[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
REDUCING WASTE AND MISMANAGEMENT:
IMPLEMENTING AGENCY WATCHDOGS'
RECOMMENDATIONS COULD SAVE
TAXPAYERS BILLIONS
=======================================================================
HEARING
before the
COMMITTEE ON OVERSIGHT
AND GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
MARCH 5, 2013
__________
Serial No. 113-15
__________
Printed for the use of the Committee on Oversight and Government Reform
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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
C O N T E N T S
----------
Page
Hearing held on March 5, 2013.................................... 1
WITNESSES
The Honorable Anthony W. Miller, Deputy Secretary, U.S.
Department of Education
Oral Statement............................................... 8
Written Statement............................................ 11
The Honorable Kathleen S. Tighe, Inspector General, U.S.
Department of Education
Oral Statement............................................... 15
Written Statement............................................ 16
The Honorable John D. Porcari, Deputy Secretary, U.S. Department
of Transportation
Oral Statement............................................... 30
Written Statement............................................ 32
The Honorable Calvin L. Scovel III, Inspector General, U.S.
Department of Transportation
Oral Statement............................................... 45
Written Statement............................................ 47
APPENDIX
Letter submitted for the record by a teacher..................... 100
Letter from the Department of Transportion to The Honorable
Darrell Issa and Elijah E. Cummings............................ 102
Letter from the United States Department of Education to The
Honorable Darrell Issa and Elijah E. Cummings.................. 110
Open and Unimplemented IG Recommendations Could Save Taxpayes $67
Billion, Staff Report from Committe on Oversight and Government
Reform......................................................... 118
REDUCING WASTE AND MISMANAGEMENT: IMPLEMENTING AGENCY WATCHDOGS'
RECOMMENDATIONS COULD SAVE TAXPAYERS BILLIONS
----------
Tuesday, March 5, 2013,
House of Representatives,
Committee on Oversight and Government Reform,
Washington, D.C.
The committee met, pursuant to call, at 10:06 a.m., in Room
2154, Rayburn House Office Building, Hon. Darrell E. Issa
[chairman of the committee] presiding.
Present: Representatives Issa, Mica, Duncan, McHenry,
Jordan, Chaffetz, Walberg, Lankford, DesJarlais, Farenthold,
Lummis, Woodall, Massie, Collins, Meadows, Bentivolio,
DeSantis, Cummings, Maloney, Tierney, Clay, Connolly, Speier,
Cartwright, Pocan, Duckworth, Davis, and Horsford.
Staff Present: Ali Ahmad, Majority Communications Advisor;
Kurt Bardella, Majority Senior Policy Advisor; Molly Boyl,
Majority Parliamentarian; Lawrence J. Brady, Majority Staff
Director; Sharon Casey, Majority Senior Assistant Clerk; Steve
Castor, Majority Chief Counsel, Investigations; John Cuaderes,
Majority Deputy Staff Director; Jessica L. Donlon, Majority
Counsel; Kate Dunbar, Majority Legislative Assistant; Adam P.
Fromm, Majority Director of Member Services and Committee
Operations; Linda Good, Majority Chief Clerk; Frederick Hill,
Majority Director of Communications and Senior Policy Advisor;
Christopher Hixon, Majority Deputy Chief Counsel, Oversight;
Jean Humbrecht, Majority Counsel; Mark D. Marin, Majority
Director of Oversight; Kristin L. Nelson, Majority Counsel;
Laura L. Rush, Majority Deputy Chief Clerk; Scott Schmidt,
Majority Deputy Director of Digital Strategy; Jonathan J.
Skladany, Majority Counsel; Peter Warren, Majority Legislative
Policy Director; Rebecca Watkins, Majority Deputy Director of
Communications; Claire Coleman, Minority Counsel; Jimmy
Fremgen, Minority Legislative Assistant; Susanne Sachsman
Grooms, Minority Chief Counsel; Jennifer Hoffman, Minority
Press Secretary; Carla Hultberg, Minority Chief Clerk; Adam
Koshkin, Minority Research Assistant; Elisa LaNier, Minority
Deputy Clerk; Lucinda Lessley, Minority Policy Director; Dave
Rapallo, Minority Staff Director; and Rory Sheehan, Minority
New Media Press Secretary.
Chairman Issa. The committee will come to order.
The Oversight Committee exists 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 Oversight and Government Reform
Committee is to protect these rights.
Our solemn responsibility is to hold Government accountable
to taxpayers, because taxpayers have a right to know what they
get from their Government, and we will work tirelessly in
partnership with citizen watchdogs and our IGs to deliver the
facts to the American people and bring genuine reform to the
Federal bureaucracy.
Today, I first want to thank our ranking member, Mr.
Cummings, for joining me in this hearing that will serve as a
fact-based blueprint for a conversation unfolding about
Government savings and Government spending. With attention to
policymakers on how best to manage an $85 billion
sequestration, this is the time to lead the discussion on
finding and eliminating waste that is based in fact.
We have heard tales of massive teacher layoffs, pay cuts,
Capitol janitors, security guards, and many other effects of
sequestration. I am here to say some of them might be true.
There will be, in fact, reductions in the size of the Federal
workforce. There will be changes in contracts. But many of them
can be avoided if we look for win-win savings.
One of our challenges is knowing, whether you are a
Republican or a Democrat, whether you are in the House or the
Senate, whether you are an IG or administering a part of
Government, we all know that there are embedded wastes in
Government. There are fiefdoms, if you will, that over the
years, with their budget divisions, have built up inherent
duplicative programs. We spent years examining them.
We are, today, meeting, among others, with two widely
respected IGs who, among other things, by definition, will tell
us it is frustrating to be an IG; you don't control your
budget, you may not even control whether or not there is an IG
in the post or, as often happens under both administrations
that I have served under, you have acting positions.
There are widely different rules on what an IG can do but,
most importantly, IGs, under the current law, have a number of
limitations. If someone leaves the Federal workforce, they
leave the ability of an IG to specifically demand their
presence and hold them accountable. If someone is in another
part of Government not covered by that particular IG, it is
only on the request and granting by the other agency that
investigation can cross the lines of jurisdiction.
It is inherently wrong. We form joint task forces. We spend
each other's money. We work together. We are one Government and
we need to have solutions that meet that one Government
oversight.
More importantly, with sequestration, one thing we are
considering here today is IGs are not immune from it. In any
company I can imagine, in tough times, when you are making
budget cuts and you are looking to find waste, you don't lay
off the people who find the waste for you. You don't, in a
fraud situation, get rid of your auditors. That is one of the
challenges we will face, and as a committee and the primary
committee of jurisdiction for all IGs, one of our challenges is
to empower a small $2 billion total Government budget and about
12,000 men and women that call themselves IGs to do more, not
less.
We also, today, have entered for the record, and it is on
our Web site, one of the continuing reports that began with
several of my predecessors ago in which we looked at the
potential savings. I want to make it clear the number in that
figure continues to rise. It rises for two reasons: Government
is getting bigger and the reporting we are getting is more
detailed. And I want to thank all those who annually give us
that information for scrubbing better and better. As far as I
can tell, we have never had a year in which we got less; we
always got more.
One of my predecessors, Mr. Henry Waxman, under the Bush
administration, put out a number of $26 billion that could be
saved if the Bush administration would act faster on these
suggestions. At the time, I was probably what you would call an
apologist. I was looking for how many of those were relatively
recent; how many had been closed; how inherently fair or unfair
Mr. Waxman's work was. When the burden changed from Mr. Waxman
to myself, I began to realize that he had done the Bush
administration a great favor. The numbers, in fact, were simply
tabulations of what was reported. Some, in fact, could be
explained. Many could be explained. Some would be dealt with in
a short period of time, and many were.
But as we all know, Mr. Cummings, myself, and everyone on
the dais, oversight is in fact about recognizing the potential
for savings, recognizing and putting in front of the
Administration, at a minimum, and the public, in some cases,
what we can do, and then encouraging it to happen faster.
This committee has had some recent successes in finding
specific areas of waste and overpayment, pushing the Government
to act faster to save the taxpayers literally billions of
dollars. It is the kind of thing we should do and we will do.
I am halfway through my chairmanship. Being halfway through
a chairmanship tells you that when you look behind you, you ask
have I done enough; and the answer is I haven't. Looking
forward, I have little time to do more. So with my partners on
both sides of the dais, today we are starting a much greater
dialogue with our IGs, a much greater dialogue with the changes
that need to be made if in fact Government outside of this
body, in the executive branch, can do better, do quicker to
save the taxpayers money.
With that, I would like to thank my partner, Mr. Cummings,
for his help in preparation for this hearing, and I recognize
the gentleman from Maryland.
Mr. Cummings. Thank you very much, Mr. Chairman.
Mr. Chairman, first of all, I appreciate your statements
and, as you were talking, I could not help but be reminded that
in so many instances our IGs are our last line of defense. Last
line of defense. IGs are critical to ensuring that our
Government works effectively and efficiently on behalf of
American taxpayers. They will be meeting a deadline on April
15th, that is, the taxpayers, and they want to know that their
money is spent effectively and efficiently. And you are right,
Mr. Chairman, we need to be acting with the urgency of now if
we are going to make a difference.
Our committee in particular relies heavily on the IGs'
detailed audits, inspections, and investigations to support our
oversight efforts. We depend on IGs to cast a very critical eye
over all aspects of agency operations, to question why things
are done the way they are done and to affirmatively identify
ways to improve program effectiveness. We are, indeed, partners
with the IG because they, in so many instances, provide us with
information that we are then able to look into and make
changes.
In December, Chairman Issa and I sent joint letters to all
73 IGs, asking them to identify the most significant open
recommendations for reducing waste and improving efficiency in
their agencies. Today's hearing will be the first of a series
of hearings to examine these recommendations.
Today I am happy to welcome the IGs from the Department of
Education and Transportation, as well as the deputy secretaries
from each Department. I would like to give special welcome to
my friend, Deputy Secretary John Porcari. He served for many
years as secretary of the Maryland Department of Transportation
and I have had the opportunity to work closely with him on
important transportation issues for my State. I have the
deepest respect. I look forward to hearing from him and our
other witnesses about how they are working to improve our
Government.
In addition, I plan to ask all of our witnesses about the
devastating effects of sequestration.
Mr. Chairman, just this weekend I was at an IHOP restaurant
after church, and a lady walked in with her 11-year-old and she
mentioned to me that she just got the sequester notice from the
Department of Defense that she would be having to be furloughed
for four days out of a month and it would cost her $800. She
has two kids, one in college and one 11-year-old, who she had
with her, and she literally broke out in tears.
The reason why I mention this is I want us to be reminded
that sequestration does have an impact. But we can hopefully
lessen that impact by making sure that we spend dollars
effectively and efficiently in the long-run to make sure that
those dollars are spent in a way where we can avoid those kinds
of situations.
This is a huge issue and, frankly, we would be derelict in
our duty if we did not examine how these arbitrary and massive
cuts will impact core Government services that Americans across
the Country rely on every single day. Like almost all Federal
agencies, the two Departments testifying before us today will
have to make deep cuts to key programs and services. For
example, these drastic cuts will reduce our mobility in the
skies. The vast majority of FAA's 47,000 employees are facing
extensive furloughs, including air traffic controllers. This
will result in delays and disruptions at our airports,
cancelled flights, and impeded commerce. I know there many who
are saying that sequestration will have little impact. They
just need to come to my district.
Sequestration also will have a devastating impact on
education programs across the Country, including on our most
vulnerable folks, our children. Cuts in Title I grants to high
poverty school districts could eliminate support to an
estimated 2,700 schools and 1.2 million disadvantaged students.
Sequestration also deeply impacts children with disabilities,
slashing funds from programs that provide special education
teachers, staff, and other support.
The irony is that we are holding a hearing today on IG
recommendations to make these two agencies more effective and
efficient, but it will be more difficult for these agencies to
implement these recommendations while their budgets are being
cut and their employees are being furloughed.
You are absolutely right, Mr. Chairman. When we have a
group of people who are basically saving the taxpayers money
and making sure those monies are being spent effectively and
efficiently, those are the last people we need to see being
furloughed. Even IG offices themselves will feel the negative
effects of sequestration, hindering their ability to conduct
the very oversight work we are praising them for today.
So I want to thank our witnesses for being here today. And
as to the report that the Chairman is submitting, I thank you
for your courtesy in talking to me before the hearing and I
thank you for making it clear that if there is any disagreement
in the numbers, we can resolve them at a future date.
With that, I yield back.
Chairman Issa. I thank the gentleman very much.
We now go to the gentleman from Ohio, Mr. Jordan.
Mr. Jordan. Thank you, Mr. Chairman, for having this
hearing today. I couldn't agree with you more. This hearing is
about facts. This hearing is about credibility. And let's just
cut to the chase. If Government agencies and the secretaries
who head those agencies would spend more time implementing the
IGs' recommendations and less time scaring the American people
with all the political statements they have made regarding
sequestration, the taxpayers would be a lot better off. I mean,
it is just simple facts.
We had a hearing two weeks ago, no, excuse me, last week,
where we had the special inspector general for TARP come in and
talk about, repeatedly, three years now, she has made
recommendations to the paymaster, the special master for
executive compensation, and only one of the eight
recommendations she has repeatedly made have been implemented.
And the facts are this: in 2009, when that program was put in
place, when the taxpayers bailed out seven different companies,
only six executives were getting pay of over half a million
dollars a year. Now, with only two companies still left in the
program, 23 executives are getting pay of over half a million
dollars a year because the paymaster won't follow the inspector
general's recommendations. I mean, this is something that has
to be done if we are going to save the taxpayers the kind of
money they deserve to have saved.
And, of course, just this past week, Mr. Chairman, when
President Obama said at his press conference that the janitors
and security guards who work at the Capitol will face pay cuts,
the superintendent of the Capitol had to send an email out to
employees saying pay and benefits will not be impacted. Once
again, the President was making statements that just weren't
accurate.
Of course, the one that is most famous is the Secretary of
Education, Mr. Duncan. And you don't have to take my word for
it that he misled the American people; take The Washington
Post, that conservative newspaper who always takes the
conservative position. Take their word for it. When Mr. Duncan
said this: It means a lot more children will not get the kinds
of services and opportunities they need, and as many as 40,000
teachers could lose their job. Here is what The Washington Post
said. The Washington Post said, ``Mr. Duncan made this claim
not once, not twice, but three times. Let this be a teachable
moment for him. Next time, before going on television, check
your facts.'' And then the last line in the article says,
``Four Pinocchios. That is the most you can get.'' That means
he totally misled the American people on this.
We need more time spent on implementing what the inspectors
general tell our agencies to do; less time spent on this
political game of scaring the American people about 2.4 percent
cut to the overall Federal budget.
So I appreciate the chairman having this hearing, having
the witnesses today, and I look forward to a good hearing for
all members, and would yield to the gentleman from North
Carolina.
Mr. McHenry. And I thank my colleague for yielding.
Chairman Issa. For two minutes and 16 seconds.
Mr. McHenry. Yes. I will keep it brief.
Chairman Issa. The gentleman is only yielding his time.
Mr. McHenry. Thanks. Well, actually, you can just give me
2.4 percent less, in light of the sequester.
So, with that, I just wanted to say that this Congress has
acted to give the executive branch dramatic flexibility for
implementing the sequester. Dramatic flexibility. Presidents,
for my full lifetime, have asked for this level of budget
flexibility. This President has said he does not want it. So
the implementation of the sequester has been limited in terms
of how agencies can fulfill those cuts, but the executive
branch does have flexibility in implementing this to make sure
that that person that the ranking member met on Sunday after
church doesn't have to be in tears and does not have to be
furloughed. There are many choices the executive branch could
make, beginning with the recommendations from the IGs.
So I thank my colleague for yielding and would yield back
the balance.
Mr. Jordan. I thank the gentleman.
Yield back my time.
Chairman Issa. I thank both the gentlemen.
We now recognize the gentleman from Pennsylvania, Mr.
Cartwright, for the opening statement.
Mr. Cartwright. Thank you, Chairman Issa and Ranking Member
Cummings.
The implementation of recommendations from our inspectors
general can serve to decrease waste and ensure that the Federal
Government is spending the taxpayers' money as efficiently as
possible.
I want to welcome our witnesses here today and tell you I
look forward to hearing about the work of the IGs today and
working with my colleagues to maximize the efficiency of
Government, an endeavor which is increasingly important during
these difficult economic times.
For example, bridge safety is particularly important in my
district. I represent the 17th Congressional District of
Pennsylvania, including Lackawanna County, Pennsylvania. In
Lackawanna County, Pennsylvania alone we have 66 bridges that
have been graded as structurally deficient or have
deterioration to one or more of their major components, and
another four bridges that are closed entirely. That is more
than 10 percent of the total bridge closures in the State of
Pennsylvania. It represents more than an inconvenience; it is a
danger and a looming expense that will be difficult to pay. It
is the type of issue we need to head off before it gets to this
point, and I believe the recommendations of the IG can help.
Unfortunately, implementation of these recommendations is
going to be all the more difficult because the testimony from
the Inspectors General Tighe and Scovel come in the midst of
yet another manufactured fiscal crisis. Republican leadership's
refusal to negotiate in good faith with President Obama has
forced our Nation into this sequestration, costing vital
programs the money needed to operate. The cuts to the
Department of Education and Transportation each measure about
$2 billion. The Department of Education will see devastating
decreases in areas including special education programs,
disability services, and higher education. Transportation cuts
will slash the budget of the key safety agency such as the
Federal Aviation Administration.
Moreover, the CR put forth by the Republican leadership
this week would further slash funding to areas such as highway
safety to below the levels agreed upon just last in MAP-21, the
comprehensive service transportation bill. The CR also fails to
account for the new structures put in place by MAP-21, thus
allocating money to accounts that no longer exist in law, while
not funding new vital programs. These are real problems with
relatively simple fixes that Congress should be solving,
instead of creating new issues for these departments.
Additionally, the very IG offices that make these
recommendations will be cut by the sequester. Inspector General
Tighe's office will be reduced by $3 million and Inspector
General Scovel's office will lose $4 million. If we are to
emphasize the role played by these offices, it makes no sense
to allow this sequester to cut back on their future work.
The negative impacts of sequester cuts are simply more
proof that blindly hacking at the budget is not an effective
path towards fiscal responsibility. If we are to make progress
in reducing waste and maximizing services, we can't allow the
sequester to continue. We can begin by following a common sense
approach, like the ones proposed by Representative Chris Van
Hollen and House Democrats or the White House, which replaces
the sequester by closing loopholes for oil and gas companies,
ensuring the wealthy don't use tax breaks to pay less than
their fair share, and things like refocusing our farm
subsidies.
We cannot do this alone. I urge Republican leadership to
come to the table in order to seriously and responsibly seek a
balanced approach that will put our Nation on a path towards
fiscal responsibility without jeopardizing our services or our
national economic recovery.
With that, I yield back. Thank you.
Chairman Issa. The gentleman yields back.
We would now like to welcome our witnesses today. The
Honorable Anthony W. Miller is Deputy Secretary of the U.S.
Department of Education and is Education Department's Chief
Operating Officer; the Honorable Kathleen Tighe is Inspector
General of the United States Department of Education. Welcome.
And the Honorable John Porcari is Deputy Secretary at the U.S.
Department of Transportation and is DOT's Chief Operating
Officer; and the Honorable Calvin L. Scovel III is the
Inspector General of the Department of Transportation.
And as many of you have seen on C-SPAN, pursuant to our
rules, would you please rise to take the oath? And raise your
right hands.
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.]
Chairman Issa. Let the record reflect all witnesses
answered in the affirmative.
This panel is extremely important to us. Your opening
statements are all in the record in their entirety, so, to the
greatest extent possible, if you could limit yourself to the
five minutes, summarize where approach, we would appreciate it.
And that will leave more time for the Q&A that I know you are
all looking forward to.
With that, Mr. Miller, if you would lead off.
WITNESS STATEMENTS
STATEMENT OF THE HONORABLE ANTHONY W. MILLER
Mr. Miller. Thank you, Mr. Chairman, Ranking Member
Cummings, and committee members for the opportunity to testify
before you on the Department's efforts to improve efficiency,
reduce fraud, and reduce waste. My testimony today will be
organized around four key components. First, I would like to
start with our overarching philosophy.
Since the start of our administration in 2009, Secretary
Duncan and our team have been committed to enhancing how the
Department conducts its operations. When the Secretary asked me
to join his team, it was an explicit intend to leverage my
extensive private sector experience to enhance the Department's
operational and performance management capabilities.
The Department of Education is committed to a philosophy of
continuous improvement as we manage a broad array of programs
and activities as cost-effectively as possible that will help
ensure our Nation's students have the opportunity to obtain a
world-class education. And I can tell you with confidence that,
while we remain focused on ways to continuously improve our
performance, the Department of Education has long been engaged
in making dramatic gains in our programmatic and operational
efficiency.
Let me start with what we have done to streamline our grant
and Federal aid programs. Recognizing that 99 percent of the
Federal funds for the Department are invested in programs, we
know that programmatic change will have the highest impact. We
looked at programs across the Department with an eye toward
increasing efficiency, maximizing impact, and ensuring the
sustainability of improvements.
We proposed, and Congress enacted, reforms to the student
loan programs in 2010, which saved taxpayers $68 billion by
boosting our share of Federal student loan volume from around
20 percent to 100 percent. We also proposed cost-cutting
efforts to further save billions of dollars by eliminating and
consolidating some Department programs and reforming other
programs. From 2010 to 2012, Congress acted on many of these
recommendations by eliminating 49 programs, which resulted in
savings of taxpayers of $1.2 billion a year.
Next I want to talk about how we have adopted a risk
management approach. Overall, the Department has been
historically been very efficient in administering its grants
and loans programs, but we wanted to evaluate areas for further
improvement. In particular, we worked aggressively to improve
how we support and provide oversight of grantees and student
aid recipients to mitigate the risk of waste, fraud, and abuse
before it happens.
We have added steps to pre-screen all grantee slates, for
example, recognizing that the more we can do early in the
process reduces the potential risks later in the process. We
have also taken steps post-award to mitigate the risk. We focus
on working closely with our inspector general and GAO in this
effort, and in our first year Secretary Duncan met with GAO's
comptroller general to ensure a collaborative working
relationship and, likewise, the Secretary and I work very
cooperatively with Inspector General Tighe and we have put in
place formal processes to ensure both GAO and IG have access to
the Department staff and have access to the resources to stay
apprised of key issues. In the last 12 months, we have
dramatically improved our ability to identify and resolve high-
priority audits in a timely manner, and we are finding new ways
to leverage audits to make targeted improvements in other
critical areas.
For the remaining one percent of the Department's funds,
which are reflected in our administrative spending, we have
taken a multi-pronged approach to improve our efforts. From an
internal management perspective, we have tried to control
personnel levels, which represents one-third of the
administrative cost, as well as taking on 60 percent of the
Department's administration cost in the area of contracts. We
have reduced rented office space; we have taken advantage of
emerging technologies such as cloud computing; and specifically
we have held and/or reduced staffing levels. For example, since
2010 we have gone from more than 4400 full-time equivalents to
approximately 4,250 FTEs, resulting in approximately $18
million in annual cost savings.
Lastly, let me turn our attention to Executive Order 13589,
promoting efficient spending. In response to the President's
Executive order, we took a holistic approach at spending and
aggressively cut travel, printing, and supply costs. We were
able to exceed this target in fiscal year 2012, reducing
spending on these activities by more than 20 percent. Key steps
we took included, wherever possible, using video conferencing
and conference calls to reduce travel; publishing online
instead of hard copy, when we could; and getting smarter in our
acquisition of supplies. These strategies have enabled us to
cut spending on travel by 20 percent, reduce spending on
printing and supplies by 30 percent and 29 percent,
respectively; and we are on pace to meet the 30 percent
reduction requirement in OMB's Memorandum 1212.
In conclusion, I would like to say while we are focused on
the topic of efficiency, as has already been highlighted, I
would be remiss if I did not address the issue of the
sequester. Even as you asked us to take thoughtful, surgical
steps to save money, which is smart government, the sequester
requires us to cut by hatchet in a way that is not good for
Government. At a time when we should be investing in education
to ensure our Nation's youth will be prepared for the
increasingly globally competitive world, the steps
sequestration forces us to take are counterproductive, to use a
gentle word.
The Department remains committed to ensuring that taxpayer
dollars are spent wisely and that recipients of taxpayer funds
are used as intended. We are proud of the work we have
accomplished thus far and look forward to continuing to improve
on both our process and our outcomes.
Thank you, Chairman Issa, Ranking Member Cummings, and
members of the committee for the opportunity to testify today
about the efforts we are undertaking to improve and promote
efficiency and reduce costs. I would be glad to answer any
questions.
[Prepared statement of Mr. Miller follows:]
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Chairman Issa. Thank you.
Ms. Tighe.
STATEMENT OF THE HONORABLE KATHLEEN S. TIGHE
Ms. Tighe. Chairman Issa, Ranking Member Cummings, and
members of the committee, I am pleased to be here today to
discuss opportunities to reduce waste and improve efficiency at
the U.S. Department of Education. I want to thank the committee
for its work in highlighting the issue of unimplemented OIG
recommendations and for shining a spotlight on a topic that is
an important part of good government.
Since 2007, we have reported to this committee on several
occasions on recommendations made in OIG reports that the
Department had not yet implemented. Our most recent letter
focused on high priority short-term and long-term
recommendations. We highlighted recommendations we have made in
five very diverse areas, all of which we believe are important
to the Department's ability to deliver its programs and
operations efficiently, and without waste of taxpayer dollars.
As is set out more fully in my written statement, those
areas are: Federal student aid fraud rings, the Federal student
aid debt management system, IT security, improper payments, and
charter schools. Each of these areas is directly aligned with
the Department's management challenges for this fiscal year, as
identified by my office.
The goal of our audit, investigative and related work in
these and other areas is not simply to identify problems, but
to recommend improvements and promote corrective action. Since
2002, my office has issued six reports on the Department's
audit resolution and follow-up processes, each noting problems
with ineffective internal controls, lack of staff and training
to conduct resolution activity, and a lack of organizational
priority placed on audit resolution.
Our most recent audit, issued in 2012, found that 90
percent of the external OIG audits issued in the three year
period we looked at had not been resolved within the six-month
deadline mandated by OMB. Over half of these were overdue for
resolution by an average of over 1,000 days and included
questioned costs of $568 million. Because the Department did
not act, it lost the opportunity to recover $415 million of
these questioned costs as a result of the statute of
limitations.
The results of our work, whether it is audits, inspections,
or investigations, can serve as a tool for the Department
management and its daily operations, long-term strategic
planning, and overall risk management. However, our work is
effective only if the Department implements timely corrective
action to address identified deficiencies or weaknesses. We are
aware that the Department is planning to take steps to improve
its audit resolution and follow-up processes, as the deputy
secretary indicated, particularly in response to our recent
audit, and we will closely monitor and report on this progress.
This concludes my statement and I am also happy to answer
questions.
[Prepared statement of Ms. Tighe follows:]
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Chairman Issa. Thank you.
Mr. Porcari.
STATEMENT OF THE HONORABLE JOHN D. PORCARI
Mr. Porcari. Chairman Issa, Ranking Member Cummings, and
members of the committee, thanks for holding the hearing today.
At the Department of Transportation, we take great pride in
being good stewards of taxpayer dollars. We are always looking
for ways to improve transparency, cut waste, and increase
efficiency. This is a duty that we take seriously and it is
something that we focus on every day. I am pleased to join you
today to discuss our efforts to implement recommendations from
the Department's Office of the Inspector General.
But before I discuss the OIGs recommendations, I would like
to touch on a topic that is on everyone's mind earlier:
sequestration. Sequestration went into effect Friday. It is
going to have serious impacts on the transportation services
that are critical to the traveling public, our cities, and our
national economy. Sequestration will cut over $650 million from
funds recently provided through the Disaster Relief
Appropriations Act of 2013, which is helping us to rebuild
critical transit systems, as well as roads and bridges, in
States hardest hit by Hurricane Sandy. The brunt of these cuts
will be felt in our work to strengthen our critical transit and
rail infrastructure in the face of future natural disasters.
Sequestration will also cut over $600 million from the
Federal Aviation Administration and, as a result of these cuts,
the vast majority of the FAA's nearly 47,000 employees could be
furloughed for up to one day per pay period until the end of
this fiscal year.
What does this mean for the traveling public? Safety is our
top priority, and we will allow only the amount of air traffic
we can safely handle to take off and land, which means
travelers should expect delays. Flights to major cities like
New York, Chicago, and San Francisco could experience delays of
up to 90 minutes during peak hours because we will have fewer
controllers on staff. Delays in those major airports will
ripple across the Country.
In addition, we have notified communities across America
that we are likely to close over 100 air traffic control towers
at airports with fewer than 150,000 flight operations per year,
and to eliminate midnight shifts in over 60 control towers
across the Country. These are harmful cuts with real-world
consequences that will cost jobs and hurt our economy.
It is important to remember that our deficit challenges
cannot be addressed by cutting waste and improving efficiency
alone. The President has put forward a solution to avoid these
cuts and we need Congress to come together to work on a long-
term, balanced solution to our deficit challenges.
At DOT we have worked very hard to implement
recommendations from the Office of the Inspector General, and
the truth is we have made great progress. DOT has established
sound systems for interacting with the Office of the Inspector
General which have enabled us to close 505 audit
recommendations during calendar year 2012. Our efforts resulted
in over $1 billion in program funds recovered, reprogrammed,
offset, or put to a better use. This represents a 19 percent
increase in the number of recommendations closed, compared to
the previous year, and 58 percent more than DOT closed in 2009.
DOT's success is based on a systematic approach that uses
objective metrics for measuring performance and a sustained
effort by the Department's top management. We are making
significant progress on a range of recommendations, such as the
Department's chief financial officer has issued new
requirements, conducted training and put in place the systems
to better ensure that unused funds associated with grants are
de-obligated based on regular and systemic reviews. The Federal
Railroad Administration has made significant progress on
implementing a national rail plan. The Federal Motor Carrier
Safety Administration has begun to draft a proposed rule that,
if finalized, will further enhance the safety of passenger
motor carriers. The notice of proposed rulemaking is scheduled
to go out for public comment this spring.
Finally, the Federal Aviation Administration has made
tremendous progress on moving forward with NextGen, which
maximizes the benefits of a GPS-based surveillance and
navigation system. NextGen is one of our generation's greatest
infrastructure investments and it is underway right now. As
part of our efforts to streamline airways, airplanes
approaching the Washington, D.C. area, for example, started
using satellite routes in August. On these routes alone, it
saved 760,000 gallons of jet fuel per year.
These are just a few of the areas where DOT has
demonstrated its commitment to good stewardship of taxpayer
money and to working effectively with our Office of Inspector
General. We will continue to carefully review all of the
inspector general's recommendations and we will continue to use
an innovative and results-oriented system to improve
transparency, cut waste, and increase efficiency.
Thank you for the opportunity to appear today. I too will
be happy to answer your questions.
[Prepared statement of Mr. Porcari follows:]
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Chairman Issa. Thank you.
And in anticipation that there is an A B relationship in
these opening statements, Mr. Scovel.
STATEMENT OF THE HONORABLE CALVIN L. SCOVEL III
Mr. Scovel. Chairman Issa, Ranking Member Cummings, and
members of the committee, thank you for inviting me here to
discuss opportunities for maximizing efficiency at the
Department of Transportation.
Each year we recommend hundreds of actions aimed at
improving DOT programs and operations, and the Department works
with us to fully implement them. Currently, more than 500
recommendations remain open. My statement today will focus on
10 that we have determined that are of the highest priority and
that impact the Department's ability to ensure stewardship of
its resources, implement transportation infrastructure programs
while protecting its investments, and to enhance aviation and
surface safety.
DOT's ability to ensure effective stewardship of its
resources has been limited by longstanding weaknesses in grants
management and IT procurement and security. In November 2011,
we recommended that DOT conduct quarterly reviews of inactive
grant projects to ensure inactive obligations are liquidated in
a timely manner. In response, DOT initiated a 60-day effort to
review inactive, undelivered orders, which identified $2.1
billion in funds for other DOT programs. We also recommended
that DOT issue a policy requiring agencies to perform quarterly
reviews and annual certifications of obligation balances.
Last week, in response to our recommendation, the Deputy
CFO issued a memorandum providing guidance on review of
obligations in undelivered orders. Later in the year we will
determine if this guidance helped the Department to correct a
persistent, systemic problem with unliquidated obligations and
to identify opportunities to free up funds for other
priorities.
Regarding IT procurement and security, we recommended that
DOT develop its IT enterprise architecture to realize cost
savings, reduce duplication of systems, and strengthen IT
security through multi-factor identity authentication for all
DOT employees and contractors. DOT plans to develop an
overarching enterprise architecture by May 2013 and to
implement an authentication mechanism by fiscal year 2016.
Half of our highest priority recommendations concerned
DOT's implementation of critical transportation infrastructure
programs and the need to protect significant investments in
these programs. To ensure FAA's complex, multi-billion dollar
NextGen air traffic control program delivers promised benefits,
we recommended that FAA establish an integrated master schedule
for implementing new technologies and infrastructure. Without a
master schedule, the agency cannot effectively address program
risks, make informed cost and scheduled tradeoffs, or determine
what capabilities should be delivered first to provide users
with the greatest benefits. FAA is currently working on this
master schedule.
We also recommended that FAA ensure that cost estimates for
realigning and consolidating air traffic control facilities are
comprehensive and updated. While FAA concurred with our
recommendation, it has scaled back its initial plan and is
currently focusing solely on the New York area facility, for
which it expects to provide a detailed cost estimate by the end
of 2014. To completely implement our recommendation, FAA will
need to produce detailed financial information regarding its
longer term plans for facility consolidations in other
locations.
Our high priority surface related recommendations also aim
to ensure the Department maximizes its infrastructure
investments. First, we recommended that the Federal Highway
Administration implement a data-driven, risk-based approach for
preparing DOT and State agreements for overseeing $40 billion
in highway funds provided annually to States. Second, we
recommended that FHWA report regularly on States' efforts to
improve the condition on the Nation's 140,000 deficient
bridges. FHWA has begun to implement these recommendations and
we will continue to monitor its progress.
We also recommended that the Federal Railroad
Administration complete a national rail plan to provide a
framework for integrating passenger and freight rail across the
Country and identify specific interstate corridor goals and
measures of success. Delays in establishing a plan with clear
stakeholder roles and performance measures could result in FRA
investing billions of dollars in Federal grant funds without
assurance that these efforts support national policy goals or
reflect stakeholder commitment. FRA expects to complete the
plan by June 2014.
Finally, we identified two high-priority open
recommendation that support DOT's number one priority, safety.
While the Department's commitment to safety is clear, DOT needs
to bolster its oversight by fine-tuning how it collects,
verifies, and uses safety data. For FAA, we recommended that
information on pilot domicile and commuting be collected and
analyzed to better target solutions to reduce pilot fatigue.
While FAA agreed with our recommendation, it has yet to
complete a scan of available data and determine whether
additional data could offer significant safety benefits.
In terms of surface safety, DOT has acted to remove unsafe
commercial drivers and carriers from roadways; however, in
April 2012 we recommended that the Federal Motor Carrier Safety
Administration publish a rule on passenger carrier leasing with
requirements comparable to those for property carriers. FMCSA
concurred with our recommendation and plans to issue a proposed
rule in 2013.
OIG is steadfast in its commitment to ensuring DOT achieves
the highest return on the Nation's substantial transportation
investments. We believe the Department shares this commitment
with us, as evidenced by its many actions in cooperation with
our office. We will continue to work with you, Mr. Chairman,
the Department, and other key stakeholders to protect taxpayer
dollars as we assist the Department in providing the American
people with safe and modern transportation systems.
Mr. Chairman, this concludes my prepared statement. I would
be happy to take any questions that you or other members of the
committee may have.
[Prepared statement of Mr. Scovel follows:]
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Chairman Issa. Thank you.
I will recognize myself for a short round of questioning.
Mr. Miller, well, maybe, Mr. Porcari, I will go to you
first. Isn't it true that the FAA handled 23 percent more
flights a decade ago than they do today, and they did it with
less air traffic controllers?
Mr. Porcari. Mr. Chairman, we have a very different traffic
control system now.
Chairman Issa. One of the deals around here is you answer
the question I ask, then you give your ups and adds. So,
please, isn't it true?
Mr. Porcari. The volume of movements is less than the pre-
9/11 numbers. That is correct.
Chairman Issa. Okay. Because one of the reasons we are here
today, you have all, on both sides of the aisle, talked about
sequestration, so I am going to focus my short five minutes on
that question. If you have less flights and more air traffic
controllers, very succinctly, what is your justification with
all the so-called improvements, and I am a pilot of more than
30 years, including using GPS, which is, by the way, as old,
almost, as I am as a pilot and finally getting implemented?
What is your justification for not gaining efficiency in the
use of air traffic controllers?
Air traffic controllers work very hard under great stress.
That has been true since I first got my license. But the truth
is navigation aids and a lot of other things in fact genuinely
justify that the numbers should be less if these efficiencies,
which we are paying dearly for, are implemented.
Mr. Porcari. In short, Mr. Chairman, the system that we
operate today, primarily because commercial airline operations
are very different than they were even 10 years ago, is
significantly different. The hub and spoke operations are
concentrated in fewer places, much higher volumes. The
congestion that we have in our major hub and spoke operations
is higher than it has been in the past. And on the general
aviation side, while general aviation continues to do well, the
patterns are different as well.
Chairman Issa. My time is short and I want to get to all
the witnesses. Look, I am a private pilot. There are less of us
today than there were a decade ago. The fact is the number of
aircraft in use, that are actually flying, is not going up, it
is going down. It has been an industry in challenge for a long
time, and as somebody who counts on air traffic controllers,
but the implementation of things, including areas that
essentially route or forbid private pilots do not justify that.
So the other thing, quite frankly, is I do believe you put
air traffic controllers into places in excess of where they
were really demanded. So telling me that some small airports
are going to lose air traffic controllers, as a general
aviation person, begs the real question of, yeah, isn't it in
some cases about time?
Mr. Miller, we sent letters to everyone, including your
boss, asking specifically for areas that, this was on February
28th, where you would like to make changes, reprogram,
essentially, drop programs. So in your testimony, when you said
that you were going to be forced to drop programs, you weren't
going to be able to do it, do you know if Secretary Duncan has,
in fact, prepared a response? Because I made it clear that I
would sponsor legislation immediately, on a case-by-case basis,
to give him that specific changes, deletes, and so on; he
wouldn't have to wait for the CR. And I, by the way, also sent
one to Mr. LaHood.
Mr. Miller. So we will be preparing kind of the formal
response to the mechanism. I think our challenge is this, and
the Secretary and I have spoken about this directly, the bulk
of our programs go to poor kids, students with disabilities,
students in Indian Country on reservations, students on
military or close to military bases. And the real question is
which of those students aren't you going to serve. It is a
selfish choice.
Chairman Issa. Okay. But for 18 months, since the President
signed sequestration, there was an agreement in sequestration
not for a tax increase, but for a cut. There was an agreement
in the tax increase in January that we were having a tax
increase. Nobody said, oh, by the way, sequestration is going
to be another tax increase.
So one of the challenges we face here is 18 months after
the President signed sequestration, and I am not one of those
people that wants to figure out chicken or egg on who came up
with it; that is for Mr. Woodward and others. The fact is the
President signed it, he signed it on your behalf. Your boss
agreed to these cuts. And it is surprising to me that I am
still being told that nobody knows where the cuts are.
Briefly, Mr. Porcari, I would ask, in Hurricane Sandy
relief, which you mentioned prominently, do you believe that
out of that $50 billion, when you need to make these Draconian
cuts, that perhaps the pay raises for FBI that were included in
there of $10 million, could be stripped out; the $2 billion for
road projects not anywhere in the affected area of Hurricane
Sandy could be stripped out; or the $500 million for weather
forecasting to create ocean zoning plan, at least for now,
could be stripped out of this emergency and have no direct
affect on Hurricane Sandy victims?
Mr. Porcari. I would first comment on the road part of it.
What Congress was doing with that appropriation is actually
paying for some of the past disasters that were the emergency
relief funding for the Federal Highway Administration had not
been previously appropriated. Those went to previous emergency
relief activities. We are proud of and believe that we are
wisely spending every penny of the Hurricane Sandy Relief Fund
that has been appropriated to us.
Chairman Issa. And I will give the same amount of time to
the ranking member.
I will tell you that, when I drove over the Nevada line up
to Lake Tahoe just a few weeks ago, I saw a brand new, brand
new sign that gave credit being put in to the stimulus, in
other words, to the Recovery Act. It was being put up two weeks
ago, three weeks ago, when we were driving through in the snow.
It is amazing to me that, with that money still being spent, at
least according to the sign and the dollars being spent, that
every time there is a request for a cut there is no money and
it is overdue. This is one of the challenges we face, is if you
don't do the $67 billion, or some portion of it that we believe
can be cut out of waste recognized by the IGs, and every
program you have is essential, then you are telling us that
only tax increases of nearly double on the American people will
in fact solve our deficit.
With that, I recognize the ranking member for seven
minutes.
Mr. Cummings. Thank you very much, Mr. Chairman.
Mr. Scovel, you heard the response of Mr. Porcari with
regard to the chairman's question with regard to airports and
air traffic controllers. Are you aware of all this, what he
just said, that there is a different situation than what it was
10 years ago? I mean, do you agree with the answer or do you
have enough information to answer what I just asked you?
Mr. Scovel. Thank you, Mr. Cummings. I can agree with parts
of it. It is a different air traffic control situation that we
have today than it was 10 or more years ago. But it is also a
fact that the number of operations has decreased markedly from
what it was 10 or more years ago.
Mr. Cummings, we have a project underway in my office, at
the request of Congress, to examine air traffic controller
productivity, and I think that is what the chairman's ultimate
question goes to. That project is underway. I don't want to
prejudge the results but, of course, we will be reporting to
House T&I and also to this committee when the review is done.
Mr. Cummings. So, do you agree with the chairman that, and
I don't want to put words in his mouth, I am just trying to
remember what he said, that maybe the distribution of air
traffic controllers is not the most efficient and effective way
to use them?
Mr. Scovel. That is a possibility. We have examined FAA's
air traffic controller workforce for a long time and we have
offered, in the past, recommendations to the agency for how it
could analyze the composition and also the distribution of its
controller workforce, because we have found problems in that
area in the past.
Mr. Cummings. And, Mr. Miller, can you please tell us the
total amount of cuts the Department of Education is now facing
as a result of sequestration?
Mr. Miller. Well, the impact of our programs is about $2.5
billion.
Mr. Cummings. I understand that about $722 million is in
cuts to Title I?
Mr. Miller. Yes. And about $600 million in special ed
programs.
Mr. Cummings. And you said it is a Sophie's choice, when
you were answering questions. I guess this is what I am getting
to. You hear two sides of these questions, and this is where I
am trying to go to, Mr. Scovel. There seems to be some people
have the opinion that when these cuts are made, the cuts are
made to things that they don't have to be made to; in other
words, that you have some fat somewhere else that you could cut
and not affect, say, programs for kids like me when I was
growing up in special ed. So I am just wondering. Tell me about
that. Explain that to me. Is this something mandated or what?
Mr. Miller. So the reality is our programs are focused on
those who are most needy.
Mr. Cummings. Yes.
Mr. Miller. And that is the bulk of our program funding.
And in an environment where we have fallen behind the world, we
are 16th in the world in terms of college graduates.
Mr. Cummings. Marching towards a third world nation.
Mr. Miller. We are 25th and 17th in terms of math and
science preparation of our 15-year-olds. And you look at the
direct investment in education and how that impacts GDP, how it
impacts employment, how it impacts earnings, and the research
is pretty compelling that the quality of education, it is clear
that investing in education is critical.
Mr. Cummings. But this is my question.
Mr. Miller. Which is the tradeoff. We have no choice.
Mr. Cummings. My question is, again I'm going back, is
there some way that, when you have sequestration under the
circumstances we have them right now, that you could avoid the
cuts in these areas?
And, Ms. Tighe, you can chime in if you want. I just want
to know, because the implication is that maybe the
Administration is trying to just zero in on things that are
going to be most_ get the headlines or whatever, and I am just
trying to figure out how strict this situation is.
Mr. Miller. Simply put, it would be that is where the money
is, the money is in these programs. There are no alternatives.
Mr. Cummings. Ms. Tighe, do you have a comment on that?
Ms. Tighe. Well, I would agree that sequestration, in its
across-the-board approach to cutting, is going to leave many
things unfunded, even things that you don't want. And since
Title I and special ed and those monies are the bulk of the
Department's monies, yes, that is where you are going to see
the cuts. I think a better approach would be looking at other
ways of reducing funding. I mean, part of this hearing was
looking at the recommendations we make. The deputy secretary
brought up the issue of there are programs, there are 200
programs in the Department of Education; not all of them are
big money programs. But why shouldn't we look a little more
thoroughly and holistically at what programs might duplicate
each other? Let's get to the point where we have a duplication
within the Department and between the Department and other
departments that focus on education things. Why can't we look
at that as a Government and make cuts there?
Mr. Cummings. So, in other words, go through those
programs, the ones that are not getting the most bang for the
buck, either reduce or eliminate those to free up money for the
others, is that right? Is that what you are trying to say?
Ms. Tighe. Yes.
Mr. Cummings. So there is some leeway, then, if these
recommendations were, with this sequestration that we are going
through right now, there is some leeway if we were to do these
things?
Ms. Tighe. Oh, I don't think there is leeway with
sequestration.
Mr. Cummings. I am talking about this one right now, what
we are going through right now.
Ms. Tighe. Yes. Right now I don't think there is leeway. I
mean, we are all facing, including my office, across-the-board
cuts.
Mr. Cummings. What kind of cuts are you facing?
Ms. Tighe. I am facing I believe $3 million, my somewhat
small appropriation. I am going to be furloughing all of my
employees for about 10 to 11 days, including for myself on
down, if the sequestration continues through the end of the
fiscal year. We have cut out our IT support contract for IT
security, our FISMA work, and we are going to cut the support
we give for our risk modeling work, and we have told four
internal employees they need to leave at the end of the month,
and cuts like that.
We have greatly reduced travel, which is really very much
impacting. When you are a criminal investigator and auditor,
you have to travel to do your business. So I am having to make
choices in what cases we open and what audits we do.
Mr. Cummings. I see my time is up. Thank you, Mr. Chairman.
Chairman Issa. Thank you.
Mr. McHenry.
Mr. McHenry. I thank the chairman. I yield to my colleague
from Ohio, Mr. Jordan.
Mr. Jordan. I thank the gentleman for yielding.
Thank you, Mr. Chairman, again for this hearing.
Mr. Miller, I just want to be clear what the chairman's
earlier questioning. You have not responded to the chairman's
letter sent last week?
Mr. Miller. I believe the letter was received on the 28th.
I got notice of it upon my return on Monday. So, no, those
wheels are turning, but I don't believe a formal response has
been submitted.
Mr. Jordan. Tell me when sequestration passed, when that
became the law. Do you know when that was?
Mr. Miller. Friday.
Mr. Jordan. No, no, no, when the legislation passed
requiring sequestration to take effect. Do you know when that
was?
Mr. Miller. I don't remember the exact date.
Mr. Jordan. August 2nd, 2011, 19 months ago. Have you not
been doing any planning? It seems to me, when you get a letter
from the chairman about sequestration, you have had 19 months
to start planning and getting ready for it. In fact, you should
have been ready for it, if you took some time, you should have
been ready for it in December, because it was supposed to hit
January 1st and was suspended for two months. It would seem to
me you would have the response ready to go just like that and
you could get right back to the chairman. So you guys didn't
start planning for this until the last couple weeks?
Mr. Miller. We planned on the implementation of sequester,
and that has been quite consuming, actually.
Mr. Jordan. Well, how long have you been planning for it?
Mr. Miller. We have been planning on the implementation of
sequester in varying degrees since the beginning of the year.
Mr. Jordan. Why not before that? It passed August 2nd,
2011.
Mr. Miller. Because, at least I interpreted the press, like
you, it was both parties and the Administration, both members
of Congress thought that it would not be going into effect.
Mr. Jordan. Let me go to the statement that the secretary
made, the now famous statement: It just means a lot more
children will not get the kinds of services and opportunities
they need, and as many as 40,000 teachers could lose their
jobs. There are literally teachers now who are getting pink
slips, who are getting notices they can't come back this fall.
Do you know where the secretary got that information, when he
made that statement, what information he was basing that
statement on?
Mr. Miller. Yes. The issue of the 40,000, which is a
recognition that the bulk of funding goes to personnel costs
and the 40,000 does represent an estimate of, if that was
translated directly with the current funding splits.
Mr. Jordan. All I am asking is did you guys do some study,
were you guys given any information saying this is going to
happen, we have surveyed schools across the Country, surveyed
some of the military schools, some of the schools in Indian
reservations you referenced, did you survey those or did you
just sort of make this up?
Mr. Miller. No, we would be precluded from that.
Mr. Jordan. So how did you base that, how could he make
that statement?
Mr. Miller. Again, we have an understanding of the cost
structures from our historic work with at the State, at the
district, and at the school level. We understand the basis of
the cost structure. So when the question is asked how might
this translate to the impact, we can say, if consistent with
the current allocation of fund, as it is today, this is what it
would translate to.
Mr. Jordan. So this was a guess. You said how this might
translate. This was a guess that the Department made and
portrayed to the American people as fact.
Mr. Miller. No, I thought we have been very clear about
might and that, if translated, this is the impact it could
have. And I think that remains true today and I think there are
examples, both in anticipation of sequestration up to now and
going forward.
Mr. Jordan. Excuse me. This doesn't say might, this says
there are literally teachers now who are getting pink slips,
who are getting notices they can't come back this fall. Is that
true?
Mr. Miller. I believe the secretary has already said he
spoke inaccurately and tried to correct that statement. But
what is true is the potential impact of up to potentially
40,000 jobs, as translated with the current spending package.
Mr. Jordan. Is there anything in writing that was given to
the secretary before he made this statement, anything in
writing to say you can say this, we think this is going to
happen? Anything in writing or just conversation that took
place at the Department?
Mr. Miller. I can't speak specifically to what the review
materials the secretary had.
Mr. Jordan. Was The Washington Post accurate when they gave
four out of four Pinocchios to the secretary's statement? Were
they accurate or do you think they were wrong?
Mr. Miller. I would presume that The Washington Post did
what they thought was consistent with their reporting
practices. I also know that in a follow-up story today they
have also said that there is an impact of sequestration likely
on jobs, so I would believe both accounts from The Washington
Post.
Mr. Jordan. Mr. Porcari, Mr. LaHood said flights to major
cities like New York, Chicago, San Francisco, and others could
experience delays up to 90 minutes during peak hours because we
have fewer controllers on staff. Now, Mr. Meadows tells me last
week, in Transportation and Infrastructure Committee, that the
FAA administrator admitted under questioning that the 90 minute
delays in major cities was not based on any data or study. Is
that true? Same question to Mr. Miller. Do you have any study,
any data that says we know for sure this is going to happen?
Because I flew this week and it didn't happen to me.
Mr. Porcari. We know some of the specific impacts. Chicago
would be a good example. By having less controllers on duty,
Chicago has two towers, we would not be able to man the north
tower, which means one runway would be out of operation.
Mr. Jordan. The question is is there any study that
indicates this in fact is going to be the case? And, if so, was
the FAA administrator misleading the Transportation and
Infrastructure Committee last week when he said there is no
data or study that indicates this is going to be the case?
Mr. Porcari. Both the administrator and the secretary were
pointing out that it is difficult to measure precisely until
the cuts are in effect. We know it will have a significant
impact, and the primary impact will be on our busiest airports.
Mr. Jordan. So once again it was a guess. We have two
secretaries, Secretary of Education and Secretary of
Transportation, guessing, suggesting without data or any study
to support, that these effects were going to happen; and we
have The Washington Post calling the Secretary of Education, I
won't use the term, but we have The Washington Post saying that
he misled the American people to the tune of four out of four
Pinocchios.
Mr. Porcari. We believe those are reasonable estimates
based on what we know now. We know the operational impacts will
be significant.
Mr. Jordan. When did you guys start planning for the
sequester? Did you start planning, like I think a good
administrator, a good planner, a good leader would do, did you
start planning in August of 2011, when this bill first passed?
Mr. Porcari. We were well prepared for January 1st.
Mr. Jordan. Did you start planning then?
Mr. Porcari. We started planning in the fall.
Mr. Jordan. Okay.
Mr. Chairman, I yield back.
Chairman Issa. I thank the gentleman.
We now go to the gentlelady from California, Ms. Speier.
Ms. Speier. Thank you, Mr. Chairman.
Mr. Miller, the IG reports that through 2010, 90 percent of
their audits that they issued since 2007 have not been resolved
within six months, 53 of those audits were overdue by an
average of almost three years, including questioned costs of
$568 million. So due to the running of the statute of
limitations, it appears that costs questioned by the IG in its
audits, the Department lost the opportunity to recover $415
million of costs.
Two years later, in January of 2012, 42 percent of those
audits were still unresolved.
So my question to you is is that acceptable performance by
the Department?
Mr. Miller. I think we are in agreement with the IG that we
need to improve our ability to resolve audits in a more timely
way, including through the completion of the corrective action
plans. It is directly why we have taken a number of steps, most
recently with the formulation of a dedicated task force. We
have already had a 30 percent, actually, a 33 percent reduction
in the backlog, and we should take that backlog to zero in the
course of this fiscal year.
Ms. Speier. But you would agree that you have lost the
opportunity to recover $415 million in costs?
Mr. Miller. We wouldn't agree with that specific statement.
Broadly stated, the opportunity, when you actually look at the
recovery, that becomes the total potential, of which generally,
based on finding, I mean based on what is in the public's
interest, the actual amount, even when we do have timely
recovery, is typically a fraction of the total potential costs.
So I would not want to leave an impression that the $400
million-ish figure was in fact the amount of recovery that
would have happened. That would be inaccurate.
Ms. Speier. Inspector Tighe, do you have any comments?
Ms. Tighe. I would agree that we probably wouldn't have
seen a recovery of $415 million. Part of our point is when you
let the statute of limitations run, you have no opportunity to
do anything.
Ms. Speier. Exactly.
Ms. Tighe. A lot of that money did involve school districts
and other State and local entities, who we know aren't richly
funded at the moment. On the other hand, part of the problem is
not just the money, it is the fact that, when you don't resolve
the audit at all, you also lose the opportunity to work with
the States and other jurisdictions to put in internal controls
to make sure they are spending that money wisely. So you really
lose a number of opportunities.
Ms. Speier. Thank you.
Mr. Miller, how much money do you spend, what resources are
expended in the suspension and debarment process in the
Department?
Mr. Miller. I don't have that specific kind of allocation
because, again, that would be an allocation of individuals that
are across multiple functions. But we could follow up and get
that specific investment we are making on the suspension and
debarment specific process.
Ms. Speier. All right, if you would get that to the
committee, that would be helpful. Have any grantees or
contractors been suspended or debarred in the past three years?
Mr. Miller. Yes. We have had 150 debarments through 2010,
and I believe that number has increased since.
Ms. Speier. And for what kinds of offenses?
Mr. Miller. It has been for a range of offenses. Again, we
could give you a breakdown of those in a follow-up.
Ms. Speier. All right, would you provide that? And have any
of these individuals been debarred permanently?
Mr. Miller. That, I can't answer specifically.
Ms. Speier. Would you provide that as well?
Mr. Miller. Of course.
Ms. Speier. Inspector, do you have some comments on that?
Ms. Tighe. Yes, I do. I think the Department has tried to
make improvements in its focus on debarment, especially in the
non-procurement area. As far as grantees, usually the grantees
themselves are certainly people associated with grants that
have been debarred, based often on our criminal investigative
work. To say grantees themselves are debarred I think may be
overstating; usually the Department doesn't debar a whole
entity, it will take individuals out of that entity. But I
think that the Department still faces challenges in making its
suspension and debarment process effective. We did an
inspection report on it last year that highlighted some issues.
Ms. Speier. All right, thank you.
I yield back.
Chairman Issa. Would the gentlelady yield to me for just a
second?
Ms. Speier. I certainly will.
Chairman Issa. Following up on the gentlelady's question,
Ms. Tighe, the $415 million, would it be fair to say that, if
you had every one of those in a situation in which you were
negotiating with the excess recipient, that the future savings
by not having this repeat would certainly be as great as that
$415 million? In other words, the behavioral change would be
the ultimate goal, in addition to any recovery?
Ms. Tighe. Absolutely. I think we have not quantified the
fact that you can save money over the long haul by putting
internal controls into place.
Chairman Issa. Thank you.
Ms. Speier, I think you were exactly on the right line. I
appreciate your yielding.
With that we go to Mr. Jordan, a returning star, is
recognized.
Mr. Jordan. I don't know about that. Thank you, Mr.
Chairman.
Mr. Porcari, some members of both the House and Senate have
said that Mr. LaHood's dire warnings aren't backed up by
financial data, where I was questioning you before, and they
suggested that the FAA could, instead, cut $500 million it
spends each year on consultants and $200 million it spends on
supplies and travel. I know this is the FAA, but do you think
that is something we can focus on?
Mr. Porcari. We could not achieve the savings that way, and
I would be glad to document why. Let me first point out what
the sequester means. Two-thirds, basically, I am sorry, three-
quarters, 74 percent of our Department is exempt from the
sequester, which means that the sequestration cuts fall
disproportionately on a portion of the Department, primarily
the Federal Aviation Administration. That 5 percent cut,
because we are partway through a fiscal year, is equivalent of
a 9 percent cut.
Mr. Jordan. But my question is, does the FAA part of your
budget spend $500 million a year on consultants and $200
million a year on supplies and travel? Yes or no?
Mr. Porcari. Those categories do exist. What is in those
categories is important.
Mr. Jordan. Let me ask it another way. Ms. Speier and I are
working on a piece of legislation. We discovered this two weeks
ago in this committee, that we all remember the GSA junket to
Las Vegas, where they spent $600 per day per attendee, $3,000
per attendee per conference, and if you use that as a
benchmark, 183 times various Federal agencies have exceeded
that mark in various conferences they have attended. I am not
sure what the number was for Transportation; I do remember
Defense was over 50 times that they had exceeded that
benchmark.
In the past year, has the Department of Transportation held
conferences around the Country and have folks attended?
Mr. Porcari. We have and we have dramatically scaled that
back.
Mr. Jordan. How many? How many?
Mr. Porcari. I would be happy to get you the exact number.
Mr. Jordan. Do you know if you were above or below the
benchmark? Did you spend more than $600 per day per attendee,
more than $3,000 per attendee per conference?
Mr. Porcari. We stay within the per diem requirements.
Mr. Jordan. Will you check on that, we can get that
information, if Transportation was above or below the
benchmark?
Mr. Porcari. I would be happy to get that for you.
Chairman Issa. Mr. Jordan, would you yield for just one
second?
Mr. Jordan. I would be happy to yield to the chairman.
Chairman Issa. When you said per diem, that is how much the
individual gets paid. What the gentleman was asking is about
how much was spent. And the GSA scandal was not about per diem.
Mr. Porcari. Mr. Chairman, what I am referring to is also
the per diem rate for hotels, what people are spending on hotel
rates.
Mr. Jordan. How many conferences did you spend Department
of Transportation employees to last year?
Mr. Porcari. I would be happy to get you that. I will tell
you that I have been personally reviewing and approving
conferences.
Mr. Jordan. You don't know that information? As much as it
has been in the news with GSA, with the hearing we had two
weeks ago, 183 times we have used that number, and you don't
know that information?
Mr. Porcari. I will be happy to get it for you.
Mr. Jordan. You come before the committee talking about
sequestration and you don't know how many conferences you went
to?
Mr. Porcari. Because we have already achieved the savings
we think we can achieve on the conference issue.
Mr. Jordan. Well, maybe we would disagree with that, and we
would like to have that information in front of the committee.
Mr. Porcari. I would be happy to get it for you. That was
last year's cuts.
Mr. Jordan. You might think you have achieved it, but maybe
the American taxpayer doesn't. That is why we have these
hearings. That is what it is all about.
Mr. Porcari. We are happy to make that public.
Mr. Jordan. Mr. Scovel, do you know how many times they
went on trips?
Mr. Scovel. Chairman Issa requested that information from
the Department. We have not audited it.
Mr. Jordan. But do you know the number of trips?
Mr. Scovel. Most certainly. Fiscal year 2010, total cost,
$12,833,000. The number of conferences was 49.
Mr. Jordan. Forty-nine conferences, 12 million bucks, but
we are going to have 90-minute delays because of the sequester,
right? We have to furlough FAA agents. That is the kind of
stuff that just drives the American taxpayer crazy. And the
fact that you know it, you know that information and the agency
head doesn't is a problem.
Mr. Porcari. If I may, the single largest FAA conference
part of it, and that is the largest part of the Department, is
actually safety training for our air traffic controllers.
Mr. Jordan. I am not saying some of them aren't important.
What I am saying is 12 million bucks and 49 times. That is
something the American taxpayer wants to know.
Let me move quickly if I can.
Mr. Miller, do you know how many conferences you sent
Department of Education employees to last year?
Mr. Miller. It was roughly----
Mr. Jordan. There is no roughly to it; there is a number.
How many did you go to?
Mr. Miller. No, we have a complete breakdown by size of
conference.
Mr. Jordan. Do you know how many? Was it 10, was it 49? Was
it above 49 or below 49? Did you beat the Transportation?
Mr. Miller. Below 49.
Mr. Jordan. Below 49. Well, that is good.
Ms. Tighe, do you know how many it was?
Ms. Tighe. I am sorry, I do not, but I can certainly get
that information.
Mr. Jordan. Do you know the cost that they had for travel
and conferences?
Ms. Tighe. I know that we reviewed the costs as reported to
this committee in earlier submissions and to the Senate, but I
don't have that off the top of my head.
Mr. Jordan. Mr. Miller, do you know, off the top of your
head, how much money the Department of Education spent on
conferences and travel last year?
Mr. Miller. In total, I believe it was about $10 million. I
know our largest conference, which would be the Federal student
aid conference, came in at about less than----
Mr. Jordan. How many employees do you have at the
Department of Education?
Mr. Miller. About 4,400.
Mr. Jordan. Forty-four hundred.
How many employees at the Department of Transportation?
Mr. Porcari. Approximately 55,000.
Mr. Jordan. Fifty-five thousand and they spent $12 million.
Forty-four hundred and you spent $10 million? Maybe you weren't
better. That is amazing.
Here is the point. Instead of having the secretaries of
these respective Federal agencies out scaring the American
people, maybe cut back on the conference; maybe actually
achieve some savings for the taxpayer and do things the way you
are supposed to.
With that, I yield back, Mr. Chairman.
Chairman Issa. I thank the gentleman.
We now recognize the gentleman from Northern Virginia, Mr.
Connolly.
Mr. Connolly. Thank you, Mr. Chairman.
Gosh, if the American people wonder why it is hard to reach
agreement on sequestration, perhaps that last round of
questioning clears that up.
Mr. Porcari, I wanted to give you an opportunity, without
badgering you, to answer the question fully in terms of air
traffic controller training, because there seemed to be some
confusion between conferences and training. Would you care to
explain what you were trying to get at before being
interrupted?
Chairman Issa. Would the gentleman yield for just a second?
Mr. Connolly. Yes, Mr. Chairman.
Chairman Issa. I would like to ask the clock be stopped.
That is a question, fairly, that shouldn't come off your time.
If you would finish the answer, I would appreciate it.
Mr. Connolly. Thank you, Mr. Chairman.
Mr. Porcari. Certainly. Thank you, Mr. Connolly. What I was
referring to with our air traffic controllers is although some
of the activities are technically listed as a conference, there
is a safety agenda where they are basically getting updated
education on safety activities and other vital parts of their
role. We think that is a very important part of what they do.
We also think it is management's responsibilities, mine as
chief operating officer, to make sure they do that responsibly
and they do that as cost-effectively as possible.
So for the last year and a half we have been very carefully
reviewing conferences, where, when, how many people go, and
what the agenda is.
Chairman Issa. Thank you.
Mr. Connolly. Thank you, Mr. Chairman, and thank you for
that courtesy.
Mr. Porcari, if I could follow up on that. What kind of
training are we talking about for air traffic controllers? I
mean, is this just how to party, how to have a good time in Las
Vegas? What kind of training is this?
Mr. Porcari. This is serious safety training. For example,
there are a number of new technologies that are deployed. We
share safety data. There are day-long activities where they are
having various safety briefings and updates and participation.
What we are trying to build is a safety culture. And if you are
familiar with safety management systems, it starts with the
people and with a holistic approach to safety. We think the
reason we have the safest air traffic control system and safest
aviation system in the world is because we have the best
trained safety experts, including our air traffic controllers.
Mr. Connolly. And just to make sure we understand what you
are talking about, training isn't for a lifetime; one has to be
sort of refreshed with changes in technology, changes in new
information, changes in technique. For example, we are getting
ready, I hope, despite sequestration, to invest in the New Gen
air traffic control system, which will absolutely expand safety
over, for example, the Atlantic, but that requires some kind of
training and understanding the technology involved. Would that
be a fair statement?
Mr. Porcari. It is a fair statement. The technology and the
state-of-the-art is evolving very rapidly. And there was a
previous question about the number of air traffic controllers
today, as opposed to previous. I mentioned that the
concentration of commercial activity is different than it was
10 years ago. The other part of it that is very important is we
are bringing our air traffic control community into the design
and implementation of our NextGen system. That is a very staff-
intensive process. But some of the early stutter steps that we
had with, for example, En Route Automation Modernization, or
because, in my opinion, we developed a system without an
integrated project team approach, did not have our controllers
as part of the process. We are doing that now. It is a very
staff-intensive process to do that.
Mr. Connolly. And, presumably, that serves a public
purpose.
Mr. Porcari. It certainly serves a public purpose of
safety, which is our number one priority.
Mr. Connolly. Right.
And, Mr. Scovel, as IG, do you take any issue with what Mr.
Porcari has just said?
Mr. Scovel. On the basis of our available data, sir, it
appears to be accurate.
If I could return to one of your earlier questions, and I
do want to make sure that the record of this committee hearing
is accurate, because I certainly don't want to be in a position
to have misled the committee at all. When I spoke of the
Department's earlier conference expenses for fiscal year 2010,
I had also hoped to bring to the committee's attention that the
Department reported to this committee for fiscal year 2011,
having spent $3.4 million on 23 conferences for fiscal year
2012, $668,000 for 11 conferences.
Mr. Connolly. Okay.
Mr. Scovel. So 2010 certainly appears to be an unusually
high number. It has come down since then. As I mentioned
before, these are not audited figures, but they had been
supplied by the Department to the committee.
Mr. Connolly. Thank you. I am sure the committee
appreciates that.
Mr. Porcari, real quickly, before my time runs out, and
again I thank the chair for his graciously allowing you to
finish your answer earlier. But you were accused of scaring the
public. Will there be furloughs among FAA employees, including
air traffic controllers, and will that affect flight patterns
and delays at airports? Will there be furloughs of TSA
employees and will there be furloughs in CBP, Customs Border
Patrol agents, all of which could lead to delays at airports,
yes?
Mr. Porcari. Yes, there will be furloughs among the vast
majority of our 47,000 FAA staff, including air traffic
controllers. Because we can't impact safety, we have to reduce
the aircraft volumes that can be processed at the most busy
times. We know that will have a significant impact on
reliability and on-time performance.
Mr. Connolly. Thank you so much.
And, Mr. Chairman, again, thank you for allowing the
witness to answer the question.
Chairman Issa. You are most welcome.
We now go to the gentleman from Utah, Mr. Chaffetz.
Mr. Chaffetz. Thank you.
Talking about the Department of Transportation here, can
you help me understand the formula as to how many days they are
going to be on furlough? How many furlough days are there going
to be and how did you come up with that number?
Mr. Porcari. First, in terms of number, we are in the
process right now of notifying our employees that they will be
subject to a maximum of one furlough per two-week pay period
through the end of the fiscal year, so, in other words, up to
11. We have arrived at that by first looking at all other
available savings, including what we can do with contracts.
Mr. Chaffetz. So of the $2.7 billion, how many of the
savings are you going to have in non-payroll-oriented savings?
Where are you going to cut that is not payroll?
Mr. Porcari. We are cutting back in a number of contracts.
And, again, within the Federal Aviation Administration, one of
the largest contracts is the contract tower program.
Mr. Chaffetz. But looking for a value here, the dollar
amount, if you have to save $2.7, how much of that is going to
come from payroll, how much of that is going to come from other
savings?
Mr. Porcari. With the Federal Aviation Administration
number, which, overall, the total sequestration number is just
over $600 million, we are going to have information technology
savings for fiscal year 2013 of about $36 million; we have a 30
percent reduction in travel costs. We are literally looking at
every single contract for the Federal Aviation Administration.
Mr. Chaffetz. And I appreciate that you said that you
started this in the fall, so here we are in March. So given,
whatever, four, six months, how much is going to come out of
payroll?
Mr. Porcari. We believe, and I will get you that number,
because it is a moving target, because as we get further in the
fiscal year, we originally thought there would be far more than
11 furloughs, and we think 11 is the outer number.
Mr. Chaffetz. Okay, so we don't know the dollar amount. We
are talking about maximum maybe 11 days for somebody over the
course of a year. How did you come up with 90-minute delays?
Where did that number come from?
Mr. Porcari. The delay number comes from what we think can
happen. Think of a bad weather day in New York or San Francisco
or Chicago, and those types of delays that you typically get
from weather activity we think that you will see because of the
furlough activity. I use the example of Chicago O'Hare, where
the airfield requires two towers. With one of them out of
operation because of furloughs, we would actually have to take
one of the runways out of operation. That is how we tried to
measure the impact.
The other thing I would mention is that the number of
impacted hub cities we think can be fairly significant, and
when any of those hubs are impacted, it disrupts the entire
system.
Mr. Chaffetz. The challenge that I have is when we say
significant or big. It doesn't sound like much of a plan and
some specificity. You are talking about $600 million. What I
would love to know is the breakdown between the payroll costs
versus the others. You talk about one day furlough, right, for
every two weeks of work. Is that for the 47,000 employees at
the FAA?
Mr. Porcari. Yes, it is for the 47,000 employees that will
be subject to it.
Mr. Chaffetz. So how many of those 47,000 employees are
actually going to be furloughed?
Mr. Porcari. The vast majority of the 47,000 employees. The
employees that work for some of the mandatory contract spending
areas, like the airport improvement program, are not subject to
it. Every thing but AIP within the FAA is subject to furlough.
Mr. Chaffetz. What I would hope that you could give me, Mr.
Porcari, is how long would it take you to give me some
specificity on the questions we just asked? I appreciate you
are coming to testify and you have lots of things you have to
prepare for, but if you have a plan we would like to see it.
And what I need to have is some specificity on those things I
just went through. Is that fair enough? What is a fair amount
of time?
Mr. Porcari. Well, we have some preliminary numbers now.
Again, we know that they will keep shifting, and I would be
happy to provide those.
Mr. Chaffetz. By?
Mr. Porcari. By close of business today.
Mr. Chaffetz. Thank you. Appreciate it.
I yield back.
Chairman Issa. When you include in that, would you also
include, to the extent that you can, for both cabinet
positions, any steps that could have or were anticipated being
taken from the beginning of the fiscal year? Because, for
scoring purposes, if you, for example, restrained hiring, you
could have abated some of this starting sooner. And I would
just like to know, to the extent that that was planned or done.
Because I know it is a moving number and part of the moving
number is things that were not spent that had been anticipated
be spent.
Mr. Porcari. We would be happy to do that. We have been in
a hiring freeze at the FAA for some time, as well as travel
restrictions.
Chairman Issa. Right. And I would like to make sure all of
that, including that which may have reduced the number, is in
the record.
Mr. Chaffetz. Mr. Chairman, if I could add to that list two
quick things: the amount of bonuses that were given out this
year and the number two is how much money you spent in Iraq and
Afghanistan. Because there are 17 different agencies that are
still spending money in Afghanistan and Iraq. If there are any
dollars associated with that, I would appreciate if you would
get back to us on that as well.
Mr. Porcari. We would be happy to get you those numbers. We
have not awarded bonuses this year.
Mr. Chaffetz. Thank you.
Chairman Issa. Thank you all.
We now go to the gentlelady from Illinois, Ms. Duckworth.
Ms. Duckworth. Thank you, Mr. Chairman.
Mr. Porcari, do you have data on how many aircraft land at
O'Hare that are controlled by the north air traffic control
tower every year?
Mr. Porcari. Yes, we do, ma'am.
Ms. Duckworth. And so you could tell me, if that were shut
down, how many aircraft would not be landing on that closed
runway based on past landings at that airport.
Mr. Porcari. Yes, we can.
Ms. Duckworth. Can you tell me how many aircraft takeoffs
and landings and air traffic is controlled by the remaining
tower at O'Hare every year?
Mr. Porcari. We can get that as well.
Ms. Duckworth. Wonderful. So can you also tell me how much
more capacity there is on that remaining tower, should the
north tower be shut down, that could be absorbed by the single
remaining air traffic control tower as it stands?
Mr. Porcari. We would be happy to. And, again, the same
principles apply at numerous other airports as well.
Ms. Duckworth. Wonderful. So then you would also be able to
tell me, based on the capacity historic data on how many land
at that north runway, if it shuts down, you know how many can
get picked up by the other control tower, how many would not be
able to be handled in a timely basis, correct?
Mr. Porcari. Yes, we do. And what you are pointing out, I
think, is very important because part of the estimating process
for delays goes to historical patterns, whether it is for
weather or any other throughput delays.
Ms. Duckworth. Wonderful. Thank you. So as someone who has
flown most of my adult life, as both a professional pilot, I
thank you for the training that I, as a DOD pilot, received
from the FAA at the safety conferences that I attended. It made
me a far better and safer DOD pilot. And now that I am a
general aviation pilot, I thank you for keeping me safe.
In fact, I am going to be signing up for one of those
training conferences on how better to speak with air traffic
controllers in a busy air traffic control environment, so I
look forward to attending that training in Chicago that is
coming up.
My question is really going to be towards Mr. Miller. Two
weeks ago I had a meeting with the superintendents of schools
in my district, who have been planning on what would happen if
the funding were cut for Title I, as well as for special
education funding, and they knew exactly how many people they
were going to have to lay off, what it was going to cost them.
Do you know, Mr. Miller, do you know how much money this
Country spends on subsidies to the oil and gas industry every
year?
Mr. Miller. No, I am not familiar with that amount.
Ms. Duckworth. It is $4 billion. Can you tell me what the
cutting Title I education funding will cut from the Department
of Education?
Mr. Miller. It will cut $750 million.
Ms. Duckworth. So, $750 million. And how about the cutting
of special education funding?
Mr. Miller. It would be another $600 million.
Ms. Duckworth. Another $600 million. So instead of slashing
education funding, you know, Democrats offered a balanced
alternative that would have made sensible cuts in our Nation's
spending to subsidize the oil and gas industries that have had
record profits, but Republican House leaders have refused to
allow a vote. If we could just cut spending on oil and gas
subsidies, we would save $4 billion.
I am concerned, Mr. Miller, that my superintendents of
schools in my district told me that because there is the
requirement that they provide services for students with
special needs and also for special education funding, what
would happen, actually, when that Title I funding is cut and
when that special education funding, such as remedial reading
tutors, is cut, they would still need to provide that, which
means that they would actually cut services to the mainstream
students.
Can you speak a little bit about what this would do in
school districts, to have to shift the pressure from students
with special needs to mainstream students, and what this would
do across the Nation if these cuts were to go through?
Mr. Miller. There is a requirement in serving the needs of
students with special needs is that they need to provide a free
and appropriate education, so there is a minimum standard that
is required. And as the Federal resources are compromised, then
they need to ensure that they are still delivering against that
standard, and that puts a strain on resources.
It is also at a time when many districts like yours are
investing in not just the basic services for those children,
but they are investing in new instructional technologies that
are going to be more effective at accelerating learning. They
are having to deal with the expansions of students who don't
speak English as their native language as they are putting in
new data systems, as they are preparing for higher standards
that are international benchmarks.
So it is not only the loss of resource, but, frankly, the
leadership that is being spent to do the budget manipulations
is taking precious time to also plan from these other
meaningful reforms. So really it is not just a cost impact, but
it is really compromising the ability to improve our education
system.
Ms. Duckworth. Thank you, Mr. Miller. So could you tell me
if you will be keeping data on what the sequestration cuts will
do to educational programs across the Country? I know some of
this is based on historic trends, and there has been discussion
here of the lack of data. Will you be keeping data over the
course of sequestration on what it does to funding education
and also to what actually gets implemented across the Nation?
Mr. Miller. We will continue to capture the data that is
currently allowable. Of course, there are restrictions in terms
of the types of data that we can capture, subject to our
statutory authorities and regulatory authorities. Consistent
with that we will be able to capture data so we can continue to
understand the adverse impact that sequestration is having.
Ms. Duckworth. Thank you so much, Mr. Miller.
I am out of time, Mr. Chairman.
Mrs. Lummis. [Presiding.] Mr. Walberg?
Mr. Walberg. Thank you, Madam Chairman.
And thank you to the panel for being here. I know you are
taking some heat today, probably because of lack of some
leadership at the top and some inaccurate, incomplete
statements that have been made.
But, Mr. Miller, let me ask you a question. The statement
was made earlier by one of our committee members that we are
dangerously close to being third world country status
educationally. I am not sure of the accuracy of that, but
improper payments in the Department of Education, Pell grant
programs specifically, that exceeded the OMB threshold of $750
million per year seemed to be a problem. In fact, in 2010,
improper payments exceeded $1 billion. Mr. Miller, I ask you
what steps has the Department taken to reduce the amount of
improper Pell grant payments.
Mr. Miller. We have taken a number of steps. First of all,
what I would like to highlight is that the rate of improper
payments has dropped significantly.
Mr. Walberg. Well, I am glad for the rate, but it is still
improper payments taking place. I guess I am asking what are
you doing to stop it? What steps have been taken?
Mr. Miller. And I think it is important because, again, the
rate, and I am going to answer the question, the rate is
important because it speaks to the impact that the steps we are
taking are having, because, again, as the number of Pell grants
has grown dramatically, the actual percentage that are subject
to improper payment has been decreasing.
We take a number of steps to work specifically with our
financial aid officers in each of our schools to work to better
ensure that we have the right students taking out the right
amount of loans, again, subject to the statutory constraints
that we have; we are working with our IG to better understand
where there is potential risk of inappropriate actors, so we
are not meeting our eligibility requirements; we, specifically
on the front end with our FAFSA, which is the vehicle by which
students apply for and qualify for aid, we work with the IRS to
put in income verification to minimize the risk that
inappropriate aid would be granted.
Mr. Walberg. Why are so few using the IRS tool?
Mr. Miller. I would not characterize that so few are using
the IRS tool. It is not as much as we would like, and that is
one of the things we are trying to continue to promote.
Mr. Walberg. Go on.
Mr. Miller. So those are the types of actions that we are
taking to reduce the rate of improper payments.
Mr. Walberg. Any additional actions you are contemplating
taking? The rate may be going down, but we have gone up in
dollars. Most recent dollars that we went up was over $1
billion.
Mr. Miller. In total. Again, that is a net. So we are as
concerned because part of this is both overpayments and under-
payments. So we are continuing to address both. We are
concerned about borrowers to the degree that that is a concern,
and we are trying to impact where it allows us to better
recover funds for the Federal Government.
Mr. Walberg. Inspector Tighe, let me address the same
concern there. As you explained in your statement, some of
these payments occur when applicants fraudulently report false
income information to receive grants. Is the fraudulent
reporting of false income information the main cause for the
improper payments or has your office identified any other
reasons?
Ms. Tighe. Oh, I think that is one reason, but by no means
the only reason, which is why I think that the Department's
actions and the income match are going to inevitably be limited
in helping improper payments. Let me speak a minute about the
IRS DRT which Deputy Secretary Miller talked about. The problem
there is we don't think anyone who wants to defraud the
Government is going to pick the IRS data retrieval system.
So what is the Department doing to manage those students or
those applicants, shall we say, some of whom might not really
be students and who aren't otherwise chosen for verification by
schools of their information, their application information?
What is the Department doing to fix that problem?
Mr. Walberg. What are they doing? What have you found?
Ms. Tighe. Well, we haven't found that they are doing
anything. I would also like to highlight that we do have a
problem with how the error rate is being calculated, to begin
with. We do recognize it has gone down, and I think it shows
that there has been some modest success in the IRS DRT match.
But I think that the way the error rate is calculated is really
just based on a statistical study with the IRS based on income.
There is also fraud related to the number of dependents and a
number of other issues like that that can happen.
Mr. Walberg. When we talk about the other issues related to
$750 million that could go towards special needs programs, $650
million, when we have $750 million and now over $1 billion of
fraud, wasted revenue going to education, I think we have a
problem.
Mrs. Lummis. Thank you.
Mr. Walberg. I yield back.
Mrs. Lummis. Thank you very much, Mr. Walberg.
I yield to the gentleman from Pennsylvania, Mr. Cartwright.
Mr. Cartwright. Thank you, Madam Chairman.
First, I would like to emphasize how much I value the work
of our inspector general community. Your work is critical for
everybody who, like me, wants our Government to work and work
better and be more efficient. So I thank you for your work, in
addition to being here today.
Now, Mr. Scovel and Ms. Tighe, I want you to invite you to
answer these questions. The sequester's arbitrary across-the-
board cuts, they also do apply to the offices of the inspectors
general, am I correct in that?
Mr. Scovel. That is correct, sir.
Mr. Cartwright. All right. So the question is how are your
offices impacted when your budgets are cut?
Mr. Scovel. Sir, if I may, we have heard from the other
witnesses about how sequestration is impacting their offices,
and it is a fact that sequestration will impact our office. My
fear all along has been that because, for instance, as Mr.
Porcari spoke of the FAA as being a personnel-heavy and,
therefore, salaries-and expense-heavy account subject to
sequestration, my office too is very personnel heavy. Seventy-
five percent of my overall budget goes to personnel salaries
and expenses.
So if we were going to get hit, that was where it was going
to happen. And for me, if I am to accomplish my mission, I have
to have my staff on deck. So my focus from very early on was to
minimize the impact on my staff, keep them at work. Sure, they
may be happy because they are getting a paycheck, but I am
happy because I am getting mission. And what we have been doing
since, actually, late 2011 has been to focus on eliminating,
reducing all expenses not staff-related, minimize those to the
greatest extent possible, and then to see how we could ride out
sequestration.
In interest of full disclosure, my office is the recipient
of some degree of extra funding in connection with our
oversight responsibilities for the Recovery Act and also for
Hurricane Sandy relief, so that has provided us some
flexibility. But we could not get to the position where we are
today, which is that we will not need to furlough any of our
staff, were it not for the cost reduction measures that we have
had in place for a long time. We have had a hiring freeze in
place since August 2011; we have reduced staff; we have
released rented space; we have not paid any bonuses; we have
withdrawn from a student loan repayment program. Across the
board we have sought to cut every single expense we possibly
could.
Mr. Cartwright. Let me jump in there, Mr. Scovel. According
to data provided to this committee, at the end of February
2013, your office had about 10 percent fewer full-time
equivalents than you had in fiscal year 2010. Is that correct?
Mr. Scovel. That is true. We are, in fact, at the lowest
strength level in the history of our office since the Inspector
General Act was enacted in 1978.
Mr. Cartwright. So what impact has that reduction had on
your work?
Mr. Scovel. Impact. Data point. It is an imperfect measure,
and I will acknowledge this. In 2004, each OIG FTE was
responsible for covering $137 million in DOT budgetary
resources. In 2012, each OIG FTE is now responsible for
covering $192 million of Department budgetary resources. For
example, last year, where, in our criminal investigation side,
I regret to say it, we had to take a pass on information that
was provided to us to see whether we believed we needed to
dedicate an investigatory resource, a staff person, to
participate with other agencies in investigating that offense.
We didn't have the personnel and we decided that the expenses
associated with participating in that investigation would be
too great to justify it.
We have also taken steps internally to increase the degree
of scrutiny that we will need to apply to every single request,
whether it is from the Department or from Congress, for audit
support.
Mr. Cartwright. I want to jump in there and I want to give
Ms. Tighe a chance here.
Ms. Tighe, your staff also expressed concern about
reductions in FTE levels in your office and with respect to
audits. What impact does this have on your ability to conduct
audits and investigations?
Ms. Tighe. Well, it certainly will have an impact, as I
mentioned earlier. Like Mr. Scovel's office, 70 percent of our
budget is salaries and benefits. The next highest increments of
funding are the common support we pay to the Department for IT
and other costs that I can't control.
Then we have our financial statement contract. After that,
I get travel, training, and smaller contracts. We are canceling
or will cancel those contracts which support our FISMA work and
our data risk modeling. We will be furloughing our employees,
from me on down, for about 11 days, 10 to 11 days through the
end of this fiscal year. That will have a very real impact on
our work, our audit and investigative work.
We are already turning down cases; we are shifting
priorities. We are telling our criminal investigators in the
field that they can only open the highest priority things and
they better watch what they do. Our audit work, we had put on
our audit plan for this year, for example, a project to look at
the grantees for the race to the top monies, which is one of
the big dollar marquee initiatives of this Administration. I
don't know if we are going to have the travel money to go out
to those grantees.
Mrs. Lummis. Thank you, Ms. Tighe.
Thank you, Mr. Cartwright.
Next is the gentleman from Tennessee, Mr. DesJarlais.
Mr. DesJarlais. Thank you, Mrs. Chairman, and thank you all
for being here today. We have had a lot of discussion today
about sequester and we have talked about where we need to cut
spending and how difficult this is going to be, and it has been
kind of contentious and even maybe it seems like people have
gotten a little defensive.
Let me ask the panel, do you agree, just looking at the big
picture, looking at our Government and our budget and our
deficit, do you believe that we have a spending and a deficit
problem in this Country? Mr. Miller, we will start with you.
Mr. Miller. Based on my reading of the press, I believe
that there is a consensus that we need to both address the
deficit to preserve the long-term health of the Country.
Mr. DesJarlais. Okay, so we did that with sequester; we cut
$85 billion, and then we also had a tax increase that raised
about $60 billion in taxes. So we have kind of taken a balanced
approach. So is that kind of in line with what you think we
need to be doing right now, based on this $17 trillion in debt?
Mr. Miller. Well, to be clear, my area of focus is the
Department of Education.
Mr. DesJarlais. I am asking you as a taxpayer.
Mr. Miller. I wouldn't want to hazard what I think is the
right fiscal policy.
Mr. DesJarlais. All right.
Mr. Miller. What I would say is the Administration view is
that we need a balanced approach.
Mr. DesJarlais. Well, I am just asking you all as
taxpayers, because our committee is here to make sure that we
are spending taxpayers' money properly.
So, Ms. Tighe?
Ms. Tighe. As a citizen and a taxpayer, not as an IG, I
would say that certainly a balanced approach makes sense. I
can't help but think, sitting as an IG, that there is
Government spending there ought to be spending that can be cut,
programs that can be run more wisely. I know that the
entitlement programs are a pot of money that ought to be looked
at in some fashion. I say that as, you know, a few years off,
myself, from receiving some of those. And taxes, and I am no
expert on tax policy, but nothing should be off the table, in
my opinion.
Mr. DesJarlais. So we have already raised taxes. Do you
want to pay more taxes?
Ms. Tighe. My husband doesn't, but I feel sometimes it is
the price I pay.
Mr. DesJarlais. Mr. Porcari, yes or no, do you think we
have a debt and spending problem?
Mr. Porcari. As a citizen and a taxpayer, I think the
balanced approach is the right way to go.
Mr. DesJarlais. Okay.
Mr. Scovel?
Mr. Scovel. I want to stay in my lane and leave the policy
decisions for all of you and the Administration.
Mr. DesJarlais. Okay. Well, I just say that because, again,
it is easier to cut other people's spending than your own. You
are all here; you are passionate about your departments, so on
and so forth.
In education, I guess I am disappointed to hear Mr. Miller
come out and say we are taking a hatchet to education. Do you
truly believe there is no waste in education? We have had the
Department of Education now for three decades, $1 trillion put
in there. Math, science, and reading scores are essentially
flat. There are Pell grants that have gone from $12 billion to
$43 billion over the last four years; we are not really seeing
a return on that investment.
We have had, as I think Representative Jordan said, 19
months to prepare for this. Is there nothing in the Department
of Education that you could look at that you would want to cut
first, before you start saying we are going to take a hatchet
to Head Start, to special education programs? That sounds to me
like scare tactics. That sounds like something I have been
hearing from the White House. Is there not a better approach in
prioritizing spending cuts?
Mr. Miller. I would say I think we have. I think what you
have seen is our proposals, with the support of Congress, to
eliminate 49 programs that cut $1.2 billion out of our
programmatic budget has in fact been very consistent with
trying to make some smart tradeoffs. I think we are at a point
now where Title I, in an environment where we are actually
raising the standards because not enough States have
competitive standards, we are actually putting more of a
challenge on our educators to do more, better, faster.
Mr. DesJarlais. Okay.
Mr. Miller. We think to dis-invest in education at this
time is only going to threaten the long-term growth and health
of this Country.
Mr. DesJarlais. And we all know that sequestration, we
talked about the Republicans taking these Draconian cuts. You
realize the super committee had an equal number of Democrats
and Republicans at the table, so sequestration was a failure by
both sides of the aisle to come to an agreement. So we have to
make cuts, and we better get used to them because there are
going to be more coming. This is just one-tenth of our deficit
spending. So I would suggest that maybe this is a good learning
experience today, that we are going to see more cuts and maybe
we need to prepare as we move on.
You were talking, Mr. Porcari, about the 47,000 air traffic
controllers, and we are going to have to furlough them, we are
going to have to take maybe up to 11 days out of the year. I
know that there have been increases in salaries. Forty-seven
thousand.
I don't know what their annual salary is, but could there
be a pay cut before we decide, hey, taxpayer, you are going to
have delayed flights because we are not going to give up
anything? You know, nobody wants to give up anything; they just
want to take more. And I think the problem that we have in this
Country and this Government right now is excess spending. We
all see it. We know that sequestration was a responsible thing
to do in the sense that we finally cut spending.
But instead of all of us feeling good that we are doing the
right thing after admitting we have a spending problem, we are,
instead, villainizing this. This President should be out
saying, thank you, everybody, for making a shared sacrifice; we
have taken the first step in doing the right thing. We
shouldn't be sitting here whining and complaining about what we
have to do, because we have a lot more of it to do.
And I know my time has expired.
Chairman Issa. [Presiding.] Mr. Porcari, there is a
question there. Do you want to answer it relative to the
contracts and so on for air traffic controllers?
Mr. Porcari. Yes. First, I would point out, through
sequestration, our employees are in fact taking a pay cut of up
to 10 percent for the remainder of this fiscal year. We have
worked very hard over the last couple years to have a good
working relationship and an appropriate collective bargaining
relationship with our air traffic controllers. We have, I
think, a 180 degree turn in terms of the working relationship
that shows up in how we implement things like NextGen with our
workforce. I would point out I think we run the risk of undoing
that and unraveling that.
Chairman Issa. I will take a liberty for just a second to
make sure that I get the answer to that last question. Within
the contract structure, you can have a reduction in force, you
can have furlough. If I understand correctly, simply reducing
the amount of pay for per hour, even with sequestration, is not
contractually allowed, is that correct?
Mr. Porcari. That is my understanding. We have started, I
should point out, over 90 days ago, the collective bargaining
process with our air traffic controllers for the furloughs.
Chairman Issa. Okay. I just want to make sure that we
understand what the Government can or can't do. We all have
suggestions of what we would like you to be able to do. I only
want us to stick to the ones that you could do at this
juncture.
With that, we go to the gentleman from Missouri, Mr. Clay.
Mr. Clay. Thank you so much, Mr. Chairman, and thanks for
this hearing.
For the record, let me state to my friend from Tennessee
that the American people know exactly what is going on here in
this Congress, which is nothing. We shirked our responsibility
with the super committee, we shirked our responsibility with
Simpson-Bowles, and they don't like it. So you can cast blame
if you want to, but the American people are smarter than that
and they know that we aren't doing a thing.
Let me direct my questions to Mr. Miller and Ms. Tighe. You
know, in 1994 there were only seven States with charter schools
school laws and 60 operational charter schools. Today there are
more than 5,000 charter schools in 40 States and D.C. The rapid
growth of charter schools presents an opportunity to help
reform our education system by presenting innovative practices
that can be incorporated into traditional public schools. But
this growth also presents risks and requires rigorous
oversight.
Deputy Secretary Miller, one of the concerns identified in
the inspector general's letter to the committee involves how
effectively the Department is overseeing and monitoring charter
school grants. There have been numerous reports of fraud in the
management of charter schools. Do you agree with Ms. Tighe's
concern that there needs to be increased accountability for
charter school funds once they reach the entity running the
charter school?
Mr. Miller. Simply put, yes. We believe that, from a policy
standpoint, the growth in charter schools and the potential
they offer for being able to develop innovative reforms are
good. We think oftentimes you have a proliferation of different
oversight and authorization models at the State level that make
the subsequent oversight kind of more complicated.
Our direct interaction, generally speaking, is with the
State entity and with the authorizing entity who are
responsible for the fiduciary duty in terms of the oversight of
funds, so our work is with the States versus with the schools.
And I think we share concerns that States need to do a better
job in terms of exercising that oversight.
Mr. Clay. So how does the Department create more
transparency in how charter schools use taxpayer funds? I mean,
do you look at graduation rates, test scores, reading levels,
and math tests?
Mr. Miller. Relative to if they are direct recipients of,
let's say, Title I monies, they are subject to all of the
statutory requirements of Title I, and there is an
accountability system within that. Generally, the dominant
framework, however, is the State framework for governing
schools, so, again, we work in partnership but respectfully
have to defer on cases to where the State's governance
framework with respect to charter schools.
Mr. Clay. Although we send them Title I money. We have some
responsibility.
Mr. Miller. And we do provide oversight for the Title I.
Mr. Clay. Okay, Ms. Tighe, I am a strong supporter of high
performing charter schools, but I am also troubled by the risk
of the privatization of public schools under the guise of
charter operators. In your investigation involving education
charter management organizations, do you find that fraud and
other problems are more prevalent with for-profit organizations
or nonprofit?
Ms. Tighe. We haven't found a difference between profit and
for-profit. We have found problems with charter management
organizations. We are actually getting ready to commence audit
work in this area, also, because while we have had a number of
investigations involving these entities and charter schools in
particular, we really wanted to go in and get a good look at
what that might mean. But I agree with you that there are
problems.
Mr. Clay. So it could be we may be able to find savings in
these funds that go to some of these organizations?
Ms. Tighe. Well, yes. We have had a number of investigative
cases already. Probably since the last few years we have opened
56 charter school investigations; we have had recoveries so far
of about $10 million. The deputy secretary was correct when he
said that part of the problem is that there are a number of
authorizers in every State and they vary, and the level of
oversight varies wildly among States, and that, I think, lies
where some of the problems are.
Chairman Issa. I thank the gentleman. A good line of
questioning.
We now go to Mr. Mica of Florida.
Mr. Mica. Thank you, Mr. Chairman.
Secretary Porcari, in the recent legislation Congress
passed, known as MAP-21, the transportation reauthorization, we
mandated the consolidation or elimination of some 50 Department
of Transportation programs. Can you tell me how many positions
have been eliminated and what taxpayer dollars we can expect
from that consolidation or elimination of programs?
Mr. Porcari. It is a very good question. First, we are in
the process of the consolidation right now and, as you know,
there are specific MAP-21 requirements for doing so.
Mr. Mica. Well, can you give us an estimate? Is it going to
be 100 positions, 500 positions, and will it save $1 million,
$10 million?
Mr. Porcari. Although the programs have been consolidated,
the need for oversight and the implementation of the funds has
not gone away. We will be redeploying the personnel in what we
think is the most effective way.
Mr. Mica. So how many positions do you expect to eliminate?
Mr. Porcari. We are currently, through selective hiring
freezes, trying----
Mr. Mica. So nobody?
Mr. Porcari. I did not say that. I said through selective
hiring freezes we are trying to actually----
Mr. Mica. Okay. And the other thing I hear, too, from
outside, talking to our DOTs, people are just trying to justify
their continued existence, and Congress sent a mandate out to
consolidate or eliminate some 50 programs, but people in the
Department of Transportation are still making excuses to
continue the red tape and paperwork; and I haven't gotten into
the devolution on that, which again I see the same thing. So
maybe you could supply the committee with some information on
the savings and elimination of the programs at a time when we
are trying to save money.
You talked about contract towers. Before I became chairman
of aviation, back in 2001, there was a GAO study, maybe you
remember it, Mr. Scovel, about the operation of contract
towers, and it came in and said that they cost less and also
they had better safety operations. Well, after I became
chairman, they asked me, the air traffic controllers said this
is a skewed study, this isn't right, they didn't ask the right
questions. I said, well, give me the questions; we will ask
them. So we did another study. The study came back and it said
that for every contract tower we save $1 million and they also
carefully monitored the safety record safer.
Now, we have been cutting back, you said, contract towers
is one of our biggest contracts and we are cutting that back?
What is the proposal to cut back?
Mr. Scovel. First of all, the objective that we have is
to----
Mr. Mica. But we are spending $134 million? Is that what we
are spending?
Mr. Scovel. We want to minimize the inconvenience for the
maximum number of travelers.
Mr. Mica. So how big is the cut here?
Mr. Scovel. So the criteria, there are up to 248 towers.
Mr. Mica. Yes, 248.
Mr. Scovel. Both FAA operated and contract towers in that
universe.
Mr. Mica. And each contract tower operates, well, the price
that I had is that the savings is about $1.5 million per
contract tower, and it is also safer. So you are cutting back
substantially contract towers. You said this is your biggest
contract, right?
Mr. Scovel. Yes, it is one of our biggest contracts.
Mr. Mica. We had a list from way back where the Clinton
administration recommended another 69 towers to be converted.
Bush never converted them. Don't you think we should start
looking at some ways we could save money and make it safer? Mr.
Scovel, are you familiar with that report?
Mr. Scovel. You are generally correct, sir.
Mr. Mica. Thank you. That is all I need to say.
[Laughter.]
Chairman Issa. The gentleman can get at least a little bit
further than generally correct, if you don't mind.
Mr. Mica. Well, really quickly. But would you provide the
however for the record? Because I only have about a minute
left.
How much in the rail area are we cutting?
Mr. Porcari. I am sorry?
Mr. Mica. The rail area, passenger rail.
Mr. Porcari. On the passenger rail side, actually it is
about a $10 million cut. We are cutting back on administrative
expenses.
Mr. Mica. We talked about some things with conferences, et
cetera. Now, you know, the increases in loss on food service on
Amtrak have gone from like $81 million to $85 million in the
last fiscal cycle. We could eliminate food service. Do you
think anyone would starve between here and New York? We did a
little analysis in the Transportation Committee. Every
hamburger was underwritten almost $7. We could stop that loss,
couldn't we? Eighty-five million dollars in loss. Wouldn't that
be an area that we could look, instead of some of these other
essential safety services? Would you consider that?
Mr. Porcari. And again, the Amtrak cuts are about $70
million. We will be happy to have that discussion.
Mr. Mica. But we could do it just by eliminating food
service, and the loss would save us $85 million just last year.
Let me close with IT. That is Mr. Clinger up there. He is
the former chairman when I came to Congress. It says the
Clinger-Cohen Act required, again, that all the agencies come
up with the enterprise architecture. We have $3 billion in
annual expenditures for IT in your Department and we have 400
information systems; some duplicative, some archaic, some
obsolete. And I understand something is coming in May, a plan?
Mr. Porcari. Yes.
Mr. Mica. Okay, we are waiting with bated breath.
Mr. Porcari. We agree there is significant opportunities
for savings there, and that has actually been a subject of
management focus.
Mr. Mica. Yield back the balance of my time.
Chairman Issa. And now for the rest of your answer, if you
don't mind.
Mr. Scovel. Thank you very much, Chairman Issa.
Just very quickly, Mr. Mica, I couldn't show my face back
at my office if I let this go by. You mentioned a GAO study on
contract towers. In fact, it was an OIG study. We have done two
of them. You are right, they are less expensive than FAA-
operated towers; they are as safe as FAA towers and generally
accepted with approval by the user community.
Mr. Mica. I apologize. I meant IG.
Mr. Scovel. Thanks.
Chairman Issa. Thought he might.
And, with that, we go to the gentleman from Massachusetts,
Mr. Tierney.
Mr. Tierney. Thank you, Mr. Chairman.
Ms. Tighe, your office did a study, I think, over three
years; they found that there was $187 million in Federal
student aid funds involved in student fraud rings.
Ms. Tighe. Yes.
Mr. Tierney. So I commend you on that. It is a good study,
but in reality it is about less than one-half of one percent of
what we spend on Federal aid, and next to what I find on the
Subcommittee of Oversight for the National Security it is like
minuscule on that basis. But it is important nonetheless. So if
you look at for-profit institutions in the higher education
field or whatever, I have some statistics here. Ninety percent
of their revenues come from taxpayers.
Ms. Tighe. That is correct. That is the limit.
Mr. Tierney. Ninety percent in the form of Federal
financial aid, Pell grants, student loans, GI bill funds,
Department of Defense tuition assistance. They have about 10
percent of all student enrollment, but they take up about 25
percent of all financial aid dollars that we spend. The Senate
Health, Education, Labor and Pensions reported, for 2009-2010,
they got $32 billion of taxpayer money on that.
That is a lot. We have had some problems with over-pricing
tuition and predatory recruiting practices, things of that
nature, but have you looked at them with respect to whether or
not they are at greater risk for these fraud rings than some of
the other institutions?
Ms. Tighe. Where we have seen the greater risk is the low-
cost institutions, which is primarily community colleges. Now,
there are for-profit schools. For example, University of
Phoenix, that operates a community college component called
Axia College, which is a little bit lower cost, has seen a
number of problems with fraud rings. It is the lower cost
institutions, primarily, although not exclusively.
Mr. Tierney. Can you explain why that is?
Ms. Tighe. Absolutely.
Mr. Tierney. You have so many more dollars in these
programs going to one set of institutions and less going to the
other, so what is the distinction? What invites them in?
Ms. Tighe. It is not really a function of dollars, I agree
with you on your statistics. But the problem with fraud rings
is it is all about what comes back to the so-called student. So
when you sign up online, online you have invisibility to your
institution. So they sign up for classes, they apply for
student aid; then the community college, for example, will take
back from the Title IV funding. Say they receive a Pell grant
of $5,000 because I am going to put zero income on my
application. Well, what happens is the community college will
take its, say, $600 for a semester of classes and it will remit
the rest to you for room and board and books and other expenses
related to education.
The problem we see for distance education is why are we
funding room and board in those kind of circumstances? All of
that grew up when brick and mortar schools, where you go on
campus, you live there, and you need to pay room and board. You
do not necessarily need to do that in distance education.
There is a restriction on the old correspondence schools.
Remember those? You do not get room and board for
correspondence schools.
The post-9/11 GI bill done by the Department of Defense
eliminates significantly living expenses.
So that gives you money that goes back to the bad guys. So
all they need to do is get a bunch of their friends or inmates
in prison institutions to apply for student aid, and then they
kick back some of that money to the ring leaders.
Mr. Tierney. So, Mr. Miller, that raises a good question.
What are we doing about that?
Mr. Miller. Generally on the issue of how do we address
these fraud rings, what we are finding is, in large agreement
working with the IG and following up on their recommendations
to take actions, you will see they break down in a series of
there are some system changes we can make.
Mr. Tierney. Like what?
Mr. Miller. Like there are statistical models on the front
end, through the application, through the FAFSA, of which,
again, it is not a few, it is about 60 percent of eligible
recipients go through the FAFSA. You can put flags in if there
is a pattern that we think looks like suspicious behavior; you
can basically require more personal identification to go on
through the application process, would be an example. Some of
these, however, require statutory changes. So there are things
that require statutory changes that, if we are really going to
change some of the eligibility requirements, that requires
actually Congress to act.
Mr. Tierney. Are you making those recommendations to
Congress?
Mr. Miller. That is something I will work with Congress and
pursue what we think is kind of the right process. And in the
middle there is regulatory changes that we are also making to
address this. We go to negotiated rulemaking and, again, it is
a very public, regulatory process.
Mr. Tierney. So could you provide to this committee the
recommendations that you have made for statutory changes and
the recommendations that you are making for rule changes?
Mr. Miller. Yes. There will be a process by which, for
negotiated rulemaking, we are starting with hearings.
Mr. Tierney. Can you provide for us what it is you are
doing? Just give us an update on exactly what requests you are
making for rule changes and what you recommend to Congress we
change in the statute.
Mr. Miller. Of course. I just want it to be clear, though,
part of the hearings in the regulatory process is to not in
fact, we have to honor the process, which says we cannot have a
prescribed prescription even before we start the negotiated
rulemaking process. It is meant to be informed by the public.
Mr. Tierney. Okay.
Mr. Miller. So at the time, then, that the agenda gets set,
we would obviously be happy to share that with you.
Mr. Tierney. So you already have some idea of what you
think ought to be changed in the law, so you can give me that
part at least, right?
Mr. Miller. We have an understanding of the issue. And then
the question is how do we engage on what the appropriate----
Mr. Tierney. So you have come to no conclusion yet as to
what changes in law may be required to be useful?
Mr. Miller. No, that would be premature at this point. We
understand there is a problem and we understand there are
different ways to address the problem, and coming up with the
specific statutory or legislative solution, we are not at that
point.
Mr. Tierney. Ms. Tighe, can you help us?
Ms. Tighe. Well, I think that the primary statutory change
we recommended was the change to the cost of attendance. I
think there has been some modest movement in the Senate through
the appropriations bill for this year that would look at Pell
grants, but I would urge Congress to look at it as a total
package, of not just Pell, but also the loans that one can get.
Possibly just looking at Pell could lead to a somewhat
perverse situation where a financial aid administrator would do
two calculations for cost of attendance, one for Pell and one
for loans, and a student who is disadvantaged or otherwise
might get more of a Pell might end up borrowing more. So we
want to avoid that.
But I don't know that the Department has put in concrete
fashion any kind of proposal to change the cost of attendance.
Chairman Issa. Mr. Tierney, if you would summarize.
Mr. Tierney. Thank you.
Do you have any written report with respect to this, Ms.
Tighe, that you want to draw our attention to?
Ms. Tighe. Well, we did do a written report on the fraud
rings that I talked about and we did make that recommendation.
Mr. Tierney. You make that recommendation?
Ms. Tighe. Yes, we do.
Mr. Tierney. Thank you.
Thank you, Mr. Chairman.
Chairman Issa. I would like to thank the gentleman.
I might remind all of us that the ranking member and I, in
the last Congress, sponsored the Data Act, which passed, that
would have changed recipient reporting, would have changed a
lot of the databases on which these kinds of investigations go.
I am not sure that you can use, but, Mr. Miller, the
Recovery Act, the so-called rat board, has been extended by
this committee's pushing and acting, and I might suggest that
what you are trying to find, you may still be able to use that
asset that former IG Devaney set up to do some modeling of what
could be done on a broader basis; and we certainly would
encourage that, and if you need support from us, we would
provide it.
With that, we go to the gentleman from Texas, Mr.
Farenthold.
Mr. Farenthold. Thank you, Chairman Issa.
Back when I was in high school, I was a DJ, and about the
time I would get sick of a song is about the time people would
start to know what the song is and start to like it. I am kind
of getting that same feeling with a lot of this talk about
sequestration. A lot of the American people, busy raising their
families and working, are really catching on; and, to me, I
think they are seeing that this is looking a whole lot like a
manufactured crisis with people screaming that the sky is
falling.
If my personal budget were being sequestered and I were in
your place, testifying before this committee, I might choose
not to pay my mortgage and say, oh my God, because of
sequestration, my children are going to be homeless; or I could
choose not to eat out as often and say, oh, my family is going
to go hungry, or heaven forbid we go look for a box of noodles
in the pantry, macaroni and cheese. Actually, our kids would
probably prefer macaroni and cheese to some of the places I
take them.
But here is what I am getting at with that. I really do
feel like this is a lot of posturing, and I want to ask the two
secretaries here. If I were to come to you and say cut 2
percent from your budget, do whatever you need to do to cut 2
percent, 2 or 3 percent, minimize the effect on safety,
minimize laying employees off. You have cart blanche to fix
your budget to cut 3 percent. Could you do it? And we will
start with Mr. Miller.
Mr. Miller. I think, candidly, we struggle with that. The
money is in money for poor kids, money for students with
disabilities, money for kids on Indian reservations. So it is
like what child is more or less important or what services are
more or less important?
Mr. Farenthold. But there is no 3 percent in overhead.
There is no 3 percent in waste, fraud, and abuse. There is no 3
percent in something maybe we don't need to do.
Mr. Miller. Ninety-nine percent of our budget is in program
dollars, it is in direct program dollars; it is not in
overhead.
Mr. Farenthold. And there is no waste, fraud, and abuse in
any of those programs, despite these fraud rings we are hearing
about? So you are telling me you couldn't cut 3 percent from
the budget if I asked you to.
Mr. Miller. The sequester is forcing us to cut. If you said
could you find cuts that would not adversely impact education
in students who are struggling right now, who are at the least
advantage and who are struggling to participate in our global
economy because they don't have the skills, I would say no. I
would say making those kind of cuts is going to have an adverse
impact that we will regret.
Mr. Farenthold. All right. I just can't believe there is
not 3 percent there.
What about in transportation, Mr. Porcari?
Mr. Porcari. Thanks for asking. Again, what the sequester
is in a part of a fiscal year, because three-quarters of our
Department is exempt from it, is the equivalent of a 90 percent
cut.
Mr. Farenthold. All right, so if I gave you carte blanche,
could you do it?
Mr. Porcari. Of course we can do it. It is a question of
what the impacts are. And that is the process we are going
through right now. I would point out the easy stuff has been
done. Since 2008, for example, within the Federal Aviation
Administration, we have cut $510 million out of the cost basis
by reducing travel by 30 percent, IT savings of $36 million,
$100 million from innovative contracts.
Mr. Farenthold. I think Mr. Mica came up with a nice
laundry list of things we could still continue to look at and I
find it very difficult to believe that just with the increased
cost of gasoline, many families have had to squeeze 3 percent
out of their budget now, and I just don't think it is
unreasonable that we would be asking. And yet we, in the House,
have come up with two different replacements for sequester that
aren't as painful, and I get at least you could find something,
Mr. Miller maybe not.
I do want to go on to the inspector generals because I have
an important question for them. I am subcommittee chairman on
this committee of Post Office, Government Workforce, and the
Census, and recent news reports in The Washington Post suggest
that agency managers could be able to choose favorites among
their employees to spare them from furloughs in sequestration.
Let's ask Mr. Scovel and Ms. Tighe, can you commit to us
that the IG's office will be looking to make sure that whatever
furloughs come are handled in a fair and appropriate manner,
and we don't have political reprisals or choosing of favorites?
Mr. Scovel. We will investigate every allegation, and we
have a hotline center that is equipped to take those
allegations and to ensure that they are inquired into properly.
Mr. Farenthold. Ms. Tighe, is there a similar situation in
education?
Ms. Tighe. Yes.
Mr. Farenthold. All right, great.
I actually only have 25 seconds and I had a couple of
questions on improper payments, so I am just going to yield
back the remainder of my time.
Chairman Issa. If I could have that time.
Mr. Farenthold. It is all yours, Mr. Chairman.
Chairman Issa. If you, Mr. Porcari, and you, Mr. Miller, if
you went to your workforce and told them that they had a
hypothetical choice of taking that furlough, that 5 percent,
effective, pay cut or finding a way to come back to you and
show that they could do the same amount of work with 5 percent
less employees next year, not this year, but in the next fiscal
year, would you predict that your workers would come up with
organizational changes, your middle managers with
organizational changes, that would allow you to keep the pay
and benefits where they are and do more or do as much with
slightly less people? Just a prediction.
I think that is what Mr. Farenthold was really getting to,
is isn't there enough organizational lethargia that builds in
that, in fact, almost any workforce faced with reducing by
attrition and other means or taking a pay cut, they will find a
way to do better in efficiency?
Mr. Porcari. Most of the savings since 2008 that I was just
outlining have actually been suggested to us by our employees.
We have a smart, very committed cadre of public servants. They
will continue to find savings and I would submit, Mr. Chairman,
they would do that with or without a sequester scenario.
Chairman Issa. Mr. Miller, you would also agree that our
workforce is smart and innovative, and, given the right
motivation, can help us in this process?
Mr. Miller. And I would argue that they have been, like
what Mr. Porcari has stated. I think, frankly, we have asked
them, even today, to take on more and more responsibilities
that they are forced, and have been over the last several
years, to be more innovative with their programs.
We are asking them to take more accountability for closing
out audits. We are asking them to take more responsibility for
providing real effective assistance to our grantees; not just
about getting the money out, but making sure it is having an
impact. So we are asking more and more of our employees each
and every day. So to say, yet again, can you do more, I think
our employees would welcome it, but they would not see that as
a new request.
Chairman Issa. Thank you.
We now go to the gentleman from Nevada and thank him for
his patience.
Mr. Horsford. Thank you, Mr. Chairman.
Prior to coming to Congress, I served in the State Senate
in Nevada, and over the last few years we experienced
tremendous budget shortfalls. It required both sides of the
aisle to come together to find a balanced approach to pass a
balanced budget, which is what we have done.
I believe that the Federal cuts, whether under
sequestration, under what occurred in the prior fiscal year, or
what may come, needs to be put in context with the cuts that
State and local entities have already incurred. In Nevada, in
the Department of Education, 70 percent of our department's
budget are federally funded positions, and that is on top of
the reductions that were made by our State agencies.
So I am a bit perplexed, Mr. Chairman, that the line of
questioning by some members on the other side somehow is
pointing the blame at our Federal agency heads, rather than
taking the responsibility as members to do our job, to come up
with the policies that we need to arrive at a balanced
approach, which is what a lot of State governments have been
doing for many years.
Now, I respect the professionals that are here today, and
your viewpoints, and I specifically want to ask Mr. Porcari on
the FAA. I am very concerned about air traffic control. We have
40 million visitors that come in and out of our major airports
in Las Vegas. So can you elaborate on what the impact of the
furloughs were that occurred in 2011 on your employees? We
focused a lot on what the new impact would be, but what already
occurred?
Mr. Porcari. To the extent that we have had furloughs in
the past, they have not been nearly as broad as what is being
proposed under sequestration. I mentioned that the vast
majority of the 47,000 FAA employees would be subject to
furloughs. That is because 70 percent of our operations account
is actually the cost of people. And those people are out there,
overwhelmingly, in the field; not in Washington, out there in
the field. Unlike anything that has happened in the past, it is
going to have an across-the-board impact on operations. What we
are trying to do is minimize the impact on the maximum number
of people.
Mr. Horsford. Again, I respect the position that FAA
employees are definitely going to feel the brunt of this under
sequestration. What about the average American traveler, what
are they going to experience?
Mr. Porcari. If you are traveling by commercial airline and
you are generally going, if you are not going point-to-point,
if you are going through a hub airport, which the bulk of
passengers are, you are likely to experience delays. It will be
significant delays at some times. If you are a general aviation
user, you will see a number of places where control tower
services, controlled air space was formerly provided, but will
not be either midnight to 8 or 24 hours, and you will operate
in what we believe is a safe but different operating
environment.
Mr. Horsford. And I think, again, this is an important
aspect because, again, sometimes people talk about Federal
employees as some nondescript bureaucrat that is not performing
an essential function. We are talking about air traffic safety.
Has anyone forgot about 9/11 and the effects of not having the
top-notch safety that we expect as the traveling public? And
what will that cause?
There is a report that was issued by the Aerospace
Industries Association that said the combined reduction in
passenger and commercial air traffic resulting from the
sequester could lead to anywhere from $10 billion to $20
billion in reduced economic activity and a job loss of upwards
of 132,000 jobs.
In Nevada, we can't afford any more job losses. We are
trying to get our economy jump-started and moving in the right
direction, and we need to work in that regard. So is this study
accurate?
Mr. Porcari. We have not independently verified that study,
and there are several others out there that have broadly
similar conclusions. What we do know is that aviation at large
is one of the driving forces behind the economy, whether it is
passenger commercial air traffic, whether it is aircraft
production, whether it is the innovation that happens on the
electronic side, on the avionic side every day. We know it is
one of the drivers of the economy. There will clearly be some
impacts on the economy, broader impacts from these
sequestration cuts.
Mr. Horsford. Thank you.
Mr. Chairman, I just want to close by saying I want to work
with anybody that has a good idea for how we can identify
targeted cuts in Federal programs that aren't efficient, that
can be improved. But to single out these across-the-board cuts
that we know are not good for our economy, that are not good
for public safety and are ill conceived, we just have to move
in a different direction.
Mr. Farenthold. [Presiding.] Thank you, and the gentleman
yields back.
We will now go to the gentleman from Gainesville, Georgia,
Mr. Collins.
Mr. Collins. Thank you, Mr. Chairman. I appreciate it.
One of the things that comes when you are new and you are
sitting on the front row, you get to listen to the entire
hearing a lot of times, especially when you are trying to go
back and forth. It is amazing to me how many things we have
talked about that had absolutely nothing to do with this
hearing, in all fairness. I mean, we have talked about
sequestration; we have talked about how it is going to affect;
we have talked about other things.
I will tell you what is interesting to me, if you want to
talk about sequestration, is that there are open and
unimplemented IG recommendations could have saved the taxpayers
$67 billion over the last few years. Sequestration is $84
billion, $85 billion. We haven't talked about that. There are
savings that can be had.
I want to tell you just a quick story to illustrate some
questions that I have. A few years ago I pastored, if you know
my background, if you don't, I pastored a church for 11 years,
I felt led to go back to law school, Grayson Law. It was a
strange thing in my life. But we looked at it and I said, the
only way I can go back at 38 years old is we have to go full-
time, to get this over with.
So my wife and I, we sat down and we said I am going to be
losing an income, because I couldn't work and go to law school
at the same time. So we looked at all of the things, from
buying sandwich meat, from buying other things, that we were
going to take lunches and cut back. I have three children. What
was not discussed was taking a kid and selling them on eBay. We
looked at what we could do.
When I look at this right here, and I served on the Georgia
legislature as well, which, by the way, we had, between Federal
cuts, we had $5 billion in cuts, my friend. In Georgia, what we
have done is we cut our budget and we lowered taxes and we have
attracted business. So it can be done. The problem I am having
right here is that there seem to be IGs, and we talked about
the cuts and my friend across the aisle talked about the cuts
for the IGs themselves. Well, at this point in time, you are
not listening to them anyway. What is the problem? You have to
have a balance here.
I go back to the $67 billion that is left on the table that
we are not looking at, that we are not talking about.
Mr. Porcari, the cuts that you were discussing is your pay
cuts with three furlough days, correct?
Mr. Porcari. Yes.
Mr. Collins. Okay. One of the other things, and I believe
it was my friend from Missouri across the aisle that talked
about the rhetoric from both sides in dealing with the inaction
in Congress. I think there is also just an understanding here
that there is a frustration in lack of sort of common sense in
planning.
Mr. Miller, you said this earlier. And I just going to
assume it was your statement here, and not assuming it to
anything else, but you said that we just thought it wasn't
going to happen. That is the problem in Government right now,
this Pollyanna approach that it wasn't going to happen. But it
was law. It was something that was coming and now it is here. I
think the frustration that most people like myself, who had to
make plans in going forward, was that you are not planning.
My question also goes back to the political nature of this.
Mr. Porcari, you have done wonderfully with your talking points
from the Department of Transportation. I remember Secretary
LaHood saying the exact same things just the other day. You
have done well with that, and I understand that. But my
question is you mentioned New York, Chicago, and San Francisco,
because those are the high-profile airports. Just curious, why
didn't you mention Atlanta, which is the busiest airport in the
world? Because it doesn't play as well?
Mr. Porcari. No.
Mr. Collins. Because you don't get the bang for the buck
from New York, Chicago, and San Francisco?
Mr. Porcari. Because I could only rattle off three or four
at a time.
Mr. Collins. So we leave off the largest in the Country?
Mr. Porcari. Not at all. There will be substantial impacts
in Atlanta.
Mr. Collins. I appreciate that. Next question. In planning
furlough days, which a lot of governments in Nevada and a lot
of other places have had to do, so you are telling me you
cannot plan well enough that you cannot stagger your furlough
days in such a way that you would have to close a tower?
Mr. Porcari. We will be staggering the furlough days. In
other words, the employees will have to take one furlough day
per pay period.
Mr. Collins. But you are telling me that you cannot stagger
them in such a way and make them effective in such a way that,
as your comment was in Chicago, closing the north tower?
Mr. Porcari. That is correct. In some of our major
operation centers, and remember, 84 percent of our operations
employees are outside of Washington in our tech center.
Mr. Collins. And how long have you had to think about this?
Mr. Porcari. We have been working on this for months.
Mr. Collins. And I think that is the problem that I am
coming to. When you have the IG's recommendations and you have
these that have been left on the table, that are currently
getting around to, not getting done, you have money left on the
table but, yet, in a hearing like this, in a time when there is
now real cuts going on, and that is part of the problem, it is
now time to squeal and say, here are the problems that we are
having.
I will leave with this last story. In Georgia, a few years
ago, when the cuts started first coming, we were trying to look
at all of our departments. One of the areas that was hit was
our regents, which was our higher education, which were taking
a direct hit. There became a saying that we were going to raise
tuition 30 percent, and then one of our presidents actually
said, who actually was over something, he said we are going to
have to cut the cooperative extension program; in other words,
we are going to cut 4-H, knowing good and well that 4-H was one
of the least things that would have needed to be cut. Instead,
what he did was generate 700 cards to every person, from
crayons to pencils from every child across the State that said
don't cut my 4-H program.
What the American people are frustrated here is they don't
understand an out-of-balance budget, they don't understand
deficit reduction and they don't understand $67 billion left on
the table. That is what I don't understand and that is what the
American people don't understand. And that is the only problem
I have.
Mr. Chairman, I yield back.
Mr. Farenthold. Thank you, Mr. Collins.
We will now go to the gentlelady from New York, Mrs.
Maloney.
Mrs. Maloney. I thank the chairman for yielding and I thank
all of the panelists for being here. I would like to address my
questions to Mr. Porcari, particularly as it pertains to Sandy
aid. I know you referenced that in your opening statement, so
I, first of all, want to thank all of my colleagues that voted
for the Sandy aid for New York, New Jersey, and 21 other States
that were impacted.
Mr. Porcari, the cuts to the Department of Transportation
under sequestration would have a devastating impact on
Hurricane Sandy relief efforts in New York and New Jersey, and
I would like to ask about two key DOT programs, the Federal
Highway Administration Emergency Relief Program and the Federal
Transit Administration's Public Transportation Emergency Relief
Program. Each faces sharp cuts under sequestration, is that
correct?
Mr. Porcari. That is correct.
Mrs. Maloney. Now, the Emergency Relief Program, which
provides relief funds to repair Federal highways and bridges,
they face over $100 million in cuts under sequestration, is
that right?
Mr. Porcari. That is right, $101 million.
Mrs. Maloney. One hundred and one million dollars. And will
the Federal Highway Administration's Relief Program be required
to grant less money to State departments of transportation than
has already been approved for Sandy relief? Will this directly
affect Sandy relief?
Mr. Porcari. We have made provisions with the Federal
Highway emergency relief money that it will not affect Sandy
relief.
Mrs. Maloney. Wow!
Mr. Porcari. As I mentioned, part of the appropriation
actually covered previous natural disasters. At least in the
case of the Federal Highway Administration, this will not be
true in the case of the Federal Transit Administration, we will
not be impacting Sandy relief. The Federal Transit cut of
approximately $544 million will, unfortunately, directly impact
the rebuilding post-Sandy.
Mrs. Maloney. Well, that is a problem. New York, as you
know, is a transit city. We are probably the largest transit
city in the world in terms of how we move our people. Will that
be a $544 million cut to Sandy, or how much will it affect the
transportation?
Mr. Porcari. That transit cut of $544 million will be
towards Sandy aid.
Mrs. Maloney. Whoa, whoa!
Mr. Porcari. And if I may point out, one of the important
things that Congress approved in the Sandy aid is mitigation,
in other words, rebuilding to a more resilient standard. There
have been two storm events in the last 18 months that have
flooded parts of the transit system, for example.
Mrs. Maloney. Five stations in my district, five subway
lines. It is huge.
Mr. Porcari. And it is those resiliency efforts that will
bear the brunt of that cut.
Mrs. Maloney. Wow. Now, is it disproportionate to Sandy
than the rest of the Country?
Mr. Porcari. This transit cut applies only to Sandy aid.
Mrs. Maloney. Only to Sandy aid. Oh my word. Oh, no. Is
there any way we can change that?
Mr. Porcari. If it is the will of Congress, obviously.
Mrs. Maloney. Well, why were we able not to sustain the
cuts in the Emergency Relief Program, but the cuts went through
in the transit program? I am just curious. How was that
decision made?
Mr. Porcari. Well, the Federal Highway Emergency Relief
funds were a little over $2 billion, and of that the cut, as I
mentioned, was $101 million, which left a sufficient balance to
not only take care of all the highway-related Hurricane Sandy
relief that we believe will be required under the program, but
to cover some of the existing priorities as well.
Mrs. Maloney. And then this other $544 million is only to
the transit money for Sandy?
Mr. Porcari. That is correct.
Mrs. Maloney. Wow. Who made that decision? Did you cut
transit across the Country or just transit to New York?
Mr. Porcari. That was a specific sequestration cut. We did
not have any flexibility in that.
Mrs. Maloney. Okay. Thank you for that information.
I also wanted to talk about a flight from the great State
of New York killing a number of people, including a very dear
friend of mine. In February of 2009, Flight 3407 crashed on
approach to Buffalo. It was very tragic. Both pilots, both
flight attendants, and 45 passengers were killed. And the
National Transportation Safety Board stated as follows, ``The
pilots' performance was likely impaired because of fatigue.''
And both of the pilots operating the flight were found to have
``commuted hundreds of miles prior to the flight.''
In December of 2011, the Department of Transportation
issued a new rule, known as the Pilot Fatigue Rule, to
emphasize the responsibility of pilots and airlines to ensure
that pilots are fit to fly when they report for duty. However,
the new rule does not restrict the amount of commuting the
pilots may undertake on their way to the airport, and I would
like to ask, who would be the proper person, Mr. Scovel? Who
would be the proper person to answer this?
Have you recommended that the FAA ensure that the
collection of data regarding domestic and commuting link for
all part of 121 flight crews? And why did you make this
recommendation? Were you the one who made the recommendation,
Mr. Scovel?
Mr. Scovel. We did, Mrs. Maloney. Thank you.
Mrs. Maloney. Okay. Why did you make the recommendation and
what type of study do you feel is required to understand the
risk of fatigue associated with pilots' commute?
Mr. Scovel. We made that recommendation, in part, because
of just what you said, of NTSB's finding. We found that most
significant and eye-opening in terms of when we looked at the
FAA's available information on pilot domicile and commuting, it
didn't exist.
So we thought it would be helpful to the agency in their
safety oversight responsibilities to at least begin to collect
that data; not to jump to the conclusion that regulation of
pilot domicile or commuting practices should be embarked on,
but in light of the dearth of the data, NTSB's concern, the
fact that the National Academy of Sciences, as well, did a
study and found a lack of available data, we thought it would
behoove the safety regulators to take a look.
Mrs. Maloney. Well, Mr. Porcari, can I ask you very quickly
do you think that the amount of review of existing studies and
literature is sufficient?
Mr. Porcari. We are not satisfied with the data that we
have. Mr. Scovel mentioned the National Academy of Sciences'
study. There was also some work done by our own FAA Aeromedical
Institute on cabin crews that we used as a proxy for flight
crews. In neither case did it draw a direct link between
commuting time and fitness for duty, which is the
responsibility of the air crew. But we all know that we can
benefit from better data on this.
Mrs. Maloney. Mr. Scovel, do you believe the FAA's
examination of existing literature is enough?
Mr. Scovel. Not yet.
Mrs. Maloney. Why not?
Mr. Scovel. The FAA owes us their response, and I believe
it was due, in fact, at the end of last week, the 28th. We
haven't yet seen it. I am told informally that it is on the
way.
Mrs. Maloney. Okay, I would like to ask the chairman if we
could request that we get a copy of that. That is important to
me and the families that lost their loved ones, and airline
pilots and everyone else.
Deputy Porcari, can you commit today to make an effort to
collect and analyze primary source data on this issue to
determine whether additional steps should be taken to ensure
flight safety?
Mr. Porcari. We are looking right now at what can be done
in terms of reliable data, and what I can commit to you is that
safety is our number one priority. We know that this is a real
frustration of all of us and we need to understand this better
at this point, so I would like, if I can, for the work that the
FAA is completing now to speak for itself as the next step in
this process.
Mrs. Maloney. Well, thank you. My time has expired,
regretfully. I have a lot of other questions, but thank you so
much for your time and testimony.
Mr. Farenthold. Thank you, Mrs. Maloney. We will do a quick
second round. I know the ranking member has a couple questions
he would like to ask and I just have one or two I would like to
ask, so we will do that, if the panel will indulge us for a
moment.
Mr. Scovel, I read through your testimony and listened to
what you had to say. The bulk of the IG recommendations out of
DOT, rightly so, deal with safety issues, bridges in
particular. I know in the district I represent, we have an
aging bridge that we are looking at $600 million that we are
going to have to replace, and that is not uncommon around the
Country.
What we didn't really talk about and one of the purposes of
this hearing was where we can find savings to avoid having to
do an additional tax increase to maybe offset some of the
things with sequester. In some of the unimplemented reports
from your Department, did you find some cost savings?
Mr. Scovel. Of course we did. Thank you, Mr. Farenthold.
Last year we had financial recommendations totaling $1.7
billion for the Department. The year before that, $1.7 billion
for the Department. That is not to say that all of those
financial recommendations translate immediately to cost
savings, because they do not.
For some of them, for instance, we would expect that our
recommendations, for instance, for the enterprise architecture
or FAA facility consolidation and realignment, they are
forward-looking. We would expect that they would lead to better
decision-making and ultimate cost savings over the course of a
long process to fully implement the program.
Mr. Farenthold. Mr. Porcari, let me ask you another. We
heard a lot of testimony about NextGen in aviation. I have the
privilege of also serving on the Transportation and
Infrastructure Committee Aviation Subcommittee, and we have
heard a lot about the delays associated with NextGen.
I also have the opportunity to speak to various folks
within the airline industry on my commutes back and forth to
Texas, and I hear time and time again that not only are these
delays costing the airlines efficiency and money, but they are
potentially costing us money. Do you have any idea how much we
would have saved if we would have gotten NextGen done anywhere
near on time?
Mr. Porcari. We can get you some estimates of the
accelerated benefits, but I will tell you just in one piece of
it, using required navigation performance in Seattle-Tacoma
Airport, where it is in place right now, it is saving the
airlines a significant amount of money. It is also the
equivalent to taking a couple thousand cars off the road in
terms of environmental safety.
Mr. Farenthold. And I know they are struggling getting a
route from Houston to Corpus Christi that has all been done.
There is some sort of other regulatory approval, I think
environmental.
Mr. Porcari. The Houston Metroplex initiative is actually
one of the marquee early short-term benefits of NextGen. I have
been down to Houston to actually meet with the
interdepartmental staff working on it; they take great pride in
getting the approvals concurrently, in designing the approaches
and the other requires parts on an accelerated basis. They are
literally committed to shaving years off of what would be a
multi-year process.
Mr. Farenthold. And is there anything that this committee
can do to help expedite that process?
Mr. Porcari. Congress has been very supportive,
historically, of NextGen, which is a multi-year system of
systems that, quite frankly, is very expensive. It is that
continued year-to-year commitment so that we can plan ahead, so
that the contracting community and the airlines can be
confident to make those investments. That is the single most
important thing, the consistency and predictability of it.
Mr. Farenthold. And having had the privilege of touring
some FAA facilities, you have some fine men and women working
there, but you have 1950s technology in there, and I think the
traveling public would be better served, as well as the
environment and a vast variety of other factors, if that were
taken care of.
Mr. Porcari. Absolutely.
Mr. Farenthold. And I will yield back the remainder of my
time and recognize the ranking member for his second round of
questions.
Mr. Cummings. Thank you very much.
First of all, I want to thank you all for being here, and
thank you for your testimony, it has been extremely helpful. It
is clear that more needs to be done. These recommendations need
to be followed through, and I would hope that both Departments
would act on them swiftly.
Certainly, a lot of the discussion has gone to
sequestration because that is what we are dealing with, and we
have heard Mr. DesJarlais say there is more to come. He made
that very clear. More cuts to come beyond sequestration.
So I guess I am trying to figure out, as I listened to you,
Ms. Tighe, and you, Mr. Scovel, I was saying to myself, you
know, the IG offices have tremendous credibility. As a lawyer,
I tremendously respect, and as a legislator I respect what you
all do. And as you talked about, I think it was you that said
there was some criminal investigation that you couldn't get
into or whatever because of personnel. I wish that there was a
level of trust with regard to other Federal employees outside
of your agencies.
I was telling a group on the Floor the other day, when they
were talking about Federal employees, it was mentioned that
Federal employees only leave at a .4 percent rate, Federal
Government; in other words, their exit rate is not as extensive
as the private sector because they have great benefits and
because they have all this pay. And I tried to tell them if
they listened to some Federal employees and asked them why they
do what they do, in most instances it is because they want to
help the public, period. It is not about pay.
So when we look at people losing their jobs, and there are
going to be some jobs lost; when we look at people taking
furloughs, like the lady that I met the other day who is going
to lose $800 a month, when she has two kids, trying to put one
through college; that is pain. And we may act like it is not a
big deal, but it is a big deal.
The thing that I guess I am really concerned about is I
want us to make sure that when we say that there is going to be
impact, that is true; in other words, that if there is
something else that can be done to avoid certain things, I want
to know that those things are being done. But I guess we get,
with situation like you, Mr. Miller, when you talk about a
Sophie's choice, where you have disadvantaged kids trying to
make it, struggling, trying to be all that God meant for them
to be, and they can't get there when you are cutting things
like WIC and all kinds of things. I know WIC is not your piece,
but you know, the aid, Title I and all that. That is kind of
tough.
So, Mr. Porcari, coming back to you, you said that three-
fourths of your budget is exempt basically, is that what you
are saying?
Mr. Porcari. That is correct, 74 percent is exempt.
Mr. Cummings. So this is my question. When I look at BWI in
Baltimore, they already have, according to our account, about
258,000 commercial flights a year. I am trying to figure out
that backup, at some point something has to give. It seems like
they are already flying from 5:00 in the morning to 1:00 at
night. So I am trying to figure out what gives. Are you
following what I am saying?
Mr. Porcari. It is an excellent question, Mr. Cummings.
Flight delays is like throwing a rock in a pond; it ripples
through the entire system. So you may have flights taking off
late as part of it; you may have cancellations. Because most
passengers are moving through a hub and spoke system, they may
miss their connections. Those connections are very tightly tied
together in banks. So we can't fully quantify what all the
impacts are. We believe that they will be significant.
It is also important to point out that they are cumulative,
in the sense that your airport experience also includes the TSA
delays to get through the security line, then the potential
flight delays beyond that.
Mr. Cummings. Ms. Tighe, just one question. Exactly where
does your responsibility end and theirs begin? For example, you
talk about possible criminal investigations or whatever, and
you talk about this money that has been lost, statute of
limitations run. Where is the line there? You follow my
question?
Ms. Tighe. No, I understand. Generally, the IG makes
recommendations. We are not management; we can't make
management decisions. We make recommendations and the
Department has to decide how to proceed on those. And it is
really their responsibility to execute. If they come up with
corrective action which we do get a chance to agree on, then it
is really up to them to execute that. I mean, that is fully in
their responsibility.
Mr. Cummings. The reason why I ask that is when you talk
about criminal investigations, I am just trying to figure out
where is that line.
Ms. Tighe. Generally, when you talk about criminal
investigations, that is purely under my bailiwick, that is not
something the Department decides one way or another. In fact, I
think the secretary, under the IG Act, is specifically
prohibited from impacting my investigations and what I initiate
and what I don't. I do know that, resource-wise, I am going to
have to drop numbers over the next couple years. Let's look
past this year. I need to drop my numbers.
Mr. Cummings. When you say drop your numbers, what do you
mean?
Ms. Tighe. In terms of people. Because I have too many
people. We haven't had good attrition. And that is maybe a nice
reflection of we are an okay place to work, but, on the other
hand, for a budget it has created some problems. So we have to
drop. We are going to have to do a buyout and do all the ways
the Government has to reduce numbers. That is going to mean
fewer investigators and fewer auditors. And that is fine if
that is the decision we make that that is how we want to spend
our money, but that is one of the consequences of, let's put
sequestration aside. We are still looking at an era of lower
budgets.
Mr. Cummings. Thank you very much.
And thank you all very much.
Mr. Farenthold. Seeing we have no other members waiting to
ask questions, I would like to take this opportunity on behalf
of the entire committee to thank our panel for being in front
of us. I realize we may not be the easiest committee to testify
for. As our mission statement says, it is our solemn
responsibility to hold the Government accountable to the
taxpayers, and that is what we try to do. Chairman Issa likes
to refer to us sometimes as the watchdogs, so thank you for
coming before the dogs. Thank you very much, and we are
adjourned.
[Whereupon, at 12:58 p.m., the committee was adjourned.]
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