[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
SEQUESTRATION OVERSIGHT: UNDERSTANDING THE ADMINISTRATION'S DECISIONS
ON SPENDING CUTS AND FURLOUGHS
=======================================================================
HEARING
before the
SUBCOMMITTEE ON ECONOMIC GROWTH,
JOB CREATION AND REGULATORY AFFAIRS
of the
COMMITTEE ON OVERSIGHT
AND GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
MARCH 19, 2013
__________
Serial No. 113-10
__________
Printed for the use of the Committee on Oversight and Government Reform
Available via the World Wide Web: http://www.fdsys.gov
http://www.house.gov/reform
U.S. GOVERNMENT PRINTING OFFICE
80-290 WASHINGTON : 2013
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC
area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, Washington, DC
20402-0001
COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM
DARRELL E. ISSA, California, Chairman
JOHN L. MICA, Florida ELIJAH E. CUMMINGS, Maryland,
MICHAEL R. TURNER, Ohio Ranking Minority Member
JOHN J. DUNCAN, JR., Tennessee CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina ELEANOR HOLMES NORTON, District of
JIM JORDAN, Ohio Columbia
JASON CHAFFETZ, Utah JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan JIM COOPER, Tennessee
PAUL A. GOSAR, Arizona GERALD E. CONNOLLY, Virginia
PATRICK MEEHAN, Pennsylvania JACKIE SPEIER, California
SCOTT DesJARLAIS, Tennessee MATTHEW A. CARTWRIGHT,
TREY GOWDY, South Carolina Pennsylvania
BLAKE FARENTHOLD, Texas MARK POCAN, Wisconsin
DOC HASTINGS, Washington TAMMY DUCKWORTH, Illinois
CYNTHIA M. LUMMIS, Wyoming DANNY K. DAVIS, Illinois
ROB WOODALL, Georgia PETER WELCH, Vermont
THOMAS MASSIE, Kentucky TONY CARDENAS, California
DOUG COLLINS, Georgia STEVEN A. HORSFORD, Nevada
MARK MEADOWS, North Carolina MICHELLE LUJAN GRISHAM, New Mexico
KERRY L. BENTIVOLIO, Michigan VACANCY
RON DeSANTIS, Florida
Lawrence J. Brady, Staff Director
John D. Cuaderes, Deputy Staff Director
Robert Borden, General Counsel
Linda A. Good, Chief Clerk
David Rapallo, Minority Staff Director
Subcommittee on Economic Growth, Job Creation and Regulatory Affairs
JIM JORDAN, Ohio, Chairman
JOHN DUNCAN, Tennessee MATTHEW A. CARTWRIGHT,
PATRICK T. McHENRY, North Carolina Pennsylvania, Ranking Minority
PAUL GOSAR, Arizona Member
PATRICK MEEHAN, Pennsylvania TAMMY DUCKWORTH, Illinois
SCOTT DesJARLAIS, Tennessee GERALD E. CONNOLLY, Virginia
DOC HASTINGS, Washington MARK POCAN, Wisconsin
CYNTHIA LUMMIS, Wyoming DANNY K. DAVIS, Illinois
DOUG COLLINS, Georgia STEVEN A. HORSFORD, Nevada
MARK MEADOWS, North Carolina
KERRY BENTIVOLIO, Michigan
RON DeSantis Florida
C O N T E N T S
----------
Page
Hearing held on March 19, 2013................................... 1
WITNESSES
Mr. David Robbins, Managing Director, Federal Communications
Commission
Oral Statement............................................... 8
Written Statement............................................ 11
Mr. Michael L. Young, Director, Office of Budget and Program
Analysis, United States Department of Agriculture
Oral Statement............................................... 15
Written Statement............................................ 17
Mr. Hari Sastry, Deputy Assistant Secretary for Resource
Management, Office of the Secretary, U.S. Department of
Commerce
Oral Statement............................................... 21
Written Statement............................................ 23
APPENDIX
The Honorable Eleanor Holmes Norton, a Member of Congress from
the District of Columbia, Opening Statement.................... 48
The Honorable Jim Jordan, a Member of Congress from the State of
Ohio, Opening Statement........................................ 50
Politico_Now Dems Worry: Did President Obama cry wolf?........... 52
Letter from Rebecca M. Blank, The Deputy Secretary of Commerce to
the Honorable Barbara A. Mikulski, a Member of Congress from
the State of Maryland.......................................... 56
SEQUESTRATION OVERSIGHT: UNDERSTANDING THE ADMINISTRATION'S DECISIONS
ON SPENDING CUTS AND FURLOUGHS
----------
Tuesday, March 19, 2013,
House of Representatives,
Subcommittee on Economic Growth, Job Creation and
Regulatory Affairs, joint with the Subcommittee on
Federal Workforce, U.S. Postal Service and the
Census,
Committee on Oversight and Government Reform,
Washington, D.C.
The subcommittees met, pursuant to notice, at 1:30 p.m. in
room 2154, Rayburn House Office Building, the Honorable Blake
Farenthold [chairman of the Subcommittee on Federal Workforce,
U.S. Postal Service and Census], presiding.
Present: Representatives Farenthold, Jordan, McHenry,
Duncan, Gosar, DesJarlais, Lummis, Meadows, DeSantis, Issa,
Cartwright, Norton, Clay, Connolly, Pocan, Horsford, and
Cummings.
Also present: Representative Mulvaney.
Staff Present: Kurt Bardella, Majority Senior Policy
Advisor; Molly Boyl, Majority Parliamentarian; Caitlin Carroll,
Majority Deputy Press Secretary; Drew Colliatie, Majority
Legislative Assistant; John Cuaderes, Majority Deputy Staff
Director; Brian Daner, Majority Counsel; Adam P. Fromm,
Majority Director of Member Services and Committee Operations;
Linda Good, Majority Chief Clerk; Tyler Grimm, Majority
Professional Staff Member; Jennifer Hemingway, Majority Senior
Professional Staff Member; Frederick Hill, Majority Director of
Communications and Senior Policy Advisor; Michael R. Kiko,
Majority Staff Assistant; Mark D. Marin, Majority Director of
Oversight; James Robertson, Majority Professional Staff Member;
Scott Schmidt, Majority Deputy Director of Digital Strategy;
Matthew Tallmer, Majority Investigator; Jaron Bourke, Minority
Director of Administration; Lena Chang, Minority Counsel; Devon
Hill, Minority Research Assistant; Brian Quinn, Minority
Counsel; and Safiya Simmons, Minority Press Secretary.
Mr. Farenthold. The committee will come to order.
As is normal at our meetings of the Committee and
Subcommittee on Government Oversight and Reform, we start each
meeting by reading our mission statement.
We exist to secure two fundamental principles. First,
Americans have a right to know that the money Washington takes
from them is well spent. And second, Americans deserve an
efficient, effective Government that works for them.
Our duty on the Government Oversight and Reform Committee
is to protect these rights. Our solemn responsibility is to
hold the Government accountable to taxpayers because taxpayers
have a right to know what they get from their Government. We
will work tirelessly in partnership with citizen watchdogs to
deliver the facts to the American people and bring genuine
reform to the Federal bureaucracy.
This is the mission of the Oversight and Government Reform
Committee.
At this point, I will make my opening statement and we will
then let the ranking member give her opening statement and then
this is a joint Subcommittee hearing so we will also go to the
Chairman and Ranking Member of the other Subcommittee.
Today we are going to talk about stewardship of taxpayers'
funds. That is what this hearing is about. It is about being
responsible managers. And finally, it is about the credibility
of this Administration.
The bottom line, is agencies should have planned better for
sequester. And if the President, the Government agencies and
the Secretaries who head these agencies would spend more time
planning and less time with political posturing before the
American people with scare tactics about the sequester, we
would be better off.
Federal agencies have known about the sequester since
August of 2011. My grandmother taught me a lot of things, but
one thing that sticks with me that I use almost every day is
plan for the worst and expect the best. Why didn't our
Government agencies apply this bit of common sense in dealing
with the sequester? Some did, some did not.
Those who didn't could have done some simple things, like
rein in bonuses, cut wasteful and frivolous spending and, as we
will learn in the course of this hearing, implement reports of
their own IGs to save money.
But what have the agencies done instead? They have listened
to irresponsible advice. Last summer, the OMB instructed
agencies to continue normal spending and operations since more
than five months remained before sequester took effect. This
was reckless. Sequester was the law of the land then as it is
today. So why didn't agencies at least have a contingency plan?
Even our Federal employee unions recognize that agencies
did not take sequester seriously. A regional president of the
American Federation of Government Employees recently commented
that agencies really have not done their homework. They are
under the illusion that the sequester was not going to happen.
With the sequester now upon us, some of the
Administration's spending choices make no sense. The only
conclusion I can draw is the President wants to politicize the
sequester and make the cuts as painful as possible. Rather than
looking for the low-hanging fruit of waste, fraud and abuse, we
have furloughs. Rather than keeping the White House open for
tours, we have Presidential golf outings. And, quite frankly, I
am appalled the President has thrown the men and women who
would take a bullet for him, the Secret Service, under the bus
for canceling White House tours.
I don't believe for a second that if the President had
asked, let's find somewhere else to cut, they would have found
plenty of options. Hey guys, how about looking at the $300,000
annual pay for calligraphers? The President and Executive
Branch agencies are talking furloughs when on the day the
sequester went effect, these agencies posted more than 400
jobs. You know, instead of those calligraphers, ZapfChancery
comes free on every MAC and does pretty nice name tags.
I am also worried about the credibility of the
Administration. We need to trust our President. But the trust
is eroding due to his false rhetoric about the sequester. When
President Obama said the janitors and security guards who work
here at the Capitol will face pay cuts, the Superintendent of
the Capitol had to send out an email to employees saying their
pay and benefits would be safe. And when the Secretary of
Education, Mr. Duncan, said teachers were getting pink slips,
the Washington Post awarded him four Pinocchios for this claim.
The public is starting to catch on. Politico recently ran
an article asking, did President Obama cry wolf about the
sequester. And the Chicago Tribune ran an editorial this week
headlined Truth-Squadding Sequester Hysteria, Officials
Sabotage Themselves When They Manipulate, Exaggerate and Flout
Common Sense.
Again, if our agencies would get to work and plan instead
of using scare tactics, we would be better off.
Thank you all for being here. I am looking forward to
productive discussion as we talk about how we are going to
manage the sequester.
I will now recognize Ms. Norton for five minutes.
Ms. Norton. Thank you very much, Mr. Chairman.
We should not be surprised by the scope of the damage that
sequester will bring. Congress was warned what would happen if
sequester took effect. We were informed about the potential
devastation of vital Government programs and services and on
furloughs of more than 1 million Federal employees. The
Congressional Budget Office estimated that the $85 billion cut
required by the Budget Deferral Act of 2011 will cause the loss
of 750,000 jobs and will slow the economy by .6 percent.
Instead of trying to prevent the sequester from happening,
our colleagues on the other side of the aisle embraced it. They
wanted it to happen. In fact, a member of this Committee said
just last month, quoted in her paper, ``Sequester will take
place. I am excited. It will be the first time since I have
been in Congress that we really have significant cuts.''
As a result of the sequester, Federal agencies, including
the Department of Agriculture and the Department of Commerce
and the Federal Communications Commission are now required to
follow the specific mandates of the Budget Control Act to make
across-the-board, indiscriminate and untargeted cuts to each
account, and I repeat, each account, calligraphers, yes, and
other accounts, you cannot substitute one for the other,
program and project and activity by program, project and
activity.
The agencies have noted that the law gives them little
discretion at implementing the cuts and that such cuts could
negatively impact their missions, the services they provide to
the American people and the economic recovery itself.
For Agriculture, this would require cutting $2 billion
across the board. Where do you think those dollars would have
gone? To help the private sectors, to farmers, agribusiness
and, yes, poor people. For Commerce, sequestration would mean
$550 million in across-the-board cuts. Where do you think that
money would have gone? To help the private sector, the small
business and satellite infrastructure.
For the FCC sequestration, the cut would be $17 million.
Guess who is going to benefit from those dollars? You guessed
it, the private sector. Now that sequester is taking effect,
Republicans want to shift the blame for the cuts to Government
activities benefiting even the private sector.
Our colleagues on the other side of the aisle have accused
the agencies of exaggerating the negative effects of
sequestration for political gain. They claim that the agencies
can simply undo sequestration by eliminating wasteful and
duplicative programs or reducing other spending. Well, that is
exactly what we would have done without sequestration. And that
is what sequestration does not allow.
And they have criticized the Administration for
implementing the sequester too slowly. A Republican-controlled
House required across-the-board cuts as their price for
extending the Nation's debt limit and overting the first fiscal
default in the Nation's history. A Republican-controlled House
has continued the longstanding practice of controlling the
power of the purse which by law give Federal agencies the
freedom to spend money as they choose. Why do they have to
spend money as Congress chooses for them and are not free to do
or undo sequester on their own?
A Republican-controlled House gave the agencies until April
11th, which is 30 days after the President issued the sequester
order, to submit to Congress their sequester plans. As I look
at the calendar, the agencies still have a couple of weeks to
go. Contrary to the accusations of some Republicans, the
agencies are not late.
So, this hearing today attacks the problem caused by
sequestration from exactly the wrong angle. If the Republican
House does not like the effects of across-the-board cuts, why
did they insist on them? Why have some embraced them? Why have
some feared for them?
If the Republican House does not like the fact that
agencies' hands are tied by law, and that only Congress can
mitigate the damaging consequences of sequestration, why have
they not changed the law? If the Republic House does not like
the time that Federal agencies are using to develop
implementation plans, why did they give the agencies so much of
it?
The course of sequestration can still be done. This is
still the House of Representatives. Today's hearing really
should be entitled Sequestration Oversight: What Were House
Republicans Thinking? That might be something for American
businesses to ponder in the days to come.
Thank you, Mr. Chairman, and I yield back.
Mr. Farenthold. Thank you, Ms. Norton.
I now recognize the Chairman of the Subcommittee on
Economic Growth, Mr. Jordan, for an opening statement.
Mr. Jordan. Thank you, Mr. Chairman.
Real quickly, in response to the Ranking Member's
statement, the reason we support reducing spending and
sequestration is because we have a debt larger than our entire
annual economy. We do have to cut some spending around this
place and we are finally taking some modest first steps.
Second, we did try to change how this was implemented. We
passed two pieces of legislation in the last Congress that
passed the House of Representatives but, as with so many other
bills when they get to the Senate, it went nowhere.
With that, Mr. Chairman, I will go to my statement.
Today's hearing compares the reality of sequestration with
the rhetoric of this Administration. The Obama Administration
has misled the American people with horror story after horror
story about the sequester.
First, Education Secretary Arne Duncan went on National
television and claimed that teachers were literally getting
pink slips. The Washington Post, that wonderful conservative
newspaper, later awarded him four Pinocchios for his claim.
Next, we had the President. I guess he didn't want to be
outdone and wanted his Pinocchios as well because he claimed
that janitors at the United States Capitol would receive a pay
cut. Washington Post gave him the same that they gave Mr.
Duncan, four Pinocchios. The President's statement prompted the
Superintendent of the U.S. Capitol to email his staff to
reassure them that this was not, in fact, the case.
Now, newspapers are running stories about the
Administration's smoke and mirrors. A Politico headline asked,
``Did President Obama Cry Wolf About the Sequester?'' The
answer was a pretty resounding yes and included criticism from,
among others, former Democratic Pennsylvania Governor Ed
Rendell.
The Chicago Tribune ran an editorial last week entitled
``Truth-Squadding Sequester Hysteria, Officials Sabotage
Themselves When They Manipulate, Exaggerate and Flout Common
Sense.'' It featured pictures of children unable to tour the
White House holding up signs that said, the White House is our
house, please let us visit. Now, news reports are indicating
that the White House may cancel the annual Easter Egg Roll. The
absurdity of this action would be comical if it were not so
cruel.
The USDA and the Department of Commerce are also partaking
in the doomsday rhetoric. In mid-December of last year,
Agriculture Secretary Vilsack issued a memo downplaying the
possibility of the sequester and informed his staff that should
it occur, USDA may have to consider some furloughs. Then, just
a little over a month later, he changed his tune and declared
that the USDA would have to furlough over 6,000 food inspectors
for up to three weeks. He recently walked back that statement
saying the U.S. Department of Agriculture would not seek
continuous furloughs. So the obvious question is, which is it?
Might happen, probably won't happen, or three weeks, 6,000
people?
The Department of Commerce said it would furlough up to
2,600 employees at the National Oceanic and Atmospheric
Administration. Yet, at the same time, it is advertising job
openings at NOAA and it was hit with an IG audit that found
NOAA paid more than $40 million in contracts without proper
justification.
Finally, let me express my disappointment with the
extraordinary amount of effort it took to get the Department of
Commerce and the Department of Agriculture to testify today.
Despite multiple offers by the Committee to move the hearing
date to accommodate these agencies, and the willingness of the
Committee to accept several different alternative witnesses
from each agency, the Committee ultimately had to threaten to
use subpoenas to secure their testimony.
Both agencies used delay tactics and appeared to play games
with the Committee in an effort to avoid testifying. Even after
finally agreeing to testify, the Department of Commerce
notified the Committee that it was doing so ``reluctantly.'' I
mean, this is amazing. An agency spending taxpayer dollars
won't even come in front of Congress, comes reluctantly after
they are given multiple opportunities, multiple dates to come
and share what is happening with the American people's tax
money.
The American people have heard one dire warning after
another about the impact of the sequester on their lives. Yet,
when it comes to accountability and answering simple questions
about what agencies are doing with the American people's money
they throw up one roadblock after another.
The issue has been at the forefront of the news for months.
Therefore, the agencies should have been planning for months
and it is inexcusable agencies would not have multiple people
ready and available to talk about it.
The American people have a right to know why they continue
to be misled by this Administration in an effort to score cheap
political points. They deserve truth. They deserve truthful and
accurate answers, not more misleading rhetoric, and we hope, we
hope to get the American people these answers today at this
Committee hearing.
And with that, Mr. Chairman, I yield back.
Mr. Farenthold. Thank you, Mr. Jordan.
We will now recognize the Ranking Member of the
Subcommittee on Economic Growth, Mr. Cartwright, for his
opening statement.
Mr. Cartwright. Thank you, Chairman Farenthold, and thank
you to the witnesses for attending the hearing today. I know we
are pulling you away from your busy schedules to speak to us
about the impact of sequestration.
Everybody in this room knows that it is not crying wolf
about sequestration. I come from the 17th Congressional
District of Pennsylvania where we have the Tobyhanna Army Depot
which employs 5,200 people, about 430 of whom are getting pink
slips, all of the rest of whom are being given furlough
notices.
These are people who for the last three years have not had
a raise, people who have diligently and faithfully been
performing their jobs, supporting the Armed Forces of the
United States and now are being told that they have to take a
further pay cut of 20 percent just because the people in
Washington can not come together and solve this.
For anyone to say that this is crying wolf, they are sorely
mistaken because people, real people, are suffering because of
this sequestration.
Also to say that nothing has happened despite Republican's
efforts is also a complete fallacy. Two bills were passed by
House Republicans last Congress and both bills died with the
Congress. House Republicans who are in charge of the United
States House of Representatives right now have not acted this
Congress to avert sequestration.
Congress passed the Budget Control Act of 2011 which
required across-the-board cuts to each program, project and
activity within each budgetary account in the event that
Congress failed to enact deficit reduction legislation.
Agencies are further limited to implementing these
congressional-mandated cuts by longstanding laws that Congress
uses to enforce its power of the purse. Together, Federal
agencies cannot avoid consequences like employee furloughs or
the disruption of services on which Americans depend.
For example, USDA furloughs, even if they are not on
consecutive days, really matter because when there is no USDA
inspector in a meat packing plant, that plant has to close
down, cannot process beef, cannot process meat. It is a big
deal to the American economy when there is no USDA meat
inspector on the job.
Now today, we are fortunate enough to have representatives
from the Federal Communications Commission, the Department of
Agriculture and the Department of Commerce discussing
sequestration. These agencies are each losing valuable funding
as a result of these blind cuts. The FCC is losing $17 million,
resulting in possible furloughs in the future. These cuts are
going to create hiring freeze at a time when people need jobs
the most, reducing the ability to monitor the airways.
The Department of Commerce will see significantly greater
reductions than the FCC with cuts of $551 million. The Economic
Development Administration will be cut by $13 million at a time
when economic development should be our focus.
Sequestration will also result in thousands of lost or
unfilled jobs at the National Oceanic and Atmospheric
Administration. No matter what a member thinks about a manmade
climate change, NOAA is responsible for weather forecasts and
warnings of natural disasters like Hurricane Sandy which
impacted my District and millions of people across the Country.
It is irresponsible and dangerous to cut a program that gives
critical and lifesaving advanced warnings of impending
disasters.
In fact, these consequences are just what was intended. In
2011, House Speaker Boehner emphasized these across-the-board
cuts in a meeting of the GOP Conference in an effort to win
Republican support for an extension of the Nation's debt limit.
Recently, Republican members have repeated their support for
across-the-board cuts labeling the cuts a victory and the best
thing that has happened since they came into office.
I am here to tell you, last week in my District the Greater
Wilkes-Barre Chamber of Commerce, which represents many
businesses and business owners in my District, wrote a letter
to me to express their disappointment with the chilling effect
that sequestration will have. They wrote whether is it the
thousands of jobs at the Tobyhanna Army Depot and their
subcontractors, small businesses aching for a forward-moving
economy, school children or those most in need in our
community, the cuts will be felt across the board.
They get it. The whole Country gets it. Across-the-board
cuts to every Government project, program and activity can only
be stopped by Congress. I urge Republican leadership to come to
the table and put a stop to this ridiculous, ridiculous
sequester.
Mr. Farenthold. Thank you very much, Mr. Cartwright.
I would like to ask unanimous consent at this point to
enter into the record an article from Politico ``Now Dems
Worry, Did President Obama Cry Wolf?''
Without objection.
Mr. Farenthold. Without objection, members will also have
seven days to submit their opening statements for the record.
Now, we are going to go to our panel. Let me introduce the
panel first.
First, we have Mr. David Robbins. He is the Managing
Director of the Federal Communications Commission. Welcome, Mr.
Robbins.
Mr. Michael Young is the Director of the Office of
Budgetary and Program Analysis at the U.S. Department of
Agriculture.
And Mr. Hari Sastry, who is the Deputy Assistant Secretary
for Resource Management at the Department of Commerce.
Pursuant to the committee rules, all witnesses will be
sworn in before they testify. Would you please rise with me?
Please raise your right hand. Do you solemnly swear or
affirm that the testimony you are about to give will be the
truth, the whole truth and nothing but the truth?
[Witnesses respond in the affirmative.]
Mr. Farenthold. Let the record reflect that all witnesses
answered in the affirmative. You may be seated.
I know each of you has submitted written testimony but in
order to allow for timely discussion, especially as we have
votes coming up this afternoon, we would like to ask you to
summarize that and try to keep your statements within five
minutes. You have a red, green and yellow light in front of
you. It works just like the numerous traffic lights on the
streets here in Washington, D.C. Your entire testimony will be
entered into the record and available for review.
So we will start first with Mr. Robbins from the FCC.
WITNESS STATEMENTS
STATEMENT OF DAVID ROBBINS
Mr. Robbins. Good afternoon, Chairmen Farenthold and
Jordan, Ranking Members Lynch and Cartwright and other Members
of the Oversight and Government Reform Committee. It is an
honor to be here with you this afternoon.
My name is David Robbins and I am the Managing Director of
the Federal Communications Commission. My core role is to
ensure that the Commission's resources are allocated and
utilized properly and to manage the staff that supports the
FCC's programs.
I joined the Commission on September 2, 2011 after serving
as the SBA's Associate Administrator for Management and
Administration. Prior to that, I worked at the FTC as an
Assistant Director in the Bureau of Consumer Protection. I also
have more than 15 years in the private sector.
I feel privileged to serve as a public servant in an agency
with such important responsibilities. The information and
communications technology sector, also known as the broadband
economy, is a growth and job creation engine. The Commission's
work to unleash wireless spectrum, extend the benefits of
broadband to all Americans, protect and empower consumers,
promote competition and ensure public safety is critical to our
economy and society.
But I also recognize that these are challenging budgetary
times for all Federal agencies. The FCC is a small, independent
regulatory agency and we already have a very lean budget, even
less than in some prior years, and we currently have our lowest
FTE level in more than 30 years. The Commission's activities
are completely fee-funded by our licensees, and these licensees
will pay the same amount to the FCC regardless of whether the
monies to go the Treasury for sequestration purposes or for
agency operations.
To better understand the challenges we face, it is
important to review our general budget situation. For Fiscal
Year 2013, the FCC requested $246 million, with $8.8 million
specifically dedicated to the Office of Inspector General. Our
Fiscal Year 2012 Appropriation, including OIG funds, was $339
million and the current CR provides $341 million to the agency.
Sequestration requires a 5 percent cut or $17 million from the
FCC's regular budget, which would result in the OIG cut of
$490,000 and the non-OIG cut of $16 million.
In addition, we have limited spending flexibility for a
broad range of programmatic needs outside of fixed costs. Our
compensation and benefits are a large part of our fixed costs,
at about 72 percent, followed by rent, utilities and a portion
of our contracts which together make up another 23 percent.
That means that roughly 95 percent of our budget is committed
to expenditures that are difficult to change quickly, leaving
us with limited options from which to address these cuts.
So our starting point for flexible budget cuts is lower
than would first appear. With a budget this small and targeted,
there is not sufficient room to reprioritize during the year to
ensure that we can handle contingencies and emergencies that
may come up.
The Commission processes over 375,000 applications a year,
including 16,000 equipment authorizations, and reviews over
300,000 consumer complaints and inquiries in addition to
handling a broad range of issues related to public safety and
homeland security, as well as universal service reform.
It is important to note that much of what we do is highly
technical and dependent upon a skilled workforce of engineers,
economists, attorneys and other experienced professionals. For
that reason, our budget is workforce intensive and it is for
that reason that we are taking every reasonable measure to
minimize the risk of furloughing our employees. But that does
not mean that we will not be forced to furlough at a later date
to ensure that the agency accomplishes its mission.
As we move forward, the FCC will be instituting cuts in
every part of our budget in order to ensure that we reach the
goal of $17 million in cost reductions. These cuts will affect
every part of our operation, including the compensation and
benefits we pay our employees, the rent and utilities we pay to
occupy and operate our various facilities, the contracts and
agreements that we utilize to purchase goods and to provide
vital services to the agency, the myriad of administration
costs that all organizations have in running their day-to-day
operations, the services we provide to licensees and consumers,
and the work we do to fulfill our public safety and homeland
security missions and to advance Congressional Directives such
as universal service.
We are working hard to balance the cuts necessitated by
sequestration with the need to ensure that our licensees,
consumers, stakeholders and everyone with an interest in the
communications industry receives the highest level of services
from the employees that are on staff.
With roughly 95 percent of our budget going to our
workforce, rent, utilities and contracts, it will be a
difficult task to find the $17 million of cuts required under
sequester without adversely impacting our workforce and the
mission of the agency.
Thank you for this opportunity to testify here today and I
will be please to answer your questions.
[Prepared statement of Mr. Robbins follows:]
[GRAPHIC] [TIFF OMITTED] 80290.009
[GRAPHIC] [TIFF OMITTED] 80290.010
[GRAPHIC] [TIFF OMITTED] 80290.011
[GRAPHIC] [TIFF OMITTED] 80290.012
Mr. Farenthold. Thank you very much, Mr. Robbins.
We will now proceed to Mr. Young from the USDA.
STATEMENT OF MICHAEL L. YOUNG
Mr. Young. Thank you, Mr. Chairman.
Mr. Chairmen, Ranking Members and Members of the
Subcommittees, my name is Michael Young. I currently serve as
the Director of the Office of Budget and Program Analysis which
is essentially the Department's central budget office. I have
been in this position for just over two years but essentially I
have served nearly my entire career within the office in
various other positions.
The 2012 budget for the Department of Agriculture was about
$152 billion which made it the fifth largest budget in the
Federal Government. As I mention in my written statement, the
Department manages a very wide range of programs including
nutrition assistance, food safety, conservation, research and,
of course, the farm programs. Based on the annual appropriation
acts, farm bills and other authorizing statutes, USDA has an
extensive and detailed account structure.
In terms of the sequester, the Balanced Budget Statute
exempts several of the Department's larger programs from
sequestration. These exemptions include the Supplemental
Nutrition Assistance Program, the Child Nutrition Program, the
Conservation Reserve Program and most of the Federal Crop
Insurance Program, among others.
For the programs that are not exempt, the sequestration
order signed by the President on March 1st requires a reduction
of 5 percent to the discretionary funds and 5.1 percent to the
mandatory funds. For the Department of Agriculture, that
translates into a reduction of almost $2 billion.
The statute provides requirements on how the reductions are
to be calculated by the Office of Management and Budget and
allocated across the Department's programs, projects and
activities. OMB calculates the sequestration percentage that
applies to each account and has now sent a report to the
Congress showing those amounts.
The statute then requires that the reductions be applied
equally to each PPA, each program, project and activity, within
a budget account. Applying the definitions in the statute, USDA
has identified over 920 PPAs in more than 110 separate
accounts.
At USDA, we began the process to identify these PPAs and
apply the Balanced Budget Act special rules on exemptions back
in December of 2011. This became a longer term process and
certainly intensified during the summer of 2012. This process
has involved significant effort, working closely with agency-
level budget officers, the Office of the General Counsel and
the Office of Management and Budget.
Following this effort, agencies have been responsible for
planning how to implement the sequestration given their
specific account structure and the PPAs within those accounts.
As the agencies move forward, the Secretary has asked them to
implement sequestration in an equitable and fair manner and in
the least disruptive manner possible that protects the ability
to perform the USDA mission to the extent possible.
However, depending on the specific structure of an agency's
accounts and the laws applicable to those accounts, more or
less flexibility may be available to minimize the impact of the
reduction.
To that end, I described in my written statement an example
where the Department could use a limited transfer authority
that we have which allows for transfers of up to 7 percent
among accounts within an individual USDA agency. As an update,
I would just note for the Committee that the Secretary
announced earlier today his intention to use this limited
transfer authority to reduce the disruptive impacts of the
sequester in some of the farm payment programs.
In contrast, as members are likely aware, the Food Safety
and Inspection Service identified a need to furlough employees
for an estimated 11 days as a result of the sequester. However,
the interchange authority would not assist FSIS in addressing
its shortfall because there simply are no other accounts from
which that agency could transfer funds to offset a shortfall.
Mr. Chairman, that is a very brief overview of some of the
work underway at the Department of Agriculture to implement the
sequester. I would be glad to respond to the questions you and
members of the subcommittees may have.
[Prepared statement of Mr. Young follows:]
[GRAPHIC] [TIFF OMITTED] 80290.013
[GRAPHIC] [TIFF OMITTED] 80290.014
[GRAPHIC] [TIFF OMITTED] 80290.015
[GRAPHIC] [TIFF OMITTED] 80290.016
Mr. Farenthold. Thank you for your testimony, Mr. Young,
and I applaud your administrators' efforts to make this as
painless as possible.
We now go to Mr. Sastry from the Resource Management
Department at the Department of Commerce.
You are recognized for five minutes, sir.
STATEMENT OF HARI SASTRY
Mr. Sastry. Mr. Chairman, Members of the Committee, I want
to thank you for inviting me to this hearing on the impact of
sequestration on the Department of Commerce.
We appreciate your interest in protecting the Department's
mission and the many services we provide to the American
public. The Department values the Joint Subcommittees'
oversight role and is committed to working with you on this
important issue.
Before getting into the impacts, I would like to give you a
few words about my background. I spent 13 years as a career
civil servant under both Republican and Democratic
Administrations, 11 of those years were at the Office of
Management and Budget as both a program analyst and branch
chief working in the area of Veterans Affairs and Defense
Health.
For nearly two years, I have worked at the Department of
Commerce as a Deputy Assistant Secretary for Resource
Management. My responsibilities include aligning the
formulation and execution of the budget with the Department's
policy priorities. I also lead the Departments' Enterprise Risk
Management.
As you know, the President was required by law to issue a
sequestration order on March 1, 2013. As a result of this
action, approximately $85 billion in budgetary resources across
the Federal Government were canceled. Of that, $567 million
were canceled within the Department of Commerce, which include
$16 million from the Sandy Supplemental. For our larger
bureaus, sequestration means budget cuts of $270 million to
NOAA, $46 million to the Census Bureau, and $38 million to
NIST.
In planning for and applying the cuts required by
sequestration, our primary focus has been on protecting our
mission. However, no amount of careful planning can mitigate
the short-and long-term effects these cuts will have on the
Department's ability to deliver on critical parts of our
mission to serve the public.
Sequestration is unprecedented and the planning process has
been confounded by the fact that we are currently operating
under budgetary uncertainty with the current CR. Communities
will feel the impacts as we are forced to reduce grants to
States, localities and universities as well as renegotiate and
potentially terminate contracts with private sector firms.
Our bureaus are already feeling the impacts as we are
forced to implement hiring freezes, curtail or cancel training,
and halt critical program investments. While we have worked
hard to manage the challenges of sequestration as best we can
within the context of this Fiscal Year, the longer it is in
effect the more our ability to accomplish the Department's
mission is degraded.
There is not a one-size-fits-all approach to this planning
and, just have you have seen differences across departments,
there are differences among our bureaus as well. The Department
of Commerce is extremely diverse, both in terms of the mission
we administer and the populations we serve, as well as the
makeup of our budget and the challenges posed by sequestration.
Planning has been complex and we are continually refining our
efforts as we work to protect our mission under sequestration.
Let me give you one quick example. Our Geostationary
Operational Environmental Satellite, or GOES-R Program, is a
critical component of our weather forecasting and will be one
of the primary tools for the detection and tracking of
hurricanes and severe weather. In order to maintain the current
schedule to launch the first satellite in 2015, this program
requires a $186 million increase in 2013.
Based on the information available to us, we initially
projected a two to three year slip in launching the first GOES-
R satellite. However, recently the House passed a CR supporting
this program with significant increases and the Senate is due
to follow suit. We will now adjust our plans to factor in these
new possible funding levels. This is just one example of how
the uncertainty drives continual updates and changes to our
planning efforts.
Current law requires that all agencies submit operating
plans by March 31st, but the passage of the CR under debate
would amend that date and also change our projected funding
levels. In the meantime, recognizing that the situation is
still in flux as Congress completes its work, I am happy to
answer your questions as best I can.
[Prepared statement of Mr. Sastry follows:]
[GRAPHIC] [TIFF OMITTED] 80290.017
[GRAPHIC] [TIFF OMITTED] 80290.018
Mr. Farenthold. Thank you very much, Mr. Sastry.
Just as a matter of housekeeping, we are expecting votes in
the House of Representatives in about five minutes on a couple
of procedural matters in the rule for considering the budget.
We will start. I will do a five minute round of questions, we
will let Ms. Norton do a five minute round of questioning, and
then we will take a recess and reconvene here immediately after
the votes to allow the other members who have questions the
opportunity to ask questions. But, obviously our first
responsibility is to vote on the matters on the Floor of the
people's House.
So with that, I will recognize myself for five minutes of
questioning.
Mr. Sastry, we will start with you. You were talking a
little bit about the two NOAA satellites. I understand there
has also been some problems with scheduling and management with
these two satellites since 2007 when the Commerce IG issued a
critical report. Is it really fair to blame the sequester for
the problems with these satellites?
Mr. Sastry. These satellites are critical to our weather
forecasting capability which the Department takes very
seriously. We have worked very closely with the IG on the
issues that they have brought up going forward and we consider
that a strong partnership.
Mr. Farenthold. Well, the problem is that we have been
struggling with these for a long time.
I also understand that your staff told this Committee that
you would be testifying here reluctantly because you don't
think you are in a good position to describe DOC's
sequestration impacts with certainty. So I want to ask you, are
you aware of page four of the February 8th letter from Deputy
Secretary Rebecca Blank to the Senate Appropriations Committee
Chairman outlining some of the impacts of sequestration on the
Department of Commerce?
Mr. Sastry. Yes, I am.
Mr. Farenthold. Are you also aware that the letter
referenced at least some of these sequester impacts as certain?
Mr. Sastry. Yes.
Mr. Farenthold. But today you are still not able to give us
a great degree of certainty. What has changed between then and
now?
Mr. Sastry. When we responded to the Chairwoman's letter in
early February, we had a set of assumptions and a set of
estimates based on the information we knew at that time. Since
then, we have had several changes that occurred from the Sandy
Supplemental to the House CR to the Senate CR. Each of those
required us to continually update our planning efforts.
Mr. Farenthold. All right. I am going to request that we
enter that February 8th letter into the record. Without
objection, so ordered.
Mr. Young, let's talk a little bit about the USDA. One of
my ongoing concerns is, and I mentioned it in my opening
statement, is that we are trying to make this as painful as
possible on people and I don't think that is appropriate coming
out of the White House or the agencies.
I am an old radio guy. Mr. Robbins could probably look up
when I first got my FCC license, assuming their computers work.
But you all have spent in the past couple of years just a ton
of money, a Hungry Pest Campaign, $942,200 for a marketing
campaign, and a Save Our Citrus Campaign, I have actually heard
those PSAs, and spent $200,000 to produce some PSAs.
Now, as an old radio guy, that is a lot of money to produce
a PSA. I checked with the station I used to work for. They are
running them for free. If you all want to do some more, I will
do them for free in my office for you.
It just seems like we ought to be able to find some of
these savings in these contracts or in other areas without
laying off some people. Don't you think we might be able to do
that? There is also one, the question here says I am supposed
to ask you about a Smokey the Bear statute. Having heard the
PSAs, I realize it is not Smokey the Bear, it is Smokey Bear.
Do you think we could maybe save some money on this production?
Mr. Young. Sir, I am not specifically familiar with the
items that you mentioned. However, I would note that most of
those, the Smokey Bear item would be in the Forest Service,
they are not projecting to have a furlough, and the others
sound as though they may be in the Animal and Plant Health
Inspection Service, and they also are not planning a furlough.
Mr. Farenthold. So I think in your testimony you said you
have a 7 percent ability to move around those cuts. Why are we
just getting to this now when we have known about sequestration
for a year?
Mr. Young. Yes, sir. The authority that we have, it is
called the Secretary's Interchange Authority, and that allows
for the Secretary to transfer up to 7 percent from one account
within an agency to another account within that same agency. It
is not available to the Forest Service due to a proviso in the
Interior Appropriations.
Mr. Farenthold. So, would you all be better off if we were
to do an Ag Appropriations Bill and get it through the Senate
and operating under a CR?
Mr. Young. It would provide more certainty, certainly, for
operations.
Mr. Farenthold. All right. And let me get to Mr. Robbins
before I am out of time.
You said the FCC, with a really tight budget, it looks like
you probably are going to be able to pull this off without
furloughs. I applaud you for that and hope you can do it. When
did you all start planning for this?
Mr. Robbins. Sir, at the FCC, my teams spend a lot of time
all of the time trying to make sure we are managing our budget
well. So, sequestration, which we knew passed back in 2011, we
have been working hard to ensure that from hiring to contracts
to every part of our budget that we are managing the funds we
have been given appropriately.
Mr. Farenthold. So regardless of the OMB letter saying do
not worry about sequestration, you all followed my
grandmother's advice and planned for the worst and hoped for
the best.
All right. I see I am out of time. I will now recognize the
gentlelady from the District of Columbia for 5 minutes and 30
seconds.
Ms. Norton. Mr. Chairman, I defer to the Ranking Member of
the Full Committee, Mr. Cummings.
Mr. Cummings. I want to thank the gentlelady for yielding.
When you cut $85 billion out of a budget over a course of
seven months, there are consequences. Duh. Mr. Chairman, In
today's hearing, the Majority wants people to believe that the
across-the-board cuts that are coming are a choice made by the
Administration and that the Administration has alternatives to
cutting everything.
To our witnesses, is it not true that by law sequestration
means across-the-board cuts to every program, project and
activity? Please answer, gentleman, I do not have a lot of
time. Go straight across.
Mr. Sastry. Yes.
Mr. Cummings. Yes.
Mr. Young. Yes.
Mr. Cummings. Yes.
Mr. Robbins. Yes.
Mr. Cummings. Yes. Thank you.
The phrase ``program, project and activity'' that is a
direct quote from the Budget Control Act of 2011 that the
Congress, we did that, which means the most granular and
specific level of spending. Is that right? Is that correct?
Quickly, gentlemen.
Mr. Sastry. Yes.
Mr. Young. Yes, sir.
Mr. Robbins. Yes.
Mr. Cummings. So the law says, the law that we created, we
created this now, says that Federal agencies must make across-
the-board cuts to everything, and Congress writes the laws.
Now, some in the Majority have recently asserted that Federal
agencies have the power to reprogram and transfer funds away
from wasteful or duplicative purposes to more meritorious ones
and in that way they can undo the across-the-board cuts caused
by the sequester. My, my, my.
For instance, Chairman Issa sent letters to the Federal
agencies seeking suggestions for specific program reductions
for elimination ``that would be more beneficial to the American
people than the across-the-board sequestration.'' The letter
suggests that agencies have flexibility to not make cuts across
the board but rather selectively cut ``wasteful spending'' to
achieve the congressionally-required reductions in spending.
Now, to our witnesses, sequestration has imposed a 13
percent across-the-board cut to everything in the Defense
Budget and a 9 percent reduction to everything in the non-
Defense budget. Do you have legal authority to restore, by
reprogramming or transferring funds, those cuts right now
without prior authorization from us, the Congress?
Mr. Sastry. No.
Mr. Young. Sir, we have the authority as I described.
Mr. Cummings. That 7 percent that you talked about?
Mr. Young. Yes, the 7 percent. But that does require us to
notify the Appropriations Committees 30 days in advance of
making such a transfer.
Mr. Cummings. And you, sir?
Mr. Robbins. No, sir.
Mr. Cummings. Is it not true that each of your agencies is
restricted by appropriation acts and authorizing statutes from
reprogramming or transferring funds to a degree necessary to
completely restore the across-the-board cuts that sequestration
requires?
Mr. Sastry. We cannot transfer that much. That is correct.
Mr. Young. Again, just with the caveat on our specific
authority.
Mr. Robbins. I would just note the FCC has really one
account. As a small agency, we are a bit different than the
others who are testifying.
Mr. Cummings. And how is that? Talk to me.
Mr. Robbins. We have one account.
Mr. Cummings. Okay. All right. So, the law that Congress
wrote, that we wrote, we wrote this, now, requires everything
to be cut under sequestration and the laws that Congress wrote
restrict Federal agencies from restoring those cuts on their
own without new authority from Congress. In other words,
Congress is responsible for creating across-the-board cuts and
for enforcing them. That is just what the House Republicans
intended all along.
In 2011, House Speaker Boehner emphasized that the price of
extending the Nation's debt limit would be across-the-board
cuts we are now seeing. Will staff put up the slide? Here is a
slide created by Speaker Boehner to use in his presentation to
the House GOP Conference in July, 2011. He used this slide to
convince the GOP Conference to go along with an extension of
the debt limit and avert default.
Look at what it says: ``A new sequestration process to cut
spending across the board and ensure that any debt limit
increase is met with greater spending cuts.'' The only reason
the House of Representatives voted to steer the Country away
from the first financial default in its history was Speaker
Boehner's promise that across-the-board cuts to everything
would follow and would not be reversed.
With that, I see my time is out.
Mr. Farenthold. Thank you very much.
And, as we are in votes now in the House of
Representatives, we will take a recess. It will probably be
around a half an hour or so that we will be gone for votes. We
will reconvene as soon as votes are over. I am not going to
give you a specific time. You all are welcome to move back to
the Majority Lounge and make yourselves comfortable. We will be
back and we appreciate your patience as we do the people's
business.
So, without objection, we are in recess.
[Recess.]
Mr. Farenthold. At this point, I think we are on the
Republican side of the aisle so we will recognize Dr.
DesJarlais, the gentleman from Tennessee, for five minutes.
Mr. DesJarlais. Thank you, Mr. Chairman, and bear with me
while we gather our thoughts here. It was a short interruption.
Mr. Young, how did you interpret a July 31, 2010 OMB memo
about the potential for sequestration and instructed agencies
to continue normal spending and operations since more than five
months remain for Congress to act? Did you follow that?
Mr. Young. Well, sir, I would say that agencies did
continue to have their full funding available. But I would
indicate that a number of agencies had been taking actions to
take reductions in various areas. I would say that a couple of
the agencies, a few of the agencies, had closed a number of
field offices and taken some other actions to reduce their
spending.
Mr. DesJarlais. So you are saying that you did prepare for
this?
Mr. Young. Yes.
Mr. DesJarlais. Okay. According to USA Jobs last week, the
USDA is advertising 152 open positions while at the same time
announcing the furloughs of meat inspectors. Some of these open
positions are things such as a visitor service information
assistant at a salary of $31,000, a position for a liaison
specialist with a salary of $47,000, Pathways intern student
trainee salary $44,000 and so on, an agriculture commodity
grader with a salary of $69,000. Why is the USDA advertising
open positions for food inspectors while planning to furlough
inspectors?
Mr. Young. Well, it sounds like a number of those titles
that you read off there would likely be in other agencies. I
know that the Food Safety and Inspection Service that employs
the meat and poultry inspectors has had a hiring freeze on for
positions that are not in their frontline inspection system. I
think those would possibly be positions in other agencies. I am
not familiar with the specific ones that you mentioned but they
may well be in other agencies that are not planning furloughs.
Mr. DesJarlais. Okay. So a position for a food inspector,
salary $50,000, is that not in the same department as the meat
inspectors?
Mr. Young. That could be in the Food Safety and Inspection
Service. I do not know the specifics regarding that instance. I
would be happy to look into it for the record.
Mr. DesJarlais. Okay, so you are saying that the 152 jobs
that are advertised just as of last week should not impact the
plans to furlough meat inspectors?
Mr. Young. No, sir, because I am guessing again to the
extent that those positions are in other agencies, we just
would not have any means to shift the funds from those other
agencies to avoid the FSIS furloughs.
Mr. DesJarlais. Okay. How is it prioritized, how is the
USDA prioritizing its furloughs? For example, is USDA
prioritizing cutting conference and travel costs over
furloughing employees and if so, how?
Mr. Young. Yes, there have been reductions in both travel
costs and conference spending.
Mr. DesJarlais. What are they cutting in terms of
conference and travel spending?
Mr. Young. I may be able to get you a number here. From
2010 to 2011, we reduced the number of conferences by 76 and
the cost by $6.4 million.
Mr. DesJarlais. Okay. Let's talk about bonuses. I
understand the USDA spent $33 million on bonuses for employees
in Fiscal Year 2011. Did you issue bonuses in Fiscal Year 2012?
Mr. Young. Yes. I know that some agencies did.
Mr. DesJarlais. Okay, so $33 million in 2011. How much in
2012?
Mr. Young. I am not sure that I have that information with
me today. I would be happy to get that for the record.
Mr. DesJarlais. Were they awarded for food inspectors?
Mr. Young. I would have to check on that, sir.
Mr. DesJarlais. And you would not know how much then?
Mr. Young. No, sir.
Mr. DesJarlais. Okay. With sequester looming, do you think
it is responsible budgeting to hand out bonuses?
Mr. Young. As I understand, there is guidance that we will
not be issuing bonuses at this time.
Mr. DesJarlais. So you don't plan on doing that this year?
Mr. Young. Other than those that are, any that might be
required by law.
Mr. DesJarlais. There are laws that require bonuses?
Mr. Young. Apparently. That would be a little bit out of my
bailiwick. It is probably more in the Human Resources area.
Mr. DesJarlais. Thank you, Mr. Young.
Mr. Jordan. [Presiding] I thank the gentleman. I will now
yield to the gentlelady from the District of Columbia, Ms.
Norton.
Ms. Norton. Thank you, Mr. Chairman. I just want to clarify
that my good colleague on the other side indicated, and it is
very important, these differences, that the OMB indicated that
you should continue to spend at normal rates because we were
five months away from the sequester.
I would have hoped that you would spend at normal rates
because normal rates would have meant that we were already into
a 10-year spending reduction that had been required to avoid
the debt ceiling debacle. So, you were already in a cut mode
and, as you have just replied, spending at normal, to be sure
cut rates, did not imply that you were not planning for what
would happen in case of sequester.
But if I may say so, I would have thought that the American
people and many of us here would have thought that the
sequester would not occur because it is among, you look at the
annals of Congress, perhaps falls into, outside of what
Congress has done even in its most insane moments.
It has been suggested that you could find savings in, I
don't know, Smokey Bear, and that it looks like the President
is trying to indeed make the sequester as painful as possible.
The last time I heard, that was the point of sequester. It was
a hammer so painful that responsible members of Congress would
never engage in it. But it was not something that the President
was supposed to do, it was something that the sequester said
you will do if you do not make the cuts in a balanced way or in
a way that both sides can agree.
Now, I just want to clarify, therefore, when it says why
are you not finding savings here, there and the other place
that would be more sane to cut than, for example, meat and
poultry plant inspection personnel, suppose you, this goes to
any of the three of you, suppose you had found an
administrative level, two or three administrative employees,
that would be easier to cut than poultry inspectors, easier in
the sense that you could do without them, to use that example,
more easily without that layer of administrative cutting
corners, to be sure, than you could do without poultry
inspectors.
Could you have made, even if you found that level of
savings needed in administrative positions, could you have made
that choice under sequester? Could I have your answers?
Mr. Robbins. I think for the FCC, we have been managing our
head count and our FT very carefully for quite some time. We
subject every hire we do to a careful scrutiny. There is no
automatic backfills. I suppose the answer for the FCC would be
yes, although as I have mentioned earlier, while we are not
currently planning to do furloughs, it is something that we
cannot take off the table.
Ms. Norton. Well, Mr. Robbins, I want to ask you about the
FCC because your agency, I believe, is not funded by the
American people as much as by regulatory fees. Is that the
case?
Mr. Robbins. Yes, it is.
Ms. Norton. So those fees are paid by business?
Mr. Robbins. Correct.
Ms. Norton. Well, how are you subject to the sequester?
Mr. Robbins. Sequestration applies to the regulatory fee
funded portion of the agency.
Ms. Norton. So what happens? Do those who owe the funds,
which are necessary of course to carry out the functions of the
agency, do they get a break from paying the fees?
Mr. Robbins. No, they do not.
Ms. Norton. Where do those funds go?
Mr. Robbins. Those fees will be collected, as required by
our appropriation, and placed over at Treasury.
Ms. Norton. Could I ask, in Agriculture we hear that there
may well be the need for fund cuts, but not at FCC. Is this
because some agencies are more labor intensive than others? It
is not very pleasant for the American people who have seen some
food scares in the last years to hear that plant, that poultry
and meat inspectors could be cut.
What is the difference between these two agencies, one
perhaps not needing furloughs, the other, Mr. Young, needing
furloughs?
Mr. Young. Well, I am not familiar with the specifics of
the FCC.
Ms. Norton. No, just discuss your agency, Mr. Young.
Mr. Young. In terms of our Food Safety and Inspection
Service, I would note that about 80 percent of that budget is
devoted just to salaries and benefits, another 15 percent of it
is spent on support activities for the frontline inspection
process. And so, that essentially leaves very little
flexibility.
Ms. Norton. So it is labor intensive.
Mr. Young. Very labor intensive, yes, madam.
Ms. Norton. Does it have an effect upon the businesses you
deal with?
Mr. Young. If the inspectors are furloughed, those plants
would not be able to sell their product in commerce.
Ms. Norton. And if I just may see the difference then with
Mr. Robbins whose fees comes from business and who believes
that he may not have to do furloughs, the reason for that is,
besides making savings before the sequester set in, are there
any particular reasons based on the nature of the Commission?
Mr. Robbins. Just as my colleague, Mr. Young, had the
difficult time time knowing what the difference between our
agencies are, I also have the same problem. I would say for the
FCC we have been trying to be careful stewards of the dollars
that you have given us.
Ms. Norton. What kind of cut have you taken so far?
Mr. Robbins. Our cut will be $17 million under
sequestration.
Ms. Norton. What percentage is that of your budget?
Mr. Robbins. So, as a percentage of the budget it is 5
percent.
Ms. Norton. No, I am talking about before sequestration.
You said you had been taking cuts and making savings before
sequestration. That was part of the point I made earlier, that
cuts were already in existence.
Mr. Robbins. I would say we have been carefully managing
our budget and that has included being careful about how we
hire people. So we are at a 30-year low right now as well as
finding savings in every other part of our budget.
Ms. Norton. Thank you, Mr. Chairman.
Mr. Jordan. Thank you. I recognize the gentleman from
Arizona, Mr. Gosar.
Mr. Gosar. Thank you very much, Mr. Chairman, and I thought
sequestration was a backstop to have responsible Government,
not to make it painful to the American people but have
responsible Government. I think that is the first think I would
like to address to the gentlelady.
But my question for you, Mr. Young, is this the first time
that we have gone through sequestration?
Mr. Young. No, sir. I believe that there were
sequestrations in the late 1980s and perhaps in 1990.
Mr. Gosar. Let me ask you a question. Did you think it was
going to go through?
Mr. Young. Well, we certainly realized that it was a
potential, yes, sir.
Mr. Gosar. How about you, Mr. Sastry?
Mr. Sastry. We also thought there was a potential that it
would go through.
Mr. Gosar. Now, my understand is it is a two-way street,
that you can also ask Congress in regards to making these cuts
a little bit different. Is that not true, Mr. Sastry? That it
is a two-way street in communication in regards to
sequestration, is it not?
Mr. Sastry. This sequestration law itself had very limited
flexibility.
Mr. Gosar. But you can ask Congress to give you that
flexibility, can you not?
Mr. Sastry. We can request reprogramming.
Mr. Gosar. Yes, you can. Did it ever come from your agency?
It did not. How about you, Mr. Young?
Mr. Young. Yes, sir.
Mr. Gosar. You actually wrote a letter in regards to this?
Mr. Young. We, the Secretary did just sign a letter this
morning with regard to transferring some funds within our Farm
Service Agency.
Mr. Gosar. No, but I am asking you did you petition
Congress in regards to having some more flexibility within the
agency?
Mr. Young. We----
Mr. Gosar. You did not. How about you, Mr. Robbins?
Mr. Robbins. As I mentioned earlier, the FCC only really
has one account. And so, transferring funds is not the same
issue for us.
Mr. Gosar. Right.
Mr. Jordan. Would the gentleman yield for one second?
Mr. Gosar. Sure.
Mr. Jordan. Mr. Young and Mr. Sastry, have you responded to
Chairman Issa's letter asking you for ways that maybe we could
work together and give you more flexibility? Have either of you
responded to that letter?
Mr. Sastry. I do know we received it and we are working on
it, but we not yet responded.
Mr. Jordan. You have not? Even though you have had 20
months to get ready for this? Mr. Young?
Mr. Young. Sir, we are also in the process of putting
together the response.
Mr. Jordan. Thanks. I yield back.
Mr. Gosar. I appreciate that, Mr. Chairman.
Let me ask you, Mr. Sastry, you are from OMB, right? Five
years experience?
Mr. Sastry. Previously, yes.
Mr. Gosar. And do you follow the publication?
Mr. Sastry. I am sorry, which publication?
Mr. Gosar. Do you look over OMB waste, fraud and abuse
within the agencies? Do you follow that at all? Have you looked
that up recently?
Mr. Sastry. The report from OMB on fraud and abuse?
Mr. Gosar. Yes.
Mr. Sastry. I have not read that report.
Mr. Gosar. I am going to kind of pinpoint something for
you. OMB actually looked at the prevailing wage and when they
did an audit of the prevailing wage, more commonly known as
Davis-Bacon, there was a 100 percent error rate in the
calculations of it. And I want workers to be paid fairly. The
majority of them are overpaid, heavily, on programs. But a lot
of them were not paid adequately.
Do you know that if we recalibrate the prevailing wage,
which is, I think very prominent in Commerce, I know it is very
prominent in Agriculture, I do not know about you, Mr. Robbins,
but you would save tens of billions of dollars? What I would
like you to do is look within your agencies and see that cost
savings and report back to the Committee if we actually took
and calculated the prevailing wage appropriately. Because I
think it is a very pointed aspect in regards to OMB that could
give us a lot of savings.
But I am also going to ask you, you know, I am a private
sector person. When you look at budgets, I mean, you have got
to look at things that work and things that do not. You are
always, and Mr. Robbins I want to compliment your stewardship
of the taxpayer dollars, but I find it disdainful when we are
not looking at programs and looking at managing those monies
much better.
Mr. Young, did you ever enter private business, sign the
front end or back end of a paycheck?
Mr. Young. I am sorry, sir, the question again?
Mr. Gosar. Did you run a private business?
Mr. Young. I have not run a private business.
Mr. Gosar. How about you, Mr. Sastry?
Mr. Sastry. No, I have not run one.
Mr. Gosar. I would like that, hopefully that we would get
some more principles of understanding in regards to public
accountability of the public tax dollars.
Mr. Speaker, I will just yield back the balance of my time.
Mr. Jordan. I thank the gentleman. I now recognize the
gentleman from Pennsylvania, the ranking member, Mr.
Cartwright.
Mr. Cartwright. Thank you, Mr. Chairman.
The Administration did not decide to impose across-the-
board cuts to spending at Government agencies. It was Congress
that did that, using Congress' power of the purse. And Congress
also required Federal agencies to submit their sequestration
plans 30 days after the President signed the Sequestration
Order. He did that on March 1st, which means that the agencies
here today are going to need to submit their plans by April
1st. Now by my reckoning, Mr. Chairman, criticizing Federal
agencies on March 19 for not having their sequestration plans
that are due on April 1st is premature, to say the least.
Unfortunately, Congress did not take into account the harm
to businesses and individuals as a result of what I have called
this ridiculous sequestration. Cutting the Federal Budget was
not a means to an end but an end in itself. In some instances,
cuts will result in furloughs, reduced benefits and disruptions
to basic services.
Mr. Young, it has been reported that furloughs will likely
be necessary for meat and poultry inspectors, as I mentioned in
my opening statement. Can you estimate the effect of these
furloughs on the meat processing industry and other related
industries?
Mr. Young. Yes, sir. I have an estimate here of about $8
billion if the furlough is in the range of the estimated 11
days.
Mr. Cartwright. And what has the USDA done in planning for
this cut to minimize the impact on industry?
Mr. Young. Well, we have, the agency has taken some steps
to reduce their spending. I mentioned a couple of things in
terms of reductions in travel and training, conference spending
and that sort of thing, and having a hiring freeze for the non-
inspection related part of the agency.
Mr. Cartwright. Thank you, sir.
Mr. Sastry, across-the-board cuts are estimated to reduce
your agency's ability to spur job creation and economic growth
among America's private sector. Is that correct?
Mr. Sastry. That is correct.
Mr. Cartwright. And Mr. Robbins, the across-the-board cuts
to FCC operations will impact economic growth and innovation in
the communications sector. Am I correct in that?
Mr. Robbins. It may very well do so.
Mr. Cartwright. Now, I received a letter dated March 6,
2013 from the Greater Wilkes-Barre Chamber of Commerce which
represents more than 1,000 member businesses that serve my
constituents in Northeastern Pennsylvania. At this time, I do
ask, Mr. Chairman, for unanimous consent to make this letter
dated March 6, 2013 part of the record.
Mr. Jordan. Without objection, so ordered.
Mr. Cartwright. Now, the chamber expressed their concern in
this letter that these across-the-board cuts will have a
chilling effect on our economy, slowing any further recovery,
and it will be felt across the board. They wrote whether it is
the thousands of jobs at the Tobyhanna Army Depot and their
subcontractors, small businesses aching for a forward moving
economy, school children or those most in need in our
community, the cuts will be felt across the board. The only
question is, who is responsible for undoing across-the-board
cuts, Federal agencies or the U.S. Congress?
And to these witnesses, I ask you, do you currently have
the legal authority to reverse the magnitude of these across-
the-board cuts that this sequestration requires? Do you?
Mr. Sastry. No, we do not.
Mr. Young. Sir, I only have the one limited authority
within a specific agency to move funds in between accounts but
that does require the notification of the Appropriations
Committee.
Mr. Cartwright. Okay. Mr. Robbins? Do you have that
authority?
Mr. Robbins. No.
Mr. Cartwright. Now, who wrote the laws that prohibit you
from exercising flexibility to undo the effects of this
sequestration? Who wrote that?
Mr. Sastry. The Budget Control Act was written by Congress.
Mr. Cartwright. It was Congress, was it not, gentleman?
Mr. Young. Yes.
Mr. Robbins. Yes.
Mr. Cartwright. In the letter from my local Chamber of
Commerce there is an explicit plea to members of Congress for
both parties to work together and develop a solution that will
not cripple our economy. They understand that solving the
problems created by sequestration is Congress' responsibility.
The whole Country understands that it is Congress that writes
the laws and it is the law that mandated across-the-board cuts
and it is the law that restricts Federal agencies from defying
Congress' intent in the implementation of across-the-board
cuts.
Now, Mr. Chairman, I am glad to have this hearing on
sequestration today but I respectfully believe that the
Majority has really got it backward.
Thank you.
Mr. Jordan. I thank the gentleman.
Mr. Robbins, when Congress passes a law, does it
automatically become the law?
Mr. Robbins. No, the President has to sign it.
Mr. Jordan. Oh. I forgot. That is an important lesson that
we all learned. Mr. Young, is that your understanding of how
the law works? Once Congress passes something, does the
Executive Branch, the President, have to sign it?
Mr. Young. Yes, sir.
Mr. Jordan. Yes. Mr. Sastry, is that how you understand how
it works in America, too?
Mr. Sastry. Yes.
Mr. Jordan. And to your knowledge, the President signed
this law, did he not?
Mr. Robins. Yes.
Mr. Jordan. He did? Imagine that. Mr. Young?
Mr. Young. Yes.
Mr. Jordan. Mr. Sastry?
Mr. Sastry. Yes.
Mr. Jordan. Okay.
Let me start with you, Mr. Young. Do you think it is
important that public officials speak plainly to the American
people, talk straight with the American people, talk straight
to the taxpayers and the folks that support this Government? I
mean, that it is important for all public officials, anyone who
works in our Government, that they should communicate in a
straightforward way?
Mr. Young. Yes, sir.
Mr. Jordan. Okay. So, I want to try and understand some of
the statements that have come from the Department. We had in
December of last year Secretary Vilsack saying we may have to
consider furloughs as a result of the sequester. And then a
month later he said no, we are going to have to have 6,000 food
safety inspectors furloughed for three weeks.
And then if I look at your testimony, your written
testimony from today, you say near the end of your written
testimony that potentially we will need to furlough employees
for up to 11 days because of sequestration.
And so it seems to me the American people just want to know
which one is it? Might happen, no, 6,000 for three weeks or
potentially for 11 days. So, which one is that? Which one is
actually the truth, if any?
Mr. Young. The current estimate is that it may be for 11
days. But I would just preface that by indicating that there is
the uncertainty of the four-year funding situation and so,
depending on where the funding comes out for the agency, that
would then change.
Mr. Jordan. And this is just in the Food Safety and
Inspection Service part of your overall budget. Is that
correct?
Mr. Young. The 11 day furlough, yes, sir.
Mr. Jordan. I mean the comments. He said may, then he said
6,000 for three weeks, and then you said potentially 11. It is
all referring to that portion of the Department of
Agriculture's budget?
Mr. Young. Yes, sir.
Mr. Jordan. Okay. Can we put up the slide? Because I just
want to show you, this is what our staff, looking at your
numbers from the Department of Agriculture, I know it is
difficult to see, but you can see the trend. It is pretty much
a straight line. It is not like it a big drop off in one
particular year or the other. In fact, where you are at post-
sequester, it is that line third from the right, that is pretty
much where you have been throughout the last several years.
And, I would further point out, you have had 20 months to
get ready for this. This law passed, do you know when the
sequestration law passed and was signed by the President?
Mr. Young. In August of 2011.
Mr. Jordan. August of 2011. So, it seems to me you should
be able to deal with this in light of the history of this
particular budget, the budget history there. Did you have to
furlough any food inspection or safety people in 2009?
Mr. Young. No, sir.
Mr. Jordan. Did you have to furlough any in 2010?
Mr. Young. No.
Mr. Jordan. How about 2011?
Mr. Young. No, sir.
Mr. Jordan. What about 2012?
Mr. Young. No, sir.
Mr. Jordan. So, the lines are basically the same and in
none of those years did you have to furlough. But suddenly a
bill comes along that you had 20 months to prepare for and you
are saying maybe 6,000 people are going to get furloughed for
up to three weeks? And that has been revised down to we don't
know how many but it might be 11 days. And you furloughed none
in the whole pattern there.
How long have you worked at the Department of Agriculture,
Mr. Young.
Mr. Young. I have worked there since about November of
1983.
Mr. Jordan. Since 1983. So, a few years, right? In all
those years, can we go back, do you remember furloughing folks
in any of those years? In the meat inspection and food safety
part of your budget?
Mr. Young. I don't recall a furlough during that time
period.
Mr. Jordan. Have any employees at the Department, this may
have been asked while I was gone, have any employees at the
Department of Agriculture received bonuses over the past year?
Mr. Young. Yes.
Mr. Jordan. How many?
Mr. Young. I don't have that specific number with me.
Mr. Jordan. Do you know what the dollar figure is?
Mr. Young. I don't have the dollar figure, but I could get
that for the record.
Mr. Jordan. Okay. We would appreciate that. To your
knowledge, has anyone instructed you at the Department, no, has
anyone instructed you, or to your knowledge anyone else at the
Department, to implement the sequester in the most politically
painful way possible? Have there been any kind of instructions
like that?
Mr. Young. No, sir.
Mr. Jordan. Have there been discussions at the Department
to implement the sequester in a different way in which you are
now implementing it? Were there other plans brought forward in
discussions at the Department?
Mr. Young. Yes. In fact, the Secretary's guidance has been
that the sequester should be implemented in an equitable
manner, in the least disruptive manner and to take steps that
would allow us----
Mr. Jordan. What I am asking is have there been plans
brought forward which say if we do it this way, there is not
even potential of food safety and inspectors being furloughed
for any length of time? Have there been any of those kinds of
plans that come forward and say, you know what, under this
plan, we have got Secretary Vilsack saying oh, we may have to
furlough 6,000 people for three weeks, you are saying 11 days
and some number, but have there been other plans brought
forward that say you know what, if we do it this way, we will
not have to furlough anybody in the food inspection and safety
area?
Mr. Young. No, I am not aware of a plan like that. And I
would just say that the plans developed for the Food Safety and
Inspection Service, as well as the other agencies, were
developed within the agencies and submitted forward. So, I am
not aware of such a plan.
Mr. Jordan. Okay. Real quick as I am about out of time. Or,
I am out of time. Can we put up the second slide which shows
the overall budget if we can? I just want to make this a part
of the record. This should be slide one, if we can look at
this. I think it should come up. Get rid of the ugly face on
the picture and get the slide up. There we go.
So Mr. Young, this is your budget. And if you notice, over
the last several years, if you notice, and this is straight
from the U.S. Department of Agricultural budget summaries,
Budget Authority, if you look at the 2013 number after the
sequester, it is larger than the 2012 number. And so, is it not
true, Mr. Young, that your budget is going to be, is larger
this year, even accounting for sequester, than it was last
year?
Mr. Young. It appears that that includes all programs, both
mandatory and discretionary.
Mr. Jordan. But are not all programs part of your budget?
Mr. Young. They are all part of the budget but they are not
all subject to sequester.
Mr. Jordan. No, I understand that. I understand the
difference between discretionary spending and mandatory
spending. What I am asking you is, is it not true that the
overall budget at the U.S. Department of Agriculture will be
larger this year than it was last year, accounting for
sequester?
Mr. Young. Well, I don't have a comparison between 2013 and
2012.
Mr. Jordan. We can show you. We have, this is the USDA, the
Appendix to USDA Budget Summary and Annual Performance Plan and
it indicates that in 2012 it was $147,534 billion and in 2013,
after sequester, it is $149 billion. So, that is roughly $2
billion higher. Is that true?
Mr. Young. Yes. I am sorry, I don't have those specific
numbers in front of me.
Mr. Jordan. We would be happy to give it to you. It is your
document. It says Budget Summary and Annual Performance Plan,
U.S. Department of Agriculture.
Mr. Young. That would have been our President's budget
submission from last February.
Mr. Jordan. Okay. Great.
All right. We now go to the gentleman from Nevada.
Mr. Horsford. Thank you, Mr. Chairman.
The people of my district sent me to represent them here to
solve problems, not to create new ones. I was a former State
Senator, I served as the majority leader, I was the chairman of
our finance committee, and I had to work during very difficult
time to root out waste and to identify savings in order for us
to achieve our goal of finding a balanced budget.
And I don't view our agency heads as the enemy. I view you
all as partners. And I would just hope that we can change some
of the rhetoric that this body and this Committee have been
focused on because it is not what the American people want from
us right now. They want us to work together to solve problems
and the sequester is a problem that needs to be fixed.
Now, I would like to ask the witnesses who are here, we
just went through the history lesson of the three branches of
Government and whose fault this is that we have this sequester.
Now that we have it, who is going to take the responsibility to
solve it?
And my question is, do you have, under the Budget Control
Act of 2011, the authority to reprogram in ways that would
allow you to not implement the sequester? Yes or no?
Mr. Sastry. Not to that extent, no.
Mr. Young. Not in total, sir. We only have the one
authority that I talked a little bit about before to transfer
funds within an agency under certain conditions.
Mr. Robbins. The FCC is a small agency and we basically
have one account.
Mr. Horsford. Will staff please put up the slide? Here is a
slide that lays out the facts about agency authority to
reallocate funds. The conclusion is that agencies are not free
to undo sequester cuts mandated by the Control Act of 2011 and
the restrictions on the agency authority to reallocate funds
prevent Federal agencies from cutting a program altogether to
offset the budget shortfall of another program.
Now, what I find astonishing is if you all took the
authority to do this around the Control Act, there would be
Members who would be calling you up here asking you why you did
that without the authority of Congress. That is the irony.
The caps on the amount of funds that can be reallocated,
emergency circumstances, purpose of reallocation and
notification and approval requirements are some of the
conditions on which programming is allowed. Is that correct?
Mr. Sastry. Yes, that is correct.
Mr. Young. Yes.
Mr. Robbins. Yes.
Mr. Horsford. So additionally, the size and scope of your
respective agencies limit the ability to reprogram funds to
offset budget shortfalls for another project. Is that correct?
Mr. Sastry. Yes.
Mr. Young. Yes.
Mr. Robbins. And again, as I have mentioned, the FCC has
one account basically and so we have, I think, a little bit
greater freedom than my colleagues.
Mr. Horsford. So, Mr. Chairman, I would just ask that, you
know, the public understands that this reprogram authority is
not an unrestricted power to pick and choose funding priorities
based on the harm to the public. It is a highly-limited
authority which Federal agencies will, of course, utilize where
allowed by law. And if we do not like that, then we, as
Congress, need to pass a law to work with our Federal agencies
as partners to fix that problem.
The USDA provides an example of the limits of that
authority. The USDA's potential furlough of meat inspectors and
its food safety inspection has gained a lot of attention
because of the anticipated affects it will have on meat
processing.
So, in conclusion, Mr. Young, could USDA reprogram
sufficient funds to prevent the unanticipated furloughs of all
meat inspectors?
Mr. Young. We have not been able to identify a means to do
that, sir.
Mr. Horsford. So, how do you arrive at the decision to
furlough employees?
Mr. Young. That decision, or again, that planning effort
was undertaken within the agency and given the amount of the
budget that is devoted just to salaries and expenses, or
salaries and benefits, excuse me, and the other fixed costs
that are related to that frontline inspection effort just
precluded the ability to avoid that.
Mr. Horsford. My time has expired. Thank you, Mr. Chairman.
I would like to work together to find a solution, not just
identify new problems.
Mr. DesJarlais. [Presiding] The Chair now recognizes the
gentleman from California, Chairman of the Full Committee, Mr.
Issa.
Mr. Issa. Thank you, Mr. Chairman. I am going to follow up
where the gentleman from Nevada left off.
I appreciate the ability to partner, but we are a separate
branch of Government where our job is to hold you accountable.
Let's go through some things. Mr. Young, were you aware of the
letter that this Committee sent asking for what areas of
reprogramming or changes would authorize you to save money on
sequestration back in February around the automatic cuts?
Mr. Young. Yes, sir.
Mr. Issa. Are you aware that you have not responded?
Mr. Young. Yes, sir.
Mr. Issa. Is that because you have no, after 19 plus months
you have no suggested changes?
Mr. Young. I believe we are in the process of developing a
response to that.
Mr. Issa. Well, I appreciate your developing the response.
Actually, statutorily, you owe Congress one on April 1st. The
question is, if you wanted to avoid cuts, if you wanted to
avoid the scare tactics that we have been hearing about not
being able to get fresh meat, wouldn't you have responded at
least with a couple that Congress could have acted on before
the Easter recess?
Is there any reason that you don't have even one item of
reprogramming, one item of legislative business, that we could
take up on a bipartisan basis, sort of the no-brainer that
could save some dollars? Is there a reason that you didn't send
one? Other than the bureaucracy of wait until you get White
House authority. That one I don't want to listen to. Is there
one reason you couldn't send us even one item to change?
Mr. Young. Well, sir, again, in terms of actually
reprogramming within the current----
Mr. Issa. That it not what my letter said. What my letter
said is, is there anything that given legislative action would
allow you, what I basically said in the letter is to you and to
your colleague to the left, the FCC didn't want, or didn't need
one, it didn't happen to get one, you have taken care of the
job quite well, is I was asking isn't there anything?
I could draw up a bill in an hour and to be honest, I would
demand that my leadership immediately consider ones that were
narrow and specifically toward areas of waste. We got no answer
from anybody but DOD and the Department of Defense, quite
frankly, sent us what they had already agreed to with the
appropriators.
So, I will go your colleague, Mr. Sastry. You didn't
respond, either. Is there not at least one item that you could
have said Congress, I don't have authority, but if you will
pass a quick law, a change, we could save money, we could avoid
some portion of sequestration?
Mr. Sastry. I do know we received the letter and it is
being worked in a separate, in a different office. I will say
that part of my job in resource management is to continue to
plan for the current law that is in place which is
sequestration which is what we have been focused on.
Mr. Issa. Well, earlier today we had testimony that just
the opposite, that nobody bothered to do anything in the way of
actual true planning until the President signed the order, that
they kept hoping that it would not happen. They kept noting
that nobody could be as dumb, apparently, as the President for
signing such a law and believing that it would happen. But the
President signed such a law, agreed to do it, cuts only, not
tax increases, and apparently he never meant it because you
never prepared in advance for sequestration. And now you act
surprised.
Mr. Young, I am going to hit you with the one that I am the
most concerned about. Under President Obama, without
legislative action, food stamp programs have skyrocketed, not
because there are more poor but because the program has been
deliberately expanded.
When the chairman of the subcommittee put up that budget
number and you said that it may include the full budget, is it
not true that, in fact, although entitlements were not subject
to sequestration, it was part of your total budget and had the
President made sensible reforms, including implementing the
IG's suggestions, and brought down spending under entitlements,
you would have in fact been bringing down your budget? Is that
not true?
Mr. Young. I am sorry, I do not have the estimates of what
changes might have been.
Mr. Issa. Have you looked at the IG's recommendations to
the Department of Agriculture? Have you looked at some of the
$67 billion of unimplemented IG recommendations?
Mr. Young. We have looked at those, sir.
Mr. Issa. Are you going to do that as part of
sequestration, maybe implement some of those items? Budget
sequestration is only for the amount you need to have. If you
save, as the FCC is, from anywhere through attrition and other
means, if you save all or part of the amount, then the budget
across-the-board cuts go down. Is that not true?
Mr. Young. Well, sir, the way we need to implement it is by
each individual program.
Mr. Issa. But it is relative. If you cut, if you were to
find savings so that your target number was less, your across-
the-board sequestration would be less.
Mr. Robbins, in the case of the FCC, you have already hit
your sequestration number, have you not?
Mr. Robbins. We plan to save $17 million through the rest
of the year. We have not saved $17 million yet.
Mr. Issa. But you have saved a considerable amount of it?
Mr. Robbins. We are in the process of saving that money.
Mr. Issa. So anything you save before March 1st in fact
lowers the across-the-board cuts you would have to make if you
are unable to save it in any other way, isn't that correct?
Mr. Robins. That would be accurate.
Mr. Issa. Mr. Chairman, I think the point I am trying to
make is the FCC by comparison anticipated a law that has been
on the books for 19 months and began making sensible, if you
will, austerities. Well, agency after agency acts surprised
that a law signed by the President 19 months ago actually meant
what it said. I thank the Chairman and yield back.
Ms. DesJarlais. [Presiding] Thank you, Mr. Chairman.
I now recognize the gentleman from Missouri, Mr. Clay.
Mr. Clay. Thank you so much, Mr. Chairman. And for my
friend from California, I think we were all surprised that the
sequester went into effect. But that was the law and we are a
Country of laws and so we have to follow the laws.
Let me ask Mr. Sastry, from a June 17, 2010 presentation on
the 2020 Census goals by Assistant Director for ACS and
Decennial Census Daniel Weinberg, Mr. Weinberg stated that
investment is required early in the cycle to reduce cost and
risk as the decade progresses. And he stated that the more
substantial a change to the Decennial Design that is
contemplated, the more must be invested up front in research.
Sequestration will cut the Commerce Department budget by
$551 million, $46 million of that will come from cuts to the
Census Bureau. Mr. Sastry, how will the Census Bureau reach its
goals of early monetary investments in program infrastructure
to reduce costs for the 2020 Census if there is such a
substantial reduction in the 2013 Budget and beyond?
Mr. Sastry. Performing the 2020 Census at a reduced cost
per household is one of their main goals, as you mentioned. And
sequestration will reduce the 2020 Census, the early investment
in the 2020 Census, just as it will every other program. And so
there will be a risk that they will not be able to reduce the
costs to the upcoming 2020 Census because of reduced
investment.
Mr. Clay. Yes, because that will increase the back loading
of the budget for the 2020 Census. Was that taken into
consideration?
Ms. Sastry. As we continue to plan for sequestration, our
mission is always our number one goal. However, the Budget
Control Act didn't provide the level of flexibility for us to
make those types of decisions.
Mr. Clay. Okay. Then how will the cuts to the Census Bureau
affect the ongoing efforts to update the Master Address File
and the Partnership Program, both of which are critical in
outreach efforts to underserved immigrant and minority
populations in correcting the undercounted and providing for a
more accurate census?
Mr. Sastry. Those programs, too, will be impacted starting
this year which will limit their ability, limit their
efficiency, as we get closer to the 2020 Census.
Mr. Clay. It seems as though you have heavily weighted
cutting from the Census Bureau's budget. I don't know if that
is wise planning.
Mr. Sastry. Our ability to plan for the cuts was very
limited from the Budget Control Act so it, what the amount that
was taken and from the programs it was taken was prescriptive
from the Budget Control Act.
Mr. Clay. I am sorry to hear that.
Mr. Young, because of the sequester, USDA identified a
reduction of 600,000 lower-income women and children who could
receive nutrition assistance and associated nutrition education
and breastfeeding support through the Special Nutrition Program
for Women, Infants and Children, WIC. Mr. Young, while SNAP and
the National School Lunch Program are exempt from the
sequester, how do the reductions to WIC disrupt and negatively
affect the efforts of those programs to feed low-income
families? Is there a relationship?
Mr. Young. Well, I am not sure that I would have the
specific information on that relationship. I do know that often
folks who are participants in one of the programs may also
participate in one of the others, depending on eligibility
requirements. But as you indicated, the WIC Program is subject
to the sequester.
Mr. Clay. Yes. Would you be able to correlate or give us,
give the Committee, some data relative to that?
Mr. Young. I would be glad to work with the folks at the
agency and see what we can provide on that.
Mr. Clay. Okay, and you can also look at the First
Congressional District of Missouri, which I represent, while
you are at it.
Mr. Young. Yes, sir.
Mr. Clay. Thank you and I yield back, Mr. Chair.
Ms. DesJarlais. Thank you.
The Chair now recognizes the gentleman from North Carolina,
Mr. Meadows.
Mr. Meadows. Thank you, Mr. Chairman.
I want to follow up a little bit on what Chairman Jordan
had mentioned. He talked a little bit about bonuses. And so,
none of you are aware of bonus levels that you have been paying
to employees, is that correct? Mr. Young?
Mr. Young. I do not have that information with me, sir.
Mr. Sastry. I also don't have that information with me.
Mr. Robbins. I would be glad to answer that for the record.
Mr. Meadows. Let me go a little bit further then. The
Department of Commerce, in 2011, paid $50 million in bonuses. A
similar amount was suggested in 2012. USDA paid $33 million in
bonuses.
So as part of this plan, I am a little unclear on whether
you have a plan or whether you don't have a plan because we
have talked on both sides of that. Do you have a plan or do you
not have a plan? Mr. Young?
Mr. Young. We do have draft plans for each of the agencies
to operate in the sequester.
Mr. Meadows. And so those draft plans, did they include
bonuses and guidelines for future bonuses?
Mr. Young. Some agencies have made those sort of decisions.
Again, I am aware that there are general guidance that bonuses
will not be paid out during the time of the sequester.
Mr. Meadows. And the OMB made that general guideline.
Mr. Young. Yes, sir.
Mr. Meadows. And have we seen employees leave because they
are not going to get their bonuses? Have you seen people filing
out of the doors because of that?
Mr. Young. I am not personally aware of any.
Mr. Meadows. Okay. How about you, Mr. Sastry?
Mr. Sastry. I am not personally aware of any but I
certainly cannot speak for the entire department.
Mr. Meadows. All right. So, neither of you are personally
aware of any lack of bonuses affecting the retention of
employees. That is correct?
Mr. Young. That is correct at this point, sir.
Mr. Meadows. Okay. So, we have had since August of 2011 to
plan for these cuts and now we are talking about laying off
people that are depending on their salaries on a weekly basis
to put food on the table. And yet, we were giving out these
bonuses and not planning. Is it because you relied on the OMB's
I guess letter of July 31st that says we have five months to
act so really, at this point, continue spending as if you have
always spent? Did you rely on that OMB guidance there as well?
Mr. Young. Well, again, the agencies did have their full
amount of funding available to them. But I would point out
that, for example, in the case of the Food Safety and
Inspection Agency, they did take a number of steps to reduce
travel and conference spending, that sort of thing. They
closed, I believe, five of their district offices over the past
year. So they were taking steps.
Mr. Meadows. And that is because of sequestration?
Mr. Young. Well, that was because of operating more
efficiently. They wanted to be in a position to operate more
efficiently in the event that lower budgets for whatever
reason, whether it be sequestration or lower funding levels,
came about.
Mr. Meadows. Okay, let's go back to your testimony earlier.
You talked about the fact that there was personnel and you
talked about this 80 percent figure in terms of personnel, some
of that being food inspectors and then another portion of that
being support. What percentage of employees would be support
for the folks who are actually doing the food inspection?
Mr. Young. I believe that about 88 percent of the agency's
personnel are related to frontline inspection work.
Mr. Meadows. Okay. So, 88 percent of them are frontline
inspection.
Mr. Young. I believe that is correct.
Mr. Meadows. Okay. So you have just a small administrative
support mechanism. Why would you say that most of the bonuses
then went to those senior level support and not to the rank and
file? When you look back at 2011 in terms of the way those
bonuses were shared, they were shared at a more senior level
instead of those that are actually, the 88 percent that are
doing the job. Why would that be?
Mr. Young. Sir, I am sorry. I do not have that data in
front of me and I am not aware of the breakdown.
Mr. Meadows. Okay. So, as we go forward, what other cost
saving measures, other than furloughs, could you implement and
become a part of your normal strategy?
Mr. Young. Well, I do understand that the agency, for
example the Food Safety and Inspection Service, does have a
hiring freeze in place for non-frontline positions. So, some
actions like that.
Mr. Meadows. But that is not long term. What long-term
plans do you have to save money? I mean, you know, if we have
hiring freeze right now, that can be lifted. Are there any
other systemic plans that you have made that will be saving
monies long term?
Mr. Young. Well, the agency has put forth a proposal to
revise its poultry slaughter inspection process and that would
potentially have longer term savings once that is implemented.
It takes regulatory action to do that.
Mr. Meadows. I see my time has expired. Thank you. I yield
back.
Mr. DesJarlais. I thank the gentleman from North Carolina.
I would like to thank all of our witnesses.
Mr. Connolly. Mr. Chairman, if you could just give me 30
seconds.
Mr. DesJarlais. Absolutely. The gentleman from Virginia is
recognized.
Mr. Connolly. I thank you.
My head, like probably the panel's, is spinning at some of
the contorted logic going on about sequestration and the
complete about face of some of my friends on the other side of
the aisle who were talking apocalypse now just last summer and
now the President signed it and it is not going to be that bad.
And they are even getting helpful and presenting some
suggestions of cuts.
Mr. Young, is citrus greening a serious problem to the
citrus industry in Florida?
Mr. Young. I understand it is, sir.
Mr. Connolly. Would it be fair to say that it is costing
the economy of Florida $3.6 billion?
Mr. Young. I am not actually aware of the specific impact
but we could certainly get that for the record.
Mr. Connolly. Well, I have a study here that says it is
$3.6 billion over five years including the loss of 6,600 jobs
associated with this very serious deadly bacterial disease that
is a growing threat to the citrus industry in your home State,
Mr. Chairman.
And I seem to recall that one of our colleagues made a big
deal out of that is the study that you should get rid of. We
don't need that. And I suppose that is matter of opinion. I
commend the study to my friend the Chairman in the seat right
now because we can get rid of studies like that, but they are
not without economic implications.
With that, I yield back.
Mr. Jordan. Mr. Chairman, if I could?
Mr. DesJarlais. Yes, the gentleman from Ohio.
Mr. Jordan. Just to the same gentleman, while citrus
greening may be a problem, is it not also true, or in your
judgment, is a $16 trillion debt a problem as well, Mr. Young,
for the Country? Is a debt bigger than the entire GDP, is that
not a problem for the Country as well?
Mr. Young. There will certainly be implications of a debt,
but I believe that those sort of economic, larger-scale
economic impacts would be not my bailiwick.
Mr. Jordan. I understand. Thank you, gentlemen. Mr.
Chairman, I yield back.
Mr. Connolly. Would my colleague yield?
Mr. Jordan. I would be happy to. I love this.
Mr. Connolly. I just will remind my colleague that the
context in which our friend and colleague from Texas brought up
the study was not that we have to start somewhere. He actually
ridiculed the study, as I understand it, and said it was
clearly unnecessary which would come as news to an awful lot of
citrus growers in Florida who actually understand the
seriousness of this illness. If you want to eliminate it, go
ahead.
But the idea that there are no consequences to
sequestration, then there are consequences to sequestration,
and then when we find consequences to sequestration we belittle
them.
Mr. Jordan. Will the gentleman yield?
Mr. Connolly. Yes.
Mr. Jordan. I don't think, people are not arguing that
there may be some consequences to reduced Government spending.
What we are arguing is that there are also consequences to
continuing to spend more money than you have and piling on a
debt that is now bigger than our entire economy. That is the
point.
Mr. Connolly. No, my friend, I don't think that is the
point because if you take that logic, then we might as well
just shut down the Government, which may be the intention of
some people around here. We still have to function.
Mr. Jordan. No, no, no. I'm not saying that at all. But we
need to take steps, to start taking those steps to get spending
under control and a 2.4 percent reduction in spending out of
the overall budget is not that big of a first step.
Mr. Connolly. Well, again, I am very glad to have people on
the other side of the aisle want to diminish the importance of
sequestration. I have a different point of view. I think it is
actually going to be quite serious. And I think, of course, the
alternative is that we have a balance of revenue and spending
cuts, not just spending cuts. And that is the philosophical
difference, is it not?
With that, I have to go vote.
Mr. Jordan. Same here. Thanks, Mr. Chairman.
Mr. DesJarlais. Well, I would like thank all of our
witnesses for taking time in their busy schedules to appear
before us today.
The committee stands adjourned.
[Whereupon, at 4:05 p.m., the committee was adjourned.]
[GRAPHIC] [TIFF OMITTED] 80290.001
[GRAPHIC] [TIFF OMITTED] 80290.002
[GRAPHIC] [TIFF OMITTED] 80290.003
[GRAPHIC] [TIFF OMITTED] 80290.004
[GRAPHIC] [TIFF OMITTED] 80290.005
[GRAPHIC] [TIFF OMITTED] 80290.006
[GRAPHIC] [TIFF OMITTED] 80290.007
[GRAPHIC] [TIFF OMITTED] 80290.008
[GRAPHIC] [TIFF OMITTED] 80290.019
[GRAPHIC] [TIFF OMITTED] 80290.020
[GRAPHIC] [TIFF OMITTED] 80290.021
[GRAPHIC] [TIFF OMITTED] 80290.022