development projects,
mentoring, and outreach. Both 1-year planning grants and continuing
grants of up to 5 years in duration are awarded. Significant matching
for the latter (usually 25 percent) is expected.
Also, NSF's Social, Behavioral and Economic Sciences Directorate
grant to the Council on Competitiveness will form a new public-private
partnership to encourage more young people, especially women and
minorities to pursue science and engineering careers.

Senator Bond. Thank you very much.
Yes, Dr. Kelly.
Dr. Kelly. Let me just say there that there is a board task
force working on this issue. It is chaired by Joe Miller,
former Chief Technical Officer of DuPont. This is a longer-run
study, but specifically on this subject.

Nuclear engineering education

Senator Bond. Thank you.
Last year, Dr. Colwell, you will remember I raised concerns
about the lack of Federal support for nuclear engineering
education, and we asked NSF to review the academic interest in
nuclear engineering. We just last week received the report, and
the review of it was disappointing. There is a recognition that
the demand for nuclear trained personnel is on the rise, but
NSF has not provided any concrete recommendations on how it
will respond.
What can be done in this particular area? I would ask you,
Dr. Colwell.
Dr. Colwell. We have had very, very recent discussions on
just this subject. The engineering directorate is keenly aware
of the lack of trained, skilled talent in this area, and we are
looking to programs for workshops and for education, the kinds
of programs as in the technological arena. That is, we need to
find some way to fast forward the training of these kinds of
people.

Top 50 institutions versus lower

Senator Bond. Finally, I do not want to be against
prestigious institutions of higher education. I have had some
association with them in the past. But NSF has been hung with
the charge of favoring only the very well-known and well-
established ones. At least we maintained flat funding for
EPSCoR, but the administration eliminated funding for the
Office of Innovation Partnerships, which is important to me,
and it flat funded programs for minorities, such as HBCU's and
the tribal colleges. Can you offer a rationale for that?
Dr. Colwell. Well, I would like to point out first some of
the successes that we have had. In the instrumentation program,
we have, in fact, been able to fund $25 million. We had
proposals for $50 million, so clearly there is an unmet need
out there.
Also in the Partnerships for Innovation, we have found that
52 percent of the funds did go to the top 50, but 25 percent of
the funds were awarded in the 51 to 150, and then 23 percent of
the funds, $876 million, was awarded to institutions not in the
top 150 receiving funds. So, obviously, this program is
working.
The EPSCoR program is highly successful--$65 million. We
are finding that the principal investigators in the
institutions are now competing very successfully, going from 25
percent success rate in their applications to 28 percent. That
means they are approaching 33 percent which is the average
success rate for all principal investigators. We are making
progress, sir.
Senator Bond. Dr. Kelly.
Dr. Kelly. But having to redirect $110 million of the
education budget did not make the answers to your questions
easier.
Senator Bond. What the administration has directed, it is
possible for the legislature to undirect.
I thank you, Dr. Colwell, for your very quick and sharp and
to-the-point responses.
Thank you, Madam Chair.
Senator Mikulski. Thank you, Senator Bond.
We are really going to bring the hearing to a close because
the votes will begin. Senator Daschle has just assumed the
responsibility and we want to be able to move to the floor.
Dr. Colwell, Dr. Kelly, and of course, Dr. Boesz, we want
to thank you for your testimony. We want to reiterate many of
the specific questions that both Senator Bond and I asked.
Know this. I do not believe we have a worker shortage in
this country. I believe we have a skill shortage in this
country. We have the people, but we need to really make sure
that they have the skills or the passion to pursue this. See, I
believe now that every career is a science career. If you are a
fire fighter or you are a police officer, you are using
technology. Right now there is someone who might not be getting
the Nobel Prize in biomedicine, but she is giving the mammogram
that is going to save lives. So, every job right now requires
technology.
This is why we are very passionate about your educational
initiatives. I would like to know from the National Science
Foundation what they are doing to make sure we do not have a
digital divide in the United States of America and your work
with other agencies on this. Then we will be able to talk about
some of these other issues. You know my very keen interest in
the biotech and the nanotech and infotech initiatives.

Additional committee questions

We really look forward, though, to very close collaboration
between yourselves, the Department of Education. We have a lot
of confidence in Secretary Paige. We have met with him and
admire what he has done in Texas. We hope it goes to the
Nation. We do believe education has to be as research driven as
medicine. So, we really encourage the NSF to take the
leadership in coordinating with Education and NIH so that what
we do is really research based and we maximize our resources.
[The following questions were not asked at the hearing, but
were submitted to the Foundation for response subsequent to the
hearing:]

Questions Submitted to the National Science Foundation

Questions Submitted by Senator Barbara A. Mikulski

science board view on the balance of federal r&d
Question. On March 28 of this year the Board's committee released a
draft report which has a number of recommendations directed at the way
the Executive Branch can improve the quality of the budget allocations
made for science and technology. Is this the kind of allocation the
Board envisioned when it put out its priority setting report? What do
you think of the balance in this R&D budget plan? Is it the kind of R&D
plan that will keep this country moving ahead of our competitors? What
level of investment in R&D does the Board believe is necessary to
maintain the economic health of the Nation? Is the Board concerned that
this Administration has yet to appoint a Presidential Science Advisor?
What impact do you think it is having on the Administration's R&D
process?
Answer. The report you mention has been revised following public
comment and adopted by the Board as an Interim Report, Federal Research
Resources: A Process for Setting Priorities (NSB 01-156). In this
report the Board addresses the need for improving the process that
produces the Federal portfolio for research in the Executive and
Legislative branches. The Board makes several recommendations on
improving advice and data to support a better process for managing the
Federal portfolio of S&T investments, and in turn to achieve national
goals for Federal research. The report does not take a position on
level of funding or allocations for research within a specific budget.
A balanced Federal portfolio of investment in basic science is
important for the health of U.S. science and technology. Balanced
Federal investments in basic sciences are critical for both expanding
the knowledge base and human resources for new applications in
industrial and other sectors, and for enabling research applications to
achieve Federal missions, including NIH research to find cures for
deadly diseases.
To adequately address our role in sustaining a strong national
science and technology enterprise we must significantly increase our
investment in basic research. As I have testified before, we are
seriously underfunding basic science across the frontiers of knowledge.
The doubling strategy for civilian research by 2010, supported by the
Senate under the Federal Research Investment Act, is an important
contributor toward achieving sufficient Federal support. Even though
our national investment in R&D has increased, the Federal share of that
investment has been steadily declining from two-thirds to slightly
above one quarter of the total. The Federal role in our national
research enterprise is unique in many respects and cannot be taken over
by the private sector. We must not only assure that the overall Federal
budget for research is sufficient, but also that funds are allocated to
research activities so as to serve national goals for Federal research
investments.
It is critically important that decisions on Federal support for
research be informed by the best science and technology review,
evaluation and advice. A credible process for scientific input to
funding decisions for research must include an effective role for the
Science Advisor in the annual budget process, supported by adequate
resources inthe Office of Science and Technology Policy. The Board is
pleased that President Bush has nominated Dr. John Marburger to be
director of the Office of Science and Technology Policy and we look
forward to his confirmation by the Senate this fall.
science board on nsf submission to omb
Question. Dr. Kelly, it is my understanding that the Board normally
reviews the budget proposal the Foundation intends to submit to the
Office of Management and Budget at its August meeting. Then after Labor
Day, the Foundation sends its proposal over to OMB. Is the budget we
have before us anything like the budget proposal you presumably saw
back in August? Can you give us a sense as to how it is different? Dr.
Kelly, you said in your testimony the Board approves and supports this
budget. Can you say the same about the Administration's outyear budgets
for NSF which project it growing at about 2 percent per year for the
next five years?
Answer. The National Science Board is kept well informed and plays
an integral part in the budget development process. Normally at its
March meeting, the NSB discusses and analyzes issues and offers
guidance on establishing priorities. NSF incorporates Board discussions
into a construct for the budget, which is discussed at the May Board
meeting. NSF then incorporates these discussions from the May meeting
into a budget call for detail information from the program officers.
Finally the NSB approves the budget in August, prior to its submission
to OMB in September. Because fiscal year 2001 was a Presidential
transition year, the fiscal year 2002 NSF budget was not submitted to
OMB until January 2001. Nevertheless, the National Science Board was
kept informed as the budget advanced to its final presentation.
With very few exceptions, all discretionary programs are treated
exactly the same concerning funding projections in the outyears.
nanoscience and technology
Question. I am very interested in the nanoscience and technology
programs. For example, being to literally design systems or devices
atom by atom--that could improve drug delivery or function as miniature
sensors for early detection of cancer-is the kid of cutting edge
research that will keep this Nation not only winning the Nobel Prizes,
but also the new global markets of the future. Tell us how you see this
program developing--where will you place your emphasis and how will you
work with the other agencies like NASA and DOD who also are players in
this program.
Answer. The NSF goals are: to create a vigorous, interdisciplinary
activity for fundamental research in discovering novel phenomena,
processes and tools in nanoscale science; to develop new synthesis
methods, device concepts and system architecture appropriate to the
unique features and demands of nanoscale science and engineering; to
establish a balanced and flexible physical infrastructure; and to
educate the workforce needed to exploit the opportunities presented by
these new capabilities. NSF has been a pioneer at the national and
international level in fostering the development of nanoscale science
and engineering. NSF, in conjunction with other Federal agencies will
be hosting a Nanotechnology event on September 13, 2001. This is
another example of the high priority accorded by NSF to the nanoscale
science and engineering arena.
In future years, the NSF investment will develop and strengthen
research and education in nanobiotechnology, new structures and
phenomena, system architecture, environment, modeling and societal
implications. In brief, NSF seeks the following outcomes in the next
five years:

------------------------------------------------------------------------
Outcomes of the Investment Targeted date
------------------------------------------------------------------------
Fundamental discoveries addressing Fiscal year 2002-06
nanoscale structures, phenomena and
quantum control; biosystems at
nanoscale, novel device and system
architecture, nanoscale processes in
the environment, and multiscale-
multiphenomena theory, modeling and
simulation. Enhanced understanding
of the distribution and behavior of
nanoscale structures throughout the
earth, atmosphere and oceans.
Provide augmented research and
development in fundamental research,
grand challenges, infrastructure,
education and nanotechnology
societal impacts in response to open
competitive solicitations and
regular program reviews.
Establish ten new centers and a Fiscal year 2002-04
national network with full range of
nanoscale measurement and
fabrication facilities. In
collaboration with other agencies,
establish ``vertical centers'' where
fundamental research applied
research, technology development,
and prototype construction or
clinical evaluations can be pursued
concurrently.
Foundations for major long-term Fiscal year 2003-06
challenges: nanostructured materials
by design, nanoscale electronics,
optoelectronics and magnetics,
nanoscale-based manufacturing,
catalysts, chemical manufacturing,
environment and healthcare. Fiscal
year 2002-06 Begin focused research
on nanoscale experimental tools and
manufacturing at the nanoscale
level. Fiscal year 2002 Support for
instrumentation and facilities for
processing, characterization and
manipulation at nanoscale, and for
equipment and software for modeling
and simulation. Nanotechnology
Experimentation and Testing Facility
(NEXT) will address scale-up of
synthesis of nanostructures,
characterization facilities with new
instrumentation beyond the state-of-
the art, new models and simulation
techniques, device fabrication and
testing for manufacturing methods.
Foster the development of an Fiscal year 2003-06
education, training and information
system and databases specifically
for nanoscience and engineering,
which will be available to the
community at large to serve rapid
development of research education in
the field.
Regional centers of universities, Fiscal year 2003-06
government laboratories, and
industry to cultivate exploratory
research, shared research in
critical areas, education, and
information flow.
Develop quantitative measurement Fiscal year 2004
methods for nanodevices,
nanomanipulation,
nanocharacterization and
nanomagnetics. Develop three-
dimensional measurement methods for
the analysis of physical and
chemical at or near atomic spatial
resolution.
Ensure that 50 percent of research Fiscal year 2005
institutions' faculty and students
have access to full range of
nanoscale research facilities.
Enable access to nanoscience and Fiscal year 2005
engineering education for students
in at least 30 percent of research
universities.
Catalyze creation of several new Fiscal year 2005
commercial markets that depend on
three-dimensional nanostructures.
Develop three-dimensional modeling of Fiscal year 2006
nanostructures with increased speed/
accuracy that allows practical
system and architecture design.
Fiscal year 2005 Nanoelectronics:
first terabit psi memory chip
demonstrated in the laboratory.
Enable manufacturing at nanoscale for Fiscal year 2006
three new technologies. Fiscal year
2006 Monitoring contaminants in air,
water, soils with increased accuracy
for improving environmental quality
and reduce emissions.
Address societal implications of Fiscal year 2006
nanotechnology.
Prototypes for biomimetic thinking is After 2006
probably the derivation of
artificial neural networks as an
outgrowth of studying the cellular
organization of the brain. After
2006 Prototypes for incorporation of
biological molecules into otherwise
electronic devices, mimicking
biological structures in fabricated
devices, and the incorporation of
lessons learned from biological
signal processing into the logic of
electronic systems.
Nanoscale measurements on microsecond After 2006
time scales to provide a blueprint
for the development of nanomachines
and synthetic molecular processors
that carry out complex functions.
Improve human performance by After 2006
combining molecular based
technologies.
Photovoltaic proteins in plants that After 2006
extract electronic energy from light
energy, or insect hearing organs 1
mm apart that have highly
directional sound source
localization sensitivity, as models
for, or components of nanosystems
that accomplish other functions.
------------------------------------------------------------------------

Another major goal is developing synergism through partnerships.
NSF will collaborate with other agencies in reaching its goals,
according to the mission and interest in nanotechnology of each agency:

----------------------------------------------------------------------------------------------------------------
Agency (in order of fiscal year 2001
investment) NSF DOD DOE NIH NASA NIST EPA Agencies \1\
----------------------------------------------------------------------------------------------------------------
Fundamental research...................... x x x x x
Nanostructured materials.................. x x x x x x x x
Nanoscale processing and manufacturing x x x x x x x
(Ex: chemical fabrication, devices,
systems, lab-on-a-chip, measurements and
standards; manufacturing user facilities)
Electronics and computer technology (Ex: x x x x x x
molecular electronics, spin electronics,
quantum computing).......................
Flight and space crafts (Ex: unmanned x x x x
missions, nanorobotics, safe materials)..
Energy conversion and storage (Ex: x x x x x
efficient solar energy, hydrogen storage)
Biotechnology and agriculture (Ex: x x x x
biosensors, bioinformatics,
bioengineering)..........................
Medicine and health (Ex: disease x x x x x
detection, drug delivery, organ
replacement).............................
Environment and sustainable development x x x x x
(Ex: water, energy, food, env. management
Nanoscale theory, modeling and simulation. x x x x x
Education, training and societal x x x
implications.............................
Technology transfer, global trade and x x x x x x x x
national security........................
----------------------------------------------------------------------------------------------------------------
\1\ Agencies with <$5M/y in fiscal year 2001: DOA, DOJ, DOT, DOTreas, DOS, NRC.

astronomy review
Question. We understand the President has called for a blue ribbon
panel to review Federal support for astronomy and astrophysics.
Specifically the panel will be asked to consider the pros and cons of
transferring NSF's astronomy programs over to NASA. What caused the
Administration to call for such a blue ribbon panel and when is the
panel expected to release its recommendations? Has there ever been a
case in NSF's history before where the Administration has given this
much thought to transferring an entire scientific discipline away from
the NSF to another agency?
Answer. In the President's fiscal year 2002 budget to Congress for
the National Science Foundation, the Administration identified ``three
management reform opportunities that will help fulfill the President's
promise to make Government more results-oriented.'' One of those areas
for reform is titled ``Reorganize Research in Astronomy and
Astrophysics''.
Historically, NASA has funded space-based astronomy and NSF has
funded ground-based astronomy facilities, as well as astronomy research
proposals. Over the past decade there have been significant changes in
the funding from each agency as reported in ``Federal Funding of
Astronomical Research'' from the National Research Council (National
Academy Press, 2000). The National Research Council also recently
released the latest decadal survey of the state of the field and
recommendations for the first decade of the 21st century: ``Astronomy
and Astrophysics in the New Millennium'' (National Academy Press,
2001). With these reports in hand, the Administration concluded that
now is the time to assess the Federal government's management and
organization of astronomical research.
Thus NSF and NASA requested that the National Academy of Sciences
convene a Blue Ribbon Panel to assess the organizational effectiveness
of Federal support of astronomical sciences and, specifically, the pros
and cons of transferring NSF's astronomy responsibility to NASA. In
response, the National Research Council established the Committee on
Organization and Management of Research in Astronomy and Astrophysics.
The Committee is directed to report by September 1, 2001.
To our knowledge there has never before been a case where an
Administration has given such high level attention to transferring an
entire scientific discipline away from the NSF to another agency.
Question. Dr. Kelly, the Science Board has in recent years sought
to take on science policy issues that were not just limited to the
Science Foundation. This astronomy matter would seem to fit that
category. What role do you expect the Board to play in this review?
Answer. In response to the Administration's request for an external
review, a National Research Council committee has been charged with
evaluation of Federal support for astronomy and astrophysics and to
consider the pros and cons of transferring NSF's astronomy program over
to NASA. It would be inappropriate for the Board to comment prior to
the issuance of the report by the Blue Ribbon Panel appointed to
undertake the review, scheduled for September 1, 2001. The Board will
work with the Director on any action necessitated by the findings of
the Blue Ribbon Panel, within the guidance provided by Congress and the
President.
decadal study in astronomy and astrophysics
Question. Recently the National Academy of Sciences released a
report entitled, Astronomy and Astrophysics in the New Millennium.
Would you outline the major recommendations made in the study and NSF's
plan and budget plan for responding to the report's recommendations and
priorities. Assume, for the sake of this question, that NSF will retain
its current responsibilities with respect to supporting astronomical
research.
Answer.
Survey Recommendations
The most recent decadal report made a number of major
recommendations that impact directly on NSF's investment in astronomy.
These are:
1. The recommendation of the previous decadal survey to construct
ALMA is reaffirmed.
2. In order to achieve the full scientific potential of new
facilities, it is essential to identify prior to construction, funds
for full instrumentation, for operations, for the timely renewal of its
instrumentation, and for the support of its user base.
3. New initiatives should not be undertaken at the expense of
individual research grants.
4. U.S. ground-based optical/infrared, radio, and solar facilities
should each be viewed by NSF and the astronomy community as single,
integrated systems. Each should be managed by NSF as a unit and
coordinated by NSF's national centers in partnership with university
and independent observatories, with cross-disciplinary reviews held at
approximately 5-year intervals.
5. Integrate one or more ``theory challenges'' into most major or
moderately sized new initiatives.
6. Because astronomy is among the most observationally oriented
sciences, it is essential to pursue a set of new instrumentation
investments for the field. Prioritized within investment-scale
categories, the ground-based instruments in the largest two categories
are as follows:
Major Investments.--Giant segmented mirror telescope (GSMT);
Expanded Very Large Array (EVLA); Large-aperture Synoptic Survey
Telescope (LSST).
Medium Investments.--Telescope System Instrumentation Program
(TSIP); Advanced Technology Solar Telescope (ATST); Square Kilometer
Array (SKA) technology development; Combined Array for research in
Millimeter-wave Astronomy (CARMA); Very Energetic Radiation Imaging
Telescope Array System (VERITAS); Frequency Agile Solar Radio telescope
(FASR); South Pole Submillimeter Telescope (SPST).
NSF Response and Planning
1. ALMA Construction: The fiscal year 2002 budget requests an
additional year of ALMA design and development at a level of $9M.
2. The requirement that sources of operating funds be identified in
advance for new instruments has been a part of NSF's Major Research
Equipment (MRE) account planning process for the better part of a
decade. The MRE Guidelines will be available on the NSF website in the
near future.
3. We are aware that concerns exist in the U.S. astronomical
community that individual grant resources have not grown adequately
over the past decade. As a result, NSF's budget proposals for the past
few years have reflected a determination to enhance support in this
area in all disciplines, including astronomy. The fiscal year 2001
budget of the Division of Astronomical Sciences (AST) was especially
aggressive in addressing this issue, and the fiscal year 2002 budget
request for astronomy also emphasizes individual research grants.
4. AST is already organized along unit-structure lines in radio and
optical-infrared astronomy, and the Division's radio astronomy
facilities in particular have been managed as a coherent unit since
1993. The reorganization of the National Optical Astronomy Observatory
into separate solar and nighttime astronomy components, now underway,
will permit a full implementation of this plan in the areas of solar
and optical/infrared astronomy. Timely cross-disciplinary reviews in
each area are also to be implemented.
5. Enhanced support for theoretical work connected with and helping
to drive major new instrumentation projects will be included as part of
the instrument-specific support which AST is planning to bring to all
new facilities.
6. Of the major instrumentation investments proposed by the decadal
survey in astronomy, only Phase I of the EVLA project is underway,
supported by internal funding within the Division of Astronomical
Sciences. Within the medium investment category, technology development
for the ATST is already underway, and at least partial support of CARMA
and LOFAR will likely be forthcoming.
The Division of Astronomical Sciences is examining the funding that
would be required between fiscal year 2002 and fiscal year 2010 to
implement the instrumentation initiatives recommended by the decadal
survey.
telescope system instrumentation program
Question. The highest priority in the modern cost category of the
decadal study in astronomy and astrophysics is for NSF to support a
telescope system instrumentation program (TSIP). The decadal study
suggests that for a modest amount of support, the TSIP will provide the
instrumentation and the telescope time that will enable both national
and private observatories to work together as a system to maximize the
research potential of these observatories within the astronomy
community. Does NSF view the TSIP as a potentially effective way to
maximize our public and private astronomy observatories?
Answer. Yes, NSF believes that TSIP is potentially of great value
to the U.S. astronomical community. The objective of the program is to
provide modest NSF investments in new instrumentation or other
improvements for large new telescopes built with non-Federal funds. In
return, some observing time on these telescopes would be made available
to any U.S. astronomer, regardless of institutional affiliation, based
on peer-reviewed observing proposals. The net result would greatly
enhance the productivity of these new telescopes while making them an
integral part of assets available for the entire community. This would
add new capabilities to the U.S. observing ``system'' to supplement
capabilities provided by the national observatories.
budget request provides $1.5b for new awards with only a 1 percent
increase?
Question. In the Administration's blueprint document it says the
budget provides approximately $1.5B for new research and education
awards in 2002. Could you explain what you mean by that particularly
since the increase you are requesting is only a little more than 1
percent.
Answer. The National Science Foundation funds approximately 20,000
science, engineering, and education awards in a given year. These
awards are a mix of multi-year awards that were made in previous years
and new awards in the current year. Each year approximately one third
of the awards made in previous years are closed, and the annual support
required for the closed awards becomes available for new awards.
Question. Would you provide for the record a breakout by
directorate of the amount of each year's budget that is available for
new awards as well as prior year awards from fiscal year 1998 to fiscal
year 2002. If there are notable differences between directorates,
please explain the reasons behind such differences.
Tables containing data for fiscal year 1988 through fiscal year
2000 are shown below. Data for fiscal year 2001 and fiscal year 2002
will not be available until after the close of each fiscal year.

----------------------------------------------------------------------------------------------------------------
Actual New Prior year Percent of new
Directorates obligations obligations obligations obligations
----------------------------------------------------------------------------------------------------------------
Fiscal year 1998 obligations:
BIO......................................... 355.70 228.00 127.70 64
CISE........................................ 269.09 127.23 141.86 47
EHR......................................... 633.16 252.06 381.10 40
ENG......................................... 343.14 234.06 109.08 68
GEO......................................... 438.02 140.47 297.55 32
MPS......................................... 687.24 251.41 435.83 37
OPP......................................... 223.01 24.74 198.27 11
IA.......................................... 129.84 12.03 127.81 2
SBE......................................... 126.58 77.90 48.68 62
---------------------------------------------------------------
Grand Total............................... 3,205.78 1,337.90 1,867.88 42
Fiscal year 1999 Obligations:
BIO......................................... 392.10 281.12 110.98 72
CISE........................................ 298.55 133.48 165.07 45
EHR......................................... 662.48 293.00 369.48 44
ENG......................................... 370.13 240.61 129.52 65
GEO......................................... 478.02 169.05 308.97 35
MPS......................................... 733.65 255.00 478.65 35
OPP......................................... 245.57 39.95 205.62 16
IA.......................................... 161.55 3.20 158.35 2
SBE......................................... 142.02 84.75 57.27 60
---------------------------------------------------------------
Grand Total............................... 3,484.07 1,500.16 1,983.91 43
Fiscal year 2000 Obligations:
BIO......................................... 418.29 271.40 146.89 65
CISE........................................ 388.57 206.24 182.33 53
EHR......................................... 683.58 315.72 367.86 46
ENG......................................... 379.82 265.27 114.55 70
GEO......................................... 487.64 178.74 308.90 37
MPS......................................... 755.88 319.47 436.41 42
OPP......................................... 258.33 40.00 218.33 15
IA.......................................... 129.25 22.53 106.72 17
SBE......................................... 162.12 74.32 87.80 46
---------------------------------------------------------------
Grand total............................... 3,663.48 1,693.69 1,969.79 46
----------------------------------------------------------------------------------------------------------------

The majority of NSF awards are made through the utilization of
either standard or continuing grants. Standard grants are those under
which NSF agrees to fully fund the award in a single fiscal year.
Standard grants normally have a duration of 6 to 60 months. Continuing
grants are those under which NSF agrees to fund the award in increments
over more than one fiscal year, pending the availability of funds.
Continuing grants normally have a duration of 18 to 60 months.
There are some notable differences between the directorates. The
reasons behind these differences lie primarily in directorate
priorities and policies. NSF Assistant Directors are given some
flexibility in deciding the appropriate mix of standard and continuing
grants. NSF management regularly considers this issue and periodically
receives input from NSF advisory committees concerning this topic.
support for minorities in science and engineering is frozen
Question. The budget emphasizes support for people as your ``most
important product''. And the ``cross cut'' and numbers seem to back
that up with an increase of nearly 13 percent over the fiscal year 2001
level. Yet, when we look at the support for minority programs within
this particular area of the budget, the funding is frozen with last
year. That would seem to say that the Administration does not believe
this part of the human resource crosscut is a high priority. What is
behind this particular proposal?
Answer. The NSF Budget for fiscal year 2002 attempts to balance
various competing priorities, with the Math and Science Partnerships
Initiative and graduate student stipends receiving the highest priority
within the EHR account. Implementing these priorities required a modest
reduction in the Human Resource Development (HRD) subactivity. We
limited that reduction to only 0.3 percent ($0.25 million) in
reflection of the strong Congressional support expressed for programs
in this area.
Partnerships represent a significant part of NSF's strategy. A
major goal of Partnerships will be to close K-12 achievement gaps
between minority and other students, so that minority students can go
to college ready to participate fully as science, mathematics,
engineering and technology (SMET) majors. Partnerships build on NSF's
systemic programs, which have had great success.
Administrative changes within HRD will result in greater leveraging
of funds and more effective allocation of funds to increase
significantly the measurable impact of programs. The Historically Black
Colleges and Universities--Undergraduate Program (HBCU-UP) has been re-
focused to devote attention to those institutions most in need of
assistance, to strengthen the quality of their academic programs and
enhance the ability of their faculty to offer high quality instruction.
The Alliances for Graduate Education and the Professorate (AGEP)
program now supports only graduate education alliances of university
consortia or entire university systems, rather than individual
institutions, significantly increasing the impact of programmatic
activities. And plans are underway to re-structure the Centers for
Research Excellence in Science and Technology (CREST) program to
emulate the successful Experimental Program to Stimulate Competitive
Research (EPSCoR) strategy of combining core support with active co-
funding of proposals submitted to NSF's other research programs.
digital divide and historically black colleges and universities
Question. According to a new report from the Thurgood Marshall
Scholarship Fund (entitled ``Historically Black Public Colleges and
Universities: An Assessment of Current Information Technology Usage''
released on April 10, 2001), historically black public colleges and
universities are going to need about $700 million over the next five
years to meet their information technology goals. According to the
study, the real ``digital divide'' here is the way information
technology is provided--or not provided, as the case maybe--to the
students as a part of their education. What can the Foundation do to
help these institutions strengthen their programs so that the students
would gain better access and experience with the information technology
skills they will need in today's global marketplace?
Answer. NSF's Directorate for Computer and Information Science and
Engineering (CISE) is uniquely positioned through its history of
support for minority institutions, its role as the lead agency in the
Information Technology Research effort, and its history of
computational and communication infrastructure support for all fields
of science and engineering. CISE can provide leadership in developing
programs that will ensure not only access to state-of-the-art
information technology, but also that the IT infrastructure is a
centerpiece of new curriculum developments, workforce, and outreach
programs. Currently CISE is developing a cyberinfrastructure initiative
to address the needs of education and society, as well as researchers,
for access to advanced computing, communication and data resources. A
primary goal of the cyberinfrastructure initiative is to increase the
capacity for IT research and education at colleges and universities,
with particular attention paid to minority serving, women's and EPSCoR
institutions.
As an example of current CISE efforts, two programs are aimed at
providing research and educational infrastructure and increasing the
number of students exposed to and pursuing degrees in information
technology fields. Both are relatively modest programs; one is new and
one has existed for over ten years. The existing program, the CISE
Minority Institutions Infrastructure (MII) Program, provides awards to
aid efforts to expand significantly the numbers of minority students
attracted to and retained in computer and information science and
engineering disciplines. The MII program supports the purchase of
instrumentation, software, systems and other resources required for
research and education in CISE related fields. It also provides support
for faculty to develop new programs and curriculum, for students, for
mentoring and outreach programs, and other activities that help improve
recruiting and retention. Among the institutions supported are many
HBCU institutions as well as other minority-serving institutions.
Current grantees include Bowie State University; Clark Atlanta
University; Tuskegee University; Florida A&M University and North
Caroline A&T University. Previous grantees included Fisk College;
Morgan State College; the University of Maryland-Eastern Shore, and
many others. MII provides planning grants as well as five-year major
awards. The new CISE Research Resources program is open to all colleges
and universities, but strongly encourages proposals from women,
minorities, persons with disabilities, minority institutions and
researchers in EPSCoR jurisdictions.
The Historically Black Colleges and Universities--Undergraduate
Program (HBCU-UP) led by the Directorate for Education and Human
Resources (EHR) supports efforts by the Nation's HBCUs to implement a
plan of action to address underrepresentation in the science,
mathematics, engineering and technology (SMET) disciplines and
workforce. HBCU-UP provides support for the implementation of
comprehensive institutional approaches to strengthen SMET teaching and
learning in ways that improve access to, retention within, and
graduation from, SMET academic programs.
In order to increase knowledge of and facility with advanced
technologies in HBCUs, the Foundation will incorporate within HBCU-UP
lessons learned this year in making the first set of awards under the
Tribal Colleges and Universities Program (TCUP). A key component of
TCUP is the development of a strong technological foundation for high
quality SMET education. The TCUP program provides assistance to
eligible institutions to bridge the digital divide and prepare students
for careers in information technology and SMET. Applications for grant
support under the HBCU-UP program may now also reflect this emphasis.
The Foundation will also strengthen coordination of activities that
provide technologically focused assistance to HBCUs and other Minority
Serving Institutions. These include grants by the Foundation to:
--the Council on Competitiveness (0110028) to initiate implementation
of the recommendations of the Congressionally chartered
Commission on the Advancement of Women and Minorities in
Science, Engineering, and Technology;
--EDUCAUSE (9980537) in support of Advanced Networking at Minority
Serving Institutions; and
--the Information Technology Association of America (0128850) to
assist in the development and implementation of customized
campus technology development plans and provide knowledge
enhancements to faculty, students, and administrators.
The National Science Foundation has a number of other programs that
address the IT infrastructure needs of minority serving institutions.
Examples include: the NSF-wide Major Research Instrumentation Program;
the Centers of Research Excellence in Science and Technology (CREST)
and the Louis Stokes Alliances for Minority Participation (LSAMP)
programs in the Directorate for Education and Human Resources (EHR);
and the Collaborative Integration of Research and Education (CIRE)
program in the Office of Integrative Activities (OIA).
elimination of innovation program for smaller institutions
Question. In the fiscal year 2001 appropriation, this subcommittee
provided NSF with $10 million to support a program NSF is calling
partnerships for innovation. One of its objectives is to help in the
transfer of research results into innovations that create new wealth in
the local and regional economy. Recently, the Council on
Competitiveness released a report assessing the Nation's
competitiveness. Once of the issue the Council raised was a call to
strengthen ``regional clusters of innovation''. What role do you think
the Foundation could play in this regional innovation effort?
Answer. The results from the projects supported through the two
competitions under the Partnerships for Innovation Program will
certainly contribute to the utilization of new scientific knowledge by
regional clusters of innovation. For example, the Microelectronics and
Photonics Innovation Incubator in Arkansas, established under the award
to the University of Arkansas, and that includes as partners several
venture capital firms and the Arkansas Science and Technology
Authority, will facilitate the utilization by industry of new knowledge
generated at the University. However, NSF also has a variety of other
programs that could contribute substantially to the regional innovation
effort.
An Integrative Graduate Education and Training (IGERT) grant, also
at the University of Arkansas, is providing for the multidisciplinary
education of Ph.D.s in the area of microelectronics and photonics, with
many of the graduate students having come from industry and intending
to return to new jobs there. A new Materials Research Science and
Engineering Center at the University of Arkansas (in partnership with
the University of Oklahoma) features an interdisciplinary research
program on semiconductor nanostructure science and applications, an
area of substantial interest to industry.
The Advanced Technological Education (ATE) Program is improving the
education of the technicians who are so essential to the high
technology industry; and the ATE centers involve close collaborations
with local and national industry. For example, the Maricopa ATE Center
in Tempe, AZ works closely with SEMATECH and the Semiconductor Industry
Association in workforce development for the electronics industry, and
also has programs for high schools to encourage a more diverse
population to seek employment in the semiconductor and supporting
industries.
The Industry/University Cooperative Research Centers (I/UCRC)
Program contributes very substantially to the translation of research
results into products and supports centers across a very broad range of
institutions. One I/UCRC at a smaller university is the Center for
Lasers and Plasmas for Advanced Manufacturing at Old Dominion
University. NSF's Science and Technology Centers also contribute to
innovation clusters.
One of the existing clusters of innovation that will be studied by
the Council of Competitiveness is the Research Triangle area of North
Carolina, where NSF's Science & Technology Center for Environmentally
Responsible Solvents & Processes is located. The center, which involves
the University of North Carolina, North Carolina State, and North
Carolina A&T University as well as a number of industrial partners, is
producing technological advances absolutely critical to the future of
the chemical industry.
new science board committee on budget and strategy
Question. Dr. Kelly, I understand that earlier this year the Board
had its annual retreat and one of the items growing out of the process
is the establishment of a new Board committee on budget and strategy.
Can you tell us how you expect that committee to operate and how it
dovetails with the budget responsibility of the Director?
Answer. Among NSB's most important responsibilities are the
provision of budget guidance to the Foundation and the approval of the
annual NSF budget submission to OMB. The NSB Standing Committee on
Strategy and Budget (CSB) was established on May 23, 2001 with the
objective of improving the Board's effectiveness in the NSF strategic
budget process. The CSB is charged with making recommendations to the
full NSB for the approval of strategic NSF budget directions and for
the approval of the NSF budget submission to OMB. The CSB will analyze
the Foundation's budget with respect to progress and consistency
against strategic directions for the Foundation; identify strategic,
long term issues that are critical to NSF's future; review the budget
from the perspective of balance between initiatives and core programs;
and take a multi-year view of strategy implementation. The Board with
the assistance of CSB, under the leadership of Dr. Anita Jones, Vice
Chair of the National Science Board, works closely and cooperatively
with the Director, NSF to ensure these important objectives are met.
The Committee is in the process of establishing its work processes.
math/science system reform program evaluation
Question. It is my understanding that over the last year or two,
there has been a pretty extensive evaluation of the NSF's systemic
reform programs. Can you highlight briefly what those evaluations have
concluded about the effectiveness of the systemic reform programs? Dr.
Kelly, what is the Board's view with respect to these NSF systemic
reform programs?
Answer. Preliminary findings from the most thorough evaluative
study to date of the Urban Systemic Initiatives (USI) covering the
initial five years (1993-98) were just released this summer. The report
is entitled Academic Excellence for All Urban Students: Their
Accomplishment in Science and Mathematics (Systemic Research, Inc.,
April 2001). This report presents preliminary findings related to
improved student outcomes and system change among 22 large urban school
districts. Findings related to improved student outcomes include: (1)
substantial increases in enrollment rates in mathematics and science
gate-keeping and higher-level courses; (2) greater enrollment gains for
underrepresented minority students than their peers; (3) achievement
test gains; and (4) increased numbers of students taking college
entrance examinations (AP, SAT, and ACT). The general conclusion is
that education reform is a complex, long-term process that requires
simultaneous changes in expectations, policies, curriculum, assessment,
professional development, student support systems, data use, and the
allocation of resources. The Executive Summary and a downloadable
version of this report are available at http://www.systemic.com/usi/
booklet.htm.
A second report was released last fall detailing the lessons that
have been learned from Statewide Systemic Initiatives (SSI). The report
was entitled Summary of Findings from SSI and Recommendations for NSF's
Role with States: How NSF Can Encourage State Leadership in Improvement
of Science and Mathematics Education (Council of Chief State School
Officers--CCSSO, December 2000). The report indicates that half of the
states showed impacts on classroom practice, with the highest gains in
achievement occurring in states with intensive professional development
linked to curriculum. A PDF copy of this report is available at http://
www.ccsso.org/pdfs/SSIReport.pdf.
Question. Dr. Kelly, what is the Board's view with respect to these
NSF systemic reform programs?
Answer. The process of evaluation of our systemic reform programs
is ongoing, with the most recent report, Academic Excellence for All
Urban Students: Their Accomplishment in Science and Mathematics,
published in April 2001. The evaluation is finding a rich array of
evidence on positive impacts of NSF's systemic programs. NSF has had
considerable success in fostering improved teaching and learning of
mathematics and science because it promotes various models that support
diverse populations and schools. In Detroit, El Paso, Memphis, Chicago,
and other cities, there are dramatic signs of improvement in student
performance (as measured, for example, by proficiency levels in state
science and mathematics assessments). I believe we are beginning to see
light at the end of the tunnel of public education and NSF, together
with many public and private sector partners, is helping to make this
happen system-wide and for all children. However, it is important to
understand that the process is slow and complex. The political and
public expectations for change may be somewhat unrealistic. Impatience,
as well as a flawed design, can undermine the course of steady reform.
The Board has concluded that systemic reform programs have been very
effective and should be further encouraged, and that efforts should be
taken to educate the public on the complexity and long-term commitment
required for success of such reforms.
impact of new math/science partnership program on current nsf programs
Question. The budget requests $200 million to start a new
Partnership program in math and science education though you will have
to redirect $110 million of your existing education budget from on
going education programs to fund this initiative. For the record, list
all the currently active awards being funded by the subactivities that
will be reduced to fund the new Partnership program. For each award
include how much the project expected to receive in fiscal year 2002
based on the NSF award agreement and how much it will actually receive
based on the current fiscal year 2002 budget proposal.
Answer. To fund the Math and Science Partnerships Initiative
(MSPI), funds will be redirected within the PreK-12 subactivity. All
awards made in fiscal year 2001 and earlier in this subactivity will be
funded in accordance with the original award agreements, and no funds
will be cut from these awards (either from the initial award amount or
from future continuing increments). The only funding redirected for
MSPI was that set aside for new awards in fiscal year 2002.
Question. Your budget proposal suggests that in addition to the
funds requested, NSF will have access to an estimated $144 million,
courtesy of the fees levied by the Federal Government for H1B visas. Of
the $144M, $58.38 million is reserved for Private-Public Partnerships
in K-12 education. How does this relate to the new Presidential
Partnership Program? Are these funds in addition to the request for
$200 million request for this new program?
Answer. The Private-Public Partnership in K-12 Education component
of the H-1B funds, established by the American Competitiveness in the
21st Century Act (Public Law 106-313), supports K-12 activities in
areas such as materials development, student externships, and math and
science teacher professional development. These activities complement
those anticipated for the Math and Science Partnership Initiative
(MSPI). There is a fundamental difference in focus, however, between
the two programs. Private-Public Partnerships will emphasize schools
joining forces with the private sector to ensure that curricula and
materials meet the needs of the workplace. MSPI, on the other hand, is
a research-based program that is centered at the state and local school
district level, in partnership with institutions of higher education.
MSPI will mobilize the participation of mathematicians, scientists and
engineers from institutions of higher education to address issues such
as: raising math and science standards; providing rigorous math and
science training for teachers; and creating innovative ways to reach
underserved schools and students. The H-1B funds are in addition to
funds requested for MSPI. The estimate of $144 million in H-1B receipts
for fiscal year 2002 and 2003 appears to have been overly optimistic.
The initial estimate for fiscal year 2001, $121 million, has since been
revised downward to $94 million, and the actual receipts may fall short
of that mark. H-1B receipts are scheduled to end in fiscal year 2003.
math and science partnership programs in the elementary and secondary
education act
Question. The Senate has passed a bill to reauthorize the
elementary and secondary education programs at the Department of
Education. Title II of the bill includes an authorization for the
Department to improve the performance of students in the areas of
mathematics and science by encouraging States, institutions of higher
education, elementary schools, and secondary schools to participate in
partnership programs. This is remarkably similar to the NSF new
partnerships proposal. Does the NSF proposal duplicate the program
being authorized for the Education Department and what is NSF's
position with respect to this part of the legislation?
Answer. The Administration's Statement of Position with respect to
the bills referenced above includes the following language:
Math-Science Partnerships.--The President's Budget provides funds
for this program within the National Science Foundation (NSF). NSF has
effectively administered other activities related to this initiative
and the Administration believes that NSF's expertise will be invaluable
in ensuring a successful program. The Administration therefore urges
the Senate to amend S. 1 to eliminate this authority from the ESEA,
enabling NSF to administer this initiative.
This accurately reflects NSF's position with respect to the
legislation.
new math and science partnership program-role of the science board
Question. Dr. Kelly, the Board has spent considerable time on the
issue of math and science education. For example, the Board held a
number of field hearings last year and recently published its own
report on math and science education called ``Preparing Our Children:
Math and Science Education in the National Interest''. To what extent
was the Board involved in the development of this new partnership
program and how does it dovetail with the work the Board has been doing
on K-12 math and science education?
Answer. The National Science Board fully supports the objectives of
the new partnership initiative. The Math and Science Partnership
initiative is in complete accord with the work we have been doing on K-
16 math and science education policy, and with the long-term NSF
investment in state, rural, and urban systemic initiatives to reform
math and science education at the K-12 level. As you note, the NSB has
undertaken a study of the appropriate NSF role in K-16 education, which
has included field hearings and the issuance of our report, Preparing
Our Children. In that report, we focus on partnerships across sectors
at the state and local levels to achieve a continuum of excellence in
K-16 education. Based on these efforts, the Board is developing,
through its Committee on Education and Human Resources, a set of
principles that will guide us in identifying appropriate activities to
be included in the Math and Science Partnership initiative.
teacher training efforts
Question. The National Commission on Mathematics and Science
Teaching chaired by Senator John Glenn focused on the need to upgrade
the number and quality of K-12 teachers of math and science. With the
redirection of some $110 million to the new Math and Science
Partnership program, according to data in the Justification of
Estimates, the Foundation will support 2,000 few teachers in fiscal
year 2002. Why should we start a new K-12 science education program
that supports less teachers?
Answer. The need to upgrade the number and quality of K-12 teachers
of math and science is well documented. Equally well documented is the
need to enhance the capacity of the system to provide high quality pre-
service and in-service teacher education in these fields. The
anticipated drop in the number of teachers participating in NSF
programs in fiscal year 2002 results from our efforts to intensify
professional development for those participating in NSF programs so as
to develop teacher leaders for future professional development efforts,
thus enhancing the overall capacity of the system. NSF's emphasis on
upgrading the capabilities of K-12 teachers of math and science
continues to be strong.
grant size and duration
Question. I understand that the President has called on NSF to
complete a study to determine whether increasing the average NSF grant
size and duration would produce greater efficiency in the research
process. When do you expect that study to be completed? What is the
current size of the average grant at NSF and how has it changed over
the last 10 years? How does the average NSF grant compare in size with
those of other research agencies who also support university research?
Answer. The study on grant size and duration should be complete in
the spring of fiscal year 2002. In fiscal year 2000 the average annual
size of NSF research grants was $105,500, up from $70,500 in 1991. The
average NIH grant, comparable in many ways to the NSF research grant
averaged $250,000 per year in fiscal year 2000. We are in the process
of collecting information on other agencies' research grants, but an
initial review of other agencies involved in funding academic research
indicated that in many cases the grants may be at least twice the size
of grants provided by the National Science Foundation.
funding rates
Question. NSF funds about one third of the proposals it receives in
a given fiscal year--that is 10,000 awards based on 30,000 proposals.
Foundation-wide what percentage of the proposals you receive each year
are judged of sufficient quality to be funded and of that amount, how
much excellent science goes unfunded each year?
Answer. About two thirds of the proposals received each year are of
sufficient quality to be funded. About $1 billion worth of high quality
proposals goes unfunded each year.
rebuild of the south pole station
Question. Can you give us a status report on the work going on at
the South Pole. I see the budget requests no new funds for the project
in fiscal year 2002. The most recent quarterly report by the NSF
Inspector General says that NSF and its Office of Polar Programs is
updating and refining the estimate of the cost to completion. Provide
the committee with the most up to date estimate and compare and
contrast that new estimate with the estimate provided to the committee
and contained in the so-called ``Augustine Report''. Where are we with
respect to the schedule and budget?
Answer. There are two projects for rebuilding South Pole Station:
South Pole Safety and Environment Upgrades (SPSE) and South Pole
Station Modernization (SPSM). SPSE was funded for $25 million in fiscal
year 1997 and includes new fuel storage, garage/shops, and power plant
facilities. All three facilities are operational, and SPSE is complete
except for minor punch list items, which are scheduled for completion
by January 2002. Approximately $24.7 million has been spent and the
cost to complete is estimated at another $300,000. This will put the
project on budget at a completed cost of $25 million.
The second component of rebuilding South Pole Station is South Pole
Station Modernization (SPSM). Congress appropriated $127.9 million from
fiscal year 1998 through fiscal year 2001 for SPSM. The project
includes new science, living, operations, and communications
facilities. Approximately $54 million has been obligated to date.
Because of unusually bad weather during the fiscal year 2001
operational season, only about 60 percent of the scheduled air
logistics support for SPSM were completed. The project is approximately
one million pounds behind schedule in delivering material from McMurdo
Station to the South Pole. The construction and logistics schedule has
been revised to spread the logistic shortfall and related construction
activities over the next four years. This rescheduling has resulted in
extension of the project by one year. The project is now scheduled for
final acceptance and dedication in January 2006, instead of January
2005. A detailed analysis of all remaining activities (design,
procurement, logistics and construction) to complete the project is 95
percent complete. Minor adjustments to the construction and logistics
schedule are still required to fully identify the impacts of the cargo
delivery shortage. The cost-to-complete estimate will factor in the one
year delay, increases on fuel cost, changes in inflation rates, and all
other known factors. Based on the 95 percent level of completeness of
the analysis, we are anticipating a small increase in the total project
cost. That remains an unknown until all adjustments are made to the
construction and logistics schedule. We will inform the Committee of
the results of the cost-to-complete analysis as soon as it is
completed, possibly in early fall.
The ``Augustine Report'' recommended a budget of $120M (FY 1997
dollars) for the SPSM project with completion in 2005. When inflated
the $120M is approximately equal to the $127.9M budget. As stated
above, because of poor weather in fiscal year 2001 the completion date
has been delayed by one year to 2006.
ig and white house critical of nsf management of construction projects
Question. I understand the Inspector General has been reviewing the
situation with respect to the management of large-scale construction
projects at NSF. A key recommendation they have made called on NSF to
develop policies and procedures specifically focused at managing these
large-scale projects. It seems that the White House shares this same
concern. In recent years, the number of construction research projects
have grown and the resources going for these kinds of projects is quite
substantial. What is the timing on the completion of this new
construction management regime and what role is the Board playing in
this oversight area?
Answer. Currently, NSF invests over $1 billion annually in
facilities and other infrastructure projects. Over time, the portfolio
of facilities has grown and diversified to include distributed projects
that challenge traditional management and oversight approaches.
Emerging multidisciplinary science and engineering (S&E) opportunities
have resulted in NSF moving towards a greater number of large projects
that are increasingly complex and present challenging technical and
management issues. Given the increasing complexity and scope of its
facilities, NSF recognizes the need to mitigate attendant risks by
ensuring that management and oversight benefit from contemporary best
practices. Improving coordination, collaboration and learning among NSF
staff and external partners enables this. To this end, and to comply
with instructions in A Blueprint for New Beginnings: A Responsible
Budget for America's Priorities (February 2001), NSF has developed a
plan for the management and oversight of large facility projects.
The plan outlines NSF's goals and strategies for integrating its
current procedures and processes into a next-generation system for
selecting, managing and overseeing large facility projects. It
addresses improvements in four critical areas:
--Enhance organizational and staff capabilities and improve
coordination, collaboration and learning among NSF staff and
external partners.
--Implement comprehensive guidelines and procedures for all aspects
of facilities planning, management, and oversight.
--Improve the process for reviewing and approving large facility
projects.
--Practice coordinated and pro-active oversight of facility projects
to ensure success.
The Plan has been reviewed by OMB, NSF's Assistant Directors, the
Office of Inspector General, and the National Science Board (NSB). On
August 9, the NSB Committee on Programs and Plans heard an updated and
revised report from the Deputy Director. The Committee was pleased with
the framework and the elements set forth in that presentation and
encouraged NSF Management to proceed with its development.
NSF recognizes the importance of improving its systems for
selecting, managing and overseeing its large facility projects and has
devised an aggressive schedule for developing and implementing each of
the major components of an improved system, some aspects of which are
already underway. The NSB will assess NSF's progress in implementing
the elements of the plan.
The National Science Board has an extensive process for the
oversight of facilities and the Board is well positioned to exercise
this responsibility. Members of the National Science Board include
executives from industry and presidents of universities, individuals
who have extensive experience in managing large, cutting edge research
facilities and instrumentation. The NSB exercises oversight of large
facilities primarily through two standing committees that make
recommendations to the full Board. The Committee on Programs and Plans
(CPP) reviews MRE projects at various stages of their development. It
makes recommendations to the Board for approval of a candidate list for
inclusion in future budgets, for approval of specific projects, and
finally, for awards to fund those projects. The Board receives regular
status reports on major facilities projects. Through its committee on
Audit & Oversight (A&O), NSB reviews specific management issues related
to large projects. Also through the A&O Committee, NSB supervises the
Inspector General and maintains oversight of management policy and
management concerns through this mechanism.
mre status reports
Question. Provide for the record a status report on the ongoing
projects that are either in or have been funded through the Major
Research Equipment account. For each project include the cost estimate
projected by the Foundation at the inception of the project as well as
the most recent cost estimate. Also include the original implementation
schedule along with the actual achievement of key project milestones
and other pertinent information. In addition, describe the NSF
management structure and process used for the implementation of each
project. Include a status report and cost estimate for those potential
major research equipment projects that have been the subject of
substantive discussion by NSF senior management.
Answer. The table below shows the projected or actual completion
dates, the original and current schedule estimates and the original and
current cost estimates for each project funded through the MRE Acount.

The figure below depicts clear lines of authority, responsibility
and communication from the NSF Director to the NSF Program Manager to
the awardee Project Director. In every large facility project, the NSF
Program Manager exercises primary responsibility for all aspects of
project management, managing the project through either a cooperative
agreement or a contract. Working closely with the NSF Program Manager,
the awardee designates one person--with strong management experience--
to be the Project Director, with overall control and responsibility for
the project in the awardee organization.

NSF vests responsibility for monitoring business operations of
large facility projects in the Chief Financial Officer (CFO). NSF
personnel reporting to the CFO ensure that all policies, guidelines and
procedures are followed and that the awardee is in compliance with
business operations, legal and financial requirements.
Through Project Advisory Teams (PATs), individuals from the project
management and business oversight branches work together. For every
large facility project, the NSF Program Manager will convene a PAT (a
practice required for all MRE projects) to provide advice and
assistance on planning, review and management of the project to assure
the establishment of realistic cost, schedule and performance goals and
to develop terms and conditions of awards for constructing, acquiring
and/or operating the facility. Each PAT will be comprised of
professionals with critical expertise in the relevant science and
engineering fields, as well as management, business and legal aspects
associated with the project.
To enable the efficient and effective evolution of NSF's large
facility projects from their pre-formulation through operations, NSF
will establish a new position, Deputy, Large Facility Projects. The LFP
Deputy will report directly to the Chief Financial Officer and will
have extensive project management experience, including building,
management, and oversight of large scientific and engineering
facilities. The LFP Deputy will be supported by several permanent NSF
staff with a mix of skills, qualifications, and extensive experience in
project management, planning and budgeting, cost analysis and
oversight. These personnel will represent a centralized resource to
assist (but not supplant) NSF Program Managers with management and
oversight responsibilities and to develop and conduct comprehensive
post-award oversight of business operations, financial and internal
control systems, and cost and schedule performance. They and experts
from other NSF Divisions and Offices (e.g., Office of General Counsel;
Budget Division; Division of Contracts, Policy and Oversight; and
Division of Grants and Agreements) will form the LFP Business Oversight
Team. This flexible, responsive team will work with NSF Program
Managers to ensure that awardees are performing to the terms and
conditions of their awards and that they are attaining cost and
schedule goals.
The LFP Deputy and the Business Oversight Team will facilitate
interactions and learning across projects and PATs and, in so doing,
will institutionalize a process for large facility projects oversight.
To ensure that project and business teams contain the skill mix
essential for success of large facility projects, NSF will draw upon
its new Administration & Management plan both to provide comprehensive
training and to recruit additional personnel, as needs arise.
integrated graduate research and education traineeship program
Question. This program has been going on since 1997. Tell us a
little about its purpose and how it is managed at NSF? What is your
view with respect to the effectiveness of this program? Do you think
that with a little modification it could also be used as a way to
encourage more students to pursue undergraduate degrees in science and
engineering?
Answer. The purpose of the Integrative Graduate Education and
Research Traineeship (IGERT) program is to facilitate a change in the
graduate education paradigm in the United States. Through IGERT grants,
which were first made in 1998, universities are provided the
opportunity to experiment with graduate education within the context of
a multidisciplinary research environment. IGERT faculty educate and
train graduate students to have a broader perspective on a significant
problem-based research topic, embark on new and innovative mechanisms
of education, provide courses and experience for personal and
professional skills development, and provide international experiences
that will enable graduates to be more globally aware.
The program is managed by a coordinating committee that is composed
of NSF program officers from each Directorate and the Office of Polar
Programs. Daily activities, project monitoring, and follow-up
evaluations are managed by the Division of Graduate Education within
the Directorate for Education and Human Resources.
Although it is too early to assess outcomes, anecdotal evidence
from two years of annual reports and principal investigator meetings
indicates that the program is having far more significant effects than
envisioned. Faculty and students from disparate disciplines are
collaborating in exciting and effective ways such as in writing
multidisciplinary publications and grant proposals. The few students
who have graduated report that they have a distinct advantage over
their peers in the breadth of their knowledge base and perspective and
in their experience in collaborating across disciplines. Grantees are
overcoming the hurdles within their universities and are demonstrating
that the resulting research is valued by funding agencies and that
graduates are sought by employers. As a result, we see sustained and
enormous proposal pressure for these awards. This strong and continued
interest is made more remarkable by the fact that IGERT grants do not
directly support faculty or their research.
The IGERT model could be used in at least three ways to encourage
undergraduates to pursue science and engineering degrees. First and
simplest would be for current IGERT projects to be expanded in scope
and level of support to include more undergraduate students. Such
students could be actively recruited to receive support for a summer or
a term in order to join an existing IGERT team of faculty and graduate
students on the interdisciplinary research problem. It is widely
believed that undergraduates involved in the research enterprise as
early as the sophomore year are often exhilarated by the experience,
and they may be more likely to choose an academic major or a career
path to build on the research experience. Second, when faculty have
become comfortable with a new model of graduate education, they may
adopt some of their approaches and techniques in their undergraduate
teaching. Some faculty have reported this sort of transformation, but
it has been a serendipitous byproduct of IGERT and NSF is only just
beginning to encourage this sort of ``ripple effect.'' A third
possibility is to develop an Undergraduate IGERT program that would
stimulate faculty and undergraduates to embark on new multidisciplinary
activities and curriculum at the bachelor's level. We believe that one
of the attractions of IGERT projects for students is that the problem
being studied is often set in a ``real world'' context, and students
grasp the concepts and become excited about solving a problem with
somewhat immediate application. The excitement of this sort of
experience might be particularly effective at the undergraduate level,
when people are still formulating their career goals.
undergraduate student support
Question. Dr. Colwell, in your testimony you say ``If we do not
boost the number of skilled U.S. workers the Nation will surely
suffer''. One way to increase the number of U.S. students pursuing
degrees in science and engineering is to focus on the undergraduate
level of education. We continue to hear reports that it is at the
undergraduate level where the real drop-off occurs. If we need to focus
more on undergraduate science education--including the two year and
community colleges--why is NSF cutting support for undergraduate
programs by 6 percent, or $8.4 million, freezing the community college
program, and reducing by 9000 the number of undergraduates supported by
your research programs?
Answer. Achieving an adequate number of skilled U.S. workers will
require the delivery of high quality education in science, mathematics,
engineering, and technology along the entire educational continuum.
Within the continuum, the undergraduate sector is central. It is the
sector to which the pre-Kindergarten through grade 12 (preK-12) sector
delivers its students and from which the preK-12 sector receives its
teachers. Similarly, the undergraduate sector delivers its graduates to
graduate education and receives from the graduate sector faculty who
teach undergraduates. Along all the major transition points--preK-12 to
undergraduate, undergraduate to graduate, and post-graduate there is
entry into the workforce, with the most significant entrance occurring
after completion of undergraduate study after two or four years of
study.
The NSF Budget for fiscal year 2002 attempts to balance various
competing priorities, with the Math and Science Partnerships Initiative
and graduate student stipends receiving the highest priority within the
EHR account. Implementing these priorities required a modest reduction
in the Division of Undergraduate Education (DUE). We limited that
reduction to only 5.9 percent or $8.4 million. Of this reduction $8.0
million represents a re-direction of funds from Teacher Preparation in
support of similar activities within the President's Math and Science
Partnerships Initiative. The National Science, Mathematics,
Engineering, and Technology Education Digital Library is reduced by
$350,000, consistent with a planned phase-down of support under this
activity toward a steady-state level of support for the final system.
With respect to the number of undergraduates supported by our
programs, our current estimates indicate that NSF will support about
31,840 undergraduates in fiscal year 2002, an increase of about 800
students over fiscal year 2001. These numbers refer to ``direct''
financial support only.
We expect to pursue highly leveraged partnership activities that
will increase the measurable impact of our undergraduate programs. For
example, the EHR Division of Undergraduate Education co-sponsored a
workshop on technology with the Directorate for Mathematical and
Physical Sciences. Collaborations with the Directorates of Geosciences
and Engineering have also provided valuable investments in
undergraduate education. This year, NSF engaged in a pilot
collaboration with the Department of Energy (DOE) in order to provide
research experiences in ten national laboratories to student
participants in five NSF grant programs.
emergency medical evaluation from the antarctic
Question. What kind of medical screening procedures do you have in
place and how does NSF enforce the screening procedures? Do you think
any changes need to be made in the screening procedures or in the
medical facilities and personnel in the Antarctic?
Answer. We operate and maintain medical clinics at all of our year-
round stations in Antarctica. These clinics are comparable to
ambulatory care facilities in rural areas in the U.S., with
capabilities supplemented with tele-medicine technologies.
Every person traveling to Antarctica under the auspices of NSF's
United States Antarctic Program undergoes a medical screening process
prior to deployment. Specific medical screening criteria are utilized
to identify individuals with existing medical conditions that require
care beyond the capabilities of our medical clinics, conditions that
would be exacerbated by the unusually harsh environment, or conditions
that would otherwise put them at risk in Antarctica. Those screening
criteria have evolved over the program's 40+ years of operational
experience and are refined periodically using the experiences of other
groups sending personnel to remote locations (e.g., U.S. Navy
submariners, Peace Corps volunteers, Department of State Foreign
Service Officers, NASA astronauts). The medical screening criteria are
reviewed annually by a panel of physicians to ensure currency and
relevancy and are modified accordingly. However, they are only as
sensitive and selective as current medical science allows. As our
recent experiences at South Pole demonstrate, that screening program is
not foolproof.
After our experience two years ago at the South Pole Station, we
expanded our medical capabilities at our medical clinics at McMurdo and
South Pole Stations by introducing ultrasound equipment and improving
telecommunications capabilities to leverage our on-ice medical staff
with medical specialists back in the United States (i.e., ``tele-
medicine''). In addition, this past year we added an additional mid-
level health care provider to complement the physician on-station at
the South Pole. Those improvements were instrumental in our ability to
diagnose the medical problem experienced by the South Pole individual
in April of this year, and allowed us to assess the risks to the
individual if he remained on-site for the duration of the austral
winter.
Even with appropriate screening, improved medical facilities, and
expanded diagnostics, medical emergencies do arise. To deal with these
situations, we intend to continue investing in telecommunications
infrastructure to further leverage our on-ice capabilities with medical
specialists in the U.S. At the present time, the South Pole Station
wide-bandwidth communications capability adequate for tele-medicine
consultations is only available six to seven hours each day. We
consider it essential to increase that coverage to 24-hours per day,
seven days per week at all three stations. Similar limitations are also
present at Palmer Station. We believe that the leveraging of our on-
continent medical care staff with specialists in the U.S. via increased
telecommunications and tele-medicine is a cost-effective approach and
should be expanded.
graduate student stipends
Question. Dr. Colwell, you make a passionate case that we have to
attract more U.S. students into graduate science and engineering
programs. Part of this budget includes an increase in the stipend
levels for graduate fellowships and traineeships as a first step in
that effort. NSF supports 5 times as many graduate students through its
research grants (20,000) as it does through its fellowship and
traineeship programs (5,000). What is NSF doing in the research
programs to increase graduate stipend levels so that they too can be
used to attract and retain more U.S. students into graduate education
in science and engineering. What constrains the Foundation from setting
a minimum level of graduate student and post-doc stipend support within
research awards?
Answer. Approximately 20 percent of graduate students supported by
NSF are supported through the agency's Graduate Research Fellows (GRF),
Integrative Graduate Education and Research Traineeships (IGERT) and
NSF Graduate Teaching Fellows in K-12 Education (GK-12) programs. By
increasing stipends in these programs, NSF seeks to attract and retain
a larger, more diverse group of talented U.S. students to graduate
education in science and engineering.
Historically, the agency has allowed stipend levels for graduate
students supported on other NSF-funded awards to be determined locally
by our grantee institutions. This provides our partner institutions
with the flexibility to accommodate local cost of living differences
and differences by field of study.
Nonetheless, the agency does anticipate that raising stipends in
the GRF, IGERT and GK-12 programs will have systemic impact on graduate
student stipends around the country, since stipend levels for students
on other NSF-supported projects have generally tracked NSF Fellow and
Trainee stipend levels.
unexpected energy costs
Question. In light of surging energy prices in the country today,
are their any particular programs or projects supported by NSF that
have--or are likely to--encounter major unanticipated energy costs now
and in the future? Examples of such high energy consuming projects
might include the U.S. Antarctic Program, ship operations for the
academic fleet, the operations of national facilities such as the
National Center for Atmospheric Research, the National High Magnetic
Field Laboratory, and others. Assess the potential impact on each of
those programs that require significant levels of energy use to fulfill
their missions and provide the Committee with these energy estimates
for each program for fiscal year 2001 and fiscal year 2002.
Answer. Economic factors including energy prices has and will
continue to have an impact on a number of NSF programs and activities
in fiscal year 2001 and fiscal year 2002; these include:
--Even with current efforts at conservation and alternative energy
sources, rising fuel prices are impacting and will continue to
impact the U.S. Antarctic Program. Fuel costs have risen $5
million over fiscal year 2000/01. The USAP currently utilizes a
number of methods to reduce fuel costs by use of alternative
energy sources and reduction of fuel consumption, including
wind turbines, photovoltaic arrays, solar heating panels, and
waste heat utilization. Waste heat utilization in particular
has proven to be extremely successful in saving fuel. The
McMurdo Station waste heat recovery project captures radiator
waste heat for use as space heat in nearby buildings. Annual
savings have grown to 300,000 gallons of fuel (approximately
$378,000). Plans are in progress to expand the system and save
an additional 200,000 gallons, and waste heat utilization is
included in planning for the new South Pole Station. The other
methods are used to a lesser extent, but given the improving
technology, the USAP hopes to expand the use of wind turbines
in the future--especially at the new South Pole Station.
Additional efficiencies in fuel usage could be achieved but
would require substantial investments. Fiscal year 2001 fuel
consumption by the USAP totaled over 10 million gallons;
consumption in fiscal year 2002 will be comparable. Increased
fuel costs have also influenced the rates we pay the Air Force
for C-141, C-5, and C-17 aircraft support and the rate we pay
the Military Sealift Command for our annual cargo ship.
--Two areas in the NSF Arctic Sciences Program very susceptible to
fuel cost variations are costs of airlift and sealift. The U.S.
Coast Guard Cutter Healy is likely to experience a similar
increase in operating costs over the planned reimbursement
rate. Aviation in Alaska also will be affected. The total
increase in Arctic operations from all of these areas has
totaled approximately $0.5 million between fiscal year 2000 and
fiscal year 2001.
--Ocean Drilling Program--Operating the JOIDES Resolution, the ship
used for the Ocean Drilling Program, requires about 8,000
metric tons of fuel per year. Historically, the cost of that
fuel has been around $205/MT. The average quotes this fiscal
year have been running closer to $320/MT or an increase of
about $1,000,000 above original estimates.
--Academic Research Fleet--Operating the Academic Research Fleet has
also become more costly. There was roughly a 50 percent
increase in fuel cost/day between 1999 and 2000, with prices
seemingly stabilized at this new higher level. For the large
ships, which consume on average, between 2,500 and 3,000
gallons of fuel per day, the increase in price per day is
between $750-$900. With most of the large ships operating 300+
days per year, the increased cost due to fuel prices is
expected to be between $2.5 and $4.5 million this year and
next.
--Increased fuel cost is not expected to be a significant factor at
the National Center for Atmospheric Research in fiscal year
2001, but is expected to add approximately $200,000 to the cost
of operations at that facility in 2002.
--The National High Magnetic Field Laboratory projected energy usage
and cost is increasing at a rate of 2.5 percent per year. For
2001 the projected cost was $1.9 million while the actual cost
is estimated to be $2.5 million, which reflects an increase of
$587,000 or 30.3 percent. For 2002, the original projected cost
was nearly $2 million while the new projected cost is $2.5
million, or 25 percent higher. In 2001, the cost per megawatt
hour increased from $31 to $44 and the fuel adjustment charge
increased from almost nothing to nearly $13 per megawatt hour.
--Power costs for the NSF Physics Programs at the CESR, MSU/NSCL, and
LIGO facilities are expected to increase in fiscal year 2002
over fiscal year 2001. The fiscal year 2001 power costs were
$3.3 million for these facilities and estimated fiscal year
2002 power costs is anticipated to be $3.9 million, an increase
of $580,000, or 17.7 percent. The unexpected increase in
program operations due to power costs is $180,000.
--The power costs at the Cornell Electron Storage Ring (CESR) in New
York appear stable for the moment, while at the National
Superconducting Cyclotron Laboratory (NSCL) in Michigan costs
are estimated to increase 10 percent in fiscal year 2002 due
largely to a 50 percent increase in the cost of coal over
fiscal year 2001. The power costs in Hanford, Washington are
also going up by 50 percent. The power costs in Livingston are
anticipated to be about flat in fiscal year 2002. While their
power costs are state-regulated, the surcharge that covers fuel
represents 50 percent of the total cost, and fuel cost
fluctuations by 15 percent have occurred in the past year. The
net result for Livingston power costs could easily be a 10
percent increase over the next several years, but not in fiscal
year 2002.
--Other facilities, such as observatories, have observed little or no
increase in energy costs. In some cases the cost for energy is
imbedded within the annual lease costs for buildings and is
difficult to break out.
senior nsf vacancies
Question. In September 2000 NSF announced it was initiating a
search for a new Assistant Director for Education and Human Resources.
The stated intent was to fill the position by January 1, 2001. What is
the current status of the search for the Assistant Director for
Education and Human Resources and when do you expect to be able to
announce the results of the search process? Please provide the status
of all other NSF Assistant Director vacancies including the length of
time they have been vacant, when the search process for a successor was
started and when you expect to fill the vacant position.
Answer. On July 12, NSF named Judith A. Ramaley as the Foundation's
new Assistant Director for Education and Human Resources (EHR). The
appointment was effective August 1, 2001. Dr. Ramaley is a biologist
who served most recently as president of the University of Vermont.
The positions of Assistant Director for Computer and Information
Science and Engineering and Assistant Director for Engineering will
become vacant on August 31st and September 4th, respectively. National
searches are currently in process for both positions.
education and human resources
Question. Provide the record the NSF fiscal year 2002 budget
request for the Education and Human Resources (EHR) account that was
submitted to OMB in January 2001. Include a breakout of that request by
subactivity and program element within each subactivity along with a
brief description of what each program element was going to focus upon
in fiscal year 2002. Also include similar data for fiscal years 2000
and 2001 for each EHR subactivity and program element.
Answer. The Foundation's budget is based on a number of factors.
The early part of the planning process is largely science-driven, with
the participation of the research and education communities and other
interested groups. Content of this phase of planning is shaped
primarily by advice and information from the external community. This
period results in the identification of many program opportunities and
provides useful guidance about priorities within programmatic fields
and scientific disciplines. NSF senior management reviews these
spending plans and determines the dollar amounts to be requested based
on resource limitations, policy concerns, long range strategic plans,
and balance across a broad and expanding science and engineering
frontier.
The second part of the process occurs within the Executive Branch.
It is at this point that resource limitation and policy considerations,
as well as the Government Performance and Results Act requirements, are
overlaid on the many possible budget options which have been produced
by the earlier planning. These priority decisions are shaped by many
considerations such as scientific readiness, technical feasibility,
response to national needs, affordability, performance goals and
results, and balance with other programs of NSF and other agencies.
OMB's role is to hold discussions on our proposed plans, review
opportunities across all Federal agencies, and determine the
appropriate budget request funding levels for the Foundation in the
context of the President's overall budget. The final choices are made
by NSF staff and management, the National Science Board, and OMB, and
are then presented to the Congress.

----------------------------------------------------------------------------------------------------------------
Fiscal year Fiscal year Fiscal year
EHR Subactivity 2000 Request 2001 Request 2002 Request
----------------------------------------------------------------------------------------------------------------
Educational System Reform....................................... 114.20 109.51 45.25
Office of Innovation Partnerships............................... 48.41 48.41 74.81
Elementary, Secondary and Informal Education.................... 193.72 191.50 165.61
Undergraduate Education......................................... 116.60 140.56 132.60
Graduate Education.............................................. 69.65 89.45 95.50
Human Resource Development...................................... 73.68 81.88 90.44
Research, Evaluation and Communication.......................... 61.74 67.70 68.20
Math and Science Partnerships................................... .............. .............. 200.00
-----------------------------------------------
Total, EHR Request........................................ 678.00 729.01 872.41
----------------------------------------------------------------------------------------------------------------

reduction in ``core'' disciplines
Question. Provide for the record a quantitative and qualitative
analysis of the $45.5 million reduction to the ``core'' contained in
the fiscal year 2002 request for the science and engineering research
directorates--by activity, subactivity, and program element within each
subactivity. Include the number of awards that won't be made, the
number of scientific personnel (senior scientists, post docs, graduate
and undergraduate students) who won't be supported as a result of this
reduction.
Answer. NSF's fiscal year 2002 Request for Research and Related
Activities (R&RA), which funds the science and engineering research
directorates, is $3.33 billion. Of this amount, over $300M supports
People, $2.1 billion supports Ideas, and over $900 million supports
Tools. The $45.5 million reduction identified by this question is for a
category described as Disciplinary Research. Disciplinary Research is
within Ideas, which overall decreases by $31 million. Therefore, the
$45.5 million reduction is offset by other increases in basic research
and does not truly represent a reduction to the ``core''. ``Core''
research also takes place within the Education and Human Resources
appropriations account.
The following table shows Disciplinary Research by R&RA activity.

For the agency in total, it is estimated that in fiscal year 2002,
NSF-supported programs and activities--funded at a total level of $4.47
billion--will support 20,770 awards and directly involve 192,900 senior
researchers, postdoctoral associates, graduate and undergraduate
students, and K-12 students and teachers. Compared to fiscal year 2001,
it is estimated that in fiscal year 2002 NSF will make 180 fewer awards
and the number of people involved in NSF-supported activities will be
approximately 800 fewer.
cost sharing
Question. The NSF Inspector General reported in its October 2000
semi-annual report that cost sharing commitments are often not met by
grantees. A few years ago, NSF and the Board acted to clarify cost
sharing requirements to grantees. Outline NSF's cost sharing policy as
it now stands, what efforts are being made to be sure that NSF
grantees, principal investigators, and NSF staff all understand the
cost sharing policy and requirements and what is NSF doing to enforce
cost sharing requirements among NSF grantees?
Answer. In June 1999, an ``Important Notice'' was sent to
Presidents of Universities and Colleges and Heads of other National
Science Foundation Grantee Organizations, which transmitted the
``National Science Foundation Policy Statement on Cost Sharing'',
approved by the Board. In addition to providing a definition of cost
sharing, the policy statement sets forth that (1) NSF-required cost
sharing is considered an eligibility rather than review criterion; (2)
NSF cost sharing requirements beyond the statutory requirement (1
percent) will be clearly stated in the program announcement,
solicitation or other mechanism which generates proposals; (3) for
unsolicited research and education projects, only statutory cost
sharing will be required; and, (4) any negotiation regarding cost
sharing will occur within NSF stated parameters. This ``Important
Notice'' was also distributed to appropriate NSF staff. During the past
year, NSF has held several training sessions on cost sharing for NSF
staff and conducted sessions on cost sharing for NSF clientele at
regional conferences, seminars and workshops.
In fiscal year 2000, almost 75 percent of cost sharing were on
awards made through the NSF Directorate of Engineering (ENG) and the
Directorate for Education and Human Resources (EHR). ``Outreach''
sessions are being conducted with program staff in these directorates
to ensure they are aware of NSF policy and what is expected of grantees
when cost sharing is made a condition of an award.
The Foundation recently conducted an analysis of grantee audits,
which contain findings related to cost sharing. The problem seems to be
more that grantees do not have financial and accounting systems which
can ``readily'' identify cost sharing realized rather than the fact
that grantees are not actually providing required cost sharing. To
ensure that grantees are able to appropriately document cost sharing in
their financial and accounting systems, NSF is conducting more pre-
award reviews of grantee financial and accounting systems to assess
grantee's capability to support cost sharing prior to award. NSF has
also instituted a policy requiring cost sharing certification when cost
sharing is in excess of $500,000.
The NSF Inspector General first reported cost sharing findings in
their semi-annual report to Congress for the period ended March 31,
1997. Over half of the cost sharing findings reported (both in number
of audit reports and dollar amount of findings cited) up to the last
semiannual period, were for grantee organizations which are not the
``traditional'' NSF type grantee (i.e., city board of education, public
school systems, state governments, etc.). NSF is currently developing
an appropriate strategy for reviewing cost sharing proposed by these
type of grantee organizations, effectively evaluating their systems and
providing outreach and instruction as necessary.
candidates for the major research equipment account
Question. Provide for the record documentation that describes the
process the Foundation goes through to consider and select projects to
be funded out of the Major Research Equipment account. Provide a time
line on the decision-making process, the criteria used to make
decisions--particularly among and between competing proposals, the
roles and responsibilities of the program staff, the relevant Assistant
Director, the Office of the Director, the National Science Board and
the OMB. Document the way projects are developed, planned, executed and
managed by NSF once construction or acquisition begins. Document the
management structure within the Foundation used during the
construction, commissioning, and operational phases of the project.
Answer.

This chart describes NSF's process for the review and approval of
large facility projects considered for funding through the MRE account.
The first step in the process is the early identification of an MRE
Pipeline Project as such. These potential projects are conceived of in
the science and engineering community, often as a result of emerging
science and engineering opportunities, and are often many years in
development following initial conceptualization.
Developed projects are then proposed by an NSF Originating
Organization(s) for consideration by the MRE Panel. These projects may
be based on a proposal already submitted and evaluated using NSF's
merit review process. The MRE Panel considers the projects on the basis
of the review criteria specified earlier and makes recommendations to
the Director. Using the review criteria, the Director selects
candidates for NSB consideration. The NSB then approves, or not,
projects for inclusion in future budget requests. The Director then
selects from the group of NSB-approved projects those appropriate for
inclusion in a budget request to OMB, and after discussion with OMB, to
the Congress.
Following the appropriations process, the Director allocates funds
to the relevant projects. If necessary, a program solicitation or RFP
is prepared and, following receipt and merit review of the proposals,
one or more awards are made.
nsf inspector general review of the epscor program
Question. The EPSCoR program was recently reviewed by the Inspector
General. Provide a summary of the IG's findings and what, if any, NSF
response is required to improve the management of the program.
Answer. The Office of the Inspector General (OIG) reviewed EPSCoR
to assess the program's compliance with selected NSF requirements and
NSF-wide and program-specific goals. The OIG review included
consideration of program administration at NSF and project
administration in two states, Mississippi and Maine. A general report
was published on March 12, 2001 and is available at the OIG web site
(http://www.oig.nsf.gov/oig012002.pdf). The report found that EPSCoR:
played a role in building a ``research culture'' at universities that
lack the physical facilities and institutional practices that
facilitate research. Many such universities build research
infrastructure by funding groups composed of a critical mass of
researchers with similar interests. Institutional leadership plays a
crucial role in identifying and developing promising niches.
The report also examined how NSF's EPSCoR Office administered its
large infrastructure awards and found ``widespread agreement that NSF
project monitoring was reasonable, that proposal review had been
constructive, and that more NSF site visits could improve project
performance.''
OIG Findings--The OIG report contained seven recommendations to
improve performance, three of which specifically referred to NSF's
management of the program. The OIG recommendations and the NSF
responses to the three specific program issues are shown below.
OIG Programmatic Recommendations
EHR and the EPSCoR Office, in conjunction with higher levels of NSF
management and NSF's research directorates, should develop an
administrative mechanism to ensure that EPSCoR co-funding dollars are
targeted at their original purpose and do not support, either directly
or indirectly, researchers who have moved to non-EPSCoR states. (OIG
01-2002, p. 23).
--NSF Action.--EPSCoR staff have met with state Project Directors and
discussed this issue, and have their agreement to strongly
encourage support of the Inspector General's position, unless
constrained by broader institutional policies. The EPSCoR staff
is also meeting with the Directorate co-funding coordinators to
explain this issue.
EHR and the EPSCoR Office should decide whether, as part of future
infrastructure awards, NSF should require broader or more formal
participation in Mississippi's EPSCoR committee by representatives of
the private sector and public sector organizations outside higher
education. (OIG 01-2002, p. 28)
--NSF Action.--EPSCoR has met with the Mississippi State EPSCoR
Committee and strongly supported the Inspector General's
position. Mississippi EPSCoR has indicated that they will
strengthen their Committee membership.
EHR and the EPSCoR Office should decide whether to adopt general
criteria to determine EPSCoR eligibility, rather than merely publishing
a list of eligible states. (OIG 01-2002, p. 37)
--NSF Action.--EPSCoR has operated in five states for 20 years and in
the other states for from 1 to 15 years. During fiscal year
2001, two additional states (Hawaii and New Mexico) became
EPSCoR participants. In response to recommendations made in the
reports issued by the fiscal year 2000 Committee of Visitors
and the fiscal year 2001 report of the Office of the Inspector
General, EPSCoR has established criteria governing
participation in the program. These criteria were approved by
NSF Director Dr. Rita Colwell and will be incorporated into a
new EPSCoR program solicitation that will describe the July
2002 Research Infrastructure Improvement (RII) grant
competition, for which awards are scheduled to begin in
February 2003. The EPSCoR staff have reviewed these eligibility
criteria with the state EPSCoR Project Directors and received
their comments and suggestions before finalizing the language
that will appear in the solicitation. The proposed eligibility
criteria are given below.
--Eligibility to participate in EPSCoR competitions will be based
on the level of NSF research funding. Each year, the EPSCoR
Office will compile and publish summary data for the
preceding 3 years of NSF research funding by state.
--Eligibility to participate in EPSCoR competitions would be
restricted to those jurisdictions that received 0.7 percent
or less of the total NSF research funds to all sources
within a state averaged over the three-year period. In the
few cases where a single large NSF-funded facility skews
the data, an adjustment will be made. For example, West
Virginia's funding data will be adjusted so that the
Greenbank Observatory is not included in the state NSF
research funding data used to calculate EPSCoR eligibility.
--Any current EPSCoR state that did not meet the eligibility
criteria would continue to be eligible for EPSCoR co-
funding and EPSCoR Outreach for a period of three years. In
these cases, the EPSCoR Office would also exercise
flexibility with respect to the support of the state's
EPSCoR administration. Quite often, the state office
supports multi-agency EPSCoR efforts; some of these
agencies do not provide administrative support.
Any state that becomes eligible for the first time would be
required to follow the existing process for entering the
program. A suitable state committee would have to be created
before a state could first request an EPSCoR Planning Grant to
determine research barriers, areas of focus, areas of
opportunity, etc. These steps are consistent with activities
that other EPSCoR states have been required to undertake prior
to competing in EPSCoR competitions.
digital divide
Question. What is NSF doing to help bridge the digital divide that
exists in our inner city schools when it comes to access to the
internet and other new educational technologies? How does the NSF urban
and rural education reform programs help local communities acquire
computers and internet access for use in K-12 math and science
education? How does NSF integrate the training of teachers in science
and math with the use of new technologies and what special efforts are
being made for those school districts confronting high levels of
poverty? How does NSF work with the Department of Education to help
bridge the digital divide when it comes to the use of advanced
technologies in K-12 education?
Answer. NSF helps to bridge the digital divide primarily through
the development of curricula materials that utilize the new
technologies and through the training of teachers to use the curricula
materials effectively. NSF does not generally provide support for the
purchase of computers or internet access for local communities, but
instead provides the content for science and mathematics courses and
the teacher training, so that the technologies can be effectively used.
NSF seeks to maximize its investment in education technology research
by ensuring that every child can benefit from its investments. The
applications of technology to underserved populations and plans for
teacher training are critical components in the evaluation of every
proposal dealing with educational technologies. NSF works with the
Department of Education and the National Institutes of Health in the
management of an interagency education research initiative addressing
the effective use of technology in K-12 reading, mathematics, and
science instruction.
public understanding of science
Question. Both the National Science Board and the Public Affairs
Advisory Committee have provided the Foundation with advice and
recommendations concerning its outreach and public affairs activities.
Provide a copy of each of these reports for the record and summarize
the various recommendations each report provided the Foundation. What
effort is the Foundation making to respond to these recommendations?
How much does the fiscal year 2002 budget request for implementing the
recommendations? Please provide a detailed listing by NSF office and
directorate of each activity being carried out in response to these
reports and the resources budgeted, by account, for each activity.
Describe the process by which these activities will be evaluated in
terms of benchmarks and outcomes over the next 3 to 5 years.
Answer. In August 2000 the National Science Board approved its
report, Communicating Science and Technology In the Public Interest
(NSB-00-99), enclosed. It includes three recommendations and associated
actions to be taken by the Foundation. The NSB identifies specific
actions for implementing each recommendation.
Recommendation #1.--The NSB directs NSF to regularly provide
requested information to public information groups to support their
outreach efforts. NSF's Office of Legislative and Public Affairs (OLPA)
responds to information requests from the public and Congress on an
ongoing basis.
Recommendation #2.--The NSB requests that NSF pursue a coordinated,
agency-wide effort to assess the effectiveness of new communication
technologies in reaching broader audiences, identify best practices in
communicating science and engineering, increase exchange of information
with higher education organizations, support training in science
communication, and develop metrics for assessing the effectiveness of
NSF public understanding and outreach activities. The NSB requests that
NSF develop programmatic responses to these suggestions and report
progress to the Board.
Recommendation #3.--The NSB requested that NSF provide NSB members
with materials about key issues in science and engineering research and
education, including selected speeches and visual presentations by the
Director and Deputy Director. Speeches and visual presentations are
posted to the NSF Web site, together with new releases and media
advisories on NSF-funded research.
The Public Affairs Advisory Group (PAAG) was established by the NSF
Director to provide guidance and suggest broad strategies for improving
NSF communications and outreach to its major constituents--the public
and Congress. The members of the PAAG drew on their broad and diverse
professional experience--in journalism, television, public affairs,
business, and academia--to recommend broad strategies to improve the
effectiveness of NSF communications and outreach efforts.
The PAAG report to the Director, completed in January 2001, notes
the increasing dependence of U.S. economic and social prosperity on
fundamental research and education in science and engineering, and
technological innovation. Improving public awareness of these links can
contribute to increasing public support for improved science and
mathematics education, encouraging more young people to choose science
and engineering careers, and creating a citizenry knowledgeable about
science and technology and capable of making informed decisions about
civic issues.
The PAAG recommended five strategies to accomplish these
objectives.
--Educating the public and government leaders about the important
connections among scientific and engineering research,
technological innovation, and our ability to prosper as a
ation.
--Strengthening NSF's relationship with the traditional broadcast and
print media in order to establish NSF as a leading resource for
science and engineering information, news, and expertise.
--Outreach to the Nation's opinion leaders to enlist their help in
raising awareness of the importance of science, engineering,
and technology.
--Focus on the relevance of science and engineering to the well being
of the U.S. public, and the practical value of investments in
fundamental research.
--Build and sustain an effective communications and outreach program,
including a significantly improved Internet presence, and
consolidate its many, often uncoordinated, efforts into a
coherent and efficient public information strategy.
Within the limitations imposed by the annual budget cycle, $400,000
in additional funding for communications and outreach activities was
allocated to the Office of Legislative and Public Affairs (OLPA) in
June for fiscal year 2001. No NSF Directorates will receive additional
funds for these activities. Within OLPA a full time staff person has
been assigned to develop a program of outreach to state and local
government officials. NSF has published an RFP for an external audit
and analysis of OLPA staff and activities. The audit will provide
advice on the mix of skills and effective structures needed to
accomplish OLPA objectives.
NSF has established a working group to identify strategies, assess
needs, and develop a work plan preparatory to improving and expanding
the delivery of science and engineering information to the public on
the Internet. Appropriate metrics for assessing the impact of these
various activities on both the public and Congress will also be
considered. The first in a series of daylong forums designed to provide
the media and interested public with accessible information on cutting-
edge science and engineering research is scheduled for September 2001.
The forum will survey nanoscale science and technology.
planning and evaluation
Question. What activities are being supported in fiscal year 2001
within the planning and evaluation function? Please describe each
distinct activity and the level of funding for each activity in fiscal
year 2001. Provide similar information for fiscal year 2000 and 1999.
Also, provide a breakdown of planning and evaluation activities--
including the funding by activity--for fiscal year 2002. Why doesn't
the Justification of Estimates include information on the planning and
evaluation function?
Answer. The planning and evaluation function provides funding to
several recurring activities. Items funded consist of activities of the
National Science Board (NSB) Office, the Office of Legislative and
Public Affairs (OLPA), the Office of Integrative Activities (OIA) as
well as other NSF staff offices. Total funding for this function is as
follows: fiscal year 1999--$5.9 million, fiscal year 2000--$8.6
million, and fiscal year 2001 (estimate)--$10.0 million. The estimate
for fiscal year 2002 will be developed over the next few months.
Specific examples of recurring activities include OLPA's support of
National Science and Technology Week and the Bayer/NSF Award for
Community Innovation; the NSB Offices' support of activities related to
the Medal of Science; the Waterman award; the Vannevar Bush award; and
development costs associated with NSF externally focused information
technology projects, such as FastLane. Non-recurring activities include
funding for the congressionally mandated Commission on the Advancement
of Women and Minorities in Science and Engineering Technology, NSF's
50th Anniversary activities, and evaluation contracts for NSF
initiatives and large programs.
Prior to fiscal year 1985, planning and evaluation funds were
included in the budget justification in the Scientific, Technological
and International Affairs (STIA) activity, within the Research
Initiation and Improvement Subactivity. In fiscal year 1985 the STIA
activity was reorganized, and as stated in the fiscal year 1985
Justification of Estimates, ``. . . funds for Foundation-wide
activities in planning and evaluation will be provided as needed from
the discipline-oriented research activities . . .'' In addition, the
Presidential Young Investigators Research Awards, the Undergraduate
College Research Support, and EPSCoR were also to be provided from the
discipline-oriented research activities.
In fiscal year 1985, Planning and Evaluation provided ``. . .
information and analyses on matters of concern to NSF management and
the National Science Board, including national scientific and
engineering needs, opportunities and problems; budgeting, planning and
program management; and program evaluation.''
______

Questions Submitted by Senator Christopher S. Bond

funding priorities
Question. What did the Clinton Administration propose for NSF's
fiscal year 2002 budget and what areas of research did it highlight?
Answer. The Clinton Administration did not develop a fiscal year
2002 budget. Instead, OMB calculated a current services baseline for
fiscal year 2002, based on a set of economic assumptions approved by
the Administration and baseline calculations defined in law. This
current services baseline budget did not contain any new policies or
programs.
Question. If we are able to increase the Foundation's budget by
$675 million, or even $200 million, how would you allocate these funds
and how would allocate these funds and how would you prioritize the
funding? Could you specify what particular areas of research such as IT
or nano and what new major research equipment projects you would
support funding? Lastly, do you support putting additional resources
into programs that broaden participation of underrepresented groups
such as the Partnerships for Innovation, EPSCoR, and HBCU programs?
Answer. NSF's fiscal year 2002 Request represents an overall
increase of 1.3 percent over fiscal year 2001 and funds all our most
significant priorities. The fiscal year 2002 Budget Request:
--Increases NSF's investments in education by 11 percent over fiscal
year 2001. The request includes $200 million in fiscal year
2002, and $1 billion over five years, to begin the President's
Math and Science Partnerships Initiative to establish
partnership agreements between States and institutions of
higher education, with the goal of strengthening math and
science education in grades K-12. I believe the Administration
is making an important statement as to the value of what NSF
brings to the larger education reform effort.
--Increases graduate stipends by nearly 15 percent in the Graduate
Research Fellowship, the Graduate Teaching Fellowships in K-12
Education, and the Integrative Graduate Education and Research
Traineeships programs to help attract the best students to
pursue careers in science and engineering.
--Provides a $20 million, or 17 percent, increase in mathematical
sciences to initiate an effort in multidisciplinary mathematics
research to enhance America's preeminence in this important
area.
--Increases NSF priority areas of Information Technology Research by
$13 million, or 5 percent, to $273 million and Nanoscale
Science and Engineering by $24 million, or 16 percent, to $174
million.
staffing resources
Question. Has NSF reviewed its short- and long-term staffing needs
based on its growing workload? Do you believe this is a serious
concern?
Answer. NSF management shares that concern and initiated the
process to prepare its workforce for the significant changes in NSF
business practices. These result from technological changes along with
the increasing complexity of science and engineering opportunities and
challenges.
NSF is developing a five-year workforce plan to reflect the
agency's short-term and long-term workforce needs. The plan's
objectives include the implementation of a complete workforce
restructuring study to review workforce position requirements and
competencies. The centerpiece of the agency's strategic workforce
development activity is the development of the NSF Academy. Underpinned
by the agency's strategic plan, the Academy will provide a
comprehensive suite of education, training and career development
opportunities. Succession planning is being built into the skill
development curriculum, to provide all employees with the opportunity
to gain the skills and knowledge necessary to operate effectively and
efficiently in a state-of-the-art electronic business environment, and
to compete for leadership and management roles both within and outside
NSF. These activities are expected to ensure the agency is well
positioned to meet its growing opportunities and challenges.
high-tech workers
Question. I am concerned about the decline of American students and
workers in the physical sciences and engineering. Could you lay out how
the Foundation is responding to the shortage of U.S.-born engineers and
scientists? I would also like to hear how NSF is working with the
academic community to encourage more students to pursue science and
engineering degrees and how NSF is working with the private sector to
ensure that these students develop the necessary skills to meet the
needs of the high-tech industry.
Answer. NSF has a comprehensive suite of programs that prepare
undergraduate students for entry into the workforce and into graduate
programs. These programs utilize three strategies: (1) direct
preparation of specific elements of the science and engineering
workforce (e.g., Advanced Technological Education, Computer Science,
Engineering, and Mathematics Scholarships); (2) attention to broadening
participation in the science and engineering workforce by groups that
are currently underrepresented (e.g., Historically Black Colleges and
Universities-Undergraduate Program, Louis Stokes Alliances for Minority
Participation, Tribal Colleges and Universities Program); and (3)
strengthening the curricular and instructional infrastructure for
providing high quality science, mathematics, engineering, and
technology education to all students (e.g., Course, Curriculum, and
Laboratory Improvement, Graduate Teaching Fellows in K-12 Education,
National Science, Mathematics, Engineering, and Technology Education
(SMETE) Digital Library).
Across the set of NSF's programs for undergraduates, a balance is
struck between providing students with the practical skills needed to
perform at a high level in the workplace and providing the firm
theoretical foundations in math and science required as preparation for
study at more advanced levels.
plant genome
Question. Recent advances in technology have made it economically
feasible and technically possible, finally, to survey sequence the gene
rich regions of large, complex plants, such as corn. However, projects
to survey sequence the gene rich regions of large, complex plants could
be accommodated with the current funding level of the plant genome
program without eliminating all other research despite the support from
the Interagency Working Group on Plant Genomes and the Maize Genetics
Community.
First of all, do you support additional funding for the plant
genome program and would NSF be able to utilize fully additional funds
if the increase were focused, primarily, on new initiative to provide
sequences and draft sequences of the gene rich regions in plants and to
provide other focused, high throughput genome sequencing efforts?
Answer. NSF is prepared to support proposals that address a new
strategy for survey sequencing of large plant genomes, if quality
proposals were received and recommended for funding by reviewers.
information technology
Question. Could you give us an update on the information technology
research initiative? Specifically, can you describe the type of
proposals being submitted for the IT initiative? To what extent are you
providing awards to proposals that are risky and innovative?
Answer. In fiscal year 2000, the NSF ITR program stressed
fundamental research in information technology. In fiscal year 2001 an
additional focus area was applications in all disciplines. In fiscal
year 2002 focus will expand to include research in multidisciplinary
areas.
In fiscal year 2001, ITR received a large number of proposals.
These proposals cover areas such as software design, use and
reliability, human-computer interaction, information management, large
scale networking, educational and social effects of IT, and many more.
All reviews have been completed, and fiscal year 2001 ITR awards are in
process.
Both mail and panel reviews for proposals were used. Around 25
percent of the proposals were co-reviewed in more than one panel, each
representing information technology research in a broad scientific
discipline. NSF program managers assessed proposals for risk and
innovation and funded high risk, high payoff efforts, where
appropriate. Program managers are able to assess the risk of an entire
portfolio of research investment and accept a degree of higher risk.
Awards from fiscal year 2000 are listed on web site http://
www.itr.nsf.gov. Awards from fiscal year 2001 will also be listed there
upon completion of the awards process. Of the fiscal year 2000 awards
one particularly exciting award was made to the University of Colorado
to research how interaction with intelligent agents can teach deaf
children how to speak. At Stanford University researchers are working
on how to make on-line information far more effective and efficient to
use than it is currently by data mining and knowledge synthesis. Other
innovative and risky projects include an effort to rewrite the air
traffic control software; building a tactile display for the blind;
computing with optical devices; and computer networks based on
biological models.
Many of the ambitious projects involve the combination of IT with
other sciences. For example, one researcher wants to study the way
humans recognize objects with electrodes sensing brain activity, and
then build computer vision systems that work the same way. Health care
experts are combining with computer scientists to design robotic
assistants to help the elderly. Finally, in a combination of three
widely separated intellectual areas, researchers in computer graphics
are using ideas from art and psychology to create new kinds of displays
to help medical experts visualize and understand blood flow and neuron
diseases.
peer review system
Question. At the Subcommittee's request, NAPA recently completed a
review of NSF's peer review system. NAPA found that NSF is unable to
assess the criteria to encourage a broader range of institutions or
greater participation of underrepresented minority researchers. In
other words, while NSF claims to be making efforts to assist smaller
research institutions and minorities, in practice, this does not occur.
NAPA recommended that NSF should institute broader-based review panels-
this means brining in participants from a wider range of institutions,
disciplines, and underrepresented minorities. It appears that NAPA's
finding supports the belief that the peer review system is still a
``good old boys'' network and hampers the ability of smaller research
institutions from participating in NSF programs.
How is NSF responding to the NAPA findings and will it follow
NAPA's recommendations?
Answer. NSF agrees with the principal finding of the NAPA report;
i.e. that it is too soon to make valid judgments about the impact and
effectiveness of the review criteria. Hence, we do not believe that
NAPA's finding supports the assertion that the peer review system is
still a ``good old boys'' network.
The NAPA report also highlighted the need to (1) improve the
conceptual clarity of the criteria, (2) better communicate with
proposers, reviewers and NSF staff about how the criteria are to be
used, and (3) improve quantitative measures and performance indicators
to track the objectives and implementation of the review criteria. We
have already taken some steps to address these recommendations and we
intend to pursue other actions suggested in the report.
At the May 2001 meeting of the National Science Board (NSB), the
Committee on Programs and Plans, along with the Education and Human
Resources Committee, discussed the NAPA report and the implementation
of the merit review criteria. Three action items were identified and
are currently being implemented:
--An NSB resolution on the importance of both merit review criteria
may be prepared and issued to the science and engineering
community;
--NSF will develop a set of examples to illustrate the application of
the broader impacts criterion (the second criterion). These
examples will be placed on the NSF website and made easily
available to the proposers and reviewers.
--NSF will prepare and implement a plan for better communicating the
importance and use of both of the merit review criteria to the
S&E community.
In fiscal year 2000, NSF added new language to its program
solicitations and announcements, and its Grant Proposal Guide. This
language requires the Principal Investigators (PIs) to specifically
address each of the merit review criterion in their proposals to NSF.
For fiscal year 2001, different on-screen pages have been provided in
FastLane, NSF's electronic data system, so reviewers can address each
merit-review criterion separately. This responds to NAPA's
recommendation that NSF improve performance indicators to permit better
tracking of the impact of the review criteria. Thus far, over 75
percent of proposal reviews submitted to NSF in fiscal year 2001 have
addressed the broader impacts criterion. This demonstrates that NSF is
continuing to improve on the implementation of its criteria.
The NAPA report compared proposal reviews conducted in fiscal year
1997 and fiscal year 1999 (i.e., before and after the implementation of
the new review criteria). NSF has and will continue to make
improvements in the implementation of the review criteria but the
impacts of these improvements will not be measurable for at least
another year. The NAPA assessment can help NSF establish a baseline for
the next assessment of our performance in this area.
nuclear technologies
Question. Last year, I raised concerns about the lack of Federal
support for nuclear engineering education. In response, as directed by
the fiscal year 2001 Senate VA, HUD appropriations report, NSF was
directed to review the academic interest in nuclear engineering
education and to provide recommendations on how NSF can support this
area. Last week, I received your report and frankly, I was a bit
disappointed by the response. Your report even recognizes the need for
nuclear engineers by stating that the demand for nuclear-trained
personnel is on the rise, yet, NSF provides no concrete recommendations
on how it will respond to this problems.
Do you have any specific recommendations where NSF can be more
directly involved in addressing the need for increased Federal support
for nuclear engineering education?
Answer. We are supporting a planning grant to Dr. James Duderstadt
at the University of Michigan to engage the leading industry
representatives, faculty and chairs of nuclear engineering departments.
The project will include:
--A market survey to better understand the interests of prospective
employers, the attractiveness of study to potential students,
the perspectives of colleges and universities;
--The preliminary design of new curriculum in nuclear engineering by
a national team of faculty and industrial experts;
--A needs assessment for supporting resources;
--The design of a summer practicum experience for students;
--The development of financial estimates for the development,
distribution, and ongoing support of the new curriculum;
--The development of contacts with credentialling bodies, practicum
sites and other potential sponsors for the planned activities.
NSF will work closely with Dr. Duderstadt and his colleagues as the
planning proceeds. Through these cooperative outreach efforts, we hope
that faculty at nuclear engineering departments will better understand
the NSF programs and vice-versa with the result that we receive a
larger number of proposals which are competitive in the merit review
process.
nanotechnology
Question. Last year, the Congress provided a significant sum of
money to jump-start the new nanotechnology initiative.
Could you give us a status on how the new program is being
implemented? I would especially like to know how this program is being
coordinated across the various participating agencies.
Answer. Implementation.--The fiscal year 2001 Nanoscale science and
engineering program was implemented for single investigators through
the core programs and by a NSF-wide solicitation for integrative
activities including interdisciplinary teams, exploratory research, and
nanoscale science and engineering centers. New topics were supported in
six research and education themes: Biotechnology, Nanostructure by
design and novel phenomena, Device and system architecture,
Environmental Processes, Multiscale and multiphenomena modeling,
Societal implications and Improving human performance. A balance and
flexible infrastructure was developed by supporting: 6 new centers and
10 existing centers, 4 large facilities, multidisciplinary teams, and
over 700 individual projects. Over 3,000 students and teachers were
supported.
Coordination.--NNI coordination is achieved though the NSTC's
Nanoscale Science, Engineering and Technology Subcommittee, direct
interactions among program officers within the participating agencies,
periodic management meetings and program reviews, and joint science and
engineering workshops. The NSET Subcommittee will coordinate joint
activities among agencies that create synergies or complement the
individual agencies' activities to further NNI goals. Communication and
collaborative activities are also facilitated by the NNI website
(http://www.nano.gov/) as well as by the agencies' sites dedicated to
NNI. Examples of NNI coordination include identification of the most
promising research directions, encouraging funding of complementary
fields of research across agencies that are critical for the
advancement of the nanoscience and engineering field, education and
training of the necessary workforce, and establishing a process by
which centers and networks of excellence are selected.
The NNI coordination process began in 1999 with the organization of
a widely-attended exploratory conference and subsequent preparation of
the report: ``Nanotechnology Research Directions: IWGN Workshop
Report.'' In the spring of 2000, NSET Subcommittee (formerly IWGN)
members took part in planning activities at each agency. In addition, a
survey is being conducted in all agencies participating in the NNI to
identify opportunities for collaboration and areas where duplication
can be avoided. Discussions are being held regarding joint exploratory
workshops (such as those on molecular electronics, quantum computing,
and nanobiotechnology) and agreements on specific interagency funding
programs. Improved internal coordination in large agencies, concurrent
with interagency collaboration, has also been noteworthy in the
planning process.
Examples of major collaborative NNI activities planned by the
participating agencies are (DOS is contributing to international
aspects on all topics):

TABLE 1.--AGENCY INTERESTS IN NANOTECHNOLOGY
----------------------------------------------------------------------------------------------------------------
Agency (in order of fiscal year 2001
investment) NSF DOD DOE NIH NASA NIST EPA Agencies \1\
----------------------------------------------------------------------------------------------------------------
Fundamental research...................... x x x x x
Nanostructured materials.................. x x x x x x x x
Nanoscale processing and manufacturing x x x x x x x
(Ex: chemical fabrication, devices,
systems, lab-on-a-chip, measurements and
standards; manufacturing user facilities)
Electronics and computer technology (Ex: x x x x x x
molecular electronics, spin electronics,
quantum computing).......................
Flight and space crafts (Ex: unmanned x x x x
missions, nanorobotics, safe materials)..
Energy conversion and storage (Ex: x x x x x
efficient solar energy, hydrogen storage)
Biotechnology and agriculture (Ex: x x x x
biosensors, bioinformatics,
bioengineering)..........................
Medicine and health (Ex: disease x x x x x
detection, drug delivery, organ
replacement).............................
Environment and sustainable development... x x x x x
Nanoscale theory, modeling and simulation. x x x x x
Education, training and societal x x x
implications.............................
Technology transfer, global trade and x x x x x x x x
national security........................
----------------------------------------------------------------------------------------------------------------
\1\ Agencies with <$5M/y in fiscal year 2001: DOA, DOJ, DOT, DOTreas, DOS, NRC.

math and science education
Question. I remain concerned about math and science education in
this country. Our high school students are performing poorly in math
and science as reported by the Third International Mathematics and
Science Study. Also, there has been a significant decline in bachelor
degrees awarded in engineering, math, and computer science degrees.
Further, the U.S. is now lagging behind other countries in the
percentages of undergraduates earning degrees in natural sciences and
engineering. Lastly, the Board reported recently that enrollment in
graduate school science programs are declining. Can you lay out for me
how the Foundation is responding to these troubling facts? Please
specify what you are doing to improve K-12 math and science education,
undergraduate education, and graduate school education.
Answer. We share your concern that individual indicators of
science, math, engineering and technology (SMET) education are not as
positive as we would want them to be. By the same token, we see various
positive signs that progress is being made, and that strategies
developed under NSF programs can be transported to a wide range of
institutions to provide real opportunities for improvement. The
centerpiece of NSF's strategy to improve SMET education is to examine
whole systems rather than individual components. This research-based
approach has been shown to be effective in identifying promising
system-wide strategies that can make a real difference. The evaluation
of the systemic initiatives makes it clear that this approach is
effective in raising achievement levels and creating system-wide
improvements that affect all students.
In PreK-12 education, a recent evaluation of the Urban Systemic
Program found improved student outcomes and system change among 22
large urban school districts, especially among minority students.
Findings related to improved student outcomes include: (1) substantial
increases in enrollment rates in mathematics and science gate-keeping
and higher-level courses; (2) greater enrollment gains for
underrepresented minority students than their peers; (3) achievement
test gains; and (4) increased numbers of students taking college
entrance examinations (AP, SAT, and ACT). In an evaluation of the
Statewide Systemic Initiatives, half of the states showed impacts on
classroom practice, with the highest gains in achievement occurring in
states with intensive professional development linked to curriculum.
The National Science Board has concluded that systemic reform programs
have been very effective and should be further encouraged, and that
efforts should be taken to educate the public on the complexity and
long-term commitment required for success of such reforms. The
President's new Math and Science Partnerships Initiative (MSPI) will
also add resources and focus to improving PreK-12 SMET education.
At the undergraduate level, NSF has a comprehensive suite of
programs that prepare SMET undergraduate students for entry into the
workforce and into graduate programs. These programs utilize three
strategies: (1) direct preparation of specific elements of the SMET
workforce; (2) attention to broadening participation in the SMET
workforce by groups that are currently under-represented; and (3)
strengthening the curricular and instructional infrastructure for
providing high quality SMET education to all students.
Across the set of NSF's programs for undergraduates, a balance is
struck between providing students with the practical skills needed to
perform at a high level in the workplace and providing the firm
theoretical foundations in math and science required as preparation for
study at more advanced levels.
The methods used to strengthen undergraduate SMET education include
inquiry-based learning, integration of learning technologies, faculty
development, teacher preparation, and curricula reform. A new emphasis
on strengthening student outcomes, focusing on educational ``end
results,'' is being explored. NSF also plans to explore the coupling of
undergraduate activities with the Centers for Learning and Teaching
(CLT) Program (a PreK-12 program), which partners universities, school
districts, state education agencies, and business and industry. Joining
the CLT to undergraduate activities is another example in which real
improvement can occur when synergies are created between educational
levels.
At the graduate level, NSF support consists of fellowships awarded
to individual students, traineeships awarded to institutions, and
support for graduate students on research grants. A major priority in
the fiscal year 2002 budget is to increase student stipends to make
SMET graduate study more attractive.
multi-year budgeting
Question. In our Senate Committee Report on the fiscal year 2001
appropriations, NSF was required to provide multi-year budgets for
major multi-disciplinary initiatives such as ITR, biocomplexity, and
nanotechnology. NSF's fiscal year 2002 Budget Justification, however,
does not contain multi-year funding data. Please submit this
information.
Answer. The following table shows the multi-year budgets for the
selected priority areas in the NSF fiscal year 2002 Budget
Justification.

----------------------------------------------------------------------------------------------------------------
Fiscal year--
---------------------------------------------------------------------
2001 2002
2000 plan request 2003 2004 2005 2006
----------------------------------------------------------------------------------------------------------------
Biocomplexity in the Environment.......... $50.00 $54.88 $58.10 $70.57 $83.31 ........ ........
Information Technology Research........... 126.00 259.43 272.53 285.00 297.74 ........ ........
Nanoscale Science and Engineering......... ........ 149.68 173.71 186.18 198.92 224.98 ........
Learning for the 21st Century............. ........ 121.46 125.51 137.98 150.72 176.78 ........
----------------------------------------------------------------------------------------------------------------

post-docs
Question. What is NSF doing in response to complaints by some
postdocs that they spend too much time in postdoc positions because
there is insufficient funding and/or employment opportunities for new
researchers who want to begin their careers independently?
Answer. The transition from postdoc to researcher is often
difficult for science, engineering and mathematics postdocs. Outreach
efforts aimed at reaching the most talented young members of the SMET
research to promote awareness of NSF research opportunities are
continually advanced by program staff at scientific meetings,
conferences and conventions. These efforts, along with frequent
workshops on proposal preparation, provide the Foundation with the
opportunity to recruit and encourage creative and innovative proposals
from new investigators.
NSF also offers substantial opportunities to new investigators
through its Faculty Early Career Development (CAREER) program. CAREER
is a Foundation-wide activity that offers the National Science
Foundation's most prestigious awards for new faculty members. The
CAREER program recognizes and supports the early career-development
activities of those teacher-scholars who are most likely to become the
academic leaders of the 21st century. CAREER awardees will be selected
on the basis of creative, career-development plans that effectively
integrate research and education within the context of the mission of
their institution. NSF encourages submission of CAREER proposals from
new faculty at all CAREER eligible institutions. Such plans should
build a firm foundation for a lifetime of integrated contributions to
research and education.
astronomy
Question. The National Research Council (NRC) recently issued a
study called Astronomy and Astrophysics in the New Millennium, which
provided a number of recommendations to strengthen ground-based
astronomy programs. For example, NRC recommended that NSF set up a
procedure to obtain ``regular expert advice'' for its AST program.
Other recommendations included: (1) improving coordination between NSF
and NASA and (2) requiring NSF to develop management plans for large
astronomy projects. How is NSF responding to these recommendations?
Answer. NSF conducts its science-driven planning activities in a
highly collaborative manner, seeking advice from a rich diversity of
NSF stakeholders. Of course, the astronomy community has set an
excellent stakeholder example, demonstrating an ability to prioritize
its compelling scientific needs and opportunities through the Decadal
Survey, as the referenced NRC study is called. NSF gives very serious
consideration to the recommendations in the Decadal Survey. The
community's recommendations are considered within the context of the
agency's overall responsibility for advancing frontiers across the
science and engineering enterprise.
Scientific opportunities demand the forging of new partnerships, to
include public and private, domestic and international, ground- and
space-based partners. Future facilities of unprecedented scale and
power will call for new linkages between resources, enabled by the
enormous potential of computer and information science and engineering
technologies to collect, communicate, store and analyze vast amounts of
information. To meet these opportunities, NSF will increase its
interaction with NASA and with the Department of Energy--to better
coordinate, plan and assess research and education activities of common
interest. The goals also include sharing programmatic information and
technology, and to develop and implement a scientific planning process
that defines areas of opportunity and associated infrastructure needs.
Over the past 50 years, NSF has enjoyed a successful track record
of providing large-scale, state-of-the-art facilities for the
astronomical sciences. At the Foundation-level, we now invest over $1
billion annually in large-scale facilities and infrastructure projects.
Our portfolio has recently grown and diversified to meet emerging
science and engineering opportunities, and it now includes shared-use
research platforms and distributed user facilities that challenge
traditional management approaches. To accommodate these new approaches,
the agency is currently developing a Facilities Management and
Oversight Plan that will be submitted to OMB in September of this year.
Question. The Administration is considering the consolidation of
NSF and NASA astronomy programs. Why do you believe this that this
proposal was made?
Answer. In the President's fiscal year 2002 budget to Congress for
the National Science Foundation, the Administration identified ``three
management reform opportunities that will help fulfill the President's
promise to make Government more results-oriented.'' One of those areas
for reform is titled ``Reorganize Research in Astronomy and
Astrophysics''.
Historically, NASA has funded space-based astronomy and NSF has
funded ground-based astronomy facilities, as well as astronomy research
proposals. Over the past decade there have been significant changes in
the funding from each agency as reported in ``Federal Funding of
Astronomical Research'' from the National Research Council (National
Academy Press, 2000). The National Research Council also recently
released the latest decadal survey of the state of the field and
recommendations for the first decade of the 21st century: ``Astronomy
and Astrophysics in the New Millennium'' (National Academy Press,
2001). With these reports in hand, the Administration concluded that
now is the time to assess the Federal Government's management and
organization of astronomical research.
Thus NSF and NASA requested that the National Academy of Sciences
convene a Blue Ribbon Panel to assess the organizational effectiveness
of Federal support of astronomical sciences and, specifically, the pros
and cons of transferring NSF's astronomy responsibility to NASA. In
response, the National Research Council established the Committee on
Organization and Management of Research in Astronomy and Astrophysics.
The Committee is directed to report by September 1, 2001.
epscor
Question. The NSF Office of Inspector General recently released a
report on the Experimental Program to Stimulate Competitive Research
(EPSCoR). The OIG questioned the rationale of EPSCoR-funded researchers
taking their funding with them when they move to institutions in non-
EPSCoR states.
What is NSF doing to satisfy this concern and other criticism
raised by the OIG?
Answer. In its review of the EPSCoR program, the Office of the
Inspector General (OIG) recommended that EHR and the EPSCoR Office, in
conjunction with higher levels of NSF management and NSF's research
directorates, develop an administrative mechanism to ensure that EPSCoR
co-funding dollars are targeted at their original purpose and do not
support, either directly or indirectly, researchers who have moved to
non-EPSCoR states. (OIG 01-2002, p. 23) In response, EPSCoR staff have
met with state Project Directors and discussed this issue, and have
their agreement to strongly encourage support of the Inspector
General's position, unless constrained by broader institutional
policies. For example, the principal investigator's institution
generally acts as the fiscal agent on NSF awards. Thus the award is
governed by institutional policies regarding capital equipment and
intellectual property. The EPSCoR staff is also meeting with the
Directorate Co-funding coordinators to explain this issue.
Of the seven recommendations contained in the OIG report, two other
recommendations specifically referred to NSF's conduct of the program:
EHR and the EPSCoR Office should decide whether, as part of future
infrastructure awards, NSF should require broader or more formal
participation in Mississippi's EPSCoR committee by representatives of
the private sector and public sector organizations outside higher
education. (OIG 01-2002, p. 28)
--NSF Action.--EPSCoR has met with the Mississippi State EPSCoR
Committee and strongly supported the Inspector General's
position. Mississippi EPSCoR has indicated that they will
strengthen their Committee membership.
EHR and the EPSCoR Office should decide whether to adopt general
criteria to determine EPSCoR eligibility, rather than merely publishing
a list of eligible states. (OIG 01-2002, p. 37)
--NSF Action.--EPSCoR has operated in five states for 20 years and in
the other states for from 1 to 15 years. During fiscal year
2001 two additional states (Hawaii and New Mexico) became
EPSCoR participants. In response to recommendations made in the
reports issued by the fiscal year 2000 Committee of Visitors
and the fiscal year 2001 report of the Office of the Inspector
General, EPSCoR has established criteria governing
participation in the program. These criteria were approved by
Director Colwell and will be incorporated into a new EPSCoR
program solicitation that will describe the July 2002 RII grant
competition, for which awards are scheduled to begin in
February 2003. The EPSCoR staff have reviewed these
``eligibility criteria'' with the state EPSCoR Project
Directors and received their comments and suggestions before
finalizing the language that will appear in the solicitation.
The proposed eligibility criteria are given below.
--Eligibility to participate in EPSCoR competitions will be based
on the level of NSF research funding. Each year, the EPSCoR
Office will compile and publish summary data for the
preceding 3 years of NSF research funding by state.
--Eligibility to participate in EPSCoR competitions would be
restricted to those jurisdictions that received 0.7 percent
or less of the total NSF research funds to all sources
within a state averaged over the three-year period. In the
few cases where a single large NSF-funded facility skews
the data, an adjustment will be made. For example, West
Virginia's funding data will be adjusted so that the
Greenbank Observatory is not included in the state NSF
research funding data used to calculate EPSCoR eligibility.
--Any current EPSCoR state that did not meet the eligibility
criteria would continue to be eligible for EPSCoR co-
funding and EPSCoR Outreach for a period of three years. In
these cases, the EPSCoR Office would also exercise
flexibility with respect to the support of the state's
EPSCoR administration. Quite often, the state office
supports multi-agency EPSCoR efforts; some of these
agencies do not provide administrative support.
Any state that becomes eligible for the first time would be
required to follow the existing process for entering the
program. A suitable state committee would have to be
created before a state could first request an EPSCoR
Planning Grant to determine research barriers, areas of
focus, areas of opportunity, etc. These steps are
consistent with activities that other EPSCoR states have
been required to undertake prior to competing in EPSCoR
competitions.
h1-b visa funds
Question. The H1-B non-immigrant petitioner receipts are projected
to be about $144 million in fiscal year 2002. How are these funds
utilized at NSF? Has NSF evaluated the effectiveness of the use of
these funds in addressing the shortage of U.S.-born high-tech workers?
Answer. Prior to October 16, 2000, H-1B funds, in accordance with
the American Competitiveness and Workforce Improvement Act of 1998
(Public Law 105-277), were used for:
--Computer Science, Engineering, and Mathematics Scholarships
(CSEMS)--annual, merit-based scholarships of up to $2,500 for
up to two years for low-income individuals pursuing associate,
undergraduate, or graduate degrees in the specified disciplines
at institutions of higher education;
--Grants for Mathematics, Engineering, or Science Enrichment Courses
(ASCEND)--opportunities for students to enroll in year-round
academic enrichment courses in the specified disciplines; and
--Systemic Reform Activities--supplement rural systemic reform
activities.
After October 16, 2000, in accordance with the American
Competitiveness in the 21st Century Act (Public Law 106-313), H-1B
funds were to be used for:
--CSEMS--maximum scholarship duration was extended to four years, and
annual stipend was raised to $3,125; and
--Private-Public Partnerships in K-12--establishes private-public
partnerships in such areas as materials development, student
externships, and math and science teacher professional
development.
To date, no formal evaluation (either by evaluation report or
Committee of Visitors) has been performed.
The projected total of $144 million of H-1B funds in fiscal year
2002 appears to have been optimistic. The initial estimate for fiscal
year 2001 of $121 million has been reduced to $94 million, and actual
receipts may fall short of that mark. H-1B funds are scheduled to end
in fiscal year 2003.
______

nsb strategic plan
Question. When we met briefly a couple of weeks ago, you mentioned
an effort by the National Science Board to develop a strategic plan on
the allocation of scientific resources and you recently held a
symposium with a number of experts from academia, industry, and the
Federal government. Where is this plan going and what are your next
steps with this plan?
Answer. The Board has approved an Interim Report, Federal Research
Resources: A Process for Setting Priorities, which includes its
recommendations on improving the process for setting priorities for the
Federal portfolio of research investments. Its recommendations address
the need for evaluation of the portfolio in light of national goals for
Federal research and for improvements in data and analytical techniques
to monitor the Federal portfolio and understand and communicate the
benefits of Federal investments to society. It identifies the need for
an improved process for research budget coordination and priority
setting in both the White House and Congress, and suggests how an
improved process might be implemented. The Committee is preparing a
final report for consideration by the Board for approval at the October
10-11 NSB meeting, after which it will be released to the public,
disseminated to Congress, the White House, and the scientific and
science policy communities, and followed up with formal discussions on
the NSB recommendations.
high-tech workers
Question. I am concerned about the decline of American students and
workers in the physical sciences and engineering. Could you lie out how
the Foundation is responding to the shortage of U.S.-born engineers and
scientists? I would also like to hear how NSF is working with the
academic community to encourage more students to pursue science and
engineering degrees and how NSF is working with the private sector to
ensure that these students develop the necessary skills to meet the
needs of the high-tech industry.
Answer. NSF has a comprehensive suite of programs that prepare
undergraduate students for entry into the workforce and into graduate
programs. These programs utilize three strategies: (1) direct
preparation of specific elements of the science and engineering
workforce (e.g., Advanced Technological Education, Computer Science,
Engineering, and Mathematics Scholarships); (2) attention to broadening
participation in the science and engineering workforce by groups that
are currently underrepresented (e.g., Historically Black Colleges and
Universities--Undergraduate Program, Louis Stokes Alliances for
Minority Participation, Tribal Colleges and Universities Program); and
(3) strengthening the curricular and instructional infrastructure for
providing high quality science, mathematics, engineering, and
technology education to all students (e.g., Course, Curriculum, and
Laboratory Improvement, Graduate Teaching Fellows in K-12 Education,
National Science, Mathematics, Engineering, and Technology Education
(SMETE) Digital Library).
Across the set of NSF's programs for undergraduates, a balance is
struck between providing students with the practical skills needed to
perform at a high level in the workplace and providing the firm
theoretical foundations in math and science required as preparation for
study at more advanced levels.
nuclear technologies
Question. Last year, I raised concerns about the lack of Federal
support for nuclear engineering education. In response, as directed by
the fiscal year 2001 Senate VA, HUD appropriations report, NSF was
directed to review the academic interest in nuclear engineering
education and to provide recommendations on how NSF can support this
area. Last week, I received your report and frankly, I was a bit
disappointed by the response. Your report even recognizes the need for
nuclear engineers by stating that the demand for nuclear-trained
personnel is on the rise, yet, NSF provides no concrete recommendations
on how it will respond to these problems.
Do you have any specific recommendations where NSF can be more
directly involved in addressing the need for increased Federal support
for nuclear engineering education?
Answer. We are supporting a planning grant to Dr. James Duderstadt
at the University of Michigan to engage the leading industry
representatives, faculty and chairs of nuclear engineering departments.
The project will include:
--A market survey to better understand the interests of prospective
employers, the attractiveness of study to potential students,
the perspectives of colleges and universities.
--The preliminary design of new curriculum in nuclear engineering by
a national team of faculty and industrial experts.
--A needs assessment for supporting resources.
--The design of a summer practicum experience for students.
--The development of financial estimates for the development,
distribution, and ongoing support of the new curriculum.
--The development of contacts with credentialling bodies, practicum
sites and other potential sponsors for the planned activities.
NSF will work closely with Dr. Duderstadt and his colleagues as the
planning proceeds. Through these cooperative outreach efforts, we hope
that faculty at nuclear engineering departments will better understand
the NSF programs and vice-versa with the result that we receive a
larger number of proposals which are competitive in the merit review
process.
math and science education
Question. I remain concerned about math and science education in
this country. Our high school students are performing poorly in math
and science as reported by the Third International Mathematics and
Science Study. Also, there has been a significant decline in bachelor
degrees awarded in engineering, math, and computer science degrees.
Further, the U.S. is now lagging behind other countries in the
percentage of undergraduates earning degrees in natural sciences and
engineering. Lastly, the Board reported recently that enrollment in
graduate school science programs are declining.
Can you lay out for me how the Foundation is responding to these
troubling facts? Please specify what you are doing to improve K-12 math
and science education, undergraduate education, and graduate school
education.
Answer. We share your concern that individual indicators of
science, math, engineering and technology (SMET) education are not as
positive as we would want them to be. By the same token, we see various
positive signs that progress is being made, and that strategies
developed under NSF programs can be ported to a wide range of
institutions to provide real opportunities for improvement.
In PreK-12 education, a recent evaluation of the Urban Systemic
Program found improved student outcomes and system change among 22
large urban school districts, especially among minority students.
Findings related to improved student outcomes include: (1) substantial
increases in enrollment rates in mathematics and science gate-keeping
and higher-level courses; (2) greater enrollment gains for
underrepresented minority students than their peers; (3) achievement
test gains; and (4) increased numbers of students taking college
entrance examinations (AP, SAT, and ACT). In an evaluation of the
Statewide Systemic Initiatives, half of the states showed impacts on
classroom practice, with the highest gains in achievement occurring in
states with intensive professional development linked to curriculum.
The National Science Board has concluded that systemic reform programs
have been very effective and should be further encouraged, and that
efforts should be taken to educate the public on the complexity and
long-term commitment required for success of such reforms.
The President's new Math and Science Partnerships Initiative (MSPI)
also promises to add resources and focus to improving PreK-12 SMET
education.
At the undergraduate level, NSF has a comprehensive suite of
programs that prepare undergraduate students for entry into the
workforce and into graduate programs. These programs utilize three
strategies: (1) direct preparation of specific elements of the SMET
workforce; (2) attention to broadening participation in the SMET
workforce by groups that are currently underrepresented; and (3)
strengthening the curricular and instructional infrastructure for
providing high quality SMET education to all students.
Across the set of NSF's programs for undergraduates, a balance is
struck between providing students with the practical skills needed to
perform at a high level in the workplace and providing the firm
theoretical foundations in math and science required as preparation for
study at more advanced levels.
The methods used to strengthen undergraduate SMET education include
inquiry-based learning, integration of learning technologies, faculty
development, teacher preparation, and curricula reform. A new emphasis
on strengthening student outcomes, focusing on educational ``end
results,'' is being explored. NSF also plans to explore the coupling of
undergraduate activities with the Centers for Learning and Teaching
(CLT) Program (a PreK-12 program), which partners universities, school
districts, state education agencies, and business and industry.
At the graduate level, NSF support consists mainly in fellowships
awarded to individual students. A major priority in the fiscal year
2002 budget is to increase student stipends to make SMET graduate study
more attractive.
The centerpiece of NSF's strategy to improve SMET education is to
examine whole systems rather than individual components. This research-
based approach has been shown to be effective in identifying promising
system-wide strategies that can make a real difference. The evaluation
of the systemic initiatives makes it clear that this approach is
effective in raising achievement levels and creating system-wide
improvements that affect all students. Joining the CLT to undergraduate
activities is another example in which real improvement can occur when
synergies are created between educational levels.
long-term vision for nsf
Question. Dr. Colwell, you have stated publicly that you supported
our effort to double NSF's budget in five years. I have heard you
discuss the importance of increasing the grant size and duration of NSF
awards and I am personally sympathetic to that goal. But it is still
unclear to me what scientific goals or vision you would like the
Foundation to achieve in the long-term.
Could you give me some sense of what policy goals you would like
the Foundation to pursue? I would especially like to hear what specific
research areas and education and human resource development goals you
envision for the Foundation.
After Dr. Colwell's response, I would also like to hear Dr. Kelly
provide some comments.
Answer--Dr. Colwell. The drivers of NSF's investments--training the
next generation of scientists and engineers, strengthening core
activities, exploiting new opportunities, building human and physical
infrastructure--all focus on strengthening U.S. leadership in today's
global, information-driven economy.
The U.S. devotes only about 2.7 percent of its GDP to research and
development--which ranks only sixth among major industrialized Nations.
The Federal share of that total investment has shrunk, raising
additional concerns. This lack of public investment in the basic
sciences and engineering could erode the Nation's leadership position.
Similarly, the latest results of international testing confirm that we
need to strengthen math and science education at all levels. Securing
U.S. world leadership in science and technology has never been more
important to the future of the Nation.
The NSF budget request identifies four priority areas for fiscal
year 2002 funding: Information Technology Research, Biocomplexity and
the Environment, Nanoscale Science and Engineering, Learning for the
21st Century. Other priorities in the fiscal year 2002 include the
President's Math and Science Partnership Initative, as well as
increased investment in NSF's core, notably in mathematics.
These investment priorities are vital to growth and innovation in
key industrial sectors and across society. In the automotive and
aeronautics industries, we can foresee nanoparticle reinforced
materials for lighter bodies, external painting that does not need
washing, cheap non-flammable plastics, and self-repairing coatings and
textiles. Terascale computing systems offer similar promise: in
biotechnology, terascale systems will reduce the processor time
required to simulate protein folding from 40 months to one day. New
insights into complex systems are essential to such areas as weather
forecasting, economic modeling, and environmental regulation. NSF's
investments in education and human resource development--such as the
Math and Science Partnerships, ADVANCE, CAREER, and the Science of
Learning Centers--focus directly on broadening participation in science
and engineering and achieving excellence at all levels of education.
Public investments in scientific research and education, combined
with native intellectual talent and the resourcefulness of the private
sector, have made the U.S. science and technology enterprise the most
envied in the world. Yet there is ample evidence that the U.S. is not
keeping pace with expanding opportunities for scientific progress. Nor
are we doing enough to develop the talent that will keep this Nation at
the forefront of science and technology well into the future. Doing
both requires a level of public investment that reflects the increased
importance of science and engineering to economic prosperity and social
well being.
Answer--Dr. KelIy. I agree completely with the objectives noted
above by Dr. Colwell. NSF is critical to development of human resources
for science and engineering and for support of transforming research.
The Board is strongly supportive of the Foundation's special interests
in Nanotechnology, Biocomplexity and the Environment, Information
Technology, Learning for the 21st Century, and the President's Math and
Science Partnership. The Board is committed to adequate support for
people and a robust agenda for scientific discovery, both of which are
essential to the advancing the U.S. economy and quality of life in the
future.
funding priorities
Question. The Administration's budget request for fiscal year 2002
falls short of our goal of increasing NSF's budget by at least 15
percent in order to keep us on pace for doubling NSF's budget by 2005.
Depending on our final allocation, it my strong hope and desire that we
will be able to increase significantly NSF's budget.
Assuming for a moment that we were able to increase the
Foundation's budget by $675 million, or even $200 million, how would
you allocate these funds and how would you prioritize the funding?
Could you specify what particular areas of research such as IT or nano
and what new major research equipment projects you would support
funding? Lastly, do you support putting additional resources into
programs that broaden participation of underrepresented groups such as
the Partnerships for Innovation, EPSCoR, and HBCU programs?
Answer--Dr. Colwell. NSF's fiscal year 2002 Request represents an
overall increase of 1.3 percent over fiscal year 2001 and funds all our
most significant priorities. The fiscal year 2002 Budget Request:
--Increases NSF's investments in education by 11 percent over fiscal
year 2001. The request includes $200 million in fiscal year
2002, and $1 billion over five years, to begin the President's
Math and Science Partnerships Initiative to establish
partnership agreements between States and institutions of
higher education, with the goal of strengthening math and
science education in grades K-12. I believe the Administration
is making an important statement as to the value of what NSF
brings to the larger Education Reform effort.
--Increases graduate stipends by nearly 15 percent in the Graduate
Research Fellowship, the Graduate Teaching Fellowships in K-12
Education, and the Integrative Graduate Education and Research
Traineeships programs to help attract the best students to
pursue careers in science and engineering.
--Provides a $20 million, or 17 percent, increase in mathematical
sciences to initiate an effort in multidisciplinary mathematics
research to enhance America's preeminence in this important
area.
--Increases NSF priority areas of Information Technology Research by
$13 million, or 5 percent, to $273 million and Nanoscale
Science and Engineering by $24 million, or 16 percent, to $174
million.
Answer--Dr. Kelly. NSF provides the core, broad-based support for
science and engineering that enables advances in science and technology
in many areas critical to the Nation's future. It is imperative that we
continue to work together to significantly increase the NSF budget to
address more adequately our priorities in research and education. Right
now we are eating our seed corn. We are not making the investments in
people and in basic research that we need for the future. There has
been a bipartisan effort to double the Federal funding for basic
science and science budgets over a five-year period, which I support,
to sustain the Nation's long-term economic health, quality of life, and
security. I concur with the priorities for the Foundation identified by
Dr. Colwell. Increased funding for Nanoscale Science and Engineering
and Information Technology Research is especially critical, as is our
investment in people. With regard to programs to broaden participation
of underrepresented groups, the Board strongly supports the
Foundation's statutory responsibility to encourage diversity in
participation in science and engineering research and education at all
levels to promote the full use of human resources in science and
engineering and to insure the full development and use of the
scientific and engineering talents and skills of our population.
staffing resources
Question. With the growing program responsibilities, I am concerned
about whether NSF has the necessary resources to manage its programs.
Has NSF reviewed its short- and long-term staffing needs based on
its growing workload? Dr. Boesz, do you believe this is a serious
concern?
Answer. Yes, it is a serious concern for NSF for several reasons.
First, I believe NSF has stretched its existing management and support
services close to the limit, and any increases in funding for science
and engineering research and infrastructure projects will require
proportionate increases in staffing resources to ensure that the grant
award process and other program initiatives are managed in an efficient
and timely manner. Like other organizations, NSF has benefited from
increased productivity due to technology advancements over the past
decade, and NSF should be commended for its efforts in applying those
advancements to keep overhead costs to a minimum. I believe, however,
that the current level of management and support staffing is
approaching the breaking point, and additional staffing will certainly
be required to handle expanded funding responsibilities.
Second, any objective assessment of the skill mix of NSF's staff is
likely to identify important deficiencies. Recent audits conducted by
my office, for example, found inadequate oversight of large projects
and a corresponding need for staff with training and experience in
managing such efforts. NSF is currently assessing its workforce needs,
and my office is planning a review of NSF's human resource management
and planning early in the next fiscal year. We will focus on the
business risks confronting NSF and whether its workforce planning
adequately addresses those risks. As the size and number of capital
projects grow and the amounts and duration of grants are increased, the
need for appropriate management and monitoring skills becomes even more
urgent.
Third, NSF faces many of the same problems other agencies will
confront in the anticipated wave of baby-boomer retirements and the
potential loss of valuable expertise and institutional knowledge. The
problem may be mitigated to some extent for NSF by its substantial use
of the Intergovernmental Personnel Act to rotate staff from the
academic and private sectors, as well as by the fact that scientists
and researchers often continue to work to a later age. Nevertheless, in
an agency that has already spread its management and support staff very
thin, it does not take many departures of key personnel to seriously
disrupt operations. In the absence of staffing depth, the efficient
transfer of knowledge from departing employees also becomes critical. A
rapid growth in NSF's workload as its budget increases in coming years
will intensify NSF's need to attract and retain the right skills,
provide the training necessary to sustain productivity, and strengthen
its staffing levels to meet the requirements of prudent management and
oversight.
assisting smaller research institutions
Question. Dr. Colwell, I remain troubled by the Foundation's
response to my concern about broadening NSF's participation to smaller
research institutions. Some of my fellow policymakers in the Senate
still believe that NSF is an agency for the elite schools such as
Stanford, Michigan, and MIT. While I appreciate your efforts to at
least maintain flat funding for EPSCoR, I am troubled by the
Administration's decision to eliminate funding for the Office of
Innovation Partnerships, which is an important initiative to me, and
flat fund programs for minorities such as the HBCUs and the Tribal
Colleges program.
Dr. Colwell, could you please explain the rationale behind this?
Answer. In determining its budget request, NSF attempts to balance
various competing priorities. In fiscal year 2002, the Math and Science
Partnerships Initiative (MSPI) and graduate student stipends were the
Foundation's highest priorities. Implementing these priorities,
unfortunately, often requires reductions in other programs. Eliminating
fiscal year 2002 funding for the Partnerships for Innovation program
(PFI) was viewed as a funding pause during which we could assess how
the program should be focused for optimum results. Overall, PFI was
viewed as a lesser priority than MSPI, student stipends, and
maintaining near level funding for important programs such as the NSF
diversity portfolio.
Our concern for maintaining a strong portfolio of programs for
underrepresented groups is reflected in administrative changes within
NSF that will result in greater leveraging of funds and more effective
allocation of funds to increase the measurable impact of programs. The
Historically Black Colleges and Universities--Undergraduate Program
(HBCU-UP) has been re-focused to devote attention to those institutions
most in need of assistance to strengthen the quality of their academic
programs and enhance the ability of their faculty to offer high quality
instruction. The Alliances for Graduate Education and the Professoriate
(AGEP) program now supports only graduate education alliances of
university consortia or entire university systems, rather than
individual institutions, significantly increasing the impact of
programmatic activities. And plans are underway to re-structure the
Centers for Research Excellence in Science and Technology (CREST)
program to emulate the successful Experimental Program to Stimulate
Competitive Research (EPSCoR) strategy of combining core support with
active co-funding of proposals submitted to NSF's other research
programs.
NSF operates a range of programs that target small institutions. In
addition to EPSCoR, HBCU-UP, and CREST, these programs include the
Tribal Colleges and Universities Program (TCUP), the Rural Systemic
Initiatives (RSI), the Model Institutions of Excellence (MIE), and many
others. NSF continues to be concerned that program offerings and awards
reflect the full range of institutions in the United States, and that
NSF activities encompass small institutions and those in underserved
areas.

subcommittee recess

Senator Mikulski. So, we conclude this hearing. I want to
thank Senator Bond for his graciousness today. We have said a
lot of kind words to each other. We actually do believe them
and we are ready to really move this appropriation forward. So,
thank you very much and we will be back in touch.
Dr. Colwell. Thank you, Senator.
Senator Mikulski. We recess until we have the EPA hearing
on Wednesday, June 13th.
[Whereupon, at 11:26 a.m., Wednesday, June 6, the
subcommittee was recessed, to reconvene subject to the call of
the Chair.]

DEPARTMENTS OF VETERANS AFFAIRS AND HOUSING AND URBAN DEVELOPMENT AND
INDEPENDENT AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2002

----------

WEDNESDAY, JUNE 13, 2001

U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met, at 10:08 a.m., in room SD-138,
Dirksen Senate Office Building, Hon. Barbara A. Mikulski
(chairman) presiding.
Present: Senators Mikulski, Leahy, Kohl, Johnson, Bond,
Burns, Craig, Domenici, and Stevens.

ENVIRONMENTAL PROTECTION AGENCY

STATEMENT OF CHRISTINE TODD WHITMAN, ADMINISTRATOR

opening statement of senator barbara a. Mikulski

Senator Mikulski. Good morning. The subcommittee of VA-HUD
will convene and today we will take testimony from
Administrator Christie Todd Whitman of the Environmental
Protection Agency. I would like to thank the Administrator for
being so flexible in the change of time and our schedule. We
were trying to do a Coast Guard hearing and several other
things, and we are trying to get caught up in our hearings.
Anyway, so thank you for your flexibility.
I want to welcome you to your first hearing before this
subcommittee. You know that we feel very strongly in this
committee that EPA serves a very important mission of
protecting human health and the environment. I was pleased to
support Administrator Whitman's nomination to lead the agency,
because I think she brings great expertise. First of all, a
long history of being an advocate for the environment, and the
administrative skills of being the chief executive of a State,
as well as having to also work with Federal agencies from the
gubernatorial level, and I look forward to working with her.
New Jersey and Maryland are confronted by many of the same
problems, whether it's brownfields redevelopment, coastal water
quality, and air pollution from their highways, byways,
expressways and roadways.
I think that with adequate resources, the agency can
benefit from her experiences in New Jersey, so I am so glad
that she is here today to answer our questions about EPA's
budget. I must say, Administrator Whitman, I am puzzled and
troubled by some aspects of the budget and look forward to our
conversation with you.
The 2002 budget for EPA totals $7.3 billion. That is a $500
million dollar decrease from 2001. This is more than a 6
percent cut. Now we have been told that this decrease is
because the new Administration cut what we would call
congressionally directed initiatives, otherwise known as
earmarks. But I am concerned that it also could cut programs to
protect water quality, clean air, enforcement of environmental
laws and of course the whole issue of scientific analysis.
In the area of enforcement, I am troubled by this year's
request. I understand the budget cuts 270 environmental
enforcers, kind of like the environmental cops on the beat, and
most of these cuts would be at the regional level where EPA
works to deter polluters from ignoring those laws.
At the same time, the budget would fund a new State grant
program. I know that a lot of enforcement goes on at the State
level and there is no way the Federal Government could, nor
should it be the sole enforcer, but I am concerned about what
is the proper balance and what is this new State grant program.
I certainly do not want to have a shift in policy that would
send the wrong message to polluters, and so I am puzzled about
how this change will be made, and also, does it require an
authorization.
Now let us go to clean water infrastructure. Communities in
Maryland and all across the Nation are confronted with enormous
costs to upgrade old and failing sewer systems, and this has
tremendous impact on its leakages into groundwater or into, in
my case, the Chesapeake Bay. In Maryland, these projects are
critical because this is part of what is causing the nutrient
discharges into the bay, and we have been working on a
bipartisan basis to save the bay.
So once again, I am puzzled by the proposed cuts to the
Clean Water State Revolving Loan Fund. There has been a request
of $850 million which is $500 million lower than the amount we
appropriated last year. We also have a $450 million request for
new sewer grant programs and frankly, I do not know what that
means, but we thought we were funding clean water at 1.3, now
it's 850, so it is less and we are going into a competitive
program instead of a funded program, and I would believe as a
governor, you would like the previous program because you could
rely on, you thought you could rely upon these funds, and I
would like to have more on that.
Then, we must raise the issue of arsenic in drinking water.
The recent decision not to revise the acceptable level of
arsenic in drinking water as required by the law written by
this subcommittee, the current standard was set in 1942, and we
know a lot more about public health and arsenic and yet I am
concerned that you delayed rolling that into February, when the
committee who confronted this last year set a June 22 date.
Climate change is something that I want to know what is the
Administration proposing, because I found the President's
recent remarks confusing. It sounds like we will be doing more
and more research, but I am not sure where the recommendations
go, where does research end and action begin.
Sound science. I know this is something you and I have
talked about, and I am absolutely committed to the concept and
also operationalizing the concept of sound science, but again,
I understand this has been cut by several million dollars, so I
would like to talk about that.
And again in the brownfields, I really like the brownfields
initiative and I think for our communities, really, the old
industrial sites of the northeast and midwest, and I also
believe that in States like Montana and Utah, that there are
these, and other western States, that the brownfields are both
an environmental problem, but they are an economic development
opportunity and I really look forward to moving that.
Of course, you know my devotion to the Chesapeake Bay. The
Chesapeake Bay Program was started by Senator Charles Mathias,
my predecessor, and we look forward to really making sure we
stay the course on the cleanup of the bay.
Finally, I am going to reiterate that I am working with my
colleague Senator Bond, and I would say this to the committee,
say it at my own caucus, urge my colleagues to say it, this
bill should not be a vehicle for environmental riders, and if
the Administration and the House and the Senate could work
together in a bipartisan basis, this would be terrific. I would
like the focus of our floor debate and then the focus of the
conference to be in how best can we help EPA serve the Nation
in public health and protecting the environment and not the
hours we spent last year, really most of our discussion on EPA
was----
Senator Bond. It was.
Senator Mikulski. They were broadly supported but
nevertheless, riders become authorizing by proxy, and we would
prefer that this really be dealt with in some sort of directive
or order.

prepared statement

So that concludes my statement, I look forward to
proceeding with the hearing, and now I would like to turn to
our ranking member, Senator Bond.
[The statement follows:]

Prepared Statement of Senator Barbara A. Mikulski

I welcome Administrator Whitman to her first hearing before the
Subcommittee.
EPA serves the very important mission of protecting human health
and the environment, and I was pleased to support Administrator
Whitman's nomination to lead the agency. New Jersey and Maryland are
confronted by many similar environmental challenges--brownfields
redevelopment and coastal water quality to name a few--so I look
forward to working with Administrator Whitman.
I think that with adequate resources, the agency can benefit from
her experiences in New Jersey. I am glad she is here today to answer
our questions about EPA's budget request, because I am puzzled and
troubled by many aspects of this budget.
The 2002 budget request for EPA totals $7.3 billion, a $500 million
decrease from the 2001 level. This is more than a 6 percent cut. We
have been told that this decrease is because the new Administration cut
earmarks. But what this really means is cuts in programs to protect
water quality, infrastructure, clean air, enforcement of environmental
laws, and scientific analysis.
enforcement of environmental laws
I am troubled by this year's request for enforcement. The budget
cuts 270 environmental cops on the beat. Most of these cuts would be at
the regional level where EPA works to deter polluters from ignoring the
law.
At the same time, the budget would fund a new State grant program.
Boosting State enforcement programs is important, but we should not
weaken our Federal enforcement efforts. We need both strong Federal and
State enforcement efforts to achieve compliance with our environmental
laws--not one or the other.
This fundamental shift in policy may send the wrong message to
polluters, and I am puzzled about how this change can be made without
authorization. I would like to know how it is possible that this budget
can keep the Federal enforcement role strong even though it cuts
resources.
clean water infrastructure
Communities in Maryland and all across the nation are confronted
with enormous costs to upgrade old and failing sewer systems. In
Maryland, these projects are critical because they will help preventing
sewage and nutrient discharges into the Chesapeake Bay.
So I am troubled by the proposed cut to the Clean Water State
Revolving Loan Fund. We have a request of only $850 million which is
$500 million lower than we have appropriated in recent years.
We also have a $450 million request for the new sewer grants
program. But I am puzzled why this budget ignores Congress' direction
to fully fund the Clean Water fund first.
arsenic in drinking water
I am also puzzled by the recent decision not to lower the
acceptable level of arsenic in drinking water, as required by a law
written by this Subcommittee. The current standard was set in 1942, and
we now know that arsenic causes cancer. What exactly is the
Administration's policy on this issue?
climate change
On this issue of Climate Change, I want to know exactly what the
Administration is proposing, because I have found the President's
recent remarks very confusing. It sounds like we will be doing more and
more research, but no real recommendations have been made. Where is the
Administration going with this important issue? How does EPA fit in?
We've had 10 years of solid study. We now need to take this important
issue to the next level. When will we get there?
sound science
One of the aspects of this budget that I find most baffling is the
cuts in sound science programs. During the campaign, President Bush
said ``efforts to improve our environment must be based on sound
science, not social fads.'' The new Administration has said many of
EPA's past actions--like lowering the level of arsenic in drinking
water--have not been based on sound science. So we should expect the
new Administration to increase funding for sound science programs. So I
am puzzled why the budget cuts EPA's science and technology account by
$56 million.
brownfields
The budget includes $98 million for brownfields activities, a
slight increase over 2001. The Senate recently passed S. 350, the
Brownfields Redevelopment Act, which would authorize a substantial
increase in brownfields funding--up to $250 million.
This will create new jobs and increase the tax base in our
communities, and I want to thank Administrator Whitman for her support
for this important legislation. I hope EPA will work to get the House
to act on this bill, so hopefully our Subcommittee can provide the
additional resources.
chesapeake bay program
The budget also cuts many regional water programs, like the
Chesapeake Bay program. The request for the Chesapeake Bay is $2
million lower than the Page 5 2001 level. I want to know the
consequences of this cut, and what it will mean to this important
program.
environmental riders
Finally, I also want to reiterate that Senator Bond and I have
always taken the position that the VA-HUD bill should not be a vehicle
for environmental riders. And I hope that as we move a bill through the
Committee this year, we will continue this policy.
Now let me turn to our Ranking Member, Senator Bond, for his
comments.

statement of senator christopher s. Bond

Senator Bond. Thank you very much, Madam Chair, and it is a
pleasure to welcome EPA Administrator Whitman to testify on the
budget. Madam Administrator, you have one of the toughest jobs
in government, but I think you are the right person for the
job. I do not know why you took it, but I am glad you did. EPA
is quickly becoming one of the most important agencies in the
government as we map out a strategy to assess and address many
of the critical questions and concerns impacting the Nation and
world, whether it is changes in climate as well as the primary
responsibility of EPA in meeting basic environmental standards
and requirements in this country.
We have had a number of problems and concerns in the past
over the ability of EPA to administer its programs effectively,
including the inability to meet work force demands, a lack of
information and accountability, failure properly to monitor and
insure the appropriate use of grants, and these will continue
to be serious challenges for you. I assure you we will work
with you in taking on steps to address the broader issues such
as climate changes, there are no easy answers or simple
solutions, but I certainly agree with the chair that sound
science must be the touchstone for environmental issues, and
most especially the large international issues and decisions,
and we need to address global climate change based on what we
know, with the firm understanding of how our decisions will
impact the climate, the economy, and our relationship with
other Nations of the international community.
Skipping on down to the statement, and I ask Madam Chair,
that my full statement be accepted into the record.
Senator Mikulski. Without objection.
Senator Bond. I want to highlight several things the chair
has noted, such as the decision of the Administration to
eliminate funding for what they dismiss as earmarks but what we
know are individual water and sewer grants to communities with
special needs. The people who have benefitted from these grants
really understand how important they are to the environment and
quality of life, and I hope that you will help us explain to
OMB the importance of these grants and the fact that I don't
believe the admonition of the OMB is going to be well received.
I too am deeply disturbed that this Administration has
apparently decided to carry on the tradition of the previous
one by proposing to slash funding for the Clean Water State
Revolving Fund down to $850 million.
I recognize the Administration is proposing a new sewer
overflow control grants program at $450 million. You know,
there is merit to it, but I believe we need to continue funding
of the Clean Water State Revolving Fund, at least at $1.35
billion. It is a pressing need.
In light of the most recent EPA gap analysis, the United
States will need to spend over the next two decades some $200
billion to replace existing water infrastructure systems, which
means by the year 2020, the United States will need to spend
some $21 billion annually to meet capital expenditures for
wastewater treatment, as opposed to about $9.4 billion being
spent annually now.
I should note that I understand that the sewer overflow
control grants program activities are also eligible under the
Clean Water State Revolving Funds and I do have some concerns
about how this new program would be administered to meet the
most critical needs in the States.
I am not a supporter generally of EPA boutique programs,
but I do note that you propose to make 25 million dollars in
grants available to States to improve their own enforcement
efforts consistent with their environmental priorities and
also, you propose making 25 million dollars in grants available
to improve environmental information systems. While, we have
had some problems with that in the past, I understand that you
have significant experience as governor in the use of
environmental information systems and will be able to assure us
that these would be effectively administered.

prepared statement

In any event, I look forward to working with you on the
many exciting and important challenges you face at EPA, and I
think that your experience in New Jersey as well as your broad
range of public service will make you a very effective
administrator and we are delighted to have you.
[The statement follows:]

Prepared Statement of Senator Christopher S. Bond

Thank you, Madam Chair. I am happy to welcome EPA Administrator
Christie Todd Whitman to testify on the EPA's budget for fiscal year
2002. This is one of the toughest jobs in the Government, but I believe
that you are the right person for this job. In particular, the EPA is
quickly becoming one of the more important agencies in the Government
as we begin to map out a strategy to assess and address the many issues
and concerns that are impacting this Nation and the world through
changes to the climate as well as for meeting the EPA's primary mission
to maintain basic environmental standards and requirements. As we
continue to evaluate the impact of human and industrial activity on the
climate and the environment, the EPA will play a larger and larger role
as both a guardian and mediator of environmental policies and issues
for this country and, in many ways, the world.
We have had a number of problems and concerns in the past over the
ability of the EPA to administer its programs effectively, including an
inability to meet workforce demands, a lack of information
accountability and a failure to properly monitor and ensure the
appropriate use of grants. These remain serious concerns and a great
challenge to you as the new EPA Administrator. In addition, the EPA is
the primary agency at the center of a storm of issues including how to
address air quality standards without undermining critically needed
energy production, what to do about the gasoline additive MTBE, and how
states will set ``total maximum daily loads'' (TMDLs) of pollution to
ensure that water quality standards are attained. I promise that we
will work with you to address the many challenges facing the EPA.
I also assure you that we will work with you on taking the next
steps to address the larger issues of climate change as it impacts the
entire world. There are no easy answers or simple solutions in trying
to meet national environmental goals in an international context. The
Federal Government invests billions of dollars each year through the
EPA alone to meet air and water quality standards as well as to address
the environmental damage resulting from decisions made in the past
during the industrial growth of this Nation. However, sound science
needs to be the touchstone for all environmental issues and most
especially these larger international environmental issues and
decisions--we need to address global climate change based on what we
know with a firm understanding of how our decisions will impact the
climate, the economy and our relationship with the other Nations of the
international community.
Moving on to the budget request before us today, EPA is requesting
a $7.3 billion budget for fiscal year 2002, a decrease of $500 million
from the fiscal year 2001 level. This reduction reflects the
Administration's decision to eliminate any funding attributed to what
is often described as ``earmarks'' but what I prefer to describe as
individual water and sewer grants to communities with special needs.
And I assure you these communities and the people and families of these
communities appreciate the difference that these grants make to the
quality of life in their communities. I look forward to working with
you in making the Administration understand how important many of these
grants are to these communities.
Unfortunately, the Administration also has carried on the tradition
of the last administration by proposing to slash the funding for the
Clean Water State Revolving Fund from some $1.35 billion in fiscal year
2001 to $850 million in fiscal year 2002. Instead, the Administration
is proposing to fund a new Sewer Overflow Control Grants program at
$450 million. While I believe that this new sewer grants program has
merit and is designed to address a critical local need, I strongly
support the continued funding of the Clean Water State Revolving Fund
at $1.35 billion in fiscal year 2002, the same level as fiscal year
2001. This need is especially relevant since the most recent EPA GAP
analysis indicates that the United States will need to spend over the
next 2 decades some $300 billion to replace existing water
infrastructure systems, which means, by the year 2020, the United
States will need to spend some $21 billion annually to meet capital
expenditures for wastewater treatment as opposed to the some $9.4
billion being spent annually now. In addition, I understand that the
activities that are eligible under the proposed Sewer Overflow Control
Grants program are also eligible under the Clean Water State Revolving
Fund. Finally, I have many concerns about how this new Sewer Overflow
Control Grants program will be administered to meet the most critical
needs among states and localities.
I am glad that the EPA is focusing on its primary programs rather
than creating a series of new programs and responsibilities for an
agency that is already strapped with many internal problems. In
addition to the Sewer Overflow Control Grants program, the EPA is
requesting funding for 2 new programs that emphasize the role of states
in managing their environmental responsibilities. In the first program,
the EPA would make $25 million in grants available to states to improve
their own enforcement efforts consistent with their environmental
priorities. The second program would have the EPA make $25 million in
grants available to states to improve their environmental information
systems. While I am not a strong supporter of boutique programs, these
programs are going in the right direction by bolstering the
relationship of the EPA with the states. Again, however, I am concerned
about implementation issues; in particular, how these grants will be
awarded, under what criteria and how the EPA will judge results.
Administrator Whitman, I look forward to working with you on the
many challenges that will face you at the EPA. Again, I believe that
you, both as a former governor and a committed public servant, are the
right person for this very challenging job.
Thank you, Madam Chair.

Senator Mikulski. Senator Johnson, I will turn to you, but
I note that the ranking member of the full committee is here.
Did you wish to make a statement at this time?
Senator Stevens. You are very gracious, but I have come to
hear the governor and I have no statement.
Senator Mikulski. Thank you. Senator Johnson.

statement of senator tim Johnson

Senator Johnson. Thank you, Madam Chairman, for holding
this very timely hearing, and welcome to Administrator Whitman.
I think your choice was an excellent one on the part of the
President, and I just want to say congratulations as well as
condolences, but nonetheless, we are glad that you are here. I
will submit a full statement and be very brief as to opening
statement.
The EPA deals with some of our most difficult and most
tractable problems in America, fundamentally important
problems. Global warming, air pollution, safe drinking water,
health of our rivers and contaminated sites. In the State of
South Dakota, we are particularly concerned with this, as I
shared with you yesterday, and I want to again express my
appreciation for your coming by and hearing some of the
concerns of South Dakota yesterday.
The issue of earmarks has been raised, and while I am not a
defender of every earmark that comes down the road, I would
share an observation with the Administration that the
chairwoman has noted and Senator Bond has noted, and that is
because elected officials in Washington determine how to use a
small portion of funds as opposed to nonelected officials at
the State level, that does not necessarily mean that these
decisions are inferior or are an unsatisfactory use of limited
resources we have available. So I would hope that we would have
a constructive effort on how best to utilize our resources and
that both Federal and State level officials would be involved.
I want to applaud EPA for its recent decision not to grant
a waiver on oxygenation of gasoline sold in the State of
California. I am pleased that that decision has been made. We
are going to maintain our clean air in this Nation, and
obviously I look forward to working with the EPA in that
regard.
I have cosponsored legislation with my good friend Senator
Chuck Hagel, bipartisan legislation I am going to call the
Renewable Fuels Security Act of 2001. This legislation would
require that by 2008, all transportation fuel in the United
States would have to be comprised of renewable fuels, at least
in 5 percent by 2016. This is ambitious legislation.
Nonetheless, I believe it dovetails nicely with the decision
made by the EPA, and I look forward to working with both you
and with Congress in general on a vigorous effort at developing
and implementing a rule for fuel standards.
I also want to express appreciation for your work on
brownfield legislation. We have a long ways to go here and
again, I would emphasize as I did the other day, the reality is
that we have brownfield problems in rural areas as well as
urban, even though the urban needs urgent attention and that's
where most people think of when they think of brownfield
problems, but they are serious issues in our rural areas as
well.
So thank you again for joining us today for discussion of
your budget and Madam Chairman, I will submit a statement to
more fully announce my views.
Senator Mikulski. Senator Burns.

prepared statement

Senator Burns. Thank you, Madam Chairman. I will just put
my statement in the record. It is getting late and I think the
visit with the Administrator will be long and detailed.
Senator Mikulski. Thank you. Without objection, it will be
accepted.
[The statement follows:]

Prepared Statement of Senator Conrad Burns

Thank you Madam Chairman, for this opportunity to speak today. I
welcome Administrator Christine Todd Whitman and thank her for being
with us today to share the goals and views of the Environmental
Protection Agency as they relate to appropriations priorities for
fiscal year 2002.
The EPA Administrator has an important and tough job, because the
responsibilities of her agency can so easily reach beyond protecting
the environment and instead infringe on the freedoms of the American
citizen. I know, because one of the reasons I ran for Senate in 1988
was because of a dispute I had been involved in with the EPA on behalf
of Yellowstone County when I was commissioner there. The EPA is charged
with enforcing our federal environmental regulations, which is a very
important job. Whether you agree with them or not, we all know that the
laws we pass here in Congress aren't worth the paper they're written on
unless they're enforced. However, in Montana I know that the State
Department of Environmental Quality is responsible for almost all
enforcement actions, so I am interested to hear from the Administrator
how her agency will continue to improve that working relationship with
the States.
Another place where the EPA has a very important role in the
detection and clean up of environmental health hazards. As you know,
folks in Lincoln County and Libby Montana are having a very tough time
dealing with the contamination of asbestos throughout the community.
People have died, others are ill, still others may become ill, and the
area has suffered socially and economically as well. Clean-up of
tremolite asbestos from the vermiculite mine that operated there for
many years is on-going and I certainly appreciate the hard work that
has gone on there. Still, there is understandable concern about how
long the clean up will take and folks are wanting to know if EPA will
be there to complete the job. This is one thing I would like to find
out about today.
One issue that I am interested in visiting with the Administrator
about today deals with the arsenic standard in drinking water. The
standard had been changed from 50 parts per billion to 5 ppb in the
final days of the Clinton Administration, but as I understand that
level is being reviewed, and I applaud that decision. I agree that any
new standard should be based on sound science, but I would add that the
cost of the standard for small water systems should also be a factor.
Setting an unreasonably low level for arsenic could be detrimental for
rural water systems in Montana and all over the West where there is a
high level of naturally occurring level of arsenic. Additionally, the
cost of treating water could be so burdensome that at the local level,
scarce dollars could be pulled from other important health and
education programs. This is a decision that needs to be made
thoughtfully, and I trust that Administrator Whitman is listening.
I look forward to hearing your testimony today and to working with
you in the future.

statement of senator larry E. Craig

Senator Mikulski. Senator Craig.
Senator Craig. Thank you. I have questions I am going to
submit for the record and to you, Director Whitman. Thank you
for coming, I have enjoyed my meetings with you and the issues
that we are working on are critically important to all of us.
I will mention one before I go because in it is an
invitation. I want you to come to our beautiful State of Idaho.
The reason I would like to have you come is that I would like
to have you submerse yourself in probably one of the largest
Superfund sites in the Nation, and the Coeur d'Alene basin. Now
this is a Superfund site that has a pristine lake in it, the
tourists come and travel through, and find one of the most
beautiful areas in the world, and yet it is by definition a
Superfund site, some 21 square miles, Madam Chairman.
The problem we have has been the length of time and the
phenomenal costs involved, but cleanup has proceeded. That's
problem one.
Problem two is that the regional EPA out of Seattle in
their studies are trying to determine whether to expand the box
from 21 square miles to as much as 1,500 square miles in a
Superfund site. Now that is about all of north Idaho.
I would also suggest to you, that is one of the number one
tourist sites in the Nation, it is a great site by a most
pristine lake, near a world class resort that says swim in the
water, it is clean. It is safe, but the EPA thinks it is a
Superfund site. That is why I think it would be important for
you to come, the Idaho delegation would love to have you out,
but I think it is important to understand priorities.
EPA in many instances, I believe, has lost its priorities
and has not appropriately targeted, and clearly, the direction
that you are offering I think begins to speak to those
important issues. Superfund ought to be real, it ought to clean
up problems, it ought to eliminate the litigation and the
timeliness, and the waste of money involved, we all know that,
you are very well aware of it.
But anyway, I want to extend that invitation to you today.
I have to run to another meeting as many of us do, and we know
there are other issues, many have been mentioned. Climate
change, TMDL, arsenic. Thank you for doing the right thing, the
correct thing in getting us to the best science that will be
most cost effective. I come from a State with very high arsenic
levels in our drinking water because of the geography of my
State. Hundreds of millions of dollars could have been spent.
It was a political trip wire placed in the right place for the
wrong reasons. You did the right thing in my opinion, and are
now going to address it in the appropriate fashion from the
best science, and out of that, we will get the best standards.
Thank you.
Senator Mikulski. Thank you, Senator Craig, and we will
ensure that your questions are inserted for Administrator
Whitman.
Senator Kohl, do you have a statement?
Senator Kohl. Yes, I have a few questions.
Senator Mikulski. We are not at questions yet. Do you have
an opening statement?
Senator Kohl. No, I'm fine, thank you.
Senator Mikulski. Then Administrator Whitman, why do you
not proceed and give us your first testimony here.

statement of christine todd Whitman

Ms. Whitman. Certainly, Madam Chair, I am delighted.
Members of the subcommittee, thank you for giving me the
opportunity to be here today to discuss fully the EPA budget.
If it's all right with the Chair, I would like to submit a
fuller statement, however, but I will read a very brief one
that touches on major points.
Senator Mikulski. Without objection.
Ms. Whitman. I am pleased to report that the President's
budget does in our view provide the funding necessary to enable
the Environmental Protection Agency to carry out its mission
effectively and efficiently. The fiscal year 2002 request is
$7.3 billion, a $56 million increase over last year's request.
The President's budget request for EPA reflects a
commitment to building and strengthening partnerships across
America, partnerships that we need in order to be able to
achieve our goal of making America's air cleaner, our water
purer, and our land better protected. The budget encourages the
development of innovative environmental programs and embraces
the expertise and experience of States, local governments and
Native tribes, while providing them with greater flexibility
with which to pursue our shared goals.
America's States and tribes receive $3.3 billion in this
proposed budget, $500 million more than requested by the
previous Administration. Included in these funds is a $25
million grant program for State enforcement programs. Each
year, as the Chair noted, the States perform about 95 percent
of the Nation's environmental compliance inspections and 90
percent of the enforcement actions. This program will allow the
States to enhance their enforcement efforts in ways that will
increase accountability for results and will provide
flexibility for meeting and addressing their unique needs.
The President's proposed budget also includes $25 million
to improve the States' environmental information systems. By
helping States and EPA exchange information electronically, we
will improve accuracy and provide for better decision making
with better information.
For the continued cleanup of toxic waste sites, the
President's budget requests $1.3 billion for Superfund. This
will allow us to continue to work to address the cleanup of the
1,200 sites that remain on the Federal national priority list,
while also supporting the Department of Defense's effort to
clean up sites that were part of the base realignment and
closure process.
I am also pleased to report that the proposed budget
increases funding for the brownfields program by $5 million
above last year's enacted budget, to $98 million. This program
will provide for additional support for the State voluntary
cleanup programs and brownfields assessment demonstration pilot
programs. It's an excellent demonstration, as the chair
mentioned, of the partnership between the Federal Government
and the States.
With respect to America's water infrastructure, the
President's budget proposal includes $2.1 billion in grants to
States to insure that every American community enjoys safe and
clean water. The Administration's proposal of $1.3 billion in
wastewater infrastructure grants to the States includes $450
million in new programs to help communities address combined
sewer overflows and sanitary sewer overflows. Also included is
$850 million for the continued capitalization of the Clean
Water State Revolving Fund.
Overall, the President's request for infrastructure is $500
million greater than last year's request.
In this budget proposal, we have sought to strike the
appropriate balance between the needs for infrastructure
funding for both the Clean Water SRF and the new grant
programs, and the exercise of judicious fiscal restraint. Our
proposal of $850 million for the Clean Water SRF and $450
million for the Wet Weather Act achieves these important goals
which the Administration shares with the Congress.
The President's budget also fully maintains EPA's support
for the core water quality programs, programs that help States
manage their water quality programs and address non-point
source pollution. We will be working with the States to develop
TMDL's for their most impaired waters, as well as to provide
technical assistance in the adoption and implementation of new
drinking water standards. We also maintain support for the
development of beach monitoring and notification programs by
States and local governments.
With respect to drinking water, the President's budget
proposes to maintain capitalization of the drinking water State
revolving fund at the current level of $823 million. The
President's budget will continue to provide States with
flexibility to transfer funds between their clean water and
drinking water State revolving funds, helping them address
their most critical needs.
I am also pleased that the President's budget request
maintains current funding for EPA's clean air program. This
will allow us to build on the progress we have made since the
passage of the Clean Air Act in 1990. It will also allow us to
strengthen our relationship with our States, tribes and local
partners by providing $220 million to help them carry out their
clean air responsibilities.
Despite the fact that much progress has been made, much
remains to be done. More than 150 million tons of air pollution
was released into the air of the United States in 1999. More
than 62 million of our fellow Americans live in counties where
monitor data shows unhealthy air for one or more of the six
common pollutants.
By using EPA's authority to set standards that will clean
the air and protect public health, authority that was recently
reaffirmed by the Supreme Court, we will continue to work with
the States to reduce transported emissions of smog producing
pollutants, and we will seek to expand the existing nine-State
market based allowance trading system to additional States.
With respect to global climate change, the Administration
is requesting $145 million in fiscal year 2002 to strengthen
our partnerships with business, organizations and consumers, to
achieve voluntary reductions in greenhouse gas emissions. These
efforts are expected to result in an annual reduction of more
than 73 million metric tons of carbon equivalent, reduce energy
consumption by more than 85 billion kilowatt hours, which will
save consumers more than $10 billion in energy costs and help
develop a new generation of efficient cleaner cars and trucks.
As business and individuals purchase new vehicles and equipment
over the coming decade we want to do all we can to insure that
these purchasers have smarter, cleaner and more efficient
options available to them. Therefore, this budget supports our
voluntarily efforts to promote the development of such
equipment and vehicles.
As important as the air we breathe is the safety of the
food that we eat. The President's proposed budget supports the
important work of using the strongest science to insure that
industrial chemicals and pesticides meet today's food safety
standards. Both our pesticides and chemicals program seek to
work with all stakeholders to insure that the products used to
protect against insects and other threats to crops are safe,
not just for the food we eat, but for the environment as well.
In all the work we do at EPA, I am committed to insuring
that the policies we set are based on the best scientific
information available. To insure the availability of solid
scientific analysis, the President's budget supports a strong
rigorous research program, including a proposed $535 million
for the Office of Research and Development, a $5 million
increase over last year's budget request.
In addition, the President's budget proposal includes $110
million for the Science to Achieve Results or STAR program.
This program is one which gives EPA access to the best
environmental scientists and engineers from outside the Agency
so that we can always be insured we are relying on the
strongest science available.

prepared statement

Taken together, I believe the President's budget helps
communities across America address their most pressing
environmental priorities. It provides funds and it sets
priorities. My Agency needs to meet its mission of protecting
our environment and safeguarding the public health. It is this
Administration's first installment on our pledge to leave
America's air cleaner, water purer, and land better protected
than when we came into office.
Thank you, Madam Chair, and I would be happy to take
questions.
[The statement follows:]

Prepared Statement of Christine Todd Whitman

Madam Chair and Members of the Subcommittee, I am pleased to be
here to discuss President Bush's request for EPA. The President's
budget provides the necessary funds for the Agency to carry out our
mission efficiently and effectively--to protect human health and
safeguard the environment. The fiscal year 2002 request is $7.3
billion, a $56 million increase above last year's budget request.
The President's budget request for EPA reflects a commitment to
increase partnerships across America to develop innovative
environmental programs that ensure stewardship of our land, air, and
water for generations to come. This request provides the resources and
vision necessary to reach our nation's environmental mission to protect
the environment and human health.
Each day, America's communities are developing environmental
experience and expertise. Sharing this expertise with the Agency will
help us fulfill its mission. The states and tribes receive about half
of EPA's budget, because they are the innovators and energizers and are
on the front line in implementing and enforcing our environmental
statutes. The fiscal year 2002 request for states, tribes and EPA
partners is $3.3 billion, almost $500 million more than was requested
by the previous Administration.
The President's request for EPA reflects a commitment to provide
more flexibility to states and local communities to craft solutions to
meet their unique environmental needs.
new enforcement grant program
The President's Budget for fiscal year 2002 includes $25 million
for grants to state enforcement programs. Each year, the states conduct
about 95 percent of the nation's environmental compliance inspections
and take about 90 percent of the enforcement actions. This grant
program will benefit the national environmental enforcement program by
providing states much-needed funds to enhance their enforcement efforts
in delegated environmental programs. EPA envisions a program which
includes three ingredients: a program for which there is accountability
for results, flexibility to use the dollars to address state
environmental priorities, and a program that is simple and efficient to
administer. Over the next several months, EPA plans to work with the
states to develop specific guidelines for the grant program. As we
proceed through this process, we will keep the Subcommittee informed of
our progress.
information exchange network
The budget request also includes a $25 million program intended to
improve the states' environmental information systems. This program
will help states and EPA create the necessary infrastructure to
efficiently exchange information electronically, which will reduce
burden, improve accuracy and inform decision-making. This request
reflects two years of collaboration with the states, with whom EPA has
created a Network blueprint to improve the nation-wide exchange of
environmental information. As an example of our ongoing efforts with
the states in this area, in June 2001 all states will have the
opportunity to begin submitting their Air Emissions Inventory data
using the Information Exchange Network, demonstrating the progress made
so far.
superfund
This budget continues a commitment to clean up toxic waste sites
with $1.3 billion for the Superfund program. The Agency's Superfund
program responds to the needs of states, communities and the public to
address contamination from uncontrolled releases of toxic wastes that
threaten human health, the environment and local economies. The
Superfund program not only protects human health and the environment
through the cleanup of toxic waste sites, but works with both public
and private partners to promote redevelopment of Superfund sites. The
President's budget proposes funding Superfund at the fiscal year 2001
appropriated level.
Cleanup construction is under way or completed at 92 percent of the
1,458 sites on the Federal National Priority List (NPL). In fiscal year
2002, the Superfund program and its partners will complete construction
at 65 private and Federal sites. This target reflects funding
reductions in prior fiscal years and the number of large, complex sites
now entering the construction phase of the Superfund pipeline. By the
end of fiscal year 2002, EPA will have undertaken more than 6,800
removals at hazardous waste sites to immediately reduce the threat to
human health and the environment.
Working with our Federal partners to clean up Federal Facilities,
the fiscal year 2002 budget includes resources to support continuing
cleanup oversight, technical assistance and property transfer at
Federal NPL and Base Realignment and Closure (BRAC) sites. Efforts to
support the Department of Defense's (DOD's) BRAC property transfer
program have created jobs and accelerated the availability of more than
350,000 acres for reuse.
brownfields
In the President's fiscal year 2002 budget, the brownfields program
request is increased by $5 million above last year's enacted level, for
a total of $98 million. These resources will be used to provide
additional support for State Voluntary Cleanup Programs and the
Brownfields Assessment Demonstration Pilot program. The fiscal year
2002 funding request provides the resources necessary to award 38
communities new Brownfields Assessment Demonstration Pilots, 29 new
Brownfields Cleanup Revolving Loan Fund pilots, and 10 new job training
pilots. The request includes supplemental funding for all three
existing pilot programs, the existing 28 Showcase communities, and for
state/tribal voluntary cleanup programs.
President Bush has made the clean up and redevelopment of
brownfields and the enactment of brownfields legislation a priority.
The brownfields program is an important urban redevelopment tool that
provides an alternative to the development of greenfields, and plays a
key role in the Administration's goal of building strong and healthy
communities for the 21st century. The Agency estimates that the
brownfields program has leveraged more than an estimated $2.9 billion
in cleanup and redevelopment funds. Through the EPA program, states,
tribes and local communities have assessed more than 2,500 sites.
water infrastructure funding
The President's budget includes $2.1 billion in grants to states
for water infrastructure to ensure that safe and clean water is
supplied in every American community. With respect to wastewater
infrastructure, the Administration proposes $1.3 billion for grants to
states in fiscal year 2002, $500 million more than the previous
Administration's fiscal year 2001 request. Included in the wastewater
infrastructure request is a new $450 million grant program to assist
local communities in addressing infrastructure needs related to
Combined Sewer Overflows (CSOs) and Sanitary Sewer Overflows (SSOs) to
address the largest remaining municipal wastewater problem, and $850
million for continued capitalization of state Clean Water State
Revolving Loan Funds (CWSRF). The CWSRF investment keeps EPA on track
with our commitment to meet the goal for the CWSRF to provide $2
billion average in annual financial assistance over the long-term even
after Federal assistance ends.
supporting core water quality programs
The President's request fully maintains support for EPA's core
water quality programs, including $170 million in grants to states
under Clean Water Act Section 106 to manage water quality programs and
$237 million for grants under the Section 319 nonpoint source program
to address polluted runoff. We recommend the elimination of the cap on
Section 319 grants to Indian Tribes. This budget includes $2 million
for ``BEACHES'' grants to support the development of beach monitoring
and notification programs at the state and local level.
In addition, the budget maintains support for EPA's most critical
core programs including efforts to:
--Work cooperatively with states to develop Total Maximum Daily Loads
(TMDLs) for the states most impaired waters;
--Train and provide technical assistance to states to aid in the
adoption and implementation of new drinking water standards;
--Reduce the backlog of expired wastewater discharge permits under
the National Pollutant Discharge Elimination System (NPDES);
and
--Work to ensure that states have protective, up-to-date water
quality standards in place.
The budget also maintains funding of $75 million to address
priority water and wastewater infrastructure needs along the U.S.-
Mexico border, and $35 million to support much needed water and
wastewater projects in Alaska rural and Native Villages. Also, in
recognition of the lack of basic wastewater infrastructure that exists
in much of Indian Country, the President is proposing to extend
authority granted by the Congress for the current fiscal year that
allows the Agency to reserve up to one-and-a-half percent of funds
appropriated for the Clean Water SRFs for wastewater grants to tribes.
drinking water srf
With regard to drinking water, the Administration proposes to
maintain capitalization of the drinking water SRF at current levels in
fiscal year 2002, $823 million. By the end of fiscal year 2002, state
drinking water SRFs will have awarded 2,400 loans, with about 850 SRF
funded projects having initiated operations by that date.
In addition, the Safe Drinking Water Act Amendments of 1996
included a provision that allows states flexibility to transfer funds
between their clean water and drinking water SRFs in order to address
their most compelling infrastructure needs. Under the President's
Budget, the Administration is proposing to allow states to continue to
exercise this important flexibility.
Taken together, the Administration's budget will help communities
across the country address their most critical clean water and drinking
water priorities.
ensuring clean air
The President's fiscal year 2002 budget request maintains current
funding for EPA's clean air program, allowing us to continue the
progress of past years. Almost $220 million or 40 percent of the $565
million in our budget request would go to our state, tribal, and local
partners to help them carry out their responsibilities under the Clean
Air Act.
In 1990, Congress passed the Clean Air Act Amendments with
overwhelming support, setting ambitious air pollution reduction goals.
Since then, the nation has achieved unprecedented success in cleaning
our air and protecting public health. Working with state, tribal, and
local partners, we have achieved these successes through rulemakings,
voluntary measures, market mechanisms, and stakeholder consultation.
Despite the substantial progress, many challenges remain.
Examples of Clean Air Act successes include the fact that the air
in our cities is cleaner than it has been in a long time. Nationally,
average air quality levels have improved for all five of the six common
pollutants subject to air quality standards. There have been dramatic
increases in the number of areas with clean air and more areas will
come into compliance with national clean air health standards in fiscal
year 2002.
Our cars and fuels are cleaner. The average new car is 90 percent
cleaner (in terms of emissions) than in 1970; over 30 percent of the
nation's gasoline is now cleaner-burning, reformulated gasoline. We
will implement the tightest emissions standards ever for cars, gasoline
and the first tailpipe standards that apply equally to cars, as well as
sport utility vehicles (SUVs), pick-up trucks and minivans.
We have issued technology-based air toxics rules, or MACT
standards, that by 2002 we believe will cut industrial air toxics by a
cumulative 40 percent from 1993 levels or 1.5 million tons per year.
Through fiscal year 2000, emissions of air toxics have declined 30
percent since MACT and the auto emission standards that began to be
implemented in 1993. The fiscal year 2002 budget request includes the
resources needed to complete the last round of MACT standards.
In the Acid Rain Program, electric utilities have cut sulfur
dioxide (SO2) emissions by approximately 28 percent or 5
million tons and have cut rainfall acidity in the East by up to 25
percent. When Title IV is fully implemented in 2010, SO2 and
nitrogen oxide (NOX) reductions will provide health
benefits, mostly from a reduction in annual cases of premature
mortality. Acid rain control will also produce significant benefits in
terms of improved visibility, lowered surface water acidity, and less
damage to high elevation forests and materials. However, recent
ecological studies show that acid rain is still a problem. We look
forward to working with the Congress on a multi-pollutant strategy to
require power plants to further reduce emissions of SO2 and
NOX.
Although substantial progress has been made, it is important not to
lose sight of the magnitude of the air pollution problem that still
remains. Over 150 million tons of air pollution were released into the
air in 1999 in the United States, and approximately 62 million people
lived in counties where monitored data showed unhealthy air for one or
more of the six common pollutants.
In fiscal year 2002 we will continue our work with states to reduce
transported emissions of nitrogen oxides that contribute significantly
to urban smog in downwind areas. Currently, 15 of the 19 states subject
to the NOX SIP call have plans that EPA has approved or
expects to approve. When fully implemented, the NOX SIP call
will achieve nearly a million ton reduction in NOX
emissions. One of the other key measures will be an expansion of the
existing nine-state, market-based allowance trading system to
additional states. During fiscal year 2002 we will be re-engineering
the information technology support structure for the allowance and
emissions tracking systems to provide for improved public access and
timely exchange of data with state partners.
addressing global warming
To address the challenge of global warming, we are requesting $145
million for voluntary and climate change science programs for fiscal
year 2002. Under this budget, EPA will continue its partnership efforts
with businesses, organizations, and consumers to achieve greenhouse gas
reductions by taking advantage of the many voluntary opportunities to
reduce pollution and energy bills by fostering energy efficient
programs, products, technologies, and cost-effective renewable energy.
As a result of work already under way, EPA's performance goals with
fiscal year 2002 funding are to:
--reduce greenhouse gas emissions annually by over 73 million metric
tons of carbon equivalent, offsetting about 20 percent of the
growth in greenhouse gas emissions above 1990 levels;
--reduce other forms of pollution, including reducing NOX
emissions by about 180,000 tons;
--reduce U.S. energy consumption by more than 85 billion kilowatt
hours, contributing to over $10 billion in energy savings to
consumers and businesses; and
--contribute to developing a new generation of fuel efficient and
low-polluting cars and trucks.
The opportunity to save on our nation's $600 billion annual energy
bill over the next decade while reducing air pollution is tremendous.
The opportunity to reduce greenhouse gas emissions is also large. We
currently expect that more than half of the nation's greenhouse gas
emissions in ten years from now will come from equipment that will be
purchased between now and then. Fully funding EPA's voluntary energy
efficiency programs will help capitalize on this tremendous opportunity
for consumers, businesses, and organizations to make smarter equipment
purchasing and investment decisions leading to a significant reduction
of U.S. greenhouse gas emissions and air pollutants. In addition, EPA
will expand its voluntary partnership efforts in the transportation
sector. Voluntary initiatives to reduce vehicle miles traveled have
enormous potential to provide near-term reductions in energy
consumption, air pollution and greenhouse gas emissions.
ensuring safe food and protecting the public from harmful chemicals
The President's 2002 Budget request supports the important work of
applying the latest science to ensure industrial chemicals and
pesticides meet today's safety standards. The budget also supports the
complementary protections brought through pollution prevention and
voluntary partnerships.
For our pesticides programs, we have carried forward earlier
increases, maintaining the registration program at $41 million to keep
a steady flow of new pesticides coming onto the market, many of which
are based on innovative and safer chemistry. Likewise we maintain our
commitment to reviewing older pesticides, ensuring they meet Food
Quality Protection Act (FQPA) standards while at the same time working
with growers and the agricultural industry to help make a smooth
transition to safer pesticides. In August 2002 we expect to meet our
second statutory deadline for tolerance reassessments, completing an
additional 2,527 and meeting the 66 percent of the 9,721 reassessments
required in the law.
This budget request includes $46 million for our new and existing
chemicals programs. Chemicals are in all the products and services we
enjoy in our daily lives. The $14 million High Production Volume
Chemical Challenge program aims to gather health and safety information
for the public to make better informed choices. As part of the HPV
voluntary program, 469 companies committed to provide basic information
about 2,155 chemicals. The budget request of $20 million will support
partnerships with states and private industry on pollution prevention
projects, reducing use or exposure to chemicals to reduce potential
risks most especially those chemicals that persist in our environment,
collect or bioaccumulate in our bodies, and have adverse or toxic
effects in the environment and on human health.
In both the pesticide and the chemical programs we continue to
place special emphasis on reducing potential risks to children and
other vulnerable populations. Emerging science is focusing our
attention on chemicals that may harm animal or human endocrine systems,
and we are working with the scientific community to find ways to
identify those chemicals as part of our endocrine disruptor program.
Let me mention here that the budget assumes no impediment to
promulgating the final pesticide tolerance fee rule in 2002, and you
will see that the request levels for the reregistration and the
tolerance reassessment programs reflect that change, namely from a
reregistration maintenance fee to a tolerance fee. These two critical
programs are fully supported with $52 million in appropriated funds if
a new fee is in place in 2002 and we will be working with you on this
issue over the coming months.
sound science
Environmental policy should always be based on the soundest
information available. The role of environmental science has become
more critical than ever in making policy decisions, thereby, improving
our ability to sustain natural resources while maintaining public trust
and the integrity of our world's ecosystem. Science has played a vital
role in improving America's environment--from targeting priority
chemicals concerns, better characterizing sources of pollution and
designing control strategies. While we must also realize that science
and public policy proceed along fundamentally different time lines, we
will continue to use the best available science and scientific analyses
to aid in the development of environmental policy.
EPA's fiscal year 2002 President's budget supports a strong and
rigorous research program. The fiscal year 2002 request includes $535
million for the Office of Research and Development (ORD), reflecting an
increase of $5 million over the previous administrations fiscal year
2001 request. This request will allow the Agency to support a research
program focused on addressing key environmental concerns such as the
health effects of small particles in order to assure promulgation of
standards that protect human health, and heightened interest in better
addressing in Agency decisions the unique susceptibilities of children
to potential environmental health threats. The Agency's request will
also continue to support the Global Change research program focusing
efforts on assessment activities examining the potential consequences
of global change and climate variability on human health, air quality,
water quality and ecosystem health.
In addition to supporting a strong intramural science program at
the Agency, the fiscal year 2002 request provides $110 million for the
Science to Achieve Results (STAR) program which includes competitively
awarded grants and fellowships. The STAR program continues to
successfully engage the best environmental scientists and engineers
from academia through a variety of competitive, peer reviewed grants.
In addition, the Agency will continue its highly successful
Postdoctoral program to hire scientists and engineers who provide a
dynamic infusion of intellectual energy and state-of-the-science
expertise, as well as assist the Agency in addressing long range
research workforce planning needs.
summary
Madam Chair and Members of the Subcommittee, the President's fiscal
year 2002 Budget for EPA provides the resources and vision necessary to
reach our Nation's environmental mission to protect the environment and
human health. This budget represents this Administration's commitment
to work with our environmental partners to develop innovative
environmental programs that ensure stewardship of our land, air, and
water for generations to come. This concludes my prepared statement. I
would be pleased to answer any questions that you may have.

Clean water infrastructure

Senator Mikulski. Thank you very much for your testimony,
and to my colleagues, we are going to try to follow with the
first round so that everybody gets an opportunity, and then we
will go to a second round as well.
Madam Administrator, my first question will go to clean
water infrastructure. When I travel through my State of
Maryland and visit my counties, they always ask me for two
things. One, can I get a fiber optic network, and number two,
can I get them water and sewer money, and that is usual and
customary. This is also a significant issue in the
environmental community. Just in my own state alone, I have
gotten close to $50 million worth of requests that are not
outrageous, and you know, I do not have to elaborate on this,
you have met with Governor Glendening, and we are appreciative
of your efforts.
I am concerned about this reduction in Clean Water
infrastructure to $850 million, because our target has been
$1.3 billion and we even think that is modest when there is all
kinds of reports that estimate there is $140 billion in
outstanding needs. Then we've got this $450 million program for
newly authorized wet weather, which is sewer, but we are up
there instead. That is making an addition to, not in lieu of
clean water.
Now, having said that, and the problems, isn't this budget
robbing Peter to pay Paul by cutting the clean water fund to
pay for the new wet weather program, and why does this budget
really ignore the trigger that the clean water fund should get
$1.3 billion before the wet weather program will kick in? Will
you comment please?
Ms. Whitman. Certainly. Senator, I recognize the fact that
the intent was to have $1.3 billion in the Clean Water SRF
State Revolving Fund program, prior to implementation of the
wet weather program. However, it was our feeling that the
importance of the wet weather program made it imperative that
we start to move forward precisely because of the needs that
you have outlined.
The $850 million in the Clean Water State Revolving Fund
program will allow that fund to revolve at a stabilized base of
$2 billion a year, that was the intended long-term revolving
level for the State revolving fund. In fact, it will revolve at
about $3 billion this year and $2 billion per year over the
long-term which we feel is the amount of money that was
initially intended to be in that revolving loan fund. As you
pointed out, the needs are much greater, but we don't know what
they now all are.
The importance, however, of the combined sewer overflow and
the sanitary sewer overflow needs was such that we wanted to
get that program started, and that's why we proposed taking
$450 million and putting it towards that program. In regards to
that new program, in the first year, the $450 million will be
given directly to the States, as a grant, according to the SRF
formula. The States will be able to then competitively give
grants to the communities that they feel have the most need for
that money. There is some certainty for the States, because the
grants will be allocated using the Clean Water SRF formula.
This proposal is different from the intent of Congress,
which said that in the first year the grants would go to the
communities directly and in the second year to the States. We
propose making the grants to the States in the first year.
We do think this is an important program. We are working on
a better understanding of what the needs are. You stated a
figure, Senator Bond, of $380 billion. My guess it's anywhere
from $450 billion to over a trillion dollars in need.

$500 million cut

Senator Mikulski. Well, Administrator Whitman, let me say
this, because this is going to take a lot more conversation.
Number one, I really firmly disagree with the Administration on
this. And we want to, I think we really need to have some
ongoing conversations about this.
When your budget was cut by $500 million, the
Administration said it was because of earmarks. Now, these $500
million earmarks weren't for a gold plated something or
another. Almost every single one of those earmarks was related
to water and sewer, and that's why they line up to see Senator
Bond and I to talk about that. So that $500 million comes from,
those earmarks come from people in local communities who
approach my colleagues in the same way they come to me, or my
constituents come to me.
If OMB, and working with you, wanted to cut us by $500
million for earmarks, they should have taken that $500 million
and put it into clean water or used that $500 million to start
the wet weather project. I fundamentally disagree with the
priorities. I can understand, every administration doesn't want
us to have earmarks, that's an ongoing battle, but that $500
million is only for a very specific area.
So I fundamentally disagree with this approach and I'm
going to work with my colleagues on this and also with you. We
don't want to be in a big fight with you, but this one program,
the reduction to $850 million, the elimination of the money
that we use for congressionally directed projects, which come
off, indeed, consistently have to come off of a State priority
list. It isn't because one of the senators is Uncle Charlie,
who was a local commissioner who ran for sheriff. I mean, this
is really very serious.
And on the wet weather, we do not in any way minimize the
importance of it, but essentially we feel it was cut twice, one
by eliminating the earmarks and then by taking $500 million and
putting it into wet weather. So we have to think about how we
can solve this issue because it's really probably one of the
most important programs that we have that goes out to the
States.
Ms. Whitman. Senator, if I might, while I don't disagree
with you, I would just point out that the $1.3 billion, if you
put the two programs together, total $1.3 billion, and what we
have done is separated it out. However, I would be happy to
work with you on that as we move forward, because this is an
enormous issue.
Senator Mikulski. Absolutely. One is a formula program and
one is a grant program. And also then, the loss of $500 million
is a reduction of $500 million, ostensibly to get rid of pork.
This is not pork.
Ms. Whitman. I wouldn't argue that one with you. I know as
a governor, we did the same thing in the sense of putting the
priorities in for the administration and then recognizing what
the legislators saw. Almost all of them were very very good
programs and had something justifiable behind them. It was just
a question of setting the budget priorities in the
Administration.
Senator Mikulski. Well, I have used my 5 minutes, so
Senator Bond.

Clean water state revolving fund

Senator Bond. Thank you, Madam Chair. I had a number of
questions about this new program and taking money out of the
Clean Water State Revolving Fund and we need to continue to
discuss this, but my basic question is when you have a program
like the State revolving fund, which basically is the seed
corn, what is the justification for taking money out of it and
saying eat the seed corn with a grant program, take some money
out of the revolving fund, and gives it out as a one-time shot.
It doesn't continue as the State revolving funds have, to feed
back into the ongoing needs that the States will have in future
years.
Ms. Whitman. That program was established before I came
here. The intent as I understand it was to have a revolving
loan fund of $2 billion. That is in fact, what the State
revolving loan fund will revolve at in the long-term. This year
it will be higher than that, but it will continue at that $2
billion revolving level over the long-term. So there is a
continuing stable high base for the revolving loan fund that
will continue.
We do not anticipate that the wet weather program will go
away in a year, it's going to be an ongoing program. But I
would suggest, just as the Chair and you have mentioned, we
need to engage as the Administration and Congress, in a very
thorough discussion of how we are going to address these
infrastructure needs, because it could be 25 times our budget,
were we to fund everything that we think is needed, and should
the Federal Government have to pick up all the costs. We need
to have a very comprehensive discussion of water infrastructure
needs. I believe this is one of the most pressing problems that
we're going to face from now until the next decade.

Enforcement program

Senator Bond. Well, I would agree with you on that.
Let me turn now to questions, other questions on the
enforcement program. The budget request redirects $25 million
from Federal enforcement to State enforcement programs and I as
a former governor myself, I like to see the States taking
responsibility, but we need to be watchful that the Federal
Government is able to fulfill its important responsibilities.
Are you confident that the remaining funds are sufficient to
insure a robust Federal enforcement program?
Ms. Whitman. Absolutely, Senator, that is our commitment. I
have said a number of times that we want to extend the carrot
where possible, but the stick is certainly not retired. We have
had recently a number of very, I won't say positive because
that would be pejorative, but certainly large settlements where
we have come down on those polluters who need to see some
enforcement action.
We believe that we can do this. What we are doing here is
maximizing the role of what the States are already doing in
compliance assistance and enforcement. They do, as I indicated,
95 percent of the compliance reviews and they do about 90
percent of the enforcement actions. We will still have a very
vigorous enforcement program, particularly for those actions
that are multistate and places where States do not have the
ability to bring enforcement action. We will still be ready and
very able to bring enforcement actions, and able to target our
work on the ones that fall to the Federal agency.

AIR POLLUTION

Senator Bond. Moving to air, the Administration has pledged
to continue with the current litigation against utilities and
refineries who may be violating new source review air
regulation, but how is the Administration exploring ways to
improve the program by removing this incentive for energy
producers or suppliers or refiners to update their facilities
with more efficient higher capacity technology? How, what can
you do to make sure that we have the sources for energy
available?
Ms. Whitman. Well, Senator, we're very sensitive to those
concerns for emissions, and we are currently undertaking a
review of the new source review program. We have reached out to
our regions, we have reached to those who have been involved in
it to ask for their input on what kinds of things could we do
to help improve the new source review and insure that we are
actually reaching the goal that we all have of cleaning the
environment but not injuring business from doing business
because of the way that it is implemented.
When we have completed our process and review, we will then
obviously reach out to stakeholders by asking for input from
others. Then we can present to everyone a comprehensive
reevaluation of new source review that continues to preserve
and protect the environment, but also allows us to insure that
we are moving forward with addressing our energy needs.
Senator Bond. Well, we as consumers need it. I thank you,
Madam Administrator, and Madam Chair.
Senator Mikulski. Senator Kohl.

ENFORCEMENT IN MILWAUKEE

Senator Kohl. Thank you, Madam Chairman. Administrator
Whitman, today it was reported that the EPA is considering
enforcement actions against Milwaukee for dumping untreated
sewage into Lake Michigan.
Senator Mikulski. Senator Kohl, excuse me. Could you pull
your microphone closer?
Senator Kohl. Okay. I will start over again. Today it was
reported that EPA is considering enforcement actions against
the city of Milwaukee sewer district for dumping untreated
sewage into Lake Michigan. While no one of course favors such
pollution, this enforcement seeks to punish a district that is
working as fast as it can to fully comply with the law.
The Milwaukee sewage district has been working hard and
investing many resources to update its sewage system. In the
early 1990s Milwaukee spend $3 billion in additional capacity
and Milwaukee is in the midst of a $320 million update to
alleviate the very problem that EPA is concerned about, leaking
pipes and inadequate storage.
And so, it seems counterproductive to fine a district that
is already working trying to get itself to comply with the law,
while other districts are continuing to dump significantly more
pollution. So, are you aware that among similar sized cities,
Milwaukee has the best record in terms of reductions in
separate and combined sewer overflows, and should Milwaukee be
held up as an example of what can be done to improve water
quality in an effective partnership between local and Federal
Government, and will you examine reaching a compliance
agreement instead of imposing what I understand might be a
$25,000 a day fine?
And does the Administration, finally, support additional
visible grant dollars in addition to loans for water
infrastructure to help communities like Milwaukee?
Ms. Whitman. Senator, it is our objective to work
cooperatively with the State and the city and the surrounding
communities to try to address this issue. There is no lawsuit
at the present time, and we will continue to work
cooperatively.
In fact, the last part of your question of providing the
additional dollars is why we decided to break up the $1.3
billion to have $850 million for the State Revolving Loan Fund
and $450 million to go towards combined and sanitary storm
sewer overflows to start to reach these infrastructures and
begin to address them. The wet weather act really targets those
particular needs, but we are intent to work in a collegial way
with the State, the city and the surrounding communities to
address the unique problems that the city of Milwaukee has.

cleanup of Fox river

Senator Kohl. I thank you. Administrator Whitman, I am also
concerned about the cleanup of the Fox River. As you know, EPA
and the State of Wisconsin have been concerned with the Fox
River and the impact of PCB contamination for some time.
Currently we are waiting for a decision on the cleanup plan,
completion of the proposed plan, and the regional plan should
be out in late July. This plan will be reviewed by EPA I
understand very soon.
Is the Administration going to have any changes to the
plan, and if so, will there be delays or extra time to conduct
an examination so that a cleanup plan can begin soon? During
the past Administration, Wisconsin was allowed to take the lead
on the cleanup, including moving the Fox River off the
Superfund list while the State worked on its program to resolve
the problems.
Also, the EPA during the previous Administration, with the
support of Senator Feingold and others regarding this issue, it
was stated in writing that the State could continue to take the
lead. Will this relationship continue in the future and can the
State count on EPA's continued cooperation?
Ms. Whitman. The State can certainly count on EPA's
cooperation. I can't comment on the final proposals in the
plan, simply because we haven't seen it. We need to review the
plan, but we will do that in an expedited way and we will work
closely with the State and insure that it is an appropriate
plan that reaches all our goals.

ARSENIC

Senator Kohl. Thank you. Moving on to the subject of
arsenic, as the chairman of the Agricultural Appropriations
Subcommittee, I see more and more rural communities come to the
USDA for rural development assistance to meet their drinking
water needs. They are worried about the arsenic standard but
they are also faced with old systems that are wearing out.
Many of these communities are graying, so many of their
inhabitants are living on fixed incomes and cannot afford
either higher taxes or steeper water bills.
In Wisconsin alone, the needs for drinking water
infrastructure are valued at $1.8 billion. Drinking water
systems are sorely needed, and many of them are faced with new
demands on systems that are wearing out. As part of the
Administration's review of the arsenic standard.
Will you consider providing additional funding to small and
disadvantaged communities to meet the new standards?
Ms. Whitman. Senator, that is part of why I asked for the
additional time to review the standard, to insure that we had
thoroughly identified the fiscal needs of the small and midsize
water companies that would be particularly hit by this, so that
we didn't see unintended consequences of people not being able
to afford their water bills, water companies going out of
business, and people sinking wells and then getting water that
has no protection in place.
We have two studies going on. One is with the National
Academy of Sciences. I have asked them to, rather than say as
they did initially that 50 is not safe, bring that level down
and take a tighter look. I asked them to tell me between 3 and
20, which is what the original record was based upon, where
they felt the science told them was a safe level, because of
the enormous consequences of this decision.
We also have asked an outside advisory panel to take a look
at what the cost implications are for the water companies in
implementing whatever standard is reached. That will give us an
idea of what we need to do as far as additional dollars. What
is going to be required in order to help small and midsize
water companies meet the requirements?
I have also even had discussions with the Secretary of
Agriculture as to what kind of Agriculture money might be
available to help our rural communities. That's one of the
things that we want to take into account when we make the final
decision.
Senator Kohl. I want to thank you for your interest, and I
thank you, Madam Chairman.
Senator Mikulski. Thank you. Ordinarily, we have been
rotating, but Senator Domenici, I understand you will yield to
Senator Leahy.
Senator Leahy. Thank you, Madam Chairman, and thank you,
Senator Domenici.
Senator Domenici. You're welcome, Senator.

New source review

Senator Leahy. It's good to have you here. I tried to reach
you a couple times yesterday and thank you for your fiscal year
2002 budget.
I want to mention in New England, Lake Champlain. It is a
unique piece of water, it has a watershed larger than the state
of Massachusetts, but it faces the kind of development problems
that any growing area in the northeast does, and your Agency
has helped Vermont and New York citizens protect the lake, and
we appreciate you doing that.
The Region 1 staff has been superb in working with the
States on environment issues. I know that I hear from everybody
in Vermont how proud they are of the professionals in the
Region 1 office as being responsive, and I invite you to come
up and see this part of the world, you probably have anyway,
but in your capacity as Administrator.
On May 23, some of the other Senators and I sent you a
letter regarding the Administration's intent to review new
source review or NSR regulations of the Clean Air Act. It
raised some red flags in my mind because I know some of the
concerns we had, and some of the Midwestern power plants and
others that have been grandfathered under that Act, and it
would cause a great deal of problems for us. But we had asked
for specific language in the Administration's national energy
plan report that represents that the President direct you and
Secretary Abraham and others to conduct a 90-day review of NSR
regulations, including both the administrative interpretation
and implementation of the provisions.
Now as I read that, it looked to me like there was a call
in this review in saying the Administration believes the NSR
regulations are currently misinterpreted and incorrectly
implemented, which would contradict what you and Attorney
General Ashcroft have said when you strongly commended EPA
legal actions against violators of NSR regulations.
You were quoted as saying, the result of legal settlements
provide Americans with cleaner and healthier air, and I agree
with you. So my letter, I wish you would look at that.
Let me ask you just one basic simple one. Why was this
language even necessary? Why is an EPA review necessary if the
provision is undeniably responsible for EPA's success in
achieving cleaner air and more healthy air?
Ms. Whitman. Senator, the review is to see what we can do
to make things better. The new source review permits review can
take up to 18 months. We don't feel this is necessarily in the
best interest of either the public or the particular business
or industry that has made the application. We need to insure
that we have a common understanding of what is subject to new
source review and what is not.
What we have found in some instances actually is that as
cases have been brought forth, are an attempt to clarify new
source review through the legal process, which in my mind is
never the best way to do it. The intent needs to be clarified
at the administrative and legislative level, not in the courts.
The new source review is an attempt to insure that we have the
program working in the best way possible so that it does what
the intent is, that we do it more effectively and better.

enforcement of New source review regulations

Senator Leahy. Well, I just want to make sure that we're
not reviewing just for the sake of reviewing, because I
remember somebody from another administration, used to
reorganize the enforcement division about every 6 or 7 or 8
weeks, and there were no real enforcement actions, they were
always in the process of reviewing it.
And I might ask you, what kind of personnel and budget
resources are going to be used to uphold and enforce the NSR
regulations?
Ms. Whitman. We are fully committed to enforcement and our
enforcement efforts. We believe that this budget allows us to
continue the type of enforcement we had in the past. But I will
also mention, Senator, that I have had a lot of anecdotal
stories about new source review actually hindering our ability
to improve air quality because of the way it has been
interpreted.
One instance, and I can't tell you exactly where, as I
don't remember, but I remember the management coming in and
saying they had a proposal to put a new form of scrubber on one
of their facilities that would capture two of the three major
pollutants in which we had an interest. However, they had
another way at another part of their plant to bring them into
compliance with the third pollutant. In fact the two and that
one were going to be below what we were requiring. Because all
three weren't captured with the one, we wouldn't grant new
source review.
It was an instance where we weren't being smart about how
we were looking at new source review. My feeling here is we
just want to make sure that it is working the way Congress
intended that it should work, and we have seen it work.
Senator Leahy. But you understand my concern.
Ms. Whitman. Oh, I absolutely do.

Enforcement cuts

Senator Leahy. We talk about these cuts in enforcement, and
as an old prosecutor, I always like the idea of having the law
on the books, and while I know that everybody is pure as
angels, they want to follow the law, every so often, a little
devil sneaks in there and sometimes we don't have enforcement.
But cuts are going to result in the loss of 270 personnel
nationwide, about 90 percent of EPA enforcement staff, and
about 80 percent of the cuts are going to come from regional
EPA offices.
I know we have always tried in Vermont to appeal to upwind
States for stronger emission controls, because they send the
emissions into the air and they seem to come down through
mercury and other problems in our lakes and our streams and our
soil. Their State enforcement agencies say gee whiz, we will
look into that, but they don't do anything, and the only thing
that might happen is if there is Federal enforcement of the
clean air law.
So, I'm happy to see new State based enforcement
initiatives that may help, but I'm really worried if we are
going to do that by cutting out Federal enforcement things,
because I do not think a State like mine is going to be able to
do diddly squat, and that's a professional prosectorial term,
in stopping these pollutants in coming into our water.
So I will look very closely at that and I will be very
happy, any answer you might want to give here, or a more
detailed answer to put in the record, why are there all these
cuts in enforcement.
Ms. Whitman. Certainly. First of all, Senator, of those
cuts, 144 are funded vacancies and have been vacant for a year,
so that it is not a cut in current enforcement action. Those
are funded vacancies that have been vacant for a year. We are
redeploying some people, which is over half of the total number
of the remaining number of people to which you refer.
Senator Leahy. We will not have a lot of vacancies like
that when an administration changes?
Ms. Whitman. They have been vacant for a year or better. We
are redeploying some people, about 65, and some of them are
being put into criminal enforcement. We are looking at criminal
enforcement, and at our Title VI problems that we have at the
Agency, and we're beefing up or redirecting some staff to those
areas. The rest we will reach through attrition, and we will
watch the attrition over the year. If attrition doesn't account
for all of them, we are not going to come in and cut. Our
commitment here is not to have anyone lose their job, but in
fact to insure that we are doing it through attrition and
through intelligent redeployment.
We are redeploying to the areas that we think need the
extra bodies. Civil rights is an important one for the Agency,
and we are redeploying people there. We are redeploying people
to TMDL management, which is another important part in disputes
resolution.
So while there will be cuts as it appears, more than half
of those are due to funded vacancies today.
Senator Leahy. My time is about up, but we will discuss
this further, because I do want to make sure that----
Senator Mikulski. Senator, I think we do want to discuss it
further. I think if you turn around and look at those----
Senator Leahy. Madam Chairman, you told me to turn around,
so I will.
Senator Mikulski. But you can see where there is a decline,
but I'm going to turn to my colleagues who have been waiting
patiently, but you can see that really the northeast and
midwest is what's going to lose, as well as Texas, a bulk of
the enforcement, so I think this is important. But I will turn
it over to Senator Domenici.
Senator Domenici. Thank you, Madam Chairman.
Senator Leahy. Thanks again, Pete.
Senator Domenici. You're welcome.
Madam Chairman, you know that I am a new member of, as old
as I am, I am a new member of your subcommittee.
Senator Mikulski. I know, and we are happy to have you.

Kyoto protocol

Senator Domenici. And I am happy to be here. I did not
think we would have as many exciting things right off as we are
having, so I am glad to be here today.
First off, let me say to the head of the Environmental
Protection Agency, I am very confused about what is going on in
your department. That may even be an understatement for you.
First, did not the U.S. Senate vote on the sense of the
Senate as to whether or not we would choose as a body to ratify
the Kyoto Agreement?
Ms. Whitman. Yes. The U.S. Senate, voted 95 to 0 against
the implementation of what was then the proposed Kyoto
Protocol.
Senator Domenici. Well, the point of it is, that is a
treaty and if the United States was ever going to enforce it,
it has to be ratified by the U.S. Senate. So what is the big
deal? Since the U.S. Senate has already said it would not
ratify it, why is the President having to answer up on this
issue when as a matter of fact, Congress has said don't send it
to us because if you do, we will kill it. And when I say we, I
am not talking about Republicans, I am talking about everybody
in the Senate. It was led by a bipartisan group as I recall,
the Senator from Nebraska, Hagel, the Senator from West
Virginia, Byrd, with every Senator voting we will not implement
it. Do you have any idea why we would have said that, Madam
Secretary?
Ms. Whitman. Senator, I can't explain why some people seem
to be rethinking their position. The Europeans took the
President's statement that as an indication from the President
that he did not feel global climate change was an issue of any
sort, and he no longer wanted to engage with Europe or the rest
of the world in solving the problem. That was not the case.

New arsenic standards

Senator Domenici. I just want to make the point for the
record one more time, and I choose to make it wherever I can,
that the issue with reference to the Kyoto Agreement was
already rendered void by the U.S. Senate saying we will not
ratify it.
Now how in the world can he proceed at the executive level
implementing it, negotiating further about it when we have
already said as a treaty, we will not accept it? Now frankly, I
think that right off, that you all dropped the ball on that
one, okay? The President should never have gotten himself in
this predicament when you consider the facts.
The facts are that all you had to do was invite senators
over to a meeting and they would have said there is no Kyoto
Agreement because we will not ratify it. With no embarrassment,
no concern, bipartisan, every single senator.
Now, having said that, let me talk about another issue of
very big importance to me and to the world, and to you. If I
were in your shoes in the middle of an environmental crisis in
the United States, with the world wanting to grow, and China
wanting to become a prosperous Nation in the world, India
wanting to, all poor countries wanting to get rich, which I am
for, and America saying we must continue to grow and prosper,
if I were in your shoes, I would be advocating a course with
reference to energy that said is there a way that we can
produce substantially more energy for ourselves and the world
and pollute the air less than we are today.
And I would have asked who can tell me how to do that, and
you know, there would have been only one answer. Of course
there would be some minor answers about, if we make solar big
enough, that would be the answer. But the one answer would be,
if you develop a game plan to use nuclear power in the poor
countries and in America to some extent in the future, you will
end up with less pollution and more energy, and what a great
achievement of leadership that would have been.
I want to say to you that that is how I feel. We are going
to vote on that soon, so there is going to be a 30-year plan to
produce less pollution as part of the implementation of our
energy policy, but I want to tell you right now, I believe the
Environmental Protection Agency has come perilously close in
the middle of a presidential desire to move with nuclear, you
have come perilously close to saying it will not happen.
Now let me ask you a question. I am reading a press release
of yours, the bottom of the first page, it says, referring to
your new standards, surface standards with reference to
potential water pollution in the middle of a desert. And you
say, under these standards, the new ones, future generations
will be securely protected, and now I underline the following:
Our standards require that a person living in the vicinity of
Yucca Mountain and drinking untreated water at the site 10,000
years from now, will have less radiation exposure than we get
today in about two round trip flights from New York to Los
Angeles.
Now I might ask you, are you interested in restricting the
round trip flights from New York to Los Angeles?
Ms. Whitman. No, of course not, Senator.
Senator Domenici. Why not? It has the same radiation
exposure as does your new standard with reference to the site
10,000 years from now. Are there two different standards for
us, one for this--is there a standard for this site and another
standard that lets Americans die from this?
Ms. Whitman. This is a consistent drinking water standard.
It's applied throughout the United States and is applied at the
other sites where there are nuclear facilities, and it's a site
that has that same standard in place.
Senator Domenici. Well, I am going to seek advice from
wherever I can get it, and find out whether we can test your
new standards in terms of whether a license will be issued,
because that is the test, that is the issue, not the issue of
putting something on the books, but can you ever license a
facility under those standards.
You in your meetings have been told it is an acceptable
standard. I worked on that, from what I can tell, longer than
almost anybody sitting around your table, and I contend that
there will never be a license issued, because you cannot prove
beyond a reasonable doubt, and that is the test when you apply
for a license, you cannot prove beyond a reasonable doubt that
you will meet those new standards 10,000 years from now. It
cannot be done.
So essentially if I am right, we have to find another way
to dispose of the waste, or we have to say to the President of
the United States, you cannot have as part of your plan, a
significant nuclear component.
Now, you are free to comment. That is my feelings and if
you think differently, you can say it now or you can say it
whenever you come to my office, and I will accept it as your
statement.
Ms. Whitman. Senator, I would be happy to repeat for the
record that this is a stringent standard, that 10,000 years is
what's required by the Nuclear Regulatory Commission's
requirement for its approval. We believe that this is a fair
standard that will protect the public, and our job is to
protect the public. We need it to insure that we have that
protection there. The standard is one that is tough but can be
met. We believe in the importance of protecting the public
health and that's why we went forward with it.
Senator Domenici. Well, I want to repeat, I believe we
should start national hearings on whether we should abolish
flights between New York and Los Angeles, because a logical
standard for radiation should be the same one that you put in
with reference to a desert site 10,000 years from now.
Now having said that, I want to make sure the committee
understands a very serious problem for western States,
including mine, and the Secretary is aware of it. I want to
insert in the record, Madam Chairperson, a chart showing what
it will cost States like New Mexico to implement the new
arsenic standards.
We understand we have been living with arsenic from time
immemorial. This is a natural component that comes from rocky
structures. We have far more than the 5 milligram, or 5 percent
or the 20 that is being suggested, and they have never shown an
incident of resulting illness from it in our State. But it will
cost, if we go all the way down to 5, it will cost us for the
replenishment of large and small systems, a total of $1.52
billion if we have to meet the 5 milligram test, 375 if we have
to meet the 10, and 127 if we have to meet the 20, to redo the
plan and replace.
Senator Mikulski. Are you asking that the chart be entered
in the record?
Senator Domenici. I am asking that.
Senator Mikulski. Frankly, Senator, I would like to see the
chart, and without objection, it certainly will be entered into
the record.
[The information follows:]

Arsenic study group

Senator Domenici. Now, I want to ask one favor of you,
which I am certainly less than entitled to based on my comments
here today about your department, but I would like you to make
sure that somebody is on this study group for arsenic that
represents one of the three States that will be economically
deprived, either New Mexico, Arizona or Utah. I would think you
would want somebody on it from the affected State, and Montana,
so I would ask if you have appointed the group, I would ask
that you open it and put someone on, and if you haven't closed
it, I think in fairness you ought to put someone on. Thank you,
Madam Chair.
Senator Mikulski. Thank you, Senator Domenici. This arsenic
and water is really a complicated issue. I think this is one of
the areas I wanted to discuss and I think there is a question
of what is public health and also the cost of compliance, and
not creating an unfunded Federal mandate.
But Senator Burns, I would like to----
Ms. Whitman. Just so the Senator knows, there is someone
from Arizona on that panel, I just wanted you to know that.
Senator Domenici. What?
Ms. Whitman. There is someone from Arizona on that study
group.
Senator Domenici. Then might I inquire why you did not put
someone from New Mexico with them. We are the most adversely
affected of the States.
Senator Mikulski. Are we okay?
Ms. Whitman. We're okay. I just wanted to make sure he knew
that.

Price of farm chemicals: canada vs. u.s.a.

Senator Mikulski. Senator Burns.
Senator Burns. Thank you very much, Madam Chairman. I just
have a couple of questions.
As you know, we have already discussed it, about Lincoln
County and Libby, Montana, and the asbestos situation up there,
and your commitment that you gave to that area up there on the
cleanup, and we appreciate that very much.
But I also am concerned about a situation on the Canadian
border. We have a situation where there is a great price
disparity between farm chemicals between what it costs to
produce in Canada and the producers in the United States, and
basically it is the same farm chemicals. And I feel like right
now, we have to take some of the irritant off of that border to
really make our free trade agreement work, and we cannot do
that unless we normalize those labels on farm chemicals.
And my question today, I know you have not been in that
chair very long, what plans you have made or are making to deal
with that situation, how do we normalize those labels?
Ms. Whitman. Senator, we are very aware of the problem of
normalization of pesticides, particularly as it impacts the
many farmers in the northwest, because they are the closest to
the border and able to see the price disparity that exists. We
are working with both the Department of Commerce and Trade, as
well as within our own Agency and the Department of Agriculture
to see what we can do to address that issue. It's a serious one
and it's one that we know that we need to address.
We have seen progress made under NAFTA in some of these
areas. Roundup is probably the most egregious at this point,
and we need to direct ourselves to that one and so we will
continue to pursue efforts of normalization in a way that's
consistent with what our standards require.
Senator Burns. Am I not correct that you are the final say,
though, on the chemicals?
Ms. Whitman. We are the final say on the chemicals and the
makeup.
Senator Burns. Now don't just limit it to the pesticides,
so go to the herbicides and the rest of them too, because it
seems to me that right now Canada uses I think six or seven
different chemicals on their production of canola. We have only
got labels of I think around three, yet all the canola that is
harvested in Canada ends up in the market in the United States.
Now there is a disparity there, and we also ought to take a
look at that, not only the normalization of the label but also
what can be applied and what cannot be applied and still enter
the United States market.
So those are the areas where--and Libby, of course, is
still a concern on the asbestos, that situation up there, and
those are my concerns, but I look forward to working with you
on these other situations and as we work our way through this,
I feel it is very very important. And thank you, Madam
Chairman, I appreciate that very much.
Senator Mikulski. Senator Bond, I know that you have a
radio show, so I will let you go next so you can go down and
participate.
Senator Bond. Madam Chair, thank you very much, that will
be a real thrill.
Senator Burns. He has a face for radio.

Genetically modified foods

Senator Bond. Thank you, Madam Chairman. I would like to
ask the Administrator, one of my priorities in this committee
is the National Science Foundation. We work together to develop
safe genetically modified foods, because I think this may be
the key to healthy feeding and assisting the world population
in dealing with problems of chemical pollution, pesticide
pollution in the environment.
I know the EPA is working with other Federal agencies to
insure that these food products and related products are
regulated to insure the highest level of safety that we as
human beings can achieve, but my question is, how do we deal
with the fears and hysteria whipped up by European
protectionists as well as others with special interests, and
some people with legitimate concerns, but how can we address
the fear factor that is being fanned that is really
devastating, both to increasing investment in this area and the
use of these products which have tremendous benefit for the
world population and our environment?
Ms. Whitman. Senator, as you pointed out, the genetically
modified or altered crops and ways of farming are as old as
farming itself. We have looked at finding pest resistant crops
and a better variety of tomatoes or corn or wheat, and this has
been going on forever. You have touched on what is really
driving a lot of the concern.
People are very nervous when they hear genetically modified
crops. It implies something to them that is akin to the
Frankenstein of the old movies. We need to do a better job of
insuring that the science is real behind anything that is
approved. Also, we need to insure that we do not make a mistake
in the future, as I think everyone in the Agency will admit we
made in the past in trying to help with a genetically modified
product and to thinking that we could somehow separate
something that is used for crops and animals from the human
food chain.
We need to understand that anything that we approve for one
has to be approved for the other because it's too difficult to
keep them separate. We need to be able to enter into a dialogue
with farmers to insure best practices are used and to be able
to reassure to the world bodies that in fact best practices do
exist and can protect the food supply.
There is a concern obviously about transparency. As a
country we have been at the forefront of insuring transparency
as we move forward. There is a concern in the European
community about labeling. We have a concern about labeling
because it raises the fear somehow that there's something wrong
with it because it says genetically modified.
We feel that the transparency in the process of development
is even more important. We are working actively with the
Department of Agriculture to see what we can do to try to
insure the community that their food is safe. We want to assure
safe food no matter what.

New farm bill

Senator Bond. It is the safest food supply in the world and
we need to continue, and I look forward to working with you on
that.
I stepped out just a few minutes ago to meet with the
leadership of one of the leading farm cooperatives in Missouri,
and they are up here and I said what is your concern, and they
said they are concerned about the new farm bill, but what they
are really worried about is the new feed lot pollution
regulations. And they wanted to know how we could be sure that
your new CAFO/AFO, TMDL, do not make it impossible for the
small farm operator to stay in business.
They say, you know, if you have to guarantee that there
will be no overflow when there is a 25-inch rain, we are out of
business. You are going to run the small farm, the small hog
producer out of business. They want to make sure that their
operations are clean. There are a lot of things that can be
done, but they want to have some assurance from EPA that you
are not just going to shut them down and run them out of
business.
Ms. Whitman. Senator, we have heard their concerns. That's
why we have extended the comment period on the CAFO
regulations. For the TMDL regulation, we have two studies going
on, one on the science and one on the costs, to insure that we
can reach those standards that are protective of the
environment but don't have the consequence of running out the
small family owned farm, and those are the ones that tend to be
most impacted by the standard.
There is some flexibility that was proposed in the original
regulations, but there are many who are afraid that it is not
sufficient to protect the small family farm. Before we are
ready to make final recommendations, we will be encouraging
more public participation and public input. We have been
listening to small farmers. I met with them the other day and
encouraged them to make sure they avail themselves of the
comment period which closes at the end of July. We want to do
our very best to incorporate all the concerns before arriving
at these two resolutions.

FTE reduction: enforcement program

Senator Bond. Madam Chair, if I may, just one last one.
There is some suggestion that there is a reduction of 269 FTEs
in the operating programs. As I understand it, there are only
65 actual enforcement FTEs who will be redeployed in the
expectation that States will be able to meet environmental
enforcement needs. I think the question that all of us want to
know is what will EPA do to insure that overall quality of
enforcement, the assurance we need to provide to everyone that
enforcement will not be lessened by this change, the
redeployment and the reliance on the State enforcement.
Ms. Whitman. Senator, the intent here is for the opposite
to be true. The plan is to leverage the dollars and the
enforcement personnel that we have. The States are on site and
know what's happening in their regions, who the bad actors are
and where to go. States perform 95 percent of the inspections
in compliance outreach now, and 90 percent of the actual
enforcement actions. They are very active.
We have not finalized the program yet, but the intent is to
insure that we help those States that are already doing a great
deal with some extra money to really ratchet up their program,
and that's our goal. We will maintain our responsibility to
insure that where a State can't enforce, EPA is there
enforcing. Where there is a multistate enforcement issue, we
are there enforcing.
In the redeployment, we are insuring that we have people
addressing the issues that we find to be troubling for the
Agency. We are moving some people to civil rights, which has
been an issue of concern at the Agency. We are moving people to
TMDL development to insure that we have the right number of
people there to help with that effort.
The request of $475 million in the budget for compliance
and enforcement efforts is in fact an increase of $10 million
over fiscal year 2001. Included in that increase is a $1.5
million increase for compliance assistance and a $1 million
increase for criminal enforcement, which we feel are priorities
for redeploying and redirecting personnel.
We believe in the States. The States will need help and we
are initiating the $25 million enforcement program to the
States. We are going to be watching that program very very
carefully as it is our responsibility to insure enforcement and
we will continue to do that.
Senator Bond. Thank you very much, Madam Administrator.
Thank you, Madam Chair.
Senator Mikulski. Thank you. Well, Administrator Whitman,
this leaves it to you and I, one on one.
Ms. Whitman. Wonderful.

coordination with other agencies to Solve problems

Senator Mikulski. But let me first of all give some
comments and then some wrap-up questions.
Just some general comments. One of the key issues, I
believe with EPA, is really devoted to coordinating with other
agencies and we are really counting on your executive ability
because that is what an executive does, to see how all the
agencies fit together to solve a problem.
And just a few observations for, as you continue your
stewardship. One, on brownfields, in the interest of time I am
not going to go into the brownfields questions, but I think you
and I both agree that brownfields is a tremendous opportunity,
and HUD has money and EPA has money, and we want to make sure
that there is leverage there and there is coordination. We have
certainly enjoyed our very cordial relationship with Secretary
Martinez, and I am not sure of their problems in Florida, but
they certainly have a lot of environmental issues. I hope that
your team would be coordinating with them so that as we clean
up brownfields, that it goes then the next step, that is, from
environmental, it goes from brownfields to greenfields, so
that's one thing.
The second, as you know, one of my highest priorities will
always be the Chesapeake Bay and again, for the cleanup of the
bay it is not only the bay programs, but it is also the work of
the USDA and NOAA, and I would hope again, there will be close
coordination with USDA and NOAA. As you know, the causes of
pfisteria are controversial. You dealt with that on the New
Jersey shores. I don't like to finger point, I like to pinpoint
solutions. We have quite a bit of research and other activity
going on with the blue crab species, et cetera. So we really
need, again, coordination, but I hope you would make a note to
really insist that those agencies are working together.
The other that I think could give us all problems is the
Army Corps of Engineers. Now I love the Corps, and you can't
have the Port of Baltimore without the Corps of Engineers. But
they are now talking about changing their wetlands policy.
Administrator Whitman, I don't want you to recommend
controversies, and to open that door again to relax permits and
so on really gives me pause.
I'm going to be talking with General Flowers about this,
but in the early days of the new Administration, with all the
challenges we have, even with some of the criticisms of the
Administration, let's not go to undoing the wetlands policy. I
don't think--I really hope that General Flowers and I can talk
about this, so that again, the Corps has what it needs to do to
be the Corps of Engineers, but if they relax their standards,
it is going to come back to you, it is going to come back to
the Congress, and we are going to have the wetlands fight all
over again, and I do not think people want to do it.
I think people have gotten used to the rules, and you know,
the whole Eastern Shore is a wetland, because of the very
nature of the bay on one side and the ocean on the other. And
so you know where I stand, I really think that like in war,
early warnings and sound intelligence would hope that we will
not get into that, so would you?
Ms. Whitman. Certainly.

working with our Partners

Senator Mikulski. I do not know if you were aware of that.
Were you aware of the wetlands issue?
Ms. Whitman. Yes, Senator, I am aware of the wetlands
issues and I am aware of the concerns surrounding what is being
talked about. We obviously have a deep commitment at the Agency
to protecting the Nation's wetlands and we will continue to
have that.
I couldn't agree with you more on your emphasis on
partnership. While I will take your words to heart on meeting
with General Flowers, I haven't done that yet, but I will
assure you Secretary Veneman and I meet on a regular basis both
informally and formally with staff to identify issues of
concern. The Chesapeake Bay is one that we were just talking
about yesterday, and where our mutual areas coincide we need to
be working together.
With brownfields, you're absolutely right, the next step is
going to be equally important, clean them up and then we need
to have the right kind of policies. I have an additional
interest in insuring that we have a good working relationship
with Housing because, of course, I would like to see and insure
that as Housing provides dollars for low to moderate income
housing that they insure they are as energy efficient as
possible. There are many new technologies now that allow us to
bring housing in at appropriate cost levels that have the best
in energy efficiency and are sustainable for the people who
live in those houses.
Senator Mikulski. Well, this is the subcommittee to talk to
and we would hope that the partnership that Secretary Martinez,
and since Senator Bond and I have kind of a concept or
something, which we continue.
Ms. Whitman. Okay.

Region 3: enforcement redeployment

Senator Mikulski. Let me go over again my questions. I am
not going to go into great detail over the enforcement issue,
it is not a great concern to me, but you can see Region 3 loses
quite a bit of people, as well as 1, 2, 4 and the others. We
have been very satisfied with the enforcement in Region 3 and
what I am concerned about is, one, that we maintain adequate
enforcement.
Second, and I am going to submit questions for the record
here, because I think we will proceed better here and then
before we do our markup, I am sure that you and I will be
talking again. I just want you to understand that Senator Bond
and I are working on a bipartisan basis with this.
Ms. Whitman. I know that.
Senator Mikulski. But States have mixed enforcement records
and my concerns would be, who is going to use the money and how
are they going to use the money, and how will EPA work with the
States that have poor records, particularly if regional staff
resources are cut?
Region 3, I think has a culture of environmental
stewardship. It includes Delaware, Maryland, you know, et
cetera, but I am concerned that not everybody has put that in,
so we really need to look at this. And as I heard how you are
going to redeploy your people in criminal issues, in others,
which obviously are very important, but it seems to me that
enforcement is just making sure that they ensure change, that
you need them in the areas where you are redeploying, but we
also leave them in these areas. So we would really like to have
an ongoing analysis of doing that. Do you have any comments?
Ms. Whitman. Well, I can certainly comment. We have not
allocated cuts across regions yet. We will look closely at the
issue.
Senator Mikulski. Well, I got this from the Environment and
Public Works Committee.
Ms. Whitman. I have seen that chart before, but we haven't
gone to that level yet to allocate those cuts by region. You
are not wrong, Senator, and the point that you make about not
all States being equal is one that I also take very seriously.
As we look at the implementation of the new program, $25
million enforcement program is something that is going to be at
the forefront.
The point here is to put the money where it will do the
most good and leverage the dollars we already have and insure
that we retain the ability to provide the enforcement where we
know States don't have that ability. This is not a flat across
the board increase where everybody gets the same thing.
Senator Mikulski. Well, we want to hear more about this.
Ms. Whitman. Certainly.

mandate for new Arsenic standards

Senator Mikulski. Let me now go to the arsenic and drinking
water. First off, I am very mindful of the cost, but we are
going to have some real issues on our hands. First of all, I am
truly troubled at the standard of 50 ppb. That is the same
standard as Bangladesh, Bolivia, and China. The European
community has 10, Japan has 10, but I am not a biochemist so I
am not going to say what the standard should be.
What I am concerned about is two things, number one, we had
a mandate for June 22, 2001, for there to be new arsenic
standards. I do not know what authority you have to move that,
but you moved it. Do you think you have authority?
Ms. Whitman. No, Senator, we will not make the date. I
don't want to say that's a common practice at the Agency,
unfortunately it's done all too often. However, we have no
statutory authority. We have asked for the Congress to consider
an extension, given that we want to insure we have the very
best data, the most current data, and the best standard
possible to safeguard the people.
But what we are not changing is the enforcement date of
2006, which is the same as what was contemplated under the
Clinton Administration proposal. There will be a new standard,
it will be dramatically lower, and it will be enforceable by
the year 2006.
Senator Mikulski. Can you tell me if you can, according to
your announcement, the EPA would delay this until February 22.
Am I correct?
Ms. Whitman. I'm hoping to get it done faster.
Senator Mikulski. What are you delaying?
Ms. Whitman. The final rule is what's being delayed. Before
we have a final rule in place, we have to indicate what the
rule would be and have it out for public comment, and fulfill
the other requirements of the rule making process. It will take
until February to have a final rule in place, but the
implementation and enforcement date will be 2006.

Sound science: Arsenic drinking water standard

Senator Mikulski. When I chaired this committee in the
early 1990s, I actually commissioned a study by the National
Association of Public Administration on where EPA was in terms
of its science, and did it have the infrastructure and were
they able to do it. I worked off that NAPA study and I know my
colleagues did, and I also then note that there has been a cut
in the science and technology account by $56 million. And
again, this is not meant to be a provocative or an
argumentative question of you.
I want to make sure that the Agency uses sound science, so
I want to ask you, what kind of science are you using now for
the arsenic drinking water standard that was not used before to
get at it, and then second, how can we have sound science if we
are cutting it by $56 million, and could we come to an
agreement by an operational definition of sound science?
Ms. Whitman. That will probably be more difficult.
Senator Mikulski. I am going to at least have this probably
for the next 18 months, and I really know Senator Bond is
passionate about sound science too, and we want to help you get
there. And rather than every time there is a dispute, everybody
criticizes the science, so I would like to----
Ms. Whitman. Well, our Office of Research and Development
actually has an increase in its budget. Science is done across
the Agency in a number of different places. Our Office of
Research and Development, the office where we look to get the
best science, has a proposed increase. What we're doing with
arsenic is that we are looking at all the scientific work that
was done in the Agency. I have asked the National Academy of
Sciences to conduct a scientific review. When they did the
initial review they said that they were troubled that 50 parts
per billion was too high. They did not indicate what would be
an appropriate lower level.
Senator Mikulski. So they did not give you a bottom line.
Ms. Whitman. They didn't give us a bottom line, so I asked
them to relook at this. There have been about three new studies
subsequent to the proposal that was done in January that
actually indicate increased problems from arsenic.
I said look at those new studies, look at everything else,
between 3 and 20, because that was where the original record
was built. I didn't want to set everything back by simply
ignoring the old record. Can you give us a better indication of
what is a safe standard in drinking water? Is it that you're
safe at 10 and not 11, you're safe at 20 and not at 21? Can
they do it? I don't know if they can. Science unfortunately is
never as precise as we would like, but I asked them to do that
and to incorporate the new studies that have come to fore and
been printed since that time.
We are also asking an outside group, and one of the
senators indicated he was not altogether happy with the makeup
of the group, although we did try to find a very balanced
group, to look at what the cost implications are for
implementation to the small and midsize water companies.
Senator Mikulski. Particularly for the western States.
Ms. Whitman. Yes. We have a number of western State
representatives, and we have a scientist who has worked on
arsenic from the southern part of California, an area that has
high naturally occurring arsenic. They are not all from New
Mexico, but we do have representation and we tried for balance.
I am going next week to a regular public meeting of the
National Academy of Sciences to ask for an update as to where
they are, how they are moving on the request we made of them to
reexamine the science and try to give us a better number. I am
taking a personal interest in this and I want to make sure we
get it right.

Science and technology reduction

Senator Mikulski. Well, we are going to--I hope we do not
have more bias in this, because this really is a good fight,
and we tried to come up with a solution here. Now I agree, and
perhaps the instructions to the National Academy study were not
as clear as they should be, but we are not going to do this
through a rearview mirror. We really do need a standard to be
in place by 2006. We also, while we establish the standard, not
only look at the cost of compliance with the standard, but look
at how we are going to do it.
I really acknowledge the validity of the concerns that were
raised by my colleagues and as Senator Kohl said, many of our
communities are the graying communities and they are usually
older core areas, areas where there are failing sewers and
failing septic systems, as there are on the New Jersey shore.
So I really want to get that.
Now second, I am concerned about the cut in the science and
technology account, and I do not know what the consequences of
that are. So we would like to know what this means.
And then last but not at all least, and this is long range,
was when we turn to EPA and we want sound science, what does
that really mean and how are we going to get it? This is a long
range conversation, we do deal with appropriations, and we do
not want to be authorizers by proxy, but it is now a buzz word
often used to delay rather than something I think you and I are
in absolute agreement on.
So this is a longer range conversation, what is the
operational definition of sound science? When is good, good
enough science? And then how do we get there and who does it?
In other words, is it an in-house thing, is it for the national
laboratories, do we essentially turn to the National Academy on
particularly high profile issues? I'm not sure of what is the
best way, but I am going to work with you to find what is the
best way so that at the end of next fiscal year, that we really
have the framework that I think meets what scientists would
agree, and then those of us responsible for setting public
policy would be conscientious of.
Ms. Whitman. Senator, I look forward to that. Most of our
studies, or almost all of them actually, are subjected to peer
review which I think is an important way to assure sound
science when you get some outside look. I have asked one of my
offices to supply me with recommendations as to how we can
insure that at the beginning of the regulatory process, we
incorporate science into the ideas that we're moving forward
and build, science and policy at the front end rather than at
the back end.
I expect those recommendations as to how I can within the
Agency redirect and insure that we are having and putting sound
science at the front end of any regulatory decision we make and
that we start to get the science in place before we determine
the outcome. That unfortunately has not always been the case. I
want to make sure that everyone understands that is going to be
the case.
Senator Mikulski. I would really like you to think about
this and also, maybe the National Academy has to advise us on
how to get science, maybe that is one of their sets of
recommendations.
But again, I am not saying what the method ought to be, I
am just telling you the outcome, and I think you would like
very much that outcome.
Ms. Whitman. I agree.
Senator Mikulski. And so, I look forward to working with
you.

Additional committee questions

Well, I think this hearing has been very informative and
instructive, and we look forward to more conversation as we
move forward. We expect to be marking up our bill in mid-July
at the subcommittee level. We are going to really try to meet
our Congressional mandated schedule this year, so everybody has
to get ready to kind of move it.
[The following questions were not asked at the hearing, but
were submitted to the Agency for response subsequent to the
hearing:]

Questions Submitted by Senator Christopher S. Bond

compliance assistance
Question. What is the status of each Aiming for Excellence Report
task and milestone in Actions 4 and 5? Provide an explanation of the
delay for any milestones behind schedule.
Answer. In the ``Aiming for Excellence Report,'' the Office of
Enforcement and Compliance Assurance's (OECA) Office of Compliance is
responsible for completing three tasks under Action 4 and three tasks
under Action 5. The Office of Compliance has completed the milestones
associated with each task. Information on these accomplishments is
provided in Attachment A.

Attachment A

aiming for environmental excellence: additional reinvention actions at
epa to encourage stewardship and accelerate environmental progress
implementation plan (office of compliance progress as of july 2001)
This Implementation Plan contains a list of the Tasks and
Milestones for the Office of Compliance's implementation of Actions 4
and 5 listed in the ``Aiming for Excellence Task Force Report.'' The
Actions and Tasks are cross referenced by number to the ten actions and
corresponding tasks in Appendix 3 of the report. The milestones present
the steps EPA is taking to be accountable for carrying through the
report's recommendations.
Action 4.--Support a network of public and private sector
organizations that provide assistance on environmental compliance.
Lead.--Office of Enforcement and Compliance Assurance, Office of
Prevention, Pesticides, and Toxic Substances, Office of Water, Office
of Policy, Economics and Innovation, Region 4.
Task 1.--We will convene a national compliance assistance forum to
share information with participants on recently developed compliance
assistance materials, get stakeholder input in setting priorities for
new compliance assistance materials, and exchange compliance assistance
tools. We will also use the forum to help identify industry sectors
that have special compliance assistance needs.
--Milestone 1.--Establish a small workgroup of state representatives
to assist EPA in planning the forum (see also Action 4, task 4;
Action 5, task 2).
--Date.--September 1999 (completed)
--Milestone 2.--Establish Agency-wide workgroup on compliance
assistance.
--Date.--September 1999 (completed)
--Milestone 3.--Establish a multi-stakeholder group through NACEPT
(National Advisory Council on Environmental Policy and
Technology) to assist EPA in planning the forum ( see also
Action 4, task 4; Action 5, task 2).
--Date.--November 1999 and meet as needed (completed)
--Milestone 4.--Convene a compliance assistance forum.
--Date.--March 2000, March 2001, and periodically thereafter
(completed). The next Forum is planned for the Fall of
2002.
--Discussion.--March 2000 Forum was attended by approximately 200
participants representing states, trade associations,
industry, federally-recognized Indian tribes, and community
groups. Gathering focused on building partnerships between
compliance assistance providers. Forum 2001 Forum attracted
approximately 300 participants representing over 25 states,
trade associations, industry, federally-recognized Indian
tribes, and community groups. Focused on sharing innovative
models for delivering compliance assistance tools and
delivery and identifying compliance assistance needs of
providers.
Task 4.--We will create a clearinghouse of compliance assistance
materials and tools. This clearinghouse will include information from
federal, state, tribal, and local governments and from private
providers, such as trade associations. EPA will add information to the
clearinghouse in phases.
--Milestone 1.--Begin design of clearinghouse.
--Date.--October 1999 (completed)
--Milestone 2.--Seek broad stakeholder input on design.
--Date.--March 2000 (completed)
--Milestone 3.--Clearinghouse operational.
--Date.--December 2000 (completed)
--Discussion.--The Clearinghouse, a new and innovative web site
that EPA developed with the States and other stakeholders
provides comprehensive links to EPA's environmental
compliance assistance materials as well as materials from
all 50 States and other organizations. Its cutting-edge
features allow users to directly interact with EPA and its
use enhances communication and collaboration among
compliance assistance providers. EPA chose to extend the
milestone to further enhance Internet security.
Task 5.--We will distribute and market compliance assistance tools
to organizations that are likely to have contact with regulated groups.
--Milestone 1.--Will be planned as tools are developed.
--Date.--On-going
--Discussion.--EPA continues its broad use and distribution of
compliance assistance tools designed to reach the regulated
community. EPA funds trade association and educational
institutions to operate 10 Compliance Assistance Centers
(the 10th, for Federal Facilities, opened in fiscal year
2000) which are designed to help small businesses and small
governmental entities understand and comply with their
environmental obligations. Currently, the Centers are
visited over 1,200 times a day by small and large
businesses, farms, governments, and the public and interest
in these Centers continues to increase. In a recent survey,
over 70 percent of the company and local government
respondents said they took one or more actions as a result
of the Center use (e.g., changing the handling of waste,
obtaining a permit). In addition to the Centers, EPA
continues to develop other tools such as industry sector
notebooks, plain language compliance guides, training
models and compliance checklists. In fiscal year 1999, EPA
completed 10 sector guides and more than 30 other outreach
documents for industries such as food processing and
chemical manufacturing. EPA is currently refining existing
compliance assistance tools to reach out to federally-
recognized Indian tribes.
Action 5.--Deliver compliance assistance information for new
``economically significant'' rules when and where it is needed.
Lead.--EPA National program offices that prepare regulations,
Office of Enforcement and Compliance Assurance (OECA)
Task 1.--We will develop compliance assistance guides and/or self-
audit checklists for economically significant rules that apply to
companies and/or government facilities (or rules that were
``substituted'' because of greater benefit), typically within 90 days
of issuance. Extensions beyond this time frame will be subject to
approval by the Deputy Administrator. EPA also may produce compliance
materials for additional rules that do not meet the economically
significant threshold, within budget limitations.
--Lead.--EPA National program office that prepares regulation, with
assistance from the Office of Enforcement and Compliance
Assurance
--Milestone 1.--Identify the economically significant rules under
development.
--Date.--June 1999 (completed)
--Milestone 2.--Finalize initial set of rules for which compliance
assistance materials will be developed.
--Date.--October 1999 (completed)
--Discussion.--Typically, the guides will be issued within 90 days
of rule issuance. Extensions are allowed because of factors
such as resource constraints, providing for greater
stakeholder involvement, or demands of other work.
--Milestone 3.--For subsequent years, use the annual compliance
assistance plan (see Task 2) to identify the regulations
appropriate for compliance guides.
--Date.--Annually in May (no longer applicable--see below)
--Discussion.--The plan will no longer be used as the method for
identifying regulations but will still include descriptive
information on the planned guides. The list of economically
significant rules for which compliance guides are to be
developed are being tracked on a on-going basis using EPA's
Rule and Policy Information and Development System (RAPIDS)
data-base. The RAPIDS data-base, established by the Office
of Policy, Economics and Innovations, will also be used to
track the development of the compliance guides themselves.
Task 2.--We will develop an annual compliance assistance plan, in
consultation with state, tribal, and other compliance assistance
providers, to ensure that compliance assistance resources are focused
on areas where they are most needed. Based on their input, we will
consider developing compliance assistance tools for other new rules
that do not meet the economically significant threshold or for existing
rules known to have compliance problems.
--Milestone 1.--Begin consultation with stakeholders.
--Date.--September 1999 (completed)
--Milestone 2.--Circulate draft plan to stakeholders.
--Date.--February 2000 and annually thereafter (completed)
--Milestone 3.--Send draft plan to the Deputy Administrator
highlighting issues raised by stakeholders
--Revised Date.--November 2000 (completed)
--Discussion.--EPA has worked in consultation with States, tribes,
the small business community and other stakeholders to
develop this plan. As a result of stakeholder comment and
discussions with the Compliance Assistance Advisory
Committee, EPA made several significant improvements to the
draft plan prior to its submission to the Deputy
Administrator such as including additional appropriate
projects. The process is allowing EPA to identify
opportunities for collaboration, eliminate duplications,
create partnerships, and identify gaps for future efforts.
--Milestone 4.--Issue final plan.
--Date.--April 2001 (completed)
--Discussion.--The fiscal year 2001 Plan catalogues 368 compliance
assistance activities and provides analysis and policy
background for compliance assistance activities. The fiscal
year 2001 Plan also outlines upcoming federal rules and
anticipated rule-related compliance guides.
--Milestone 4.--Begin developing fiscal year 2002 Plan
--Date.--On-going
--Discussion.--EPA is currently placing information into the Plan
database. Publication of the draft fiscal year 2002 Plan to
seek public comments in the Federal Register is scheduled
for July 2001.
Task 3.--We will field test certain compliance assistance tools
before issuing them. For one or two rules, the Agency will also develop
special software to guide facility operators through regulations and
provide answers on applicability, deadlines, and what must be done to
comply.
--Lead.--EPA National program office that prepares regulation, with
assistance from Office of Enforcement and Compliance Assurance
--Milestone 1.--Identify 1-2 regulations that are appropriate for
software development (expert system).
--Date.--May 2000 and annually thereafter (completed). The TRI-ME
(Toxics Release Inventory Made Easy) expert system has been
developed by the Office of Environmental Information to
help prospective reporters understand and comply with the
EPCRA section 313 (TRI) reporting requirements.
--Milestone 2.--Identify appropriate staff to support development of
software development (expert system).
--Date.--May 2000 and annually thereafter (completed)
--Discussion.--Office of Environmental Information staff are
developing the system.
--Milestone 3.--Establish schedule for developing and field testing
software (expert systems). Date:Spring 2001 (see below)
Discussion: The first version of TRI-ME was released as a pilot
distribution to 6,000 facilities in the Spring of 2001, for use
in completing the TRI forms for calendar year 2000 that were
due by Monday, July 2, 2001. Depending on future funding and
user feedback, EPA anticipates that a new version of TRI-ME
will be released for each TRI reporting year as part of the
annual TRI Reporting Forms and Instructions. Beginning with
reporting year 2001, in which reports will be due by July 1,
2002, the Agency expects to distribute TRI-ME to all facilities
subject to EPCRA section 313. Each version of TRI-ME will be
updated to reflect the most current regulations and guidance.
Further, with each version of TRI-ME the Agency will strive to
improve the user interface, as well as the ``expert
intelligence'' incorporated into the software.
Question. What are the rules currently considered economically
significant for the purposes of developing compliance assistance tools?
Provide the rule finalization date and the status of any tools
development for rules finalized or to be finalized by December 2001.
Answer. As outlined in the ``Aiming for Excellence Report,'' EPA
may develop compliance assistance tools for rules that have an economic
impact of $100 million or more on companies and/or government
facilities or other rules, as appropriate. EPA also develops compliance
tools for rules that have a significant economic impact on a
substantial number of small entities as defined under the Small
Business Regulatory Enforcement Fairness Act.
The potential universe of regulations for which compliance guides
may be developed is continually changing based on changes to specific
provisions of a regulation and subsequent economic analysis. Also,
changes in rule finalization dates alter the compliance tool schedule.
Extensions in developing compliance tools are allowed because of
factors such as resource constraints, providing for greater stakeholder
involvement, or demands of other work.
For the purposes of this response, Attachment A contains
information, as of July 5, 2001, on the ten rules finalized or expected
to be finalized by December 2001.

Attachment A

ECONOMICALLY SIGNIFICANT REGULATIONS--COMPLIANCE ASSISTANCE TOOLS AS OF JULY 5, 2001
----------------------------------------------------------------------------------------------------------------
Estimated
Regulation Projected/Actual Final Projected/Actual Compliance Compliance
Publication Date Tool Completion Date Tool Cost
----------------------------------------------------------------------------------------------------------------
Office of Air and Radiation:
Rulemakings for the Purpose of September, 2001.............. December, 2001............... $4,800
Reducing Interstate Ozone
Transport (Contact: D. Grano, 919-
541-3292).
Heavy-Duty Engine Emission January 18, 2001............. March, 2002 \1\.............. NA
Standards and Diesel Fuel Sulfur
Control Requirements (Contact: T.
Wysor, 734-214-4332).
Tier II Light-Duty Vehicle and February 10, 2000............ March, 2002 \2\.............. NA
Light-Duty Truck Emission
Standards and Gasoline Sulfur
Standards (Contact: T. Wysor, 734-
214-4229).
NESHAP: Chemical Recovery January 12, 2001............. September, 2001 \3\.......... $60,000
Combustion Sources (Contact: G.
Wood, 919-541-5272).
Control of Emissions of Air October 6, 2000.............. January, 2001................ $20,000
Pollution from 2004 and Later
Model Year Heavy-Duty Highway
Engines and Vehicles; Revisions
of Light-Duty Truck Definition
(Contact: J. Guy, 202-564-9276).
Office of Prevention, Pesticides and January 5, 2001.............. April, 2001.................. $7,700
Toxic Substances: Lead:
Identification of Dangerous Levels of
Lead Pursuant to TSCA Section 403
(Contact: D. Topping, 202-260-7737).
Office of Water:
National Pollutant Discharge December, 1999............... March, 2000.................. $5,000
Elimination System Regulations
for Revision of the Water
Pollution Control Program
Addressing Storm Water Discharges
(Contact, J. Faulk, 202-564-0768).
National Primary Drinking Water January 22, 2001 \4\......... NA \5\....................... NA
Regulations: Arsenic and
Clarifications to Compliance and
New Source Containment Monitoring
(Contact: I. Dooley, 202-260-
9531).
National Primary Drinking Water December 16, 1998............ August, 2001 \6\............. $6,000
Regulations: Stage 1 Disinfectant/
Disinfection By-Products Rule
(Contact: T. Grubbs, 202-260-
7270).
Office of Environmental Information: November, 1999............... July, 2001................... $71,000
TRI; Reporting Threshold Amendment
for Certain Persistent and
Bioaccumulative Toxic Chemicals
(Contact Gail Froiman, 202-260-0697).
----------------------------------------------------------------------------------------------------------------
\1\ Guide development is underway following consultation with the regulated community to ensure key issues are
addressed and that EPA uses the most appropriate method of conveying information.
\2\ Guide development is underway following consultation with the regulated community to ensure key issues are
addressed and that EPA uses the most appropriate method of conveying information.
\3\ Issuance date extended to assess the extent of litigation on the regulation.
\4\ Regulation currently under review.
\5\ Schedule for development of small system compliance guide will follow rule development schedule.
\6\ Issuance date extended to address technical corrections.

Question. Provide the name of the person in each program office
currently responsible for ensuring that compliance assistance tools are
developed for each economically significant rule.
Answer. Attachment A for question Bond-002 contains the name of the
person in each program office currently responsible for ensuring that
compliance assistance tools are developed for each economically
significant rule. If any additional information is needed please
contact Peter Pagano with the Office of Congressional and
Intergovernmental Relations at 564-3678.
Question. Provide an estimate of the cost of developing compliance
assistance tools for each economically significant rule finalized or to
be finalized in 2000 and 2001?
Answer. The costs associated with developing compliance assistance
tools for economically significant rules vary significantly. Cost
variations are based on the type of technical issues associated with
the substantive requirements of a rule, the degree of experience that
the regulated community has in dealing with environmental rules, and
the diversity of the regulated community (e.g., need for bilingual
assistance materials). In addition, cost variations occur because of
the multiple ways in which information exchanges occur with the
regulated community, including face-to-face training and delivery of
information via computer-based technology. Cost variations are also
associated with whether EPA develops a compliance guide within the
agency or uses contractor assistance to develop the guide. Finally,
cost fluctuations are affected by timing of the tool development; it is
often more cost efficient for the rule developer to prepare the
compliance guide at the time, or soon after, the final rule is
promulgated. Attachment A contains information on the estimated cost
associated with each completed compliance guide.
Question. How is EPA transforming the compliance assistance
activity plan from a list of compliance activities into a planning tool
describing needs, goals, and actions necessary to address those needs
and goals?
Answer. In April 2001, EPA published the Compliance Assistance
Activity Plan (the Plan) for fiscal year 2001. This first Plan is a
compilation of 368 compliance assistance activities agency-wide for
fiscal year 2001. The projects in the Plan were identified as part of
the planning and budget development process which began in the Spring
of 1999 and they were finalized after the agency received its fiscal
year 2001 appropriations. The fiscal year 2001 Plan established a base-
line of agency compliance assistance activity. As a planning tool, it
helped compliance assistance providers by: identifying opportunities to
partner; highlighting planned projects that were duplicative; and
providing the opportunity to better utilize and leverage limited
resources. The Plan also identifies EPA's 2001 priorities and the
regulation-specific compliance assistance tools being developed for
economically significant rules and for rules that have a significant
economic impact on a substantial number of small entities as defined
under the Small Business Regulatory Enforcement Fairness Act.
From the experience of developing the fiscal year 2001 Plan, EPA
has made refinements to the Plan development process and how the agency
intends to use the Plan in order to enhance its usefulness as a
planning tool. For instance, the Office of Compliance (OC) is
undertaking a ``gap analysis'' to identify whether planned compliance
assistance projects match the agency's identified programmatic and
regional priorities. OC will provide this analysis to program and
regional offices to advise them in future planning efforts. In
addition, EPA is incorporating a variety of stakeholder outreach
efforts into the Plan development process. To better determine the
highest priority compliance assistance needs, this year EPA regions and
headquarters are holding additional stakeholder meetings with states,
tribes and other groups that will augment the feedback received from
stakeholders and assistance providers at the Compliance Assistance
Providers Forum held in March 2001. The agency is also soliciting
comment on its proposed fiscal year 2002 compliance assistance projects
via a Federal Register notice this summer. All the comments received
through the Forum, stakeholders meetings and Federal Register notice
will be reviewed by all regional and relevant headquarters program
offices and considered in the development of the agency's fiscal year
2002 operating plans.
Question. Provide a ranking of the top 10 compliance assistance
needs and identify the criteria used for the ranking such as risk of
environmental damage or susceptibility of the problem to compliance
assistance techniques.
Answer. Office of Enforcement and Compliance Assurance (OECA) does
not have a ranked list of the top 10 compliance activity needs.
However, the Memorandum of Agreement (MOA) between EPA's Headquarters
and EPA Regional offices establishes a clear focus and a set of
priorities for compliance assurance activities within EPA for a two
year cycle as well as ongoing ``core'' responsibilities. The MOA also
guides our partners in the States and local jurisdictions. The MOA
Guidance for fiscal year 2002 and 2003 outlines the following priority
areas: wet weather (Clean Water Act), anti-microbial rules (Safe
Drinking Water Act), New Source Review/Prevention of Significant
Deterioration and Toxics (Clean Air Act), permit evaders (Resource
Conservation and Recovery Act), petroleum refining sector. Within these
priority areas, compliance assistance projects will be implemented, as
appropriate, based on the environmental problem or environmental risk
to be addressed.
Question. Describe how future Compliance Assistance Activity Plans
will direct EPA actions and resources to meet those priority needs?
Answer. It is anticipated that future Compliance Assistance
Activity Plans will reflect EPA's continuing efforts to better identify
the priority needs for compliance assistance, improve the process for
obtaining stakeholder input, engage in dialogue on how best to meet the
identified needs, and provide guidance on how to direct resources to
the highest priority needs. In addition, EPA is undertaking an effort
to better identify how compliance assistance resources are being
utilized by using the Plan to help identify the funding sources for the
planned fiscal year 2002 activities. It is not anticipated, however,
that the Plan will be used to specifically direct EPA actions and
resources; the agency's Strategic Plan and annual operating plans and
budget are the principal mechanisms for this effort.
Question. How is EPA holding rule development officials accountable
to ensure their new rulemakings include consideration of compliance
assistance tools from the earliest possible point?
Answer. EPA recognizes the importance of providing regulated
entities with information to assist them in understanding and meeting
their compliance obligations. Throughout the rulemaking process, we
actively seek input from the states and the regulated community so that
rules are crafted to be clear and understandable. In addition, through
the development of EPA's annual Compliance Assistance Plan, EPA
assesses the need for compliance assistance tools across the programs
with a specific focus on compliance assistance tools to implement new
regulatory requirements. That said, EPA acknowledges that its
rulemaking development can be improved. Accordingly, on March 10, 2001,
the Administrator formed a task force comprised of the then Acting
Assistant Administrators to evaluate the Agency's current rulemaking
process and make recommendations for improvement. EPA's senior
management has transmitted it recommendations to the Administrator for
her review and approval. We will supplement our answer to this
question, as appropriate, upon the Administrator's decisions on
improving the regulatory process.
In addition, EPA has established a goal to develop compliance tools
within 90 days of promulgating the final rules for the two types of
regulations for which the Agency has committed to providing compliance
guides. EPA has committed to develop compliance guides for federal
regulations that have a ``significant economic impact on a substantial
number of small entities'' as defined under the Small Business
Regulatory Enforcement Fairness Act (SBREFA). EPA has also committed to
develop either a compliance guide or a self-audit checklist for federal
regulations with an ``economically significant'' impact of $100 million
or more on companies and/or government facilities as outlined in EPA's
Aiming for Excellence report. The Agency is ensuring accountability by
closely tracking the implementation of these efforts and widely
publicizing its progress through various efforts, including the annual
Compliance Assistance Activity Plan.
Question. How could EPA comprehensively analyze its upcoming
regulatory requirements and determine where new compliance assistance
tools could most effectively increase compliance with those
requirements?
Answer. EPA has established a program for continuing the compliance
assistance needs discussions with its partners through EPA's National
Compliance Assistance Forum. Discussions and information provided at
these forums has been used to identify compliance assistance needs and
provide input on EPA's National Compliance Assistance Activity
Clearinghouse and the Annual Compliance Assistance Activity Plan.
Another vehicle for assessing compliance assistance needs comes from
EPA's work with the Compliance Assistance Advisory Committee (CAAC)
which is a component of the National Advisory Council for Environmental
Policy and Technology (NACEPT). These efforts not only support the
development of compliance assistance tools, but they also provide a
forum to assess the effectiveness of EPA's compliance assistance
efforts. Through all of these activities EPA is comprehensively
analyzing forthcoming regulatory requirements to identify which are
best suited to compliance assistance.
Based on discussions with stakeholders, EPA has also decided to
identify, through the rule development process, which rules have an
``economically significant'' impact on the regulated community, defined
as $100 million or more, and that EPA will develop compliance guides
for those rules. Similarly, as mandated by the Small Business
Regulatory Enforcement Fairness Act (SBREFA), based on the regulatory
flexibility analysis conducted early in the rule development process
EPA develops plain English compliance assistance guides for all SBREFA
rules. In addition, EPA has established a goal to develop compliance
tools within 90 days of promulgating the final rules for the two types
of regulations for which the Agency has committed to providing
compliance guides.
Question. How could EPA comprehensively analyze current regulatory
requirements to determine where new compliance assistance tools could
most effectively increase compliance with those requirements?
Answer. EPA recognizes the need to ensure compliance with current
regulatory requirements and routinely conducts compliance analyses and
outreach to identify areas of significant noncompliance. This analysis,
in conjunction with analysis by various EPA program offices, is used to
develop preliminary national compliance assurance priorities, including
compliance assistance priorities and candidates for compliance
assistance tools. These draft priorities are shared with various
stakeholders including EPA Regions, States and Tribes for further
refinement. In addition, in order to increase the focus and
effectiveness of its compliance program, and to assure maximum
stakeholder input into how EPA utilizes its compliance assistance
resources, EPA has begun a process of seeking public comment on its
preliminary national enforcement and compliance priorities through
publication of a Federal Register Notice. EPA uses national meetings
like the Compliance Assistance Providers Forum to identify regulatory
requirements and sectors in need of compliance assistance. Toward these
same goals, EPA is also working with the Compliance Assistance Advisory
committee (CAAC), a multi-stakeholder working group, of the National
Advisory Council for Environmental Policy and Technology (NACEPT) to
identify priority areas for compliance assistance activity. When
appropriate, EPA also works with other groups to identify and develop
focused compliance assistance tools such as the recent EPA/CMA effort
to determine the root causes of non-compliance in the chemical industry
sector. Finally, this year OECA has requested that each Region hold
sessions with stakeholders to solicit input on compliance assistance
needs and priorities.
Question. Estimates of the printing industry show that up to 90
percent of all printers will never be visited by an environmental
inspector or face following enforcement actions. What are other
industries which have a low likelihood of being subject to traditional
enforcement techniques?
Answer. All facilities must comply with the regulatory requirements
that apply to their operations and may be inspected at any time.
However, most industry sectors composed of small businesses are less
likely to be the subject of a Federal inspection or enforcement action.
State or local environmental agencies may have more frequent
interaction with small businesses. Compliance assistance has generally
been EPA's preferred approach for helping small businesses better
understand their regulatory obligations. EPA also offers compliance
incentives in the form of waived or reduced penalties to businesses
that voluntarily identify, correct and disclose violations in a timely
manner as stated in its Small Business Compliance Policy and the Audit
Policy (for facilities that do not meet EPA's definition of a small
business).
Question. How could EPA analyze the scope and extent of its
enforcement activities to determine areas where compliance assistance
might fill the gaps where the enforcement program does not currently
reach?
Answer. EPA continues to measure and analyze the effectiveness of
its compliance assistance and enforcement efforts and determine which
tools are most effective in particular situations. The agency has been
moving to an approach that identifies and addresses environmental
problems using innovative integrated initiatives or strategies that
combine compliance assistance, incentives, monitoring and enforcement
to address the priorities of the enforcement and compliance assurance
program. EPA's experience has shown that use of these tools in a
strategic, targeted way helps address noncompliance and uses resources
more efficiently and effectively. Once EPA has determined the
appropriateness of an integrated strategy, it is implemented in
partnership with states through the EPA regional/state planning process
to address the problem or priority.
EPA has also determined that small businesses, as a category, are
often most in need of assistance to understand their regulatory
obligations and are less likely to be subject to federal inspections or
enforcement actions. Therefore, much of our compliance assistance
efforts have been directed to this group.
Finally, it should be noted that the agency has devoted, and will
continue to devote, resources to measure the effectiveness of different
types of compliance and enforcement tools. In the past two fiscal
years, EPA provided nearly two million dollars to fifteen states to
develop and implement outcome based compliance assistance measures. In
addition, the Office of Enforcement and Compliance Assurance has
provided funds to the regions to conduct compliance assistance projects
with a measurement component and is undertaking a number of
statistically valid studies to determine industry sector compliance
rates. It is through the continuation of these and similar activities
that the agency can build a body of knowledge of the efficacy of all of
the compliance and enforcement tools.
Question. How is EPA documenting and measuring environmental
improvements from compliance assistance activities?
Answer. EPA is documenting and measuring environmental improvements
from its compliance assistance activities in several ways. In 1998, the
Office of Compliance developed a PC-based database, the Regional
Compliance Assistance Tracking System (RCATS), to track regional and
headquarters compliance assistance outputs. RCATS was revised in fiscal
year 2000 to capture outcome measures in three broad areas: (1)
awareness and understanding of regulatory requirements; (2) changes
within the regulatory community to improve environmental performance;
and (3) direct reduction of emissions/discharges. The methods used to
evaluate activities have included: mailed/faxed, Internet posted and e-
mailed surveys, phoned interviews, pre and post-tests for workshops and
training sessions, and on-site revisits, where appropriate.
This year, the Office of Compliance will be exploring the
feasibility of collecting outcome data using a statistically-valid
methodology so that broader conclusions based on representative samples
can be made about the environmental improvements that result from
compliance assistance activities.
Other efforts to document and measure environmental improvements
from compliance assistance include conducting regional compliance
assistance measurement pilots for the past two years, providing grants
to states for developing compliance assistance measures and documenting
environmental outputs, and working with a group comprised of EPA and
state representatives to develop compliance assistance data standards
so that EPA and states share more uniform data on compliance assistance
activities.
Question. What is the status of EPA efforts to determine total
resources devoted across the agency to compliance assistance
activities?
Answer. The Senate Small Business Committee has requested EPA to
provide agency-wide compliance assistance information. In response to
this request, the Agency has established a Compliance Assistance key
program that each EPA program office will use to identify compliance
assistance resource information. The Annual Planning and Budget
Division (APBD) is continuing to work with the Agency's programs to
validate the compliance assistance resource information and plans to
provide this information to the Senate Small Business Committee by the
end of August 2001.
Question. How is EPA adopting a broad, holistic approach to
environmental assistance recognizing that compliance assistance is part
of a much larger spectrum of environmental activities?
Answer. In order to promote a holistic approach to providing
environmental assistance, the Office of Enforcement and Compliance
Assurance (OECA) has been working with a variety of other assistance
providers to ensure that compliance assistance is integrated into the
full range of activities designed to improve the environment. For
example, OECA has partnered with industry, academics, environmental
groups and other agencies to establish ten sector-based Compliance
Assistance Centers (Center). The Centers provide not only easy to
understand compliance information but also information on pollution
prevention and best management practices. As another example, OECA has
worked closely with EPA's pollution prevention staff, media program
staff and industry groups to incorporate pollution prevention and
technical assistance in the series of sector notebooks that it has
developed and continues to develop. There has also been extensive
collaboration between OECA and the network of small business assistance
providers within and outside the agency to deliver the full range of
environmental assistance information to small businesses.
Question. How is EPA making an explicit commitment to compliance
assistance in its Strategic Plan?
Answer. The Office of Enforcement and Compliance Assurance (OECA)
has made compliance assistance a significant part of its strategic
planning efforts. Goal 9 of the Agency's Strategic Plan, ``A Credible
Deterrent to Pollution and Greater Compliance with the Law'', dated
September 2000, sets as an objective for the Agency that, ``EPA and its
state, tribal and local partners will promote the regulated community's
compliance with environmental requirements through voluntary compliance
incentives and assistance programs.'' Through this objective OECA hopes
to increase ``the understanding of environmental requirements through
the development, distribution and use of compliance assistance tools.''
To implement this strategic objective, OECA has included in the
Annual Performance Plans for fiscal years 2001 and 2002, Annual
Performance Goals and Performance Measures to assure that compliance
assistance is developed and made available to assistance providers and
the regulated community.
An important note is that for fiscal years 2001 and 2002, OECA has
committed under Annual Performance Measure PM 258, to developing 150
compliance assistance tools described in its fiscal year 2001
Compliance Assistance Activity Plan. This plan is also referenced in
OECA's national work planning guidance for the ten regional offices,
the fiscal year 2002/2003 Memorandum of Agreement (MOA) Guidance. The
linkages between the Strategic Plan, the Annual Performance Plan, the
Compliance Assistance Activity Plan, and the MOA Guidance ensure a
strong commitment to compliance assistance.
Question. How is EPA more widely seeking and incorporating into its
planning process feedback on compliance assistance from stakeholders
and communities?
Answer. The Office of Enforcement and Compliance Assurance (OECA)
is taking a two track approach to expanding the opportunities for
stakeholder input into its planning process. OECA develops national
work planning guidance for the regional compliance and enforcement
program every two years. For the fiscal years 2002/2003 national
program guidance, released June 19, 2001, stakeholder involvement began
in March of 2000. The ten regional offices were requested to solicit
suggestions for national compliance and enforcement priorities from
their state, tribal and local regulatory partners. OECA received over
150 suggested priorities. Similar suggestions were grouped, background
information developed on these groups and on September 28, 2000 EPA
published a Federal Register Notice (FR Notice) describing 15 potential
compliance and enforcement priorities and soliciting citizen input. On
November 15, 2000 OECA hosted a national priorities meeting with
Agency, state, tribal and state association representatives to discuss
the results of regulatory and citizen input into planning process. The
draft national guidance contained six national compliance and
enforcement priorities which had been described in the September FR
Notice. These six priorities were recently announced as OECA's
priorities for fiscal year 2002/2003.
The second track for greater stakeholder involvement in the OECA
planning process is through a greatly expanded Compliance Assistance
outreach effort. For example, OECA has hosted two national Compliance
Assistance Activity Forums, national gatherings to share innovative
approaches and discuss current strategies, successes and lessons
learned. The two forums have been attended by over 500 individuals
representing states, tribes, communities, community activist groups,
industry, assistance providers and trade associations. At Forum 2001,
EPA solicited input on compliance assistance priorities from
stakeholders for the drafting of the fiscal year 2002 Compliance
Assistance Plan. OECA has also established a Compliance Assistance
Advisory Committee as a standing subcommittee of the National Advisory
Council on Environmental Policy (NACEPT). This group was establish
under the aegis of the Federal Advisory Committees Act (FACA) and was
created to advise OECA on how to better provide compliance assistance
and develop a comprehensive Compliance Assistance Activity Plan. The
first plan, released in 2001, catalogues over 350 compliance assistance
activities; provides analysis and policy background on compliance
assistance; and outlines anticipated and pending Federal rules and
rules related compliance guidance. The national work planning guidance
to the ten regional offices references the Compliance Assistance
Activity Plan. For the fiscal year 2002 Plan, each regional office is
holding sessions with stakeholders to solicit their input on compliance
assistance needs and priorities for the draft fiscal year 2002 Plan.
Question. How are program offices and regions addressing in their
strategic plans how compliance assistance and compliance incentives
will be implemented?
Answer. EPA program offices address compliance assistance and
incentives as part of their annual planning processes. It is during
this planning that specific assistance programs or compliance tools are
identified that respond to a particular environmental protection
objective in the strategic plan. EPA Regions address compliance
assistance in their MOAs with Office of Enforcement and Compliance
Assurance, as described in response to Question number 006.
Question. How is EPA senior management providing specific guidance
to all staff levels regarding the role of compliance assistance in the
agency's mission?
Answer. EPA senior management has conveyed a clear commitment to
staff about the role of compliance assistance by: (1) emphasizing
assistance in objectives under Goal 9 of the Agency Strategic Plan; (2)
including goals and measures on assistance in Office of Enforcement and
Compliance Assurance's (OECA) Annual Performance Plan; (3) utilizing
assistance tools to address various national priorities identified by
OECA; (4) implementing various initiatives described in the Aiming for
Excellence Report to help other assistance providers; (5) providing
$315,000 in fiscal year 2000 and $476,000 in fiscal year 2001 for
Regional and state compliance assistance initiatives; and (6) awarding
$1.2 million to 10 states for compliance assistance outcome
measurement.
Question. What is the status of EPA designation of a National
Compliance Assistance Director within Office of Enforcement and
Compliance Assurance and a Compliance Assistance Coordinator in each
program office and regional office?
Answer. After conducting an internal program review and receiving
feedback from stakeholders, the Office of Compliance created a new
division, the Compliance Assistance and Sector Programs Division, to
provide the agency with a focal point for advancing the practice of
compliance assistance. To advance the compliance assistance program,
this division has established a compliance assistance work group
comprised of contacts in each EPA program office and regional office to
assist in developing the annual Compliance Assistance Activity Plan and
planning for the annual Compliance Assistance forum.
Question. How is EPA encouraging sector-based and problem-based
approaches to compliance?
Answer. To facilitate sector-based and problem-based approaches to
compliance by EPA Regions and state programs, Office of Enforcement and
Compliance Assurance has: improved the capacity of single-media data
systems to analyze compliance trends by industry sector and identify
areas of potential noncompliance; solicited ideas from state regulatory
partners about environmental risks and noncompliance patterns which
should be considered national priorities; developed on-line targeting
information tools that analyze noncompliance on a geographic or
facility basis; and created partnerships with trade associations to
develop sector-based compliance assistance centers to provide
information about compliance problems.
Question. How is EPA developing integrated targeting strategies
that incorporate all environmental assistance approaches?
Answer. In recent years, EPA has improved its capacity to apply the
full range of tools (compliance assistance, incentives for self-
auditing such as pollution prevention tools, inspections, and
enforcement actions) in combinations tailored to specific risks or
noncompliance patterns. One area where Office of Enforcement and
Compliance Assurance (OECA) has developed such an integrated strategy
is for addressing compliance assistance needs associated with
Concentrated Animal Feeding Operations (CAFOs). In addition, OECA's
final fiscal year 2002/2003 Memorandum of Agreement (MOA) Guidance
provides direction to the regions on how to use each of these tools in
addressing the six national MOA priorities. Through the Compliance
Assistance Clearinghouse, the Annual Compliance Assistance Activity
Plan, the Compliance Assistance Providers Forum, and other mechanisms,
EPA has a more comprehensive understanding of the available assistance
techniques which can be applied to specific environmental problems.
Question. How is EPA developing operation guidance defining the
Agency's role as compliance assistance ``wholesaler?''
Answer. EPA recognizes that its co-regulators, state, local and
tribal governments provide the bulk of direct compliance assistance.
EPA recognizes this and is attempting to better serve the significant
efforts of these agencies as well as the network of private compliance
assistance providers. At this time, the agency is working closely with
states and various provider communities to better understand and
discuss the appropriate roles and responsibilities for different
organizations providing compliance assistance. Clearly, there is not
one single model for addressing all compliance assistance needs.
Solutions to the development and delivery of compliance assistance will
need to be developed on a case-specific basis. We are continuing to
enhance the agency's ``wholesaler'' functions through the annual
Compliance Assistance Activity Plan. We are also clarifying our role as
a compliance assistance ``wholesaler'' through dialogue with various
stakeholders at venues such as the National Compliance Assistance
Providers Forum, regional stakeholder meetings, the Compliance
Assistance Advisory Council, and the Small Business Development Centers
and Small Business Assistance Program conferences.
Question. How is EPA ensuring that the analytic blueprint for each
new regulation includes a compliance assistance analysis?
Answer. Pursuant to the Small Business Regulatory Enforcement
Fairness Act (SBREFA), EPA has committed to develop compliance guides
for Federal regulations that have a ``significant economic impact on a
substantial number of small entities.'' The Agency also develops either
a compliance guide or a self-audit checklist for federal regulations
with an ``economically significant'' impact of $100M or more on
companies and/or government facilities. As of July 5, 2001, there are
ten rules finalized or expected to be finalized by December 2001 for
which a guide or checklist is scheduled to be developed.
More generally, Agency guidance requires program offices
responsible for ``Tier 1 and Tier 2'' regulatory actions (i.e., those
that require participation of the Administrator's office and those that
need cross-media or Assistant Administrator-level involvement) to
develop an ``analytic blueprint.'' An analytic blueprint is a plan for
the analyses, consultation and other activities that support the
regulation. Among other things, the blueprint is intended to:
--Identify the potential regulated universe and compliance/
enforcement issues for each group within the universe;
--Identify compliance/enforcement issues for different regulatory
options; and
--Identify the outreach and technical support needs for rule
implementation.
Use of an analytic blueprint should help rule developers focus, at
any early point in the process, on what compliance assistance would be
appropriate for that particular rule.
The Administrator recently charged an Agency task force with
developing recommendations on how to improve EPA's regulatory
development process.
Question. How is EPA ensuring that each rulemaking working group
perform an assessment of the compliance assistance needs associated
with the various regulatory options, including an assessment of the
resources needed for implementation?
Answer. EPA examines the need for compliance assistance through
several different mechanisms throughout the rule development process.
The Small Business Regulatory Enforcement Fairness Act (SBREFA)
requires EPA to develop compliance guides for Federal regulations that
have a ``significant economic impact on a substantial number of small
entities.'' The Agency also develops either a compliance guide or a
self-audit checklist for Federal regulations with an ``economically
significant'' impact of $100M or more on companies and/or government
facilities. As of July 5, 2001, there are ten rules finalized or
expected to be finalized by December 2001 for which a guide or
checklist is scheduled to be developed.
With regard to SBREFA's compliance guide requirements, the Agency's
``1999 Revised Interim Guidance for EPA Rulewriters: Regulatory
Flexibility Act as Amended by the Small Business Regulatory Enforcement
Fairness Act,'' prescribes the conditions and criteria for preparing
small business compliance guides. This guidance directs regulatory
workgroups to begin developing compliance assistance guides as early in
the process as there is enough information to do so, with a goal to
publish the guides within two months of promulgation of the rules. The
guidance further states that ``it remains EPA policy that program
offices should assess the direct impact of every rule on small entities
and minimize any adverse impact to the extent feasible, regardless of
the magnitude of the impact or number of small entities affected.''
Question. How is EPA ensuring that each rulemaking working group
include a description of the compliance assistance tools that will be
developed for the selected regulatory option when preparing its rule
for Federal Register publication?
Answer. EPA is required to develop compliance guides for federal
regulations that have a ``significant economic impact on a substantial
number of small entities'' as defined under the Small Business
Regulatory Enforcement Fairness Act (SBREFA). In addition, EPA has
committed to develop either a compliance guide or a self-audit
checklist for federal regulations with an ``economically significant''
impact of $100 million or more on companies and/or government
facilities as outlined in EPA's ``Aiming for Excellence'' report. For
purposes of determining if we will issue Compliance tools, program
offices in EPA have the lead in undertaking the analysis which will
determine if a rule falls under SBREFA or is economically significant.
Information regarding program office plans to develop compliance guides
is available to the public through the annual Compliance Assistance
Activity Plan (the Plan). On or about July 25, 2001, a Federal Register
notice will announce the availability of the draft Plan inventory for
fiscal year 2002 for public review and comment.
Agency interim guidance for EPA rulewriters, regarding implementing
the Regulatory Flexibility Act, as amended by the SBREFA, dated March
29, 1999, advises rulewriters to integrate development of compliance
assistance guides into the rulemaking process. Rulewriters are advised
to begin on compliance assistance guides as soon as there is enough
information to do so. The Office of Compliance is working with the
Office of Policy, Economics and Innovation to improve tracking of
compliance guide development during the regulatory process.
Question. How is EPA better targeting compliance assistance to
constituencies which have not traditionally participated in compliance
assistance activities?
Answer. EPA is taking numerous steps to draw more diverse
constituents into compliance assistance activities. In particular, EPA
is soliciting more input from our stakeholders. The Office of
Enforcement and Compliance Assurance (OECA) sponsors the Compliance
Assistance Advisory Committee (CAAC), a multi-stakeholder working group
of the National Advisory Council for Environmental Policy and
Technology to provide input and guidance into the national compliance
assistance program. OECA also broadly solicits input into its
compliance assurance priorities by holding stakeholder meetings and
issuing a Federal Register Notice prior to its selection of priorities.
EPA also seeks out new constituents through holding the annual
Compliance Assistance Providers Forum which brings together an array of
compliance and environmental assistance providers and industry to
collaborate and identify compliance assistance priorities.
In addition, EPA is partnering with third parties who can expand
the reach of the agency's ``wholesale'' compliance assistance efforts.
EPA recognizes that its co-regulators, state, local and tribal
governments, trade associations and other assistance providers have
direct access to and, often, the trust of the regulated community. The
agency is attempting to better serve the efforts of other assistance
providers by undertaking ``wholesale'' compliance assistance functions:
developing a web-based National Compliance Assistance Clearinghouse,
holding an annual Compliance Assistance Providers Forum, developing an
annual Compliance Assistance Activity Plan, creating compliance
assistance tools that can be distributed locally by other assistance
providers.
Another example of how partnering with third parties can expand the
reach of compliance assistance to new constituencies is the compliance
assistance centers. Eight of the ten compliance assistance centers that
EPA supports are run by third parties. These centers are a degree
removed from EPA and thus can reach sources that, in the past, may have
been uncomfortable approaching EPA for assistance, or may deal
primarily with their trade association. EPA is also establishing a
partnership with the National Center for Manufacturing Sciences that
will provide logistical support in the form of computer hardware,
software and web support which will make it possible for new industry
sectors to establish their own compliance assistance centers and reach
new segments of the regulated community.
Finally, the Office of Enforcement and Compliance Assurance is
using non-traditional as well as traditional data sources to identify
industry sectors with environmental problems that could, in part, be
addressed by compliance assistance. These efforts should enable the
agency to identify problems and provide compliance assistance to
constituencies that in the past, may have not been addressed by the
agency.
Question. How is EPA developing a voluntary national compliance
assistance providers' measurement collection system?
Answer. The Office of Compliance has developed its own internal
tracking system, Reporting for Compliance Assistance Tracking System
(RCATS). Compliance assistance staff in the regions and headquarters
report on their output and outcome data through this system. Because
RCATS is on a platform (Lotus-Notes) that is not often used by states
and because states' reporting needs may differ from ours, in fiscal
year 1999 OC funded the efforts of the Northeast Waste Management
Officials Association, to develop a state version of RCATS. The
National Advisory Council for Environmental Policy and Technology's
(NACEPT) Compliance Assistance Advisory Committee has also been
discussing measuring compliance assistance outcomes and is expected to
make recommendations to the Agency on measurement collection. Most
recently, Office of Enforcement and Compliance Assurance (OECA) is
developing ICIS, the Integrated Compliance Information System, that
will replace RCATS and will serve both EPA and state reporting needs.
ICIS will incorporate data elements of the Annual Agency Compliance
Assistance Plan, RCATs, and the other compliance assistance output and
outcome measures that are relevant to EPA as well as states. In
developing the compliance assistance functions for ICIS, the Agency
will build on the work begun by the joint EPA/State Data Standards
project co-chaired by OECA, Office of Environmental Information (OEI)
and Environmental Council Of States (ECOS) to identify the data
elements and outcome measures for the compliance assistance program and
conduct analyses of ongoing measurement projects. The system will be
made available to states and facilitates EPA and the states sharing
data on compliance assistance activities.
Question. How is EPA testing methods for understanding the direct
impact of compliance assistance on compliance and environmental
performance at regulated activities?
Answer. The Office of Compliance (OC) has focused its assistance
efforts on small business/communities that have not had much exposure
to traditional enforcement and therefore may not be fully aware of
their compliance obligations. The bulk of such activities are
undertaken through EPA's regional offices and commonly include:
hotlines, workshops/seminars/training, development of compliance guides
(e.g., plain-language explanations of regulations, videos), and on-site
visits.
Over the past few years, EPA has conducted over 50 surveys to
determine the impacts of its compliance assistance program in three
broad areas: (1) awareness and understanding and regulatory
requirements; (2) changes within the regulatory community to improve
environmental performance; and (3) direct reduction of emissions/
discharges. The methods used to evaluate activities have included:
mailed/faxed, Internet posted and e-mailed surveys, phoned interviews,
pre and post-tests for workshops and training sessions, and on-site
revisits, where appropriate. For the last two years, the Office of
Enforcement and Compliance Assurance (OECA) has asked each Region to
undertake a compliance assistance measurement project and report back
on the results. In addition, the Office of Compliance has funded eight
Regional projects in fiscal year 2000 and ten projects in fiscal year
2001 that are designed to measure the effectiveness of workshops,
Internet information, user guides and on-site visits, as well as
finding new tools to enhance the effectiveness of compliance
assistance. In addition to evaluating compliance assistance tools, the
projects also used various measurement techniques (i.e., surveys,
website hits, pre- and post-test) to begin to evaluate the best way to
generate defensible outcome measures for these important activities.
In fiscal year 1999 OECA funded 5 states: Texas, Connecticut,
California, New Hampshire and Colorado, to develop and implement
outcome based compliance assistance measures ($778,000) and funded 10
states in fiscal year 2000: Iowa, Maryland, New York, Michigan, New
Mexico, Ohio, Massachusetts, and Missouri ($1,270,541).
In fiscal year 2001, OECA is embarking on a pilot project to
determine the feasibility of collecting statistically-valid outcome
information. OECA will be comparing the cost and feasibility of
collecting statistically-valid outcome data through on-site visits
versus mailed surveys for three regulated sectors: metal finishers,
marinas and salvage yards. By exploring the feasibility of collecting
outcome measures in a statistically-valid manner, EPA hopes to further
improve its ability to measure outcomes from its compliance assistance
efforts.
Question. Provide the dollars and FTE for activities under the
Compliance Assistance and Centers Key Program. In meeting this request,
provide resource levels from the fiscal year 2001 budget request,
fiscal year 2001 enacted, fiscal year 2001 actuals, and fiscal year
2002 request. Organize the information by appropriation, Goal,
Objective, Sub-objective, Office or Region, and Activity.
Answer. The table below provides the dollars and FTE under the
Compliance Assistance and Centers Key Program for the Office of
Enforcement and Compliance Assurance (OECA). The key program database
does not contain information for fiscal year 2001 actuals. Therefore,
this information is not included in the following table.

[In millions of dollars]
----------------------------------------------------------------------------------------------------------------
Fiscal year 2001 Fiscal year 2001 Fiscal year 2002
request enacted request
Approp/Goal/Obj/HQ Office/Region -----------------------------------------------------
Dollars FTE Dollars FTE Dollars FTE
----------------------------------------------------------------------------------------------------------------
EPM....................................................... 24.0 212.2 25.1 206.0 26.5 213.0
0501...................................................... 0.4 4.0 0.5 3.9 0.5 3.9
Ofc of Site Remed. Enforce................................ 0.4 4.0 0.5 3.9 0.5 3.9
0902...................................................... 23.6 208.2 24.6 202.1 26.0 209.1
Immediate Office.......................................... 0.3 0.0 0.4 0.0 0.4 0.0
Ofc of Compliance......................................... 4.3 22.9 6.4 25.4 6.2 25.4
Ofc of Reg. Enforce....................................... 2.1 16.7 0.0 0.0 0.0 0.0
Federal Facilities Enforcement Office..................... 0.8 3.1 0.8 3.1 0.8 3.1
Ofc of Enf. Capacity & Outreach........................... 0.4 3.7 0.3 3.0 0.0 0.0
Ofc of Planning, Policy Analysis, & Communications........ 0.0 0.0 0.0 0.0 0.3 3.0
Regions................................................... 15.7 161.8 16.7 170.6 18.3 177.6
Oil Spills Response....................................... 0.3 1.8 0.3 1.8 0.3 1.8
0502...................................................... 0.3 1.8 0.3 1.8 0.3 1.8
Ofc of Site Remed. Enforce................................ 0.2 0.9 0.2 0.9 0.2 0.9
Ofc of Compliance......................................... 0.1 0.9 0.1 0.9 0.1 0.9
Superfund................................................. 0.1 0.8 0.0 0.0 0.0 0.0
0902...................................................... 0.1 0.8 0.0 0.0 0.0 0.0
Ofc of Enf. Capacity & Outreach........................... 0.1 0.8 0.0 0.0 0.0 0.0
----------------------------------------------------------------------------------------------------------------

enforcement
Question. In the face of attrition to its Regional enforcement
FTEs, how is EPA ensuring that the enforcement staffs in each Region
are sufficient to handle the enforcement needs in that given Region?
Answer. Agencies routinely face attrition in their program and use
their resources to focus on their most pressing problems. The fiscal
year 2002 budget provides EPA's enforcement and compliance assurance
program sufficient resources to carry out the appropriate federal role,
focusing on federal cases involving multi-state or multi-facility
corporations, environmental programs which cannot be delegated to
states due to statutory prohibition, or issues for which EPA can
provide specialized expertise.
The President's focus is helping states conduct their enforcement
activities while maintaining a federal enforcement level that was set
in fiscal year 2000.
Question. In reassigning enforcement FTE to non enforcement
positions as proposed by the President's Budget, how will EPA ensure
that enforcement staff in each Region are sufficient to handle the
enforcement needs in that Region?
Answer. If such reassignments are necessary, Regional managers will
make reassignments only after taking into consideration the need to
address high priority risks and noncompliance patterns in their region.
The fiscal year 2002 budget provides sufficient resources to the
enforcement and compliance assurance program, both headquarters and
regions, to address multi-state, multiple facility, and cases that
cannot be delegated to states.
Question. How will the proposed reduction of enforcement FTE and
additional state enforcement resources impact enforcement outputs--
federal, state, and local?
Answer. We expect improved national enforcement results. Already 90
percent of inspection activities are conducted by States. The
Administration's proposal to give States greater resources will enhance
their ability while reducing the overlap of State and Federal efforts.
Question. How will the proposed reduction of federal enforcement
FTE and additional state enforcement resources impact national
environmental indicators, such as clean air and clean water?
Answer. The Agency believes that the resources in the enforcement
program are sufficient to continue achieving significant reductions in
pollution through enforcement and compliance assurance activities at
the federal level. Additional resources to the States will enable them
to better achieve their delegated duties. The Administration's shift of
resources from Federal enforcement to State level enforcement is
designed to enhance compliance, not detract from it.
Question. How will EPA ensure that geographic areas subject to a
decrease in federal enforcement personnel realize an increase in state
enforcement resources?
Answer. Although we expect that states will take a number of
enforcement actions made possible by the use of the grant funds, we do
not expect that there will be a one-to-one correspondence overall, or
geographically, between reductions in federal enforcement actions, and
increases in state enforcement actions. Instead, states will use the
grant funds to address important environmental risks and noncompliance
patterns through strategies that utilize enforcement actions,
inspections and investigations, incentives for facility self-auditing,
and compliance assistance in appropriate combinations.
Question. How will EPA avoid imposing matching requirements for the
$25 million in new enforcement grants on states which may already have
too few environmental resources?
Answer. EPA does not intend to incorporate matching requirements in
the new enforcement grant program. Through EPA's consultation with
states and tribes, we determined that matching requirements would be a
burden that might deter states and tribes from participating in the
program.
Question. Will acceptance of multiple proposals from states for the
$25 million in new enforcement grants reward states which have the
resources to submit numerous high quality proposals.
Answer. Based on feedback from states and tribes EPA will likely
require a lead agency within a state or tribe to submit a single,
consolidated proposal. Agencies other than the lead agency will remain
eligible to receive grants funds if they are included in the proposal.
Question. How will EPA compare future outcome improvements expected
from the new state enforcement grants to the immediate loss of output
activities from the FTE decrease?
Answer. There will likely not be a one-to-one correspondence
between reductions in federal activities (outputs and outcomes) and
state and tribal activities that will result from use of the new grant
funds. Instead, the goal is to ensure that states and tribes are
focusing on high priority environmental problems, and are held
accountable for measuring and reporting results.
Question. Will states receive the entire $25 million from the new
enforcement grant program or will EPA use some of that money?
Answer. EPA will distribute the entire $25 million to states,
tribes, and other eligible entities.
Question. How will EPA obtain information from states measuring
their outputs or outcome from usage of the new $25 million?
Answer. States will be approved for grant funding only if their
grant proposal includes specific plans to measure and report on their
performance in achieving results. For example, states will need to
define performance measures for determining whether they are having an
impact on the environmental risk or noncompliance pattern they are
addressing with the grant funds. EPA will establish required reporting
intervals for states to provide performance information that can be
reviewed by EPA on a regular basis.
Question. Will the information EPA obtains from states on their use
of the $25 million be sufficient for EPA to determine whether the
environment was hurt by the enforcement FTE cuts?
Answer. Information gathered from states and tribes on their use of
grant funds will allow the Agency to determine the impact they are
having on the environmental problems they chose to address.
EPA's performance information about its own programmatic outputs
and outcomes will be used to determine whether there is a non-
compliance pattern or emerging environmental risk that needs to be
addressed. As we have in previous years, EPA will continue to monitor
information about program performance to ensure we are focusing on
important problems, and achieving the right results and outcomes.
Question. How will EPA articulate a new vision for national
enforcement which includes appropriate balance, roles and
responsibilities between state and federal enforcement agencies?
Answer. The grant program will provide opportunities to improve and
expand our enforcement partnerships with states. These opportunities
will allow EPA and states to further clarify their respective roles and
responsibilities.
enforcement: breakout of federal enforcement activities between multi-
state and single-state actions
Question. What is the breakout for federal enforcement activities
between multi-state and single-state actions?
Answer. For the most recently completed fiscal year, fiscal year
2000, there were a total of 5,609 settled administrative and judicial
actions (data from EPA's Enforcement Docket Data System). Of the 219
judicial actions, five involved multiple states; of the 5,390
administrative actions, 42 involved multiple states.
The attached chart identifies some of the significant multi-state
cases to date in fiscal year 2001. Specifically, the chart shows multi-
state cases with consent decrees or publicly announced agreements in
principle that have been lodged in fiscal year 2001.

EPA OFFICE OF ENFORCEMENT AND COMPLIANCE ASSURANCE FISCAL YEAR 2001--SIGNIFICANT MULTI-STATE CASES
----------------------------------------------------------------------------------------------------------------
Injunctive Environmental
Company Number of Relief Project(s) \1\ Penalties Environmental
Facilities ($1,000) ($1,000) ($1,000) Benefits
----------------------------------------------------------------------------------------------------------------
BP Amoco \2\.................. 8 500,000 ( \3\ ) 10,000 40,000 tpy \4\
(SO2, NOX)
Koch \2\...................... 3 80,000 ( \5\ ) 4,500 6,000 tpy (SO2,
NOX)
Motiva \2\.................... 9 400,000 5,500 9,500 50,000 tpy (SO2,
NOX)
MAP \2\....................... 7 265,000 6,500 3,800 23,000 tpy (SO2,
NOX)
Cinergy \6\................... 10 1,400,000 21,500 8,500 500,000 tpy
(SO2, NOX)
Morton International \2\...... 24 44,000 16,000 22,000 400 tpy of
hazardous waste
properly
disposed
Nucor \2\..................... 14 85,000 4,000 9,000 9,400 tp (NOX
and VOC) over
the life of the
agreement
Safety-Kleen Corp \2\......... 130 3,000 ( \5\ ) 221.25 Improved
financial
assurance
VEPCO \6\..................... 8 1,600,000 13,900 5,300 250,000 tpy (SO2
and NOX)
Willamette \2\................ 13 74,000 8,000 11,200 27,000 tpy (VOC,
PM, and CO)
Palm Harbor Homes (EPCRA Part 10 163.5 ( \5\ ) ( \5\ ) 19 violations
22 Administrative Action) \2\. for failing to
file Form R
reports for
diisocyanates
processed when
manufacturing
homes.
Preston Engravers and Roto-Die 3 245 ( \7\ ) ( \5\ ) Not yet
Co \2\. available--CDS
not yet
complete
Walmart \2\................... 17 4,500 ( \5\ ) 1,000 Not available
Amtrak \2\.................... 9 ( \7\ ) 900 500 Not available
Air Liquide \2\............... 22 ( \7\ ) 500 4,500 Not available
----------------------------------------------------------------------------------------------------------------
\1\ Rounded to the nearest million.
\2\ Settlement--Lodged or Entered.
\3\ Not yet quantified.
\4\ tpy (tons per year)
\5\ None.
\6\ Agreement in principle.

Question. What types of actions are most appropriate for state
enforcement agencies?
Answer. States are well equipped to handle most violations of the
delegated enforcement programs they administer. States already conduct
more than 90 percent of inspections and can often respond more quickly
to routine violations than EPA. Because states handle most permitting
responsibilities, EPA coordinates closely with states on any Federal
enforcement action that affects a program administered by states.
Question. What types of actions are most appropriate for EPA versus
state enforcement agencies?
Answer. For obvious reasons--such as lack of effective state
jurisdiction--multistate cases are well suited to federal enforcement.
EPA works closely with states in developing and negotiating such cases,
and states often join the federal government as parties to the final
consent decree. Global settlements may offer companies an efficient way
to settle many violations at once, and may help to preserve a level
playing field in a competitive marketplace.
Other cases appropriate for EPA involvement involve violations
leading to interstate transfer of pollutants, e.g., the long-range
transport of air emissions like nitrogen oxides and sulfur dioxides.
Such pollutants are the target of the Agency's lawsuits for violations
of the Clean Air Act New Source Review provisions, which require
companies to install pollution controls on grandfathered plants when
they are expanded in a way that increases their capacity to emit.
Interstate pollution may arise under other statutes, e.g., when
pollutants from an industrial discharger in one state flow downstream
to affect water quality in another. Still other examples of appropriate
federal cases, more difficult to categorize, involve environmental
violations that are technically complex or otherwise beyond the
capacity of the state to address. Finally, EPA remains responsible for
certain programs in some states, while others, such as the Toxic
Substances Control Act, wetlands enforcement, pesticide registration or
right-to-know laws are either not delegated to states or cannot be
under the law.
Question. How would any changes to the current balance of roles and
responsibilities between federal and state enforcement agencies improve
environmental protection?
Answer. Any reexamination of federal and state roles and
responsibilities would be designed to ensure that federal and state
enforcement and compliance assurance resources are focused on the most
important environmental problems. The partnerships enabled by the grant
program will lead to clearer identification of these problems, and the
most appropriate combination of federal and state resources to
effectively address them.
Question. How can EPA modify its audit policy to encourage more
reporting of environmental violations versus purely paperwork or
reporting violations?
Answer. To date, over 5,000 facilities have entered EPA's audit
program and disclosed all types of violations under nearly every
federal environmental statute that EPA administers. The Audit Policy
has proven to be efficient for companies and EPA in resolving record-
keeping and reporting violations. Record-keeping and reporting
requirements provide the framework for public access to information,
the structure for safe handling and the use and discharge of hazardous
substances, and are derived from federal laws enacted by Congress. The
failure to submit emergency and chemical inventory forms, for example,
can have tragic consequences, such as the death of firefighters unaware
of the presence of hazardous chemicals. EPA believes that the benefits
to public health and the environment of statutes like the Emergency
Planning and Community Right to Know Act, which was enacted by Congress
in the wake of the Bhopal tragedy, should not be minimized. Since
monitoring and reporting violations represent a significant amount of
environmental violations in general, it is not surprising the
violations disclosed under the audit program reflect a similar pattern.
In addition, EPA has had success in using targeted integrated
strategies to increase the quality and breadth of disclosures. For
example, EPA has undertaken several efforts over the past 2 years to
encourage the disclosure and correction of violations of emission and
discharge limits. These include a compliance partnership agreement to
encourage controlling volatile organic compounds (VOC) emissions from
petroleum storage tanks, an audit agreement with the National Pork
Producers Council to reduce or eliminate penalties for disclosure and
correction of Clean Water Act violations; 67 municipal audits which are
expected to reduce sanitary sewer overflows by improving maintenance
and expanding capacity; and voluntary audits by airlines of compliance
with fuel standards.
EPA is seeing an increase in the breadth of disclosure types
through use of corporate auditing agreements--agreements that allow
companies to plan corporate-wide audits with an advance understanding
between the company and EPA regarding schedules for audits, disclosures
and corrections. Most recently, EPA is entering into audit agreements
for voluntary review and corrections relating to the handling, use and
disposal of chlorofluorocarbons (CFCs); meeting air emissions standards
under the New Source Review program and national emission standards for
hazardous air pollutants; use, disposal, storage and marking of PCBs;
operating standard and corrective action requirements for underground
storage tanks; and illegal injection of hazardous substances into
underground wells.
The Audit Policy as it exists currently is providing a meaningful
incentive for companies to participate in the program, as is evidenced
by the fact that participation in the program has doubled nearly each
year since the policy's inception.
Question. How is EPA measuring the outcome improvements to the
environment resulting from use of the Audit Policy?
Answer. EPA reports successes of Audit Policy use in a quantitative
measure, consistent with reporting requirements under the Government
Performance and Results Act. In addition, last year, in recognition of
the significant growth in the audit program and to better reflect the
Agency's focus on environmental and health improvements that result
from its settlements, EPA began tracking its audit cases in a modified
system that will allow for input regarding case results, similar to
EPA's enforcement cases. We are hopeful that additional information
will be available this year.
Question. How can EPA modify the use of its enforcement discretion
to encourage activities, such as in the reinvention area, which bring
about improvements to the environment?
Answer. In order to encourage innovative projects promising
superior environmental results, EPA made clear it would consider the
use of tailored compliance mechanisms, such as enforcement discretion.
See 62 Federal Register 19872, 76-77 (April 23, 1997). In fact, EPA has
used enforcement discretion for innovative projects in a number of
instances, e.g., International Paper Co. XL Project (flexibility
provided to exceed Clean Air Act permit limits to develop and calibrate
Predictive Emissions Monitoring System model); New York State
Department of Environmental Conservation XL Project (flexibility
provided to ``bridge'' the gap between the effective dates of a Federal
project-specific rule and the equivalent State project-specific rule);
New England Universities Laboratories (time-limited enforcement
discretion used to ``bridge'' the gap between the effective dates of
the Federal project-specific rule and the equivalent Massachusetts
rule); and OSi XL Project (EPA agreed in advance to issue an
administrative compliance order putting OSi on an 18-month compliance
schedule in event project testing alternative RCRA Subpart CC controls
is terminated). In addition, EPA offers incentives involving
enforcement discretion, to those facilities participating in the
National Environmental Performance Track Program (Performance Track).
Performance Track is a recognition program designed to motivate and
reward companies and other entities that are top environmental
performers. These incentives include lowered priority for inspection
targeting, access to Audit Policy penalty mitigation and recognition of
good faith participation in the program in discretionary penalty
assessment.
Question. How are EPA Regions improving their monitoring of
enforcement agreements to determine compliance with those agreements,
as examined by the EPA's Inspector General (IG)?
Answer. As the IG noted in their report, the actions already taken
by Office of Enforcement and Compliance Assurance (OECA) and the
Regions will resolve most of the IG's recommendations. OECA has used
the report for reminding the Regions of the need to follow existing
requirements and guidance for tracking compliance milestones, analyzing
violations of judicial and enforcement instruments, and prioritizing
them for response. In addition, at OECA's request, the Regions revised
the region-specific enforcement instrument compliance tracking and
enforcement plans covering, both judicial consent decrees and
administrative orders. OECA can provide the full response to the IG's
report if requested.
Question. How is EPA improving its reporting of environmental
achievements to accurately reflect actual pollution reductions achieved
from enforcement actions versus reporting projected results?
Answer. In fiscal year 1996, Office of Enforcement and Compliance
Assurance (OECA) developed a method to estimate the anticipated
reductions achieved through enforcement actions at the time of
settlement. In the future, OECA intends to make clear in its public
documents that those pollutant reductions through enforcement actions
are estimates, made at the time of settlement, assuming the injunctive
requirements in the underlying enforcement instruments are implemented.
In addition, OECA has taken steps to improve the accuracy of pollutant
reduction estimates by providing guidance and training to regional
offices about estimation techniques.
Question. How is EPA establishing performance measures for ensuring
that facilities under a formal enforcement action return to compliance?
Answer. Beginning in fiscal year 2002, Office of Enforcement and
Compliance Assurance (OECA) intends to develop and implement an annual
performance measure for each region, requiring regular updating of the
Consent Decree Enforcement Tracking Subsystem (CDETS) in DOCKET, or an
appropriate alternative database, to reflect key schedules/milestones
and actions taken to ensure compliance with judicial cases.
Question. How is EPA verifying and validating that actual
accomplishments resulted from EPA enforcement activities?
Answer. Office of Enforcement and Compliance Assurance (OECA)
currently reports pollutant reduction estimates for enforcement actions
at the time of settlement. OECA is investigating several options for
verifying actual pollutant reductions resulting from an enforcement
action based on the estimates reported. Resource constraints will make
it virtually impossible to physically verify that the pollutant
reduction amount estimated has actually been realized in all of EPA's
enforcement cases; however, we expect in most cases the estimation
techniques would be adequate.
grants
Question. How many different non-profit recipients received non-
construction grant awards in the last 3 years?
Answer. Between fiscal year 1998 and fiscal year 2000 EPA awarded
grants to approximately 1900 different non-profit recipients.
Question. How many dollars did EPA award to non-profit recipients
in non-construction grants in the last 3 years?
Answer. Between fiscal year 1998 and fiscal year 2000, EPA awarded
$756,394,243 to non-profit recipients.
Question. List the top twenty non-profit EPA grant recipients by
number of awards in fiscal year 2000. Provide also the number of awards
and total dollar amount awarded.
Answer.

FISCAL YEAR 2000 TOP 20 NON-PROFIT GRANTEES BY NUMBER OF AWARDS
------------------------------------------------------------------------
No. of Dollars
Rank Name/City/State Awards Awarded
------------------------------------------------------------------------
1National Older Worker Career Center, 89 $14,912,002
Washington, DC
2National Caucus & Center on Black Aged, 84 8,315,158
Washington, DC
3National Senior Citizens Ed & Rsch Ctr, 64 8,226,948
Silver Spring, MD
4Natl Asian Pacific Center for Aging, 38 6,257,258
Seattle, WA
5The Environmental Careers Organization, 28 7,213,689
Boston, MA
6National Academy of Science, Washington, 25 5,983,972
DC
7National Council on Aging, Washington, DC 23 4,141,298
8National Association for Hispanic Elderly, 20 4,534,076
Pasadena, CA
9International City/county Mgmt. Assoc., 10 2,066,540
Washington, DC
10Environmental Law Institute, Washington, 9 887,538
DC
11Northeast States for Coordinated Air Use 8 1,924,353
Mgmt., Boston, MA
12Inter Tribal Council of Arizona Inc., 8 1,171,944
Phoenix, AZ
13Research Triangle Institute Research, 7 2,409,300
Triangle, NC
14Center for Watershed Protection Inc., 7 334,500
Ellicott City, MD
15Lake Michigan Air Directors Consortium, 7 1,946,140
Des Plaines, IL
16Center for Clean Air Policy, Washington, 7 888,233
DC
17National Association of Counties, 7 971,000
Washington, DC
18The Environmental Council of the State, 6 876,991
Washington, DC
19WV University Research Corporation, 6 5,291,063
Morgantown, WV
20Natl Conference of State Legislatures, 5 424,439
Denver, CO
------------------------------------------------------------------------

Question. List the top twenty non-profit EPA grant recipients by
total amount of funds awarded in fiscal year 2000. Provide also the
number of awards and the total dollar amount awarded.

FISCAL YEAR 2000 TOP 20 NON-PROFIT GRANTEES BY DOLLARS AWARDS
------------------------------------------------------------------------
No. of Dollars
Rank Name/City/State Awards Awarded
------------------------------------------------------------------------
1North American Development Bank, San 1 $41,000,000
Antonio, TX
2National Older Worker Career Center, 89 14,912,002
Washington, DC
3National Caucus & Center on Black Aged, 84 8,315,158
Washington, DC
4National Senior Citizens Ed & Rsch Ctr, 64 8,226,948
Silver Spring, MD
5National Rural Water Association, Duncan, 3 8,114,800
OK
6The Environmental Careers Organization, 28 7,213,689
Boston, MA
7Natl Asian Pacific Center for Aging, 38 6,257,258
Seattle, WA
8Health Effects Institute, Cambridge, MA 1 6,000,000
9National Academy of Science, Washington, 25 5,983,972
DC
10WV University Research Corporation, 6 5,291,063
Morgantown, WV
11America's Clean Water Foundation, 1 4,749,750
Washington, DC
12National Association for Hispanic Elderly, 20 4,534,076
Pasadena, CA
13American Water Works Association Research, 2 4,205,100
Denver, CO
14National Council on Aging, Washington, DC 23 4,141,298
15Lovelace Biomedical & Envir. Res 2 3,334,400
Institution, Albuquerque, NM
16Canaan Valley Institute, Davis, WV 4 3,222,096
17National Fish & Wildlife Foundation, San 1 2,931,301
Francisco, CA
18Water Environment Research Foundation, 1 2,778,600
Alexandria, VA
19Border Environmental Cooperation Comm., El 1 2,500,000
Paso, TX
20Rural Community Assistance Programs In., 3 2,497,716
Leesburg, VA
------------------------------------------------------------------------

Question. How many bench reviews did EPA conduct of non-profit non-
construction grantees in fiscal year 2000? List by region.

Bench Reviews Fiscal
Regional Grants Management Office Year 2000
I.......................................................................
II......................................................................
III............................................................... 3
IV......................................................................
V.......................................................................
VI................................................................ 2
VII.....................................................................
VIII....................................................................
IX......................................................................
X.......................................................................
HQ................................................................ 15
______
Total....................................................... 20

Question. How many onsite reviews did EPA conduct of non-
profit non-construction grantees in fiscal year 2000? List by
region.
Answer. As noted in the following table, EPA Grants
Management Offices conducted a total of 26 administrative
onsite reviews of non-profit non-construction grantees in
fiscal year 2000.

On-site Reviews Fiscal
Regional Grants Management Office Year 2000
I................................................................. 2
II................................................................ 3
III............................................................... 1
IV......................................................................
V................................................................. 2
VI......................................................................
VII.....................................................................
VIII....................................................................
IX................................................................ 5
X.......................................................................
HQ................................................................ 13
______
Total....................................................... 26

Question. How many Full Time Equivalents (FTE) are devoted to
conducting onsite reviews of grantees?
Answer. 3 FTEs.
information burden:
Question. What steps did EPA take to correct the misleading
reporting burden reduction information reported to OMB, as documented
by the General Accounting Office in its report on this subject last
year?
Answer. The General Accounting Office (GAO) review found that EPA's
estimate for hours of burden reduced, as reported in Reinventing
Environmental Protection, is misleading because it represents the sum
of program changes and program adjustments. We believe this finding is
too narrow because it does not represent the full range of burden
reduction activities that EPA has pursued.
EPA has acted aggressively to reduce burden through a variety of
innovative activities that provide environmental managers with more
choice and assistance in meeting their environmental responsibilities.
These activities include: the establishment of compliance assistance
centers; development of electronic reporting opportunities; creation of
audit policy and regulatory compliance options; implementation of plain
language regulations and guidance; and developing electronic tools such
as the Toxic Release Inventory-Made Easy (TRI-ME) that help make our
regulations and guidance more understandable and easier for the public
to deal with. GAO's report states that these efforts were outside the
scope of their review of the agency's information collection
requirements.
We agreed with the recommendation that the Agency should correct
the burden hour estimate for the national pretreatment program. The
reduction of nearly 600,000 burden hours was a result of Office of
Management and Budget (OMB) approval of an Information Collection
Request (ICR) renewal submitted by EPA converting burden hours for
contracted lab analyses into burden dollars. This ICR was adjusted to
convert the burden dollars back to burden hours in the renewal approved
by OMB on September 28, 2000. Subsequently, OMB has modified its
approach regarding the proper categorization of such contracted
services, specifying that burden should be expressed in hours to the
extent possible.
Question. What steps did EPA take to ensure that it does not
continue to use improper burden reduction reporting techniques as
exposed by GAO?
Answer. EPA will properly identify burden reductions as adjustments
and/or program changes as defined by OMB. Also, EPA will characterize
lab analysis burden where possible as consistent with OMB's latest
guidance.
Question. How many hours of paperwork burden did EPA impose on
businesses in the last reporting year and each of the previous four
years?
Answer. The total EPA burden hours (includes business, state and
local governments other non-federal reporting enitities) for each of
the last five fiscal years is as follows:

[In millions of dollars]

Year Burden hours
Fiscal year 2000.................................................. 129
Fiscal Year 1999.................................................. 119
Fiscal Year 1998.................................................. 115
Fiscal Year 1997.................................................. 116
Fiscal Year 1996.................................................. 108

Some of the key increases in burden hours from fiscal year 1999 to
2000 are:
--3.6 million hours: Total Maximum Daily Load final rule (3.3 million
hours due to an adjustment of previous burden to account for
burden on states
--1.1 million hours: Radon in Drinking Water final rule
--1.2 million hours: NPDES--animal feeding operations permits
--1.6 million hours: RCRA lead-based paint debris final rule
--1.5 million hours: Toxic Release Inventory persistent
bioaccumulative toxic (PBT) final rule
Question. How is EPA reducing the paperwork burden it imposes on
businesses?
Answer. EPA continues to review existing paperwork requirements for
streamlining opportunities on a case by case basis. In addition, we are
promoting burden reduction across entire programs, as in the Office of
Solid Waste's burden reduction effort for the RCRA program. EPA also
has initiated cross Agency efforts like the National Environmental
Information Exchange Network and the More Effective and Efficient
Reporting initiative that will provide burden reduction opportunities.
Question. How is the Office of Environmental Information working
with program offices to tailor new rules to impose less paperwork
burden?
Answer. OEI has initiated a new initiative called More Effective
and Efficient Reporting (MEER). An Agency-wide burden reduction
strategy is one component of this initiative. OEI is working closely
with other EPA offices to identify appropriate activities which can be
part of an on-going, long-term effort to streamline collections while
maintaining the Agency's commitment to our mission. OEI's goal is to
develop a strategy with several incremental steps which can help the
Agency make information collection more efficient and less burdensome.
As part of this effort, OEI has been working with its partners and
stakeholders to streamline and consolidate reporting, facilitating, and
examining impediments to consolidation. Over the next year, OEI intends
to establish a MEER Steering committee and workgroup, develop a
background report on burden reduction and consolidation efforts to
date, and convene a program office workshop on burden reduction
efforts.
Question. How are the program offices, either with or without the
help of OEI, reviewing current paperwork requirements to reduce their
burden on businesses?
Answer. The Office of Solid Waste (OSW) is developing the Burden
Reduction Proposed Rule to reduce the record-keeping and reporting
burden RCRA imposes on the States, the public, and the regulated
community. This streamlining is important not only to meet the goals of
the Paperwork Reduction Act, but also to allow EPA and the states to
focus their implementation efforts on the most important regulatory
requirements. OSW is assessing which RCRA requirements can be cut back,
streamlined, or eliminated; they estimate that they should be able to
reduce burden by about 40 percent.
Several EPA initiatives have been launched that have potential for
significant burden reduction. These projects have generally helped to
steer the Agency toward ways of collecting and managing information
from the public and States which will be more efficient over the long-
term. Most notable among these is the National Environmental
Information Exchange Network (NEIEN). The NEIEN is a partnership
program with the States aimed at developing an integrated environmental
data exchange. It includes efforts to move toward electronic reporting,
use of specific data standards, and a centralized data exchange
network. Six data standards were finalized on November 21, 2000. EPA
and the States are currently developing three additional data
standards. EPA plans to propose a rule, the Cross-Media Electronic
Reporting and Record-keeping Rule (CROMERRR), to simplify the transfer
of data to the Agency as well as remove obstacles to e-reporting.
Another cross-Agency initiative with burden reduction potential.
Performance Track will reduce reporting burdens for companies which
have been recognized for performing beyond compliance with regulatory
requirements to attain levels of environmental performance and
management which benefit people, communities, and the environment.
In addition to Agency and programmatic streamlining efforts, EPA
has encouraged a number of innovative activities which are typically
not counted in burden reduction estimates. These include Web-based
Compliance Assistance Centers, the promotion of internal facility audit
policies to detect violations, and options for regulatory compliance
such as emissions trading. EPA has also worked hard to implement easier
to understand regulatory language. Among the Agency's oldest innovative
efforts, EPA has been providing assistance to small businesses through
the Office of the Small Business Ombudsman.
performance goals
Question. Provide the number of annual planning goals in the fiscal
year 2001 and fiscal year 2002 annual performance plans, and the
breakout of output and outcome goals.
Answer. The Agency's fiscal year 2001 and fiscal year 2002 Annual
Plans contain 75 and 77 annual performance goals (APGs), respectively.
EPA periodically evaluates for outcome orientation its entire set
of externally reported APGs which are listed in the Agency's Annual
Plan/Congressional Justification document. For fiscal year 2001, there
are 179 APGs, with 33 characterized as end outcomes, nine as
intermediate outcomes, and 137 as outputs. For fiscal year 2002, after
an initial review, there are 181 APGs, with 42 characterized as end
outcomes, 11 as intermediate outcomes, and 128 as outputs. The
hierarchy used in these evaluations is generally consistent with one
that has been used by the General Accounting Office.
performance measures
Question. Provide the number of performance measures in the fiscal
year 2001 and fiscal year 2002 annual performance plans, and the
breakout of output and outcome goals.
Answer. The Agency's fiscal year 2001 and fiscal year 2002 Annual
Plans contain 163 and 135 annual performance measures (APMs),
respectively.
EPA periodically evaluates for outcome orientation its entire set
of externally reported APMs which are listed in the Agency's Annual
Plan/Congressional Justification document. For fiscal year 2001, there
are 358 APMs, with 65 characterized as end outcomes, 32 as intermediate
outcomes, and 261 as outputs. For fiscal year 2002, after an initial
review, there are 360 APMs, with 77 characterized as end outcomes, 26
as intermediate outcomes, and 257 as outputs. The hierarchy used in
these evaluations is generally consistent with one that has been used
by the General Accounting Office.
Question. How is EPA increasing the number of outcome goals and
performance measures?
Answer. The Agency recognizes the need to make greater use of
outcome goals and measures, and we have initiated a variety of projects
to improve performance measurement. We use improvement work teams,
conduct workshops, and prepare special analyses to support development
of more outcome-oriented goals and measures. Some examples of our
ongoing work include: establishment of a work group and cooperative
agreement with Florida State University to develop more outcome-focused
goals and measures related to chemicals and pesticides (Office of
Prevention, Pesticides, and Toxic Substances); the establishment of a
National Performance Measurement Strategy with includes a plan to
develop more outcome-based performance goals and measures (Office of
Enforcement and Compliance Assurance); and benchmarking of performance
measures used by other agencies with functions similar to those of
EPA's varied programs (Office of Chief Financial Officer). In addition,
in order to help maintain a focus on outcomes, the Agency has
established an annual performance goal in its Annual Plan dedicated to
increasing the proportion of our goals and measures that are
characterized as outcomes.
Question. How can EPA examine and revise its GPRA strategic
planning more quickly than otherwise required under GPRA?
Answer. The Agency's strategic planning is an ongoing activity that
occurs throughout the development of each annual budget and undergirds
all major programmatic decisions of the Agency. This activity is not
governed by GPRA deadlines. GPRA does, however, establish a minimum
triennial floor for the development of revised Agency strategic plans.
Although the GPRA allows plans to be revised earlier than the triennial
deadline, the law--as well as good governmental practice--requires
federal agencies to consult with Congress and consider the views and
suggestions of other entities potentially affected by or interested in
their strategic plans. As a result, the revision of the Agency's Plan
is an extensive process that neither could--nor should--be completed
hastily. The Agency's most recent Strategic Plan was completed in
September of 2000, with the next mandated revision due in September of
2003. While a well-considered revision could be accomplished earlier
than this date, the Agency would need to carefully evaluate the time
required to meaningfully consider the strategic direction of all of its
programs, consult closely with Congress and State and Tribal partners,
and engage the views of the regulated community, citizen and public
policy groups, as well as the public as a whole. Our experience with
prior Strategic Plans demonstrates that an extensive revision
undertaken with significant consultation could require two years from
the beginning of the initial project planning to the production of the
document itself.
Question. Will EPA develop different measures for program
management and program effectiveness?
Answer. Over the last few years, EPA has worked to establish sound
measures for program management. The Agency's Strategic Plan includes a
separate strategic goal for effective management as a way to capture
activities and results that are fundamental for effective and efficient
operation of all Agency programs. The Agency is committed to its on-
going effort to improving the quality of all its performance goals and
measures including those pertaining mainly to program management
activities.
EPA has established a framework for results-based management that
the Agency continues to improve upon. By improving its ability to track
progress, EPA positively affects improvements in demonstrating overall
program effectiveness.
Furthermore, a number of ongoing activities, within EPA's existing
programs, should positively impact EPA's ability to increase both the
quantity and quality of environmental outcome measures in Agency
management systems. This improvement strategy includes an analytic
approach to assist programs in the development of measures that better
reflect program effectiveness and directly communicate environmental
results. This approach involves using a framework known as the
Hierarchy of Indicators. The framework consists of six categories that
range from administrative measures, or outputs, to changes in
environmental quality or outcomes.
This approach can be very useful in developing measures that
reflect programmatic goals and ensure that the activities of the
offices are properly linked to environmental results (to the extent
possible). The hierarchy can be used to assist program offices in
developing measures that are farther along the continuum. Not all
Agency activities are conducive to such changes. However, offices
responsible for necessary administrative activities are encouraged to
develop intermediate outcomes that better link activities to
environmental outcomes.
efforts to reduce the npdes permit backlog
Question. What is the Status of EPA's efforts to reduce the backlog
of federal and state NPDES permits? Provide a breakdown by region and
state.
Answer. EPA has made strong progress in reducing the NPDES permit
backlog towards meeting our target of a 10 percent backlog for major
permits by the end of 2001 and 10 percent backlog for all permits
(majors and minors) by the end of 2004. EPA-issued permits for major
facilities are slightly off the target trend line to meet the 2001
goal, however, a large boost is expected through the issuance of a
general permit covering major facilities in Alaska. EPA continues to
improve permit backlog of minors through permit issuance and data
clean-up.
The authorized states, as a whole, have made some improvements
toward meeting the 2001 goal of 10 percent backlog of majors, however,
achievement of the target for authorized states is in doubt. Authorized
states' efforts to meet the 2004 backlog reduction goal of 10 percent
backlog for all permits are on target, with states making strides
through both permit issuance and data clean-up.
The attached charts provide data on State and Regional progress
towards meeting backlog reduction goals.

resources to reduce npdes backlog
Question. Provide the level of resources EPA is devoting to reduce
the NPDES backlog from fiscal year 2001 and in the fiscal year 2002
request.
Answer. Both EPA and state permitting agencies have developed
strategies that affirm permit issuance as a high priority task and in
many cases, reorganize staff to reduce permit backlog.
NPDES permit issuance is a substantial undertaking in EPA Regional
Water Divisions and in State water pollution control agencies. To help
reverse the trend in rising backlogged permits, EPA has spent about
$200,000 on assistance for EPA permit issuance in 2001 and we
anticipate making the same level of assistance available in 2002.
Additionally, in fiscal year 2001 EPA spent approximately $70,000
tracking the NPDES permit backlog and providing data to states and
state organizations. A similar level of spending for these activities
is anticipated for 2002.
In fiscal year 2001, EPA also made some if its contracts available
to states to use in assisting them with permit issuance and data clean
up. We anticipate continuing this practice which enables the states to
use their Section 106 grant funds to secure contractor support for
permit issuance by using EPA national contracts.
enforcement targeting
Question. Describe EPA's efforts to strategically target its
enforcement and compliance activities to address the most significant
risks to human health and the environment.
Answer. There are several methods employed by EPA to target
enforcement and compliance activities to address the most significant
risks to human health and the environment. Below is a summary of some
of these key activities.
Evaluation of risk impacts on a multimedia basis.--EPA uses several
analytic techniques to evaluate risk--particularly at the sector-level.
For example, EPA develops comprehensive sector rankings every two
years, and factors this information into the enforcement/compliance
planning process. EPA examines all major industrial sectors to assess
noncompliance patterns, emissions by media, and relative risk posed by
each industry to nearby populations. The risk model used to assist in
this evaluation has been peer reviewed and approved by the EPA Science
Advisory Board.
Stakeholder input to identify risks.--Through the Memorandum of
Agreement (MOA) process, EPA solicits comment from a broad range of
stakeholders on possible environmental problems. This information
gathering process assists EPA in evaluating potential risks that may be
missed by data analysis (because some problems are outside the scope of
EPA data collection). In addition, OECA recently instituted a process
for EPA personnel to nominate environmental problems for OECA's
consideration.
Empowering staff to apply risk-based criteria. EPA has developed
the Online Tracking Information System (OTIS) that assists EPA and
state staff in applying risk criteria in their daily decisions. The web
site provides a user friendly tool to examine regulated facilities in
the context of compliance history, pollutant release, and demographics.
In addition, OECA is now adding the capability to query data based upon
watershed health--again allowing Regions and States to better target
resources. Users can also look for facility clusters based upon the
mapping application supported by OTIS. Because the site bridges
pollutant releases, environmental conditions, and compliance data,
Regions and States now have the capability to easily assess relative
impacts when making compliance monitoring decisions.
Media priorities.--OECA implements many of its strategic priorities
based upon studies and analysis that examine significant risks. For
example, the EPA Clean Water Action Plan provides a set of specific
steps for improving water quality. Many of the key priorities explained
in this Plan are key components of OECA's MOA process. Additionally,
evaluation of facility types (e.g., major permittees versus minor
permittees) under the CWA, CAA, and RCRA program in relation to
supporting compliance monitoring and enforcement policies focus
Regional and state attention on facilities that pose a higher risk to
human health and the environment.
Enhanced targeting.--Looking to the future, EPA is in the process
of bringing together more extensive data that may assist in correlating
health data (e.g., cancer rates) with enforcement data. This type of
analysis, along with technical advances in risk modeling, will enable
EPA to continue aligning the compliance and enforcement program with
health and environmental risks.
number of tmdls required by section 303(d) list
Question. What is the latest estimate of the number of TMDLs
required under current state section 303(d) list? Please break this
down by state.
Answer. The list below contains the number of impaired waters on
each State's 1998 list and an estimate of the number of TMDLs that are
required. This information is based on State information and, in some
cases, EPA's estimate of the total number of TMDLs required. The number
of TMDLs actually necessary may differ, depending upon how individual
States submit the TMDLs to EPA (i.e., as a single TMDL per pollutant
per waterbody or ``bundling'' a group of TMDLs within a waterbody or
watershed).

------------------------------------------------------------------------
Number
State Number of of
Waters TMDLs
------------------------------------------------------------------------
Alabama............................................. 154 310
Alaska.............................................. 58 79
Arizona............................................. 103 225
Arkansas............................................ 51 70
California.......................................... 509 1,471
Colorado............................................ 79 197
Connecticut......................................... 223 312
Delaware............................................ 377 669
District of Columbia................................ 36 86
Florida............................................. 712 1,973
Georgia............................................. 584 920
Hawaii.............................................. 3 6
Idaho............................................... 710 1,619
Illinois............................................ 738 2,863
Indiana............................................. 208 373
Iowa................................................ 157 220
Kansas.............................................. 1,107 1,692
Kentucky............................................ 231 367
Louisiana........................................... 196 607
Maine............................................... 226 267
Maryland............................................ 196 371
Massachusetts....................................... 906 1,450
Michigan............................................ 267 410
Minnesota........................................... 143 172
Mississippi......................................... 721 2,241
Missouri............................................ 180 216
Montana............................................. 869 2,350
Nebraska............................................ 114 216
Nevada.............................................. 37 90
New Hampshire....................................... 226 263
New Jersey.......................................... 1,059 1,648
New Mexico.......................................... 186 330
New York............................................ 627 632
North Carolina...................................... 477 378
North Dakota........................................ 133 329
Ohio................................................ 881 2,281
Oklahoma............................................ 531 1,430
Oregon.............................................. 1,183 1,769
Pennsylvania........................................ 1,039 1,711
Rhode Island........................................ 127 245
South Carolina...................................... 658 739
South Dakota........................................ 161 296
Tennessee........................................... 352 795
Texas............................................... 146 247
Utah................................................ 203 585
Vermont............................................. 196 248
Virginia............................................ 883 1,002
Washington.......................................... 1,317 2,188
West Virginia....................................... 722 1,022
Wisconsin........................................... 551 942
Wyoming............................................. 63 122
American Samoa...................................... 1 1
CNMI................................................ 2 2
Guam................................................ 3 6
Puerto Rico......................................... 199 207
Virgin Islands...................................... 9 15
-------------------
Total......................................... 21,845 41,318
------------------------------------------------------------------------
(Seven states, Georgia, South Carolina, Montana, Michigan, New Mexico,
Utah, and Wyoming have approved 2000 303(d) lists which are not yet
have not been updated into the table).

state non-point source data to prepare tmdls
Question. How many states have the nonpoint source data necessary
to prepare all required TMDLs?
Answer. EPA recognizes that not all states have comprehensive data
for nonpoint source loadings of TMDL listed waters. EPA expects that,
where additional data is needed, it will be developed as part of the
TMDL process.
total estimate of cost to prepare tmdls by state
Question. What is the latest estimate of costs to prepare all
required TMDLs? Please break this down by state.
Answer. Congress directed EPA to provide a ``comprehensive
assessment'' of both development and implementation costs of the
``Total Maximum Daily Loads'' (TMDL) program in the Conference Report
106-988 describing the VA/HUD and Independent Agencies Appropriations
Act for Fiscal Year 2001. A draft of this report, ``The National Costs
of the Total Maximum Daily Load Program,'' was released for public
comment in early August, 2001. Comments are due on December 7, 2001.
The draft report estimates that the total average annual costs to
states and EPA of developing TMDLs, over the next 15 years, are
estimated to be between $63-69 million per year. It will cost a total
of approximately $1 billion over 10 to 15 years to develop 36,000 TMDLs
in the over 20,000 waterbodies known to be impaired. EPA expects that
states will increase the number of TMDLs developed each year, spending
about $30 million in the year 2000, $43-48 million in 2002, and about
$68-75 million starting in 2005 and each year thereafter until 2015.
The costs of TMDL development cited in the draft report are based
on requirements of the existing TMDL program and the new provisions
added, but not implemented, in the July 2000 rule. The costs of the
additional requirements associated with the July 2000 regulations
represent less than 10 percent of the total cost estimated in this
report. The draft report does not contain estimates of the costs for
preparing the required TMDLs broken down by state.
state resources to prepare tmdls
Question. What is EPA's estimate of whether the states have the
resources necessary to prepare all required TMDLs? Which States does
EPA believe do not currently have the resources necessary?
Answer. EPA does not have a state-by-state analysis of potential
state costs. State funding for TMDLs has grown substantially over the
past few years. For example, resources available under Section 106
Water Program Grants increased from $115 million in fiscal year 2000 to
$170 million in fiscal year 2001. In addition, under section 604(b)(3)
of the Clean Water Act, states may use up to one percent of State
Revolving Loan Funds Grants funds (or $100,000, whichever is greater)
for planning and related purposes, including development of TMDLs. In
fiscal year 2001, the total funding available under this authority was
$14 million. EPA has also revised the eligibilities for the section 319
funding to provide that up to 20 percent of each state's allotment (up
to $47.5 million nationally) may be used to complete assessments of
nonpoint sources contributing to impaired waters and to help establish
TMDLs for those waters. Finally, EPA has budgeted $10 million in
contract funds to support state efforts to develop TMDLs.
length of time required to approve all tmdls
Question. If TMDLS are approved at historic rates, how long will it
take EPA to approve all required TMDLs?
Answer. EPA's current policy is that all TMDLs should be
established within 8-13 years from the time a water is initially listed
as impaired. EPA believes that the pace at which states develop TMDLs
and EPA approves them will continue to increase over the next few
years. In 22 states, there are consent decrees or court orders which
require that TMDLs be established within 4 to 13 years.
cost to approve tmdls
Question. How much will it cost EPA in resources and FTEs to
approve these TMDLs? Please break down by region.
Answer. While we have not delineated resources specifically for
approvals, we can provide our estimates of total Regional TMDL
resources, which includes support for TMDL approvals as well as for
review and approval of CWA Sec. 303(d) lists and support for
development of TMDLs at the request of a state or where a state does
not develop a TMDL called for in a consent decree. Specifically, in
fiscal year 2001:

------------------------------------------------------------------------
FTE
EXTRAMURAL Amount
------------------------------------------------------------------------
Region 1.................................... 4 $600,000
Region 2.................................... 6 640,000
Region 3.................................... 5 1,100,000
Region 4.................................... 16 1,420,000
Region 5.................................... 6 1,170,000
Region 6.................................... 7 1,150,000
Region 7.................................... 4 740,000
Region 8.................................... 3 940,000
Region 9.................................... 9 870,000
Region 10................................... 14 870,000
Undistributed............................... .......... 500,000
---------------------------
Total................................. 75 10,000,000
------------------------------------------------------------------------

adequate agency funds for tmdls
Question. Is EPA budgeting the funds necessary to approve all
required TMDLs?
Answer. EPA believes that there are adequate funds requested in the
fiscal year 2002 budget to approve the required TMDLs.
estimated number and cost savings from bundling tmdls
Question. What number or percentage of TMDLs does EPA estimate
states will be able to bundle and how much time and money will this
save?
Answer. The draft cost study examined a large sample of 1,096 TMDLs
for 668 water bodies submitted to EPA. This sample indicates the extent
to which states are already beginning to adopt approaches for
efficiently developing TMDLs. More than half the TMDLs benefitted from
the cost efficiencies that can be realized by coordinating the
development of multiple TMDLs for a single waterbody and by
coordinating the development of TMDLs for multiple water bodies within
watersheds. Based on these findings, a national level analysis of
interconnected waterbodies within watersheds was conducted and
concluded that more than 80 percent of all waterbodies, accounting for
90 percent of all TMDLs, could potentially realize varying degrees of
cost efficiencies; we expect that states will likely bundle 60-70
percent.
The cost of developing a TMDL for one pollutant is estimated to be
$28,000 on average nationally, but may range from about $6,000 to
$154,000. The lower end reflects the cost of a TMDL that is easiest to
develop and has the benefit of maximum efficiencies (e.g., the TMDL for
the second nutrient pollutant for a water body). The higher end
represents the costs of TMDLs that are the most difficult to develop
and for which there is no benefit of related work done on other TMDLs
in the water body.
For a more detailed discussion of efficiencies, see the draft
report, pp. 16-20, and the support document # 1, pp. II-5 to II-9.
attainability analysis to determine cause of impairments
Question. Does EPA agree that the states should review their use
attainability analysis (UAAs) to determine whether individual
impairments are caused by natural contamination or introduced
pollution?
Answer. EPA agrees that states should periodically review their
water quality standards to determine whether the existing designated
uses and associated criteria for a specific waterbody are properly
identified and attainable. Completing UAAs is one way that states (and
EPA) can determine whether impairments result from natural sources or
introduced pollutants.
two-tiered list to set tmdl priorities
Question. Does EPA believe states should create two-tiers of TMDL
with an action list for which data reveals an impairment and for which
a TMDL should be developed and a second ``preliminary'' list for those
water with less data available and the impairment is less certain? If
not, why?
Answer. EPA agrees that it is important that the list of waters
needing TMDLs be as accurate and scientifically valid as feasible. EPA
is aware that in some instances existing states' lists of impaired
waterbodies include waterbodies for which little or no data supports
the listing. EPA supports efforts by states to develop clear,
scientifically based methodologies which describe how waters are
determined to be impaired. In some cases, states may use action lists
and preliminary lists to aid in that decision. EPA realizes that there
will be waters for which the states lack sufficient data on the nature,
extent and source of the impairment to determine if a TMDL is the
appropriate response to the water quality problem. EPA is preparing, in
cooperation with states the Consolidated Assessment and Listing
Methodology (CALM)) that will provide information on good monitoring
practices and methods. EPA has also drafted an ``Integrated Listing and
Reporting Guidance'' that provides an option for states to submit one
characterization of all their waters, including those impaired as
required by section 303(d). This integrated guidance allows states an
opportunity to describe those waters needing additional monitoring to
support a decision that a waterbody is impaired.
distribution of impaired waters in two-tiered system
Question. If states were to employ a two-tiered system, what
percentage of waters does EPA believe the action list and preliminary
list would occupy among the total waters?
Answer. EPA cannot estimate how currently-listed waters would be
distributed if states were to establish a two-tiered list. This would
depend on the methodologies used by the individual states to decide
which waterbodies are impaired. EPA is developing guidance
(Consolidated Assessment and Listing Methodology (CALM)) in cooperation
with states, to help states develop and improve on these methodologies
for the 2002 listing cycle.
impact of placing waters on preliminary list
Question. Does EPA believe that placing waters with little data on
a preliminary list would mean putting off action on these waters?
Answer. Placement of waterbodies on a preliminary list would defer
TMDL development for these waters, however, supplemental monitoring
would be scheduled and undertaken. If an impairment requiring a TMDL
was confirmed, a TMDL would be scheduled and completed.
voluntary monitoring programs
Question. What volunteer initiatives could states implement to
address water quality in waters for which impairment data is lacking?
Answer. A number of states manage and support statewide networks of
volunteers who collect water quality data. When properly trained, these
volunteer monitors can collect chemical, biological and physical data
that can supplement professionally collected data. Some states utilize
this quality-controlled volunteer data in developing Section 305(b)
reports and Section 303(d) lists. Even where states do not support a
statewide program through their water quality or natural resource
agency, they often can use data collected by volunteer organizations
associated with universities, schools, and watershed groups. While
volunteers must be organized, trained, and supported, and the data they
produce must be stored, managed, and evaluated, their efforts are cost-
effective and have proven valuable in screening for problems and
providing data for waters the states cannot otherwise monitor. EPA
provides guidance and technical support to volunteer monitoring groups
for streams and rivers and lakes and believes that this data is a
valuable compliment to the data collected by state and federal
agencies.
reinvention:
Question. What is the status of EPA's review of its reinvention
programs?
Answer. On April 10, Administrator Whitman issued a memorandum
charging EPA's Innovation Action Council (IAC) with formulating
``recommendations for updating [EPA's] innovation strategy.'' In
considering appropriate next steps, the IAC is looking at both the
challenges (environmental, regulatory or programmatic) facing the
Agency, and the innovative approaches and tools needed to meet those
challenges. The IAC is receiving recommendations from a number of
recent reports by outside groups and has had preliminary discussions
with several state environmental commissioners as it develops its
recommendations. Preliminary recommendations will be forwarded to the
Administrator for her consideration and additional stakeholders will be
consulted before the strategy is finalized.
Question. How will EPA improve its reinvention programs to reduce
barriers or transaction costs for participants?
Answer. EPA is currently working on updating its Regulatory
Innovations Strategy. As part of this effort, the Agency will work to
streamline and simplify the processes of these activities. Project XL
is one high profile program where this is happening. In a mid-course
re-engineering, the XL program cut approval and negotiation times
significantly. We were able to do so by clarifying program elements,
helping sponsors develop better projects and proposals, improving
stakeholder involvement processes and by streamlining internal review
and decision-making. EPA will continue to place a high priority on
reducing transaction costs for participants, co-regulators,
stakeholders and Agency staff.
While reducing transaction costs is always an important goal, the
appropriate evaluation of any activity considers both the costs and the
benefits. Early analyses of XL projects, for example, demonstrate that
participants are attaining benefits that far outweigh the costs of
negotiating the agreement.
Question. How will EPA direct the program offices and Office of
Enforcement and Compliance Assurance (OECA) to reduce barriers,
transaction costs and approval time for reinvention projects?
Answer. Many of the innovation programs, particularly those
providing regulatory flexibility, represent new ways of doing business
for EPA. They have required EPA organizations and staff to establish
new types of relationships with project sponsors, stakeholders, co-
regulators and each other. These projects pose challenging issues that
cut across EPA's organizational lines, thus requiring a new type of
cross-Agency coordination and decision-making.
EPA has worked to establish procedures to ensure the timely
development, review and approval of projects under innovation programs,
and has made significant progress in improving the efficiency of these
processes while retaining the necessary consideration of key legal and
technical questions. For example, in Project XL EPA has now signed over
50 final project agreements--each one reflecting the input of relevant
program offices, OECA and General Counsel (OGC). This involvement
provides valuable technical and other expertise that benefit all
parties in the projects.
EPA is committed to the continuous improvement of its processes for
dealing with the complexity of innovation projects. The innovation
update currently under development by the IAC is expected to explore
ways to continue to reduce transaction costs and approval time while
ensuring that all consideration have been factored in.
Question. Will EPA approve reinvention proposals to change current
regulatory requirements if they provide improvements in the
environment?
Answer. Project XL currently accepts and implements proposals to
change the regulatory requirements for the project participants. If
evaluation of the project demonstrates that the regulatory change
results in benefits--environmental or economic--that outweigh the cost
or risks, EPA will consider making those changes available to broader
segments of the regulated community. To date, XL projects have resulted
in, or have contributed to, new hazardous air pollutant regulations
(MACT), new approaches to air permitting (New Source Review), and a
national policy regarding the disposal of lead-containing construction
debris.
Question. How will EPA ensure innovative approaches to improve
environmental protection are incorporated into the daily operations of
the agency rather than limited to experiments outside the mainstream of
the Agency's programs?
Answer. All of EPA's innovation pilots are intended to provide
innovative approaches that can be used to develop standard EPA
regulatory practices that are cheaper and more flexible. Innovative
approaches are being adopted already in regulatory programs (i.e., to
date, XL projects have resulted in or have contributed to new hazardous
air pollutant regulations (MACT), new approaches to air permitting (New
Source Review), and a national policy regarding the disposal of lead-
containing construction debris). In developing recommendations for the
Administrator to update EPA's innovations strategy, the Innovation
Action Council plans to address how to make the process of moving good
ideas from ``pilots to practice'' more routine and systematic. Also,
recently announced plans to improve the rule-making process include an
increased emphasis on considering a wide array of options at the
outset, and involving EPA senior management in the early regulatory
planning process. EPA is also exploring ways of making information on
innovations more widely available throughout the Agency and to states
(e.g., a catalogue or electronic clearinghouse).
Question. How will EPA reflect the efforts to institutionalize
reinvention activities into day-to-day activities in its resource
allocation for fiscal year 2002 and fiscal year 2003?
Answer. As part of the effort to update EPA's innovations agenda,
the Agency's senior leadership is reviewing options for incorporating
innovation into budgeting and planning processes and is committed to
strong management of its innovations program. The fiscal year 2002
President's request for EPA reinvention programs is focused on
developing and coordinating sector-based approaches, facility-based
pilots, small business assistance and performance incentives. The
Agency is continuously building upon its innovation programs by
institutionalizing reinvention activities into its day-to-day
activities. The Agency will consider the forthcoming recommendations
for updating EPA's Innovations Strategy while developing its fiscal
year 2003 request.
pbt list:
Question. Has EPA made a final decision on whether it is
scientifically appropriate to apply its PBT methodology to metals and,
if it is, how that should be done? If EPA has made such a decision,
when was it made, where is it explained, and why did the Agency
conclude there was no need for independent peer review of the issue by
the SAB?
Answer. The Agency's PBT methodology was developed by the Agency to
identify whether a substance is persistent, bioaccumulative and toxic
(i.e., a PBT). The PBT methodology, the basis for its development, and
its application are explained in the proposed (64 FR, 687-729, January
5,1999) and final (64 FR, 58665-58753, October 29, 1999) PBT chemical
rules.
In addition, EPA uses a methodology called the EPA's Waste
Minimization Prioritization Tool (WMPT), which is being used to
identify PBT chemicals for a number of EPA projects. WMPT is a peer-
reviewed chemical hazard screening tool that uses persistent,
bioaccumulative, and toxic properties of a chemical, to evaluate its
potential hazard. The WMPT has been peer-reviewed by outside experts,
and focus group meetings were held with industry, government, and
public interest groups among other review activities.
Recognizing there are continuing issues on the application of the
PBT methodology to lead and other metals, the Agency has committed to
seek peer review from its SAB. As stated in the Final TRI Lead Rule,
``The external peer review would address the question of whether lead
and lead compounds should be classified as highly bioaccumulative. The
external peer review would address the issue of how lead and other, as
yet unclassified, metals, such as cadmium, should be evaluated using
the PBT chemical framework, including which types of data (and which
species) are most suitable for these determinations.''
Question. If EPA has made a final decision that it is
scientifically appropriate to apply its PBT methodology to metals, is
there a difference in the way EPA applies its PBT methodology to metals
versus organic compounds? If so, what is the difference and where is it
explained?
Answer. The Agency's PBT methodology was developed by the Agency to
identify whether a substance is persistent, bioaccumulative and toxic
(i.e., a PBT). The PBT methodology, the basis for its development, and
its application are explained in the proposed (64 FR, 687-729, January
5, 1999) and final (64 FR, 58665-58753, October 29, 1999) PBT chemical
rules.
Recognizing there are continuing issues on the application of the
PBT methodology to lead and other metals, the Agency has committed to
seek peer review from its SAB. As stated in the Final TRI Lead Rule,
``The external peer review would address the question of whether lead
and lead compounds should be classified as highly bioaccumulative. The
external peer review would address the issue of how lead and other, as
yet unclassified, metals, such as cadmium, should be evaluated using
the PBT chemical framework, including which types of data (and which
species) are most suitable for these determinations.''
Question. If EPA has not made a final decision whether it is
appropriate to apply PBT criteria to metals, do you intend to take any
steps to discourage states and localities from using the Agency's draft
PBT list for regulatory purposes, particularly insofar as the draft
list includes several metals?
Answer. As stated in the Federal Register Notice, EPA developed the
draft RCRA Persistent, Bioaccumulative and Toxic (PBT) List for use in
the voluntary hazardous waste minimization programs, not for regulatory
purposes. EPA headquarters provided regional and state partners draft
waste minimization chemical priorities at its RCRA National Meeting in
August 2000, stressing that regions and states should focus on these
draft waste minimization chemical priorities rather than the draft RCRA
PBT List. Emphasis on using the draft waste minimization chemical
priorities in regional and state waste minimization activities is
further enhanced through monthly conference calls and meetings between
EPA headquarters and regional representatives and state partners.
Question. Why did EPA disregard the fiscal year 2001 VA/HUD
Conference Report language and the bipartisan recommendation of the
House Science Committee and proceed with applying the PBT methodology
to metals, in the form of increased reporting of lead, before seeking
independent SAB peer review of the appropriateness of applying its PBT
methodology to metals?
Answer. EPA carefully considered the fiscal year 2001 VA/HUD
Conference Report language and the bipartisan recommendation of the
House Science Committee when it proceeded with finalizing the TRI lead
rule. EPA has committed to seek peer review from its SAB as discussed
in the preamble to the that rule.
Question. What is the scope of the review that EPA plans to ask the
SAB to conduct? Will the review be consistent with the request in last
year's VA-HUD Conference Report that asked for a broad review of the
``scientific appropriateness of applying PBT criteria and methodology
to metals?'' If not, why not?
Answer. As stated in the final TRI Lead Rule, the Agency has
committed to seeking SAB peer review as follows: ``. . . The external
peer review would address the question of whether lead and lead
compounds should be classified as highly bioaccumulative. The external
peer review would address the issue of how lead and other, as yet
unclassified metals, such as cadmium, should be evaluated using the PBT
chemical framework, including which types of data and which species are
most suitable for these decisions.''
Question. What procedures are in place to ensure that the charge
sent to the SAB fully covers all relevant issues concerning the
application of EPA's PBT methodology and criteria to lead and other
metals?
Answer. To ensure that the charges sent to the SAB are consistent
with the statements in the final TRI lead rule regarding SAB review,
the Agency has placed the development of the SAB charges under the
purview of EPA's Risk Assessment Forum, which has established both an
intra-Agency steering committee composed of senior EPA managers and an
ad-hoc intra-Agency technical panel composed of senior EPA scientists
to develop the charges and background document. Several of the EPA
staff who were involved with the development of the lead rule and other
EPA activities that are using the PBT framework are involved with the
development of the SAB charges. These individuals are very familiar
with the relevant issues raised during the public comment periods on
those activities and the interagency review period with respect to the
commitment the Agency made in the final TRI lead rule regarding SAB
peer review.
Question. When does the Agency expect to transmit a charge to the
SAB on these issues?
Answer. EPA is actively preparing for peer review from its SAB. EPA
expects to have the specific SAB charges delivered to the SAB by Fall
of 2001. EPA's preparation for the SAB peer review includes preparing a
background document, developing the charges to the SAB, assembling the
materials necessary for the SAB review, and involving all the affected
offices within the Agency.
Question. Will the SAB review comply with the Agency's criteria for
independent peer review as set forth in its Peer Review Handbook?
Answer. The SAB review will satisfy the requirements of the
Agency's peer review policies.
Question. What is the expected completion date of the SAB review?
Does EPA expect to reconsider any decisions based on application of its
PBT criteria and methodology to metals if the SAB concludes that
applying the Agency's PBT criteria to metals is scientifically
inappropriate?
Answer. Generally, the SAB tries to complete its assessment and
provide EPA with a written reply within four months of receipt of the
charges. EPA will carefully review and consider the advice provided by
the SAB to the charges put forth by EPA. EPA will then make a
determination on how to proceed based on that review.
Question. What plans, if any, does EPA have in place to evaluate
criticisms of its analysis of economic impacts on small business in the
TRI lead rule during the time the SAB review is underway?
Answer. The General Accounting Office (GAO) evaluated the analytic
methods that EPA used. They concluded that the methods used and the
conclusions drawn ``were within the discretion provided by both the RFA
and EPA's guidance.'' EPA has no plans at this time, to do an
additional analysis of the impact of the TRI lead rule on small
businesses.
small business
Question. How did EPA include small business concerns into its
current review of EPA rulemaking processes?
Answer. The recently completed review of the Agency's rulemaking
process was an internal review led by a Task Force consisting of the
Agency's Assistant Administrators. Four subgroups were set up to
address particular elements of the process: science; economics; policy
(e.g., RFA/SBREFA); and process. The Small Business Ombudsman/Small
Business Division in the Office of Policy, Economics and Innovation and
the Small Business Advocacy Chair contributed to the recommendations of
the policy subgroup. Representatives from the Agency's Compliance
Assistance program also participated and represented small business
concerns during the review.
Question. How is EPA using that process to ensure that small
business issues are addressed from the beginning of the rulemaking
process?
Answer. The Agency's process contains several elements that help
ensure small business issues are addressed from the beginning of the
EPA rulemaking process. First, the Agency offers training and guidance
to rule writers that includes material on the Regulatory Flexibility
Act (RFA) and the Small Business Regulatory Enforcement Fairness Act
(SBREFA) requirements, as well as the Agency's policy to conduct
outreach and provide accommodations in ANY rule that imposes ANY impact
on small entities. Second, the Agency uses a tiering process for rule
development. To initiate a rulemaking, a program office completes a
tiering form that provides an overview of the action, including whether
or not the action is expected to have an impact on small businesses.
The Agency has developed comprehensive guidance on determining the
impact on small businesses (``Revised Interim Guidance for EPA
Rulewriters: Regulatory Flexibility Act as amended by the Small
Business Regulatory Enforcement Fairness Act'' (March 29, 1999)).
Third, one of the first tasks in developing significant rules is
preparation of an ``analytic blueprint.'' The Agency uses the analytic
blueprint to help guide early development of appropriate information
and early consultation with small businesses and other stakeholders.
The blueprint helps the Agency ensure that relevant information (e.g.,
potential small business impacts) is developed and brought into the
decision-making process. Finally, the Agency provides checklists to
rulewriters, including references to the requirements of RFA/SBREFA.
Question. How is EPA increasing its knowledge of the impacts of its
regulatory requirements on small business?
Answer. EPA is continually learning from its past and current work
experiences, as well as seeking new ways to increase its knowledge of
the impacts of its regulatory requirements on small businesses. The
Administrator or Deputy Administrator meet periodically with
representatives of small business trade groups to discuss issues of
particular concern to small businesses. The meetings have now become a
tradition at EPA and serve to improve understanding on both sides of
issues and, at times, lead us to change practices that are unduly
burdensome to small businesses. The Agency has also reviewed some of
its past assessments, as well as the methods used at other federal
agencies/departments.
Question. How is EPA increasing its knowledge of the impacts on
small business of rulemakings under consideration?
Answer. EPA has developed a comprehensive guidance manual for
rulewriters to facilitate the evaluation of potential small business
impacts (``Revised Interim Guidance for EPA Rulewriters: Regulatory
Flexibility Act as amended by the Small Business Regulatory Enforcement
Fairness Act'' [March 29, 1999]). Specific tools used by EPA to
increase its knowledge of impacts of rulemakings under development
include: SBREFA panels; meetings with industry trade groups; small
business trade groups and consultations with small businesses.
Question. How is EPA increasing delivery of information about its
regulatory requirements to small businesses?
Answer. EPA has a long history of developing materials to aid the
regulated community in its compliance efforts. These documents include
such items as Sector Notebooks, Plain English Guides, and Fact Sheets.
EPA makes these and numerous other resources easily accessible through
the main EPA Internet home page (www.epa.gov). Moreover, beyond the
confines and oversight of the Agency, EPA provides support and
maintains meaningful affiliations with many other programs and
personnel advising small entities by working through industry
partnerships, grants, cooperative agreements, as well as the Small
Business Assistance Programs run by the states under section 507 of the
Clean Air Act. Finally, the Agency, with its stakeholders, has
developed a host of internet-based Compliance Assistance Centers to
provide technical information specific to particular industries. These
centers are funded by EPA, but are managed by university and industry
partnerships.
Specific programs include:
--(1) the Asbestos and Small Business Ombudsman located at EPA
Headquarters;
--(2) Regional small business liaisons, who serve as local resources
to assist small entities who contact the EPA regional offices;
--(3) various hotlines and clearinghouses that serve entities of any
size, including large percentages of small entities; and
--(4) technical and program staff located throughout Headquarters and
the regions who are available to answer questions in their
subject area or refer small entities to the appropriate state
and local resources.
Question. How is EPA ensuring that program offices considering
rulemakings determine potential small business impacts in areas which
they may not already be aware?
Answer. The Agency focuses on consideration of potential small
business impacts early in the process. The Analytic Blueprint is a tool
the Agency uses to map out the information that will be available to
decision makers to inform development of, and selection among, policy
options. The Agency's RFA/SBREFA guidance informs development of the
blueprint and analytic planning. A screening analysis under RFA/SBREFA
requires analysts to examine the following questions to make an initial
assessment of the potential of a rule to have a significant economic
impact on a substantial number of small entities (SISNOSE):
--What types of entities are subject to the rule (regardless of
size)?
--Are any small entities included?
--Are any small entities adversely affected?
--Is the rule likely to have a significant economic impact on a
substantial number of small entities, considering both
qualitative and quantitative information?
EPA establishes a SBREFA Panel to learn from small entity
representatives of any small business impacts if the screening analysis
indicates there may be SISNOSE. Further, the Agency's policy to conduct
outreach and provide accommodations in ANY rule that imposes ANY impact
on small entities encourages the consideration of potential small
business impacts early in the regulatory development process. Finally,
EPA continues to develop its relationship with the Small Business
Administration's Office of Advocacy as a means to identify the concerns
of small businesses.
Question. How is EPA ensuring that program office economic analysis
of small business impacts do not omit small businesses or industry
sectors it believes may be impacted by the rulemaking but on which the
agency does not currently possess impact information?
Answer. The Agency's screening analysis under RFA/SBREFA requires
analysts to examine the following questions to make an initial
assessment of the potential of a rule to have a significant economic
impact on a substantial number of small entities (SISNOSE):
--What types of entities are subject to the rule (regardless of
size)?
--Are any small entities included?
--Are any small entities adversely affected?
--Is the rule likely to have a significant economic impact on a
substantial number of small entities, considering both
qualitative and quantitative information?
If the answer to the last three questions is ``no,'' then the
Agency will certify the rule as having no SISNOSE. If the answer to the
final question is ``yes'', then the Agency will proceed to prepare a
Regulatory Flexibility Analysis (RFA) and convene a Small Business
Advocacy Review Panel.
If the Agency does not have enough information to determine with
confidence that it can certify that there is no SISNOSE, then the
Agency assumes the answer to the above final questions is ``yes'' and
will prepare an RFA and convene a Small Business Advocacy Review Panel.
This ensures that small business or industry sectors that may be
impacted by a rulemaking, but for which the Agency does not currently
possess impact information, are not omitted from the analysis. If, in
the course of initiating the formal analysis of potential economic
impacts on small entities, the Agency determines that impacts are not
significant, then the Agency can decide to certify no SISNOSE at any
time before proposal.
EPA's policy is to make an assessment of the rule's impact on any
small entities, to engage the potentially regulated entities in a
dialog regarding the rule, and minimize the impact to the extent
feasible--even where the Agency certifies that a rule will not have a
significant economic impact on a substantial number of small entities.
This policy also ensures that impacts on small business or industry
sectors are not omitted.
Question. How is EPA ensuring that self-imposed deadlines for
rulemakings are not used to skip collection of information on small
business impacts?
Answer. EPA is committed to collecting and analyzing appropriate
information to support its actions, including information related to
small business impacts. Data collection and information needs are
explicit elements of the analytic blueprint EPA develops for
significant rules. EPA is renewing its emphasis of the Analytic
Blueprint and up-front identification of information needs and
scheduling constraints. EPA is also reviewing its Action Tracking
System to identify areas of improvement, including how to manage
interim deadlines and milestones.
acrylamide rulemaking
Question. What is the status of EPA's consideration of whether to
regulate acrylamide grouts?
Answer. EPA is currently gathering and reviewing new data to
determine whether the underlying data and assumptions it used in
support of prior regulatory analyses are still reasonable.
EPA is reviewing data on key factors including chemistry,
economics, and exposure control options. It is reconsidering both
regulatory and nonregulatory options for protecting grouting workers.
Much of the current data was collected by consulting technical
literature. EPA also contacted some businesses and local governments to
gather information. The economic data update is focusing on the
chemical grout marketplace. It addresses the relative costs, market
share, and desirability to users of acrylamide and its substitutes. The
information EPA has collected is also relevant to the question of how
many people are exposed and therefore how extensive is the risk from
the use of acrylamide grouts. EPA is also collecting and reviewing data
on currently available personal protective equipment to determine
whether there is an adequate and affordable means of providing exposure
protection to grouting workers.
Once EPA has completed the data gathering and analysis phase, it
will revisit the question of whether to protect workers who use
acrylamide grout and how to do so. EPA expects to have decided upon a
course of action by the end of September 2001.
Question. Has EPA determined that a nonregulatory approach may be
sufficient to adequately protect human health?
Answer. No, EPA has not yet made a decision. EPA is collecting and
reviewing data on currently available equipment for providing worker
protection. The effectiveness and cost of such equipment are key
factors in the decision. Other important factors are whether the
equipment is compatible in terms of durability, comfort, and function
with grouting conditions in the field. EPA will consult with the
Occupational Safety and Health Administration (OSHA) and other affected
stakeholders before making a final decision.
wiper rulemaking
Question. What is the status of EPA's rulemaking on the handling
and disposal of solvent-contaminated wipers?
Answer. EPA is currently evaluating an option that would exempt
solvent-contaminated reusable and disposable wipes from RCRA hazardous
waste regulations provided that specified conditions are met, such as
the absence of free liquids, and proper labeling and storage. This
option includes conditions identified in some state policies, and
addresses disposable wipes containing hazardous solvents.
Question. Does the wiper rule provide EPA with the opportunity to
level the economic playing field for small businesses who want to use
nonwoven wipers and rags, in a way that benefits small businesses and
the environment?
Answer. Yes. EPA is evaluating an option that would provide
regulatory relief for small businesses using disposable or nonwoven
wipes and rags, provided specified conditions are met, such as the
absence of free liquids, and proper labeling and storage.
Question. Does the wiper rule provide EPA with the opportunity to
create uniform standards for the disposal of laundered shop towels,
nonwoven wipers and rags and thereby eliminate contradictory state
rules and minimize confusion and excessive costs on the use of these
products?
Answer. Yes. The option that EPA is evaluating would create uniform
standards for industrial wipes, rags and shop towels, reduce the costs
of compliance with RCRA regulations for many generators, and address
inconsistencies that exist in current state policies with respect to
these materials.
Question. How many small business industrial launderers oppose this
rule versus the number of small businesses which would benefit from the
rule either through supplying nonwoven wipers and rags or using such
products?
Answer. EPA does not know the number of industrial laundries
opposing this rule. However, we do know that the two trade associations
representing many industrial laundries oppose this rule. Conversely, we
are aware of other industrial laundries who favor this rule.
Question. Is the wiper rule an example of a rule which impacts
small businesses, but not substantially, therefore not requiring a
small business advocacy panel?
Answer. EPA is completing an economic impact analysis on small
businesses. At this time, we are unable to provide information as to
whether this rule will require a small business advocacy panel.
new source review
Question. What is the status of EPA's new source review litigation
effort? Provide a brief summary of EPA action, litigants, factual
background including degree of actual environmental impact, legal
issues, current status, expected next step, and settlement if obtained?
Answer. As you are aware, the Department of Justice (DoJ) is
currently reviewing the existing enforcement actions against certain
utilities and other defendants for violations of New Source Review
requirements under the Clean Air Act. In the meantime, both the
Environmental Protection Agency and DoJ are proceeding with settlement
discussions with some companies, and in litigation with others. The
Eleventh Circuit Court of Appeals has informed us that it will hear
argument in September on the Tennessee Valley Authority's appeal of the
EPA's Environmental Appeal Board decision last fall finding TVA liable
for substantial violations of NSR.
In the meantime, EPA has concluded global consent decrees with four
petroleum refining companies covering 27 facilities representing about
28 percent of total domestic refining capacity. These agreements, which
resolve alleged violations of NSR and other important provisions of the
Clean Air Act, are expected to reduce emissions of sulfur dioxide,
nitrogen oxide, and other criteria pollutants by at least 130,000 tons
per year. All four of these consent decrees have been lodged with
federal courts; we expect all four will be entered by the end of the
fiscal year. This month, EPA announced another settlement of alleged
NSR violations at a refinery owned by Clark Oil Company in Illinois; we
expect the agreement to reduce sulfur oxide emissions by nearly 5,000
tons annually. Last October, EPA entered into a consent decree with
Tampa Electric Company to resolve alleged NSR violations, and in
November announced agreements in principle with Dominion Resources
(VEPCO) and Cinergy. Assuming the VEPCO and Cinergy agreements lead to
consent decrees, the three settlements together are expected to reduce
sulfur dioxides and nitrogen oxides by a combined total of 750,000 tons
per year.
Attached is a summary of the most significant recent settlements or
active cases involving alleged violations of NSR, which includes some
information about projected environmental benefits from these actions.

Attachment: New Source Review Snapshot

power plants
Companies settling, in active discussion or in litigation--49
percent of Total Coal-fired Capacity
Global Settlements.--Tampa Electric Company--Injunctive Relief:
Approximately $1 billion; SOX/NOX Tons Reduced:
190,000 per year when fully implemented.
Global Agreements in Principle.--Vepco and Cinergy (Announced);
Combined Injunctive Relief: Approximately $3 billion; Anticipated
SOX/NOX Tons Reduced: 750,000 per year when fully
implemented.
Current Negotiations.--Global settlement discussions with three
additional companies.
Complaints Filed.--8 companies (AEP, Dayton Power & Light, Duke,
First Energy, Illinova, SIGCORP, Southern Co., TVA); AEP, Southern, TVA
together emit 5.5 million tons of SOX/NOX, or
about 20 percent of emissions from all coal-fired capacity nationwide
(1996 data).
Litigation Update.--EPA claims against TVA largely upheld by
Environmental Appeals Board (EAB) in the fall of 2000; 11th Circuit
scheduled to hear TVA's appeal of the EAB decision in September of
2001; Summary Judgment pending for AEP.
refineries
Total cases settled, in negotiation, or under investigation:
Global Settlements.--Koch, BP, Motiva, Marathon-Ashland; 28 percent
of U.S. Refining Capacity; Combined Injunctive Relief: Approximately
$1.3 Billion; Anticipated SOX/NOX Tons Reduced:
130,000 tons per year when fully implemented; Additional reductions in
VOCs, benzene and other pollutants.
Single Facility Settlements.--Cenco, CA; Clark, Illinois (4,700
tons per year of SOX, reduced).
Current Negotiations.--Negotiating global settlement with three
companies representing up to 25 percent of additional refining
capacity.
Under Investigation (114's and NOV's).--Notices of Violation issued
to Exxon-Mobil and Citgo facilities.
Active Litigation.--Murphy Oil trial appellate decision expected in
July 2001.
wood products
Global Settlement.--3 companies (Georgia Pacific, Louisiana Pacific
and Willamette); Willamette settlement reduced VOCs and other
pollutants by 27,000 tons per year.
State Settlements.--Weyerhaeuser.
Current Negotiation.--Boise Cascade: 2 NOVs issued, 8 facilities
addressed.
pulp and paper mills
Complaints Filed.--Two single-facility judicial complaints
(Westvaco, Gladfelter).
Current Negotiation.--One company.
Under Investigation.--At least 5 additional facilities.
iron & steel (mini-mill)
Global Settlement.--Nucor Steel; Injunctive Relief: $85 Million;
VOC/NOX Tons Reduced: 9,400 per year when fully implemented.
Ongoing Disclosure Initiative.--Invitation to Audit 42 mini-mills.
other significant cases
Buckeye Egg Farms; NOV issued for PSD/PM violation at large egg-
laying facility.
Question. Provide examples of how EPA may have used litigation to
obtain clarification of New Source Review (NSR) requirements instead of
through legislative or rulemaking processes.
Answer. EPA believes its enforcement actions have proceeded from a
consistent understanding and interpretation of New Source Review
requirements by the Agency, and were based on noncompliance uncovered
in investigations. EPA has not used litigation to obtain clarification
of NSR requirements.
An Enforcement Alert, published in January of 1999 (before filing
of EPA's complaints against power companies), represents one of our
efforts to publicize concerns about noncompliance with NSR
requirements. A copy of the Enforcement Alert (January, 1999, Volume 2,
Number 1) is available on the Internet at http://es.epa.gov/oeca/ore/
enfalert/psd.pdf.
Question. How can EPA improve the New Source Review program to
protect air quality but ensure utilities and refiners do not face
disincentives to install more efficient production technology?
Answer. In May 2001, the National Energy Policy Development Group,
in its National Energy Policy Report, recommended that the
Administrator of the EPA, in consultation with the Secretary of Energy
and other Federal agencies, examine the New Source Review (NSR)
regulations and report to the President on the impact of NSR on
investment in new utility and refinery generation capacity, energy
efficiency, and environmental protection. During July, as part of the
NSR review and report to the President, EPA met with interested
stakeholders and held a series of public meetings to solicit
information about the impact NSR might have on refiners or utilities.
These meetings will help us to formulate the recommendations that will
be included in the report to the President. Thus, EPA believes that it
is premature to make recommendations prior to completing the review.
Question. How can EPA improve the New Source Review (NSR) program
to protect air quality but ensure actual emissions are the focus and
not potential or theoretical emissions?
Answer. EPA took comments on its method for calculating emission
increases under the NSR program in 1996 and again in 1998. We are still
in the process of deliberating over whether changes are needed and, if
so, what changes are most appropriate.
Question. How can EPA improve the New Source Review program to
protect air quality but reduce the time and burden needed to obtain NSR
permits?
Answer. The New Source Review (NSR) program is typically
administered by State and local air pollution permitting authorities.
EPA provides guidance to these authorities for implementing the
program. EPA proposed several process improvements as part of the 1996
NSR proposal. Because disputes arise over what control technologies are
considered available, the permit review process can become lengthy. EPA
proposed several measures designed to streamline and provide more
certainty concerning the control technology review requirements for
NSR. Additionally, EPA proposed measures to clarify the roles,
responsibilities and time frames for review by Federal Land Managers of
sources potentially affecting air quality near national wilderness
areas and parks. We are still in the process of deliberating over these
changes.
clarify and define concentrated animal feedlot operation regulation
Question. How can EPA better clarify and define its proposed
concentrated animal feedlot operation (CAFO) regulation?
Answer. EPA has held nine public information sessions around the
country to help the public better understand the proposed regulations
(Baltimore, MD; Ames, IA; Riverside, CA; Ft. Wayne, IN; Dallas, TX;
Chattanooga, TN; Denver, CO; Boise, ID; and Casper, WY). We are engaged
in an ongoing dialogue with major associations and their membership to
discuss the proposal and EPA's goals. We are also working closely with
USDA in order to further understand the potential impacts of the
proposal on the agricultural community, to analyze underlying data that
can help us refine the regulatory approach, and to examine options for
meeting EPA's goal to protect water quality.
The comment period was extended to July 30 to give the public more
time to prepare written comments on the proposal. New information
received during the public comment period that EPA may use in the final
rule will be published in a ``notice of data availability'' in late
fall of this year. The public will then have an additional 30 to 45
days to comment.
EPA understands the concerns some have raised with respect to the
regulation, and we continue to examine the issues as we work towards
preparing options for the final rule scheduled for December 2002.
impact of concentrated animal feeding operations rule on use of
chemical pesticides
Question. How will the CAFO rule increase the use of chemical
pesticides [fertilizer] on crops by discouraging the use of manure?
Answer. It is not the intent of the proposed revised regulation to
increase the use of commercial fertilizers nor discourage the use of
manure. We understand that the proposed 100 foot setback provision for
land application and the co-proposals concerning the off-site transfer
of manure may inadvertently have such a result.
EPA is aware that 65 percent of manure produced by CAFOs is in
excess of their on-site crop needs, and that as many as 350 counties
generate more phosphorus from AFOs than is needed for crops. EPA is
carefully studying this issue and is working to craft a solution to
avoid disrupting manure markets.
weather impact on concentrated animal feeding operations requirements
Question. How does EPA ensure that CAFO requirements needed for wet
climates are not overly burdensome in dry areas?
Answer. EPA believes that our proposal accounts for differences in
climate. For example, we proposed that production areas be designed to
contain manure, wastewater, and contaminated runoff for certain
periods, i.e., beef and dairy feedlots must be designed for a 25-year,
24-hour storm (as defined by the National Oceanic and Atmospheric
Administration), and that swine, poultry and veal areas be designed for
zero discharge except in catastrophic events. In wet climates, the
resulting design would be more rigorous than would be required in a dry
climate. For land application areas, permits would incorporate the
state-adopted NRCS 590 standard which includes methods for determining
rate of manure application. These methods take into account rainfall,
slope, soil conditions, and other factors that accommodate climactic
differences in determining optimal conservation practices.
EPA has also proposed that both the co-permitting and the off-site
transfer certification requirements could be waived if the State has an
effective program for managing and redistributing excess manure
nutrients. It may be the case that a State with dry climates could more
realistically tailor its program to achieve such waivers, than a State
with wet climates, because of the greater challenge to prevent
nutrients from entering waters of the U.S. resulting from wet weather
events.
cost of determining hydrologic issues
Question. How did EPA consider the costs associated with
determining hydrologic issues, such as whether ground water at a
facility is linked to federal waters?
Answer. Under one technology option, EPA and USDA developed a
methodology to assess geological features that would most likely
constitute a direct hydrological connection to surface water. The
method results in an estimated 24 percent of facilities nationally that
would incur costs to prevent discharges to groundwater. In the proposed
rule, EPA has provided an opportunity for facilities to obtain a
hydrologist's report that no hydrological connection exists, and
therefore no further action would be necessary. EPA also included the
cost of installing monitoring wells, lagoon liners, and solid storage
pads at these facilities in its Regulatory Impact Analysis of the
proposed rule.
preventing duplicative reporting and record keeping requirements
Question. How does EPA ensure that its federal reporting and record
keeping requirements are not duplicative of existing state requirements
in given states?
Answer. Forty-three States are authorized to administer the NPDES
program for CAFOs. In these cases, States could coordinate the
reporting and record-keeping requirements of any programs under their
control, including their non-NPDES programs for AFOs and CAFOs.
concentrated animal feeding operation
Question. How is EPA addressing concerns over co-permitting,
nutrient management plans, and the financial resources necessary to
establish the regulatory infrastructure needed to implement and enforce
the proposal?
Answer. EPA is working with USDA, representatives of the regulated
community, and our State co-regulators to refine our proposals in light
of our goal to protect water quality, and to identify solutions that
are effective, affordable, and flexible. We understand that whether we
rely on voluntary programs, regulatory programs, or both, the animal
production industry and States need the financial resources to
implement the management practices needed at both the production areas
and the land application areas, or for developing other uses for excess
manure. We are seeking to participate in the dialogue over the Farm
Bill to help address these concerns.
clean air violations from bakeries
Question. What is the status of EPA's information request from
bakers regarding their handling of refrigerant in their appliances?
Answer. EPA has sent Section 114 information requests to large
baking companies regarding their compliance with ozone layer protection
requirements governing ozone depleting refrigerants used in industrial
process refrigeration and other equipment. EPA has requested additional
information where initial responses were unclear, and has received
several follow-up responses from the baking companies. EPA continues to
analyze these responses. Responses received to date indicate serious
compliance difficulties at many of the baking facilities, involving
excessive emissions of ozone depleting compounds as well as record-
keeping-related violations.
Question. How could EPA reach a comprehensive settlement with this
industry which would allow participating bakers to devote the maximum
amount of resources to coming into compliance and protecting the
environment?
Answer. EPA representatives have initially met with the main trade
association for the baking industry, the American Bakers Association,
to discuss a comprehensive settlement of all violations discovered by
self-audits. EPA has pledged to continue these discussions and explore
ways of resolving any such violations while achieving the greatest
environmental benefit consistent with EPA's self-auditing policy.
Question. How is EPA addressing municipality concerns that a zero
discharge standard for overflows from collection systems would impose a
technologically impossible and scientifically unsupportable burden on
municipalities?
Answer. Section 301(a) of the Clean Water Act (CWA) establishes a
zero discharge standard for unpermitted discharges. This strict
liability standard requires that dischargers obtain an NPDES permit for
their discharge according to the standards in section 301(b). EPA
recognizes that some overflows from sanitary sewer collection systems
are unavoidable, even at the best run systems. EPA is currently
considering how best to address this reality in its regulations. One
approach is through the existing ``upset'' and ``bypass'' provisions,
that recognize exceptional incidents. The ``bypass'' provision
prohibits the intentional diversion of waste streams from any portion
of a treatment facility, but provides a framework for identifying the
limited circumstances when EPA will not bring enforcement action. The
``upset'' provision provides a framework for identifying the limited
circumstances when the permittee may establish an affirmative defense.
These provisions could be tailored to specifically address SSOs.
Another approach would be to authorize by permit a limited number of
partially treated discharges in circumstances where the discharge is
beyond the reasonable control of the operator. EPA is currently
considering these and other approaches.
impact of zero discharge standard on cwa technology-based standards
Question. How would EPA avoid circumventing the required process
for developing CWA technology-based standards if it imposed a zero
discharge standard?
Answer. Section 301(a) of the Clean Water Act (CWA) establishes a
zero discharge standard for unpermitted discharges. This strict
liability standard requires that dischargers obtain an NPDES permit for
their discharge according to the standards in section 301(b). EPA
recognizes that some overflows from sanitary sewer collection systems
are unavoidable, even at the best run systems. EPA is currently
considering how best to address this reality in its regulations. One
approach is through the existing ``upset'' and ``bypass'' provisions,
that recognize exceptional incidents. The ``bypass'' provision
prohibits the intentional diversion of waste streams from any portion
of a treatment facility, but provides a framework for identifying the
limited circumstances when EPA will not bring enforcement action. The
``upset'' provision provides a framework for identifying the limited
circumstances when the permittee may establish an affirmative defense.
These provisions could be tailored to specifically address SSOs.
Another approach would be to authorize by permit a limited number of
partially treated discharges in circumstances where the discharge is
beyond the reasonable control of the operator. EPA is currently
considering these and other approaches.
best management practices for secondary standards for collection
systems
Question. How can EPA work within existing regulations which
recognize that some discharges are better addressed through best
management practices, to develop a secondary standard for collection
systems?
Answer. EPA is considering whether to publish a rule that would
require NPDES permits for municipal sanitary sewer collection systems
to contain a standard provision for better operation and management of
systems to avoid SSOs, increased attention to system planning, and
better notification to the public in the event of an overflow. As an
alternative to modifying the existing regulations, EPA could issue
guidance or a policy on applying existing NPDES regulations, including
the bypass and upset provisions at 40 CFR 122.41(m) and (n) and the
secondary treatment regulations at 40 CFR 133, to municipal sanitary
sewer collection systems and SSOs.
public comment on alternative regulatory principles
Question. How can EPA provide an opportunity for comment on
alternative regulatory principles?
Answer. EPA is reviewing the proposed rule. One option would be to
propose a framework for: evaluating the specific circumstances of a
discharge from a municipal sanitary sewer collection system; and
determining whether to potentially excuse those discharges, either
though the exercise of enforcement discretion or through establishment
of an affirmative defense. Another option would be to propose a
framework in which a limited number of partially treated discharges
could be authorized by permit in circumstances, such as extreme wet
weather, where the discharges were beyond the reasonable control of the
operator. The proposed rule will provide an opportunity for interested
stakeholders to comment on whatever framework is proposed, as well as,
alternative approaches to deal with these discharges.
information management
Question. Provide the status of each Reinventing Environmental
Information initiative and milestone, either still standing alone or as
incorporated into more recent efforts.
Answer. The original elements of the Reinventing Environmental
Information initiative (REI)--Data Standards, Electronic Reporting,
State Participation (The One Stop Program), Systems Reengineering (the
13 REI systems), Locational Data Improvement (Geospatial efforts), and
Facility Identification (the precursor to the Facility Registry
System)--have been incorporated into the Agency's information
integration efforts and are the core components of the infrastructure
needed by EPA to participate, as a partner, in the National
Environmental Information Exchange Network (NEIEN). The following is an
update on the status of each of these projects:
Data Standards.--The REI Action Plan committed EPA to create a data
standards program for the Agency. Specifically, this plan directed EPA
to: (1) Promulgate interim standards for Date, Facility Identification,
SIC/NAICS, Latitude/Longitude, Biological Taxonomy, and Chemical
Identification; (2) Develop Business rules and promulgate final
standards; (3) Establish a central Agency support program; and (4)
Implement standards in national systems. In addition, the REI Action
Plan called for the Agency to institutionalize the data standardization
process and develop standards and protocols for electronic reporting.
EPA has either met or has made significant strides in achieving these
goals. As of November 2000, data standards and business rules for all
six of the areas originally identified in the REI initiative have been
completed and implementation dates for the 13 national systems have
been set. These dates are:

------------------------------------------------------------------------
IMPLEMENTATION
DATA STANDARD DATE COMPLETED DATE FOR REI
BY EPA SYSTEMS
------------------------------------------------------------------------
Calendar Date........................... 1/20/99 9/30/99
SAIC/NAICS.............................. 1/20/99 9/30/02
Facility ID............................. 11/21/00 9/30/03
Lat/Long................................ 11/21/00 2/28/02
Chemical ID............................. 11/21/00 3/31/03
Biological ID........................... 11/21/00 3/31/03
------------------------------------------------------------------------

In addition to finishing these standards, the Agency has
established a central support program for implementing them in major
EPA systems. This support program involves conducting periodic surveys
of implementation status; general communication and outreach to program
offices; and convening meetings with program information management
officials and system managers. As a result, EPA system managers have
begun implementing these standards in 12 of the 13 national systems
identified in the REI Action Plan (we are working with the last system
to address technical obstacles to conformance). The Calendar Date
standard, the only standard for which the implementation date has
passed, has been implemented by most of EPA's 13 national systems. Most
of the national systems are on track for the Latitude/Longitude and
SIC/NAICS data standards which have implementation dates next year.
Progress has also begun on the remaining data standards which have
implementation dates into 2003.
Significant progress has also been made in institutionalizing the
data standardization process. Specifically, the Environmental Data
Standards Council was created and has forged a firm partnership with
EPA, State, and Tribal organizations; it is about to circulate two new
jointly developed draft data standards (Permitting, and Enforcement and
Compliance) for broad public review and comment. The Council is
deliberating on a new round of standards based on State, EPA, and
Tribal needs with priority consideration of electronic format data
exchanges slated for the National Environmental Information Exchange
Network.
Electronic Reporting.--EPA has drafted a rule to address an
electronic reporting process and remove existing regulatory barriers to
electronic reporting. At this time, the rule is in Administration
review. EPA has also initiated several electronic reporting activities
with States and the regulated community, and has begun to receive
official submissions of air emission and Toxics Release Inventory (TRI)
data electronically.
Locational Data Improvement Project.--The Agency is continually
improving the quality of locational data (latitude and longitude
coordinates) of regulated entities stored in the Agency's Locational
Reference Table (LRT). During 2000, approximately 100,000 new or
improved locational data points were submitted to the LRT.
Facility Registry System (FRS).--FRS development was completed in
fiscal year 2000. As of July 2001, FRS contains over 500,000
authoritative facility identification records. FRS is available by
clicking on ``facility information'' under the ``Queries, Maps and
Reports'' option located at www.epa.gov/enviro TRI.
Question. In fiscal year 2002, which 15 States will use the Central
Data Exchange (CDX) infrastructure to provide data to EPA?
Answer. The original projection of 15 States has been exceeded in
fiscal year 2001. Specifically, in fiscal year 2001, a total of 34
States are using CDX to report data to EPA, across the following
program areas:
--Annual Air Emissions Inventory submissions under the Clean Air Act
were received through CDX from 34 States, including: AL, AZ,
CA, CO, CT, FL, IL, IN, KS, KY, LA, MA, MD, ME, MN, MO, MS, NC,
ND, NE, NH, NJ, NY, OH, OK, PA, RI, SC, TN, UT, VA, VT, WA, WY.
We also received submissions from county air boards in states
including: KY, NC, NE, NV, PA, TN, WA. Several other states,
such as Hawaii have indicated they plan to use CDX before the
end of this fiscal year.
--TRI Form R submissions under the Emergency Planning and Community
Right to Know Act (EPCRA) were received from over 600
facilities in seven states: OH, IL, MI, TX, LA, CO, WA.
--For exchanging data with States under the National Pollution
Discharge Elimination System (NPDES), established by the Clean
Water Act, we are currently working with VA and plan to expand
testing to NJ.
In fiscal year 2002, we plan to further expand CDX implementation
as follows:
--to all states and counties submitting air emissions data to EPA;
--to all state and local drinking water authorities involved in
reviewing data provided by laboratories under the Safe Drinking
Water Act's Unregulated Contaminant Monitoring Rule (UCMR);
--to all facilities nation-wide required under EPCRA to report TRI
data to the TRI program;
--complete testing with VA and NJ, expand to offer CDX to 5-10 states
that submit to EPA's Permit Compliance System in support of the
NPDES program; and
--CDX will also conduct testing with State programs involved in the
exchange of data under the Resource Conservation and Recover
Act (RCRA), and Water Quality Monitoring Data provided to EPA's
STOrage and RETrieval System (STORET).
Question. How much of the $25 million for the National
Environmental Information Exchange Network (NEIEN) will go to getting
these 15 States on-line?
Answer. The original fiscal year 2001 projection of 15 States being
on-line with the Central Data Exchange (CDX) has been increased to 34
States using CDX to report data to EPA across various program areas.
The $25 million for the NEIEN Grant Program is proposed to have three
broad components for which any of the 34 States would apply and
potentially receive a portion of the funding. It is anticipated that
the majority of the States will apply for Core Capacity Building Grants
of which 45 percent to 50 percent of the total funding received will be
dedicated to a competitive process.
Question. How much will it cost to get the remaining States to use
the CDX/NEIEN system?
Answer. Although the Agency does not currently have estimates of
the overall costs for States to participate in the Network, EPA and the
States have several efforts underway that will provide information
related to State costs. These efforts include: (1) a State Readiness
Assessment, which is examining States' readiness to participate in the
Network; (2) a State node pilot project, which is assessing what is
involved in developing a State ``node'' or portal on the Network; and
(3) a preliminary study of the costs and benefits of selected data
flows through the Network. These efforts, taken together, will provide
key information related to State costs.
Question. How much will the continued operation of the CDX/NEIEN
annually cost EPA and the States?
Answer. Over the next several years, CDX will process an increasing
volume of electronic reporting as well as assuming other data receipt
processes (including paper, diskette, magnetic media and other forms of
data submission). EPA's costs are expected to rise accordingly: $10
million in fiscal year 2002, $13 million in fiscal year 2003, and up to
$21 million in fiscal year 2004.
We do not have projections regarding the costs states will incur to
participate in the Network, but currently have several efforts underway
that will assist in estimating State costs. State costs should decline
compared to their present costs because the Network will feature
electronic reporting to a single EPA portal.
Question. How will EPA collect information from non-CDX states?
Answer. EPA's long-term intention is to obtain all of its
regulatory compliance data through CDX. CDX is being implemented on a
program by program basis, with States joining when their systems allow.
States which are not able to send data through CDX are using the same
procedures in place prior to CDX implementation--they are submitting
data to EPA's program legacy systems.
Question. How will the CDX system address data quality issues from
the standpoint of data entry and the quality of the data put into
whatever system is currently used?
Answer. The CDX process allows the Agency to address data quality
in two ways:
(a.) Avoiding Data Entry Errors by:
--Establishing ``intelligent'' edit checks in our electronic forms at
the point data is entered by users.
--Leveraging data already provided by the user to pre-populate forms,
thereby reducing amount of re-keying.
--Introducing ``error detection' measures into our data receipt and
processing functions that automatically detect and send
detected errors back to the submitter.
(b.) Enhancing Error Detection and Correction by:
--Providing viewing features' for States/industry to review and
correct data in information systems before it is made available
to the public. It is this last feature of CDX that helps
address the inherent quality of the data being entered into
State and EPA information systems.
Question. How is EPA integrating standardization and other
information management improvements into the new CDX/NEIEN systems?
Answer. CDX uses data standards as one of the data receipt error
checks when possible. In addition to flagging errors and returning them
to the submitter for correction, CDX is providing the capability for
submitters to review the data they have submitted to CDX before it is
transferred to its legacy system and made available to the public. This
allows the data submitter to verify the accuracy of data which passes
automated edit checks. CDX also incorporates Agency data standards into
all file submission specifications it releases to its user community.
Question. How is EPA moving from better collecting, processing and
using currently required data to requiring and using only a smaller
core of essential environmental information?
Answer. Although the Network does not directly address this issue,
the use of standardized electronic formats should make it easier to
identify duplicate submissions and other opportunities for
streamlining. Through the More Efficient and Effective Reporting (MEER)
Initiative, the Agency is exploring opportunities to streamline and
consolidate environmental reporting requirements by both reducing the
submission of similar data multiple times and consolidating related
reports.
Question. Who is responsible for correcting errors identified in
information contained in the CDX/NEIEN system?
Answer. Data errors in the content of the submitted data must be
corrected by the submitter. Obvious errors (e.g., missing values) will
be identified upon receipt in CDX and the submitter will be immediately
notified. EPA believes that the CDX process will not introduce any
additional errors. EPA will continue to facilitate the identification
and correction of data errors through the error correction process that
is a feature of our national data systems and many websites.
Question. How will the Agency integrate information collected
through the CDX/NEIEN into programmatic or enforcement information
systems or otherwise meet the requirements for which those systems were
designed?
Answer. CDX receives data from its source submitter (State or
regulated facility) and transmits these data to their programmatic or
enforcement system in a format acceptable to the system.
Question. What is the status of the Agency's efforts to modernize
its programmatic information systems?
The Agency is continuing its ongoing, significant efforts to
develop, maintain, and enhance its programmatic information systems. As
the systems' requirements evolve to reflect changing customer
expectations and changes in programmatic emphases, the system managers
plan incremental or more major modernization projects. For the first
time ever at EPA, the system managers are now able to plan such
projects in the context of an overall Agency Enterprise Architecture.
Several of EPA's Program Offices (e.g., OW, OSWER, OECA) are
undertaking architectural and information strategic planning exercises
within their programmatic domains, in coordination with EPA's
Enterprise Architecture program. These programmatic planning exercises
will help establish the additional detail needed for efficient and
effective modernization of programmatic information systems.
EPA annually oversees, and periodically evaluates, its major IT
investments to determine whether the systems are delivering what was
expected. This year's information technology Capital Planning and
Investment Control (CPIC) process tracked 26 programmatic systems, in
great detail. Each programmatic system investment proposal described
the system's: (1) required management approvals; (2) conformance with
data standards; (3) plans for ensuring data quality; (4) approach to
data integration; (5) extent of architectural alignment; (6) commitment
to security planning and controls; and, (7) consideration of deployment
costs. The modernization work documented in each proposal clearly
reflects the Agency's major information management priorities, and the
investment proposals present a comprehensive annual status snapshot for
the Agency's major systems.
Question. How is the modernization of the Agency's programmatic
systems integrated with the NEIEN efforts?
Answer. An important element of the Agency's Reinventing
Environmental Information effort was modernizing 13 major program
systems. Beginning in fiscal year 2000, the modernization efforts were
linked to the Agency's information integration efforts and, in turn,
the NEIEN. EPA's Information Technology Management Reform Act (ITMRA)
review process explicitly includes program consistency with the
Agency's integration effort as important criteria for funding.
As a result of these efforts, EPA program offices are focusing on
the Agency-wide integration efforts--for example, several program
offices have redirected major data flows through the CDX, and a
schedule for a series of these redirected data flows affecting all
Agency program offices is being developed, collaboratively with OEI,
the States, and the Program Offices. EPA Program and Regional Offices
also are actively working on other integration efforts including
implementing the approved data standards, using the Facility Registry
System, and developing the NEIEN.
Question. Describe the role OEI is playing in agency information
management resource decisions, including implementing cuts to program
offices needed to develop the operating plan?
Answer. Under ITMRA of 1996 (``Clinger-Cohen Act''), EPA and other
Federal agencies are given responsibility for overseeing the
acquisition, use, and disposal of information technology (IT) in order
to improve the productivity, efficiency, and effectiveness of Federal
programs. These Congressional requirements have provided a valuable
tool for OEI to ensure that EPA's IT investments are cost effective.
OEI has been aggressively undertaking its Clinger-Cohen
responsibilities, including those relating to the review of IT
investments, and intends to continue to improve its IT investment
management process and results.
With regard to implementing cuts to program offices needed to
develop the Agency's operating plan, OEI performs an important role by
issuing the Chief Information Officer's independent advice to the EPA
Administrator. This letter, which is required by the Clinger-Cohen Act,
provides the Administrator with information on what major investments/
systems should be funded in the Agency's budget.
Question. What is the status of OEI strategic planning for EPA
information management? Please provide the most recent materials in
this area.
Answer. EPA has initiated a process to develop a strategic plan to
manage the Agency's information resources (e.g., data, technology,
people, policies, funding). As a preliminary first step, OEI is
currently holding internal discussions with senior officials in its
Regional and Program Offices to develop a vision and goals to guide
EPA's management of information. Following an internal review of the
vision and goals document (during the First Quarter fiscal year 2002),
the Agency will meet with its State and tribal partners and
stakeholders to solicit their input (Second Quarter fiscal year 2002).
EPA then will develop an action plan to implement the vision and goals
(Third Quarter fiscal year 2002). At this point, a strategic
information plan has not yet been developed. When the Agency produces
such materials, we would be happy to share them with you.
tri
Question. To what degree has EPA increased the number of TRI
chemical forms submitted in digital format?
Answer. The proportion of chemical submissions received
electronically (diskette or web-based electronic reporting) has risen
from about 60 percent of Reporting Year 1994 submissions (received in
1995) to 83 percent of Reporting Year 1999 submissions (received in
2000). (Each Form R is used to report one chemical. Since 1998, a Form
A--used to certify that a facility is not subject to Form R reporting
for a specific toxic chemical--may be used to report multiple
chemicals. Thus, each chemical listed on a Form A counts as an
individual chemical submission.
Since 1987, EPA has offered an electronic means of reporting TRI
submissions. The Automated TRI Reporting Software (ATRS) provides a
means of completing a Form R and/or Form A electronically, with field
and batch level validation checks. A reporting facility can submit via
a diskette to both EPA and more than 40 states. Beginning last
reporting year (Reporting Year 1999), the TRI program co-sponsored a
web-based electronic reporting pilot with EPA's Office of Information
Collection. The pilot provided the TRI reporting community with the
option to complete their Form R and/or Form A submission(s) with the
ATRS software, and then transmit their submission(s) via the internet.
About 90 facilities participated, reporting more than 600 chemicals.
For Reporting Year 2000, EPA continues to encourage electronic
reporting with two new options. The first is the Toxics Release
Inventory-Made Easy Software (TRI-ME). TRI-ME is an interactive,
intelligent, user-friendly software tool that guides facilities through
the TRI reporting experience. Like ATRS, TRI-ME submissions can be sent
to EPA on diskettes. The second is an expanded version of the web-based
reporting pilot from last year; several thousand facilities have been
invited to participate in web-based reporting this year, using either
ATRS or TRI-ME. Additionally, some facilities that participated in last
year's web-based electronic reporting pilot were given the option to
digitally sign their submission(s) to EPA. This eliminates the need to
separately mail a diskette and a signed certification statement to EPA.
The TRI Program plans to continue to expand and enhance electronic
reporting to reduce facility's reporting burden, improve data quality,
and speed publication of the TRI data.
Question. How does the technical information contained in the TRI
database provide local families and communities with the actual risk
they may face to their health?
Answer. TRI data, together with other data, can provide a valuable
starting point in evaluating risk. However, the information contained
in the TRI database alone is not sufficient to determine potential
adverse effects on human health and the environment. The determination
of potential risk depends upon many factors, including the toxicity of
the chemical, the fate of the chemical after it is released, the
locality of the release, and the populations that are exposed to the
chemical after its release. Information on releases and other waste
management activities of toxic chemicals from the TRI database is an
important resource for determining the potential chemical exposure; as
it provides local communities with information on the quantities
released to the various environmental media in their communities.
Question. Does the TRI database provide local communities with a
determination of whether it is safe to live in their communities?
Answer. The TRI database alone does not provide local communities
with a determination of whether it is safe to live in their
communities. TRI data, in conjunction with other information, can be
used as a starting point in evaluating exposures that may result from
releases and other waste management activities of toxic chemicals. The
determination of potential risk depends upon many factors, including
the toxicity of the chemical, the fate of the chemical after it is
released, the locality of the release, and the populations that are
exposed to the chemical after its release. As you may be aware, EPCRA
section 313(h) states that the purpose of the information collected is
to ``. . . provide information to the Federal, State, and local
governments and the public, including citizens of communities
surrounding covered facilities'' and ``. . . to inform persons about
releases of toxic chemicals to the environment; to assist government
agencies, researchers, and other persons in the conduct of research and
data gathering, to aid in the development of appropriate regulations,
guidelines, and standards; and for other similar purposes.''
Question. Does the TRI database provide local communities with a
description of the degree to which their health is hurt by living in
their communities?
Answer. TRI reports reflect releases and other waste management
activities of chemicals, not exposures of the public to those
chemicals. TRI data, in conjunction with other information, can be used
as a starting point in evaluating health impacts associated with local
conditions.
Question. Does the TRI database provide local communities with a
description of the degree to which their health is affected by local
industry use of chemicals which are not released into the surrounding
community ?
Answer. TRI reports reflect releases and other waste management
activities of chemicals, not exposures of the public to those
chemicals. The use of chemicals by a facility determines whether the
facility must report. Facilities in the specified industries that have
the equivalent of 10 or more full-time employees and meet established
thresholds for manufacturing, processing, or otherwise use of listed
chemicals must report their releases and other waste management
quantities (including quantities transferred off-site for further waste
management).
Question. How is EPA determining whether noncompliance with TRI
provisions may be a widespread unawareness or misunderstanding of the
requirements before taking enforcement action?
Answer. EPA looks at several factors when examining noncompliance
with TRI provisions before taking an enforcement action:
1. Fair notice given to the regulated community: the amount and
types of EPA outreach and compliance assistance including printed
material distributed to regulated entities, free workshops provided by
EPA Regional Offices, guidance documents on the EPA website, including
questions and answers on specific chemicals required to be reported.
2. The clarity of the instructions in the TRI reporting forms: EPA
guidance as to what is required to be reported and how to calculate
emissions for the TRI reporting.
3. The commencement date of the reporting requirements: chemicals
which were required to be reported for many years are more likely to
trigger an enforcement response than chemicals that have recently been
added to the TRI.
4. The magnitude of the violations: EPA considers the amount and
types of toxic chemicals that have not been reported to the TRI when
considering an enforcement response.
5. The possible reasons for noncompliance: EPA examines the
noncompliance rates for various chemicals and tries to determine the
underlying reasons for high non-compliance rates.
6. The use of EPA compliance incentive policies to encourage
companies to examine their compliance. Two such policies, ``Incentives
for Self-Policing: Discovery, Disclosure, Correction and Prevention of
Violations'' (Audit Policy), and ``Policy on Compliance Incentives for
Small Businesses'' (Small Business Policy), provide incentives to
conduct environmental audits by substantially reducing or eliminating
penalties for entities that voluntarily discover, disclose,
expeditiously correct and prevent violations of federal law.
Question. What is the status of EPA's incorporation of the recent
National Mining Association (NMA) v. EPA decision into its reporting
obligations for the mining industry?
Answer. EPA posted on its website a summary of the decision and a
copy of the response letter sent to counsel for NMA, explaining the
Agency's position on the extent and effect of the Court's Order. In a
June 14, 2001 letter, and a June 28, 2001 letter to counsel for NMA,
EPA explained that mining facilities currently have a statutory
obligation to determine whether they exceed reporting thresholds, in
compliance with the requirements of EPCRA section 313 and consistent
with the court's decision.
As a consequence of the NMA decision, the Agency is considering a
rulemaking to clarify the status of mining extraction and beneficiation
activities.
Question. How will the reporting requirements for 2000 include the
court's ruling that mining extraction and benefication are not
``processed'' under EPCRA?
Answer. The Court in NMA ruled only on a very narrow issue-
specifically, the Court overturned the interpretation adopted in the
1997 rule, that the extraction and beneficiation of naturally-
occurring, undisturbed ores is ``processing,'' on the grounds that
these ores had not been ``manufactured'' within the meaning of EPCRA
section 313. As a result of this decision, EPA is not requiring mining
facilities to report based on the interpretation adopted in the 1997
rule.
Mining facilities currently have a statutory obligation to
determine whether they exceed reporting thresholds, in compliance with
the requirements of EPCRA section 313 and consistent with the court's
decision.
Question. Will EPA require industry to include, in their
calculations of the amount of toxic chemical that are processed or
manufactured at mining facilities, toxic chemicals that are present in
ores during extraction and beneficiation?
Answer. Mining facilities currently have a statutory obligation to
determine whether they exceed reporting thresholds, in compliance with
the requirements of EPCRA section 313 and consistent with the court's
decision. In addition, under current requirements, if a facility
exceeds a threshold for a chemical at that facility, it must report on
all non-exempt releases of the chemical that occur at the facility.
This requirement was not addressed by the Court's decision in NMA.
Further, the Court explicitly declined to reach the question of whether
manufacturing that occurs during the course of extraction and
beneficiation is an EPCRA section 313 threshold activity. As a
consequence of the NMA decision, the Agency is considering a rulemaking
to clarify the status of mining extraction and beneficiation
activities.
hwir rulemaking
Question. What is the status of EPA efforts to identify additional
targeted exemptions to the Hazardous Waste Identification Rule (HWIR)?
Answer. EPA is currently developing two proposed rules that are
related to targeted exemptions to the definition of hazardous waste.
Both proposals are expected to be signed within the next year.
The first proposal is an expansion of the current ``headworks''
exemption for solvents destined for wastewater treatment. It will
address: (1) possibly exempting the four solvents (benzene, 2-
ethoxyethanol, 2-nitropropane, and 1,1,2-trichloroethane) that were
added to the solvents listing in 1986, but not added to the exemption,
and (2) possibly allowing the alternative of direct monitoring to
demonstrate compliance with the exemption (as opposed to requiring a
mass balance be performed).
The second proposal is a new conditional exemption for certain
slagged combustion wastes. Wastes that have been slagged to
liquefaction (typically at temperatures above 2100 deg. F) are presumed
to have all hazardous organic chemicals eliminated. The proposal will
address the presence of metals in such wastes.
In addition, we have also started work on scoping analyses for four
possible additional exemptions, using readily available data: (1)
biological treatment residues exemption, (2) scrubber water combustion
residue exemption, (3) exemption for leachate managed in a wastewater
treatment unit, and (4) expanding the current de minimis exemption.
Depending on what our preliminary analyses reveal, and on available
resources, we may develop additional proposals in the 2002/2003 time
frame.
Question. How will the Agency proceed, including working with
stakeholders, in the exploration and development of additional
Hazardous Waste Identification Rule (HWIR) exemptions?
Answer. EPA has met several times with industry representatives to
better understand their perspective on the burdens imposed by hazardous
waste identification and how best to address that burden, and we will
continue this dialogue. We have invited states to participate in our
rulemaking workgroup discussions, and plan to continue working closely
with states to address implementation issues. We have also notified
waste management industry and environmental groups about our
rulemakings, and will encourage broader participation by these groups
as the proposals progress.
snap rule
Question. What is the status of EPA's proposed rule to further
restrict the use of hydrofluorocarbons in the manufacture of foam
products? When will EPA finalize this rule?
Answer. The July 2000 proposed rule generated a broad range of
comments and viewpoints on the feasibility of EPA's proposed
restrictions and on the availability of non-ozone depleting
alternatives for the various end-uses within the foam industry. To
reliably assess the factual basis of these comments, the Agency
commissioned an extensive analysis of the foams industry and the
technical and economic constraints faced by the various components of
the industry, including chemical and equipment manufacturers, chemical
formulators, and foam manufacturers and applicators. EPA also met with
various industry representatives and received additional technical
information to fill other information gaps identified in the original
comments.
In May 2001, EPA published a Notice of Data Availability in the
Federal Register (66 FR 28408) to provide the public with an
opportunity to review all of the additional information collected by
the Agency since the end of the comment period. Comments on this
additional information are now being reviewed and the Agency hopes to
issue a final rulemaking by the end of this year that will take account
of all comments and information received since the proposal.
Question. How could EPA split the rule to move forward with the
original purpose of the rule to regulate HCFCs without accelerating the
existing phase-out schedule of current substitutes?
Answer. The purpose of the proposed rule is to implement Section
612 of the Clean Air Act and facilitate the transition away from ozone-
depleting chemicals in instances where safe and effective alternatives
are available.
In developing the final rule, the Agency will consider, based on
comments received and available information, whether the proposed
restrictions on HCFC use in the various foam end-uses are appropriate.
The final rulemaking may be divided into two or more components in the
event that some portions of the rule requires additional data
generation.
EPA is reviewing the data collected to determine if there is
sufficient information to issue a final rulemaking that will adequately
address the range of issues confronting the industry. EPA has, and will
continue to, investigate the best way to implement its statutory
authority while providing clear and equitable direction to the affected
industry.
workforce development
Question. How will EPA ensure that it has the right mix of skills,
experience, talent and motivation in its workforce that it will need as
it moves away from its traditional federal command, control, and
enforcement approach to a more cooperative relationship with states and
others?
Answer. EPA's efforts to meet what has been called the ``Federal
human resources crisis'' has led to the development of Investing in Our
People, EPA's Strategy for Human Capital 2001 through 2003. This
strategy represents a comprehensive approach to the effective
management of the Agency's human resources, with programs in areas
ranging from family-friendly initiatives, developmental activities, and
empowering human resources information systems. Part of the strategy is
EPA's Workforce Assessment Project (WAP) which serves as a foundation
for the Agency's workforce planning efforts. The WAP identifies the
critical cross-cutting competencies that all employees need today and
out to the year 2020 and serves as the first step for improving the
effectiveness of its workforce and finding the best way to achieve the
President's desire to ``make Government more responsive to the needs of
citizens, more efficient, and more accountable.''
EPA offices already employ a number of methods to develop the
skills its workforce needs. These include: mentoring programs;
rotational assignments or ``job swap'' programs that often include
cross-media training and experience; Individual Development Plans; and
hiring through the Student Career Experience Program, and the EPA
Intern Program. Finally, many offices use Intergovernmental Personnel
Act (IPA) assignments that enable EPA employees to gain skills by
serving in state or local governments or universities, as well as
enable the Agency to acquire critical skills by bringing in external
expertise for a specified period.
Workforce planning is a fundamental strategy to improve EPA's human
capital. We are currently working with the Administration, particularly
the Office of Management and Budget, to assess EPA's workforce, and
restructure as appropriate. We will give full attention to these issues
in the fiscal year 2003 President's Budget.
Question. How will EPA address the potential impending retirement
of a significant percentage of its SES workforce?
Answer. EPA is concerned about the large number of senior leaders
who are eligible to retire over the next several years. To prepare for
this potential turnover, EPA has designed and is about to implement, a
Senior Executive Service Candidate Development Program (SES CDP). This
program will provide the process and structure for EPA to select a
number of high potential GS-14 & 15 employees and provide them a series
of developmental experiences that will help them build their skills and
competencies in the core executive qualifications required of senior
leaders.
This program has been approved by the Office of Personnel
Management (OPM) and EPA anticipates selecting approximately 50
candidates in January 2002. Candidates will go through a developmental
process that will last up to 18 months. Those who successfully complete
their development will be recommended by EPA's Executive Review Board
to the OPM's Qualifications Review Board for certification for non-
competitive appointment into SES positions. This program will provide a
well-qualified and motivated pool of senior leaders who can replace
those who will be retiring over the next several years.
Question. How will EPA establish a sound credible employee
development program for all sectors of the Agency's workforce? How will
you measure improved productivity or other results from these programs?
Answer. In 1997, EPA initiated the Workforce Development Strategy
(WDS). This strategy provides a comprehensive approach to help all
Agency employees develop the skills and competencies required to
achieve EPA's mission. The WDS has several components: (1) Workforce
Assessment (completed in 1999) to identify the critical cross-cutting
competencies that all employees need today and out to the year 2020;
(2) Workforce Planning Initiative (just beginning) to develop a
standardized methodology that will provide a basis for strategic
recruitment, retention and development; (3) EPA Intern Program
(operational) is a comprehensive, entry level, permanent employment and
career development program designed to recruit and nurture the next
generation of EPA leaders; (4) New Skills/New Options (being
implemented this fall) is designed to help employees in administrative
job series learn the skills and develop the competencies necessary to
improve their performance and link them to the mission of their
organizations; (5) Mid-Level Development Program (in implementation
stage now) provides a curriculum addressing the cross-cutting skill
sets that virtually all employees need to be effective; (6) Management
Development Program (some components are implemented, others coming on-
line over the next several months) focuses on creating leadership
excellence at all levels of management through tailored training
programs, support tools and 360 degree feedback; (7) SES Candidate
Development Program (described in response to preceding question); and
(8) Organizational Leadership Enterprise (being implemented in several
organizations) provides an integrated leadership approach that improves
overall organizational performance.
Some metrics for determining the success of the WDS include
employee turnover rates, job satisfaction, promotions/job progression,
number of employee complaints regarding managerial performance,
customer satisfaction rates, length of time it takes to fill positions
(particularly in the SES), popularity of training programs/
developmental tools, ability to attract high-performing employees, and
employee performance measures. All of these indicators tend to measure
the relative ``health'' of the organization as an employer. We are also
embarking on a project to determine success measures that relate more
directly to mission outcomes and results. The results of this effort
are some months away.
Workforce planning is a fundamental strategy to improve EPA's human
capital. We are currently working with the Administration, particularly
the Office of Management and Budget, to assess EPA's workforce, and
restructure as appropriate. We will give full attention to these issues
in the fiscal year 2003 President's Budget.

subcommittee recess

Senator Mikulski. And having said that, this subcommittee
is recessed until tomorrow at 2 p.m. when we will take
testimony from the Secretary of HUD.
[Whereupon, at 12:23 p.m., Wednesday, June 13, the
subcommittee was recessed, to reconvene at 2 p.m., Thursday,
June 14.]

DEPARTMENTS OF VETERANS AFFAIRS AND HOUSING AND URBAN DEVELOPMENT AND
INDEPENDENT AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2002

----------

THURSDAY, JUNE 14, 2001

U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 2:49 p.m., in room SD-138, Dirksen
Senate Office Building, Hon. Barbara A. Mikulski (chairman)
presiding.
Present: Senators Mikulski, Kohl, Bond, and Shelby.

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

STATEMENT OF MEL MARTINEZ, SECRETARY
ACCOMPANIED BY:
DANIEL MURPHY, CHIEF OF STAFF
ROBERT WOODSON, DEPUTY TO THE CHIEF OF STAFF FOR POLICY AND
PROGRAMS
RICHARD HAUSER, GENERAL COUNSEL
DAVE GIBBONS, DEPUTY CHIEF FINANCIAL OFFICER FOR BUDGET
PEGGY YOUNG, SENIOR ADVISOR TO THE CHIEF FINANCIAL OFFICER
OSCAR ANDERSON, SPECIAL ASSISTANT TO THE SECRETARY FOR
LEGISLATION
CHRISTOPHER BOESEN, SPECIAL ASSISTANT, OFFICE OF LEGISLATION
NANCY SEGERDAHL, PRESS SECRETARY/SENIOR COMMUNICATIONS ADVISORS
TO THE SECRETARY
JOHN WEICHER, ASSISTANT SECRETARY FOR HOUSING FEDERAL HOUSING
COMMISSIONER
SEAN CASSIDY, GENERAL DEPUTY ASSISTANT SECRETARY, OFFICE OF
HOUSING
MICHAEL MORAN, ASSISTANT GENERAL COUNSEL
JEFFREY LUBELL, DIRECTOR, POLICY DEVELOPMENT DIVISION, OFFICE
OF POLICY DEVELOPMENT AND RESEARCH

OPENING STATEMENT OF SENATOR BARBARA A. MIKULSKI

Senator Mikulski. The VA/HUD subcommittee of appropriations
will come to order. This afternoon we will be taking the
testimony of our new cabinet officer, Secretary Mel Martinez of
Housing and Urban Development.
First of all, this committee would like to apologize to the
Secretary. We know that our hearing was supposed to start at
2:00 p.m., but because of a parliamentary thicket that has
developed on the Senate floor, we are much delayed. The
committee apologizes to you. It is not our usual and customary
practice certainly to keep a cabinet-level officer waiting. And
should there be votes and someone, and we have to temporarily
recess. We invite you to use the facilities of our offices and
phone calls or any other conveniences you might do.
Mr. Martinez. Thank you.
Senator Mikulski. So Mr. Secretary, we feel embarrassed
about this situation, but we welcome you most warmly. You have
one of the most difficult jobs in government, providing housing
assistance, trying to rebuild the neighborhoods, helping the
elderly, the disabled, the homeless and all at the same time
being fiscally responsible. We would like to--I would like to
personally thank you for the way that we have begun with
various issues that have come to our attention. We have found
you most responsive and indeed quite collegial and we look
forward to such a cordial relationship.
Since our first conversation the gavel has changed. But I
want you to know that Senator Bond and I share many of the same
values and goals when it comes to housing. And in fact probably
in this committee it has been characterized by bi-partisanship.
But certainly, particularly those areas on housing, we are very
much in alignment. His goals--Senator Bond's goals--on
affordable housing, helping neighborhoods and proper fiscal
management are my own.
But as we begin our hearing I think with the new cabinet
officer, I think this is the time to take stock, to look at
HUD's core programs, and to make HUD a true partner with local
government. I know you share my vision and I look forward to
working with you.
As I look at the President's budget I see areas of common
ground and areas of concern. In the area of faith-based
initiatives, know that I have always been consistently
supportive of faith-based initiatives. In our very first
meeting you shared with me your own personal story about the
role that Catholic Charities played in your life. I noted that
I had been a Catholic Charities social worker. I guess in some
ways I still am on this committee.
We want to be able to listen to the President's initiative;
to really be able to flesh it out because in housing and urban
development we have already had faith-based initiatives. Much
of the housing for the elderly--my hometown of Baltimore is
organized by the associated Jewish and Catholic charities, etc.
The work of the homeless in particular has, I think, been a
signature issue for faith-based activity. So we look forward to
that.
So we want to hear more about it and we want to know how we
can work with the administration. We will be insistent, though,
that any new program be constitutionally compliant. And I know
you as both a lawyer and a citizen would want the same.
Looking at Section 8--boy, is this a big issue for us to
work on. Renewing Section 8 contracts continues to be our
number one priority. Working families depend on this in the way
of absolutely moving people from welfare to work, and to make
sure that housing subsidies are not meant to be a way of life
but to be a way to a better life.
So we want to hear several things: One, how you want to use
Section 8. The issue of returned Section 8 vouchers. And number
three how also that the Section 8 database is more reliable and
consistent.
Another area, which we have already worked on, is predatory
lending. We continue to be plagued by something called flipping
or predatory lending. This is where through unscrupulous
investors the poor are gouged, the taxpayer and FHA is
defrauded, dreams are broken and opportunities are lost. I
mean, really, we are dealing with scum; white collar crooks at
the worst. And we want to continue our course on predatory
lending. We want to thank you for the--Ms. Maggiano who you
have assigned to work with predatory lending. We think in
Baltimore we can be the laboratory for coming to a national
solution.
But often what happens is that there are defaults when FHA
housing, either through predatory lending or because of poor
counseling for first-time homeowners. And then neighborhoods
are left with something called HUD houses. And instead of being
a great name, instead of it being something that everybody
would want to buy, it becomes a vacant house that is often the
very reason that neighborhoods deteriorate and destabilize. So
we want to stop not only the predators. Also make sure that
when people come into homeownership, they are ready for it. But
also what are we going to do with those FHA houses?
We also want to talk about public housing. We are
disappointed at the administration's decision to cut $700
million from the Public Housing Capital Fund. We want to talk
about repair and maintenance and also about new construction.
In the area of construction we are concerned that there has not
been a lot of production. And Senator Bond feels very
passionately about it, so do I and so does Senator Sarbanes.
I am going to leave in the interest of time him to
elaborate on his own views on the topic, but know that they are
really parallel views. And I hope we can work with Senator
Bond, Senator Sarbanes, Senator Gramm, of course, but we three
are the ones that really have a great passion on this area.
In the area of elderly housing, we know that we have to
look at new ways to meet the aging population. We note that it
is only a $6 million increase in elderly housing and we would
like to know how you are going to meet the increased demand on
this.
In the area of the digital divide, we note with enthusiasm
your desire to create seven hundred computer learning centers.
We really believe that these could be tools. E-villages in
communities now riddled with despair could really be workforce
readiness for adults in getting their kids ready for the
future.
Also, one of the other areas that I want to discuss is the
FHA multi-family loan limits. One possible way to create more
housing is to raise the loan limits for FHA multi-family loans.
I noted it in your testimony. People from the home builders and
the mortgage bankers have already discussed this with me. So we
are interested in what you think would be a prudent way to do
this. But I recall that in 1986 when we passed yet another tax
bill, they cautioned us that the change in the tax rules, and
now the FHA limits that have not been raised in a number of
years really has had a chilling effect in the creation of new
multi-family private sector dwellings. And we would like to
know your views on this.
So we have a lot to talk about, which is essentially
though, how we can empower poor people that the subsidies we
provide today are a way to a better life; a way to a life of
self-sufficiency and economic empowerment. And with that I am
going to conclude my statement and turn to Senator Bond.

STATEMENT OF SENATOR CHRISTOPHER S. BOND

Senator Bond. Thank you very much Madame Chair. With the
usual timing, the Senate apparently is going into a vote now,
which goes----
Senator Mikulski. Let's see. Let's just see.
Senator Bond [continuing]. Which goes to prove my basic
belief that Murphy's Law was unduly optimistic when it comes to
scheduling the Senate. But I thank you Madame Chair and I join
you in welcoming and apologizing to HUD Secretary Martinez to
testify on HUD's budget for fiscal year 2002.
Senator Mikulski. Senator Bond, I am going to excuse myself
and ask you to come in to captain the ship. That way I can run
and vote and come back. Other members that are here will kind
of be able to get this train rolling.
Senator Bond. I would be honored to do so. I like to keep
in practice.
Senator Mikulski. He can have the microphone, but hide
this.
Senator Bond. I am not going to touch it. I am not going to
touch it. Thank you Madame Chair. As I started to say, I know
this will be a very difficult year for the Department, but we
really are gratified by your presence, Mel, as Secretary and
what Chairman Mikulski has said. And I certainly echo that we
are most impressed and gratified by your commitment to
reforming and rebuilding HUD. Nevertheless--and this is where
the `however' comment comes in--we are deeply concerned. I am
concerned that HUD's budget request of $30.4 billion may
actually be a reduction from the fiscal year 2001 funding, and
this budget reverses the progress made in the last several
years by Congress on a strongly bi-partisan basis and ignores a
number of priorities related to pressing housing and community
development needs.
I do not place the administration's budget decisions on
your doorstep--the ones to which I most strongly object. I know
the delay and the transition and the fact that you did not have
your people in place nor did you have, what I would think would
be a reasonable time to review it. But clearly this is an OMB
budget. Much of the work product was done by the professional
staff who, from my perspective, may have overstayed their
welcome. I urge you to take charge of the HUD budget process
away from those who seem to have dismissed many of the
congressional initiatives on which we had agreed. I will submit
a more complete statement of my concerns for the record and we
will go into them in questions.
Senator Bond. First I am concerned over a number of
proposed budget cuts in public housing which include reductions
of some $700 million from the Public Housing Capital Fund, as
well as a complete elimination of the Public Housing Drug
Elimination Program, which is funded at $309 million in fiscal
year 2001. We made considerable progress over the last several
years in meeting the long-term capital needs of public housing,
and I have heard from the public housing community that a
drastic cut of this nature may interfere with financing and
other plans--long-standing plans, which they had. I am also
pleased that we have been able to make progress in addressing
crime and drug abuse in public housing and I hate to see us
give up that effort.
Further I am concerned over the elimination of the Rural
Housing and Economic Development Program--a very modest program
that made a big difference in leveraging new funds for many
distressed rural areas; something that Senator Harkin and I
have worked on and we see a great need in rural America.
In addition, the HUD budget for fiscal year 2002 proposes
to set aside a $200 million, taking it out of the HOME program
for down payment assistance. This takes away from the
flexibility of local governments to make the determination of
about how to assure an adequate supply of housing stock.
Homeownership is an important goal, but limiting State and
local decision making in the HOME program makes no sense,
especially since downpayment assistance is already an eligible
activity.
Finally, program accountability and oversight are critical
to the successful rebirth of the Department and there needs to
be a re-emphasis on these requirements. As one example, the
funding of empowerment zones in the HUD budget causes me real
concern in view of recent HUD IG Reports suggesting the misuse
of funds as well as, a lack of HUD oversight. However, the
issue that needs to be addressed most urgently in this hearing,
one that the Chair has already pointed out, is the Section 8
program.
I am a strong supporter of Section 8 project-based housing
because it guarantees housing for low-income families in many
tight housing market places where vouchers simply do not work.
For example you can give somebody on a walker or maybe a
wheelchair or crutches a voucher and tell them to go out and
look. But if there are no places to go, that elderly person,
that disabled person, is not going to be able to walk that far.
And this is not only a problem for elderly and disabled
persons, if there is no available affordable, low-income
housing, then low-income families will be left homeless or in
substandard housing. I remain very concerned that HUD still
does not do enough to preserve Section 8 project-based housing
as low-income housing when the Section 8 contracts expire. It
is particularly troubling when we continue to lose housing for
elderly and disabled Americans despite requirements in the
fiscal year 2001 Act that HUD make every attempt to preserve
this housing as low-income housing.
I also understand that the House is seeking to rescind some
114-plus million dollars in Section 8 assistance for fiscal
year 2001 despite the fact that HUD must still meet rescission
requirements of 1.8 billion from the enactment last year of the
2001 appropriations. While HUD has been the bank over the last
few years for upwards of some $10 billion as offsets to fund
any number of other administration and congressional
priorities, the simple fact of the matter is that well may have
run dry.
We need to ensure that families with Section 8 vouchers
will be able to use these vouchers to obtain housing and that
expiring Section 8 project-based contracts will be renewed. In
other words, we should not be playing fast and loose through
some shell game where HUD or OMB hold back critically needed
housing funds to allow rescissions to pay for other activities
at the expense of a poor family without housing. That is not
acceptable. This contravenes the clear intent of Congress and
is poor policy under any circumstances.
Finally, as you may know, and as I think actually we may
have discussed, and certainly the Chair mentioned it, last year
we introduced the Housing Needs Act of 2000 to provide block
grant funding to develop assisted housing for extremely low-
income families as a part of mixed-income housing. We are going
to be working on introducing similar legislation because the
housing needs of extremely low-income families remain a
critical need. I believe I shared with you that fact that in
St. Louis County, Missouri when the public housing authorities
issues housing vouchers, for every hundred they issue they know
they are going to get fifty back because there no available
low-income housing. The housing voucher does not do much to
keep off the rain if there is no wood or bricks or mortar for
families to apply it to. This is going to be an important
debate. We look forward to working with you, discussing this
problem and having your guidance and leadership in crafting
responsive legislation.
My concerns today are really about the failure of this OMB
budget proposal to meet the housing needs of this Nation as
well as an indictment of the last Secretary and his failure to
put HUD on a firm footing to meet the housing needs of low and
moderate-income families as well as the redevelopment and
development needs of States and localities. HUD must seize the
mantle of leadership in providing housing for American families
and for developing and redeveloping our communities. Mr.
Secretary I look forward to working with you on rebuilding and
reforming HUD. It is a huge challenge but an important
challenge. And speaking of leadership, I see now that the
mantel of leadership is about to pass to the distinguished
Senator from Wisconsin. It is my pleasure to turn the hearing
over to you, Senator.

STATEMENT OF SENATOR HERB KOHL

Senator Kohl. Thank you, I will have a brief statement.
Senator Bond, I want to thank you and Senator Mikulski for
convening this hearing. I want to welcome Secretary Martinez. I
very much look forward to working with you. As a new member of
this subcommittee, this is the first time I have had the
opportunity to review the HUD budget in great detail. I have
been fortunate to have much input from the people of Wisconsin.
So let me say there was much disappointment in two areas and
others which I will address later, the reduction in capital
funds and decision to terminate the Drug Elimination Grant
Program.
I have heard from public housing authorities in Wisconsin
who are deeply concerned about the proposal to cut $700 million
in the Public Housing Capital Fund. In Milwaukee alone, there
is a backlog of $100 million of capital needs. Although the
administration has said there is unspent money in the Capital
Funds pipelines, these funds have been obligated and public
housing authorities expect to spend them as planned. The vast
majority of Wisconsin housing authorities have spent their
funds now in a timely fashion.
Capital funds address critical needs such as fire
protection systems in high-rises, replacements of roofs and new
heating systems. We cannot allow these basic improvements to
our public housing stock to be delayed because of a
misunderstanding about how much capital is truly available. I
hope the subcommittee will investigate this issue thoroughly
and ensure there are sufficient funds to meet the basic needs
of public housing residents.
The Administration's proposal to terminate the Drug
Elimination Grant Program is surprising. This program has been
hailed for its successes and has been credited with helping to
reduce crime in public housing developments across the Nation.
In Wisconsin the Milwaukee Housing Authority has used its grant
to fund public safety programs and activities for children and
youth, including education programs. The results speak for
themselves. In the year 2000, violent crimes in that area
dropped by 43 percent and non-violent crimes dropped by 36
percent. Madison has had similar successes. East Madison's
communities centers' Positive Options Program, which is funded
by a Drug Elimination Grant, won an award from the State of
Wisconsin for being an outstanding and effective service. Just
as the program is being hailed, its funding is now threatened.
Frankly the argument that HUD should not be in the law
enforcement business does not carry much water with me. If this
program ensures that our public housing is safer and more
secure then it is a program which is helping us meet the
program needs in our community, which is after all a core
mission of HUD.
I thank you very much.
Senator Bond. Senator Shelby.

STATEMENT OF SENATOR RICHARD C. SHELBY

Senator Shelby. Thank you. Secretary, as you well know we
are voting and we will probably continue to vote. If Senator
Kohl has not voted he will vote on this.
Secretary, the FHA multi-family credit subsidy, which you
are very familiar with, is an important program that helps
address some needs, the housing needs of thousands and
thousands of American families. It seems that this program
consistently encounters funding shortfalls. I believe that the
Administration's decision to include 40 million in the
supplemental appropriations bill is a sound one that will
provide clear benefits. I guess what I am getting at is, in the
short term, how far do you believe these funds will go to help
to deal with the shortage of affordable housing in America? Do
you believe additional funds will be needed to get us through
this fiscal year 2001?
Mr. Martinez. Senator, let me just say that I had a
prepared statement which will be offered for the record, and I
will spare you going through anymore prepared remarks and just
try to deal with your questions and the obvious issues that
have arisen in the statements from the Senators.
The credit subsidy program is that recurrently seems to
have shortfalls in funding. HUD began the fiscal year prior to
my Administration with a $12.5 million deficit in that program.
So with the appropriated funds for this current year, there was
already a $12.5 million catch-up. So it is no surprise that
along with that and basically a demand-driven program that it
has run out of money again. Three or four times in the last 6
years this occurred.
The $40 million is an amount equal to the sum, which was
put into the budget as an emergency appropriation, or to be
available as an emergency. We did not think it was appropriate
to declare an emergency when if fact what we have is a need
program, but not an actual housing emergency as such. I would
liken that to events like we might have had in Oakland and San
Francisco after the earthquake a few years ago, or maybe a
hurricane or some other natural disaster, which would trigger
an emergency. But the fact is the grant subsidy program does
serve a portion of the market of 80-100 percent of median
income, which is, you know, in many respects affordable
housing.
Senator Shelby. In a way it creates a dynamic for others,
doesn't it?
Mr. Martinez. Correct. So it is a good thing. What we are
proposing is that in addition to the $40 million subsidy, which
we know is not enough to cover the demand, is that we do
something that is going to put this program on a stable footing
for years to come----
Senator Shelby. The future.
Mr. Martinez.--which is raise the premium of the FHA
premium to 80 basis points which will give us an opportunity to
fund all that is in the pipeline--certainly in the pipeline the
40 million will do. But all that is going to be in the demand
driven pipeline for this year and then it also allows to put it
on a solid footing for years to come. So that, I think there is
some benefit in the predictability that the marketplace will
have.
Senator Shelby. Don't builders need predictability?
Mr. Martinez. I think they do. And I think it is something
that is helpful----
Senator Shelby. You cross that fine line.
Mr. Martinez.---that you also need to be able to make the
deal when they put the deal together. And when the program all
of a sudden runs out of money, well, that creates tremendous
disruption. So I believe that it is a healthy thing to put it
on a pay-as-you-go basis. The 80 basis points that it will
have, you know, an increase----
Senator Shelby. How much money will that bring in? Do you
have some numbers on that? Are you scoring that?
Mr. Martinez. I do not have that.
Senator Shelby. Could you do it for the record?
Mr. Martinez. I am told it would be the equivalent of
another $40 million, so that would be probably an $80 million
infusion into the program which----
Senator Shelby. Which will probably be good.
Mr. Martinez. It would be very good. It is almost as much
as----
Senator Shelby. You are the Secretary. You have got a
background on all this. You know how this works.
Mr. Martinez. Yes, sir. It would be almost as much as was
initially appropriated for the whole year. So we are talking
about $80 million just to complete this year.
Senator Shelby. Correct me if I am wrong on this. Was last
year's $40 million set-aside in last year's appropriation, has
that money been spent? Has it been released?
Mr. Martinez. No.
Senator Shelby. You are saying no.
Mr. Martinez. No.
Senator Shelby. What about that money? Couldn't you use
that money in some way?
Mr. Martinez. It would call upon me to ask the President
that we had a housing emergency which I, in good conscience, do
not know that we have.
Senator Shelby. So I had to show you had one.
Mr. Martinez. Right.
Senator Shelby. Could you have one in this area of low-
income and maybe not over the whole housing market?
Mr. Martinez. I think we have housing needs. We have
housing demand. We have housing goals and hopes. But I think
that what happened to the people of El Salvador, who lost 20
percent of their housing in the country because of an
earthquake is an emergency.
Senator Shelby. Real or immediate?
Mr. Martinez. An immediate, urgent emergency is not what I
see. But the raising of a premium in addition to the $40
million I think gets us where we want to go. It is something
that some of the industry finds onerous because it is an
increase in their cost. But the fact of the matter is that is
going to be predictable and is going to be stable. And for
years to come, I think, it is going to provide a program that
the builders out there can count on.
Senator Shelby. The builders need predictability for the
future.
Mr. Martinez. And to get financing, to put deals together.
Now one other thing we will do is--if upon review of the
premium's charge, we find that what we are charging is more
than should be charged--we would be inclined to reduce that
premium based on the experience. This would be a business
proposition. It would be a pay-as-you-go. We look at the
premium charge and if it was too much, we would reduce it.
Senator Shelby. Thank you. Madam Chairman, thank you.
Senator Mikulski. You are more than welcome and I
understand you have also had a chance to speak and ask
questions. Senator Kohl, you as well?
Senator Shelby. Madam Chairman, excuse me if you would. I
have asked that my opening statement be made part of the
record.
Senator Mikulski. Absolutely. Without objection, so
ordered, yes.
Senator Kohl, have you spoken?
Senator Kohl. I have made an opening statement and asked
some questions.
Senator Mikulski. Good and we are going to move on now. We
have really kept our Secretary waiting. Why don't you go ahead
and start on your opening statement and Senator Bond will join
us and we all have had a chance to read your statement but we--
--
Mr. Martinez. I will try to summarize.
Senator Mikulski. But we want you to have the--but you take
whatever time. You do it whatever way you want. We really are
apologetic for this afternoon.
Mr. Martinez. Madam Chair, you are very kind and I am
delighted to be before you. I noticed that swing of the gavel
since I began my tenure as Secretary. But let me tell you that
I value bi-partisanship that seems to reign in this Committee.
I believe as it relates to housing and urban development and
the needs of the people of America who are served by HUD, we do
need to approach it on a bi-partisan basis. So in that same
spirit, I look forward to working with you as Chair of the
Committee try to do some things that I know we share as goals
for the people of our country.
We at the Department of HUD face great challenges as we
work to improve the Nation's housing and expand opportunities
for America's families. President Bush and I are committed to
restoring the confidence of the Congress and the American
people in the operation of this agency. Our fiscal year 2002
budget is a first step for restoring that confidence.
Let me say at the start that even though we are focused
today on the budget, our ultimate success will not be measured
by how much money we spend. I want this Department to be judged
on the numbers that are far more important which is how many
families get a chance to buy their first home and how many
children grow up in the kinds of neighborhoods we would all
want our children growing up in.
The Administration has set that the overall growth of
Federal discretionary spending at 4 percent, a level that is
responsible and appropriate. But the President recognizes this
Department's mission of improving housing and community
development opportunities brings with it a special set of
obligations. That is why the Department of Housing and Urban
Development's proposed budget increases by nearly 7 percent for
fiscal year 2002.
I am very pleased that the President has made increasing
home ownership and the freedom that comes with it, a top
priority of his Administration. Home ownership plays a vital
role in creating strong communities by giving families a stake
in their neighborhoods while helping them to build wealth. And
yet even though almost 70 percent of all families in America
have realized the dream of home ownership, minorities and low-
income families lag far behind. That must change and this
Department is firmly committed to reducing that gap in home
ownership.
The cost of down payments remains the single, biggest
barrier to home ownership. The American Dream Down Payment Fund
provides $200 million in matching assistance to help more than
130,000 low-income families purchase a home. I am also happy to
announce that Section 8 voucher holders will now be able to use
up to 1 year's worth of assistance towards a down payment on a
home because of the good work of Congress in passing the
American Homeownership and Economic Opportunity Act. We now at
HUD are implementing the function of that Act, and we will see
families being able to accumulate those Section 8 vouchers
towards homeownership.
Another of our proposals is the $1.7 billion Renewing the
Dream tax credit that will support the rehabilitation or new
construction of some 100,000 homes for purchase in low-income
neighborhoods. A fourth initiative will expand access to home
ownership by reducing payments in a first years of a mortgage.
Each of these efforts will compliment HUD's existing home
ownership programs.
Of course we recognize that homeownership is not an option
for everyone. Today more than four million households rely on a
variety of HUD programs to help them with their high cost of
rental housing. This budget preserves and expands our
commitment to every American seeking the freedom to live in
decent and affordable housing.
I want to specifically note the President's proposal to
increase the limits for FHA multifamily insurance by 25
percent. We need to spur to the construction and rehabilitation
of affordable rental housing in high-cost areas and increasing
the limits is a critical step in that direction. Building
stronger communities means helping low-income families increase
their skills and earnings. Helping families become self-
sufficient is also part of it.
The Community Technology Centers, which the Chair spoke of,
delivers on both counts. For fiscal year 2002, HUD will provide
$80 million in competitive grants to help communities create or
expand Computer Technology Centers in low-income areas.
Unfortunately, too many Americans looking for a home
instead find themselves victimized by housing discrimination
and outright fraud. The people of HUD are committed to
vigorously enforcing our fair housing laws to help ensure that
all Americans have equal access to rental housing and home
ownership opportunities. For the fiscal year, the Department
plans to increase by 16 percent over current levels the amount
of funding available for fair housing enforcement and
educational activities.
We are also taking additional steps to crack down on
predatory lending. For example the abusive practice of property
flipping that destroys neighborhoods and the dreams of American
families. We intend to eliminate this practice as far as HUD is
concerned by denying FHA insurance to properties resold within
a certain period of time.
I know this is of great concern to the Chairwoman in her
hometown of Baltimore. HUD has taken a number of positive steps
to combat flipping and predatory lending. We have helped
assemble a local predatory lending task force with local and
State organizations to address flipping in the FHA single
family program. I assigned several senior HUD staff to this
particular task force. We were pleased to provide an update of
the recent activities of the task force at last month's field
hearing in Baltimore. Our efforts in Baltimore should act as a
testing ground for nationwide reform.
I have not touched on many of our other notable efforts.
Among them are work to improve the quality of life with the
elderly, assist those with disabilities, reduce lead based
paint hazards and aid the homeless. Perhaps we will have a
chance to discuss some of those as your questions direct.
As you know last year's HUD budget increased by 16 percent.
I do not believe we can continue that rate of growth. If we
did, our budget would be over $180 billion by the year 2010.
While most of our programs are being funded at last year's
record-high level or even slightly higher levels, I will
mention two important reductions, and these have already been
mentioned. The budget provides nearly $2.3 billion for the
Public Housing Capital Fund. Let me make this clear. The
Capital Fund will still have over half a year's funding in
reserve to address any backlog needs. This budget funds 100
percent of the money necessary to cover the modernization and
maintenance needs for fiscal year 2002. The PHAs have over $8
billion in backlog funding if you include those funds already
released for the year 2001.
So what I am saying basically--and Senator Kohl very
specifically to your concerns--is that there will not be any of
these encumbered expenses for maintenance and modernization
that any housing authority would have in the pipeline or would
even conceive in doing in this coming year that will be
hampered by this reduction in the funding, given the $8 billion
backlog that currently exists, much of which is an unencumbered
or unasked for funds at this time.
HUD has also proposed terminating the Public Housing Drug
Elimination Program. While a well-intentioned effort, it
suffers from a large number of abuses. This effort also
duplicated the efforts of many other cabinet departments and
required the Department of Housing and Urban Development to
take on a law enforcement role that I believe to be clearly
outside our core mission.
I have met with Attorney General Ashcroft to determine how
Federal law enforcement resources can be best utilized to fight
crime in public housing authorities. I also believe, and if I
can expand on this a moment, that I am greatly concerned about
the abdication of responsibility for law enforcement and
housing authorities by local law enforcement. I believe that
the Drug Elimination Program, while it has had successes in
some instances, in many instances, it has not. It has been
devoted to additional cops on the beat in public housing
authorities or lighting or issues like this. It has very often
been used for things far afield from fighting drugs.
The fact is that these people that live in housing
authorities are not outside the scope and the responsibility of
local law enforcement. They are also not beyond the scope and
responsibilities that the Federal Government has in all its
other grant programs and other programs that are available.
So my hope is that we can bring the housing authorities
into the mainstream of opportunities that exist with $19
billion of drug monies that are available from this year's
budget alone and that we can have a more sensible program that
is geared toward law enforcement administered by those who are
accustomed to administering law enforcement grants through the
Justice Department, which I think in the end will have a
beneficiary effect and get us to a better place in terms of our
drug elimination issues.
A $150 million of what was budgeted last year for this
program will continue to go to the housing authorities as part
of the at-large grants or general grants they could utilize for
these programs if they so chose. My hope is that they would be
focused on good programs, on sincere honest efforts to
eliminate drugs, but not on some of the other things we have
seen utilized in the past, and which we think go really far
afield from the goal of drug fighting.

prepared statement

I have often spoken candidly about the need to resolve
HUD's serious management challenges. Throughout the years,
Congress has repeatedly told the Department to improve its
management and restore its focus--in other words, get its own
house in order. This Administration is listening and we have
dedicated ourselves during this first year to riding the ship
of state. As we seek to fulfill our mission this Department is
committed to continuing a strong relationship with the Congress
so that together we can make the Department of Housing and
Urban Development an efficient and effective fighter on behalf
of America's housing and community development needs.
Thank you very much.
Senator Mikulski. Thank you, Mr. Secretary. And it's quite
an agenda we have to work on.
[The statement follows:]

Prepared Statement of Mel Martinez

Chairwoman Mikulski, Ranking Member Bond and distinguished Members
of the Committee, thank you for this opportunity to discuss the
Department of Housing and Urban Development's budget for fiscal year
2002.
The Department of Housing and Urban Development faces a big
challenge in the coming years as we find ways to improve housing and
expand opportunities for families seeking to improve their quality of
life. President Bush and I are committed to restoring the confidence of
the Congress and the American people in the operation of this Agency.
Our fiscal year 2002 budget is the first step toward restoring that
confidence. This is a compassionate and responsible budget that will
allow us to serve people more effectively and empower individuals and
communities across the Nation.
This Department's success will not be measured by how much money we
spend, but by how many families get the chance to buy their first house
and by how many children get the chance to grow up in the kind of
neighborhood we all want to live in.
The Administration has set the overall growth for Federal spending
at 4 percent. This is a responsible and appropriate level. But the
President also recognizes that this Department has a special obligation
to help fulfill this Nation's housing and community development needs.
That is why the Department of Housing and Urban Development's
proposed budget increases nearly 7 percent for fiscal year 2002. This
will allow the Department to meet its priorities in improving housing
and community development opportunities for American families. This
budget will help low-income families become home owners, increase the
amount of affordable rental housing, help low-income individuals build
the skills they need to compete in the modern workplace, support
community development, meet the needs of special populations, strongly
enforce our fair-housing laws, and provide the adequate resources to
improve the management of the Department.
helping low-income families achieve homeownership
Housing--particularly homeownership--is at the heart of that
mission. President Bush has made increasing homeownership--especially
for low-income families and minorities--a top priority of his
Administration.
Homeownership plays a vital role in creating strong communities by
giving families a stake in their neighborhoods and helping them to
build wealth. Although a period of sustained economic growth has helped
to raise the overall homeownership rate to a record level, the
homeownership rates of minorities and low-income families lag far
behind those of other families.
The most recent data show that the homeownership rate for Hispanic
and African American households is under 50 percent. By contrast, the
homeownership rate for the Nation as a whole is 67 percent. This
Department is firmly committed to reducing this gap by increasing the
homeownership rates of minority households.
The data indicate that homeownership rates are also lagging in
central cities (51.4 percent) and among households with incomes below
the area median (51.5 percent). Since minority households are more
likely to fall into these categories, it is clear that their
homeownership rates can be raised by improving access to homeownership
in central cities and among low-income families.
For fiscal year 2002, the Bush Administration has proposed a number
of new or expanded initiatives to improve homeownership rates among
low-income and minority families. Since the biggest single obstacle to
homeownership is the inability to afford a downpayment on a home, two
of the initiatives--the American Dream Downpayment Fund and the Section
8 Homeownership program--focus directly on overcoming this obstacle. A
third initiative--the Single-Family Housing Tax Credit--will subsidize
the costs of homes that are rehabilitated or newly constructed for
purchase by low-income households, while a fourth initiative--FHA's
Hybrid Adjustable Rate Mortgage--will expand access to homeownership by
reducing mortgage payments in the initial years of a mortgage.
The American Dream Downpayment Fund will provide $200 million
within the HOME program to match downpayment assistance provided by
third parties. This proposal will help 130,000 low-income families
overcome the biggest obstacle to homeownership--putting together a
downpayment.
Another proposal that will help families own their own homes is the
expansion of the use of Section 8 vouchers for homeownership. Under
soon-to-be-published regulations, voucher-holders will be able to use
up to one year's worth of Section 8 assistance for the downpayment on a
home. HUD expects this program to be of use to existing voucher holders
who can afford the ongoing costs of a mortgage, but who do not have
enough savings to cover a downpayment.
Based on legislation enacted in the last Congress, HUD is also
implementing an alternative approach to Section 8 homeownership under
which the voucher can subsidize ongoing homeownership costs. As part of
a pilot program to accommodate the needs of disabled households, HUD
will apply higher income eligibility limits to these households.
A third proposal--the Single-Family Housing Tax Credit--is a $1.7
billion tax credit that will support the rehabilitation or new
construction of an estimated 100,000 homes for purchase in low-income
neighborhoods over a 5-year period. The program will subsidize up to 50
percent of project costs and benefit low-income families.
In addition to working closely with the Department of Treasury in
designing this tax credit, HUD will conduct a thorough review of
policies and regulations that may constitute a barrier to the
development of affordable single-family homes and consider ways to
streamline the development process.
For fiscal year 2002, HUD seeks authority to allow the Federal
Housing Administration (FHA) to offer families a hybrid adjustable-rate
mortgage. These mortgages reduce the initial homeownership costs by
combining a low fixed rate in the early years of the mortgage with a
rate that adjusts with the market thereafter. HUD estimates that the
introduction of hybrid adjustable rate mortgages will allow FHA to
provide mortgages to an additional 40,000 families in fiscal year 2002.
It also will yield additional income of $99 million for the FHA and $13
million for the Government National Mortgage Association (Ginnie Mae).
These initiatives will complement HUD's existing homeownership
programs. The main HUD programs that help families achieve
homeownership are the HOME Investment Partnerships Program (HOME), the
FHA Mortgage Insurance and the Community Development Block Grant (CDBG)
program. HUD also works to expand homeownership opportunities through
the efforts of Ginnie Mae, programs for Native American Communities,
the Self-Help Opportunities Program (SHOP), Housing Counseling and
oversight of the Government Sponsored Enterprises (GSEs)--Fannie Mae
and Freddie Mac.
In fiscal year 2002, HUD will provide $1.796 billion in total HOME
funding, the same as in fiscal year 2001. HOME is a flexible block
grant that provides support for local affordable housing efforts. Funds
are allocated directly to large cities, counties, or consortia of
smaller areas (known as ``participating jurisdictions'') and to states
for distribution to other cities and towns. There are currently 594
participating jurisdictions, although that figure is expected to rise
in fiscal year 2002.
Recipients of HOME funds have substantial discretion to determine
how the funds are spent. To date, approximately 45 percent of HOME
funds have been spent on assistance to homeowners and new homebuyers,
with the balance going to activities that help make rental housing
affordable. HOME funds can be used to expand access to homeownership by
subsidizing downpayment and closing costs, as well as the costs of
acquisition, rehabilitation, and new construction. To date, HOME
grantees have committed funds to provide homeownership assistance to
more than 320,000 low-income households.
In fiscal year 2001, the HOME program received a substantial
increase of nearly $200 million (12 percent) over the prior year's
level. For fiscal year 2002, HUD will dedicate this money to the
American Dream Downpayment Fund, described above, which is funded as a
set-aside within HOME.
FHA insurance continues to be one of the Nation's principal tools
for increasing homeownership for moderate-income and first-time
homebuyers. FHA insurance helps make homeownership affordable for
families who may not qualify for conventional mortgages.
FHA offers a range of different insurance products. In fiscal year
2002, an estimated 1.15 million families will finance their homes
through FHA's Mutual Mortgage Insurance Fund. Other FHA homeownership
products include insurance for rehabilitation loans, condominiums,
energy-efficiency loans, and reverse mortgages for elderly homeowners.
In addition, FHA provides mortgage insurance for multi-family
developments and health-care facilities.
Many of FHA's single-family programs operate at a surplus, which
means that income from premiums is more than enough to cover expected
losses from defaults. For example, new mortgages insured by the Mutual
Mortgage Insurance Fund in 2002 are expected to generate $2.5 billion
over the life of the loan.
In fiscal year 2002, FHA plans to make a number of programmatic
reforms to strengthen its financial position. For example, to address
losses in the General Insurance and Special Risk portfolios, FHA will
raise premiums and review its underwriting criteria in a number of the
programs in these portfolios. This will reduce the amount of credit
subsidy required to support these programs from $101 million in fiscal
year 2001 to $15 million in fiscal year 2002.
Ginnie Mae helps to ensure the availability of mortgage funds for
low- and moderate-income families served by FHA and other Federal
government programs. Ginnie Mae guarantees securities backed by pools
of mortgages insured by FHA or guaranteed by the Rural Housing Service
(RHS) or the Department of Veterans Affairs. Through this guarantee,
Ginnie Mae has helped to finance homeownership opportunities for more
than 24 million families.
Ginnie Mae operates a Targeted Lending Initiative in which the
guarantee fees it charges lenders are reduced for mortgages in any of
the Nation's 72 Empowerment Zones, Enterprise Communities, and adjacent
eligible central city areas. Since its inception in 1996, this
incentive has led to over $11 billion to finance more than 121,000
loans in central cities.
The Department's fiscal year 2002 budget also has three programs
that are specifically designed to help promote homeownership among
Native American communities.
First, the Indian Housing Block Grant provides tribes or tribally
designated housing entities with a flexible source of funding for
affordable housing and related activities. As provided in the Native
American Housing Assistance and Self Determination Act (NAHASDA), block
grant funds may be used for a wide range of homeownership and rental
activities. The fiscal year 2002 budget provides $649 million, the same
level as enacted in fiscal year 2001.
Second, the Title VI Federal Guarantees for Tribal Housing
Activities provides loan guarantees for Indian Housing Block Grant
recipients who need additional funds to engage in affordable housing
activities, but who are unable to borrow from other sources without the
guarantee of payment by the Federal Government. The fiscal year 2002
budget provides $6 million in funds set aside within the Indian Housing
Block Grant Program as a credit subsidy to guarantee $53 million in
private sector loans.
Third, the Indian Home Loan Guarantee Program (Section 184) helps
Native Americans to access private mortgage financing for the purchase,
construction, or rehabilitation of single-family homes by providing
loan guarantees to lenders. The fiscal year 2002 budget provides
continued funding of $6 million in credit subsidies to guarantee a
total of $234 million of such loans.
To support its homeownership programs for Native American
communities, HUD will again provide $2 million to the Native American
Indian Housing Council which delivers technical assistance and training
to tribally designated entities, conducts research, and provides
information on Indian housing and economic development issues.
In addition to the programs discussed above, the fiscal year 2002
budget includes funding for a number of other programs that help
families achieve homeownership.
One such program is Housing Counseling, which provides
comprehensive housing counseling services, including pre-purchase,
default, and renter counseling to eligible homeowners and tenants. By
educating families on the homeownership process and the
responsibilities and benefits of homeownership, Housing Counseling
helps to expand homeownership opportunities. For fiscal year 2002, HUD
plans to continue funding this program at $20 million as a set-aside
within HOME.
Another such program is the Self-Help Homeownership Opportunities
Program (SHOP). SHOP provides grants to national and regional nonprofit
self-help organizations to subsidize the costs of land acquisition and
infrastructure improvements. Homebuyers must contribute a significant
amount of sweat equity or volunteer labor to the construction or
rehabilitation of the dwellings. For fiscal year 2002, HUD is
requesting $22 million for SHOP as a set-aside within the Community
Development Block Grant account, an increase of $2 million over fiscal
year 2001. The increase reflects the early successes of this program.
Fiscal year 2002 grants will help to produce more than 1,400 new homes.
HUD also sets affordable housing goals for two key housing
financial institutions over which it has oversight responsibilities:
Fannie Mae and Freddie Mac. These Government Sponsored Enterprises
(GSEs), play a vital role in financing affordable owner-occupied
housing in the Nation through their participation in the secondary
mortgage market. Last year, HUD announced new affordable housing goals
for the GSEs that will substantially increase the availability of
financing for affordable housing. In fiscal year 2002, HUD will
continue to monitor the compliance of the GSEs with these goals and
work in cooperation with them to find new ways to expand homeownership
for all Americans.
In fiscal year 2002, HUD plans to continue to fund a $3 million
cooperative agreement with the Housing Assistance Council (HAC). HAC is
a nonprofit corporation that works to increase the availability of
decent and affordable housing for low-income people in rural areas
throughout the United States. In fiscal year 2002, HAC will focus on
the affordable housing needs of people living in the ``Colonias.''
These are poor rural communities and neighborhoods along the U.S.-
Mexican border that lack basic infrastructure and services, as well as
decent and affordable housing.
affordable rental housing
While seeking to expand homeownership opportunities, HUD recognizes
that homeownership may not be a practical option for all families,
especially those at the bottom of the income scale. To help low-income
families afford the high costs of rental housing, HUD provides rental
subsidies to more than four million households nationwide through a
variety of programs.
To spur the construction of more affordable rental housing, HUD has
proposed that the limits for FHA multi-family insurance be increased by
25 percent. Increasing the limits will help to spur the availability of
private financing for new production and substantial rehabilitation of
residential rental housing in high-cost areas.
The fiscal year 2002 budget seeks to strengthen HUD's current
rental assistance programs rather than proposing any new ones. During
fiscal year 2002, HUD will focus in particular on improving the
utilization of Section 8 vouchers and public-housing capital funds by
housing agencies.
This budget funds the project-based and tenant-based Section 8
programs under a single account, known as the Housing Certificate Fund.
In the Section 8 voucher program, families live in modestly priced
rental housing that they find in the private market. In the project-
based Section 8 program, by contrast, families live in specific
developments that have a pre-existing contractual relationship with
HUD. In both programs, families are expected to contribute 30 percent
of their adjusted income for housing costs (rent plus utilities). HUD
provides subsidies to cover those rental costs not paid by the tenant.
In fiscal year 2002, HUD will obligate $15.1 billion in new budget
authority to renew all expiring Section 8 contracts for one year, an
increase of $2.2 billion over fiscal year 2001. The increase is
explained largely by the fact that Section 8 contracts were previously
funded on a long-term multi-year basis. As long-term Section 8
contracts expire, the number of contracts that need to be renewed each
year (and the funding required to do so) increases. Fiscal year 2002
funds will be used to renew expiring contracts for 2.7 million units.
For fiscal year 2002, the Department has requested $197 million for
approximately 34,000 additional ``incremental'' Section 8 vouchers.
These vouchers will enable HUD to make progress in reducing the number
of low-income renter households with worst-case needs, which stood at
4.9 million in 1999. Rather than targeting the vouchers to any specific
purpose, HUD will distribute them through the Fair Share allocation
system to public housing agencies (PHAs) that have demonstrated an
ability to use effectively their existing vouchers, as measured by high
voucher-utilization rates. This process will maximize the ability of
housing agencies to meet locally defined needs.
HUD recognizes that in the past, it has not moved as quickly as it
should have in issuing incremental vouchers to PHAs. If Congress funds
its request for incremental vouchers, HUD will act expeditiously to
distribute the vouchers to PHAs.
To further speed assistance to low-income families, HUD has
targeted for improvement in 2002 the utilization of existing Section 8
vouchers by PHAs. The most recent available data indicate that housing
agencies are utilizing approximately 92 percent of the vouchers under
contract for one year or more. By working to improve PHAs' utilization
of vouchers, HUD will be able to serve tens of thousands of additional
families within existing funding levels.
In addition to funding contract renewals, the Housing Certificate
Fund provides funds for a number of additional activities. One of those
is the Tenant Protection Program. This program protects families who
live in a project-based subsidized development whose owner either
chooses to opt-out of the program or is terminated for cause. Such
families receive ``enhanced'' vouchers to help them remain in their
developments or tenant-based assistance to move to a new apartment.
Housing vouchers are also provided to public-housing tenants displaced
by the demolition of distressed public housing. In fiscal year 2002,
funds are requested for an estimated 30,000 tenant protection vouchers.
HUD is also requesting funds to continue its performance-based
Contract Administrator Program, which funds contracts with designated
State or local housing agencies, sometimes in partnership with other
public or private entities. Acting as HUD's agent, contractors oversee
some 20,000 direct contracts between HUD and project owners for
project-based Section 8 assistance. In fiscal year 2002, approximately
$196 million will be required to continue these contracts, which run
for three years.
HUD will shortly be submitting legislation to continue authority to
restructure FHA-insured mortgages in conjunction with ``marking'' down
of excessive rents for certain Section 8 project-based developments to
the rents charged in the surrounding market. Authority for the Mark-to-
Market restructuring program expires at the end of fiscal year 2001.
public housing
The public housing program is funded through the Public Housing
Operating Fund, the Public Housing Capital Fund, and the HOPE VI
program.
While no longer supporting the development of new public housing on
a major scale, HUD remains committed to sustaining and improving the
Nation's public housing by funding public housing operating and capital
expenses. Through the HOPE VI program, HUD also funds the demolition of
obsolete public housing stock and its replacement with vouchers or new
public housing that blends into the community.
The fiscal year 2002 budget provides $3.385 billion for the Public
Housing Operating Fund, an increase of $150 million over the fiscal
year 2001 enacted levels.
In light of higher-than-expected energy costs, some PHAs are facing
a shortage of funds in fiscal year 2001. To address this problem, the
Department has moved quickly to provide $105 million of fiscal year
2001 funds to affected agencies. If this increase is not sufficient to
cover costs associated with the sharp and unexpected rise in energy
rates , PHAs will be reimbursed for excess utility costs due to rate
increases as outlined in regulation.
The Public Housing Capital Fund provides formula grants to PHAs to
meet the accrual of new modernization requirements and to reduce the
backlog of rehabilitation and modernization requirements.
The fiscal year 2002 budget provides $2.293 billion for the Public
Housing Capital Fund, a decrease of $700 million relative to fiscal
year 2001. This amount will be sufficient to meet all new modernization
requirements. Because PHAs have a large amount of unspent capital funds
from prior years, the budget does not provide any new funds to address
the backlog of modernization needs. Two other reasons to cut this
program include the facts that: QHWRA (Public Housing Reform) gives
PHAs the ability to leverage federal funds with private investment to
finance capital improvements; and HOPE VI removes the most severely
distressed units which represent a disproportionate share of backlog
need.
The purpose of the reduction in capital funds is to draw down
capital funds that have been appropriated, but not expended, by PHAs.
Recognizing that the funds are primarily for capital improvement
projects, HUD expects PHAs to obligate these funds within 18 months and
expend them in 36 months. Although not all PHAs are falling behind in
scheduled modernization, the buildup of unobligated and unexpended
funds by some PHAs indicates that modernization funds may not be
reaching the PHAs with the greatest needs or capacity. For example, as
of March 1, 2001, $700 million in fiscal year 1998 funds remained
unspent by PHAs. HUD plans to review the Capital Fund program and put
procedures in place to ensure a more timely and effective reduction of
the nearly $18 billion backlog of modernization and rehabilitation
needs.
While we provide increased funding for the Public Housing Operating
Fund, this Department also provides funds for the demolition and
revitalization of severely distressed public housing under the HOPE VI
program. The budget requests $574 million for HOPE VI grants in fiscal
year 2002, the same as the fiscal year 2001 enacted level.
HOPE VI was launched as part of an effort to demolish 100,000 of
the most distressed public housing units. As of the end of fiscal year
2000, HUD had approved applications to demolish nearly 113,000 units
and PHAs had actually demolished approximately 60,000. Almost 35,000 of
the completed demolitions were carried out in connection with HOPE VI
revitalization grants.
The HOPE VI program will expire in fiscal year 2002 and must be
reauthorized to continue. The Department is evaluating the HOPE VI
program and will submit authorizing language during the coming year to
extend and amend the program to target funds to the highest priority
needs.
For fiscal year 2002, HUD has proposed the termination of Public
Housing Drug Elimination Grant Program (PHDEP), which was funded at
$309 million in fiscal year 2001. There are three main reasons for this
termination. First, the program is duplicative of the Operating and
Capital Funds in that all expenditures that are eligible under PHDEP
are also eligible expenditures of one or both of these funds. Second,
many other Cabinet Departments have anti-drug programs that can be
brought to bear on the problems of drug use and violent crime in public
housing. Governmentwide, over $18 billion in Federal funding is
projected for fiscal year 2002 on anti-drug programs and illegal drug
enforcement efforts. Finally, the Inspector General has severely
criticized PHDEP for being the source of funds for such inappropriate
activities as staff retreats, bank loans, and Christmas parties.
Indeed, the Department itself diverted PHDEP technical assistance funds
to implement a gun buy-back program, which the Comptroller General
ruled was not a legal use of funds.
Although HUD is not requesting funds for PHDEP, it will fund
Operation Safe Home and the Witness Relocation Program. The Inspector
General operates a special task force--Operation Safe Home--which
combines the expertise of Federal and local crime-fighting forces to
combat violent crime such as illegal drug trafficking and gang-related
activity in public and assisted housing developments. In fiscal year
2002, $10 million will be set aside within the Public Housing Operating
Fund and transferred to the Inspector General for additional law-
enforcement staff.
The Witness Relocation Program assists families that have
cooperated in efforts to combat crime in communities. It is a crucial
part of Operation Safe Home. Since the initiation of Operation Safe
Home, the Inspector General has relocated 650 witnesses whose testimony
was essential to the prosecution of perpetrators of violent crimes.
building assets and skills among low-income families
Central to HUD's mission of promoting stronger communities are
programs to help low-income working families acquire skills that will
increase their earnings and to help families on welfare make progress
towards self-sufficiency. HUD also seeks to help low-income families
accumulate assets so that they can achieve homeownership, pursue
educational opportunities, start a new business, and attain other
important goals.
HUD's basic programs contribute to this objective by providing low-
income families with the housing stability they may need to focus on
obtaining work or increasing their earnings. HUD's homeownership
assistance programs also help families accumulate assets. In addition,
HUD has a number of programs that focus directly on building assets and
skills among low-income families.
The Community Technology Centers program is one such initiative.
For fiscal year 2002, HUD will provide $80 million in competitive
grants to help communities create or expand computer technology centers
in low-income areas. The centers will provide free Internet access and
help families acquire computer skills, access educational information,
and search for work.
Through the Neighborhood Networks program, HUD has helped to create
more than 700 computer technology centers in multi-family assisted
housing developments and HOPE VI sites throughout the country. Hundreds
of additional computer centers operate in public housing and Native
American housing. HUD supports the development of these centers by
providing guidebooks and other technical assistance, sharing
information on best practices, and allowing the centers to occupy space
in affordable housing developments.
Another such program is the Family Self-Sufficiency (FSS) Program.
Currently serving some 55,000 families in the tenant-based Section 8
and public-housing programs, FSS promotes the development of local
strategies to help families obtain or increase employment so that they
can build assets and achieve economic independence and self-
sufficiency. FSS helps to link participating families with local
opportunities for educational services, job training, counseling, and
other services while they are receiving housing assistance. As
participating families increase their work effort, the amount of
increased rent attributable to increased income from employment is
deposited in an escrow account. Families that comply with program rules
and become independent of welfare assistance by the end of the 5-year
program term can use the funds in the escrow account to purchase a
home, pay for higher education, start a business, or other agreed-upon
goals.
In fiscal year 2002, HUD will work to increase participation in FSS
by providing funding for FSS service coordinators at local housing
agencies, helping to spread awareness of successful practices, and
promoting partnerships between local housing and welfare agencies. The
fiscal year 2002 budget provides $46.4 million for FSS coordinators
within the Housing Certificate Fund.
The Administration plans to offer additional incentives to
encourage savings and asset accumulation by low-income households
through the Individual Development Accounts (IDA) initiative. This new
program will improve access to savings institutions by creating a
mechanism to subsidize the savings of eligible participants. Financial
institutions would be allowed a tax credit in exchange for matching
contributions to participants' deposits. Individuals would then be able
to withdraw their contributions and matching funds, along with
earnings, for qualified purposes, such as education expenses, first-
time home purchases, and business start-up expenses, that help
facilitate entrance into the country's economic mainstream.
The Resident Opportunity and Self-Sufficiency Program (ROSS )
provides a range of supportive services to families in public housing
through competitive grants to PHAs, resident groups, Indian tribes and
other qualified organizations. The services funded through ROSS are
designed to help families make progress towards self-sufficiency;
enable the elderly and persons with disabilities to live independently
through service coordinators and other activities; and support resident
management, business development, capacity building and conflict
resolution activities.
Funding for ROSS in fiscal year 2002 is continued at $55 million,
the same level enacted in fiscal year 2001. Consistent with prior
practice, it is funded as a set-aside in the CDBG program.
Through its Youthbuild program, HUD provides young high-school
dropouts (aged 16-24) with education and job training services,
counseling and other support activities and onsite paid training in
housing rehabilitation or construction work. This will help these
youths find well-paying jobs. The average wage earned by Youthbuild
trainees is $7.50 per hour and an impressive 84--percent of the
graduates obtain full-time employment or re-enter school on a full-time
basis. A wide range of groups are eligible to compete for Youthbuild
funds, including nonprofit organizations, State and local housing
agencies and State and local governments.
In fiscal year 2002, HUD will continue Youthbuild at last year's
level of $60 million and will continue the program as a set-aside
within the CDBG program. HUD estimates that this funding will provide
training to an estimated 3,774 youths.
HUD has also been active in helping to make ``Welfare-to-Work'' a
reality. The fiscal year 1999 VA-HUD Appropriations Act included funds
for up to 50,000 Section 8 vouchers to help families make the
transition from welfare to work. Housing vouchers can help families
make progress towards self-sufficiency by providing them with the
residential stability they may need to focus on obtaining or retaining
work as well as the opportunity to move closer to a new job. Although
implementation of the Welfare-to-Work Voucher program has been delayed
due to the challenges of designing a new program and of coordinating
the efforts of local housing and welfare agencies, substantial progress
has been made in recent months.
The costs of renewing the existing Welfare-to-Work vouchers are
included as part of the overall Section 8 contract renewals in the
Housing Certificate Fund. As requested by Congress, HUD's Office of
Policy Development and Research is in the process of evaluating this
program.
community and economic development
Beyond housing issues, HUD's other core commitments involve
community and economic development. Our fiscal year 2002 budget will
continue to support these programs, which play an essential role in
helping communities address locally determined development priorities
and maintaining long-term prosperity.
Much of HUD's community development work is done under the auspices
of the Community Development Block Grant Program (CDBG). CDBG provides
local communities with a flexible source of funds to help them attract
private investment, maintain a high-quality housing stock, rebuild
infrastructure and community facilities, provide critical community
services, and create new high paying jobs. CDBG funds are provided
directly to approximately 1,000 large cities and counties (known as
``entitlement communities'') and to States for distribution to smaller
communities. For fiscal year 2002, HUD has requested a total of $4.8
billion in CDBG funds. This is composed of $4.4 billion for CDBG
formula grants and $403 million in set-asides for specific programs.
The amount requested for the CDBG formula is the same as the level
enacted in fiscal year 2001. This represents a record level of formula
funding and a $160 million increase over the amounts appropriated in
fiscal years 1999 and 2000.
During fiscal year 2002, the Department will continue to work to
increase communities' timely expenditure of previously allocated CDBG
funds. Although HUD's efforts over the last few years have led to a 34
percent reduction in the number of communities that are failing to meet
their timeliness obligations, there are still a number of communities
that are not spending their CDBG funds in a timely manner.
The Department intends to work closely with communities to ensure
that comprehensive plans are implemented fully and funds are used
expeditiously under the consolidated plan review process.
Although funding for the CDBG formula is maintained at fiscal year
2001 levels, HUD has proposed a substantial reduction in funding of
set-asides within CDBG. The enacted level of set-asides within CDBG in
fiscal year 2001 was $713 million. The requested level for fiscal year
2002, by contrast, is $403 million, a reduction of $310 million. The
principal source of the reduction is the proposed elimination of
funding for the Economic Development Initiative and the Neighborhood
Initiative Demonstration. These programs, which together totaled
$401million, were earmarked for ``special purpose'' grants in the
appropriations act.
The growth in special purpose grants has been dramatic over the
past few years. In fiscal year 2001, the appropriations act contained
over 800 individual projects. Administering these individual grants is
costly, time-consuming, and distracts HUD staff from its core programs.
As most of the special purpose grants would be eligible expenses under
the CDBG formula, these types of projects can be funded if deemed to be
priorities by local recipients of CDBG funding.
The Section 108 Loan Guarantee program provides a means by which
local communities can leverage their CDBG grants to obtain financing
for large community revitalization projects. Under this program, the
government acts as the guarantor of loans secured by current and future
CDBG funds. Section 108 financing is at work in hundreds of communities
across America. Over 1,200 projects have been funded since the
program's inception in 1978.
In every year since fiscal year 1997, the total loan volume
authorized for the Section 108 program has been $1.2 billion. Only
about one-third or less of this loan level has been used each year,
however, with an average annual utilization of $375 million. To reduce
the level of the government's outstanding commitment to levels that
reflect actual usage, while at the same time ensuring that any upward
surge in loan volume is fully accommodated, the fiscal year 2002 budget
is requesting a loan volume of $609 million. HUD will reconsider the
loan volume cap for fiscal year 2003 based on this year's demand for
the program.
Another HUD program designed to assist in community development is
the Empowerment Zones and Enterprise Communities (EZ/EC) Initiative.
The EZ/EC initiative is an interagency effort to promote economic
development and community revitalization in distressed areas by
targeting tax relief and Federal funds to designated Empowerment Zones
(EZs) and Enterprise Communities (ECs). EZs and ECs are eligible for an
array of different tax credits and other incentives designed to spur
investment and economic growth. EZs and ECs also receive some amount of
Federal funding for revitalization activities. Grants are used for a
wide variety of activities that assist residents and businesses,
including workforce preparation and job creation efforts linked to
welfare reform; neighborhood development; support for financing capital
projects; financing of projects in conjunction with Section 108 loans
or other economic development projects. Funds are also used for rental
assistance and other housing assistance, policing and healthcare.
To date, there have been two rounds of EZ/EC designations, with a
third round authorized but not yet made. In the first round, nine
communities (six urban and three rural) were designated as Empowerment
Zones and 95 communities were named as Enterprise Communities. Twenty
new Empowerment Zones--15 urban and 5 rural--were designated in the
Round II competition, along with 20 new Enterprise Communities, all
rural.
In December 2000, Congress approved legislation to designate nine
new EZs, seven in urban areas and two in rural areas. HUD will
designate the seven new urban EZs in 2001, while the Department of
Agriculture will designate the rural EZs. The legislation also
authorized the designation of 40 Renewal Communities, 28 in urban areas
and 12 in rural areas, to be designated by HUD by the end of 2001.
Businesses in Renewal Communities will benefit from local regulatory
streamlining and a variety of Federal tax incentives to stimulate
economic growth.
HUD, originally proposed to provide each of the 15 Round II urban
Empowerment Zones with $10 million in annual grant funding. Cumulative
funding to date has not reached this level, but HUD is seeking funding
of $150 million for fiscal year 2002, equaling the originally proposed
annual amount.
This Department is also active in helping to redevelop brownfields.
Brownfields are vacant or underutilized properties whose redevelopment
is hampered by the real or perceived threat of environmental
contamination. A recent survey of over 200 cities by the U.S.
Conference of Mayors indicated that more than $2.7 billion in
additional tax revenues and 675,000 new jobs could be created if
brownfields sites were returned to productive use. For fiscal year
2002, HUD proposes to fund the Brownfields Economic Development
Initiative at $25 million, the same level as enacted in fiscal year
2001.
The Brownfields Economic Development Initiative makes competitive
economic development grants available to local governments in
conjunction with Section 108 loan guarantees. The grants enhance the
security of the Section 108 loan, facilitating the reclamation of
brownfields. HUD works closely with the Environmental Protection Agency
to implement strategies to return brownfields to productive uses.
In addition to the programs discussed above, several additional HUD
programs help to support local community and economic development.
To help reduce the hazards of lead-based paint, the fiscal year
2002 budget requests a 10 percent increase in funding for the Lead-
Based Paint Hazard Reduction and Healthy Homes Programs for a total of
$110 million. Pursuant to Executive Order 13045, a multi-agency task
force that included HUD, EPA, Justice, and the Centers for Disease
Control and Prevention developed a comprehensive 10-year plan to
eradicate the risk associated with lead-paint poisoning from American
homes. HUD's grants are key to the achievement of this objective. The
increased funding in fiscal year 2002 will be distributed through a
competitive process to entities that match every Federal dollar with
significant additional dollars. All funds, whether private or Federal,
must be used for hazard reduction or public education on lead-poisoning
prevention.
Included in this request is a set-aside of $10 million to continue
the Healthy Homes Initiative, which helps to develop, demonstrate, and
promote cost-effective preventative measures to correct multiple safety
and health hazards in the home that can cause serious disease and
injuries to children.
HUD is also funding the National Community Development Initiative
(NCDI). NCDI is a partnership of public and private funders and
intermediaries that works to expand the capacity of community
development corporations and other community-based and nonprofit
organizations to carry out community and economic development. HUD
provides NCDI funding to national intermediaries, including Habitat for
Humanity, the Enterprise Foundation, and Local Initiatives Support
Corporation, which then provide capacity building services to the
targeted organizations. The fiscal year 2002 budget requests $29
million for NCDI, an increase of $1 million over fiscal year 2001
levels. The additional $1 million will go to Habitat for Humanity to
increase funding for their capacity building efforts to $4.4 million.
Colleges and universities can make an important contribution to the
revitalization of America's cities and neighborhoods by bringing their
intellectual and financial resources to bear on locally identified
problems. HUD has several programs that encourage partnerships between
colleges and universities and local governments and community-based
organizations. These programs include: the Community Outreach
Partnership Centers Program, the Historically Black Colleges and
Universities Program, the Hispanic-Serving Institutions Assisting
Communities Program, the Alaska Native/Native Hawaiian Institutions
Assisting Communities Program, and Assistance to Tribal Colleges and
Universities. In addition, the Community Development Work Study program
provides stipends and tuition support for economically disadvantaged
and minority graduate students who plan to pursue careers in community
and economic development. The fiscal year 2002 budget funds all of the
university programs at fiscal year 2001 levels.
In order to assist with the community and economic development
needs of Native American and Insular Area communities, HUD funds Block
Grants for Indian and Insular Area Communities within CDBG. The fiscal
year 2002 budget provides $69 million for Indian community development
block grants and $7 million for community development block grants to
Insular Areas (American Samoa, Guam, the Northern Mariana Islands, and
the Virgin Islands). Funding for Insular Areas is included within the
set-aside for Section 107 grants.
A set-aside of $1.25 million in the Indian Community Development
Block Grant will fund the Native eDGE program, an interagency
initiative designed to facilitate sustainable economic development
within American Indian and Alaska Native communities. eDGE includes a
telephone call center, a publications clearinghouse, a web site, and a
technical assistance information center. The web site links seventeen
Federal agencies, educational institutions, and organizations through a
single portal so that tribes, Native Americans, lending institutions,
and private businesses can collaborate to promote economic growth.
meeting the needs of special populations
HUD programs provide housing and other essential support to a wide
range of populations with special needs, including the elderly, persons
with disabilities, homeless persons, and persons with HIV/AIDS.
In fiscal year 2002, HUD will continue its strong level of support
by funding the programs targeted for these populations at or above
fiscal year 2001 levels. Notable increases include $20 million in
additional funding for the Housing Opportunities for Persons with AIDS
(HOPWA) program and $20 million for the Improving Access Initiative,
which will be used to increase access by disabled persons to the
facilities of nonprofit organizations.
In fiscal year 2002, HUD plans to continue its strong support for
the elderly by providing $783 million for elderly housing programs, an
increase of $6 million over fiscal year 2001 levels.
The principal HUD program targeted specifically to the elderly is
the Supportive Housing for the Elderly (Section 202) program. This
program provides capital advances to finance the construction and
rehabilitation of structures that will serve as supportive housing for
low-income elderly persons and provides rent subsidies (known as
Project Rental Assistance Contracts (PRAC)) for the projects to help
make them affordable. For fiscal year 2002, HUD will provide $679
million for Section 202 grants, an increase of $3 million over fiscal
year 2001. The fiscal year 2002 budget also includes $3 million for
PRAC renewals.
In addition to providing funds for new Section 202 developments,
the fiscal year 2002 budget includes $50 million to cover the costs of
converting existing Section 202 developments to assisted living
facilities and another $50 million for service coordinators that help
the elderly maintain their independence. Both of these activities are
funded at fiscal year 2001 levels.
More than 1.3 million elderly households are also served by public
housing and tenant-based and project-based Section 8 programs.
In addition to programs for the elderly, this Department also
places a strong emphasis on meeting the needs of the disabled. The
Supportive Housing for the Disabled (Section 811) program provides
capital advances to construct or rehabilitate rental housing with
supportive services for very low-income persons with disabilities. (As
noted below, a portion of Section 811 funds is used for tenant-based
rental assistance.) For fiscal year 2002, HUD will provide $217 million
for new Section 811 grants, the same level as in fiscal year 2001. The
budget will also provide $1 million for PRAC renewals to help keep
existing Section 811 developments affordable.
In recognition of the importance of providing non-elderly persons
with disabilities with mainstream housing opportunities, the Department
plans to continue to set-aside a portion of Section 811 funds to
provide these households with tenant-based vouchers that they can use
to rent private market apartments of their choice. Public housing
agencies will also continue to have the authority to provide vouchers
to non-elderly persons with disabilities pursuant to designated public
housing plans.
Some 500,000 households with one or more disabled persons are also
served by public housing and project-based and tenant-based Section 8
programs.
As part of a Governmentwide effort to improve the access of
disabled persons to community services, HUD's fiscal year 2002 budget
includes $20 million as a set-aside within the CDBG account for the
Improving Access Initiative. This initiative will provide competitive
grants to help organizations that are exempt from the Americans with
Disabilities Act and have limited resources to make their facilities
accessible to the disabled. Among other eligible organizations are
civic organizations and religiously affiliated service providers.
Of particular importance to the Department of Housing and Urban
Development are the needs of the neediest among us who lack even the
most basic shelter. The fiscal year 2002 budget continues to provide
strong support for homeless persons by funding HUD's homeless programs
at fiscal year 2001 levels. In fiscal year 2002, a total of $1.12
billion is provided for homeless assistance grants and shelter plus
care renewals.
The Department will focus on providing permanent housing solutions
to those without homes and work closely with the Department of Health
and Human Services and other agencies to identify and remedy the
barriers to homeless persons' access to mainstream supportive services
programs. As specified by Congress, at least 30 percent of Continuum of
Care funding will be used to provide homeless persons with permanent
housing.
The Continuum of Care process allows local communities to determine
their own priorities for the use of HUD homeless programs funding.
Under this process, communities submit Continuum of Care plans to HUD
which describe local priorities and rank specific projects according to
locally identified needs. HUD provides funding to communities that
provide for maximum participation by local homeless providers and
representatives of homeless clients, that clearly identify gaps in
housing and service needs, and that coordinate homeless assistance with
mainstream health, social services and employment programs.
The Continuum of Care funds three programs geared toward the needs
of the homeless. The first is the Supportive Housing Program, which
provides funds to develop supportive housing and services that will
allow homeless persons to live as independently as possible. Funds are
used for transitional housing (up to 24 months) and permanent housing
for persons with disabilities.
The second is the Shelter Plus Care Program, which provides rental
assistance for hard-to-serve homeless persons with disabilities in
connection with supportive services funded from sources outside the
program. This is a form of permanent housing. In fiscal year 2001, a
special account was created to fund renewals of expiring Shelter Plus
Care contracts. In fiscal year 2002, HUD will continue to fund these
renewals at $100 million.
The third program under the Continuum of Care is the Section 8
Moderate Rehabilitation for Single Room Occupancy (SRO) Dwellings for
Homeless Individuals Program, which provides rental assistance for
homeless persons through the moderate rehabilitation of SRO dwellings.
In addition to funding these three homeless programs, HUD will
provide approximately $150 million in Emergency Shelter Grants by
formula. These grants are used for the rehabilitation or conversion of
buildings into homeless shelters, as well as certain related social
services, operating expenses, homeless prevention activities, and
administrative costs.
Finally, the Department will continue to work in fiscal year 2002
to implement the Congressional mandate to develop and implement new
systems to track homeless individuals as they enter and exit the
network of homeless services programs and to provide unduplicated
counts of the number of homeless persons served. HUD believes it
essential to get a fix on the reach of HUD's homelessness programs so
that the performance of these programs can be measured.
HUD is also concerned about the special housing needs of those
suffering from HIV/AIDS. The Housing Opportunities for Persons with
AIDS (HOPWA) program funds housing assistance and related supportive
services for low-income persons with HIV/AIDS and their families.
Grants are provided by formula allocations to States and metropolitan
areas with the largest number of cases and highest incidence of AIDS.
In addition, a small portion of funds is awarded competitively among
projects proposed by State and local governments and nonprofit
organizations.
In fiscal year 2002, HUD will provide $277 million for the HOPWA
program, an increase of $20 million over fiscal year 2001 levels. This
will support an increase in the number of jurisdictions eligible for
funding based on increases in the number of persons with AIDS as
reported to the Centers for Disease Control and Prevention.
enforcing fair-housing laws
HUD is committed to vigorous enforcement of the fair-housing laws
to help ensure that all households have equal access to rental housing
and homeownership opportunities. For fiscal year 2002, the Department
plans to increase the amount of funding available for fair-housing
enforcement and education activities by 16 percent over current levels.
The Department also plans further steps to decrease the incidence of
predatory lending.
HUD contributes to fair-housing enforcement and education by
directly enforcing the Federal fair-housing laws and by funding State
and local fair-housing efforts through two grant programs.
The first grant program is the Fair Housing Assistance Program
(FHAP), which strengthens nationwide enforcement efforts by providing
grants to State and local agencies to enforce laws that are
substantially equivalent to the Federal Fair Housing Act. For fiscal
year 2002, HUD will provide $23 million for FHAP, an increase of $1
million over current levels.
The second program is the Fair Housing Initiatives Program (FHIP),
which provides funds to public and private fair-housing groups, as well
as to State and local agencies, for activities that educate the public
and the housing industry about fair-housing laws--including
accessibility requirements, investigate allegations of discrimination--
and help to combat predatory lending practices and reduce barriers to
minority homeownership.
In fiscal year 2001, FHIP was funded at $24 million, of which $7.5
million was dedicated to the National Survey of Housing Discrimination,
a major study of housing discrimination being conducted by the Urban
Institute. This left $16.5 million for FHIP grants. As no additional
funding for the survey is needed in fiscal year 2002, the fiscal year
2002 level of $23 million provides an effective increase for FHIP
grants of $6.5 million.
The additional $6.5 million in fiscal year 2002 FHIP funding will
be directed towards increasing the number of organizations that receive
funding for activities to enforce the rights granted under the Fair
Housing Act and substantially equivalent State and local laws through
education, outreach, prevention, and other enforcement activities. This
funding increase will significantly expand the geographic distribution
of FHIP awards to communities that are currently underserved or not
served at all by fair-housing organizations. In fiscal year 2000, HUD
was only able to fund 42 percent of eligible applicants. With the
increase in funds, HUD will be able to fund 72 percent of the eligible
applicants.
During fiscal year 2002, HUD also plans to continue its efforts to
combat predatory lending. The Department will work closely with
interested parties, including consumer groups, Federal, State and local
regulators, and the industry to put an end to predatory lending
practices, increase financial literacy, and expand access to
homeownership and private mortgage credit. As part of this overall
effort, HUD will consider ways to better enforce existing laws--which
may include strengthening existing regulations--as well as assess the
need for legislative action to better protect consumers and stop unfair
lending practices.
improving hud's management
Despite the progress of the last twelve years, much more needs to
be done to resolve HUD's serious management challenges. Although HUD is
no longer listed by the General Accounting Office as a ``high-risk''
agency, many of its major programs continue to bear this label. This
Administration has made improving the management and restoring the
focus of this Department its number one priority. It is a message that
Congress has told HUD repeatedly throughout the years. And this
Administration is finally listening.
The starting point for any improvement in how this Department
operates is proper use of staff. During fiscal year 2002, HUD will
review staffing levels against program needs to rationalize the
distribution of staff resources. HUD's efforts will be aided by the new
Resource Estimation and Allocation Process which will help the
Department to assess where staffing should be increased or decreased to
administer its programs effectively. HUD is also working to develop a
long-term staffing strategy to meet the rapid increase in retirements
expected over the next several years. Currently, the average HUD
employee is 48 years old with 18 years of Federal service. To ensure
HUD's continued ability to deliver its programs in an effective and
timely manner, HUD must develop a strategy for dealing with this loss
of talent and experience.
HUD will also continue its efforts to improve oversight of the
local housing agencies and property owners who administer its housing
programs. Although the Department recognizes that the physical
inspections protocol used to assess public housing and multifamily
assisted housing needs further refinement to ensure consistent and fair
results, it plans to continue to assess the physical condition of HUD-
assisted housing to ensure that it is decent and safe.
The Department will also take steps to improve income and rent
determinations to reduce subsidy overpayments. HUD overpays hundreds of
millions of dollars in low-income rent subsidies due to the incomplete
reporting of tenant income, the improper calculation of tenant rent
contributions, and the failure to collect fully all outstanding rent.
During fiscal year 2002, HUD will implement a number of measures to
resolve this problem, including the development of tools to assist
housing agencies and housing owners in the determination of income and
calculation of rent, and the introduction of a quality control program
to monitor the performance of these intermediaries. HUD also plans to
review the current laws and regulations regarding income and rent
determinations to ascertain whether their simplification would
facilitate program compliance.
The Department is greatly concerned that some recipients of HUD
funding are either failing to utilize all of the funds provided by HUD
or failing to obligate and spend the funds in a timely manner. These
practices significantly diminish the effectiveness of HUD's programs.
HUD will be reviewing the following programs to determine how to
increase the rates of expenditure of funds: Section 8 vouchers and
project-based renewals, the Section 202 program, CDBG, and the Public
Housing Capital Fund.
Inadequate information systems have weakened FHA's ability to
monitor lenders that use its guarantees and contributed to HUD's
failure to obtain a clean opinion from its auditors in 1999. A
fraudulent scheme known as ``property-flipping'' recently highlighted
internal weaknesses in FHA's single-family systems and controls. To
combat this scheme last year, FHA implemented emergency foreclosure
moratoria to protect borrowers in areas where property flipping was
prevalent. During fiscal year 2002, FHA will strengthen the integrity
of its internal systems and controls to eliminate the need for
foreclosure moratoria and other emergency responses. Actions will
include improving the loan origination process and providing better
monitoring of lenders and appraisers.
The Department is committed to the continued review and evaluation
of its programs to determine what is working well and what needs to be
improved. HUD is also committed to continuing to conduct surveys and
research to collect the factual information on housing markets and
conditions necessary to inform the policy decisions of HUD, Congress
and State and local governments. To this end, the fiscal year 2002
budget provides $43 million in funding for basic research and
technology, the same amount as in fiscal year 2001.
Finally, HUD recognizes the importance of the work being conducted
by two Congressional Commissions: the Millennial Housing Commission and
the Commission on Affordable Housing and Health Care Facility Needs in
the 21st Century. HUD is prepared to assist Congress in assembling
factual information on the extent of the Nation's housing needs,
analyzing HUD's programs, and developing proposals for improving
current housing programs.
This Administration is openly and strongly committed to focused
programs and an efficient government that works. And my approach to the
task will focus on four governing principles.
First, our mission will be to serve people, not programs.
Second, we will have the discipline to stick to our mission.
Mission creep is mission death.
Third, we will be good stewards of our resources.
Fourth, we will observe the highest ethical standards. This means
more than prosecuting graft. It means rejecting the subtler corruption
of settling for good appearances rather than insisting on good results.
As we seek to fulfill our mission, this Department is committed to
continuing a strong relationship with Congress so that together we can
make the Department of Housing and Urban Development an efficient and
effective fighter on behalf of America's housing and community
development needs.
Thank you.

Mr. Martinez. Yes it is.
Senator Mikulski. We are going to, in the interest of our
colleagues here, our first round of questions will be five
minutes each so that everyone has a chance to ask their
questions if they want. And I know that Senator Bond and I will
probably have a second round. Of course our colleagues are
welcome for a second round.

PREDATORY LENDING

I would like my first set of questions to deal with the
issue of predatory lending. And again, we want to thank you for
assigning Ms. Maggiano to us. She is absolutely engaged in the
Baltimore Task Force, which is the laboratory. And also your
responsiveness in holding back those foreclosures until we get
a real plan. And thank you for including it in your testimony.
Mr. Secretary, what steps do you think we can take in this
year's legislation or even recommend to the authorizing to
prevent flipping on a national basis? Because it is pretty bad
in Baltimore, but Senator Stabenow, Senators Dorgan and
Fitzgerald, many are very concerned about this nationwide.
Mr. Martinez. Well, Madam Chairwoman, let me say that you
are good to recognize the people at HUD who have been making
this program work in a way that allows us to have the good news
that we see to be coming out of Baltimore. And Ms. Maggiano was
here today. I want to make sure we recognize her and Bryant
Applegate, who is also with her, who have been working
diligently on this. Because I think as we often talk about this
Department and shortcomings and all of that, that we often
overlook the people--the career people--that are there day in
and day out who really try to do an outstanding job for the
people who are hurting.
One of the things we have learned is that there cannot be
this flipping practice without fraudulent appraisals. And that
I would say would be key area of our focus. It is our focus
administratively to do what we can to make sure that these
appraisals that are the cornerstone of any fraudulent
transaction do not take place. So I would say if we can focus
our legislation on that issue and how we can best regulate
appraisals. Also, I think the second issue might be the
timelines of resales once an FHA deal is done.
We are also looking internally as to how some of the
transactions took place in Baltimore and in other areas as
well. One of the issues that we have to look at is our
personnel allocations and how we are devoting personnel to
oversee some of these areas. I think one of the problems we
have had at HUD is that we have seen the numbers at HUD drop
over the years of people. Sometimes that can be pennywise and
pound-foolish because we have also seen that the oversight that
is necessary for all of these vast programs around the country
has not been there at times. So we will be looking at those
issues as well. But I would say the issue of appraisals is at
the heart of this.
Senator Mikulski. Well, I think, would you consider--this
is just a recommendation for further discussion--do you think
we should go back to a system where FHA approves the appraiser?
Mr. Martinez. I think something like that would be very
healthy and I would like to have further discussions on that.
But I think a approval of a rated and a well-regarded appraiser
is preferable to just allowing appraisals to come in that
sometimes lack the credibility.
Senator Mikulski. Well the Baltimore advocacy groups feel
that again the appraiser--and most appraisers are honest and
meet very tough standards and so on, but then perhaps there
needs to be like a HUD-approved list. We ask you to come up
with those series of recommendations.
Let's go to the question, though, on--first of all, we look
forward to the task force and the final mark up on this bill.
We look forward to their recommendations we can implement now.
Mr. Martinez. I think they will have some recommendations.
Senator Mikulski. Second, though, is this whole issue of
property disposal of FHA. There are two issues. One, the way
often the FHA house itself has been so rundown and the
flippers--the ones that buy it for like $12,000 and sell it for
$72,000 with the balloon payment. Essentially the plumbing is
bad. The toilets are not working. The roofs are awful. The
people default because they cannot keep it going.
Two questions: One, do you think--would you think we could
use FHA money to rehab a HUD house before it goes back on the
market? And how do you think we can look at property disposal
of HUD houses when they have occurred essentially in almost
blocks or in groups of neighborhoods? We are not talking about
the single house in a suburban neighborhood where there has
been a default on the mortgage. We are talking about--gosh
there are blocks in Baltimore where there are twenty and thirty
and so on houses.
Mr. Martinez. Well, the whole issue of property disposition
is so important because it obviously affects not only the
particular homeowner or home involved, but also affects an
entire neighborhood. As this happens, it is a blight on an
area. But HUD has designed a program of accelerated claims
disposition and we are currently preparing regulations to
implement this program. We anticipate that those regulations
will be in place in September.
Additionally, we will also conduct a demonstration program
involving five thousand assets prior to finalizing the details
of the administration of this program, which should be in July.
We are committed to working with local governments and non-
profits to ensure that HUD's property disposition program
serves as a catalyst for neighborhood revitalization. We have
designated over 800 hundred revitalization areas and have
executed asset control agreements in 14 cities. We are working
with our local partners to identify what additional areas of
program improvements we could have. But we think those are good
efforts in the right direction.
Senator Mikulski. Well, I think those are very good
efforts. One of the things that I would like to be able to
discuss with you further is the use of FHA funds or other funds
to rehab the home. Let's say--let me just say that there are
two hundred homes you would want to turn over to either
Baltimore city government or Prince George's County's
government or it could be to a community group, like St.
Ambrose housing--a community development organization. But they
do not have the bucks to then rehab it to then sell it and you
see where it is.
Mr. Martinez. I think we should look at that with you and
see what possible returns there could be or where the returns
would go if we can enhance the property value. But we should
look into that and that is clearly part of the problem is that
even turning the house over to a group you still need to have
rehab money in order to make it happen.

SECTION 8

Senator Mikulski. Well, my time is up. Senator Bond.
Senator Bond. Thank you, Madam Chair. As I said everything
goes wrong. As I got over there they said they are about ready
to start another vote.
Senator Mikulski. So you waited.
Senator Bond. So I waited. And guess what? They vitiated
the yeas and nays. But in any event, my apologies again. I
appreciate the fact that you went ahead. The question I have is
for you Mr. Secretary as well as Mr. Dave Gibbons. And I
wondered if he might be able to join us at the table as HUD's
Senior Budget Officer because we need to get to the bottom of
this Section 8 problem. As you know, every year we go through
some period during which we look to rescind what people call
excess Section 8 funds. Rescission of Section 8 funds have
banked many other congressional priorities over the last few
years--floods, disasters of all kinds, anything that members
and the Administration wanted to spend money on.
In this year's supplemental, the House is proposing to
rescind one hundred and fourteen plus million dollars from
Section 8 funds and the Housing Certificate Fund. In addition,
last year we rescinded $1.833 billion. We really need to
understand from your viewpoint what is available for
rescission, when it's available, and why it is available.
And I am also very much concerned that HUD and/or OMB will
maybe slowing down the availability vouchers to eligible low-
income families in order to meet rescission requirements.
So, Mr. Gibbons, first can you please explain the status of
the $114-plus million rescission that is being discussed?
Mr. Gibbons. First of all, I have not seen the language.
They have not shared the language with us so I am going to have
to take this two different----
Senator Mikulski. Pull the microphone closer, sir. It's
hard for us to hear you.
Mr. Gibbons. To date we haven't seen the actual language of
the rescission so I am going to have to approach this from a
couple of different----
Senator Bond. Well first I guess we also need to know the
status of the rescission of the $1.8-plus billion in excess
section 8 funds from last year's fiscal year 2001 VA/HUD
appropriations bill. Maybe start with that and we can build on
that.
Mr. Gibbons. That's fair enough. All total, the amount of
recaptures that we are required to get pursuant to the 2001
appropriations bill is $3.4 billion, of which $1.83 billion was
rescinded in the 2001 bill. The remainder had been assumed as
form of recaptures in offsets to total renewal costs in 2001.
To date, we have recaptured $2 billion in funds. Most of that
was recaptured at the end of last year, at the end of fiscal
year 2000, carried over into 2001 to help meet the total needs
of the $3.3 billion to $3.4 billion that we must recapture. Of
the $2 billion that we recaptured, $1.6 billion of it has been
redirected back into the programs as is required.
We are amending both long-term project-based contracts as
well as to meet renewal of tenant-based contracts. That leaves,
at this moment, $400 million that we have available towards the
$1.83 billion rescission. So we still need $1.4 billion in
recaptures between now and September 30th of this year to meet
the full requirements of the existing 2001 bill. If you add the
additional $114 million we would need $1.5 billion between now
and September 30th.
I have no idea whether all that additional $100 million is
available. We will not do the recapture until late in August on
both the tenant-based and project-based program. So we hope
that it will be available but it may not be. There are four
things that are working a little bit against it. You mentioned
one of them in your opening remarks.
The first is utility costs for both project-based and
tenant-based programs are a lot higher this year. And that has
two effects. One, is that PHAs will use more of their funds
which otherwise might be in excess and available to recapture.
They will be sending more of those funds to the project owners
so there will be less available than we might have anticipated
due to higher utility costs.
The same is true for the project-based program. We have
already seen an increase this year in project-based costs for
project owners come in for additional resources of about $75
million to $100 million. So those funds which would normally be
available due to expired long-termed contracts, are being
plowed back into the program.
The third and fourth reason is, you remember, I think you
pointed out earlier Senator that in the beginning we identified
a total of about $10 billion which had been excess. None of
those funds are left. They have all been rescinded. So we don't
have that old pot to go back to as we have had in prior years
if we were running short.
Senator Bond. In your best estimate are you going to be
able to meet the $1.833 billion figure that was established
last year? That is beginning to sound questionable from what
you said.
Mr. Gibbons. The way the language was written last year,
you had to do the rescission. If you couldn't get it out of
Section 8, then you went someplace else to get it. I do not
know what the language says for the one----
Senator Bond. I am just talking about last year.
Mr. Gibbons. We will absolutely get those funds. They will
either come out of Section 8 or, according to the statute, that
if we can't find them in Section 8 we are to go to some other
heading in HUD and take it from unobligated balances in other
programs. I do not know what the language says for the $114
million.
Senator Bond. Thank you very much.
Senator Mikulski. This is a topic we will return to because
the issues raised by Senator Bond are issues that I was also
going to raise. We will pick back up on it. But Senator Kohl,
let me turn to you and then we will turn to Senator Shelby in
turn.

ELDERLY HOUSING

Senator Kohl. Mr. Secretary, as a member of the Special
Committee on Aging, I have taken a special interest in meeting
the housing needs of seniors, particularly seniors in rural
communities. Our programs have played a critical role in
helping many urban and rural seniors age in place and provide
an alternative to nursing homes and other expensive options.
One program that has been helpful in Wisconsin is the Service
Coordinator Program. This program is an excellent way to
connect people who are frail with resources existing in their
community in order to enable them to stay in their homes. The
administration has included level funding of $50 million in its
proposed budget for Service Coordinators and the Congregate
Services Housing Program, which brings services to senior
housing complexes. And yet there is a demand to expand this
program, beyond renewing existing contracts, to allow more
seniors to age in place independently and with dignity.
According to one study as many as 20 percent of seniors in
202 housing have no Service Coordinator. Given the tremendous
pressure to provide more options to seniors to age in place,
how do you propose we meet this need and would you support a
proposal to prevent Service Coordinators to be included as part
of a facility's routine operating expenses? Do you anticipate
future increases in funding for Service Coordinators? And is
this an area where there could be a collaboration with HHS?
Mr. Martinez. I think the last part of the question hits
the nail right on the head, which is the need for cooperation
between HUD and HHS. I have begun a series of conversations
with Secretary Thompson beginning with the issue of
homelessness, but I think this issue of the elderly is very
ripe for this as well. Clearly we need to try to assist our
elderly population, our aging population, to age in place
whenever possible and to have facilities that have sufficient
support to allow them to avoid the need to be transported to a
nursing facility and things like that. So I think the things
you are raising in your question are precisely the kind of
thinking we need as we go forward.
The Congress has impaneled a commission, to study aging,
housing needs of the aging for the 21st century. And I think
that, and certainly with my background in coming from Florida,
I am well aware of the needs of this population as well as the
forward thinking types of ideas we must have in order to allow
folks to age in place.
In the 202 program, we clearly understand the need for
there to be supportive services. What I would like to do is to
bring in the services that are available through HHS and bring
them to bear on this population in a way that can allow us to
provide coordination of services and the counseling services
and all the other services that are necessary in order for
folks to age in place. So, I think your question is headed in
precisely the right direction and I hope that we can move in
that fashion.

HOMEOWNERSHIP COUNSELING

Senator Kohl. Okay. Mr. Secretary yesterday the New York
Times ran a story--well two days ago--noting that the number of
American's falling behind on their mortgage payments has
increased sharply in this past year. The percentage of home
owners with FHA mortgages with loan payments more than thirty
days overdue went above ten percent for the first time ever. At
the same time the President has embarked upon an initiative to
increase first time house ownership among low income families.
We need to do everything we can to ensure that these families
have all the tools they need to stay in their homes.
So now Freddie Mac has just come out with a study that says
that borrowers that get counseling have a 34 percent lower
delinquency rate than borrowers without counseling. And yet
this budget includes level funding of $20 million for housing
counseling. So are you concerned about the rising delinquencies
and shouldn't we be doing more in the counseling area to
counter this trend, Mr. Secretary?
Mr. Martinez. No question, I think that there is a great
concern for the rising of delinquencies. We think that as we
are striving to increase homeownership, particularly among our
low-income and minority populations, anytime we have a
foreclosure is essentially a failure or a set back. So anything
we can do to continue to allow folks to own their homes is a
very positive step.
The Lost Mitigation and Forbearance Program that FHA has
works to prevent families from losing their homes by modifying
the terms of their mortgage and delaying the foreclosure while
there is reason to expect that they will be able to make good
on the default. We have also put a moratorium on foreclosures
in selected areas, including Baltimore, as we look into that
area of predatory lending.
Yesterday I had a meeting with one of our largest private
mortgage holders in the country and they were talking to me as
I raised the issue with them because I think a lot of this
happens in the private market as well. They were telling me,
Countrywide happens to be the company I am speaking of, of the
very aggressive efforts that they have of counseling and
bringing assistance at a time when people seem to be having the
same experience in the private markets that we are seeing in
the FHA.
So the fact is that this is a sign of the times as we have
had a little bit of an economic slowdown. But the fact is that
not only through the FHA but also even in the private sector
there seems to be a great deal of effort in counseling and
helping families restructuring debt so we can help keep them in
their homes.
Senator Kohl. Well, I quite agree with you. The facts seem
to coincide with what you have just said, and yet your budget
includes level funding of $20 million for housing counseling.
All of the facts seem to indicate that the greater the degree
of counseling, the lower degree of mortgage foreclosures. So,
but I do not square what you are saying with the facts.
Mr. Martinez. Well I just do not know that it is necessary
for us to increase the budget in that area in order for us to
continue the efforts that we have underway. I do not think it
is a monetary problem. I think what we have to do is implement
and be aggressive about what we are doing and so I believe we
can carry out the function with the current funding level we
have available.
You have to remember that it is about the quality of the
counseling that takes. It is about the expertise of those
people involved in the process and the help that they can
provide to a family in need. So I am not sure additional funds
in that area are going to make a difference. I think what we
have available in the current funding levels will allow us to
carry out the mission.
Senator Kohl. Well I thank you so much. Thank you Madam
Chairman.
Senator Mikulski. Your questions were excellent Senator and
very parallel to my own. Thank you. Senator Shelby, you have
been waiting very patiently.

PREDATORY LENDING

Senator Shelby. Thank you Madam Chairman. Mr. Secretary, I
want to get back into the flipping of mortgages and the dynamic
basically being created with a fraudulent appraisal, a
misleading appraisal, or something like that. Has the Justice
Department been called upon to get into these cases where
there--and they are all over the country.
Mr. Martinez. They have. I am just verifying that they
have, but I am sure they have.
Senator Mikulski. Senator, through the U.S. Attorney's
office.
Mr. Martinez. There are investigations that go on and we do
get success from time to time in this area. We need to do all
we can there.
Senator Shelby. But it is very, very important in your
position, and in ours too, to help root out the fraud that will
destroy good programs quickly such as this. The key to any
loan, I suppose, whether it is in the private sector period or
if it is a HUD FHA-insured loan, a VA guaranteed loan, would be
the appraisal. What does the appraisal show? If there is a
history of this, it seems to me like an investigation would
uncover it fairly quickly and you could put a stop to it. I
know it is easier said than done.
Mr. Martinez. It is about our manpower and our ability to
supervise. Before my phone starts ringing from all my appraiser
friends, I think we should all--and as a lawyer I am always
sensitive about good lawyers versus those who may stray outside
the line--but there are many good appraisers out there. It
isn't about the industry or the profession. It is about the
people----
Senator Shelby. Most of them are probably honest.
Mr. Martinez. Absolutely. And it is just about those few
that seek to step out for a momentary gain and we should
prosecute those and have a sure prosecution for them.
Senator Shelby. What they do, Mr. Secretary as you know, is
they hurt good programs and they will destroy good programs if
we don't root it out. And I have confidence in you to know that
you are going to turn over every rock to get to it because it
will destroy what you are trying to do.
Mr. Martinez. Thank you Senator.

HUD LOCAL OFFICES

Senator Shelby. Mr. Secretary in another area I think it is
very important that your people on the regional level and in
the national level here in Washington get along with people in
various cities spread all across the country. We have had some
evidence of that in my State of Alabama and you have worked
some of that out and I appreciate that. But when local
officials work well with the regional officials, when regional
officials work well with your offices here, it just calls for a
much better function in our offices, doesn't it sir?
Mr. Martinez. Absolutely. Yes sir.
Senator Shelby. And what are you doing to foster this?
Mr. Martinez. Well, first of all, I think it is important
to improve the morale in our Department and I have been working
hard to do that. Also as I travel, this sounds simple but it is
something that hasn't been done in many years, I visit our HUD
offices in each of the localities.
Senator Shelby. That's good.
Mr. Martinez. And I got a clear message to our folks in HUD
which is we need to work and cooperate with our local
officials. I am trying also to give more authority to our field
offices. I am trying to give more autonomy to HUD's regional
directors and State representatives so they can have the
ability to more closely work, not only with local government,
but also with the private sector in their local communities; be
able to make the decisions, be able to set direction and be
able to work in the kind of cooperative way that I think you
are describing.
Senator Shelby. And hold them totally accountable for what
they do, correct?
Mr. Martinez. Absolutely. Absolutely hold them accountable.
And you know there is no room for us to be the problem. I do
not think that HUD should ever be the problem as it relates to
dealing with the mayor's office or as it relates to dealing
with a private developer who may be trying to do a project. All
too often we hear that HUD is difficult to deal with; that you
cannot get answers. Those are the kinds of things, frankly, I
am determined to make a difference in and put an end to.
Senator Shelby. Thank you Mr. Secretary. Thank you.

SECTION 8

Senator Mikulski. Mr. Secretary, I would like to come back
to Section 8 and follow up on Senator Bond's questions. One of
the things that both the Republican Chair and a Democratic
Chair have faced is that whenever there was a shortfall they
turned to HUD and usually the Section 8 accounts to pay the
bill for other programs. Most often when FEMA, because they
were responding to natural disasters, needed more money. So we
were the bank. Senator Bond and I have been sending warnings
now for a number of years and we are afraid now that we have
really hit the bottom. And for the last several years Congress,
as I said, has rescinded these large amounts. We hear that over
in the House they are going to keep pushing this concept of
getting more money out of ``something called a rescission.'' Is
there any amount of money currently available for rescissions?
Just plain English.
Mr. Martinez. I will let Mr. Gibbons give an answer to that
question.
Mr. Gibbons. No.
Senator Mikulski. That's pretty plain.
Mr. Gibbons. Right now I have $400 million and I owe you
$1.8 billion. So the answer is no, not at this time.
Senator Mikulski. So we could conceivably be in a situation
where you are going to have to find $1.8 billion in other
programs and none of them are cushy.
Mr. Martinez. No. That is absolutely right. We do not have
extra funds available. And the idea that HUD should be raided
for the benefit of other programs, I just do not find that to
be an attractive prospect and I will fight hard for that not to
happen.
Senator Mikulski. Well we really encourage you to be in
contact with the House about this particular situation. And
then second, we are going to need a plan for this $1.8 billion.
And I do not know what your thoughts are on that.
And let me come to the utilization rates which is also one
of our problems. Year after year it seems that the same public
housing authorities have difficulty utilizing vouchers and
their funding is at risk of being recaptured, or they return
these vouchers. Some of this is due to poor management and the
other is due to simply because of prosperity and the lack of
other apartments being built.
Mr. Secretary what we have discussed, landlords do not want
to rent to Section 8. Now there is all kinds of reasons they do
not want to rent to Section 8. Some are despicable and illegal.
But others Section 8 does not pay enough when they can get
higher rents. Could you tell us your views on this and how you
intend to address this issue?
Mr. Gibbons. Again, I will take the first part of your
question. There is a scheduled recapture, additional recapture
of the both tenant-based and the project-based in late August
with the hope that it will garnish enough to meet the $1.83
billion that Congress rescinded in the 2001 appropriation bill.
Senator Mikulski. So we are counting on the return vouchers
in August to be the bridge that brings us over these troubled
waters?
Mr. Gibbons. Yes that is correct.
Senator Mikulski. We will already have marked up our bill?
Mr. Gibbons. This is from 2001's appropriation bill that we
owe and we were due to recapture in August and we hope that
there is sufficient recaptures available in the Section 8
program to fully meet that need. If there is not, then the
Secretary will be required to go to another program in HUD that
has unobligated balances, wherever that would be, and take
whatever we do not have in the Section 8 program. If you add
the $114 million to that amount then that, just as an
additional $114 million that we will either have to get out of
Section 8 or some other program by the end of September. But
there is a scheduled recapture of funds again in
August.
Senator Mikulski. Well the Committee really needs to be
kept apprised of this. I know Senator Bond has a follow-up but
what about the utilization issue?
Mr. Martinez. Well, I was going to say that in utilization
there are some things we are doing. Following up on
congressional initiatives in the past but increasing the local
flexibility to raise the subsidy levels. We think that is a
very important initiative. Public housing authorities now have
discretion to raise the subsidy levels to 110 percent of the
local fair market rent. In addition to that, more surveys of
localities so we can more accurately forecast and predict what
fair market rents might be in different communities. As we do
more surveys we will then have a better, more up-to-date list
of what fair market rents should be. We think these things will
help. In addition to that, the program is going to allow our
Section 8 voucher holders to purchase a home with your Section
8 vouchers, I think all these things in concert will help the
utilization rate.
Senator Mikulski. My time is up. Senator Bond.
Senator Bond. Thank you very much Madam Chair. Lots of
tough issues to deal with. Let me hit on a number of them. In
last year's Senate Report, we instructed the Department to
develop transition plans to transfer the mark-to-market
functions from the Office of Multifamily Housing Assistance
Restructuring, OMHAR, to HUD's Office of Housing. What is the
status of the transition? How is HUD going to ensure that it's
restructuring deals are not affected? Do you have the staffing
resources and capacity to continue the program?
Mr. Martinez. Yes sir we do. There is still a need for the
program. We are seeking the authority to extend the
restructuring tools of the Mark-to-Market Program. HUD does
plan to extend OMHAR for 3 years but bringing it in-house with
two exceptions. The Office will not be PAS appointment and the
office will be under the jurisdiction of the Assistant
Secretary of Housing. So that is the way in which we intend to
bring it about, but we are very much engaged in that
transition, which I think, will take place in September.
September is the time we anticipate--September 30th actually I
guess the end of fiscal year would be the time for that.
Senator Bond. Mark-to-Market authorization expires at the
end of this fiscal year. Your budget justification shows you
intend to submit legislation to extend and modify the
restructuring authorities. One area that troubles me is the
inability of the Administration to force owners into full
restructuring deals, leaving some of these properties at
increased risk to fiscal and financial problems. A draft GAO
report I have heard, found there were eleven properties
identified as troubled and twenty three more as potentially
troubled because the properties were not properly restructured
by OMHAR.
Can you give us an overview of your position on the Mark-
to-Market reauthorization and your views on how long the
program should be extended, what specific areas the
Administration intends to modify, and any forcing mechanisms
you plan?
Mr. Martinez. I think there is no question that the program
needs to be continued. I think a 3-year timeframe is what we
are talking about. Frankly, that may not be long enough. I
think that as we talk about it we wonder whether we should
really look at 5 years. But we are looking at a 3-year request
right now and see where that puts us. I think there has been
great success in some of the OMHAR restructuring. I have no
doubt that from time to time they may miss the mark because
they are dealing with properties that sometimes might be
troubled at the front end and might be difficult to restructure
them in a way that will make them solvent.
But we estimate that the savings in Section 8 for the next
5 years are really pretty significant. They are in the mid-$150
million range for the next several years. So we believe it is
worthwhile to manage our program in a way that continues to
make that stock of housing that is so needed available to
Section 8 holders.
Senator Bond. I have a problem of particular concern in my
State. Several months ago we heard that Section 202 property,
the Boulevard Apartments were going to be shut down. The
elderly were going to be moved out to a spot far away from
their health care facilities and from the amenities that made
living for the elderly there appropriate. We were delighted and
everyone was excited when Washington University agreed to work
with us on developing a new mixed-income multifamily property
in the same neighborhood, so the current residents would not be
adversely displaced. And all we had to do was have the
cooperation of the
Department.
Instead, for some reason, the Department is apparently bent
on forcing the relocation of the residents and sale of the
property by September, which really has the residents upset.
They are pushing them to an isolated and distressed area. It
seemed to me that we had a tremendous opportunity. What
happened?
Mr. Martinez. Well, Senator, this is a project that
apparently the conditions of the housing was such that it was
deemed unsafe. There was fire hazard and so forth.
Senator Bond. We understand that.
Mr. Martinez. What I am told is that HUD has never required
a specific relocation to a certain place, but that we have
given the folks a Section 8 voucher that they can utilize at
their choice. So I do not think that has been a HUD
requirement. We have had some regulations that have made it
difficult or impossible for us to simply allow the program to
go as we hope.
I have now special counsel who is reviewing the entire
project and will continue to work with your staff to find a
good resolution to it. I do not think our goals are any
different. I just think we are constrained at times in the
Department as to what we can do by the regulations that may be
applicable.
Senator Bond. Well, actually they were actually directing
them to be moved to Council Towers. Have you had any
discussions with the current owners, or Washington University
or Fannie Mae about working this out. These are all the
partners that were willing to work out the development of this
facility for the benefit of these disabled tenants.
Mr. Martinez. Senator I have not. I think what we should do
is try to find a way going forward to continue to work with
your staff and the HUD staff to continue to do what we can to
solve the problem in a way that is amicable to everyone
concerned. I do not think HUD ought to be the problem in the
deal. But there are some limitations in what we apparently can
do. We cannot give preference to any given bidder as a
preference to the outcome to the program. We may have a desired
outcome we would like to see happen or seems to be the most
sensible. But we just cannot give preferential treatment to
anyone of the bidders. That would be outside what is possible
or appropriate for us to do.
But I will pledge to you that we will certainly work
closely with your staff to continue to move the project forward
that makes the residents happy and allows us to get out of a
property situation that was really a trouble property based on
the safety situation.
Senator Bond. Well a lot of the entities I mentioned were
willing to make significant concessions because of the
importance of this to the area. Initially from our discussions
with HUD and all the others, it looked like a tremendous win-
win situation. So if you will make sure that everybody's is
working together we will have a tremendous celebration when we
move them all in.
Mr. Martinez. Well, I would love to come to your place and
have that celebration when we get it done. But rest assured
that the direction has been to do what we can to make sure that
this happens in a positive way, within the bounds of what I
know we would all want to do which is the right thing legally
speaking.
Senator Bond. Thank you Mr. Secretary. Madam Chair.
Senator Mikulski. I would like to return another point on
Section 8. Exactly the point you made sir, you cannot tell
anybody where to go under Section 8 because one, I think our
Constitution prohibits it and two, our Fair Housing laws. But
there is also another side to this. And what we are seeing is
that now with the vouchers we are having new concentrations of
poverty.
And you might recall that the point of HOPE VI in tearing
down high-rise public housing was to get rid of--to deal with
these concentrations, these zip codes of poverty. And because
of the concentration, they went from poverty to also really
systemic social
pathology.
Okay, now what is happening is, we have gone from vertical
poverty to horizontal poverty. That there are new
concentrations emerging in Section 8 areas. I wonder, and I
know you are going to be meeting also with the urban county
people tomorrow--this is an issue they want to raise. Do you
have any type of thinking going on number one to identify this
and be able to track this? And then number two, are you working
on some type of saturation index like we had once in tenant
housing?
Mr. Martinez. We do monitor that Senator and clearly what
you say is a concern to us all. We don't want to end up in a
situation like we had at one time, and still do in some areas,
but not intended to continue the perpetuation of these high-
rises with large concentrations of poverty. But we note your
concern, and we have heard your concern on this, and our
efforts have really focused on relocating families with
information, and when we do at one of these HOPE VI housing
projects on a range of different housing options, and
assistance to help them access options they can afford.
We do have studies underway to track the outcome of
families that do relocate from HOPE VI developments. As someone
in the recent past in local government, I am a great believer
in the HOPE VI program. I think it is a tremendous thing. Some
of the things I have seen it do in my former community in
Orlando have been very positive. The fact is that the
relocation is something that has always concerned me as to what
happens to these people. Where do they go? I think that is one
of the weaknesses in the HOPE VI program and I think we need to
strengthen that.
I think overall as the project comes up for
reauthorization, I think it is a great program--one that we
need to celebrate and enhance. But we need to pay close
attention to what is happening to the relocations----
Senator Mikulski. There's a very eager staffer sitting in
back of you writing notes--white shirt with the burgundy tie.
Did you have something you wanted to add to amplify this? But
you seemed to know that we were on the right track.
Voice. We are very interested in working with you.
Senator Mikulski. What did you say?
Mr. Martinez. He said he is very interested in working with
the Chairwoman.

HOUSINIG PRODUCTION

Senator Mikulski. This then, of course though, takes us
to--one of the issues that Senator Bond and I have been
concerned about along with many members of the authorizers is
the need for new housing production. We need to do something
about the lack of affordable housing. We need to be able to
increase production. Senator Bond, Sarbanes, and I looked at
some of this. We wonder what are your thoughts on this? What
plans do you have? What would you like to bring to the
committee? And what perhaps could we do in this year's
appropriations?
Mr. Martinez. Well we appreciate your interest in
production. I know that Senator Bond shares that passion. I am
well aware of the statistics that point us in the direction to
the fact that more housing production needs to be a part of our
strategy. I had hoped that we would look at least in terms of
my own thinking to have this year allow the Millennial Housing
Commission, which is meeting--and I understand moving along
very rapidly----
Senator Mikulski. Very hard working.
Mr. Martinez. Very hard working under the leadership of Mr.
Ravitch and also former Congresswoman Molinari. They are doing
a great job and I am looking forward to meeting with them. I
have had staff in conversations with them to see what they come
up with and the range of options they bring back to us in terms
of where we might go. I believe that in this year's budgetary
cycle it would be very difficult for me to come to you and say
here is where we can have additional funds for----
Senator Mikulski. So you think that is premature.
Mr. Martinez. I think it is. I would prefer to work very
closely with the Chairwoman and the ranking member as well as
with this Millennial Commission as we look to next year in a
concerted effort that we then might come up with a production
program that I think we all could really see to fruition. That
would be my counsel and my plea to you as we defer by a year.

FHA

Senator Mikulski. I think that's prudent though we are
anxious about it. Let me just exercise a minute. One of the
areas--I am going to go to private sector housing because we
just talked about the tight squeeze in apartments, the
rejection of Section 8 people. Rents are increasing. Utilities
are going are up so rents are going to increase--just the
nature of doing business.
I understand in the budget and also members of my rental
community have talked to me that you made a proposed 25 percent
increase in FHA multifamily loan limits. Am I correct?
Mr. Martinez. That is correct.
Senator Mikulski. And that this has the strong support of
mortgage bankers, realtors, AFL-CIO, mayors, home builders.
Could you comment on that? And do you think that these are not
the same issues but we need more production in the area of
rental areas, we are doing it. Do you want to comment on it and
then could you share with the committee do you think you can do
this by regulation? Do you need our help?
Mr. Martinez. First thing, let me say that I am delighted
for that to be the one area where we have had very unanimous
agreement between the mortgage bankers, the homebuilders, and
myself, which I think is a great point of building on even more
areas where we might agree. The fact is this is something that
has not been raised for 9 years. I do believe that it will help
spur production because I think that even though we may defer
by a year the issue of production program, we do need to
encourage more production.
So we do need legislative review for that and it would be
our hope that this could happen in a timely fashion so that we
can move forward in this area. I do believe that there is much
that HUD can do, not only in the area, but also as we try to
work more aggressively with local governments and local
developers to increase housing production. I think we can
increase affordable housing production even absent of a
production program just by what we do and how we do it.
Senator Mikulski. We would like to work very closely with
you on this. There have been no new FHA multifamily projects in
several cities including my own in metropolitan areas. And what
is being built is really very upscale or very kind of gentry
oriented in downtown.
Mr. Martinez. It's amazing the rents they are charging in
some of those places. I saw a project in West Palm Beach,
Florida, where the rents are incredible. It is great to see the
economic and urban revitalization that is taking place in so
many places around the country. But at the same time we need to
mix in the affordable housing component, which seems to be
absent in so many places as we do this.
Senator Mikulski. Senator Bond.
Senator Bond. Thank you Madam Chair. Mr. Secretary I know
you have a lot of other things to do than read old conference
reports but I have here a last year's VA/HUD conference report.
Senator Mikulski. Is that yours?
Senator Bond. Page thirty-six. I take it home and read it
every night.
Mr. Martinez. I'll start doing that now.
Senator Bond. I spilled an ice cream bar on it. Some other
stains on it.
Mr. Martinez. I have been looking for some summer reading.
Senator Bond. Page thirty-six, Section 233, not
withstanding any other sections of law, to the extent that the
Secretary determines that a multi-family property held by the
Secretary is not feasible for continued rental assistance
payments under such subsections (a), the Secretary may in
consultation with the tenants of that property contract for
project-based rental assistance payments with an owner or
owners of other existing housing properties or provide other
rental assistance. I wanted you to know that we have written
into the law something that may be useful to you in dealing
with the citizens in the boulevard.
Mr. Martinez. I appreciate that and be assured that our
staff is going to be in touch with yours. We are going to get
this problem solved.
Senator Bond. Oh, I think they will talk about it.
Mr. Martinez. You better believe it. You better believe
they will. But, you see, we need to do more than talk about it.
They got to get some solutions and I will push them on that.
Senator Bond. You know the Missouri slogan?
Mr. Martinez. Show me. Is that it?
Senator Bond. That's right.

HOMEOWNERSHIP INITIATIVE

Mr. Martinez. I thought it was.
Senator Bond. On the HOME set-aside, as I mentioned
earlier, the Administration is proposing to set aside $200
million within the HOME program for downpayment assistance. The
idea is interesting. I like homeownership. But I find it hard
to support a set-aside in the HOME program when HUD is not
proposing to add any additional funds. Taking an eligible
activity and making it a requirement means a reduction of
flexibility in local decisionmaking. Is there any good argument
that I have missed why the decision making should be taken away
from States and localities with regard to the use of these
funds?
Mr. Martinez. Well, I would point out, Senator, that in the
past, a larger portion of the HOME funds have been used for
downpayment assistance than what is being directed even now. So
what I think the President is trying to do in this program is
to very much focus the attention on downpayment assistance of a
program that has already included down payment assistance as
part of what it does. And while I agree with you, it does seem
to go counter to a lot of what we would like to do, which is to
give more local authority and more local autonomy. It does deal
with a very important issue, which is home ownership, and to
identify down payment as the key issue toward home ownership. I
think it presents a very strong emphasis and priority into the
issue of down payment assistance.
So HOME was already doing it. HOME was doing it largely to
that extent anyway. So I just think it is now focusing the
energies of it, and as we say, we propose and you dispose. And
if more money was to go to that program we would use it wisely.
Senator Bond. Well we--I certainly share your emphasis and
enthusiasm for homeownership, but we have a problem with
production of housing generally and that I would hope we could
focus on that. I had a question something that has been going
on at HUD prior to your arrival--HUD's implementing the Single
Family Property Disposition Program, the asset control areas or
ACAs. And with regard to one ACA in Chicago, my staff learned,
that in order to sell the foreclosed properties conveyed to a
local non-profit, additional Federal subsidies in the form of a
Special Purpose Grant was provided to pay for the needed
repairs.
Now that is taking critically needed Federal housing funds
out of one pocket and putting into another. It seems to me it
is contrary to the intent of the 1998 property disposition
legislation where HUD was to sell properties to local
governments and qualified non-profits at a price that allowed
adequate rehabilitation and resale to low-income home buyers
without the need for additional subsidies.
And I do not understand why we are getting a Federal grant
to pay somebody who has just made a bid on a HUD-owned single
family property. Would you--I would like to have a written
answer--but if you can figure out what is going on because
something doesn't look right in that deal.
Mr. Martinez. I know we are working on that issue and I
would like to maybe give you a written answer to that. I think
that would be the best way.

homeless assistance

Senator Bond. Okay. Supportive Services for homeless. Three
years ago we required HUD to set aside 30 percent of the
McKinney Funds for permanent housing. HUD had been and
continues to spend a significant percentage of McKinney money
on services instead of focusing the funds on housing. With the
growing demand for permanent housing renewals there is likely
going to be less money available for new construction and
supportive services.
My view is that other agencies, like HHS, Labor, and VA,
need to be stepping up to the plate to provide the services.
The name of your agency starts with Housing. What are HUD's
plans for funding services in permanent supportive housing so
that we can end chronic homelessness?
Mr. Martinez. Senator you are precisely correct and I look
for your support and the Chairwoman's support on this issue as
I try to move us into the housing business. If we do not
provide the shelter, no one else will. There are other agencies
of Federal responsibility that have, as part of the
responsibility, the issue of services.
As I said, we have a task force working between HHS and HUD
on this very issue and the clear indication from Secretary
Thompson and myself to both of bureaucracies was fix this
problem. We have got to get to a point where HUD dollars are
going to housing, to shelter. What HUD was intended to provide.
And to make sure that these people that are now under some sort
of housing that HUD has provided are getting the kinds of
services that they need for drug intervention, for mental
illness, or for other societal issues that they are dealing
with that really fall under the purview of HHS, or quite
frankly as you mentioned so appropriately, Education or Labor.
I am determined that we should focus our efforts on housing
while allowing these other social services to be provided by
those agencies that provide it to the population at large.
Frankly, I do not want to go back into this issue--I do not
want to go back into it at all. But I will mention that it is a
little bit like this Drug Elimination Grant Program. Law
enforcement agencies, drug elimination programs around the
country that are funded by the Federal government should also
touch people in public housing. It should not be our role to be
diverting what is going to public housing to do a function of
law enforcement or drug intervention that really ought to be
done by other agencies. So I don't mean to mix apples and
oranges here and really even----
Senator Bond. Good point. You score one on that.

HOPE VI

Mr. Martinez. Well good. Maybe I should quit right now.
Senator Bond. But no, I appreciate your focus on that.
Senator Mikulski. Coming back to the housing business and
what happens like in Phase II. I want to talk about HOPE VI.
HOPE VI expires in 2 years and my original thoughts around HOPE
VI will be--was that we needed not only a new fiscal
architecture but a new social architecture. Very much along
your lines which was getting rid of the zip codes of poverty
and pathology, enlisting the tenants in a way to community
building and personal capacity building. And that we would be
creating a new social architecture building on family, always
building on family. Now the program expires in 2 years, but I
would like to look ahead.
Now I am not into automatically renewing or rubber stamping
or whatever. We have had a lot of experiences and I think most
of it has been good. There has also been other problems. I
wonder, what are you, what within the Department are you doing
in terms of the anticipated expiration of HOPE VI? Are you
looking to have a task force? Are you looking at lessons
learned? Best practices? What it meant to people? What were
some of the shadow sides like the reconcentration in
neighborhoods and therefore creating hollow opportunities
rather than real opportunities? I wonder what your thoughts are
on proceeding.
Mr. Martinez. Senator I agree with you that we should be
looking forward and I must confess to you that having only a
recent tenure at the Department that we really have not begun a
serious process of analyzing HOPE VI. The fact is that is an
area we should address. I think the issues that you bring to
bear are all that should be on the table. We should look at all
of those issues as part of how we approach continuation of HOPE
VI.
But let me also add to that that I think it would be a
great opportunity for us to look to the faith-based and
community organizations that the President intends to engage in
a more direct way, and partnership with us to look into this
area as to how we might accomplish a better mix of residential
areas within the communities of the relocation of the HOPE VI
residents and even these new properties that are emerging.
I believe that there is a limited amount that government
can do in order to make people live in certain places. I think
community-based organizations and some of our faith-based
organizations might be in a better position to provide
assistance as we try to not only work on the relocations, but
also work on the whole social structure that is necessary for
these families to be successful.
I would hope that we can bring them into the equation as we
look to the future. But I think clearly we should have a task
force that would work closely with the Congress in going
forward with a program that I think has been largely seen as
incredibly successful. We also need to make sure it goes
forward in a way that makes it even better and tweaks those
areas that I think tweaking is needed.
Senator Mikulski. Well, first of all Mr. Secretary, those
lights mean again that we are going to have a vote. And I
anticipate we adjourn we would be through for the day. So let
me just move quickly here. First of all on HOPE VI, there has
been research done. Urban Institute done a lot of evaluation
and Dr. Arthur Napperstack has put in a lot of time. I would
hope that there would be a task force, just looking ahead.
And also, sir, I am looking ahead to the large urban
counties. Often programs have been concentrated in cities. And
in big cities we had the big public housing. This HOPE VI was
in response to the distressed public housing and a task force
on this.
Now when I go into my suburban communities, and
particularly those that are so-called urban beltway
communities, what we have found is that landlords are running
public housing by proxy. They have taken large apartment
buildings, rent only to Section 8. They take the money but they
do not do any of the maintenance. They become again public
housing by proxy.
I think the urban counties are going to talk with you about
that again. This is a dialogue that will go on between you and
I and the committee and the authorizers and so on. I am not
looking for new programs, government as Big Brother, or
permanent brother. But I think we need to look also at what is
happening in our older communities and also where public
housing exists by proxy in which there are these large
apartment units, which now quite frankly I have got county
executives--your kind of guy you know--that wants me to help
them buy them and tear them down.

FAITH BASED INITIATIVES

So we have got a lot cooking. But before we break, first of
all, thank you so much for the community tech initiative, I
think it is empowerment. See I am a self-sufficiency advocate.
So it is not only about housing. It is about personal capacity
housing and strengthening neighborhoods. Now could you share
with us, for my last question, what is the President's Faith-
Based initiative for HUD?
Mr. Martinez. Well let me say that I think is the most
exciting thing that will be coming about as a result of this
Administration. I think it is the opportunity to empower Faith-
Based organizations to work in close partnership with
government to provide those kinds of services as we have been
discussing here today. I think that the President's intent is
to ensure that as we set our Office at HUD and other offices in
the various five agencies that are involved with the Faith-
Based offices, that we will have a close connection with
private sector, with the not-for-profit, and the community-
based organizations--some of which might not be animated by
faith--in order to deliver the services that government alone
cannot do.
So it is about bringing in a close working partnership. It
is not about taking a role of government and making it
paramount or eliminating the role of government, but taking
government to do what it can, but then also allowing these
organizations--like Catholic Charities which you and I are so
familiar with--to work in the fullness that they can.
We have been doing it for years in many ways as you pointed
out. The Jewish communities, the Methodist communities, and the
Catholic communities have had elderly housing that has been
very successful. It is replicating that model again and again
and again as we attempt to deliver the whole gamut of social
services in our society. I think it has got great promise. I am
very, very positive about it. Our faith-based office at HUD is
already up and running. It is all still very embryonic, but I
think the hope and the potential that it has, I think is
tremendous.
Senator Mikulski. Is this new money?
Mr. Martinez. Well, it's not now new money. There will be,
I think, programs that will be geared to them. But it isn't new
money in order to initiate the current offices. We do have
certain dollars that we have earmarked for the office at HUD to
be functioning. But it isn't new money in the sense of a new
set of grants that are going to be awarded or something like
that.
Senator Mikulski. Is this some kind of catcher's mitt? In
other words, churches who say how can I get involved with HUD,
build my community and so on, is this like a gateway into HUD?
Mr. Martinez. It is. And it is also the reach out by HUD.
It is the going to people like Reverend Lutz in Philadelphia
who are doing so much to revitalize their communities, to
engage them and say here is what HUD has available. How can we
work with you?
Senator Mikulski. I want to give my colleague time.
Senator Bond. Thank you very much.
Senator Mikulski. We have a lot to talk about with that.
Senator Bond. Again this has been very helpful and we
sincerely appreciate it. I just noticed in your written
statement, Mr. Secretary, that you are happy to announce that
Section 8 voucher holders will be able to use up to one year's
worth of assistance toward a down payment on a home because of
the American Homeownership and Economic Opportunity Act. Permit
me to call your attention to Title 3, Section 301, paragraph A,
sub-paragraph 7: Down payment assistance may provide assistance
for the family in the form of a single grant as a contribution
towards a down payment in connection with a purchase of a
dwelling to the extent provided in advance in appropriations
acts.
So if you wouldn't mind waiting until we appropriate funds
for that before you go down that road, I think you would save
us all some problem. We believe in homeownership, but we need
to make sure that we can include that in the appropriations act
before you do it.
Mr. Martinez. Yes sir. We just wanted to be ready for when
the money is there.
Senator Bond. Okay, we will work with you anyway we can. We
very much appreciate it and looking forward to working with
you. As we all know, even before this hearing, there are lots
of interesting challenges which are going to make it a very
rewarding and exciting several months. We thank you for your
willingness to take on this very important responsibility.

conclusion of hearings

Mr. Martinez. I look forward to working with the Committee.
Senator Mikulski. Mr. Martinez, I do have one issue, which
I will give to you--FHA loan limits in Howard County. They are
being treated like Baltimore although they are closer to
Washington. Let me hand this to you. This committee--first of
all we thank you and we thank you for your patience. Again we
apologize. This concludes not only this hearing but all of the
hearings for VA/HUD for fiscal year 2002. And on this, the
subcommittee stands recessed and we will be seeing everybody as
we mark up.
[Whereupon, at 4:20 p.m., Thursday, June 14, the hearings
were concluded, and the subcommittee was recessed, to reconvene
subject to the call of the Chair.]
NONDEPARTMENTAL WITNESSES

[Clerk's note.--The following testimonies were received by
the Subcommittee on VA, HUD, and Independent Agencies for
inclusion in the record. The submitted materials relate to the
fiscal year 2002 budget request.
The subcommittee requested that public witnesses provide
written testimony because, given the Senate schedule and the
number of subcommittee hearings with Department witnesses,
there was not enough time to schedule hearings for
nondepartmental witnesses.

ENVIRONMENTAL PROTECTION AGENCY

Prepared Statement of the University Corporation for Atmospheric
Research (UCAR)

On behalf of the University Corporation for Atmospheric Research
(UCAR) and the university community involved in weather and climate
research and related education, training and support activities, I
submit this written testimony for the record of the U.S. Senate
Committee on Appropriations, Subcommittee on VA, HUD and Independent
Agencies for the fiscal year 2002 budget.
university corporation for atmospheric research
UCAR is a non-profit, university membership consortium composed of
66 North American institutions that grant the Ph.D. in atmospheric,
oceanic, and related sciences. It is a Colorado-based corporation that
manages and operates the National Center for Atmospheric Research
(NCAR) and the UCAR Office of Programs (UOP). UCAR is supported by the
National Science Foundation (NSF) with additional funding from the
National Aeronautics and Space Administration (NASA), the National
Oceanic and Atmospheric Administration (NOAA), the Department of Energy
(DOE), the Environmental Protection Agency (EPA), the Department of
Defense (DOD), and the Federal Aviation Administration (FAA). In
addition to its member universities, UCAR has formal relationships with
approximately 100 additional undergraduate and graduate schools
including several historically black and minority-serving institutions
and 38 international universities and laboratories. The UCAR mission is
to support, enhance, and extend the capabilities of the university
community, nationally and internationally; to understand the behavior
of the atmosphere and related systems and the global environment; and
to foster the transfer of knowledge and technology for the betterment
of life on earth.
introduction
Now, more than at any other time in our nation's history, our
security, our quality of life, and our economy depend on our
investments in science and technology. The President's budget request
states that, ``Scientific knowledge is becoming the most sought after
commodity in the world. The U.S. ranks only 6th among OECD nations in
the share of GDP devoted to research and development.'' Yet the
Administration's request for nonmedical scientific research for the
nation does not even keep pace with the rate of inflation. The recently
released report of the Hart-Rudman Commission on National Security
supports that statement, as do leading economists, including Alan
Greenspan, who agree that federal R&D investments have fostered the
technological progress that has produced more than half our nation's
economic growth over the past 50 years. Last year, Congress made
genuine bipartisan commitments to strengthen science, engineering and
long-term growth by significantly enhancing basic research investments
across agencies. But the Administration's proposed budget for fiscal
year 2002 falls short of constructing a strong and balanced science
portfolio for the country.
national science foundation (nsf)
For educational progress to be continued and enhanced, and for new
scientific achievements to be realized, the fiscal year 2002 NSF budget
simply must exceed the Administration's total request. The
Administration's budget request for NSF states, ``The productivity of
the U.S. scientific and engineering community--depends critically on
NSF support of fundamental research.'' But the proposed budget includes
only a very modest 1.3 percent increase for the agency, or $4.472
billion, an amount insufficient to cover even the cost of inflation.
Last year, Congress wisely set a course to double the funding for the
agency over five years when it provided a 13.6 percent increase. I ask
the Committee to make a second installment on your fiscal year 2001
investment by supporting a 15.0 percent increase for a total NSF budget
of $5.14 billion in fiscal year 2002. This is an increase that the
science community has the capacity to use immediately and well. Each
year NSF receives approximately 30,000 proposals and has the resources
to fund about 9,000 of them. Nearly $2 billion worth of proposals rated
very good to excellent through the merit review process go unfunded.
Recent national competitions have produced success rates as low as 7
percent, not because of a paucity of excellent proposals, but because
of lack of adequate funding. These low proposal success rates reflect a
capacity for progress in this country that is not being realized.
A 15 percent increase can also be productive in terms of the NSF
grant size and duration. Currently, grants average approximately
$106,000 over three years. I am pleased to see the Administration
directive to the Foundation for a study involving U.S. research
universities in determining whether increasing the average grant size
and duration will impact research productivity in a positive manner.
UCAR and its university members look forward to the opportunity to work
with NSF on the Administration's suggestion to examine this issue.
Within the NSF, I would like to comment on the following specific
initiatives and programs:
Research and Related Activities (R&RA)
Regarding R&RA programs, the budget request language states,
``These activities support areas of inquiry critical to long-term U.S.
economic strength, security, and quality of life. Research activities
spur new knowledge, ideas, tools and approaches that open doors to
understanding and solving problems and offer increased opportunities
for economic growth.'' Yet the request for R&RA, the heart of the
nation's nonmedical basic research budget, is 0.5 percent below the
fiscal year 2001 Current Plan numbers. This decrease is then reflected
in the budgets of all the NSF Research Directorates. As the budget
request states, ``NSF investments in R&RA reflect the Foundation's
three strategic goals: People, Ideas and Tools,'' the three
cornerstones of education and opportunity for all citizens, scientific
research achievement, and technological advancement. I urge the
Committee to allocate for Research and Related Activities an amount
that reflects an overall 15 percent increase for NSF as requested
above.
Geosciences (GEO) Directorate
The fiscal year 2002 request for GEO is 0.6 percent below fiscal
year 2001 Current Plan numbers. I do not understand how this decrease
can possibly ``support the operation and enhancement [my italics] of
national user facilities,'' as the request language states. The GEO
Directorate is this country's principal source of funding for
university-based research in the atmospheric, earth and ocean sciences.
GEO activities address the nation's ability to understand, predict and
respond to environmental events and changes. Through involvement in
such interagency programs as the U.S. Weather Research Program (USWRP),
the National Space Weather Program, and the U.S. Global Change Research
Program (USGCRP), GEO research advances our ability to predict natural
phenomena such as severe storms, solar variability, and climate
patterns that impact society. The potential threat of weather and
climate disruptions to our economy is significant; both the Federal
government and the private sector estimate that over $2 trillion of the
U.S. gross national product is affected annually by weather and
climate. Given the current struggles within our energy sector and
within the economy as a whole, this is an unfortunate time to decrease
research efforts that could help to anticipate weather and climate
variability more effectively. I urge the Committee to allocate for the
Geosciences Directorate an amount that reflects an overall 15 percent
increase for NSF.
Atmospheric Sciences (ATM) Research Support.--The fiscal year 2002
request for ATM research support is 1.0 percent below fiscal year 2001
Current Plan numbers. This ATM activity funds university research that
advances our understanding of the Earth's atmosphere as well as its
interactions with the Sun. As our ability has increased to do more
complex research on solar-terrestrial interactions and the interactions
of the earth's systems, so has the cost of necessary research tools
such as computation time and instrumentation. If enacted, the fiscal
year 2002 request for ATM will compound this problem and cause a
setback for university research including the improvement of models to
advance predictions of atmospheric and Earth system processes, and the
further examination of biogeochemical cycles and human impacts on
weather and climate. I urge the Committee to allocate for Atmospheric
Sciences Research Support an amount that reflects an overall 15 percent
increase for NSF.
National Center for Atmospheric Research (NCAR).--Funded within
ATM, this world-class center for atmospheric research supports the
entire atmospheric and related sciences community through observational
and computer facilities, instrumented research aircraft, and an
extensive visiting scientist program. In fiscal year 2001, more than
1,500 researchers and students will use the NCAR facilities and
approximately 150 visiting scientists will stay for extended periods.
The Administration's request for fiscal year 2002 decreases the NCAR
budget by 1.1 percent based on Current Plan fiscal year 2001 amounts. I
urge the Committee to allocate for the National Center for Atmospheric
Research an amount that reflects an overall 15 percent increase for
NSF.
As a contribution within the GEO budget to the NSF Learning for the
21st Century overall priority area, we appreciate the $2.45 million
being allocated for innovative approaches to education including the
development of the geosciences community's Digital Library for Earth
Systems Science (DLESE). We would also like to point out the UCAR
program, Significant Opportunities in Atmospheric Research and Science
(SOARS). SOARS, funded directly by ATM within GEO, is having a positive
impact on the number of ethnically diverse atmospheric sciences
graduate students through its model mentoring approach and research
orientation. It is an excellent example of NSF's efforts to produce a
diverse, internationally competitive workforce to meet the challenges
of this new century.
Computer and Information Science and Engineering (CISE)
Within R&RA, CISE computer science research has contributed to
advances in computers, software, and computer use that have benefited
almost every academic discipline and revolutionized the manner in which
much research is conducted. CISE provides advanced computing and
networking capabilities needed by academic researchers for leading
research in all science and engineering fields. The Administration's
request for CISE is down 1.6 percent from the fiscal year 2001 numbers.
I urge the Committee to allocate for Computer and Information Science
and Engineering an amount that reflects an overall 15 percent increase
for NSF.
Major Research Equipment (MRE) Programs
In the Tools section of the budget request, it is stated that,
``Investments in research facilities are necessary for scientists and
engineers to do world-class research.'' Yet the MRE account, the major
NSF resource for nonmedical research facilities in this country, is cut
by 20.6 percent from fiscal year 2001. I urge the Committee to examine
the Major Research Equipment account cuts carefully and reconsider
funding for programs that have been planned carefully and that promise
tremendous advances in this country's research capabilities.
Terascale Computing Systems
As part of the Information Technology Research Initiative included
within the MRE account, I urge the Committee to support the President's
fiscal year 2002 request of $55.0 million for Terascale Computing
Systems that will enable U.S. researchers to gain access to leading
edge computing capabilities. Our nation lags behind other developed
nations in high-end computing, a situation that has already adversely
affected the atmospheric science community's ability to run the complex
models necessary to understand and predict regional and global climate
change. As the atmospheric sciences community strives to learn more
about the effects of solar variability on the earth's atmosphere, space
weather that impacts satellite communications, climate variability and
weather patterns, the need for computational power exceeds capacity.
Any advances in computing capacity will return significant scientific
advancements in many fields. In the atmospheric sciences, ITR promises
progress in atmospheric modeling that will enable us to effectively
address many of our nation's weather and climate policy issues.
High-performance Instrumented Airborne Platform for
Environmental Research (HIAPER)
While we support the great advances in science and technology that
all MRE funded programs represent, we were disappointed as a community
to learn that HIAPER was not included in the fiscal year 2002 budget
request. Following approval of the program by the National Science
Board, funding for this modern research aircraft was begun by Congress
in fiscal year 2000 and continued in fiscal year 2001. We sincerely
hope that funding is continued since at least one other aircraft
currently in service at NSF will end its useful lifetime in the next
three years, and all delays in procurement and instrumentation result
in higher costs. We look forward to HIAPER's completion and to its
vital contribution to our understanding of how severe weather and other
climate phenomena develop and impact the nation and the globe.
Earthscope
I encourage the Committee to consider the Earthscope project for
future funding. This geophysical instrument array will allow scientists
to make major advances in our knowledge and understanding of the North
American continent. The initial Earthscope activity, deployment of
high-capability seismometers throughout the United States, will improve
our resolution of the subsurface structure and lead to advances in
understanding fault conditions and the rupture processes of
earthquakes.
Education and Human Resources (EHR)
I urge the Committee to support the President's request of $872.0
million in fiscal year 2002 for Education and Human Resources, an 11.0
percent increase over fiscal year 2001. As we enter the 21st Century,
the importance of science education at all levels and for all people is
crucial. Within the budget request language pertaining to education, I
applaud the Administration's call to strengthen NSF's ability to
leverage institutional partnerships for the improvement of math and
science education. I support also the request for increased stipends to
attract our best graduates for research and teaching fellowships.
However, I ask that these increases not be realized at the expense of
NSF's current very successful overall programs of the Education and
Human Resources Directorate, the Major Research Equipment account
(addressed above), or the core research directorates (such as GEO and
CISE described above).
The Administration's recommended new Math and Science Partnership
Initiative is begun with $200 million in fiscal year 2002, yet the
total requested increase for EHR is only $86 million. I ask that the
Committee ensure that proven EHR programs with excellent track records
such as Teacher Enhancement, Informal Science Education, or
Undergraduate Education not be penalized.
National SMETE Digital Library
We urge the Committee to support the President's request of $26.80
million for the National SMETE Digital Library (NSDL) within the EHR.
While this is a 1.3 percent decrease from fiscal year 2001, our
community appreciates greatly the advances that the NSF digital library
effort is providing for science education. The NSDL long-term goal is
to produce a digital library of high-quality educational materials at
all levels in science, mathematics, engineering and technological
education (SMETE). This research, teaching and learning resource is
being developed in response to needs articulated by the academic
community and corporate leaders. NSDL presents a tremendous opportunity
to improve access to superior instructional materials and advanced
classroom technologies.
U.S. Global Change Research Program
The President's request for USGCRP activities within NSF is $187.3
million for fiscal year 2002. This amount is level with fiscal year
2000 and fiscal year 2001 allocations and therefore represents the
continued erosion of NSF's contribution to this interagency program
that addresses interactions among physical, biological, ecological, and
human systems at various scales. Working with national and
international research institutions, this program allows the
atmospheric sciences community to improve prediction capabilities for
climate fluctuations between excessively wet and dry periods, and for
long-term climate change. This research is a critical investment for
the future of this nation, its economy, and the health and safety of
its citizens. I urge the Committee to allocate for the U.S. Global
Change Research Program an amount that reflects an overall 15 percent
increase for NSF.
NSF Priority Areas
Biocomplexity in the Environment (BE)
I urge the Committee to support the President's fiscal year 2002
request of $58.10 million for Biocomplexity in the Environment. This
interdisciplinary initiative will advance our ability to understand the
complex systems that are structured or influenced by living organisms
and the interactions within biological systems and physical processes.
We are confident that BE efforts will lead eventually to better
understanding of human impacts on the environment and enhanced
predictability of environmental systems, including climate, that will
assist environmental decision makers and contribute to society's
ability to adapt to natural hazards.
Information Technology Research (ITR)
I urge the Committee to support the President's fiscal year 2002
request of $272.53 million for Information Technology Research and to
support the NSF in its role as leader of this multi-agency initiative.
This investment will produce tools and capabilities that should benefit
all scientific fields and much of society in the next several years.
ITR promises innovations that will provide efficiencies in the way
university researchers process and access data, communicate with
collaborators, and share research results. Given the enormous earth
systems and solar-terrestrial data sets that are critical to
atmospheric sciences research, it is possible that the ITR
computational effort could advance our field of science through
innovative processing, archiving, and networking methods which we have
not yet imagined.
Nanoscale Science and Engineering
I urge the Committee to support the President's fiscal year 2002
request of $173.71 million for Nanoscale Science and Engineering.
Nanotechnology promises to revolutionize our control of matter in areas
such as information technology and to change the way in which most
products are made. We look forward to the manner in which it may
advance research in the field of the atmospheric sciences, particularly
through possible major breakthroughs in the development of new research
capabilities involving technology such as computers, radars, and
satellites.
21st Century Workforce
I urge the Committee to support the President's fiscal year 2002
request of $125.51 million for the 21st Century Workforce. In order to
remain a global leader in most scientific fields and competitive in all
areas, this country must offer the opportunity for all of our citizens
to increase their understanding of science, mathematics, and technology
and to meet the challenges of the dramatic global transition to a
technology-literate workforce. The SOARS program mentioned above is a
good example of a highly successful effort to broaden involvement in
the sciences. The 21st Century Workforce is an important focus that
could help to create and enhance effective programs such as SOARS.
Blue Ribbon Panel
I would like to express my support for the section of the proposed
NSF budget calling for the National Academy of Sciences to create ``a
Blue Ribbon Panel to assess the effectiveness of the current
organization of federal support for astronomical sciences.'' Studies of
this nature can be extremely constructive and we look forward to
participating in the process. However, the wording of the President's
original blueprint budget stating that the panel would assess ``. . .
the pros and cons of transferring NSF's astronomy responsibilities to
NASA,'' is troubling. NSF and NASA each contribute their own degree of
expertise, training and infrastructure to the exploration of the
universe. NSF addresses astronomy using ground-based equipment and NASA
builds and operates space-based instruments. Both of these arenas are
critical to the discovery of our universe's mysteries and scientific
wonders. Transferring astronomical research currently performed at NSF
into NASA's portfolio, would restrict any new understandings that come
from a complimentary, two-tiered approach. I want to express my sincere
hope that our nation continues its diversified approach to astronomy as
well as other sciences.
national aeronautics and space administration (nasa)
The Administration's request for NASA overall is $14.5 billion, a
2.0 percent increase above fiscal year 2001 estimates. As with NSF's
budget, this increase obviously does not meet inflation and will
necessitate the reduction and/or elimination of some excellent
programs. I urge the Committee to support NASA with a modest 5.0
percent increase, or a total of $15.2 billion, for fiscal year 2002.
Science, Aeronautics and Technology
This year, NASA instituted a new budget structure eliminating the
Mission Support category and moving those funds into the Human Space
Flight accounts as well as those of Science Aeronautics and Technology.
For purposes of comparing fiscal year 2002 proposed numbers with fiscal
year 2001 estimates, I will comment on aspects of the Science,
Aeronautics and Technology account using the old, fiscal year 2001
budget structure that includes Mission Support as a separate account.
Based on the fiscal year 2001 budget structure, the request for
Science, Aeronautics and Technology would be funded at $6.17 billion, a
real cut of 0.23 percent. (This appears under the new structure as a
16.4 percent increase.) I urge the Committee to support a 5.0 percent
increase, or $6.49 billion, for Science, Aeronautics and Technology in
fiscal year 2002 in order to support the following NASA programs that
are of critical importance to the scientific advancement and security
of our nation.
Space Science Enterprise
The extraordinary mission of the Space Science Enterprise, to solve
mysteries of the Universe, explore the Solar System, discover planets
around other stars, understand the behavior of the Sun and its
interaction with Earth, and search for life beyond Earth, is of great
interest to the public as well as the academic community. These
challenges form the basis of the country's space science program over
the next several decades. I urge the Committee to support the
Administration's request of $2.45 billion for Space Science, a 5.7
percent increase over fiscal year 2001. (The request appears in the
newly structured budget as $2.786 billion, or a 20 percent increase.)
Sun Earth Connections (SEC).--The SEC program within the Space
Science Enterprise formulates missions to investigate the effects of
solar phenomena on Earth and on the space environment. Its overall goal
is nothing short of understanding the changing Sun and its effects on
the Solar System, life and society. SEC contains several missions that
promise great benefit to society, and are of particular importance to
our community including the following:
--Thermosphere, Ionosphere, Mesosphere Energetics and Dynamics
(TIMED), the first science mission of Solar Terrestrial Probes
within SEC, will help us gain a more detailed understanding of
the transport of chemicals that influence climate change, as
well as a better understanding of space weather variables that
impact spacecraft, astronauts in space, and communications. The
development phase of TIMED is complete and the launch of the
TIMED mission is expected to occur this summer. I urge the
Committee to support the fiscal year 2002 request of $8.4
million for TIMED mission data analysis.
--Solar-B, scheduled to launch in 2005, will provide data to help
understand events such as solar mass ejections that can
endanger astronauts in orbit and hit Earth's atmosphere with
enough force to cause expensive communications disruptions. I
urge the Committee to support the fiscal year 2002 request for
$21.9 million for the continued NASA development of the Solar B
mission's instrument subsystems.
Solar Probe.--I understand that difficult decisions must be made
during any budget cycle, but I must express the atmospheric science
community's disappointment that Solar Probe, one of the most exciting,
promising NASA programs now under development, is eliminated under the
requested Space Science Enterprise budget. I focus on it because it is
crucial to unlocking the mysteries of the solar corona which is
composed of the most energetic material in our visible solar system. If
this program is eliminated, we will lose humankind's first look at the
poles of the Sun, an opportunity to better understand the space weather
disturbances that affect our technological and military infrastructure,
and years of development of a mission that has remained within budget.
I urge the Committee to continue to fund Solar Probe without moving
resources from other planned solar and space physics programs.
Earth Science Enterprise (ESE)
ESE's mission is to develop space-based observation systems to
improve our understanding of the complex Earth system and its response
to natural and human-induced changes. Analysis of ESE data enables
improvement of the prediction of climate, weather and the occurrence of
natural hazards. The fiscal year 2002 budget request states that,
``Earth system science is an area of immense benefits to the nation,
yielding new knowledge and tools for weather forecasting, agriculture,
water resource management, urban and land use planning, and other areas
of economic and environmental importance.'' Such critical work should
not be diminished, particularly at a time when our country's
environmental and economic resources are under tremendous pressure. The
fiscal year 2002 budget request proposes $1.51 billion, a 13.9 percent
cut from fiscal year 2001, for the Earth Science Enterprise. (This
appears as a 2.0 percent increase in the new budget structure.) I urge
the Committee to support the Earth Science Enterprise at $1.56 billion,
or a 5.0 percent increase, in fiscal year 2002.
Earth Observing System (EOS).--To answer the critical question,
``How is the Earth changing and what are the consequences for life on
Earth,'' ESE deployed the Earth Observing System (EOS) satellites to
collect data on the major interactions of the land, oceans, atmosphere,
ice and life that comprise the Earth system. The first phase of EOS
deployments is approaching completion in the next several years, so it
is understandable that the EOS budget request is down for fiscal year
2002. However, I do hope that the proposed, major cut of 10.2 percent
does not jeopardize beneficial programs already underway such as the
following:
--Aura.--The Aura mission (formerly called the EOS Chemistry Mission,
or CHEM) of EOS focuses on the impact of greenhouse gases on
the global climate and is therefore key to our understanding of
climate change. In 2002, all of the Aura instruments will be
delivered and integrated onto the spacecraft, and observatory
level testing will begin leading to the scheduled launch in
2003. In addition to climate change information, this mission
will provide data to answer such critical questions as whether
the Earth's ozone layer is recovering and whether air quality
is deteriorating around the globe. I urge the Committee to
support the fiscal year 2002 budget request of $80.6 million
for Aura instrument completion.
EOS Follow-On.--As the first cycle of EOS missions comes to a
close, EOS Follow-On missions are being planned. This next generation
of missions will provide new technology and space systems to continue
global climate change observations, continue the global land cover
change data set, and create improved observations of atmospheric
phenomena such as global precipitation, ocean wind vectors, and aerosol
levels. I urge the Committee to support the Administration's fiscal
year 2002 request of $129.6 million for EOS Follow-On.
aero-space technology enterprise
Aviation Safety Program
The Aviation Safety Program (AvSP) within the Aerospace Technology
Enterprise has a goal of radically improving air travel, with a major
emphasis on improving safety. The budget request for AvSP cuts the
program from $70.85 million in fiscal year 2001 to $70.0 million in
fiscal year 2002. In real dollars, this is a reduction of almost 4.0
percent. This very small piece of the NASA budget covers six critical
areas, one of which is Weather Accident Prevention (WxAP), a program
that develops and supports the implementation of technologies to reduce
fatal aviation accidents and delays caused by weather hazards.
The world-wide demand for air travel is expected to more than
double in less than two decades. If the current accident rate remains
the same as it is today, the increased traffic volume could result in
approximately one major accident per week. According to the National
Transportation Safety Board, approximately 30 percent of all aviation
accidents are weather related, and 37 percent of the fatal accidents
are weather related. AvSP's specific safety goal is to develop and
demonstrate technologies, many of them through the WxAP, that
contribute to a reduction in aviation accident and fatality rates by a
factor of five by the year 2007. I urge the Committee to support
programs such as the WxAP that are critical to all air travelers by
providing the Aviation Safety Program a responsible 5.0 percent
increase, or $74.4 million, for fiscal year 2002.
conclusion
On behalf of the atmospheric sciences community, I ask that you
continue the commitment the Committee made last year to invest
aggressively in our country's future. During this rare time of budget
surpluses, we can afford to double NSF's budget and to continue NASA
programs that promise discoveries that will benefit and advance
society. History has shown that these investments will pay tremendous
dividends to the country in lives saved, technologies developed, and
American leadership sustained throughout the world.
On behalf of the UCAR community, I want to thank the Committee for
the important work you do for U.S. scientific research, education, and
training. We appreciate your attention to the recommendations of our
community concerning the fiscal year 2002 budget of the National
Science Foundation and the National Aeronautics and Space
Administration.
______

Prepared Statement of the City of Newark, NJ

Mr. Chairman and members of the Subcommittee, thank you for giving
the City of Newark, New Jersey an opportunity to submit for the record,
about projects under your jurisdiction which are very important to the
people of Newark and the surrounding region. The support of this
Committee has been critical in the past, and we wholeheartedly thank
you for your aid to projects that have truly impacted on the people of
Newark and our economy. Newark's infrastructure needs are vital to
enabling us to maintain our position as a regional center for commerce,
government and entertainment.
Newark is a City with vast potential, and there is a renewed
vitality and sense of optimism in Newark. Newark is the largest City in
New Jersey, with 275,221 residents in 1990, and ranked sixty-third in
the nation in population. Newark's twenty-four square miles of land
makes it the smallest of the country's top one hundred cities, with the
fifth highest population density in the nation. Much of our land is
taken up by Newark International Airport, higher education and medical
facilities, and other institutional uses, increasing the density of our
actual ``livable'' space. As the physical crossroads of the Northeast
Corridor, the future economic viability of Newark is inextricably
dependent upon the continued modernization and expansion of our
intermodal transportation system, as well as systems which support
these endeavors. Improvements that impact our roadway network, our rail
system, and our port and airport facilities directly translate into
jobs and economic prosperity for our City, State and Region. The
proposals for economic development activities outlined herein may be
related to water infrastructure projects, but they will actually
translate to improvements in the quality of life for residents of and
visitors to Newark.
The first project for which we ask your assistance is an essential
wastewater/wet weather regional infrastructure improvement. It will
have a tremendous impact on the efficiency and future expansion of
Newark International Airport, the ability of Amtrak and New Jersey
Transit to maintain railroad service in wet weather, and redevelopment
of industrial property close to the Airport, known as the Airport
Support Zone. We seek essential help to address the ever-worsening
overflow and flooding of the combined sewer overflow system which runs
through this area, in order to prevent flooding and the threat of
service disruptions.
The Queens and Peddie Ditches are the principal stormwater
conveyances for the East and South Wards of the City of Newark. Both
ditches feed in to the Southside Interceptor and are in desperate need
of cleaning and reconstruction. The regulating chamber at the
intersection of the Queens Ditch and the Southside Interceptor also
needs massive reconstruction. In their current state, these conveyances
do not provide the necessary stormwater capacities. An average five-
year storm event will surcharge these ditches and pose a major threat
to the operation of Newark Airport and the Major Northeast Amtrak Rail
link. The surcharge of the ditch is also the primary cause for street
flooding and sewer backups in the South Ward of the City of Newark.
Peddie Ditch and Queens Ditch are the two drainage channels primarily
responsible for the regional flooding. These ditches are heavily silted
and dysfunctional, the culverts are in disrepair and obstructions need
to removed. The result is severe flooding in critical areas, including
a large urban park, the Newark Airport Support Zone, the Airport
perimeter, and along Amtrak's Northeast Corridor Line. During Hurricane
Floyd, flooding from the Peddie Ditch caused suspension of rail
services. This is a regional challenge, but jurisdictionally, falls to
the already overburdened City of Newark to resolve.
The project is also critical to the development of the warehouse/
industrial complex along Frelinghuysen Avenue and the Waverly Yards
property to support expansion of Newark Airport. Reconstruction of the
South Side Interceptor will eliminate the flooding problems on
Frelinghuysen Avenue, especially in the vicinity of the critical
connections with Route 22 and I-78. The removal of standing water will
enhance the connections of this area to Newark Airport and further its
development as an Airport Support Zone. The rehabilitation of the
Queens Ditch will reduce flooding in the vicinity of International Way
and Waverly Yards. This area is located immediately adjacent to the
Northeast Corridor, the Airport Monorail Extension, and the proposed
conference center and hotel complex.
The estimated cost of all required work is approximately $20
million. Congress has recognized the validity of the Queens-Peddie
Ditch initiative by providing $475,000 through the fiscal year 2000 VA/
HUD Appropriation. This has enabled us to initiate preliminary studies
and design efforts to alleviate the flooding problems. The City now
respectfully requests $20 million for completion of this regional
project. While the City of Newark has raised the maximum bonding
financing that it can to invest in its aging and deteriorating
wastewater system, this regional project is beyond our capability to
undertake without federal assistance. Critical federally-supported and
regulated facilities--the airport and rail lines--are repeatedly
threatened by the flooding of the Queens/Peddie Ditch system.
The second project I will briefly describe concerns the generation
of hydroelectric power through the addition of in-line turbines at
existing water transmission facilities. Newark has an extensive water
collection and treatment system, spread over a large area in northern
New Jersey. The City's Pequannock Water Treatment facilities and
aqueduct downstream of the Charlotteburg Dam and Reservoir present a
unique opportunity to recover energy that is currently dissipated in
the diversion of water through various dam gatehouse and intake
structures, pipeline, and downstream screen chambers. Further, the
potential hydroelectric power and energy represented in the conveyance
could, most of the time, offset the existing power and energy
requirements of the water treatment facilities themselves, including
the loads present at dams and treatment facilities. With this potential
in mind, the City performed an evaluation of the power production and
energy generation potential of its system.
This project proposes to construct a Water Turbine Hydroelectric
Facility at the City's Cedar Grove balancing reservoir. Utilizing the
existing infrastructure, this proposed facility would take advantage of
the hydrostatic head on the transmission aqueduct between the West
Milford Treatment plant (elev. 700 feet) and the Cedar Grove Reservoir
(elev. 380 feet). This proposed facility would be capable of offsetting
the City's electrical operating expenses in additional to the needs of
the Water & Sewer Utility.
The proposed site lies alongside a power company easement which
makes connection to the grid quite simple. The fairly static flow
provided by the interceptor makes this a logical location for a turbine
regulator set up. The revenue realized by this venture could
potentially offset the cost to construct concrete storage tanks at the
Cedar Grove site in order to meet Federal compliance for the
elimination of open potable drinking water reservoirs. This method of
energy recovery would be the least invasive as it could be implemented
without significant disruption of our present system. It is estimated
that costs for planning and design will be $2 million, and construction
of the project will cost $10 Million, for a total of $12 million.
The assistance of this committee in funding these projects is
vital. The rehabilitation of the Queen's/Peddie Ditch system will
directly impact on service improvements for AMTRAK and Newark
International Airport, facilities which are critical links in Newark's
transportation network, and your support for them is crucial to our
continued economic development. And your support for innovative
hydroelectric energy generation will further enable the City of Newark
to impact on its own environmental and economic concerns. Your
attention and consideration of the needs of Newark, New Jersey are
deeply appreciated.
______

Prepared Statement of Rogene F. Henderson, Senior Scientist, LRRI, The
Lovelace Respiratory Research Institute

It is requested that the U.S. Environmental Protection Agency (EPA)
continue to support the National Environmental Respiratory Center, a
government-industry program to determine the apportionment of health
risks among individual air contaminants and their sources from
exposures of populations to complex air pollution mixtures. Funds for
the Center are requested in the fiscal year 2002 EPA appropriation. It
is further requested that EPA serve as the lead agency in coordinating
support for the Center from multiple federal agencies.
what is the national environmental respiratory center?
The National Environmental Respiratory Center (NERC) is a
laboratory research program to improve our understanding of the
contributions of individual air contaminants (and thus their sources)
to the health hazards of breathing complex mixtures of air pollutants.
Recognizing a serious gap in our understanding of air quality
health issues, Congress established NERC through the fiscal year 1998
EPA appropriation. The program was intended to address a set of common
fundamental scientific issues faced by multiple federal agencies,
states, and non-federal organizations. Accordingly, NERC is jointly
supported by these entities to spread costs and foster consensus
regarding research results. The Center is operated by the independent,
not-for-profit Lovelace Respiratory Research Institute (LRRI) in
Albuquerque, NM. LRRI has experience and facilities uniquely suited to
this mission, and longstanding, high credibility with both government
and industry in conducting and interpreting research aimed at
contentious, high-stakes issues.
NERC is the nation's sole laboratory program focused directly on
this issue.
what is the ``pollutant mixtures'' issue?
Simply stated, we do not understand how small concentrations of air
pollutants from many man-made and natural sources act together to cause
the health problems associated with dirty air. Conversely, we do not
have an acceptable ability to predict the health impacts, for better or
worse, of changing the composition of the complex air pollution
mixtures we actually breathe.
Environmental (and occupational) air quality regulations focus on a
limited number of single pollutants (eg, ozone), pollutant classes (eg,
particles), and pollution sources (eg, diesel engines), which are
reviewed and debated one at a time. In reaction, research programs have
also focused on one pollutant, pollutant class, or source at a time.
People never breathe only one pollutant, or pollutants from only one
source, at a time! People are really exposed to very complex, ever-
changing mixtures of air contaminants from many sources. Congress,
researchers, regulators, industry, and the public are increasingly
aware that the ``single pollutant'' approach does not provide a true
understanding of the relationship between air quality and health. This
``pollutant mixtures'' problem has recognized for decades, but has been
avoided by agencies and research organizations because of its
complexity and pressures to continue the status quo of the single-
pollutant, single source regulatory-research cycle.
Every one of the several air pollution epidemiology studies in the
U.S. and elsewhere during the past year that have examined more than
one air pollutant suggests that it is unlikely that any population
effect can be attributed solely to one pollutant or source. It is
likely that combinations of pollutants act together to cause effects.
Because the levels of most pollutants go up and down at the same time
due to meteorology, it is also true that the few routinely measured
pollutants may be blamed for effects caused solely or in part by air
contaminants that are not routinely measured.
The pollutant mixtures problem is a high-stakes issue. Correctly
estimating both the health-effectiveness and cost-effectiveness of air
quality management strategies aimed at specific man-made pollutants and
sources depends on our resolving this issue.
The problem is faced by many federal and non-federal stakeholders
for different reasons. EPA faces the problem in dealing with
environmental air quality. DOE faces the same fundamental problem in
understanding the role of energy-related emissions in the public health
burden, or how changing the composition of emissions will impact
health. DOD faces the same fundamental problem in dealing with their
emissions and site contamination issues. DOT faces the problem in
understanding how different transportation strategies might impact
public health. Multiple DHHS agencies face the problem. NIEHS has
concluded that risks from chemical mixtures can not be estimated
accurately from combining information from single-chemical studies.
NIOSH acknowledges the difficulty of dealing with mixed exposures of
workers. ASTDR is trying to place mixed exposures from waste sites into
context among other exposures. CDC's office of Smoking and Health is
trying to estimate whether changes in smoke composition from ``safer
cigarettes'' actually reduce health risks. Many sectors of industry
face similar problems.
All of these organization-specific dilemmas have a common
fundamental underlying problem: our present poor ability to understand
the health impacts of individual components of a complex exposure, and
thus how changes in the complex exposure are likely to impact health.
Although initiated because of environmental air pollution, the work of
NERC addresses this fundamental issue in a manner applicable to many
``mixture'' problems.
how does the center approach the problem?
Management Strategy
It was recognized from the beginning that the mixtures problem had
to be approached as a fundamental, or core, issue. It is impossible to
study the health effects of every possible mixture, so a strategy has
to be developed to understand the impacts of different classes of
chemical when contained in a mixture. Moreover, if the work is to be
responsive to the needs of many organizations, some having conflicting
interests, management of the program and interpretation of results must
be independent from sponsorship. Accordingly, a diverse, expert
External Scientific Advisory Committee (ESAC) was formed and vested
with authority for guiding development of the research strategy and
approving research protocols and summary of results. The research
described below was recommended unanimously by the ESAC, which is
listed in Table 1.

Table 1.--External Scientific Advisory Committee

Morton Lippmann, PhD, Chair, New York University
Gerald van Belle, PhD, University of Washington
Michael Bird, MSc, PhD, DABT, C.Chem, FRSC, International Agency for
Research on Cancer
John Vandenberg, PhD, U.S. Environmental Protection Agency
Bill Bunn, MD, JD, MPH, International Truck & Engine
Ron White, MST, American Lung Association
Glen Cass, PhD, Georgia Institute of Technology
Ron Wyzga, MS, ScD, Electric Power Research Institute
Jonathan Samet, MD, MS, Johns Hopkins University
Research Strategy
The Center's research strategy addresses the fundamental
``mixtures'' problem in a manner that has both long-term and short-term
pay-off. The key problem is a lack of a database of exposure vs. health
effect suitable for analysis in a manner revealing the roles of common
mixture constituents. Environmental air sampling does not provide
sufficient detail on exposure composition, and epidemiology does not
provide sufficient detail on health outcomes. Data from laboratory
studies using different protocols cannot be combined into a suitable
single database. The principal goal of NERC therefore, is to create and
analyze a database on mixture composition vs. health effects. The
database is being constructed by a series of studies applying identical
protocols and health measures to animals exposed by inhalation to
complex mixtures having different, but overlapping, compositions (just
like real air pollution). By using real-world, source-based pollution
mixtures, or exposure atmospheres, the program will also provide
important health comparisons among common pollution sources during the
several years required to build the combined database.
The health responses to twelve atmospheres will be measured in 12
separate, but identically-designed, studies (Table 2). The atmospheres
recommended by the ESAC include diesel (contemporary and outdated
engines and fuels) and gasoline (contemporary on-road, catalyst-
equipped and off-road) engine exhaust, road dust (paved and unpaved)
wood smoke (hardwood and softwood), cooking fumes (meat and vegetable),
tobacco smoke, and coal-fired power plant emissions. The atmospheres
were selected for their variations in composition, and for their
relevance to current air quality concerns. Measurements will include
over 400 physical and chemical properties of the atmospheres and over
200 health variables spanning the five general areas of concern listed
in Table 2. Four exposure levels of each atmosphere will be used,
including levels representing realistic human environmental exposures.
The basic experimental design, the several different animal ``models''
and the composition measurements were selected on the basis of
recommendations from peer workshops involving numerous federal and non-
federal scientists and technical experts.

TABLE 2.--NERC RESEARCH MATRIX
----------------------------------------------------------------------------------------------------------------
Defenses Heart &
Irritation & Allergies against Lung Cancer
Inflammation & Asthma Infection Function
----------------------------------------------------------------------------------------------------------------
Diesel exhaust (contemporary, outdated)........... + + + + +
Gasoline exhaust (on-road, off-road).............. + + + + +
Road dust (paved, unpaved)........................ + + + + +
Wood smoke (hardwood, softwood)................... + + + + +
Tobacco smoke..................................... + + + + +
Cooking fumes (vegetable, meat)................... + + + + +
Coal power plant.................................. + + + + +
----------------------------------------------------------------------------------------------------------------

what is the center's status and schedule?
The work of the Center is well underway. After pilot studies to
refine the experimental design, the study of the first atmosphere,
contemporary diesel emissions, is underway and will be completed during
fiscal year 2001. Preparations are underway for beginning the study of
the second atmosphere, hardwood smoke.
Data from each atmosphere and comparisons among pairs of
atmospheres will be published as each study is completed.
The time required to complete and analyze the combined database
depends on the level of funding secured. If funding is adequate to have
studies of two atmospheres ongoing in parallel, the database can be
built in five years. Some data analysis can be done concurrently with
completing the database, but analysis of the combined database will
require approximately a year after the data from the last atmosphere
are acquired.
what is the center's financial status and what support is being sought?
Completing the current research agenda within 6 years will require
approximately $6 million/year. Support is being sought from multiple
federal agencies and non-federal government and industry sources.
Significant progress has been made, but the critical level of funding
has not yet been reached. Our goal is to develop $5 million/year from
federal agencies complemented by $1 million/yr from non-federal
organizations.
Non-EPA sponsorship has grown continuously. Among federal agencies,
the Department of Energy's Office of Heavy Vehicle Technologies has
provided $300 thousand and the Department of Transportation has
committed $375 thousand in fiscal year 2001 funds to NERC. Non-federal
sponsorship has grown, and will approach $500 thousand by the end of
fiscal year 2001. Funds have been received from the California Air
Resources Board, American Chemistry Council, American Petroleum
Institute, American Trucking Association, California Trucking
Association, Caterpillar Inc., Cummins Engine Co., General Motors
Corp., John Deere and Co., Detroit Diesel Corp., ExxonMobil Corp., Ford
Motor Co., International Truck & Engine Co., Japanese Automobile
Manufacturers Association, Phillips Petroleum, Salt River Project,
Southern Co., and individuals. Discussions are underway with a number
of additional organizations.
EPA's continued involvement in this program is critical. EPA bears
the primary, although certainly not sole, mandate for the environmental
air contaminants NERC is studying. Moreover, EPA funding continues to
be the foundation upon which the remainder of the necessary funding is
being developed. A continued commitment from EPA is thus key not only
to continuing the program, but to securing continued funding from other
federal and non-federal organizations.
Dialogue is being sought among relevant agencies (EPA, DOE, DOT,
DOD, DHHS) to develop a multi-agency strategy for funding the program
in a planned, collaborative manner, in contrast to independent
contributions sought piecemeal by LRRI. It is unlikely that this
important program will fulfill its mandate without an improvement in
the stability and level of funding that could come from interagency
agreements to incorporate the program into multiple agency budgets.
Current and potential non-federal sponsors have noted their likely
increased willingness to commit support to the program if there is
evidence of a federal commitment to the program's success. In the view
of LRRI, it is logical that EPA play the lead agency role in this
interagency, government-industry program.
Lovelace respectfully requests that $3 million be designated for
the National Environmental Respiratory Center in the fiscal year 2002
EPA appropriation, and that EPA be charged with the lead agency role in
coordinating multi-agency support and participation in the program.
______

Prepared Statement of Dr. Robert Rubin, President and CEO, Lovelace
Respiratory Research Institute (LRRI)

It is proposed that the Department of Housing and Urban Development
through its constituent agencies support the renovation of the LRRI
clinical facilities and purchase of necessary equipment to support
LRRI's ability to maintain its high research and clinical standards,
and to better provide appropriate patient data security.
LRRI has committed to a building campaign using $10M in private
funds to improve its laboratory facilities and equipment. LRRI's
clinical study facility is in need of renovation to better accommodate
the thousands of outpatients recruited for these studies and to better
maintain security of their patient information. LRRI requests $2M to
help renovate this facility.
Project Impact:
LRRI, as a private non-profit research institute, places top
priority on its ability to translate its basic science findings from
animal models, into protocols designed to evaluate new approaches for
treating respiratory disease. These protocols lead to new innovative
techniques and approaches to health care.
LRRI conducts clinical studies requiring the recruitment of
thousands of patients that provide the basis for making the link
between genetic and cellular defects and clinical disease presentation
and demographic characteristics. Currently, LRRI is conducting
population-based genetic studies in:
--Chronic obstructive pulmonary diseases (COPD),
--Early detectors for lung cancer,
--Pulmonary fibrosis, and
--Mechanisms of asthma and other lung diseases in Hispanic and Native
American children.
Two events have greatly enhanced the ability to better understand
the mechanisms of human disease in communities. One is the dramatic
advance in molecular and cellular biology over the last 10 years,
especially in human genetics. The other is the ability to collect and
process data using advance computer systems and statistical techniques.
This process called ``molecular epidemiology'' makes the link between
genetic and cellular defects and clinical disease. LRRI has formed
collaborations with national and local a private health providers to
collect and manage patient data to carry out their ``molecular
epidemiological'' studies. These partners include, the:
--Lovelace Health Systems (LHS),
--Albuquerque Veterans Administration Medical Center (VA),
--University of New Mexico School of Medicine (UNM), and the
--University of Miami School of Medicine (UMSM).
Given the nature of the clinical studies performed, LRRI's facility
requires security mechanisms well beyond those of ordinary medical
clinics. As one can well imagine, this facility is the repository of
very sensitive personal data, including that linked to an individual's
DNA. To carry out this responsibility for privacy and confidentiality,
there is a need to renovate the facilities and equipment necessary to
be physically and electronically impenetrable to all but those who have
specific and authorized access.
The existing 8,000 sq. ft. facility was constructed in the 1950's
and requires renovation and upgrades to provide a suitable, efficient,
functional and secure facility. The proposed project would require
reconfigured space, upgrades to meet current fire and safety codes, new
interior finishes, new plumbing, upgraded electrical and a new heating,
ventilation and air conditioning system.
The current clinical trial's facility is occupied in part by other
LRRI functions. Some of these functions will need to be relocated to
provide the required additional space for the clinical studies.
Unfinished space is being made available in the new research facility
included as part of the $10M LRRI campaign. The proposed project will
include the completion of 8,000 square feet of the unfinished space for
this purpose.
Accordingly, to meet this responsibility and to improve LRRI's
ability to conduct its clinical studies, we respectfully request $2M.
The responsible Federal agency is the Department of Housing and Urban
Development--EADI.
______

Prepared Statement of Dr. Floyd J. Frost, Jr., Ph.D., Senior Scientist,
Lovelace Respiratory Research Institute (LRRI)

It is proposed that the Environmental Protection Agency (EPA)
support the funding request of a consortium of agencies, led by the
Lovelace Respiratory Research Institute (LRRI). This diverse and expert
team, which includes the University of New Mexico (UNM), New Mexico
School of Mining and Technology (NM Tech), state and local public
health and environmental agencies, and municipalities will provide a
comprehensive study on the health and other risk effects from
waterborne arsenic.
the problem
The U.S. Environmental Protection Agency (EPA) recently lowered the
maximum contaminant level (MCL) for arsenic from 50 to 10 parts per
billion (ppb). According to the EPA, this revised MCL will affect
thousands of community water systems located primarily in areas of the
country with high naturally occurring arsenic in surface and ground
water, such as New England and the western states. Because of the
expense of removing arsenic and the large number of systems affected,
revising the arsenic MCL will have significant economic consequences.
EPA estimates the annual costs of compliance to be $218 million.
However, a study by the American Water Works Association Research
Foundation (AWWARF) estimates the costs to be closer to $600 million.
EPA based their assessment of arsenic-related risks primarily on a
report by the National Research Council (NRC) that concluded, ``there
is sufficient evidence from human epidemiological studies in Taiwan,
Chile, and Argentina that chronic ingestion of inorganic arsenic causes
bladder and lung cancer, as well as skin cancer.'' However, the NRC
also noted important limitations of the scientific data and recommended
further research to characterize a possible dose-response relationship
at low exposures to arsenic in drinking water. The NRC report
emphasized that ``With minor exception, epidemiological studies of
cancer are based on populations exposed to arsenic concentrations in
drinking water of at least several hundred ppb. Few data address the
degree of cancer risk at lower concentrations of ingested arsenic''.
According to the EPA, removing arsenic from drinking water will
prevent the occurrence of and death from arsenic-related bladder and
lung cancers and possibly cardiovascular and hypertensive diseases. The
EPA estimated that lowering the arsenic MCL from 50 ppb to 10 ppb will
prevent 28 bladder and lung cancers each year. The number of
cardiovascular and other deaths prevented was not quantified. These
estimates of prevented cases or cancer were obtained by extrapolating
cancer risk from populations in southern Taiwan consuming high
waterborne arsenic levels (about 500 ppb) to U.S. populations consuming
low waterborne arsenic levels (less than 50 ppb). The EPA acknowledged
that their linear model ``could overestimate risk at low doses'' and
that the overestimate increases as the exposure level decreases. The
NRC estimate of the number of arsenic-caused cancers was \1/74\th the
EPA's estimate (0.4 cases vs 28 cases). Recent epidemiological
information also suggests there may be no increased risks from low dose
arsenic exposures in U.S. and European populations. Given the
uncertainty in the risk assessment, the EPA concluded ``decisions about
safe levels are public health policy judgments''.
The NRC recognized the limitations of the available data and
recommended additional studies to refine the dose-response relationship
between arsenic ingestion and cancer of the skin, bladder, and lung,
especially at low doses. Such studies are ``deemed to be of critical
importance for improving the scientific validity of risk assessment''.
The EPA's own Science Advisory Board recommended that EPA set an
interim standard that would affect only a small number of drinking
water systems. This would allow time to improve arsenic health risk
estimates, as well as to examine uncertainties over the feasibility of
treatment and the cost of compliance. Although the proposed treatment
technologies have been used for many years for other purposes, they
have never been used for arsenic removal, and there is no information
beyond laboratory experiments to demonstrate that these technologies
will work in full scale treatment plants. Many of these concerns are
addressed by this proposal.
Until recently, there were no studies of U.S. populations exposed
to elevated drinking water arsenic levels. Thus, it was not clear
whether the Taiwan findings could be extrapolated to U.S. populations.
Drinking water at lower levels of arsenic. However, several recent
studies suggest that U.S. populations exposed to lower arsenic levels
may not be at elevated risks of bladder and lung cancer. In 1999 the
EPA published a study of a cohort or group of 4,045 Millard County,
Utah residents exposed to drinking water with 14 to 166 ppb arsenic.
This cohort was formed from Church of the Latter Day Saints records.
Participants were followed to determine if they had died. If so, the
cause of death was identified. Efforts were made to determine the
waterborne arsenic exposures (arsenic level and number of years the
person drank the water) for each cohort member. Of the participants,
2,203 had died at the time of the study. The authors observed no
association between arsenic exposure in drinking water and mortality
due to bladder, lung, liver or kidney cancer in the Utah cohort. No
increased risk of death was found for heart disease or stroke. These
were unexpected results based on findings of the Taiwan and South
American studies.
Another U.S. study and one European study found that there was no
association between the risk of bladder cancer and arsenic exposure.
The authors concluded that their findings were not statistically
consistent with the findings of the Taiwan study.
costs of compliance
The new arsenic standard will affect approximately half of all New
Mexico drinking water systems. The estimated annual costs of compliance
for New Mexico drinking water systems range from $49 to $60 million.
This is a large fraction of the total costs for all drinking water
utilities in the United States. The average monthly bills will be
approximately $41-$46 per month for customers of large water systems
and $90 per month for customers of small water systems. However, for
some smaller water systems, the average monthly water bills could
increase to over $500/month. For many rural areas, the costs of
drinking water will exceed the EPA affordability levels and result in
considerable reallocation of both community and household resources.
These costs are very high for economically disadvantaged New Mexico
populations living in rural areas. Other people living in rural areas
in other states will also find their water bills drastically increased
as a result of the regulation. There have been no rigorous studies of
the costs of this regulation for small drinking water system, or the
economic consequences of the rule on these communities.
transportation risks
Compliance with the arsenic rule will require transportation of
massive amounts of toxic chemicals to and from water treatment plants
in the affected areas. The City of Albuquerque has 92 wells located
mostly in residential neighborhoods, many of which must be treated. We
estimated the chemical transportation requirements for meeting the
proposed arsenic standard and the number of miles traveled by
employees. Based on the miles traveled and the expected number of fatal
accidents per million miles traveled, we estimated the number of people
likely to die and the years of life lost. Depending upon the treatment
type selected by the utility, we found that the number of years of life
lost will be greater than or equal to the number saved from reduced
cancer risks.
Our study of transportation risks suggested that if the risks from
water treatment are considered, the regulation may increase rather than
reduce the loss of life. Furthermore, our study did not look at risks
to water treatment plant operators or to local citizens and emergency
response personnel from toxic chemical spills. Since the study was
limited to Albuquerque, there is considerable uncertainty over the
nationwide effect of the rule on transportation related deaths.
economic consequences
A study completed for the American Water Works Association (AWWA)
suggested that an increased water bill of over $50 per household per
year could raise serious affordability concerns for people living in
poverty. This might cause low-income households to make tradeoffs that
would be detrimental to the family's health and welfare. In many
states, and especially in the U.S. Southwest, the monthly rather than
yearly increases in water bills will commonly exceed the $50
affordability threshold.
A study by the Brookings Institution and the Harvard Center for
Risk Research came to the same conclusions. They argued that mandated
increases in the costs of water treatment will force families to
reallocate their resources away from other expenditures. Some of this
reallocation will be away from other health risk reduction activities,
such as diet, medical care, pharmaceuticals, etc. If the reduced risk
from lowering the arsenic standard is less than the increased risk from
resource reallocation, then, the rule will cause a net increase in the
risk of premature morbidity and mortality. The methodologies used are
relatively new, and there are currently insufficient data to accurately
estimate the health effects from specific resource reallocations in
communities affected by the arsenic rule. However, for many rural
vulnerable economically disadvantaged populations and the elderly on
fixed incomes, the monthly drinking water bills will increase more than
$50 rather than $50 per year.
the proposed project
The funding request involves a consortium of agencies, led by the
Lovelace Respiratory Research Institute (LRRI) and including the
University of New Mexico (UNM), New Mexico School of Mining and
Technology (NM Tech), state and local public health and environmental
agencies, and municipalities (Albuquerque, and Rio Rancho). This team,
lead by LRRI, was assembled recently to assist the City of Albuquerque
and other southwest utilities in responding to the EPA's proposed
arsenic regulation. It has a unique combination of skills in
epidemiology, water treatment, economics, toxicology, geology and
applied public health and is centrally located in a region most
affected by the rule. The following goals are proposed:
A. Assess the total costs of the arsenic rule and, especially, the
costs for economically disadvantaged communities.
Because of new information on treatment technologies and
clarification on whether treatment wastes may be legally sent to
landfills, the earlier cost estimates should be updated. More
importantly, prior cost studies did not extensively examine the costs
to small communities. These communities do not have the economies of
scale of larger cities, in which costs can be spread over a large
number of people. EPA recognized that many small communities may be
severely affected by the rule but indicated that states will be able to
subsidize these communities through loans and grants. For New Mexico,
the revolving fund for all drinking water and wastewater capital
projects has only $40 million available annually. The total capital
costs for New Mexico of the arsenic rule will exceed $400 million.
B. Assess the consequences if small communities and their residents
reallocate a large fraction of their resources for drinking water
treatment. (a) Is there is evidence of adverse health effects from
community or household resource reallocation for mandated water
treatment? (b) What is the magnitude of the increased health risks? (c)
How certain or uncertain are those added risks? (d) Are the adverse
consequences from resource reallocation smaller than the benefits from
the new water treatment?
C. Are the adverse public health consequences of water treatment
greater than the benefits?
Our preliminary study of transportation risks associated with the
new arsenic standard was restricted to the City of Albuquerque and did
not consider anticipated risks from the toxic chemical spills, exposure
of workers to hazardous substances or construction of new water
treatment facilities. Since this preliminary study, we have become
aware of work done by others on risks and benefits of moving hazardous
material to approved landfills. We propose to extend our work to a
nationwide study and compare our findings with other studies of adverse
consequences of environment interventions.
D. Extend the scientific base for waterborne arsenic health
effects.
Although studies conducted in Taiwan and South America have found
adverse health effects from waterborne arsenic exposure, studies
conducted in the United States (U.S.) and Europe have not been
statistically consistent with the risks predicted from the Taiwan
studies. We feel that research-funding agencies have been reluctant to
fund U.S. studies because of the likelihood that the studies will not
find adverse health effects. Similarly, we believe that U.S.
researchers are reluctant to propose or conduct these studies since
negative findings are unlikely to further their careers. Therefore, the
studies most needed to evaluate the justification for the proposed
multibillion-dollar arsenic rule have the lowest funding priority.
Health examination studies should be conducted in communities with
potentially high-risk populations and with high levels of waterborne
arsenic to determine if there is evidence of predicted elevated risks
of cardiovascular disease and skin cancer. Cohort mortality studies
should be conducted in several locations to replicate the Millard
County, Utah study conducted by EPA. This study did not detect any
evidence of elevated cancer risks from arsenic exposures. The follow-up
period for the Millard County study should also be extended to include
more recent deaths. The requested funding will be used to conduct
health examination surveys and cohort mortality studies of arsenic
exposed communities (e.g. Fallon, NV, Socorro, NM)
E. Water treatment technology evaluation.
There are a number of unresolved issues related to drinking water
treatment. These issues arise due to lack of current knowledge and
experience in building and operating the proposed treatment plants.
Federal funds are available to help build pilot treatment plants but
there is insufficient funding to evaluate and summarize their
performance and calculate the costs of construction and operation. Data
from several pilot treatment plants need to be reviewed and summarized
to address these issues. Furthermore, treatment technologies for
smaller communities need to be evaluated for cost and feasibility.
Funding will also be used for this evaluation.
F. To oversee the proposed studies, we will assemble an external
panel of epidemiologists, drinking water engineers, economists, risk
assessors and toxicologists.
This panel will meet and prepare an annual report evaluating the
project. The purpose of this panel is to insure that the studies
address the most important public health issues, that they are
rigorously designed and conducted and that the findings are justified
by the data.
Accordingly, we respectfully request $1.6M in funding.
______

Prepared Statement of the University of Miami, Coral Gables, Florida

Mr. Chairman and Members of the Subcommittee: we appreciate the
opportunity to submit testimony today on behalf of my colleagues at the
Rosenstiel School of Marine and Atmospheric Science at the University
of Miami. We respectfully seek your continuing support in fiscal year
2002 for two important projects.
First, my colleagues and I seek fourth-year funding through the
Environmental Protection Agency for the National Center for Atlantic
and Caribbean Coral Reef Research to conduct research to protect and
preserve the nation's endangered coral reef resources. Next, we seek
third-year funding through the National Aeronautics and Space
Administration for the National Center for Tropical Remote Sensing
Applications and Resources--the SAR Facility. We have special expertise
in both coral reef research and in remote sensing technology and
applications, and it is for these reasons that I appear before you
today.
Founded in 1925, the University of Miami is the largest private
research university in the Southeastern United States and the youngest
of 23 private research universities in the nation that operate both law
and medical schools. Through its 14 colleges and schools, more than
2,300 faculty instruct almost 14,000 students in more than 170 areas of
undergraduate study and 192 disciplines for graduate and professional
study.
The Rosenstiel School is recognized as one of the premier academic
oceanographic research facilities in the world and ranked among the top
six nationally. Located on a 16-acre tract on Virginia Key in Miami's
Biscayne Bay, the Rosenstiel School provides the only subtropical
marine research facility in the continental United States, and is
adjacent to and coordinates daily with the national NOAA lab and
research facility. Because of our unique location--the Gulf Stream is
immediately offshore; just to the south lies a vast expanse of the only
living coral reef off the shores of the continental United States; and
just to the east the Florida-Bahamas Carbonate Platform--we are a
unique resource for the nation, as well as for Florida and the
southeast region. Our more than 100 recognized scientists, researchers,
and educators collaborate closely with other institutions--in Florida
and beyond--in addressing critical national, regional, and Florida
natural, environmental, and climatic challenges.
national center for atlantic and caribbean coral reef research
The Rosenstiel School is a major national research institute
focusing on the living coral reef as a unique and critical national and
international resource, critical to the vitality and health of the
marine life and coastal marine environment of Florida and the
southeast. Florida's coral reefs are the only living coral reefs off
the continental United States. The environmental, climatic and man-made
challenges to and stress on these precious resources are extensive. To
preserve and protect our reefs requires the organization and
coordination of the broadest range of talent and resources.
We have committed to a major investment of our resources and seek
to enlist a broad range of Florida, regional, and national expertise to
coordinate the most advanced and productive research that will ensure
the protection of living coral reefs. For fiscal year 2002 we seek $3
million through the EPA to continue and expand the National Center for
Atlantic and Caribbean Coral Reef Research Center (NCORE), begun in
fiscal year 1999, a parallel to the Hawaii-based and focused effort.
Together, these centers will provide a balanced, focused, critical
scientific mass brought to bear on these precious, unique, and
vanishing natural resources.
Coral reefs are the only ecosystems on Earth constructed entirely
by the secretions of a complex assembly of marine animals and plants.
They are economically important resources of humans as sources of food,
medicinals, building materials, and coastal protection. They are
especially invaluable, in our increasingly crowded world, for the
spiritual relief they provide the millions of people that journey to
visit them each year. Unfortunately, changes in water quality due to
coastal development, environmental changes potentially related to
global climate change, and over-exploitation of coral reef fisheries
resources, are contributing to world-wide coral reef deterioration at
an alarming pace, especially in the Caribbean region. U.S. coral reefs
in Florida are down-stream of the entire Caribbean coral reef system,
and are thus dependent on Caribbean reefs for larval recruits and
maintenance of fisheries stocks. Florida reefs could also be affected
by pollutants released into marine waters by nations in the region, and
from our own rivers via discharge into the Gulf of Mexico.
Scientists are hampered in helping government make critical and
socially difficult management decisions by our rudimentary
understanding of coral reef ecosystem processes. Coral reef
environmental research has historically been piece-meal and under-
funded with few attempts at true interdisciplinary process-oriented
research. Local changes in water quality, broad scale environmental
changes potentially related to global climate change, and fisheries
over-exploitation of coral reef ecosystems, are thought to be
contributing to deterioration of coral reefs worldwide.
NCORE initiated a new approach to coral reef research. The Center
seeks to coordinate U.S. coral reef policy and research, and assemble
major national and international initiatives pertaining to coral reefs.
The Center fosters organization and collaboration within the U.S.
scientific community, leads the development of a new level of
understanding of the processes and environmental conditions necessary
for the establishment, survival and sustainable use of coral reef
ecosystems public. The initial focus is on problems faced by coral
reefs in Florida and U.S. possessions in the Caribbean region (Puerto
Rico and the U.S. Virgin Islands), but also to coordinate these efforts
with those of coral reef researchers within the Caribbean region, in
recognition of the importance of larger scale relationships between
coral reef systems within the Inter-America Seas.
NCORE invites nation-wide participation of scientists with
expertise in coral reef research, and involves scientists from related
disciplines. The specific functions of the National Center for Atlantic
and Caribbean Coral Reef Research are: (1) to study fundamental
scientific aspects of the function of coral reef ecosystems; (2) to
establish a database of past and ongoing coral reef research in the
United states; (3) to directly interact with resource managers at local
to national levels; (4) to provide accurate, but non-technical
syntheses to the public; and (5) to develop instrumentation and
observational strategies for coral reef research.
national center for tropical remote sensing applications and resources
Synthetic Aperture Radar (SAR) is a powerful remote sensing system,
able to operate in all weather, day or night. Space-based satellite SAR
systems are able to monitor the movement of targets on land or ocean in
near real-time, map topography with unprecedented accuracy, assess
storm and flood damage to urban and rural infrastructure, localize
forest and wildfires, and assess the soil properties of farm land (soil
moisture) and health of vegetation. SARs provide data that can be used
to forecast major volcanic eruptions and understand the earthquake
process, and a host of other military, civilian, and scientific
applications. SAR can make a major contribution to Southcom's various
missions, especially in the area of drug interdiction, civil defense
(e.g., storm damage assessment) and natural hazard mitigation (e.g.,
volcano forecasting).
The University of Miami uses SAR data for a variety of terrestrial
and oceanographic applications, and has a large amount of experience in
the analysis and use of SAR data, and expertise in the operation of
satellite downlink facilities.
The SAR receiving facility currently under construction by the
University of Miami will provide a unique capability for the Caribbean
and southeastern U.S. region. Applications of this ground receiving
station will be extremely diverse. They will include a wide range of
scientific applications in earth, atmosphere and ocean sciences, as
well as more practical applications in the fields of environmental
monitoring, natural hazard assessment, civil defense and defense
tactical applications. The station will initially operate at X-band,
and will be capable of receiving data from a wide variety of low-Earth
orbiting satellite systems. Our initial operational capability will
focus on SAR and visible and infrared imagery. The combination of these
sensor and imaging types will provide an unprecedented wealth of
information of the earth's surface. Future upgrades of the Center's
system should include the capability to collect L- and S-band
downlinks, as well. In all cases a high priority will be placed on high
reliability data reception to low elevation angles (2 degrees above the
local horizon). A heavy launch schedule over the next few years will
place numerous new satellites with SAR and other radiometric sensors in
space that requires at least two antennas to enable data recovery in
the case of simultaneous satellite passes or situations with a blocked
line-of-sight. The voluminous flow of data associated with high-
resolution satellite sensors such as SAR will require high reliability
data archiving with rapid retrieval, rapid dissemination of data (both
raw and analyzed to some specified level) to selected users, full data
analysis capability, and higher level software products to aid in data
interpretation.
In fiscal year 2000 you provided support to launch this vital
initiative and continued your support in fiscal year 2001. We hope to
continue our partnership with the National Aeronautics and Space
Administration in fiscal year 2002 and seek $1.5 million for the NASA
Advanced Tropical Remote Sensing Center, the SAR Facility.
For purposes of illustration, I will provide three example
applications for the SAR Facility: natural hazard mitigation, drug
interdiction, and educational opportunities.
natural hazard mitigation and civil defense
It is appropriate that NASA's remote sensing research program
include a component of natural hazard mitigation for Central America,
South America, and the Caribbean region. The reason is that the
nation's long-term security is best served by having prosperous,
politically stable democracies in this hemisphere. The U.S. has a role
to play in promoting the economic and political ``health'' of the
region. Even ignoring strictly humanitarian considerations, problems
such as poverty and civil unrest can negatively impact the U.S.
directly and indirectly. Examples include illegal immigration, reliance
on a drug economy, and lost market opportunity for U.S. business. The
poor infrastructure that is endemic to much of the hemisphere is
exacerbated by natural disasters via negative feedback: poor countries
generally have weak infrastructure that is easily damaged by natural
disasters (witness the recent devastation in Honduras during passage of
tropical storm Mitch). The region is especially vulnerable to
earthquakes, volcanic eruptions, and hurricanes. Techniques to mitigate
the effects of these disasters can be of enormous benefit.
Volcano Hazard.--For volcanoes, SAR interferometry generates
accurate topographic data (DEMs) enabling accurate prediction of the
direction and speed of lahars, a type of volcanic mudslide. Lahars are
often the major ``killer'' from volcanoes, claiming more than 20,000
lives at Nevado del Ruiz, Colombia in 1985. A mudslide from a dormant
volcano was responsible for most of the casualties in Honduras during
the recent passage of tropical storm Mitch. SAR interferometry also
allows detection of pre-eruption swelling of a volcano, which can be
used to help predict eruption. Such studies are only of academic
interest at present, because it takes so long to acquire imagery from
available ground stations (three month or longer waits are typical). A
South Florida ground station can provide at least several weeks warning
of major eruption to authorities in the affected area.
Earthquakes.--Are a major hazard for much of the western Americas.
A relatively small earthquake in Los Angeles several years ago caused
$20 billion in damages. An earthquake in the 1970s in Managua, the
capital of Nicaragua, so severely damaged the city that parts of it
were never rebuilt. The associated economic devastation is believed by
many social scientists to have been a contributing cause to two decades
of civil war. At present most researchers do not feel it is feasible to
predict earthquakes. Nevertheless, SAR can play a critical role, by
precise mapping of ground displacement during earthquakes, which can
lead to better understanding of the earthquake process. SAR is probably
the best tool available for this type of study. In some cases, SAR is
the only tool, e.g., in inaccessible parts of South America.
Hurricane Damage Assessment and Civil Defense.--As more people and
societal infrastructure concentrate in coastal areas, the U.S. is
becoming more vulnerable to tropical cyclones. Hurricanes are the
nation's costliest natural disaster. Early and accurate warnings can
save millions of dollars and reduce the detrimental impact of storms.
Quick-look SAR can assess storm damage and identify areas of immediate
need. SAR images can also provide information on sea state and surface
wind speed, important to weather forecasters and civil defense
planners. Radar frequencies are also sensitive to the intensity of rain
and can better locate concentrations of strong rainfall within tropical
storms. Such real time observations can provide better estimates of
storm strength prior to landfall.
drug interdiction
Small, fast moving boats are one of the major vectors for drug
delivery to the coastal southeastern United States. These boats travel
exclusively at night without running lights, and are very difficult to
detect. Their low radar cross sections mean the P3 Orion surveillance
aircraft equipped with standard ocean surface radar only rarely detect
them (the targets have to be fairly close to the aircraft). Given the
large area of ocean used by traffickers, and the relatively small
numbers of surveillance flights, detection success rate is low.
SAR can easily detect such targets. It does so not by direct
detection of the boat, but by wake imaging. The center line wake of a
small fast moving boat is typically 100-200 meters long, and is
relatively smooth compared to the adjacent ocean surface, and thus is
easily detected by standard civilian SAR. A recent test by the Office
of Naval Intelligence had virtually 100 percent success at detecting
this class of target during nighttime RADARSAT passes. The test target
was a fiberglass boat operated by the University of Miami.
At the present time, there are two civilian SAR satellites that a
South Florida ground station can access, RADARSAT and ERS-2. On an
average, we can expect to image a given ``patch'' of ocean every few
days with these systems, and thus would not detect and track all
targets. On the other hand, we could expect to track a much larger
number of targets than are currently possible, and could generate, with
``post-diction'' analysis, an accurate picture of where most illegal
traffic is originating and landing. Over the several day transit period
of these small craft to the southeastern U.S., approximately 30 percent
to 40 percent of targets would be detected in ``real time'' with
available satellite coverage, enabling direct interdiction by the Coast
Guard. This assumes, of course, that the data can be made available
quickly. The South Florida SAR Facility will make this possible.
In summary, satellite SAR data could make a major impact on the
drug interdiction program. However, realizing its full potential
requires a dedicated facility in South Florida, integrated into the
chain of command of the drug interdiction effort, and integrated into
academic efforts in the area of rapid data processing and raid image
analysis. The proposed University of Miami SAR ground station is an
excellent vehicle for this collaboration.
education: k-12, undergraduate, graduate level
The Florida Space Grant Consortium (FSGC) is a voluntary
association of seventeen public and private Florida Universities and
Colleges, all the community colleges in the state, Kennedy Space Center
Astronaut Memorial Foundation, Higher Education Consortium for Science
and Mathematics, and Spaceport Florida Authority. Collectively, it
serves more than 230,000 university students (100 percent of the public
enrollment and approximately 75 percent of total Florida enrollments).
FSGC represents the State of Florida in NASA's Space Grant College and
Fellowship Program. As one of the sixteen founding Space Grant
Consortia, it was formed in 1989 when the federal Space Grant program
was implemented. With programs now in place in fifty states plus Puerto
Rico and the District of Columbia, Space Grant now joins the Land Grant
and Sea Grant Programs to form a triad of federally mandated programs
addressing critical national needs in education, research and service.
The new National Center for Tropical Remote Sensing at the
University of Miami would provide a unique opportunity for FSGC to
begin dedicated education and training of the use of space-based remote
sensing and imagery. Furthermore, opportunities also exist to broaden
the educational use of the Tropical Remote Sensing site through a K-12
education partnership with Miami-Dade County Public Schools. We
envision the development of a magnet studies program in space science
that would be modeled after a very successful existing program in
marine science and technology in collaboration with the University of
Miami. This partnership would educate first-rate students and help
produce the next generation of scientists, engineers, and technology
experts for the nation.
Mr. Chairman, we recognize that this will be another difficult
year. However, we hope that you and your colleagues on the Subcommittee
will find it possible to continue to support these two important
initiatives that deal with issues of crucial national importance. The
results of the work at the National Center for Atlantic and Caribbean
Coral Reef Research will make important contributions to the national
effort to save our endangered coral reef communities. Similarly, our
proposal for the SAR Facility will enable us to continue our
partnership with NASA in developing a vital resource in South Florida
that will benefit the entire nation.
______

Prepared Statement of the California Industry and Government Central
California Ozone Study (CCOS) Coalition

Mr. Chairman and Members of the Subcommittee: On behalf of the
California Industry and Government Central California Ozone Study
(CCOS) Coalition, we are pleased to submit this statement for the
record in support of our fiscal year 2002 funding request of $2.5
million from the Environmental Protection Agency (EPA) for CCOS as part
of a Federal match for the $8.7 million already contributed by
California State and local agencies and the private sector.
Ozone and particulate matter standards in most of central
California are frequently exceeded. In 2003, the U.S. Environmental
Protection Agency (U.S. EPA) will require that California submit SIPs
for the recently promulgated, national, 8-hour ozone standard. It is
expected that such SIPs will be required for the San Francisco Bay
Area, the Sacramento Valley, the San Joaquin Valley, and the Mountain
Counties Air Basins. Photochemical air quality modeling will be
necessary to prepare SIPs that are acceptable to the U.S. EPA.
The Central California Ozone Study (CCOS) is designed to enable
central California to meet Clean Air Act requirements for ozone State
Implementation Plans (SIPs), as well as advance fundamental science for
use nationwide. The CCOS field measurement program was conducted during
the summer of 2000 in conjunction with the California Regional
PM10/PM2.5 Air Quality Study (CRPAQS), a major
study of the origin, nature, and extent of excessive levels of fine
particles in central California. CCOS includes an ozone field study, a
deposition study, data analysis, modeling performance evaluations, and
a retrospective look at previous SIP modeling. The CCOS study area
extends over central and most of northern California. The goal of the
CCOS is to better understand the nature of the ozone problem across the
region, providing a strong scientific foundation for preparing the next
round of State and Federal attainment plans. The study includes six
main components:
--Developed the design of the field study
--Conducted an intensive field monitoring study from June 1 to
September 30, 2000
--Developing an emission inventory to support modeling
--Developing and evaluating a photochemical model for the region
--Designing and conducting a deposition field study
--Evaluating emission control strategies for the next ozone
attainment plans
The CCOS is directed by Policy and Technical Committees consisting
of representatives from Federal, State and local governments, as well
as private industry. These committees, which managed the San Joaquin
Valley Ozone Study and currently managing the California Regional
Particulate Air Quality Study, are landmark examples of collaborative
environmental management. The proven methods and established teamwork
provide a solid foundation for CCOS. The sponsors of CCOS, representing
state, local government and industry, have contributed approximately
$8.7 million for the field study. The federal government has
contributed $500,000 for some data analysis. In addition, CCOS sponsors
are providing $2 million of in-kind support. The Policy Committee is
seeking federal co-funding of additional $8.5 million to complete the
data analysis and modeling portions of the study and for a future
deposition study.
For fiscal year 2002, our Coalition is seeking funding of $2.5
million from the Environmental Protection Agency (EPA). There is a
national need to address issues related to the 8-hour ozone and
PM2.5 standards set by EPA. Nationally, research and data
gaps exist in effectively coordinating particulate matter and ozone
control strategies, in understanding ozone deposition, and in using
models for future ozone and particulate matter SIPs (and updating
existing SIPs). Federal assistance is needed to address these issues
effectively, and CCOS provides a mechanism by which California pays
half the cost of work that the federal government should otherwise
pursue. California should not have to bear the entire cost of
addressing these issues.
The CCOS field study took place concurrently with the California
Regional Particulate Matter Study--previously jointly funded through
Federal, State, local and private sector funds. The quality and
concurrency of these studies brought both technical and financial
benefits that merit EPA funding for the purpose of addressing national,
SIP-related issues.
Financially, CCOS was timed to enable leveraging of the efforts for
the particulate matter study. Some equipment and personnel served dual
functions to reduce the net cost of the CCOS field study. The study
itself was also very cost-effective since it builds on other successful
efforts including the 1990 San Joaquin Valley Ozone Study.
From a technical standpoint, carrying out both studies concurrently
was a unique opportunity to address the integration of particulate
matter and ozone control efforts. Regarding the need for ozone
deposition research (how much ozone is removed from the ambient air by
plants and soil surfaces), California is an ideal natural laboratory
for studying deposition given the scale and diversity of the various
ground surfaces in the region (crops, woodlands, forests, urban and
suburban areas). With respect to SIP-based modeling, evaluating and
testing various models with the extensive data provided by both CCOS
and the California Regional Particulate Matter Study will advance the
use of models for future SIPs nationwide since the region covered by
the study is large and technically challenging. Improving model
performance for SIPs is essential since models drive emission reduction
targets and control strategies. The federal government should fund
continuing efforts to improve the performance of models used in SIPs.
Thank you very much for your consideration of our request.
______

Prepared Statement of the Integrated Petroleum Environmental Consortium

It is proposed that the U.S. Environmental Protection Agency
continue to support a focused, university-based program, the (IPEC),
with the goal of increasing the competitiveness of the domestic
petroleum industry through a reduction in the cost of compliance with
U.S. environmental regulations. Continued Federal support of $2 million
is specifically requested as part of the fiscal year 2002 appropriation
for the Environmental Protection Agency through the Science and
Technology account or other source the Subcommittee may determine to be
appropriate
Mr. Chairman, on behalf of the Integrated Petroleum Environmental
Consortium (IPEC), I would like to take this opportunity to thank the
Subcommittee for providing $1.5 million in funding for IPEC in the
fiscal year 1998 and fiscal year 1999 appropriations bills and $750,000
in the fiscal year 2000 and fiscal year 2001 appropriations bills for
the Environmental Protection Agency (EPA). Under the Subcommittee's
leadership both houses of Congress and the final appropriations bills
included funding for this Consortium each year. Specifically this
funding was provided for the development of cost-effective
environmental technology and technology transfer for the domestic
petroleum industry. With funding under the Science and Technology
account of EPA, IPEC is implementing a comprehensive mechanism (Center)
to advance the consortium's research expertise in environmental
technology. IPEC's operating practices and linkages to the independent
sector are ensuring that real problems in the domestic petroleum
industry are addressed with real, workable solutions. The consortium
includes the University of Tulsa, the University of Oklahoma, Oklahoma
State University, and the University of Arkansas.
We are pleased to report that, as envisioned and proposed by the
Consortium, State-level matching funds have been obtained to support
IPEC, creating a true Federal-State partnership in this critical area.
In fiscal year 1998 and fiscal year 1999, IPEC received $375,000 in
matching funds from the Oklahoma State Reagents for Higher Education.
We anticipate receiving an additional $185,000 from the Reagents as
matching for each of the fiscal year 2000 and fiscal year 2001
appropriations when received from the EPA. A similar amount has been
pledged by the Reagents as matching funds for a fiscal year 2002
appropriation.
Since December, 1997 IPEC has worked closely with the EPA to meet
all internal requirements for funding of research centers. These
efforts have resulted in an excellent working relationship with the
Environmental Engineering Division of the EPA National Center for
Environmental Research and Quality Assurance with IPEC's grant from EPA
(fiscal year 1998 appropriation) finalized September 2, 1998.
Since September 1998 IPEC has funded 18 research projects that
promise to help ease the regulatory burden on the domestic petroleum
industry. These funded projects include: the use of plants to clean
contaminated soils; the natural biodegradation of gasoline by
microorganisms in the absence of oxygen; the beneficial use of
petroleum wastes as road materials; the control of the formation of
toxic hydrogen sulfide in oil wells; the development of simple sampling
devices to replace expensive live organisms to assess toxicity in
contaminated soils; the treatment and disposal of naturally occurring
radioactive material (NORM) in oil production equipment; the
remediation of brine-impacted soils; development of a sound scientific
basis for ecological risk assessment of petroleum production sites;
improving the economics of well plugging; improving the efficiency of
oil-water separation; and enhancing the remediation of oil contaminated
soils. These projects were first reviewed and approved by our
Industrial Advisory Board (dominated by independent producers) as
relevant to our mission of increasing the competitiveness of the
domestic petroleum industry and finally reviewed and approved by our
Science Advisory Committee (SAC) on the basis of scientific quality.
The EPA has endorsed each member of the IPEC SAC.
IPEC has provided $1,612,071 in funding for these projects.
However, another $1,432,226 in funding for these projects have been
secured by the investigators as matching funds from industry and
industry organizations such as the Gas Research Institute, the American
Petroleum Institute and the Petroleum Environmental Research Forum.
This is over and above the matching funds provided by the Oklahoma
State Reagents for Higher Education. IPEC has pledged to Congress to
work for a 1:1 match of federal dollars. As you can see IPEC is living
up to that promise! IPEC is a true public/private partnership.
IPEC's technology transfer program is directed toward providing
useful tools for environmental compliance and cost reduction to
independent producers. The first objective of this program is to raise
the level of technical training of the field inspectors of the oil and
gas regulatory bodies of Oklahoma and Arkansas including the Oklahoma
Corporation Commission, the Arkansas Oil and Gas Commission, and the
Osage Agency of the Bureau of Indian Affairs with regard to first
response to spills, pollution prevention, and remediation of oil and
brine spills. The second objective of this program is the development
of checklists for independent producers to assist them in environmental
audits (``staying out of trouble checklists''), remediation of oil and
brine spills, and first response to spills. Oklahoma and Arkansas
regulatory field agents are being used to deliver these tools to the
independent producers.
IPEC's technology transfer flagship is the International Petroleum
Environmental Conference. In November, 2000 IPEC held the 7th
International Petroleum Environmental Conference in Albuquerque, NM.
There were 348 in attendance from all facets of the oil and gas
industry including independent and major producers, service industry
representatives, and state and federal regulators. The program for the
7th conference featured several plenary lectures, over 135 technical
presentations, exhibits, a poster session and a special symposium on
characterization and remediation of the subsurface. Co-sponsors of the
conference included the Interstate Oil and Gas Compact Commission, the
Railroad Commission of Texas, the Texas Independent Producers and
Royalty Owners Association, the Gas Research Institute, the Oklahoma
Independent Petroleum Association, the Oklahoma Energy Resources Board,
the EPA Office of Research & Development, and the National Petroleum
Technology Office of the U.S. Dept. of Energy. IPEC sponsors the
participation of fifteen state regulators from Oklahoma and Arkansas
each year at the conference. The 8th International Petroleum
Environmental Conference will be held November 6-9, 2001, in Houston,
TX.
the continuing crisis in the domestic petroleum industry
Much attention has been paid recently to the high costs to
consumers of gasoline and natural gas. Energy experts agree that the
price increases currently being experienced were brought on by short-
term shocks that resulted from sudden changes in supply and demand. On
the demand side there has been increasing demand for petroleum
worldwide, especially in the Far East. On the supply side, OPEC and
several non-OPEC countries have removed significant amounts of crude
oil from production. Once again America has been held hostage to the
marketing whims of foreign producers and we are in no position to
respond. Since 1990 there has been a 27 percent decline in the number
of jobs in the U.S. exploring and producing oil and gas and the number
of working drilling rigs has seriously declined. Thirty-six refineries
have closed since 1992 and no new refineries have been built since
1976. Most energy analysts agree that we need to ``drill our way out''
of the current high prices and shortages; however, the industry's
infrastructure (in terms of equipment and trained personnel) cannot
support the amount of drilling activity current prices would otherwise
encourage.
In order to regain energy security the U.S. must have a coherent
domestic energy strategy. Some may be willing to entrust the health of
the U.S. economy to windmills and solar-powered cars, but it will be a
stable and profitable domestic oil and gas industry that is the
nation's best defense against OPEC market manipulations. The current
upswing in crude oil prices may eventually stimulate the industry.
However, the record low prices that preceded the current increases have
left many companies in financial positions that make it impossible to
launch new exploration activities. Additionally, many in the industry
are simply uneasy with the volatility that has come to characterize the
industry. Much of U.S. domestic oil production is carried out by
independent producers who are producing from mature fields left behind
by the majors. Although there is a significant resource base in these
fields, this is the most difficult and the most costly oil to produce.
The independent producer has only one source of revenue--the sale of
oil and gas. There is no vertical depth to his business.
A major factor in the high cost of production in the domestic
petroleum industry is the cost of environmental compliance. IPEC is
working to strengthen the domestic petroleum industry and reduce the
impact of market volatility by providing cost-effective environmental
technologies to solve those problems that are having the greatest
impact on production costs. These efforts are especially needed now as
we develop new sources of natural gas such as coal-bed methane. This
new source of natural gas is desperately needed to meet our nation's
energy demand but coal-bed methane presents some unique environmental
problems which must be addressed in a cost-effective manner. A strong
and stable domestic petroleum industry is our best hedge against
foreign market manipulation.
ipec's response to critical research needs
IPEC is continuing to fulfill its pledge to you of responsiveness
to the needs of domestic petroleum industry and fiscal responsibility.
IPEC continuously probes our Industrial Advisory Board for new ways to
assist the industry and seeks out cost-effective technical solutions to
these problems through an aggressive solicitation and review process.
IPEC will continue to work with the domestic petroleum industry to
provide technical solutions to those environmental problems that
represent the greatest challenge to the competitiveness of the
industry. In addition, IPEC proposes to launch two new technology
transfer initiatives.
new ipec initiatives
Petroleum extension agents
There are over 3,500 independent oil producers in Oklahoma and
Arkansas. Most of these are very small companies, the ``mom and pop''
operations whose business is run from the pickup truck and the kitchen
table. These small producers are especially vulnerable to industry
volatility. The ongoing crises in the domestic petroleum industry
requires a multi-level response with a specific outreach effort to the
smallest of the independents, those without in-house experts, to advise
them on the latest production techniques to minimize costs; how to
prevent spills and the accompanying clean-up costs; and how to comply
with state and federal regulations to avoid fines and costly loss of
production. This type of assistance is not currently provided by the
private sector engineering and service companies because the small
producers cannot afford private sector services of this kind.
IPEC proposes to provide these services to small independent
producers through a system of petroleum extension agents (PEAs). Up to
ten (10) full-time equivalent petroleum professionals will be hired in
a pilot program to call on small independent producers throughout
Oklahoma and Arkansas to provide direct assistance in every aspect of
operating a profitable and environmentally friendly business as an oil
producer. These PEAs will be seasoned veterans of oil and gas
production in the state in which they will operate and operate from the
major oil producing areas of the states. PEA services will be made
known to producers through advertisements and through field agents of
the Oklahoma Corporation Commission and the Arkansas Oil and Gas
Commission. PEAs will also seek out and call on small producers in the
same way that county agricultural extension agents call on small
farmers. In difficult situations PEAs will be able to draw on the
significant resources of the IPEC institutions and the IPEC Industrial
Advisory Board. Since representatives of the state regulatory bodies
serve on the IAB, IPEC can also serve to help resolve problems.
The results expected from this program are: a reduction in the
costs of production and increased profitability among small independent
producers; lesser numbers of small producers going out of business;
less abandoned resources; greater state tax revenues; and increased
compliance with environmental regulations and greater protection of
natural resources. The Oklahoma and Arkansas PEA program will serve as
a model and pilot program for other oil-producing states.
Train the trainer--Expanding environmental know-how among Native
Americans
Historically much of the oil and gas produced in Oklahoma has come
from Indian land. In the culture surrounding the early days of oil and
gas production there were few environmental regulations or concerns.
This past lack of proper environmental practice resulted in damage that
is still visible and problematic today. The most persistent problems
are soil and groundwater contamination resulting from spills and
discharge of produced water brine. Historic brine are seen today as
scars on the land, devoid of vegetation, and highly eroded. Because of
the age of these spills many of the companies responsible are no longer
in business. Historic brine scars not only represent a loss of use of
land but also a continuing source of pollution of valuable surface
waters and groundwater. These brine impacted sites contain salt which
jeopardizes public and private sources of drinking water through runoff
and drainage. The sole solution to this continuous source of salt
pollution is remediation. Many Oklahoma tribes occupy lands scarred by
brines and the salt in these scars threatens tribal recreational and
drinking water sources.
IPEC proposes to provide tribal organizations with an in-depth
training program in environmental know-how related to these oil and gas
problems resulting in the education of Native American environmental
specialists. Further IPEC proposes to give these specialists the skills
and resources to allow them to train others in methods of remediation
of oil and brine spills and pollution prevention.
The remediation of crude oil spills and brine scars does not
require expensive instrumentation or highly specialized equipment. The
major equipment required is simply earth-moving equipment. Most tribes
have equipment of this type currently used for road work and other
municipal projects. Therefore, remediation of oil and brine spills is
not economically beyond the reach of the tribes. By ``training the
trainer'' IPEC extends its reach beyond the classroom into the tribes
building self-sufficiency within the tribes to solve environmental
problems on tribal lands and protect precious natural resources.
funding of ipec
IPEC is seeking appropriations of $2 million for fiscal year 2002
through the Environmental Protection Agency. This request is a $1.25
million increase over the fiscal year 2001 appropriation. The
additional funding will be used to expand our activities into coal-bed
methane and fund the PEA pilot program and the Train the trainer
program. The consortium will be responsible for at least a 50 percent
match of federal appropriations with private sector and state support
over any five-year period. The Consortium will be subject to annual
review to ensure the effective production of data, regulatory
assessments, and technology development meeting the stated goals of the
Consortium.
______

Prepared Statement of the American Lung Association and the American
Thoracic Society

The American Lung Association and the American Thoracic Society
appreciate the opportunity to submit written comments to the Senate VA-
HUD Appropriations Subcommittee. The American Lung Association is the
nation's oldest voluntary non-profit health organization. For the
better part of a century, the American Lung Association has fought for
better lung health for all Americans.
The American Thoracic Society (ATS), founded in 1905, is an
independently incorporated, international professional and scientific
society which focuses on respiratory and critical care medicine. The
ATS has approximately 13,500 members. The Society's members help
prevent and fight respiratory disease around the globe, through
research, education, patient care and advocacy.
Lung disease is the third leading cause of death in the U.S.,
responsible for one in every seven deaths. More than 25 million
Americans suffer from a chronic lung disease. Lung diseases cost the
U.S. economy an estimated $89.1 billion annually. Lung diseases
represent a spectrum of chronic and acute conditions that interfere
with the lung's ability to extract oxygen from the atmosphere, protect
against environmental of biological challenges and regulate a number of
metabolic processes. Lung diseases include: emphysema, chronic
bronchitis, lung cancer, tuberculosis, pneumonia, influenza, sleep
disordered breathing, pediatric lung diseases, occupational lung
diseases, sarcoidosis and asthma.
Nearly all of these lung diseases are severely impacted by air
pollution.
How well or how poorly our lungs perform is contingent on the
quality of air around us, making the impact of air pollution
inescapable. Air pollution remains a primary contributor to a high
prevalence of respiratory diseases.
For the past 35 years, the American Lung Association and the
American Thoracic Society have conducted scientific, public health and
educational programs to fight air pollution and to improve the quality
of air we breathe. We remain strong supporters of the Clean Air Act and
its amendments. We can attest to the significant impact the Clean Air
Act has had upon cleaning our nation's air and allowing us all to
breathe a little easier.
While the nation has made great strides in improving air quality,
many areas across the nation experience unhealthy levels of air
pollution many days each year. The EPA reported that in 1997,
approximately 59 million American lived in counties that did not meet
the current federal air pollution standards. The number of people
living in non-attainment counties jumps to 107 million when the revised
air quality standards are used. Tens of thousands of Americans still
die prematurely each year from complications associated with exposure
to air pollution.
oppose clean air act legislative riders
Mr. Chairman, the American Lung Association and the American
Thoracic Society are greatly concerned that the VA-HUD appropriations
bill has become a target in the past for substantive legislative riders
seeking to change laws that protect the public health and our
environment. Often these riders seek to delay the implementation of
clean air standards that protect our clean air or reduce the level of
protection to our environment.
In particular, the Clean Air Act has become the target of narrow
changes attached to EPA's appropriation. Actions taken by the EPA to
improve air quality enjoy broad public support. A recent poll conducted
by the American Lung Association found that a majority of Americans
support cleaner burning fuels and cleaner burning cars. In the same
poll, 60 percent of respondents felt that the air quality was worse
than it was ten years ago. Clearly, Americans are aware and concerned
about air quality issues.
the u.s. supreme court and the clean air act
The American Lung Association and the American Thoracic Society are
very pleased with a recent series of decisions issued by the U.S.
Supreme Court related to the Clean Air Act. Recent high court rulings
have affirmed the founding principle of the Clean Air Act adopted more
than thirty years ago: that clean air standards should be based on
protecting public health--not on cost.
The Court upheld the constitutionality of EPA's 1997 standards for
particle pollution (soot) and ozone (smog). The Court rejected without
reservation all challenges to the EPA standard for soot. EPA estimates
that meeting this standard will save 15,000 lives each year.
In the same decision, the Court remanded the implementation of the
1997 8-hour ozone standard back to the Environmental Protection Agency.
The Court did not question the underlying health science or the level
of the standard, but rather ruled that EPA must develop a reasonable
approach to implementing the standard.
Underlying both components of the U.S. Supreme Court's decision was
the affirmation of the health-based standard setting process and it
reliance on the best available scientific data. The high court
preserved the vital role that sound science should play in setting
those standards.
In a separate decision, the Supreme Court rejected without comment
an appeal from seven states and several power companies of a Federal
Court of Appeals, D.C. Circuit upholding EPA's ``NOX SIP
Call.'' This regulation requires 22 states east of the Mississippi and
the District of Columbia to reduce nitrogen oxide (NOX)
emissions from power plants in the Southeast and Midwest that
contribute to smog in the Northeast. A 2000 study for the Clean Air
Task Force found that power plants in the Midwest, Southeast and
Northeast contribute about 25 percent of the NOX emissions
that result in unhealthy levels of smog in these areas. The study
estimated that excess smog in these areas causes more than 200,000
emergency room and hospital admissions and 6 million asthma-attacks
each year.
EPA found these reductions necessary in order to achieve compliance
with the old one-hour ozone standard, not the more stringent eight-hour
standard affirmed by the Supreme Court last week. However, the emission
reductions resulting from this rule will be essential for areas in the
eastern U.S. to meet the 1997 eight-hour ozone standard.
the epa budget
The Administration has indicated it will seek $7.3 billion for EPA
for fiscal year 2002. This is one-half billion less than Congress
provided in fiscal year 2001. We are concerned that a one-half billion-
dollar cut in the EPA budget will significantly reduce the
effectiveness of EPA programs.
From the information made available to the public, it is unclear
what the Administration's spending priorities for EPA are. The overall
priorities released so far indicate that the President will propose an
overall increase in State and Tribal Grants to administer programs and
will grant increased flexibility to meet environmental goals.
We strongly urge Congress and the Administration to maintain the
commitment to Sound Science Clean Air research activities of the
Science and Technology programs. Recent studies supported by EPA grants
are adding new understanding to the role outdoor and indoor air have on
the initiation and progress of respiratory diseases. Now is clearly not
the time to reduce EPA's commitment to research that is essential to
providing the underpinning sound science needed for future air quality
standards reviews and pollution control regulations.
epa and state grants
Much of the work in implementing, monitoring and enforcing the
Clean Air Act is conducted at the state and regional level. While much
of the key leadership is provided by EPA, a good share of the work is
done by states. The proposed increase is a positive step forward.
However, given the work load remaining, meeting the existing new ozone
and particulate standards, the preparation needed for new standards and
ongoing work in other clean air activities like air toxics, other
criteria pollutants attainment programs, and permits--additional
support for state clear air activities is needed.
epa: niehs superfund basic research project
Mr. Chairman, the ALA/ATS would like draw special attention to the
NIEHS Superfund Basic Research project. This program focuses on the
health effects of toxic chemical exposure at Superfund hazardous waste
sites, and devises methods for minimizing the relative health risks of
exposure for clean up site employees. The ALA/ATS believes the EPA has
made an excellent investment in the future of human protection and
worker safety by supporting this research and training program. We
recommend $45 million for transfer to the National Institute of
Environmental Health Sciences (NIEHS) for superfund research and an
additional $23 million for Superfund worker training. The NIEHS
Superfund research program is conducting exciting research to develop
biomarkers for measuring the actual burden of environmental toxics in
humans.
the va medical and prosthetics research program
The American Lung Association and the American Thoracic Society
strongly encourages the Subcommittee to support the VA medical and
prosthetics research program by recommending an fiscal year 2002
appropriation of at least $395 million. Equally important, we urge the
Committee to make a commitment to support sustainable funding increases
in subsequent years. For too long, this program has suffered from a
roller coaster of threatened cuts and flat funding, with an occasional
hard won increase of significant size. This instability has made it
difficult for the VA research program to maintain its momentum and to
attract to VA the talented and skilled personnel necessary to conduct
cutting edge research and to care for veterans. It has also caused low
morale among clinician-scientists who, based on their experience caring
for veteran patients, spend years developing research proposals only to
learn their projects have been approved, but cannot be funded, or whose
budgets are cut before the work is done.
Three core needs justify the ALA/ATS recommendation:
1. Increase investigator-initiated research to foster recruitment
and retention of high quality physician-investigators and to
continuously strive to advance diagnosis and treatment of conditions
that particularly afflict veterans.
VA has identified four areas where there is a critical need for
more effort and in which VA is uniquely positioned to make substantive
contributions: treatment of chronic diseases; diagnosis and treatment
of degenerative diseases of the brain; improving quality of care; and
research involving special populations, particularly those who suffer
from spinal cord injury, stroke, diseases of the nervous system and
post traumatic stress disorder.
2. Expand training programs to attract the next young generation of
clinician-scientists to careers in the VA health care system. VA's
Career Development programs are a national resource for training the
next generation of clinician scientists, those health care
practitioners who treat patients and address questions that have a
direct impact on care.
3. Accommodate biomedical research inflation so that, at a minimum,
VA can maintain its current level of research activity on conditions
prevalent in the veteran population such as prostate cancer, diabetes,
heart diseases, Parkinson's disease, mental health, spinal cord injury
and aging related diseases. Additional funding is also required for VA
to implement more stringent controls on research involving human
subjects and to ramp up new oversight programs.
In summary, the VA medical research and prosthetic research program
is a high quality, peer-reviewed scientific program that is leading the
way to new treatments and cures for veterans and all Americans. The
ALA/ATS strongly urge the Subcommittee to provide $395 million for the
VA medical and prosthetic research program to continue its excellent
work.
Mr. Chairman, the American Lung Association and the American
Thoracic Society appreciate the support you and the Subcommittee has
shown for the EPA and the VA medical and prosthetics research program.
We look forward to continue to work with you on these valuable
programs.
______

Prepared Statement of the Upper Mississippi River Basin Association

The Upper Mississippi River Basin Association (UMRBA) is the
organization created 20 years ago by the Governors of Illinois, Iowa,
Minnesota, Missouri, and Wisconsin to serve as a forum for coordinating
the five states' river-related programs and policies and for
collaborating with federal agencies on regional water resource issues.
As such, the UMRBA has an interest in the budget for the U.S.
Environmental Protection Agency (EPA), particularly as it affects
funding of water quality programs administered by the states.
state pollution control grants (section 106)
Funding for Section 106 State Pollution Control Grants would
decline by $2.0 million under the Administration's fiscal year 2002
budget request. While the UMRBA is pleased that this request comes
close to matching the substantial funding increase implemented in
fiscal year 2001, the states are reluctant to see any reduction in
resources for this important program. The federal Section 106 funds, in
combination with the states' matching dollars, support the core state
water quality programs, including water quality assessment and
monitoring, surface and ground water standards, point source
permitting, and training and public information. Adequate funds are
particularly critical to supporting the states' development and
implementation of total maximum daily loads (TMDLs). The tasks
associated with developing TMDLs for impaired waters include watershed
characterization, computer modeling and related analyses, allocation of
permissible loads, development of TMDL reports and plans, and public
outreach and stakeholder development. These responsibilities have the
potential to overwhelm state agency resources that are in many cases
already strained. Regardless of how controversies surrounding EPA's
TMDL rule are ultimately resolved, TMDL planning and implementation
promises to be a major challenge. Further increases in funding to
enable states to meet these challenges, as well as base program needs,
will be imperative.
clean water state revolving funds
The UMRBA is deeply concerned about the lack of support in the
Administration's fiscal year 2002 budget proposal for the Clean Water
State Revolving Fund (CWSRF), which helps address wastewater
infrastructure needs. The CWSRF has made tremendous contributions to
improving the nation's water quality. In contrast to fiscal year 2001
funding of $1.35 billion, the budget request for fiscal year 2002 is
only $850 million, a reduction of 37 percent. Given the flexibility to
redirect wastewater funds to the Drinking Water State Revolving Fund
(DWSRF) and Section 319 nonpoint source grants, even less than $850
million might well be available for the wastewater SRFs. While the
flexibility to shift among these three programs can help the states
address their most pressing needs, it is no substitute for adequate
funding. Estimates of the nation's wastewater infrastructure needs
certainly vary, and EPA is scheduled to release an updated Clean Water
Needs Survey next year. However, there is absolutely no doubt there are
substantial unmet needs. The high demand for these funds underscores
the need to reauthorize CWSRF funding and increase annual federal
appropriations to $2 billion.
sewer overflow control grants
The UMRBA strongly supports efforts to address the problems of
combined sewer overflows (CSOs) and sanitary sewer overflows (SSOs).
Wet weather events are a major source of water pollution and require an
integrated effort to address them. However, the states do not support
the Administration's proposal to provide $450 million for CSO/SSO
grants while simultaneously reducing CWSRF funding by $497 million. The
fiscal year 2001 Omnibus Appropriations bill authorized the new sewer
overflow grants, but only in years when the CWSRF receives at least
$1.35 billion. This provision clearly reflects Congress' judgment that
both programs address critical needs and should not be traded off
against one another. The UMRBA concurs with this judgment and urges
Congress to maintain the requirement.
state nonpoint source grants (section 319)
The Administration has requested $237.5 million for the Section 319
state nonpoint source (NPS) grant program. This is the same amount that
was appropriated for fiscal year 2001 and $37.5 million above the
fiscal year 2000 enacted level. Nonpoint sources are one of the major
causes of water pollution in the Upper Mississippi River Basin, which
drains the nation's agricultural heartland. Adequate funding for
Section 319 and complementary efforts, including the USDA's
conservation programs, is essential to meeting the region's major water
quality challenges. While the UMRBA is pleased that the Administration
is seeking to maintain last year's increase, it should be recognized
that continued progress in addressing nonpoint pollution will require
increased resources for Section 319.
research
The UMRBA is concerned with the adequacy of water quality research
funding under the Administration's budget. The budget request includes
increased funding in some important areas, including almost $1 million
for research on suspended solids and sediment. Turbidity and sediment
are major problems on the Upper Mississippi River. This research
promises to help inform development of criteria for non-contaminate
suspended solids and sediment and to identify cost-effective strategies
for managing these materials. Another notable increase is $1.9 million
in new funding for decision support tools to help states in developing
TMDLs. However, these increases should not come at the expense of
equally important research efforts. The Administration's budget
proposes cutting $690,000 from EPA's work to develop integrated water
quality criteria. These criteria, which will incorporate sediment
guidelines and aquatic life and wildlife criteria, represent a
promising risk-based approach to protecting aquatic life in complex
systems such as the Upper Mississippi. The URMBA is also concerned with
a proposed $339,000 cut in research on habitat alteration, biocriteria,
nutrients, eutrophication, and harmful algal blooms. This is precisely
the sort of information needed to inform efforts to address the Gulf of
Mexico hypoxia problem. As states, federal agencies, and local
communities struggle with increasingly complex water quality problems,
it is essential to support the research that will provide the
scientific underpinnings of sound solutions.
______

Prepared Statement of the Upper Mississippi River Basin Association

The Upper Mississippi River Basin Association (UMRBA) is the
organization created 20 years ago by the Governors of Illinois, Iowa,
Minnesota, Missouri, and Wisconsin to serve as a forum for coordinating
the five states' river-related programs and policies and for
collaborating with federal agencies on regional water resource issues.
As such, the UMRBA has an interest in the budget for the Federal
Emergency Management Agency (FEMA).
Mitigation.--Of particular interest to UMRBA is funding for
mitigation of future flood hazards. Mitigation, which is the on-going
effort to reduce or eliminate the impact of disasters like floods, can
include measures such as relocating homes or community facilities off
the floodplain, elevating structures, or practicing sound land use
planning. Mitigation planning and implementation measures are essential
to reducing the nation's future disaster assistance costs.
Unfortunately, FEMA's fiscal year 2002 budget proposes a dramatic
reduction in funding for mitigation activities. In particular, the
Hazard Mitigation account would be cut from its fiscal year 2001 level
of $46 million, to only $19 million in fiscal year 2002. The National
Flood Mitigation Fund would also be reduced from $29 million to $20
million.
The Hazard Mitigation Grant Program (HMGP) is a particularly
popular and enormously helpful program. Authorized under Section 404 of
the Stafford Act, the HMGP provides grants to states and local
governments to implement long-term hazard mitigation measures after a
major disaster declaration. Because grant funds are made available
during the immediate recovery from a disaster, it offers a particularly
attractive option for communities that may not otherwise consider
mitigation. It is not yet clear what the full impact of this spring's
flooding along the Upper Mississippi River may be and whether HMGP
funding will be made available for mitigation activities. However,
following the disastrous 1993 Midwest floods, the demand for HMGP funds
was so high that Congress provided two supplemental appropriations.
Since 1993, mitigation funds have been used to acquire or elevate
10,372 flood prone properties in 236 communities in the five UMRBA
states. The effectiveness of this mitigation investment is demonstrated
by the fact that many of these were repetitive-loss properties that
will no longer experience flood damage. The tax payer savings are
evident.
Given the effectiveness of the HMGP and other mitigation programs,
the UMRBA urges Congress to restore funding for mitigation programs in
FEMA's fiscal year 2002 budget. In addition, UMRBA recommends that
Congress reject the Administration's proposal to reduce the federal
share for HMGP grants from 75 percent to 50 percent. By reducing the
cost-share for mitigation, the incentive for communities to take
advantage of these grants is also reduced. Frequently, out of
compassion for those affected by a disaster, the nonfederal cost share
for federal disaster recovery assistance is often relaxed or
eliminated. In those instances, affected communities and their
residents may find such disaster relief a more attractive option than
mitigation, which would reduce their future risk. We need to ensure
that mitigation remains a viable option for floodprone communities.
National Flood Insurance Program.--The President's budget proposes
two cost saving reforms for the National Flood Insurance Program
(NFIP). Of particular concern to UMRBA is the proposal to terminate
flood insurance coverage for repetitive loss properties after one more
claim. While repetitive loss properties need to be brought into
compliance with flood risk standards, strategies to do so should
include a one-time offer of mitigation assistance to enable repetitive
claimants to floodproof or relocate their homes. Such a proposal is
currently before Congress in legislation sponsored by Representatives
Bereuter, Blumenauer, and Costello (H.R. 1428). Under the ``Two Floods
and You Are Out of the Taxpayers' Pocket Act,'' a repetitive claimant's
refusal to mitigate would then result in NFIP premiums being set at the
actuarial rates. In the absence of such a program, denying insurance to
policy holders with repetitive claims will likely increase the public
demand for federal disaster relief, with no real opportunity to prevent
future damages. The UMRBA therefore urges Congress to reject the
President's proposal to deny flood insurance coverage to repetitive
loss properties without first ensuring that affected property owners
are offered viable mitigation opportunities.
Flood Map Modernization.--UMRBA supports the proposed budget
provisions that would allow $15 million of disaster relief funds to be
used for flood map modernization activities in post-disaster situations
and authorize the transfer of $7 million in unexpended previously
collected NFIP fees to support on-going flood map modernization. Among
other things, flood maps are used to determine risk-based NFIP premium
rates and develop disaster response plans for federal, state, and local
emergency management personnel. However, most flood maps are over 15
years old and are rapidly becoming obsolete. Many flood maps are
outdated by the effects of land use changes in the watersheds. When
out-dated maps underestimate flood depths, it can often lead to
floodplain development in high risk areas. It is therefore important
that flood maps be updated on an ongoing basis and in a timely way.
The Corps of Engineers is currently conducting a Flow Frequency
Study that will update the discharge frequency relationships and water
surface profiles of approximately 2,000 river miles of the Upper
Mississippi, Lower Missouri, and Illinois Rivers. This data will have a
variety of uses, including updating Flood Insurance Rate Maps (FIRMs)
used by hundreds of flood prone communities along these rivers. The
Corps and FEMA have estimated that 4,180 map panels in the 7-state
study area will need to be revised at a cost of approximately $30
million. Using data from the Corps study will be a far more cost-
effective way to update FIRMs than having FEMA independently study
flood hazards and update the maps. UMRBA therefore urges Congress to
provide funding for the Upper Mississippi flood mapping project and
direct FEMA and the Corps to coordinate their efforts to advance FIRM
updates.
______

Prepared Statement of the Nuclear Energy Institute

Mr. Chairman and members of the subcommittee, my name is Ralph
Andersen. I am the chief health physicist at the Nuclear Energy
Institute. I have worked in the areas of radiation protection, site
cleanup and decommissioning, and nuclear waste management for 28 years.
Before joining NEI nine years ago, I was superintendent of radiation
protection at Detroit Edison Company's Fermi 2 nuclear plant, and the
director of environmental protection and probabilistic risk assessment.
Earlier in my career, I was a radiation safety officer and lecturer in
the Department of Physics and Astrophysics at the University of
Colorado and associate radiation safety officer and principal
researcher at the University of Maryland Medical Center.
The Nuclear Energy Institute develops public policy for the U.S.
nuclear industry. We represent 270 member companies with a broad
spectrum of interests, including every U.S. utility that operates a
nuclear power plant, their suppliers, fuel fabrication facilities,
architectural and engineering firms, labor unions and law firms,
radiopharmaceutical companies, research laboratories, universities and
international nuclear organizations.
In my testimony today, I would like to discuss two issues: federal
support for nuclear engineering education and the Environmental
Protection Agency's (EPA) continuing duplicative regulation of Nuclear
Regulatory Commission (NRC) licensees.
ending duplicative regulation
This committee has cautioned EPA against duplicative regulation,
but the agency has persisted, and this has been of ongoing concern to
the nuclear energy industry.
The nuclear industry's highest priority is protecting public health
and safety as well as the environment during all aspects of facility
operation. Achieving this goal depends on clear and consistent federal
policy that:
--assures protection of public health and safety;
--makes the best use of available public and private funds and
resources; and
--helps build public trust and confidence in federal decisions and
programs.
The current situation--one of duplicative and conflicting
regulation by two federal agencies--works against those principles.
On behalf of the nuclear industry, I want to commend you for your
continued oversight of EPA--in particular, the agency's administration
of the National Priorities List, also known as the Superfund program.
Public Law passed by Congress earlier has discouraged the allocation of
funding for dual regulation by EPA of nuclear energy facilities that
are undergoing decommissioning and license termination under NRC
regulation. In doing so, the Congress is holding the Administration
accountable for regulatory reform policy by deterring regulatory
activities that are ``inconsistent, incompatible, or duplicative of
those of other federal agencies.'' \1\
---------------------------------------------------------------------------
\1\ Executive Order 12866, ``Regulatory Planning and Review,'' at
58 Fed. Reg. 51735, dated October 4, 1993.
---------------------------------------------------------------------------
EPA has continued to interject itself into the NRC's regulatory
process for site decommissioning and license termination. Further, EPA
has threatened to list NRC-licensed facilities on the National
Priorities List after such facilities have been decommissioned in full
compliance with NRC regulations which, I should emphasize, were
established to be fully protective of public health and safety.
EPA has inserted itself into the NRC's regulatory process through
interaction with state agencies, the industry and the public in a
manner that represents an inefficient use of government resources and
undermines public confidence in government and industry efforts to
protect public health and safety.
In 1998, the House Appropriations Committee adopted report language
that recognized the NRC's ability to oversee the full remediation of
nuclear facilities. This language specifically prohibited EPA from
using federal funds to place NRC licensees on the National Priorities
List.\2\ However, there has been no evidence that EPA intends to comply
with the committee's guidance and no indication that it will not
persist in challenging the NRC's authority to regulate decommissioning
and site cleanup activities.
---------------------------------------------------------------------------
\2\ U.S. House of Representatives, Report 105-175 to accompany H.R.
2158.
---------------------------------------------------------------------------
In 1999, the House Appropriations Committee expressed heightened
concern about EPA actions. The committee pointed out that ``any
reversal of the long-standing policy of [EPA] to defer to the NRC for
cleanup of NRC-licensed sites is not in the public interest and is not
a good use of public or private funds.'' \3\ Further, the committee
recognized that attempts at dual regulation by EPA have created
legitimate stakeholder concerns regarding the authority and finality of
NRC licensing decisions, the duration and cost of site cleanup, and the
potential future liability of parties associated with affected sites.
---------------------------------------------------------------------------
\3\ U.S. House of Representatives, Report 106-286 to accompany H.R.
2684.
---------------------------------------------------------------------------
The House Appropriations Committee also encouraged EPA and the NRC
to enter into an MOU to clarify the circumstances for EPA's involvement
at NRC-licensed sites--when requested by the NRC. The agencies were
directed to report to the committee by May 1, 2000, on the MOU status.
As the deadline passed, the two agencies advised the committee that
there has been no substantial progress on the development of an MOU.
The General Accounting Office (GAO) reviewed the status of the MOU
in June 2000 and examined the underlying issues associated with it. GAO
acknowledged the Congress' efforts to encourage the agencies ``to
clarify their conflicting regulatory roles related to nuclear facility
cleanup and decommissioning.'' \4\ However, GAO concluded that ``given
the agencies' historical differences and lack of recent progress,
without congressional intervention, they may not resolve their
differences.''
---------------------------------------------------------------------------
\4\ GAO/RCED-00-152, ``Radiation Standards: Scientific Basis
Inconclusive, and EPA and NRC Disagreement Continues,'' June 2000.
---------------------------------------------------------------------------
In its most recent report accompanying H.R. 4635,\5\ the House
Appropriations Committee said ``that both agencies have not worked in
good faith to resolve the problem of dual regulation by the federal
government in NRC-licensed site decommissioning.'' The committee
directed the EPA administrator ``to undertake a review of EPA action on
the MOU, the costs to NRC licensees associated with dual regulation by
NRC and EPA on site cleanup, the potential costs associated with
listing these facilities on the [National Priorities List], and options
for resolving this issue by regulation, litigation or legislation.''
The committee set a deadline of March 31, 2001, for submittal of the
report. We have no indication that the EPA has conducted the
comprehensive review directed by the committee--despite the rapidly
approaching deadline.
---------------------------------------------------------------------------
\5\ U.S. House of Representatives, Report 106-988 to accompany H.R.
4635.
---------------------------------------------------------------------------
Last year, EPA issued a guidance memorandum to its regional
Superfund managers clarifying EPA's role under the Comprehensive
Environmental Response, Compensation, and Liability Act (CERCLA) at
facilities licensed by NRC.\6\ Unfortunately, this memorandum makes
clear EPA's intent to continue to impose additional regulation on NRC
licensees. The guidance memorandum:
---------------------------------------------------------------------------
\6\ OSWER No. 9272.0-15P, ``Interim Final Guidance on Evaluation of
Facilities Currently or Previously Licensed by NRC under CERCLA,''
dated February 17, 2000.
---------------------------------------------------------------------------
--does not acknowledge that the NRC is the lead agency for regulating
its licensees;
--does not place any constraint on EPA involvement at NRC sites when
not requested by the NRC; and
--does not include any suggestion that EPA should consult or
otherwise coordinate with the NRC on these issues.
With such glaring omissions, this document--now standing as EPA
policy on the agency's role regarding NRC-licensed sites--stands in
direct conflict with guidance this committee provided to EPA.
EPA persists in efforts that undermine the credibility of the NRC's
regulatory process and erode the trust and confidence of public and
government stakeholders in the NRC's health and safety standards.
A telling example occurred this past year in Maine. The Maine
legislature last August passed a law \7\ to establish cleanup standards
for decommissioning nuclear facilities patterned after EPA's continued
undermining of the validity of NRC's cleanup standards. EPA was heavily
involved in shaping this legislation. For example, the agency provided
testimony and subsequent guidance to the state legislature on the
proposed law and stressed its support of Maine's efforts and
legislative intent ``to mirror EPA's policies.'' EPA also sent a letter
to the Maine legislature, clarifying differences between the standards
promulgated in the act and EPA's standards that ``may have arisen
inadvertently during the drafting of the legislative language and
[were] not discovered until after the legislation was enacted.'' The
letter commits EPA to ``working closely with [the state] to provide
closure on the matter,'' although it notes that ``it is not possible to
further analyze the issue'' until the final license termination plan,
required by NRC regulations, is available from the nuclear power plant
undergoing decommissioning in Maine.
---------------------------------------------------------------------------
\7\ An Act to Establish Clean-up Standards for Decommissioning
Nuclear Facilities, enacted by the Second Regular Session of the 119th
Legislature of the State of Maine, Chapter 741, S.P.1084-L.D.2688.
---------------------------------------------------------------------------
Mr. Chairman, we do not dispute the propriety and legality of the
actions taken by the state in carrying out its authority and
responsibility to the people of Maine. In fact, we view the active
involvement of state and local government and the public as essential
to the NRC regulatory process for decommissioning a facility. Indeed,
NRC regulations expressly provide for such participation. However, we
object to EPA's engaging in duplicative and conflicting regulatory
efforts, taking every available opportunity to undermine the legitimacy
of the NRC's regulatory process and standards.
There has been little progress by the two agencies in the past four
years toward resolving this issue. Contrary to the guidance of this
committee, EPA continues to engage in activities that impose
duplicative and conflicting requirements. And, there has been no
substantive progress in developing an MOU between the EPA and the NRC.
The industry continues to support the development of an MOU between
the EPA and the NRC to clarify their respective roles and authorities
in the decommissioning of NRC licensee facilities. In fact, we are
hopeful that the recent change in leadership at EPA will lead to the
kind of cooperative and constructive inter-agency dialogue that is
necessary to produce such an MOU. The industry encourages the committee
to work with the Bush administration and EPA Administrator Christine
Todd Whitman to address this important issue. However, based on the
record, the industry is skeptical that an MOU--even if one is concluded
between EPA and NRC--will provide a lasting resolution to the issue of
dual regulation. The agencies entered into a similar MOU in 1992,\8\
and EPA previously has deferred to the NRC as a matter of policy under
CERCLA. It is the breach of that agreement between the two agencies
that has created the existing dual regulation.
---------------------------------------------------------------------------
\8\ Memorandum of Understanding between Ivan Selin, Chairman,
USNRC, and William K. Reilly, Administrator, USEPA, on Guiding
Principles for EPA/NRC Cooperation and Decisionmaking, dated March 16,
1992.
---------------------------------------------------------------------------
In our view, an MOU alone cannot solve this issue. Provisions in
CERCLA set the stage for conflicting and overlapping authority between
the NRC and EPA, which inhibits the remediation of NRC-licensed sites
in a timely and economical manner. The conflict stems from the fact
that the Atomic Energy Act gives the NRC responsibility to regulate the
civilian use of nuclear materials. Under this authority, the NRC has
overseen the successful remediation of more than 70 sites in a manner
that fully protects public health and safety. By comparison, CERCLA
assigns EPA primary responsibility to administer the remediation of
contaminated sites included on the Superfund list.
Given the lack of progress over the past three years, in spite of
the efforts of the Congress, the industry believes that a legislative
solution is needed to resolve the problem. In the interim, we
respectfully offer several suggestions for the committee's
consideration that may help avoid duplication in site cleanup
regulation, and the imposition of unwarranted additional costs, until
such legislation is enacted:
1. The committee should explicitly prohibit the EPA from using
appropriated funds for dual regulation of NRC-licensed facilities.
2. The committee should reconsider its previous report language
regarding an NRC-EPA Memorandum of Understanding (MOU) and provide
definitive direction and guidance on what the MOU should address, as
well as establishing a firm deadline for completion of the MOU.
3. If the EPA does not submit a report on the committee-directed
review of the situation, the committee should consider initiating an
independent audit of EPA actions and expenditures of resources with
regard to the previous direction of the committee.
supporting nuclear engineering education
NEI also would like to take this opportunity to thank the committee
for recognizing the importance of nuclear technology research and
education. In last year's bill passed by Congress, the National Science
Foundation was directed to review academic interest in nuclear
engineering education and to provide recommendations on how NSF can
provide support in this area.
To remain the global leader in nuclear technologies, the United
States must ensure that the associated expertise and scientific
infrastructures are maintained. Our nation must increase research in
nuclear technologies, which have yielded extraordinary benefits in
medicine, scientific research, electricity production, food safety and
many industrial applications. It is essential to attract new scientists
to these programs and maintain university programs to train them. The
United States must stay on the cutting edge of these vital
technologies.
When the National Science Foundation submits its report, NEI would
like to have the opportunity to work with the committee to help assure
that the appropriate level of support at NSF will be made available for
nuclear technologies next year.
In addition, NEI is working on behalf of the industry to determine
staffing and subsequent education needs for engineers, health
physicists and technical tradespeople. The industry is also developing
staffing strategies and communications that encourage students to
pursue careers in nuclear technology. A potential shortage of nuclear
engineers, health physicists and professionals with expertise in other
areas is a matter the industry takes very seriously.
______

Prepared Statement of the Mickey Leland National Urban Air Toxics
Research Center

The Mickey Leland National Urban Air Toxics Research Center
(NUATRC) is requesting a $2.2 million appropriation for fiscal year
2002 to continue the air quality public health research on air toxics
in urban areas as directed by the U.S. Congress. The Leland Center is a
501(c)(3) institution, which was authorized by Congress in the Clean
Air Act Amendments of 1990 (Title III, Section 301 (p)).
The Leland Center has been operational for eight years and receives
EPA Assistance Awards based upon Congressional appropriations. We
leverage these federal funds with private sector funding, with
industrial firms being the major contributors. Our private contributors
include ten major U.S. companies, whose year 2000 contributions were
the highest in our history. NUATRC utilizes an administrative services
agreement with The University of Texas-Houston Health Science Center in
the Texas Medical Center complex. This arrangement allows the Leland
Center to take advantage of the world-renowned scientific community at
The University of Texas and the Texas Medical Center, as directed by
Congress, while still remaining an independent entity.
The Leland Center's mission is to sponsor and direct sound, peer-
reviewed scientific research on the human health effects of air toxics
in urban populations. It is an integral part of the air toxics strategy
established by Congress to assess the risks posed by these materials to
individuals living in areas where air quality concerns have been
expressed by both medical and scientific experts and urban community
leaders.
The NUATRC is governed by a nine-member Board of Directors,
appointed pro rata by the Speaker of the U.S. House of Representatives,
the Majority Leader of the U.S. Senate, and the President of the United
States. In turn, the Board appoints a 13-member Scientific Advisory
Panel, selected from national research institutions, academic centers
and the private sector. The current membership of both the Board of
Directors and the Scientific Advisory Panel is carried in Attachment 1.
We are awaiting Congressional action on the appointment of three new
Board Members.
achievements
We are pleased to bring to the Subcommittee a positive and
promising report on the progress of the research work being sponsored
by the Mickey Leland National Urban Air Toxics Research Center. We have
established the following major scientific achievements over the last
several years that are in keeping with our Congressional charge in the
Clean Air Act Amendments of 1990:
1. Establishment of how important indoor toxic air pollutants are
and how important personal exposure to the specific levels of these
pollutants are. These findings are resulting in a reevaluation of the
national emphasis on outdoor levels and sources.
2. Development of inexpensive and accurate technology to allow
measurements of individual personal exposures to air toxics. This
provides a new and, for the first time, direct view of the possible
public health risks of air toxics.
3. Results that support a new focus on those air toxics that exist
on particles and may be a factor in the claims of increased mortality
from these exposures.
4. Initiation of community-based studies that involve participation
by those citizens directly exposed to urban levels of air toxics. This
includes early data from our involvement in the National Health and
Nutrition Examination Survey (NHANES).
We owe these advances in large part to the work of our Scientific
Advisory Panel, made up of world class scientists from the public
(EPA), private and academic sectors, who have spent considerable time
and effort to develop and refine these studies in a collegial and
efficient manner. We also are fortunate to have had the encouragement
of the Congress, which has consistently supported the NUATRC with
annual appropriations in the EPA budget, without which we would not be
able to continue.
We continue to work closely with the US EPA, through which we
access the Congressionally-appropriated funds. We have still been
unable to have EPA include our research funding in their budget without
the necessity of the appropriation process, but non-scientific factors
continue to hinder this effort and result in less effective and time-
consuming processes. We have an excellent working relationship with the
EPA scientists that serve on our research panels, and we are continuing
to interact with their administrative counterparts to establish a
firmer base for our EPA financial support.
current activities
The Leland Center has begun three new air toxics research
initiatives, all of which address the national concerns about asthma.
We want to determine whether air toxics play a major role in the
exacerbation of asthma, which is a multi-faceted and complex public
health issue. The NUATRC has had several discussions with the
scientific staff at the National Institutes of Environmental Health
Sciences (NIEHS) to understand how we can best leverage our experience
in personal exposure assessment with the NIEHS' well known expertise in
public health effects. We are hopeful of developing considerable
support in 2001-2002 for joint NUATRC-NIEHS programs on urban air
toxics and asthma exacerbation.
The NUATRC is also starting a major new research program in Houston
on children's asthma and the effects, if any, that result from
exposures to air toxics. We expect that this study, which will not
involve federal funding, will begin in the second quarter of 2001 and
last for 20 months. Aside from generating important health data in
Houston, it will help define the cost and scope of any national study
of this kind, similar to what we are discussing with NIEHS. Our ability
to discern specific personal exposures to those air toxics that are
thought to play a role in asthma exacerbation will allow us to pinpoint
and separate those effects from the many urban confounders that often
mask the important factors in the spread of this disease. We have
relied on scientific input from our expert Panel and submit all
proposals to external peer-review. This process has led us to select a
team of physician/scientists from major medical research institutions
at the Texas Medical Center. Specifically, we are nearing agreement
with a interdisciplinary research team whose members represent Baylor
College of Medicine, The University of Texas School of Public Health
and Texas Childrens' Hospital to carry out this work with asthmatic
middle school children in the Houston area. This research will be
supported through funding from local philanthropies and state, county
and city offices, along with private sector contributions. No federal
monies are included, but we are hopeful that the success of this
program will lead to NIEHS involvement in a wider ranging study of
asthma and air toxics with a national focus, and part of our
appropriations request is for leveraging the NIEHS support.
In addition to this field research study, the NUATRC is hosting a
major scientific Symposium in late May, 2001 at the Texas Medical
Center, which will also focus on asthma, entitled ``Environmental Air
Toxics: Role in Asthma Occurrence?''. The draft program for this
Symposium is carried as Attachment 3. We are delighted that a highly
recognized team of national experts will participate in this Symposium,
which again is being supported by contributions from diverse parties
and does not depend on EPA Grant monies. In all of our work, we seek to
leverage federal funds, especially that appropriated to us by this
Subcommittee. We have jointly funded work underway with the Health
Effects Institute in Cambridge, MA., SKC, Inc., the National Center for
Health Statistics, the Houston-based funding group assembled for our
Houston asthma research, and a private (ExxonMobil, American Chemistry
Council, etc.)/public (NIEHS, University of Texas) consortium
underwriting our Asthma Symposium.
research findings to date
As we indicated in our submission last year, we are continuing our
research efforts to better understand the individual personal exposures
of people living in urban areas to a number of the 188 toxics defined
in the Clean Air Act. However, we are also beginning to receive data
from our new health effects studies, an emphasis area on which we will
continue to focus in 2002.
We have achieved pioneering accomplishments in measuring levels of
personal exposures to toxic air pollutants. These studies in New York,
New Jersey, Los Angeles and Houston are nearing their end and the
information generated has been reported at a number of major scientific
meetings over the past 12 months. The investigators at Columbia
University, EOHSI in New Jersey and The University of Texas have
obtained massive amount of important data which will be the subject of
many analyses and publications over the next several years. These data
point conclusively to the importance of the indoor environment and the
assessment of personal exposures to air toxics, in terms of assessing
the actual public health risk from these materials. In Attachment 4 to
this submission, we provide examples of the kind of information we are
obtaining, which suggests that the nation's environmental resources
need to be refocused on indoor and personal situations, as opposed to a
continuing emphasis on fixed site urban air monitors.
These fixed site monitors, which play a key role in determining
overall urban air quality and air quality standard attainment, are not
precise enough to address public health risks. The support we have
received from this Subcommittee has been instrumental in creating a new
scientific emphasis on personal exposures. The US EPA has now accepted
the importance of such approaches and is instituting its own program in
this area.
The NUATRC research programs at Harvard and Washington State
University are our first ventures into health effect studies and both
these programs are focused on the air toxic component of fine
particles, notably metals, in terms of possible effects on peoples'
heart rate and pulmonary functions when exposed to fine particles.
These ongoing epidemiological studies will also allow us to better
define future research, which will combine personal exposure
measurements, the apportionment of source contributions and the health
effects end points, as are being developed in this work at Harvard and
Washington State. Of course, the NUATRC's asthma studies in Houston
this year and hopefully nationally in 2002, will be a major advance in
the public health science area.
We have also expanded our involvement in community-based
environmental health research, which is an important element in our
charge, as air toxics health effects can be expected to
disproportionately impact the economically and medically underserved
people in our urban populations. We have research underway in Baltimore
under a Johns Hopkins University research grant to address exposures to
air toxics in a residential community in close proximity to an
industrial complex. This research also has a goal of keeping the
community informed as to the results of our studies, which is all too
often ignored or neglected in our haste to complete these studies and
submit them for publication. This causes an understandable and
unfortunate backlash in such communities. We have a somewhat similarly-
intentioned program in progress at the University of Illinois at
Chicago, which deals with the levels of polycyclic aromatic
hydrocarbons (PAH) in indoor environments.
administration
The Leland Center operates with a small administrative staff of
five full-time equivalent employees, one consultant, and important in-
kind support from The University of Texas. Our staff are all employees
of The University of Texas, which obviates the need for considerable
personnel support services and allows us the benefit of residence at
the University, while remaining an independent institution. This
provides important scientific and administrative benefits, including
access to Medical School and School of Public Health faculty. We are
proud of the high rate of monies spent directly on research compared to
administrative costs, and we continue to strive for additional
economies.
budget rationalization
As discussed in detail earlier, our initial asthma work on the
local Houston scene will hopefully be expanded to embrace a national
study with NIEHS, which we will cost share. With the completion of our
two major personal exposure studies at EOHSI and Columbia University,
we are planning to have these data subjected to more thorough and
detailed analyses than was believed necessary when the programs were
started. We would plan to offer RFA's to the scientific community to
``mine'' this complex and deep data base. We also would continue our
involvement with the NHANES program run by the National Center for
Health Statistics, in which our participation is highly leveraged. This
work has become a more expensive federal program over the last several
years, but our leveraged participation in such an important study makes
it worthwhile to continue. The particle personal exposure monitor
development is progressing nicely and was anticipated to be a multiyear
effort. It has drawn considerable attention from the scientific
community, including the federal agencies. The Health Effects Research
at Washington State University is continuing and is showing interesting
results on the effects of toxic exposures on human respiratory
functions. The successful NUATRC Small Grants Program is a continuation
of the current work at Johns Hopkins and the University of Illinois at
Chicago and we have received considerable comment and support on these
approaches. We must also initiate work to validate the accuracy of our
passive exposure monitors at the very low concentrations that are
becoming more common in the field. The emphasis we place on having
Workshops and/or Symposia every year has proven cost-effective in
advancing our understanding of these health effects. The Research
Support category is very significant in providing funds for scientific
peer-review, publications, reports and other activities of the
Scientific Advisory Panel. The budget carried below is a ``hold the
line'' effort recognizing the budget pressures that we all face. We
will continue, as noted elsewhere, to seek alternative funding sources
for our research program.

Budget

Asthma/Air Toxics Research Program............................ $250,000
Population-based Air Toxics Exposure Studies.................. 250,000
Collaboration with NHANES..................................... 150,000
Particle Monitor for air Toxics............................... 250,000
Health Effects Research....................................... 100,000
Small Grants.................................................. 100,000
Personal Monitor validation studies........................... 100,000
Workshops, Symposia........................................... 50,000
Research Support.............................................. 200,000
Administration................................................ 750,000
--------------------------------------------------------------
____________________________________________________

Total................................................... 2,200,000

Prepared Statement of the People for the Ethical Treatment of Animals

Chairman Bond and Members of the Subcommittee: People for the
Ethical Treatment of Animals (PETA) is the world's largest animal
rights organization, with more than 700,000 members. We greatly
appreciate this opportunity to submit testimony regarding fiscal year
2002 appropriations for the Environmental Protection Agency. My
testimony will focus on the EPA's Endocrine Disruptor Screening Program
(EDSP). The EDSP is the largest government-sponsored animal-testing
plan in U.S. history. Millions of animals are slated to die in painful
toxicity tests in this program.
Congress included language in the 1996 Food Quality Protection Act
mandating a screening program to determine whether pesticides and
certain other chemicals disrupt the human hormonal (endocrine) system.
It's a laudable goal. However, the scientific justification of the
EPA's large-scale testing program, with regard to human health effects,
has been widely questioned.
For example, the chair of the EPA's joint Scientific Advisory
Panel/Science Advisory Board (SAP/SAB) subcommittee on endocrine
disruptors stated at the conclusion of its deliberations on the EDSP
that ``there was an undercurrent through the whole [SAP/SAB] discussion
that the EPA program was ahead of science.'' \1\
---------------------------------------------------------------------------
\1\ Bureau of National Affairs, Daily Environment Report, 2 July
1999.
---------------------------------------------------------------------------
As Dr. Bernard Schwetz, acting deputy commissioner of the Food and
Drug Administration, has written, ``With the passage of the Food
Quality Protection Act in 1996, enormous amounts of resources were
plowed into developing agreement on test batteries to detect hormonal
activities of chemicals [while] determining whether there were, in
fact, adverse effects in humans seemed a much lower prior-
ity. . . . We do not know if there is a causal relationship between
adverse health effects in humans and exposure to endocrine disruptors
in our environment. It seems obvious that our focus should be on
determining whether such a relationship exists and, if so,
characterizing the extent of the problem.''\2\
---------------------------------------------------------------------------
\2\ Bernard Schwetz, Acting Deputy Commissioner, U.S. Food and Drug
Administration, ``Responding to Environmental Issues: Lessons
Learned,'' Environmental Health Perspectives, v. 107(10), October 1999.
---------------------------------------------------------------------------
A senior scientist with the National Institute for Environmental
Health Sciences who concurred with an international expert panel
critical of the existing structure of the program has stated
nevertheless that ``due to commitments by laboratories and government
agencies and the availability of funding, the program will proceed--
justified or not.'' \3\
---------------------------------------------------------------------------
\3\ Michael Shelby, Director, Laboratory of Toxicology, National
Institute of Environmental Health Sciences (NIEHS), at the Third World
Congress on Alternatives and Animal Use in the Life Sciences, Bologna,
Italy, 1 September 1999.
---------------------------------------------------------------------------
The Food Quality Protection Act states that the program will
provide for the testing of all pesticide chemicals (of which there are
only several hundred) to determine whether their effects in humans are
similar to effects produced by naturally occurring estrogen. However,
the law gives the EPA administrator authority to include other
chemicals suspected of having estrogenic effects or other endocrine
effects. Although it was not the intent of Congress, this allowed the
program to mushroom into its current proportions. The EPA has used this
leeway to include all 87,000 chemicals on the market and has broadened
the scope of effects to include androgen and thyroid as well as
estrogen effects. Meanwhile, other sections of the law, including the
requirement to consult with the Department of Health and Human Services
and the requirement to use appropriate validated tests, are being
ignored.
Currently, the EPA is planning to test tens of thousands of
chemicals. Yet the agency is unable even to define what an endocrine
disruptor is, and officials cannot agree on what constitutes an adverse
effect. Worse, the agency is planning to proceed with tests that have
not been appropriately validated, thereby generating huge amounts of
data that cannot be interpreted.
Current scientific estimates are that between 600,000 and 1.2
million animals will be killed for every 1,000 chemicals tested under
the EPA's plans--thus resulting in the suffering and death of an
astronomical number of animals. In addition to ethical concerns raised
both by animal protection organizations and by a joint subcommittee of
the EPA's Science Advisory Board and Scientific Advisory Panel,\4\ the
proposed tests also raise questions concerning the reliability of the
data. Numerous reports, including the National Academy of Sciences'
exhaustive 1999 study,\5\ cite not only the enormous differences
between animal and human endocrine systems, but also widely varying
differences between the endocrine systems of different strains of the
same species of animals.
---------------------------------------------------------------------------
\4\ U.S. Environmental Protection Agency, Review of the EPA's
Proposed Endocrine Disruptor Screening Program by a Joint Subcommittee
of the Science Advisory Board and Scientific Advisory Panel, 1999.
\5\ National Research Council, Hormonally Active Agents in the
Environment, National Academy Press, 1999.
---------------------------------------------------------------------------
With the EPA's present plan, millions of dollars, hours of labor,
and animals' lives will be spent to generate data that will be
meaningless. However, there are several concrete steps that the EPA can
take to reduce unnecessary animal tests, ensure that all test methods
are appropriately validated, utilize other research methods, which will
provide more scientifically relevant data on how humans are affected by
endocrine disruptors, and put the millions of dollars for this program
to use in ways that will actually benefit human health and the
environment. We request that the Senate Appropriations VA-HUD
Subcommittee include report language to ensure that these steps are
taken.
high-throughput pre-screen
At the outset of the program, the EPA's Endocrine Disruptor
Screening and Testing Advisory Committee (EDSTAC) recommended to the
EPA that a non-animal test method, known as the ``high-throughput pre-
screen'' (HTPS) be the first step before any other testing. The HTPS is
crucial to the efficiency of the program, because without the data
generated by the HTPS, the chemicals cannot be prioritized into a
logical testing sequence. Although the EPA claims it will use structure
activity relationship (SAR) modeling in place of the HTPS, SAR cannot
be used without the data generated by the HTPS.
The HTPS could screen out many chemicals from further testing.
Without it, millions of animals will be killed to test chemicals that
would have been eliminated early on in the program.
Congress appropriated $4 million in fiscal year 1999 to develop and
implement the HTPS for chemicals proposed for the EDSP. After spending
only $70,000 and conducting one feasibility study, it appears that the
EPA is not applying the balance of the funds to develop the HTPS. The
EPA appears to have abandoned further development of the HTPS, despite
the ongoing progress being made on this technology by researchers in
Japan.
Currently, the EPA intends to begin animal testing before the HTPS
is completed. In response to a suggestion that the EPA take more time
to develop the HTPS, Penelope Fenner-Crisp, senior science adviser in
the EPA's Office of Pesticide Programs, explained that the agency is
unwilling to miss legislative deadlines, saying, ``We have to do
something that looks like implementation.''\6\
---------------------------------------------------------------------------
\6\ Bureau of National Affairs, Daily Environment Report, 1 April
1999.
---------------------------------------------------------------------------
We request that the Senate Appropriations VA-HUD Subcommittee
stipulate that no funds be used for animal tests until the development
of the HTPS has been completed, and no funds be used to conduct animal
testing on a chemical until that chemical has been analyzed by the
HTPS.
validation of test methods
The Food Quality Protection Act states that all tests must be
``appropriate'' and ``validated.'' However, at present none of the
animal tests planned for the EDSP are being validated for their
relevance to human health effects. Therefore, the resulting data will
not prompt any meaningful regulatory action to protect human health.
The EPA does not plan to require the rigorous validation of the
animal tests that is required of all non-animal tests. Indeed, the
agency recently awarded a $34 million contract to a laboratory for the
development and validation of tests for the EDSP from a proposal in
which validation experience was barely even mentioned.
The Advisory Committee on Alternative Toxicological Methods (ACATM)
for the National Toxicology Program (NTP) has expressed ``grave
concern'' over the EPA's double standard in validation and has twice
unanimously recommended that all proposed test methods for the EDSP be
validated through the Interagency Coordinating Committee on the
Validation of Alternative Methods (ICCVAM).\7\ However, the EPA
rejected this recommendation. Although it does indeed require the
validation of all non-animal tests to be assessed through ICCVAM with
very rigorous and thorough standards, the EPA follows a dangerous
double standard by not requiring this same validation assessment of the
animal tests. Allowing quicker and less rigorous validation procedures
for animal tests not only creates a bias against non-animal tests, it
compromises the reliability of the resulting data as well.
---------------------------------------------------------------------------
\7\ National Toxicology Program Advisory Committee on Alternative
Toxicological Methods, resolution passed unanimously at its meeting on
28 November 2000.
---------------------------------------------------------------------------
We request that the Senate Appropriations VA-HUD Subcommittee
stipulate that no funds be used for validation of test methods unless
the validation of those test methods (both animal and non-animal
methods) is assessed through ICCVAM and that all necessary funds for
this assessment be provided to ICCVAM by the EPA as needed.
non-animal test methods
Although the EPA requires more chemical toxicity tests on animals
than any other federal agency, it currently spends virtually none of
its $500 million research budget on developing non-animal test methods
and has not adopted a proactive approach in this area. Frequently, non-
animal test methods are more economical, more reliable, more relevant
to human health than animal tests, and are also more humane.
We request that the Senate Appropriations VA-HUD Subcommittee
stipulate that at least 20 percent of the funds appropriated for the
EDSP be used to research and develop non-animal test methods.
the need for studies on human populations
There is much controversy in the scientific community regarding the
existence, nature, and severity of adverse effects in humans from
exposure to endocrine disruptors. For example, two of the most
frequently cited effects in humans are an increase in the rate of
hypospadias and a decrease in sperm counts. However, several recent
independent studies have concluded that there has been no change in the
rate of either of these occurrences.\8\
---------------------------------------------------------------------------
\8\ ``Hypospadias Rate May Not Be Increasing,'' Endocrine/Estrogen
Letter, v. 6(6), 22 March 2000; Acaio, B.D., T. Gottfried, R. Israel,
and R.Z. Sokol, ``Evaluation of a Large Cohort of Men Presenting for a
Screening Semen Analysis,'' Fertility and Sterility, v. 73(3), March
2000.
---------------------------------------------------------------------------
The Food Quality Protection Act directs the EPA administrator to
consult with the Secretary of Health and Human Services to utilize
``other scientifically relevant information'' (in addition to testing)
in order to determine whether certain substances have endocrine effects
in humans.
Contrary to those instructions, the EPA has no plans to involve the
Department of Health and Human Services and is using no other source of
information than its testing program. However, without knowledge of how
human populations are being affected by endocrine disruptors, the EPA
will not have the real-world data it needs to prompt regulatory action.
We request that the Senate Appropriations VA-HUD Subcommittee
stipulate that at least 10 percent of the funds appropriated for the
EDSP be given by the EPA to the Department of Health and Human Services
to be used for human epidemiological studies, including short-term
studies such as monitoring for biomarkers of estrogenic exposure, in
order to characterize the existence, nature, and severity of adverse
human health effects caused by exposure to endocrine disruptors.
summary
In summary, PETA requests that the appropriations for the EDSP for
fiscal year 2002 be provided with the following stipulations stated in
the report accompanying the appropriations bill:
(1) No funds may be used for animal tests until the development of
the HTPS has been completed, and no funds may be used to conduct animal
testing on a chemical until that chemical has been analyzed by the
HTPS.
(2) No funds may be used for validation of test methods unless the
validation of those test methods (both animal and non-animal methods)
is assessed through ICCVAM.
(3) All necessary funds for the validation assessment of both
animal and non-animal test methods by ICCVAM must be provided to ICCVAM
by the EPA as needed.
(4) At least 20 percent of the funds appropriated for the EDSP must
be used to research and develop non-animal test methods.
(5) At least 10 percent of the funds appropriated for the EDSP must
be given by the EPA to the Department of Health and Human Services to
be used for human epidemiological studies, including short-term studies
such as monitoring for biomarkers of estrogenic exposure, in order to
characterize the existence, nature, and severity of adverse human
health effects caused by exposure to endocrine disruptors.
These steps will promote the sound scientific practices needed for
the tangible protection of human health and the environment, as well as
a significant reduction in the use of animals. Thank you for your
consideration of our request.
______

Prepared Statement of the Doris Day Animal League

Mr. Chairman and members of the Subcommittee, thank you for the
opportunity to submit testimony relevant to the fiscal year 2002 budget
request for the U.S. Environmental Protection Agency's (EPA) Office of
Research and Development (ORD) and the Endocrine Disruptor Screening
Program (EDSP). I hope the Subcommittee will consider the concerns of
the 300,000 members and supporters of the Doris Day Animal League and
take steps to ensure the EPA recognizes the necessity of sound science
approaches in its research, development and validation of new and
revised toxicological test methods. These methods can significantly
reduce the numbers of, and ultimately replace, animals in its testing
programs. In addition, I am hopeful that this Congress, with
appropriate input from all stakeholders, can improve the coordination
of science priorities at the EPA, perhaps by authorizing a new
position, Deputy Administrator for Science.
research, development and validation of non-animal, alternative test
methods
In the previous two fiscal years (2000, 2001), the enacted budget
for the Office of Research and Development has hovered at approximately
$500 million ($534 million and $492 million, respectively). Within
these appropriations, we have found it difficult, if not impossible, to
track funding by ORD for specific non-animal, alternative test methods
to meet the EPA's needs in new testing programs. It is our contention
that many emerging technologies, which often prove to be faster to run,
less expensive and at least as predictive as current animal tests used
for hazard and risk assessment, would benefit from research and
development dollars. Therefore, we request that $10 million, from the
current budget request or over and above the President's budget, be set
aside for research, development and validation for regulatory
acceptance of non-animal, alternative test methods. Activities funded
by these allocations shall be designed in consultation with the Office
of Pollution Prevention and Toxic Substances. It is our preference that
these test methods have direct relevance to new EPA testing programs,
including the High Production Volume chemical testing program, EDSP and
Children's Health initiative. Our request for $10 million represents
just 2 percent of the total ORD budget and would be perceived by all
stakeholders as a genuine commitment by EPA to new non-animal,
alternative test methods.
I also request that the Subcommittee require the EPA report to the
Subcommittee by March 30, 2002 regarding expenditures and plans for
additional expenditures for fiscal year 2002 funds.
endocrine disruptor screening program (edsp)
The Environmental Protection Agency has been mandated, under the
Food Quality Protection Act and the Safe Drinking Water Act Amendments
of 1996, ``to determine whether certain substances may have an effect
in humans that is similar to an effect produced by a naturally
occurring estrogen, or such other endocrine effects as EPA may
designate.'' This statutory requirement was in response to concerns
about abnormal reproductive and developmental effects in wildlife
exposed to various chemicals in their natural environments. The EDSP is
an effort to primarily assess the health effects to humans, with
wildlife concerns a component of the program. On its face, it is a
worthy endeavor.
However, as currently proposed by the agency, thousands of
chemicals may be tested by a protocol comprised of 16 test methods,
most which are animal tests. It has been estimated that as many as 1.2
million animals will be killed per every 1,000 chemicals tested under
the current structure of the EDSP. These projections make this proposed
program the largest use of animals in toxicological testing by a
federal agency. For this reason, it is being carefully scrutinized by
concerned animal protection organizations wanting to ensure that all
concrete steps are taken with this new science to protect animals--both
wildlife and animals in the laboratories.
The very language in the FQPA on which the EDSP is based can
strongly address one of the concerns of the animal protection
community. To my knowledge, this is the first time that the word
``validation'' has been used as a requirement for sound science in
developing test methods for a federal toxicological program. The
statutory language required the screens and tests used in the EDSP to
be validated to ensure appropriately relevant, reliable and
reproducible tests and screens for the best science. The EPA, as co-
chair of the Interagency Coordinating Committee for the Validation of
Alternative Methods, supports the following definition of validation:
the process by which the reliability and relevance of a procedure are
established for a specific purpose. (``Validation and Regulatory
Acceptance of Toxicological Test Methods,'' NIH Report 97-3981).
In 1996, when the Acts were passed, the Interagency Coordinating
Committee for the Validation of Alternative Methods (ICCVAM) was in its
infancy. Since then, federal regulatory and research agencies,
including the EPA, have benefited from the effective assessment of
validity of new screens and tests afforded by ICCVAM. The ICCVAM
assesses the validity of new and revised test methods, including
alternatives, that have cross-agency application. In light of the
interest by the Food and Drug Administration and other federal agencies
and the fact that the proposed test methods for the EDSP are new or
revised for new endpoints, the ICCVAM could clearly provide a uniform
assessment of the validity of all EDSP test methods. Indeed, the ICCVAM
was permanently authorized by Congress last year in recognition of the
continuing crucial role it can play to facilitate assessment of test
methods that have cross-agency application, while giving a level of
confidence in the scientific assessment to various stakeholders.
The Advisory Committee on Alternative Toxicological Methods for the
National Toxicology Program, comprised of scientists from the public
and private sectors, passed unanimous resolutions on two occasions
strongly supporting the ICCVAM assessment. However, EPA continues to
assert that the non-animal, alternative test methods can be reviewed by
ICCVAM, while the animal test methods will solely be reviewed by the
agency's Science Advisory Board/Scientific Advisory Panel (SAP/SAB).
This bifurcated approach gives animal protection advocates and other
stakeholders cause to believe that two different standards of
scientific validity may be applied. And while the agency claims it will
use the same criteria for assessment of validation as the ICCVAM, the
level of confidence in the ICCVAM is stronger. Also, any claim made by
the agency that ICCVAM assessment may slow down implementation of the
EDSP is simply hyperbole.
I urge the Subcommittee to support the assessment of validation of
tests and screens for the EDSP by the ICCVAM with appropriate fiscal
support from the EPA. This interagency process can provide appropriate
peer review of new tests and screens proposed for the EDSP. The ICCVAM
should work with the EPA's SAB/SAP to avoid unnecessary delay in the
program. Among other things, ICCVAM's assessment can serve to ensure
due consideration is given for the replacement, reduction and
refinement of the use of animals in these new tests and screens. This
request should in no way be perceived as calling for a reduction of the
President's request for activities in the Science and Technology
account addressing endocrine disruption.
I would also request that the Subcommittee require the Agency
provide a report to the Subcommittee by March 30, 2002 regarding
expenditures and plans for additional expenditures for fiscal year 2002
funds under the EDSP.
conclusion
I respectfully request that the Subcommittee direct the EPA provide
$10 million for the ORD to research, develop and validate non-animal,
alternative toxicological test methods for regulatory acceptance.
I also respectfully request that the Subcommittee direct the EPA to
provide appropriate fiscal support to the ICCVAM for assessment of
validation of all tests and screens to be incorporated into the EDSP.
______

Prepared Statement of The Nature Conservancy

introduction and background
Mr. Chairman and members of the Subcommittee, I appreciate the
opportunity to submit written testimony on fiscal year 2002
appropriations for the U.S. Environmental Protection Agency (EPA).
The Nature Conservancy is an international, science-based, non-
profit organization dedicated to conserving biological diversity. Our
mission is to preserve the plants, animals, and natural communities
that represent the diversity of life on Earth by protecting the lands
and waters they need to survive. The Conservancy has more than one
million individual members and over 1,500 corporate members; we have
programs in every state and in 27 nations. To date, our organization
has protected more than 12 million acres in the United States and has
helped local partner organizations preserve approximately 80 million
acres internationally. The Conservancy itself owns more than 1,300
preserves--the largest private system of nature sanctuaries in the
world.
Biological diversity is important for a number of reasons. Species
and natural communities harbor genetic and chemical resources that
contribute to advances and products in medicine, agriculture and
industry. The value of these goods is enormous. It represents, however,
only a fraction of the value these ecosystems provide to humanity in
terms of services, such as waste assimilation and treatment, climate
regulation, drinking water, and flood control. One estimate of the
value of these services for the entire biosphere is $33 trillion, which
is nearly double the gross national product (Costanza et al 1997). In
addition to these benefits, the environment serves as an instrument
through which educational, cultural, aesthetic and spiritual values are
often expressed.
Last year, the Nature Conservancy and the Association for
Biodiversity Information released a study documenting America's
astonishing natural abundance. For example, we now know the United
States is home to more than 200,000 native species of plants and
animals and ranks at the top in its variety of mammals and freshwater
fish. Ecosystems in the United States are also among the most diverse.
They range from tundra, to deserts, prairies, and various forest types.
However, as many as one-third of the nation's species are at risk and
at least 500 species have already gone extinct or are missing. The
single biggest threat to species survival is loss of habitat, which
generally occurs as a result of human activities. Almost 60 percent of
America's landscape is already severely altered.
Reversing the trend will require working at larger scales and
across state and other jurisdictional lines. The Nature Conservancy is
committed to this effort. In fact, we are pledging to invest $1 billion
in private funds over the next several years to protect critical
natural areas around the country and abroad. These investments alone,
however, will not be enough. True conservation success will only be
achieved through the work of partners, including the Federal
government. Funding is needed at the Federal level to support on-the-
ground conservation projects and to ensure policies that promote a
sustainable environment.
summary of recommendations
EPA is responsible for administering a number of programs that
protect public health and the environment. The Nature Conservancy
recommends funding for seven programs with which we have had direct
experience and that we believe help preserve biodiversity. The seven
programs include the following:

THE NATURE CONSERVANCY'S FISCAL YEAR 2002 FUNDING RECOMMENDATIONS FOR
SELECTED EPA PROGRAMS
------------------------------------------------------------------------
Fiscal Year 2002 Recommendations
Program Name -----------------------------------
EPM Account STAG Account
------------------------------------------------------------------------
Clean Water Act State Revolving Fund ................ $1,350,000,000
(CWASRF)...........................
Coastal Watersheds and National \1\ $70,000,000 ................
Estuaries Program..................
Non-point Source Management Program 16,900,000 250,000,000
(Section 319)......................
Wetlands Protection Program......... 18,000,000 18,000,000
Great Lakes National Program Office. 16,000,000 ................
Gulf of Mexico Program.............. 5,000,000 ................
Regional Geographic Initiative...... 15,000,000 ................
------------------------------------------------------------------------
\1\ Includes $35 million recently authorized for the National Estuary
Program under the Estuaries and Clean Waters Act of 2000 and $35
million for other coastal activities.

These programs benefit public health, the environment, and, by
extension, biodiversity conservation. For example, loans made under the
CWASRF to establish or restore riparian corridors along streams (to
address non-point pollution) will improve water quality, while also
improving or providing important aquatic and terrestrial habitat.
Section 319 funds can be used to produce a similar range of benefits.
The seven programs referenced generally satisfy niches filled by no
other federal programs. For example, unlike Farm Bill programs, the
Section 319 program can be used to address non-point pollution from
diverse sources such as urban runoff and leaking septic systems, not
just pollution from agricultural sources. Its broader focus reaches
more vulnerable habitats such as grassed swales that are important to
grassland birds, which as a group are the most threatened in the United
States.
In general, the seven programs for which the Conservancy is
advocating are holistically based. The geographically focused programs,
in particular, enable multiple pollution problems to be addressed in an
integrated rather than singular fashion for a given resource.
The Conservancy supports level or increased funding for each of the
seven programs mentioned. Our remaining comments, however, focus on
three of the seven programs: the Great Lakes National Program Office,
the Gulf of Mexico Program, and the Regional Geographic Initiative. We
would be happy to provide comments on the programs not covered below at
the request of the Subcommittee.
geographic-specific recommendations
EPA's geographic programs are extremely important to conserving and
restoring areas of ecological, cultural and economic significance.
Moreover, they address diverse environmental and public health threats
in a non-regulatory fashion. They also provide opportunities for public
and private parties to collaborate to achieve mutually beneficial
goals. As Director of the Conservancy's Great Lakes Program, I know
first-hand the importance of such collaborative efforts. EPA's Great
Lakes National Program Office has helped catalyze some of the
Conservancy's protection efforts in the region. The Conservancy, in
turn, has significantly leveraged this federal investment to advance
the science necessary for proper management and protection of the
unique ecosystems of the Great Lakes region.
The Nature Conservancy recognizes the overall constraints through
which EPA's fiscal year 2002 budget must be determined. As such, we
recommend only modest funding increases. We wish to emphasize, however,
the need for comprehensive legislative packages to be crafted to
address the range of needs facing our Nation's geographic specific and
important resources.
1. Great Lakes National Program Office
EPA's Great Lakes National Program Office (or GLNPO as it is
commonly called) promotes activities that protect the safety of food
and water drawn from the Lakes and seeks to protect and restore
critical habitats vital to supporting healthy and diverse communities
of plants, fish, and wildlife. GLNPO also has responsibility for
meeting U.S. obligations under the Great Lakes Water Quality Agreement
with Canada.
The Nature Conservancy considers GLNPO to be a significant
conservation partner in the Great Lakes ecoregion. GLNPO provided 40
percent of a $500,000 Conservancy led effort involving over 400 public
and private partners to develop a broad-based, ecoregional conservation
plan for the Great Lakes region. The Conservancy's plan includes the
Great Lakes watershed, an area covering 294,000 square miles. The plan
identifies priority conservation areas that, if protected or restored,
would conserve the full range of the region's unique biodiversity.
GLNPO has also provided five percent toward an $838,000 Conservancy
effort to identify priority aquatic communities in the near shore areas
of the Lakes. These examples demonstrate how GLNPO, The Nature
Conservancy, and other organizations have significantly leveraged
resources to develop tools and preserve actual places for future
generations to cherish and enjoy.
The Great Lakes Basin is a region of superlatives, of both great
beauty and industrial strength. The Great Lakes represent the largest
system of fresh surface water on Earth. They span parts of eight U.S.
states and one Canadian province and house more than one-tenth of the
U.S. population and one-fourth of Canada's. The lakes influence climate
and hydrology, creating an ecologically unique environment in which a
wealth of species and communities thrive. Among the many interesting
features found in the Great Lakes region are thousands of freshwater
islands (including Manitoulin Island--the world's largest freshwater
island); the largest freshwater river delta on earth (St. Clair River
Delta); the largest collection of sand dunes of freshwater origin in
the world; wild, unfragmented northern forests; and 185 globally rare
plants, animals and natural communities.
Activities in the region, however, have exacted a toll: vital
wetlands have been dredged and filled, deepwater fisheries have been
depleted, and vast forests have been cleared. Exotic plants and
animals, such as purple loosestrife and zebra mussels, have been
unwittingly unleashed in water and on land, decimating native species
and inflicting massive economic costs. Species in trouble include the
prairie whitefringed orchid, dwarf lake iris and lake sturgeon. High-
impact recreation and tremendous loss of grasslands to farming and
urban development pose threats as well.
Time is running out to protect the biodiversity of the Great Lakes
region. For example, over half of the 271 sites identified by the
Conservancy as harboring significant and viable species or natural
communities are irreplaceable. That is, these sites represent the only
opportunity to protect certain species or communities unique to the
Great Lakes region. One-third of the sites need action right now.
Partnerships with farmers and foresters, hunters and anglers, industry
and homeowners, and various government agencies like GLNPO are vital if
the Great Lakes region and all of its inhabitants are to remain
healthy.
The Nature Conservancy, therefore, respectfully requests an
appropriation of $16 million for EPA's Great Lakes National Program
Office in fiscal year 2002. The additional funding should support
GLNPO's grants program, which enables organizations like the
Conservancy to further develop the science and tools needed to protect
Great Lake resources. These funds have been considerably restricted in
recent years, thereby limiting opportunities for the Conservancy and
others to leverage GLNPO funds for environmental protection.
2. Gulf of Mexico Program
EPA's Gulf of Mexico Program protects public health, abates
nutrient enrichment problems, conserves and restores habitat, and
controls invasive species in the Gulf region. The program reaches its
goals by providing technical and financial assistance to Gulf States
and private partners to promote voluntary, incentive-based activities
to remedy threats to the region's coastal rivers and estuaries.
The Nature Conservancy directly matched funds provided through the
Gulf of Mexico Program to develop an ecoregional plan for the northern
Gulf of Mexico. Like the Conservancy's other ecoregional plans, the
Gulf plan identifies priority areas that, if protected or restored,
will conserve the region's unique biodiversity. The plan was developed
in consultation with approximately 75 partners, including some of the
nation's leading experts in coastal and marine sciences. The
Conservancy is presently working with the Gulf of Mexico Program and
the United States Geological Survey to make the plan and its data
available to all partners working in the region so that it can be used
as a management guide.
The northern Gulf of Mexico is a productive environment, ranking as
one of the nation's leading producers of finfish and shellfish. NOAA
estimated the commercial value of the 1997 harvest to be $823 million.
The Gulf of Mexico has been ranked as the number one region for seafood
harvest in both poundage and monetary value. The health of the Gulf and
ultimately its productivity is at risk. Over 60 percent of the
continental U.S. drains into the northern Gulf, thereby contributing
excess nutrients and other pollutants. Additional stresses include
hydrologic alterations in the watershed and direct and indirect habitat
destruction. Excess nutrients flowing from watersheds, especially in
the upper Midwest, have created an area of low oxygen that extends
thousands of miles off the cost of Louisiana (an area commonly referred
to as the ``dead zone''). Few animals can survive in these conditions
of low oxygen. This situation has emphasized to planners,
conservationists, citizens, and decision-makers the importance of
recognizing land and water connections on a broad scale in order to
solve problems such as those found in the Gulf.
Now that a large-scale plan has been developed for the region, a
greater infusion of federal resources is needed to fully address the
critical and far-reaching threats facing the ecosystem. The Nature
Conservancy recommends an appropriation of $5 million for EPA's Gulf of
Mexico program in fiscal year 2002. These additional funds will enable
the program to continue playing a critical organizing role for
environmental protection and restoration activities in this region. The
additional funds should also be used to support a more comprehensive
monitoring and modeling program to evaluate the full range of the
``dead zone.'' Additional funds should also be used to promote
incentives and other voluntary measures to reduce nutrient loads to the
system. Success in this area will require activities at multiple levels
and by various public and private partners.
3. Regional Geographic Initiative
EPA's regional offices provide grants under this program for
projects addressing complex ecological relationships, such as those
occurring between land, water and air. Most EPA programs address
environmental problems in an isolated fashion. That is, they approach
problems within the confines of a single, environmental media, economic
sector, or pollutant. The Regional Geographic Initiative, on the other
hand, enables practitioners to address threats to multiple
environmental resources simultaneously at a single site. Project sites
can vary in scale according to the problems being addressed, thereby
enabling sites to extend beyond state jurisdictional boundaries. These
factors enable more comprehensive solutions to environmental problems
to be derived. Examples of these multi-faceted projects include those
that protect drinking water sources and aquatic habitat by preserving
forest ecosystems and adjacent wetlands, remedy lead paint and air
quality problems in low-income communities; and address exotic and
invasive species, habitat loss for native species, and pollutant
inputs.
The Nature Conservancy, in partnership with the Colorado, Montana,
and Wyoming Natural Heritage Programs, received funding through this
Initiative to inventory the critical biological resources of the South
Platte, Upper Arkansas, and Upper Yellowstone watersheds. The data have
been integrated with water quality, monitoring, land use, pollutant,
GIS and other data to create comprehensive pictures of the threats
facing these systems. The data, in turn, are being used to inform the
threat abatement strategies of local partners, such as the Conservancy,
and government stakeholders.
The Nature Conservancy recommends an appropriation of $15 million
for the Regional Geographic Initiative in fiscal year 2002. Significant
progress has been made in addressing some of the nation's most
fundamental pollution problems. The problems that remain, however, are
diffuse and will require comprehensive solutions if significant
breakthroughs are to be made. EPA's Regional Geographic Initiative is
one means through which the federal government can significantly foster
such innovations in thinking and application.
closing
Thank you for the opportunity to provide these brief comments and
for your attention to the important role EPA programs play in
protecting public health and the environment and in conserving
regionally-unique ecosystems. While the charge to conserve biodiversity
is a daunting one, public and private partnerships such as those
afforded under EPA's programs offer the promise of success. The
Conservancy would not be investing so heavily with its own resources if
we did not believe this to be true. We look forward to continuing our
work with Federal agencies, state and local governments,
nongovernmental organizations, and the private sector to ensure the
long-term protection and sustainable use of the environment toward the
ultimate goal of preserving the diversity of life on Earth. We
appreciate the Subcommittee's support for the EPA programs that help
make this important work possible.
______

Prepared Statement of the National Jewish Medical and Research Center

Mr. Chairman, and Members of the Subcommittee, thank you for the
opportunity to submit testimony to the hearing record regarding the
Environmental Lung Center at the National Jewish Medical and Research
Center in Denver, Colorado. The National Jewish Center, formerly the
National Jewish Center for Immunology and Respiratory Medicine, is the
world's foremost center for the study and treatment of lung disease.
As you know, funds for research at the Environmental Lung Center
were included in recent EPA Appropriations. We successfully completed
the Environmental Protection Agency peer review process and are now in
our fourth year of working with the Agency. First, I would like to take
this opportunity to thank the Subcommittee for its support and to
report on the excellent research that is being undertaken as a result
of this support. We believe that a very productive relationship with
the agency has been fostered. Essentially, the mission of the
Environmental Lung Center will be to provide the sound science
necessary to assist the agency with regulatory policy in specific
areas, specifically respiratory health effects of air pollution.
The goals of the Center include determining the health effects of
air pollution in patients with pre-existing lung disease and the
mechanisms whereby air pollutants produce adverse health effects. We
are investigating the effects of air pollution in children with asthma
and adults with chronic obstructive pulmonary disease (emphysema). We
are working to improve our understanding of the scientific basis for
evaluating health hazards and the risk for patients with pre-existing
lung disease.
This research is extremely important given the fact that in the
United States, lung disease is a leading cause of death. It is now well
known that man-made environmental and occupational pollutants
contribute significantly to the rising numbers of those afflicted,
particularly impacting residents and commuters to urban areas and those
who work in occupations such as mining, construction, textiles and
manufacturing. Indoor air pollution and improper ventilation also cause
the spread of respiratory illnesses. To eradicate these illnesses and
address general environmental concerns, the Clean Air Act authorized
EPA to set exposure standards for six widespread air pollutants. As you
know, these standards continue to provoke heated debate in the
scientific and regulatory communities. Our task is to find out the
extent to which the exposure thresholds are true, as measured against
individual susceptibility, and to assist the regulatory bodies in this
country to come up with decisions regarding toxic thresholds of
compounds and the medical relevance of the EPA's fixed testing-station
data to surrounding populations.
As the only high ranking institute in the nation that concentrates
on lung disease and the only one that sees patients as well as conducts
research, National Jewish has made great contributions to the
advancement of medical knowledge about the effects of environmental
pollutants on the human pulmonary system. Its location in Denver is
significant in that the city is plagued with environmental pollutants
(nearly 300,000 Colorado residents have chronic lung disease, which is
well above the national average, although our patients come from all 50
states). Our dedicated research at National Jewish has shown definite
linkages between certain types of ambient air pollutants and asthma and
chronic obstructive pulmonary disease (COPD). We are currently
exploring this further.
The Environmental Lung Center's research efforts will range broadly
from studies of molecular biology and immunology to direct studies of
air pollution on patients with lung disease. The focus of our work is
on the special features of the lung as an immune organ, the
pathogenesis of oxidant and particulate inhalation injuries, and the
effects of ambiant air pollution on two specific cohorts of patients,
childhood asthma and adults with emphysema. For the purposes of this
testimony, I will describe the proposed studies in a very general way
that will give the Subcommittee a view into the complexities of
determining safe levels of airborne toxins given human susceptibility
factors.
Our research program is designed to determine the effects and
mechanisms of injury of particulates and oxidant gases on the
respiratory system. We have chosen particulates because of the national
concern expressed by the Environmental Protection Agency and the
National Academy of Sciences on how little we know about the health
consequences of exposures to particulates. Our institution has great
strength in respiratory medicine and immunology, so we can readily
bring scientific expertise to bear on this program. Funding will have
an immediate impact on our understanding of the scientific basis of the
effects of air pollutants on the respiratory system. We have chosen to
focus our clinical studies on two groups of patients who are thought to
be very susceptible to air pollution. The first group are children with
asthma. We have a school on site for children with asthma. We will have
a unique opportunity to evaluate the relationship of particulate air
pollution to asthma symptoms, clinical and physiologic changes, and
medication use. The other group that we have chosen are patients with
chronic obstructive pulmonary disease (COPD). This group of patients
have a higher mortality rate during times of heavy particulate air
pollution. To learn more about the mechanisms whereby air pollutants
effect patients with asthma and COPD, we have developed unique murine
models of these two human conditions. We will expose mice with
genetically defined respiratory and immunologic abnormalities to air
pollutants in a defined, well-characterized manner in order to
determine the mechanisms of how air pollutants effect the respiratory
system. Finally, we have two projects which will determine the effects
of ozone on specific critical proteins and cells of the respiratory
system. These systems might provide a new sensitive biomarker to detect
adverse health effects without having to use complex clinical
indicators of hospital admissions and morbidity.
In fiscal year 2002 we are again requesting $1.75 million to
continue these projects. We are particularly proud of our studies on
two susceptible populations of individuals with pre-existing
respiratory disease. Children with asthma are a special patient
population requiring additional studies to define the health risks of
air pollution by the EPA. The second patient group are patients with
moderately severe COPD or emphysema. It is in this latter group that
epidemiologic evidence has indicated an increase in hospitalization and
mortality related to particulate air pollution. We are in a unique
position for studying the effects of air pollution on individuals with
pre-existing respiratory disease.
The major thrust for the next few years is to take advantage of
modern molecular biology and genetics in order to study environmental
lung disease. Never before have researchers had the ability to
determine the genetic basis for individual susceptibility and the
molecular mechanisms of disease. Our institution is internationally
known for its research in immunology, and we want to utilize this
expertise to study environmental lung disease.
Mr. Chairman, we believe that we are the best partner to provide
the type of sound scientific research necessary to assist the agency
with its regulatory decision-making goals. Our desire is to grow this
relationship and hope that the subcommittee will again provide $1.75
million for fiscal year 2002 to continue this relationship for another
year. This federal investment will enhance our nation's commitment to
protecting the health and safety of its workers, citizens and
individuals the world over. The research conducted by the Center will
lead to medical breakthroughs and environmental findings that will
assist the federal government to set new standards for both government
and business. Your support for these efforts will save lives and
ultimately, save costs for the federal government and for businesses
who are currently struggling to comply with new standards.
Thank you.
______

Prepared Statement of the Association of Minority Health Professions
Schools

Mr. Chairman and members of the subcommittee, thank you for the
opportunity to express the views of the Association of Minority Health
Professions Schools (AMHPS).
I am Ronny B. Lancaster, M.B.A., J.D., Senior Vice President for
Management and Policy at the Morehouse School of Medicine, and
President of the Association of Minority Health Professions Schools.
AMHPS is an organization which represents twelve (12) historically
black health professions schools in the country. Combined, our
institutions have graduated 50 percent of African-American physicians
and dentists, 60 percent of all the nation's African-American
pharmacists, and 75 percent of the African-American veterinarians.
AMHPS has two major goals (1) to improve the health status of all
Americans, especially African-Americans and other minorities; and (2)
to improve the representation of African-Americans and other minorities
in the health professions. We are working toward achieving this goal by
seeking to strengthen our institutions and fortify other programs
throughout the nation that will improve the role of minorities in the
provision of health care and research.
agency for toxic substances and disease registry
Congress created the Agency for Toxic Substances and Disease
Registry (ATSDR) to implement the health-related sections of law that
protect the public from hazardous wastes and environmental spills of
hazardous substances. The mission of ATSDR is to prevent exposure and
adverse human health effects and diminished quality of life associated
with exposure to hazardous substances from waste sites, unplanned
releases, and other sources of pollution. ATSDR works in partnership
with Environmental Protection Agency, the Centers for Disease Control
and Prevention, and the National Institute of Environmental Health
Sciences to carry out its public health activities.
ATSDR is performing critical work in the field of environmental and
toxicological studies that has a profound impact on public health. In
order to carry out the level of activity that is called for in its
mission statement, AMHPS recommends an appropriation of $75 million for
ATSDR in fiscal year 2002, level funded from fiscal year 2001.
the atsdr/amhps cooperative agreement on environmental health and
toxicology research
In 1992, ATSDR identified a need for enhanced information on 38
hazardous substances. Through a cooperative agreement between ATSDR and
the Minority Health Professions Foundation (MHPF), the historically
black health professions schools that I represent are engaged in
research on twelve of these priority hazardous substances. They
include:
(1) Lead
(2) Mercury
(3) Benzene
(4) Cadmium
(5) Benzo (a) pyrene
(6) Flouranthene
(7) Trichlorocthylene
(8) Toluene
(9) Zinc
(10) Manganese
(11) Chlordane
(12) Di-n-butylphthalate
Mr. Chairman, I would like to express my appreciation to the
subcommittee for its support again last year of the ATSDR/MHPF
Cooperative Agreement. The productivity of this research program is
evidenced by the number of publication and scientific presentations
made by the funded investigators. To date, more that 55 manuscripts
reporting the finding of the various research projects have been
published in peer-reviewed and prestigious scientific journals. These
journals include: ``Brain Research'', ``Neurotoxicology'', ``Journal of
Neurochemistry'', and ``Environmental Health Prospectives''.
Moreover, investigators have made more than 120 presentations at
national and international scientific meetings, including the annual
meeting of the Society of Toxicology, the Experimental Biology meeting,
the International Congress of Toxicology meeting, and the International
Society of Psyschoneuropharmacology meeting. Finally, the ATSDR/MHPF
Cooperative Agreement has contributed significantly to the training of
students in toxicology and environmental health. Annually, more than 30
students, both graduate and undergraduate, are actively involved in the
research program.
Unfortunately, Mr. Chairman, it is our understanding that ATSDR is
proposing a significant reduction in funding for the Cooperative
Agreement in fiscal year 2002. Currently, funding for this program is
$3.1 million. However, given ATSDR's budget constrains, we understand
that support for the Cooperative Agreement in fiscal year 2002 may be
reduced by as much as 75 percent.
Mr. Chairman, if this reduction were to materialize, it would:
--Terminate nine out of twelve ongoing research projects in their
final year;
--Deprive science of some of the most significant findings from the
research program;
--Waste $15 million invested to-date in research projects that will
not be completed; and
--Terminate employment for approximately eighty percent (80 percent)
of all project personnel.
The member institutions of the Association of Minority Health
Professions Schools encourage the subcommittee to continue to support
the ATSDR/MHPF Cooperative Agreement at the current level of funding.
We should continue to build on the progress we have made through this
important partnership, not abandon our efforts to improve our
understanding of the effect that hazardous substances have on some of
our nation's most at-risk populations.
Mr. Chairman, thank you very much for the opportunity to present
the views of the Association of Minority Health Professions Schools.
______

Prepared Statement of the National Treasury Employees Union

Chairman Bond, Ranking Member Mikulski, and distinguished Members
of the Subcommittee, my name is Colleen Kelley, and I am the National
President of the National Treasury Employees Union. NTEU represents
more than 150,000 federal employees, including the professional
employees who work at the Environmental Protection Agency. I appreciate
this opportunity to present testimony to you today on behalf of the men
and women who work to ensure a cleaner and healthier environment for
all Americans.
Day in and day out, the employees at the EPA are working to reduce
the health risks to the American public through the enforcement of our
environmental laws, the cleanup of contaminated lands and waterways,
and the development of new scientifically sound environmental
standards. If we want to continue our nation's progress in cleaning up
our environment, then Congress must work to ensure the EPA gets the
staffing and resources the agency needs to effectively carry out its
mission. Unfortunately, the budget President Bush has proposed for the
Environmental Protection Agency falls far short.
The Bush budget severely undercuts current EPA operations and fails
to provide funding to support efforts to combat future environmental
threats. Most troubling is the Bush proposal to cut the EPA workforce--
those on the front lines in protecting the American public from
environmental dangers--by 500 employees. Specifically, the budget would
cut EPA's enforcement staff in Washington, DC, and in regional offices
by 9 percent. While cutting the staffing and funding levels for the
EPA, the Bush budget shifts significant power from the federal
government to the states, many of which have questionable environmental
enforcement records, and to private contractors, who are often more
concerned with their quarterly financial reports than developing and
enforcing fair and consistent environmental standards.
Environmental protection and enforcement programs and federal clean
water and clean air programs take severe hits under the Bush budget.
The budget proposed by President Bush slashes $500 million from the
level of funding appropriated by Congress for 2001. The $500 million
cut from the EPA budget includes a cut of $158 million from EPA's
efforts to enforce laws that keep polluters from contaminating our air
and our drinking water. It also includes cuts to the Safe Food Program,
which is aimed at ensuring a food supply free of harmful pesticides;
the Pollution Prevention Program, which helps reduce toxic emissions in
our air; the Waste Management Program, which fosters the safe
transport, storage, and disposal of solid waste; and the Global and
Cross Border Environmental Risk Program, which helps reduce global
atmospheric environmental health threats.
President Bush's budget even slashes $56 million from EPA's Science
and Technology Account, the agency's primary stream of funding to
support scientific and technological research into how best to protect
the health of American families. This is particularly ironic since
President Bush has rolled back many Clinton Administration
environmental protection regulations--including the revised standard
for cancer-causing arsenic in America's drinking water--claiming the
EPA needs to conduct more scientific studies.
As the number and complexity of threats to our environment and to
human health continue to increase, it is critical that the Congress
provide additional funding for staffing at the EPA. We owe it to future
generations of Americans to leave them with a clean environment. We are
all stewards of the earth, and as such, we should continue to foster
science-based innovation and public policy that protects the public
health and our environment. The professional employees at the EPA are
the ones who have years of expertise in these critical areas, and they
are the ones who are in the best position to foster environmental
progress. We cannot expect the EPA to continue to protect the public
health without the staffing and resources necessary to do the job.
The work performed by the men and women at the EPA is often taken
for granted. Yet thanks to persistent work by EPA employees, we are
reducing air pollution, improving the quality of our drinking water
systems, and allowing Americans to live longer and healthier lives. EPA
scientists, analysts, lawyers, and others who have dedicated their
lives to serving the public continue to work to find the most cost
effective and most efficient solutions to addressing our country's
greatest environmental threats.
Now is the time to build on our science base so that we can be
assured that the planet we leave to our next generation is cleaner and
in better shape than the one we inherited from earlier generations. The
American people expect that their tax dollars are being spent to
continue to expand the science base at the EPA so that we can better
mitigate and prevent environmental threats. Unfortunately, the budget
President Bush has proposed for the EPA would likely reverse years of
environmental progress. I urge you to reject President Bush's EPA
budget proposal and pass a budget that provides the EPA with the
staffing and resources required to do its job.
I would like to thank this Subcommittee for giving NTEU the
opportunity to present our views on the EPA budget for fiscal year
2002. As you continue your subcommittee's deliberations, I hope you
will give special consideration to EPA's dedicated workforce, a team of
public servants who have committed themselves to cleaning up our
environment and protecting the health of the American people.
______

Prepared Statement of the State and Territorial Air Pollution Program
Administrators and the Association of Local Air Pollution Control
Officials

The State and Territorial Air Pollution Program Administrators
(STAPPA) and the Association of Local Air Pollution Control Officials
(ALAPCO) appreciate this opportunity to provide testimony regarding the
fiscal year 2002 proposed budget for the U.S. Environmental Protection
Agency (EPA), particularly regarding grants to state and local air
pollution control agencies under Sections 103 and 105 of the Clean Air
Act.
STAPPA and ALAPCO are the national associations representing air
quality officials in 54 states and territories and more than 165
metropolitan areas across the United States. Under the Clean Air Act,
state and local air quality officials have the primary responsibility
for implementing our country's clean air program on behalf of our
citizens. This extremely complex and diverse program requires state and
local air agencies to address particulate matter, ground-level ozone,
toxic air pollution, acid rain and other types of air pollutants, many
of which cause significant adverse health effects, including cancer,
severe respiratory ailments and premature death. Air agencies must
continue to carry out the core elements of our programs, which serve as
the foundation of our nation's clean air effort, while, at the same
time and with the same staff and resources, address new initiatives
that focus on emerging problems.
With respect to fiscal year 2002, the President's proposed budget
calls for $208.5 million for state and local air agency grants under
Sections 103 and 105 of the Clean Air Act, which represents level
funding from last year. While we understand that there are constraints
throughout the federal budget, we are concerned that level funding will
make it far more difficult for state and local air quality agencies to
meet their health-based and environmental requirements under the Clean
Air Act. Accordingly, we strongly urge that Congress recognize the
severe and growing budget shortfall facing state and local air agencies
and provide an increase of $33 million under Section 105 of the Clean
Air Act.
air pollution is a significant problem
Although we have made substantial progress in improving air
quality, air pollution still presents a pervasive national public
health and environmental problem. In fact, the health risks from
exposure to air pollution are significant and far exceed those from
almost every other environmental medium. Over 60 million people live in
areas of the country where health-based air quality standards are
violated. Further, 125 million people live in areas with air quality
that does not meet the new health-based eight-hour ozone standard.
Aside from our traditional air contaminants, more hazardous pollutants
are emitted into the air than are released to surface water, ground
water and land combined. In view of the importance of what is at
stake--public health--and the difficulty and complexity of the task we
still face, it is critical that we focus the necessary resources on
ensuring that the air our citizens breathe is clean.
The magnitude of the national problem posed by air pollution and
the tremendous risk to public health this problem presents demonstrate
clearly that our nation's air program budget warrants far more
resources than are currently being appropriated. No matter what efforts
we make to address air pollution, and in spite of any innovations or
plans we develop, we will not reach our goal--healthful air quality--
without adequate funds. We believe increased funding for the air
program should be a top priority--commensurate with the relative risk
to public health and the environment.
state and local air agencies need additional resources
Several years ago, STAPPA, ALAPCO and EPA conducted a collaborative
effort to assess funding needs, which concluded that federal grants to
state and local air pollution control agencies under Section 105 of the
Clean Air Act continue to fall short by nearly $100 million each year.
Unless the fiscal year 2002 budget includes significant increases over
recent years, state and local air agencies will continue to face a
serious funding shortfall that would impede our ability to address the
important public health problems throughout the country that result
from air pollution.
This shortfall is growing larger because the demands being placed
on state and local agencies are increasing. Since the completion of the
collaborative effort, new ambient air quality standards have been
promulgated for fine particulate matter and ozone, the regional haze
program has been implemented and numerous standards to control toxic
air pollution have been promulgated. Each of these has placed an
increased resource burden on our agencies without commensurate
increases in our Section 105 grants.
There are many who mistakenly believe that the federal permit fee
program under Title V of the Clean Air Act, which requires the
collection of fees from major sources to cover the costs of the permit
program, is the solution to the funding woes of state and local air
agencies. While the permit fees collected pursuant to Title V are
essential to our efforts, they do not solve our funding problems for
several reasons.
First, Title V fees may only support the operating permit program
and cannot be used for other activities. Second, the fee program only
applies to major sources, while most permits are issued for non-major
sources, which do not pay Title V fees. The issuance of minor source
permits is quite resource intensive. Finally, increases in costs for
air quality programs (except for permit programs themselves) are not
addressed by permit fee programs.
In other words, federal grants and permit fees support separate
activities and cannot be mingled. Even if fees are adequate for major
source permit programs, which they may not be in many cases, the funds
are not available for the other elements of air quality programs.
Since fees are not the answer, federal grants are critical to the
effective operation of our programs. While we feel the Section 105
program should be increased in fiscal year 2002 by at least the entire
amount of the shortfall that the study identified, we recognize that
this is unlikely in view of the very difficult task facing Congress in
distributing finite resources to many worthy programs. We believe,
therefore, that it is reasonable for the increase to be phased in over
a three-year period, beginning with an increase of $33 million in
fiscal year 2002.
On what would we spend additional resources? Increased grants would
help to support many activities. For example, there is much that still
must be done to address toxic or hazardous air pollution. We must
assess the extent of the problem through monitoring and data analysis,
implement technology-based (or ``MACT'') standards, develop strategies
for addressing national and local problems, and issue permits to many
minor sources (an expensive undertaking that is not covered by permit
fees under Title V of the Clean Air Act), among other things. In
addition to toxic air pollution, we must continue to address criteria
pollutants, such as ozone and particulate matter, and regional haze and
visibility. In fact, the list of our responsibilities for which
additional funds are necessary is long and includes, among others, the
following: transportation-related projects; land use and air quality
programs; development, replacement and/or upgrading of monitors (apart
from fine particulate matter monitoring); collection of essential
emission and pollutant data; minor source inspections and permits;
training; implementation of ozone strategies; multi-state approaches to
regional air quality problems; and public education and outreach.
As we work to confront our air quality problems, we grow in our
understanding of the nature of air pollution. This experience has
allowed us to better define the issues we face and to recognize that
the air quality problems before us are different from those of the past
and will require new solutions. While many of the approaches that have
served us well in the past will continue to play an essential role, it
is imperative that we also explore new strategies to augment our
programs and add more tools to our repertoire. For example, there is a
greater need to reduce emissions from small industrial, mobile and area
sources, which is more resource intensive than the traditional
stationary source program. This has increased the demand for outreach,
inspection, enforcement and compliance assistance. These innovative
strategies, including additional flexibility for both state and local
agencies and the regulated community, which the new Administration
strongly supports, do not come without a price. The development and
implementation of these new and flexible innovative strategies will
also require significant resources.
enforcement grants
The President's budget request includes $25 million for a state
enforcement grant program. While we are very gratified by the
Administration's vote of confidence in the important work of state
enforcement programs, and we hope Congress will include this program in
the final appropriations, we wish to express two concerns.
First, STAPPA and ALAPCO are extremely concerned that EPA's current
framework does not include local air pollution control agencies among
those entities eligible to compete directly for enforcement grant
funds. We find this omission to be very troubling, particularly in that
Congress specifically recognizes local air pollution control agencies
in the Clean Air Act and goes so far as to include such local agencies
in the definition of ``air pollution control agency'' under Section 302
of the Act. Further, under Section 105 of the Act, Congress authorizes
the EPA Administrator to make grants to local air agencies. But perhaps
most important is the fact that many local air pollution control
agencies across the country have been delegated direct responsibility
for enforcement of programs under the Clean Air Act and, in effect,
function similarly to state agencies with respect to enforcement. In
fact, in some cases, local air agencies have greater knowledge and
understanding of the sources in their respective jurisdictions,
enabling them to bring unique and very valuable expertise to
enforcement activities. Not allowing local air pollution control
agencies to apply directly to EPA for enforcement grants and to be
awarded such grants directly by EPA seriously undervalues the integral
role of local air agencies and, moreover, is counter to the federal/
state/local partnership principles upon which the air enforcement
program is built. Therefore, we strongly urge that EPA's enforcement
grant program ensure that local air pollution control agencies be
allowed to compete directly for and be directly awarded enforcement
grant funds.
Second, while some of the funds for the grant program are
additional, approximately $10 million are merely resources transferred
from EPA's own enforcement budget. While we think the new grant program
will be very worthwhile, we do not believe these increases should be at
the expense of EPA's enforcement budget, particularly if it leaves the
agency with insufficient funds for important enforcement activities
(e.g., enforcing consent decrees against heavy-duty diesel
manufacturers). We would not want the national enforcement program to
suffer--both EPA and state/local grants need to be adequate. We
recommend, then, that the enforcement grant program remain at the $25-
million level, but that EPA's enforcement budget also be preserved.
epa's budget
During decades of air pollution control, state and local
governments have gained substantial experience and expertise to employ
in our quest for clean air. We have learned a great deal about the
science of air pollution, the technology of control and strategies for
addressing local problems. As a result, state and local agencies
welcome the flexibility to craft and tailor programs that will best
suit our needs. However, we cannot solve the problems related to air
pollution alone; we need EPA to perform those duties that are best
suited to a federal agency. It is only through federal, state and local
cooperation that we will succeed. Accordingly, we welcome and support a
strong federal role in the national air quality program.
Among the responsibilities EPA has undertaken and upon which we
will continue to rely are establishing (and revising) strong national
standards for pollutants, industries and sources, including motor
vehicles; developing national guidance, conducting research, providing
training and carrying out enforcement oversight and appropriate
enforcement actions. As a federal agency with a national perspective,
EPA is best suited to these tasks.
In order for EPA to fulfill its responsibilities with respect to
the air program, it needs to be adequately funded as well. We touched
upon this issue above, with respect to the enforcement budget. We urge
Congress, therefore, not to reduce EPA's budget, since decreasing EPA's
ability to carry out its programs will adversely affect the job state
and local air agencies are able to do. In fact, we believe EPA's air
quality budget should be increased to allow the agency to fulfill its
responsibilities the way the Clean Air Act intended.
conclusion
In conclusion, we strongly urge you to ensure that state and local
air agencies receive significant increases in grant funding in fiscal
year 2002, specifically by providing an increase of $33 million to
state and local grants under Section 105 of the Clean Air Act in fiscal
year 2002, as the first part of a three-year phase-in of at least a
$100-million increase. Further, we recommend that the enforcement grant
program be funded, but not by diverting EPA enforcement resources, and
that local air quality agencies be permitted to apply directly to EPA
for grants and receive grants directly from EPA under the program.
Finally, we recommend that EPA programs be adequately funded.
Thank you very much for this opportunity to provide you with our
testimony. Please contact us if you have questions or require any
additional information.
______

Prepared Statement of the Southwest Center for Environmental Research
and Policy

scerp's role in improving environmental conditions in the u.s.-mexican
border region
Mr. Chairman and Members of the Subcommittee: Thank you for this
opportunity to submit testimony regarding the current state of the
U.S.-Mexican border environment and the region's need for the (SCERP).
As elaborated in the testimony below, the growth of trade and
population in the region has exacerbated the environmental degradation
and the resultant impacts on residents along the border. Despite
SCERP's successes, this growth has outpaced the capacity of SCERP and
other agencies in the region to effectively manage the environmental
deterioration. Consequently, SCERP respectfully requests $6,000,000 for
fiscal year 2002 to initiate needed programs that have been delayed for
the past two years due to insufficient resources and to broaden the
coverage of the programs to larger segments of the border region. Past
funding has included $2,500,000 for fiscal year 2001, $2,375,000 for
fiscal year 2000, and $3,000,000 for fiscal year 1999.
scerp's mission is to help u.s.-mexican border residents
The human population living on the U.S.-Mexican border, currently
estimated at over 12 million, is expected to double to over 24 million
by 2020, making it the largest rapidly growing region of North America.
Most of the growth will occur in the already burgeoning twin cities of
San Diego-Tijuana and El Paso-Ciudad Juarez, although smaller border
communities such as Nogales, Arizona, and Laredo, Texas, have annual
population growth rates that exceed the capacity of local governments
to provide infrastructure and maintain environmental quality. This
dynamic frontier, characterized by rapid environmental and social
change, demands that border stakeholders not only have a comprehensive
understanding of its current socio-economic and environmental
conditions, but that we are prepared for alternative scenarios in the
future.
The Southwest Center for Environmental Research and Policy (SCERP)
is a binational consortium of five U.S. and four Mexican universities
created in 1990 to respond to that challenge. Its original mission as a
precursor to the United States and Mexican governments' Border XXI
Program was to ``initiate a comprehensive analysis of possible
solutions to acute air, water and hazardous waste problems that plague
the United States-Mexico border region.'' Since then, the consortium's
mission has expanded from focusing solely on applied environmental
research to include policy development as well as outreach, education,
and regional capacity building for border communities--SCERP's ultimate
customers.
SCERP achieves its mission by uniting academic expertise from
multiple disciplines with policymakers at the binational, state,
tribal, and local levels; with nongovernmental organizations; and with
private industry to address pressing transborder issues. In addition to
being a current partner of the Border XXI Program, SCERP has emerged to
support the border activities of many organizations. Many federal,
state, and local agencies have come to rely on SCERP as a source of
high quality information and analysis, to support them in their work.
As agencies face the daunting task of satisfying growing community
needs with already strained budgets, they value SCERP's flexibility in
partnering across jurisdictions, using well-established crossborder
networks, and providing the cutting-edge information that develops
solutions. SCERP's vision is a vital region with a dynamic and diverse
economy, sustainable environmental quality, intact ecological systems,
and a high quality of life for all border residents.
scerp has demonstrated value on over 200 projects
In its first ten years SCERP has produced a critical mass of data
and analysis related to air, water, and hazardous pollution through the
successful completion of applied research projects. The findings from
these projects have been applied to grassroots environmental health
education, to the development of new technologies, and to policy
recommendations. Among our successes are:
--Informing communities about general environmental issues and
solutions
--Providing safe drinking water for low-income residents throughout
the border region
--Reducing risk from lead, cadmium, selenium, and arsenic to pregnant
women in the El Paso-Ciudad Juarez area
--Developing membrane filtration methods to treat drinking water from
the Rio Grande
--Developing training materials to facilitate conversion of Ciudad
Juarez brick kilns to clean fuels that have applications
throughout Mexico
--Producing Visual Decision-Support Systems based on our work on
integrated cross-border Geographic Information Systems
--Developing pollution prevention and removal strategies for the
Tijuana River watershed
--Influencing national legislation, such as the Border Smog Reduction
Act of 1998 (H.R. 8) based on our advanced understanding of
transborder air pollution sources and solutions
SCERP responds to grassroots concerns and priorities; applies data
to binational management, monitoring, and enforcement decision-making
challenges; and directly addresses key environmental threats. At the
same time, SCERP is developing the local capacity of researchers,
students, and organizations to handle current and future needs through
advanced education, training, and partnering.
scerp budget request is justified in light of growth and pressing needs
SCERP has proven its ability to select timely projects that target
high priority environmental concerns in the U.S.-Mexican border region,
carry them out effectively, and disseminate their results to border
stakeholders. Through the Transboundary Watershed, Paso del Norte Air
Basin, Tribal Environment Resource Development, and Emissions Permit
Trading programs, SCERP has also combined promising localized projects
into muli-year, multi-disciplinary programs that cover broader segments
of the border region.
In the past, SCERP has been very successful despite minimal levels
of funding. By working with border stakeholders and providing education
and training of the next generation of border leaders, SCERP has
completed over 200 applied research projects with concrete benefits to
border communities. Nevertheless, the unprecedented 151 percent
expansion of trade due to NAFTA since 1994 and the immense increase in
border traffic have overwhelmed existing infrastructure, thereby
creating new environmental problems and exacerbating old ones. In
addition, the population boom on both sides of the border has meant
that border communities are falling further behind in their ability to
handle key environmental problems.
Now, more than ever, border communities need SCERP to address this
gap between the growing environmental problems and local capacity to
analyze and manage problems. Despite SCERP's success in improving
environmental conditions in some parts of the border region, there is
still much to be done. Border stakeholders, including the U.S. EPA,
BECC and NADBank, border states, tribes, nongovernmental organizations,
cities, and other SCERP partners have asked SCERP to address the
following high priority issues and their impact on public environmental
health:
--the sustainable use of water
--the intersection of trade, energy, and air pollution
--pollution prevention and control of hazardous materials controls
--the future of agriculture in arid regions
--invasive species displacing economically important ones
SCERP program initiatives for 2002 will deal with these issues with
thorough consideration of economic, legal, political, and social
factors. For SCERP to effectively address these issues, it is
imperative that SCERP's funding be increased to $6 million for fiscal
year 2002.
The following table illustrates how funding has been used in the
past and plans for the future. The program years marked with one
asterisk (*) indicate that the program was leveraged and/or subsumed by
outside funding sources. The program years marked with two asterisks
(**) indicate that the program was delayed and/or downscaled due to
insufficient resources.

----------------------------------------------------------------------------------------------------------------
RESEARCH YEARS 1999 2000 2001 2002 2003
----------------------------------------------------------------------------------------------------------------
MANAGEMENT & ADMINISTRATION........................................ 450 380 360 500 500
OUTREACH, TRAINING & COMMUNICATIONS................................ 185 180 190 250 400
RESEARCH, DEVELOPMENT & POLICY:
Researcher Initiated (Competitive) Projects.................... 250 1,440 1,250 2,000 3,000
Trans-Border Watershed Research Program........................ 413 ( * ) ....... ....... .......
Paso del Norte (Fine Particulate) Air Program.................. 400 ( * ) ....... ....... .......
SCERP Tribal Environment Development Program **................ 300 150 125 250 250
Binational Emissions Permit Trading Program.................... 308 ( * ) ....... ....... .......
Border Environment Scenario Prediction Program **.............. 250 125 300 750 750
Border Water Quality and Supply Issues Program **.............. ....... ( ** ) 20 500 1,000
Trade, Energy and the Environment Program **................... ....... ( ** ) ( ** ) 750 750
Human Environmental Health Program **.......................... ....... ( ** ) ( ** ) 300 750
Living Resources and Restoration Program **.................... ....... ( ** ) ( ** ) 300 750
Research Planning and Faculty Development...................... 444 100 255 400 500
--------------------------------------------
TOTAL........................................................ 3,000 2,375 2,500 6,000 8,650
----------------------------------------------------------------------------------------------------------------

While SCERP continues to leverage its congressional funding with
support from other government, private, and philanthropic sponsors, the
congressional support is still critical to maintaining current
projects, developing new programs, and translating the results of those
projects and programs to the communities that need them.
The federal component of support is key to our ability to leverage
sustainable partnerships with other agencies in the immediate future.
Congressional funds provide important seed money for critical projects
that are later adopted and institutionalized by other funding sources,
leaving a lasting impact in the region. The preliminary results of one
SCERP member university's survey found that in the past ten years, the
$2.5 million invested in SCERP by Congress leveraged another $3.4
million. At this university alone, one SCERP grant of $75,000 brought
in five others that totaled about $1,000,000 from agencies as diverse
as the Department of Defense and the National Science Foundation.
scerp wants to address more of the critical issues of importance to
border stakeholders
The EPA, border states, tribes, BECC and NADBank, NGOs, and other
SCERP partners have identified the need for applied research and
projects in the following areas. Increased funding leveraged with other
resources will enable SCERP to expand its focus and incorporate
projects in these areas.

--------------------------------------------------------------------------------------------------------------------------------------------------------
Area High Priority Medium Priority Lower Priority, but Important
--------------------------------------------------------------------------------------------------------------------------------------------------------
Air............................. Agricultural Burns.................... Air Deposition of Mercury and Other Fugitive Dust Sources and Transport
Air Emissions Inventory............... Airborne Pollutants and their
Cost-Benefit Analysis................. Potential Impacts to Water Quality.
Solid Waste Dumps.....................
Water........................... Drinking water........................ Phosphates............................ Drinking Water Collection Systems
Toxic Plumes.......................... Watersheds and/or Total Maximum Daily
Regionalization of Water Systems...... Loads (TMDLs).
Tracking System for BECC/NADB Proj- Satellite Water Treatment.............
ects. Santa Cruz River......................
Groundwater...........................
Hazardous Materials............. Used Tires............................ Spill Analysis and Damage Prediction.. Risk Analysis of Transport, Storage
Needs Assessment for Hazardous and Vulnerability Atlas................... and Disposal of Hazardous Waste
Solid Waste Management Infrastructure. Site Remediation...................... Through State and Bordering Cities
Natural Resources............... Endangered, Transboundary and Riparian Habitat......................
Migrational Species.
Environmental Information....... ...................................... Technology Transfer................... ......................................
Source Books..........................
Pollution Prevention............ ...................................... Analysis of Installation and Operation Industrial Ecology
of Fueling Facilities with
Underground Storage Tanks (USTs).
NAFTA Effects on Transportation Sys-
tems.
ISO 14000 and Voluntary Activities
Environmental Health............ Human (Environmental) Health.......... Biomarkers............................ ......................................
Potable Water Storage.................
Contingency Planning and ...................................... Landfills............................. Fires
Emergency Response. Agua Prieta Chemical Accident Hazards
Economics....................... ...................................... Economic Assessments.................. ......................................
Environmental Accounting..............
--------------------------------------------------------------------------------------------------------------------------------------------------------

conclusion
SCERP seeks to improve the quality of life of the people living in
communities along the border through applied research information,
insights, and innovations that address the complex environmental and
socioeconomic issues they confront. Enhanced congressional support of
SCERP will contribute significantly to the commitment of citizens of
the United States to the principles of a sustainable border region, and
our partnership with the people of Mexico.
______

Prepared Statement of Casey Kroon, Chairman, Board of Supervisors,
Sutter County, California

Mr. Chairman and members of the Senate VA-HUD and Independent
Agencies Appropriations Subcommittee, I would like to thank you for
this opportunity to testify before this committee. My name is Casey
Kroon and I am the Chairman of the Board of Supervisors for Sutter
County, California. On behalf of the County of Sutter, California, I
would like to request your support for two of the County's highest
priorities for fiscal year 2002.
Sutter County, located north of the City of Sacramento, is an
economically depressed rural region which relies heavily on agriculture
for economic stimulus. Sutter County ranks among the highest in
unemployment rates--averaging two to three times the statewide figure--
and among the lowest in household incomes. The County has one of the
largest percentages of population on public assistance and one of the
lowest employment growth rates in California. Given these demographics,
the County must diversify its economy in order to improve the lives of
its citizens.
First, Sutter County requests your support of an earmark of
$300,000 under the Economic Development Initiative (EDI) account to
complete preliminary design and environmental clearance work on water,
wastewater, drainage, and transportation projects for industrial
development in the County.
The South Sutter County Industrial/Commercial Reserve is well
positioned geographically to provide an opportunity to develop
approximately 3,500 acres of land near the Sacramento International
Airport and major transportation corridors, including Interstate 5.
While this area provides real economic development and diversification
opportunities, the County lacks the financial resources to stimulate
significant interest and development.
As part of its General Plan Update, the County prepared a South
Sutter County Facilities Plan, which addresses infrastructure needs
related to water, wastewater, drainage, and transportation facilities
in the area to be developed. The requested earmark will be used for
further design and environmental clearance work necessary to fully
prepare the area for development. This work is the critical next step
in the County's efforts to improve its economy by way of attracting
industrial development.
Second, the County requests your support of an earmark of $3
million under the Environmental Protection Agency's State and Tribal
Assistance Grants (STAG) Program to improve the Yuba City sewer and
wastewater treatment system and extend it into an urban area
immediately adjacent to the incorporated area.
Sewer treatment and disposal for developed areas west of Yuba City
are provided by on-site sewer systems. The systems were constructed
pursuant to obsolete standards and many of the systems are failing.
Developing a sewage collection system to service these areas would
replace the on-site septic tanks and leach fields currently in use. The
septic tanks are responsible for many drinking water wells exceeding
allowable nitrate levels. In addition, eliminating leach fields will
reduce groundwater contamination. The alleviation of these problems
will provide an opportunity for much-needed business expansion and
economic growth. The City of Yuba City is in full support of the sewer/
wastewater system expansion. The total cost of the project, including
construction, is estimated at $14 million.
Once again, thank you for this opportunity to testify before this
committee.
______

Prepared Statement of the Sacramento County Regional Sanitation
District

Mr. Chairman and members of the Senate VA-HUD and Independent
Agencies Appropriations Subcommittee, I would like to thank you for
this opportunity to testify before the committee. My name is Roger
Niello and I am the Chairman of the Board of Directors for the
Sacramento County Regional Sanitation District. On behalf of the
citizens and communities of Sacramento River watershed, I request your
support of a $3 million earmark under the Environmental Protection
Agency's Environmental Programs and Management fund to continue the
Sacramento River Toxic Pollutant Control Program (SRTPCP) and the
Sacramento River Watershed Program (SRWP).
The SRTPCP, a multi-year water quality management effort, and its
companion stakeholder process, the SRWP, have worked together to
successfully organize a regional program that includes representatives
of federal, state, and local agencies, agriculture and industry
organizations, environmental organizations, and citizen groups. The
program uses a stakeholder-based, watershed management approach to
develop and implement non-point and point source strategies addressing
water quality standards for a number of toxic pollutants of concern to
the Sacramento River watershed and downstream Bay-Delta.
The proposed earmark would allow the SRTPCP and the SRWP to
continue the Sacramento River water quality monitoring program--
including internet accessible data reporting--assess water quality
problem areas and pollutant sources and trends, implement effective
management strategies to meet water quality objectives, and promote
public awareness of watershed issues through a strategic communications
plan.
In the past year, the SRTPCP and SRWP have: continued work to
develop stakeholder-led water quality management strategic plans for
mercury and organophosphate pesticides in the Sacramento River
watershed; implemented educational programs for landowners on
management practices for OP pesticides; completed the third year of an
integrated water quality monitoring program in the Sacramento River
watershed linking multiple agency and watershed monitoring efforts;
produced the second annual water quality monitoring report for the
watershed that identified water quality problems and tracked progress
of management efforts in the Sacramento Valley; coordinated and linked
activities of watershed groups and local agencies within the Sacramento
River watershed; established a resource center and website to provide
technical information and assistance to local watershed groups and
individuals; secured significant television coverage, distributed
informational publications and regularly published newsletters, and
hosted a watershed conference, and implemented K-12 educational
programs to inform the public of watershed management and water quality
issues.
The program has regional and statewide impacts that affect the
Sacramento River watershed and downstream areas of the San Francisco
Bay and Sacramento-San Joaquin Delta. Water quality management
activities included in the program are geared toward the protection of
human health, aquatic life, and drinking water and will benefit
millions of Californians. The program will also assist local agencies,
communities, and citizens by providing an open and equitable process
for managing water quality and by promoting efficient use of resources
through collaborative efforts of federal, state, and local entities.
Once again, I thank you for this opportunity to testify before this
committee.
______

Prepared Statement of Steve Miklos, Mayor, City of Folsom, California

Mr. Chairman and members of the Senate VA-HUD and Independent
Agencies Appropriations Subcommittee, I would like to thank you for
this opportunity to testify before the committee. My name is Steve
Miklos and I am the mayor of the City of Folsom, California. On behalf
of the citizens of Folsom, I request your support of two to the City's
highest priorities.
The City of Folsom is one of California's fastest growing
communities. Folsom is expected to reach its build-out population of
70,000 citizens by the year 2010. Additionally, Folsom continues to
attract major corporate and industrial developments such as the
Kikkoman Soy Sauce plant, the Gekkeikan Sake plant, and the continued
expansion of Intel Corporation's major R&D facility that serves as one
the Northern California's top employment centers. While growth benefits
the City in many ways, the regional nature of the growth and related
infrastructure needs puts significant strain on local government
attempting to keep up with development.
First, the City requests $2 million under the Environmental
Protection Agency's State & Tribal Assistance Grants (STAG) Account for
engineering, construction and inspection to upgrade and replace failing
portions of the City's sewer system.
The City's older, existing sewer system is heavily impacted by
growth and needs immediate improvements. A critical consideration is
the fact that Folsom is situated upon the American River, and problems
with the City's sewer system may have immediate and damaging impacts
upon this heavily used and highly exposed water resource. In January
2000, a significant storm event caused a great increase in infiltration
and inflow of stormwater into portions of the City's older sewer
system. Unfortunately, the sewer system was not capable of handling the
event, resulting in a sewer spill into the American River. The State of
California Regional Water Quality Control Board issued an
Administrative Civil Liability Fine of $700,000, which was paid by the
City. Currently, the City is undertaking an analysis of its sewer
system, which is expected to identify the need for significant
rehabilitation of the City's older sewer system.
Federal funding will be used to improve and enhance the safe
transmission of sewer water to treatment facilities. The City is
prepared to share the costs associated with this project at the
required forty-five percent level.
Second, the City requests your support of a $4 million earmark
under the Economic Development Initiative Account (EDI) for the design
and construction of a new fire station facility.
As I mentioned before, the City of Folsom is experiencing great
expansion and needs $4.0 million to design and construct a new fire
station and training facility in the central business district area of
the City. The new station would service the major portion of the
population and the heaviest requests for service. The strategic
location of this new station will improve response times, will
consolidate services, and will take full advantage of a 360 deg.
response radius from the facility. The new fire station would, in
addition to fire apparatus, house two paramedic staffed transporting
medic units (ambulances) providing advanced life support to the growing
number of citizens and those commuters on nearby U.S. Highway 50.
Thank you again for this opportunity to testify before this
committee.
______

Prepared Statement of the American Public Power Association

The American Public Power Association (APPA) is the service
organization representing the interests of the more than 2,000
municipal and other state and locally owned utilities throughout the
United States. Collectively, public power utilities deliver electric
energy to one of every eight U.S. electric consumers (about 40 million
people) serving some of the nation's largest cities. The majority of
APPA's member systems are located in small and medium-sized communities
in every state except Hawaii. We appreciate the opportunity to submit
this statement concerning fiscal year 2002 appropriations for programs
under this Subcommittee's jurisdiction.
clean air partnership fund
APPA supports continued funding of the Clean Air Partnership Fund
in the fiscal year 2002 budget. As locally-owned providers of
electricity to nearly 40 million consumers across the country, we are
strongly interested in pursuing projects that benefit the environment.
Along with the states, local governments, business and the
environmental community we lend our enthusiastic support for this
program that offers an innovative approach to addressing multi-
pollution problems in a cost-effective way. The fund would help finance
environmental technologies and environmentally related energy
technologies and programs.
We believe at an adequately funded level, the Clean Air Partnership
Fund could become a significant incentive available to locally owned,
not-for-profit electric utilities to make new investments in renewable
and clean energy projects. Such projects have the potential of
providing important economic and environmental benefits to the
communities served by the municipal utility. Along with significant air
quality benefits resulting from accelerated use of emissions-free
energy sources, new jobs are created each time these technologies are
deployed.
Among other projects, we would look to the Fund to spur development
of landfill gas-to-energy projects. These projects are valuable in
reducing methane gas emissions. As municipally owned electric
utilities, we have unique opportunities to partner with cities and the
landfills they operate.
Green Lights Program
The Green Lights program encourages use of energy efficient
lighting to reduce energy costs, increase productivity, promote
customer retention and protect the environment. Program partners agree
to survey lighting in their facilities and to upgrade it, if cost-
effective. Environmental benefits result from more efficient energy use
and from reductions in emissions of carbon dioxide, sulfur dioxide and
nitrogen dioxide, thus improving air quality. EPA provides program
participants public recognition and technical support. Both large and
small APPA member systems participate in this program including City
Utilities of Springfield, MO; Concord Municipal Light Plant, MA; City
of Georgetown, TX; Grant County Public Utility District, WA; Gray's
Harbor County PUD, WA; Greenville Utilities Commission, NC; Indiana
Municipal Power Authority, IN; Los Angeles Department of Water & Power,
CA; Mason County PUD, WA; New York Power Authority, NY; Norwood
Municipal Light Department, MA; Omaha Public Power District, NE;
Orlando Utilities Commission, FL; Port Angeles City Light Department,
WA; Puerto Rico Electric Power Authority, PR; Sacramento Municipal
Utility District, CA; City of St. Charles Electric Utility, IL; Salt
River Project, AZ; Virgin Islands Water & Power Authority, VI;
Springfield Utility Board, OR, and Taunton Municipal Lighting Plant,
MA.
Energy Star Programs
A number of EPA's Energy Star programs build on the successes of
Green Lights. These important EPA programs are examples of successful
public/nonpublic partnerships that promote the use of profitable,
energy-efficient technologies as a way to increase profits and
competitiveness while at the same time minimizing pollution. They
include Energy Star Buildings, the Energy Star Transformer Program,
Energy Star office equipment and the Residential Energy Star Program.
APPA member systems participate in and support EPA's Energy Star
efforts.
Landfill Methane Outreach Program
The Landfill Methane Outreach Program provides environmental
benefits by encouraging utilities to make use of landfill gas as an
energy source. Several APPA member systems participate in this program,
including Illinois Municipal Electric Agency, IL; Jacksonville Electric
Authority, FL; Emerald People's Utility District, OR; Los Angeles
Department of Water and Power, CA, and Orlando Utilities Commission,
FL. Utilities voluntarily agree to take advantage of the best
opportunities to use landfill gas in generating power. EPA recognizes
and publicizes the utility's efforts and provides technical assistance.
One of the success stories cited by EPA occurred with APPA member
system Emerald People's Utility District in Eugene, OR. This public
power utility worked collaboratively with the State of Oregon, Lane
County officials and a private investment company to develop a 3.4 MW
plant at the Short Mountain Landfill. EPUD's general manager says
landfill energy recovery is like ``turning straw into gold,'' providing
additional revenue to EPUD as well as a fee to the county.
council on environmental quality (ceq)
APPA supports level funding in fiscal year 2002 of $3,020,000 for
the Council on Environmental Quality (CEQ). As units of local
government APPA member utilities have a unique perspective on
environmental regulation. Public power utilities and others from
industry have experienced a general lack of consistency in federal
environmental regulation. While additional layers of government should
be avoided, a central overseer can perform a valuable function in
preventing duplicative, unnecessary and inconsistent regulations. The
council is responsible for ensuring that federal agencies perform their
tasks in an efficient and coordinated manner. For these reasons, APPA
supports the existence and continued operation of CEQ.
Again, APPA member systems appreciate your consideration of our
views on priority appropriations issues for fiscal year 2002.
______

Prepared Statement of the Metropolitan Water Reclamation District of
Greater Chicago

I am Terrence J. O'Brien, President of the Metropolitan Water
Reclamation District of Greater Chicago, and on behalf of the Water
Reclamation District, I want to thank the Subcommittee for this
opportunity to present our priority for fiscal year 2002, and express
our appreciation for your support of our requests over the years. The
Metropolitan Water Reclamation District (District) is the sponsor for
the federally approved combined sewer overflow (CSO) project, the
Tunnel and Reservoir Plan (TARP), in Chicago, Illinois. Specifically,
we are asking that $15 million be included to continue construction of
this project in the Subcommittee's VA, HUD and Independent Agencies
Appropriations Bill for fiscal year 2002. The following outlines the
project and the need for the requested funding.
introduction
The District was established in 1889 and has the responsibility for
sewage treatment, and is also the lead agency in providing sponsorship
for flood control and stormwater management in Cook County, Illinois.
In fact, the District was established in response to an epidemic of
waterborne diseases caused by drinking polluted Lake Michigan water,
which killed 90,000 people in 1885. By 1900, the District had reversed
the flows of the Chicago and Calumet Rivers to carry combined sewage
away from Lake Michigan, the area's main water supply. The District has
been involved with major engineering feats since its inception.
In an effort to meet the water quality goals of the Clean Water
Act, to prevent backflows into Lake Michigan, and to provide an outlet
for floodwaters, the District designed the innovative TARP. The TARP
tunnels, which were judged by the Environmental Protection Agency (EPA)
on two occasions as the most cost-effective plan available to meet the
enforceable provisions of the Clean Water Act, are a combined sewer
overflow elimination system. The TARP reservoirs, also under
construction, will provide flood control relief to hundreds of
thousands of residents and businesses in he Chicagoland area.
tunnel and reservoir plan
The TARP is an intricate system of drop shafts, tunnels and pumping
stations which will capture combined sewer overflows from a service
area of 375 square miles. Chicago will remove three times the amount of
CSO pollution as Boston's projected removal--for approximately the same
cost. The remaining Calumet tunnel system will provide 3.1 million
pounds of biological oxygen demand (BOD) removal versus Boston's one
million pounds of BOD removal per year. In fact, Chicago's CSO
pollution problems are worse than the combination of Boston, New York,
and San Francisco's pollution problems. The Chicago Metropolitan Area's
annual BOD loading is 43 million pounds per year. This contrasts with
the combination of Boston, New York and San Francisco's combined annual
BOD loading of 35 million pounds.
A good portion of the remainder of the TARP system is to be built
in the southeast side of Chicago and the southern suburbs (Calumet
system), a low-income, high neglected and highly polluted area. This
community suffers from tremendous land, air and water pollution--
literally a dumping ground for multi-media pollution ranging from
chemical waste to serious water pollution.
Due to the enormous risk to the community, the District as the
local sponsor cannot afford to leave the citizens vulnerable.
Therefore, it is imperative that this work must continue. Because the
construction industry is already doing work in the area, the climate is
favorable for proceeding with this work at this time, producing
significant cost savings. What we are seeking, then, is funding to
advance federal work.
We have a proven and cost-effective program. In fact, we have
estimated that TARP's cost is about a quarter of the cost of separating
the area's existing combined sewer systems into separate sewage and
stormwater systems. Upon reanalysis, the EPA has consistently found the
TARP program to be the most cost-effective solution that will reduce
the impacts by the greatest degree to meet the enforceable requirements
of the Act, with the least amount of dollars. The project, while
relating most specifically to the 52 tributary municipalities in
northeastern Illinois, is also beneficial to our downstream communities
such as Joliet and Peoria. These benefits occur because of the capture
of wastewater in the tunnels during the storm periods and by treatment
of the discharge before being released in to the waterways.
Since its inception, TARP has not only abated flooding and
pollution in the Chicagoland area, but has helped to preserve the
integrity of Lake Michigan. In the years prior to TARP, a major storm
in the area would cause local sewers and interceptors to surcharge
resulting in CSO spills into the Chicagoland waterways and during major
storms into Lake Michigan, the source of drinking water for the region.
Since these waterways have a limited capacity, major storms have caused
them to reach dangerously high levels resulting in massive sewer
backups into basements and causing multi-million dollar damage to
property.
Since implementation of TARP, 358 billion gallons of CSOs have been
captured by TARP, that otherwise would have reached waterways. Area
waterways are once again abundant with many species of aquatic life and
the riverfront has been reclaimed as a natural resource for recreation
and development. Closure of Lake Michigan beaches due to pollution has
become a rarity. After the completion of both phases of TARP, 99
percent of the CSO pollution will be eliminated. The elimination of
CSOs will reduce the quantity of discretionary dilution water needed
for flushing of Chicago's waterway system, making it available as
drinking water to communities in Cook, DuPage, Lake, and Will counties,
which have been on a waiting list. Specifically, since 1977, these
counties received an additional 162 million gallons of Lake Michigan
water per day, partially as a result of the reduction in the District's
discretionary diversion in 1980. Additional allotments of Lake Michigan
water will be made to these communities, as more water becomes
available from sources like discretionary diversion.
With new allocations of lake water, more than 20 communities that
previously did not get to share lake water are in the process of
building, or have already built, water mains to accommodate their new
source of drinking water. The new source of drinking water will be a
substitute for the poorer quality well water previously used by these
communities. Partly due to TARP, it is estimated by IDOT that between
1981 and 2020, 283 million gallons per day of Lake Michigan water would
be added to domestic consumption. This translates into approximately 2
million additional people that would be able to enjoy Lake Michigan
water. This new source of water supply will not only benefit its
immediate receivers but will also result in an economic stimulus to the
entire Chicagoland area, by providing a reliable source of good quality
water supply.
TARP was designed to give the Chicago metropolitan area the optimal
environmental protection that could possibly be provided. More
importantly, no other project was found to be as cost-effective. In
addition, the beneficial use of the project is being enhanced by the
addition of the flood control reservoirs now being designed and
constructed by the Corps of Engineers, which will be connected to the
tunnels for additional capture and storage of combined sewage during
flood events. We believe TARP stands as a tribute to our nation's Clean
Water goals and one that is being accomplished within the most
economical constraints.
requested action
The $15 million we are seeking in fiscal year 2002 funding in the
Subcommittee's bill will help keep the local sponsor whole for the
advance construction it plans to accomplish on the Torrence Avenue and
Little Calumet Legs for the Calumet System of the congressionally-
authorized TARP project. While the TARP project was originally
authorized at 75 percent federal funding, the District as local sponsor
has been contributing at least 50 percent of the total project cost. We
greatly appreciate the Subcommittee's endorsement of our request over
the years to advance the construction of this work. This fiscal year
2002 will go a long way to address serious water quality, stormwater
and safety problems. It will have a tremendously beneficial impact on a
community, which suffers from water pollution and significant flooding
problems. The EPA has approved the facilities plan for the overall TARP
project and design has been completed. The EPA has identified this
particular segment of work as the next critical section of the plan to
be constructed based on significant water quality benefits.
Once on-line, the Torrence Avenue Leg of the Calumet System will
capture 2.0 billion gallons of CSOs per year and will protect 15.6
square miles of the City of Chicago from raw sewage backup and
flooding.
We urgently request that this funding be included in the
Subcommittee's bill for the construction of the Calumet System of the
TARP project. We thank you in advance for your consideration of our
request.
______

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Prepared Statement of the People for the Ethical Treatment of Animals

Chairman Bond and Members of the Subcommittee: People for the
Ethical Treatment of Animals (PETA) is the world's largest animal
rights organization, with more than 700,000 members. We greatly
appreciate this opportunity to submit testimony regarding fiscal year
2002 appropriations for the Department of Housing and Urban Development
(HUD). My testimony will focus on HUD funds for the city of Virginia
Beach, Va., for the expansion of the Virginia Marine Science Museum
(VMSM).
PETA respectfully requests that the subcommittee include report
language stating that no HUD funds shall be given to the city of
Virginia Beach for any expansion of the VMSM. PETA makes this request
in light of the city's intent to build a tank for a permanent captive
dolphin exhibit, the city's repeated violations of the Virginia Freedom
of Information Act (VFOIA) in connection with prior HUD funds, and the
city's failure to document how the current proposal will meet the
criteria established by HUD for the award of funds.
Funds awarded for the expansion of a stranding center are likely to
predetermine the construction of an inhumane captive dolphin
exhibit tank.
The VMSM currently has a stranding center for the rescue and
rehabilitation of sick and injured marine animals. It is our
understanding that the city of Virginia Beach intends to apply for HUD
funds for the purpose of expanding the existing VMSM stranding center.
While PETA applauds the good work of the stranding center, we
oppose the request for HUD funds because the VMSM's plans to expand the
stranding center have been and are inextricably linked to the
construction of a new controversial captive dolphin tank. Both a new
stranding center and the captive dolphin tank are part of what the VMSM
calls the Phase III Expansion. The city has repeatedly claimed that an
expansion of the stranding center is not economically feasible absent
the construction of the dolphin tank for which the sole purpose is to
display and breed dolphins for profit.
A coalition of 28 animal protection organizations, including PETA,
opposes the VMSM dolphin tank project.
Dolphins suffer greatly in captivity.
Confining dolphins to tanks shortens their lives through stress-
related diseases and depression caused by swimming in endless circles.
According to current U.S. National Marine Fisheries Service records,
the mortality rates for captive cetaceans is greater than 60 percent.
It is simply not possible to reproduce in captivity the natural habitat
that cetaceans require. Because dolphins communicate and navigate by
echolocation, the small confines of a tank are extremely stressful. The
eminent marine mammal authority, Jean-Michel Cousteau, explained that
``their world becomes a maze of meaningless reverberations.''
The VMSM intends to populate the proposed dolphin exhibit tank with
animals bred in captivity who supposedly cannot be released. However,
the marine mammal science community acknowledges that there are no
criteria (excluding extreme conditions such as blindness) upon which to
base an evaluation of whether any individual animal is a suitable
candidate for release. Even long-term captive dolphins have been
successfully rehabilitated and released.
The VMSM also intends to contact other zoos and aquariums for
dolphins, thereby becoming part of the chain responsible for the
violent capture of wild dolphins. This trade includes chasing dolphins
by boat, separating them from their families, netting them, and
dragging dolphins onto the boat repeatedly until the ``ideal'' animal
is captured. Frequently in this process dolphins drown or die of
capture shock. Worse, the museum intends to breed the dolphins for
display and profit. It is more than likely that either a baby or mother
will eventually be sold to another facility (whose level of care we
will never be able to monitor) and another closely-knit family will be
broken up.
The city of Virginia Beach violated the Virginia Freedom of Information
Act in connection with past HUD funds.
In an attempt to keep the animal protection coalition from learning
of the VMSM's plans, the city of Virginia Beach has illegally withheld
plans for the dolphin tank from the public. Beginning in January 2000
and continuing for fifteen months, PETA requested access to public
records concerning the VMSM Phase III Expansion pursuant to the VFOIA.
Museum officials and other city personnel continually denied the
existence of a great number of public records that were the subject of
a number of these VFOIA requests. As a result, in March 2001, PETA
filed a lawsuit against city officials, including the director of the
VMSM, based on over 100 violations of the VFOIA. In a settlement
agreement dated April 9, 2001, city officials admitted to violations of
the statute and released tens of thousands of illegally withheld
documents.
Among the city's most egregious violations of VFOIA were the city's
repeated denials that it had renewed efforts to obtain the funds
awarded through a fiscal year 2000 HUD Economic Development Initiative
(EDI) Special Projects Grant less than one month after HUD had denied
the city's initial request for release of these funds (RROF). The
initial RROF was strongly opposed by PETA and other citizens.
Consequently, city officials intentionally hid from the public the
city's resubmittal of the RROF for more than six months. Moreover, the
RROF itself was not released until October 20, 2000, well after the
Virginia Beach city council had already voted to accept the funds.
Thus, the city was able to avoid timely public debate on this very
controversial issue. The following chart details the serious nature of
the city's illegal actions:
February 15, 2000--City submits request to HUD for release of EDI
special project funds (RROF). No notice to public even though city
manager certifies to the contrary.
February 22, 2000--PETA is made aware of first RROF by city's
response to VFOIA request.
February 28, 2000--PETA submits written objection to the grant and
requests that HUD disapprove the RROF because city did not provide
proof of notice to public and did not conduct environmental review
(both of which were required by HUD regulations).
March 7, 2000--HUD disapproves rrof because city did not provide
proof of notice to public and did not conduct environmental review.
March 30, 2000--City submits draft revised RROF. Project
description changed to avoid requirements for public notice and
environmental review.
April 11, 2000--PETA requests all records regarding follow-up
efforts to obtain HUD funds.
April 28, 2000--City fails to identify existence of, or release,
second RROF even though the document was submitted on March 30 and
resubmitted on the next business day that follows the city's response
to PETA'S VFOIA request.
May 1, 2000--City resubmits revised second RROF.
August 14, 2000--PETA submits VFOIA request for records regarding
effort to obtain funds but second RROF and related documents are not
identified or released.
September 29, 2000--PETA submits VFOIA request for records
regarding effort to obtain funds.
October 6, 2000--City council meeting notice lists vote regarding
second RROF. This is PETA'S first notification of existence of second
RROF.
October 10, 2000--City council votes to accept grant.
October 20, 2000--City releases second rrof to PETA more than 6
months after submittal to HUD.
The above is only one example of the city's ongoing crusade to
avoid public participation in any and all decisions related to the
controversial Phase III Expansion, in flagrant disregard of state law
and the principles of open government. Specifically, the city crafted
the RROF discussed above to avoid HUD regulations concerning public
notice and environmental review and then violated the state Freedom of
Information Act by withholding public records related to the submittal
of the RROF.
The city of Virginia Beach has failed to demonstrate the existence of
criteria identified by HUD as relevant to EDI Special Project
Grants.
Last year's award of a HUD Economic Development Initiative Special
Projects Grant to the city of Virginia Beach for the controversial
Phase III Expansion raised a firestorm of protest by Virginia Beach
citizens who questioned, and still do question, how HUD funds can be
considered an appropriate means to finance projects seemingly so
unrelated to the purpose of the agency, such as the construction of a
captive dolphin tank and the design and engineering of museum exhibits
related to the marine mammal stranding center.
In documents we received as a result of a recent VFOIA request, the
city of Virginia Beach urged support for the request for the
appropriation of HUD funds for the expansion of the stranding center
with no more than a vague reference to a potential increase in
employment and a potential beneficial tax impact, and thus an alleged
economic benefit to the neighborhood near the museum. However, these
statements are mere allegations. To the best of PETA's knowledge no
details whatsoever--not even a basic description of the types of jobs
that will be created by the expansion of the stranding center, much
less an economic impact analysis--have been provided to support these
statements. At the very least, HUD must require the city of Virginia
Beach to demonstrate an adherence to the stated national objective of
such grants, which includes a clear economic benefit to a target low or
moderate-income neighborhood, before even considering appropriating
these funds.
summary
Because of the immense suffering that captive dolphins endure, 28
animal protection organizations and thousands of local residents oppose
the VMSM's plans to build the captive dolphin tank that is part of its
Phase III Expansion. In an effort to bypass public debate, the city of
Virginia Beach has acted illegally in its pursuits of HUD funds for
this project. We therefore request that the subcommittee include
language in the report accompanying the fiscal year 2002 VA-HUD
Appropriations bill stating that no HUD funds shall be given to the
city of Virginia Beach, Va., for any expansion of the VMSM.
If you do not feel that that would be possible, please consider
including the following language in the report: No HUD funds shall be
given to the city of Virginia Beach, Va., for the purpose of expanding
the VMSM unless HUD receives plans from the VMSM specifying that the
funds will not be used for any project that is part of an expansion
that includes, now or in the future, a captive dolphin exhibit tank,
and unless those plans include a meaningful analysis of the independent
economic viability of the construction and operation of an expanded
stranding center without the assistance of profits from a captive
dolphin exhibit tank.
Thank you for your consideration of our request.
______

Prepared Statement of the National American Indian Housing Council and
Coalition for Indian Housing and Development

On behalf of the members and Board of Directors of the National
American Indian Housing Council and the Coalition for Indian Housing
and Development, I would like to thank Chairman Bond, Ranking Member
Mikulski, and other distinguished members of the Subcommittee for the
opportunity to submit public witness testimony today.
hud's budget request
As Chairman of the National American Indian Housing Council and the
Coalition for Indian Housing and Development and Executive Director of
the Navajo Housing Authority, I write today as a voice for Americans
who daily endure the most deplorable housing conditions in the country.
These are people within American borders who commonly live 15 to 20
people in one small house. These are people for whom proper sewage
facilities, roads, and indoor plumbing is often a luxury, rather than a
standard. These are people who, like many other Americans, dream of
owning their own homes.
Indian housing is at a crucial stage. Many of the housing problems
that have long plagued Indian communities remain unresolved. The
passage of the Native American Housing Assistance and Self-
Determination Act of 1996 (NAHASDA) has given tribes and Tribally
Designated Housing Entities (TDHEs) incredible new opportunities, and
with adequate funding, NAHASDA can be the most important tool in
building sustainable, healthy communities in Indian Country.
President Bush has requested $650 million for the NAHASDA block
grant for fiscal year 2002. This is the same amount as was proposed and
appropriated for fiscal year 2001. I am pleased to see that the
President has lent his support to Indian housing by proposing funding
for the program for at least last year's level, but unfortunately,
maintaining current levels of funding will bring us nowhere near the
levels tribes need to meet their members' housing needs.
funding needs for indian housing
Indian housing is in more need of federal support than any other
housing program in this country. The lack of significant private
investment and the dire conditions faced in many communities mean that
federal dollars make up a larger portion of the total housing resources
than in other areas.
NAIHC estimates that to meet the needs as presented to us now, we
need at least $1.0752 billion in funding for the NAHASDA block grant,
the basic housing program for tribes.
For the Navajo Nation in particular, the immediate need is between
20,000 and 30,000 housing units. Spanning over 18 million acres of
land, the Navajo Nation suffers from chronic unemployment and massive
housing need. Over 56 percent of Navajos live below the poverty level.
As for many other tribes across the nation, this is a situation that
requires drastically increased federal assistance to remedy.
Indian housing needs are many and varied. Basic infrastructure,
low-rent housing, homeownership and housing counseling services are all
crucial. The NAHASDA block grant allows tribes to determine their own
needs and their own course of action. In this respect, NAHASDA is a
model program and should be supported. In supporting NAHASDA, however,
the Congress must also support improved technical assistance for tribes
seeking to efficiently and effectively utilize NAHASDA's unique
features.
the effect of new census data
Recently released census data for 2000 confirm a major increase in
the Native American population. Data show a doubling of the number of
Native Americans and Alaska Natives from 1.96 million to 4.1 million,
including Americans of mixed-race Native descent. For Native Americans
and Alaska Natives that are not of mixed-race, data show an increase of
over 28 percent for a total of 2.5 million.
For a population struggling intensely to provide adequate shelter
for its families, an increase of this magnitude puts an incredible
strain on the restricted funds tribes rely on. These census figures
only confirm what tribal leaders and tribal housing administrators have
known for some time--housing needs on reservations have outgrown
available funding. While not all Native Americans live on reservations
where housing needs are the most severe, tribal leaders attest to
population increases across the board, including on reservations.
In light of this new data, it is NAIHC's hope that Native
communities will receive the funding increases outlined below to offset
hardship brought on by rapidly growing need.

Need for Indian Housing Program Funding, Fiscal Year 2002

Need Area Appropriation Needed
Existing Housing........................................ $113,600,000
Operation Housing Modernization/Improvements............ \1\ 306,600,000
New Housing Development Implementation/Program
Operations Costs.................................... \2\ 432,000,000
Title VI Loan Guarantee Credit Subsidy.................. 32,000,000
Section 184 Mortgage Guarantee Credit Subsidy........... 6,000,000
--------------------------------------------------------
____________________________________________________
Fiscal year 2002 NAHASDA funding total...........\4\ 1,075,200,000
========================================================
____________________________________________________
Community Development Block Grant Set-Aside............. \5\ 144,000,000
BIA Housing Improvement Program......................... \6\ 33,000,000
--------------------------------------------------------
____________________________________________________
Total Request for Indian Housing for fiscal year
2002.............................................. 1,252,200,000

\1\ NAIHC estimates 52,000 units currently need renovation and an
additional 19,000 need replacement. This figure assumes an average of
$26,000 per unit, for 11,792 units in fiscal year 2002.
\2\ Assumes increase in annual development to 4,500 units at an average
cost of $96,000/unit. HUD estimates new construction needs at one-third
of the existing housing stock or approx. 50,000 units. In addition, this
takes into consideration about 30 new federally recognized tribes that
will be eligible for housing assistance.
\3\ Includes $147 million for administration of the Indian housing
program at the tribal level, and an additional $38 million for
environmental reviews, planning and technical assistance as required
under the Act.
\4\ Compared to fiscal year 2001 Appropriations of $650,000,000.
\5\ Assumes an increase of the CDBG Indian set-aside from 1.5 percent of
the proposed $4.8 billion to 3 percent to develop much-needed
infrastructure resources and economic development opportunities.
\6\ Compared to fiscal year 2001 Appropriations of $11,000,000.
---------------------------------------------------------------------------
public and indian housing drug elimination program
Eliminating funding for the Public and Indian Housing Drug
Elimination Program (PIHDEP) would abruptly halt successful efforts by
tribes around the country to combat drug abuse and its resulting
effects on tribal communities. The President proposes an end to this
program with a redistribution of funds to increase operating subsidies
for public housing authorities in hopes that PHAs will use the funds
for more effective anti-drug activities or for other priorities.
Tribes and TDHEs do not participate in public housing programs and
therefore receive no public housing operating subsidies. The
Administration claims the program should be eliminated because of
general misuse of funds and ineffective anti-drug activities, but in
Indian Country, these programs have seen remarkable success.
According to an eleven-month study conducted by NAIHC in 1999 and
2000, the PIHDEP has created an opportunity for TDHEs to develop
innovative, creative, unique solutions to crime reduction in Native
communities. The NAIHC study noted that, prior to the Public and Indian
Housing Drug Elimination Programs, tribes reported feeling overwhelmed
with the burden of having to address these problems on their own,
without knowledge of how to solve the problems or money with which to
build an infrastructure of programs and services designed to address
these community issues.
HUD Secretary Mel Martinez has said that the PIHDEP is too open-
ended and that HUD has no business being involved in such a program.
While it is not possible at this point to come to quantitative
conclusions about the percentage of improvement in these communities in
regard to any decrease in crime or substance abuse, the NAIHC study
indicates that the PIHDEP is having a positive effect in tribal
communities. Decreased crime and improvements in community values can
do much to support sustainable housing conditions on reservations.
NAIHC feels it was an oversight on the part of the Administration
to end this program without arranging for supplemental funding for
tribes elsewhere. A blanket verdict on the Drug Elimination Program
does not take into account several successful programs around the
country, including Indian Drug Elimination activities. If this is the
direction the Department chooses to go, providing operating subsidies
to take the place of PIHDEP, then the tribes must be compensated with
an increase in the NAHASDA block grant to support drug elimination
programs on reservations.
rural housing and economic development program
Of further concern to NAIHC and CIHD is the elimination of the
Rural Housing and Economic Development Program from the President's
budget. Although funded at only $25 million for the past two years, a
large portion of RHED grant recipients have been tribes and TDHEs.
Furthermore, although RHED has been said to duplicate USDA programs, on
the contrary, this program has been able to fill in for tribes where
other programs have not. It has been a new and useful tool in capacity
building and for supporting innovative housing and economic development
activities. Taking into consideration the limited resources available
in Indian Country, taking away useful programs is counter-productive.
If the goal is to increase the capacity of tribes and other rural
communities in order to make them self-sustaining, this is just the
sort of program that ought to be supported by the Congress and
Administration.
funding for native hawaiian housing
During the previous legislative session, the Congress enacted the
Native Hawaiian Housing Assistance program (Title II, Public Law 106-
568). This is the first such effort to provide aid for Native Hawaiians
since the Hawaiian Homes Commission Act of 1920. Modeled after the
NAHASDA, the new Native Hawaiian Housing Assistance program should
provide the tools desperately needed to improve Native Hawaiian
housing.
Although housing conditions for the greater Native American
population are appalling, Native Hawaiians continue to have the
greatest unmet need and the highest rates of overcrowding in the United
States. Overcrowding is seen in Native Hawaiian homes at a rate of 36
percent as opposed to 3 percent for all other homes in the United
States. While housing problems are seen in 44 percent of American
Indian and Alaska Natives homes, the number is actually higher at 49
percent for Native Hawaiians, and only 27 percent for other homes in
the United States. Right now there are 13,000 Native Hawaiians, or 95
percent of those eligible to live on the Hawaiian Home Lands, who are
in need of housing.
In light of these desperate conditions in Hawaii, the Coalition for
Indian Housing and Development requests $9.3 million to go directly to
the Department of Hawaiian Homelands to support activities for fiscal
year 2002, the first year of operation of this new program.
community development block grants
The Community Development Block Grant (CDBG) program is a crucial
tool for the development of infrastructure and economic opportunities.
The Indian set-aside under the program has been 1.5 percent of the
total appropriation for several years. NAIHC believes that both to
develop effective housing strategies and for the economic development
needed to support homeownership and job creation, this amount should be
expanded to at least 3 percent of the total requested amount, or $144
million. Clearly, we must invest in infrastructure and job creation now
if tribes are going to be successful in the long term. This money can
do exactly that and eventually lead to stronger on-reservation
economies.
conclusion
In closing, I would again like to thank all the members of this
subcommittee, in particular Chairman Bond and Ranking Member Mikulski,
for their continuing support for Indian housing programs and the
tribes. NAIHC and CIHD look forward to working with each of you in this
session of Congress and I am happy to answer any questions you may
have.
______

Prepared Statement of The National Alliance to End Homelessness, Inc.

Mr. Chairman and members of the Subcommittee, I am presenting
testimony on behalf of the National Alliance to End Homelessness (the
Alliance). The Alliance is a nonpartisan, nonprofit organization that
has several thousand members across the country. These members are
local faith-based and community-based nonprofit organizations and
public sector agencies that provide homeless people with a roof over
their heads as well as services such as substance abuse treatment, job
training, and health and mental health care. We testify, however, on
the needs of homeless people. It is our fervent hope that one day all
of these wonderful organizations will be able to turn their formidable
skills to other endeavors because the problem of homelessness will have
been solved.
Thank you for allowing us to submit testimony on the appropriations
for programs that assist homeless people. The National Alliance to End
Homelessness has focused its work on solutions to homelessness since we
were first formed in the early 1980s. Since that time, an
infrastructure of programs has been built to meet the needs of homeless
people. This homelessness assistance infrastructure, while over-
subscribed, has learned how to help people manage the experience of
homelessness. It is supported by substantial federal funding, as well
as state and local government funds. It has many extremely positive
attributes, including its ability to leverage tremendous volunteer and
philanthropic resources and its foundation in social entrepreneurship
and the faith community.
But despite the breadth and accomplishments of this infrastructure,
homelessness has continued to grow. Despite the fact that there are now
some 40,000 programs to assist homeless people, the number of people
experiencing homelessness has gone up, from between 1.3 and 2 million
in 1988 to between 2.5 and 3.5 million in 1998--1 out of every one
hundred Americans.
Is this because the homelessness system is doing a poor job? The
answer is no. The system does a good job of helping the majority of
those who have become homeless, although it can always be improved.
Rather, the problem is that the homeless system, itself, cannot stop
more and more people from becoming homeless. Nor can it create the
housing that is needed for people's homelessness to end. It can't close
the front door into homelessness. It cannot open the back door out of
homelessness.
The National Alliance to End Homelessness believes that as a nation
we are at a critical juncture in dealing with the problem of
homelessness. We can no longer afford to simply manage the problem. We
must make changes in order to address the continuing flow into the
homeless assistance system, and the backlog that has been created
within it. If we do not make these changes--if we simply hold our
current course--large-scale homelessness will be with us indefinitely.
This is simply not acceptable.
The good news is that there is a set of practical and pragmatic
steps that we believe can change the direction in which homeless
assistance is moving and make the programs more outcome oriented. Over
the past several years, you have taken action in many of these areas.
My first order of business is to thank you. Because of your work on
permanent supportive housing, data collection, services and
coordination--and because of your generous funding of the homeless
programs--we are beginning to turn the tide. This Committee has made a
real and substantial difference in the direction of homeless assistance
and the Board of Directors of the National Alliance to End Homelessness
is deeply grateful.
There is more to be done, however. There are four areas in which we
can focus our efforts to end homelessness. First, we can encourage
local and state jurisdictions to plan for outcomes and not simply to
manage the problem. Second, we can do a better job of preventing
homelessness--in effect closing the front door into homelessness.
Third, we can target the creation of more housing that will help those
who simply have no where else to go--opening the back door out of
homelessness. And finally, we can strengthen the infrastructure that
helps families stabilize so that they are not threatened with
homelessness.
focus on outcomes
A first step in changing course is for jurisdictions to plan how to
end homelessness, rather than simply managing the problem. To do this
every locality must have good data that can tell local planners both
how many homeless people there are, and even more importantly how they
utilize the homeless system. Do homeless people enter and exit the
homeless system quickly? Do they stay in the system for years at a
time? What services have an impact on housing stability--and which do
not? For the past two years, this Subcommittee has required the US
Department of HUD to increase its data collection efforts and create
real information on the result of spending. These requests are now
having a major impact both on the Department, and in communities. Last
year, the Subcommittee further instructed HUD to take the lead in
working with jurisdictions to develop the types of data systems that
can provide useful administrative data for planning purposes. We are
grateful for these actions.
Recommendation.--We urge the Subcommittee to continue to provide
funding for data collection efforts that tell us how the federal
homeless assistance funding is being spent, and the outcomes of this
spending at the local level. We also urge the continuation of
requirements that improve administrative data collection and analysis
at the local level.
close the front door
A next step is to close the front door to homelessness. To do so we
must ensure that many of the public so-called safety net systems that
are supposed to prevent homelessness do their jobs better. One agency
that has a major responsibility for people who are at high risk of
homelessness is the Department of Veterans Affairs. Despite the rather
extensive range of income, housing and health care resources that the
Department has at its disposal, a shocking number of veterans becomes
homeless. While we do believe that HUD should provide assistance to
veterans commensurate with their percentage of the homeless population,
we believe that it is the responsibility of the Department of Veterans
Affairs to use its substantial resources more effectively to prevent
homelessness among veterans, and to provide veteran-specific, veteran-
run assistance to veterans who do become homeless.
Recommendation.--We urge that the VA Homeless Providers Grant and
Per Diem program be funded as a line item in the Department at the
level of $50 million. We further recommend that the Department be
required to report upon the number of people exiting the VA system and
entering the homeless assistance system; the number of homeless people
it serves; and the outcomes of this assistance. We also urge Congress
to require each VA medical center to describe the services it delivers
to homeless people and how it plans to reduce homelessness among
veterans.
open the back door
Perhaps the key element in ending homelessness is to open the door
out of homelessness. Most homeless people (perhaps 80 percent) enter
and exit the system successfully and do not return. They are
essentially very poor people who are experiencing a housing crisis in a
period of affordable housing shortages. The homeless system essentially
manages the churning in the bottom of the housing market. But there is
a group of chronically homeless people for whom shelter is home. This
group represents around 20 percent of the homeless population. Members
of this group are almost all chronically disabled and many are unlikely
to ever generate significant earnings through wages. Accordingly, to
stay housed they will require long term housing subsidy. They live in
the shelter system, where by virtue of their long stays, they absorb
resources far in excess of their number. Further, they are high users
of other expensive public systems such as hospital emergency rooms.
Permanent supportive housing is a proven effective strategy for
addressing the needs of this group. We believe that providing
supportive housing to chronically homeless people is good public
policy. It meets a tremendous human need, and also has the potential to
pay for itself in reduced public service costs. Finally, it will free
the emergency homeless assistance system to deal more effectively with
people who are experiencing housing emergencies. This is truly opening
the back door out of homelessness.
The Subcommittee has taken extraordinary leadership in this issue.
HUD Continuum of Care spending on permanent housing for this population
had been in rapid decline. The Subcommittee set aside 30 percent of the
funds in the HUD Homeless Assistance Grant program for permanent
housing for disabled homeless people. We deeply appreciate this step,
which has made an enormous difference. In the last two year's
competitions, nearly 30 percent of the funds were spent on permanent
housing-up from only 18 percent a few years ago. Now we must take the
next step.
Recommendation.--We ask the Subcommittee to make permanent the
provision that requires that 30 percent of the HUD Homeless Assistance
Grant program funding be spent for permanent housing for people with
disabilities.
A second, equally important, measure is to shift the cost of
renewing these permanent housing units out of McKinney and into the
Housing Certificate Fund. If these programs continue to be funded from
McKinney, we will not be able to build an adequate supply of supportive
housing to achieve our goal. Permanent long-term housing should be
funded out of housing accounts--the homeless funds cannot be used to
assist people in crisis if they also have to pay for the continuing
housing needs of anyone who has ever been homeless.
To end homelessness among chronically homeless and chronically ill
people will require approximately 200,000 units of supportive housing.
Currently there are as many as 80,000 units of supportive housing
funded through the Homeless Assistance Grants. Creating enough
supportive housing for all who are in the system is within our reach,
but this important renewal shift must be made. Last year the
Subcommittee took the critically important step of establishing a
special account to cover the renewals of the Shelter Plus Care units.
This has given stability to the housing of this most vulnerable group.
We ask you this year to take the next step.
Recommendation.--We ask that you shift the renewals for Shelter
Plus Care and permanent housing funded under Supportive Housing Program
from the Homeless Assistance Grant Program to the Housing Certificate
Fund. Renewal should be granted if the funds are appropriated and the
sponsor is in compliance with its contract and with law, and should be
subject to a verification of need via the Continuum of Care process.
Compliance can be determined through monitoring by the local HUD
office, including site inspections. Shelter Plus Care and SHP would
retain their programmatic provisions.
We estimate that in fiscal year 2002, $120 million will be required
for renewal of Shelter Plus Care and Supportive Housing Program
permanent housing.
An additional source of funding for disabled homeless people is
HOPWA (Housing Opportunities for People with AIDS). Stable affordable
housing is essential to preventing the early onset of illness,
accessing life-extending medical care and drug therapies, and
maintaining quality of life for HIV-infected people and their families.
HOPWA is the only federal housing program that funds comprehensive,
community-based HIV-specific housing. It gives local communities the
capability to devise the most appropriate and effective housing
strategies for people with HIV/AIDS, whether those needs are for short-
term or transitional housing, rental assistance, or community
residences. It should be noted that it is far less costly to provide
someone with HIV/AIDS related illnesses with a permanent place to live
than to allow them to live on the streets where their exposure to
opportunistic infection not only shortens their lives but also can
require expensive medical attention.
The need for housing assistance among people with HIV/AIDS is
demonstrated, yet the current level of HOPWA funding does not meet this
need. The National AIDS Housing Coalition estimates that,
conservatively, 500,000 Americans living with HIV/AIDS will need
housing assistance to survive during the course of their illness. Last
year, HOPWA funding could meet the needs of only approximately 50,000
people with AIDS and their families. Because there will be between four
and eight new entitlement jurisdictions this year, failure to provide
additional resources will result in funding cuts to jurisdictions
currently receiving assistance, further exacerbating the problem.
Recommendation.--We ask the Subcommittee to provide $300 million
for the Housing Opportunities for People with AIDS (HOPWA) program.
We must continue to generate new supportive housing projects and to
fund the very effective network of programs that help most people exit
homelessness.
Recommendation.--In order to maintain local efforts that help end
homelessness for tens of thousands of people every year, the Alliance
supports $1.6 billion in funding for the Homeless Assistance Grant
program.
Recommendation.--We urge you to provide $150 million for the
Emergency Food and Shelter Program administered by FEMA, which has a
superb record of preventing homelessness and meeting emergency needs of
homeless people.
building the infrastructure
The provision of adequate housing that is affordable to very poor
people is, ultimately, the solution to homelessness.
Recommendation.--The Alliance requests a funding level of $40
billion for the U.S. Department of Housing and Urban Development. This
figure is based upon OMB and CBO assessments of what is needed to
maintain on-going services in the Department, plus a modest increase to
cover increasing energy costs and to maintain the much-needed growth in
the incremental Section 8 allocation.
Senator Mikulski, Senator Bond and members of the Subcommittee, my
Board members, including our Co-Chairmen Mrs. James A. Baker III and
Mr. Eli Segal, join me in thanking you for what you have done in the
past few years to change the nature of the homeless assistance
programs. The changes you have made--requiring data collection,
ensuring that a reasonable amount of the funding is spent on permanent
housing for the most needy, guaranteeing that formerly homeless,
chronically ill people have stably funded housing, and increasing the
funding to make sure that such changes did not have an adverse effect
on the homeless system--these changes have resulted in making the HUD
Homeless Assistance Grant Program much more outcome-oriented and
effective. The help and leadership of the Appropriations Committee have
made a difference in people's lives. Thank you.
Homelessness is not inevitable. Only 25 short years ago there was
virtually no homelessness--and this can again be the case. The federal
programs to help homeless people leverage themselves many times over in
volunteerism, in-kind donations and money. They are operated by faith-
based and community-based organizations that are lean and effective
organizations. Every year they help thousands of people escape
homelessness forever. Federal funds are the critical element in this
process, and they can do even more. We hope to continue working with
you to make sure this money does the best possible job for homeless
people and for the nation.
______

Prepared Statement of College Partners, Inc.

Mr. Chairman and distinguished Members of the Subcommittee, I am
Dr. Audrey F. Manley, President of Spelman College. I am accompanied by
Dr. Louis W. Sullivan, President of the Morehouse School of Medicine,
and Dr. Willis Sheftall, Senior Vice President for Academic Affairs at
Morehouse College representing Dr. Walter Massey, President of
Morehouse College. We three presidents, have formed College Partners,
Incorporated (CPI), a non-profit corporation. I want to thank you for
allowing us to appear before you today as you consider funding
priorities relevant to the fiscal year 2002 VA-HUD-Independent Agencies
Appropriations bill. I am Chairperson of CPI, but for the purpose of
today's testimony, I have asked Dr. Sullivan to deliver our remarks.
Specifically, we are here today to request that the subcommittee
provide $10 million over the next two fiscal cycles (@ $5 million a
year) from the Economic Development Initiatives account to support an
economic development initiative that is of critical importance to our
campuses and the surrounding community. The requested funding is half
of the total cost of the project, $20 million, which will come from
other project resources. In the time that I have, I would like to talk
about the CPI partnership, how it originated, and what we are trying to
do for our institutions and the community in which they are located.
CPI is a not-for-profit organization comprised of Spelman College,
Morehouse College, and the Morehouse School of Medicine. This
partnership evolved out of a shared commitment to utilize and leverage
existing individual resources in order to expand our individual
capacities and to enhance the revitalization of the surrounding West
End community of Atlanta, Georgia, which sits at the boundary of the
Atlanta University Center (AUC), and is less than three miles from
downtown Atlanta. Our goal is to integrate the academic community with
the surrounding neighborhood and to create an educational corridor that
will focus on quality housing, youth and adult education, job training,
health services, child development and daycare services, public
awareness, and scholarship support for at least 50 students.
In addition to being partners in CPI, Spelman College, Morehouse
College and the Morehouse School of Medicine are all a part of the
University Community Development Corporation (UCDC). UCDC was
incorporated in 1988 and was designed to explore and execute ways for
each of the six HBCUs that make up the Atlanta University Center (Clark
Atlanta University, Interdenominational Theological Center, Morehouse
College, Morehouse School of Medicine, Morris Brown College, and
Spelman College) to become more involved in improving the physical,
social and economic condition of the neighborhoods adjacent to, and
contiguous with the AUC campus. In addition to university members, the
City of Atlanta's Neighborhood Planning Unit and other community groups
also are represented.
the west end community
The immediate West End includes the now-demolished Harris Homes
public housing project, minor retail and commercial properties, an
insurance field office, and a MARTA rail and bus line. Moving outward,
the property is three miles southwest of prime commercial developments
such as Phillips Arena, the Georgia Dome, and the World Congress
Center. Despite the West End community's strategic location, however,
the area has been unable to significantly capitalize on the current
renewed interest in ``in town'' residential and commercial development.
Recent reports profile the West End as a community with high
unemployment, low educational attainment, deteriorating and/or vacant
housing, and a preponderance of families that live at, or below, the
federal poverty level. According to the 1990 U.S. Census data,
statistics show that this community suffers from an unemployment rate
of over 25 percent, while the median income of the Harris Homes
community in particular was a staggering $5,912. Moreover, while 61
percent of the families are living below the poverty level, over 70
percent of the female-headed households are similarly situated.
Additionally, these and other statistics significantly affect the
health and mortality rates of city residents. Subsequently, the overall
mortality rate of Atlanta African American residents, which are the
overwhelming majority in the West End community, is almost one and one-
half times that of white residents.
the vision
Our vision includes transforming the under-developed property in
the Lee Street Corridor into an inviting entrance to a vibrant learning
and living environment. The development will integrate the colleges
with the surrounding neighborhoods to create an educational corridor or
``College Town'' and will provide an improved physical linkage between
the neighborhoods and adjacent college campuses. Ashby Street,
traditionally a dividing line between the Colleges and neighborhoods
west of the campuses, will be redesigned with a fabric of public
spaces, landscaping and local-serving retail uses. Ashby Street will
become a ``seam'' joining the neighborhoods and the Colleges, as
opposed to the divider it has been in the past.
CPI is working in partnership with the Atlanta Housing Authority
(AHA) to acquire the 11-acre tract of land in a value-for-value land
swap. As part of an agreement signed in May 1999, CPI agrees to
purchase real estate in other parts of southwest Atlanta in exchange
for the 11-acre tract held by AHA. Acquisition of this property is
critical to our efforts to expand the campuses for future growth. Such
expansion is currently curtailed by Interstate Highway 20 and the 2,700
public housing units that are within a one-mile radius of our campuses.
The requested land will enable the surrounding community development
process to continue and remain on target with the objectives of the
city's Empowerment Zone, which already has improved the neighborhoods
east and north of the campuses.
With the acquisition of the requested land, the Colleges will be in
a stronger position to expand their capabilities and establish and/or
expand programs in our institutional areas of expertise and experience.
For example,
Spelman College, through its Education department, plans to provide
local residents with training in early childhood development and
childcare while simultaneously providing a hands-on laboratory for
student education majors. Through the College's Continuing Education
program, Spelman would be able to work with single heads-of-households
to transition from welfare to work. Additionally, Spelman would be able
to expand it's Entrepreneurial Business Development Program, which
already has provided nearly 200 local community residents with training
on how to establish, maintain, and expand a home-based or micro-
enterprise in retail, service, and manufacturing industries.
Morehouse College anticipates expanding its partnership with the
Fannie Mae Foundation and HUD to provide leadership training to
community organizers, local nonprofit organizations, and the members of
the Neighborhood Planning Units (NPUs). The Fannie Mae project is
designed to establish mutually beneficial relationships with adjacent
communities that will result in sustained economic and social
improvement and provide students with service-learning opportunities
that cultivate civic growth and development. Additionally, Morehouse,
in partnership with each of the other AUC institutions, has already
taken the lead to work with the Atlanta Public Schools in the
development of an application to establish a charter school, which will
have an emphasis on mathematics and science and will provide clinical
experiences for aspiring teachers from each of the AUC institutions.
The Morehouse School of Medicine has made health services an
integral part of its focus in developing primary care physicians and
anticipates expanding its Community Health and Preventive Medicine
Programs. Several components of the program include a Health Promotion
Resource Center, a Center for Public Health Practice, and a Preventive
Medicine Residency Program. Each of these programs is designed to
partner with communities to provide services to assist with health
related issues. Additionally, the School would like to expand its
Benjamin Carson Science Academy, an initiative to introduce minority
elementary and middle school students to health and science careers
early in their education. The program, which has worked aggressively
with youth from Harris Homes, consists of a Saturday academy and a
four-week summer component.
Additionally, the acquisition of the property will allow all three
CPI institutions to expand their campuses, helping to alleviate
problems associated with projected student enrollment increases and
limited space within the AUC generally. The combined student enrollment
for all six AUC institutions is approximately 12,700, up from 8,400 in
1990, an increase of over fifty percent. Moreover, combined enrollment
is expected to grow by approximately 2,000 students over the next
twenty years. All six AUC institutions are in full support of CPI and
this initiative.
A study conducted by real estate appraisers Pritchett, Ball, & Wise
comments on the West End community that, ``within the life cycle of a
neighborhood, including growth, stability, decline, and revitalization,
we place this neighborhood in the early stages of revitalization.'' The
West End's geographic proximity to the downtown epicenter, coupled with
its balanced set of land uses, lends the area to reap secondary
benefits from housing to entertainment to small-, mid- and large-scale
commercial development. CPI acknowledges and appreciates the academic,
community, and municipal support that it has received from the City of
Atlanta generally and the West End community specifically. By acquiring
this land and utilizing it, CPI will be able to give back to the West
End community and assist it in its development efforts.
On behalf of Spelman College, Morehouse College, the Morehouse
School of Medicine, and College Partners, Inc., we want to thank you
for the opportunity to present this testimony to you today.
______

Prepared Statement of the Alachua County Board of County Commissioners

Mr. Chairman: On behalf of the Alachua County Board of County
Commissioners, I would like to thank you for the opportunity to submit
testify before your Subcommittee regarding two critical projects. They
are the Partners for a Productive Community Enhancement Initiative, and
the Critical Services to Underserved Areas Initiative.
Priority # 1: Partners for a Productive Community Enhancement
Initiative ($2.3 Million in Funding Requested)
In response to a spiraling crime rate in southwest Alachua County,
the Alachua County Sheriff's Office requested help from the Board of
County Commissioners in 1993. Specifically, the Sheriff reported that
57 percent of its 911 calls came from an area that had only 3.2 percent
of the County's population.
The County Commission responded by providing $38,000 in funding for
a Program Manager to staff the Partners for a Productive Community
(PPC) Program in fiscal year 1994.
The PPC was launched as a strategic planning effort with three
goals: the establishment of neighborhood-based services, the
development of public/private partnerships and a focus on crime
prevention. This Program has enjoyed great success due to the
coordinated efforts of the Sheriff's Office, the Courts and the Alachua
County Department of Community Support Services. Furthermore, since the
inception of this Program, the County has budgeted over $1.6 million to
support the Program through the Community Support Services Department
and Sheriff's Office. Additionally, over $2.4 million has been leverage
from other county departments, local social service providers and the
Sheriff's Office through a local law enforcement grant.
The goal of the Sheriff's Office was to reduce the number of calls
from the area, and to develop a relationship of trust with the area's
residents. The goal of the Courts was to help with the swift
prosecution of cases, and to increase personnel in key areas. Finally,
the goal of the County's Department of Community Support Services was
to develop and implement a neighborhood needs assessment, and to
determine the social service needs in accordance with the results of
the assessment. The Community Support Services Department was also
responsible for developing public/private community partnerships, and
community based organizations comprised of tenants, property owners and
managers. Thus, this project represents a multi-agency strategy to
stabilize, revitalize and sustain five specific neighborhoods of
Alachua County.
In addition to improving the area's basic infrastructure, federal
funding is also being requested to provide community recreational
programs for the area's youth. These activities will provide positive
alternatives to crime, and allow youth to participate first hand in
community improvement programs. In doing so, these programs will build
and encourage positive self-esteem, leadership skills and academic
achievement. To complement these programs, additional improvements will
be made in the community Safe Havens. Finally, the requested funding
will also allow the PPC to expand this successful demonstration program
into other at risk Alachua County communities such as Archer, Florida.
Specifically, the PPC will develop a partnership strategy to address
the unmet needs of health care, education, training, employment, youth
recreation and transportation for the residents of Archer.
This request for federal funding is justified by the tremendous
improvements and accomplishments that have been made in these
neighborhoods since 1995. These achievements include: free community
day care for 75 children, 30 community day care slots, 24 in-home day
care slots, the creation of 30 new jobs by the Early Progress Center,
the reduction in 911 calls from 57 percent to 14 percent of total calls
in the area, and substantial increases in the property values for four
of the five neighborhoods.
Furthermore, the implementation of seasonal recreation programs in
the targeted communities by the Y.M.C.A. has been instrumental in
providing positive, character building activities for children,
teenagers and adults. Day camps are provided during the summer months,
and back-yard sports are provided at the end of the school day during
the school year. In addition, two 4-H Clubs serving 60 neighborhood
children were established along with after school and community teen
programs. Adult literacy and GED classes were made available at a
nearby school campus. Finally, other programs have been established for
the purpose of creating a sustainable neighborhood. These programs
include quarterly informational forums concerning small business
development, educational opportunities, self-help seminars, budget
management and landlord/tenant issues.
With respect to community-wide improvement programs, a total of
nine neighborhood cleanups were completed this year. With the active
involvement of the residents of the neighborhoods, the Alachua County
Office of Codes Enforcement has been able to reduce from twenty to two
the number of abandoned and vandalized buildings. Furthermore, a new
Waste Collection Ordinance which was supported by the PPC permits the
efficient and timely citation of violators.
The sustaining factor within this program is the formally organized
Partners for a Productive Community Council. The Council is the guiding
force that deals with issues and determines unmet needs. For example, a
block captain organization was started this year with the assistance of
the PPC Council, and the Alachua County Sheriff's Office. This group
monitors and manages crime prevention programs block by block.
In recognition of the numerous accomplishments described above, the
PPC received the National Association of Counties' Achievement Award in
1996 for distinguished and innovative contributions to improving county
government. Additionally, the League of Women Voters presented the
County with a similar award for outstanding community service.
Furthermore, in December 1999 Alachua County received Official
Recognition from the Executive Office of Weed and Seed for two of the
neighborhoods being served by the Partners for a Productive Community
Program. Pursuant to this recognition, these communities have been
awarded a $175,000 Weed and Seed Grant for prevention and intervention
strategies focusing on Cedar Ridge and Linton Oaks neighborhoods. This
grant will further strengthen the long-term efforts to improve the
quality of life in these neighborhoods.
As noted above, the federal funding requested will also be used to
expand the successful Partners Initiative into the rural community of
Archer, which is located in the southwestern portion of Alachua County.
Archer and the rural areas surrounding it have a population of 6,348,
of which 16 percent fall below the poverty level. While the City of
Archer has one elementary school, emergency rescue, fire and police
services are contracted from Gainesville/Alachua County. There are also
two public housing communities, and a small obsolete community center
which is used as a congregate meal site for senior citizens.
Consequently, many of Archer's residents travel to Gainesville for
employment, social services, recreational activities, adult and
continuing education and health care.
Recently, the University of Florida, School of Nursing received
$200,000 from the Florida Legislature to provide primary health care
through a clinic based in Archer. Presently, this clinic is on the
State Department of Health's list to be eliminated due to the limited
area that it serves. Should this occur, there will be a need for
additional funds to meet the health care needs in this area. Thus, a
portion of the federal funding in this request could be channeled
through the Alachua County Health Department in our continuing effort
to develop partnerships, maximize resources and expand services to the
citizens of Alachua County through our rural service initiative.
Employment opportunities, recreation for teens and outreach social
services continue to be a challenge for the community of Archer.
According to the Alachua County Sheriff's Office, Archer's crime rate
is disproportionately high for a community its size. In 2000, the
Alachua County Sheriff's Office received 2,657 calls for service. Of
the dispatched calls, 30 were assaults and batteries, and 5 were for
sexual battery. The largest number of dispatched calls (869) concerned
burglary and theft.
In conclusion, Alachua County is requesting $2.3 million in federal
funding to continue its highly successful and award winning
neighborhood revitalization programs; and to expand these successful
model programs to other neighborhoods, including the City of Archer,
Florida.
Priority # 2: Critical Services to Underserved Areas ($1.81 Million in
Funding Requested)
Without a safe and reliable source of public utilities, the
residents who live in the southeastern portion of the City of
Gainesville and Alachua County must rely upon the use of obsolete
private water systems, septic tanks and propane gas for their utility
services. In addition to the health and safety concerns, this lack of a
public utility infrastructure serves as a deterrent to the area's
economic revitalization.
While several subdivisions in the target area are in immediate need
of a public utility infrastructure, it is the County's intent to
approach this model program by focusing on the Kincaid Road subdivision
as Phase I of the Initiative. This subdivision currently has over 150
homes on septic tanks, with many of them also using propane gas for
heating. Historically, there are numerous health risks associated with
malfunctioning septic tanks, including the possible contamination of
ground water which could lead to the development of diseases within the
area.
Gainesville Regional Utilities (GRU) indicates that the
infrastructure needed to provide wastewater service to this area
includes: the wastewater collection system lift stations, grinder pumps
and on-site plumbing to connect to a new gravity sewer system. GRU
estimates that the construction and extension of a central wastewater
system to the Kincaid Road subdivision will cost approximately
$1,585,000, while the extension of the natural gas lines is estimated
at about $225,000. Thus, the total cost of Phase I of this model
program is $1.81 million. Finally, it's important to note that GRU is
currently planning wastewater facilities to serve the Kincaid Road
subdivision, and may perform additional engineering work as in-kind
services. The additional engineering work is estimated to cost
approximately $121,000.
While Alachua County is requesting assistance from the federal
government in funding this portion of the model program for the area's
revitalization, the County has already begun numerous other programs
and projects that have had an positive, significant impact on the
area's redevelopment. For example, in July of 1996, the County began a
series of neighborhood meetings in Greentree Village, which is a
subdivision of about 60 households in the target area. Residents were
encouraged to express their concerns about the area's problems and
establish priorities. As a result of these meetings, the County
assisted Greentree Village in the establishment of a crime watch
program and the creation of a backyard recreation program through the
Y.M.C.A.
Several new public buildings and facilities have also been located
within the target area to encourage its redevelopment. During 1998/99,
Alachua County expended about $5.5 million to purchase and renovate the
Eastgate Shopping Center for the Alachua County Sheriff's Office. This
new facility is 56,200 square feet in area, and it serves as the base
of operations for the County's 239 sworn deputies, and 260 non-sworn
administrative and support personnel. Completing this law enforcement
complex is the new Alachua County Communications and Emergency
Operations Center which recently opened adjacent to the new Sheriffs
Office. This facility cost about $5.3 million and operates as a joint
center for both Alachua County and the City of Gainesville.
Finally, with a contribution of approximately $430,000 from Alachua
County, the City of Gainesville is completing a new Technology
Enterprise Center (TEC) within the target area. This $3.0 million
business incubator consists of a new, two-story 30,000 square foot
facility located in the City of Gainesville Enterprise Zone. Over 60
percent of the construction funds for the TEC were provided by a grant
from the U.S. Economic Development Administration. The purpose of
business incubators is to promote the growth and development of new
enterprises by providing flexible space at affordable rates, a variety
of support services, access to management, technical and financial
assistance, and opportunities to interact with other entrepreneurs and
business experts. Though not yet open, about 13,000 square feet of the
TEC has already been leased to a leading technology accelerator company
specializing in speeding pioneering technology entrepreneurs to the
market. It is expected that when fully operating, the TEC will foster
the creation of higher wage jobs, the expansion of the tax base and the
augmentation of new business development within the target area.
In conclusion, Alachua County is undertaking the redevelopment of
an existing urbanized area, which includes the modernization of its
utility infrastructure. These improvements will build upon numerous
previous programs and projects that have already had a positive impact
upon the area. Phase I of this model program includes the extension of
a central wastewater system to the Kincaid Road subdivision, as well as
the extension of natural gas lines. The support of this Phase of the
project through federal funding will serve as an impetus for the
continued revitalization of these residential areas.
summary of written statement and testimony
A detailed review of the two initiatives described above indicates
a well-conceived program of significant model projects. Moreover, these
programs have a proven record of creating employment opportunities
while addressing compelling community needs. Additionally, these
initiatives have benefitted low and moderate income neighborhoods
through the elimination of physical and economic distress. Finally,
these programs demonstrate the County's continuing commitment to those
projects and initiatives that emphasize a balance between environmental
protection, economic development and social equity for all of the
residents of Alachua County.
Thank you for your consideration.
______

Prepared Statement of Fountain House

Mr. Chairman and Members of the Subcommittee, I am Anne Mai,
Secretary of the Board of Directors of Fountain House, which is located
in New York City.
Thank you for this opportunity to present a $400,000 proposal for
Federal Funding that is comprised of two components: $200,000 for
Fountain House and $200,000 for its parent organization, the
International Center for Clubhouse Development (ICCD).
This proposal addresses national, regional and local needs in the
mental health care and services field. The economic empowerment of this
grant should be considered along with the many social, community and
personal benefits that this grant provides. The results of this grant
can be measured in at least two ways. First, local and state funding
will be freed to handle more severe patients and pressing needs in the
community and the system. Second, gainfully employed Clubhouse members
become taxpaying consumers with purchasing power, reducing State, and
Federal benefit and service costs.
The Clubhouse Model of psychiatric rehabilitation begun by Fountain
House over 50 years ago has spread across the country and around the
world because it works so well and is so cost-effective. Operating on a
nonmedical model, Clubhouses consider their participants as members of
the Clubhouse, not patients, and the staff and membership are taught to
recognize and stress what is positively working in people rather than
their illnesses. Members are seen as people, not diagnoses. The therapy
practiced within the Clubhouse is the healing that takes place in warm
relationships developed while doing the work of the house in a work-
ordered day. This is meaningful work, not make-work; the program
depends on the participation of its members who are active partners in
its day-to-day operations. The results of this simple, cost-effective,
commonsense approach are remarkable. Members of Clubhouses recover,
grow, and thrive in vital and culturally sensitive communities that
offer hope, respect, support, friendship, education and employment.
They get their lives back and get back to work in record numbers in our
innovative transitional employment programs.
fountain house
The first Clubhouse, Fountain House, was incorporated in 1948. It
has served over 16,000 members since its inception and now serves 1200
active members annually. For thirty years Fountain House was alone in
its unique way of working with ex-patients of psychiatric institutions.
In the past several years Fountain House has helped to establish more
than 250 Clubhouses in the United States and more than 100 overseas.
Last year Fountain House won the Gold Medal Achievement Award from the
American Psychiatric Association. As the Clubhouse model quickly
spread, it became evident that a certification and standardization
process was critical to maintain the quality and integrity of the
original ideal. Because Fountain House's original mission was to serve
its New York City membership, the International Center for Clubhouse
Development was instituted to function as a parent governing and
supportive body to encourage Clubhouse development and ensure
programmatic quality control. All Clubhouses, including Fountain House,
are submitted to a rigorous and ongoing certification process and staff
and members undergo regular training in what the National Institute of
Mental Health once described as the best training program they had ever
funded.
Other ICCD Clubhouses in the United States serve an estimated
37,500 people with mental illness annually. The National Mental Health
Association states that 5.5 million Americans experience one of three
severe mental illnesses. Today the demand for quality services
continues to far exceed current resources. The Clubhouse model provides
members with cost effective, comprehensive supports that are unique to
the health care system.
Overview of Fountain House Training Program
Fountain House, along with four other Clubhouses in the U.S. and
three Clubhouses abroad, provides training in the Clubhouse model to
help Clubhouses work toward certification. The training covers a three-
week period and is based at the Fountain House Clubhouse, 425 West 47th
Street, New York City. The trainees (colleagues) in each group are
members and staff drawn from four or five different agencies, with each
agency sending two or three people. Some of these agencies are
organizations intending to build Clubhouses, while others are already-
existing Clubhouses. Fees charged by Fountain House to each
participating agency finance the program. The training is intense and
highly effective and the residential action-learning component is
critical. The guesthouse where the colleagues stay is now in desperate
need of renovation. The request of $200,000 for the Fountain House
component is entirely for the renovation of the guesthouse where the
colleagues stay during their training.
iccd
The mission of the International Center for Clubhouse Development
is to build and coordinate a strong network of Clubhouse programs all
of which meet the highest standards established by the overall
Clubhouse community. In pursuit of this mission, the Center promotes
the development and strengthening of Clubhouses; oversees the creation
and evolution of Clubhouse standards; facilitates and assures the
quality of training, consultation, certification, research and advocacy
and provides effective communication and dissemination of information.
The ICCD has a research affiliation with the University of
Massachusetts Medical School. The Clubhouse Research Program, housed in
the Center for Mental Health Research within the Department of
Psychiatry, provides ICCD a recognized and credible medical research
base from which to access Federal grant funds for validating Clubhouse
methods and procedures.
ICCD Clubhouses annually serve an estimated 37,500 people in the
United States. As the demand fro quality services continues to exceed
current resources, the Clubhouse model provides members with cost
effective, comprehensive support unique to our health care system. The
ICCD standards that must be met by all certified Clubhouses are aimed
at securing and promoting the highest level of member growth and
autonomy in the areas of work, housing and community living.
New York has a large number of Clubhouses supported by the ICCD.
This strong network of Clubhouses has promoted an improved range of
services and provides much needed services to individuals emerging from
psychiatric hospitals. The Clubhouse concept of empowerment provides
support, stability and training for those who need transitional
assistance as they integrate into society as productive and balanced
individuals. There is a constant shortage of trained and qualified
Clubhouse directors. It is beyond the ability of the ICCD to raise
funding for this training through private and state funding. This one-
time grant will permit ICCD to establish the base needed to meet
existing and future demand for coordination of certification and
Clubhouse practices. The grant would allow the ICCD to strengthen its
core management and coordinating capability.
This grant will benefit all existing 250 Clubhouses and the 37,500
people with mental illness whom they serve, as well as future
Clubhouses (now opening at an average rate of 25 new houses a year).
We respectfully request your assistance in obtaining this $400,000
grant for Fountain House and the ICCD through the fiscal year 2002 VA-
HUD Appropriations Bill.
______

Prepared Statement of the City of Palo Alto, California

Mr. Chairman and members of the VA-HUD and Independent Agencies
Appropriations Subcommittee, I would like to thank you for this
opportunity to testify before you. My name is Sandy Eakins and I am the
mayor of the City of Palo Alto, California. On behalf of the citizens
of Palo Alto, I request your support for two of the City's highest
priorities.
The City requests your support of an appropriation of $500,000
under the Economic Development Initiative to assist in the
rehabilitation and expansion of the Children's Library, the first stand
alone library building in the United States built exclusively for
children.
The Children's Library, designed by locally known architect Birge
Clark and constructed in 1940 within a local Historic Resource complex,
is a single-story historically significant building. It is currently
overcrowded and in need of rehabilitation and expansion. It suffers
from delayed maintenance and many of its original systems need
replacement. It also has seismic and accessibility deficiencies. The
adjacent ``Secret Garden'' is heavily used and has already been
negatively impacted by previous building additions within the complex.
Except for relatively minor repairs and modern accommodations, the
building has not been remodeled since construction and is in need of
rehabilitation to keep its childlike attractiveness and period historic
appearance.
The Children's Library opened in 1940 as gift from Lucie Stern, a
charitable resident of Palo Alto, in honor of her daughter Ruth. It was
Mrs. Stern's requirement that it be for Palo Alto's children. All
documentation shows this was a requirement of acceptance of the gift.
This Library is the first separate public library building in the
United States designed and built exclusively for children from birth to
middle school. It is important to the community because it provides
services that are not readily available at the main library.
Approximately 115,000 patrons from Palo Alto and surrounding areas
visit the Children's Library each year and there is a collection of
about 40,000 volumes.
Some of the special features of the building and library include:
1940's decor including light fixtures, furniture, and colors; hand-
thrown Mission tile roof that is believed to have been handmade by
Ohlone Indians; Spanish style design by Birge Clark, well-known for
hundreds of buildings listed on the Palo Alto Historic Resources
Inventory, and David C. Clark, all surrounded and linked by a series of
covered walks and landscaped spaces; a locally designed tiled fireplace
with nursery rhyme themes; and a Secret Garden, bordered by six-foot
high brick walls and enclosed by a series of high, curved hedges.
Second, the City requests your support of an appropriation of
$275,000 under EPA's State and Tribal Assistance Grant for storm drain
infrastructure improvements.
The storm drain system serving the Charleston Terrace neighborhood
currently drains directly into Adobe Creek through a 36 inch-diameter
outfall. When the creek level rises, the storm drain backs up until the
water level in the storm drain reaches the creek level. During moderate
storm events, the storm drain back-up causes ponding and minor property
flooding on local streets. Sediments and other urban runoff pollutants
flow directly into Adobe Creek causing degradation of the creek's water
quality.
Due to the flood threat and negative water quality impacts
attributable to the existing conditions, this is a high priority
infrastructure project for the City. The construction of a pipeline
connecting the Charleston Terrace storm drain system and the existing
Adobe Storm Water Pump Station would allow the storm drain to empty
when the creek is high, whereby, reducing street ponding and property
flooding. The pump station wet well would capture some of the sediment
and other associated pollutants from the storm runoff and facilitate
sediment/pollutant removal.
This project is consistent with the City's Storm Drain Master Plan
and with the Urban Runoff Management Plan managed by the Public Works
Department as mandated by the City's National Pollutant Discharge
Elimination System (NPDES) permit for discharge of storm water. It is
also consistent with local, regional, and state goals for management of
storm water discharges, protection of water quality in local creeks and
San Francisco Bay, and reduction in pollutant discharges from urban
runoff sources.
Thank you again for this opportunity to testify before this
committee.
______

Prepared Statement of the City of Roseville, California

Mr. Chairman and members of the VA-HUD and Independent Agencies
Appropriations Subcommittee, I would like to thank you for this
opportunity to testify before you. My name is Claudia Gamar and I am
the mayor of the City of Roseville, California. On behalf of the
citizens of Roseville, I request your support for two of the City's
highest priorities.
The City requests your support of a $2.5 million earmark under the
Economic Development Initiative (EDI) account to renovate the historic
Roseville Tower Theater into a multipurpose facility.
The Roseville Tower Theater, located in the City of Roseville's
historic downtown area, is a 1,000-seat movie theater built in 1940.
Vacant for the past 15 years, the theater deteriorated due to lack of
maintenance. The theater is also contaminated by friable asbestos.
The Tower Theater was acquired by the City of Roseville in 1989.
The City, in partnership with the Roseville Arts Center, a local
nonprofit, has been working for the past 10 years to convert the
theater into a modern multipurpose facility serving live entertainment
and offering meeting space. Since assuming ownership of the Tower
Theater, the City of Roseville and Roseville Arts Center have invested
over $1 million to renovate the theater lobby, remove asbestos from the
building, and develop a renovation plan for the auditorium. The
renovation plan for the Tower Theater auditorium includes an auditorium
space redesign for theatrical productions seating 550 persons,
renovations to the auditorium floor including leveling and the
installation of a movable stage, modernization of existing restrooms,
installation of an elevator, and the 6,500 square foot addition to the
back of the existing theater.
Upon completion of the Tower Theater renovation, its new addition
and an adjoining property owned by the Roseville Arts Center will be
effectively integrated as one facility offering, galleries, gardens,
entertainment and a variety of meeting space arrangements. The new
facility will also meet all current state and federal code regulations,
including the Americans Disabilities Act.
The estimated cost for completing the Tower Theater renovation is
$5 million. The Roseville Arts Center is currently pursuing $2.5
million in private funding and the City is pursuing $2.5 million. The
City of Roseville is committed to arranging financing for the Tower
Theater Renovation Project. However, federal assistance is needed in
order to complete the theater renovation.
Second, the City requests a $5.1 million earmark under the Federal
Emergency Management Agency (FEMA) for the Roseville Flood Control
Project. This project includes flood control improvements to providing
increased levels of flood protection to over 200 structures, most of
which are single family homes.
Roseville suffered devastating flooding in January 1995. President
Clinton and FEMA Director James Lee Witt visited the site and promised
Federal funding for flood control improvements. In 1996, the city was
awarded $6.27 million in FEMA HMGP funds to pay 75 percent of the cost
of the City's flood control project, initially estimated to cost $8.3
million. In 1998, the cost estimate increased to $12.2 million due in
part to requirements imposed by the State Reclamation Board and FEMA.
The State Office of Emergency Services (OES) encouraged the City to
proceed with the project and to submit reimbursement requests beyond
the $6.27 million in a ``cost overrun'' status. It is the City's
understanding that OES believed additional FEMA funds would be
available, as other disaster relief projects in California (e.g.,
Northridge Earthquake) were not expected to use all of their FEMA
funding allotments. Based upon the OES position, the City began
construction in May 1999. To fully fund the $12.2 million estimated
project cost in the interim, the City overmatched by borrowing from our
General Fund and road maintenance fund with the expectation of OES
reimbursement via ``cost overrun'' funds.
Construction is nearly complete with total costs at $16.1 million
due to legal challenges, construction costs, and soft costs. On October
18, 2000, OES surprised the City with the information that no surplus
FEMA funds were available and that surplus funds had been redirected to
other projects. The City temporarily used General Fund reserves and
road maintenance funding to cover the shortfall of $5.1 million
dollars.
Thank you again for this opportunity to testify before this
committee.
______

Prepared Statement of the Babyland Family Services, Inc.

Mr. Chairman: Thank you for giving me an opportunity to submit
written testimony on behalf of Babyland Family Services, Inc. about an
extremely important economic development initiative, ``Project NET-TO-
WORK:'' A Neighborhood Employment and Technology Initiative for Healthy
Children and Families. The agency is seeking $1 million in fiscal year
2002 appropriations as an Economic Development Initiative (EDI) under
the Department of Housing and Urban Development.
Babyland provides child care and early childhood education services
for 750 children (0 to five years old) at eight child care centers and
provides emergency shelter and family support services to 750 other at-
risk and low-income children and families. Babyland is currently
Newark's Early Head Start grantee (serving children 0 to 3 years old,
pregnant teenagers, young fathers and families living with HIV/AIDS)
and has a partnership with the Newark Public Schools to provide Abbott
preschool services to over 250 children. The agency has an extensive
partnership with the New Jersey Department of Human Services for the
provision of child welfare, family violence and child care services.
project net-to-work
Project NET-TO-WORK is a one-year capital and program start-up
request in which federal funding will enable the agency to complete the
construction or renovation of a major facility (approximately 36,000
square feet) that will thereafter offer the ongoing employment
training, placement and support services necessary to promote economic
development. It will also provide the necessary seed funds for program
operations, which will be sustained through the generation of program
income, local and state government contracts and grants from
foundations.
Project NET-TO-Work will provide a comprehensive safety net and
partnership--one-stop employment and self-sufficiency services that
eliminate common barriers to employment for low to very low-income
families in Newark and surrounding areas. Babyland's current service
area includes those portions of Newark (Central, West and North Wards)
and East Orange that are still economically distressed. The project
will target low-income African-American and Latino families who are
receiving public assistance or who are near public assistance. In
particular the initiative will be addressing the needs of single
mothers, teenage parents and males involved in or at risk of
involvement in the juvenile justice system.
The project will create 30 new child care jobs and will provide
employment training and placement services for 150 residents. In
addition, the project will address multiple barriers to job training
and employment retention, including: (1) Full-day year-round child
care; especially for infants; (2) Pediatric health care services,
including asthma management and preventive health education; (3) Family
counseling, especially substance abuse and mental health services and
(4) Quality of life and violence issues, especially family violence,
crime and dilapidated housing.
The main components of the project include the following:
--Employment training, placement and follow-up support services--
which includes individualized assessment, planning, basic
skills development including literacy, mentorship, peer
counseling, support service referrals, classroom instruction,
internship placements, job placements and ongoing mentorship
after placement.
--Child care and early childhood education services for 137 children,
from infant to five years old, and their families through
center-based and family child care options.
--Health services--basic preventive health services will be provided
onsite at the facility, including assessment, screening and
examination, education, referral and follow-up for children and
families.
--Access to Computer Technology for community residents through the
creation of a computer lab and training program.
--Family counseling to prevent and address family violence and child
abuse issues, with an emphasis on parent education, substance
abuse counseling and mental health counseling.
--Neighborhood safety and quality of life initiative that trains and
empowers residents to develop a five-block safety zone around
their neighborhood through the creation and development of
block associations, community policing, local business
associations and other community organizing efforts.
The goal of Project NET-TO-WORK is to help eliminate physical and
economic distress in the communities that the agency services. Through
this project, Babyland expects to create at least 180 new jobs,
especially in the areas of education, human services, food preparation
and fashion design. The agency also expects to create a facility that
will serve as a stabilizing force in an economically distressed
neighborhood. A child care component will promote the healthy
development of 137 children as well as serve as a job-supporting
service for 137 parents. A health component will directly benefit over
1,500 at-risk children in the Babyland service area through the
prevention and management of childhood illnesses, thereby further
preventing parent absenteeism from work. A computer technology
component will provide over 300 low-income residents with access to
basic and individualized computer technology knowledge that is
essential to their long-term success at work. Finally, a grass-roots
neighborhood violence reduction component will promote partnerships
among residents, law enforcement, churches, businesses and other
stakeholders and achieve the following: the reduction of physical
blight (graffiti and dilapidated housing), prostitution, drug dealing,
car jacking, domestic violence and various forms of crime.
There is widespread support for this very important initiative.
Babyland Family Services, Inc. expects to receive funding for the
project from the following non-federal sources:
--The Annie E. Casey Foundation Families Count Award--$500,000
unrestricted funds
--The Newark Public Schools--approximately $1 million for early
childhood education
--Private lending institutions--$1 million for capital support
--Local foundations and government (City and County)--$250,000 for
employment training and employment support services.
--The Dreyfus Health Foundation and Victoria Foundation--$70,000 for
health and community organizing projects.
--United Way--$200,000 for program operations
--Other potential funders include The Healthcare Foundation of New
Jersey and the Prudential Foundation.
It is our hope that the Subcommittee will favorably consider this
one-time request that will enable the agency to leverage funding for
this much needed economic development project.
Thank you for your consideration.
______

Prepared Statement of the National Federation of the Blind

Mr. Chairman: My name is James Gashel, and I serve as Director of
Governmental Affairs for the National Federation of the Blind. My
address is 1800 Johnson Street, Baltimore, Maryland 21230; telephone,
(410) 659-9314. Thank you for the opportunity to present this testimony
concerning appropriations to the Department of Housing and Urban
Development, Economic Development Fund.
For fiscal year 2002, the National Federation of the Blind (NFB) is
requesting $4 million for construction and initial opening of the
National Research and Training Institute for the Blind (NRTIB). This
Institute is described more fully in information attached to my
statement and is also shown in a picture provided.
Before I discuss the national significance of this project, I would
like to mention some of its more important economic development
features. First, you should note that the State of Maryland has
acknowledged the economic benefits of this project by making a
commitment of $6 million to be provided over a period of three years.
The NFB's facility serves as an economic anchor that encourages the
development of properties in the immediate area of South Baltimore and
north toward Federal Hill. The present NFB operating budget of $16
million is projected to double to $32 million in the first ten years of
the Institute's operation. Over 95 percent of the NFB's revenues are
raised outside of Maryland, with the vast majority of expenditures
being made in Maryland. It is estimated that there will be over $320
million of increased spending in Maryland during the next twenty years
resulting from the establishment of the Institute, and the present NFB
staff of sixty will expand to well over one hundred in the first years
of the Institute's operation.
With this growth, the NRTIB will provide substantial economic
benefits for the broader community. However, this project is especially
important throughout the nation to people who are blind. For example,
the modern technology being developed presents marvelous opportunities
and manifold challenges for people who can't see. The opportunities
include the potential of access to written communications, books,
magazines, and virtually anything else in writing which would normally
appear only in print. The challenges include being sure that the new
devices used to communicate will support and accommodate to nonvisual
as well as visual use. This can be done, but it will take a focused,
vigorous, and sustained effort to make it so. The result will be a
dramatic change in possibilities for people who are blind or become
blind.
Providing blind people and those who teach them with literacy
instruction--the ability to read and write in Braille--is a related
challenge. Literacy and productivity in the workplace go hand in hand,
not to mention being essential to just finding a job. Seventy-four
percent of working-age blind people are unemployed, but eighty-five
percent of those who can read and write in Braille are also working.
Therefore, literacy is a critical factor for the Institute to address
with distance learning technology and other methods.
Blind people serving as successful role models and planners of the
program will lead this Institute in collaboration with several academic
and research institutions including Johns Hopkins University, the
University of Maryland, and the University of Louisville. In fact,
leadership by blind people on behalf of blind people is a hallmark
principle of the National Federation of the Blind and will be carried
forward in the Institute.
Mr. Chairman, over half of the amount needed for construction has
already been contributed by private sources, including our most recent
grant of $800,000 from the Kresge Foundation. These contributions from
private sources are in addition to the support already committed by the
State of Maryland. The Community Development Fund under HUD and
specifically the Economic Development Initiative or HUD section 107
earmarks are appropriate authorities for federal support for this
project. Our request to this Subcommittee would provide sufficient
funds to complete the project.
I thank you.
the national research and training institute for the blind
executive summary
The National Federation of the Blind (NFB), a membership
organization of blind and visually impaired individuals, parents of
blind children, and interested others, has maintained its National
Headquarters in Baltimore, Maryland, since 1978. With a membership of
over 50,000, the NFB has become the leader in innovations that result
in improvements in self-determination, employment, and self-respect
among the blind. The National Federation of the Blind is strategically
positioned for growth and is in the process of establishing the first
National Research and Training Institute for the Blind developed and
operated by a staff responsible to an organization of blind persons.
This consumer perspective will better ensure that the directions taken
by the Institute will be those that we as blind people identify as
critical to our full participation in society.
The NFB Research and Training Institute, in partnership with
Maryland's foremost educational institutions, the University of
Maryland and the Johns Hopkins University, will serve as the nation's
hub for:
--Educational programs designed to upgrade the skills of teachers of
the blind
--Training programs to inform parents of blind children of the newest
teaching techniques and technology central to their children's
success
--New ways to access computer information with speech and Braille
technology
--Research that will improve mobility for the blind
--Methods that allow easy learning of Braille by older citizens
losing vision
--Improving the chances small companies have for getting useful
adaptive technology to market, through a dedicated adaptive
technology incubator center
Just as Gallaudet is known throughout the world as the center for
research, training, and new innovations for the deaf, the NFB's
National Research and Training Institute for the Blind will be known
internationally as the foremost center of major initiatives designed to
improve the lives of blind individuals. Through technology innovations,
highly qualified and dedicated staff, and strong collaborative
agreements, the NFB Research and Training Institute will create the
learning and research environments essential for true innovation.
The combination of economic growth, neighborhood and community
development, and the need for innovation and training in the field of
the blind serves as the basis for this request.
We are blind and visually impaired people committed to improving
our lives and the lives of others. In order to maximize the impact of
our efforts, we invite you to be our partner, joining thousands of
individuals, foundations, and corporations throughout the country to
make the dream of the National Research and Training Institute for the
Blind a reality.
economic development features
The present NFB operating budget of $16 million is projected to
double to $32 million in the first ten years of the Institute's
operation.
Over 95 percent of the NFB's revenues are raised outside of
Maryland, with the vast majority of expenditures being made in
Maryland.
It is estimated that there will be over $320 million of increased
spending in Maryland during the next 20 years resulting from the
establishment of the Institute.
It is projected that the present NFB staff of 60 will expand to
well over 100 in the first years of the Institute's operation.
In 1999 the NFB was awarded a $3 million grant from the U.S.
Department of Labor (DOL) for the establishment of America's
Jobline, a text-to-speech telephone-based technology network
which delivers employment listings over the phone. Jobline,
first operational in Maryland and now available in 21 states, will soon
be available throughout the country. In addition to the grant from the
DOL, $4.5 million will be awarded to the NFB in the next two years from
the states where Jobline becomes operational.
Due to the efforts of the NFB, in 2000 The Institute of Museum and
Library Services, an independent federal agency, received a $4 million
appropriation designed to expand the NFB's Newsline for the
Blind. Soon these funds will make it possible for us to offer
this text-to-speech telephone newspaper directly to all Americans who
can no longer read newspapers visually.
The NFB's ongoing relationship with federal agencies such as the
Office of Special Education, the Rehabilitation Services
Administration, and the U.S. Department of Labor will be important
funding sources for large national research and training initiatives of
the new Institute.
The NFB's facility serves as an economic anchor that encourages the
development of properties in the immediate area of South Baltimore and
north toward Federal Hill.
the building
The NRTIB will be a five-story structure built on the present
block-square property known as the National Center for the Blind, which
is owned by the Jacobus tenBroek Memorial Fund. The tenBroek Fund, a
501(c)(3) nonprofit organization was established after the death of the
NFB's founding president, Dr. Jacobus tenBroek.
--The first story (which is underground on the north side of the
building) as well as the second story will be for parking. The
parking area will accommodate cars for visitors, trainees, and
participants in conferences and is an important feature because
the neighborhood is already short of parking spaces for the
residents.
--The third floor will house an adaptive technology development
center and instructional space, including classrooms, a
distance learning center, and specially-equipped technology
labs.
--The fourth floor will be designated for a Library Research Center
and the Center for Braille Literacy, with their associated
offices.
--The top floor will consist of a fixed 100-seat auditorium equipped
with electronic capabilities and a large multi-purpose space,
which can be separated into a number of smaller spaces to be
used for the technology access incubator center, meetings,
conferences, and public education events.
The NRTIB will be attached to the present headquarters building of
the NFB at several points, thus integrating access to sleeping rooms,
dining facilities, the International Braille and Technology Center,
staff offices, and existing training space.
challenges
Nonvisual access to computer technology is an ever-increasing
challenge for the blind. Most educational and employment opportunities
are now and will continue to be dependent on the blind individual's
ability to access and use a full variety of technology.
Presently it is estimated that there are 1.1 million blind persons
in the country, including 788,000 over the age of 65. As the population
ages, there will be a larger number of seniors experiencing severe
vision loss (estimated 1.6 million by 2015). Independent living,
Braille skills, and general adjustment training opportunities are
lacking now and will be even more scarce in the future, without a
significant intervention.
Despite federal and state annual rehabilitation expenditures of
over $200 million, 74 percent of working-age blind adults remain
unemployed.
The estimated cost for a lifetime of supported unemployment for
each blind individual is $916,000. This includes only Social Security
or Supplemental Security Income payments, lost tax revenues, and
Medicare expenses.
Less than 10 percent of school-age legally blind children learned
Braille in 1999, yet studies indicate that Braille is a critical factor
in successful employment--85 percent of blind adults who use Braille
are employed.
the programs
The following six Initiatives and their related programs will
constitute the primary activities of the Institute.
Technology Access Initiative:
As everyday technology such as wireless phones, palmtop note
takers, Internet access devices, VCRs, microwaves, ATMs, and even
televisions become driven increasingly by pictures and onscreen menus,
the NFB must play a critical role to ensure that such technology is
adapted for the blind. Without nonvisual access to technology (via
speech and Braille output), blind people will become dependent on
others to operate devices that sighted people rely on every day. That
level of dependence is unacceptable, inefficient, and unnecessary.
Unfortunately, due to the widespread obsession with visual design
in technology, the shortage of good technology training, the cost of
equipment, and the rapid advancements in technology applications, blind
people now face the dismaying prospect of being left out if nonvisual
access is not continually updated and improved. This means that
advances in software and hardware must include design that allows
nonvisual access.
The National Research and Training Institute for the Blind will be
the center of technological advancement for the blind:
--Adaptive technology will be developed and promoted, in partnership
with the University of Maryland's Technology Advancement
Program, the Institute for Advanced Computer Studies, and the
Office of Information Technology, as well as the Lions Vision
Research and Rehabilitation Center at the Johns Hopkins Wilmer
Eye Institute
--Adaptive speech and Braille training programs taught by staff at
the Institute, using classroom and technology labs, distance
learning technology, and online course formats, will be made
available to professionals working with the blind, parents of
blind children, and adults who are losing vision
--A technology incubator will be established within the Institute to
provide entrepreneurs with the infrastructure to develop
technology that will be useful to the blind and may have other
applications
Below are examples of technology applications which will need the
nonvisual solutions targeted to be developed through the direct and
indirect programs of the Institute:
--Informational and service kiosks
--Electronic voting machines
--Electronic touch-screen applications
--Visual, menu-driven appliances
--The increasingly graphic Internet and the numerous alternative
technologies to access the Internet
--Proprietary software used by employers
The NFB has a long record of helping to develop adaptive
technology. Starting with Ray Kurzweil's first synthetic speech reading
machine in the mid-70s, the NFB has assisted dozens of companies in
designing and testing scores of innovative technological solutions.
In addition, the NFB continues to develop its own technological
innovations. Newsline for the Blind and America's
Jobline, two text-to-synthetic-speech national
telecommunication projects, demonstrate the NFB's ability to respond to
blind consumer needs with tailor-designed devices.
Blind Children's and Braille Literacy Initiatives:
The National Research and Training Institute will be the center of
a growing Braille Literacy Initiative that will ensure that the
progress led by the NFB continues and that Braille is recognized to be
a communications tool as essential to the blind as American Sign
Language is to the deaf.
--Educational classes, both on premises and via distance learning
technology, will be offered for teachers of the blind,
vocational rehabilitation professionals working with
individuals experiencing vision loss, and parents of blind
children.
--Model learning strategies will be developed, demonstrated in pilot
projects, and disseminated throughout the country.
--Innovative methods for learning Braille will combine new technology
applications with the experience of competent Braille users.
--The development of computer-based speech and Braille output
learning games for blind children will motivate, teach, and
prepare youth for the computer age.
Research Initiative:
A growing partnership with the Johns Hopkins University's Lions
Vision Research and Rehabilitation Center will be the foundation for
pragmatic research. This research will combine the expertise of one of
this nation's foremost medical research institutions with the world's
largest consumer organization of people who know firsthand what it
takes to meet the challenges of blindness. The Institute's research
agenda will include the development, evaluation, and dissemination of:
--Innovative travel aids for the blind
--Technology helpful in communication with the deaf-blind
--New methods for making the Internet easily accessible using
nonvisual methods
--Intervention strategies useful to seniors with limited vision
These activities will result in technologies that aid individuals
in their transition from medical patients to independent persons who
happen to be blind.
Blind Seniors Initiative:
Less money is spent and fewer services are available to those over
55 losing vision than to younger blind people. Yet more than 50 percent
of the 70,000 individuals who become blind in this country each year
are over the age of 65. New approaches must be developed and taught to
state and local staff members in rehabilitation, older Americans, and
older blind programs and to staff and residents in centers for
independent living.
The National Research and Training Institute will bring together
knowledgeable professionals who will:
--Design education and resource materials useful for the older blind
--Develop training programs to assist state and local agencies in
helping blind and visually impaired seniors remain independent
and continue to participate in the activities they hope for in
their retirement years
--Conduct projects to improve technology training methods used with
this population
Employment Initiative:
The NFB has already demonstrated an ability to operate high-quality
training programs. The NFB residential rehabilitation training centers
in Ruston, Louisiana, Minneapolis, and Denver have 90 percent or higher
success rates placing their graduates in competitive employment or
higher education. The key staff members in each of these centers have
been trained by the NFB. The blind need more successful centers like
these, and the NFB needs the space to research and test program
improvements and provide staff training for the new centers as well as
refresher courses for existing staff.
The Employment Initiative of the National Research and Training
Institute will provide focus, resources, and direction for a
comprehensive evaluation of contemporary methods for helping the blind.
From such an evaluation will come the necessary knowledge to develop,
demonstrate, and replicate innovative training programs to replace
existing efforts that have failed to bring the blind into the
workforce. NFB partners in this effort include: United Parcel Service,
The Gallup Organization, IBM, Marriott Worldwide Reservations,
Countrywide Home Loans, Premium Office Products, Massachusetts General
Hospital and Partners Health Care System, and Legal Sea Foods.
______

Prepared Statement of the City of Miami Beach, Florida

Mr. Chairman: On behalf of the City of Miami Beach, Florida, I
appreciate the opportunity to present this written testimony to you
today on two extremely important economic development initiatives,
currently underway within our city. We respectfully request your
consideration of these projects for funding from your fiscal year 2002
appropriations legislation.
--Byron Carlyle Theater Restoration.--The rehabilitation of a large
downtown theater to serve as a cultural and community center.
--Atlantic Corridor Greenway Network.--An important project which
brings together enhanced tourist/commuter transportation,
alternative transportation, intermodal access, urban
revitalization and economic redevelopment in a linear park or
greenway setting.
byron carlyle theater restoration
The City of Miami Beach wishes to pursue direct funding for the
acquisition and redevelopment of this facility through HUD
Appropriations as an Economic Development Initiative. The Facility will
serve as a venue for cultural and non-profit institutions, functionally
interacting with the North Shore Youth Center. The two primary
objectives of this facility are: (1) to use cultural institutions as a
catalyst for the revitalization of the North Beach area, and (2), to
provide a facility that can house those organizations that are being
priced out the their current locations. The City is seeking $2.1
million towards this project.
The Byron Carlyle Theater is a 7-screen movie theater that is
located in the central business district of Miami Beach's North Beach
area of. The theater was closed by Regal Cinemas in 1999, and has been
vacant ever since, creating a void in what once was a thriving downtown
neighborhood. The City of Miami Beach has begun the implementation of a
strategic plan for the revitalization of the North Beach area, which
includes approximately $124 million in capital improvement projects
that will be implemented during the next 6 years. The redevelopment of
vacant buildings such as the theater is crucial to the economic and
business development components of the North Beach Strategic Plan.
However, due to the unique layout and structural nature of older movie
theaters such as the Byron Carlyle Theater, redevelopment options are
limited and expensive.
There are two reasons that Miami Beach needs the Byron Carlyle
Theater as a multi-purpose cultural facility. First, the redevelopment
of this theater is an integral component of the Strategic Plan for the
economic revitalization of the North Beach area of Miami Beach. While
other areas of Miami Beach have enjoyed tremendous economic success
over the last ten years, the North Beach area has lagged in its growth
and continues to evidence a concentration of low income households and
a lack of private sector investment. The emergence of cultural
institutions during the beginnings of the economic revitalization of
South Beach's Art Deco District directly contributed to the area's
continued success. Secondly, the success that cultural organizations
helped create in South Beach is also a reason for the creation of a
cultural facility in North Beach. As South Beach boomed, local cultural
institutions became self sufficient and successful, area market trends
began to improve and property values appreciated significantly. In
1993, the primary cultural area in South Beach was on Lincoln Road,
where rental rates averaged $12 per square foot. In 2000, rental rates
reached $75 per square foot, and many small businesses and cultural
organizations were forced to either relocate or dissolve. Additionally,
many cultural organizations currently housed in City-owned facilities
will soon have to relocate as the City expands to meet the ever-
increasing service levels expected by the citizens. A central facility
that accomplishes both goals is critical to the economic revitalization
of the North Beach neighborhoods.
The Acquisition and Renovation of the Byron Carlyle will also help
develop the entire City of Miami Beach into a world-renowned center for
the creation and consumption of culture. Miami Beach is home to many
internationally acclaimed cultural organizations, such as the New World
Symphony, the Miami City Ballet, and the Bass Museum. These
organizations, however, are located in a small concentrated area of
South Beach. The City also has over 75 smaller cultural groups that are
the true cultural heart of Miami Beach. Organizations such as the
Concert Association of Florida, Ballet Flamenco La Rosa, and the
Performing Arts Network continue to struggle for their economic
survival. The ability to provide a facility that allows these groups to
remain in Miami Beach will provide a venue where many emerging and
small organizations can continue to grow and prosper and at the same
time provide a catalytic cultural component to the revitalization
effort in North Beach.
In 1999, in an economic impact report to the City of Miami Beach's
Mayor's Economic Council, Florida International University identified
that investment in the cultural arts has the highest economic output
multiplier of all local industries. The challenge for cities such as
Miami Beach, however, is, providing the level of Cultural Arts
investment that is required to generate this ``biggest bang for the
buck.''
The City of Miami Beach estimates that the cost to acquire and
rehabilitate the Byron Carlyle is $7.2 million. The City currently has
approximately $2.2 million for this project, which will include the
$1.7 million purchase price. The City has also identified funding
sources that will be committed to the annual operation of the facility
once it opens. The City of Miami Beach is requesting and additional $5
million for the renovation of this facility as an Economic Development
Initiative.
atlantic corridor greenway network
(An Important and Innovative Program that brings together Enhanced
Tourist/Commuter Transportation, Alternative Transportation, Intermodal
Access, Social Justice, Urban Revitalization and Economic Redevelopment
in a Linear Park or Greenway Setting)
The City of Miami Beach exists as an eight mile long chain of
barrier islands that is separated from the mainland of Miami-Dade
County by the Biscayne Bay Marine Estuary. The historic and scenic
Indian Creek Waterway system snakes its way through the chain of
islands. Miami Beach was settled in the late 1800's as a farming
community. Just after the turn of the century, entrepreneurs recognized
the area's potential and launched the development of a resort
community. The result was a development boom which reached its peak in
the 1930's & 1940's and established Miami Beach as the number one beach
tourism destination in the world. At that time, an elaborate transit
network effectively serviced the public's need and automobiles were of
little use to Miami Beach visitors and business owners. As a result,
very few parking facilities were developed Citywide.
The post-war prosperity of the 1950's brought on a vast expansion
in the development of single family homes and lower density multifamily
residential facilities to Miami Beach. By the time changes in world
economic conditions brought new development in Miami Beach to a halt in
the 1960's, the City of Miami Beach was a completely developed
metropolitan area. The area remained in economic doldrums until the
mid-1980's when Art Deco revival and a resurgence in beach tourism
ignited a wave of redevelopment that has eclipsed any previous period
of development in Miami Beach history. This resurgence in development
has also brought on major changes in both Miami Beach's population
demographics and traffic patterns. Since 1980, the median age of Miami
Beach residents has dropped from 65 to 44 years old. During that time,
approximately 25 percent of the City's hotel and apartment facilities
that historically catered to the City's retiree and seasonal visitor
populations, were converted to condominiums occupied by permanent
residents. The number of vehicles owned by residents of Miami Beach has
increased from approximately 40,000 cars in 1975 to more than 100,000
in 1995.
The traffic congestion caused by daily commuters, residents and
visitors trying to traverse the city and vying for the scarce few
available parking spaces seriously impedes access to area businesses,
cultural/entertainment centers, residential facilities, public parks
and greenspace. This traffic gridlock has also had negative impacts on
tourist/convention bookings, local business revenues and has limited
future economic development through concurrency constraints on growth.
Through the development of the Atlantic Corridor Greenway Network,
the City of Miami Beach is creating a regional alternative
transportation network which will interconnect key intermodal centers,
area business districts, cultural/tourism centers, residential
neighborhoods, parking facilities, parks, schools and the beaches. The
Network will be comprised of a citywide system of bicycle/pedestrian
accessways, enhanced public transit facilities, expanded Electrowave
electric shuttle service and innovative regional parking improvement
programs.
The system of bicycle/pedestrian trails will be created to provide
continuous, multi-purpose public access corridors throughout the City.
The access corridors will be developed as Greenways or linear parks
which will snake their way along the City's beaches, waterways and
natural ecosystems with connections to residential areas, resort areas,
business districts, civic centers, transit sites and parking
facilities. Rest areas, vista areas, waterway access facilities, and
interpretive signage will be interspersed throughout the greenways to
provide enhanced heritage and ecotourism amenities and recreational
opportunities for trail users.
By connecting the Greenway trails with improved transit sites in
strategic residential areas, employment centers and regional parking
facilities, the Network will encourage greater utilization of public
and alternative modes of transportation for daily commuting, lowering
transportation costs and freeing critically needed parking in the
business districts. Through the creation of innovative employee park &
ride programs for local businesses, the Network will shift additional
cars away from key business and tourist centers to less utilized
regional parking facilities.
The alleviation of some of the traffic congestion and parking
shortages along the Atlantic Corridor will encourage new economic
development in Miami Beach by reducing the concurrency restrictions
currently limiting new development and by increasing local business
utilization by residents and visitors.
Local government has already made a substantial investment in the
development of the Atlantic Corridor. To date, the City has obtained
more than $12,000,000 in project funding, completed the design and
permitting of more than 3.5 miles of the Network's trails, and will
complete the construction of the first 2.5 miles of trail in fiscal
year 2001-2002. If approved, this $3,200,000 appropriation request will
allow the City to complete the development of a series of residential
connector nodes, which will directly link the City's key residential
areas with regional employment centers, transit facilities and the
Citywide trail network.
______

Prepared Statement of the City of Gainesville, Florida

Mr. Chairman: On behalf of the City of Gainesville, Florida, I
would like to thank you for the opportunity to submit testimony before
your Subcommittee on a major economic development initiative the City
has undertaken to revitalize the Downtown area of Gainesville. The
cornerstones of the City of Gainesville's Downtown Revitalization
Initiative are: (1) the development of the Sweetwater Urban Stormwater
Park which we are seeking $9.7 million from the U.S. Environment and
Protection Agency (2) the right-of-way acquisition and construction
activities of Depot Avenue for which we are seeking $6 million as a
Housing and Urban Development Economic Development Initiative (HUD/
EDI).
The Downtown Revitalization Initiative is a broadly developed,
multi-faceted initiative that has an established goal of revitalizing
Downtown Gainesville. The City of Gainesville has experienced a
renaissance in establishing Downtown as a desirable place to live, work
and play. The Initiative encourages the redevelopment of existing
buildings and parking lots within Downtown into mixed residential,
commercial, and office uses. Already the City has participated in two
redevelopment multi-use projects in Downtown that have brought in
residential, commercial and office spaces. The City's participation is
providing streetscaping and stormwater management, both being vital
components of the success of any redevelopment initiative. A third
redevelopment project under way is Alachua County's proposed Judicial
Complex and associated parking structure.
The Revitalization Initiative is dependent on a master stormwater
facility that has been planned as a landmark stormwater park that will
not only serve as a functional stormwater management facility, but
provide an urban park setting for Downtown and nearby residents,
visitors and employees. The proposed park is located on the southern
boundary of Downtown adjacent to the City's Historic Train Depot (built
in 1907) and the City's Electric Utility's repowering of the historic
Kelly Power Plant that is currently underway. The Historic Train Depot
was purchased by the City and is in the process of being renovated in
accordance with Federal and State Historic requirements and using
Federal Transportation Enhancement Program and State Historic
Preservation funding. The Historic Train Depot will be a vital
component of the stormwater park to allow a center of activity that is
complementary of the overall goals of the Downtown Revitalization
Initiative.
The stormwater park will also function as a Rail Trail Hub to
provide linkage of four primary existing and proposed rail trail
systems. From the south the existing Gainesville Hawthorne Rail Trail
provides a linkage to the Historic Boulware Springs facility and
proposed park owned by the City, the State Payne's Prairie Preserve and
further out to the City of Hawthorne.
The proposed Downtown Connector will connect the Gainesville
Hawthorne Rail Trail through the stormwater park and is being
implemented with funding through the Transportation Enhancement
Program. From the east the existing Waldo Road Beautification Trail
connects the stormwater park with the City's recently completed Martin
Luther King Center, a community sports complex that provides much
needed community meeting space and recreational programs. In addition,
the Waldo Trail provides a linkage to many predominately African
American neighborhoods including the City developed Cedar Grove
residential neighborhood.
The proposed 6th Street Rail Trail will provide access to the north
and west through three historic, and predominantly African American,
Porters and Pleasant Street Neighborhoods and the Grove Street
Neighborhood. The 6th Street Trail will be constructed using a
combination of local, state and federal dollars. The existing Depot
Avenue Rail Trail connects these trails along the borders of the
stormwater park and Depot Avenue. The trail and enhanced roadway will
provide a primary multi-modal transportation corridor connecting the
University of Florida and Shands Medical Complexes to Downtown.
Sweetwater Urban Stormwater Park
The Sweetwater Urban Stormwater Park component will provide
stormwater treatment for Depot Avenue, the proposed Rail Trails, as
well as the Downtown portion of the Sweetwater Branch watershed located
upstream of the park. The site of the proposed Park served as the rail
transportation hub linking Fernandina Beach on the east coast of
Florida to Cedar Key on the west coast in the mid-1800's. The Historic
Train Depot's under-roof, otherwise open loading docks will provide
open vistas to the proposed Sweetwater Urban Stormwater Park. The
historic Depot building's unique character and location will serve to
make it both a lively destination hub for the neighborhood and a
catalyst for further redevelopment of Downtown. The building is a
standing testament to and a significant visual emblem of Gainesville's
rich history. The restoration of this building in conjunction with the
restoration of the 22-acre Sweetwater Urban Stormwater Park is expected
to provide a major community destination and regional ``eco-tourism''
attraction for the community.
The Park is in the planning stages as the centerpiece of a U.S.
Environmental Protection Agency (EPA) and Florida Department of
Environmental Protection funded Brownfields pilot project. This project
consists of the cleanup costs, construction of the stormwater
facilities, installation of reuse water system for irrigation, and
development of the recreational components of the Park. The total cost
of the Sweetwater Urban Stormwater Park is estimated at $17,200,000.00.
The City of Gainesville currently has budgeted $571,000 for property
acquisition, $1 million for construction of stormwater facilities and
$5 million for coal tar remediation. A state grant of $400,000 is
available for acquisition costs. Brownfield grant funds are being used
for site investigation and design activities currently underway. An EPA
grant for $500,000 is being used for preliminary engineering and
environmental work for a portion of the stormwater component of the
project. Federal funding request is for $9,700,000.00.
Depot Avenue
This component includes the enhancement of approximately two (2)
miles of Depot Avenue from SR 331 to US 441. The enhancement will
encourage increased utilization of mass transit, bicycle and pedestrian
modes of travel; increase accessibility to a major public heritage and
recreation destinations for the community; and enhance the linkage
between Downtown and the University of Florida and Shands Medial
Complexes.
Depot Avenue traverses Gainesville from west to east, approximately
\1/2\ mile south of, and parallel to, SR 26 (University Avenue). Its
western terminus is at the eastern edge of the campus of the University
of Florida and associated student housing developments, and its eastern
terminus is at SR 331 in Southeast Gainesville. It skirts the southern
edge of downtown Gainesville at its mid-point, and its intersection
with SR 329 (Main Street) is considered to be the southern ``gateway''
to Downtown. Main Street is being reconstructed by the State to include
on-street parking, enhanced bicycle/pedestrian facilities and
landscaping in conjunction with the Downtown Revitalization Initiative.
The enhancement of Depot Avenue will also provide infrastructure
and improved safety while accessing Downtown, University of Florida
area, the adjoining Porters Neighborhood, just west of SR 329 (South
Main Street) and the SpringHill Neighborhood in Southeast Gainesville.
The Porters Neighborhood lies within Census Tract 2, which extends
north of University Avenue, and the SpringHill Neighborhood lies within
Census Tract 7. Census Tract 2 is approximately 37.7 percent African
American and Census Tract 7 is approximately 75.6 percent African
American (Census, 1990). Approximately 35.1 percent of all families in
Census Tract 2 are in poverty and approximately 31.6 percent of all
families in Census Tract 7 are in poverty (Census, 1990).
The socio-economic conditions of these areas include high crime
rates, sub-standard housing, and lack of access to services and
investment. According to the Gainesville Police Department, there were
over 3,000 reported crimes on the east side of Gainesville during 1996,
the most common crimes included aggravated assault, burglaries and drug
sales.
The enhancement of Depot Avenue provides for safer access to the
higher employment areas of Gainesville, including Downtown and the
University of Florida, improving physical infrastructure, including
drainage improvements, lighting and streetscaping, and providing safe
bicycle and pedestrian facilities that connect both east and west
Gainesville to Downtown.
This project will encourage redevelopment and infill in Downtown
and the urban core of Gainesville and its adjacent areas. The City, as
the provider of urban mass transit service, is proposing to develop a
multi-modal transportation center in the vicinity of Depot Avenue in
order to take advantage of the transportation linkage between Downtown
and the University campus. An enhanced Depot Avenue will provide a
region-based incentive for reducing sprawl development in the
Gainesville Metropolitan Area by providing an alternative east-west
corridor to SR 26 that allows for maximum use of alternative
transportation. As a consequence, this project will increase mobility
while minimizing pollution and congestion associated with the use of
single occupant vehicles.
The City of Gainesville obtained a HUD grant of $277,500.00 that is
being used towards surveying and mapping costs. The Depot Avenue
component includes right-of-way acquisition and construction activities
at a cost of approximately $6 million.
Federal support is critical for the success of the City's Downtown
Revitalization Initiative. It is our hope that the Subcommittee will
give our request every consideration.
______

Prepared Statement of the City of Fairfield, California

Mr. Chairman and members of the Senate VA-HUD and Independent
Agencies Appropriations Subcommittee, I would like to thank you for
this opportunity to testify before this committee. My name is George
Pettygrove and I am the mayor of the City of Fairfield, California. On
behalf of the citizens of Fairfield, I request your support of a $2
million earmark under the Economic Development Initiative (EDI) account
for the construction of the Solano County Government Center.
Fairfield has been the county seat of Solano County since 1858.
Today, downtown Fairfield is the administrative center of the Solano
County government, including the offices of the County Administrator,
the Board of Supervisors, several general government agencies, and the
County law and justice center. Solano County has outgrown the existing
facilities and the County will either build a new county building at
the current site in the downtown or move county services to other
suburban areas of the County. The City of Fairfield wants County
offices and services to remain downtown, thereby maintaining the
economic viability of the area and promoting redevelopment of adjacent
private land.
The City and County jointly funded a Master Plan for the project in
downtown Fairfield. In its final stages of completion, the Master Plan
envisions multi-story county government buildings, parking structures,
and support space. The first phase of the project will include a multi-
story county government building up to 300,000 square feet in size,
streetscape improvements and a parking structure with 1,180 spaces to
serve the new facility and downtown office and retail businesses.
This project is a key element in the City's strategy to redevelop
the downtown. It will create a distinctive new landmark in the center
of Fairfield. By retaining and expanding existing County government
functions, the project will provide a customer base and an economic
engine for growth in the adjoining business district. The project will
also result in significant upgrades to adjoining streets, with new
street trees, public places, landscaping, and public art. The new
County Government Center will also encourage intensification of
development in the City center, leaving raw land in areas outside the
City's core available for more suitable uses.
The estimated cost of the first phase of the Solano County
Government Center is $75 million. Solano County and the City of
Fairfield are working together to develop a funding plan for the
project. As part of this joint effort, the City seeks Economic
Development Initiative funding to leverage city and county funds for
the design and construction of the new County Government Center.
Once again, thank you for this opportunity to testify before you.
______

NATIONAL SCIENCE FOUNDATION

Prepared Statement of the American Society for Microbiology

The American Society for Microbiology (ASM), the largest single
life science organization in the world, comprised of more than 42,000
members, appreciates the opportunity to provide written testimony on
the fiscal year 2002 budget for the National Science Foundation (NSF)
and the Environmental Protection Agency (EPA).
The ASM represents scientists who work in academic, industrial,
medical and governmental institutions worldwide. Microbiologists are
involved in research to improve human health and the environment. The
ASM's mission is to enhance the science of microbiology, to gain a
better understanding of basic life processes, and to promote the
application of this knowledge for improved health, and for economic and
environmental well being.
The following testimony will outline the ASM's funding
recommendations for both the NSF and EPA research and development
programs for fiscal year 2002.
national science foundation
The ASM, as a member of the Coalition for National Science Funding
(CNSF), endorses the recommendation to provide no less than $5.1
billion, a 15 percent increase, for the NSF in fiscal year 2002. This
would raise the NSF budget by $765 million from its current $4.4
billion level of funding for fiscal year 2001. The ASM strongly
supports Congress's bipartisan commitment of last year to strengthen
science and long-term investments in basic research by significantly
increasing the National Science Foundation's budget. It is critical to
sustain this strong federal investment in fiscal year 2002 and beyond
in order to maintain U.S. competitiveness and leadership in science and
technology, which depends on adequate funding for basic research.
The NSF is the primary source of nonmedical basic research support
in the nation's colleges and universities. NSF is the only federal
agency whose mission consists of comprehensive support for the sciences
and engineering and is thus a major source of funds for training of our
nation's intellectual capital. It is a key agency for supporting
research that uses genomic information in new and creative ways. Other
NSF initiatives will result in increased understanding of environmental
and human microbial interactions, which have particular relevance to
global environmental change as well as infectious diseases and
represent a new frontier in scientific research.
NSF's mission to promote and advance research and education in the
United States is accomplished by funding the highest quality academic
research and education programs. A 15 percent increase would enable NSF
to support additional excellent research projects in pursuit of
important discoveries and innovations. Enhanced support for the NSF's
efforts to improve education will help expand our nation's intellectual
capital. Strong links between research and education are essential to a
healthy research enterprise, an educated public, and a well trained
future workforce.
Continued research concerned with the impact of microorganisms on
the well being of humans, animals, plants, and the environment is
critical. The ASM supports NSF's increased focus on microbial biology
and the diversity of microorganisms, an initiative under the auspices
of the NSF's Directorate for Biological Sciences (BIO). Studies on the
unknown microbial biomass provide opportunities to discover new
knowledge about microbial life forms and their potential application in
industry, medicine and agriculture. In addition, microbiological
research continues to provide the foundation for advances in
biotechnology. These advances are based on understanding the molecular
basis of microbial physiology and the biology, genetics, and molecular
biology of viruses, yeast and bacteria and the vectors derived from
them.
biocomplexity
ASM urges support for NSF's bold initiative to better understand
the complexity of interactions between organisms and their environment
so that human impact and trends in our global environment can be better
understood and properly managed. Advances in the underlying disciplines
from molecular biology, ecology and the geosciences to mathematics and
the computational sciences have now made it feasible to begin to
understand more complex interactions. Microorganisms are key components
of the soil, water, plant, and animal environments and therefore are
dominant factors in understanding these interactions. Furthermore, only
a small percentage of the microbial species on earth are known, leaving
their functional role unknown. These unknown organisms are the largest
untapped source of biodiversity and a potential source of new
pharmaceuticals, enzymes, biocontrol agents, and tools for
nanotechnologies.
genomic research and informatics
The tremendous advances in DNA sequencing technology have now
provided the full genetic code for many organisms, and will include the
sequences of probably 60 microbes by the end of 2001. This information
is revolutionizing our ability to understand the common features of
life as well as the differences among organisms. However, to capitalize
on the sequence information research efforts on functional genomics and
informatics needs to be enhanced. The function of most of the genes now
discovered from sequencing are unknown. Functional genomics research
provides the opportunity to understand the role of these genes.
Informatics provides the common computer based information about these
genes and the software tools to mine these data. As a new field in
science, there is a great shortage of people with appropriate training
in informatics. ASM recommends that programs in functional genomics and
informatics be enhanced to meet this major national need.
The ASM requests that Congress give high priority to increasing the
NSF's funding by at least 15 percent for fiscal year 2002. Most of
today's scientific achievements leading to the development of
biotechnology, antifreeze proteins, improved crops and plant-based
products, new antibiotics and pharmaceuticals and DNA fingerprinting
have their roots in basic research supported by the NSF. The many
future public health and environmental challenges the United States
will face can only be overcome through the potential of basic research
to generate crucial new scientific knowledge and advancements that lead
to new technologies for the future.
environmental protection agency
The EPA's scientific research and development programs are critical
to researchers in the fields of applied and environmental microbiology.
Research on environmental microbiology is essential for improving air,
water, and soil quality; for assuring the safety of potable water
supplies; for providing safe means for waste disposal; and for cleanups
of environmental contaminants. The ASM believes that sound public
policy for environmental protection depends on adequately funded
programs of intramural and extramural research based on a system of
peer review to assure that support is awarded to research programs
having both quality and relevance. The EPA has begun its own peer
review system based upon the National Science Foundation model.
Critical peer review of both the intramural and extramural research
programs of the EPA are necessary for ensuring the quality and
scientific validity of studies that are funded.
safe water and water research
Control of water pollution in the United States over the past two
decades has focused on chemical risks, overshadowing the significant
risks associated with microbial pollutants. Waterborne microorganisms
pose increasingly greater threats to public health, due to changing
patterns in water use, increased water pollution, the nation's aging
water treatment systems, and out-moded risk assessment protocols. The
Centers for Disease Control and Prevention (CDC) estimates that each
year in the United States up to 900,000 cases of illness and possibly
900 deaths occur as a result of waterborne microbial infections.
Disease causing microbes are responsible for a variety of maladies from
diarrhea (Cryptosporidium) to respiratory distress to heart disease. In
1993, the Cryptosporidium outbreak in Milwaukee cost that community
well over $55 million. The 1997 Pfiesteria bloom in the Chesapeake Bay
area caused $43 million in economic losses. The ASM believes it is
imperative to provide support to EPA efforts to address risk associated
with microbial contamination, such as, the Waterborne Microbial Disease
Program (WMDP). The WMDP is an internal EPA effort to examine the
coverage of current programs related to waterborne microbial disease
and develop an integrated strategy that will assure current and future
regulatory programs adequately address microbial public health
concerns. The ASM has recommended that EPA work with the CDC, National
Institute for Environmental Health Sciences (NIEHS), and other federal
agencies, as well as universities and other key nongovernment groups to
provide the needed reliable science.
The ASM also recommends that biological research could be
strengthened within EPA by initiating an independent scientific
assessment that:
--Focuses on the appropriate and necessary human and financial
resources needed for research, development, and implementation
of water protection programs focused on waterborne microbes.
--Identifies the education and training programs needed to improve
surveillance of our waters and our human population for
outbreaks.
--Determines which programs and methods must be developed or expanded
to monitor the microbial threat in the nation's water systems.
science to achieve results program
The EPA's Science to Achieve Results (STAR) program is an important
mission-driven, extramural research initiative. This program funds
important environmental research proposals from scientists outside the
federal government and is a valuable resource for the EPA in finding
solutions to many complex environmental problems. Grants made under the
STAR program last from two to three years and provide about $150,000 of
scientific support per grant year. The STAR program funds projects in
specific focal areas including global warming, drinking water, ecology
of harmful algal blooms, water and watersheds, ecological indicators,
and pollution prevention, which have significant microbiological
components. ASM applauds the EPA's new initiative to develop multi-year
plans (e.g., for Particulate Matter and other programs) that will
relate STAR and intramural research products to the Agency's strategic
goals for different program areas. These plans will help provide a
framework for the Agency to consider, and to explain the balance of R&D
performers in individual research areas.
ASM recommends that 20 percent of the STAR budget remain open for
exploring broader issues not covered by targeted RFA's. This mechanism
captures the creativity of the scientific community to foresee EPA
relevant needs and solutions.
graduate environmental fellowship program
The EPA's Graduate STAR Environmental Fellowship Program has been
an outstanding success in attracting some of the best young talent to
environmental research. ASM strongly endorses this program and, based
on its success, suggests that the funding be increased for fiscal year
2002. Both the public and private sectors will benefit from a steady
stream of well-trained environmental specialists. The fellowship
program has had a major impact in attracting exceptionally talented
young scientist to pursue careers in environmentally related fields.
ASM also encourages the EPA to fund additional environmental
microbiology fellowships in such research areas as bioremediation,
global warming, and molecular methods to detect water contamination.
The Fellowship Program will provide the critical expertise this nation
will need to face today's challenges in industrial pollution, microbial
contaminated water systems and general environmental quality. ASM also
believes this program is critical to maintaining the highest level of
competence in environmental science to address the challenges yet
unseen.
During this year's appropriations process, the ASM urges Congress
to consider these needs and provide the necessary incremental funding.
The ASM appreciates the opportunity to comment and would be pleased to
provide additional information.
______

Prepared Statement of the American Chemical Society

The American Chemical Society (ACS) would like to thank Chairman
Christopher Bond and Senator Barbara Mikulski for the opportunity to
submit testimony for the record on the Departments of Veterans Affairs
and Housing & Urban Development, and Independent Agencies
Appropriations bill for fiscal year 2002.
As you may know, ACS is a non-profit scientific and educational
organization, chartered by Congress, representing more than 163,000
individual chemical scientists and engineers. The world's largest
scientific society, ACS advances the chemical enterprise, increases
public understanding of chemistry, and brings its expertise to bear on
state and national matters.
We firmly believe that advances in science and engineering have
produced more than half of our nation's economic growth in the last 50
years. They remain the most important factor in the productivity
increases responsible for our growing economy and rising standard of
living, economists agree. Each field of science contributes to our
diversity of strengths and capabilities and has given us the
flexibility to explore new fields and apply science in unexpected ways.
Over the last 25 years, funding for biomedical research has increased
while federal support for most other disciplines has remained flat or
declined. Congress took an important step in the right direction last
year when it increased funding for scientific research for fiscal year
2001. To nourish the roots of innovation in all fields and help ensure
the success of growing investments in biomedicine, balance must be
restored to the nation's R&D portfolio while supporting overall growth
in the nation's science and technology budget. This should be a top
priority for Congress and the administration as fiscal year 2002
appropriations are considered.
nsf budget recommendations
ACS commends Congress for providing NSF a 14 percent increase for
fiscal year 2001. To meet the challenges of the nation's 21st century
scientific, education, and workforce needs, ACS strongly supports
funding the National Science Foundation (NSF) in fiscal year 2002 at
$5.1 billion, a 15 percent increase. NSF supports research and
education programs that are crucial to innovation and help meet the
demand for a highly skilled workforce. The recommended funding level
would allow NSF to more fully meet the unrealized opportunities in core
disciplinary research areas, enhance multi-disciplinary research, and
increase its impact on science and mathematics education.
nsf research programs
Progress in core disciplines such as chemistry, physics, and
mathematics is essential to the success of complex, multi-disciplinary
R&D in areas such as nanotechnology and bioinformatics. Support for
core programs comes from several NSF directorates, including the
Mathematics and Physical Sciences Directorate (MPS). MPS supports
research to investigate the inner structure of matter, origins of the
universe, dynamic chemical reactions, and new and efficient
computational techniques. MPS research underpins many other scientific
endeavors and fuels the development of new technologies, new markets,
and new tools for discovery. The Society supports providing a strong
increase for MPS that is proportional to other directorates.
ACS also supports fundamental, multi-disciplinary research programs
supported by NSF. These include nanotechnology, information technology,
and environmental research. With a variety of scientists working to
study these complex problems, novel fields of investigation may emerge
that will give us a better understanding of our world. The resulting
multi-disciplinary workforce will advance the competitive edge of our
nation's industries by creating innovative tools and technologies.
Developments in nanotechnology could one day revolutionize
manufacturing processes, electronics, medicine, and environmental
protection. NSF supports research on nanoscale chemical, biological,
and environmental processes and on novel phenomena only visible with
atom-scale control over matter. Information technology research,
including computational chemistry, also holds enormous potential for
technological advances and thus warrants strong support. Research on
biocomplexity in the environment will improve science-based predictive
capabilities for decision-making. Understanding the powerful
interactions that occur within complex biological systems and between
these systems and the Earth's environment will lead to a better
understanding of natural processes and the effects of human behavior on
the natural world.
NSF traditionally receives high marks for efficiency-less than 4
percent of the agency's budget is spent on administration and
management. NSF awards funds to researchers only after a rigorous
merit-review process using expert peers. Currently, the Foundation must
decline almost as many highly rated grant proposals as it can fund.
These are lost opportunities for significant discoveries. Increased
funding will allow NSF to fund more outstanding proposals and increase
the size and duration of its grants--a longstanding goal of the
Foundation--without limiting the number of new awards.
nsf education programs
Improving K-12 science education should be a national priority. The
Third International Math and Science Study-Repeat showed that the
longer U.S. students stay in school, the lower they perform relative to
students in other nations. Our 12th graders should not rank below their
peers in almost all developed countries in science knowledge. If the
U.S. is to retain its lead in science and technology, they must not.
We cannot meet the demand for skilled workers because too few
Americans are choosing to study science and engineering. We must do a
better job teaching our children science and mathematics and motivating
them to choose careers in these fields. Better teacher preparation and
continuing professional development are essential: of the 300,000
middle and high school science and mathematics teachers in the United
States, nearly 30 percent have neither a major nor a minor in the
subject they teach.
Although states play the lead role in funding education, the
federal government must strengthen its long-standing effort to improve
the quality of mathematics and science education across the nation.
NSF's Education and Human Resources (EHR) programs are an essential
part of this effort.
The nation's investment in EHR helps meet the demand for skilled
workers and ensure that citizens have lifelong opportunities to learn
about science and technology in all parts of the country. In fiscal
year 2001, Congress appropriated $787 million for EHR programs. The 15
percent increase ACS advocates for fiscal year 2002 will advance
efforts to improve science and mathematics curricula, reform education
practices, and equip science teachers for success in the classroom.
EHR's programs are instrumental in efforts to achieve standards-
based, inquiry-centered science and mathematics education. With an
emphasis on curricula, assessments, and teacher preparation and
professional development, EHR PreK-12 programs improve science and
mathematics education in urban and rural states and school districts.
EHR programs help train the nation's technical workforce. Two-year
college science, technology, and mathematics education is strengthened
through the Advanced Technological Education (ATE) program. Since the
two-year college system is especially important for economically
disadvantaged students, who use it as a point of entry into higher
education, we encourage EHR to develop other innovative programs to
attract students from underrepresented groups.
EHR programs also play a critical role in providing advanced
training for scientists, mathematicians, and engineers. Funding for
graduate and post-doctoral fellowships can shorten the time to the
Ph.D. degree, increase participation of underrepresented groups, and
significantly broaden research and training opportunities.
______

Prepared Statement of Chicago State University

Mr. Chairman and other Members of the committee, my name is Elnora
Daniel, and I am the President of Chicago State University (CSU).
Established in 1867, CSU is the second oldest public institution of
higher education in the State of Illinois. The University has a $75
million budget, sits on 161 acres on the South Side of Chicago and
enrolls over 8,400 students. Of its student body, 85 percent are
African American; 70 percent are female; and 80 percent are graduates
of the Chicago Public Schools. Most students are the first generation
of their families to attend college. Forty percent of the students have
full-time jobs and 63 percent have at least one child. More than two-
thirds of CSU students live within five miles of the campus. Most
notably, the University enrolls one-third of all African American
students attending public universities in Illinois, and ranks first
among public universities in Illinois in conferring master's degrees to
African Americans.
Despite the achievements and successes CSU has achieved in
addressing the needs of a non-traditional student population, there are
a unique set of challenges the institution faces as an urban campus,
located in a high-poverty community. Therefore, assistance is needed
from the federal government to help us (1) maintain our status as one
of the lead educators of African American college students in the state
of Illinois, and (2) develop and implement collaborative community
revitalization and educational strategies needed to address the
contemporary challenges affecting urban campuses such as CSU.
Specifically, during the fiscal year 2002 appropriations cycle, CSU
asks that $1 million be provided to support planning and development
for a residence hall that will house single parents pursuing
undergraduate degrees. Funding is sought from the Economic Development
Initiatives account in the VA-HUD-Independent Agencies Appropriations
bill.
As stated previously, most of the students attending CSU are women
with children. They are the first generation of their families to
attend college, and more often than not come from low-income
backgrounds. These circumstances present special challenges, and often
obstacles, in terms of the University's retention and graduation
efforts.
In fact, national student retention data suggest that only about 14
percent of the full-time students who are single parents persist from
matriculation to graduation. This trend means that about 86 percent of
single parents do not graduate--an occurrence that hinders economic,
social and educational advancement, and fuels the multi-generational
cycle of poverty that affects so many families who live in the area
where the University is located.
The proposed residence hall will have an in-house child care center
that will be open during the evening hours and on weekends to
supplement the hours of operation of the current CSU child care center.
The benefit of the proposed facility will be to address the primary
factors that prevent single parents from completing college. The long-
term benefit will be a reduction in the number of children raised by
parents whose limited educational and academic development has a
cyclical effect on their children, thus resulting in continued poverty.
Children raised in a success oriented and educationally sound
environment generally become success oriented and are more inclined
toward generational independence, as opposed to the generational
dependence that feeds urban decay, poverty and illiteracy.
The ultimate goal of building the facility is to increase the
graduation rate of the selected single parent participants by 200
percent--from 14 percent to 42 percent. Moreover, in addition to
consistent child care and a supportive environment, the parents will be
able to receive emotional developmental counseling from the CSU
Counseling Center, as well as academic developmental counseling from
the CSU Academic support center.
In addition to this request, as a predominantly black institution,
CSU supports the recommendations shared with the subcommittee yesterday
by the National Association for Equal Opportunity in Higher Education
(NAFEO) in support of increasing funding for the minority serving
institution programs that are funded by the National Science Foundation
(NSF) and the National Aeronautics Space Administration (NASA).
Specifically, we support increased funding at the NSF for the Alliances
for Graduate Education and the Professorate, the Louis Stokes Alliance
for Minority Participation, HBCU-UP, and the Major Research
Instrumentation/Facilities program. At NASA, $75 million is requested
for the Minority University Research & Education program. These
programs are playing a critical role in helping minority serving
institutions like CSU to contribute to national science and technology
goals.
Mr. Chairman, this concludes my testimony. I would be happy to
answer any questions.
______

Prepared Statement of the University of Medicine and Dentistry of New
Jersey

The University of Medicine and Dentistry of New Jersey (UMDNJ) is
the largest, free-standing public health sciences university in the
country. The UMDNJ statewide system is located on five academic
campuses and consists of 3 medical schools and schools of dentistry,
nursing, health-related professions, public health and a graduate
school of biomedical science. UMDNJ owns and operates University
Hospital in Newark, New Jersey, the largest provider of indigent care
in the state. We also provide health care and educational services
through our core and affiliated teaching hospitals and our higher
education partners as well as through an integrated behavioral health
care delivery system and a statewide system for managed care. No other
institution in the nation possesses the resources that match our scope
in higher education, research, health care delivery and community
service initiatives with federal, state and local government entities.
The Robert Wood Johnson Medical School (RWJMS) is one of three
schools of medicine at UMDNJ. Nationally, RWJMS ranks among the top ten
medical schools in the percentage of minority student enrollment. The
school ranks in the top one-third in the nation in terms of grant
support per faculty member. It is home to four major research
institutes: The Environmental and Occupational Health Sciences
Institute (the only NIEHS-designated Center of Excellence in
Environmental Health Sciences), the Center for Advanced Biotechnology
and Medicine, and two of our top priority centers of excellence--the
Cancer Institute of New Jersey (CINJ) and the Child Health Institute
(CHI).
We appreciate this opportunity to bring to your attention these two
priority projects--the Cancer Institute of New Jersey and the Child
Health Institute--which are consistent with the mission of this
committee. Both projects are statewide in scope and include
collaboration within the University system and with our affiliates. Our
research projects also underscore the University's commitment to
eliminating racial and ethnic health disparities. We appreciate the
past and continued support of this committee to sustain the high
standards of excellence in the research and training programs of the
University of Medicine and Dentistry of New Jersey.
The Cancer Institute of New Jersey (CINJ) was established in 1990
with $15 million in grant support, including a $10 million capital
grant from the federal government. CINJ is a center of excellence of
the University of Medicine and Dentistry of New Jersey (UMDNJ) and a
partnership of UMDNJ-Robert Wood Johnson Medical School, Robert Wood
Johnson University Hospital, St. Peter's University Hospital, and the
Atlantic Health System. Over the past decade, CINJ has grown to become
one of the nation's most successful cancer institutes and has garnered
the distinction of being New Jersey's only NCI-designated cancer
center. CINJ joins a select group of 60 cancer centers in the country
to be awarded this designation based on the capability to integrate a
diversity of research approaches with exceptional patient care.
CINJ is centrally located in New Brunswick, New Jersey, a city
known as the ``healthcare hub'' of the state and home to two research
universities (UMDNJ-Robert Wood Johnson Medical School and Rutgers
University), two teaching hospitals, and headquarters of a national
pharmaceutical company--Johnson & Johnson. New Brunswick serves the
health care needs of nearly 3.5 million people who live within a 30
mile radius of the city.
New Jersey is the most densely populated state in the country with
more than 8 million people occupying 7,500 square miles of space. New
Jersey is especially devastated by cancer where incidence and mortality
rates are higher than the national average. CINJ is dedicated to
providing all New Jerseyans with the best cancer care through its
comprehensive prevention, treatment and education programs. Its
scientific research programs are designed to rapidly transform
promising laboratory discoveries into clinical practice.
To achieve that mission, CINJ has developed a provider network that
includes 20 hospital partners across the state that extend CINJ's
resources to every county in the state and provides patients,
residents, physicians and health care institutions with seamless access
to the exceptional cancer programs that are available through CINJ.
CINJ established the Dean and Betty Gallo Prostate Cancer Center which
has garnered $9 million in federal support over the past 3 years.
Because African-American males are 2.5 times more likely to die from
prostate cancer, the Gallo Prostate Cancer Center has partnered with
the 100 Black Men of New Jersey organization to offer prostate cancer
screenings in minority communities throughout the state. Launched in
1999, this initiative has provided screenings for prostate cancer to
more than 1500 men living within Essex, Hudson and Union Counties,
using churches, schools and other community settings. Our goal is to
extend prostate cancer screening services to all 21 New Jersey counties
by 2003.
In New Brunswick, CINJ also works with the Chandler Health Center,
a federally-qualified community health center operated by RWJMS, on
early detection programs and examinations for medically indigent adults
and children. CINJ provides outreach to make the benefits of clinical
trials more widely available to the state's minority communities.
Cancer is the second leading cause of death in the United States.
New Jersey is especially devastated by the disease and ranks 9th in the
overall number of cancer deaths this year. The American Cancer Society
estimates that 40,000 new cases of cancer will be diagnosed in the
state and that about 18,000 New Jerseyans will die of the disease. CINJ
has formed a partnership with the Environmental and Occupational Health
Sciences Institute (EOHSI) to study the impact of pollution in New
Jersey's environment on the high rate of cancer statewide.
CINJ's mission is focused on providing all New Jersey residents
with a cancer institute of exceptional quality. CINJ is dedicated to
the prevention, detection, treatment and care of patients with cancer.
Its scientific research programs are designed to rapidly transform
promising laboratory discoveries into clinical practice. CINJ
physicians and scientists of CINJ are recipients of numerous
distinguished awards and receive research grants totaling $50 million
per year.
CINJ currently occupies a 76,000 square foot research and treatment
facility, but the demands have outpaced its capacity and existing
resources. The facility was originally designed to accommodate 16,000
adult patient visits, but last year there were more than 37,000 patient
visits representing about 3,000 new patients. Patient visits continue
to increase at an annual rate of 10 percent. We anticipate 50,000 to
60,000 patient visits at CINJ by 2003.
Our immediate objective is to expand our clinical and research
units by constructing a 120,000 square foot addition to the New
Brunswick facility. The facility will comprise adult and pediatric
treatment and evaluation areas, a patient education center, offices and
research laboratories and the Dean and Betty Gallo Prostate Cancer
Center.
The new facility is expected to take two years to construct
creating numerous construction-related jobs in the New Brunswick area.
When completed, the new facility will accommodate nearly 200 additional
employees including 30 additional faculty as well as support staff
(nurses, social workers, pharmacists and clinical research associates).
When completed, CINJ's total operating budget is projected to be
$65 million. Applying a standard economic multiplier of 5, the total
impact on the New Brunswick area is estimated to be $325 million.
UMDNJ has approved the construction of the new addition to CINJ's
New Brunswick facility and has commitments of some $16 million toward
the construction cost of approximately $30 million. Within the next two
years, the Cancer Institute of New Jersey will seek designation from
the National Cancer Institute as a comprehensive cancer center. CINJ
has completed and won the first two essential designations and is
moving ever closer toward the crucial comprehensive center designation.
The next phase of development for CINJ is critical and expansion of its
New Brunswick facility is essential to achieving that goal. We
respectfully seek $10 million toward the construction of a new addition
to the CINJ New Brunswick facility.
The Child Health Institute of New Jersey (CHI) is integral to the
long-term plan for the enhancement of research at the Robert Wood
Johnson Medical School in developmental genetics, particularly as it
relates to disorders that affect a child's development and growth. The
program will enable the medical school to expand and strengthen basic
research efforts with clinical departments at the Robert Wood Johnson
University Hospital, in particular, those involved with the new
Bristol-Myers Squibb Children's Hospital.
The Child Health Institute will fill a critical gap through the
expansion, by new recruitment, of an intellectual base upon which
molecular cellular studies of child development and health will build.
The CHI facility is expected to cost about $40 million with an
additional $10 million endowment. To date, CHI has achieved $4.8
million in federal funding; $1.9 million facility grant awarded by the
National Center for Research Resources of the National Institutes of
Health (NIH); $30 million from private, individual, foundation and
other government sources including the State of New Jersey.
The Child Health Institute will focus research on the molecular and
genetic mechanisms that direct the development of human growth and
function. Scientists will investigate disorders that occur during the
process of development to discover and study genes contributing to
developmental disabilities and childhood diseases in order to determine
how genes and the environment interact and to identify the causes and
possible avenues of treatment of cognitive disorders such as mental
retardation, autism and related neurological disorders.
The Child Health Institute will act as a magnet for additional
growth in research and healthcare development in New Jersey. The
Institute will encompass 100,000 square feet and will house more than
40 research laboratories and associated support facilities. Fourteen
senior faculty will direct teams of M.D. and Ph.D. researchers,
visiting scientists, postdoctoral fellows, graduate students and
technicians for a full complement of about 130 employees.
At maturity, the CHI is expected to attract $7 to $9 million of new
research funding annually. The Institute's total annual operating
budget is projected to be $10-$12 million. Applying a standard economic
multiplier of 5, the total impact on the New Brunswick area is
estimated to be between $50-$60 million per year.
The strong support of parents and families of affected children has
produced important collaborations for the Child Health Institute.
Advocacy groups are convinced of the value of basic research as a
critical strategy toward treatment and cures. An example is autism. The
Child Health Institute serves as the administrative base for the
Governor's Council on Autism, which distributes $1.5 million annually
in grants from the State to provide education and treatment services
for autistic children and their families.
The Child Health Institute represents the best hope for a sustained
campaign against childhood diseases and disorders that affect our most
vulnerable population--our children. Congress has recognized the
importance of the Institute and has provided close to $5 million over
the past two years. We respectfully seek $5 million this year to
complete the federal government's commitment to the development of the
Child Health Institute of New Jersey.
We want to thank this committee for supporting the critical needs
of research and economic development throughout the nation. The ability
of urban-based academic health centers such as UMDNJ and the Robert
Wood Johnson Medical School to conduct research to address cancer and
childhood diseases must continue to grow with federal, state and
private support. We appreciate the strong support of this committee to
sustain these efforts as medicine and its associated technologies are
the engines for economic growth.
Thank you for your past support and for this opportunity to present
testimony in support of UMDNJ's top priority projects--the Cancer
Institute of New Jersey and the Child Health Institute of New Jersey.
______

Prepared Statement of the American Association of Community Colleges

The American Association of Community Colleges (AACC) welcomes this
opportunity to submit comments on fiscal year 2002 appropriations for
the National Science Foundation (NSF). AACC represents over 1,100
public and private degree-granting, regionally accredited two-year
institutions of postsecondary education.
Over the last decade, the National Science Foundation and America's
community colleges have developed a strong partnership that is vital to
carrying out their respective missions. Participation in NSF's programs
that improve science, math, engineering, and technology (SMET)
education has bolstered the educational offerings of community
colleges. At the same time, community colleges' participation in these
programs has broadened their reach and enhanced their effectiveness.
The Administration's fiscal year 2002 budget proposes a $56 million
increase for the NSF, which is approximately 1.3 percent more than
fiscal year 2001. This funding level is inadequate for the crucial role
the NSF plays in the nation's scientific research and education. Fiscal
year 2001 marked the first year of a five-year plan to double the NSF's
budget, a plan supported by top appropriators in both parties. AACC
urges Congress to appropriate sufficient funds next year to eventually
bring this plan to fruition.
The majority of the NSF programs in which community colleges
participate are housed in the Education and Human Resources (EHR)
Directorate. While the Administration's budget calls for a nominal
increase in fiscal year 2002 funding for EHR, from $787 million to $872
million, that increase is deceptive, since the EHR budget request also
includes a $200 million Math and Science Partnership Initiative.
Community colleges are ready and willing to participate in this new
initiative to improve K-12 math and science education. However,
achieving this goal must not come at the expense of other NSF education
programs that are engaged in critical activities such as preparing
students for technical fields, developing the instructional workforce,
improving core science and math curricula, and providing necessary
laboratory equipment. The $110 million that would be diverted from
these programs to the Math and Science Initiative represents
approximately 14 percent of the entire fiscal year 2001 budget for the
NSF's Education and Human Resources directorate. Such a cut would
severely compromise the effectiveness of these programs at a time when
demand for them is at its peak.
AACC believes that a net increase in resources should be directed
towards EHR programs, which improve SMET programs at a great number of
institutions and provide opportunities for a broad range of students.
Community colleges are particularly involved in the programs described
below, and AACC urges the Congress to appropriate the funds specified
for each of them.
The flagship of community colleges' partnership with the NSF, the
Advanced Technological Education (ATE) program, promotes improvement in
the education of science and engineering technicians at the
undergraduate and the secondary school levels. The NSF recognizes that
community colleges are essential to the education and training of
qualified technicians, and for that reason the ATE program is dedicated
to funding projects at two-year institutions. ATE grantees are
producing technicians with the skills to operate cutting-edge equipment
and the knowledge of science, math and engineering that are sorely
needed in fields such as information technology, biotechnology,
manufacturing, and environmental technology.
The ATE program has achieved these results by funding Centers of
Excellence and individual projects that: develop and disseminate
curricula; provide opportunities for faculty development; create
internships and other hands-on field experiences for students and
teachers; foster collaboration between community colleges, four-year
colleges and universities, secondary schools, businesses and
government; and recruit students into SMET education. The National
Centers of Excellence are housed at community colleges across the
country. Each Center focuses on a given field, such as engineering
technology, and engages in all of the activities described above. The
Centers are expected to have a national impact and create model
materials and educational approaches. The approximately 150 projects
that are active at any given time may engage in only one of the above
activities and are generally more geographically and topically limited.
The work of the Centers and the projects is complementary: the Centers
disseminate materials created by the projects and the projects adapt
these materials to other disciplines and different student populations.
In fiscal year 2001, NSF began several new initiatives within the
ATE program. The program will fund regional information technology and
manufacturing centers that will focus on reforming academic programs in
a given region to produce highly qualified workers who meet industry's
needs. NSF hopes to fund up to five of these Regional Centers each
year.
In addition to centers and projects, the ATE program added a third
category of awards for articulation partnerships in fiscal year 2001.
Within this new category, NSF plans to fund two subcategories of
articulation partnerships: those that impact two-year college programs
for prospective K-12 teachers, and those that ease the transition of
students in community college SMET programs into programs at four-year
colleges and universities.
The NSF has recognized that community colleges play a significant
role in the preparation of K-12 SMET teachers. Department of Education
statistics show that 20 percent of all teachers began their higher
education in community colleges. According to the NSF, that number is
greater than 50 percent in some states, and many new teachers have
taken all their mathematics and science courses at a community college.
Projects funded under this new category will aim to increase the
number, quality, and diversity of prospective K-12 SMET teachers in
pre-professional programs at community colleges, and provide
opportunities for in-service teachers to become certified in
mathematics, science, or technology.
The Administration has requested $39.16 million for ATE in 2002,
level with fiscal year 2001 funding. In fiscal year 2001, this program
received a record number of proposals--reflecting the growing need to
produce skilled workers for the technology-based economy. AACC urges
Congress to appropriate $50 million for this vitally important program.
The Course, Curriculum and Laboratory Improvement (CCLI) program is
another important component of NSF's support for community colleges.
This program improves SMET education for all undergraduates, including
community college students. Unlike the ATE program, CCLI is not focused
on particular high-technology fields, but rather core SMET education.
The work of the two programs is complementary, as students interested
in technology careers can benefit from the educational materials and
methods developed under both programs. Like other NSF undergraduate
programs, CCLI helps institutions of higher education better educate a
broader array of students in SMET subject areas.
Funding in real dollars for the CCLI program has been eroding. The
Administration has requested a modest fiscal year 2002 increase of
$1.36 million, to a total of $57.54 million in fiscal year 2002. AACC
supports a more robust increase in the CCLI budget to compensate for
recent years of neglect. Congress should appropriate $65 million for
CCLI.
Community colleges across the country thank this subcommittee for
its ongoing support of NSF programs that strengthen their institutions
and communities. AACC thanks the subcommittee for this consideration of
our views.
______

Prepared Statement of New York University

On behalf of New York University, I appreciate the opportunity to
speak in support of public investment in basic research and, in
particular, to salute the National Science Foundation, whose funding of
fundamental research is so important to the health and well being of
our nation.
The Foundation's support of university-based research is essential
to our national ability to prepare for the scientific and technological
challenges that we will face in the 21st century. NSF supports
established as well as junior investigators, funds research as well as
equipment, and shapes emerging areas of research in the physical, life,
computational, and social sciences. NSF funding is critical both for
its direct support of research, training, and education, as well as its
indirect impact in enabling extramural (university-based) researchers
to attract additional funding for research and science infrastructure
from other federal agencies, private foundations, and industry. In that
regard, I urge Congress and this Committee to support the proposal of
the Coalition for National Science Funding for a 15 percent increase
for NSF for fiscal year 2002.
At New York University, NSF funding has supported leading-edge
research across a range of areas from quantum dynamics to computational
biology to molecular evolution to developmental genetics to theoretical
particle physics. I would like today to underscore genomics, an
important and pervasive area of contemporary biological research that
is a very important priority for NSF and an area in which NYU intends
to make major contributions.
We applaud NSF's initiative in soliciting genomics approaches and
grant applications to its several study divisions, and its special
initiatives like ``2010 Project'', which aims to determine the function
of the 25,000 genes in the mustard weed, Arabidopsis Thaliana, by the
Year 2010. The implications of genomics, and NSF support of it, cannot
be overstated. Its scope encompasses every living thing--humans,
animals, and plants--and has the potential to revolutionize our
understanding of all living things.
advances in genomics
The genome is the recipe or blueprint for life. During the last
decade--and particularly during the last two years--the unraveling of
the genetic code has opened up a vast range of new opportunities for
evolutionary and developmental biologists, chemists, and information
scientists to understand what genes are, what they do, and how they do
it. Genomics is revolutionizing biology and is dramatically changing
the way we characterize and address biological questions. As a field
that straddles biology, chemistry, computer science, and mathematics,
genomics is growing at an extraordinary pace and is transforming these
disciplines as well as the social and behavioral sciences.
In its first stage, the revolution in genomics was characterized by
a period of intensive development of techniques to analyze DNA, first
in simple models, like yeast, bacteria, the worm, and the fruitfly,
then in the mouse, and now in humans. The structure and function of
genes are similar in these models, making comparisons useful. The
second phase was characterized by the use of these tools to address
whatever biological question was most easily approached, given the
state of technique development. It may be described as structural
genomics--which comprises the mapping and sequencing of genomes and is
mainly driven by technology. The scientific community is now poised to
enter the third phase of the genomics revolution in which investigators
bring perspectives from other fields, like immunology, genetics, and
neurobiology to pursue investigations that are driven by hypothesis
rather than technique. This third phase is generally termed functional
genomics and uses the map and sequence information already collected to
infer the function of genes.
At New York University, we think the key issues facing genomics
today are how to translate the enormous quantities of gene sequence
data into knowledge of gene function. The answers lie, we believe, in
comparative functional genomics, an approach that looks for the
occurrence of the same genes in different species that share certain
structures or functions, and provides a powerful method for
understanding the function of particular genes. Comparative functional
genomics uses two primary modes of analysis: (1) identifying what has
been conserved over long evolutionary periods, and (2) determining
crucial differences that distinguish two closely related species. This
focus can provide the key to unraveling the complex regulatory networks
for crucial biological functions.
Studies in comparative functional genomics are necessarily
multidisciplinary. Comparative functional genomics synergizes basic
science research programs such as those at NYU's Faculty of Arts and
Science, with computational science, specifically bioinformatics, at
its Courant Institute of Mathematical Sciences. Further, the scope of
the enterprise is such to encourage collaboration not only within but
also between research institutions. As an example, the concentration
within NYU of strengths in evolutionary biology, neurobiology,
developmental genetics, human genetics, applied mathematics research,
imaging and computation is further extended through the University's
research collaborations and affiliation agreements with major
metropolitan area institutions. Productive affiliations that were
recently articulated in response to New York State's major new
initiative to develop the State's science and technology resources link
NYU with The New York Botanical Garden and the American Museum of
Natural History which house the world's largest collections of well-
characterized specimens from the animal and plant kingdoms
respectively, and Cold Spring Harbor Laboratory, one of the world's
centers for molecular biology and genomics research.
New York University and other major research institutions are
poised to make important contributions to the next phase of genomics
research. NSF funding is critical to maintain and strengthen the
vibrancy of university-based science research.
research applications and national benefits
Research in genomics can offer benefits to our citizens in a wide
range of domains from new energy sources to crops that resist disease,
insects and drought to better industrial processes to identification
(or exoneration) of crime suspects. Genomics can be a major resource
for directly energizing a range of commercial enterprises, and can
provide a strong framework for economic development in vital, high-tech
industries.
Advances in Biological, Computational, and other Research Fields.--
The understanding of the human genome has very broad applications to
cell biology, embryology, developmental biology, and population
genetics. Genomics connects and illuminates science in all these
fields. Further, functional genomics research has created a need for
information processing structures that efficiently compare and analyze
patterns in enormous data sets and allow ready representation and
interpretation of their common elements and differences. As an example,
computer scientists at NYU are working closely with molecular
geneticists and business entrepreneurs to develop a library of genomics
software tools. Some of these tools are already being considered by
medical researchers for use in diagnosing tumors, which have a genetic
structure different from healthy tissue.
Applications for Environmental Issues.--Genomics offers important
new approaches to addressing environmental problems and conservation.
As an example, knowing the genetic sequence of plants may allow us to
identify clusters of genes and their function (to produce a flower from
a shoot) and manipulate them (to cut flowering time); enhance seed
viability without affecting the quality of a fruit; and increase the
nutritional value of grains. As we continue to sequence new plants and
isolate more genetic clusters, we can expect to discover how to develop
crops that have increased resistance to temperature extremes and
disease, and that can also grow in less hospitable soils. As we learn
more about how genes are switched on and off by environmental factors,
we may be able to predict how a crop will function in a particular
climate before attempting to cultivate it. These discoveries and others
can revolutionize agriculture within a decade.
Commercial Applications.--Fundamental studies in genomics are
producing new data about the function of genes that will have
widespread commercial applications for the development of novel human
and veterinary therapeutics and diagnostics; ``customized'' patient
care; the development of crops with improved growth capabilities or
improved resistance to herbicides; and so on, in a list that can impact
virtually every aspect of our health and well being.
Economic Development.--R&D investment in genomics is energizing
biotechnology, pharmaceutical, biomedicine, agbiotech, computer
software, and engineering enterprises, as genomics research begins to
spawn a new generation of commercializable technologies, and new
bioinformatics and software companies and genomics platform companies
(that generate specific genomic data for product development).
More generally, investment in research can foster vital university-
centered concentrations of industrial activity: In a now familiar
dynamic, industry draws on the faculty's entrepreneurial energies,
their expertise in training the personnel needed to staff high-
technology firms, and the fundamental scientific research that can
translate into practical applications. High-tech firms spring up near a
research university and, in turn, attract or spin off additional high-
tech firms in the same or related fields. The interaction of scientists
across firms makes the spread of information quicker and the
development of projects more rapid. Initial firms and newer firms share
a growing pool of highly trained personnel. The expansion of the
skilled labor pool makes hiring easier and attracts still more firms.
And, once a core of high-tech industries locates in an area, venture
capitalists identify the area as ``promising'' and the flow of
capital--a key ingredient for high-technology growth--increases.
In a related economic spiral, R&D funding spurs job growth across a
range of economic sectors. A conservative approximation that uses state
employment multipliers maintained by the U.S. Commerce Department's
Bureau of Economic Analysis points to immediate employment impacts: The
BEA calculates that each $1 million in R&D grants supports roughly 34.5
full and part time jobs directly within the university and indirectly
outside the university as the university's expenditures ripple through
the local and state economy.
Biomedical Applications for National Health Needs.--An investment
in genomics research will help us to understand complex, multi-gene
diseases such as cancer, heart disease, and Alzheimer's; distinguish
different forms of a disease, permitting precisely targeted treatment;
and understand why drugs work and how to design better ones. Genomics
has the potential to revolutionize the development of mass screening
tests for genetic disorders, ultimately making it possible to identify
the hereditary contribution to common diseases, predict individual
responses to drug intervention, and design drugs that are customized
for individual use.
In summary, investment in genomic science is a strategic and
efficient vehicle for advancing fundamental studies in a wide variety
of scientific fields, facilitating applications that can greatly
enhance the public welfare, and energizing existing and new industries.
Increasing the investment in state-of-the-art equipment and in research
that enables geneticists, computer scientists and physical chemists to
readily interact with each other is essential for the development of
this important area. We firmly believe that a federal investment in
these and other biomedical research fields repays itself many times
over.
The commitment of this committee to support the National Science
Foundation and its genomic initiative is greatly appreciated. We urge
Congress to continue its commitment to increase the funding of the
basic sciences and particularly to keep NSF on a doubling track.
______

Prepared Statement of the National Corn Growers Association

The National Corn Growers Association (NCGA) appreciates the
opportunity to provide the Subcommittee with our recommendations for
fiscal year 2002 appropriations for the National Science Foundation's
Plant Genome Initiative. The NCGA represents 30,000 corn growers in 48
states and the association's mission is to create and increase
opportunities for corn growers in a changing world and to enhance corn
utilization and profitability.
We, strongly, urge you to provide $90 million in fiscal year 2002
for the NSF Plant Genome Research Program, an increase of $25 million
above the fiscal year 2001 level with the increase focused, primarily,
on providing sequences and draft sequences of gene-rich regions
(including full-length cDNA sequencing) of plants that are economically
significant to the U.S. Obtaining a publicly accessible draft sequence
of the gene-rich regions and the full-length cDNA sequence of the corn
genome is our number one research priority.
We recognize that $25 million represents a significant increase for
this program. However, this level will give the NSF the funds necessary
to begin to support projects that will provide draft sequences of the
gene-rich regions of large, complex plants, such as corn. The recent
work to provide draft sequences of the human genome has paved the way
for us to do comparable work in plants. Finally, it is feasible and
cost effective to survey sequence the gene-rich regions of large and
complex plant genomes, such as corn. In March, the Maize Genetics
Community listed obtaining a draft sequence of the maize genome as its
number one research priority. Last fall, the Interagency Working Group
on Plant Genomes recommended that $100 million be invested in
sequencing the gene-rich regions of economically important crops, such
as corn, wheat, and barley. The $25 million increase for the NSF plant
genome program will begin that investment.
As you know, increasing funding for plant genomics has been the
number one appropriations priority for the NCGA since 1996. We remain
convinced that the future of the corn industry is written in corn's
genetic code and that plant genomics will give us the fundamental
information necessary to revolutionize American agriculture. Plant
genomic research offers us the greatest potential to increase the value
and demand for U.S. crops, thereby increasing grower income and
reducing grower reliance on Federal farm programs. Advances in basic
plant science that result from a vigorous plant genomics program will
allow us to create new hybrids and varieties that will--
--Improve human and animal health;
--Reduce medical costs due to more nutritious, healthier, food for
individuals;
--Reduce worldwide malnutrition through higher yielding and more
nutritious crops;
--Reduce environmental problems for crop and livestock growers;
--Expand plant-based renewable resources for raw materials,
industrial feedstocks, chemicals, and energy; and
--Enable growers to get more income from the market, thereby reducing
grower reliance on Federal farm programs.
The NSF plant genome program has revolutionized plant research and
has rejuvenated the plant research community. Already, the NSF program
has been a spectacular success during its short life. To date, 54 plant
genome research projects have been supported by the NSF program, in
addition to the Arabidopsis sequencing effort. The genome-sequencing
project for Arabidopsis thaliana (a model plant species) was completed
this past year, four years ahead of schedule. The biological tools and
resources to study complex plant genomes, such as expressed sequence
tags, and new plant-specific genome research technologies are being
developed. Since the start of the program, there has been a 400 percent
increase in the number of expressed sequence tags for plant species
deposited into the public database. The NSF program is supporting whole
genome research into plant processes that include plant productivity,
pathogen resistance, and mineral nutrition. All of the tools and
genetic resources developed under the NSF program are publicly
accessible.
Ensuring that basic, fundamental knowledge of economically
important plants is accessible to everyone is one of the critical
components of the NSF program. The projects have created massive plant
genomics databases, tools, and resources that are available to the
scientific community at large. Now, we must bring into the public
domain draft sequences of the gene-rich regions of economically
important plants to make certain that this fundamental knowledge
remains widely and freely accessible.
Recently, Monsanto provided a draft sequence of rice to the NSF
supported International rice sequencing effort. The existence of the
public sequencing effort encouraged Monsanto to provide its draft
sequence to the publicly funded, research community. It is essential
for us to act now to ensure public accessibility to draft sequences of
other plants that are economically important to the U.S. An increase of
$25 million for the NSF plant genome research program will help to
ensure that public and private scientists and plant breeders have
access to draft sequences of economically significant plants, such as
corn, and to other basic, fundamental knowledge.
For fiscal year 2002, we, strongly, urge you to provide $90 million
for the NSF plant genome research program with the increase focused,
primarily, on providing sequences and draft sequences of gene rich
regions (including full-length cDNA sequencing) of plants that are
economically significant to the U.S.
Thank you for the opportunity to present our views.
______

Prepared Statement of the National Council for Science and the
Environment

summary
The National Council for Science and the Environment strongly
supports the bipartisan effort to double the budget of the National
Science Foundation (NSF) by fiscal year 2006. To that end, we encourage
the Committee to provide at least $5.1 billion, an increase of 15
percent.
We emphasize the need for increased funding for the ``biocomplexity
in the environment'' initiative and encourage the Committee to strongly
support full and effective implementation of the National Science Board
report, ``Environmental Science and Engineering for the 21st Century:
The Role of the National Science Foundation,'' approved on February 2,
2000. This report calls for significant improvements in the way that
NSF supports environmental research, assessment and education, and
proposes that the Foundation invest an additional $1 billion in these
areas, to be phased in over 5 years. NSF has begun to implement this
report and deserves Congressional support.
We also encourage the committee to at least double funding for the
Environmental Protection Agency's Science to Achieve Results graduate
fellowship program to total of more than $20 million.
Attached is a letter signed by more than 120 university and college
presidents, business, scientific and environmental leaders calling for
significantly increased funding for scientific programs about the
environment in NSF, the Environmental Protection Agency, NASA and other
agencies.
We appreciate the Committee's ongoing interest in science for
environmental decisions.
testimony
The National Council for Science and the Environment (NCSE) thanks
the Committee for the opportunity to provide testimony on the National
Science Foundation (NSF) and its proposed budget for fiscal year 2002.
NCSE is a nonprofit, nonpartisan organization dedicated to improving
the scientific basis of environmental decisionmaking. We do not take
positions on environmental issues, only the need for science and better
connections between science and decisionmaking.
Our work is endorsed by nearly 500 organizations ranging, from the
U.S. Chamber of Commerce to the Sierra Club, including the National
Association of Attorneys General, National Association of Counties and
other governmental associations, some 300 colleges and universities,
and more than 80 scientific and professional societies.
We greatly appreciate this subcommittee's support over the last
five years for our efforts to encourage the NSF to expand its
scientific activities that can help to improve environmental
decisionmaking. The appropriation provided for fiscal year 2001 and
NSF's implementation of a new report from the National Science Board
provide the first real opportunity for the significant realization of
this goal.
overall budget request
The science, engineering, education and related activities
supported by NSF are essential to the future well-being and prosperity
of the nation and deserve the highest priority by Congress. The long-
term prosperity of the nation and the maintenance of our quality of
life depend on a steady and growing commitment of this Committee to
providing support for science.
The National Council for Science and the Environment strongly
encourages the Committee to provide at least $5.1 billion (an increase
of $683 million or 15.3 percent) for the National Science Foundation in
fiscal year 2002. This funding would be consistent with the bipartisan
goal to increase the total funding level of the NSF to $10 billion by
fiscal year 2006. This position is shared by the Coalition for National
Science Funding, of which NCSE is a member.
biocomplexity in the environment
NCSE is particularly supportive of NSF's biocomplexity and the
environment initiative. This initiative provides a focal point for
investigators from different disciplines to work together to understand
complex environmental systems, including the roles of humans in shaping
these systems. The resolution of many important environmental and
societal problems is lagging, in part, because of insufficient
scientific understanding. In most cases, because the problems are
cross-disciplinary, an expansion of the biocomplexity approach at NSF
could lead to significant progress in understanding. Despite the record
budget increase for NSF last year, an important opportunity was missed
when Congress provided only $75 million of the $136 million requested
for this initiative. This innovative interdisciplinary initiative
demonstrates the future of environmental research. There is strong
justification for Congress to provide at least the $136 million that
was requested in fiscal year 2001.
The time is indeed overdue for NSF to take a lead at providing a
comprehensive scientific understanding of the environment. NSF is
already the leading federal sponsor of peer-reviewed research regarding
the environment, with a portfolio exceeding $700 million. Most of this
investment is directed at scientific advances within particular
disciplines. An interdisciplinary approach is needed to build on this
base to truly understand the environment and the relationships between
people and the environment. The biocomplexity and the environment
initiative is the first step towards a comprehensive understanding.
The biocomplexity approach has been developed by some of the finest
minds in the nation. There is no question that the scientific community
is ready to take advantage of this opportunity. In fiscal year 2001 NSF
received more than 300 full research proposals under this initiative.
Topics that were funded included: how game fish populations are
affected by human activities such as lakeshore development which causes
shoreline erosion, the importance of parasites and viruses in causing
extinctions of Hawaiian birds, and the biological, physical and human
impacts of an non-indigenous plant on West coast salt marshes.
Unfortunately, because NSF was only able to provide $52.5 million for
biocomplexity in fiscal year 2000, only 16 proposals were funded, a
success rate of only 5 percent. In fiscal year 2001 NSF will not have
significantly more money for this competition. The lack of funding for
such a promising area of scientific investigation is extremely
unfortunate. Many innovative scientists and engineers will be
discouraged from taking new approaches, if the growth of funding does
not match the interest of researchers.
In fiscal year 2000, NSF also provided 57 awards of up to $100,000
over two years for ``incubation activities'' in the area of
biocomplexity. As a result of this relatively small investment, many
research groups are forming to develop an interdisciplinary approach to
environmental science and engineering. Many of these awards went to
smaller institutions that do not yet have the capacity to compete with
the major universities which received the full awards. Again, if
funding is not increased, these incubation activities will be for
nought.
In fiscal year 2001, NSF is soliciting proposals in four topical
areas: (1) Dynamics of Coupled Natural and Human Systems (CNH); (2)
Coupled Biogeochemical Cycles (CBC); (3) Genome-Enabled Environmental
Science and Engineering (GEN-EN); (4) Instrumentation Development for
Environmental Activities (IDEA).
Each of these is a promising area of interdisciplinary science
that, with sufficient investment, is likely to lead to significant
advances in understanding the functioning of the environment and the
way that humans interact with the environment.
We also encourage the Committee to provide start up funding for the
National Ecological Observatory Network (NEON), which was proposed by
NSF, but not funded in fiscal year 2001. NEON would integrate cutting
edge computing power with a distributed network of environmental
observation sites. The effect would be to create a nationwide virtual
laboratory for research to obtain a predictive understanding of the
environment. Each observation site would be a partnership of
universities, government laboratories and private research facilities
that would share equipment and be linked through a high speed
telecommunication and networking infrastructure. Each site then would
be linked electronically to create a geographically dispersed national
network of observatories. Although this idea has yet to receive
funding, it has already generated interest from other nations, raising
the possibility of an eventual global environmental observatory
network. The collaborations that would be facilitated by the network
will greatly benefit the ability of science to observe environmental
change, predict future change and support collaborative research to
better understand the causes and consequences of environmental change.
New approaches and technologies are really fostering a quantum leap
in the power of science and engineering to understand the environment.
NSF's proposed investments in biocomplexity science and the
collaborative tool of the National Ecological Observatory Network allow
it to advance the cutting edge. However, if funding does not keep up
with the intellectual and technological advances, not only will science
suffer, but our nation that depends on scientific understanding for
economic prosperity and environmental quality will suffer as well.
national science board report on environmental science and engineering
The National Council for Science and the Environment is the primary
proponent of the effort to expand, improve and enhance the relevancy of
the scientific efforts of the National Science Foundation regarding the
environment. We believe that NSF as an independent, non-regulatory
science funding agency can be the ideal source for credible scientific
information about the environment.
Our efforts have had considerable support from this committee. This
Committee's report accompany the fiscal year 1998 Appropriations Bill
directed NSF to study how it would establish and operate a National
Institute for the Environment that, ``provides a major role for
stakeholders in defining questions needing scientific attention and
which funds ongoing knowledge assessments, extramural research, on-line
information dissemination, and education and training through a
competitive peer reviewed process'' (amendment offered by
Representative Frelinghuysen and adopted by the Committee).
Ultimately, the National Science Board (NSB) responded by
unanimously approving a report, ``Environmental Science and Engineering
for the 21st Century: The Role of the National Science Foundation,'' on
February 2, 2000. The NSB report sets out a bold, ambitious set of
recommendations that could transform NSF's role in support of science
to improve environmental decisionmaking. The recommendations, if
implemented effectively, have the potential to accomplish most of the
objectives that NCSE and its supporters have worked for over the past
decade and which are represented in the Committee's fiscal year 1998
report.
The NSB recommends that ``environmental research, education and
scientific assessment should be one of the highest priorities for NSF''
with a significant increase of funding from the present $600 million to
$1.6 billion annually, over 5 years. It further recommends the
development of ``an effective organizational approach that meets all
the criteria required to ensure a well-integrated, high priority, high
visibility, cohesive and sustained environmental portfolio within
NSF''. The NSB makes 10 recommendations in the areas of research,
education, scientific assessments, infrastructure, information, and
partnerships.
The NSB recommendations are consistent with the direction advocated
by the Appropriations Committee and represent an expanded role and
portfolio for NSF in environmental research, education, scientific
assessments and information distribution. The recommendations of this
report will need the support of Congress to become reality.
NSF has begun to implement the recommendations of the NSB. They
have appointed an environmental coordinator and created a new position
in the office of the Director. They have formed an Advisory Committee
on Environmental Research and Education.
We respectfully request that this committee ensure that the
recommendations become reality by providing the necessary funding as
well encouragement for NSF's implementation activities.
epa's science to achieve results graduate fellowship program
Finally, we also wish to comment favorably on the Science to
Achieve Results graduate fellowship program of the Environmental
Protection Agency. This is the only federally-supported fellowship
program specifically aimed at graduate students in the environmental
sciences and policy areas. Like the environmental programs at NSF, the
STAR fellowship program suffers from a serious mismatch between
resources and highly qualified applicants. Investment in environmental
scientists, engineers, policymakers and professionals is essential for
the nation to reap the benefits of scientific advances.
The STAR fellowship program began in 1995 and has funded
approximately 100 students a year since then. The funding for this
program has been capped by the appropriations committee at $10 million
annually. The STAR awards are highly competitive; over the past three
years 1400 to 1500 students have applied annually, and only 7 percent
of applicants have been funded.
NCSE Senior Scientist David Blockstein participated in a review
panel for fellowship applicants last February. He was extremely
impressed with the quality of student applicants, but was very
depressed that the lack of funding prevented many students who were
rated as ``excellent'' by the review panel from getting funded. A
majority of Dr. Blockstein's panel sent a letter to the EPA encouraging
that the funding for the panel be doubled in the shortest possible
time.
The National Council for Science and the Environment encourages the
Committee to double the present appropriation for the STAR fellowship
program to $20 million. Of the billions of dollars within the
Committee's domain, this minor investment in our future scientists and
engineers may have some of the largest payoff in terms of the nation's
future.
If the nation is to be serious about taking a scientific approach
to understanding, resolving, and preventing environmental problems,
there must be a serious increase in funding for environmental science,
engineering and education. The role of this subcommittee is pivotal in
beginning that process. Thank you very much for your support of science
to improve environmental decisionmaking.
Attached: Copy of letter calling for significant funding increases
for environmental science, engineering, and education programs signed
by more than 120 national leaders of academic, scientific,
environmental, and business organizations.

Letter From the National Council for Science and the Environment

DC, March 8, 2001.
President George W. Bush,
The White House,
Washington, DC.
Dear President Bush: During your recent election campaign, you
talked about the importance of basing environmental decisions on
science. We, as a diverse coalition of academic, business,
environmental, governmental and community leaders, working with the
National Council for Science and the Environment agree with you in this
regard.
We are writing to urge you to implement your campaign commitment by
making investment in science for environmental decisionmaking a
priority in your administration. In particular, we are asking you to
provide significantly increased funding for scientific programs to:
--Assess what is known about the environment
--Better understand the environment
--Provide scientific information about the environment
--Support science-based education about the environment.
These programs include:
--National Science Foundation's biocomplexity in the environment
initiative and portfolio of environmental science, engineering
and education programs
--U.S. Geological Survey's biological, geological, hydrological, and
mapping divisions
--U.S. Environmental Protection Agency's Office of Research and
Development, especially the Science To Achieve Results (STAR)
research and fellowship programs
--National Oceanographic and Atmospheric Administration
--U.S. Department of Agriculture's environmental research programs
through CSREES and the Agricultural Research Service,
particularly the Natural Resource Initiative
--U.S. Forest Service forestry research
--Department of Energy's environmental science programs
--National Aeronautics and Space Administration earth exploration
programs
--National Institute of Environmental Health Sciences
We hope that your initial budget will support science as an
investment that will lead to a stronger economy, healthy people, and a
healthy environment.
Sincerely,
Peter D Saundry,
Executive Director.
Dick Bartlett,
Vice Chairman, Mary Kay Holding Corp.
Roger McManus,
President Emeritus, Center for Marine Conservation.
Joan Verplanck,
President, NJ Chamber of Commerce.
George Colvin,
Certified Professional Geologist, Cox-Colvin & Associates.
Craig Cox,
Certified Professional Geologist, Cox-Colvin & Associates.
Martin Schmidt,
Certified Professional Geologist, Cox-Colvin & Associates.
Michael S. Giaimo,
V.P. Energy and Environmental Affairs, Business and Industry
Association of New Hampshire.
Richard A. Anthes,
President, University Corporation for Atmospheric Research.
John T. Gibson,
President, Alabama A&M University.
Mary Lynne Bird,
Executive Director, The American Geographical Society.
Richard J. Cook,
President, Allegheny College.
Lattie Coor,
President, Arizona State University.
Jeanne O'Laughlin,
President, Barry University.
David H. Swinton,
President and CEO, Benedict College.
Gloria R. Scott,
President, Bennett College.
Larry Shinn,
President, Berea College.
Oswald P. Bronson,
President, Bethune-Cookman College.
Jon Westling,
President, Boston University.
Jehuda Reinharz,
President, Brandeis University.
Gwen Fountain,
Interim President, Butler University.
James Rosser,
President, California State University, L.A.
John D. Welty,
President, California State University-Fresno.
Mathew Goldstein,
Chancellor, City University of New York.
Claire A. Van Ummerson,
President, Cleveland State University.
Steven K. Katona,
President, College of the Atlantic.
William Cibes,
Chancellor, Connecticut State University System.
Joseph R. Fink,
President, Dominican University of California.
David R. Black,
President, Eastern College.
William M. Chace,
President, Emory University.
Anthony J. Catanese,
President, Florida Atlantic University.
Carl V. Patton,
President, Georgia State University.
Eugene M. Tobin,
President, Hamilton College.
Thomas R. Tritton,
President, Haverford College.
Myles Brand,
President, Indiana University.
Laurence I. Peterson,
Dean, Kennesaw State University.
Wesley C. McClure,
President, Lane College.
Michael Mooney,
President, Lewis and Clark College.
David B. Henson,
President, Lincoln University.
Constance Woo,
Dean of Library, Long Island University.
Michael S. McPherson,
President, Macalester College.
Geoffrey Gamble,
President, Montana State University.
Earl S. Richardson,
President, Morgan State University.
Daniel H. Lopez,
President, New Mexico Institute of Mining and Technology.
Clara Lovett,
President, Northern Arizona University.
Delbert Baker,
President, Oakwood College.
Robert Glidden,
President, Ohio University.
Daniel E. Garvey,
President, Prescott College.
Daniel O. Bernstine,
President, Portland State University.
Alice Chandler,
Interim President, Ramapo College of New Jersey.
William Nevious,
President, Reinhardt College.
Malcolm Gillis,
President, Rice University.
Paul B. Ranslow,
President, Ripon College.
Richard Yanikoski,
President, Saint Xavier University.
Paul Locatelli, S.J.,
President, Santa Clara University.
James E. Walker,
President, Southern Illinois University.
John H. Keiser,
President, Southwest Missouri State University.
Audrey F. Manley,
President, Spelman College.
Paul Yu,
President, State University of New York-Brockport.
Roger W. Bowen,
President, State University of New York-New Paltz.
Horace A Judson,
President, State University of New York-Plattsburg.
Beheruz N. Sethna,
President, State University of West Georgia.
Peter Likins,
President, University of Arizona.
M.R.C. Greenwood,
Chancellor, University of California-Santa Cruz.
Linda Bunnell Shade,
Chancellor, University of Colorado-Colorado Springs.
Georgia Lesh-Laurie,
Chancellor, University of Colorado-Denver.
Freeman Hrabowski,
President, University of Maryland-Baltimore County.
Donald N. Langenberg,
Chancellor, University of Maryland System.
Blanch Touhill,
Chancellor, University of Missouri-St. Louis.
William McCoy,
Interim Chancellor, University of North Carolina-Chapel Hill.
James Woodard,
Chancellor, University of North Carolina-Charlotte.
Patricia A Sullivan,
Chancellor, University of North Carolina-Greensboro.
Charles Kupchella,
President, University of North Dakota.
Jess K. Zimmerman,
Director, University of Puerto Rico.
Terry A. Cooney,
Acting President, University of Puget Sound.
Robert L. Carothers,
President, University of Rhode Island.
William E. Cooper,
President, University of Richmond.
Steve Privett,
President, University of San Francisco.
John M. Palms,
President, University of South Carolina-Columbia.
John T. Casteen III,
President, University of Virginia.
John D. Wiley,
Chancellor, University of Wisconsin-Madison.
Thomas F. George,
Chancellor, University of Wisconsin-Stevens Point.
Julius E. Erlenbach,
Chancellor, University of Wisconsin-Superior.
Philip L. Dubois,
President, University of Wyoming.
Frances D. Fergusson,
President, Vassar College.
Eugene P. Trani,
President, Virginia Commonwealth University.
Charles W. Steger,
President, Virginia Polytechnic Institute and State University.
Bernard Franklin,
President, Virginia Union University.
Karen W. Morse,
President, Western Washington University.
Mark F. Deering,
President-Ohio Section, American Institute of Professional
Geologists.
Daniel A. Lashof,
Senior Scientist, Natural Resources Defense Council.
James Lazell,
President, The Conservancy Agency.
T. Nejat Veziroglu,
President, International Association for Hydrogen Energy.
M. Lee Pelton,
President, Willamette University.
Perry Moore,
Provost, Wright State University.
Rita McManamon,
Director, Conservation Action Resource Center.
William C. Baker,
President, Chesapeake Bay Foundation.
Eugene V. Coan,
Sr. Advisor to the Executive Director, The Sierra Club.
Gerlad M. Meral,
Executive Director, Planning and Conservation League.
John G. Robinson,
Senior Vice President, Wildlife Conservation Society.
Donald Brunning,
Chairman and Curator, Wildlife Conservation Society.
G. Thomas Bancroft,
Vice President, The Wilderness Society.
Gregory H Aplet,
Forest Ecologist, The Wilderness Society.
Robert Engelman,
Vice President for Research, Population Action International.
Mark Shaffer,
Senior Vice President, Defenders of Wildlife.
Albert C. Yates,
President, Colorado State University.
Lawrence K. Pettit,
President, Indiana University of Pennsylvania.
Joanne V. Creighton,
President, Mount Holyoke College.
Kenneth P. Mortimer,
President, University of Hawaii.
Henry T. Yang,
Chancellor, University of California Santa Barbara.
Elliot Norse,
President, Marine Conservation Biology Institute.
David F. Brakke,
Dean College of Science & Mathematics, James Madison University.
Henry N. Tisdale,
President, Claflin University.
Anibal Colon Rosado,
President, Universidad Central de Bayamon.
Walter M. Bortz III,
President, Hampden-Sydney College.
Tom Gerety,
President, Amherst College.
Martin J. Muggleton,
President, Greater Corning Area Chamber of Commerce.
Karen Hitchcock,
President, State University of New York-Albany.
Brian C. Mitchell,
President, Washington & Jefferson College.
Nannerl O. Keohane,
President, Duke University.
Robert W. Lawless,
President, University of Tulsa.
George Rupp,
President, Columbia University.
Shirley Kenny,
President, State University of New York-Stony Brook.
Judith S. Weis,
President, American Institute of Biological Sciences.
______

Prepared Statement of the American Society for Engineering Education

On behalf of the American Society for Engineering Education (ASEE)
Engineering Deans Council, I would like to express appreciation for the
opportunity to offer testimony on fiscal year 2002 appropriations for
the National Science Foundation. This subject holds great importance
for engineering educators as well as the country as a whole, given the
NSF's vital role in advancing basic science and engineering research.
ASEE strongly urges the Administration and Congress to provide no
less than $5.1 billion, a 15 percent increase, for the NSF in fiscal
year 2002. We believe this increase to be a necessary step toward
doubling the NSF's budget by 2006.
The NSF occupies a unique position at the critical juncture of
economic strength, learning and discovery, and national well being.
Pioneering basic research in engineering and the sciences funded by the
NSF stimulates technological innovation, enables advances in medical
care, and stretches the limits of human knowledge. In the current
climate of heightened global economic competition and rapidly evolving
fields of scientific inquiry, strong and steady support of the NSF
serves a vital national interest.
In February of this year, ASEE urged Congress to consider an
appropriation of $5.1 billion for the NSF in the fiscal year 2002
budget in order to bring balance to the federal research portfolio,
maintain the global leadership of the U.S. in basic science and
research, and educate a new generation of scientists and engineers. For
these reasons, ASEE enthusiastically encourages the Senate to answer
the call of Senators Christopher Bond and Barbara Mikulski to double
the NSF budget over the next five years.
As innovation comes increasingly to determine market leadership,
the NSF brings particular expertise to the task of identifying and
nurturing the basic science and engineering research that underlies the
dominant position of the U.S. in the global economy. A growing chorus
touts the importance of this kind of federal engagement with science
and technology, including Federal Reserve Chairman Alan Greenspan, the
Council on Competitiveness, and Business Week, to name just a few. As
David Baltimore, President of the California Institute of Technology,
recently said of basic science and engineering research: ``It is the
seed corn of commercial innovation, but it is not carried out by
industry because its value is too general. Instead it is a key function
of government.''
At the leading edge of learning and discovery, the NSF funds path-
breaking research in core disciplines of science, engineering,
mathematics, and computing. The performance of this research serves a
host of broader needs. As the source of more than one-third of all
federal support for basic engineering research, the NSF makes possible
work that has led to such important technologies as computer-aided
design, fiber optics, biotechnology, advanced composite materials, and
magnetic resonance imaging. These discoveries render a vast range of
benefits: increased efficiencies in manufacturing processes, more
robust communications networks, less invasive and more accurate medical
instruments, and more fuel-efficient cars and trucks.
NSF-sponsored research also underlies many advances in medical
care. Harold Varmus, former Director of the National Institutes of
Health and currently President of the Memorial Sloan-Kettering Cancer
Center, has noted: ``The NSF has a splendid history of sustaining
fundamental research across a broad spectrum of disciplines, and this
approach is especially important now as laboratory work becomes
increasingly important.'' The field of bioengineering provides one
venue for engineers to make contributions to such interdisciplinary
work, applying engineering principles and methods to medicine, biology,
agriculture and the environment. Such research has led to innovations
in medical care and instrumentation, including ultrasound, prosthetics
and synthetic transplants, pacemakers, and ocular implants.
NSF funding for the research underlying such advances also serves
to educate the next generation of engineers and scientists. Doubling
the NSF budget would enhance the development of more of these young
researchers, whose skills and energy comprise the future of our
nation's science and technology enterprise. As former Presidential
Science Adviser Neal Lane recently observed: ``Chief executive officers
of American industry say that the biggest threat to U.S.
competitiveness in the next century is a shortage of technologically
skilled workers. Those future scientists and engineers must come out of
the nation's universities and colleges. The surest way to leave the
United States vulnerable to this threat is to cut funding for the
NSF.''
NSF support yields outsized results, as it is highly leveraged and
attracts complementary funds from both public and private sources. For
example, external support for cost-shared Engineering Research Centers
registers two-and-a-half times the size of the initial NSF investment.
The students who graduate with engineering degrees of all levels bring
highly prized skills into all sectors of the American workforce. The
most advanced carry on the research that pays off in many surprising
ways. Other engineering graduates produce and manage many of the
technological innovations said to account for one-third to one-half of
the recent growth in the American economy. Still others bring advanced
analytical abilities and knowledge of high technology to fields as
diverse as health care, financial services, law, and government.
Attached is further documentation of the many ways NSF support is
promoting engineering education and research at U.S. colleges and
universities (Att. A). This wealth of human capital owes much of its
capacity to strategic NSF support for engineering education. Attachment
B describes a range of outreach strategies engineering programs are
pursuing to extend their science and math education expertise to K-12
schools in ways that complement these NSF efforts.
A succession of predictable, sizable increases to the NSF budget
will permit even greater development of these human resources. A core
agency focus for fiscal year 2002, the Math and Science Partnership
Initiative, seeks to involve all the stakeholders in the development of
human capital--from academe, industry, and government--in an effort to
prepare Americans for a future that will increasingly require basic
understanding of the technical material they will face at work, home,
and in their civic responsibilities. NSF programs have also become
important resources for broadening the participation of under-
represented groups such as minorities and women in the fields of
science, math, and engineering and, through programs like the
Experimental Program to Stimulate Competitive Research (EPSCoR), for
strengthening the research and development infrastructure of many rural
and small states. A plan to double the NSF budget will permit the
allocation and coordination of the activities needed to promote the
broadest possible development of science, mathematics, and technology
skills among all Americans. Attachment B conveys the broad strength of
support for this position, expressed through the Coalition for National
Science Funding (CNSF), which ASEE and the ASEE Engineering Deans
Council have enthusiastically endorsed.
Doubling the NSF budget will enhance the value of the agency's
other cross-cutting initiatives. New funding for multidisciplinary
mathematics research will enhance the transfer of results and
applications from mathematics and statistics research to science and
engineering disciplines, expanding the cadre of researchers trained in
both mathematics and science. Dynamic interdisciplinary work across
engineering and science disciplines promise startling advances in, for
example, medicine, manufacturing, and communications. The assurance of
steady resources over extended periods of time for high-risk, high-
reward endeavors--such as research in nanotechnology, biocomplexity,
and high-speed computing--would greatly enhance their prospects for
success. As Varmus says, ``it is crucial that leaders of science
agencies be able to anticipate several years of steady growth during
periods of expansion. These agencies make multi-year awards and are
responsible for training and research infrastructure, as well as the
operational costs of doing research.'' In an increasingly
interdependent research system, the NSF is uniquely situated to foster
productive exchanges across the full range of scientific and
engineering disciplines.
The Engineering Deans Council of the American Society for
Engineering Education (ASEE) is the leadership organization of the more
than 300 deans of engineering in the United States. Founded in 1893,
ASEE is a nonprofit association of 12,000 members dedicated to the
improvement of engineering and engineering technology education.

Attachment A.--NSF-Funded Advances in Engineering Research and
Education Under Way at U.S. Engineering Programs

Student Teachers.--Question. What do you get when you put a
teacher, a kindergartener, and an engineering graduate student together
in the same room? Answer. The NSF's GK-12 Fellows Outreach Program at
the University of Colorado-Boulder's College of Engineering and Applied
Science. The GK-12 program infuses pre-engineering education into
public school classrooms from the K-12 grade levels. The result is a
better education for school children, who are introduced to engineering
and science concepts in a hands-on manner that promotes more effective
learning.
Risky Business.--The U.S. electric utility industry is undergoing
major functional and structural changes. Traditionally, prices of
electric energy and related services have been determined through
endorsement by regulatory authorities of rates proposed by utilities.
As a result, this industry has been very much risk-averse and the
utilities could pass on the risk to the end users because of their
regulatory protections. But, little is known however about how
financial risk management techniques apply to the electric power
industry. Researchers from the Illinois Institute of Technology are
planning to investigate the application of financial risk management
techniques to technical innovation problems facing the electric utility
industry today, hoping to craft a viable solution for the assignment of
risk in a rapidly deregulating market.
Water Contaminant Removal.--Scientists at Penn State University are
working to alleviate a common type of water contaminant called
perchlorate which is extremely mobile and persistent in the surface and
ground water of some areas in the U.S. Perchlorate has been detected in
the water supplies of approximately twelve million people, and has
proved difficult to remove through conventional water treatment
technologies. Penn State researchers are investigating biological
treatment of perchlorate where microbes reduce the contaminant to
innocuous oxygen and chloride. The commercial effect of this would be
to save large amounts of money, that has been currently ear-marked for
water purification to be used for both future development and current
residential and commercial usage.
Recycled Paper.--University of Florida researchers have developed a
technique to remove ink from paper that is both cheaper and more
effective than current methods, thereby increasing the viability of
paper recycling enterprises. This new technique replaces traditional
ink-removing surfactants with a blend of cheaper chemicals. The blend
is not only more effective with a broader variety of paper stocks than
the surfactants, it also nearly doubles the amount of recycled paper
that can be used to produce new product for the same cost, researchers
say.
Tired Tires.--In the wake of the recent mishaps plaguing the tire
industry, researchers at Oakland University in Rochester, Michigan,
have developed a technique to highlight areas of structural weakness of
an object. This technique called shearography is finding use in some
segments of the tire industry. The FAA has just approved the process
for use in aircraft tires. Shearography, which uses a laser and a
digital camera to compare views of the surface of an object under
stress and normal conditions, serves to highlight areas of weakness and
help prevent stress-related accidents. As well, the tire retread
industry has adopted shearography, to determine which tire casings are
suitable for reprocessing.
Manufacturing Education.--Lehigh University in conjunction with
Focus: Hope and the Society for Manufacturing Engineers have created a
new coalition named the Greenfield Coalition designed to teach
engineering education to minority students from inner city Detroit. The
Coalition has created and developed curricula and learning materials,
delivered courses in Greenfield knowledge areas, taken the first steps
in integrating experiential learning within the academic programs, and
has graduated students from degree granting schools. A current focus is
the application of new computer-based technologies to improve
educational outcomes.
Jury Duty.--How can the views of ordinary citizens be used in
making decisions about managing risks? Researchers in the Department of
Engineering and Public Policy at Carnegie Mellon University have
developed methods, which allow representative ``jury-like'' groups of
lay people to become knowledgeable about scientific risks of government
policies, and then rank them in order of concern. Repeated experiments
have demonstrated that the method produces robust results, and that the
people participating find it highly satisfactory. Such methods should
help government and industry to make better, more democratic risk-
management decisions.
A Family Affair.--At the Mother-Daughter Saturday Engineering
Academy, sponsored and created by California State University-Los
Angeles, technology runs in the family. Here mothers and daughters can
work together alongside female engineers to explore engineering
careers, visit high-tech companies, and take part in lectures and
contests. Hands-on experiments include building a mini-bridge tower,
subjecting a raw egg to a two-story bungee jump and racing a mini solar
car. The program's four main goals are:
(1) To encourage high schools female students to consider
engineering as a viable option for their future careers, thereby
dispelling the myth that engineering is physically difficult and ``non-
feminine,''
(2) To provide bonding between teenage girls and their mothers.
During six 4-5 hour sessions, girls and their mothers work as a team:
they listen to lectures, work on computers and hands-on projects, and
compete in contests.
(3) To raise the level of scientific knowledge and foster
appreciation for engineering professions among the general female
population.
(4) And to create a network of supporters and collaboration between
different constituencies interested in women's education. Classes are
small (20 teams per course), so attendees receive individual attention
and have many opportunities to ask questions.

Attachment B.--Building Tomorrow's Workforce

Engineering schools are forging new relationships with K-12
teachers to make science and math more exciting to kids. By Alvin P.
Sanoff
Several times a week, University of Washington engineering students
Lisa Behmer and Jessica Yellin enter Marcus Whitman Middle School in
Seattle and head for the classroom of math teacher Joseph Hardy. There
Behmer, a senior majoring in materials engineering, and Yellin, a
doctoral candidate in mechanical engineering, join Hardy in teaching
math to eighth graders. Rather than using a traditional approach of
lectures and drills, the trio uses an inquiry-based teaching method
designed to engage students in the learning process. Recently, they
asked students to design bicycles for a fictitious race across the
state of Washington. As part of that project, Behmer and Yellin brought
three bicycles into the classroom, each with a different gear ratio,
and asked the students to figure out which would work best given the
terrain that the bike riders would have to traverse. ``We set up the
class as if it were a consulting engineering firm designing bicycles
for the race,'' says Yellin. Behmer and Yellin are among some 15
University of Washington graduate students and undergraduates who, with
National Science Foundation support, are working with teachers in
middle schools in the Seattle area to make math and science more
exciting for students. Denice Denton, dean of the College of
Engineering at the University of Washington, says that the program
``puts role models in front of kids who can get them excited about
careers in math, science, and engineering and, at the same time, helps
teachers get a better handle on what mathematicians, scientists, and
engineers do so that they can better advise kids on these careers.''
The project is one of many in which engineering schools are engaged
in an effort to address a growing national problem: the weak
performance of American students in math and science in comparison to
their peers in other industrialized nations. Recently released results
from the Third International Mathematics and Science Study-Repeat
showed that American eight graders were outperformed in math and
science by students in more than a dozen nations, including Singapore,
Taiwan, South Korea, Japan, Hong Kong, Belgium, and the Netherlands.
France and Germany did not participate in the test. The results are
particularly disappointing because in recent years one blue ribbon
commission after another has issued warnings about the perilous state
of science and math education in the nation's schools, yet little has
changed as a result. Dean Karl Reid of the College of Engineering,
Architecture, and Technology at Oklahoma State University says that
while the warnings have produced a number of programs that he describes
as ``islands of excellence,'' a coordinated national effort has been
lacking. Says Reid: ``We have to recognize there is a crisis and then
attack the crisis in a much broader, well-planned way.''
Last fall, in a report entitled ``Before It's Too Late,'' the
National Commission on Mathematics and Science Teaching for the 21st
Century, chaired by former Senator John Glenn, warned that time is
running out for action and laid out an ambitious agenda to improve the
performance of American students. At the center of the agenda: an
intensive program with a price tag of $5 billion to upgrade the
quality, skills, and knowledge of math and science teachers.
Citing studies that show a linkage between student achievement in a
subject and whether their teachers are certified and have majored in
that subject, the commission argued that ``the most direct route to
improving mathematics and science achievement for all students is
better mathematics and science teaching.'' A member of the commission,
Rep. Rush Holt of New Jersey, has introduced legislation to fund the
commission's recommendations. Holt said the legislation would establish
``grant programs for states to improve the recruitment and retention of
math and science teachers'' as well as `` the quantity and quality of
their professional development programs.''
The legislation would also create academies throughout the nation
to train 3,000 fellows in math and science teaching. The fellows would
be recruited for a one-year intensive course in effective teaching
methods in math and science and, in return, would agree to teach for
five years in districts with math and science teaching shortages, of
which there are many. According to the National Commission, more than
one in four high school math teachers and nearly one in five high
school science teachers ``lack even a minor in their main field of
teaching.''
Shortly before the Glenn Commission issued its report last fall, a
committee of the National Research Council also focused on the need to
upgrade math and science teaching. Its recommendations included a call
for the nation's colleges and universities to work with local school
districts to ``establish a comprehensive, integrated system of
recruiting and advising people who are interested in teaching science,
mathematics, and technology.''
Leaders in engineering education have long realized that they have
a major stake in the quality of science and math teaching at the K-12
level. Students who are deficient or lack interest in math and science
are unlikely to consider engineering as a career. Rep. Vernon Ehlers of
Michigan, who along with Holt has led the charge on Capitol Hill for
federal support to improve math and science teaching, says that ``a
preponderance of evidence indicates that our schools aren't preparing
our students adequately for the knowledge-based, technologically rich
America of today and tomorrow.''
The test results from the international exam as well as the
decisions made by today's college students about what to study bear
Ehlers out. Despite the growing demand for trained engineers,
enrollment in engineering schools has remained relatively flat for
almost a decade, with the number of bachelor's degrees granted annually
hovering between 62,000 and just over 63,000. The supply of engineers,
say engineering educators, is simply not adequate to meet demand. In
computer science alone, the Department of Labor estimates that
postsecondary institutions will have to produce nearly four times as
many graduates as they now do to meet demand. The lack of supply has
led many employers to hire computer scientists from abroad under the H-
1B visa program.
Despite a seemingly endless string of front-page stories about the
growth of information technology and the availability of technology-
related jobs, OSU's Reid says college students are more interested in
pursuing the social sciences than in studying engineering. One reason
for this, he says, is the lack of an adequate number of well-trained
math and science teachers: ``We simply do not place a value on teaching
in science and math that is necessary to attract the caliber of people
we need to stimulate young people to consider science and math-related
careers. There ought to be differential pay scales to reward those who
have the special abilities that are needed to teach science and math.''
lending a hand
As the lack of student interest in pursuing careers that require
expertise in science and math has become more apparent, a number of
engineering schools, like the University of Washington, have entered
the fray, developing a wide variety of initiatives to help classroom
teachers do a better job of engaging students. Some of the initiatives
send engineering students into the classroom to work with teachers and
students, while others bring teachers to university campuses where they
hone their skills and upgrade their knowledge under the tutelage of
engineering faculty.
One of the most ambitious ventures has been launched by Rensselaer
Polytechnic Institute's Center for Initiatives in Pre-College
Education. The center's main focus is on working with students and
teachers in elementary and middle schools in the Troy, N.Y., area.
Lester Rubenfeld, a math professor who directs the center, says that it
has emphasized ``trying to get teachers to change their pedagogical
style to take a more interactive approach rather than to just be
purveyors of information--and we are integrating computer technology
into the process.''
The center sends ``technology mentors''--RPI undergraduates and
graduate students in education from the nearby State University of New
York at Albany campus, many of whom majored in math or a science as
undergraduates--into 15 schools twice weekly. The mentors serve as
resources for the teachers and, says Rubenfeld, ``they become part of
the educational environment in the building.'' The mentors help the
teachers integrate technology into their classrooms and serve as
sounding boards. ``We thought a lot about how to really gets kids
interested in math and science,'' says Rubenfeld, ``and decided that
you can't go in at the high school level. You have to go back further
in time and get kids interested when they are about to lose interest,
somewhere between the 4th and 7th grades.''
Educators agree that the elementary and middle school years are
crucial. If students get turned off to math and science when they are
young, it is very difficult to turn them back on in high school. Yet it
is in the earlier grades that teachers are least likely to be well-
trained in math and science. Janie Fouke, dean of the College of
Engineering at Michigan State University, recalls that shortly after
graduating from college she took education courses so she could be
licensed as a middle and high school science teacher. ``I found that a
lot of my classmates, especially those interested in elementary
teaching, lacked a strong interest in science or math,'' says Fouke.
Rick Cleary, associate dean for undergraduate programs at Cornell
University's College of Engineering, says that ``a lot of elementary
teachers didn't have a good experience in science and math and that
makes it hard for them to excite their students.'' RPI is attempting to
address this problem by obtaining funding for a program that would
bring a number of elementary and middle school teachers to campus for a
year and two summers. The teachers, who would be called Rensselaer
Technology Fellows, would learn how to use technology in their teaching
and then would return to their school districts to work with other
teachers.
As for RPI's existing ``technology mentors'' program, it is unusual
in that it involves cooperation between two institutions of higher
education, RPI and SUNY-Albany, and between faculty and students from
different disciplines--the sciences and education. It is relatively
rare for there to be close cooperation between science and education
faculty members, in part because scientists often view their peers in
education with a certain disdain. Stephen Director, dean of the College
of Engineering at the University of Michigan, sees the lack of
cooperation as unfortunate since each has distinctive strengths.
``Engineering colleges understand the content, while education schools,
in spite of all the criticism that is lodged against them, understand
how students learn.''
new partnerships
Michigan is one of several universities at which a partnership has
developed between education and engineering faculty members, with the
goal of improving math and science education. At Michigan a member of
the engineering faculty is collaborating with an education professor on
an approach to teaching science in the middle schools that emphasizes
having students actually do science. For example, says Director, rather
than simply absorbing the basic facts about why earthquakes occur, the
students are asked to ``think about deep and interesting questions such
as `Why do earthquakes stop?' ''
At Ohio State University, collaboration between faculty in the
sciences and in education has gone a step further. The College of
Mathematics and Physical Sciences has hired a director of math and
science education who is working with OSU's College of Education to
increase the number of ed-school students who will become math and
science teachers. Ohio State's College of Engineering, meanwhile, is
sending teaching fellows--graduate students and upper level
undergraduates--into several Columbus public schools to work with
teachers in grades three to five.
Much like the participants in the University of Washington program,
the fellows, who take a course in education and teaching methodology,
spend six to 10 hours a week in the classroom working with teachers and
their students. ``Historically, it was the College of Education that
was principally involved with grades K-12,'' says engineering dean
David Ashley. ``But in the last few years the university has made a
serious outreach and engagement initiative that includes the College of
Engineering. If you had asked someone in engineering five years ago
what we did in K-12, there would be nothing we could point to. But now
K-12 is something that we are doing across the university.''
Similarly, at the University of Colorado at Boulder graduate
students from the engineering college spend parts of two days a week in
middle and high schools in the Boulder area introducing engineering
concepts to students and teachers. ``The schools are very receptive
because we do not try to teach an engineering curriculum,'' says
engineering dean Ross Corotis. ``We try to let them know that science
and math principles can be used to create things that make society
better.''
A different kind of partnership between engineering and education
professors exists at Pennsylvania State University at University Park.
There education and engineering professors co-teach a course for would-
be math and science teachers called ``Fundamentals of Science,
Technology, and Engineering Design.'' David Wormley, dean of Penn
State's College of Engineering, says that students in the course ``gain
a sense of the impact that engineering has on solving societal
problems. It is an opportunity for us to impact secondary education.''
Many colleges and universities have focused their efforts on
special summer programs for teachers. The University of Virginia, the
Georgia Institute of Technology, the University of Texas at Austin and
the University of Colorado at Boulder are among a number of
institutions that bring teachers to campus for training in engineering,
math and science.
At Georgia Tech, about a dozen teachers from high schools around
the state participate in a summer long program that involves working
with a faculty member on a research project. ``The teachers very often
become co-authors of a paper and they go back to school with lots of
ideas for the classroom,'' says Engineering Dean Jean-Lou Chameau. At
the University of Colorado, the engineering school's Integrated
Teaching and Learning Laboratory is utilized for summer programs
involving both middle school and high school teachers and students. The
programs for teachers range from a few days to a few weeks in length
and emphasize projects they can replicate in their classes for under
$20.
a tough sell
Still, getting engineering faculty interested in K-12 education can
be an uphill battle at times. Administrators acknowledge that faculty
members who operate in an environment where tenure and promotion are
based primarily on research see little immediate payoff in putting a
lot of time and effort into K-12 education. RPI's Lester Rubenfeld says
flatly that such efforts ``are not rewarded on research campuses. I do
not recommend it for people without tenure.'' Rubenfeld says that
faculty members are more likely to become engaged with K-12 education
``when their kids get into high school and they realize the
deficiencies of the system. Then they get concerned about why their
kids' education in math and science is not what it should be.''
In that regard, RPI has been instrumental in the development of a
program called Project Lead the Way, which began in the 1980s when
faculty members helped a teacher at a local high school develop a
series of technology oriented courses. Project Lead The Way, which has
since become an independently run national program, offers high schools
a five-course sequence of pre-engineering courses and provides training
for those who teach the courses. Some 175 high schools are
participants. The Project has also created a middle school program
called Gateway to Technology, a single course with four stand-alone
units. Lester Gerhardt, associate dean of engineering at RPI, says that
the program is ``geared for students who like math and science and are
curious about how things work.''
In fact, a number of the K-12 initiatives in which engineering
schools are involved focus not on average students, but on students who
show promise and/or interest in engineering and related fields. Many of
these programs are aimed at women and minorities. Cornell's Engineering
School operates what it calls the Curie program, which brings about 150
female high school students to the campus for a week each summer to
expose them to doing research. Michigan State's College of Engineering
participates in a program to enrich math and science opportunities for
students in the Detroit schools. Every summer 30 to 40 high school
sophomores and juniors take part in a four-week residential experience
focused on math, computing and engineering. A number of universities
not only offer summer programs, but also run programs of much shorter
duration during the school year that have a more modest goal than
improving K-12 science education. These programs are designed simply to
expose students to engineering and the sciences. A case in point is
Michigan State's mechanical engineering design day. Twice a year
several hundred students from schools around the state are bused to
East Lansing for the event, which takes place at the end of each
semester. They watch mechanical engineering students demonstrate the
projects they have designed and take part in a design competition
themselves, building bridges out of cardboard and tape or constructing
models of the Leaning Tower of Pisa out of Popsicle sticks and tape.
Yet, despite the best of intentions, there is no indication thus
far that the proliferation of programs is likely to measurably change
the performance of U.S. students in science and math. ``All these small
efforts won't become synergistic if we continue to do them as ad hoc
entities,'' says the University of Washington's Denton. ``We need to
make the sum greater than the parts. We need a national campaign.''

Attachment C.--Coalition for National Science Funding

The Coalition for National Science Funding (CNSF), a group of
eighty scientific, engineering, and professional societies,
universities, and corporations, commends Congress and the
Administration for providing the National Science Foundation (NSF) with
the largest dollar increase in the agency's history. The Coalition
appreciates the efforts of Senators Christopher ``Kit'' Bond and
Barbara Mikulski to double the NSF's budget, and the support of
Representatives James Walsh and Alan Mollohan for the NSF. We applaud
the goal of doubling the NSF budget and the fiscal year 2001
appropriation clearly sets us on the right path.
To maintain this momentum, CNSF strongly urges the Administration
and Congress to provide no less than $5.1 billion, a 15 percent
increase, for the NSF in fiscal year 2002. We believe this increase to
be a necessary step toward doubling the NSF's budget by 2006.
Our national knowledge base in the sciences, mathematics, and
engineering is increasingly important to broad economic and social
interests. Doubling the NSF budget by 2006 will fund the crucial
investments that the agency makes in key components of this vital
knowledge base. These funds will permit investments in the basic
research needed to rejuvenate and stimulate core disciplines of
science, mathematics, and engineering, which are the underpinnings of
technological innovation.
The primary source of federal support for non-medical basic
research in colleges and universities, the NSF is the only federal
agency whose mission consists of comprehensive support for the sciences
and engineering. Equally important are investments in people who will
apply new knowledge and expand the frontiers of science and
engineering. Through its support of research and education programs,
the agency plays a vital role in training the next generation of
scientists, engineers, and mathematicians. Currently, the NSF must
decline almost as many highly-rated grant proposals as it can fund.
Increased funding for the NSF will not only enable the funding of more
outstanding proposals that will help broaden the nation's knowledge
base, it will also enable the agency to increase the size and duration
of its grants.
Over the past half century the NSF has had monumental impact on our
society. The NSF investment has paid dividends in building the
infrastructure of the individual scientific disciplines, as well as
laid the groundwork for innovative interdisciplinary research to meet
modern day scientific and technical challenges. Many new methods and
products arise from the NSF investment in research, such as geographic
information systems, World Wide Web search engines, automatic heart
defibrillators, product bar codes, computer aided modeling (CAD/CAM),
retinal implants, optical fibers, magnetic resonance imaging
technology, and composite materials used in aircraft. NSF-sponsored
research has triggered huge advances in understanding our planet's
natural processes, which lead to providing a sound scientific framework
for better decision-making about earth's natural environment. These
methods, products, and advances in understanding accrue from basic
research performed over many years, not always pre-determined research
efforts aimed toward a specific result. Furthermore, the NSF
traditionally receives high marks for efficiency--less than four
percent of the agency's budget is spent on administration and
management.
For these reasons, CNSF highly recommends that Congress and the
Administration continue to invest in NSF by providing, at a minimum,
$5.1 billion for fiscal year 2002, and work to double the NSF's budget
by 2006.
______

Prepared Statement of the American Institute of Biological Sciences

The American Institute of Biological Sciences, which represents 79
scientific societies with a cumulative membership of over 190,000
biologists spanning all of biology--from basic to applied, from
molecular to organismal, from agronomy to zoology--submits the
following written testimony regarding the fiscal year 2002 funding for
the National Science Foundation (NSF).
The American Institute of Biological Sciences strongly supports the
bipartisan effort to double the budget of the NSF by fiscal year 2006.
To that end, we encourage the Committee to provide at least $5.1
billion for NSF, an increase of 15 percent over fiscal year 2001.
We recognize that the Subcommittee needs to know why an increase of
this magnitude is justified. The answer--with regard to the kind of
research conducted by our members--is that NSF funding is the primary
source of federal support for basic research on the biology of the
natural world (the non-biomedical life sciences) in colleges and
universities. This funding is critical to some disciplines which have
little private sector funding because research in these areas rarely
results in marketable products. Yet, the knowledge gained in this kind
of research is critical in many ways. The most obvious way this
knowledge is used is in the management of our natural resources. Making
choices about the often conflicting needs to extract and use resources
and the competing need to protect our environment requires a strong
foundation of biological knowledge. In fact, that knowledge can often
help us develop solutions that allow us to minimize the impact of the
use of our natural resources. But there are many other ways in which
biological information affects our lives. For example--the anti-cancer
drugs Vincristine and Vinblastine were first extracted from the
Madagascar rosy periwinkle, while the anti-cancer drug Taxol was first
extracted from the Pacific yew. Just this week, a an announcement was
made that a new anti-cancer drug made from shark cartilage has been
found to be effective. Without funding for the basic, biological
research on our natural resources, we might never have known of these
species, much less their usefulness to humans. And without
understanding how human activities affect these species, we might not
be able to prevent them from disappearing from the planet. We might not
recognize the environmental threats that could have dire effects on
humans. We again ask the Congress to take note of the recommendations
of the National Science Board in its report, ``Environmental Science
and Engineering for the 21st Century: The Role of the National Science
Foundation.'' The report calls for a $1 billion increase in funding for
environmental research, assessment, and education, to be phased in over
5 years. It bears repeating that much research of this sort receives
very little private sector funding.
Much biological and ecological research is inherently long-term
research, because biological systems change slowly and it takes years,
if not decades, to assess the change and determine the underlying
causes. Two NSF programs--Long-term Ecological Research Network and
Long-term Research in Environmental Biology (LTERB)--recognize the need
for sustained funding for biological research, yet LTERB is limited to
a five-year award. It is often said that research awards need to be
longer so that scientists won't have to spend all their time writing
grant proposals. While we share this valid concern, the justification
for longer grants in the biological sciences is actually scientifically
appropriate.
The research funded by NSF--particularly the Biocomplexity in the
Environment Initiative--is therefore critical in understanding our
complex environmental systems. The resolution of many important
environmental and societal problems depends on our gaining sufficient
understanding of these systems. The Biocomplexity Initiative gives us
the rare opportunity to tackle these problems on a cross-disciplinary
basis, with chemists, geologists, hydrologists, and biologists working
together to learn how systems work and how to rectify imbalances that
have grave consequences for humans, wildlife, and our ecosystems. For
instance, a team of scientists funded by the Biocomplexity Initiative
are looking at oceanic algal blooms, which absorb nitrogen and carbon
from the atmosphere. Someday, this information could help us to
mitigate the effects of greenhouse gasses. This kind of research is
necessarily large in scope and often requires a long-term monitoring of
the system. It is expensive but worthy research. Last year, NSF
requested a $136 million increase for this initiative; Congress
provided $75 million. We encourage the Congress to provide NSF with at
least $150 million for this initiative in fiscal year 2002.
In fiscal year 2001, NSF was able to fund only 16 Biocomplexity
proposals (a success rate of 5 percent), along with 57 small awards for
``incubation'' activities to allow research groups to begin smaller,
preliminary efforts to undertake this complex research. These promising
activities will have no future if the NSF does not receive a
substantial increase for the Biocomplexity initiative.
Last year, NSF sought funding under the Major Research Equipment
account to start a new effort to be known as the National Ecological
Observatory Network (NEON). The goal of NEON was to create a nationwide
virtual laboratory for research to obtain a predictive understanding of
the environment. Each of 10 planned observation sites would consist of
a partnership of universities, government facilities, and private
research organizations that would share equipment and be linked through
a computer network for the purpose of sharing information with one
another, other researchers, and the public. Congress declined to
provide the requested $12 million start-up funding for NEON last year.
We urge the Congress to fund this project in fiscal year 2002.
As important as the new ideas and knowledge generated by scientific
research are, the people educated to apply them appropriately and those
educated to keep the knowledge continuum growing are just as important.
For the last several years the number of U.S. students studying
science, mathematics, and engineering has decreased to alarming levels.
These students are the future of science and math research and
education. Continuing investment in their education, at the
undergraduate and graduate levels, is a critical need for this country.
Students at all levels need strong training in biology and should have
opportunities to study the natural world around them.
We appreciate the opportunity to submit this written testimony to
the Senate Appropriations Subcommittee on VA, HUD, and Independent
Agencies.
______

Prepared Statement of the American Society of Mechanical Engineers

The National Science Foundation (NSF) Task Force of the Council on
Education of the American Society of Mechanical Engineers (ASME
International) is pleased to provide comments on the NSF fiscal year
2002 budget request.
ASME International is a worldwide engineering society focused on
technical, educational and research issues. It conducts one of the
world's largest technical publishing operations, holds some 30
technical conferences and 200 professional development courses each
year, and sets many industrial and manufacturing standards. This
testimony represents the considered judgment of the NSF Task Force of
the Council on Education and is not necessarily a position of ASME
International as a whole.
nsf fiscal year 2002 budget request overview
The National Science Foundation plays a critical leadership role in
directing the nation's non-defense related scientific and engineering
research. Through thoughtful and visionary planning, NSF has greatly
contributed to the technological superiority that the United States
enjoys today. The Task Force shares NSF's broad-based, cross-cutting
vision for basic engineering and scientific research. As such, we
strongly endorse the Foundation's efforts to continually improve and
expand the ``innovative ideas, outstanding people, and cutting-edge
tools'' that comprise the nation's technological and scientific
infrastructure.
While NSF had experienced substantial funding increases in recent
years, the Budget Request for fiscal year 2002 reflects only a 1.3
percent increase to $4.47B. Within this request, funding for the
Engineering Directorate would remain virtually unchanged in current
dollars at $431M. In justifying this modest request, President Bush
points back to the 5.8 percent and 17.3 percent increases in fiscal
year 2000 and fiscal year 2001 respectively. In stark contrast,
however, the funding rate for the National Institutes of Health will
continue with the fourth year of a ``doubling in five years'' plan,
increasing by 13.5 percent to more than $23B. In terms of the overall
budget proposal, research funding for NIH would constitute about 50
percent of the nation's non-defense related science and technology
portfolio.
NSF's four priority areas from the previous fiscal year continue to
headline the fiscal year 2002 budget request. These are:
--Information Technology Research (ITR),
--Nanoscale Science and Engineering (NNI),
--Biocomplexity in the Environment (BE),
--Learning for the 21st Century (SMET).

TABLE I--NSF BUDGET OVERVIEW WITH AND WITHOUT SPENDING IN THE PRIORITY AREAS.
[DOLLARS IIN MILLIONS]
----------------------------------------------------------------------------------------------------------------
NSF Agency Wide Engineering (ENG)
-------------------------------------------------------------
Fiscal Fiscal
year 2001 Fiscal Percent year 2001 Fiscal Percent
current year 2002 change current year 2002 change
plan request plan request
----------------------------------------------------------------------------------------------------------------
Total Budget...................................... $4,416.39 $4,472.49 $1.3 $430.84 $431.05 <0.1
Salaries and Expenses......................... 160.54 170.04 5.9 n/a n/a n/a
Inspector General............................. 6.27 6.76 7.8 n/a n/a n/a
=============================================================
Total Program Budget.............................. 4,249.58 4,295.69 1.1 430.84 431.05 <0.1
ITR........................................... 259.43 272.53 5.0 8.17 9.17 12.2
NNI........................................... 149.68 173.71 16.1 55.27 70.30 27.2
BE............................................ 54.88 58.10 5.9 2.69 3.69 37.2
SMET.......................................... 121.46 125.51 3.3 2.70 3.40 25.9
=============================================================
Remaining Funds................................... 3664.13 3665.84 <0.1 362.01 344.49 -4.8
----------------------------------------------------------------------------------------------------------------
Comparisons include both agency-wide and the engineering directorate.

Funding has been requested to expand ITR by 5.0 percent (to $273M),
NNI by 16.1 percent (to $174M), BE by 5.9 percent (to $58M) and SMET by
3.3 percent (to $126M). Each of these priorities, but NNI and SMET in
particular, continue to be strongly supported by ASME.
In light of the 1.3 percent overall increase, expansions in the
priority areas necessarily imply reductions in other areas. Table 1
clearly shows the impact on funding for core programs. Agency-wide,
there will be virtually no change from current year plans, while the
Engineering Directorate (ENG) would experience a 4.8 percent decrease
in funding for core research programs.
The Task Force endorses the leadership role that NSF has played in
guiding the nation's basic research and development activities. By
maintaining a balance between exciting new developments, and the core
programs, which incubate such breakthroughs, NSF has built an
outstanding record of supporting a broad spectrum of research of the
highest quality. We continue to recognize the importance and timeliness
of the four priority investment areas, ITR, NNI, BE, and SMET. These
address major national needs for the 21st century and are being
implemented at a critical juncture in the nation's technological
development. (However, as will be discussed in the next section, it is
not clear that an optimum balance has been achieved.)
There are a number of particularly noteworthy items in the fiscal
year 2002, beginning with the planned increase in graduate fellowship
stipend levels. Ensuring a continuous stream of well-trained, highly
qualified research scientists into leadership positions is critical to
the survival and growth of the nation. In this respect, the Task Force
strongly endorses NSF's planned increase in stipends for graduate
fellows from $18,000 to $20,500. The logical extension of providing the
nation's children with a strong science and technology knowledge base
is simultaneously maximizing the pool of science and technology
educators and leaders. Making fellowship stipends attractive to the
nation's best and brightest students is certainly a positive step.
Overall increases in the number of graduate fellowships awarded is
also especially positive. NSF is the only federal agency with the
direct charter of training graduate students for advanced research and
development careers. It is therefore important that this continue to be
a major priority area in perpetuity. It is not clear, however, that the
correct balance in types of graduate fellowships has been struck. Plans
to stabilize the Graduate Research Fellowship (GRF) program at 900 new
offers per year while increasing the number of GK-12 Fellowship could
be interpreted that research is becoming a lesser priority. If true,
such a direction would not only compromise the vitality of NSF, it
would also jeopardize the nation's world leadership role in research
and development.
In general, we also support and applaud the activities within ENG.
NSF's vision of a committed balance between people, ideas and tools is
exemplified within ENG. The Directorate is justifiably proud of the
large numbers of CAREER and GRF awards it supports. Integrating ITR and
SMET principles into the Network for Earthquake Engineering Simulation
(NEES) to create one of the three Major Research Equipment (MRE)
accounts is an excellent example of the long-range cross-cutting focus
of the ENG leadership.
ASME has strongly supported the nanotechnology initiative since its
inception as an NSF emphasis area in fiscal year 2000. In the past two
years, funding for this initiative has grown substantially. With a
growing record of research and development successes, the transitioning
of nano-science and engineering into commercially viable technologies
is becoming a pressing challenge for NNI. For this reason, the
introduction of Nanotechnology Experimentation and Testing Facilities
(NEXT) by ENG is timely. It is recommended that NSF look toward
developing this effort in MRE in upcoming fiscal year planning.
Finally, the Task Force endorses NSF's participation in K-12 math,
science and engineering education initiatives consistent with the
agency's broader mandate to lead the nation's research and development
enterprise. Most notably, NSF has included $200M in its fiscal year
2002 budget request to kick-off the Math and Sciences Partnership (MSP)
program. The goal of MSP is coupling K-12 and higher education SMET
education into a single integrated effort by encouraging universities
to adopt SMET into their core missions.
Clearly, the future of this nation depends on how well its children
are prepared to meet the socio-technological challenges that will arise
in their adult lives. In this technological age, providing the highest
quality math, science and technology education to all children should
be a national imperative. We, therefore, applaud President Bush's ``no
child left behind'' policy and NSF's willingness to contribute to
making it a reality. However, it is important to note that the overall
fiscal year 2002 Budget Request, coupled with this added emphasis on K-
12 education, changes the balance between K-12 education and research.
The Task Force cautions that a `proper balance' must preserve the
integrity of NSF's fundamental research and development mission.
questions and concerns
Sky rocketing gasoline prices and the ongoing energy crisis in
California serve as stark reminders of the need for balance in long
range R&D planning. Thus, as in previous years, the Task Force's key
questions and concerns arising from the fiscal year 2002 budget request
center on matters of balance. In particular, we are concerned with:
--the gross funding imbalance in the federal R&D portfolio between
life sciences and engineering/physical sciences
--insufficient support for core engineering programs at NSF, and
--inadequate funding levels for existing grants.
The fiscal year 2003 R&D budget request reflects continued
imbalance. Funding for the life sciences (i.e. NIH) continues to
increase at a rate that would result in a doubling from fiscal year
1998 to fiscal year 2003. At the same time, however, funding for all
other non-defense agencies with a significant R&D component have seen
moderate to negative increases over the same five year period. If the
current budget request is enacted, funding for R&D in the life sciences
will be roughly equal to all other non-defense R&D combined.
There is clearly no argument against attempting to eradicate life-
threatening illnesses and developing technologies to improve the
quality of life of those challenged by debilitating diseases. However,
one must question the singular focus, which has already left the nation
lacking adequate power and transportation infrastructure to provide a
sustainable quality of life. Can the nation afford to pursue the ideal
of eradicating diseases without concomitant advances in the nation's
basic technological infrastructure?
NSF's conflicting commitments to building on its emphasis areas
while effectively maintaining current spending levels in fiscal year
2002 has resulted in plans for dramatic cuts to core programs,
particularly within ENG. As indicated in Table I, requested spending
for core research in ENG not related to any of the four emphasis areas
is 4.8 percent less than the fiscal year 2001 current plan. Since the
4.8 percent figure is a composite over the entire ENG directorate,
obviously specific programs will be impacted differently.
One example of programs particularly affected by initiative driven
spending is Chemical and Transport Systems (CTS). The fiscal year 2002
budget request for CTS is $50.15 M, down $0.57 M or -1.1 percent from
fiscal year 2001 projections. Of the $50.15 M, CTS plans to spend
$16.98 M (or 34 percent of its budget) on NNI alone,. Coincidentally,
this is the same program from which basic R&D for future power
generation and oil refinery technologies should come.
Ensuring adequate numbers of core and initiative efforts has been
accomplished to-date in large part by limiting grant sizes. The
projected median research award size for fiscal year 2002 will remain
at about $77,000 per year. This continues to be in general sufficient
to support one graduate student and a senior investigator. However, an
extended period of constant grant sizes has eroded buying power and the
ability to adequately support professional development. Further,
forming small teams (2-3 senior investigators) to pursue and define the
major initiative areas of the future is virtually impossible. Thus to
truly advance the frontiers of science and technology, significant
increases must be made not only to the number of grants, but to the
size of each grant as well.
summary
ASME continues its enthusiastic support for the National Science
Foundation and its leadership in articulating the nation's basic
research and development vision. In fiscal year 2002, NSF has requested
funding to expand major, cross cutting initiatives addressing pivotal
technological issues facing the nation. This includes the
nanotechnology initiative strongly endorsed by ASME. Expansion of the
graduate fellows programs coupled with increases in stipend levels
reinforces NSF's commitment to graduate education (i.e. developing
people). The focus on developing people and ideas in general is
certainly reflected throughout the ENG directorate's budget request as
well. The challenge for this year appears to be maintaining a healthy
balance between maintaining world R&D leadership and incorporating K-12
math, science and engineering education and between supporting core
programs and expanding key initiatives.
There is great concern over the growing imbalance between life
sciences funding and the rest of the nations research and development
portfolio. Crises, such as those occurring in the gasoline and power
production industries, reflect long term failure to value and support
core research focussed at advancing the nation's technological
infrastructure. The current budget plan does not appear to permit NSF
to meet key fiscal year 2002 Performance Goals (i.e. Goals III-1a and
III-2) By increasing the number and size of its awards, NSF will be
better positioned to fulfill its leadership responsibility in directing
the nation's research and development activities.
______

Prepared Statement of the American Psychological Society

Mr. Chairman, Members of the Committee: Thank you for this
opportunity to present the views of the American Psychological Society
(APS) on the fiscal year 2002 appropriations of the National Science
Foundation (NSF). I am Alan Kraut, Executive Director of APS. We are a
15,000-member organization of scientists and academics, most of whom
are located in colleges and universities across the country. Many
members of the American Psychological Society are supported by NSF, and
much basic research in our field could not exist without NSF funding.
recommendation for fiscal year 2001 nsf budget
As a member of the Coalition for National Science Funding, APS
supports the Coalition's recommendation of $5.1 billion for the
National Science Foundation in fiscal year 2002. This would be the
second installment of the five-year plan to double the NSF budget. The
increase that you and your colleagues in the Senate provided for NSF in
fiscal year 2001 was an important first step in offsetting the
comparative underfunding that has been experienced in NSF's budget in
the past several years. The scientific community is grateful for your
support and it is our greatest hope that you will continue to support
the much-needed expansion of NSF's budget.
Within the NSF budget, we ask the Committee to continue its history
of support for behavioral and social science research at NSF. This
Committee was instrumental in encouraging NSF to establish its Social,
Behavioral, and Economic Sciences (SBE) Directorate a decade ago, and
over the years has directly encouraged many of the initiatives coming
out of that directorate.
Before discussing specific activities of the SBE directorate, I
first want to provide a brief overview of basic psychological research,
to give you an idea of the scope and breadth of the field that I
represent.
an overview of basic psychological research
APS members include thousands of scientists who conduct basic
research in areas such as learning and memory, and the linked
mechanisms of how we process information through visual and auditory
perception. Others study decision making and judgement; mathematical
reasoning; language development; the developmental origins of behavior;
and the impact of individual, environmental and social factors on
behavior. This basic psychological research conducted by APS members
has implications for a wide range of applications, from the design of
airplane cockpit control panels, to how to teach math to children; to
how humans can best learn using technology; to the development of more
effective hearing aids; to increasing workforce productivity; and to
the amelioration of social problems such as prejudice or violence.
While this is a diverse range of topics, all of these areas of
research are related by the notion that understanding the human mind
and behavior is crucial to maximizing human potential. That places them
squarely at the forefront of many of the most pressing issues facing
the Nation, this Congress, and the Administration.
Turning now to the SBE Directorate, I'd like to highlight two
programs, one in cognitive neuroscience, and one in child development.
These initiatives exemplify SBE's essential leadership on the cutting-
edge frontiers of research, and they illustrate the important work that
will either languish or flourish, depending on the size of the increase
for the NSF budget this year.
cognitive neuroscience initiative
Basic behavioral science supported by SBE traditionally has
included research in cognition, perception, language, development,
emotion/affect, and social psychology. These have been funded primarily
through its Division of Behavioral and Cognitive Sciences. Recognizing
the potential contributions of neuroscience to these and related areas,
the directorate has added funds to these programs for the express
purpose of bringing more neuroscience perspectives to bear on these
topics--to map these psychological mechanisms onto the physical
dimensions of the brain.
Theoretical work in behavioral science has greatly advanced our
understanding of the basic mechanisms underlying memory, emotion,
learning, and other psychological and cognitive processes. Now, with
brain imaging and other non-invasive techniques, we are poised to
confirm and extend these theories through studies of the living brain.
Scientists from a range of areas will be able to test theories about
normal brain functioning; assess the behavioral consequences of brain
damage; and reach new levels of understanding of how the brain develops
and matures, in terms of both structure and function.
This initiative will usher in a new era in cognitive and behavioral
science research, one that has enormous implications for virtually all
sectors of our society, including education, industry and technology,
and health care. But reaching this new era depends on the basic science
that only NSF can provide.
I should also note that NSF is providing larger and longer grants
under this initiative, in recognition of the higher cost of conducting
these kinds of interdisciplinary, technology-dependent studies. This
new funding policy is an important development for behavioral science,
in part because it reverses a previous trend toward smaller, shorter
grants on average in behavioral science in comparison to the average
grants in other disciplines.
children's research initiative
Recognizing that a combination of perspectives--cognitive,
psychological, social, and neural--is needed to fully understand how
children develop and how they acquire and use knowledge and skills, the
SBE directorate will support new interdisciplinary research centers
that will focus primarily on integrating traditionally disparate
research disciplines concerned with child development. Known as the
Children's Research Initiative (CRI), this program will bring together
such areas as cognitive development, cognitive science, developmental
psychology, linguistics, neuroscience, anthropology, social psychology,
sociology, family studies, cross-cultural research, and environmental
psychology, to name only some of the relevant disciplines. Basic
researchers from these areas will focus on problems that cannot be
solved through single investigator studies. This initiative aims to
enhance the content knowledge of the fields involved; build an
intellectual infrastructure within and among disciplines; and build a
program of research in relevant aspects of developmental, learning, and
human sciences.
As with the cognitive neuroscience initiative, the CRI program
illustrates the critical role NSF plays in creating and capitalizing on
basic scientific opportunities that will have enormous implications for
our nation's ability to realize the potential of all of its citizens.
The two initiatives I just described are in the Division of
Behavioral and Cognitive Science. SBE's other main component, the
Division of Social and Economic Sciences, also supports a substantial
amount of basic psychological science. Examples of research topics
being addressed in that division include: human dimensions of global
change, group and individual decision making, risk management, and
human factors. Research in these areas has the potential to increase
employee and organizational productivity, improve decision making in
critical military or civilian emergency situations, and inform the
public policymaking processes across a range of areas. We ask the
Committee to support this division's behavioral and social science
research programs.
the science of learning
Another core area of interest at NSF is the science of learning.
This field draws from a variety of research topics across psychology,
such as brain and behavior, learning, memory, perception, social
psychology, development, and so on. We have the knowledge base and a
critical mass of scientists to help solve the educational and learning
issues that have been identified by the government as high priorities.
But getting that knowledge into the classroom is going to require a
multi-disciplinary, multi-agency effort. The basic challenge is this:
How can we apply and extend our knowledge of how people think, learn,
and remember to improve education?
In early March, a diverse group of psychologists and other
scientists and educators met at Kellogg West conference facilities on
the campus of California State Polytechnic University at Pomona, to
address this and similar questions about the problems and possibilities
of linking the science of learning to educational practice. More
specifically, our focus was on using science to improve learning in the
university and beyond. The conference was supported by the Spencer
Foundation, the Marshall-Reynolds Trust, California State University,
San Bernardino and APS. Several representatives of NSF attended the
meeting, as did Cal Poly President Robert Suzuki, a member of NSF's
National Science Board and chair of the Board's Committee on Education
and Human Resources.
It was agreed that although researchers know what cognitive,
psychological, and social factors affect learning, this knowledge too
often has not been put to use in the classroom or in industrial
training settings. In fact, it would be difficult to design an
educational model that is more at odds with current research on human
cognition than the one that is used in most colleges and universities
in the United States. For example, virtually all college science and
math courses, especially at the introductory level, involve a lecture
where a lone professor mostly talks (and writes on the board or on
overheads) and the student takes notes. This is a satisfactory
arrangement for learning if the desired outcome is to produce students
who can repeat or recognize the information presented, but one of the
worst arrangements for promoting in-depth understanding. We need
instructional designs that maximize transfer to the real world, enhance
critical thinking abilities, and encourage the habit of life-long
learning.
The ultimate goal of the initiative that began with the March
conference is to develop new models of learning that will help pave the
way for our educational system to become more global, more integrative,
more diverse, and more flexible. One step in reaching this goal will be
the development of a research agenda that identifies critical questions
that can advance the science of learning and provide help in solving
national educational problems.
More generally, the science of learning is a topic that cuts across
many areas at the Foundation, from Education and Human Resources to
NSF's Workforce Initiative. For example, the Foundation has been
planning a program of Centers for the Science of Learning under the
cross-cutting 21st Century Workforce initiative. But these centers are
in jeopardy in fiscal year 2002 unless adequate funding is provided. A
delay in this and similar programs would mean a delay in the nation's
ability to respond to the urgent, technology-driven need for new ways
of training and education at all levels of learning.
We ask this Committee to monitor and support NSF's efforts to bring
the science of learning to bear on the nation's educational needs. The
expanded budget we recommend for fiscal year 2002 will allow NSF to
capitalize on the growing momentum surrounding this issue both at NSF
and in the field.
public understanding of science
NSF has made public understanding of science one of its science
education priorities. We applaud NSF's leadership in this area, and we
believe that the success of these efforts will be enhanced by focusing
on examples from behavioral and social science research. These sciences
have unique potential to increase science literacy because of their
intrinsic relevance to daily life. That is, in addition to promoting
understanding of questions in physics and math, NSF could also be
promoting scientific understanding by showcasing how processes of
learning and remembering take place, or the scientific validity of
certain organizational management structures in industry, or any one of
a hundred other areas of NSF support in social and behavioral science.
Public understanding of psychological science is also a priority at
the American Psychological Society. Last year we launched a new
journal, Psychological Science in the Public Interest, which presents
reports modeled after those generated by the National Research Council.
Developed by panels of distinguished scientists, these reports focus on
issues where psychological science can contribute to our understanding
of topics of national importance. The first issue described ways to
improve diagnostic decision-making over a wide range of situations
using techniques from psychological science. Scientists have developed
rigorous statistical procedures that have enormous potential to
increase the accuracy and usefulness of such diverse applications as
detecting breast cancer; improving weather forecasts; analyzing
structural flaws in airplanes; and possibly even predicting violence.
The second issue of PSPI assessed the validity of popular
psychological tests such as the well-known Rorschach and other
projective tests, finding that the tests have limited value despite
their widespread use in everything from diagnosing mental disorders to
determining which parent gets custody in a divorce. Upcoming reports
will address such questions as: Does class size matter? Do herbal
remedies improve memory or intelligence? Does SAT coaching work?
To ensure that PSPI reports will reach the widest possible
audience, we have been working with Scientific American to develop
articles for the magazine that will be based on the studies published
in Psychological Science in the Public Interest. We also are working
with nationally-known newspapers and radio and television networks to
reach an even wider audience. Our reports recently have been featured
in the New York Times, on National Public Radio, and in many other
outlets. I would be pleased to provide you with copies of the PSPI
reports and their Scientific American counterparts, or you can view
them on our website at www.psychologicalscience.org.
NSF is helping to support this initiative through a small grant
that is allowing the PSPI editorial board to evaluate and refine its
review and vetting processes, and is enabling the dissemination of the
research reports to a broader audience.
In closing, I want to note that building and sustaining the
capacity for innovation and discovery in the behavioral and social
sciences is a core goal of the National Science Foundation. We ask that
you encourage NSF's efforts in these areas, not just those activities
I've described here, but the full range of activities supported by the
SBE directorate and by NSF at large. As one example, NSF Director Rita
Colwell has announced that a major new initiative will be launched in
the behavioral and social sciences in fiscal year 2003. Your support in
fiscal year 2002 will help NSF lay the groundwork for this long-overdue
emphasis on these sciences.
Thank you again for the opportunity to appear before you to present
our recommendations. I would be pleased to answer questions or provide
additional information.
______

Prepared Statement of the National Association for Equal Opportunity in
Higher Education

background
Mr. Chairman and distinguished Members of the Subcommittee, I am
Dr. Henry Ponder, Chief Executive Officer and President of the National
Association for Equal Opportunity in Higher Education (NAFEO). I want
to thank you for allowing me to appear before you today as you consider
funding priorities relevant to the fiscal year 2002 VA-HUD-Independent
Agencies Appropriations bill. In the time that I have, I would like to
highlight many of the accomplishments of NAFEO as well as some of the
initiatives that we support and are looking to begin and/or expand upon
in the new millennium.
NAFEO is the national umbrella organization representing the
nation's 118 predominately and Historically Black Colleges and
Universities (HBCUs). Our mission is to champion the interests of HBCUs
through the executive, legislative and judicial branches of federal and
state government, and to articulate the need for a system of higher
education where race, ethnicity, socio-economic status, and previous
educational attainment levels are not determinants of either the
quantity or quality of higher education. The organization takes lead
responsibility for the development and dissemination of public policy,
programmatic efforts, and strategic and educational materials that: (1)
enhance the role of HBCUs generally, and (2) promote minority student
enrollment and attainment specifically. NAFEO is comprised of
institutions of higher education that represent a broad spectrum of
interests--public and private, large and small, urban and rural,
liberal arts, agricultural, research, scientific and technological
institutions. Of all of the HBCUs that belong to NAFEO, 46 percent are
public, and 54 percent are private. The organization's membership is
comprised of 2-year and 4-year institutions, as well as schools that
offer advanced and professional degrees, and they are situated in every
quarter of the country, the District of Columbia and the Virgin
Islands.
NAFEO was founded in 1969 at a time when the nation had before it
overwhelming evidence that educational inequality in higher education
remained manifest. The 1954 Supreme Court decision, ``Brown'' vs.
``Topeka Board of Education,'' and its progeny, focused national
attention on the dual and unequal primary and secondary education
systems nationwide and spurred two decades of litigation and
legislation designed to redress the inequalities. But, the initial
debate neither paid much attention to the inequalities in higher
education nor focused on the nation's HBCUs as equal opportunity
institutions; thus, a solution to some of the nation's higher education
issues was eluded.
NAFEO institutions historically are responsible for educating the
vast majority of African Americans. Today, while NAFEO institutions
enroll approximately 16 percent of all African American college
students, they confer about 30 percent of all the baccalaureate degrees
earned by African Americans annually. In some disciplines, such as
engineering and teacher education, the number is significantly higher.
Moreover, these schools produce the largest number of African American
baccalaureate recipients who eventually go on to receive doctorates,
especially in the sciences.
During the last two decades, many of the educational achievements
African Americans have experienced are directly attributable to NAFEO
and its member institutions. However, despite the progress, the
increases in college-going rates for African American high school
graduates have not kept pace with those of the white population. Ten
years ago, African American high school graduates enrolled in college
at a rate that was only 5 percentage points below that of white
graduates (28.0 percent vs. 33.0 percent). Today, there is a difference
of 8 percentage points (34.0 percent vs. 42.0 percent). Much of the
responsibility for ensuring greater educational access for African
Americans, closing the college entrance gaps and addressing emerging
trends at the national level, rests on the shoulders of NAFEO and its
member institutions. As a result, additional resources will be required
from the federal government and the private sector if achievement gaps
are to be closed in African American communities.
I would first like to acknowledge various programs under this
subcommittee that have been beneficial to HBCUs in the past.
Specifically, NAFEO supports additional funding in the areas identified
in the table below, which details our specific requests by relevant
department.

programs of special significance: expansion of undergraduate and
graduate research & development opportunities
The HBCU-UP Program
NAFEO is very concerned about the underrepresentation of African
Americans in the science, engineering and mathematics (SEM) fields,
which is a serious problem that affects our ability to compete in the
nation's scientific and technological workplace. This situation results
in the loss of opportunity for a large segment of society. As a result,
throughout the U.S., sweeping changes in social policy designed to
increase the self-reliance and self-sufficiency of citizens from
disadvantaged backgrounds are taking place. In order to ensure access
to employment opportunities in the emerging field of high technology
and other scientific areas, it is essential that vigorous efforts be
undertaken to increase the number of African Americans with degrees in
mathematics, the physical sciences and engineering. HBCUs should play a
critical role in addressing this problem because of their strong track
record in annually producing a disproportionately large number of
minority undergraduates with degrees in these fields. In this vein,
NAFEO requests $20 million in funding for the Historically Black
College and University Undergraduate Program (HBCU-UP), in an effort to
address the basic investment deficits that HBCUs face today,
particularly: faculty research grants, research experience for
undergraduates, and scientific instrumentation.
The HBCU Research University Science and Technology Initiative
This year, NAFEO is supporting the establishment of an initiative
that stimulates the competitive research and development (R&D) capacity
of HBCUs that provide doctoral degrees in science-related fields.
Specifically, we ask that $10 million be provided to support this
effort. There are ten HBCUs that provide graduate and doctoral degrees
in science-related fields--Alabama A&M University, Clark Atlanta
University, Florida A&M University, Hampton University, Jackson State
University, Morgan State University, Norfolk State University, North
Carolina A&T University, Tennessee State University, and the University
of Maryland, Eastern Shore. The National Science Foundation (NSF)
should take the lead in establishing the program, ultimately working to
expand the program to involve other relevant agencies. Appropriate
funds should be made available to implement the program, with uses
including, but not being limited to:
--Start-up funding for new faculty;
--Faculty exchanges and development;
--Academic instruction in disciplines where African Americans are
underrepresented;
--Instrumentation, supercomputing and science facility renovations;
and
--Supportive services for students in the graduate and doctoral
pipeline.
The ultimate objective of the effort would be to stimulate
competitive research and systemic change across the HBCU community.
Data assembled and disseminated by the federal government reveal
disturbing trends related to the participation of HBCUs in the federal
R&D enterprise. Based on data compiled by NSF, for 1999, about $14
billion was awarded by the federal government to all institutions of
higher education for R&D. Of this amount, only $164 million was awarded
to HBCUs, less than one percent. Even more disturbing is the fact that
these funding levels represent a decline in the amounts provided in
previous years ($202 million in 1995, and $188 million in 1996), while
overall funding in this area has increased (up from $12.8 billion in
1995 to over $14 billion today). Looking specifically at R&D funding
awarded by the National Science Foundation, while overall funding to
institutions of higher education was $1.9 billion in 1998, only 2.2
percent, or $43 million was awarded to HBCUs. This averages out to less
than $400,000 per HBCU institution, while the top 100 institutions
average $19 million per institution. Furthermore, data prepared by the
White House Initiative on HBCUs, shows the total NSF funding awarded to
HBCUs for fiscal year 1999 was just 1 percent of the total awarded to
all institutions of higher education.
Forty-two percent of all doctorates for African Americans are in
education compared to 19 percent for all U.S. citizens. Conversely,
African American representation in the sciences is very low. In 1999,
African Americans received the following number of doctorates of all
those awarded to U.S. citizens in the following fields: mathematics--10
of 538 (1.8 percent); computer science--16 of 412 (3.8 percent);
chemistry--46 of 1,251 (3.7 percent); physics--6 of 651 (0.9 percent);
engineering--84 of 2,474 (3.4 percent); and biological sciences 109 of
3,654 (3.0 percent).
Additionally, as noted previously, data reveal that HBCUs are the
primary producers of African American undergraduate students who pursue
graduate and doctoral degrees in science and technology (S&T) areas.
Specifically,
--Forty-two percent of all the PhDs earned each year by African
Americans are earned by graduates of HBCUs; 18 of the top 23
producers of African Americans who go on to receive science-
related PhDs are HBCUs.
--HBCUs are 4 of the top 10 producers of successful African American
medical school applicants. Those four HBCUs produce 20 percent
more African American applicants than the other six combined.
--Eight of the top 10 producers of African American engineers are
HBCUs.
the role of the federal government in educational research and
development
Historically, funding for federally-sponsored R&D activities have
been concentrated in a very small number of institutions of higher
education and states that were in the best position to take advantage
of an explosion in federally-funded academic research following World
War II. As A. Hunter Dupree notes in his book, ``Science in the Federal
Government'' (1957), this targeting of resources resulted from a
federal science policy that provided resources primarily to a select
group of federally-initiated and supported institutions. He also notes
in the concluding paragraphs of his treatise that a ``democracy that
has in fact enjoyed the results of science has been more tolerable,
more humane, and more able to fulfill its responsibilities to its
people . . . a government without considerable scientific competence
could not have governed at all . . . science has not only contributed
to the power of the government but to the ability of the people to
maintain their freedom.''
In taking a first step across the threshold of the new millennium,
industry, academia and policy makers increasingly are using federal R&D
resources as a way to strengthen our nation's global competitiveness
and to ensure economic stability. Most recently, they have embraced a
complex strategy that involves, in part, (1) doubling funding, over a
multi-year period, for the National Institutes of Health (NIH) and NSF;
(2) importing workers by expanding usage of H-1B certificates as an
anecdote to the difficult challenges presented by the ``digital
divide'' and growing shortage of technologically-skilled workers; and
(3) increasing funding for internet development and expansion, and
other programs related to telecommunications and information
technologies (IT). In this climate, Dupree's supposition that science
contributes not only to the power of government, but also to the
ability of a people to maintain their freedom, has serious implications
not only for the nation, but for African Americans and other
underrepresented groups.
However, in order to participate more actively in the federal R&D
enterprise, and to support national efforts to increase the number of
Americans equipped with advanced science and technology (S&T) skills, a
much larger number African Americans and persons from other minority
groups will need to receive graduate degrees in S&T fields. In fact,
reiterating disturbing trends that have been widely reported for almost
two decades, an April 2000 report published by the National Science and
Technology Council (NSTC) concludes that:
--Many types of science, technology, and engineering (ST&E) jobs are
among the fastest growing in the U.S. workforce, to the point
that demand for workers has outstripped supply;
--There is already evidence that worker shortages are limiting
economic growth;
--The potential shortage of skilled workers could have devastating
consequences for the future. Since it takes many years to train
a scientist or engineer, we must invest now to guarantee the
availability of a skilled and competent workforce for the 21st
century;
--Agencies should expand or add programs that effectively overcome
barriers such as the transition from one educational level to
the next;
--It is in the national interest to vigorously pursue the development
of domestic ST&E workers from all ethnic and gender groups. We
should pay special attention to groups that are currently
underrepresented in the ST&E workforce, because it is with
these groups that much of our nation's growing talent pool
resides.
Originally authorized in 1950, explicit in the NSF's mandate was a
caveat to refrain from any ``undue concentration'' of funding for
research and development. The legislation states:

``In exercising the authority and discharging the functions
referred to in the foregoing subsections, it shall be an objective of
the Foundation to strengthen research and education in the sciences and
engineering, including independent research by individuals, throughout
the United States, and to avoid undue concentration of such research
and education.'' (42 U.S.C. 1862, Sec. 3e)

In light of this legislative guidance and for the reasons stated
previously, NAFEO seeks sufficient funding to for programs that will
engage more fully HBCUs in mainstream federally-sponsored research and
development efforts.
This concludes my testimony. Again, on behalf of the National
Association for Equal Opportunity in Higher Education, I want to thank
you for the opportunity to appear before you today.
______

Prepared Statement of the NAHB Research Center

Mr. Chairman, Senator Mikulski and Members of the Subcommittee: I
am pleased to appear before you today to request continued funding for
the Partnership for Advancing Technology in Housing (PATH) initiative.
I commend this Subcommittee for its foresight and leadership in
providing funding for the PATH initiative. We believe PATH should not
only be maintained but also increased, for if the PATH program is to
achieve its 2010 goals it has to have a long term federal commitment,
leveraging even greater investment by industry.
As you know, PATH is a voluntary initiative which seeks to
accelerate the creation and widespread use of advanced technologies in
order to radically improve the quality, durability, environmental
performance, disaster resistance, energy efficiency and affordability
of our nation's housing by 2010. These are ambitious goals. In fact,
the National Academy of Sciences has suggested that they may be too
ambitious given the limited funding allocated to the program to date.
The industry steering committee agrees with the Academy's finding in
this regard and has put together a task force to address redefining the
goals in such a way that progress can be measured and the
reasonableness of the goals evaluated.
I am pleased to report significant progress over the past year on
many of the activities that were presented to the Subcommittee in the
PATH Operating Plan. Yet, if America's homes are going to be more
affordable, safer to build and to live in, more environmentally
sensitive, and more durable, PATH still has a long way to go. In that
regard, I would like to emphasize the research and technology
activities that are underway as they speak to the long-term success of
the program.
Technology roadmapping is the process of organizing research and
development activities to help decide which technologies are worth
spending time, money, and resources on. A roadmapping effort for PATH
takes into consideration those home building technologies with the most
potential to impact the PATH goals as well as ways to fund their
research, development, dissemination, and use. The roadmapping process
has, for the first time, brought together a broad and diverse segment
of the home building industry together with government and academia to
identify what technological developments are needed for PATH to achieve
its goals. There have been hundreds of industry participants in this
process working primarily in three areas: information technology to
accelerate and streamline home building; advanced panelization systems;
and, whole-house and building process redesign.
To illustrate both the complexity and the potential, I will talk
specifically about just one area, that of information technology.
Advancements in information technology offer exciting opportunities to
build better homes at lower cost, but it is a complex undertaking.
Process change that takes advantage of the benefits of current and
emerging information technologies is critical to the undertaking. For
example, if electronic permitting involves just electronic delivery of
plans, little time is saved out of what could be a months-long process.
However, if the application is checked in parallel by the various code
departments and required changes are immediately transmitted to the
contractor for initiating corrective actions, much more time can be
saved during the process. Just this one example has to involve
builders, manufacturers, local government leadership, code departments,
software manufacturers, and other players. But, the payoff can be very
significant, and potentially a significant contributor to meeting the
2010 goals set for the program.
Industry investment in PATH is considerable. Although there was
skepticism at the outset that a government partnership could make a
difference, industry participation has been exceptional. Private sector
commitments to cooperative research projects with the federal
government under PATH now exceed $5 million. In addition, it is
estimated that PATH leverages another $50 million in private sector
research and development that is directed toward APTH program goals.
New Cooperative Research and Development initiatives have been
instigated with seed funding from HUD and the PATH Program. A program
with the CertainTeed Corporation is aimed at increasing the
affordability and quality of homes by finding efficiencies in the basic
approach used to build homes, with an emphasis on business and
construction processes. Results will provide savings to be shared with
subcontractors and their labor crews to build a more stable workforce.
Other exciting cooperative efforts include: optimizing the use of steel
in production home building, 11 grants to 9 Universities co-funded by
PATH and NSF for basic research on new technologies that will support
the next generation of U.S. housing, and multiple projects in
partnership with NIST and industry leaders from Dow Corning, GE
Plastics, Rohm & Haas, and others on nonproprietary research to improve
long-term performance of building materials.
Field Evaluations and Demonstrations are underway involving the
support of approximately thirty builders and remodelers across the U.S.
who are helping the Research Center to evaluate emerging technologies
in their housing projects. In addition, there are field evaluations
underway with non-profit groups such as Habitat for Humanity and
several projects with the American Lung Association to monitor indoor
air quality which are coming up with interesting findings. The results
of these evaluations and demonstrations will be communicated broadly to
the industry through the ToolBase program described below, as well as
through the HUD website. Industry commitment to date in these
evaluation activities is substantial and will continue to grow as new
technologies are developed to address the PATH goals and builders from
across the country offer to evaluate their performance, installed cost,
installation issues, and consumer acceptance in real world housing
projects.
Both industry and government agree that essential to improving the
bricks and mortar of our housing and achieving the PATH goals is a
strong information dissemination effort.
Communications and Outreach for the PATH program is accomplished
through the NAHB Research Center's ToolBase program. Because the
building industry is comprised of over 200,000 firms, many innovations
do not achieve market acceptance for 15-20 years. The Research Center
built a new communications infrastructure for reaching these companies
quickly and efficiently to let them know of emerging problems in the
field but also to help them find technical solutions that they can
immediately put into practice. Through PATH program support this
ToolBase program has expanded its technical offerings to builders and
contractors and has set up new mechanisms for learning about problems
in the field that can be solved through technical research and
development. A technical hotline is in place that fields between 8,000
and 10,000 calls each year. Hotline staff help builders understand what
resources are available to help them make decisions on the use of new
technologies. A technical newsletter is distributed six times per year
to over 80,000 companies through their local home builder associations.
A wide range of resources is now available on the Internet, including
an Ask the Expert page that allows the industry to find solutions on-
line and a new E-News monthly technology news service that is
distributed for free to subscribers. The ToolBase program reports the
results of PATH program results directly to the industry so that we can
help them reduce the time that it takes to bring innovative new
products to market. ToolBase is another source of industry investment
in the PATH program. Over $3 million has been invested by the private
sector to date in the development of the ToolBase communications
infrastructure.
Outreach to the industry is also accomplished through the specialty
trade shows and conferences. In February, PATH co-sponsored TecHOMExpo
in Atlanta, Georgia putting on over 20 educational programs and over
100,000 square feet of exhibits. Both PATH and EPA are sponsors and
advisors for the National Green Building Conference. This year's
conference in Seattle, Washington March 18-20, included participation
from the Sierra Club and the American Association for the Advancement
of Science (AAAS). PATH is a contributing sponsor for this event, sits
on the advisory committee, and led two education sessions for
attendees.
While much has been accomplished, there is still much to do. The
current PATH budget level of $10 million will not fully support, in a
timely manner, the research and development needs identified through
the roadmapping process. If the subcommittee's budget allocation
permits, we believe an additional $3 million, for a program level of
$13 million, could leverage a much higher rate of industry involvement
and increased private sector research and development.
Again, members of the subcommittee, we thank you for your
leadership in support of the PATH initiative, and please let me know if
we can answer any questions.
______

Prepared Statement of the Society for Neuroscience

Mr. Chairman my name is Donald Price. I am the President of the
Society for Neuroscience and a Professor of Pathology, Neurology, and
Neuroscience at The Johns Hopkins University School of Medicine. I am
also Director of the Division of Neuropathology and Director of the
Alzheimer's Disease Research Center. I also serve as the Co-Director of
the Parkinson's Disease Research Center and Co-Director of the
Amyotrophic Lateral Sclerosis Research Center at The Johns Hopkins
Hospital and The Johns Hopkins University School of Medicine. I am
testifying on behalf of the Society for Neuroscience, the largest
scientific organization in the world dedicated to the study of the
brain and nervous system. Neuroscience forms the fundamental basis of
the medical specialties of psychiatry, neurology, neurosurgery, and an
important portion of many other medical specialties including
anesthesia, endocrinology, geriatrics, internal medicine,
ophthalmology, otolaryngology, pediatrics, and rehabilitation medicine.
The Society for Neuroscience numbers among its members more than 28,000
basic and clinical researchers affiliated with universities, hospitals
and scientific institutions throughout North America and in other
countries.
Chairman Bond, the Society appreciates this opportunity to give
testimony, and we thank the members of this Subcommittee and the entire
Congress for the priority that was placed on funding biomedical
research at the National Science Foundation (NSF) and the Veterans
Administration (VA) last year.
The Society for Neuroscience requests increased research funding
for the National Science Foundation and for the Department of Veterans
Affairs to facilitate the progress of research already being conducted
at these institutions, and to aid in the funding of future projects and
grants.
national science foundation
The NSF is one of our nation's premier scientific agencies and is
responsible for extraordinary contributions to a broad range of
scientific knowledge cutting across numerous scientific disciplines.
The success of the research funded by NSF is evidenced by the over 100
Nobel prizes that have been awarded to researchers supported by NSF
grants. The cross-cutting nature of the scientific research supported
by NSF grants has allowed investigators from each of the separate
scientific disciplines to benefit from the work performed by colleagues
in other fields. NSF-supported research embodies a collaborative
enterprise and the results have provided immense benefits in our search
for knowledge, and in our search for treatments and cures to deadly
diseases.
The President's fiscal year 2002 budget for the National Science
Foundation requests $4.5 billion, a one percent increase over fiscal
year 2001. While additional details regarding the President's budget
have not yet been made available, this recommendation is particularly
disappointing considering the strong support the Congress demonstrated
last year by providing NSF with a nearly 14 percent increase. The
Society for Neuroscience strongly recommends substantial increases in
funding for the National Science Foundation in line with the increase
provided by Congress last year.
NSF-supported neuroscience research has played a major role in
improving our understanding of neurological and mental disorders. The
quality of this research was once again recognized by the Nobel
Assembly with the awarding last year of the Nobel Prize in Physiology
or Medicine to Dr. Paul Greengard, an NSF grantee. (This was a joint
award to Dr. Greengard and two other scientists). Dr. Greengard's
research has resulted in a substantially increased understanding of how
the brain and nervous system function at the molecular level.
Greengard's work has helped us understand how dopamine and several
other chemical transmitters exert their effects in the nerve cell.
In addition to the pioneering research conducted by Dr. Greengard,
NSF funds hundreds of studies in the area of basic neuroscience, and
these studies have contributed immensely to our knowledge of the brain
and central nervous system. The cross-disciplinary approach employed by
NSF is particularly beneficial to research on the brain and central
nervous system. New engineering advances, for example, have led to new
and more powerful imaging technologies, which have greatly aided
researchers in their study of the brain.
The Society for Neuroscience strongly supports the National
Nanotechnology Initiative announced last year. Nanotechnology--the
ability to manipulate individual atoms and molecules--has the potential
to change the way in which almost everything is made, including new
medicines. The Society urges continued support for this important
initiative and recognition of nanotechnology as a high priority area of
research.
department of veterans affairs
VA-sponsored research is unique among many of the federal research
programs in that the majority of its work involves clinical research
performed by physician investigators. The nation's medical research
enterprise benefits, our nation's veterans benefit, and we all benefit
from the VA's ability to integrate clinical and basic research. This
integration allows the VA to effectively promote the rapid transfer of
new medical knowledge from bench to bedside.
The Society for Neuroscience asks that this Subcommittee provide
sustained increases in funding for medical research at the VA that is
in line with the nearly 10 percent increase provided last year. We
support the recommendations of the Friends of the VA Medical Care and
Health Research (FOVA) coalition and the Independent Budget for the
Veteran's Administration. Both organizations have recommended an
increase of $45 million for the VA's Medical and Prosthetic Research
Program, an increase of 12.5 percent over last year's funding level.
Funding for the VA Medical and Prosthetic Research Program has gone
through periods of stagnation and sporadic increases over the last
several years. This important medical research program was suffering
from relatively flat funding levels for several years with the notable
exception of fiscal year 1999 and fiscal year 2001 when Congress
provided increases of 16 percent and 9 percent respectively. I would
also note that the VA has consistently stated that it could do much
more if it is provided with additional resources. Last year, for
example, the VA requested an increase of $76 million. Unfortunately,
this request did not make it past the Office of Management and Budget
(OMB), which slashed the agency's request for an increase in research
funds to $0. Congress wisely rejected this recommendation.
The VA has identified four major areas in which it would put
additional funds to use. The neurosciences are included in all of these
major areas. First, are major new treatment studies in Parkinson's
disease, Post-Traumatic Stress Disorder (PTSD), diabetes, and other
areas. Second is improvement in the VA's quality enhancement research
initiative. The VA has stated that this initiative is severely
underfunded in vitally important areas including mental health, spinal
cord injury, stroke, cerebral vascular disease, and AIDS. The third
major area identified by the VA is brain disease, with a focus on nerve
regeneration and its application to spinal cord injury. This area of
research represents a prime example of the importance of linking basic
and clinical research. The fourth and final major area identified by
the VA is what the agency refers to as bioscience. The VA noted in its
testimony last year that its research efforts in diseases such as
schizophrenia are severely underfunded. The agency also noted that it
would be reducing its commitment to the VA centers of excellence by
half in fiscal year 2000.
Mr. Chairman, the VA medical system serves a critically important
role by providing our nation's veterans with access to highly skilled
medical care while also providing researchers with an opportunity to
conduct large, long-term, pivotal clinical trials benefiting all
Americans. Unfortunately, flat funding levels for several years, with
sporadic increases, have inhibited the VA's ability to recruit and
maintain high-quality researchers.
summary
The Society for Neuroscience asks that this subcommittee support a
$674 million, or 15 percent, increase over fiscal year 2001 for the
total NSF budget, bringing it to $5.1 billion. The Society for
Neuroscience recommends $395 million for the VA Medical and Prosthetic
Research program in fiscal year 2002, an increase of $45 million, or
12.5 percent, over fiscal year 2001. We strongly believe that the
research programs we advocate area worthy investment in our country's
future, and we urge you to place NSF and VA research among the
Subcommittee's highest priorities.
Thank you for the consideration of our request.
______

Prepared Statement of the Coalition of EPSCoR States

Mr. Chairman and members of the Subcommittee, thank you for the
opportunity to submit this testimony on behalf of the Coalition of
EPSCoR \1\ regarding the National Science Foundation's Experimental
Program to Stimulate Competitive Research (EPSCoR). I am the State
Program Director for Alabama EPSCoR.
---------------------------------------------------------------------------
\1\ Alabama, Alaska, Arkansas, Idaho, Kansas, Kentucky, Louisiana,
Maine, Mississippi, Montana, Nebraska, Nevada, North Dakota, Oklahoma,
Puerto Rico, South Carolina, South Dakota, Vermont, West Virginia, and
Wyoming.
---------------------------------------------------------------------------
As most of you know, the Experimental Program to Stimulate
Competitive Research (EPSCoR) was established at the National Science
Foundation about 20 years ago to assist those states, which
historically had not participated fully in federal research and
development (R&D) funding to become more competitive, especially for
NSF funding and later for NIH, DOD and other federal R&D funding.
Historically, these states were less competitive than others throughout
the nation for a variety of reasons--some tended to be rural and
geographically isolated (at least prior to the Internet); others tended
to be among the states with large numbers of students who were under-
represented minorities or disadvantaged economically; and some were
states that traditionally invested more heavily in an agriculture and a
natural resource research base than a technological one. For these
reasons the EPSCoR states simply did not benefit from the large federal
institutional development investments made to universities and colleges
in the 1950s and 1960s, as part of a national effort to broaden and
strengthen the U.S. public university system and its R&D capability.
Helping these ``less research intensive'' states grow to be more
competitive has become more important in recent years in order to
overcome the concentration of federal R&D funding in a few states and
institutions and to create a broader research community throughout the
nation. Today, all states should be full participants in federal R&D
efforts and federal R&D support should be available to qualified
students and researchers wherever they are.
The EPSCoR program started with only five states. It grew to its
current number of nineteen states and Puerto Rico as more states came
to realize the need to raise the research capabilities to new levels in
certain states, and the value of a program that emphasized
infrastructure and capacity building. Simply funding faculty research
proposals was never going to move these states to a level where they
could contribute to local, state and national S&T needs and economic
competitive goals.
The EPSCoR program remained a very small program for the first half
of its life. Its budget was only $8 million federal-wide in 1990 for
all the states. It has only been in the last seven to eight years that
we have seen real increases in funding and the extension of the program
to agencies outside of the NSF. For those of us in the EPSCoR states,
these have been welcome advances but we also understand that they have
been extremely modest in comparison to the overall increases in total
federal R&D funding. We also know that research infrastructures are not
developed overnight, especially with these modest investments.
Today, however, I want to emphasize the importance of this program
to my state of Alabama and other participating states. Let me give you
a few examples from Alabama. The Quantum Research Corporation in its
2000 State-at-a-Glance report to NSF indicated that, over the life of
the Alabama EPSCoR program, the NSF investment of $13 million in EPSCoR
researchers in Alabama through 1996 has resulted in $56.1 million in
non-EPSCoR awards to those same researchers from NSF, NASA and NIH; a
4.3 to 1 return. The return would be higher if DOE, EPA and other
agencies were included.
How has the EPSCoR program allowed us to achieve such a return on
NSF's investment? First and most importantly, the EPSCoR program builds
capacity. It does not simply support research by individual faculty,
but rather, assists us in securing the equipment, faculty start-up
packages, graduate students, professional development opportunities and
other things that enable our institutions to compete for other funding.
These are the basic infrastructure needs in most institutions seeking
to expand their research programs.
The cornerstone of the NSF EPSCoR program is the Research
Infrastructure Improvement (RII) awards. It is these awards that have
proven to be so highly successful and critically important to the
states' efforts to increase and sustain a more focused and competitive
academic science and technology base. It is the RII awards that
strengthen our ability to compete favorably for mainstream program
funds at the NSF, other agencies and for private sector dollars.
In addition to infrastructure, there is a component in the NSF
EPSCoR called co-funding. This is designed to help EPSCoR researchers
obtain research support from the regular NSF funding streams. The co-
funded projects are supported by a combination of funds from the EPSCoR
program itself and also from funding in the NSF Research Directorates.
NSF plans to continue and expand co-funding, which we also support, but
again, we do not want co-funding to divert resources from the critical
need for infrastructure development.
To give you a concrete example of an EPSCoR program, I will
highlight Alabama's NSF EPSCoR programs. On February 1, 2001, the
Alabama EPSCoR was awarded a Research Improvement Infrastructure grant
from NSF that will bring $9 million of NSF funds along with $5.9
million of non-federal matching funds over three years. This new RII
grant will fund research development activities at eight institutions
of higher learning in Alabama: Alabama A&M University (AAMU), the
University of Alabama (UA), the University of Alabama at Birmingham
(UAB), the University of Alabama at Huntsville (UAH), Tuskegee
University (TU), the University of South Alabama (USA), Shelton State
Community College and education efforts at K-12 institutions: Alabama
School of Math and Science in Mobile and Tuscaloosa County Schools. The
project includes thirteen industrial partners from Alabama, Colorado,
Kansas, New York, and California and additional partnerships with NASA
and Oak Ridge National Laboratory. While the specific R&D areas under
development vary across states, Alabama's program is similar to EPSCoR
efforts in the other 19 participating states.
Within the EPSCoR programs in every state, efforts continue to
identify (1) research areas in which to concentrate limited state
resources and (2) the barriers that must be removed to attain
nationally competitive science and engineering research and education
programs in Alabama. A critical need for EPSCoR states and universities
is to overcome a lack of critical mass (i.e. too few faculty in a given
area of research) by collaborating inside the state and with outside
partners. In Alabama, to build critical mass, increase shared
resources, and improve human resource development, the new NSF project
supports the development of three Centers of Excellence and an
Interconnective high-speed computing networking infrastructure:
--Alabama Structural Biology Consortium (ASBC).--At three
universities (UAH, USA, and UAB) researchers are addressing
important scientific problems through collaborative use of
expensive instrumentation and specialized expertise, while
fostering partnerships with our biotech industries;
--Integrated Micro-Electromechanical Systems (IMEMS).--UAH, AU, TU,
and UA propose a new IMEMS facility on the University of
Alabama at Huntsville campus that will expand existing
technology in the State by improving and building on
micromachining and nano/microfabrication capabilities for
fiber-optics and chip production ( a critical need for local
industry.
--Large-Scale Electromechanical Systems (LEMS).--Composed of two
Alabama universities, one community college, one university
from another EPSCoR state, a K-12 institution, 11 industrial
partners, and two federal laboratories/agencies, LEMS will
expand existing capabilities for economic development in
medium-and large-scale mechanical systems used by industry
while increasing the pool of researchers and training
practitioners/technicians to meet Industry's need for a highly
skilled workforce.
--Internet2 Initiative.--The NSF recognized Alabama's leadership in
the computational sciences by supporting the ``Alabama Internet
2'' project which has constructed a high performance
communications network connecting the Alabama Supercomputer
Center and seven of Alabama's research universities. This
network has begun to allow Alabama to become more competitive
with other states that already have a high performance network
for research and education. Internet 2 has reduced research
costs and time. Any faculty member on a given research campus
now has direct, and timely, access to resources that are not
physically close to the campus. The ability to access data,
instrumentation, and collaborate electronically allows both
increased interaction and competition equal with the rest of
the research community.
I would like to point out that when NSF announced several years ago
a vBNS connections program that was to create a second generation
Internet for research purposes, the early announcements mentioned
connecting up to 100 institutions to the new network. In the first
three competitions, of the more than 70 awards granted, only one went
to an EPSCoR state. Almost one-third of the country was again being
left out of a major program that was likely to impact research
competitiveness for many years to come. Furthermore, it was this same
one-third of the country--the EPSCoR states and universities (which
needed this infrastructure most and which stood to gain more than
others because of geographic isolation.
Fortunately, through the excellent efforts of the EPSCoR office at
NSF, the program officers in the NSF's Computer Information Science and
Engineering (CISE) Directorate, and perhaps a little noise from our
states, there is now at least one high-speed connection in every state,
including all the EPSCoR states. Furthermore, we have been brought into
a number of the associated programs, which are working on a national
supercomputing grid, applications and uses of the network, and distance
education.
We currently have many of the same concerns that we had over
networking--that is, exclusion--from other new initiatives such as
nanotechnology, biodiversity, information technology, workforce
training and development. These are new initiatives at NSF. They are
important initiatives for the economy of our states and the U.S.
competitiveness in the global marketplace. They are important to future
economic vitality and growth in every state. In a mobile society and a
global economy that is highly dependent upon science and technology, no
state can afford to be left behind in these important endeavors.
NSF EPSCoR is helping us ensure, through its research
infrastructure improvement awards and co-funding, that our states have
an opportunity to develop these new fields. This is vitally important
to the economy of each of our states and especially to our young people
who live therein. Despite increased mobility, the vast majority of
students still attend college within 100 miles of home. EPSCoR helps to
guarantee that students and residents of all states have the access to
high-quality education, front-line research, and the quality of life
and jobs that comes with an active and competitive R&D base.
The EPSCoR program solicitation, released in January 2000 allowed
states to request up to $3 million a year for three years during the
competitions held after July 2000. Consequently, we urge the
subcommittee to continue support for EPSCoR by appropriating $90
million in fiscal year 2002 funding for the NSF EPSCoR core program in
the NSF Education and Human Resources Directorate. This funding will:
(1) allow the NSF EPSCoR program to implement its expanded core program
to continue building our infrastructure and expertise in areas of
scientific importance to the states and nation; and (2) increase co-
funding and assistance to our states so that the number of scientists
and engineers in the EPSCoR states and universities that receive
competitive federal R&D support continues to grow.
In this regard we are particularly supportive of NSF efforts to
increase our participation in large-scale initiatives such as the
Integrative Graduate Education and Research Traineeship (IGERT),
materials science initiatives, nano-scale initiatives, and the new
large-scale centers for learning and teaching. I would like to note
that in Alabama, the Talladega Wetland Ecosystem recently won a
prestigious NSF-IGERT grant to fund faculty in the departments of
biological sciences, geography and geology; allowing research into
real-world problem solving via ``externships'' with federal/state
agencies, and a new course curriculum using distance learning
technology.
While EPSCoR is very important to us, on behalf of the Coalition of
EPSCoR states, I would like to express our support for a strong NSF
budget in fiscal year 2002. NSF is the only federal agency whose
singular mission is the support of basic research and education across
scientific, mathematical, and engineering disciplines. Furthermore, NSF
awarded more than two-thirds of the NSF budget to colleges and
universities for research and education activities in fiscal year 1999.
As Federal Reserve Board Chairman Alan Greenspan said, ``If we are to
remain preeminent in transforming knowledge into economic value,
America's system of higher education must remain the world's leader in
generating scientific and technological breakthroughs and in meeting
the challenge to educate workers.'' NSF's programs are at the heart of
a new knowledge generation across all fields.
On behalf of the Coalition of EPSCoR states, I am here to tell you
that the relatively modest NSF investment in EPSCoR is playing a unique
role in developing a truly nationwide science and technology
capability. A strong EPSCoR is a sound investment for our nation's
future. A strong budget for NSF however, is critical to increased
inclusion of talented scientists and students in science and
technology.
The activities sponsored by the Alabama EPSCoR affect the lives of
Alabama citizens in numerous ways. Our activities have increased
economic development, health care, technology, education, research and
communication in Alabama.
We appreciate the strong support you have given us in the past. We
have used the EPSCoR funding wisely to benefit our states and the
nation, and we hope that you will continue to work with us on this
issue in the coming year.
As you also know, Congress has appropriated $10 million for the
NASA EPSCoR program in each of the last three fiscal years. Currently,
there are twenty states that are eligible for NASA EPSCoR, but only
half have ever received a NASA EPSCoR implementation award. We ask for
a $12 million appropriation in fiscal year 2002 to increase state
participation in NASA EPSCoR. In the fall of 2000, following a planning
process in each state, NASA issued a new solicitation for EPSCoR
proposals in the states. Each state has now submitted proposals and new
awards will be made shortly. The $12 million requested would provide
continued support for 10 states currently in the program and new
research infrastructure awards to more states. Also, a small amount,
less than $1 million would be available, for outreach and technical
assistance to the states. EPSCoR is a small program at NASA but it is
very important for the 20 states that participate in it. Its high
technology focus truly allows these states to become research partners
in activities that would otherwise likely be closed to them.
Thank you for your consideration of this request.
______

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

Prepared Statement of the Association of American Universities

The Space Science Working Group (SSWG) of the Association of
American Universities includes several hundred space scientists at
approximately fifty universities nationwide. SSWG scientists work in
all three NASA science areas (Office of Space Sciences, OSS; Earth
Science Enterprise, ESE; Office of Biological and Physical Research,
OBPR), building instruments for NASA missions, carrying out
experimental and theoretical investigations, and bringing hands-on
experience of exciting NASA science to graduate and undergraduate
students. Areas of interest and concern to us this year include:
--International Traffic in Arms Regulations (ITAR),
--International Space Station (ISS) descoping,
--Research & Analysis and Data Analysis funding, and
--Cancellation of the UnESS program in the Office of Earth Science.
general issues
International Traffic in Arms Regulations (ITAR)
Last year, this Subcommittee included language in both the House
and conference reports that directed the Office of Science and
Technology Policy (OSTP) to work jointly with the National Security
Council, NASA Administrator, and the Secretary of State to
expeditiously issue clarification of ITAR in order to relieve pressure
on university collaborations and personnel exchanges. The review was to
be completed within 120 days of enactment.
Over the last year, increasingly strict interpretations of the ITAR
regulations have continued to frustrate university scientists.
Clarification has yet to be issued, although we understand that
negotiations are continuing between NASA, OSTP, and the State
Department. We appreciate the attention that OSTP and the NASA
Administrator's office have given to this issue. The State Department's
Science Advisor has also been very supportive. Nevertheless, given the
change in administrations and the resultant loss of knowledgeable
personnel, we are concerned that if clarification is not issued within
the next few weeks, we may find ourselves back at the starting point
once again.
Science is an international activity, and space science in
particular has long thrived through collaboration with foreign-born
colleagues. We continue to believe that ITAR restrictions on scientists
carrying out unclassified research on civilian spacecraft do not serve
any national security purpose. Carrying out spaceflight missions is a
difficult task for researchers in and of itself; carrying out this
activity in a thicket of legal restrictions with threats of huge
personal fines is impossible. It will shut off collaboration with our
foreign colleagues, causing U.S. researchers to ``go it alone'' in
space research, to everyone's loss. Some universities have already
declined to participate in certain NASA projects given the legal
uncertainties.
While recognizing that ITAR is not a budget issue, we nevertheless
ask for your continued support in clarifying that these ITAR
restrictions are not applicable to civilian, unclassified, fundamental
space science research. We note that an existing directive, National
Security Decision Directive 189, competently addresses the issue we are
facing and that, by simply affirming its viability and its
applicability to U.S. universities' aeronautics programs and space-
based research, the need for a complicated fix can be avoided. We
recognize that other Congressional committees have jurisdiction over
this matter as well, and we will also work with them to resolve this
matter.
Possible Impacts on Science of the International Space Station (ISS)
Decsoping
The SSWG is aware of the potential $4 billion cost overrun of the
International Space Station (ISS) over the next five years. We are
greatly concerned, however, that the resultant descoping will
jeopardize the science programs and urge that steps be taken to protect
research capabilities. The quality of the research facilities is a
crucial factor in determining the value of the ISS scientific program.
Experience accumulated over the last fifteen years has taught us how to
design experimental instrumentation that will maximize the productivity
of on-orbit research. This includes the availability of versatile and
reconfigurable scientific capabilities that will be ``permanently''
available on the ISS and hardware that mimics Earth-based instruments.
Such basic infrastructure is required to minimize the amount of traffic
to and from low-Earth orbit. The availability of the currently
scheduled major science facilities must be protected from any budget
cutback. Productivity on the ISS will be shown to be a major
improvement over the old Shuttle-Spacelab-Mir era through the use of
dedicated research facilities.
There is already a queue of over one hundred flight investigations
waiting their turn for access to these on-orbit facilities. These
investigations encompass five disciplines in the physical sciences in
addition to biological and biomedical research. Although NASA
emphasizes the biomedical research associated with crew health
maintenance and preservation, a large number of investigations address
cutting-edge scientific problems of fundamental importance, but also
with direct application to Earth-based technological, industrial, and
health issues. Advances in the scientific understanding of these issues
can be significantly advanced through low-gravity experiments.
The astrophysics community is also concerned about possible large
scale descoping. One highly rated near-term mission concept, the
Advanced Cosmic Ray Composition Experiment for the Space Station
(ACCESS), is critically dependent on an ISS berth. This mission will
measure the composition of high-energy cosmic rays, the origin of which
is problematical. This information will be used to directly test the
idea that these relativistic particles originate in supernova
explosions. The astronomical community is committed to development of
ACCESS, and the mission is an important part of the Office of Space
Science Strategic plan, a consensus document crafted with strong
participation by academic scientists. The mission is featured
prominently in the priority lists of the recently issued National
Research Council report on ``Astronomy and Astrophysics in the New
Millenium'', the McKee-Taylor Decade report. This massive mission would
be vastly more expensive as a free-flyer, and the SSWG wishes to
underscore the importance of a berth for it on the ISS. The same P3
berth on the truss will be used later for the X-Ray Imaging Survey
Telescope (EXIST) which will survey the universe for black holes.
office of space science (oss)
Current and Future Initiatives
The launch and successful deployment of Chandra, the third of four
in the Great Observatories series, has marked our country's leadership
in X-ray astronomy, and has already resulted in important and
fascinating discoveries. The observatory has identified the distant
galaxies that account for the diffuse X-ray background, and has worked
with the Hubble Space Telescope to provide a new understanding of
supermassive black holes in the centers of galaxies like our own.
Galileo and Mars Surveyor have uncovered evidence of large quantities
of water on Mars and two moons of Jupiter. The touchdown of the NEAR
spacecraft on the asteroid Eros was an event that, in particular,
captured public enthusiasm. All of these missions have strong academic
components, and much of the key science has come out of the university
environment. Moreover, their success augurs well for future
achievements by the Mars and Discovery programs.
The budget blueprint refers to funding for development of critical
technology to support future decisions on high-energy astrophysics
missions. The SSWG enthusiastically supports such funding, and points
out that such funds have been virtually non-existent for several years.
With the successful development of the Chandra Observatory, our
community looks ahead to top priority projects like Constellation-X and
LISA. While these mission concepts are well understood and have goals
that are clearly achievable, the economy with which they are developed
and realization of their full capabilities will benefit from a
strategic investment of resources in, for example, detector technology
and formation flying. As part of the Supporting Research and Technology
(SR&T) line, these funds will be actively competed for by academia.
Strategic Planning
The SSWG notes that the triennial strategic planning exercise for
NASA is now complete, with responsibly prioritized missions. The OSS
strategic plan is entirely consistent with the community needs for
astrophysics that have been expressed in the McKee-Taylor Decade
Report. Hard choices have been made, and our community is ready to move
forward.
Research and Analysis (R&A) and Data Analysis (DA)
The SSWG would like to thank the committee for its interest in and
support for the Research and Analysis program line in the last fiscal
year. This program line is built on the recognition that creative ideas
for future missions can come out of basic, non-mission-specific
research. Such research includes laboratory studies, theoretical
studies, and development and validation of new instrument concepts. The
SSWG would like to underscore the importance of this funding line to
academic institutions around the country. Distributed mostly in the
form of small grants, the line provides for on-the-job training for the
next generation of space scientists, and engages them in far-term
thinking about strategic needs. The SSWG applauds the triennial Senior
Review of this funding. Such reviews allow NASA to allocate the limited
funding in a way that is best suited to meeting the long-range goals of
the strategic plans of the agency.
The SSWG also notes that many of the R&A needs of astronomy
programs supported by the National Science Foundation parallel those
supported by NASA. Flexible resources for research are a critical
element of a healthy national science policy, and are, in fact, a major
part of the mission of the NSF. The ongoing lean budgets for R&A at
NASA and for the astronomy grants program at NSF are, therefore, major
weaknesses in U.S. astronomical research efforts.
Problems continue to exist in Supporting Research and Technology
line, however. For example, in the solar system exploration area, funds
for mission operations and data analysis continue to be tight, meaning
that important scientific research is not being supported. Slow
processing of research grants that have been selected for funding has
exacerbated the problem.
office of biological and physical research (bpr)
The life and microgravity science communities were generally
encouraged last year by the creation of a new Enterprise for biological
and physical research. Establishing the new Office of Biological and
Physical Research (OBPR) underscored the growing importance of these
disciplines within NASA. However, recent events have led to extreme
concerns regarding the future of these disciplines and their
communities. Rather than demonstrating the expected significant growth
of a new Enterprise, the complete loss of one, or more, of these
disciplines is a real possibility.
The fiscal year 2002 proposal for the OBPR shows no significant
increase over fiscal year 2001, except for modest gains in the level of
support to the National Space Biomedical Research Institute. This was
not unexpected considering the recent creation of the Enterprise.
However, the recent budget outline announced by the Administration
projects only slightly increased funding for NASA, concurrent with
significant cost overruns in the International Space Station (ISS)
Program. To internally absorb these deficits, as noted earlier, NASA
has identified significant reductions in ISS infrastructure (deferral
of habitation and propulsion modules, deletion of the crew return
vehicle, and reduction of solar array power capacity). As these
measures will be insufficient to meet the deficit requirement,
additional ISS assets (i.e., the centrifuge accommodation module (CAM)
and its research equipment complement--all items of international
barter agreements), discipline ground research programs, and recently-
added Shuttle research missions are also threatened with cancellation.
As NASA has removed all other alternatives to flying existing hardware
(Spacelab and free-flyers), these disciplines have only one access
mechanism to the microgravity environment--ISS. Thus, for example, a
fifty percent reduction in ISS crew size, coupled with a loss of the
CAM, glovebox, habitats and habitat holding racks is tantamount to
elimination of the Fundamental Biology Program within NASA.
A significant multi-disciplinary microgravity research community
also has evolved over the years. All the supported research is
nationally competed and rigorously peer-reviewed. One part of the
research program (fundamental physics) includes seven Nobel laureates
who are still active investigators. There is a very strong ground-based
component of the program in addition to the flight investigations
portion. Like the biology program, this discipline would be severely
impacted by significant descoping.
The SSWG recognizes and appreciates the Congressional support these
disciplines have received in the past. We are requesting continued
Congressional support in urging NASA to protect the biological and
physical research communities. This requires strengthening and
protecting the ground-based research programs, including expansion of
the investigator-initiated research initiatives. We would also request
that NASA, in collaboration with these communities, be urged to
undertake a review of options for a free-flyer program to provide an
alternate mechanism of access to the microgravity environment for these
communities.
earth science enterprise (ese)
The SSWG was pleased to see in the budget blueprint recognition
that the outyear plan for the second generation of Earth Observing
System (EOS) satellites has been underfunded in recent years, and that
the fiscal year 2002 request will include a five-percent increase for a
science-driven EOS Follow-On program. We hope that such a program will
be fully supported by Congress.
As is the case in the Office of Space Science, funding of the R&A
components of the Earth Science program continue to be of concern. We
urge that the ESE R&A program be strengthened and shielded from
budgetary raids.
We were perplexed by the cancellation of the University Class Earth
System Science (UnESS) program in NASA's fiscal year 2002 request. The
UnESS program provides an ideal framework for the education and
training of students for future roles in the United States space
industry, and for leadership by faculty and universities in the Earth
Science Enterprise (ESE). Dr. Ghassem Asrar, Associate Administrator
for Earth Sciences, has described UnESS as a key program for educating
the next generation of Earth system scientists, engineers, and
managers. This connection between education and training is vital to
the continued technical excellence of academic programs in the space
sciences throughout the country. The size and scope of the UnESS
missions are specifically limited to enable a university-led team to
conceptualize, design, develop, test, launch, and operate a useful
scientific mission in a relatively short time frame. Because of its
education role, UnESS is a critical element for maintaining U.S.
leadership in the space science of Planet Earth during a period when a
major fraction of our nation's technical workforce is nearing
retirement.
In developing UnESS, NASA aims to remove the most significant
obstacle to the productive use of ESE science and technology in the
public and private sector by ensuring that end-users of mission
products are a part of the mission team from development to
applications. We believe that the UnESS program is of tremendous value
to both the scientific and educational missions of NASA and would urge
its continuation.
other issues
Space Grant Colleges
The SSWG has often pointed out the important outreach role that
space research plays. A glance at news media, educational television,
or the crowds at the Air and Space Museum makes it clear that the high
technology ``Aerospace Adventure'' engages young and old alike.
Probably more than any other area of modern research, space science has
the capacity to interest young people in the hard questions of
research, and to focus their interests onto pursuing technical studies
in school that prepare them for the workplace of tomorrow. The Space
Grant College system continues to play an important and successful role
in workforce development through its university programs and its
outreach to elementary and secondary school students. Its matching
funds result in a highly leveraged program. We hope that the
Subcommittee will fund the Space Grant effort at its authorized level
of $28 million for the coming year.
Thank you for your attention to these matters.
______

Prepared Statement of the American Museum of Natural History

Good afternoon, Mr. Chairman and Members of the Subcommittee. My
name is Darrel Frost, and I am Associate Dean of Science for
Collections at the American Museum of Natural History. I very much
appreciate the opportunity to submit testimony in support of the
National Aeronautics and Space Administration [NASA] and the National
Science Foundation [NSF], and to summarize both our accomplishments
during the past year and our planned initiatives and objectives for
fiscal year 2002. Most of all, I want to thank this Subcommittee for
all the contributions it has made to scientific research and education
in this nation and at the American Museum.
This Subcommittee, with a scope that includes the NSF and NASA,
plays a pivotal role in our nation's science and education enterprises.
The future of our research and development; our science, math,
engineering, and technology education; and our 21st century workforce
in many respects rests here.
The National Science Foundation, under distinguished leadership, is
pursuing key initiatives that include research on information
technology, mathematics, biocomplexity, and the nation's workforce.
These initiatives, as well as the core research and education programs,
require funding at significantly increased levels for real growth.
NASA, under its skilled leadership, captures the nation's spirit
and invigorates the thirst for exploration into the unknown. Every day
at the Museum we see evidence that NASA powers the public's
imagination. To continue to expand understanding of our planet, our
solar system, and the universe, investment in NASA must be strong. We
ask the Subcommittee to fund NASA at the increased levels necessary to
advance its goals in cutting-edge R&D, breakthrough technologies,
educational excellence, and collaborations and partnerships. As this
testimony will demonstrate, such funding is vital for NASA to maintain
the national science education leadership it has asserted through its
successful partnerships with the American Museum and others in the
informal science education community.
Let me now review for you the American Museum's accomplishments and
plans.
about the american museum of natural history
The American Museum of Natural History is one of the nation's
preeminent institutions for scientific research and public education.
Since its founding in 1869, the Museum has pursued its mission to
``discover, interpret, and disseminate--through scientific research and
education--knowledge about human cultures, the natural world, and the
universe.'' It is renowned for its exhibitions and collections of more
than 32 million specimens and cultural artifacts. Its audience of
nearly five million annual visitors--approximately half of them
children--is one of the largest, fastest growing, and most diverse of
any museum in the country. More than 200 Museum scientists conduct
groundbreaking research, in fields ranging from systematic biology and
comparative genomics to earth sciences and astrophysics. Their work
forms the basis for all the Museum's activities that seek to explain
complex issues, dispel misconceptions, and help people to understand
the events and processes that created and continue to shape the Earth,
life and civilization on this planet, and the universe beyond.
nasa partnership
In 1997, under the leadership of Congress, the American Museum
joined in a close educational and scientific partnership with NASA to
advance the shared goal of fostering scientific literacy nationwide.
This partnership has been extraordinarily productive and has helped to
build a unique national education resource created with private funding
catalyzed by the federal contribution. Together the American Museum and
NASA have been exploring the frontiers of science and reaching millions
of Americans with joint science education efforts. We have established
the National Center for Science Literacy, Education, and Technology
[NSCLET] and partnered in life and microgravity, space, and earth
sciences research. Together we have asserted critical national
leadership in science education, conveying the excitement and awe of
research and exploration for a rapidly expanding audience of many
millions of visitors onsite and online.
Rose Center for Earth and Space
In the past year, a dramatic and exciting one, we have deepened and
enhanced our NASA partnership, as the overwhelming response to the
Museum's new Rose Center for Earth and Space demonstrates. February
2001 marked the Rose Center's first anniversary. Greeted with critical
and popular acclaim and record-setting attendance surpassing all
projections, the Rose Center includes a rebuilt Hayden Planetarium,
Cullman Hall of the Universe, and Gottesman Hall of Planet Earth.
Throughout this dramatic facility, innovative exhibits and up-to-the-
minute science displays attest to the ongoing success of our
collaborations with NASA. The Digital Galaxy Mapping Project, for
example, has come to spectacular fruition in the Planetarium's Space
Show. In this joint effort, the AMNH scientific and technical team,
working in concert with NASA scientists and engineers, have brought
together diverse datasets to create a scientifically accurate three-
dimensional map of the galaxy that has enthralled and educated the more
than one million new visitors who have visited since the Rose Center
opened.
Concurrent with the Rose Center, the Museum also launched an
ambitious and thriving astrophysics research program that now includes
eight scientists. The Planetarium's Space Theatre provides an
assemblage of the most powerful and sophisticated scientific
visualization tools ever designed and full-dome, three-dimensional
views of massive datasets. Museum astrophysicists use these
unparalleled tools for three-dimensional data ``mining'' and display
their observational, theoretical, and computational research programs.
These tools are, in fact, a resource to the international scientific
community and were showcased at a spring 2000 Museum conference,
``Stellar Collisions, Mergers, and Their Consequences.''
National Center Science Bulletins and Families of Products
The Museum's National Center for Science Literacy, Education, and
Technology has developed high quality, technology intensive education
materials and programs that bring cutting-edge science to students and
teachers, to families and community settings. Since its inception the
National Center has created more than 70 different websites; CD-ROMS;
books; magazines for students, teachers, parents, and families;
exhibition guides, and more. Fueled by our NASA collaborations, we have
been able to forge partnerships with Time For Kids, Discovery,
Classroom Connect, and others for disseminating these standards-based
educational materials to a large national audience. And to help meet
the need for well trained K-12 science teachers, NSCLET has introduced
an innovative series of online science courses for teachers, taught by
Museum scientists.
In the past year the National Center has also expanded the
complexity and reach of its three interrelated Science Bulletins--the
BioBulletin, EarthBulletin and AstroBulletin--in the Halls of
Biodiversity, Planet Earth, and the Universe, respectively. These video
reports, developed by AMNH teams in active collaboration with NASA
facilities such as Goddard Space Flight Center, Goddard Institute for
Space Studies, Langley Research Center, and the Jet Propulsion Lab,
feature breaking global and space news in high definition wall
displays. The BioBulletin presents stories on global biodiversity,
using data accessible through remote sensing, Geographical Information
Systems, and other technologies. The EarthBulletin broadcasts news on
earth events such as earthquakes, floods, and atmospheric conditions.
The dramatic 13.5-foot-long AstroBulletin showcases NASA news and data,
displaying up-to-date images and events in space, including a log of
current NASA missions. The public first saw the TRACE satellite's
dramatic pictures of surging solar gases when NASA released them for
public display in the AstroBulletin.
Near the Bulletins in each hall are touch screen computer kiosks
that enable visitors to delve more deeply into the stories, and the
Bulletins are also accessible to visitors everywhere on the Museum's
website. The National Center has, as well, developed a coordinated
distribution plan for sharing the Bulletins broadly in varied formats
at science centers, museums, and informal learning venues around the
country.
fiscal year 2002 agenda
The Rose Center's thrilling exhibitry, scientific visualization,
the Digital Galaxy and Space Show, the National Center's technology
intensive science education products, the popular Science Bulletins--
these are some of our partnership's many benefits in promoting science
education while delivering NASA education and research resources to a
vast national and international audience.
To leverage the Museum's and NASA's investment in improving science
education and literacy and to further our work together, the American
Museum now seeks to institutionalize our partnership, building on our
joint accomplishments while drawing fully on the Rose Center's reach
and resources. We therefore request $4 million to establish at the
Museum a NASA Program for Immersive and High Definition Education
Display. Our proposed joint activities will include:
--Scientific visualization.--The Museum now has the vast
technological and scientific capacity to produce digital
programs to display the phenomena of the astrophysical
universe. Drawing on the Digital Dome's unique visualization
capacity, we propose ongoing advancement of the Digital Galaxy
database and images to support new Hayden Planetarium space
show components, coupled with dissemination of those components
in varied formats suitable for partners in diverse venues.
--Science Bulletins.--The Museum proposes the Science Bulletins'
advanced development, production, and systematic distribution
to multiple audiences and sites. In the BioBulletin,
EarthBulletin and Earth Event Wall, and AstroBulletin and
Universe Wall, established under prior NASA agreements, we will
continually enhance science content and coverage; expand
capability for exploiting Geographical Information Systems
[GIS], remote sensing, and other emerging technologies; and
improve data structure to present breaking science news and
NASA data to the public. We plan to distribute the Bulletins
widely at sites of varied size and capacity throughout the
country.
--Networks.--Access to ultra high speed communications networks is
critical to the planned Museum-NASA activities. From
computational astrophysics and scientific visualization to
exhibition multimedia displays and distribution, the ongoing
partnership requires access to state-of-the-art high-speed
networks and advanced research and education applications.
As we seek to institutionalize the Museum's successful NASA
partnership, let me stress the full power and reach of the platform we
bring to our collaboration. Since the Rose Center opened, the American
Museum's annual onsite audience has increased 45 percent, to nearly
five million annual visitors. The number of visiting school groups has
increased 28 percent. In addition to these onsite visitors, the
Museum's website enjoys an average of more than 16,000 unique online
visitors each day. The shared NASA and Museum efforts therefore are
positioned in the years ahead to reach a combined onsite and online
audience that could reasonably approach 10 million children, adults,
families, teachers, and communities. This is a national and
international museum audience without equal.
It is also important to point out that this partnership has
succeeded on many levels, including the leveraging of the federal
investment with nonfederal support, and the Museum plans to carry out
all proposed programs with funds from nonfederal as well as federal
sources. The federal participation to date has fueled our successful
fundraising efforts, enabling the Museum to more than match the federal
investment with contributions from private donors, foundations, and
corporations. We are confident that with continued congressional
leadership, we will be able to continue to leverage federal investment
so very favorably.
In closing, the AMNH-NASA partnership has brought together two
entities with unique resources and a shared commitment to improving
science education and science literacy. Institutionalizing this
partnership will help to assure that this productive and far-reaching
relationship will endure and will grow. Through a rich program of
science education pursuits and displays based on immersive and high
definition technologies, the Museum and NASA will continue to advance
the nation's knowledge, understanding, and appreciation of the
scientific enterprise.
______

Prepared Statement of Florida State University

Mr. Chairman, I would like to thank you and the Members of the
Subcommittee for the opportunity to present testimony before this
Committee. I would like to take a moment to briefly acquaint you with
Florida State University (FSU).
Located in Tallahassee, Florida's capitol, FSU is a comprehensive
Research I university with a rapidly growing research base. The
University serves as a center for advanced graduate and professional
studies, exemplary research and top quality undergraduate programs.
Faculty members at FSU maintain a strong commitment to quality in
teaching, to performance of research and creative activities and have a
strong commitment to public service. Among the faculty are numerous
recipients of national and international honors, including Nobel
laureates, Pulitzer Prize winners as well as several members of the
National Academy of Sciences. Our scientists and engineers do excellent
research, have strong interdisciplinary interests, and often work
closely with industrial partners in the commercialization of the
results of their research. Having been designated as a Carnegie
Research I University several years ago, Florida State University
currently is approaching $125 million per year in research awards.
FSU will soon initiate a new medical school, the first in the U.S.
in over two decades. Our emphasis will be on training students to
become primary care physicians, with a particular focus on geriatric
medicine--consistent with the demographics of our state.
Florida State attracts students from every county in Florida, every
state in the nation, and more than 100 foreign countries. The
University is committed to high admission standards that ensure quality
in its student body, which currently includes some 192 National Merit
and National Achievement scholars, as well as students with superior
creative talent. We consistently rank in the top 20 among U. S.
colleges and universities in attracting National Merit Scholars to our
campus.
At Florida State University, we are very proud of our successes as
well as our emerging reputation as one of the nation's top public
universities.
Mr. Chairman, before I discuss the project we are pursuing with
NASA, let me first mention the recent renewal of funding for the
National High Magnetic Field Laboratory (NHMFL) by the National Science
Foundation. Citing outstanding progress in enabling researchers to
address critical problems in science ranging from materials research to
chemical and biological sciences, the National Science Foundation has
awarded the National High Magnetic Field Laboratory $117.5 million for
the next five years. This is a 30 percent increase over previous
allocations and is a clear indication that the NSF views the research
and development being done at the NHMFL as a top priority investment
and one that is critical to our nation. Thanks to the work being done
at this facility, and the recognition of you and your colleagues to the
importance of this work, the U.S. is on the forefront of magnetic
research and technology.
Next, let me tell you about a project we are pursuing this year,
which is a collaborative endeavor involving natural hazards research.
southeastern virtual consortium for extreme events (seveer) project on
natural hazards r&d using remote sensing
This is a joint initiative with several academic institutions:
Florida State University, University of Alabama, Georgia Tech,
Louisiana State University, Texas A&M, and Mississippi State
University. This initiative will allow these universities to work
together to share resources, technology and expertise to conduct
research as well as provide professional and public education to
citizens, state governments and Federal agencies crucial information on
prediction and mitigation related to all kinds of natural hazards.
SEVEER recognizes the impact of the information technology revolution
on the United States and creates a virtual center to study the
prediction and mitigation of all types of natural disasters including
hurricanes, tornadoes, forest fires, floods, droughts, and other
unexpected natural disturbances. This particular project will uniquely
utilize remotely-sensed data from the $50B public/private space and
ground-based observing system developed during the last decade to
provide the time-sensitive data necessary in predicting these extreme
events. Specifically, this project will advance the timeliness and
accuracy of severe environmental event detection and warning
capabilities in the SE United States using operational and research
remote sensing systems and advanced land/ocean/atmospheric predictive
models. Expertise and assets from universities in every Gulf Coast
state and across the Nation, in cooperation with state and federal
agencies, will be integrated to address the impacts of natural hazards
on the coastal ocean, land hydrology, and atmosphere. Extensive use of
FSU's supercomputing resources will be made so that the new extreme
event prediction system can be developed and tested in an operational
environment.
We are requesting $3 million from the National Aeronautics and
Space Administration, on behalf of our consortium of universities, to
develop and implement this initiative.
Mr. Chairman, this project is just one of the many exciting
activities going on at Florida State University and in the southeast
that will make important contributions to solving some key problems and
concerns our Nation faces today. Your support would be appreciated,
and, again, thank you for an opportunity to present these views for
your consideration.
______

Prepared Statement of The Mars Society

Mr. Chairman and Members of the Subcommittee: My name is Dr. Robert
Zubrin, President of The Mars Society. I would like to thank you for
this opportunity to offer comments regarding the fiscal year 2002
budget for the National Aeronautics and Space Administration
(``NASA''). As detailed below, we strongly believe that NASA's budget
should include a program funded at a level of at least $140 million per
year (about 1 percent of NASA's current budget) within the NASA Human
Exploration and Development of Space (``HEDS'') organization to develop
the technologies necessary to lay the groundwork for future human Mars
exploration missions.
I. The Mars Society
The Mars Society is an international grassroots organization
created to further the goal of the exploration of the planet Mars. Our
efforts to further this goal have involved broad public outreach to
instill the vision of pioneering Mars, support of ever more aggressive
government funded Mars exploration programs around the world, and
conducting Mars related research on a private basis. Our first major
project was building the Flashline Mars Arctic Research Station in the
Canadian Arctic last year to serve as a test-bed for technologies and
practices that will be needed for human Mars exploration. We recently
secured funding for, and are in the process of building, a second
research station, which will be located in the American Southwest.
I am the author of The Case for Mars and Entering Space, as well as
dozens of technical papers and articles. In the early 1990s, I
developed a plan (``Mars Direct'') that showed how a robust mission to
Mars could be achieved for $20-$30 billion and in 10 years or less, by
maximizing the use of existing technologies and resources found on
Mars.
II. Need for Technology Development Funding
We believe there is no question that eventually this Nation's
scientific curiosity and pioneering spirit will lead to a decision to
send people to Mars--a world of spectacular mountains three times as
tall as Mount Everest, canyons three times as deep and five times as
long as the Grand Canyon, vast ice fields, and thousands of kilometers
of mysterious dry riverbeds. The planet's unexplored surface may hold
unimagined riches and resources for future humanity, as well as answers
to some of the deepest philosophical questions that thinking men and
women have pondered for millennia. The discovery last year of surface
features that may have been produced by the recent flow of liquid water
further supports the idea that Mars once had (and may still have)
conditions conducive to life. To find evidence life, though, will
likely take more than robotic eyes and remote control. In fact, all
that Mars holds will remain beyond our grasp until men and women--
agile, autonomous, intuitive beings--walk upon its surface.
Whether the decision to send people to Mars is made tomorrow or in
10 years, there are many technologies that need to be developed in
order to conduct such a mission in a safe and cost-effective manner. By
investing a modest amount of money now to develop these technologies,
both the ultimate cost and the time needed to assemble such a mission
could be significantly reduced. In addition, such a program would
provide the core of the talent and expertise that will be required to
achieve such an ambitious goal.
Until a few months ago, a very modest amount of NASA funds
(primarily agency discretionary funds) were used to fund such a
program. However, after the recent disclosure of Space Station cost
overruns, an order was issued to stop or eliminate all technology
development projects supporting eventual human Mars exploration. While
The Mars Society is in full agreement that many hard choices have to be
made to remedy the cost overruns relating to the Space Station, we
believe that this technology development program is too important to
this Nation's future in space to be sacrificed to feed Space Station
overruns. In our opinion, Space Station overruns must be dealt with
within the Space Station's own budget.
Rather than shut down the tiny amount of human Mars technology
development work that was underway, such funding should be
significantly expanded. A program should be funded at a level of at
least $140 million per year (about 1 percent of NASA's current budget)
within the NASA HEDS organization, to develop the technologies
necessary for human Mars exploration missions. When our Nation is ready
to make a commitment to send humans to Mars, this modest program will
have already laid a portion of the technological groundwork for the
mission, saving both time and money.
Below are some of the technologies that should be investigated in
such a program.
1. In-Situ Resource Utilization.--Cost effectiveness is a necessity
for future human space exploration. Mars provides us with a tremendous
opportunity to lower the cost of exploration by ``living off the
land.'' The atmosphere of Mars, composed largely of carbon dioxide, is
the resource that makes this possible. Using a century-old technology,
it should be possible to use the Martian atmosphere, as well as a
relatively small amount of hydrogen brought from Earth, to create
oxygen, water, and all of the fuel (methane) for the return trip. This
would dramatically reduce the mission mass and save billions of dollars
in mission costs. The cost-cutting potential of this technology
certainly justifies further investigation and development.
2. Propulsion.--Using current chemical rocket technology, it would
take at least six months for a crew to reach Mars and at least another
six months for them to return after their stay on the surface. With
improved propulsion systems, transit times could be reduced, which
would increase the safety and reduce the cost of human missions to
Mars. In addition to improved chemical propulsion systems, we should
look at new propulsion ideas, such as plasma technology, ion drives,
nuclear rockets, and many other possibilities that have the potential
to take months off the voyage. Creating a technology research program
would allow us to examine the best way to approach this technological
problem.
3. Life support.--Without proper life support systems, any future
Mars explorers could not survive. We should build on the systems
already developed for the Space Station to achieve systems that can
more fully recycle wastes and withstand the rigors of a long-duration
mission where re-supply from earth is not feasible.
4. EVA suits.--We currently do not have space suits that would be
useful on Mars. Our current EVA suits are designed for zero gravity
conditions. They would be far too heavy and unwieldy on the surface of
Mars. A Mars EVA suit must be light, durable, and allow it's occupant
to move around freely and perform such simple tasks as bending over and
getting back up without difficulty. Without a new EVA suit design, the
astronauts would not be able to leave their habitat.
5. Human habitats for interplanetary transit and surface use.--As
noted above, The Mars Society is currently using private funds to
investigate various aspects of this technology. Although we hope to
make significant contributions to habitat design, our projects will not
address many of the technological requirements for these habitats. In
addition, The Mars Society does not have the means to examine the needs
for a habitat during interplanetary transit. A technology program would
be able to focus on these critical issues.
6. Human surface mobility systems (manned rovers).--While the first
humans on Mars would be able to make innumerable discoveries on foot,
their range would be limited. Because of this, it would be prudent to
study various options for a pressurized rover, which would give the
astronauts a vastly larger exploration range, allowing them to explore
tens or even hundreds of kilometers from their habitat module.
7. Heavy lift vehicles.--Such a mission would be much more
expensive without heavy lift capabilities. Our Nation has not had a
heavy lift vehicle capable of launching such a mission since the Saturn
5 rocket. In addition to a Mars mission, such a vehicle would be useful
in numerous civilian and military space-related endeavors. Such a
vehicle could be designed to make use of existing Space Shuttle
facilities and hardware.
8. Advanced power systems, both nuclear and non-nuclear.--We need
to determine the best source of power during Mars surface habitation.
This is more challenging than any power issue we have had to deal with
in the history of the space program. We will be on the surface of Mars
for at least a year, so a reliable power supply is a critical
technology that will need to be developed.
III. Some Reasons to Support Human Mars Exploration
1. Economic/Social/Technology.--Some will say that we need to solve
problems at home before we invest in space exploration. In reality, it
is just the opposite. Dollar for dollar, the space program has provided
more benefits to our Nation and the world than any program in United
States history; the largest number of benefits coming as a result of
the Apollo program. A Mars exploration program will likely accelerate
economic and social benefits as Apollo did. By investing in space, we
benefit Earth.
2. Education.--Apollo inspired children around the country to
pursue science and math careers. They saw that they could participate
in events larger than themselves. A human mission to Mars will
certainly have the same impact. Inspiring our children to learn is the
best education program.
3. Science.--The scientific ramifications of a human mission to
Mars are enormous. The study of Martian geology and atmospheric
conditions will not only teach us much about the future habitability of
Mars but also about our own planet. By sending humans to Mars, we will
be much more likely to answer the question of whether there was ever
life on Mars. In the search for signs of fossilized life on Mars, a
human crew could likely achieve in their first few days more than what
could be accomplished in many years by any series of robotic probes.
4. Exploration.--Without a great history of exploration the United
States would not exist. We need to continue our great heritage of
exploring the unknown so that we can guarantee that our society will
remain vital and will not fall into stagnation. Mars is not just a
scientific curiosity; it is a world with a surface area equal to all
the continents of Earth combined, possessing all the elements that are
needed to support not only life, but technological society. With the
International Space Station operational, it is time to lay the
groundwork for the next logical step--the human exploration of Mars.
5. National Optimism.--We need to rekindle the national optimism
that made the United States the greatest country on Earth. A human
mission to Mars is the natural vehicle for this revitalization. A
strong sense of national optimism is the best vehicle for continued
prosperity.
6. Public Support.--A recent Roper poll shows that about two-thirds
of the American public support sending a human mission to Mars. The
American public has had an enormous appetite for Mars for years. This
appetite has fueled countless science fiction accounts of Mars and
unprecedented interest in NASA exploration missions to Mars. When Mars
Pathfinder landed in 1997, there were over 100 million hits on the
Pathfinder website in the first day. There have been well over half a
billion hits since. All together, NASA's Mars related websites have
received over 1.2 billion hits since 1997.
7. Self Definition.--A humans to Mars program would be a forceful
reaffirmation of the fundamental nature of America as a nation of
pioneers. We Americans owe everything we have today to our predecessors
who were willing to go to a wilderness and build where no one had built
before, to take on challenges that had never been faced, and to do what
had never been done. Were we to abandon that tradition, we would become
something less. That is a form of decline that we cannot afford and
cannot accept. Ultimately the issue of whether we embrace the challenge
of Mars is one of who we are.
IV. A New Direction
Our space program has been literally and figuratively going around
in circles since the end of the Apollo Program. Few people under the
age of 40 have any direct recollection of our Nation's greatest
technological and exploration achievement; landing humans on the Moon.
In addition, more people are even beginning to deny that the Moon
landing ever took place. While this opinion used to be limited to
fringe elements of our society, it has now become main stream. Earlier
this year, the Fox Network aired a program that claimed that the Moon
landing was a hoax. An estimated 20 million people watched this
program. It was so popular that the network aired it for a second time,
several weeks later. Since then, teachers around the country have been
forced to do damage control, responding to many of their students who
now believe that the Moon landing was a hoax.
Should we be surprised by this phenomenon? Absolutely not! In the
late 1960s and early 1970s, the possibilities in space exploration
looked limitless. What should have been ``one giant leap for mankind,''
the Moon landings have turned out to be just a few ``small steps.''
After launching the Nation, and the world, into what looked like our
greatest age of exploration and learning, we retreated and have never
returned. We now need to engage in a new and great age of exploration
and discovery--an age that will again inspire our Nation and the world.
conclusion
As the past few years have demonstrated, Mars is an extraordinary
planet that yields her mysteries only grudgingly. If we are ever to
gain a complete understanding of its complexities, we will need to send
human explorers to that world to fill in the enormous gaps in knowledge
left by our robotic probes. We urge Congress to establish a modest
program (at least $140 million per year) to develop the technologies
necessary to lay the groundwork for what will certainly be the next
great Age of Discovery.
Once again, I would like to thank you for the opportunity to
present this testimony.
______

DEPARTMENT OF VETERANS AFFAIRS

Prepared Statement of the American Heart Association

medical and prosthetic research program
It is highly likely that heart attack or stroke will cause your
death or disability or that of a loved one. Heart attack, stroke and
other cardiovascular diseases remain America's leading cause of death
and a main cause of disability. Cardiovascular diseases account for
nearly 1 of every 3 deaths in the U.S.
The American Heart Association, along with 22 million volunteers
and supporters, works to reduce death and disability from heart attack,
stroke and other cardiovascular diseases. We commend this Committee's
support of the Department of Veterans Affairs' Medical and Prosthetic
Research program.
still number one
Heart attack, stroke and other cardiovascular diseases have been
America's No. 1 killer since 1919. Nearly 61 million Americans of all
ages suffer from cardiovascular diseases. Americans of all ages!
Hundreds of millions of Americans have major risk factors for
cardiovascular diseases--about 50 million have high blood pressure, 41
million adults have high blood cholesterol (240 mg/dL), 49 million
smoke, 107 million adults are obese or overweight and 10 million have
physician-diagnosed diabetes. As the baby boomers age, the number of
Americans afflicted by these lethal and disabling diseases will
increase substantially. Cardiovascular diseases cost Americans more
than any other disease--an estimated $300 billion in medical expenses
and lost productivity.
While heart disease and stroke occur at all ages, they are most
common in Americans over age 65--an age group that is about 13 percent
of the U.S. population and will be 16.5 percent by year 2020. By the
year 2020, the percentage of veterans over 65 years of age will be
about three times that of the general population. The VA's planning
models recognize that its aging patient population demands more care.
More than 4.49 million or 16.4 percent of the veteran population
reported suffering from ``heart trouble'' in the 1993 National Survey
of Veterans. More than 998,000 or 3.6 percent of the veteran population
are stroke survivors. As the veteran population ages, the number of
veterans afflicted by heart disease and stroke will increase
substantially.
how you can make a difference
We recommend an fiscal year 2002 appropriation of $395 million for
the VA Medical and Prosthetic Research program. Our recommendation,
consistent with that of the Friends of VA Medical Care and Health
Research and the Independent Budget, a detailed analysis of VA funding
needs developed by four of the major veterans service organizations and
endorsed by more than 60 other organizations. An appropriation of $395
million would allow maintenance of fiscal year 2001 initiatives and
implementation of new initiatives for fiscal year 2002, allowing an
increase in investigator-initiated research, expanded training programs
to attract the next young generation of clinician-scientists and
accommodate medical research inflation. We challenge our government to
significantly increase funds for heart and stroke research through the
VA Medical and Prosthetic Research program. We strongly urge the VA to
establish heart and stroke research centers to advance the battle
against heart attack, stroke and other cardiovascular diseases--
America's No. 1 killer and a leading cause of disability. Our
government's response to this challenge will help define the health and
well being of citizens in this new century.
insufficient va resources devoted to heart and stroke research
The VA Medical and Prosthetic Research program plays an important
role in heart and stroke research and deserves the strong support of
Congress. In fiscal year 1999, VA support for research on heart disease
was $23.7 million (a 13 percent increase from fiscal year 1998),
accounting for 7.4 percent of the fiscal year 1999 VA's Medical and
Prosthetic Research budget. In fiscal year 1999, VA-supported stroke
research represented $4.2 million or 1.3 percent of the VA's Medical
and Prosthetic Research budget. We are concerned that insufficient
money is being devoted to America's No. 1 killer--heart disease--and
our No. 3 killer--stroke. Both are major causes of permanent
disability. Besides its own program, VA investigators spent another
$40.5 million on heart research and $7.8 million on stroke research
from outside sources.
va heart and stroke research benefits all americians
The mission of the VA Medical and Prosthetic Research program is to
``discover knowledge and create innovations to advance the health and
care of veterans and the nation.'' While the primary purpose of the VA
health care system is the provision of quality health care to eligible
veterans, VA-supported research contributes to the quality of care by
bringing talented and dedicated physicians into the VA system.
Discoveries from VA-supported research benefit veterans, science and
the world's health. VA cardiovascular research is an integral part of
the scientific effort in this field. VA researchers include nationally
recognized, distinguished scientists and several Nobel Laureates. The
VA had supported Ferid Murad, M.D., 1998 Nobel Prize winner for
research demonstrating the role of nitric oxide in regulating blood
pressure. Several VA investigators have been acclaimed for their work
in cardiovascular research. For example, American Heart Association
volunteer Gerald F. DiBona, M.D. was awarded the prestigious VA
Middleton Award in 1995 for internationally recognized research on
kidney and cardiovascular diseases.
The Medical Research component of the VA Medical and Prosthetic
Research program supports basic and clinical research, mainly
investigator-initiated peer reviewed studies. It provides funds for
support of VA-based faculty members (M.D.s or Ph.D.s) at various stages
in their careers, multicenter cooperative studies--a large portion of
which are cardiovascular studies--and research equipment. Also, VA
investigators provide core faculty support at major medical schools
affiliated with VA institutions. The presence of a VA research program
aids the VA. This small but internationally recognized, highly
competitive research program in fiscal year 2000 supports 2,157
investigators at 132 VA-supported facilities.
VA cardiovascular research is largely clinical. The VA is a major
contributor to clinical research, playing a unique role because of its
ability to immediately translate research findings into practice.
VA-supported research has produced landmark results and
revolutionized treatment in the cardiovascular area. You and your
family have benefited directly from VA heart and stroke research.
Several cutting-edge examples follow.
--Heart Attack Treatment.--VA's Quality Enhancement Initiative
Ischemic Heart Disease Study found that VA medical facilities
provide equivalent or superior treatment for heart attack
patients when compared with the private sector. Quality
measures for these veterans surpass those in the private sector
in the use of aspirin, beta blockers, ACE inhibitors and in the
evasion of calcium channel blockers. Similar findings were
found for angioplasty patients.
--Heart Bypass Surgery.--In 1998, an estimated 553,000 heart bypass
surgery procedures were performed on 336,000 patients in this
nation at an average cost of $44,820 per procedure in 1995.
Generally, one year after surgery, 10 to 15 percent of the vein
grafts used in these procedures become blocked. VA research has
found that reducing the temperature of the solution used to
harvest the vein grafts may stop heart arteries from becoming
narrowed with atherosclerosis. The study also found that while
a daily aspirin stops artery vein blockage for a year after
surgery, long-term survival depends on the extent of underlying
disease before the procedure and the length of time of the
procedure. In a landmark study, VA researchers found that heart
medication works just as effectively as heart artery bypass
surgery for certain groups of patients with narrowed arteries.
In 2000, VA surgeons were the first to perform this surgery on
patients without anesthesia.
--Gene Therapy And Heart Failure.--About 4.7 million Americans suffer
from congestive heart failure, a major cause of hospitalization
for Americans age 65 and older. VA researchers have found in
animal studies that inserting a gene in heart cells affected by
heart failure started an active increase in the chemical that
triggers the cells to beat more strongly. Additional research
in this area could provide a new lease on life for millions of
Americans. Also, VA scientists, using gene therapy in animals,
increased the number of blood vessels that transport oxygen to
the heart.
--Stroke Risk Reduction.--About 9 percent of older Americans suffer
from the most common type of an irregular heart beat, atrial
fibrillation, a stroke risk factor. Research has shown that low
doses of the blood thinner warfarin can lower stroke risk by
about 80 percent in sufferers of atrial fibrillation.
--Stroke Survivor Improvements.--Stroke is a leading cause of
permanent disability in this country and the No. 3 killer. VA
studies have produced therapies to enhance quality of life for
survivors. VA researchers have created a software program to
assess and treat the stroke-related speech disorder aphasia.
Also, they have shown that strenuous exercise can benefit
stroke survivors who are paralyzed on one side of their body,
and have developed a rehabilitation procedure to restore arm
movement. Researchers have identified seven pathways associated
with motor recovery from stroke, allowing more precise
predictions about functional recovery of stroke survivors.
--Aspirin and Angina.--About 6.4 million Americans suffer from angina
(chest pain) due to insufficient blood supply to the heart. In
another landmark study, VA research found that aspirin cuts
deaths and heart attacks by 50 percent in patients suffering
from unstable angina.
--Angioplasty Benefits.--In 1998, an estimated 926,000 angioplasty
procedures were performed in this nation to restore blood flow
to the heart by widening narrowed arteries. VA research was the
first to evaluate angioplasty. Results showed that after
undergoing angioplasty, patients suffered less pain and can
exercise longer than those taking only medication. Another
study found clot-busting drugs had similar results to
angioplasty for heart attack survivors at savings of $3,000 per
patient. Annually more than 150,000 people are candidates for
clot-busting drugs, according to VA.
--Heart Failure.--The growing number of sufferers from heart failure
has earned this disease the title of ``the new epidemic.'' A
major VA study, in conjunction with the National Heart, Lung,
and Blood Institute and Intercardia Corporation, showed
unexpectedly that the beta blocker bucindolol did not reduce
death from heart failure. This was the first study to include
large numbers of African Americans and patients with advanced
heart failure.
--Heart Failure Drugs.--An estimated 4.7 million Americans suffer
from congestive heart failure, the often-disabling inability of
the heart to pump sufficient blood throughout the body. A VA
study showed that heart medications can enhance the heart's
pumping ability and keep sufferers of congestive heart failure
alive. These study results have revolutionized heart failure
treatment.
--High Blood Pressure.--An estimated 50 million Americans have high
blood pressure, the leading stroke risk factor and a major
cause of heart attack. VA research found that like private
sector statistics, physicians increase anti-hypertensive
medicine in only 25 percent of patients with higher blood
pressure and that the patients who had their blood pressure
monitored were poorly controlled. More aggressive management of
these patients will reduce the number of heart attacks and
strokes, America's No.1 and No. 3 killers, respectively. An
inexpensive computerized reminder system helps doctors manage
patients and cut costs by reducing use of calcium channel
blockers.
--Cholesterol.--An estimated 11 million veterans are at increased
risk of heart disease due to high cholesterol levels, according
to the VA. A groundbreaking VA-supported clinical trial found
that daily use of the drug gemfibrozil, raises HDL by 6
percent, reduces coronary heart disease risk by 22 percent with
reductions in heart attack, stroke, transient ischemic attack
and carotid endarterectomy for heart disease sufferers with low
levels of both ``good'' and ``bad'' cholesterol. Results could
mean cost savings because gemfibrozil is cheaper than statin
drugs. This is the first study to show significant reduction in
risk of major cardiovascular diseases by raising HDL, the
``good'' cholesterol, lowering triglycerides and not changing
LDL, the ``bad'' cholesterol. VA research showed the
effectiveness of cholesterol screening, when broken down into
HDL and LDL for adults--even those older than age 65. Another
study found that the addition of soy protein to a low-fat diet
substantially lowers cholesterol in those with moderately high
cholesterol levels.
--Irregular Heart Beat Treatment.--An estimated 1 million Americans
suffer from atrial fibrillation, the most common irregular
heartbeat, which causes more than 75,000 strokes a year. VA
researchers found that the drug digoxin was not effective in
controlling heart rate. But, they discovered when digoxin was
combined with a beta-blocker, patients achieved almost perfect
heart rate. These results will enhance treatment for atrial
fibrillation and reduce stroke risk.
--Wheelchair Aerobic Fitness Trainer.--This trainer is an alternative
to drug-induced stress testing for cardiorespiratory fitness
and coronary artery disease in people with lower limb
disabilities.
--Psychoeducational Program for Stroke Family Caregivers.--Most
stroke survivors are helped in the recovery process by a family
caregiver, usually the spouse. A pilot study testing a program
to reduce physical and psychological demands on family
caregivers found this intervention reduced depression and
caregiver burden and better prepared them for their role.
Preliminary results found that a telephone intervention may be
as helpful as the in-home program. Execution of this program
could have vital results for family caregivers of 4.5 million
American stroke survivors.
--Non-Q-Wave Heart Attack.--Of the estimated 1.1 million Americans
who will suffer a heart attack this year, about 600,000 will
experience non-Q-wave--EKG classification--version. VA research
showed that noninvasive treatment of non-Q-wave heart attack
patients saves money, an estimated $20 billion a year, and is
just as effective or in some cases better than invasive
procedures such as heart bypass surgery or angioplasty. Higher
death rates were associated with invasive procedures. Results
could change treatment for sufferers of this type of mild heart
attack. An economic study is examining cost-effectiveness on
initial stay and follow-up care and estimating impact of
adoption of these recommendations on American health care costs
and pioneer VA cost determination methods.
--Heart Attack Treatment.--VA researchers found aspirin is as
effective as aspirin and the blood thinner, Coumadin, for heart
attack victims. Aspirin is cheaper and does not need dose
regulation.
heart and stroke research challenges and opportunities for va
Research advances outlined above and other progress have been made
possible by congressional support of the VA Medical and Prosthetic
Research program. Thanks to research, more of our patients, our
families and our friends survive their heart attack or stroke and with
a better quality of life. However, while more Americans are surviving,
heart attack and stroke are still are No. 1 and No. 3 killers,
respectively, and can cause permanent disability, requiring costly
medical care and loss of productivity and quality of life. Clearly more
work is needed if we are to win the fight against heart disease and
stroke. Challenges and research opportunities to advance the battle
against heart disease and stroke abound. Examples of on going VA
research are highlighted below.
--Heart Failure Studies.--A VA study is comparing effects of three
anti-clotting therapies (aspirin, warfarin or clopidogrel) in
heart failure patients. Another study is creating a large DNA
bank of sufferers to examine genetic basis of heart failure. A
third study, the first large scale, international, randomized
clinical trial, is evaluating effects of digitalis, a 200-year
old treatment in preventing heart failure deaths. Heart failure
is a major cause of hospitalization of Americans age 65 and
older. Another study is determining if sleep apena oxygen
treatment will improve survival and quality of life of veterans
with heart failure and reduce hospitalizations. It will
identify sleep apnea risk factors in those with stable heart
failure. A blood test developed by VA researchers may help
emergency department doctors diagnose congestive heart failure.
This test may offer an alternative to physical exams, x-rays,
stress tests and echocardiography for diagnosing heart failure.
Heart failure represented more than 22,000 VA hospitalizations
in 1990 at a cost of about $100 million. Results will improve
treatment of heart failure that affects 4.7 million Americans.
--Inflamed Arteries.--Many heart attacks and strokes are the end
result of atherosclerosis, the disease process that causes
obstructed blood vessels. VA-supported research has shown that
inflammation may cause atherosclerosis or hardening of the
arteries. Scientists have identified large numbers of a certain
receptor on inflammatory cells in heart blood vessels. If
researchers can create a way to block that receptor,
progression of atherosclerosis might be prevented.
--Heart Attack Research.--An estimated 1.1 million Americans suffer a
heart attack each year. VA research is assessing cost-effective
ways to diagnose and treat suspected heart attack without
costly invasive procedures, including a computer analysis of
the heart's electrical signals during exercise and a new
scoring system in treadmill tests. Scientists are examining
long-term outcome and risk factors for heart attack sufferers,
for those who have heart attack during surgery and for those
who have heart bypass surgery. Researchers have identified a
molecular marker that may help predict heart attack or
insufficient blood supply to the heart. They are studying
whether such attacks can be prevented by increasing levels of a
protein that stimulates blood vessel growth and helps repair
damaged tissue. Findings could save money, improve health care
and reduce surgery.
--Warfarin and Aspirin Study.--Heart attack is America's single
largest killer. A VA-sponsored study is analyzing effects of
the blood thinner warfarin plus aspirin versus aspirin alone in
reducing deaths from heart attacks. If results confirm the
hypothesis, VA estimates that 20,000 lives could be saved.
--Angioplasty.--Heart disease, the No. 1 killer in the United States,
affects about 20 million Americans. In the first of its kind
study, COURAGE, VA is comparing the effectiveness of
angioplasty with medical therapy versus aggressive medical
therapy alone in patients with heart disease. The results of
this study could revolutionize treatment of heart disease. In
1998 an estimated 926,000 angioplasty procedures were performed
to restore blood flow to the heart by widening narrowed
arteries. The average cost of angioplasty in 1995 was $20,370.
--Atherosclerosis and Iron Research.--Atherosclerosis is a major
heart attack and stroke risk factor. VA research is evaluating
the concept that too much iron in the blood stream contributes
to atherosclerosis. Research results could revolutionize the
treatment of heart attack and stroke.
--Stroke Research.--Stroke strikes about 600,000 Americans each year;
many survivors are permanently disabled. Researchers found
restricting use of limbs unaffected by stroke can help patients
recover use of limbs affected by stroke more quickly and fully.
Progress in deciphering language of the brain's motor cortex,
the section that helps control muscle movement, could lead to
new technology that may reconnect damaged areas or
communication pathways of the brain and may restore lost
function after a stroke. Scientists implanted electrodes in leg
muscles of stroke patients and used sophisticated software to
electronically stimulate muscles. VA researchers were the first
to demonstrate that robot-assisted therapy is more effective
than conventional treatment in restoring upper limb movement
following stroke. Researchers are studying genetic
susceptibility to carotid atherosclerosis, a major cause of
stroke. Scientists are examining quality of care at VA
hospitals, because of findings that blacks suffer more severe
strokes than whites and that blacks are less likely to receive
imaging tests or carotid endarterectomy, surgery to remove
buildup of atherosclerotic plaque in the main artery to the
brain, located in neck, to prevent stroke.
The number of VA research applications has grown slightly over the
last five years, but funding cuts and/or inflationary increases
severely restrict support for approved applications. For the programs,
which were reviewed for fiscal year 1999 funding, more than 30 percent
of approved applications were funded. Ten years ago, 40 to 50 percent
of the approved applications were funded.
Through fiscal year 2000, total dollars appropriated for the
Department of Veterans Affairs Medical and Prosthetic Research program
have increased $128 million since 1985 at an approximate annual rate of
about 3 percent. But, there has been a decrease in terms of constant
``1985 dollars'' of $14.7 million. The Medical Research programs
highlighted below are of interest to the American Heart Association.
--Investigator-Initiated Studies.--During fiscal year 2000 this
program constituted an estimated 71 percent of the Medical and
Prosthetic Research appropriated budget. These investigators
comprise the core of all VA research and provide the
preceptorship for career development awardees.
--Cooperative Studies.--In fiscal year 2000 this program supported an
estimated 38 clinical trials. The VA offers a unique
opportunity for cooperative studies due to close linkage among
hospitals. These studies provide a mechanism by which research
on the effectiveness of diagnostic or therapeutic techniques
can achieve statistically significant results by pooling data
on patients from a number of VA hospitals. The Cooperative
Studies Evaluation Committee evaluates proposals developed by
teams of clinicians and biostatisticians. The VA has supported
landmark clinical trials in the cardiovascular field (e.g. high
blood pressure treatment and coronary artery bypass surgery).
--Career Development Awards.--Applications for these awards are
reviewed both locally and by the VA Central Office. This
program experienced a decrease in the number of awards by 58
percent from a high in 1991 of 212 awards to a low of 88 awards
in fiscal year 1997. In response to the Research Realignment
Advisory Committee's suggestion to rejuvenate this program, a
renewed emphasis began in fiscal year 1997 for the VA's Medical
Research Service, Health Services Research and Development
Service and, for the first time, Rehabilitation Research and
Development Service. This will result in an anticipated 176
Career Development Awards in fiscal year 2000.
action needed
Today's investment in medical research will lead to future returns.
Returns include continued decreases in death rates from heart attack,
stroke and other cardiovascular diseases, reduced federal outlays for
hospital and long-term care, a well-trained cadre of medical
researchers and a healthier society.
Consistent with the Friends of VA Medical Care and Health Research
and the Independent Budget, we recommend an fiscal year 2002
appropriation of $395 million for the VA Medical and Prosthetic
Research program. This appropriation will allow maintenance of fiscal
year 2001 initiatives and implementation of new initiatives, including
continuation of research momentum in heart disease and stroke and
maintenance of VA's vital role in this field. We urge VA to establish
heart and stroke centers to fight cardiovascular diseases--America's
No. 1 killer and a major cause of disability.
______

Prepared Statement of the Lac du Flambeau Band of Lake Superior
Chippewa Indians

My name is Henry St. Germaine, Sr. and I am the Tribal Chairman for
the Lac du Flambeau Band of Lake Superior Chippewa Indians. The Lac du
Flambeau Reservation is in the ``North Woods Area'' of Wisconsin and
our homeland is called Waswagoning. The Lac du Flambeau tribal members
always want us to remind Congress about the special and unique
relationship the Federal government has with Indian tribes. The Federal
government is obligated by Treaty and Executive Order to provide for
critically needed social, education, health and governmental services
to the Band and its members in exchange for the land, water, natural
resources and peace our forefathers provided. As Congress and the
President begin work on the fiscal year 2002 Budget, the obligations
and commitments to provide for these services must not be forgotten and
should be given the highest priority. The Lac du Flambeau Band submits
the following issues and concerns to the Subcommittee concerning
veterans affairs, housing and the environment.
veterans' administration
I would first like to address how the system is failing our
American Indian veterans with regard to accessing veterans' benefits.
American Indians across the country have the highest record of military
service per capita when compared with other ethnic groups. These men
and women have put their lives at risk to ensure the survival of future
generations, yet they consistently have problems accessing basic
benefits and services. I share in their frustration as they attempt to
get to the local county veterans service office (``CVSO'') located
almost 50 miles away. Many of our tribal members lack any form of
transportation. Our winters are severe and travel is difficult even if
you have reliable transportation. Many tribal members do not have
telephones, contributing to further decreased access to the local
CVSOs. Additionally, many veterans are intimidated by the myriad of
paperwork and the various eligibility criteria for different veterans
benefits.
According to a resolution prepared by the Great Lakes Inter Tribal
Council in Lac du Flambeau, there are approximately 40,000 American
Indian veterans in Wisconsin. It is estimated that only 5 percent of
these veterans are aware of the benefits programs for veterans. Lac du
Flambeau has recently started collecting information regarding tribal
members who are veterans. Currently, 130 veterans have registered and
we expect this statistic to double since we are in the early stages of
gathering this information and the numbers do not include family
members. This list also does not include veterans who are non-enrolled
descendants and other American Indians living on the reservation.
We come before you to urge the Committee to establish a tribal
veterans service office (``TVSO'') on the Lac du Flambeau Reservation
to render services to American Indian veterans and their families.
Currently, the Band is not a recipient for Federal or State grants in
regards to securing tribal veterans' benefits. By Congress
appropriating $150,000 as a proposed budget, we can finance and secure
office space for a TVSO at Lac du Flambeau. We ask that this TVSO have
autonomy and the same benefits and opportunities as the CVSO. We
respectfully request that Congress honor our warriors and ensure that
these American Indian veterans can access veterans' benefits with fewer
barriers by placing a TVSO on the Lac du Flambeau Reservation.
housing
There is a shortage of housing on the Lac du Flambeau Reservation
and the housing that is in place is substandard. This problem is
exacerbated by the barriers to lending and the population growth in the
area. In March 2000, the Bureau of Indian Affairs released a Labor
Force Survey that shows the Lac du Flambeau enrolled membership
population is 3,056 with a projected population growth of 4 percent by
the year 2005. The tribal housing authority's NAHASDA Block Grant is
$1,513,632. The Band's housing stock is 191 rental units and 112 Mutual
Help units--a total of 303 units and over half the units are considered
to have overcrowded living conditions. The rental units are 15 to 36
years old and are in substandard condition, most of which require major
rehabilitation and modernization. There are currently 300 Lac du
Flambeau members on the waiting list for housing. Band members continue
to move back to the reservation only to find overcrowded living
conditions and no housing.
The Band faces a housing shortage and inadequate funds exist to
rehabilitate existing units. The NAHASDA Block Grant level of funding
is below inadequate and often it is a balancing act to leverage funds
for new housing development or to rehabilitate the current housing
stock. We must address rehabilitation and modernization needs
simultaneously. Unfortunately, the lack of funds is an obstacle to
moving forward to provide affordable housing for our members. The
urgent need for rehabilitation is equal to the need for additional
housing and the costs are equally substantial.
President Bush's fiscal year 2002 budget proposal for HUD is 30.4
billion, a 7 percent increase over last year. However, most of the
increase is required to cover existing contracts for rental assistance.
For NAHASDA, the Administration has requested funding at last year's
level of $650 million. I strongly urge the Committee to increase the
NAHASDA appropriations to a level that is responsive to the growing
housing needs on the reservation. The current level of funding is
simply not enough to provide safe and healthy homes for our families
and children.
environment
The Lac du Flambeau Reservation is rich with lakes and forests and
nearly 50 percent of the reservation is saturated with water. The total
resource areas are as follows: Wetlands--24,000 acres (27.7 percent),
Lakes & Rivers--17,897 (20.7 percent), Forested Uplands--41,733 (48.2
percent), and Other--3,000 (3.5 percent). Approximately 25 percent of
the reservation area is owned by non-Band members and is considered fee
land. The Band was blessed with a very diverse ecosystem and a huge
responsibility to protect, enhance, and conserve the natural resources
for present and future generations.
Under the Clean Water Act, the Band has the responsibility and the
authority to manage the water resources of the Lac du Flambeau Indian
Reservation. The Band has adopted water quality standards which, once
approved by EPA, will be applicable to all who reside within the
exterior boundaries of the reservation. To effectively manage the water
resources of the reservation, this authority must remain with the Band.
It would be impossible to manage water resources under any other
authority than that provided by the Lac du Flambeau themselves. The
notion that the State's level of protection is adequate is not a
responsible one. Lac du Flambeau, and other subsistence-based Tribes,
require more stringent water quality standards to support their culture
and lifestyle. Of particular concern is the fact that Tribal members,
on the whole, have a larger portion of fish in their diet than the non-
Indian population of Wisconsin. Some fish on the Lac du Flambeau
Reservation are inedible even by State of Wisconsin standards that were
developed using consumption levels below those of the Band. States do
not incorporate subsistence lifestyles into their water quality
standards. Presently, toxic pollutants, such as mercury, have entered
reservation waters and caused a tribal ban on all fish consumption of
walleye from one of the best fisheries and most beautiful lakes on the
Reservation. These toxic pollutants have entered Lac du Flambeau waters
under current State of Wisconsin standards, which are in place until
the Band's water quality standards are recognized.
This is not the only environmental problem facing the Band.
Shoreline development is an ever-increasing problem on the reservation.
The greatest source of this non-point source pollution is shoreline
development, both tribal and non-tribal. Natural shoreline areas
provide important terrestrial and aquatic habitats. Natural shoreline
areas also contain important native plant species that filter out
contaminants and protect reservation waters from pollution. Lake
riparians often remove the native vegetation and attempt to replace it
with a bluegrass lawn they brought with them from urban areas. These
lawns often require the use of chemicals and fertilizers that wash into
reservation waters causing excessive growth of algae and pollution of
the lake (or stream) ecosystems. Moreover, in Lac du Flambeau, it is
cost prohibitive to establish and maintain a traditional bluegrass lawn
due to topsoil and fertilizer requirements. Therefore, sparsely
vegetated or bare ground areas often result. These areas quickly erode
and negatively impact the Band's water quality and may disturb
archeologically significant areas.
The Lac du Flambeau Reservation has unique characteristics and a
shoreline restoration project needs to be encouraged among lake
residents. Education and outreach are essential in changing attitudes
about shoreline buffer areas. Current EPA funding programs do not allow
the Band to adequately address non-point source pollution, which is the
major source of water quality degradation on the Reservation.
In 1998, the Band completed a Unified Watershed Assessment. At the
initial meetings introducing these Assessments, EPA Administrator Carol
Browner indicated that EPA would be requesting the bulk of new water
quality management dollars under the 319 Program. She suggested that,
while other programs, such as 314, may be drastically under-funded, the
resources would be available within the 319 Program to address these
concerns. While this may be reassuring to States, Tribes are left out
in the cold. Unless Congress removes the Tribal 319 cap, Tribal
governments will be unable to compete for 99.66 percent of total EPA
319 allocation. In fiscal year 2001, this congressionally imposed cap
was lifted for one year only. A separate tribal set aside for the 319
Program, similar to the successful 106 Water Pollution Control Program,
may be necessary if Tribes are to adequately manage non-point source
pollution on reservations.
Over the past decade, EPA funding has played a vital role in
environmental management on the Lac du Flambeau Reservation by
assisting the Band in water quality monitoring. The purpose of these
activities was to gain valuable baseline water quality data and to
utilize it while writing Water Quality Standards for the reservation's
surface waters. Currently, the standards have been submitted to EPA and
the Band has applied for regulatory authority to operate a water
quality standards program.
Clean Water Act Programs, such as the 106 Water Pollution Control
Program, are essential to water quality protection on the Reservation.
The Band is grateful that recent increases have been achieved under
this important program. Proposed funding levels show the
Administration's commitment to resource preservation in Indian country.
The future of this funding must continue to be strong in order for the
Tribes to carry out the vast array of Federal programs. States have
been receiving funding for nearly thirty years and have used this money
to build an environmental infrastructure. Indian Tribes must be
afforded time and money to bring environmental programs on par to those
of the States. The Band requests that Congress, at a minimum, maintain
106 funding at the levels proposed in the President's Budget. In the
upcoming years, the Band must continue to protect and manage water
resources on the reservation. We will accomplish this through a variety
of water quality projects and the assumption of additional Federal
regulatory programs. The Band is requesting $130,000 106 Program
dollars in fiscal year 2002 to accomplish the following: implementation
of a drinking water protection plan, non-point source management,
public education for lakefront property owners, water quality
standards' revisions, and interactive kiosk sites for zoning and
environmental protection information.
Besides surface water resources, EPA has also helped the Band in
developing underground storage tank, radon, and solid waste programs on
the reservation. These programs have succeeded largely due to the
General Assistance Program (``GAP''). GAP has been used to increase
environmental awareness and compliance on the reservation. Continued
support of GAP will allow the Band to build on past accomplishments and
ensure proper compliance with various environmental regulations and
mandates. Although GAP was originally created as a four-year program,
these monies need to be set aside annually if tribal governments expect
to make continued progress in environmental management. The Band
receives approximately $110,000 annually through GAP. The monies
received since 1992 have allowed the Band to make significant progress,
however $110,000 is not adequate to support the implementation of these
government mandated programs. Indian Tribes are required to comply with
many environmental mandates. We need an increase to at least $135,000
for fiscal year 2002 to support additional staff which are needed to
assist the Band in protecting and conserving our natural resources.
There are more than 200 underground storage tanks on the reservation,
most on non-Indian fee land, that need to be investigated or removed in
order to protect the Band's groundwater supply. The solid waste
management program also needs to be continued and expanded to comply
with Federal, State, and Tribal solid waste regulations. This is a
monumental task for one individual. Therefore, we urge the Committee to
increase the appropriations for GAP so that we may hire additional
staff to help us comply with these environmental mandates.
In addition, the recently enacted Tribal Cooperative Agreement
Authority, which allows the EPA to award cooperative agreements to
Tribes to assist in implementing Federal environmental programs, should
be renewed for additional years. A specific tribal set aside for this
new program would also be helpful to the Band in achieving necessary
environmental goals. Currently this Cooperative Agreement Authority
does not carry any additional funding allocation for Tribes. Tribes are
precluded from obtaining any State dollars allocated for similar EPA/
State Cooperative Agreement Authority.
Wetland resources are a valuable commodity in today's environmental
landscape and are being lost at an alarming rate nationwide. Current
set asides for the State/Tribal Wetland (104) Programs are inadequate.
Tribal funding levels for this program are often less than those of the
106 Program and GAP. Fierce competition between Tribes and States often
results in Tribes gaining little overall funding. The Lac du Flambeau
Reservation is 27.7 percent wetlands and the Band has applied for 104
dollars. To date, the Band has only received money from the fiscal year
1996 grant funding cycle. As development pressures increase on the
reservation, greater demands will be placed upon the wetlands of the
reservation. Additional monies must be budgeted for the 104 Program to
meet these demands.
We request the Committee's strong support to enable us to preserve
and expand our environmental programs.
______

Prepared Statement of the Assiniboine and Sioux Tribes

The Assiniboine and Sioux Tribes of the Fort Peck Indian
Reservation, in Montana. appreciate the opportunity to present this
testimony.
veterans affairs
The Tribes would like to bring to the attention of the Subcommittee
the significant needs of Native American veterans. As the Subcommittee
no doubt knows, in proportion to Indian representation in the Nation's
population, Native American men and women have served in this country's
armed forces in far greater numbers than any other group in our
society. In Vietnam alone, more than 42,000 Indians served. More than
90 percent of these individuals volunteered. One study has shown that
one in every twelve eligible white American man served in Vietnam, but
for Indians it was one in four. This same study showed that most
Indians who served in combat in Vietnam were assigned to front-line
combat assignments. Thus, at least in Vietnam, not only did Indian men
serve in disproportionate numbers, Indian men were in the most
dangerous line of fire in a higher number, as well.
The Veterans Administration has begun to understand that it needs
to do a better job of meeting the needs of native veterans. The Tribes
were very pleased by the recent statements of Secretary Anthony
Principi at the National Congress of American Indians and the
commitments that he has made to improve the quality of service that
native veterans receive. We urge the Subcommittee to support his
efforts.
Some of the VA's recent efforts include a sharing agreement with
the Oneida Tribe Community Health Center, which enables treatment for
veterans on or near the Oneida Reservation. In the Black Hills, the VA
has established six community-based healthcare clinics throughout South
Dakota close to reservations. On the Hopi Reservation in Arizona, the
VA established the first Vet Center to be located on a Reservation. We
understand that there is now also one on the Navajo Reservation in
Chinle, Arizona and others planned. These types of initiatives should
be expanded to better meet the needs of Native Veterans.
In particular, the Fort Peck Tribes are very concerned that except
for a community health initiative with the Fort Harrison VA, there are
no programs in the State of Montana to ensure that the VA is meeting
its obligations to the native veterans in Montana. At Fort Peck alone,
there are more than two-hundred veterans residing on the Reservation.
The majority of these veterans are Korean war and Vietnam war veterans.
Thus, the average age of our veterans is well over fifty. Because of
the advancing age of our veterans, the medical and other VA needs of
our veterans are significant. Unfortunately, in order to receive any
type of medical service, these veterans must travel long distances to
either Miles City or Glasgow, Montana. The VA offers no transport
services to our veterans. Some of our veterans are disabled and cannot
drive and some of the veterans lack the financial resources to make the
trip. Moreover, there is no place on the Reservation for veterans to
learn about the services and benefits of the VA, including burial
services, the new medical benefits for Medicare eligible veterans, and
educational opportunities for the younger veterans.
Thus, the Tribes urge the Subcommittee to dedicate funds for a Vet
Center on the Fort Peck Reservation to provide services not only to
native veterans but all veterans of Northeast, Montana. This Vet Center
could serve as a resource center on VA services, provide counseling and
referral services, and provide transportation services to and from the
health facilities for veterans in the area.
Of great concern in all Indian communities is the impact of
diabetes on our people. Even more alarming is the Air Force's recent
study confirming the link between the use of Agent Orange and adult-
onset diabetes. As a result of this study, the VA now treats diabetes
as a war time disability. Thus, we urge the Subcommittee to continue to
support the treatment and prevention of diabetes among veterans.
housing
Severe housing deficiencies continue to plague Indian communities.
The tragedy of homelessness and substandard housing is only too
familiar to Indian tribes within this country.
The last census documented that 16 percent of all Indian homes had
no electricity, 21 percent had no piped water and over half had no
central heating and 43 percent of Indian households were below the
poverty line. Today, there are about 160,000 units of Indian public
housing in existence. But approximately 16,700 need replacement and
53,000 need substantial rehabilitation. The Department of Housing and
Urban Development estimates that there is a need for about 87,000 new
housing units for Indian families. On the Fort Peck Reservation, there
is a waiting list of 600 people. The Tribes annual grant from the
Department is $5.5 million. However, because of O&M obligations to
existing stock, the Tribes are only able to build 20 new units every
other year. The federal government's trust responsibility demands that
this Indian housing crisis be addressed. Funding for Indian housing
programs, we want the Subcommittee to know that the needs are
significant and that increasing the funding over last year's funding
level of $650 million is critical.
I would like to thank the Committee for the opportunity to testify
before you today.
______

Prepared Statement of the Great Lakes Indian Fish & Wildlife Commission

glifwc's fiscal year 2002 appropriations priorities
$318,000 to maintain its (1) Crandon Mine assessment project, and
(2) Lake Superior environmental protection programs that currently are
funded by EPA's Coastal Environment Management (CEM), Great Lakes
National Program Office (GLNPO), and Environmental Justice programs.
1. Ceded Territory Mining Assessment.--$168,000 to continue
technical and scientific work relating to a proposed zinc and copper
mine near Crandon, Wisconsin. The mine will impact ceded territory
natural resources that are subject to the tribes' treaty reserved
rights to hunt, fish and gather.
2. Lake Superior Programs and Projects.--$150,000 to continue (a)
participation in the BiNational Program to Restore and Protect Lake
Superior, including the Lake Superior Lakewide Management Plan (LaMP),
and (b) research projects related to the Lake Superior basin and the
LaMP. Historically, GLIFWC has received this amount through a
combination of funding from EPA's CEM, GLNPO, and Environmental Justice
programs.
treaty rights and glifwc's environmental protection role
Eleven Minnesota, Michigan, and Wisconsin Chippewa tribal
governments established GLIFWC to assist them in:
--implementing treaty guaranteed rights to hunt, fish, and gather in
treaty ceded territories;
--protecting Lake Superior fishing rights; and
--cooperatively managing and protecting ceded territory natural
resources and their habitats.
Tribal members rely upon fish, wildlife, and plants for religious,
cultural, medicinal, subsistence, and economic purposes. A number of
state and federal court rulings have affirmed the rights of GLIFWC's
member tribes to hunt, fish, and gather from the lands and waters ceded
by these treaties. However, these rights mean little if contaminated
natural resources threaten the health, safety, and economy of Chippewa
people, or if the habitats supporting these resources are degraded.
glifwc programs funded by epa
GLIFWC currently administers EPA funding for:
1. Study of Proposed Crandon Mine in Wisconsin.--GLIFWC's work
includes hydrological modeling, contaminant transport analysis, and
baseline biomonitoring studies.
2. Participation in the Lake Superior Bi-National Program.--Since
fiscal year 1996, EPA has provided CEM funds for a 1 FTE equivalent to
facilitate GLIFWC's participation in the BiNational Program to Restore
and Protect Lake Superior, including preparation of the Lake Superior
LaMP and participation in various International Joint Commission (IJC)
and State of the Lake Ecosystem Conference (SOLEC) forums.
3. Research and Special Projects.--Since fiscal year 1997, EPA has
provided a combination of CEM, GLNPO, and Environmental Justice funds
for GLIFWC to conduct scientific research to produce data relevant to
the Bi-National Program/Lake Superior LaMP and to human health.
specific fiscal year 2002 funding needs
GLIFWC would use fiscal year 2002 funds to:
1. Work on the Proposed Crandon Mine.--$168,000 for GLIFWC's
review, analysis and GIS mapping related to the mine, particularly as
to groundwater modeling and contaminant transport issues, analysis of
the proposed reflooded mine management plan, and continuation of
ongoing baseline biomonitoring projects.
Rationale.--Both the state and federal permit processes are moving
toward draft Environmental Impact Statements. GLIFWC has been an active
player in reviewing the state mining and federal 404 permit
applications since 1994, particularly regarding hydrological issues. It
has established a groundwater modeling component to its program that
has contributed to greater precision and accuracy of computer modeling
programs used by both state and federal agencies. It is working to
establish similar capabilities regarding contaminant transport issues.
In December 2000, the mining company modified its reflooded mine
management plan. The modified plan predicts violations of Wisconsin's
groundwater quality standards. This plan must be analyzed, in
particular regarding its proposed contaminant control technologies and
the computer models underlying its contaminant predictions.
In addition, GLIFWC has established a biomonitoring program
designed to gather baseline data for contaminants found in certain
plants and animals near the proposed mine site. For many of the species
involved, GLIFWC has obtained only one year of funding for a three-year
project. Data must be collected over a three-year period to provide an
adequate number of samples for statistically determining changes in the
environment. Fiscal year 2002 would be the second year of this project.
2. Participate in the Lake Superior Bi-National Program.--$80,000
for continued funding of GLIFWC staff (1 FTE equivalent) who will
participate in the BiNational Program, in the preparation and
implementation of the Lake Superior LaMP, and in IJC and SOLEC forums.
Rationale.--GLIFWC has been actively involved in the BiNational
Program and preparation of the Lake Superior LaMP since 1993. It
currently serves on the BiNational Program's Task Force and Workgroup,
and on the Workgroup's chemical and habitat committees. It is
participating in the preparation of the LaMP 2002. It also helps to
liaison with other relevant Great Lakes institutions, such as the Great
Lakes Fishery Commission, on issues of mutual concern between
environmental and natural resource managers.
As for IJC forums, GLIFWC staff regularly attend the biennial IJC
meetings and provide periodic comments when issues arise in the
interim, such as on the matter of Great Lakes water diversions. As for
SOLEC, GLIFWC staff addressed the 2000 plenary session on the topic of
wild rice and organized a breakout session on wild rice.
3. Continue Research and Special Projects.--$70,000 for Lake
Superior habitat and human health research projects.
Rationale.--GLIFWC has undertaken a number of studies related to
the Lake Superior ecosystem. For example, with GLNPO and CEM funds,
GLIFWC is preparing a report on the threat of wetland and terrestrial
exotic plants to Lake Superior, is studying sturgeon in the Lake
Superior basin, and is GIS-mapping fish spawning and nursery locations
for both native and exotic species. In addition, as part of its ongoing
natural resource contaminant/human health research, GLIFWC used
Environmental Justice grants to update its fish consumption advisory
database and to undertake wild rice contaminant research for heavy
metals.
For fiscal year 2002, GLIFWC would explore EPA funding for three
projects:
--Inventory zebra mussels in Chequamegon Bay and establish an
interagency workgroup to inventory, monitor, and develop
strategies to minimize the spread of zebra mussels in Lake
Superior and inland waters.
--Assess impacts from mining waste (stamp sands) dumped into Lake
Superior during the late 1800s, map an important whitefish and
lake trout spawning reef in Keweenaw Bay, and determine the
distribution of stamp sands in relation to the spawning reef.
--Assess chemical contaminants in archived and newly collected
samples of whitefish and lake trout, focusing on dioxins, PCBs,
and polybrominated dyphenyl ethers (PBDEs).
benefits of glifwc's epa-funded programs
Securing GLIFWC's EPA funding base provides the benefits of:
1. A Constructive, Stabilizing Tribal Natural Resource Management
Institution.--Over the years, GLIFWC has become a recognized and valued
partner in natural resource management and in providing accurate
information to the public. Because of its institutional experience and
staff expertise, GLIFWC provides continuity and stability in
interagency relationships and among its member tribes, and contributes
to social stability in the ceded territory in the context of treaty
rights issues.
2. Cooperative, Cost-effective Partnerships.--Since its inception
in 1985, GLIFWC has built many partnerships with other government
agencies, schools and universities, and nongovernmental community
groups and conservation organizations. This is particularly true
regarding Lake Superior and its ecosystem. These partnerships have: (a)
identified mutual natural resource concerns, and implemented
conservation and enhancement projects; (b) maximized each partner's
financial resources and avoided duplication of effort and costs; (c)
achieved public benefits that no one partner could have achieved alone;
and (d) engendered cooperation rather than competition.
3. Sound Science and Research, and Better Integration and
Consolidation of Data.--GLIFWC recognizes that rational policy
decisions are based upon sound science and accurate information. That
is why, with funds provided by EPA, GLIFWC has undertaken a number of
projects intended to promote good decisions based upon facts and proven
scientific data.
adequate funding for tribal participation in lake superior initiatives
GLIFWC asks Congress to provide adequate, long-term funding for
CEM, GLNPO and Environmental Justice programs that are essential for
continued tribal participation in both the policy and technical aspects
of these initiatives. Specific programmatic and general assistance
program funding designed for the exercise of tribal environmental
protection authority does not meet all of GLIFWC member tribes' needs
relating to their ceded territory treaty rights, particularly regarding
Lake Superior. That is why EPA's CEM, GLNPO and Environmental Justice
programs have been so important in helping tribes, and their duly
authorized agencies like GLIFWC, to participate in Lake Superior
initiatives.
GLIFWC and its member tribes are working hard to do their share in
protecting the Lake Superior ecosystem. They want to remain active
partners in ensuring that it continues to provide for the well being of
all those--tribal members and their neighbors--who rely upon this vital
resource to meet so many needs.
______

Prepared Statement of the Joslin Diabetes Center

introduction
Mr. Chairman, thank you for this opportunity to provide a status
report on the Diabetes Project conducted jointly by the Joslin Diabetes
Center in Boston, MA and the Department of Veterans Affairs, for which
you provided $5 million in the fiscal year 2001 Appropriations Act. Our
request for fiscal year 2002 to continue and expand this project with
the VA is $6 million, of which the VA's costs represent approximately
50 percent. I am Dr. Sven Bursell, Principal Investigator of the
project and Associate Professor of Medicine at the Harvard Medical
School.
background
Joslin Diabetes Center has been involved with the Department of
Defense and the Department of Veterans Affairs in a pilot demonstration
project for the advanced detection, prevention, and care of diabetes.
The Joslin Vision Network (JVN) has been deployed in VA sites in VISN
21 in Hawaii (Honolulu, Hilo and Maui), VISN 1 in New England (Boston,
Brockton and Togus Maine) and VISN 19/20 (Seattle and Tricities in
Washington, Anchorage in Alaska and Billings in Montana). The JVN
employs telemedicine technology to image the retina of patients with
diabetes, through an undilated pupil, and produces a digital video
image that is readable in multiple formats.
This project was funded initially through the Department of Defense
Appropriations Act. The Department of Veterans Affairs medical staff
was eager to expedite the deployment of this advanced diabetes
technology beyond the limited resources available through participation
in the DOD funded project. We petitioned this Subcommittee for
additional resources to be made available to the VA for discretionary
diabetes detection and care.
This Committee provided $2 million in fiscal year 2000 and $5
million in fiscal year 2001 for expansion of this project within the
VA. The VA is eager to continue expansion, citing the JVN as the model
of the future telemedicine in a recent conference of the Association of
Military Surgeons-General of the US (AMSUS). We are seeking $6 million
to continue this expansion, and are supported by the VA medical policy
staff.
The leadership shown by this Subcommittee has enabled the VA to
provide its patient population the best diabetes care, prevention, and
detection in the world. We extend our sincere appreciation to you for
your response to that request.
fiscal year 2001 activities
The policy and program officials of the VA have established the
appropriate contracts and statements of work that resulted in consensus
with respect to deployment of the Joslin Vision Network (JVN)
technology to three sites: Anchorage, Alaska, TriCities, Washington,
and Billings, Montana. A Reading Center will be created and utilized in
Seattle, Washington. In addition, the refinement of JVN technology,
both hardware and software, will move toward developing a scalable
system that is capable of widespread deployment agency-wide. This
system will be completed by March 31, 2001 and it is anticipated that
this next generation of the system will be completely integrated into
the VA's VISTA Medical Records System and the VA communications
infrastructure.
Results from our various demonstration installations have shown
that appropriate clinical resources can be efficiently allocated with
respect to appropriate ophthalmology referral. For example, the
installation in Togus Maine where there is no ophthalmology resources
on site has shown that the use of the JVN system can effectively
prioritize patients that need to be seen by the opthalmologist at the
time when the ophthalmologist plans to visit that clinic. This site is
imaging approximately 10 patients per day and they find the JVN program
extremely resource efficient in providing the appropriate eye care to
their patients. The same experience was noted from the VA clinics in
Hilo and Maui where the Optometrist from the Honolulu VA visits these
island clinics once a month and was able to effectively focus his time
on the patients that really needed his expertise for managing their
diabetes eye complications. Technologically, we will be providing an
application that automatically detects retinal pathology from the JVN
images. Using this first step approach it is anticipated that we can
reduce the load on the reading center by as much as 50 percent. This is
achieved through the use of a computer application that scans the
images and detects any abnormalities that may be associated with the
development of diabetic retinopathy. In those cases where the computer
detects pathology a reader will be notified to perform the appropriate
reading for retinopathy assessment. In the case where the computer does
not detect any pathology the patient can be assigned to a low risk
priority where the computer findings can be rapidly confirmed by the
reader and the patient asked to return for repeat JVN imaging in a
year. This application will be clinically validated using the existing
JVN data base of patients in April and May of 2001 and if the
sensitivity and specificity of the algorithm meet clinical standards
then it is anticipated that this will be deployed to existing reading
centers over the latter half of 2001.
fiscal year 2002 request
For fiscal year 2002, we request that in the VA Medical Account $6
million be allocated to continue and expand this project. The positive
response within the VA system indicates that with sufficient resources,
the JVN technology would be deployed in a number of sites with the
ultimate goal of incorporating the JVN technology throughout the VA
Medical Care system. I understand that with the funding that this
request for fiscal year 2002, and perhaps one additional year, we will
no longer need to request explicit funds through this route. That is,
the VA Budget Request by the fiscal year 2004 cycle will include
provisions for full deployment for the JVN throughout the VA Medical
Care system. As the technology, systems and production of equipment are
standardized to off the shelf specifications, the expense per site will
decrease. The request of $6 million includes $1.5 million to complete
the proof-of-concept business model to the point where the system
operation and clinical programs are autonomous within any particular VA
environment and that the VA, and any other medical system, can utilize
the this advanced detection tool and reading center technology to cost
effectively augment their clinical programs.
With the other $4.5 million, the VA and Joslin would determine the
sites with the most need for portable advanced detection and begin to
train personnel and equip additional VA facilities to utilize the JVN
technology.
The specific goals for fiscal year 2002 include the following:
--Establish specific medical codes that will allow the VA to track
performance with respect to these JVN examinations and to
ensure that it conforms with VA performance criteria in
multiple remote VA outpatient settings;
--Improve adherence to scientifically proven standards of diabetes
eye care and diabetes care;
--Improve/promote access to diabetes eye care;
--Increase number/percentage of patients with Diabetes Mellitus
obtaining eye care;
--Provide education patients and providers in the clinical setting.
The use of the JVN equipment and expansion of screening
opportunities are a continuing major focus for fiscal year 2002
activities. The actual number of sites deployed to will be determined
on the locales with the greatest need for diabetes care in conjunction
with the telecommunications infrastructure at the identified sites and
the ease and costs associated with interfacing the JVN technology into
the existing infrastructure.
An equally important concentration of resources in fiscal year 2001
was focused on refining the technical core using outcomes based medical
and case management scenarios to develop a diabetes healthcare model
that is modular, customizable and that can be seamlessly integrated
into the existing VA telemedicine systems. This is the stated goal of
the medical leadership in the VA, DOD and HIS health care systems. The
overarching vision for the VA/JVN project is a web-based comprehensive
diabetes health care system that can be interactively used by both
patients and providers, that incorporates diagnosis specific education
and training modules for patients and providers and that incorporates
software applications that allow outcome measures to be statistically
assessed and individual treatment programs to be interactively adjusted
based on these outcome measures. The JVN Eye Health care system exists
as a component of a comprehensive diabetes management system,
incorporating other clinical disciplines such as endocrinology,
vascular surgery and internal medicine.
In order to make the above vision a reality we have expended
considerable effort in migrating the JVN demonstration technology
platform into an application that is totally compliant with existing
medical informatics infrastructures and the existing VISTA
infrastructure of the VA system. This will encompass the integration of
hardware and software in close collaboration with available resources
from the VA VISTA program that will allow a highly scaleable
transparent integration of the JVN Diabetes Eye Health Care system into
the existing health informatics infrastructures of the VA system. The
proposed development effort for fiscal year 2002 will result in the
development of modular applications associated with different aspects
of total diabetes disease management such as clinical risk assessment,
outcomes assessments, behavior modification in an interactive
electronic environment, and education programs. These applications will
be designed in collaboration with participating VA sites to provide an
ultimate product that appropriately assesses the clinical diabetes risk
and provides treatment plans and behavior modifications that are
tailored to any particular patients needs. The programs will also be
designed so that they can realize a significant cost and resource
efficiency with respect to support and maintenance of the JVN component
and the diabetes management programs that will facilitate an
accelerated deployment in the future.
For the fiscal year 2002 project phase, we have established the
following tasks, targets, and activities:
--Deployment of a viable, sustainable, and refined operating JVN
Diabetes Eye Health Care model and Comprehensive Diabetes
Management program.
--Develop a modularized medical outcomes based telemedicine diabetes
management program in continued collaboration with the VA with
outcome measures incorporated into software based on clinical
results and research experiences of the fiscal year 2001
efforts.
--Develop curriculum based patient and provider educational modules.
--Integrate internet based portals that are accessed by patients for
reporting of glucose values and receiving feedback with respect
to goals for self management of their diabetes and adjustments
of their treatment plans based on these goals. These portals
will also provide regular education modules for the patients
that are customized to their particular needs and clinical
diabetes risk assessment.
conclusion
Continuation and maintenance of this Committee's policy of support
for the improvement of the diabetes care in the VA medical system
through funding of this $6 million request, the benefits by the close
of fiscal year 2002 will include:
--Deployment of JVN detection and care at 5 different VA centers
where each center will provide services for 6 different remote
sites for a total 35 sites;
--JVN accessibility to increase VA patient compliance to eye
examinations to at least 95 percent of the diabetic patient
population in any area being serviced. From an estimate of the
VA diabetic patient population we would estimate that the JVN
would be accessing an estimated patient population of 196,000,
or an estimated 11 percent of the total VA diabetic population
after completing anticipated 2002 deployments.
--The model for VA's deployment of the JVN as a diabetes detection
and disease management platform for expansion to availability
for the entire VA patient population.
Thank you for this opportunity to present this request for $6
million for fiscal year 2002 and status report for fiscal year 2001 on
a medical technology breakthrough for the patients and health care
system within the Department of Veterans Affairs.
______

Prepared Statement of the American Association of Nurse Anesthetists
and the Association of VA Nurse Anesthetists

The American Association of Nurse Anesthetists (AANA) is the
professional association that represents 29,000 certified registered
nurse anesthetists (CRNAs) across the United States. The Association of
Veterans Affairs Nurse Anesthetists (AVANA) represents over 500
certified registered nurse anesthetists across the United States and
Puerto Rico. We appreciate the opportunity to present our testimony to
the subcommittee and to offer recommendations on ways to cut costs
without sacrificing quality of care for our nation's veterans.
background information about crnas
In the administration of anesthesia, CRNAs perform virtually the
same functions as physician anesthetists (anesthesiologists) and work
in every setting in which anesthesia is delivered including hospital
surgical suites and obstetrical delivery rooms, ambulatory surgical
centers, health maintenance organizations, and the offices of dentists,
podiatrists, ophthalmologists, and plastic surgeons. Today CRNAs
administer approximately 65 percent of the anesthetics given to
patients each year in the United States. CRNAs are the sole anesthesia
provider in at least 70 percent of rural hospitals, which translates
into anesthesia services for millions of rural Americans. CRNAs are
also the sole anesthesia providers in numerous VA facilities.
CRNAs have been a part of every type of surgical team since the
advent of anesthesia in the 1800s. Until the 1920s, anesthesia was
almost exclusively administered by nurses. In addition, nurse
anesthetists have been the principal anesthesia providers in combat
areas in every war the United States has been engaged in since World
War I. Data gathered from the U.S. Armed Forces anesthesia communities'
reveal that CRNAs have often been the sole anesthesia providers, both
at home and while forward deployed. For decades CRNAs have staffed
ships, isolated U.S. Bases, forward deployed Combat Hospitals (Kosovo .
. .), and Forward Surgical Teams without physician anesthesia support.
The US Army Joint Special Operations Command Medical Team and all Army
Forward Surgical Teams are staffed solely by CRNAs. Military CRNAs have
a long proud history of providing independent support and quality
anesthesia care to military men and women, their families and to people
from many nations who have found themselves in harms way. CRNAs also
provide anesthesia services in the medical facilities of the Department
of Defense, the Public Health Service, the Indian Health Service, the
Department of Veterans Affairs, and countless other public and private
entities.
The most substantial difference between CRNAs and anesthesiologists
is that prior to anesthesia education, anesthesiologists receive
medical education while CRNAs receive a nursing education. However, the
anesthesia part of the education is very similar for both providers,
and both professionals are educated to perform the same clinical
anesthesia services. CRNAs and anesthesiologists are both educated to
use the same anesthesia processes and techniques in the provision of
anesthesia and related services.
The practice of anesthesia is a recognized specialty within both
nursing and the medical professions. Both CRNAs and anesthesiologists
administer anesthesia for all types of surgical procedures; from the
simplest to the most complex, either as single providers or in a ``care
team setting''.
nursing shortage predicted: how this committee can help
While both types of health professionals can provide the same or
similar services, it costs the Department of Veterans Affairs (DVA)
significantly less to retain CRNAs because they draw a significantly
lower salary than their physician counterparts. Therefore, it is in the
best interest of the DVA, and this Committee, to implement policies and
to support initiatives that assist in the effort to maintain adequate
numbers of CRNA employees in the DVA.
The current employment scenario for CRNAs and the DVA is
complicated by the predicted national nursing shortage that has been
well publicized in the press and professional journals. Enrollments in
nursing education programs continue to decline and the nursing
workforce continues to age and retire. The number of nursing students
enrolled in education programs has decreased 5 percent per year over
the last 5 years. Recent articles stated the average age of the CRNA in
the VA was 50 years old. Recruitment of nurse anesthetists for the DVA
becomes increasingly difficult when the civilian sector faces such
critical shortages. According to a recent survey by the AANA
Administrative Management Committee, as many as 59 percent of the
civilian institutions in the country are also actively recruiting
CRNAs.
Data gathered by Loretta Wasse, Past Deputy Director, Anesthesia
Headquarters, indicated that 10-12 percent of the CRNAs in the DVA
retired in 2000. In real numbers this means the DVA lost over 50 CRNAs.
These retirement numbers combined with nursing shortages, means that
the DVA must work harder at recruiting and retaining nurse
anesthetists. This Committee can greatly assist in the effort to
attract and maintain essential numbers of nurse anesthetists in the DVA
by their support of competitive salaries.
One thing that consistently attracts and maintains good employees
is an attractive salary. Competitive salaries could assist the DVA with
retention of cost-effective CRNAs to provide anesthesia services for
our nation's veterans. But providing competitive salaries for employees
can be an ongoing battle, especially in the face of restricted budgets.
This is where this Committee can help, by providing adequate funding
for personnel.
If salaries cannot stay competitive in the face of a national
nursing shortage, then the DVA will surely face a shortage of CRNAs.
Historically, the cost to correct such a problem has been steep. The
DVA faced a severe shortage of CRNAs once before in the early 1990s,
which was moderately corrected with the implementation of a locality
pay system in 1991. In 1992, Congress expanded the authority of the
local medical directors and allowed them to survey an expanded area to
determine more competitive average salaries for CRNAs, which boosted
pay and morale. Implementation of this expanded authority assisted the
DVA in making great leaps in retention and recruitment of CRNAs at that
time.
In addition, new graduates in various cities are offered starting
salaries equal to or exceeding the VA ceiling. Also, the new pain
initiative, ``Pain as the 5th Vital Sign,'' will increase anesthesia
workload and needs for education. Anesthesia Continuing Education funds
are already insufficient for CRNAs employed by the VA.
Ken Wetjen, CRNA, past president of AVANA, conducted a survey of
education funding for CRNAs. He found many private hospitals are
providing tuition assistance from $1,000-$1,500 a year. Many VA's have
little or no funding to send staff to education programs.
The current Veterans' Equitable Resource Allocation (VERA)
reimbursement payment system funding lags data collection by two years.
VAs are not receiving adequate funding to provide competitive wages and
education to recruit CRNAs. History has shown the CRNA to be a quality,
cost-effective health care provider. The Veterans Benefits and Health
Care Improvement Act of 2000 is a step in the right direction. AVANA
would like to thank the Committee for their support in getting the
legislation passed last year. The legislation insured the VA nurse
anesthetist the minimum COLA raises received by GS employees.
We strongly encourage this Committee to take a role in facing this
nursing shortage head on, by providing adequate funding for personnel.
With the current shortage of anesthetists, we must insure competitive
salaries and education funding to retain and recruit high quality,
cost-effective anesthesia providers. We look forward to working with
this committee to ensure that veterans have access to quality health
care at the VA always.

LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS

----------
Page
Alachua County Board of County Commissioners, prepared statement. 564
Allbaugh, Joe M., Director, Federal Emergency Management Agency.. 237
Prepared statement........................................... 249
Statement of................................................. 246
American:
Association of Community Colleges, prepared statement........ 589
Association of Nurse Anesthetists, prepared statement........ 652
Association of VA Nurse Anesthetists, prepared statement..... 652
Chemical Society, prepared statement......................... 583
Heart Association, prepared statement........................ 637
Institute of Biological Sciences, prepared statement......... 609
Lung Association and the American Thoracic Society, prepared
statement.................................................. 516
Museum of Natural History, prepared statement................ 631
Psychological Society, prepared statement.................... 614
Public Power Association, prepared statement................. 550
Society for Engineering Education, prepared statement........ 602
Society for Microbiology, prepared statement................. 581
Society of Mechanical Engineers, prepared statement.......... 611
Anderson, Oscar, Special Assistant to the Secretary for
Legislation, Department of Housing and Urban Development....... 449
Anderson, William, Deputy Chief Financial Officer, Corporation
for National and Community Service............................. 1
Assiniboine and Sioux Tribes, prepared statement................. 646
Association of:
American Universities, prepared statement.................... 627
Local Air Pollution Control Officials, prepared statement.... 541
Minority Health Professions Schools, prepared statement...... 538

Babyland Family Services, Inc., prepared statement............... 570
Barger, Brenda S., letter from................................... 244
Barile, Vincent L., Deputy Under Secretary for Management,
National Cemetery Administration, Department of Veterans
Affairs........................................................ 65
Boesen, Christopher, Special Assistant, Office of Legislation,
Department of Housing and Urban Development.................... 449
Boesz, Dr. Christine C., Inspector General, National Science
Foundation..................................................... 275
Prepared statement........................................... 295
Statement of................................................. 293
Bohmbach, James W., Chief Financial Officer, Veterans Benefits
Administration, Department of Veterans Affairs................. 65
Bond, Senator Christopher S., U.S. Senator from Missouri:
Opening statements of...............................1, 66, 179, 237
Prepared statements........................................279, 362
Questions submitted by............................30, 109, 342, 396
Statements of.....................................43, 276, 361, 452
Burns, Senator Conrad, U.S. Senator from Montana:
Prepared statement........................................... 365
Statement of................................................. 182
Byrd, Senator Robert C., U.S. Senator from West Virginia,
questions submitted by......................................... 141

California Industry and Government Central California Ozone Study
(CCOS) Coalition, prepared statement........................... 512
Cassidy, Sean, General Deputy Assistant Secretary, Office of
Housing, Department of Housing and Urban Development........... 449
Catlett, D. Mark, Acting Principal Deputy Assistant Secretary for
Management, Department of Veterans Affairs..................... 66
Chicago State University, prepared statement..................... 585
City of:
Fairfield, California, prepared statement.................... 580
Gainesville, Florida, prepared statement..................... 578
Miami Beach, Florida, prepared statement..................... 576
Newark, NJ, prepared statement............................... 499
Palo Alto, California, prepared statement.................... 568
Roseville, California, prepared statement.................... 569
Clark, Eligah D., Chairman, Board of Veterans' Appeals, Office of
the Secretary, Department of Veterans Affairs.................. 66
Coalition of EPSCoR States, prepared statement................... 624
College Partners, Inc., prepared statement....................... 562
Colwell, Dr. Rita R., Director, National Science Foundation...... 275
Prepared statement........................................... 289
Statement of................................................. 288
Craig, Senator Larry E., U.S. Senator from Idaho:
Prepared statement........................................... 96
Questions submitted by....................................... 125
Statements of...............................................95, 365

DeWine, Senator Mike, U.S. Senator from Ohio:
Prepared statement........................................... 183
Questions submitted by....................................... 128
Statement of................................................. 183
Domenici, Senator Pete V., U.S. Senator from New Mexico,
questions submitted by......................................... 127
Doris Day Animal League, prepared statement...................... 531
Duffy, Dennis M., Principal Deputy Assistant Secretary, Assistant
Secretary for Policy and Planning, Department of Veterans
Affairs........................................................ 66

Egan, Nora E., Chief of Staff, Office of the Secretary,
Department of Veterans Affairs................................. 65
Eisenstein, Robert, Assistant Director for Mathematical and
Physical Sciences, National Science Foundation................. 275
English, Patricia, Acting Chief Financial Officer, Federal
Emergency Management Agency.................................... 237
Epley, Robert J., Associate Deputy Under Secretary for Policy and
Program Management, Veterans Benefits Administration,
Department of Veterans Affairs................................. 65

Feussner, John R., M.D., Chief Research and Development Officer,
Veterans Health Administration, Department of Veterans Affairs. 65
Florida State University, prepared statement..................... 633
Fountain House, prepared statement............................... 567
Frost, Dr. Floyd J., Jr., Ph.D., Senior Scientist, Lovelace
Respiratory Research Institute (LRRI), prepared statement...... 505

Garthwaite, Thomas L., M.D., Under Secretary for Health, Veterans
Health Administration, Department of Veterans Affairs.......... 65
Gibbons, Dave, Deputy Chief Financial Officer for Budget,
Department of Housing and Urban Development.................... 449
Goldin, Daniel S., Administrator, National Aeronautics and Space
Administration................................................. 179
Prepared statement........................................... 187
Statement of................................................. 185
Great Lakes Indian Fish & Wildlife Commission, prepared statement 647
Griffin, Richard J., Inspector General, Office of the Secretary,
Department of Veterans Affairs................................. 66

Hauser, Richard, General Counsel, Department of Housing and Urban
Development.................................................... 449
Henderson, Rogene F., Senior Scientist, LRRI, The Lovelace
Respiratory Research Institute, prepared statement............. 501
Hopper, Thomas L., letter from................................... 244

Integrated Petroleum Environmental Consortium, prepared statement 513

Johnson, Senator Tim, U.S. Senator from South Dakota:
Prepared statements........................................181, 282
Questions submitted by....................................... 145
Statements of.............................5, 83, 181, 242, 281, 363
Joslin Diabetes Center, prepared statement....................... 649

Kelly, Dr. Eamon M., Chairman, National Science Board, National
Science Foundation............................................. 275
Prepared statement........................................... 285
Statement of................................................. 283
Kelly, Margaret H., Deputy Executive Director, Neighborhood
Reinvestment Corporation....................................... 43
Kicklighter, Claude M., Director for Special Events, Assistant
Secretary for Public and Intergovernmental Affairs, Department
of Veterans Affairs............................................ 66
Klein, Art, Director of Budget Office, Veterans Benefits
Administration, Department of Veterans Affairs................. 65
Kohl, Senator Herb, U.S. Senator from Wisconsin, statement of.... 454
Kowalczyk, Gary, Coordinator, National Service Programs,
Corporation for National and Community Service................. 1
Kroon, Casey, Chairman, Board of Supervisors, Sutter County,
California, prepared statement................................. 548

Lac du Flambeau Band of Lake Superior Chippewa Indians, prepared
statement...................................................... 642
Lazar, Ellen, Executive Director, Neighborhood Reinvestment
Corporation:
Prepared statement........................................... 47
Statement of................................................. 43
Lubell, Jeffrey, Director, Policy Development Division, Office of
Policy Development and Research, Department of Housing and
Urban Development.............................................. 449

MaGaw, John, Acting Deputy Director, Federal Emergency Management
Agency......................................................... 237
Mars Society, prepared statement................................. 634
Martinez, Mel, Secretary, Department of Housing and Urban
Development.................................................... 449
Prepared statement........................................... 461
McClain, Tim S., General Counsel, Office of the Secretary,
Department of Veterans Affairs................................. 66
McMichael, Guy H., III, Acting Principal Deputy Assistant
Secretary, Assistant Secretary for Information and Technology,
Department of Veterans Affairs................................. 66
Metropolitan Water Reclamation District of Greater Chicago,
prepared statement............................................. 551
Mickey Leland National Urban Air Toxics Research Center, prepared
statement...................................................... 525
Miklos, Steve, Mayor, City of Folsom, California, prepared
statement...................................................... 549
Mikulski, Senator Barbara A., U.S. Senator from Maryland:
Opening statements of.............................60, 275, 357, 449
Prepared statement........................................... 359
Questions submitted by.................................37, 129, 316
Statements of.......................................3, 80, 200, 239
Moran, Michael, Assistant General Counsel, Department of Housing
and Urban Development.......................................... 449
Murphy, Daniel, Chief of Staff, Department of Housing and Urban
Development.................................................... 449
Murphy, Frances M., M.D. MPH, Deputy Under Secretary for Health,
Veterans Health Administration, Department of Veterans Affairs. 65

NAHB Research Center, prepared statement......................... 620
Nappi, Patrick, Deputy Under Secretary for Benefits, Veterans
Benefits Administration, Department of Veterans Affairs........ 65
National:
Alliance to End Homelessness, Inc., prepared statement....... 558
American Indian Housing Council and Coalition for Indian
Housing and Development, prepared statement................ 556
Association for Equal Opportunity in Higher Education,
prepared statement......................................... 617
Corn Growers Association, prepared statement................. 593
Council for Science and the Environment:
Letter from.............................................. 597
Prepared statement....................................... 594
Federation of the Blind, prepared statement.................. 572
Jewish Medical and Research Center, prepared statement....... 537
Treasury Employees Union, prepared statement................. 539
New York University, prepared statement.......................... 590
Norris, Jimmy, Chief Financial Officer, Department of Veterans
Affairs........................................................ 65
Nuclear Energy Institute, prepared statement..................... 522

People for the Ethical Treatment of Animals, prepared statement528, 553
Person, Mary A., letter from..................................... 243
Peterson, Malcolm L., Comptroller, National Aeronautics and Space
Administration................................................. 179
Principi, Hon. Anthony, Secretary of Veterans Affairs, Department
of Veterans Affairs............................................65, 86
Prepared statement........................................... 89

Rapp, Roger, Acting Under Secretary for Memorial Affairs,
National Cemetery Administration, Department of Veterans
Affairs........................................................ 65
Riggin, E. Phillip, Deputy Assistant Secretary, Assistant
Secretary for Congressional Affairs, Department of Veterans
Affairs........................................................ 66
Rubin, Dr. Robert, President and CEO, Lovelace Respiratory
Research Institute (LRRI), prepared statement.................. 504

Sacramento County Regional Sanitation District, prepared
statement...................................................... 548
Schultz, Robert W., Deputy Assistant Secretary for
Administration, Assistant Secretary for Human Resources and
Administration, Department of Veterans Affairs................. 66
Segerdahl, Nancy, Press Secretary/Senior Communications Advisors
to the Secretary, Department of Housing and Urban Development.. 449
Shelby, Senator Richard C., U.S. Senator from Alabama, statements
of...........................................................183, 455
Snugs, Clarence J., Deputy Executive Director/Treasurer,
Neighborhood Reinvestment Corporation.......................... 43
Society for Neuroscience, prepared statement..................... 622
Southwest Center for Environmental Research and Policy, prepared
statement...................................................... 544
State and Territorial Air Pollution Program Administrators,
prepared statement............................................. 541

The Nature Conservancy, prepared statement....................... 533
Thompson, John H., Deputy General Counsel, Department of Veterans
Affairs........................................................ 66
Thompson, Joseph, Under Secretary for Benefits, Veterans Benefits
Administration, Department of Veterans Affairs................. 65
Tucker, Daniel, Director, Budget and Planning Service,
Departmental Administration, Department of Veterans Affairs.... 65

University Corporation for Atmospheric Research (UCAR), prepared
statement...................................................... 493
University of:
Medicine and Dentistry of New Jersey, prepared statement..... 586
Miami, Coral Gables, Florida, prepared statement............. 508
Upper Mississippi River Basin Association, prepared statements.519, 521

Venneri, Sam, Associate Administrator for Aerospace Technology,
National Aeronautics and Space Administration.................. 179

Weicher, John, Assistant Secretary for Housing Federal Housing
Commissioner, Department of Housing and Urban Development...... 449
Whitman, Christine Todd, Administrator, Environmental Protection
Agency......................................................... 357
Prepared statement........................................... 369
Statement of................................................. 366
Woodson, Robert, Deputy to the Chief of Staff for Policy and
Programs, Department of Housing and Urban Development.......... 449

Yarbrough, Charles V., Chief Facilities Management Officer,
Department of Veterans Affairs................................. 65
Young, Peggy, Senior Advisor to the Chief Financial Officer,
Department of Housing and Urban Development.................... 449

Zenker, Wendy, Acting Chief Executive Officer, Corporation for
National and Community Service................................. 1
Prepared statement........................................... 8
Statement of................................................. 6

SUBJECT INDEX

----------

CORPORATION FOR NATIONAL AND COMMUNITY SERVICE

Page
Additional committee questions................................... 30
America's promise................................................ 19
AmeriCorps:
Alumni organization.......................................... 25
Literacy achievements........................................ 20
Use of education awards...................................... 24
Baltimore Experience Corps....................................... 41
Budget request summary........................................... 10
CNCS programs, reporting the full cost of........................ 33
Continued management improvements................................ 17
Coordination with other organizations............................ 30
Detailed explanation of trust fund financing..................... 28
Digital divide................................................... 25
E-Corps...................................................... 38
Faith-based initiative...........................................33, 40
Fiscal year 2000 audit........................................... 16
Grantee oversight................................................ 22
Grants management and cost accounting............................ 21
Keeping national service strong under the new administration..... 37
National Service Trust........................................... 31
Funding, adequacy of......................................... 23
New initiatives.................................................. 32
Performance reporting............................................ 34
Points of Light Foundation....................................... 18
Procurement...................................................... 37
Silver scholarships.............................................. 41
Tax exemption................................................ 27

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Affordable rental housing........................................ 464
Building assets and skills among low-income families............. 466
Community and economic development............................... 467
Elderly housing.................................................. 477
Enforcing fair-housing laws...................................... 471
Faith based initiatives.......................................... 491
FHA.............................................................. 486
Helping low-income families achieve homeownership................ 461
Homeless assistance.............................................. 489
Homeownership counseling......................................... 478
Initiative................................................... 487
Hope VI.......................................................... 489
Housing production............................................... 485
HUD:
Improving management......................................... 472
Local offices................................................ 480
Meeting the needs of special populations......................... 470
Predatory lending..............................................473, 479
Public housing................................................... 465
Section 8......................................................475, 481

DEPARTMENT OF VETERANS AFFAIRS

Acute illness and traumatic injury............................... 154
Additional committee questions................................... 109
Aging and age-related changes.................................... 153
Albuquerque VAMC................................................. 127
Benefits backlog................................................. 92
Cancer........................................................... 158
CARES............................................................ 128
System....................................................... 107
Chief Research and Development Officer, a message from the....... 151
Chronic diseases................................................. 157
Claims processing task force..................................... 91
Processing times............................................. 138
Cleveland Plain Dealer articles.................................. 131
Co-payments...................................................... 120
Collections...................................................... 132
Community based outpatient clinics.............................105, 126
Nursing homes................................................ 123
Compensation for children of Vietnam veterans.................... 123
Demonstration project--Clarksburg VA Medical Center and Ruby
Memorial Hospital.............................................. 143
Department of Defense/Department of Veterans Affairs (DOD/VA)
sharing........................................................ 119
Department of Veterans Affairs, Veterans Health Administration,
Office of Research & Development, May 2001..................... 151
Designated research areas........................................ 152
Disability compensation for type II diabetes..................... 92
Emergency room care.............................................. 121
Fort Howard....................................................103, 129
Geriatric evaluations............................................ 102
Health services and systems...................................... 171
Heart disease.................................................... 158
Hepatitis C....................................................106, 139
Screening.................................................... 121
Information technology........................................... 126
Liver/kidney disease............................................. 164
Long term care..................................................97, 131
Medical care collections......................................... 100
Care funding level........................................... 99
Medical research................................................98, 135
Services..................................................... 115
Medicare reform, need for........................................ 101
Mental illness................................................... 166
Military and environmental exposures............................. 155
Retirees benefits............................................ 126
Millennium Act, regulations to implement the..................... 95
National Cemetery Administration................................69, 121
Neurological disorders........................................... 160
Nursing home care unit at the Beckley Veterans Affairs Medical
Center......................................................... 142
Shortages.................................................... 93
Osteoporosis/Osteoarthritis...................................... 163
Outpatient clinic in Charleston, West Virginia................... 141
Priority 7's..................................................... 104
Recovery audit program........................................... 121
Sensory disorders................................................ 165
Special needs populations........................................ 119
Populations.................................................. 169
St. Louis VAMC parking needs..................................... 109
State home program............................................... 122
Veterans homes............................................... 125
Substance abuse.................................................. 168
Tampa study--automatic clinical guidance......................... 104
Travel rates..................................................... 126
Tricare for life................................................. 96
VA:
Construction................................................. 174
Health Care--Community-based Clinics Improve Primary Care
Access (GAO-01-678T)....................................... 69
Healthcare information security.............................. 144
Medical care program......................................... 67
Research..................................................... 149
VERA............................................................. 129
Veterans Benefits Administration................................. 68
Claims....................................................... 177
Education.................................................... 145
Health care.................................................. 146
Issues....................................................... 109
VHA staff shortages.............................................. 125
Waiting times.................................................... 135

ENVIRONMENTAL PROTECTION AGENCY

Acrylamide rulemaking............................................ 434
Additional committee questions................................... 396
Addressing global warming........................................ 372
Air pollution.................................................... 377
Arsenic.......................................................... 379
In drinking water............................................ 360
Study group.................................................. 386
Arsenic standards:
Enforcement grant program.................................... 369
Farm bill.................................................... 389
New.......................................................... 383
Mandate for.............................................. 393
Source review..............................................380, 435
Attainability analysis to determine cause of impairments......... 428
Best management practices for secondary standards for collection
systems........................................................ 439
Brownfields..................................................360, 370
Chesapeake Bay program........................................... 360
Clarify and define concentrated animal feedlot operation
regulation..................................................... 437
Clean air violations from bakeries............................... 439
Water infrastructure.......................................360, 374
Water state revolving fund................................... 376
Climate change................................................... 360
Compliance assistance............................................ 396
Concentrated animal feeding operation............................ 438
Coordination with other agencies to solve problems............... 390
CWA technology-based standards, impact of zero discharge standard
on............................................................. 439
Drinking water SRF............................................... 371
Enforcement...................................................... 408
Breakout of Federal enforcement activities between multi-
State and single-State actions............................. 410
Cuts......................................................... 381
In Milwaukee................................................. 377
Of environmental laws........................................ 360
Of new source review regulations............................. 381
Program...................................................... 376
Targeting.................................................... 424
Ensuring clean air............................................... 371
Safe food and protecting the public from harmful chemicals... 372
Environmental riders............................................. 361
$500 million cut................................................. 375
Fox River, cleanup of............................................ 378
FTE reduction: enforcement program............................... 389
Genetically modified foods....................................... 388
Grants........................................................... 413
Hydrologic issues, cost of determining........................... 438
HWIR rulemaking.................................................. 446
Impact of concentrated animal feeding operations rule on use of
chemical pesticides............................................ 438
Information burden............................................... 415
Exchange network............................................. 369
Management................................................... 440
Iron & steel (mini-mill)......................................... 436
Kyoto protocol................................................... 382
NPDES:
Permit backlog, efforts to reduce the........................ 418
Resources to reduce backlog.................................. 424
Other significant cases.......................................... 436
PBT list......................................................... 430
Performance goals................................................ 417
Measures..................................................... 417
Power plants..................................................... 436
Preventing duplicative reporting and record keeping requirements. 438
Price of farm chemicals: Canada vs. U.S.A........................ 387
Public comment on alternative regulatory principles.............. 440
Pulp and paper mills............................................. 436
Refineries....................................................... 436
Region 3: enforcement redeployment............................... 392
Reinvention...................................................... 429
Science and technology reduction................................. 394
Small business................................................... 432
Snap rule........................................................ 446
Sound science..................................................360, 373
Arsenic drinking water standard.............................. 393
Superfund........................................................ 370
Supporting core water quality programs........................... 370
TMDLs:
Adequate agency funds for.................................... 427
Cost to approve.............................................. 427
Estimated number and cost savings from bundling.............. 428
Length of time required to approve all....................... 427
Number of required by section 303(d) list.................... 425
State non-point source data to prepare....................... 426
Resources to prepare TMDLs............................... 427
Total estimate of cost to prepare by State................... 426
Two-tiered list to set priorities............................ 428
TRI.............................................................. 444
Voluntary monitoring programs.................................... 429
Water infrastructure funding..................................... 370
Waters:
Distribution of impaired in two-tiered system................ 428
Impact of placing on preliminary list........................ 429
Weather impact on concentrated animal feeding operations
requirements................................................... 438
Wiper rulemaking................................................. 435
Wood products.................................................... 436
Workforce development............................................ 447
Working with our partners........................................ 391

FEDERAL EMERGENCY MANAGEMENT AGENCY

Alaska, rising sea levels in..................................... 241
Cerro Grande:
Claims and settlements for................................... 264
Fire......................................................... 254
Personal property claims from................................ 256
Self-certification for claims................................ 260
Consequence management........................................... 263
Disaster reforms................................................. 238
Disasters, funds for............................................. 239
Emergency reserve in 2002........................................ 255
FEMA:
As all-hazards agency........................................ 240
Ever expanding assignments................................... 264
Terrorism role.............................................239, 249
Fire grant program............................................... 271
Fire programs.................................................... 240
Support for.................................................. 270
Flood insurance program.......................................... 272
Insurance reforms............................................ 238
Mapping...................................................... 268
Hazard mitigation:
Cost share of................................................ 259
Grants as a discretionary program............................ 262
Mitigation....................................................... 263
Coordination of programs..................................... 260
Importance of pre-disaster................................... 247
In Iowa...................................................... 248
National mitigation plan......................................... 261
Office of National Preparedness.................................. 257
Preparedness initiatives......................................... 243
Project impact.................................................248, 260
Recovery..................................................... 256
Repetitive loss properties....................................... 269
Responsibility and accountability in budget...................... 247
Review of consequence management................................. 258
State and local:
Measurement of capabilities.................................. 266
Preparedness for disasters................................... 266
Plans for disaster prevention in Maryland.................... 267
Teleregistration................................................. 256
2002 budget...................................................... 238
Reductions................................................... 240
Unspent hazard mitigation dollars................................ 261
West nile virus.................................................. 265

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

A new vision for continued vitality.............................. 215
Air traffic management, a revolutionary approach to.............. 227
Advanced health monitoring system................................ 221
Aeronautics, blueprint for the future of......................... 217
Aeronautics is vital to the nation............................... 213
Program...................................................... 223
Vision for the 21st century.................................. 213
Air traffic control.............................................. 225
Current modernization efforts................................ 226
Budget, overview of the fiscal year 2002......................... 188
Combustion and fluid physics research program.................... 206
Computer software/loud noise/vibration problems.................. 210
Crew return vehicle............................................203, 208
Critical issues................................................217, 229
Earth science.................................................... 205
Science budget............................................... 211
Energy, increasing cost of....................................... 234
EPSCoR........................................................... 182
EROS Data Center................................................. 182
Glenn Research Center (GRC)...................................... 207
Habitation module/crew return vehicle............................ 202
In-space propulsion.............................................. 220
Major challenges to overcome..................................... 214
Mars, manned mission to.......................................... 233
Microgravity research program.................................... 221
NASA:
Contract management.......................................... 234
Enterprise detail............................................ 190
Space transportation mission................................. 222
National airspace system, a technological revolution for the..... 225
Other key initiatives............................................ 197
Polymer energy rechargeable system/Glenn microsystems initiative. 208
Space shuttle, privatization of remaining tasks.................. 222
Proposed national objectives..................................... 228
Propulsion research infrastructure............................... 220
Qualified scientist/engineers.................................... 231
Senn High School students, introductory of....................... 185
Skill--scientific knowledge for Indian leadership and learning... 181
Space launch initiatives (SLI)................................... 212
Station cost overruns........................................ 201
Tourism........................................................209, 210
The system is reaching saturation................................ 225
Today's air transportation system................................ 225
What is needed................................................... 226

NATIONAL SCIENCE FOUNDATION

Additional committee questions................................... 316
ALMA............................................................. 304
Antarctic, emergency medical evaluation from the................. 332
Assisting smaller research institutions.......................... 354
Astronomy........................................................ 347
Review....................................................... 319
Attention to broadening participation in the science and
engineering workforce by groups that are currently
underrepresented............................................... 308
Basic award administration....................................... 295
Biocomplexity and the environment................................ 291
Budget:
Doubling goal and oversight goals............................ 298
Request provides $1.5B for new awards with only a 1
percent increase?...................................... 321
Fiscal year 2002 guidance.................................... 298
Building on education program results............................ 301
Candidates for the major research equipment account.............. 337
Cost sharing...................................................295, 337
Decadal study in astronomy and astrophysics...................... 320
Digital divide................................................... 339
And historically black colleges and universities............. 323
Education and human resources.................................... 335
Education programs, redirection of funds and evolution of........ 302
Elimination of innovation program for smaller institutions....... 324
EPSCoR........................................................... 348
Funding needs.................................................... 296
Priorities.................................................342, 353
Rates............................................................ 328
Graduate student stipends......................................290, 333
Grant size and duration.......................................... 327
H1-B visa funds.................................................. 349
High-tech education.............................................. 305
Workers....................................................342, 350
Importance of basic research..................................... 297
Information technology........................................... 343
Research..................................................... 291
Integrated graduate research and education traineeship program... 331
Interdisciplinary mathematics.................................... 290
Learning for the 21st century.................................... 291
Major research equipment......................................... 292
Management of large infrastructure projects...................... 295
Math and science education.....................................346, 351
Partnership programs in the Elementary and Secondary
Education Act.............................................. 327
Partnerships................................................. 301
Initiative............................................... 290
System reform program evaluation............................. 325
MRE status reports............................................... 329
Multi-year budgeting............................................. 347
Nanoscale science and engineering................................ 291
Nanoscience and technology....................................... 317
Nanotechnology................................................... 345
Information technology and math and science education........ 300
NSF:
Budget request............................................... 285
Funding needs and priorities................................. 297
Inspector general review of the EPSCoR program........... 338
Programs: High tech workforce............................ 305
IG and White House critical of management of construction
projects................................................... 328
Impact of new math/science partnership program on current
programs................................................... 326
Long-term vision for......................................... 352
Vision....................................................... 299
Nuclear engineering education.................................... 314
Technologies...............................................344, 351
Other fiscal year 2002 highlights................................ 292
Peer review system.............................................305, 344
Planning and evaluation.......................................... 341
Plant genome..................................................... 343
Post-docs........................................................ 347
Priority areas................................................... 291
Questions submitted to the....................................... 316
Reduction in ``Core'' disciplines................................ 336
Science and engineering:
Support for minorities in is frozen.......................... 322
Workforce, direct preparation of specific elements of the.... 306
Science, public understanding of................................. 340
Science Board Committee on Budget and Strategy:
New.......................................................... 325
New math and science partnership program-role of the......... 327
On NSF submission to OMB..................................... 317
Strategic plan............................................... 350
View on the balance of Federal R&D........................... 316
Senior NSF vacancies............................................. 335
South Pole, rebuild of the station............................... 328
Staffing resources.............................................342, 354
Strengthening the curricular and instructional infrastructure for
providing high quality science, mathematics, engineering, and
technology education to all students........................... 312
Teacher training efforts......................................... 327
Telescope system instrumentation program......................... 321
The health of the science and engineering enterprise: some issues 286
Top 50 institutions versus lower................................. 315
Training programs--research directorates......................... 314
Undergraduate student support.................................... 332
Unexpected energy costs.......................................... 334
Very large array telescope....................................... 303
WIPP versus homestake............................................ 304

NEIGHBORHOOD REINVESTMENT CORPORATION

Affordable multifamily developments.............................. 57
Budget request, fiscal year 2002................................. 44
Campaign for home ownership...................................... 44
Exciting new initiatives......................................... 53
Low-income renters, examples of serving extremely................ 58
Neighborworks multifamily initiative................... 45
NeighborWorks Vision:
For fiscal year 2002: building on the........................ 56
Inspired leadership and the.................................. 48
Outcomes and achievements........................................ 56
Predatory lending................................................46, 60
Proven successes................................................. 49
Section 8 home ownership.........................................44, 59
Neighborhood reinvestment, vision for............................ 46