[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
INTERIOR, ENVIRONMENT, AND RELATED
AGENCIES APPROPRIATIONS FOR 2014
=======================================================================
HEARINGS
BEFORE A
SUBCOMMITTEE OF THE
COMMITTEE ON APPROPRIATIONS
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
________
SUBCOMMITTEE ON INTERIOR, ENVIRONMENT, AND RELATED AGENCIES
MICHAEL K. SIMPSON, Idaho, Chairman
KEN CALVERT, California JAMES P. MORAN, Virginia
TOM COLE, Oklahoma BETTY McCOLLUM, Minnesota
TOM GRAVES, Georgia CHELLIE PINGREE, Maine
JAIME HERRERA BEUTLER, Washington JOSE E. SERRANO, New York
DAVID P. JOYCE, Ohio
DAVID G. VALADAO, California
NOTE: Under Committee Rules, Mr. Rogers, as Chairman of the Full
Committee, and Mrs. Lowey, as Ranking Minority Member of the Full
Committee, are authorized to sit as Members of all Subcommittees.
David LesStrang, Darren Benjamin, Jason Gray,
Erica Rhoad, and Colin Vickery,
Staff Assistants
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PART 6
Page
Indian Education Oversight Hearing............................... 1
Water Infrastructure Oversight Hearing........................... 217
Indian Health Oversight Hearing.................................. 405
Department of the Interior FY 2014 Budget Oversight Hearing...... 551
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Printed for the use of the Committee on Appropriations
________
U.S. GOVERNMENT PRINTING OFFICE
81-687 WASHINGTON : 2013
COMMITTEE ON APPROPRIATIONS
HAROLD ROGERS, Kentucky, Chairman
C. W. BILL YOUNG, Florida \1\ NITA M. LOWEY, New York
FRANK R. WOLF, Virginia MARCY KAPTUR, Ohio
JACK KINGSTON, Georgia PETER J. VISCLOSKY, Indiana
RODNEY P. FRELINGHUYSEN, New Jersey JOSE E. SERRANO, New York
TOM LATHAM, Iowa ROSA L. DeLAURO, Connecticut
ROBERT B. ADERHOLT, Alabama JAMES P. MORAN, Virginia
KAY GRANGER, Texas ED PASTOR, Arizona
MICHAEL K. SIMPSON, Idaho DAVID E. PRICE, North Carolina
JOHN ABNEY CULBERSON, Texas LUCILLE ROYBAL-ALLARD, California
ANDER CRENSHAW, Florida SAM FARR, California
JOHN R. CARTER, Texas CHAKA FATTAH, Pennsylvania
RODNEY ALEXANDER, Louisiana SANFORD D. BISHOP, Jr., Georgia
KEN CALVERT, California BARBARA LEE, California
JO BONNER, Alabama ADAM B. SCHIFF, California
TOM COLE, Oklahoma MICHAEL M. HONDA, California
MARIO DIAZ-BALART, Florida BETTY McCOLLUM, Minnesota
CHARLES W. DENT, Pennsylvania TIM RYAN, Ohio
TOM GRAVES, Georgia DEBBIE WASSERMAN SCHULTZ, Florida
KEVIN YODER, Kansas HENRY CUELLAR, Texas
STEVE WOMACK, Arkansas CHELLIE PINGREE, Maine
ALAN NUNNELEE, Mississippi MIKE QUIGLEY, Illinois
JEFF FORTENBERRY, Nebraska WILLIAM L. OWENS, New York
THOMAS J. ROONEY, Florida
CHARLES J. FLEISCHMANN, Tennessee
JAIME HERRERA BEUTLER, Washington
DAVID P. JOYCE, Ohio
DAVID G. VALADAO, California
ANDY HARRIS, Maryland
----------
1}}Chairman Emeritus
William E. Smith, Clerk and Staff Director
(ii)
DEPARTMENT OF THE INTERIOR AND RELATED AGENCIES APPROPRIATIONS FOR 2014
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Wednesday, February 27, 2013.
OVERSIGHT OF INDIAN EDUCATION
WITNESSES
HON. KEVIN WASHBURN, ASSISTANT SECRETARY OF INDIAN AFFAIRS, DEPARTMENT
OF THE INTERIOR
GEORGE A. SCOTT, DIRECTOR, EDUCATION, WORKFORCE AND INCOME SECURITY
ISSUES, GOVERNMENT ACCOUNTABILITY OFFICE
HEATHER SHOTTON, PRESIDENT, NATIONAL INDIAN EDUCATION ASSOCIATION
Opening Remarks of Chairman Simpson
Mr. Simpson. Thank you. Good morning and welcome to the
first hearing of the House Appropriations Subcommittee on the
Interior, Environment, and Related Agencies of the 113th
Congress. Before we get started today, allow me to take a
moment to welcome our returning members and our many other
members who hopefully will be here to be welcomed when they get
here.
Of the programs within this subcommittee's jurisdiction, I
think it is fair to say that there is more that Republicans and
Democrats can agree on than disagree on, and I hope we continue
to work well together on these things that we value and that we
strive to find common ground on those things, no matter what is
happening beyond these doors.
Almost a year ago today, our subcommittee was sitting here
with then-Assistant Secretary for Indian Affairs, Mr. Larry
Echo Hawk, a good friend of mine and Mr. Cole's. Mr. Cole asked
about per-pupil expenditures at BIE versus non-BIE schools. We
followed that up with a formal request to the GAO to look into
the matter--in effect to update and expand upon studies they
conducted several prior years. At the time, we thought we were
asking GAO to answer a relatively simple question.
Fast-forward to January of 2013 when the GAO informed the
subcommittee that their final report will not be ready until
July 2013 and that the subcommittee should be aware of
significant management challenges at both the Bureau of Indian
Education and the Bureau of Indian Affairs that are affecting
their ability to deliver quality education.
The GAO reminds us that these are not new management
challenges and this is not the first time that problems within
Indian education have been reported. This is also not the first
time that this subcommittee has attempted to help turn things
around, but we must keep at it not only to ensure that things
do turn around but that they stay that way. It is simply the
right thing to do.
Therefore, these management challenges, coupled with recent
or soon-to-be turnover at key leadership positions within the
Department of the Interior and the Bureaus, has prompted this
subcommittee to convene this hearing now before the GAO
actually completes its finding so that the subcommittee can be
in a stronger position to take any necessary corrective action
as part of the fiscal year 2014 budget process. To wait would
be to miss a narrow window of opportunity and I believe the
children have waited long enough for this already.
Some people have wondered why we are doing this now rather
than waiting for the GAO report. We will probably be writing
our bill. In fact, we will be writing our bill before the GAO
report comes out. We wanted some preliminary information from
them and to talk with you if there are things we need to do in
our budget that can help turn around the situation.
The United States Government has a unique and well-
documented moral and legal responsibility to help educate
American Indian children, a responsibility that goes far beyond
the $2.5 billion in direct federal spending in fiscal year
2012, of which this subcommittee's contribution was 35 percent.
What is happening outside the classroom and outside the BIE has
just as much impact on student success as what is happening
inside, if not more. Many complicated factors come into play
and many more people no doubt are working hard to help students
succeed.
But as we step back to evaluate our efforts, when we look
at the condition of those schools and the roughly 48,000
students directly under the BIE's responsibility, and when we
look at measures of progress such as test scores, graduation
rates, and employment, and we see the disparity that no doubt
our witnesses will testify to today, one thing is perfectly
clear to me--that we can and we must do better than this.
So I am interested in us having a constructive and
productive discussion today and in the days ahead about how we
can help the agency succeed. Whether it will be not just
funding but also legislation, policy, a gentle nudge, a swift
kick, any of those types of things, I am interested in putting
all options on the table for consideration of helping in this
area.
With that, let me welcome our witnesses here today as well
as our distinguished guests in the audience and the many tribes
and tribal organizations around the country who are submitting
written testimony for the record. Thank you all for your
commitment and your assistance in helping us help you.
Our first panelist is Hon. Kevin Washburn, the newest
Assistant Secretary for Indian Affairs at the Department of the
Interior. Welcome aboard, Mr. Washburn. You will be supported
by Acting Director of Bureau of Indian Education, Mr. Brian
Drapeaux, and Director of Bureau of Indian Affairs, Mr. Michael
Black. Because Indian education activities are implemented by
both bureaus, it is helpful to have both of you here today.
After Mr. Washburn testifies, we thought we would take some
questions from the committee, but I think what we will probably
do is have the director of the GAO and Dr. Heather Shotton, the
President of the National Indian Education Association,
testify, and then we can have you all sit at the table together
and answer these questions. And what we really want is a
discussion about what are we going to do to improve the quality
of education for our Indian children in this country. And what
can we do to help?
So I appreciate your being here. Today's ranking member,
Mr. Moran, is not here. Betty McCollum from Minnesota is taking
his place as the ranking member.
And do you have any opening remarks you would like to make?
Opening Remarks of Congresswoman McCollum
Ms. McCollum. Yes, I do, Mr. Chair. And thank you very
much. And I welcome you, Assistant Secretary Washburn, and the
other witnesses to the subcommittee this morning as well.
Education is a cornerstone and the foundation in which we
build our collective future. Native American parents, like
parents all across this Nation, look for a good education and
an investment in a better future for their children. While
Indian education is a tough responsibility for the Department
of the Interior, it is a moral responsibility for all of us, as
the chairman said. This morning, we will review how these
responsibilities are being carried out and see what we can do
working together to improve the Indian education system.
Now, let's face it. There is significant room for
improvement in Indian test scores and the delivery of the
Indian educational services. In Minnesota, where I am from,
where we pride ourselves on the education of our young people,
only 42 percent of Native Americans graduate high school on
time. That is a shameful record. That rate is half of what our
state sees for white students.
We will hear today about the long-standing problems that
have existed in Indian education. Some of these are reflection
of larger social issues; some reflect the inconsistent
direction and management and the delivery of Indian education
services. And many are rooted in history of unacceptable low
funding levels.
I have appreciated the fact that we approach Native
American issues in this subcommittee on a bipartisan basis. And
in this spirit I approach this oversight hearing to see how we
can work collectively together at this table to facilitate
improvements in Indian education.
But as we know, this is a time of restrained funding, and
it has been a challenge to provide financial resources
necessary to provide a quality education for Native American
students. We know that money alone is not the answer, although
it certainly helps, especially when we see the backlog on
school construction and the fiscal state of many Indian
education facilities. The heartbreaking impact of the condition
of these schools on Indian children can be heard in the words
of a student from Minnesota's Leech Lake Band: ``All 13 years I
have been told that education is very important. It is hard for
me to believe this when I see how my school looks compared to
other schools.'' Well, the school is a pole barn and the
temperature back home right now is in the 20 degree range.
We are just 2 days from implementing the sequestration that
will cut more than 5 percent of federal spending not only from
Indian education but a whole host of other programs that serve
Native Americans. These adverse impacts on these programs are
the poster child for the senselessness of sequestration.
And let me quote John Kennedy as I close. He said, ``Our
progress as a Nation can be no swifter than our progress in
education.'' Well, therein lies the danger of sequestration.
There will be no progress under sequestration. And in fact, the
across-the-board cuts will do real harm to much of the work
that this committee has done bipartisan in the past.
So Mr. Chairman, I want to thank you for holding this
hearing on Indian education, and I want to thank you for the
way that we work together to make the lives of all children
across this country, but especially Native American children,
better. And I look forward to hearing the testimony of our
witnesses. Thank you.
Opening Remarks of Assistant Secretary Washburn
Mr. Simpson. Thank you, Congresswoman.
Why don't we have George Scott, the Director of Education
Workforce and Income Security Issues for the Government
Accountability Office come forward and then we can go from one
testimony to the next. And also Dr. Heather Shotton, President
of the National Indian Education Association. We actually have
nameplates for you.
Assistant Secretary, again welcome, and thank you for being
here today to discuss this important topic with us to help us
get an understanding of what we might be about to do to help
improve the conditions. The floor is yours.
Mr. Washburn. Thank you, Chairman, Ranking Member, and
members of the subcommittee. It is a real honor to be here
today. It is a real honor to hold this position. I am a member
of the Chickasaw Nation from Oklahoma. I went to the same high
school as Tom Cole and was represented by his mother in the
State Legislature for a while. I am a former resident of Ms.
McCollum's district as well, and so it is kind of like coming
home in some ways here.
Mr. Simpson. I hate to ask this. Have you ever been to
Idaho?
Mr. Washburn. I visited Idaho and Maine and wonderful
places.
I have actually for the last 10 years or so been a teacher
and/or a school administrator, mostly in state educational
institutions. I have a strong personal interest and commitment
to education. My draw to this particular kind of public service
is not for the money, and it is also not for altruism purely
either. It is because it is such a rewarding job. I am sure
that there are several teachers who will attest to that who are
in the room.
No offense to the ladies and gentlemen here, but it is much
more fun working with students than it is working with
Washington officials, for example. Not only are they more
educable, it is more rewarding educating them.
I also love to learn and I am----
Mr. Simpson. That is not a good start. Well, you know, we
are both specializing in legislation.
Mr. Washburn. That is right. That is right.
I love to learn, too, and I have been learning a great deal
in the last few months. Many of you have been the teachers and
I am grateful to be here learning because that is one of life's
joys as well.
I am still very much in learning mode about our activities.
Like it is serving in Congress, in the Administration, they do
not give you six months to kind of get up to speed before they
start making you make important decisions. And so I cannot
whine about that over here, but I am a deliberative-type
person. I like to be able to think about things before I have
to start making important decisions. And there is sometimes not
a lot of time for that. Just to give you a sense, the budget
was largely in process before I even arrived--the fiscal year
2014 budget. The first draft had been done before I arrived at
the Department. So I am trying to get up to speed quickly and
make a difference where I can.
I have been greatly helped by BIA Director Mike Black and
Acting Director of the BIE, Brian Drapeaux. And they are both
here with me today. And I may defer a question to them. They
have tried to educate me and I am a willing learner, but they
still know a lot more than I do.
I have seen a lot of things that worry me in Indian
Country, frankly. One of them is the school construction issue
that Ms. McCollum raised. Soon after I got on board I sent the
report over to Congress to talk to you about the challenges
that we face in school construction. And that is very real to
me.
I visited Red Lake High School shortly after the shootings,
getting close to 10 years ago, and that was a real eye-opening
experience because I went up there. It was about a year after
the shootings at Red Lake High School and I was working at the
University of Minnesota and I went up there to recruit
students. And so we went up there with our aim to meet with
juniors because juniors are the students that are kind of now
starting to think about college. And I think that there were
something like 60 juniors in the junior class and only
something--it was in the single digits--like six or seven of
them were actually in school that day that I was there.
And when I asked why that was, the teacher said well, the
parents aren't making their kids come to school. And whenever
the kids said I do not want to go to school, I am scared, it is
kind of hard to argue with them a year after a school shooting
like that. That is tough. These school shooting problems are
really detrimental. And I worry that we may have lost a
generation of kids at Red Lake to education because of that
kind of thing. And those are really serious, serious problems.
I had been working really hard to get up to speed on the
issues here in Indian education. The way I have been doing it
is largely talking to people, the same way that you all learn.
And one of the teachers that I met with recently said that at
his school, students just miss more class. It is an Indian
school and they miss more class than people do at ordinary
public schools. And there are good reasons for it. In a small
Indian community, the obligation to attend funerals and wakes
and that sort of thing is very high. There are all sorts of
cultural activities that are very important to attend. A lot of
the schools are in rural areas and weather can be a significant
factor. If a blizzard comes through in the Dakotas, it may make
it very hard to get to school.
And this teacher told me that on average students miss 45
days of school a year. And if you multiply that times 12 years,
that comes out to losing about 3 years of education. So it is
no wonder that some of our Indian students are not reading at
grade level or not performing at grade level because they have
actually had 3 years less of schooling by the time they would
reach graduation age. And that has a huge effect I think. It
makes it very challenging to be successful in Indian education.
I am told that our performance, while it does not look good
objectively, is as good as state public schools that serve
similar populations with similar challenges. So, we do as good
a job as anyone does, but it is a very challenging job.
In the Bureau of Indian Education, the schools that we run
or that we fund serve about 5 to 10 percent of the Indian
students in the United States. So more than 90 percent of them
are in public schools. And so we are not a significant
participant. We are an important participant, but we cannot
really claim to own education of Indian students. That is a
much broader thing than what we do.
The students in Indian schools often have great needs.
Poverty is rampant and all the things that go with that,
learning disabilities and behavioral issues sometimes. And so
we do have a difficult population. But as I said, our teachers
perform as well as teachers in public schools.
I recently got to go visit the Chemawa Indian School, which
is a boarding school out in Oregon, and it was a very
heartwarming experience. It is a 9 through 12 boarding school,
so 9th grade through 12th grade. The students there were
exceedingly engaged. I was there in the evening and I went to
the cafeteria and I went to the dorms and I was in meetings all
day so I did not get there for classroom, but I met with a lot
of the teachers and then I went to a basketball game at
Moccasin Square Garden, their gymnasium. And it was really
neat. They were playing a team from a neighboring town that was
all white. I mean all the kids were white and their parents
were white and so the distinction between the communities was
kind of apparent.
But the game was started in an interesting way. Instead of
the Star-Spangled Banner, they did a traditional flag song. And
it was really neat to see both teams standing at attention
listening to the flag song while they were looking at the flag.
And I saw astonishment I guess at first on the faces of the
team from the neighboring town and their parents and great
interest. And it was really a nice, heartwarming experience
because they were obviously very interested. A good flag song
will run about 10 minutes. So they got the full experience. But
it was a wonderful game and it was really neat to see. Sports
are one thing that really engages kids and so it was neat to
see that they are using sports in such a good way at that
school.
We have got a lot of things going in the Bureau of Indian
Education and I am trying to get up to speed on all of these
things. My own sort of personal background as a Chickasaw from
Oklahoma is pursuing self-governance. I think that tribes
generally do things better than federal employees can when we
can empower the tribes and provide the underwriting and the
funding for the tribes to run our responsibilities. In other
words, I think the tribal employees do very well in enforcing
the federal trust responsibilities, as long as we give them the
support they need to carry that out. I do think it is a federal
responsibility, but it can be executed best with tribal hands.
We are working on that substantially with the Navajo
Nation. We have about 183 schools in the BIE system. Most of
those are now tribal schools. They are funded by us but they
are run by tribes. And about 60 of them are on the Navajo
Nation. And we are moving towards a single contract with the
Navajo Nation so there will be a Navajo school district in
essence. And that will leave us actually with a very small
percentage of the number of schools that we actually run. So we
are making great strides in the area of self-governance. It
will be soon that we are only running a dozen schools or so
ourselves and the rest of them are run by tribes directly. And
I think that that will certainly be an improvement.
So those are some of the things that we are working on. I
know you have some questions and I can maybe talk a little bit
more about those as they come up.
[The statement of Kevin K. Washburn follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Simpson. I appreciate it. Thank you, Secretary. George.
Opening Remarks of Mr. George A. Scott
Mr. Scott. Thank you, Mr. Chairman and members of the
subcommittee.
Mr. Simpson. And thank you for agreeing to come and talk to
us before your report is completed because, as I said in the
introduction, there may be things hopefully within this bill
that we want to do based on some of the findings and so forth.
So it is a little unusual to have you come and talk before the
report is done, but I appreciate it.
Mr. Scott. Now, thank you. Our desire is always to be
timely and responsive to your needs, so we do appreciate the
opportunity to discuss the preliminary findings of some of our
work on the management of the Bureau of Indian Education (BIE).
In fiscal year 2011, the Federal Government provided over
$800 million to BIE schools. These schools serve about 41,000
Indian students living on or near reservations. Given the
significant gaps in educational outcomes for students in BIE
schools compared to public schools, questions remain about the
extent of federal progress in supporting Indian education. My
testimony today will focus on key management challenges
hindering efforts to improve the education of Indian children
and BIE's limited governance of some schools.
Over the years, there have been a number of efforts within
Indian Affairs to reorganize administrative functions and
improve its ability to support schools. However, management
challenges such as fragmented administrative structures and
frequent turnover in leadership have continued to hinder
efforts to improve Indian education. A study commissioned by
Indian Affairs to evaluate its administrative structure
concluded that organizations within Indian Affairs do not
coordinate effectively and that communication among them is
poor. Long-standing issues such as incompatible procedures and
the lack of clear roles among various offices can contribute to
delays in schools obtaining needed resources.
For example, delays in contracting have occasionally
affected BIE's ability to provide services for students with
disabilities in a timely manner. Likewise, the responsibility
for facilities management is also fragmented and can result in
delays in addressing critical issues. For instance, one school
we visited closed for a few days because Indian Affairs
initially did not respond to their request for funds to replace
a broken boiler. School officials in another state told us that
they are unsure whether they should invest in additional
modular classrooms because they have not been told if or when
they will receive a new facility.
Given the seriously poor condition of some schools, it is
critically important that officials within Indian Affairs
ensure that facility maintenance and construction issues are
addressed in a timely, transparent, and consistent manner.
Leadership turnover in Indian Affairs has exacerbated some
of the various management challenges. Since the year 2000,
there have been about 12 acting and permanent assistant
secretaries for Indian Affairs, six deputy assistant
secretaries for management, and eight Bureau of Indian
Education directors or acting directors. These are key
leadership positions that should play important roles in
strategic planning, policy development, and ensuring
accountability for agency performance and program outcomes. We
have previously reported that frequent changes in leadership
may complicate efforts to improve student achievement and that
the lack of leadership negatively affects an organization's
ability to function effectively and sustain focus on key
initiatives.
In addition to the management challenges, school governance
remains an issue. Although BIE's responsibilities to operate
Indian schools are in some respects similar to those of a state
education agency, its influence is limited because most schools
are tribally operated. BIE administers and provides technical
support for a number of programs funded by the Department of
Education and also monitors schools. However, in tribally
operated schools, tribes retain authority over key policies.
This means that BIE must seek cooperation from tribal officials
to implement reforms. For example, they cannot require tribally
operated schools to adopt teacher and principal evaluation
systems.
Further complicating reform efforts, BIE schools, unlike
public schools, have the responsibilities of both school
districts and schools. According to BIE and Department of
Education officials, many of these individual schools are small
in size and may lack the organizational capacity to function as
a school district. We have previously reported that smaller
school districts may lack the resources, knowledge, or
expertise necessary to provide certain services. This can at
times further strain BIE's ability to effectively support these
schools.
In conclusion, while its mission is clear, significant
questions remain as to whether the Bureau of Indian education
has the autonomy, resources, and administrative support within
Indian Affairs to successfully achieve its goals. Accordingly,
sustained attention is needed to address the long-standing
challenges hindering efforts to improve Indian education. This
includes the commitment to sustain leadership and
accountability in key positions.
Additionally, it is imperative that offices within Indian
Affairs work together more effectively and efficiently to
support schools. We will continue to monitor these issues as we
complete our work and we will consider making recommendations
as appropriate to help address these challenges.
This concludes my statement. Thank you.
[The statement of George A. Scott follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Opening Remarks of Dr. Heather Shotton
Mr. Simpson. Thank you, Mr. Scott.
Dr. Shotton, the floor is yours.
Ms. Shotton. Thank you, Chairman Simpson.
Chairman Simpson, members of the subcommittee, I must
acknowledge Representative Cole, my representative from the
State of Oklahoma. Thank you for convening this important
oversight hearing on Indian education. My name is Dr. Heather
Shotton, and I am the president of the National Indian
Education Association. I am also a member of the Wichita and
Affiliated Tribes of Oklahoma, the Kyowa Nation and the
Cheyenne and Arapahoe Tribes.
On behalf of NIEA, I am grateful for this opportunity to
provide testimony and answering questions the subcommittee may
have.
NIEA was founded in 1970 and includes a large collective
membership of American Indian, Alaska Native, and Native
Hawaiian educators, tribal leaders, school administrators,
parents, and students. NIEA and our native education partners
wish to highlight the lack of educational parity currently
affecting native students. In particular, our students deserve
the right to attend safe, secure, structurally viable schools
that provide learning environments conducive to equipping our
children for college and future endeavors.
Indian education is currently in nothing less than a state
of emergency. Native children experience large disparities in
academic achievement, and our students face some of the lowest
high school graduation rates. This situation is increasingly
dire for our students in BIE schools.
Underlying this issue of low achievement is the issue of
poor conditions of many of our schools. BIA inspectors recently
identified a total of 120 safety deficiencies in four BIE
elementary schools on the Rosebud Sioux Reservation alone. And
even more alarming is a recent Interior Department report that
found that the dilapidated condition of BIE schools have the
potential to seriously injure or kill students and faculty.
Some of the deficiencies that have been identified for
schools in poor condition include classroom walls that are
buckling and separating from their foundation; water leaks near
electrical outlets and light fixtures; non-operable fire alarm
systems; exposed asbestos, lead paint, mold, and water damage;
and regular academic use of condemned buildings.
Native children should not have to risk their lives on a
daily basis to access the fundamental right to an education.
Furthermore, research tells us that the physical condition of a
school affects our ability to learn. It affects student and
teacher attendance, teacher retention and recruitment, child
and teacher health, and the quality of the curriculum.
There are only two educational systems for which the
Federal Government is directly responsible, and that is the
Department of Defense and schools that are federally operated
and federally funded tribal schools. And while the DOD fiscal
year 2013 budget request of $2.7 billion includes an aggressive
construction plan to improve and modernize schools, the BIA
fiscal year 2013 budget request eliminates new school
replacement, and this leaves our already vulnerable students
attending schools in the worst conditions even more vulnerable.
While BIA has recently focused on smaller projects of
maintenance and upkeep due to funding constraints, this does
not address the large-scale needs of many of the decrepit
schools and continues to place our students and teachers at
serious risk. While it is important to highlight the dire
issues facing our native children, I also want to provide on
behalf of NIEA to the subcommittee some sound solutions for
moving native education forward.
First, NIEA would request that the BIA release an updated
BIA-funded schools in poor condition index and tribal priority
construction list. One main concern is that the BIA index of
schools in poor condition was last released in 2009. Further,
the most recent BIA school construction priority list was
released in 2004. These outdated lists are unacceptable and we
request that BIA update and disseminate the lists.
Secondly, NIEA requests funding for school construction and
repair. NIEA understands the current fiscal climate. However,
it is important to note that full funding is needed for
completing the remaining construction projects and starting new
construction projects to replace those facilities that are most
in need. In the NIEA fiscal year 2014 budget request, our
association requested school construction and repair funding to
be set at $263.4 million.
Third, we request interagency and native cooperation. There
must be a collaboration at the federal level to ensure that
funding is used efficiently during these times of constrained
budgets. And additionally, any future Bureau streamlining must
include direct regional consultations and comment periods with
native partners. The Department of Interior should also
establish a Tribal Advisory Committee to advise the Secretary
of the Interior on policy issues and budget development for the
BIE school system.
Finally, NIEA recommends that the BIA continue to upgrade
the quality of the teaching force in BIE schools. This includes
research-based professional development practice, including
collaboration with our tribal colleges and universities.
Mr. Chairman, subcommittee members, we appreciate your work
to protect the funding of native programs and your continued
dedication to improving native communities and protecting
native education. We hope that Congress will protect and
strengthen native education programs and funding to ensure
educational parity for native students with non-native
students. I look forward to addressing your questions.
[The statement of Heather Shotton follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
EXPECTATIONS FOR INDIAN EDUCATION
Mr. Simpson. Thank you. Thank you all for your testimony. I
appreciate you all being here today.
You mentioned, Doctor, that the conditions in schools
affects the quality of their education and went through a
variety of reasons why it does that and their ability to learn
stuff. The one other thing that it does is really tell young
people and students whether we value them or not.
Ms. Shotton. Yes.
Mr. Simpson. Which is probably as important as all the
other factors put together. I appreciate your testimony and
look forward to working with you.
The subcommittee has been out on Rosebud, and while we did
not go to the school, they gave us a slideshow presentation of
it. If I can remember correctly, it was pretty ugly and most
people would not send their kids to that condition. I have been
up in Lapwai and have looked at the school that they just built
on the Nez Perce Reservation and the one that they actually had
to get out of because it was deemed unsafe. The conditions of
the schools, I mean the physical condition of them, is really
highly suspect and something needs to be done.
This committee has focused on Indian health services over
the last few years to try to make sure that we meet our
responsibilities there. We are not completely there yet, but we
are moving in the right direction. We need to do the same thing
with Indian education. At least I think that is the feeling of
most members of this subcommittee.
But let me ask you, there are a lot of people who think the
Federal Government should not be involved in education at all.
We ought to get rid of the Department of Education and
everything else. Obviously, we have a responsibility here just
as we do with the DOD schools. What should we expect out of our
Indian education system? We look at the fact that the standards
or the measurements we use to address quality, whether it is
buildings or whether it is outcomes or those other things, do
not match up with other public schools and so forth.
One of the hard things to do is appropriate money into a
program that you think is broken. Part of the reason it might
be broken is because of insufficient funds, but part of it is
also, as Mr. Scott testified to, is the organizational
structure and lack of communication between a variety of--
typical Federal Government if you will.
What should we expect as a committee and how can we hold
the Department accountable for the dollars that we are giving
them that are actually improving the quality of education? That
is kind of a broad question, but is basically what this hearing
is really all about. Would someone like to take that on?
Mr. Washburn. Well, we do have a significant responsibility
to Indian children, and it is a part of our trust
responsibility. In certain cases, it is actually written into
treaties. Some tribes have treaties and it is written in there
that we will provide education, and I presume that means a
quality education.
I guess one of the things that strikes me, and being
somewhat new to this, is in the rest of the world we have sort
of started looking at uniformity as being overrated. We believe
in diversity now and we believe in specialization. And so
outside of the Indian context, there are charter schools that
are focused on different things. And so I guess I feel like to
some degree we need to have an education system for Indian
Nations that recognizes that what is right for one tribe might
be different than for another tribe or community.
And so I guess one of my concerns is that we keep
flexibility in there. And that is one of the reasons I believe
so strongly in self-governance. And so we have to be moving
towards a system that recognizes a significant voice for native
communities about what their education looks like because that
will mitigate some of the problems that Mr. Scott mentioned
about leadership at the Bureau of Indian Education or in the
Assistant Secretary's office.
I hope he was listening to Dr. Shotton's testimony because
you can imagine the challenges of leadership in this area. Who
would want all the responsibilities that she mentions? You are
crazy to take on this responsibility frankly. And so it makes
it hard to----
Mr. Simpson. Is that why we have such high turnover in
personnel?
Mr. Washburn. The job is untenable in some respects
frankly. I mean it is difficult. This is difficult to take
responsibility for that. I mean, the children could die on your
watch. That is the kind of thing that she is saying. She is in
essence saying that I am responsible for and Mr. Drapeaux is
responsible for. That is high-stakes stuff. They do not pay any
of us enough to be responsible for that sort of thing.
Mr. Simpson. It is high-stakes stuff for us, too.
Mr. Washburn. Well, no. I think we are together.
CONSIDERATION OF DEPARTMENT OF EDUCATION ROLE
Mr. Simpson. Let me ask you a question that I get asked by
officials within the Department of the Interior. They have
asked why the Department of the Interior deals with Indian
education. Should that not be in the Department of Education?
And why do we deal with Indian Health Services? Should not that
be in--and it is pretty much over in Health and Human Services.
I have had officials within the Department of the Interior ask
me that question and I think I know the answer. What is your
response to that?
Mr. Washburn. Dr. Shotton.
Ms. Shotton. Thank you. Well, as a professor of Native
American studies, I think I have a longer historical response
to that in terms of why BIE is placed within the Department of
the Interior, and I think that deals with historically how
natives and tribes were dealt with in terms of land management
and resource management and those kind of issues. I think many
of us ask that question with the education system for our
tribes and our native students being placed within the BIA
really speaks to what hopefully is happening more recently and
more interagency cooperation to effectively deliver a quality
system of education for native students.
I think those are the things that we are speaking to,
making sure that we are having interagency cooperation and also
consultations and corporation with our tribal leaders and those
that are charged with actually delivering the system of
education on our reservations and in our BIA-funded schools.
Mr. Simpson. Well, Doctor, you talk about interagency
cooperation and Mr. Scott is talking about interdepartmental
cooperation and communication and the lack of it. I look at the
organizational structure in this and I think, yes, this was
written by the government. It is about as confusing as you
could get and makes it more and more difficult. Well, it is not
my responsibility; it is Darren's responsibility. Ultimately,
do we need an organizational restructure? That is always the
easy answer, but would that help or something along those
lines?
Mr. Scott. Mr. Chairman, I certainly agree with Mr.
Washburn and Dr. Shotton. This is high-stakes. These are our
children that we are talking about here, many of whom are in
unsafe schools and certainly not receiving an education I think
we would all agree that they are due. That said, it is also
important to make sure that at the federal level we hold the
folks accountable who are responsible for running education.
And I think this hearing is an important step in both
increasing the transparency around some of the challenges that
the Bureau of Indian education faces, but also ensuring that
along the way we build in some accountability and terms of
moving forward. What is the plan for transforming Indian
education in this Nation? Have we brought all of the
stakeholders together to make sure there is an agreement about
the common vision for doing that? And then having a plan in
place where we have metrics and measures so that we know are we
making progress or not. And to the extent we are not, making
sure we hold the appropriate officials accountable.
I mean this is challenging. This is a challenging area. You
know, I have been with the GAO for 25 years. This is one of the
most challenging areas I have run across. That said, though,
that is no excuse for not making more progress here than we
have seen and ensuring moving forward that there is additional
accountability for ensuring that things are done differently
going forward.
Mr. Washburn. Chairman, thank you. It is a very important
question. And frankly, we have wrestled with this at the
Department of the Interior. I mean the Secretary has asked me
the same question that you just posed to us. And I think that
that means that it is a live question and perhaps always should
be a live question because we want Indian children served by
the agency that can serve them best.
I think it is still true that the BIA and the BIE have the
closest relationship to tribes in the country. And at times, we
have lost their trust but we are always working to retain their
trust. And so, I think it is to some degree a question for
Indian Country whether BIE should go to the Department of
Education. And I think that they seem to have answered that
question in the negative when it has been put to them.
But I have to tell you that Secretary Arne Duncan over at
the Department of Education has an enthusiasm for Indian
education, so I have worked hard to figure out ways that we can
capture that enthusiasm and make it work to the benefit of
Indian children. Because if they are raring to go to be
involved in Indian education, we want to provide them
opportunities.
One of the things that we have sort of been looking at is
revitalization of tribal languages, native languages. And there
is money in the budget for us, for BIE to do that. There is
budget money at HHS and the Administration for Native
Americans, ANA. And there is money at the Department of
Education for doing that. Three different places with the same
goal. Money is put in different parts of the budget. And so I
am not sure that that is wrong because the private sector would
say that is good to get government agencies competing with one
another. Who can do better?
But on the other hand, there needs to be good coordination
with this because I have been around long enough to see that
some, tribes that are very successful are going to get the
money from all three of the agencies. You can imagine that a
very well-positioned tribe might just sort of take advantage of
that, and that is not necessarily what is best for Indian
Country.
So we have to coordinate together to make sure that those
monies for that sort of thing are spread properly and in a just
fashion, not just that the tribe with the best lobbyists, went
and got all the money. But it makes it harder when it is in
three different pots. I am not saying that it should all be in
the BIE pot. I am not sure that that is right. It has been
interesting.
I am coming back into government. The last time I was in
government was in 2002 and being back in government is
different now because back then, and certainly throughout our
history, the BIA was the face of the Federal Government in
Indian Country. It is quite rewarding now to see that HUD and
HHS and so many other Departments have a real role in Indian
Country. And I think that that is in part a testament to the
existing Presidential Administration, but it has also been
building and developing over time.
And my position, Assistant Secretary for Indian Affairs, is
no longer--I am still probably the point of the spear in Indian
Country, but the spearhead is much broader than it ever was
before, which puts burdens. There are burdens and benefits. It
puts a greater onus on us to cooperate very well with them. And
I know OMB has tried to get us to figure out ways to force us
to cooperate better--one of the burdens is that we need to
cooperate to make sure the left hand knows what the right hand
is doing. But it is a benefit to Indian Country to have the
whole Administration focused on Indian Country rather than just
one agency.
Mr. Simpson. Yeah.
Mr. Washburn. So difficult questions.
SEQUESTRATION AND INDIAN EDUCATION
Mr. Simpson. Ms. McCollum.
Ms. McCollum. Mr. Chair, there are so many questions and so
many people who can help guide us as we establish policy and we
talked a little bit about maybe what the future should be and
we touched on the past, but I am going to focus on the present.
Right now, with sequestration, we have Impact Aid really
being cut. Most of our school dollars in the Department of
Education are forward-funded. Impact Aid is not forward-funded
so this is real time, real cuts to schools. And for example--I
know we all have examples and this is the reason why you saw me
out here with my cell phone here--I have public schools with
100 percent Indian enrollment, three of them. So that means
Impact Aid. Nett Lake is one school. In fact, when the boiler
went out, the State of Minnesota passed a special law to fund
the boiler because it was in the middle of the winter to get it
done.
I have two other public schools with majority Indian
enrollment, so I have five schools that right now, as we move
forward, are going to see the Impact Aid, which is not
sufficient enough for educating students. And we are now,
because it is not forward-funded. The checks to those districts
are going to stop.
So if you could maybe comment a little bit. We have got
school facilities we can talk about and things like that, but
the responsibility of getting Impact Aid right for Native
Americans students who are not in BIE schools as well, too,
because that is also where, as statistically we know, a lot of
the students are being educated.
Ms. Shotton. Thank you, Representative McCollum.
I think that it is a very important point when we talk
about the looming threat of sequestration and particularly
Impact Aid and how that will impact some of our schools,
particularly when we look in terms of dollars, those schools
that will immediately be impacted--Red Lake School District in
Minnesota, $900,000; when we look at Gallup-McKinley School
District in New Mexico, $2.4 million. So those are some
examples. Even Mr. Drapeaux mentioned the other day how that
would affect our tribal colleges and universities, particularly
Haskell Indian Nations University.
When we talk about Impact Aid in particular, I think being
more responsible and making sure and ensuring that those
dollars actually go to native students is an issue that we have
to address.
Ms. McCollum. Mr. Chairman, thank you. And the reason why I
brought that up is if we are moving forward with any
possibility of doing the right thing--and I know that all the
people around this table are trying to come up with a solution
of how sequestration--there is no doubt in my mind. I know how
hard some individuals are working particularly. As we come up
with things, sometimes something like that can get forgotten in
part of the solution. I just wanted to put it on the radar.
TRIBAL CONSULTATION, REPLACEMENT SCHOOL CONSTRUCTION
So briefly, I would like to know, and the chairman touched
on this, how do we get tribal consultation to help the Bureau
of Indian Affairs and the Bureau of Indian Schools meet the
diverse needs of tribal schools? Because one size is not going
to fit all. So how do we do this to make sure all the different
voices are heard at the table?
And then I will just throw my second question in to save
some time and just do it now. Based on conversations that I
have had with some tribal leaders, the report that I just
shared with my colleague, Ms. Pingree, is pretty eye-opening.
And then, you look at the concerns that I am hearing that the
Office of Budget and Management has zeroed out requests for
replacement of school funding. You put that together with the
GAO report and people are pretty alarmed and pretty concerned.
Now, you came aboard, as you so rightly put, inheriting
kind of a process that is in place. Could you maybe share with
us some ideas that collectively you might have on how we really
do a path forward for replacing these schools? Because we have
had different lists come out. We have got this list and this
school district thinks that they are on this list and then this
tribal school thinks that they are on this list. Then we come
up with a third one, and what we create is distrust. What we
create is conflict. And that is the last thing our children
should be expecting from any of us to do. So could you maybe
talk about some ideas you might have on how we work with tribes
to straighten that out?
Mr. Washburn. Thank you, Madam Ranking Member. Why don't I
go first?
Tribal consultation is one of the most important things we
do. And the Administration has been very focused on consulting
with tribes on everything we do. There are two things going on
with consultation or at least with--tribal consultation is
designed to get input on what tribes think about how we run
things. And when the tribes are running themselves, we do not
have to do consultation. They get to run the programs. And so
consultation is less important in that kind of context. Getting
things in control at the tribal level will decrease some of the
burdens or the pressures on consultation.
We do actively seek consultation. Those often occur in
national meetings or regional meetings at least and we do the
best we can anytime we are making changes to obtain
consultation.
And let me pivot into the school construction report
because we have methods of getting tribal consultation, but the
school construction report that you are mentioning actually
came about through a negotiated rulemaking process, which is a
very, very formal way of getting consultation from Indian
people about how we should behave. Most of the people on that
negotiated rulemaking committee were non-federal officials. And
so that report comes out from non-federal officials. And that
is a good example of how we consult or at least get input more
broadly than just talking to ourselves.
School construction is a challenge. I gather that the 2004
report was the one we have been working on for the last 10
years and we have prioritized about 14 schools that were the
absolute worst for replacement. And we have, over the course of
9 years or so, replaced 11 of those 14. And there are three
left on that 2004 list. What this new report does is it creates
a different set of criteria for us to look at schools with. And
we need to use those criteria and apply them to all our
facilities in Indian Country and then come up with a new list.
We do not want to leave those last three schools on the old
list hanging, so we have decided that we will continue to
prioritize those three as we develop our new list.
These are difficult questions. I will tell you that in
general the guidance I gather that has come down in our
Department is we are not taking good enough care of the
buildings we have now, so why do we want to construct more?
That is kind of the attitude. And that is the sensible thing,
right? If you are not doing a good enough job with the
buildings you have, why would you want to build more buildings?
That is not the complete answer when you have got kids going to
schools that are problematic. And so I have heard you loud and
clear on that. We also got to speak yesterday privately and I
will take that back and look at that.
We have asked that the money not be used for school
construction in our recent budgets but for repair because it is
easier and quicker to repair a building than to build an
entirely new one. But I am interested in looking at these
issues as we continue to develop budgets.
Ms. McCollum. Thank you, Mr. Chair.
Mr. Simpson. I will tell you that we did the last 2 years
put in at least enough money to build the next school on that
list. OMB zeroed out the fund and we put money into it, and
then frankly, we got fought in the Senate as we were trying to
do some things. So I agree with you that the funding limits are
very important.
Let me take an opportunity to introduce Congressman Rick
Nolan, who is in the back of the room, from Minnesota's 8th
Congressional District. And welcome. I know you have students
here and interest in the subject. So thanks for coming to the
hearing this morning.
INDIAN AND NON-INDIAN EDUCATIONAL SPENDING
Mr. Cole.
Mr. Cole. Thank you, Mr. Chairman. And before I start,
first, thank you for doing this hearing. I appreciate it very
much and all the work that the staff did. And I want to thank
the three of you because I know you have spent a lot of time
preparing for this. I know how passionate you are. The
testimony was extremely helpful quite frankly.
Let me start with the very simple question that actually
led to the hearing, and I will just address this to all of you.
Mr. Secretary, you might want to take the first shot. But I was
curious just if you compared the schools that the BIA runs, or
native schools basically, with schools in surrounding state,
the same state, where the resource is comparable. In other
words, do we have as many dollars on a Native American kid
where we have a federal responsibility as a kid right next door
who has a mixture of sort of state, local, and a little bit of
federal help too? If we are in Arizona on a reservation or in
North or South Dakota, are there at least at the outset as many
resources per student as the comparable schools that
surrounding areas have?
Mr. Washburn. Congressman Cole, thank you. And that sounds
like a simple question.
Mr. Cole. I thought it was, but it clearly was not.
Mr. Simpson. That was the question that started all this.
Mr. Washburn. Yeah, in government there are no simple
questions.
I will say it varies. We have schools in 23 different
states, and in some of those states, I think it is fair to say
we spend more per pupil, and in some of those states we spend
less per pupil. And another question is how do we do compared
to DOD?
Mr. Cole. We are headed there?
Mr. Washburn. Okay. Well, and the answer is it is hard to
have a uniform answer to that since there are 23 different
states that we could compare to and far more communities that
we could compare it to. And so I do not know the answer to the
per-pupil spending question. This is a situation of liars, damn
liars, and statistics. You can kind of massage the data I think
to say different things depending on what you look at. I would
love to give you a simple answer to a simple question, and I
cannot do that. I am told that we do well in comparison to
other schools with similar populations. And I think that that
is fair. But I do not know at the fine-grain level how we do on
the per-pupil portion.
Mr. Cole. Mr. Scott.
Mr. Scott. Certainly. Thank you for that. When we looked at
this issue over a decade ago, which is part of the reason you
asked us to update those numbers, we did find that, on average,
per-pupil expenditures are a little higher for the BIE schools.
However, when you look at similarly situated schools, or nearby
public schools, it was relatively comparable. We are looking
forward to working with Indian Affairs to make sure we get the
necessary data to try to update those numbers, because as I
said, the statistics that I cited were from over a decade ago.
So I want to have that context around it. We are looking
forward to being able to provide an update on that analysis.
If I could just for one second circle back on a couple
questions Ms. McCollum asked. In terms of tribal consultations,
one of the things I would encourage folks at Indian Affairs to
consider is to go beyond holding meetings with folks, and look
for different opportunities to seek feedback from all the
stakeholders who are involved in Indian education. This, for
example, could include focus groups and some surveys because,
oftentimes folks will tell you one thing face-to-face when in
fact they may have some different things in mind if you give
them an opportunity to provide feedback anonymously. So whether
it is around administrative reorganization or some broader
issues, I think it would be helpful for Indian Affairs to
continue to consider a range of mechanisms to obtain feedback
from affected stakeholders.
The second issue in terms of the schools' construction and
moving forward with the new list, I do think as Indian Affairs
moves forward, it will be very important for them to develop a
communications strategy so that it is really apparent to all
stakeholders what the new criteria will be as far as facilities
going on the list, as well as helping them understand what the
differences are. While moving forward and developing a new list
is clearly important and a priority, it is also important that
there be a clear communication strategy so that all affected
parties really understand the difference between the old list
and new list. Short of that, it is likely to create some
additional questions and mistrust issues.
I think our work and the work of its own internal study has
found that consistently communication within the department, as
well as communication with the stakeholders, has been a key
challenge for Indian Affairs. And so I think developing some
long-term communication strategies to help address that issue
is critically important.
Mr. Cole. Dr. Shotton.
Ms. Shotton. Yes, Representative Cole. I think in answering
this question--and Mr. Washburn alluded to this--it seems very
simple if we can compare them to other surrounding public
schools. But it is a little more complex. I think when looking
at BIE students and their parity in terms of being funded the
same as surrounding schools, you have to consider the cost of
running boarding schools within this. And so sometimes the
comparisons should be more to the cost of a private boarding
school rather than surrounding public schools. So I think those
are important considerations to note when you are comparing the
cost per student in BIE schools.
CAPITAL VS. OPERATING BUDGETS
Mr. Cole. Please.
Ms. Shotton. No, go ahead.
Mr. Cole. Well, I was going to say another thing that
strikes me in terms of the difference here--and I have a lot of
areas to cover so excuse me for rushing through this. You
really have two budgets, and when you look at any school
system, you have an operational budget and you have a capital
budget. And you clearly have a huge problem in Indian Country
because we do not work capital budgets the same way. They
cannot vote bond issues, they cannot tax themselves. Tribes
that have a source of revenue cannot invest extra revenue on
top. Our tribe does that in a variety of areas. Tribes that are
not as fortunate obviously would probably want to do it and
cannot and do not have any means. So I would ask when you look
at your statistics if you could give us some idea of capital
resources versus operating budget as well.
It seems to me that facilities are the main problem that we
have. I agree very much. I want perhaps all of you to address
this quickly. I believe very much, Mr. Secretary, in what you
had to say about self-governance. I mean my experience in
healthcare and other areas has been when tribes actually have
the authority that they do a better job. And if they do not do
a very good job, well, guess what? Their local tribal members
know who the councilmen are and they get their fingers right
around their throat and the job gets better, just like it does
in government anyplace else.
But if the people making the decisions are a thousand miles
away and appointed and you have no means of knowing who they
are or dealing with them, it is just very difficult to make
them responsive to you. So I mean pushing the decision-making
down to the tribal level I think is by and large a good thing.
If it does not work right the first time, over time it will
because it has a means of self-correcting.
Yet, at the same time, Mr. Scott, you seem to suggest--and
I am sure you are right, particularly when you look at things
like capital--these decisions are made a long way away. They do
not decide in a local school district, you know, on the Navajo
Nation we are going to have a bond issue and we are going to do
something and we are going to upgrade the school. Somebody a
long way away is going to make the decision.
So how do you achieve the self-governance that I think you
rightly are searching for, Mr. Secretary, and at the same time
make these larger bureaucracies responsible? Because I am not
sure centralizing the decision-making is all that good.
Actually, that is kind of the history of decisions being made
in Washington, D.C., and not being made by tribal people with
tribal interests and knowledge immediately available. I do not
know what kind of structural mechanism you devise to reconcile
those things.
Mr. Washburn. I think we have been moving towards--after
our Bronner report which looked at these issues, we have been
moving towards a system that puts the decisions out in the
regions as far as we can, as best we can. It centralizes the
accountability. And in fact here in Washington, I am
accountable to you. That is why I am sitting in this chair. And
I am accountable to Mr. Scott, who is looking at our programs.
And so our accountability resides in Washington to a great
degree. So we have got that function. We are putting our audit
functions and our accountability functions. We have centralized
those, but we are trying to push the decision-making out
closest to the tribes and the schools as we can. And that has
been one of the ways we have tried to restructure things to
work better.
Mr. Scott. I certainly want to commend Indian Affairs for
commissioning the Bronner study, but I also want to make sure
that they take away the right lessons from the study. Because
previously, there was a NAPA study that basically said to
centralize some things even though I am not sure the NAPA study
said to centralize everything. And so now you have the Bronner
saying some sort of hybrid approach is really the way to go.
And so, I am certainly going to defer to Mr. Washburn in terms
of the ultimate decisions they want to make about this.
I do think it is critically important that as you
transition to whatever new structure you have, that you build
in certain things to ensure that you can measure whether you
are making adequate progress in terms of having a focus on the
customer, ensuring you have the right performance metrics in
place so that you know whether you are meeting the customer's
needs in a timely manner and that you have assurance that you
have the right people with the right skills and abilities to
properly execute your new mission. Absent that, reorganizing
the administrative structure alone is not going to be
sufficient to address some of these long-standing problems.
BIE SCHOOL GOVERNANCE
Mr. Cole. Can I ask you a very simple and basic question?
On most BIA schools, you mentioned there is a lot of tribal
control. What is the mechanism for government? What is the
equivalent of the local school board for a BIE school?
Mr. Washburn. Well, we have tribal school boards. This has
been a source of a little bit of tension, too, because we have
got independent school boards for schools that compete for
power a little bit with the tribal government itself. And so
this is interesting. We have replicated a great deal of what we
have in the counties and the cities at the tribal level. And
that is a good thing in general.
When we do tribal consultation, we often go to tribal
leaders. And frankly, in this area, that is not entirely
adequate because tribal school boards are in control to a great
degree. But we have kind of replicated all the complications
that exist in the rest of the world in this area. So the
mechanism is tribal school boards for a lot of these schools.
Mr. Cole. Dr. Shotton, you obviously have spent a lot of
time thinking about this and studying it. What would you see as
the best form of governance? Recognizing we have boarding
schools and differences, and there might be a variety of them,
but if you were sort of getting--how would you empower a local
school district or a tribe to actually go about the business of
educating native kids within the BIE system?
Ms. Shotton. Well, I think that we always need to advocate
for tribal control of education. I think we are certainly on
the same page there that when we empower our tribes to employ
their self-determination and take control of the education of
their own citizens, of their own tribal members, tribes know
how to educate their students. However, we must also equip them
to do that. We cannot continually underfund these schools and
expect our tribes to be able to run them efficiently.
I think when we talk about consultations and advisory
committees and those kinds of things, we must include the voice
of our tribal leaders. We must also include the voice of our
national native education leaders on these issues. So I think
that it requires a continued cooperation and reaching out and
consultation with our tribes to inform what is happening within
the BIA and the BIE.
And I think that we would be interested to know if there is
a current plan for restructuring and if there is a plan to
release, how we would do that? And if there is, if there is a
time frame for that.
DOD SCHOOLS
Mr. Cole. I am going to conclude pretty quickly. You have
been very generous, Chairman. And I know other people have
questions.
DOD, just a little bit of background history, part of that
happened because our former colleague, Norm Dicks, was
traveling and he has military schools and he heard complaints.
I have military schools and I heard complaints, and I visited a
couple of them and the complaints were very well-founded. And
brilliant staff came up with the idea to do one big effective
deal; fix all these schools at once. And then in that case we
were going to turn them over, after we get them up to
standards, to the local school systems. They were a part of
them anyway in many cases. But we made a big capital
investment. It was a very big bipartisan effort because I think
everybody wants the children of American service people to have
the very best education possible.
I do not know in this budget environment if we could ever
do something like that, but that model is what worked. And it
strikes me that what the chairman says is absolutely true. We
do have a special responsibility. We have a trust
responsibility that our government has assumed over many years.
I recognize all the problems that Assistant Secretary
Washburn has to wrestle with because a lot of these kids are
coming from awfully challenged environments in terms of
poverty, distance and isolation. It is pretty tough. On the
other hand, they ought to go to a good school. And as the
chairman said, they ought to be able to walk in and know
somebody someplace cares about me and the kind of education I
am going to get and wants me to have the best opportunity to do
whatever I can do and go as far as my skills can take me. And
that probably relies more on us in these cases, as they do with
DOD kids, than any others in the country. There is somebody
else to do that in most states. There is not anybody else but
the Federal Government in this case. So I would hope we look to
something like this.
Last point, probably should not say it, you guys have
pretty good ties. You have a spectacular necklace. That is a
wonderful piece of work.
Mr. Simpson. Ms. Pingree.
Ms. Pingree. Thank you very much for the fashion
commentary. No end to what I am going to learn on this
committee.
So thank you, Mr. Chair, for holding the hearing. I am very
excited to be one of the newer members of this committee and
really appreciate those members who have been working on this
issue for a long time. What a depth of knowledge you have. You
are asking some obviously very deeply concerning questions.
I feel like I am learning a lot today and I am here to
learn a lot today. So I am focusing most of my efforts on
seeing how much I can absorb.
But I do have a couple of specific questions, mostly for
you, Mr. Secretary.
I am lucky enough to represent Maine. We have two Members
of Congress. And we have four tribes in Maine, the Penobscot,
the Passamaquoddy, the Maliseet, and the Micmac. And because
most of them are not in my district, I have had very little
experience with some of the challenges that they have. But of
course, now that I have this great opportunity to serve on this
committee and learn more, I have been digging in. And I am
pleased to hear that you have been to visit Maine.
BEATRICE RAFFERTY SCHOOL
I want to ask specifically about one of our schools. You
mentioned the 2004 list, and that of the 14, 11 had been done
and three are left. And one is the Beatrice Rafferty School,
which is in Perry, Maine, a Passamaquoddy school. They were one
of those priority question projects. So when we contacted them
to say give us some more background about what is going on
there, it was a little shocking to me to realize that they had
been on the list for so long, that they were only in the
planning stages, and had not even received any funding for
design let alone construction.
And in the time that they have been waiting, in the time
that they have been one of these schools that was slated for
replacement, they have needed extensive repairs just to keep
the building usable for those students. That means hundreds of
thousands of dollars have been spent on replacing walls that
fell down, replacing a portion of the roof, and conducting
ongoing mold inspections, not to see if there was mold in the
building, but to see if the mold in the building was one of the
toxic molds that would affect the students.
So it is hard to hear that in the context of this notion
that we want kids to feel valued when they go to school and we
want them to be able to learn. And for the 120 students there
is just clearly not a good environment. And they had the sense
in their conversation with me that they are pretty much never
going to hear from us again, that the school is going to
continue to fall down around them, that they are going to come
up with what little they can to just keep it going, but they
are asking. So what is going to happen here? Will there ever be
any money for designer funding?
And I heard you say this morning that you suggested that
the three schools that had not been completed from that list,
even though the criteria may be changing, but those three
schools will be attended to. But I would like to be able to say
at least to them whether is there any possibility that this
school is going to be replaced. When will they hear from
someone again? What is going to happen?
And I am sorry, too, in a room full of people and stories
all over that are clear that there are schools in need of help
and repair. I did not want to single out just my own school for
concern, but it is a great opportunity for me to learn and to
be able to at least say, okay, so I am trying to learn. What is
going to happen here? And I appreciated that you brought this
problem up and I would love to hear your thoughts about it.
Mr. Washburn. Thank you, Congresswoman. What I am going to
do is take back your concerns to the Secretary and the OMB and
let them know I got an earful yesterday from Ms. Pingree, and
we have got some friends from the----
Ms. Pingree. It is those M states.
Mr. Washburn. Yeah, that is right. I think the people in
the back of the room from the BUGS school would say that they
are similarly in dire circumstances. And it is not something I
relish but I would like to see what the next list holds as far
as what other schools.
I would hope that you would not judge us on our worst
schools, but we have got to solve those problems. The problems
are very real at the worst schools, the schools with the
greatest challenges. And I will take this back and again the
conversation has been we are not taking care of the buildings
we have well enough, so, we do not want to build new buildings.
I know that that does not answer all the questions, especially
around the schools that are in the absolute worst condition. So
I will take that back and register your concerns about this.
Ms. Pingree. Great. Well, I will certainly look forward to
having a further conversation about this.
BIE SCHOOL CONSTRUCTION
Ms. McCollum. If you are taking money for repair and you
are on a list, either the three-school list or the new list,
and you start doing repair work, sometimes there is concern
that that is going to move you down the list.
Ms. Pingree. Right.
Ms. McCollum. And I know that that is a concern for people
out in public schools when they start repairing it that they
will not get something done. Is that going to have a negative
impact? Is that something that they should be concerned about?
Mr. Washburn. Well, I guess when I hear that, what I hear
is people are trying to game the system. I mean if you have got
a repair that needs to be done, you should take the money and
get the repair done. The new criteria that are in that book,
maybe because the quality of the building is taken into
account, and that is one of the criteria. You should not
decline the repair money and put students in jeopardy because
you are trying to make the worst case for the need.
So even though it might have a tiny effect on the number of
points that get scored for the building, that would be my
thoughts about that.
Ms. Pingree. Yes, thank you, Congresswoman.
In our consultations, and our conversations with our
partners, they highlighted conversations that expressed the
same concerns that if they began to fund individual maintenance
projects, rather than replacing the much-needed replacement of
the facilities, that it could potentially push their facility
further down the list. And so there is some fear about only
kind of having this piecemeal approach to address small
projects rather than the full spectrum of what their issues
are. And so I think that is a very valid concern from what we
have heard in conversations with constituents.
Ms. McCollum. Thank you, Ms. Pingree.
Ms. Shotton. Well, thank you. I appreciate the additional
question. And I guess in our further concentration, I mean that
is an important question for this school. If nothing else, I
think at some point they want to know--so we were on the list,
we are one of those three, you know, are we never going to hear
again? Do we have to find alternative means? Should we keep
repairing the building? I think all those are very valid
questions, and my guess is that if this is happening in one of
our tiny little schools, it is everywhere else.
So thank you for your consideration.
Mr. Washburn. Ms. Pingree, that is certainly consistent
with what we have heard in our work, particularly this issue if
you go ahead and make some repairs to your school, does that
affect your place on the list? And I would just encourage the
folks in Indian Affairs to communicate with schools about
that----
Mr. Simpson. Yeah.
Mr. Washburn [continuing]. In terms of sort of what is
their long-term strategy here so that everyone is operating
from the same set of assumptions about what this will mean in
the long-term. I think at a minimum we owe that communication
to the folks at the local level so that they really understand
long-term what this process looks like and to what extent, if
at all, making some interim repairs to your building will
affect your long-term capital needs.
Mr. Simpson. Appreciate that. The gentlelady may be
interested to know that the money we put in, since it was the
next list on the school, the school you mentioned was the next
school on the list, it would have been for that school, which
ultimately got dropped in negotiations with the Senate when we
could not get them to go along with that.
Mr. Joyce.
GUNS IN INDIAN SCHOOLS
Mr. Joyce. Thank you, Mr. Chairman.
And I appreciate you being here, Dr. Shotton and Director
Black and Assistant Secretary Washburn, and your testimony here
today in answering questions. I have a direct question for you,
Assistant Secretary Washburn.
And let me preface it by saying for the last 25 years I
have been a prosecuting attorney who represented school
districts, and I have the misfortune of a year ago today being
in one of my high schools which is a crime scene in which six
kids were shot.
In looking at the Inspector General's report in preparing
for today's hearing, I noticed that 6 percent of high school
students and 37 percent of middle school students are bringing
guns to schools. And I applaud the efforts taking place up
there with the drug abuse resistance and anti-bullying programs
and also doing things as far as anger management training. But
I was wondering if you could update us on whether or not there
has been a reduction in the number of guns being brought to
school? Because I think it is important that kids are given the
best education that is humanly possible in the safest
environment humanly possible.
Mr. Washburn. Congressman, thank you for the question. And
I do not have the data for how many kids are bringing guns to
Indian schools. I will tell you we have taken some steps. All
the schools have continuity of operations plans if God forbid,
the worst happens that there is a school shooter situation or
any other emergency for that matter. That is one that has been
heavy on our hearts lately.
We have been doing other things that do not cost too much
but help out a lot, so parking police squad cars in front of
the school, it does not mean a police officer is there
necessarily but it provides a visible deterrent so that people
think that there is an officer there and they see the squad
car, and that can sometimes be effective. And it does not cost
as much because that car would be sitting in a parking lot
somewhere if it was not parked at the school. That cannot be
the entire strategy to prevent school shootings obviously, but
we are trying to do the things that do not cost much and that
might have an effect. And so we are looking to be very creative
about finding ways to address these serious issues.
Mr. Joyce. Thank you. No further questions, Mr. Chairman.
Mr. Simpson. Let me ask kind of a--well, a question I guess
is what it is. As Congress is demonstrating this week that if
we enact a law, it is difficult to change that law. The same is
generally true for appropriations laws even though new bills
are written each year annually. Things get into appropriation
bills and then stay there forever and ever and ever, and a lot
of times we do not know why they went in originally.
EXPANSION OF GRADES AT EXISTING SCHOOLS
A tribe recently brought to my attention the real-life
impacts of language this subcommittee has carried since fiscal
year 1995 prohibiting the expansion of grades at existing
schools. The language forces this particular tribe to bus its
sixth-grade students off reservation to the nearest public
school for a year before returning them to the school to the
reservation for seventh through 12th grade. Does this make
sense?
Mr. Washburn. I have an answer. No.
Mr. Simpson. What are the consequences of deleting the
language that prevents the expansion of grades in existing
schools? This is an example where clearly it does not make any
sense to have that. Are there other consequences that we do not
know about?
Mr. Washburn. Well, my sense is--and this language has been
in there a long time, more than----
Mr. Simpson. 1995.
Mr. Washburn. Yes, I mean probably the reason that was put
in there was we do not want schools expanding the grades that
they are offering. If we cannot keep----
Mr. Simpson. We cannot afford it.
Mr. Washburn. Cannot afford it and cannot keep the building
in shape. I mean the next thing they will want is a new
building for the additional grades that they have. And so that
might have been a way to put the cap on Indian education a
little bit so that we are not expanding at a time when we
cannot afford to build new buildings. I am just guessing that
that must have been the purpose of that. In that case, at Sho-
Ban, it is kind of a silly outcome honestly.
I will take that back to OMB and the Secretary and talk
about that with them about whether that might be appropriate to
delete that one.
Mr. Simpson. Get us an answer to that by the time we write
our bill because we will either delete the language or probably
give the Department the ability to waiver that language at
their discretion. But it is a discussion we need to have
because it is really one of those simple things that needs to
get done.
LEGISLATIVE LANGUAGE PROPOSALS
Mr. Cole.
Mr. Cole. Just a couple more questions. Thank you, Mr.
Chairman. And along the lines that you just covered, it would
be very helpful if any of you would give us specific proposals
about language that could go in the bill that would be helpful.
You know, again, we have some ideas. I am particularly
interested in bolstering self-governance and I am particularly
interested in things that would give local schools some
understanding or control over their capital budget, which I
think they really probably do not have now given the way we
fund Indian education. And I am not sure what that would be but
your suggestions would be certainly something I would look at
with a great deal of interest.
Also, I would ask that as you go forward you think about
whether or not, again, a large-scale capital program--and that
is probably something that would not be done this year--but,
what is the utility of this as opposed to this sort of
piecemeal approach? I just think we are at the bottom of a
cliff we are never going to get to the top of. We have to make
something to sort of get there. Now, as I recall, the Bush
Administration tried to do something like that early on. I
think the President actually, when he was a candidate, met with
tribal leaders back in 2000 or something and made some
commitment. And I know there was a rather substantial
investment in 2001 or 2002 or sometime in that area.
It sounds to me like it either was not enough or we just
did not get the job done or again we maybe did not have the
sustained maintenance after that. So looking back on the
history of that might be somewhat helpful as well.
COOPERATION BETWEEN BIE SCHOOLS AND TCUS
And a final point again, and Dr. Shotton, you touched on
this and might want to elaborate a little bit, I am very
interested in whether and where cooperation between tribal
colleges and tribally operated schools within the BIE system--
what kind of relationship can we have? And are there some
outstanding examples?
And one last question--and you may want to address this,
too, Assistant Secretary Washburn--are there any tribes that we
should look at that are just models? I mean you say, wow, this
is a tribal school that is really being run really well by the
tribe. I think the Cherokees Sequoyah School is an awfully good
school. And that was not the history of that. And they have
gotten deeply involved in investments and what have you. I have
been to the facility before. It is extremely impressive. And
they have clearly made this a point of pride and a point of
success for their young people. So are there other places we
should go look and models that we might be able to replicate or
encourage?
Ms. Shotton. I think of that when we talk about cooperation
between BIE schools and our TCUs. I think a great opportunity
is with regard to professional development. Turning to our TCUs
to help provide the professional development that our teachers
need in our BIE schools is a prime opportunity. They understand
the cultural needs of our students. They understand the
perspectives. They understand the things that we need for
tribal students. And I think that we turn to TCUs as ways to
educate our future leaders. And that was kind of the prime
reason for starting TCUs, to allow tribes to create the future
leaders. And so I think that that is a great example to work
more cooperatively and collaboratively with TCUs to help
provide that much-needed professional development for our
teachers and BIE schools.
Mr. Washburn. Thank you, Congressman. I guess on the model
question, I am sure that there are wonderful stories out there.
One that comes to mind is the Southern Ute Tribe in
southwestern Colorado. They started basically a Montessori
program years ago. They were troubled because their children
knew who George Washington was but they did not know who the
president of the tribe was and that sort of thing. And they
thought we need to do a better job of educating students about
our own government and our own culture and our own languages.
And so that is a really neat example. It also combined early
childhood education, which we know is exceedingly effective
very much worthwhile expenditures because it makes long-term
improvements in people's lives.
The capital budget question that you mentioned we have put
about $2 billion into Indian schools in the last 10 years or so
and going back into the Bush Administration. The report that we
have recently released shows that the community asserted that
we needed $1.3 billion more. But that is less than what we have
put in. There has been a sustained commitment. It has not been
a single infusion in a couple of years. It has been over the
course of time.
But the ARRA funding also, you all spent a lot of money on
Indian schools with the ARRA funding, too, and that was not a
complete capital infusion, but it was a significant one.
JOINT VENTURES
Mr. Cole. And one last question. And this is just an idea
and I do not know if you have any reaction to it or maybe we
already did this. One of the most successful programs we have
in healthcare--and this does not always help your tribes--is
joint venturing where we literally get tribes and the feds
operating together. We have seen it obviously with the
Chickasaws and their healthcare program where a lot of the
capital was done. They had the ability to do that but then a
lot of the operational was picked up. Do we have any equivalent
to that in BIE program? And would there be any merit in that
approach?
Mr. Washburn. Let me say I do not know the complete answer
to that question but I saw some really neat joint venturing
recently with a state public school system and a tribe. The
Kalispell tribe in Eastern Washington--they are a small tribe,
380 members or something like that--their kids go to the local
state public school. They thought about having their own school
but they have only got 380 members. It would not be a very big
school and the school is really close. They were very
comfortable with the school they went to, but they wanted more
tribal cultural education and tribal language education.
So what they do is their kids go to the public school. The
tribe provides the cultural and language teachers and the
students that want to go--and mostly it is the Indian kids, but
it is not just the Indian kids--can take those electives and go
to those classes. And that is kind of a neat example. Obviously
when, you know, governments can work together, it is a
beautiful thing. And that seems to be a really successful
example.
Mr. Cole. Thank you.
Thanks, Mr. Chairman.
Mr. Simpson. Ms. McCollum.
Ms. McCollum. Thank you, Mr. Chair. I saw a couple of Head
Start facilities where tribes that, as Mr. Cole pointed out,
had resources available upgraded and were doing some fabulous
things with their Head Start facilities. But you know, then
there is more inequity possibly for students who, through no
fault of their own, have a tribe that does not have gaming
usually as a resource.
One of the things that we run across, whether it's
reference to sovereignty in statutes, whether it is labor law
or something like that, they might list states, municipalities,
but then they do not list tribal nations. And so it is whether
it was unintended or done deliberate. I was not in the room
when some of these statutes were written. So there is inequity
that is out there.
FEDERAL COLLABORATION
There is also an inequity out there when the Department of
the Interior--and I think it is a good thing that HUD and some
of the other agencies are reaching out and working in Indian
Country, still too centralized in my opinion and not enough
consultation quite often. But here we are charged with the
overall working cooperatively in a partnership with our tribal
nations here.
But there are so many other agencies out there and we are
just talking about education, for example. We have got the
Department of Education. I recently found out the Department of
Agriculture in one of its programs and one of its lines down
below with rural schools can fund programs in Indian Country.
So for us as appropriators to kind of have a handle on it to
know what is really going on, for a tribal organization to know
what is going on, and then all the grants that keep getting
added that are in different spots, and then you need to be a
grant writer is what is happening. One of the things that we
have been working on here and that I have been requesting for a
while, and finally, from OMB is a unified budget.
But I noticed even in the report from GAO, and it is no
fault of your own, but you just kind of talked about this silo
of dollars. What do we need to do, to do the right thing in
managing the federal dollars and working in partnership with
tribal leaders?
And let's just take education. I mean healthcare is another
example where things are all over. Is that something that
people have been struggling with or thinking about? I mean
because I feel like now in order for us to do a good job with
putting more money into schools, we need to watch that line in
the Ag bill to make sure that they do not zero that out or lose
it or we might lose broadband or internet or something like
that. What are some of your struggles with that? How could we
do a better job together in these dollars that have been
allocated?
Mr. Washburn. Let me say a little bit about that.
Ms. McCollum. I mean we are all struggling with this
together.
Mr. Washburn. Sure. Sure.
Ms. McCollum. This is no one's fault. We are all struggling
with it together.
Mr. Washburn. We have got sort of a great example that
happened in the last decade or so. The Department of Justice
went out and built a whole lot of correctional facilities in
Indian Country, and they are beautiful, some of them. And then
they turned to the BIA and said staff them up. And we did not
have it in our budget. We did not know it was coming. That was
not any communication between DOJ and BIA. And so it is a neat
thing that they were engaged in Indian Country but we were not
coordinating very well. And so we are doing a lot better at
doing that.
One of the great successes of this Administration has been
the Tribal Nations Conference because once a year, every
December, all of the Secretaries get together and a lot of
their staff and tell Indian Country what we have been doing.
And it forces us to talk to one another, too. And OMB has been
interested in these. How can we make sure that you are
coordinating across Departments?
And so it is a difficult task because there are so many
different units. But we are convinced that we need to be
working better at those things. And so we are working on that.
I have heard complaints from several people. Tribes do not
want to have to choose which Cabinet-level agency they are
going to go to. Whatever they need, they need it. Having to go
search and find the right agency to fund that is not ideal. It
would be nice if there was one United States interface and this
is what we need; help us find it. And there is not a help desk
at the front of the Federal Government that says oh for that
you need to go to this Department.
Mr. Simpson. Let me ask. Do you have an employee that is
employed by the BIE that has an office over in the Department
of Education or one that has an office over in the Department
of Justice?
Mr. Washburn. No, not inside those offices. We meet with
them fairly often. Around education there is the White House
Initiative on Indian Education. And that has served as an
umbrella organization that has really kind of helped bring a
lot of people together around these issues. But no, we do not
actually have physical presence within those buildings. We try
to meet with them regularly.
Mr. Simpson. The problem is a lot of things go on in the
Department of Education, and wouldn't it be nice to have
someone there that you could say, well, this is what is
happening in Indian Country and this is why this might work or
might not work or whatever, but be part of a discussion on an
everyday basis of what the heck is going on. And the same is
true with the Department of Justice and other areas.
Mr. Washburn. No, it is true. Energy is an area where the
Energy Department actually has a lot of things going on, and so
what we have been endeavoring to do is try to meet very often
with them to know what are they funding, feasibility studies,
so that we know that we need to fund the permitting processes
once the feasibility study is done and that sort of thing. So
again, enormous coordination problems because we have a lot of
resources in the Federal Government but they are highly spread
out.
Mr. Scott. Ms. McCollum, I think the example you cited
presents both the challenges and opportunities. Clearly, with
different agencies doing different things, there is the
potential to be fragmentation and duplication of efforts. That
said, though, there is also an opportunity to enhance
collaboration across these agencies. I spoke earlier about this
idea of transforming the vision for Indian education in the
country. And I think having increased collaboration across the
various federal efforts would provide an opportunity to do
that. Short of that, though, you do run the risk of different
agencies doing different things and they may not be
complementary at times. So I do think it is important for there
to be some effort to look for opportunities to strengthen
collaboration across the various agencies.
Ms. McCollum. Well, Doctor, how good of a dance partner are
we?
Ms. Shotton. Fabulous. You know, that was exactly what I
was going to say. The fragmentation in terms of funding for
tribes and for native people, particularly around education, is
an issue. I mean the funding is coming from so many different
sources and you need all of those different agencies.
I think another concern that we have from our perspective
is the increased funding and increase and explosive growth of
bureaucracy. So the funding that is going to more
administrative costs is an issue that we are really concerned
about. And so I think that is also something that we have to
address when we are talking about some of these funding issues.
Mr. Simpson. Ms. Pingree, anything else?
Ms. Pingree. No, thank you.
Mr. Simpson. Do you have anything else, Tom?
Mr. Cole. No, I just thank you all.
FEDERAL TRUST RESPONSIBILITY
Mr. Simpson. Well, let me just conclude. Let me ask one
question. Might as well get a little provocative here. It says,
Dr. Shotton, in your written testimony you state, ``While DOD
budgets are often easy to justify for military purposes, it is
equally as important that Congress defends spending on native
populations to fulfill its trust responsibilities.'' In your
opinion, is the problem due to the fact that most Members do
not understand the trust responsibilities well enough to defend
it or do you see another reason here?
And for the record, could you explain what the trust
responsibilities are pertaining to Indian education?
Ms. Shotton. I think at the heart of that, Mr. Chairman, is
that, yes, too many people do not understand the trust
responsibility that the Federal Government has to tribes. As a
college professor, I run into this every day. It is not
something that we teach in our school systems. It is not
something that we teach in our history courses. And so many of
the students that I receive do not understand the role of the
Federal Government and the relationship and the sovereignty of
tribes and the role of the trust responsibility of the Federal
Government. And these are people that are going to go on to be
our future leaders. So absolutely, I think there is a real lack
of understanding of the trust responsibility.
So when we talk about explaining the trust responsibility,
the way that I explain it to my students in very simplified
terms is it is kind of like rent. The trust responsibility was
a promise to provide education, to provide healthcare, and for
the well-being of natives and native children when tribes ceded
lands to the Federal Government and those lands that now make
up the United States. And I think in speaking to this
subcommittee, I think everyone here understands that. But many
of our leaders do not understand the very basics of our trust
responsibility.
So essentially, it is that responsibility that is laid out
in many of our treaties for the Federal Government to provide
for the education, the well-being, and for healthcare of tribes
for the land that they ceded to the United States.
Mr. Simpson. Appreciate that. Go ahead.
Mr. Cole. Just for the record and probably inappropriately,
but the Chickasaws are more than willing to cede back every--if
we can just have northern Mississippi and parts of Alabama
back. We will call it even. All is forgiven.
Mr. Simpson. I knew that was a bad question to ask. No, I
often hear this. And there are excuses that are made all the
time for not doing what is our responsibility, not fulfilling
our responsibilities. And you hear more and more from people
who say, well, but they got all those casinos. They do not need
funding from the Federal Government anymore because they are
making money hand-over-fist, you know? And you go to some
reservations and some tribes are doing very well with casinos,
and others, it is not really a benefit.
It is something we need to be able to explain to more
Members of Congress so that they understand what our
responsibilities are and how we are doing in meeting those
responsibilities and what needs to go on to improve it.
But I appreciate all of you being here. This is a very
interesting subject for this subcommittee, and we will continue
to work on it.
COMMUNICATION BETWEEN BIE AND DASM
Mr. Scott, I look forward to your final report when you get
it out because there are some things that concern me. And we
talk about communication between federal agencies. As I was
reading this last night, it said, ``BIE officials reported
having difficulty obtaining timely updates from DASM on its
responsibilities to request for services from schools.
According to the BIE officials, they used to have regularly
scheduled meetings at DASM leadership to discuss operations,
but the meetings were discontinued in September 2012. BIE now
depends on ad hoc meetings to discuss issues requiring
resolution. As a result, BIE officials stated there is a
disjointed approach to serving schools.''
So it is not just between federal agencies. It is also
within the Department. And it is something that we want to help
you work on because all of us in this room, every member of
this committee, as well as you that testified, as well as
guests, all have the same goal here, and that is to provide the
best quality education that our Indian children deserve in this
country, as well as the other responsibilities we have. So we
look forward to working with you to address this.
Thank you for being here today. And again, welcome to the
new post.
Mr. Cole. Can I have one last question?
Mr. Simpson. Yes.
Mr. Cole. Now that you have read Mr. Scott's turnover
statistics, we have your guarantee you are going to stay here a
full year and get this job done for us?
Mr. Washburn. But I heard Dr. Shotton's testimony, and that
is a grave responsibility.
This committee's leadership has been incredible, and the
Administration does appreciate the incredible leadership of
this committee on Indian issues. Thank you.
Mr. Simpson. Thank you all very much.
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Wednesday, March 13, 2013.
WATER INFRASTRUCTURE FINANCING OVERSIGHT HEARING
WITNESSES
MIKE SHAPIRO, ENVIRONMENTAL PROTECTION AGENCY, OFFICE OF WATER, DEPUTY
ASSISTANT ADMINISTRATOR
ALFREDO GOMEZ, GOVERNMENT ACCOUNTABILITY OFFICE, DIRECTOR OF NATURAL
RESOURCES
AUREL ARNDT, GENERAL MANAGER, LEHIGH COUNTY AUTHORITY, ON BEHALF OF
AMERICAN WATER WORKS ASSOCIATION
BEN GRUMBLES, U.S. WATER ALLIANCE, PRESIDENT
HOWARD NEUKRUG, COMMISSIONER, PHILADELPHIA WATER DEPARTMENT, ON BEHALF
OF NATIONAL ASSOCIATION OF CLEAN WATER AGENCIES
JEFF STERBA, PRESIDENT, AMERICAN WATER, ON BEHALF OF NATIONAL
ASSOCIATION OF WATER COMPANIES
THAD WILSON, M3 CAPITAL PARTNERS, LLC, VICE PRESIDENT
Opening Remarks of Chairman Simpson
Mr. Simpson. Good morning, and welcome to today's hearing
on water infrastructure financing. We have a number of
witnesses on two panels, so I will keep my remarks brief so
that we may hear from everyone, and quickly move into question
and answer session, where I expect a robust discussion. I would
like to ask the members and witnesses to do the same thing.
The intent of today's hearing is to discuss what we on the
Appropriations Committee have appropriated to date to the Clean
Water and Drinking Water State Revolving Funds and current
balances in State Revolving Funds, and what that means for the
number of loans and projects funded annually. Today's
discussion is about how do we get from point A to point B, and
then where are we going, and from where we are to where we need
to be.
In 2010, the Congressional Budget Office analyzed public
spending on transportation and water infrastructure and found
that state and local governments account for about 75 percent
of the total public spending on transportation and
infrastructure, and the federal government accounts for only
about 25 percent. Since 1987, the first year of the Clean Water
Revolving Fund, the committee has appropriated a total of $52.3
billion to the SRFs. This includes last year's appropriation of
$2.38 billion for the Clean Water and Drinking Water State
Revolving Funds.
In 2002, EPA's GAP analysis identified a $533 billion
shortfall between the assessed need and the level of investment
over a 20-year period. EPA's most recent clean water needs
assessment in 2007, and most recent drinking water needs
assessment in 2008, identified a combined $633 billion in
infrastructure needs through 2028. And that need is only
certain to grow as population pressures increase, as chemical
and other contaminants infiltrate, and as infrastructure
continues to age.
This is a nationwide issue that creates very real local
challenges. States and cities are reviewing their budgets and
trying to find ways to pay for these infrastructure projects to
ensure a clean and safe drinking water supply for their
residents, while also maintaining critical services. Meanwhile,
rate payers cannot afford to see their water bills increase
when struggling to make ends meet with their mortgages and
higher food and gas prices.
At the federal level, if SRF funding is maintained at the
fiscal year 2012 mark, we would not meet identified needs using
federal funds for more than 250 years. That is 250 years.
Mr. Moran. Repeat that sentence once more, Mr. Chairman.
Mr. Simpson. At the federal level, if SRF funding is
maintained at the fiscal year 2012 mark, we would not meet the
identified means using federal funds for more than 250 years.
Mr. Moran. I do not know about you, but I may not be
around.
Mr. Simpson. I plan on being around. I plan on seeing that
happen, at the same time I see us finishing our appropriation
bills by October 1.
Mr. Moran. And living on the Moon.
Mr. Simpson. At the same time we have a massive federal
debt of more than $16 trillion, which demands that we reduce
federal spending. So we, too, face tough choices.
Some argue that one cannot find solutions using the options
currently available to us, and most agree that there is not one
single approach that will serve as a ``magic bullet''.
Therefore, we need some out-of-the-box thinking, and all
options need to be on the table.
We also need to be thinking about how to use existing funds
and infrastructure more efficiently. The Congressional Budget
Office estimates that many urban drinking water systems lose 20
percent of their water through pipe leakage. The American
Society of Civil Engineers estimates the resulting loss of 7
billion gallons of drinking water per day. Further, EPA
estimates that there are at least 240,000 water main breaks
each year in the United States. In the Washington DC area,
there were 2,211 breaks last year, which was the lowest level
in the past 6 years. So we have significant challenges to
address both for capital infrastructure and for the operations
and maintenance. And I reiterate that I hope that we can
collectively bring some innovative thinking to the discussion
today.
EPA serves as the federal manager for the SRF funds. The
GAO has analyzed various infrastructure financing options and
implementation challenges from a nationwide perspective. We
appreciate and look forward to the testimony. We then have a
second panel of witnesses that represent national, county, and
city levels that have been thinking about both federal and non-
federal investment opportunities and other innovative
approaches to paying for water infrastructure projects. We
appreciate the expertise that they bring to bear along with
their respective policy and legislative ideas for members of
this subcommittee to consider.
Mr. Simpson. Mr. Moran, do you have any opening statement?
Opening Remarks of Congressman Moran
Mr. Moran. Yes, I do, Mr. Chairman, and I want to tell you
in advance, I have got to go to two more hearings where I am
giving testimony, but I want you to carry this on. This is an
oversight hearing, and so it is preferably appropriate for only
one--oh, you have got Mr. Serrano just in time. So Mr. Serrano
will represent our side.
Having said that, I do not think there really is one side
or the other, and that is one of the reasons for this hearing.
Because while we may differ to some extent on the way to get
there, I think we both agree on the objective of making our
water cleaner and safer for everyone, and making the investment
that is necessary in the infrastructure to bring that about.
I want to welcome Mr. Shapiro, who is head of the Office of
Water at EPA, and Mr. Gomez from the GAO, the director of its
Natural Resources Division, and the other panelists that will
be joining us on the second panel.
This subcommittee's jurisdiction does include the federal
government's two main programs for financing drinking water and
wastewater infrastructure. The Drinking Water and Clean Water
State Revolving Funds combined totaled almost $2.5 billion in
fiscal year 2012. It was 28 percent of EPA's total
appropriation. I want to say, Mr. Chairman, that the Senate
appropriations mark yesterday of these programs was very
disappointing, and in my view, irresponsible. As difficult as
it was to make the cuts that this subcommittee did, we made
them in as responsible a way as possible, but the
appropriations for EPA and the Interior appropriations bill
itself is significantly above the Senate mark, and for that, I
am very disappointed and I think the Senate, at least in that
respect, did a disservice to the public in terms of water
safety particularly.
But given the fiscal environment of austerity in the
Congress, it will be even more difficult for us in the future
to adequately fund State Revolving Funds. This is just the
first year of the implementation of the Budget Control Act. We
have got another 9 years to go, and the sequester is not going
away, nor do I think the reduced levels of funding will go
away, and they will be reflected in the fiscal year 2014
budget.
So that is why this hearing is ever more important, because
I think that the fiscal cliff deal, as it was called, is also
irresponsible on the part of the Administration to accept 82
percent of budget cuts that were all deficit financed, and not
to resolve the sequester and the debt ceiling at the time. But
there was a Minority that felt that way. But now we are dealing
with the repercussions of that. I also think we need to address
entitlement programs, because if we do not, there will be no
money for any discretionary programs.
But that is why this hearing is so important to not only
discuss whether there is an adequate level of federal
investment, but how much investment is needed in terms of
public and private sector investment. EPA surveys, as you said,
Mr. Chairman, indicate that we need about $635 billion over the
next 20 years. Between the 2009 Recovery Act and the fiscal
year 2009 and 2010 Interior appropriations bills, we provided
about $13 billion for State Revolving Funds. Now, they may have
been historic levels, but they were grossly inadequate levels
of funding, leaving a $500 billion funding gap that was
reported by EPA back in 2000, and that EPA recognizes and that
this country should recognize.
I do support your efforts, Mr. Chairman, to look at the
alternative financing, and we are going to hear about that
today from experts who know more than we do, and we need their
expertise and insight. But I do think that public-private
partnerships, which have been around for years, are still
underused by municipalities, and when they cannot turn to the
State Revolving Fund anymore because of the reduction in
federal funding, I think they are going to have to turn to
other more innovative ways of funding needed infrastructure. We
are going to hear why they have not done that today, I am sure,
particularly from the second panel.
I think the idea of a national infrastructure bank, and
taxing bottled water--both of those ideas, I think, have some
merit to meet the need, but the concourse is unsustainable. One
of the problems is that we are spending billions on the back
end to correct what is happening on the front end. At one
point, it was thought if you just let all this fertilizer and
stuff go into the water that dilution is the solution to
pollution, people thought. Well, hardly. That stuff washes down
the Potomac, it gets into the Chesapeake Bay, to use a local
example, and then it puts the plant life on steroids and when
it decomposes, sucks all the oxygen out of the water so nothing
else can live. You have only to look at the District of
Columbia to highlight our Nation's water ills. I mean, that is
where we spend most of our time, Members of Congress and the
federal government, and yet, this highlights the problem.
Everybody wants to have clean water. It is 75 percent of
our bodies, but are we willing to pay to stop the sewer
overflow after rainfalls from going into the Chesapeake Bay?
DC's Clean Rivers Project would cost $2.6 billion, and The
Brookings Institution indicated that rate payers are not able
or willing to pay that, and that is just a typical case of many
urban, suburban, and rural communities. So how do you finance
these needed improvements without having sufficient support
from rate payers. In fact, there is good reason why they could
not support the kind of increases in rates that would be
necessary.
Now we have this tradition of providing a quote that
sometimes is relevant. There is a guy by the name of Fuller,
Thomas Fuller. He was 17th century--and I am sure Tom Cole has
read him extensively--but he said, ``We never know the worth of
water until the well is dry.'' There is another one that I will
offer for you all's benefit, Mr. Chairman, which takes a
somewhat lighter approach. W.C. Fields said, ``You really can't
trust water because even a straight stick turns crooked in
it.'' So I am not sure what the relevance of that is, other
than it is talking about water, but when the staff finds it, I
have to use it. So yes, a stick turns crooked in water, and so
W.C. Fields thought that you cannot trust it--it was not meant
to be particularly deep.
With that, we can get to the hearing, Mr. Chairman. Again,
I appreciate you having the hearing. I am going to have to
leave in a few minutes, but thanks a lot for having such an
important hearing.
Mr. Simpson. Thank you, Mr. Moran.
I would like to ask that Mike Shapiro from the EPA,
followed by Alfred Gomez from GAO, to offer their testimony,
and we will expeditiously move into questions for this session.
Mike.
Opening Remarks of Mr. Mike Shapiro
Mr. Shapiro. Chairman Simpson, Ranking Member Moran, and
members of the subcommittee, thank you for the opportunity to
appear before you today to discuss the state of the Nation's
drinking water and wastewater infrastructure, as well as the
accomplishments of the Nation's primary sources of low-cost
infrastructure financing, the Clean Water and Drinking Water
State Revolving Loan Fund Programs. I have a longer statement
that I have submitted for the record. I will give you a summary
here.
Clean water and safe drinking water contribute to our
public health and to the welfare and economic well-being of our
families and communities. We have come a long way in improving
protection for public health, water quality, and the
environment under the Clean Water Act and the Safe Drinking
Water Act. Our Nation's drinking water meets standards as
protective as any in the world, and we have improved water
quality and increased public health protection in streams,
lakes, bays, and other waters nationwide.
We have achieved this progress in large measure through our
ability to construct and maintain a robust infrastructure for
the provision of drinking water and collection and treatment of
wastewater. Nevertheless, major challenges lie ahead. Our
Nation needs significant water and wastewater infrastructure
investment. According to the EPA surveys, America needs $300
billion in wastewater and $335 billion in drinking water
infrastructure improvements over the next 20 years. These
resources are needed to address challenges which include
repairing and replacing aging facilities, managing increased
demand from population growth, reducing nutrient pollution,
controlling pollution from stormwater runoff, controlling
pathogens, and dealing with the challenges of improving
infrastructure, security, and resilience.
Two of the Nation's most important sources of water
infrastructure financing are the Clean Water and Drinking Water
State Revolving Loan Fund Programs, the SRFs. These programs
are low-interest loan programs that give states flexibility in
financing projects. The EPA provides capitalization grants to
the state SRF programs. States contribute an additional 20
percent of what EPA provides, and they are required to make
loans at below market rates. This results in a substantial
interest savings for communities, typically providing the
equivalent to a grant covering approximately 20 percent of the
cost of the project.
One of the most important features of the SRFs is that
repayments are recycled back into the program to provide an
ongoing funding source for additional water projects.
Additionally, states have the ability to leverage federal grant
awards through the sale of bonds. Twenty-eight clean water SRF
programs and 22 drinking water SRF programs have leveraged by
issuing bonds.
The SRFs fund projects based on each state's assessment of
greatest need, which often includes small systems and those
serving disadvantaged communities. In other words, systems that
have few options for financing infrastructure improvements.
In 2012, the SRF provided $7.7 billion in funding to more
than 2,600 communities across the country. Total funding
contributed by federal appropriations and by states over the
life of the two programs is closing in on $120 billion, with
only $52.6 billion of these funds having come from federal
appropriations.
Under the drinking water SRF authorization, states were
given the authority to use a portion of their capitalization
grants for additional subsidization in the form of principal
forgiveness or grants. Similar authority has been available
under the Clean Water SRF program since the passage of the
American Recovery and Reinvestment Act, ARRA. This valuable
authority has allowed states to provide critical resources to
our most-needed communities that could not afford SRF loans,
even at subsidized rates.
Another important feature of the SRF programs is the Green
Project Reserve, first introduced under ARRA, which helps
utilities function in more environmentally sound ways. One of
the benefits of the Green Project Reserve is the increase in
funding and visibility for green infrastructure. Green
infrastructure techniques utilize natural systems or engineered
systems that mimic natural landscapes to capture, cleanse, and
reduce discharges using plants, soils, and microbes.
As Representative Moran pointed out, investment alone is
not sufficient in managing our infrastructure. In addition, we
need to plan those investments and operate them in ways that
are sustainable, and a lot of EPA's efforts in supporting our
infrastructure programs over the last several years has focused
on developing tools, techniques, and sharing best practices so
that the money that we invest is used as wisely and sustainably
as possible.
In conclusion, the SRF programs are clearly focused on
actions and funding to achieve compliance with environmental
and public health standards, but are confronted with
significant challenges. Addressing these challenges will take
effort from the EPA, states, communities, and other partners,
and will require us to use more innovative and sustainable
tools to solve significant challenges.
We look forward to working with members of the
subcommittee, our federal and state colleagues, and our many
partners, stakeholders, and citizens to continue progress in
providing safe and clean water for all Americans. Thank you
again for inviting me to testify, and I will be happy to
respond to any questions.
[The statement of Mike Shapiro follows:]
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Mr. Simpson. Thank you, Mike. Alfredo.
Opening Remarks of Mr. Alfredo Gomez
Mr. Gomez. Mr. Chairman, Ranking Member Moran, and members
of the subcommittee, good morning. I am pleased to be here
today to discuss the infrastructure needs facing the Nation's
drinking and wastewater systems.
The U.S. faces costly upgrades to aging water
infrastructure. The most visible signs of this problem are
frequent sewer overflows into rivers and streams, and as noted
earlier, water main breaks in the Nation's largest cities.
Several approaches have been proposed to help bridge the gap
between projected infrastructure needs and current funding. My
statement today summarizes the results of our reports on these
approaches. I will focus on three main areas: EPA's Clean Water
and Drinking Water State Revolving Fund Programs--the SRF
programs, stakeholder views on three alternative financing
approaches, and three, issues in financing drinking water and
wastewater infrastructure.
First, EPA's SRF programs are the largest sources of
financing. EPA uses federal appropriations to provide grants to
states, which in turn provide low or no interest loans to local
communities or utilities to pay for water infrastructure.
Second, to better understand the three alternative
approaches, we surveyed industry and government stakeholders.
So the first approach is a clean water trust fund, which would
provide a dedicated source of funding for wastewater projects.
Stakeholders identified key issues that would need to be
addressed, such as how a trust fund would be administered and
used, what type of financial assistance should be provided, and
what activities should be eligible to receive funding. A
majority of stakeholders said that a trust fund should be
administered through EPA in partnership with the states, but
they differed on how a trust fund should be used.
Another approach mentioned earlier, a national
infrastructure bank, would use public and/or private funds to
finance infrastructure projects through a variety of loans,
loan guarantees, and other mechanisms. A majority of
stakeholders that we interviewed supporting creating such a
bank, but also identified several issues that should be
considered. These are the bank's mission and administrative
structure, its financing authorities, and project eligibility.
The last approach is public-private partnerships that
involve private investment and infrastructure projects. We
identified seven municipalities that had entered into these
partnerships for wastewater projects. For example, the city of
Santa Paula, California, entered into a contract with a private
company to design, build, finance, and operate a wastewater
treatment facility. Stakeholders identified advantages for all
of the partnerships that we reviewed, such as having access to
other sources of financing. They also identified challenges,
such as dealing with local opposition that may arise from
concerns about private companies not being as responsive.
A third area that we focused on deals with efficiently
financing water infrastructure. So as the Nation faces limited
budgets, it is important to target federal funds to communities
with the greatest need, such as those that are economically
disadvantaged. EPA's IG and GAO found that EPA has limited
information about how states target these communities for
funding. A recent report on rural water infrastructure found
inefficiencies when state-level programs did not cooperate in
funding projects. Officials from two USDA state offices had to
deobligate more than $20 million that they had committed to
projects because they were not aware that the state SRF
programs had committed to fully fund the same projects.
Also, our past work highlights the importance of asset
management tools to help utilities manage existing and future
assets more efficiently and effectively. EPA has implemented
our recommendations to improve its promotion of asset
management to utilities; however, it is up to utilities to use
these tools and we have not assessed the extent to which they
now do.
In summary, the funding needs for upgrading the Nation's
water infrastructure require attention. In considering the
various funding approaches, it is helpful to consider how an
entity will be administered and funded, how we will finance
projects, and what projects will be eligible. It would also be
important to consider how to target funds to those with the
greatest needs and to spend funds efficiently.
Mr. Chairman, this completes my statement. I would be
pleased to respond to any questions.
[The statement of Alfredo Gomez follows:]
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CLEAN WATER INFRASTRUCTURE FUNDING BACKLOG
Mr. Simpson. Thank you, both of you, for your testimony.
This is a really perplexing problem that we face. In fact,
I think it is one of the great challenges that we face, not
only water infrastructure systems, but infrastructure in
general, and a lot of these systems are meeting their lifespan.
The concern I have is two-fold. One is being able to
address this overwhelming need when you look at, what did you
say, $635 billion in clean water and safe drinking water needs
assessment out there, and the fact, as I said in my opening
statement, we are putting $2 to $3 billion in there every year,
and we can address this in about 250 years. And if nothing gets
worse over 250 years, then we will have fixed it in 250 years.
I do not think anybody thinks that is realistic.
So on the one hand, what we are appropriating is not
meeting the needs to address the backlog and keep up with this
infrastructure. Secondly, in an environment of reduced budgets,
there is more and more pressure being placed on every aspect of
our budget. We are financing now with appropriated dollars
going into the revolving loan funds. It puts pressure on all
the rest of the budget. So we do not do an adequate job there,
and we do not do an adequate job of addressing the problem.
And what I have been frustrated with over the years is how
do we get out of that? You mentioned several different types of
alternative financing, whether it is the trust fund such as, I
suspect, the highway system uses, or a national infrastructure
bank, which was discussed for a number of years when Chairman
Oberstar was chairman of the Transportation Committee, or the
public-private partnership arrangements. But certainly,
Congress needs to take up some way to create a way of financing
these systems for the future. I do not have the answer for it,
obviously.
I think Earl Blumenauer and I introduced a bill a couple of
years ago that essentially created a trust fund. The question
is, what do you tax? With the highway trust fund, we can tax
gasoline or something that is pretty easy to do. Trying to
address it by creating a tax on clean water is a little more
difficult. So we looked at the industries that benefit the most
by having clean water, things like that, and having some tax
revenue from them going into a trust fund. But it is one of the
challenges that I think Congress faces in general.
You mentioned that we have spent, since the life of the
program, $120 billion, us and local units of government, all
together.
Mr. Shapiro. That was the total outlay. The $120 billion is
total outlays from the State Revolving Fund Programs, so that
includes the federal capitalization money, the 20 percent state
match, any of the funds that are recycled into the system
through repayments, as well as, in some cases, some interest
that accrues as states manage the resources in their funds. So
it really emphasizes the power of leveraging the dollar through
the recycling of those dollars back into the funds as loans are
paid off.
In addition, though, you very correctly point out that in
many cases, especially in larger projects, there are other
sources of funding that support infrastructure, municipal bonds
being a principal resource, and that would be in addition to
the $120 billion.
Mr. Simpson. As I read the history of all of this, when
they created the State Revolving Loan Funds, I get the
impression that the idea was at the time that we would put
these resources into it as kind of seed money to start these
revolving loan funds, and that you would build up enough in
these revolving loan funds that eventually the federal
government would not be putting any more money into them, that
they would be self-sustaining with the revenue coming back in
to fund other projects and so forth. Was that the idea behind
the revolving loan funds, and if so, how much is the federal
government going to put into it?
Mr. Shapiro. Well, I think conceptually, and I was not
around when these provisions----
Mr. Simpson. That is why I said reading the history of it.
Mr. Shapiro. But I think the idea was that they would, over
time as the funds build up, you would decrease perhaps the
relative need for federal dollars. I do not know whether the
thought was ever that they would come to absolute zero. I think
there are a couple of, you know, issues that we have to address
first as deciding ultimately what the right level would be for
revolving funds, and then even in the situation where we reach
that level, there are certain uses of the funds that would
deplete the base over time. If states want to continue to
provide low-interest loans, which is the key, there is going to
be some erosion. Set-asides for grant or loan forgiveness,
which is very important to many of the poorer income
communities, would reduce the size of the funds in the systems.
So if we are talking about achieving some stable level of
funding over time, there will always be some erosion that one
would have to attend to, but again, there is a significant
public policy question over what level is the right level.
And just to sort of clarify one point you made, although it
is easy to compare the $600 billion-plus in total needs over 20
years, with the small annual federal appropriation, as I
mentioned, in the most recent year there was about $7.7 billion
of outlays, and so if you multiply that over 20 years, it is
very simplistic, but you see that the funds, the revolving
funds can address a significant, not maybe the majority, but a
very significant percentage of total projected cost. It is a
testament, I think, to the design of those funds and their
management by the states that they are providing such an
important resource.
And just one other point, because of the different history
of when the funds began and how much capital they have
accumulated over time through annual appropriations, you really
have to look at the clean water funds and the drinking water
funds a little bit differently, since their capitalization is
much different. The clean water fund has had more time and more
money.
Mr. Simpson. But as you say, $7.7 billion was invested in
this over last year, and if you look over the next 20 years if
the same rate of investment went on, you are talking about $150
billion, somewhere in that neighborhood. Over the next 20
years, what do you anticipate, or do you anticipate that
backlog need would have grown? Would it have grown more than
the $150 billion we invested?
Mr. Shapiro. Well as I said, our current 20-year surveys
suggest that the need we can account for is about $636 billion.
Now, there are good reasons, and many people will probably
proffer additional ones, why those numbers could well be low.
They only account for projects that are fairly certain in terms
of our ability to survey, so once you get out beyond 5 years,
it is harder and harder to get accurate estimates, and I think
a lot of people believe, for that reason, that those might be
underestimates of the actual ultimate 20-year need.
Mr. Simpson. Do we have any idea on what the growth rate of
that needs assessment has been? When is the last time we did
the GAP analysis?
Mr. Shapiro. Well, there are two different things. The
surveys take place roughly every 4 years. The results that I
cited were from reports generated in 2008 and 2009. We have new
survey results from the drinking water survey that should be
coming out this year, and we have another round of survey
information that will be coming out under the clean water
survey in the near future. The GAP analysis that people
referred to was one that was developed, I think, in 2002 and is
based on a separate set of information and analyses. We have
not repeated that GAP analysis.
Mr. Simpson. When I was reading kind of the history of
this, the first GAP analysis that was done--I do not know if it
was a GAP analysis or if it was the 4-year survey that went
on--by the time the next one was done, the need had grown by
about $100 billion, in spite of the investment that was made
over that time between the surveys. So I guess the question is,
is while we can say we are going to put $150 billion into it
totally over the next 20 years, if the need assessment is going
to grow by $200 billion, we are losing ground.
Mr. Shapiro. There is no question that certainly if you
compare the most recent survey information that I cited with
the previous survey, there was a significant increase in needs
reported, and that, you know, we will have to see what the
results of the next cycle are. But needs have been growing,
that is correct.
ASSET MANAGEMENT
Mr. Simpson. Are there ways to reduce the cost of the
infrastructure building that we are doing, and what are those
and what are the new technologies and so forth that are being
used to reduce the cost of what these systems cost?
Mr. Shapiro. Well, as GAO has pointed out, managing assets
more efficiently and effectively should help reduce the total
costs needed to provide good service.
Mr. Simpson. What do you mean by managing assets more
efficiently?
Mr. Shapiro. Replacing pipes that are wearing out at the
right time before they break and destroy streets, managing the
replacement of infrastructure so that you are replacing it as
it is needed in an effective way as opposed to either too early
or too late, by doing a good job of cataloging and inventorying
the assets in place, and a good process of auditing and
updating the information so that you have a better sense of
where the investments are needed more effectively.
Another tool that we think will have growing importance is,
especially in dealing with the expenses associated with
managing stormwater and combined sewer overflows, is the use of
green infrastructure, as I mentioned, more natural approaches
to using green space and infrastructure that deals more
naturally with the flow of water to reduce the size of the gray
infrastructure, the holding tanks, the storage facilities, that
might be needed to deal with surge capacities associated with
storms. That should reduce costs. So there are a number of
tools that we have at our disposal to help mitigate some of the
cost increases, and a lot of it comes down to being smart about
using the best tools that are available, and smart about using
and planning for a sustainable approach to asset management.
Mr. Gomez. Mr. Chairman, if I could provide an example
here.
So in the work that we did looking at asset management, we
talked to a lot of utilities and reported benefits from using
asset management. For example, the improved decision making
that they had about their capital assets, such as getting
better understanding of maintenance as was mentioned,
rehabilitation, and replacement needs. So for example, we heard
the Seattle Public Utilities used asset management to target
its maintenance resource. In particular, they used a risk-based
approach to target pipeline repairs. So for example, they were
looking at the age of the pipes, they were looking at the
material, they were looking at the proximity to historic
landfill, street slopes, to calculate the risk of ruptures.
And so using that information, they were able to identify
15 percent of the pipes that were at high risk of rupture, and
they were able to focus and repair those. So it allows them to
get a good sense of their inventory, what the condition of that
inventory is, and then focus their dollars on it.
Mr. Simpson. Years ago when I sat on city council, I can
remember we sent some of those monitors down some of our
wastewater lines and water lines and all of that kind of stuff,
and I was surprised to see that they were made of brick, a lot
of them. And Idaho is a relatively new state compared to a lot
of them. But tree roots had grown in and all of that type of
thing. And we then went to steel and so forth. Are there other
types of materials that could hopefully address this problem
that would be cheaper or last longer or anything like that?
Mr. Gomez. Not that we have discussed, but it is possible
from your second panel that folks may have some ideas about
newest technology. We also learned from using asset management
that it provided for a more productive relationship with the
governing authorities, rate payers, and others. So for example,
the Louisville Water Company was able to use asset information
to convince its governing board that it needed to increase
rates because they would not be able to cover the expected
costs. So I think it gives utilities the information that they
need to make those cases to either increase rates or to focus
attention on those areas that need it most.
Mr. Shapiro. And as I understand, there has been continual
improvement in the materials that are used for the underground
infrastructure to improve their strength and durability. There
has also been some real progress made in what is so-called in
situ approaches to relining or even fully replacing pipes
without having to dig up the city streets and incur the huge
costs and disruptions associated with that. So industry has
been responding, I think, creatively in figuring out how to do
these jobs better and more efficiently.
REGULATORY COSTS
Mr. Simpson. Last question. Do you know what the cost of--I
want to say the cost of regulation, but all of it is due to
regulation, I suspect, of some sort of another. But as that gap
or that needs assessment grows, how much of that is growth
because of increased regulations of new findings or new
chemicals or the like? I think specifically if we lowered the
arsenic standards to what is it, 10 parts per billion now, and
we lowered that from 50 parts per billion, which put increased
pressure on small communities particularly to reduce that
arsenic level, which has cost them an awful lot of money. Do we
know the extent of the cost of the regulations?
Mr. Shapiro. I do not have the information right in front
of me, but our needs surveys do provide some estimates
associated with costs incurred to meet regulations. But I would
also have to say that typically those are not the majority of
the costs that we are dealing with. The basic provision of, you
know, the infrastructure in the case of drinking water to treat
it to a point where it meets basic standards, get it
distributed to residences or businesses, and the maintenance
and continued upgrading of that is a large share of the total
cost, and likewise in wastewater. The basic infrastructure for
collecting and providing basic treatment is also a substantial
cost.
There is no doubt that as we identify important health-
related reasons to lower our standards or to regulate materials
that have not previously been regulated, there typically are
additional costs, which we evaluate in the course of the
rulemaking and try to be as accurate as possible in
forecasting.
Mr. Gomez. Mr. Chairman, I just wanted to add to that
point.
So in our work, we did not focus on that particular issue,
linking it to the regulations; however, what we did find,
though, is that a good amount of that cost is due to the aging
and deterioration of the infrastructure.
Mr. Simpson. I just found out that the EPA and the states
arrived at an estimate of $52 billion in regulatory costs
versus the $282 billion in non-regulatory costs.
Mr. Serrano.
DISASTER RELIEF
Mr. Serrano. Thank you, Mr. Chairman. I had a couple of
questions myself, and then I inherited Mr. Moran's binder, so I
will mix and match here, Mr. Chairman, and you tell me when my
time is up, so I will try to do the best I can here.
Let me ask you a question that I had in two parts. The
first part is the waterways and shorelines of my region in New
York that were severely impacted by Hurricane Sandy. Rebuilding
efforts are just getting underway and it is important that we
do it in the smartest and most cost-effective way possible.
Could you both speak about the ways in which the restoration
and rebuilding from Hurricane Sandy is an opportunity to use
green infrastructure projects, not just to filter and cleanse
runoff but also to protect and secure communities against
future storms.
And the second part is what role do you folks play in a
situation like that? Is it like FEMA where FEMA comes in and
gets involved, or do you wait for the municipality to call you?
We have had 9/11--New York years ago went through something
that it never thought it would see, and we always saw graphics
on TV about these kinds of storms but never saw them upfront.
So now it is the issue of water and not just for the beaches
but the water for drinking. So number one, or number two, you
go in, what is happening, and what is the best way to deal with
this as we rebuild?
Mr. Shapiro. Well, I will answer number two first and then
I will go back to number one. But EPA has a significant role as
part of the overall plan for any emergency response situation.
We are a member of the team and are typically called upon in
situations which almost always occur in hurricanes, other kinds
of natural disasters where there may be releases of pollutants
or toxic chemicals. My own office, the Office of Water, works
very closely with our emergency response colleagues at EPA as
well as FEMA and other federal, Corps of Engineers in looking
at issues of infrastructure damage and assessing responses that
are needed either during the course of the emergency or in the
recovery period that follows.
So again, our exact role varies from emergency to emergency
but in the case of Hurricane Sandy, we had EPA staff deployed
to the federal response centers in New Jersey and New York to
deal with a number of issues, among them assisting in assessing
the availability and damage to water and wastewater
infrastructure, so that is a very important part of our role.
In the case of Hurricane Sandy, we have really been
involved much more intensively in the recovery efforts than we
have in the past, and as you know, Congress in its
appropriations for recovery from Hurricane Sandy appropriated
$600 million through the revolving loan programs to assist, and
this is really unique, to assist not in the reconstruction of
water and wastewater facilities that were damaged, because FEMA
has resources to do most of that, but actually to look beyond,
you know, kind of simply building the same things that were
there before but rather enhancing as appropriate facilities and
the infrastructure in ways that make them safer against
hurricanes and flooding and other natural disasters and
increase their resilience in the event that there is another--
which there will be inevitably--another major hurricane or
other natural disaster. So we are working closely with the
states to figure out how to implement that unique piece of
legislation through the revolving fund programs, and we hope,
and the plan really is to integrate various federal resources
so that our money gets used in a way that is appropriate but
complements resources that would be available from FEMA as well
as HUD in community development block grants, for example, that
are being made available.
Mr. Simpson. Will the gentleman yield?
Mr. Serrano. Sure.
Mr. Simpson. So let me get this straight. FEMA pays for the
construction, if you will, that was done by the hurricane to
wastewater and water treatment facilities?
Mr. Shapiro. FEMA has the authority to pay for restoring
facilities that have been damaged, you know, once there is a
natural disaster declaration, and the resources have been made
available through the Hurricane Sandy appropriations to fund a
substantial portion of that work. My understanding is, now they
are in the process of assessing the damages and coming up with
appropriate estimates. I am sorry. Should I continue?
Mr. Serrano. Sure.
GREEN INFRASTRUCTURE
Mr. Shapiro. So that moves into green infrastructure, and
we are very much hoping that we will be able to work with the
states and through EPA's regional office as well as with other
federal agencies so that the restoration activities that take
place do provide a model for the use of approaches, green
infrastructure and other complementary approaches, that enhance
the resilience and protect the facilities in a more effective
way than we were able to do in the past, so as my testimony
points out, green infrastructure allows us to use natural
features of the landscape as well as engineered structures like
porous pavement and green roofs to slow down the surge of
floodwater, to absorb it, to get part of it returned to the
groundwater, part of it is lost through evapotranspiration so
that there is less of a surge and a slug of pollutants that
occurs during the storm.
There are also aspects of green infrastructure such as use
of either engineered or natural wetlands that can aid in
resisting the surge of the ocean during a storm, absorb excess
runoff and absorb pollutants so in general, to accomplish both
the protection and resiliency goals in a way that is more
effective and also as a benefit often provides attractive green
space that enhances communities at the same time and deals with
some other problems like helping to clean the air. So it is not
a panacea for every problem but we see green infrastructure as
being a major component of our infrastructure vision for the
future.
Mr. Serrano. Mr. Gomez.
Mr. Gomez. So we have some upcoming work that is looking at
how states and locals and the federal government are adapting
to these kinds of events, and in particular we are looking at
how utility efforts are adapting to storm damage. Rebuilding is
a really good opportunity to see how you can better adapt to
these events, so it is an excellent opportunity for folks to
see what they can do to improve on the existing infrastructure.
In terms of how else GAO can help is, GAO usually is asked
to go in and look at the progress of the federal rebuilding
efforts, so we have done that in the past and that is something
where we could also see in this effort with Superstorm Sandy
how the federal effort is progressing.
Mr. Serrano. Well, I thank you both for a very thorough
answer.
When I first got involved in politics a long time ago in
the state assembly in New York, Mr. Chairman, water and so many
other issues were issues not related to New York City,
certainly not to the Bronx. Water was something that came
through the faucet and that was it. We thought meat came from
the supermarket. And then as you grow up and you understand
what is going on, you realize how important it is. What has
really changed is that, number one, people in crowded cities
have in the last generation, or at least 10, 15 years, and we
have done with the Bronx River, and the Bronx, as you know, Mr.
Chairman, just getting much more involved in using what is
around them for recreation and making very serious statements
about using that. And secondly, when you see a situation like
this, more and more the urban centers are dealing with water
issues, water availability and water pollution and so on and so
forth. Now, these issues bring us together. They are not issues
for someplace out West or in the South. They are also for the
urban centers. So I thank you.
CHESAPEAKE BAY RESTORATION
And Mr. Chairman, with your permission, I will ask one more
question from Mr. Moran's binder, because it affects us. Around
here, you always see New York bagels, New York pizza. That is
to tell you that they are selling a good product. In the Bronx,
we have Maryland crabs, because if you put Bronx crabs, it may
not go over that big, so we exploit our pizza and so on.
So the question, Mr. Shapiro, is, you know that the
Chesapeake Bay is on a ``pollution diet'' and our State of
Virginia along with Delaware, D.C., Maryland, New York, West
Virginia and Pennsylvania have to implement changes to reduce
pollution into the bay watersheds. How much of the pollution
problem in the bay is related to issues with wastewater
treatment? And as Mr. Moran mentioned in his statement, D.C.
needs to spend $2.6 billion to fix their combined sewer
overflow problem that affects the bay. So we have a total
figure for infrastructure needs to get the bay in compliance.
And before you answer that question, if there is any reporter
here, please do not get me in trouble in the Bronx. We do have
other things that we offer other than crabs.
Mr. Shapiro. Before I begin my response, I just want to
compliment the work that has been done on the Bronx River. I
think we really point to that as one of the models in the
country for how in an urban area communities have come together
around water and----
Mr. Serrano. You know, a beaver came back after 200 years
to New York City.
Mr. Shapiro. Did he stay?
Mr. Serrano. He stayed. Ask me the beaver's name.
Mr. Shapiro. What is the beaver's name?
Mr. Serrano. Jose.
Mr. Shapiro. I learned something. Thank you.
Getting on to the Chesapeake Bay, what we found in looking
at the sources of pollution in the bay that the large
wastewater treatment plants including Blue Plains but also
others in the urban areas of the bay are a substantial source
of nitrogen and phosphorus. The states at this point have
stepped forward and put together a comprehensive plan for
addressing the point sources, the wastewater treatment plants,
and significantly reducing their loads of both nitrogen and
phosphorus. At Blue Plains, the investments that are going on
there as well as in cities across the bay watershed, really are
testimonies to the willingness of communities to step up to
help address the problems in the bay. But the wastewater
treatment plants alone in managing their nutrients will not
solve the problems, and our pollution diet that you referred to
really calls for significant reductions from a variety of
sources including agricultural sources, which have been
contributing nutrients as well.
Mr. Serrano. Thank you, Mr. Chairman.
Ms. Herrera Beutler [presiding]. Madam Chair.
Mr. Serrano. Madam Chair.
Ms. Herrera Beutler. That will probably be the only time I
get to say that. It is pretty exciting.
Mr. Serrano. It comes sooner than you think.
CLEAN WATER ACT REGULATIONS
Ms. Herrera Beutler. Well, I guess I am the next to ask a
question.
There was a couple of thoughts I had as I have been
listening to this, and you have been sharing your comments
about the urban water challenges and how you are addressing
those. I come from a different situation in southwest
Washington State. On the west side of the state, we actually
get quite a bit of water, so much water that it is hard for us
to imagine not having it. And one of the challenges, as you are
talking about this and talking about the aging infrastructure,
I was thinking about in one of my counties, we have seven very
small cities and then a larger city. I do not know if you are
familiar with the Western Washington Stormwater Manual. It is a
step well beyond the Clean Water Act and what we have received
even from the EPA. We have asked, is this under Clean Water
what we are supposed to be doing, and we have had informal
confirmation that no, that is the state going beyond. And what
we are dealing with is, so I have got these small cities who
have this aging water infrastructure and would like to update
it, change it. And we have sewer needs just like everybody
else, but the stormwater fees that are being added to these
cities, these tremendous amounts of money have more to do with
meeting a new regulatory standard that is not getting us the
better, newer infrastructure. It is just more punitive in
nature.
So I was very interested in seeing--and the chairman asked
the question about regulation versus just updating maintenance
and doing what we need to do. Is there any way I could get some
specific information about our region or Washington State in
terms of the regulatory cost versus the aging infrastructure
and the maintenance? Because that seems to be more where you
all are focusing. Is that possible to get that information?
Mr. Shapiro. I do not know how much specific detail we have
in our surveys concerning just your part of the state because
they are surveys, especially on the Clean Water side. We can
check to see.
FUNDING ARRANGEMENTS
Ms. Herrera Beutler. I would be happy with statewide
information as well. We just have very different parts. I mean,
the west side is very different than the east side of the
state. I assume that you keep some sort of information on that.
Because that would allow us then to move into a place where we
can put money into the maintenance.
The other question I had, Mr. Gomez, your testimony was
talking about different approaches to financing this
infrastructure, one being some sort of a trust fund, a clean
water trust fund. Immediately I was thinking about some of the
infrastructure funds that we currently have--harbor maintenance
trust fund, highway trust fund--all good, important uses that
over the course of time and the wisdom of some have diluted
those uses. I do not know if that is the right way to say it,
but that money gets spread from its initial intended purpose.
Do you envision ways or safeguards we can put into place if we
were to create some sort of a trust fund that would
specifically target this money so that we are not 10 years from
now going back and saying well, this money was for--and yet we
are not meeting our infrastructure needs.
Mr. Gomez. Certainly. I mean, that was one of the issues
that we raised in our report with the trust funds, one of the
issues that stakeholders told us about is how are you going to
structure it, how are you going to set it up, what are you
going to finance. So it is all about how Congress sets it up. I
mean, with the trust fund, you have a dedicated source of
funding, but as we mentioned earlier too, I believe, the
chairman noted it, is the difficulty of getting those funds in.
You know, there are different various financing approaches that
we looked at for the trust fund and different taxes, you know,
taxes on bottled water, on pharmaceuticals, flushable items,
but you raise the key point about what areas do you focus on.
Some of the stakeholders said that it could complement, for
example, the Clean Water SRF. Others said that it should be
separate. So it all depends on how you structure it and how it
is administered, and that would be one of the key issues.
Mr. Simpson. Mr. Joyce.
Mr. Joyce. Thank you very much for being here today. Mr.
Shapiro, I would like to ask you a question in sort of maybe
follow-up to what our chairman was asking. You talked about the
American Recovery and Investment Act and that the states were
having authorities apportion their capitalization grants for
additional subsidization, that is, principle--you said loan
surplus. In these difficult economic times, do you think
allowing private utility companies to join in and use these
revolving funds that would be similar to the Safe Water and
Drinking SRFs would expand programs that otherwise might not be
expanded due to these tight times?
Mr. Shapiro. Well, actually, to be clear, again, there are
two funds. There is the Clean Water State Revolving Fund and
the Drinking Water State Revolving Fund. Under the Drinking
Water State Revolving Fund, privately owned community water
systems can access the SRF money through loans. Under the Clean
Water, they cannot. That is restricted to municipal wastewater
utilities. And again, Congress made different judgments
obviously. The Drinking Water Revolving Fund was created later
in 1996. The Clean Water Fund was created in 1988, I believe.
So some of that may reflect different perceptions about the
nature of drinking water versus wastewater responsibilities on
the part of government but the experience we have had under the
drinking water program is that good projects have been put
forward from both private and public utilities and each state
makes its own decisions about how to rank and select projects
but in general, both kinds of entities have been able to access
funds through that mechanism. Again, I think it is sort of a
public choice as to how you perceive the role of public sector
versus the private sector for providing these kinds of
infrastructure services.
Mr. Joyce. In follow-up to that question then, sir, you
said the previous one, that would be the 1988 Clean Water Act,
do you think that needs to be updated then to allow that to
occur?
Mr. Shapiro. I do not have a view on whether it needs to be
updated. I think if we want to provide the ability for the fund
to do that, it would clearly need a reauthorization, given the
way that the statute is currently structured.
Mr. Joyce. But the latter one is working so it might be
something to look into?
Mr. Shapiro. It might be something that you would consider.
Mr. Joyce. Thank you. I yield back.
Mr. Simpson. Let me ask one other question. Has the
Administration or the EPA--I guess they are the same--proposed
any form of financing this infrastructure differently along the
lines of what was proposed or what was suggested by the GAO,
whether it is an infrastructure bank or trust funds or
whatever?
Mr. Shapiro. As far as I know, there have been no
alternative proposals put forward by the Administration for
financing. I think we may have provided some technical
assistance on questions that were asked about some of the
different approaches and some of the legislative vehicles that
have been explored but the Administration has not taken a
position on any of them.
Mr. Gomez. Mr. Chairman, I just wanted to bring attention
to one of the alternative approaches that actually is being
used but not as often, and that is what we talked about earlier
in public-private partnerships, and so as I noted earlier, we
looked at seven. All of those seven involve private financing
so it is a private company that is coming in and investing
resources in a particular part of that infrastructure, and
generally it is through a lease agreement or some type of
contract. The communities do get an upfront payment, and so the
lease terms range anywhere from 20 to 35 years. We are not
really sure why it is not used as often. I think the last one
that we noted was used in 2008. All the others were back in the
1990s, whether it is the need for more education, but it is
another mechanism that is out there that communities could use.
Mr. Simpson. Sort of like a toll road. You mentioned during
your testimony some of the pros and cons or the concerns that
some people have about the public-private partnership. Of the
seven that you looked at, are they working well? Are people
happy with them? I know it is a hard standard to meet.
Mr. Gomez. Well, one of them we learned actually terminated
its contract because of difficulties that they were having but
the others as we know are working at this point. We have not
gone back to see. I believe this work we issued in 2010. But as
we know, we talk to the cities, we talk to the folks that are
doing these, and except for one that terminated, they are
working. We did note all of the challenges. You know, there
were some challenges in terms of things that people--there was
public and political opposition from rate increases. There is
also the issue of financing challenges, so because you have
public and private monies coming together, how do you deal with
tax exemption and IRS rules, so that was one of the challenges.
One of the municipalities talked about a loss of control, so
for example, once the lease is over, one of the communities
that had a facility built and designed was not as familiar with
the design and so they were just concerned that once the lease
expires they are going to have to take it over, and they were
not as comfortable at that point. So those are things that they
are working through.
RURAL COMMUNITY WATER INFRASTRUCTURE
Mr. Simpson. One of the other challenges we have in Idaho,
like many other states, there are a lot of small communities.
It is substantially probably more expensive per unit to deliver
clean water and wastewater treatment to a town of six or seven
or five or four or three thousand people than it is to a very
large community. Are these public-private partnerships mostly
in larger communities?
Mr. Gomez. I believe the ones that we looked at, it was a
mix. There were some smaller communities and----
Mr. Simpson. What do you mean by small?
Mr. Gomez. Well, usually the definition, I believe, is
under 10,000 people.
Mr. Simpson. I grew up in Idaho, and at the time, the
eighth largest city in Idaho was just under 10,000. That is a
challenge.
Mr. Serrano. I had 10,000 in my apartment building.
Mr. Simpson. Are there specific--within the SRFs and so
forth, are there ways to target some of these to smaller rural
communities? Because I find they have the--especially I dealt
with several of them trying to deal with the Arsenic Rule where
it just becomes cost prohibitive for them to do anything with
it. Do we target resources to some of the smaller rural
communities?
Mr. Shapiro. Well, I think there are two points.
Mr. Simpson. And when I talk about rural communities, I am
not talking about rural ones in New York.
Mr. Shapiro. Right. Many states do in fact target smaller
communities for technical assistance, especially under the Safe
Drinking Water Act and the revolving fund that supports that.
They can set aside resources to provide technical assistance to
help smaller communities figure out what might best meet their
needs. Often they have a lot of trouble getting to the point
where they can put forward a good, solid proposal because they
do not have the history and the in-house expertise to do the
preliminary work and figure out the best alternatives. So we
try to--the states try and we try to help through our efforts
these smaller communities getting access to information and
tools they need to plan, and then states in their priority-
setting process are able to select communities that have a
greater need for resources and often rural communities tend to
both have high per-capita costs of service, as you pointed out,
and in many cases are also not as wealthy as some of the larger
communities. So the states have the ability to use the loan
forgiveness provisions in both SRFs now to help those
communities as well as select through their prioritization
process preferences for communities that are more economically
disadvantaged and have less access to other sources of capital.
And our records show that--again, I have to use the 10,000
benchmark, but a substantial portion of the total SRF monies go
to communities or projects serving communities less than
10,000.
Mr. Gomez. So I just wanted to add to my comment earlier
about public-private partnerships. So from our table in my
statement, we do have Fairbanks, Alaska, which is probably over
10,000 people, probably a couple of apartment complexes. The
PPPs that we looked at, some of them were small communities,
and the reason being why they would look to these partnerships
is because they do not have the capacity to manage so they were
looking for others with that expertise, and that is one thing
that we also learned is these private companies do have the
expertise, they invest resources in research and development.
But another point that I wanted to make in terms of what is
out there for rural communities or these smaller communities,
and that is that both EPA, as Mr. Shapiro mentioned, provides
monies through the existing SRFs but also the U.S. Department
of Agriculture through their Rural Utility Service targets
communities under 10,000 people. So that is another area that
is out there. And we did do work looking at rural utilities.
And so we found that both EPA and USDA are working together
now, more to streamline the application process because,
historically, communities had to do two applications for these
grants but we want to make sure that it is just one grant
application so they do not do two engineering reports, two
environmental analyses; they can just do one. Because that is
an added cost to these utilities that we do not believe that
they have to do.
Mr. Simpson. Other questions for this panel? If not, we
thank you for your testimony.
Mr. Serrano. Mr. Chairman.
Mr. Simpson. Yes.
Mr. Serrano. If I may, Mr. Chairman, would it be possible,
with your permission, you know, that this subcommittee has been
better than any other subcommittee in dealing with the issue of
the territories, if they could at a later date report to us
just what involvement the agency has in the territories so that
we have a better understanding?
Mr. Simpson. I did look at that in the GAO report because
it also had the list of the needs in the territories. It also
had the list of the needs on Indian reservations throughout the
country and Alaska Native reservations. So we can get that for
you.
Mr. Serrano. Okay. Thank you, Mr. Chairman.
Mr. Simpson. You bet. Thank you very much. We appreciate
it.
The second panel is Mr. Aurel Arndt, General Manager of the
Lehigh County Authority in Pennsylvania. Mr. Arndt is
testifying on behalf of the American Water Works Association.
Ben Grumbles, the President of the U.S. Water Alliance. Howard
Neukrug, Commissioner for the Philadelphia Water Department.
Mr. Neukrug is testifying on behalf of the National Association
of Clean Water Agencies. Jeff Sterba, President of American
Water, New Jersey. Mr. Sterba is testifying on behalf of the
National Association of Water Companies. And Thad Wilson, Vice
President of M3 Capital Partners in Chicago. Welcome, and thank
you for being here today. Mr. Arndt, I guess we will start with
you.
Opening Remarks of Mr. Aurel Arndt
Mr. Arndt. Thank you, Mr. Chairman. Members of the
subcommittee, good morning.
I am here today representing the American Water Works
Association and its 50,000 members across the United States. I
am General Manager, as has been announced, of Lehigh County
Authority, which provides water and wastewater service in the
Lehigh Valley Region of Pennsylvania, which is about 40 to 50
miles north of our suburbs to the south in Philadelphia.
One of the roles that I played over the years is, I have
been a board member of the Pennsylvania Infrastructure
Investment Authority, which is Pennsylvania's SRF, also known
as PennVest, so I can bring you some perspective in that
regard.
My comments today are going to focus on three things. I am
going to talk a little bit about the water infrastructure
investment need, I am going to talk about some current tools
that we use to finance that infrastructure, and I am going to
also introduce a new tool that we are strongly supporting,
which we believe can help to enhance the pool of capital
available for water infrastructure. We have all heard about the
importance of water earlier here today, and not to diminish the
importance of public health protection, environmental
protection, public fire protection, but I think there are a
couple of key economic findings that are also important related
to water infrastructure.
The Department of Commerce has estimated that for every
dollar spent on water infrastructure, $2.62 is created in the
economy as a result of that investment. In addition, every job
in the water workforce actually creates 3.6 jobs in the
national workforce, so it has a significant multiplier effect
in the economy.
About a year ago, the American Water Works Association
produced a report which is called ``Buried No Longer:
Confronting America's Water Infrastructure Challenge.'' I
believe we have provided copies of that report to the
subcommittee. That report reveals that to restore our aging
infrastructure, the buried infrastructure, which is largely the
pipes, and to meet the needs of a growing population that we
will have to spend $1 trillion over the next 25 years, a
significant sum and certainly greater than the number that you
heard earlier. It is important to point out, as I mentioned,
that this is only our buried infrastructure. In addition to
that, we have our above-ground facilities, we have wastewater
facilities, we have stormwater facilities and other water
infrastructure which are at least as great as that. And to
determine the total magnitude of investment needs, you need to
add those two numbers to come up with the real scope of what is
in front of us.
The American Water Works has had a longstanding position
that water systems should be financed through customer rates
and self-sustaining through customer rates and charges. In that
way, the customers make much better use decisions in terms of
their water and wastewater usage, and in addition, communities
make better investment decisions. But the funds that are
available from those sources are sometimes inadequate. As an
example, many times it is difficult to finance large regional
or national-scale water infrastructure projects because of the
sheer magnitude of those numbers, and the current tools that we
have are not adequate to address those types of projects, among
others.
So the real question is, what tools do we need going
forward? And our association has supported the development of a
robust toolkit which includes a variety of different approaches
that can be used for financing that water infrastructure. Among
them, the current tools that we have available are the use of
tax-exempt bonds, Build America bonds, private activity bonds,
and the state revolving loan funds. I am not going to comment
on all of these. I believe some of our other panelists are
going to address some of those items. However, I do want to
point out that tax-exempt bonds are used by at least 70 percent
of the water utility systems across the country. The dependence
on that source of funding, which is the primary source of
capital to invest in our infrastructure, is critical and we
need to preserve that. We fully recognize that there are many
issues considering the economic circumstances that our country
faces including the issue of availability of tax-exempt bonds,
but we feel that any change to diminish the availability or
increase the cost related to tax-exempt bonds can only serve to
hurt our ability to finance that water infrastructure given
that dependency that we have based on current circumstances.
We also urge you to restore the full payment that was
promised by the federal government to issuers of Build America
bonds, which have been cut as a result of the sequester.
Ultimately, the result of that is that the available funding
for investment in our capital infrastructure is diminished by
that loss of revenue that was promised by the federal
government when those bonds were issued.
Mr. Simpson. If I could ask, how much was that loss of
revenue?
Mr. Arndt. I believe it is about 7 or 8 percent, and
potentially we have been told that could grow going forward.
Beyond those current tools, the American Water Works
Association has been advocating the creation of a new program
called WIFIA, the Water Infrastructure Finance and Innovation
Act, which is patterned after the highly regarded and
successful Transportation Infrastructure Finance and Innovation
Act, or TIFIA, as I am sure you know it. We believe that WIFIA
can fill a significant gap or void that exists in our financing
toolbox that we have available to us. As I mentioned earlier,
large projects typically are unable to tap into the state
revolving loan funds because a single project or perhaps a few
large projects could essentially deplete the total funding that
is available through many of the state SRFs, and they are
already--most of them are already oversubscribed.
I would like to talk a little bit about some of the
features of the WIFIA program as we foresee it. WIFIA would be
able to provide loan guarantees and other forms of credit
support to utility systems that are proposing to finance water
infrastructure, and the two types of recipients that this
concept envisions is that utilities sponsoring large projects,
and for purposes of beginning a dialog, we have suggested that
any utility sponsoring a project greater than $20 million would
be able to obtain direct funding from the WIFIA program. In
addition, the SRFs would be able to leverage their programs by
aggregating smaller loans from those smaller systems that you
spoke about earlier and aggregating those loans to a pool of
$20 million and be able to tap into the WIFIA program as well.
The way the program would work, again, very much like
TIFIA, is that the Treasury would provide the funding to the
WIFIA program. In turn, WIFIA would make the loan guarantees or
issue the credit support to either those large project sponsors
or to the SRFs, and in turn, the system recipients of those
loans or other credit support would pay fees and/or interest on
the loans, which money would be returned to WIFIA over a period
of time and then in turn WIFIA would return those funds to the
Treasury. In many ways, it is a self-liquidating program. There
is certainly an initial outlay but one that is repaid in the
future.
One of the most important features of the WIFIA program as
we see it is that it has minimal cost to the federal
government. Under the Federal Credit Reform Act, Congress needs
only to appropriate the subsidy cost or, if you will, the net
long-term cost of the program. For two reasons, this cost to
the federal government is actually very minimal. First of all,
as I mentioned a moment ago, the program is self-liquidating so
the funds out are repaid over a period of time, in many cases
with interest or with additional fees that are attached to the
financing. The second feature is that water debt in general has
one of the highest credit ratings and best credit histories of
all types of public indebtedness that is out there. Fitch
Rating Services, one of the three largest rating agencies,
determined a few years ago that the default rate on water
infrastructure financing is four-hundredths of a percent, and
this was done over several decades. So the likelihood of
receiving that full repayment back to the federal Treasury is
very, very strong.
In addition, the SRFs that exist around the country that
leverage their programs currently through the issuance of
additional bonds, there has been no history of default, so they
of course have, if you will, 1.000 batting average, and so
again, there is a great assurance of repayment of those funds.
Last session, last year, as a matter of fact,
Representative Bob Gibbs from Ohio circulated a draft of this
legislation for comment and review and actually conducted two
hearings in that regard approximately a year ago in February
and March of 2012. We urge Congress to enact Mr. Gibbs' draft
and move that tool forward so that water utilities will be able
to access this very important and useful tool to fill the gaps
that result from the existing tools that are out there and to
broaden the capabilities of the financing that we currently
have available.
In short, we believe WIFIA will allow our Nation to build
more infrastructure at less cost, and on top of that, we get a
cleaner environment, better public health and safety, and a
stronger economy.
I would like to thank the committee for this opportunity
again to appear before you. I would like to congratulate you on
your leadership on this issue, and I found the earlier round of
questions very intriguing, and you are certainly finding the
type of complex issues that we have been grappling with on a
day-to-day basis as water suppliers, and we look forward to
working with you to address those.
[The statement of Aurel Arndt follows:]
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Mr. Simpson. Mr. Grumbles.
Opening Remarks of Mr. Benjamin Grumbles
Mr. Grumbles. Thank you, Mr. Chairman and Congressman
Serrano, I really appreciate the opportunity to appear before
you. I am Ben Grumbles, President of the U.S. Water Alliance,
and I too want to commend you and Congressman Moran and the
staff for putting together a critically important hearing and
the great discussion so far this morning.
I think Governor Rendell said it, but he said that you
cannot sustain a world-class economy with a second-class
infrastructure system. The bottom line is that as much success
as we have had in building an enviable around-the-world, an
enviable water and wastewater infrastructure system, it is
showing signs of age. The needs are growing. The public funding
is decreasing, and I cannot think of a more important topic
today to talk about than shifting that paradigm from water
being invisible to invaluable, and finding some innovative and
collaborative ways to fund our Nation's future when it comes to
water and stormwater and wastewater.
The U.S. Water Alliance is a truly unique, nonprofit,
educational organization. We have drinking water, clean water,
stormwater, agricultural, energy, public and private sector
individuals coming together, through leaders to collaborate on
shifting some of the paradigms. Howard Neukrug, who is on the
panel, is the Vice Chair, and we have had some real thoughtful
leaders--urban water, rural water--shift the paradigm. And you
know full well, in fact, you have been displaying it this
morning, that hope and policy themselves do not treat the water
and make it clean, do not meet the needs for businesses and
communities; you need funding as well as vision on policies and
regulatory strategies.
So just three points I wanted to make very briefly while I
still have your attention, and one of those is the most
fundamental first step in addressing this growing crisis on
water and wastewater infrastructure is the value proposition,
valuing water to support people and ecosystems, the value of
water. I am honored to be part of a coalition. Jeff Sterba,
sitting to my left, is one of the leaders in a public-private
coalition that will only grow to increase public awareness
about the value of water, the worth of water, that will make
your job easier in the long run because of the understanding at
the local level and nationally of the critical need to invest
more. There is a difference between price and cost and value,
and as a Nation, we cannot afford to keep water so cheap. The
price is an inherently local matter but it becomes a national
issue when we are not finding sustainable and dedicated sources
of funding for infrastructure, and all water is local but also,
if that thought prevailed, we would not have a Clean Water Act
or Safe Drinking Water Act. And you are showing some leadership
by drawing attention to this issue, and the first step is
really a national effort with Congressional support, with
support from the private sector, local utility leaders, is
really getting out the word about the worth of water and the
need to invest more in it, not just the infrastructure but the
ecosystems that are provided.
The other major point is the partnering, and what a great
discussion this morning about public-private partnerships, and
you have got real experts on this panel about that. I would
just simply say, particularly because our organization has a
perfect blend of public and private sector enthusiasts, you
need both, and you need to move into the future and more
innovative approaches. The private activity bond legislation
that was proposed in the last Administration and also this last
year moved through the House. I think this is a very important
step forward. The key part of it, though, is that it is not
making decisions for communities as to who owns or operates
their water and wastewater systems; it is removing an
artificial state volumetric cap on private activity bonds, and
that could lead to new money to the tune of $5 billion a year
dedicated to the effort. I do not know, but I know it is one
positive step and it also signals that Congress cannot just
rely on the SRFs or one single mechanism and that there needs
to be federal involvement and help to supplement the 95 or 97
percent of the funding that comes at the local level for water
and sewer infrastructure.
Then the last point, besides the valuing of water and the
partnering between the public and private sector, is really
this paradigm shift in greening the infrastructure. It is not
in lieu of gray infrastructure. There is always going to be a
need for a hybrid, a mix, but greening the infrastructure and
also recovering the resources--I would just simply say,
particularly the U.S. Water Alliance working with other
organizations, particularly NACWA and WEF and others--the
leaders in this effort fully believe that there are great
benefits and energy and money savings through green
infrastructure, and sometimes it is not about federal dollars,
it is about federal willingness and support to sometimes
provide a soft landing for innovative communities like
Philadelphia, who want to do some innovative work. We may not
get it right on the first try but if the environmental
community and the regulators are there with them, we can get
some amazing progress on that front. And the resource recovery,
I am impressed by the product that just came out by the Water
Environment Federation, NACWA, the National Association of
Clean Water Administrators, and the Water Environment Research
Foundation on the utility of the future. I know Howard's
testimony talks about that at length. Mr. Chairman, that is
really about looking at wastewater facilities, formerly viewed
as treat-and-discharge facilities, as centers of regeneration,
as green factories, and that will produce energy and money and
a more sustainable approach.
Anyway, Mr. Chairman, Congressman Serrano, thank you so
much for shining a spotlight on this critical issue of water
infrastructure financing. I look forward to a good, robust
discussion.
[The statement of Benjamin Grumbles follows:]
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Mr. Simpson. Thank you.
Mr. Neukrug.
Opening Remarks of Mr. Howard Neukrug
Mr. Neukrug. Thank you both for your leadership. My name is
Howard Neukrug. I am the Water Commissioner for the City of
Philadelphia. I also serve on the board of directors of the
National Association of Clean Water Agencies, also more
commonly known as NACWA, and we represent over 350 municipal
wastewater utilities.
Congressman Serrano, you will not see it on my bio that was
submitted here, but I did have a little canoe trip down the
Bronx River a couple of years ago, and I highly recommend it
for everyone. It really shows everything that is right and
could be great about America's waterways. At the same time, you
see the pollution and the problems and the amount of money that
is needed to make improvements to a river like the Bronx River,
so I commend you on your work here.
Modernizing the country's aging infrastructure may be the
single-most important public works need facing our Nation.
Nothing less than full attention, focus and support of federal,
state, local, private sector and public water utility industry
will be needed to tackle what EPA is estimating at $635 billion
need over the next 20 years.
Today, U.S. cities like Philadelphia bear almost the entire
burden of the costs of clean water. As an industry, we have
been raising rates by more than double the rate of inflation
for the last 10 years and probably for the next 20 years up to
and sometimes beyond the limits of our customers' ability to
pay, and there is still a backlog today of over $40 billion
local water infrastructure projects. Given the enormity of
these numbers and the criticality of water to society, it
really remains vital that the federal government continue to
leverage local investments in infrastructure by supporting
programs like the Clean Water State Revolving Fund. NACWA
believes that a clean water trust fund modeled after the
highway trust fund is still the best option to help ensure a
sustainable, dedicated and reliable revenue stream into the SRF
system, and Chairman Simpson, thank you very much for your
support of that concept.
Outside the jurisdiction of this committee but also needed
is for Congress to maintain the tax-exempt status of municipal
bonds. If limited or eliminated, it would increase the costs of
local borrowing by billions of dollars, effectively reducing
the capital investment that utilities can make in our cities
and our towns. With the partnership between the federal
government and local utilities, we are and we will continue to
find ways to leverage every dollar. Utility leaders in
Philadelphia and elsewhere are working to turn waste streams
into resources that produce energy, recycle clean water and
recover heat and nutrients. We are driving innovation in green
infrastructure and adaptive management. Our vision is to meet
these complex responsibilities and opportunities of our times
using the most innovative and efficient means that are
possible.
Philadelphia is extremely proud of our innovative $50
million Biogas Cogeneration Facility now under construction
using a public-private partnership model, all with private
investment. We will be using the methane gas byproduct of our
treatment process to safely generate 6 megawatts of
electricity, which is more than 80 percent of the power and
heat needed to run this large wastewater plant. Last year,
using another public-private partnership model, we developed a
$60 million sludge pelletization facility, and I know that may
not sound pretty but we are successfully repurposing
environmental waste into a vital nutrient resource and saving
millions of dollars in the process. Both of these projects were
developed using private equity dollars. They are good for the
environment, they reduce our operating costs, and they leave
precious public capital dollars available for Philadelphia to
invest in its aging infrastructure.
Finally, one of our most celebrated efforts to date has
been the newly launched Green Cities, Clean Waters partnership,
which restores local waterways and manages stormwater runoff
with cost-effective green infrastructure. This massive
undertaking to green and update our infrastructure for the 21st
century is absolutely essential and reliant on strong public
and private sector partners. We are thrilled that we have been
able to partner with the EPA to overcome financial barriers by
adding regulatory flexibility without sacrificing water
quality, and we are proud to be among the Nation's first
partners with the EPA to use an integrated approach to water
management.
We have come a long way in cleaning up our rivers and our
streams but we still struggle, and as our infrastructure grows
older, as it has been made very clear here, it does not grow
any stronger. Significant investment is and will be needed to
make an update on network of pipes and facilities while the
costs of operating those aging systems continue to track
higher. We are investing in innovation, adaptation, flexibility
and resilience, and are glad to see the federal government at
the table with us with the same vision and goals.
There are many ideas floating around Washington on how the
federal government should support local investment in
infrastructure, and all have some merits and some pitfalls, but
there is nothing more dangerous than continuing down a path of
underfunded and undervalued water infrastructure. We must work
together to find a solution that works under these times of
reduced discretionary spending, high unemployment and poverty,
and the absolute need for a sound water infrastructure system
in the United States. Utility leaders across the country are
ready to transform our industry and leverage our ratepayers'
investments to guarantee water quality and an environment that
is sustainable and unrivaled, so thank you for this
opportunity.
[The statement of Howard Neukrug follows:]
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Mr. Simpson. Thank you.
Mr. Sterba.
Opening Remarks of Mr. Jeffry Sterba
Mr. Sterba. Thank you, Mr. Chairman, Mr. Serrano. It is
great to join you today. We serve about 15 million customers in
a little over 30 states in the United States plus some
provinces of Canada. I am here representing our company as well
as NAWC, the National Association of Water Companies, which
represents the private water industry made up of a number of
providers throughout the United States.
Earlier, Mr. Chairman, you talked about the 250 years. Let
me give you another angle on the 250 years. At the rate--and
this is why I believe that the number of what it will cost to
maintain the kind of infrastructure the United States deserves
is not $633 billion but much higher than that. The rate at
which we are replacing the infrastructure that exists today
underground means that we are expecting that that
infrastructure will last 250 years. That means that what was
put into the ground by Thomas Jefferson at Monticello is about
coming up for replacement. That is a little difficult to
believe as a viable scenario. So the $633 billion is really
based on doing what we do today when that is not sufficient to
provide the level of service that I think customers need in the
future.
Let me in the brief time just touch on four aspects that
can help on the financing front, and it is focused on--there is
really two pieces. One is, how do we manage the cost of
financing, which goes to what are interest rates, the use of
tax-exempt debt, etc. The second is, how do we bring more
capital into the market because the level of capital that has
been committed, particularly from the public sector, is not
sufficient. So let me address those two related things.
The first item I would raise is an issue that we have run
into in a number of occasions through our public-private
partnership work. There is a tax inefficiency if a municipality
or another public entity wants to lease or sell its system to a
private entity. So in a public-private partnership, there is a
lease, and we effectively will lease that system. But if tax-
exempt debt was used to finance those assets, then that tax-
exempt debt must be defeased. Even though the city still
retains ownership and the city is still accountable for that
debt, that tax-exempt debt must be defeased. The cost of that
defeasance is anywhere from a 15 to a 25 percent penalty on top
of the amount of debt that is outstanding. That does not go to
the U.S. Treasury, so it is no help to the federal government.
It does not go to customers. In fact, it is a drain on
customers because it will increase rates in the longer term and
it takes capital out of circulation. It is basically sitting in
an account for the benefit of bondholders. This is an easy
change to be made administratively, and we have proposed to the
Administration a change in rules that would relieve this and
put it back into the way that the regulations were interpreted
in the pre-1986 window where this issue did not come up. So
that is a fairly easy one and can provide great benefits to
communities.
The second one, which Ben mentioned, is private activity
bond reform. Right now, water sits under the volume cap and
that is a significant constraint. So we have supported, NAWC
has supported and this House has been very supportive of having
legislation that would remove the volume cap, as is done today
for solid waste for airports and a number of other elements.
Now, I will note that there has been some well-founded
criticism of how private activity bonds have been used. I think
the classic example is $1.6 billion of PABs being used to build
a company's headquarters in Manhattan. I want to distinguish
between that kind of usage of PABs and what happens in the
water business. In the water business, PABs would be used
specifically for infrastructure, infrastructure that is going
to stay in that community, hopefully not 250 years, but let's
say 100 years, and will be there to serve customers for the
long term. Also, the benefit of that tax-exempt debt does not
flow to shareholders, it flows through to customers and rates,
because as a regulated utility, as all of our private water
companies are, we operate on cost of service, and so the cost
of that debt and the savings associated with tax-exempt debt
flows directly through to customers. So I will make that
distinction.
The third area I would touch on is the notion of state
revolving funds and eligibility, and we are very strongly
supportive of the state revolving fund mechanism. I would
clarify something that I think Mike said in his comments in the
last panel. Under the Drinking Water Act, private companies are
eligible to receive state revolving fund loans but only if the
state approves it. So over half the states in the United States
do not allow private companies to qualify or to apply for state
revolving fund loans, yet what we find is that the needs of
those private companies are included in the use surveys that
are submitted to the EPA. So that seems to be something that
could be easily fixed. And then as Mike mentioned on the clean
water side, there are not provisions relative to allowing
private entities to utilize the state revolving funds.
The last thing I would mention is on this notion of public-
private partnerships. We have found that they can--they are not
a panacea but they can be very effective and very useful.
Howard has the advantage of running a relatively large system
that has some sophistication to it in terms of the capacity to
enter into those kinds of agreements. Three-P agreements are
complex, and for a small community to look at entering into one
of those with the legal, financial and other ramifications, the
transaction costs can be very high. Canada, just as an example,
has done something different where they have created a
corporation that is originally founded by the government that
provides the facilitation for communities to develop public-
private partnerships. You have to go through them if you are
going to use any public monies. It requires that somewhere near
80 percent of the money must come from private coffers, so that
is what we are trying to do is, pull more private capital into
the marketplace, and they are able to help manage those
transaction costs by creating some standardization to these
agreements because, no offense meant, but you put five lawyers
in the room, you are going to get six different agreements, and
that is what happens in a lot of the PPPs unless you have the
discipline that Howard or some of the other large communities
can bring to the table.
So with that, I want to thank you all very much for your
time and for taking on this issue. There are major challenges,
but I got to tell you, from my vantage point, they are all
resolvable.
[The statement of Jeffry Sterba follows:]
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Mr. Simpson. Thank you.
Mr. Wilson.
Opening Remarks of Mr. Thad Wilson
Mr. Wilson. Thank you, Chairman Simpson and Ms. McCollum.
It is an honor to be here today to discuss water infrastructure
financing options. My name is Thad Wilson. I am a Vice
President with M3 Capital Partners. We are a management-owned
investment firm based in Chicago. Through an advisory
affiliate, M3 currently manages equity commitments of over $3.4
billion on behalf of a U.S. public pension plan.
M3 is currently forming a North American water
infrastructure fund that we anticipate will be initially
capitalized by U.S. public pension plan investors. It is
expected that the fund will focus primarily on offering an
innovative design-build-operate-finance approach that we
believe offers a robust form of public-private partnership, or
P3, to municipalities to capitalize their water infrastructure
improvements.
In the United States today, there is a significant and
growing need for investment in critical water infrastructure,
as we have heard this morning, and given current funding
challenges, accessing private capital through P3 structures may
be a compelling option for municipalities. At the same time,
public pension plans need long-term investments that can
provide stable returns for their beneficiaries--teachers,
firefighters, police officers and other public employees.
There are various P3 structures municipalities can consider
to meet their water infrastructure financing needs including
structures that utilize an upfront equity investment to
capitalize projects as part of a long-term concession agreement
between a municipality and a private investor partner. The
investor partner may be comprised of a public pension plan or
an infrastructure fund, which provides most of the upfront
equity for the project, and a service provider, which provides
the experience and expertise to implement the project. That
investor partner typically assumes key risks associated with
the design, construction, operations, maintenance and/or
financing of the project. To the extent the investor partner
meets established performance levels, the upfront investment
plus an appropriate return is effectively returned to the
investor partner over the life of the P3 through service fees
paid by the municipality.
As was cited early this morning, the city of Santa Paula,
California, provides a recent P3 example. The city's wastewater
treatment facility was built in 1939 and was out of compliance
and needed to be replaced. Facing a tight deadline to avoid
over $8 million in fines, the city moved that project forward
under a design-build-operate-finance procurement process. In
July 2008, just two months after the contract was awarded, the
investor partners broke ground on that project, and in May
2010, a new water recycling facility was in full operation
seven months before the compliance deadline.
Two examples of P3s for existing water and wastewater
systems were structured last year in the cities of Bayonne, New
Jersey, and Rialto, California. In both cases, the investor
partners made upfront payments to fund initial capital
improvements and other community needs and assumed
responsibility for the operations and maintenance of the
subject water facilities during that P3 term.
In my view, the primary benefits of water infrastructure
P3s include the following. Because a P3 is not a sale or
privatization, municipalities can retain long-term ownership
and control of their water facilities. Municipalities can
accelerate the launch of new projects, which may help to meet
compliance deadlines and may generate near-term employment
opportunities for the local economy. Municipalities can
transfer key risks to the investor partner. As a result, the
investor partner is well assigned with the municipality and is
putting its capital at risk with a requirement to perform its
obligations throughout the term of the P3. And finally,
municipalities can potentially realize lifecycle cost savings
as a fully integrated team takes on the responsibility to
design, build, operate and finance their water infrastructure
projects.
Potential measures to facilitate more water infrastructure
P3s include the following: increasing awareness of the
potential benefits of P3 structures combined with efforts to
implement regulations that facilitate the use of P3s similar to
the efforts in Canada that were just mentioned, helping to
lower the costs of the debt financing for private investor
partners in water facility P3s, potentially by removing the
state volume cap on private activity bonds for such projects,
and by promoting additional policies to facilitate low-cost
funding for P3, potentially through the SRF program or the
WIFIA program that was mentioned earlier. With access to low-
cost debt financing, investor partners could deliver such
projects to municipalities based on a lower overall cost of
capital, generating cost savings that ultimately could be
passed onto the community ratepayers.
Thank you for your time today and for your consideration of
this important issue.
[The statement of Thad Wilson follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Simpson. Thank you, and again, thank all of you for
being here today.
STATE PRIVATE EQUITY BONDS
As I said in my opening statement, I actually think this is
one of the biggest challenges we face, and there are a lot of
challenges around this country but we are, as I say in speeches
a lot, we are the beneficiaries of our forefathers' investment
in infrastructure, and most people when you say infrastructure
think of roads and bridges, but you are not only talking roads
and bridges, you are talking dams, harbors, all of the
infrastructure we have in this country. You go to foreign
countries and look at the infrastructure challenges they have
that have not had this type of investment from their
forefathers, and we are not keeping up with it, frankly. It is
an investment that we have to make if we are going to address
these problems. It is not just addressing the infrastructure,
it is also being able to address the rest of the parts of the
budget that deal with it, which makes us not be able to do a
good job there and not address the problems that we are having
with water infrastructure.
Now, three of you mentioned removing the cap on state
private activity bonds. Have any states tried to exceed that
cap or add the cap level or anything currently?
Mr. Arndt. Our association had done an analysis a few years
ago, and most of the states exceed or max out, they do not have
available funds, and given the competition for those private
activity bonds, it is very difficult for water-related
infrastructure projects to access those monies. So they are
very limiting in regard to making monies available for water.
Mr. Sterba. What Aurel said at the end is really important.
Remember that you have got many other competing needs, which
frankly are visible. Water is invisible, and so it tends to get
to the bottom of the rung because of that, and so it is not
only that it does not get its fair share, it is that it is at
the bottom of the table.
Mr. Wilson. It was also pointed out, these are long-term
projects and take a long time to structure and review and get
through approval, and a level of certainty around the
availability of those funds over a period of time would be
important.
Mr. Simpson. You are right. One of the real challenges you
have here is that nobody really thinks about where water comes
from until it does not come. Nobody thinks about what happens
when you flush the toilet unless it does not flush, and that
really is the challenge. When you drive on a road that ruins
your front-end alignment, people notice that right away. So
this is the invisible infrastructure that has to be addressed.
FINANCING POOLS
You mentioned creating a trust fund like the highway trust
fund or the airport trust fund or the harbor maintenance trust
fund or the inland waterways trust fund. We have a lot of trust
funds. What do you tax to put in there?
Mr. Neukrug. Well, I look at these bottles, and there is
about $15 worth of bottled water here, and the city of
Washington could supply that to you for less than a penny. I
think there is room for----
Mr. Simpson. Is it not amazing that people will complain
about $3.50 gas but will pay for a bottle of water.
Mr. Neukrug. It is really incredible, and we have it here
because it is convenient but it is not a necessity, and I think
this is a prime example. As a matter of fact, when you look at
our waterways and you look at the floatables, the trash that is
in our waterways, whether it comes through the wastewater
process or just overland, it is predominantly these bottles. So
I think there is a very good case to be made that is one
location. Another area, of course, is flushables, what we call
in Maryland the toilet paper tax, where you will be using
things that actually have a relationship to the water I think
are eligible areas for this.
Mr. Simpson. What about the idea of creating a national
infrastructure bank, as some people have suggested? How would
that work? Any ideas? None of you mentioned this, so I hate to
ask you.
Mr. Arndt. My presumption is that it would be some form of
indebtedness that would be necessary to provide the capital,
the seed capital, for that type of an entity. It was actually
one of several alternatives that we looked at before we settled
on this WIFIA approach. The difficulty from our perspective
with a trust fund or with a water infrastructure bank is that
essentially you have a dollar in equals a dollar out, whereas
with WIFIA, because of the Federal Credit Reform Act, every
dollar that is appropriated for a WIFIA-like program actually
is leveraged. In TIFIA, for example, there is a ten-to-one
leveraging ratio, so every dollar that is appropriated actually
provides $10 in spending authority, and it is because of only
needing to fund that subsidy cost, and I think we could make
the case that in the case of water infrastructure, that the
leveraging ratio should be even higher. So for every dollar you
appropriate for a WIFIA-type program, you get a much larger
spending capability and a much larger infrastructure
investment.
Mr. Grumbles. Mr. Chairman, so I was, like a few people in
the room, like Tom Curtis, I was around on Capitol Hill working
as a staffer when the state revolving fund model for the Safe
Drinking Water Act was enacted, and also back in 1986 the Clean
Water State Revolving Fund, a program which the President
vetoed and then vetoed it again and it was overridden by the
Congress and put into place with a very clear end date in terms
of the authorizations but it was also very clear that Congress
and the American people wanted it to continue because of the
model. The basic point I would make on this with your question
about a national infrastructure bank, it is not just a question
of where the dedicated funding comes from, it is also where the
fund resides, and that is--I think one of the reasons that the
Clean Water and Drinking Water State Revolving Fund model has
been so successful is it is really not a fund, it is 50 funds
or different funds. They have a designated agency, is this
case, EPA, being the go-between and overseeing the federal
dollars through Congressional appropriations but it has
devolved down into the states, who actually run the programs,
as the Council of Infrastructure Finance Authorities would tell
you.
One big concern that some have about a national
infrastructure bank, even though it draws needed attention to
infrastructure, is, there is such a track record of water being
put at the back of the bus or under the bus, and roads and
bridges, which are very important, or airports getting most of
the attention, and so that is part of the concern. And then
when you create a national infrastructure bank, does that then
create a vacuum and the support for the state revolving funds
under clean water and drinking water proven successful
programs, do they get shortchanged because of a new
infrastructure bank? So that is some of the concerns or
perspectives that I think you are already aware of.
Mr. Sterba. That goes to the issue, just like the PAB
question, of, if you have everything under one umbrella, how do
you allocate and get prioritization, and so you have to find a
way around that, and that is where, I think, these targeted
mechanisms can be appropriate. The thing that I keep struggling
with, though, is, if you do not--if you decide to create a
trust fund and you tax something, that is creating a revenue
stream that is pulling money out of a private side--and you are
hoping that that will be multiplied over. Under most of these
mechanisms, though, the real question for me is, are we really
creating more money? Are we creating new capital that will
flow, or are we just changing the price at which that capital
gets charged? It seems to me that in this situation, we really
need to find new ways to bring capital to address water and
wastewater needs, and I look at it fairly simplistically. You
got the ability to do it through taxation of some form, whether
it is indirect or direct, and then it is used by the federal
government and the states to make things happen, or you use
private capital, and the real answer is, you have got to use
both.
One encouragement I would have for the subcommittee is,
anything that you do, do it in a way that pulls private capital
in to a greater degree. If you go to TIFIA, the transportation,
which is a very good model, one of the things when you go on
that Web site, it says our fundamental purpose is to attract
other sources of capital from private markets in order to
leverage federal expenditures. So if we do not pool private
capital, we might reduce cost but we have not done anything
more. We have not necessarily addressed the infrastructure
issue.
Mr. Simpson. You mentioned the private partnerships are
not--SRF funds are not available for them in about half the
states. Restate that.
Mr. Sterba. I think it is roughly half the states do not
allow private utilities to make application for state revolving
fund under the Clean Drinking Water Act. About half do. So, for
example, two of the big states that we serve are Pennsylvania
and New Jersey. They have a very robust, and they really think
about it, particularly Pennsylvania, from an economic
development side. But other states do not.
Mr. Simpson. What is the reason those other states do not?
Mr. Sterba. Well, it can be a lot. It could be that the
private utilities in that state did not get in line early
enough and so it has been taken up by other things. It could be
that the state says, look, I only got so much, I am
prioritizing things that are visible, I am prioritizing
economic development, I am prioritizing roads, whatever the
case may be that they are going to use that state revolving
fund for.
Mr. Simpson. But I assume they have the state revolving
fund for water systems that are publicly owned.
Mr. Sterba. For the water systems, and that is where it is
going, you can understand it. The political side says I am a
mayor, I have a need, that is a private company, they should
not get any, we need it. There is more than enough demand in
the public market, in the public water market, to use those
funds, so we do not want private water companies to get it. But
the problem is, private water companies pay the same taxes that
helped create the state revolving funds. Should they not have
the same access?
WATER INFRASTRUCTURE MANAGEMENT
Mr. Simpson. Well, and your goal is actually to deliver
clean water.
Mr. Sterba. Absolutely.
Mr. Simpson. And that is what you are after.
Mr. Sterba. A hundred percent.
Mr. Simpson. And if you are a citizen out there, I really
do not care whether it is done by the municipality or whether
it is done by private, as long as I turn on my tap and the
water comes out and it is clean and it is at a reasonable
price, and we might have differences of opinion about what a
reasonable price is, but one of the things I heard in the
earlier testimony was that citizens, when you have private
companies, did not like the price increases. I have never seen
a community upgrade their water system where the prices did not
go up. We get letters all the time about those things.
Mr. Sterba. And this goes to what Ben was talking about in
terms of the value of water, and helping customers understand
better what the value of water is today, because today people
do not pay for the molecule of water. They pay to clean it,
they pay to deliver it, and in many instances, they are not
paying the full cost of that. So it makes it very difficult
when you are only replacing your investment as if it was going
to last 250 years to enhance that reinvestment if you have only
got rates that are recovering cost for over 250 years.
Mr. Grumbles. Can I just chime in one basic point, and that
is, there is plenty of room to advance public-private
partnerships without ignoring the fundamental principle here,
and that is that water is a basic human right. It is our most
precious liquid asset but it is also a human right, and so the
country, our national water policies really continue to be
founded perhaps more than other countries in the world on this
public ownership idea or on public accountability, and the
magic place to go is always ensure that there is public trust
and public accountability in water because it is not simply a
commodity but find ways where the agents of delivering that
water can bring new money to the table and new ideas, and I
think that is something the committee should look at
encouraging just like in Philadelphia, Commissioner Neukrug,
the Natural Resources Defense Council, which is a member of
ours, the U.S. Water Alliance, and others are really looking at
and saying hey, they are tackling one of the most expensive
infrastructure issues, and that is, stormwater around the
country, sewer and water, and one way to avoid the costs of the
public fisc is to bring in the private sector and to create--it
could be fees, but if you do it in a way that provides market-
based flexibility so that developers, their private money goes
towards managing stormwater in a more effective way and they
get credit for it, that fee is decreased because of some of the
green infrastructure work they are doing that the agencies
approve of. I think that is a really good model and it is one
that we are seeing all across the country, communities between
a rock and a hard place because of the water infrastructure,
and stormwater is one of the biggest unfunded mandates that
some communities face. They are looking for innovative
approaches, and the private sector and land developers have a
really important role to play. They have to be treated fairly
too, but it is a perfect example where we have to move beyond
the older model of, it has got to be publicly funded money
because water is involved.
Mr. Arndt. If I could take the conversation one step
further, I think your question in the prior session really went
in the direction of what I want to say, and that is, if you
look across the country, there are some 54,000 community water
systems, many, many of them small, many of them do not have
what we call the technical, managerial and financial capability
to really be sustainable going forward. My organization has
actually acquired 30 water and wastewater systems over the
years. I am guessing Jeff's number would dwarf mine. But we
have integrated those systems into our core service area. We
have upgraded service. We brought some financial discipline to
the system, and I think without addressing that element, we
kind of keep putting a band-aid on the problem and let the
underlying situation persist, and so I think anything that can
be done to incentivize the--allowing entities that can provide
the service, be it a private entity or public entity, that they
should be incentivized to essentially consolidate those systems
that cannot survive going forward, and as a result, I think we
will be able to better manage that investment need in front of
us and also potentially reduce the costs that would otherwise
be before us.
Mr. Simpson. Well, it is interesting that if you look in
the Teton Valley in Idaho, there are several small communities,
I am talking real small communities that are spread out
probably over a 20-mile valley, and it used to be that they
would each have their wastewater treatment facility and stuff.
Now they are looking at a common system and they are doing that
more and more across southern Idaho and these areas, but you
were going to say something, Thad?
Mr. Wilson. To your point, Mr. Chairman, about the public-
private partnerships potentially accessing SRF funds, that is
something we have been exploring with a couple state agencies.
Under the structure we envision, the municipality would
continue to own the facility, or if we are building a new or
replacement facility, they would actually own it, they would
own title to it, they could access SRF funds and combine that
with our private equity that we are bringing into that
partnership, and it would be a way to leverage those SRF funds
to go farther.
Mr. Simpson. But in your situation, the municipality does
not own the system is what you are talking about?
Mr. Wilson. In the areas where we provide retail service to
customers, we own the system. We are under regulated rates by
the state commissions. We also do public-private partnerships
where we operate systems for others. Most of those are
operational agreements. Some of them are more of a lease
arrangement, and that is where we run into the defeasance
issue, etc. In that instance, we would not be the applicant to
the state revolving fund because if it is going to be owned by
the municipality, they are the applicant for the state
revolving fund. It is the challenge of how you bring those two
pieces together.
One of the things you mentioned earlier, Mr. Chairman,
which I am so glad you did, because like the one that Aurel
raised, it is one of those that does not always get talked
about, but it is the efficiency of capital spend. One of the
things that just shocked me was, we recently did an analysis
with a municipality. We just looked at supply chain, the cost
of meters, pipes and vales, those kinds of basic, the
fundamental building blocks of infrastructure for the water and
wastewater industry. The difference between what they were
paying for that equipment versus what it cost through our
supply chain was about 30 percent. You would leverage that out,
that is 30 percent more capital that could be available without
doing anything other than getting more efficient. It is scale
but it is also expertise.
I come out of the energy world, and I have only been in the
water space for two and a half years, but an enormously open
roadmap for us is on applying technology in this industry. We
have not done it. There is so much more than can be done from
leak detection to ways to reduce the energy use. But that is
very difficult to do at small scale and so this notion of how
do we bring entities together is important.
Mr. Simpson. It is. There are a lot of very interesting
examples that are used. The amount of water we use, when you go
into airports and you run your hand under it and the water runs
for a minute, it is amazing how much water that saves. I read a
study one time of how much water you would save if you turned
off the tap while you were brushing your teeth. Being a
dentist, that was always interesting to me.
Ms. McCollum. Do you?
Mr. Simpson. Actually, no, and the reason nobody does is
because the individual savings to me is miniscule, but the
savings to society as a whole would be large. That is the way
things work. Ms. McCollum, go ahead.
Ms. McCollum. Well, being the Girl Scout in the room then,
I liked what you said about convenience. We do not look at the
big-picture cost. There is petroleum that went in there and the
energy on so many different scales that all went in here. I get
funny looks when I go with people and I am in a restaurant
here, because in Minnesota, I mean, nobody ever asks if you
want bottled water unless you are at a really high-end
restaurant, and then they do not mean flat water, they mean
sparkling and I go, no, I drink D.C. tap water and everybody
kind of goes huh. So a lot of it is this false sense of somehow
this is very great water because, Mr. Chairman, it is carefully
blended from selected natural springs.
Mr. Simpson. Exactly.
FUTURE WATER INFRASTRUCTURE ISSUES
Ms. McCollum. Like a fine wine is blended.
I want to take this maybe up a couple more feet into the
sky. I just left a defense briefing where we were talking about
North Africa and Yemen. Big national security there: water.
International security for us: water. So water comes down to,
as you so eloquently said, a basic human right. And you touched
on small cities and townships and then we went into the whole
thing about states' rights. And the League of Cities is here. I
was on a city council, so you guys are near and dear. I was in
the state legislature, city council, so I dealt with water on
many different levels. So there is modernizing our systems,
there is maintaining our systems, there is building new
infrastructure, so there are different roles and different ways
in which you kind of come in. And going to sewer separation,
where you are really kind of going in and doing the heavy
lifting, which is the new modernization of systems in some of
our municipalities that can be 60, 100 years old. That is not
cheap work no matter who does it. So if you could maybe kind of
touch on that a little bit.
And then you make money building projects. You also make
money selling water. So let me give you a little story.
Minnesota, water rich, right? Lake Superior down 4 feet,
climate change. I have a good-sized lake which we prided
ourselves--we like to do winter carnivals and do all kinds of
crazy things when it is cold like fish on the ice and
everything. The lake where the dock and the chair used to kind
of be at the end of the table, now the water is here and the
dock is where that chair is. So we had USGS, and thank you very
much for this committee funding them and the good work that
they do, and they said okay, there might be a little puncture
in White Bear Lake. Yes, climate change is playing a factor in
it because they looked at other lakes around. It is our
reservoir. We are going through water faster than we ever
thought we were going to go through it. So we have a
metropolitan council and they are looking at it. Now cities are
fighting over who goes to conservation first, who is most
important.
Where do you fit in? Where do you see your responsibility
in maintaining these systems as to really talking about the
ethic of how much water we use and using it efficiently,
whether it is, you know, in airports or watering bans, because
it would seem to me--and I was in the private sector most of my
adult life in sales. It would seem to me for a lot of your
business models, you made money by how much you pump out? What
do we do to incentivize you as part of our solution here to
reduce the amount of water we are wasting?
Mr. Neukrug. That is a great question. I think we are doing
it. I think it is a really exciting time to be in the water
industry because there is so much innovation going on, so many
new things that are happening with leak detection, water
conservation, this new thing that we are calling stormwater
conservation, managing the rainwater, and there is so much
potential here, and the problem is, as we have been talking
about all along, there is not enough money. In particular,
there is not enough capital dollars. So we are all in this game
of prioritizing how do we figure out what is the best way to
spend that last dollar that we have, and Jeff, you talked about
level of service. Right now, the level of service that is
acceptable in the United States is that there will be one
water-main break every two minutes. That is the level of
service that the United States is accepting. I am not sure if
they would accept it if went to one break every minute. I do
not know. We are kind of making those decisions for the United
States because of the limitations of how much money we have.
The same thing with boil-water notices. How many is too much?
Occasionally you have them. In Philadelphia we have not had
one--I do not think we ever had a boil-water notice but other
cities have them every now and then. Is that okay? What about,
you are talking about storage, if one of our reservoirs dropped
and we did not have any water for two or three days? Is that
acceptable? And what do you want us to pay in order to avoid
that risk?
So there are a lot of questions that we are all working on
on a daily basis, thinking about how do we best manage this
system with the amount of money we have, and for Philly, we
were working on a $100-million-a-year capital budget. That is 5
years ago. Now we are up to $250 million a year. So we went
from looking at $100 million a year and then a 5-year plan that
is a half a billion dollars to looking at $250 million a year,
and now we are looking at 25 years out, and that is a $10
billion program. So our whole perspective has changed, and it
is not just Philadelphia, I think it is the entire industry is
looking further out, understanding the issues.
Asset management was brought up earlier, prioritizing our--
you know, what are we going to do with our money, and, you
know, I am here because I need some support from the federal
government because right now I get very little. So most of
every penny that I have, which is all the money that I have, is
coming from my ratepayers, and that is fine. I think that is
appropriate. But there is no way that I can raise the rates
sufficiently to cover everything that I want to do and need to
do. So I am making decisions and so is every utility manager in
the country about what level of service is acceptable to
America in 2013. We are not even considering what is acceptable
in 2023.
Mr. Arndt. And I think Howard's latter point goes to, given
the fact that we do not have a bottomless bucket of funds to do
everything we would like to do, a big part of what we are doing
and growing annually is consumer education, customer education,
so that they are better consumers of the water and they
understand what goes into the service that they receive. I
guess in many ways, I look at it somewhat differently than you
characterize it. The water is the vehicle for the services that
we provide in many ways, and it represents a relatively small
cost if you just took the value of the raw material itself. But
it has significant societal implications in terms of
environmental issues and that sort of thing, and so our
educational efforts are very heavily focused on youth
education, really educating the consumers of the future or
letting those kids go home and tell their parents they should
not be letting the water run while they are brushing their
teeth, and I think that is one of the things that we think is
very, very important.
Another piece of it is what we call full cost pricing, that
what we charge for the service should be reflective of the full
cost of providing that, and in many ways, it does not, and I
think simple economic theory says that if you charge something
that is reflective of its full cost, you will get better
management and utilization of that resource or that asset, and
I think that is one of the things where there has been this, we
cannot raise our water rates because, and in the political
arena, that rings true many times, and as a result, something
gets chopped out of the water budget that is really important.
Ms. McCollum. Mr. Chair, could I ask a question? Could you
set up a meter that would watch how much I am using to consume
for my basic needs versus my lawn care? I mean, because if you
are going to charge me, then based on my ability to pay, being
a retired worker, you know. And then the other question,
because we are going to wrap this up, is, where are you with
working with--I just was out to Simon Properties Managers out
in Maplewood, Minnesota. They have this big stormwater thing.
They are watering their trees off of it. They are going to have
less--because we have the frost, so they are going to have less
potholes and all this other stuff because of what they are
doing in their parking lot. And brown water technology. When
you go in, are you a full-service provider? Can you lay
everything out? Do you work with the other contractors on how
to look at a big picture or do you just come in and look at
this part of the picture?
Mr. Sterba. You have raised a very critical issue. It is
the notion of thinking about one water. This industry has a
tendency to think about drinking water, wastewater, stormwater,
or traditionally. More and more, though, you are finding
thinking about one water. So you think about--I know Howard is
doing a lot of things on how do you get property owners to take
the responsibility for the amount of runoff so that water is
used and not flooding the sewer system. We do--in New York
City, we have six high-rise buildings where we do 100 percent
reuse. The city of Fillmore, California, we have a-million-
gallon-a-day reuse system so we are taking brown water, if you
will, and we use it for irrigation, for flush, for cooling
purposes.
You also raised an issue, though, that is a troubling one
for the industry, which is this notion that--as I said, we
serve all across the country, so if you go to California, our
average use per customer is about 110, 115 gallons a day. You
go to New Jersey, it is 300-plus gallons a day. Why? Well,
because Californians understand water is scarce. New Jersey
does not have that mindset yet. They have not realized what is
changing in the marketplace and what is going to happen to
water. But what we are seeing across our systems is a decline
in use per customer. So as people use less water, what happens,
and this is true whether you are a public company like we are,
a private company that is publicly traded or you are a
municipality, you have rates that are not going to recover your
costs because you are 80 percent fixed costs, 20 percent
variable, but your revenues are 20 percent fixed, 80 percent
variable. So you will always--you are in this catch-up mode.
That is--you know, we have got to find a way, and this is
probably not legislatively, but it is regulatorily-wise or it
is imposing some mandates potentially for funding where you
build the kind of appropriate price structures so that you
incentivize efficiency as oppose to penalize efficiency. And
then you can do things like provide an amount of water at a
fixed price that is what people need to live on, but if they
choose to take 20-minute showers or they choose to have ultra-
green lawns, whatever the case may be, where they do something
more, well, then they pay for that.
Mr. Grumbles. Our organization, which is not a trade
association, we are a national--it is like a think tank,
convener of collaborations, policy thinkers and doers. We were
formed because of the need for a one-water, integrated water
holistic approach. The question you asked about sewer
separation is a perfect example of how all of us need to work
together, the regulators, the environmental community, the
utilities, the private sector, to not back away from the goals
for, in this case, the Clean Water Act, but to find ways that
recognize a community may not have the money and the time or
the patience to do sewer separation to deal with the sewer
overflow problem, they can come at it in different ways, and
green infrastructure, a combination of different technologies
and strategies are very promising, and it can work but it
requires some time and research and also a track record, and
across the country in communities, we are seeing a willingness
to do something different. It may not be sewer separation but
it can be a combination of green infrastructure practices with
regular check-ins by the regulators so that you are making
progress and doing it in a more cost-effective way. And it all
gets to the basic point that water, we take it for granted and
everybody says that but we do not really do much about that,
and great ways to work on that are to be able to advance the
smart technologies that monitor. So there really are--there are
companies, there are utilities that can provide their customers
with smartphones where they get weekly or a monthly notice that
oh, they are exceeding a certain amount in their bill, they may
want to check on how they are consuming that water, or they can
pay just to have the water--in Arlington County, for instance,
you can pay to get a bill metered just on water that you are
using for outdoor irrigation. And businesses that are springing
forth, and it is not just through an EPA water sense program
but through other efforts, are developing ways to respect the
fact that every drop counts and you can save money with new
technology, weather-based sensors, and it is not just a
technology for arid, water-scarce regions. I mean, that is the
value in water. But thanks for asking the question.
Mr. Simpson. I really did not expect this hearing to go on
for two and a half hours, but it is obviously a very important
subject. It is one that we take seriously and hopefully the
Transportation Committee that oversees the Clean Water Act
takes very seriously, and I am hopeful that we will get
something done in this Congress to address this pressing
problem that we have of dealing with the infrastructure, which
will also help me with my budget and a few other things, but it
is something that we have got to do if we are going to make the
most of limited resources that we have.
I thank all of you for being here today and I appreciate
your testimony very much. Thank you.
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Tuesday, March 19, 2013.
OVERSIGHT OF INDIAN HEALTH
WITNESSES
YVETTE ROUBIDEAUX, DIRECTOR, INDIAN HEALTH SERVICE
REX LEE JIM, VICE PRESIDENT, NAVAJO NATION, TREASURER AND NAVAJO AREA
REPRESENTATIVE, NATIONAL INDIAN HEALTH BOARD OF DIRECTORS, ON
BEHALF OF NATIONAL INDIAN HEALTH BOARD
D'SHANE BARNETT, EXECUTIVE DIRECTOR, NATIONAL COUNCIL OF URBAN INDIAN
HEALTH
KELLY MOORE, ASSOCIATE PROFESSOR, CENTERS FOR AMERICAN INDIAN AND
ALASKA NATIVE HEALTH, COLORADO SCHOOL OF PUBLIC HEALTH, UNIVERSITY
OF COLORADO DENVER, ON BEHALF OF FRIENDS OF INDIAN HEALTH
HENRY FIELDS, PROFESSOR AND CHAIR, DIVISION OF ORTHODONTICS, COLLEGE OF
DENTISTRY, OHIO STATE UNIVERSITY, ON BEHALF OF AMERICAN DENTAL
ASSOCIATION
Opening Remarks of Chairman Simpson
Mr. Simpson. The hearing will come to order.
Good afternoon and welcome to this oversight hearing on
Indian health. In 2010, the United States enacted into law the
following policy: ``A major national goal of the United States
is to provide the resources, processes, and structure that will
enable Indian tribes and tribal members to obtain the quality
and quantity of healthcare services and opportunities that will
eradicate the health disparities between Indians and the
general population of the United States.'' Let me say that
again. ``A major national goal of the United States is to
provide the resources, processes, and structure that will
enable Indian tribes and tribal members to obtain the quantity
and quality of healthcare services and opportunities that will
eradicate the health disparities between Indians and the
general population of the United States.''
A few of those disparities are reflected in these sobering
statistics provided by the National Congress of American
Indians. Native people die at higher rates than other Americans
from tuberculosis, 500 percent; alcoholism, 514 percent;
diabetes, 177 percent; injuries, 140 percent; homicide, 92
percent; and suicides, 82 percent.
This subcommittee has, over the past several years, made
funding for Indian Health a higher priority. In fact, from 2000
to 2012 under both Republican and Democratic leadership,
funding for the Indian Health Service went from 2.4 billion to
nearly 4.4 billion before sequestration. No doubt some of that
increase was an attempt to keep pace with the nationwide
problem of rising medical care costs, but my hope is that the
rest of the increases has made a positive difference in
people's lives.
So the fiscal year 2014 budget delay provides us with this
opportunity today to step back and ask the following questions
in support of the national goal I stated at the outset: has the
increased funding made a measurable difference in the health of
American Indians and Alaska natives, and why? And where do we
go from here in this constrained fiscal environment?
We are pleased today to be joined by two panels of experts.
Our first panelist will be Dr. Yvette Roubideaux, Director of
the Indian Health Service. After Dr. Roubideaux testifies, we
will have a round of questions from the subcommittee. Then, we
will invite up our second panel, which includes Mr. Rex Lee
Jim, Vice President of the Navajo Nation, testifying on behalf
of the National Indian Health Board; Mr. D'Shane Barnett,
Executive Director of the National Council of Urban Indian
Health; Dr. Kelly Moore, Associate Professor at the Centers for
American Indian and Alaska Native Health at the University of
Colorado, testifying on behalf of the Friends of Indian Health;
and Dr. Henry Fields, Professor at the College of Dentistry at
the Ohio State University, testifying on behalf of the American
Dental Association.
Mr. Simpson. Let me also take this moment to welcome our
distinguished guests in the audience and the many tribes and
tribal organizations around the country who are submitting
written testimony for the record. Thank you all for your
commitment and your assistance in helping us today. I will say
that we are expected to have votes at about 2:15, so our
anticipation is that we hope we will get through with Dr.
Roubideaux so you do not have to hang around if you do not want
to. If you want to listen to the other panel, that is fine, but
then we will probably go vote and then have the second panel up
as soon as we get back from this first series of votes, which
should not take too long.
I would like to turn to my ranking member, who is at a
luncheon that is not quite over yet, but he will be here as
soon as he can make it. And then you have an opening statement?
Ms. McCollum. I am excited to get going, sir.
Mr. Simpson. Okay. Mr. Moran will provide his opening
statement when he gets here. Dr. Roubideaux, the floor to you.
Dr. Roubideaux. Thank you. I am just making sure that the
microphone is on. You are good? Push the button. You can hear
me now?
Mr. Simpson. Yes.
Dr. Roubideaux. Perfect. Well, good morning.
Mr. Simpson. Would you like to have your opening statement
now or----
Mr. Moran. Apparently you are not so Irish there or
something.
Mr. Simpson. Seriously, so let's not go there.
Mr. Moran. I will not go there. Do you want a cookie?
Mr. Simpson. I have two here. You will be off the hook on
your side of the table.
Opening Remarks of Mr. Moran
Mr. Moran. Actually, I have such a fine opening statement,
Doctor. I know you would want me to share it. We do want to
thank you for coming to the subcommittee oversight hearing
today.
And I thank you, Mr. Chairman, for giving us the
opportunity to say a couple words.
We, I think, recognize that a person's greatest asset
oftentimes is their state of health because if you do not have
your health, there is not much that you can enjoy in life. And
the fact is that too many Native Americans' health status is
seriously impaired in category after category. The Native
Americans suffer sickness and disease at far greater rates than
other Americans, and that is what Chairman Simpson noted in his
address. And Native Americans die at higher rates than other
Americans.
The statistics you quoted, Mr. Chairman, are just stunning.
Whether it be alcoholism, diabetes, injuries, homicides,
suicide, it is something that we have to address, and this is
the best way to address it. Native Americans' life expectancy
is still 4 years less than Americans of any other race, and as
bad as those statistics are, though, I want to recognize the
terrific work that is done by the Indian Health Service. Over
the last 50 years, Indian Health Service has made a real
difference in the lives of Native Americans, particularly in
terms of high infant mortality and deaths from disease. But we
still have many challenges, especially the epidemic of
diabetes. We recognize that there are larger societal issues,
but poverty, education, rural isolation all comes together to
present special challenges for Indians' health.
I do appreciate the bipartisan support that Indian Health
has had on this subcommittee. I think it should be recognized
because it is real and substantial and meaningful. But it is
becoming more and more difficult. This bill proportionately was
cut more than any other bill by the Senate, and that is very
troubling. A 5 percent cut in Indian health programs is not
what the American taxpayer would want done; it is certainly not
what this subcommittee wants to see. The situation is going to
continue to be very difficult, but this subcommittee is
committed to doing everything we can to advance the state of
Indians' health and to support you in your efforts, Dr.
Roubideaux. So I thank you very much.
I thank you, Mr. Chairman.
Mr. Simpson. Dr. Roubideaux.
Opening Remarks of Dr. Yvette Roubideaux
Dr. Roubideaux. Well, thank you, Mr. Chairman and members
of the subcommittee. My name is Dr. Yvette Roubideaux. I am the
director of the Indian Health Service. I am really pleased to
have the opportunity to testify on the accomplishments of the
Indian Health Service.
Well, over the past few years, we have been working to
change and improve the Indian Health Service. And I want to
thank you so much for our progress on appropriations. It has
been really critical to our progress in terms of accomplishing
our agency priorities and improvements. Since 2008, the IHS
appropriations have increased by 29 percent, which is making a
substantial difference in the quality and quantity of
healthcare we are able to provide, which in the end helps us
reduce health disparities in the communities we serve.
For example, Contract Health Service funding, which is how
we pay for referrals to the private sector, has increased 46
percent since 2008, and 4 years ago, only four federal programs
were funding beyond Medical Priority 1, which is ``life or
limb'' for referrals. Now, almost half of all federal Contract
Health Service programs are funding referrals beyond Medical
Priority 1. This is significant because it means more patients
are accessing healthcare services that they need, including
preventive services like mammograms and colonoscopies. The
increases in Contract Health Service funding also means that
the IHS Catastrophic Health Emergency Part, or CHEF fund, which
used to run out of funding for high-cost cases reimbursement in
June, is now able to reimburse cases all the way until August.
So although IHS faces uncertainty about its funding level for
fiscal year 2013, we are committed to continuing our efforts to
change and improve the Indian Health Service.
While IHS has made considerable progress in addressing our
agency priorities and reforms, our first priority is to renew
and strengthen our partnership with tribes, and that is based
on our belief that really the only way that we can improve the
health of our communities is to work in partnership with them.
Over the past few years, we have made several improvements that
have resulted in better decision-making and more effective
progress on our agency reforms.
For example, Tribal Consultation is helping us improve our
Contract Health Service program, the business of it and our
referral process. Tribal Consultation is also helping us
improve coordination of care for veterans through
implementation of our 2010 updated MOU and the recently signed
IHS-VA National Reimbursement Agreement.
Our second agency priority is to bring reform to the Indian
Health Service, and this year, the IHS is focused on planning
for implementation of the Affordable Care Act health insurance
exchanges and Medicaid expansion in 2014, and we continue to
make progress on implementation of the reauthorization of the
Indian Health Care Improvement Act.
IHS is also making progress on our internal IHS reform
efforts, including organizational and administrative reforms,
improved budget planning, financial management, human
resources, performance management, and more consistent business
practices throughout the Agency. While IHS has responded with
corrective actions for the findings from the Senate Committee
on Indian Affairs investigation of the Aberdeen area, we have
since conducted reviews of all 12 areas and are implementing
corrective actions as well.
Our third agency priority is to improve the quality of and
access to care. We have focused our efforts on a number of
customer service and quality improvement strategies over the
last few years, including our Improving Patient Care program,
which establishes a patient-centered medical home model within
the Indian Health System.
In 2011, the Indian Health Service successfully met all of
its national Government Performance and Results Act, or GPRA,
performance clinical indicators, and this is an accomplishment
that was never before achieved in IHS. And it is really due to
a system-wide focus on improvement and also increased access to
care from the recent funding increases.
For example, receipt of mammograms by women for many years
was in the low- to mid-40 percent range, and by fiscal year
2012, it has increased to over 50 percent.
So our final agency priority is to ensure that our work is
transparent, accountable, fair, and inclusive. And this
includes a focus on system-wide accountability for progress on
agency reform efforts.
So in summary, we are making progress and changing and
improving the Indian Health Service. And thank you so much for
your support and your partnership. It has really been essential
to our progress thus far. And although we are in a time of
uncertainty regarding resources and we clearly have much more
to do, the work of the past few years has clearly established
that by working together, our efforts can change and improve
the Indian Health Service. And that helps us ensure that our
American Indian and Alaska Native patients and communities
receive the quality healthcare that they need and they deserve.
Thank you. And I am happy to answer questions.
[The statement of Yvette Roubideaux follows:]
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CHEF AND CHS
Mr. Simpson. Thank you, Dr. Roubideaux. I appreciate you
being here today and I appreciate the work that you are doing
and have done with us trying to address this disparity.
You mentioned during your testimony that the old saying in
Indian Country used to be do not get sick after June. You now
say that you can get sick clear up until August. What happens
in September?
Dr. Roubideaux. Well, there are two things. So there is the
overall budget for Contract Health Service where we make
referrals, and then there is this pot of money called the
Catastrophic Health Emergency Fund. That is where we reimburse
facilities for the costs of high-cost cases after they meet a
certain threshold. That money is sort of a first-come, first-
served, so it actually runs out when it runs out. And so what
we are saying is it is now running out in August instead of
June. Those cases have still been paid for; it is just that we
are not reimbursing them. But if we reimburse them through this
fund, that means those resources can be used for other
referrals.
Mr. Simpson. So tribes are having to use their own
resources to pay for those medical costs rather than being
reimbursed?
Dr. Roubideaux. Their Contract Health Service fund.
Mr. Simpson. Yes.
Dr. Roubideaux. Yes, the overall pot of funds. The phrase
do not get sick after June has been a very effective advocacy
tool and way to describe the fact that for Contract Health
Service, the way that we pay for referrals, we have an
incredible shortfall in the amount of funding that is available
for the referrals. So in the past, they used to just use it up
and then it would run out.
Mr. Simpson. Yes.
Dr. Roubideaux. What we have done is we have implemented
improvements in the way we manage the Contract Health Service
program so that it is better apportioned throughout the year
and that there are weekly meetings of the Contract Health
Service program to look at medical priorities for approvals of
referrals.
So the budget is clear. Even though we are doing that and
the money is being apportioned out throughout the entire year,
there is still significant need. Our current Contract Health
Service budget is around $800 million. The actual need related
to denied and deferred services is almost $1 billion above
that.
Mr. Simpson. We figured out a way to separate the terms
contract support costs and Contract Healthcare Services so that
we can understand which we are talking about? We have mentioned
that before that we oftentimes get them confused here.
Dr. Roubideaux. Yes. Contract Health Services, how we pay
for referrals, contract support costs is the administrative
costs related to contracts to tribes. I cannot reveal anything
about the 2014 President's budget, but I can say that we took
your advice and are changing the name to Purchased and Referred
Care. We are proposing that in our budget. So Purchased and
Referred Care does better reflect that this funding goes to
referrals.
GPRA
Mr. Simpson. Probably the thing that we rely on most is a
measure of how well we are doing at addressing this--I do not
want to say backlog--but this need that exists in meeting our
obligations, and as the statute says that I read earlier,
making sure we address this disparity. I mean I read the
statistics of the differences between the Indian population and
all other Americans based on pure numbers. How are we doing? I
mean we have been at this effort for some time and trying to
address this disparity. It seems to still exist. What measures
are we using to try to reduce them?
Dr. Roubideaux. Well, the Indian Health Service does do
regular surveillance on a number of things. The ultimate
outcome is of course reducing the disparities in mortality or
death rates. And we can see over time over the course of the
Indian Health Service being in place, as Representative Moran
said, we can see that mortality is decreasing in a number of
areas. The areas where we see mortality decreasing include
alcohol deaths, diabetes deaths, unintentional injuries,
homicide, and tuberculosis. But you are right. American
Indians, Alaska Natives still do suffer significant health
disparities and the quality of care. Alcohol mortality is still
6.1 times greater, diabetes is still 2.8 times greater, and
unintentional injuries are still 2.4 times greater. Those are
in sort of the long-term health outcomes.
The way for us to prove that as a healthcare system is to
improve access to quality healthcare. And that is where we
really see some of the more short-term progress that will lead
to long-term progress. I mentioned how we, for the first time,
met all of our GPRA indicators, which measure the quality of
care and the access to care that we provide.
When you look at all of the GPRA indicators, we can show
significant improvements in, for example, access to dental
services has increased 15.2 percent since 2008, sealants placed
has increased 22.6 percent, topical fluoride patients have
increased 40 percent, mammograms have increased 15.3 percent,
colorectal cancer screening has increased 59 percent, tobacco
cessation has increased 67.6 percent, and so on. We can provide
you a full chart of what the increases have been over the last
4 years. But it is really clear that in order to address those
long-term health disparities, we have to provide better access
to care in our system, and the resources and funding increases
in the past few years are definitely giving us a great start in
doing that.
Mr. Simpson. One of the challenges we had--and it is true
across all America I suspect--is--and maybe it is more
emphasized within Indian Country, you go to some places, as we
did when we went to Oklahoma and some other places, they are
doing very well in terms of the healthcare services they are
providing, facilities that they are building, and so forth. In
other parts of Indian Country, it is almost the dark ages. How
do we decrease this disparity, not just between Native
Americans and the rest of the American population, but the
disparity within Indian tribes?
Dr. Roubideaux. Well, what we need to do is make sure that
when we get more resources for the system, we make sure that
those resources benefit all of our patients, whether they are
served by IHS-direct programs, whether they are served by
tribally managed programs, or served by Urban Indian Health
programs. And looking at tracking trends, monitoring
performance, looking at access to care, and making sure that we
are consulting with all of the tribes in the 12 IHS areas to
make sure what their priorities is helping us do better at
improving the quality of care, access to care, and ultimately
to reduce those disparities.
UNFILED POSITIONS
Mr. Simpson. How are we doing filling the unfilled
positions that you have, whether they are doctors or dentists
or other professionals?
Dr. Roubideaux. Well, we have always had a challenge with
vacancy rates, especially with clinical providers and
physicians, and we are facing greater challenge with a looming
shortage of primary care doctors. But what we have been doing
are a number of reforms. One is the overall agency reform. When
I was first director, we surveyed all of our providers, all of
our staff, and asked them what they wanted to see, and I
thought they wanted to see more improvements in clinical care.
And really what they wanted is the organization to function
better. And so that is why we have had such a focus on
improving business and administrative processes,
accountability, performance, and communication, and so want to
create a better environment within which people can work. We
also continue to use recruitment and retention bonuses. We have
our loan repayment programs, scholarship program. We have
worked with HRSA on getting National Health Service Corps
scholars for loan repayment and scholarship placed in our
system.
And overall, one of the most exciting things that we have
is our Improving Patient Care program, which is changing our
care to a more team-based care that spreads the work to the
highest level of each of the providers so that the doctor does
not become completely overwhelmed because there are other
members of the team that can do other parts of the care. And
then trying to make the improvements and get more modern
equipment and really try to find ways to improve the working
conditions that people live in----
Mr. Simpson. Are those vacancy rates going down?
Dr. Roubideaux. Yes. We actually are seeing some
improvements. You may remember the vacancy rates for dental
were over 30 percent several years ago. They are now around 10
percent. There are improvements in a number of the other
provider vacancies, but some of them we still struggle with,
and physicians are always going to be an area where we really
need to work harder. But the use of advanced practice nurses,
physician assistants, and again, reorganizing the way we
provide care will make sure that we use those providers more
efficiently and that we do not overload them so that they get
burned out.
Mr. Simpson. Mr. Moran.
Mr. Moran. Thanks, Mr. Chairman. Appreciate it. That
printer must have put that nametag together in a mirror.
Dr. Roubideaux. I know. I just noticed that.
Mr. Moran. Did you notice that?
Dr. Roubideaux. Roudibeaux.
WATER SANITATION
Mr. Moran. We had an oversight hearing on water sanitation
systems last year. That does contribute to some of the disease
issues we have had to deal with. Have we made any progress in
that regard, Dr. Roubideaux?
Dr. Roubideaux. Well, we are doing what we can to make
progress on sanitation facility construction, and the Recovery
Act definitely did help with giving us $63 million more, and
EPA also gave us $90 million more. So we were able to work on
the backlog of sanitation projects that is there. The estimate
of the Sanitation Deficiency System that updated the need to
serve existing homes in 2011 was 3.1 billion, and then in 2012,
it had gone down to 2.8 billion. But in terms of what is
economically feasible, that has gone up a little to 1.6
billion. There is just an enormous, enormous burden of need for
water and the sewage disposal and solid waste disposal
facilities in our new and existing homes. So with that
incredible need of 2.8 billion in 2012, there is clearly still
more to do. But it is clear that more resources do help us make
progress.
HEALTH EDUCATION AT RESERVATION SCHOOLS
Mr. Moran. Thank you. A number of the illnesses, diseases
that we experience the highest rates of are what are called
behaviorally related problems, are you working with the school
systems on reservations in terms of healthcare diets and
nutrition counseling?
Dr. Roubideaux. We are. And that is mostly through the
resources we have received through the Special Diabetes Program
for Indians. I know many of those programs that provide
diabetes prevention and treatment services do outreach and work
with the local schools and try to help with education on
nutrition. We also have our public health nurses who can go out
to the schools and do education, as well as our Nutrition and
Health Education staff. So we do do some outreach. It is clear
we could do more, and that is why I was pleased to have already
met twice with Assistant Secretary Kevin Washburn over at the
Department of Interior, and I hope to have more meetings to
talk with him about how we can do further collaboration on the
portfolio that he has that includes schools.
VETERANS AFFAIRS
Mr. Moran. I hope so. The Department of Veterans Affairs
and the Department of Defense are supposed to be sharing some
of their medical facilities with IHS, and there are some issues
with regard to reimbursement for the care of Native American
veterans. How are we progressing on that?
Dr. Roubideaux. Well, we actually are making progress in
terms of trying to improve the coordination of care for
American Indian/Alaska Native veterans who are eligible for
both IHS and the VA. And in 2010 I signed an updated Memorandum
of Understanding with the VA that is working to improve
coordination of services. We have a number of work groups at
the national level that are working on trying to improve
coordination in a number of areas, including sharing
information, quality of care, IT systems, telehealth, and so
on.
And in terms of reimbursement, we have been very fortunate
that the Indian Health Care Improvement Act did include Section
405 that allows that the VA reimburse IHS. And on December 5,
we were able to sign our National Reimbursement Agreement with
the VA that allows the VA to reimburse IHS for direct care
services for eligible American Indian/Alaska Native veterans at
a rate that helps our facilities and was requested by tribes.
And so we are implementing that now in 10 federal sites. We
are also implementing it in tribal sites. Alaska, of course,
has been implementing it since August as well. And I believe
the first federal site has already set up the billing and sent
the first bill. So I think we are making progress there.
The issue of sharing facilities is something that we have a
couple of examples of in our communities, and we hope to do
more of that.
Mr. Moran. Very good. And lastly and very quickly, the
chairman mentioned that the rate of death for alcoholism is
over 500 percent greater among Native Americans. Are those
statistics any better this year?
Dr. Roubideaux. Those statistics over time are better, but
there is still a significant disparity. And so we are focusing
our alcohol and substance abuse funding to try to continue to
address that with mostly tribal- and community-based programs.
Mr. Moran. Thank you, Dr. Roubideaux.
Mr. Simpson. Mr. Calvert.
Mr. Calvert. Thank you, Mr. Chairman.
GENETICS AND DISEASE
Just on a point that Mr. Moran brought up on some of the
lifestyle diseases, has there ever been a study also whether
there is any genetic predisposition to certain diseases more in
the native population than in other populations?
Dr. Roubideaux. Well, it is clear that we need more
research in that area. We know from prevalence studies, studies
of the rates of diseases, that certain diseases occur more
frequently in American Indians and Alaska Natives, but that----
Mr. Calvert. But it seems like diabetes is----
Dr. Roubideaux. Diabetes is actually one of the most
notable where we see some of the highest rates in the world.
And the epidemic of diabetes that is hitting America now hit
American Indians and Alaska Natives in the 1970s. And that is
why we have had programs since then to try and address that
epidemic.
YRTC IN CALIFORNIA
Mr. Calvert. All right. My primary question is about the
tribes in California that waited 4 years for the construction
of their Youth Regional Treatment Centers mandated by the
Indian Health Care Improvement Act, and with the development of
these centers that have been finally initiated, it is important
that the work continues. And I just wanted to see if you could
assure the Committee that the centers will remain a priority
and these facilities, their construction budgets and so forth,
will not be delayed, and whether or not sequestration may
affect your plan to move forward on these Youth Regional
Treatment Centers.
Dr. Roubideaux. Well, certainly the California tribes have
made it very clear that the Regional Youth Treatment Centers,
both in the southern and northern California, are a top
priority, and that is what we have been working on over the
past couple of years. We already have the land for the southern
YRTC, and the design. We got the funding for the design in the
2012 budget. And the design of the southern YRTC will be
completed by the end of this year. And so that would make it
perfectly ready for construction funding in the following year.
And $15.5 million is needed to complete the southern YRTC. The
northern YRTC we have just purchased the land and just got
control of that. And so we are looking forward to requesting
the funding for design and construction in future budgets.
Mr. Calvert. Okay. Good. Thank you.
Mr. Simpson. Ms. McCollum.
FORWARD FUNDING AND SEQUESTRATION
Ms. McCollum. Thank you, Mr. Chair.
The VA, it took them a long time, but they finally got
forward-funded with their medical costs. That would help with
all of the problems that we have because we have underfunded
for contract, but in light of what is going on with
sequestration and some other things, it might have provided
some relief. So if you could maybe talk about forward-funding,
if there has been any discussion with the Obama Administration
about moving forward with that. I think it is pretty difficult
with the scenario that we are facing right now, but I think it
is something that the VA talked about for years and years and
years before they got it.
The sequestration is going to take $220 million from IHS,
and I think for many of us, we were quite surprised. We thought
in the sequestration, because Medicare/Medicaid were kind of
roped off, fenced off, and protected, I think there was a lot
of assumptions that we took care of the most vulnerable
populations when clearly we did not. Not only did we not take
care of a very vulnerable population in sequestration, but now,
they are going to be facing some cuts after this committee and
other Members of Congress worked extraordinarily hard to raise
things up.
Has there been any discussion about what we need to do at
the Executive Branch? Because some of us have spoken here of
trying to find the money to put Native American healthcare
system at least held at, you know, not in harm's way the way
Medicaid and Medicare have been.
Dr. Roubideaux. Well, it is clear, as you say,
sequestration is a devastating impact for the Indian Health
Service. The cut, after the fiscal cliff deal, it looks like it
is going to be about 5 percent, which is still 220 million, as
you have said, which is very significant. And we have estimated
that there will be 3,000 fewer inpatient admissions and 804,000
fewer outpatient visits.
And the thing about the law is that it mandates every
program, project, and activity be reduced, so there is a
limited ability to protect priorities. So even if the
Administration wanted to protect the Indian Health Service, the
law, as it is written right now, would not do that. We are
grateful for working with Congress and hoping to find a
solution to larger budget deficit issue so that we can minimize
the impact or avoid sequestration. But it is really clear and
we are really interested in hearing options and solutions to
try to help us make sure that we can minimize the impact and
also continue the progress that we have made.
What I am concerned about is we have made so much progress
and I certainly hope it does not take us further backwards with
the sequestration that we are facing.
Ms. McCollum. Mr. Chair, in the Recovery Act, which
passed--and I realize that that was controversial amongst us,
you know, passing it and what it achieved and what it did not
achieve, but there was an unintended consequence of Indian
schools being left out because they were and the Department of
Education. Now, we had what we thought was a rope-off, a fence-
off for the most vulnerable Americans in the sequester with
what was accounted for in Medicaid and Medicare. And once
again, Native Americans were left out. So I think we have a
real problem. As these grand bargains and deals are put
through, I think one of the boxes that we are all going to have
to ask are checked off by our colleagues and by the
Administration is: and how are the Indian children and elders
doing?
Thank you, Mr. Chair.
Mr. Simpson. Mr. Cole.
IHS FUNDING COMPARISON CHART AND CSC
Mr. Cole. Thank you, Mr. Chairman.
Good to see you again, Doctor. First, a request. You
mentioned you could get us that improvement chart we went down.
I would really like to get a copy of that. And a couple of
years ago--and I have used this to great effect since then--you
produced a chart that just, in terms of dollar amounts, went
through Native Americans, average American, veterans, Medicare
recipients, and it was very striking about where Native
Americans ranked. And so if you have an updated version of
that, I would love to get a copy of that. I was able to wave it
around a Budget Committee meeting to some effect recently, so
it is a great piece of ammunition to have.
Let me ask you this: obviously, this committee--and you
referenced it in your testimony--has put a lot of emphasis on
contract support costs. And we had made some progress. So far
in fiscal year 2013, have you been able to fully fund contract
support and can you tell us whether or not you will be
requesting full funding in fiscal year 2014?
Dr. Roubideaux. Well, I am unfortunately not able to talk
about the fiscal year 2014.
Mr. Cole. Do you want to give us a hint?
Dr. Roubideaux. I am unable to tell you what we are doing,
but we are certainly interested in working with Congress on
this very important issue that I know is a priority for tribes.
Mr. Cole. Okay. Well, how are we doing in '13 to this point
in terms of fully funding?
Dr. Roubideaux. Well, the '13 appropriation is not
complete, so I am not sure what the outcome will be. I know
that the actual need in 2013, if the President's budget for
2013 was implemented, which it does not look like now, but
would be $70 to $80 million. And so the need is still great for
contract support costs and we are still interested in working
with all of you to try to address that, especially since the
Supreme Court decision.
Mr. Cole. Okay. Yes, absolutely. Let me ask you this: you
might enlighten us a little bit because I think you would
probably be better informed. We chatted a little bit about
this. I know you are going to get at least some money it looks
like in the Senate CR, not nearly enough, but can you give us a
quick overview of what you think is developing through the CR
that might assist you in the sequester process?
Dr. Roubideaux. Well, I have heard that the Senate version
of the CR, while it does include a rescission and
sequestration, may include an increase of $53 million for new
staff for facilities, and these would be facilities we are
constructing or are being constructed by tribes through the
Joint Venture Project. And once their construction is done, IHS
has agreed to request the staffing from Congress, so it is
considered a commitment. And so we have made that request and
we do not know the final outcome of the 2013 budget, but I know
that all of those tribes and all of those facilities that are
waiting for that staffing funding really need it and it would
help us get those facilities fully open in providing the
healthcare services that the communities need.
JOINT VENTURE
Mr. Cole. Last question I know because we are very limited
in time and a point first. Chairman, you raised the difference
between really joint venture tribes in effect and, you know,
tribes that are getting their services directly from IHS, and
that is a huge difference, as you know. I mean some tribes have
revenue streams they can put additional money on top of and
actually can deal with the sequester a little bit better than
tribes that are not as fortunately situated. I have got
actually both kinds of facilities and tribes in both situations
in my district, and you know, it is pretty unfair in terms of
those that simply do not have the ability. They would do so if
they could.
Toward that end, can you tell me where we are at in the
joint venture process right now and whether or not the funds
that were obligated--again, I know you have had to shuffle
around funds to deal with shortfall, so if you could just give
us some overview of how that has affected joint venture both
for the tribes that in good faith put up money expecting
support and sometimes not getting, but also some of the tough
choices you have had to make because of that?
Dr. Roubideaux. Right. Well, when we signed the Joint
Venture Agreement with the tribes, they agree to fund the
construction of the healthcare program and we agree to request
the funding for the staffing through Congress. But it always is
subject to appropriations. And so in a way, there are sort of
three partners in this journey. It is the tribe, the Indian
Health Service, and Congress. And as you know----
Mr. Cole. I know who I would not trust in that trio.
Dr. Roubideaux. Well, you know, it has been challenging
times with the budget and the ability to predict what the
budgets will be in any year. And I appreciate all your
partnership and trying to help us get the funds that we need,
but we have many facilities who we are now required to, because
of the appropriations not meeting the need, what we have to do
is sort of fund the staffing over multiple years. And I know
that the tribes do not like that but it is the only way we have
been able to try to be fair when we base it on the beneficial
occupancy, which is when they are ready to open.
And so we have several of these facilities in the queue and
we have some that are just getting started, and it makes us
concerned about should we open another round for applications
for the Joint Venture Program when we have so many facilities
that need new staffing? And that is a big struggle and a
decision we will need to make.
Mr. Cole. This is a case, Chairman, where we are being
penny wise and pound foolish because we get tribes to invest
and then do not follow through and they are not going to invest
again. So hopefully, we can do better. I yield back.
Mr. Simpson. Just to follow up on what Mr. Cole was talking
about and what you were, the $53 million that they apparently
plussed-up in the Senate CR, the problem is where they took
some of it from. They terminated the BIE School Construction
Renovation Program, and so we kind of robbed from Peter to pay
Paul and it does not advance us anywhere. What we need when we
are talking about fully funding the contract support that this
committee has tried to do over the years, what we need is some
cooperation with the body across the rotunda and we all need to
be working off the same numbers. And we have talked about this
before and the challenges that presents.
So Ms. Pingree.
RECRUITMENT AND RETENTION
Ms. Pingree. Thank you very much, Mr. Chair. And I am
looking forward to the tutorial on working with the Senate. I
knew I was going to learn something coming here.
I am very grateful to be one of the new members on this
committee, and a lot of my colleagues have already asked
several of the things that I am also interested in, but just to
the interest of time, let me reinforce a couple of them, and if
you have some more comments, I would be happy to hear.
Coming from the State of Maine, I am fortunate to represent
four tribes. And some of these things, like I said, you have
already heard the concerns. The Passamaquoddy was deeply
concerned about the fact that, as Ms. McCollum said, that
several programs were held harmless. And it seems very
unreasonable that these were not, that Indian health is not
treated in the same way as the other programs that we held
harmless. And to the extent that there is any way to look at
that, it certainly seems like it is causing tremendous
difficulties for them.
I think you talked a little bit about the model diabetes
program, and we have been fortunate to have three of our four
tribes involved in that and are just interested to know some of
the things you talked about, what you can do. What can be done
with more outreach is certainly significant. It is a
significant problem in my State anyway and exacerbated within
the tribes. And so to the extent that more could be done on
outreach or, you know, just assistance to people who are really
battling a very serious problem.
And the one other thing I wanted to bring up was around the
area of something that the Micmac tribe has been dealing with.
And again, I think you talked a little bit about some of the
challenges of medical personnel. But they have had really great
success under the Government Performance and Results Act for
the past 3 years. They met all 21 of the GPRA indicators and
have been recognized nationally for their work on dental
services and outreach, which is of course a serious challenge
again in a rural state within and outside the tribe.
But one of their huge issues is recruiting workers. Can you
talk a little bit more in that area? Even in areas that have
success stories, it does not seem like they are getting
assistance for being able to recruit the quality staff that
they need or retain them once they get them. So to the extent
that you want to comment, I know some of those things you have
already discussed today, but they are looming issues for us as
well. Thank you for your testimony.
Dr. Roubideaux. And we would be happy to work with you on
recruitment and retention strategies.
What we are trying to do now is share best practices around
the system because it seems like there are some facilities that
do better than others at recruiting and retaining. A part of it
is salaries, but we have got some special pay systems that we
have implemented that have made our physician salaries much
more competitive than they were in the past. Our other
providers we have recently gotten some increases in pay for
them as well.
One of the things that we are trying to work with tribes on
is that--and I saw this as a physician myself when I worked in
the Indian Health Service--it really makes a difference if the
community helps with the recruitment efforts, the community
welcomes the providers, invites them to local events, you know,
works with them in partnership on how to make things improve.
And that is why I have a high priority on tribal consultation
because I really feel if the providers connect with the local
community, they may be more likely to see it as home and want
to stay there. And our primary problem, in addition to
recruitment, we also have those challenges with retention. And
if we find a good doctor or a good nurse or a good provider, we
have to do everything we can to keep them.
Mr. Simpson. Mr. Joyce.
SEQUESTRATION PERCENTAGE
Mr. Joyce. Thank you, Mr. Chairman.
Dr. Roubideaux, thank you for appearing here today, and
this may be a little bit of a follow-up to what my colleague,
Ms. McCollum, had asked you, but I understood that there were
between the sequestration cuts you normally expected a 2
percent cut, but then when doing the math, it was applied to
closer to 9 percent. Can you explain why almost all other
discretionary health programs are protected and the American
Indians are not?
Dr. Roubideaux. Well, what I can do is explain the sequence
of events which was, you know, certainly sequestration was not
supposed to happen, but when the Super Committee did not make
their decision, then OMB was required to do an analysis of what
sequestration would mean for the Federal Government. And it was
in that analysis that OMB did that they discovered that the
exclusion for both IHS and HRSA that had been in previous
versions of the Budget Control Act was not in this Budget
Control Act. That was back in September. That report was sent
to Congress. We were informed and we notified our stakeholders
about the fact that instead of a 2 percent exclusion, actually,
the cut would be the full sequester, which at that time was 8.2
percent.
However, with the fiscal cliff deal in December, the levels
have been brought down to about a 5 percent cut. But that is
still $220 million, and that is really devastating for our
system. So it appears that it is not in this version of the
Budget Control Act, and I think there is certainly a lot of
concern about the Indian Health Service not having that
exclusion.
Mr. Joyce. Thank you. I yield back.
Mr. Simpson. Mr. Valadao.
DOMESTIC VIOLENCE PREVENTION INITIATIVE
Mr. Valadao. Thank you, Mr. Chair.
Your statement indicates that because of IHS' Domestic
Violence Prevention Initiative, 344 sexual assault frantic
examination kits have been submitted by IHS to law enforcement.
While I applaud the work the Service has done on this front, I
cannot help to feel that 344 SAFE kits seems kind of low
compared to the statistic of one in three native women will be
sexually assaulted in their lifetime. How does your statistic
of 344 SAFE kits submitted compare to the rate of sexual
assault in Indian Country? If 344 is low by comparison, how
does the Service intend to increase the number of SAFE kits it
submits to law enforcement? And what challenges does the
Service face in increasing the number of SAFE kits it offers?
Dr. Roubideaux. Well, the data that we gave up about 344
SAFE kits being submitted to law enforcement is related to the
data collection around our Domestic Violence Prevention
Initiative. In that initiative, we are funding 65 projects in
the Indian Health System, 44 tribes, 13 IHS and 8 Urban Indian
Health Programs to be able to provide culturally appropriate
prevention and treatment models and evidence-based practices to
address domestic violence and its strategies. In addition, we
are training medical personnel to conduct the medical exams in
all 45 of our hospitals that offer those kind of services and
we are also providing funding to provide the equipment that
they need for those services.
And so I am not sure that this is the total number for our
entire system. I know this is the number for the 65 projects
that we have funded. And we will try to look and see if we can
get some additional data to see what the number is for the
entire system.
UNDERFUNDED IHCIA PROVISIONS
Mr. Valadao. And one more question if you do not mind.
There are currently 23 unfunded provisions in the recently
permanently reauthorized Indian Health Care Improvement Act.
What are the funding priority areas for IHS?
Dr. Roubideaux. Well, you are absolutely right. The Indian
Health Care Improvement Act has over 80 provisions that help
update and modernize the Indian Health Service. However, many
of them represent new authorities and demonstration projects
for which we do not have new or additional funding.
What we have been doing is trying to implement the ones
that we can without funding, and we have made great progress on
that, but there still are a number of priorities. And I have
consulted with tribes, and some of those priorities are long-
term care services, dialysis services, and behavioral health
issues. And so those are issues that we are trying to work on
related to the budget formulation and working with tribes on
tribal priorities. In this challenging budget climate, it has
been difficult to get those budget priorities into the budget
when there are higher priorities that we hear from tribes like
Contract Health Service and how we pay for referrals. But we
continue to work with the tribes on those priorities.
Mr. Valadao. Thank you.
AFFORDABLE CARE ACT
Ms. McCollum. I was going to ask you take yield for a
second. I had a follow-up.
Was any of that funding in the Affordable Care Act? I know
some of it was a line item separate from where you were, but my
understanding was there was also some things that were funded
in the Affordable Care Act that would be of benefit to Indian
Country.
Dr. Roubideaux. Well, there is actually many things in the
Affordable Care Act that are benefiting American Indians and
Alaska Natives. Certainly, the health insurance exchanges that
are being established increase access to health insurance
coverage in a more affordable way and that funding is critical
to make sure that our patients have that option to be able to
purchase affordable health insurance in case they do not have
it. And that helps them in addition because if they still go to
IHS, we can build their health insurance, and then those
revenues can be used to improve health care for the rest of the
community. So that is one of the benefits.
There are a number of other demonstration projects that are
being implemented in the Affordable Care Act around community
prevention and community transformation, long-term care,
supports and services, and so on that we have many tribal
grantees who are part of that as well.
And so we are grateful for the fact that the Affordable
Care Act is another way that the federal responsibility for
health care is given. The Indian Health Service is a healthcare
system that provides healthcare services, but if more of our
patients can have these other benefits of also being covered by
health insurance or by Medicaid, that is more resources for all
of our facilities and for the rest of the community.
So that is why we are really focused on implementation of
the Affordable Care Act in preparation for 2014 when the
exchanges go live and the Medicaid expansion and those states
that have chosen to do it is available for our patients.
REINSTATE HEALTH RESEARCH AND MONITORING TRENDS
Mr. Simpson. In the House Report accompanying the fiscal
year 2013 Appropriation Bill, we encourage the IHS to reinstate
health research and monitoring of trends, including updating
the trends in Indian health and regional differences. In the
Indian Health Report, are there efforts underway to get this
going?
Dr. Roubideaux. Yes, there are. So the Trends in Indian
Health is a report of mortality statistics over time, and it is
extremely important to us and it is a priority. The challenge
of that is that it actually takes at least 4 years for us to
get that data from the states through a number of channels to
get it to us where we do the analysis and adjust for the
underreporting on death certificates. So we are always a few
years behind on publishing that data, and that has been true
for many, many years. We plan to publish another version of
Trends in Indian Health during the next year and also regional
differences in Indian Health, which looks at the differences by
areas.
We also on occasion do ad hoc publication of special
reports. Those are usually based on available funds as well.
But tracking these trends is extremely important to us and we
are in the process of getting another report. And the issue is
it always is several years behind because from the time we get
the vital statistics data from the states and then it goes
through a number of other venues. Then, it gets to us.
Mr. Simpson. Thank you. And thank you. We have got a vote
going on now. Thank you for your testimony. We appreciate you
being here.
The Committee will recess for these votes. We have got
three votes, a 15-minute vote that started 10 minutes ago, so
it is nearing an end, and then two 5-minute votes. And then we
will be back for the panel that begins probably 20 minutes from
now. So I appreciate it. Thank you for being here. And thank
you for the work that you do in working with us in trying to
address these concerns. As you noted and as I have noted and as
Jim has noted, it is a bipartisan effort on the part of this
committee. It is a responsibility we have. It is one we take
very seriously.
And I guess you could probably blame me as much as anybody
for not recognizing early enough that sequestration was going
to hit Indian Health Services unlike Medicare and Medicaid and
the others that were kind of exempted out of that. I should
have had my antennas up and caught that, and unfortunately, I
did not. It is something we have got to deal with. But we want
to work with you to make sure that it does not have any more
negative impact than absolutely necessary. So I appreciate it.
Thank you.
Dr. Roubideaux. Thank you.
[Recess.]
Mr. Simpson. Thank you for your patience in waiting for us
during that series of votes.
Our next panel is Mr. Rex Lee Jim, Vice President of the
Navajo Nation testifying on behalf of the National Indian
Health Board; Mr. D'Shane Barnett, Executive Director of the
National Council of Urban Indian Health; Dr. Kelly Moore,
Associate Professor of the Centers for American Indian and
Alaska Native Health at the University of Colorado testifying
on behalf of the Friends of Indian Health; and Dr. Henry
Fields, Professor at the College of Dentistry at Ohio State
University testifying on behalf of the American Dental
Association. I understand Dr. Moore has to catch a plane, so we
are going to let you testify first, and then if there are
questions there, we might do those before we go to the others.
So Dr. Moore, the floor is yours.
Opening Remarks of Dr. Kelly Moore
Dr. Moore. Thank you, Mr. Chairman. Good afternoon, Mr.
Chairman, Mr. Moran, and committee members. I am Dr. Kelly
Moore, a member of the Muscogee Creek Nation of Oklahoma and a
pediatrician. I am an associate professor at the University of
Colorado with the Centers for American Indian and Alaska Native
Health and a retired captain in the U.S. Public Health Service
with 20 years of service to IHS.
I am here on behalf of the Friends of Indian Health, a
coalition of over 50 health organizations, including the
American Academy of Pediatrics. The Friends appreciates the
opportunity to address whether increased congressional funding
for the IHS has been effective in improving the health of the
American Indians and Alaska Natives.
I can say from my experience that funding increases have
made a positive difference in the care and treatment of
children, as well as people with diabetes. These are most
evident in the sustained improvements of blood sugar, blood
pressure, and blood cholesterol levels that we have seen among
people with diabetes. We have also seen impressive results in
preventing complications. By teaching people with diabetes the
importance of foot care, providing protective footwear, and
routine podiatry care, IHS has reduced amputations by 20 to 25
percent in some areas.
The Together on Diabetes program is a program for young
people in the Navajo area and in White River, Arizona. The
program's success lies with the family health coaches who
provide crucial one-on-one support to help youth achieve
changes in health behaviors and attendance at their healthcare
appointments. This is an essential step towards better health
for our young people with diabetes.
Programs have also been established to address other
pediatric health priorities. The AAP has seen a number of model
programs on their Committee on Native American Child Health
site visits. Open-access scheduling which allows parents to
call and schedule sick visits or well-child care visits the
same day or same week is now more widely available. At one
site, this has improved show rates for appointments from 65
percent to 91 percent. Immunization rates are now at an all-
time high. Many programs designed to address healthy weight
promotion among youngsters have been put in place like the ``Be
Hopi, Be Healthy'' Camps.
Telehealth is also emerging as a way to improve healthcare
and remote areas because ENT specialists are rare and ear
infections and ruptured eardrums are common for children.
Alaska has developed a telehealth solution to provide services
to 248 sites. For every dollar spent by Alaska Medicaid to
reimburse telehealth, $11.50 was saved in travel costs.
Not only has there been an improvement in pediatrics and
diabetes care, but mortality rates for IHS patients have fallen
from the 1990s. Since 2005, overall mortality rates have fallen
by 11 percent. But there is still much to do. Suicide is the
second-leading cause of death among American Indians and Alaska
Natives between the ages of 15 and 24. Almost 23 percent of
native youth over age 12 report alcohol use. While native
teenagers, young people, and middle-aged adults have the
highest rates of methamphetamine use in the United States, drug
use varies among tribes. For this reason, the Friends believe
that IHS drug programs should not be focused exclusively on
meth. Funding should support a treatment/prevention/recovery/
law enforcement infrastructure with a focus on family.
Substance abuse prevention is most effective when the whole
family is involved.
Many American Indian and Alaska Native children live in
economically depressed areas. Nearly one in four Native
American children live in poverty, experience four times higher
rates of abuse and neglect, and have lower rates of educational
achievement than other racial and ethnic groups in America.
Early literacy promotion initiatives like Reach Out and Read
and family nurse home visitations can improve maternal and
child health outcomes. Investments like these have been proven
to produce savings in health care costs and reduce the use of
Child and Family Services.
In my written testimony, I also discuss the plight of the
American Indian and Alaska Native male and the high death rate
among this group. For several years, the Friends has testified
about the need to fully fund Contract Health Services. In 2010,
over 217,000 referrals for Contract Health Services were
denied. We thank the Committee for increasing the funding by 64
million since 2010. But in spite of these increases, the need
for Contract Health Services and reliance on private specialty
and tertiary care will be ongoing because the IHS and tribal
healthcare delivery system is predominantly a primary care
medical system. But a redesign of the Contract Health System
could result in care that is timelier, more effective, and
patient-centered at a lower cost.
Prevention and early treatment programs can also reduce the
need for Contract Health Services, but having a sufficient
workforce is the key to their success. Filling vacancies
through loan repayment has proven to be an effective
recruitment and retention tool. In 2012, the IHS awarded 507
new loan repayment contracts and 316 contract extensions.
However, 338 requests were denied. The Friends urges the
Committee to increase funding for this account by at least $17
million to fund all applications.
It is difficult to adequately address health problems
without the best and most up-to-date research. Surveillance
research in particular is vital to understanding disease and
injury patterns and the impact of newer treatments and
interventions. The Friends recommends additional funding for
the IHS and tribal Epidemiology Centers to conduct surveillance
research to better target resources to improve the health
status of Indian people.
The Friends thanks the Committee for its continued support
of the IHS. Your actions have indeed made a difference, but
because the IHS has been underfunded for years, the health
disparity gap has not yet closed. We look forward to working
with you to close that gap.
[The statement of Kelly Moore follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Simpson. Thank you for your testimony. What time do you
have to catch a plane? When do we need to get you----
Dr. Moore. My flight is at 5:10. I probably need to leave
here by 4:00 at the latest I would say.
Mr. Simpson. We could ask questions now and then go to the
rest of the panel if that is okay. Do you want to do the panel
first?
Ms. McCollum. No.
Mr. Simpson. Okay.
Ms. McCollum. I am okay with it.
Mr. Moran. Absolutely.
EDUCATIONAL PROGRAMS
Mr. Simpson. Okay. Let me ask you. You mentioned a program
called Reach Out and Read. Tell me how the educational programs
relate to improving health care?
Dr. Moore. You know, that is really a good question. Reach
Out and Read is an art and literacy program that is actually
implemented in the context of well-child care visits. So nurses
and doctors actually distribute books at 6 months to 5 years of
age to encourage parents to read aloud to their children. It
has really changed the way pediatrics is practiced in our
Nation, and it gives doctors an evidence-based strategy to
promote child development and school readiness.
Children served by Reach out and Read will develop the
language and literacy skills necessary to read, complete
school, and succeed in life. And the success of each one of
those children and the collective success of all at-risk
children all over the country will mean increased productivity
and economic security for our Nation. If they are able to get
jobs, it will improve their health literacy in terms of
understanding instructions given to them related to
medications, related to treatment for conditions for which they
are being seen. So it does have a lot to do with health as well
as health equity.
APPOINTMENTS
Mr. Simpson. You mentioned also in your testimony that the
improvement in showing up for an appointment in this one
program went from 65 to, what did you say, 95 percent or
something like that?
Dr. Moore. 91 percent, yes.
Mr. Simpson. A lot of people do not understand this when I
tell people in the rest of the world that are not dentists and
stuff--I was a dentist in the real world--that the biggest
expense in the dental office is actually missed and broken
appointments. And the same thing is true for most other medical
programs.
Dr. Moore. Absolutely.
Mr. Simpson. When somebody does not show up for an
appointment, the costs and everything else still go on. But
there is nobody there you are servicing so that is an important
factor. And if there are things that we can do to make sure
that people show up for the appointments that they have, we
will be able to spread limited dollars a lot further.
Dr. Moore. Absolutely.
Mr. Simpson. Mr. Moran.
Mr. Moran. I am fine. Thank you, Mr. Chairman.
Mr. Simpson. Mr. Cole.
SUCCESSFUL PROGAMS
Mr. Cole. Just a quick one. You have got obviously a good
and extensive background. If you are looking at things that
tribes could do to reinforce what IHS has done, what are
successful tribal programs, either where they have resources or
they have taken some initiative that has really made a
difference on top of what the service itself has?
Dr. Moore. Well, I think Dr. Roubideaux's comment about
helping with recruitment and retention in terms of helping to
make health professionals feel at home in Indian communities
where they serve would be extremely beneficial. I think that is
one of our biggest problems is sometimes we are able to recruit
but if tribes could help support, you know, keeping those
healthcare professionals in our community, that would be, you
know, a tremendous service.
I think if tribes could also look at sort of other economic
initiatives that can, you know, help many of our Indian Nations
rise up and out of poverty, that would incredibly help, I
think, the health status of American Indians and Alaska Natives
as well.
Mr. Cole. Thank you.
Mr. Simpson. Ms. McCollum.
HHS INITIATIVES
Ms. McCollum. Thank you. I am glad you mentioned Reach out
and Read. I have actually seen doctors in action doing it. We
do it with some of our low-income immigrant groups, as well as
our Native American families on the east side of the St. Paul.
And talking to the doctors afterwards, the doctors love it, but
the doctors not only are encouraging a child to read, but with
toddlers in the room, they will have a toddler book, and some
toddlers do not even know to reach for the book because they
have never been handed a book. And then that is a clue to the
doc sometimes that there might be a literacy problem even with
the adult and then spending a little more time talking about
how the antibiotic is taken, would you like a reminder, how
would you like me to--and so they saw even improvement in the
way medication was being applied to the young adult. It is a
public, private, and doctor initiative through the Department
of Ed, so a lot of people give and donate to a lot of our
corporations.
Are there some other examples? I know you mentioned not
one-size-fits-all in the drug program or its suicide
prevention. It needs to be culturally appropriate. But we have
got the CDC; we have got SAMHSA. My question is is there an
intra-HHS group that works on Native American health issues
with some of the centers for disease control with some of the,
you know, the Department of Health? What kind of conversations
are people having whether it be urban Native American health or
on the reservation? And then my other question would be the
challenges--we have people who winter back and forth or adults
who come down for awhile while they are ill and they are in the
Twin Cities for the winter, and then they go back up in the
summer and electronic medical records and making sure that
compliance and that doctors are prescribing the same thing.
So I threw a lot of things out there and whatever you want
to talk about, I am happy to listen to.
Dr. Moore. Right. There are some interagency groups that
have been, for instance, around obesity, fetal alcohol
syndrome. Those kinds of approaches have been used in terms of
voting interagency collaboration on important health
disparities. I think that some of the conversations that are
taking place are indeed that we need to move beyond addressing
health disparities through just focusing on just healthcare and
healthcare facilities to try and address things like the social
determinants of health. And that is why I love the Reach out
and Read program.
But there are other programs. One of the ones that I am
familiar with actually happened many years ago on the Pima
Indian reservation where they were looking at diabetes
prevention activities for overweight Pima individuals. And as
many of you know, the Pima of the Gila River Indian community
have some of the highest rates of diabetes reported in the
world. And what they found was that they had two groups, and
one group received just the traditional change or lifestyle,
start eating better, start being more active, whereas another
group got together and just talked about the cultures and
traditions of the Pima people and what they could do to try and
instill that in their youth. And when they looked at both
groups later in terms of some metabolic indicators related to
diabetes, it was actually the group where they focused on
traditional history, traditional cultural ways that could be
implemented again now, they actually did better. Their BMI was
lower and some of their indicators like insulin levels for
diabetes were also lower as well.
So those kinds of things can really help as well. So I
really support a lot of programs that try and instill cultural
pride, respect, just traditional ways of living. Even though we
cannot go back and turn back the hands of time, there are still
many things about that that help promote self-esteem of our
youth, and that can be very helpful.
Mr. Simpson. Ms. Pingree.
Ms. Pingree. Thank you.
LOAN REPAYMENT
Thanks for your testimony and your work today. My
colleagues have already asked a lot of things that I was
interested in any way. And I will only ask you to follow up on
one thing. I represent the State of Maine. We have four tribes
there, and we have a practitioner shortage anyway, and that the
tribes are experiencing it in an even more severe way.
And it was interesting to hear you say a little bit about
the program that helps with loan repayment. I know from talking
to medical students--and we have a small medical school in our
State--many of them want to stay but loan repayment is, you
know, $250,000, $300,000 for many of them, and that they are
dealing with a low-funded job, it is very difficult to just
even keep their head above water even if they want to do that.
So if you could just reiterate what the current funding is and
what you think the shortage is to the extent that you know?
Dr. Moore. Let's see. I think we saw there were in 2012,
507 new loan repayment contracts and 316 contract extensions,
but there were 338 requests that were denied. So we were urging
the Committee to consider increased funding for this account by
at least $17 million to fund all the applications that the
Indian Health Service receives. But you are absolutely right.
The incredible debt burden that is assumed by young healthcare
professional students is extremely overwhelming and can prevent
them from pursuing that type of career.
Ms. Pingree. Great. Well, thank you for your testimony.
Mr. Simpson. Thank you, Dr. Moore, for being here today.
You can stay as far as you would like. You are welcome to stay,
but we appreciate you being here today to give your testimony
as we try to address this issue.
Vice President Jim, we welcome you here, Vice President of
the Navajo Nation, and we look forward to your testimony.
Mr. Jim. Thank you.
Opening Remarks of Mr. Rex Lee Jim
Chairman Simpson, Ranking Member Moran, and members of the
subcommittee, thank you for holding this important oversight
hearing on Indian health. My name is Rex Lee Jim. I am the vice
president of the Navajo Nation. I am also the co-chair for the
IHS Budget Formulation Group. I also sit on the Secretary's
Tribal Advisory Committee for the DHHS.
As the treasurer for Navajo area representatives of the
National Indian Health Board, thank you for inviting NIHB to
provide these comments.
We all know that the federal trust responsibility is the
foundation for federally funded health care to all members of
the 566 federally recognized Indian tribes, bands, and Alaska
Native villages. This trust responsibility is a direct result
of treaties that were made between the United States and tribes
and reaffirmed by Executive Orders, congressional actions, and
two centuries of Supreme Court case law. We also all know that
it is possible to improve health equities as the health status
of Indian people has improved slowly over the last 40 years
with an increase in resources, healthcare providers, funding,
and other support. Yet, the IHS has long been plagued by
woefully inadequate funding in all areas, a circumstance which
has made it impossible to supply Indian people with the level
of care they need.
Thanks to the dedication of this committee, steps have been
taken towards the fulfillment of the federal trust
responsibility by ensuring that IHS receives annual increases.
Strong and sustained funding is necessary to address
preventable disease and allow IHS to move from a sick-care
system to a true public health model with a focus on
prevention.
An excellent example of this model is the Special Diabetes
Program for Indians. SDPI provides grant funding to 404
diabetes treatment and prevention programs and 35 states. SDPI
grantees follow specific reporting requirements that allow for
assessment of grantee progress. We have seen remarkable
progress over the last several years on the data gathered from
the SDPI programs, for example, a decrease in the average blood
sugar level from 9 percent in 1996 to 8.1 percent in 2010, a 73
percent increase in primary prevention.
SDPI is making a real difference in the lives of people who
must manage diabetes on a daily basis. This federal investment
and community-driven, culturally appropriate programs has led
to significant advances in diabetes education, prevention, and
treatment. This program is a significant accomplishment for
travel healthcare and shows how adequate funding to address a
chronic disease can achieve health improvements.
Today, we offer the following recommendations to help to
advance the Indian Health Care System. First, we asked Congress
to work towards full funding of the Indian Health Care System,
which is currently funded on average at 56 percent of true
need. Tribes have long asked for full funding of the IHS and we
do not know the full potential of the IHS unless it is fully
funded. For example, in 2010 IHS spending for medical care was
$2,700 per user in comparison to the average federal healthcare
expenditure of the $7,200 per person, a difference of $4,500.
The tribal projected needs-based budget for fiscal year 2015 is
now $27.6 billion. This would be less than 3 percent of the HHS
budget of $941 billion.
NIHB also urges Congress to consider the rates of both
medical and nonmedical inflation during the appropriations
process and recommend an increase in funding to address these
needs.
As I noted in my written testimony, the national data on
American Indians and Alaska Natives is outdated. We need timely
and accessible data to appropriately assess the health care
needs for our people in order to plan healthcare delivery and
public health programs. With this foundational knowledge,
tribes can make the best possible decisions for allocation of
scarce financial resources. Other federal agencies collecting
health data often do not offer American Indian and Alaska
Native statistics, thus resulting in failure to correctly
identify Indian individuals. Data ownership and access issues
must be addressed, however, before this potential can be
realized. We request additional funding to support the tribes
and collecting data.
Another recommendation is to advance appropriations to IHS.
Since fiscal year 1998, funding for IHS has not been provided
before the commencement of the new fiscal year. The delayed
funding, which ranges from 5 days to 197 days, significantly
hampers tribal and IHS health care providers' budgeting,
recruitment, retention, provisional services, facility
maintenance, and construction efforts.
If IHS funding was an advanced appropriation cycle like the
Veterans Administration, tribal healthcare providers, as well
as the IHS, would know the funding a year earlier and it would
not be subject to continuing resolutions. Providing sufficient,
timely, and predictable funding is needed to ensure the Federal
Government meet its obligation to provide healthcare for our
people.
Another priority of Indian healthcare is the Contract
Health Service. The CHS exists because the IHS system lacks the
capacity to provide all the healthcare needed by the IHS
service population. In theory, CHS should be an effective and
efficient way to purchase specialty care. In reality, CHS is so
grossly underfunded that Indian Country cannot purchase the
quantity and types of care needed. The IHS Tribal Alert Group
and CHS is reviewing this issue and we encourage this committee
to review the work group's final recommendations once they are
released.
The tribes are extremely concerned about the consequences
of sequestration. Unlike other federal programs such as
Medicaid and the VA, the IHS is not exempt from the looming
automatic across-the-board cuts. The IHS budget will suffer a
devastating cut of $220 million. Its true costs will be
measurable in lives as well as dollars. If this Congress cannot
design alternate methods of deficit reduction, the NIHB
requests that Congress makes the IHS permanently exempt from
all cuts.
Lastly, we also mentioned in our written testimony and
issue with the implementation of the Affordable Care Act. The
Act includes Indian-specific benefits and protections, but
unfortunately, the provisions include different statutory
references of Indian law. We are asking for Congress' help with
a legislative fix for adopting the definition of Indian used by
CMS for Medicaid.
And closing, although our Nation faces a new budget
reality, the National Indian Health Board asks that this
subcommittee give full consideration to the true needs of the
IHS as well as Indian Country and the federal trust
responsibility to its first Americans.
I thank the subcommittee for its time and for the
opportunity to present this testimony. Thank you.
[The statement of Rex Lee Jim follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Simpson. Thank you, Mr. Lee.
Mr. Barnett.
Mr. Moran. Mr. Chairman, I am getting a little worried
about Dr. Moore making it to the airport on time. Even if you
are leaving from National, you probably need to leave now if
you are going to make a five o'clock flight.
Mr. Simpson. There is nobody that knows that better than
Mr. Moran.
Mr. Moran. You could encounter a little traffic across the
bridge.
Dr. Moore. Absolutely. Well, thank you so much.
Mr. Barnett. Thank you very much, Dr. Moore.
Dr. Moore. Thank you.
Opening Remarks of Mr. D'Shane Barnett
Mr. Barnett. Chairman Simpson, Ranking Member Moran, and
members of the subcommittee, good afternoon. My name is D'Shane
Barnett. I am Mandan and Arikara from the Mandan, Hidatsa and
Arikara Nation of Fort Berthold, North Dakota.
On behalf of the National Council of Urban Indian Health,
our 38 member healthcare programs, and the more than 100,000
American Indians and Alaska natives that we serve each year, it
is an honor to appear before you today to speak about the
health status of American Indians and Alaska Natives living in
cities across the United States.
Before I begin, I would like to thank Congress for the
recent passage of the Violence Against Women Act and for
including the tribal protections. Given that much of our
population migrates back-and-forth between reservations, rural
towns, and urban areas, these protections will support many of
the women that we serve.
Urban Indian communities are direct result and consequence
of failed federal policies. Instead of investing in employment
and education in Indian Country, between 1952 and 1960, the
Bureau of Indian Affairs relocated an estimated 160,000
American Indians off of their reservations to live in urban
areas as part of its Indian Relocation Program. With job
opportunities scarce and little or no financial assistance from
the BIA, American Indians developed significant health
disparities that persist to this day.
In 1974, the Supreme Court ruled that assistance afforded
to Indian people is not limited to those currently living on a
reservation. In recognition of the deplorable health status of
urban Indians, Congress enacted Title V of the Indian Health
Care Improvement Act to ensure that healthcare services made
available in the fulfillment of trust responsibility to reach
all American Indians and Alaska Natives.
IHS-funded Urban Indian Health programs are both an attempt
to mitigate the harm caused by the federal relocation policy
and an expression of the United States trust responsibility to
all American Indians and Alaska Native people. IHS currently
funds 38 Urban Indian Health programs operating in 21 states.
With line item funding of only $43 million, these programs
provide more than 275,000 patient encounters each year to
Indian people providing high-quality, culturally appropriate
services that cannot be received at other safety net healthcare
providers.
In addition to primary care services, our programs provide
traditional healthcare services, behavioral and mental health
services, residential substance abuse treatment services,
sexual assault and domestic violence prevention, and social
services such as job placement and health insurance eligibility
and enrollment.
IHS funding for Urban Indian Health is currently estimated
to represent only 18.6 percent of total need. Because of this,
our programs leverage $1.50 for every dollar appropriated
through the Indian Health Service. However, the federal trust
responsibility cannot be shifted onto states, counties,
foundations, and public or private reimbursement. The primary
source of funding for the majority of our programs remains of
the Indian Health Service.
It is essential to note that Urban Indian Health programs
to not benefit from funding resources in other areas of the IHS
budget such as Contract Health Services, facilities, contract
support costs, or others. Because of this, resources intended
to improve the health status of American Indians in urban
centers need to be appropriated to the IHS Urban Indian Health
line item.
According to the 2010 census, 71 percent of Indians live in
urban centers. This means that even in cities where Urban
Indian Health programs, or UIHPs, exist, limited IHS funding
and recent budget cuts have led to many patients either being
referred out for treatment or going without care entirely.
Current funding limitations make it impossible to provide
comprehensive services to every patient. Further, the fact that
UIHPs have had their sexual assault prevention grants and their
domestic violence prevention grants eliminated means that there
are fewer resources to address the disparities that our women
and their families face each and every day.
All too often, federal policies and laws that were intended
to improve the health of all American Indians have
inadvertently excluded urban Indian patients and providers. One
example is the IHS-VA agreement language that was discussed
earlier, which does not include urban programs. Another
example, Congress provided IHS and tribal health programs with
100 percent federal payment for Medicaid services known as
FMAP. The tiny omission of our programs from 100 percent FMAP
is creating significant barriers to health care for urban
Indian people even though data provided by HHS shows that
conclusion of urban Indian programs in 100 percent FMAP is
estimated to cost somewhere in the range of only $5 million a
year.
Increased Medicaid revenues via 100 percent FMAP could
mitigate some of the challenges of limited IHS resources. For
this reason, NCUIH urges Congress to take the lead and provide
urban Indian Medicaid beneficiaries with the same opportunities
for care that IHS and tribal patients enjoy.
Likewise, the Administration's determination that the
definition of Indian and the Affordable Care Act is intended to
include only members of federally recognized tribes will have a
detrimental and disproportionate impact on urban Indian
communities and healthcare providers. While our programs serve
tribal citizens from hundreds of federally recognized tribes,
many of our patients face obstacles to tribal enrollment or are
members of tribes that lost federal recognition as a result of
the devastating federal termination policy of the 1940s.
Although these Indians are eligible to receive services from
IHS, tribal, and urban healthcare facilities, they will
nevertheless be excluded from the American Indian provisions
and protections of the healthcare law.
HHS leadership has publicly acknowledged their intent to
work with Congress and we urge you to address this problem and
a line the ACA definition of Indian with the current Medicaid
definition of Indian, which explicitly includes urban Indians
and other native people who may not currently be enrolled
members of federally recognized tribes.
In closing, I would like to emphasize that NCUIH supports
the tribal recommendation for full funding of the Indian Health
Service at $27.6 billion. And we ask that full funding be
afforded to the Urban Indian Health line item at $231 million
and that the shortfall be addressed by annual increases of only
$18.8 million over 10 years. We would like to urge you to
extend 100 percent FMAP for Urban Indian Health programs.
And finally, we want to call your attention to the harmful
effects of the sequestration. We stand with the National Indian
Health Board in calling for exemption of the Indian Health
Service from sequestration and we ask the Subcommittee to
consider the impact of these cuts when determining IHS funding
levels for fiscal year 2014 and beyond.
Thank you very much for your time here today and I would be
happy to take any questions you may have.
[The statement of D'Shane Barnett follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Simpson. Thank you, Mr. Barnett.
Dr. Fields.
Opening Remarks of Dr. Henry Fields
Mr. Fields. Good afternoon, Mr. Chair, Mr. Moran, and
committee members. I am Henry Fields, Chairman of the American
Dental Association's Council on Government Affairs. I am a
professor and division chair of orthodontics at The Ohio State
University. I am a private-practicing orthodontist and chief of
orthodontics at Nationwide Children's Hospital in Columbus. I
am also trained as a pediatric dentist.
The ADA appreciates the opportunity to respond to the
Committee's question as to whether and to what extent your
actions in prior years have reduced the tremendous disparities
between Native Americans and the general population and to
recommend future actions. In the 1990s, the budget for the IHS
Division of Oral Health was $65 million. Today, it is more than
$159 million. We are grateful for all the Committee has done to
address the oral health needs of the American Indian and the
Alaska Natives. It has resulted in improvements and oral
health, but there is much that needs to be done.
There is an epidemic in early childhood caries, or ECC,
which is simply tooth decay among native children. The ECC
prevalence is about three times or 300 percent higher in this
population than in other equivalent populations. We will never
drill, fill, or extract our way out of this epidemic.
Traditionally, preventing oral disease has been possible
and cost-effective. Children having their first dental visit
before 1 are more likely to have follow-up preventive visits
and lower dental costs. The earlier a child sees a dentist, the
more cost savings there are.
Regarding ECC, the epidemiology of ECC is unclear. We need
appropriate measures and data. Poor enamel may be a factor.
Oral bacteria are different in this population and need
studied, as well as does the immunology of the situation. We
need new treatment approaches. This appears to be a different
disease, especially among this group.
Traditionally, placing dental sealants on older children
has resulted in Medicaid savings, especially for high-risk
populations. IHS dentists are making advances in these areas in
prevention. In 2011, the IHS placed over 276,000 sealants,
19,000 over their goal.
Regarding treatment, IHS dentists increased the number of
patients seen from 23 to 28 percent, which is a 5 percent
increase since the 1990s. And regarding the utilization of
fluoride application, over 161,000 Indian students received at
least one fluoride treatment. This is almost 26,000
applications over its goal. Things are improving.
These accomplishments are due to a focus on prevention
combined with an increased workforce. In 2009, the IHS reported
needing 140 dentists. Today, the vacancies are down to 40. The
IHS Summer Externship Program and improved loan program funding
have contributed to attracting dentists. Last summer 104
externs participated in the summer program, which resulted in
12,000 patient visits. The average dental student alone debt is
$200,000. In 2012, the IHS Loan Repayment Program funded all
107 applicants from dentists and hygienists. Of those, 65
extended their contracts, underscoring the effectiveness of
this recruitment and retention tool. This appears to be
working.
Of course, more dentists are needed for more dental care.
But while pleased with the increased utilization, we would like
to see this rate continued to increase to 37 percent for adults
and 46 percent for children, which is the national rate.
Additional investments in oral health literacy, which
others have acknowledged, prevention and workforce are needed
to accomplish this goal. More IHS dentists means the division
can move more quickly to implement the Early Childhood Caries
Initiative. The first step was to conduct an oral health
assessment of children up to age 5. These data were gathered
over 2 years ago but have not resulted in being fully or
officially released. This delay has consequences. The ADA has
met with the Arizona Dental Association and they have been
meetings that we have implemented over 2 years ago with local
tribes preparing to try to join forces and implement these
recommendations for the ECC. Without these data and direction
from the IHS, we cannot act. We urge the Committee to encourage
the IHS to release the report.
Assuming that the report will eventually be released, the
division will need a full-time person to monitor and coordinate
the initiatives with the tribes and their partners, another
comment that others have made. Having someone to oversee the
project is vital to ensuring a uniform approach by all
participating entities. We urge the Committee to provide an
additional 300,000 for needed personnel and materials.
We know that due to years of underfunding oral health
disease among American Indians and Alaska Native children and
adults exceeds treatment capacity. In 2009, the ADA estimated
that to achieve parity with IHS patients, the budget for the
division would need to be $600 million. That level of funding
is not going to happen overnight, especially in these
constrained economic times. So it is necessary to augment IHS
services in other ways.
During the past 6 years, the ADA has recruited more than
200 volunteer dentists and dental students to serve in Indian
Country. More volunteers could be recruited if IHS could
streamline the credentialing process.
The ADA and several other state societies in Indian Country
have joined forces to advance oral health outreach through the
Native American Oral Healthcare Project. Our meetings with
tribal leaders have centered on such goals as we can work
together to enhance preventive efforts, increase access to
dentures for elderly, and to increase oral health literacy.
Clearly, there is need for more American Indian dentists.
We are taking the first steps to establish an educational
pipeline that will extend from exposing young children to oral
health careers to mentoring native dental students. As our
plans developed, we anticipate a need for additional resources
for the tribal nations to meet these goals. We hope that the
Committee will continue to support our efforts in building
these private-public partnerships. Thank you for allowing the
ADA to testify. We are committed to working with you, the IHS,
and the tribes to reduce dramatically the disparities in oral
disease and access to care that currently exist in Indian
Country. Thank you.
[The statement of Henry Fields follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
DENTISTRY CHALLENGES
Mr. Simpson. Thank you, Dr. Fields. And thank all of you
for your testimony. Since we have had vacancies go from 140
down to 40, apparently, I better leave Congress pretty quick if
I am going to start filling one of those. What are the
challenges that make it difficult for dentists to practice
dentistry on reservations?
Mr. Fields. I think some of the cultural interactions are
difficult for some people to understand. I think that loan
repayment and salaries were an issue in the past. I think those
have been improving and they are being met. I think that part
of some of the morale issues among the dentists would be with
early childhood caries, the inability to make inroads. It is so
difficult. It is devastating, and it hurts the morale of the
providers, I think.
HEALTHCARE PROFESSIONS
Mr. Simpson. You mentioned something that I was going to
ask Dr. Roubideaux about and that it seems to me like one of
the best ways to get dentists and doctors back to reservations
is to help educate them in the field of dentistry and being a
physician. What is the pipeline of getting more Native
Americans involved in healthcare professions and so forth? Are
there very many Indians that are going to college to become
doctors or dentists or anything else like that?
Mr. Fields. Well, I think that the data would indicate that
there are a number of young Indians who want healthcare
careers. And many times, those decisions are made quite early
in life. Sometimes, people make those in grade school and
junior high. Unfortunately, if those aspirations are not
cultivated, you go nowhere. And there has not been very good
cultivation of those people so that then they can achieve the
academic excellence that they need in high school, and then
they need to be tutored or directed when they are in college to
understand what they need to take for prerequisites. If you go
to a smaller school that does not have adequate directional
services, most people get lost. And I think it is not because
they do not have the aspirations; it is because they are not
cultivated. And that just requires more time and energy.
And that is what the Pipeline Project is about, trying to
bring these people along, give them adequate attention, help
them succeed. Right now, they are trying to succeed on their
own and the Pipeline Project is aimed at trying to bring those
people along and provide them with the resources they need.
Mr. Simpson. We can learn a lot from the TRIO program that
actually takes young people that are first-time students where
their parents have never really gone to college or anything--I
happen to be the co-chair of that caucus--that it actually gets
them in high school in the Upward Bound Programs and other
things. A lot of times these students have never thought about
going to college because their parents never went. They never
had a history of that, or anything else.
It really helps mentor them and tutor them into thinking of
going to postsecondary education and then helps support them
through the program. It has been a tremendous asset in helping
these first-time students. Not only does it help that first-
time student, it helps all of their friends and sisters and
brothers who never thought about going to college that went,
man, Jane went to college. Maybe I can go to college.
We could probably learn something from the TRIO program
about how to get people, Indians, into medical educations,
because ultimately, that is going to be part of the answer.
But anyway, I appreciate your testimony.
INDIAN HEALTH FUNDING
Mr. Simpson. Mr. Jim, after reading your written testimony,
I came away with the message or at least the impression of the
message that recent Indian health funding increases have been
helpful but insufficient, that the data needed to truly measure
progress is inadequate and outdated, and that the health
disparity between American Indians and Alaska Natives and other
populations continues to widen. Is that an accurate
interpretation of your testimony?
Mr. Jim. Mr. Chairman, that is an accurate interpretation.
My testimony indicates that the budget based need is at $27.6
billion, and so even though there have been increases, it is
only a little bit over $4 billion. And also there is a huge
difference. And so we recommend that over 12 years that there
be a phase-in so we get to the $27.6 billion level and so we
are asking about $5.3 billion for this fiscal year 2015. And if
we continue to do that, we should be able to catch up.
And to answer some of your earlier questions regarding
Indian Country and Navajo, we are doing what is called Grow
Your Own, and so we are beginning to do an analysis of what is
needed on that. And there are 206 employed medical doctor
positions on Navajo and less than 10 are occupied by Navajo.
Mr. Simpson. So you do have 10 doctors that are Navajo?
Mr. Jim. Less than Navajo. We have more Navajo doctors but
they are practicing outside because they are treated better and
they get higher paying--and so on. But we are also beginning to
talk about medical school and more dosing program so more
people can begin to think about the health profession. I think
that is the key to long-term to help medical professionals stay
on Navajo to do retention there, so we need to do that.
Mr. Simpson. Mr. Moran.
SCHOOL ASSAULT AND DOMESTIC VIOLENCE PREVENTION
Mr. Moran. I was wondering about the vote we have coming up
and it has been called, so I do not want to take long, but let
me just mention a couple things quickly.
The Urban Indian Health program eliminated sexual assault
and domestic violence prevention programs. I wonder what impact
that had on Urban Indian Health. But I need kind of a quick
answer because I want to be able to give Ms. McCollum and Ms.
Pingree an opportunity to ask and Mr. Cole.
Mr. Barnett. As far as its impact on the health, it
resulted in a reduction of about $1 million. So the total urban
funding of $43 million does not include that additional $1
million. So we had a $1 million loss.
Mr. Moran. Okay.
Mr. Barnett. And then as far as the impact of that loss, it
is going to take a little while for us to put the data
together.
Mr. Moran. As many people fought so hard and particularly
Mr. Cole to get Indians included in the protection and then
that program is eliminated--and this will not be a question,
but it does seem that that Special Diabetes Program for Indians
was quite successful, Mr. Chairman, and it would seem that it
might have applicability to other diseases, particularly those
that are behaviorally oriented. So hopefully, we will hear more
about that. But I do not want to take up any more time because
we are under the pressure of a vote taking place right now.
Mr. Simpson. Mr. Cole.
FUNDING BARRIERS
Mr. Cole. Thank you, Mr. Chair. And just a couple
observations and then kind of a question and then an offer. As
I reflect on Dr. Roubideaux's testimony and the testimony of
the four witnesses on this panel, it is clear we have actually
made a difference. I mean, we have got big problems but the
resources have measurably improved things, which is kind of
what you look for. And I think this committee can be awfully
proud of that, particularly you, Mr. Chairman, and you, Mr.
Moran, because you guys laid the groundwork and built the
bipartisan coalition for that to happen. So we know we need to
do more.
I am particularly concerned, and Mr. Barnett, you and I
have talked about this before, but we clearly have some
barriers that prevent the flow of money into these urban
facilities. We have got one in Oklahoma City and one in Tulsa
there that are unbelievably good, and honestly, if those
patients are not taken care of there, they are going to flow in
probably as indigent patients into other areas and not be
looked after as well. I would like to sit down with you and
perhaps Ms. McCollum would work with me on this is my fellow
co-chairman and see if we can identify what some of these
structural barriers are.
And you can count on us to try to do the best we can,
everybody on this committee to try and help on the funding
side. So I am not trying to avoid that, but the definitional
problems that you mentioned, those kinds of things, and perhaps
Dr. Roubideaux would help us with that, too, and the Department
so that we just try to remove bureaucratic barriers that are
getting in the way and making it more difficult to function so
that when we manage to infuse part of the system, we do not
overlook--because I recognize how many, you know, Native
Americans get treatment at those facilities, and a long way
away from home in many cases. They are not where they can
easily access trouble facilities. And we want to make sure that
network of urban centers are good. So I would like to sit down
and work with you, see if we can--not necessarily something we
can do as appropriators, but maybe we can move something
through the normal legislative process and make this a little
bit easier.
Mr. Moran. We can do anything.
Mr. Cole. Yeah, well, if they will let us, yes.
Mr. Barnett. Well, we will let you.
Mr. Cole. Okay.
Mr. Simpson. Ms. McCollum.
Ms. McCollum. Thank you. And I totally agree with what we
are hearing about, you know, the challenges of urban settings
for dentistry. I have one over here. For dentistry it is even
worse and the urban settings because we do not have dental
clinics to my knowledge.
Mr. Barnett. Most do not, exactly.
Ms. McCollum. Maybe few do. Yes, mine does not.
So I want to just kind of bring up another area, and it was
told in a story by a Native American doctor, Dr. Warren, and it
was amazing. He talked about how he was working down at the
Phoenix Indian Medical Center. He had his grandmother come down
living with them to provide elder care. They are both enrolled
out of Pine Ridge. She was not doing really well. They would
not see her in the Phoenix Indian Medical Center because they
said, well, you have to go back to Pine Ridge. And here he is
trying to provide intergenerational care which is very good for
families, for his children, for him, for her, so she delayed,
delayed, delayed, delayed. Finally, she was diagnosed with lung
cancer. So if she wanted treatment, she has to go back.
So this is another issue, another burden that we put,
especially on families. Here is somebody who went and got a
medical degree and is working.
I think it is unethical, so is that something in Indian
Country that we could work with with the Administration, with
Congress to kind of come up--and part of that gets to the full
funding. I know it is a big problem that we will be working on
for a while.
Mr. Barnett. Yes, and I think our programs would be
committed to working with IHS and with Congress to explore
this. Our programs, because of the authority coming from the
Title V of the Indian Health Care Improvement Act are able to
serve those individuals that perhaps cannot be served at a
tribal or IHS facility because of where they are located. So we
can serve those people. The problem is we do not have the
funding. We especially do not have funding for specialty care
like cancer, services like that. So I think we could explore an
option and try to put our heads together.
Mr. Simpson. Ms. Pingree.
Ms. Pingree. I will be quick. And I just want to thank you
for your testimony and the work that you are doing today. I am
new to the committee but lucky enough to have four tribes in my
State that I have been able to work with a little. And I know
how appreciative they are of Indian Health Services when they
work and the preventative programs like specialist diabetes
care and how worried they are about the sequester and the cuts.
So I am wholeheartedly in support of what you are doing.
And Dr. Fields, I appreciate seeing that we have been
adding to the roles of dentist. I know that is a huge issue in
rural areas and making sure we have adequate care. And I just
want to echo what the chair said that I think when people from
the tribes have the ability to aspire to being in healthcare
themselves and making those opportunities available, they are
more likely to return to their communities. And just to get a
brownie point, I want you to know that I went to the dentist
yesterday, and even though it was a really busy day for me, I
was afraid not to go because my dentist yells at me if I do not
show up. So I have come to understand.
Mr. Fields. That is a good dentist.
Mr. Simpson. He must have gone to The Ohio State
University.
I went to The Washington University in St. Louis.
Mr. Fields. Your chairman on this committee will also yell
at you if you do not show up.
Mr. Simpson. I appreciate the shortness of this panel, or I
apologize for it. We have a vote going on, got about 4 minutes
left in it, but I want to assure you all that your testimony is
important and we take it very seriously, and we will be in
touch with all of you in the coming days and months as we try
to put together a bill for '14, and hopefully, we will get to a
bill for '14 at some point in time. I appreciate the Dental
Association being very active in this and trying to address a
real need out there in Indian Country. I thank all of you.
Mr. Fields. Thank you.
Mr. Barnett. Thank you.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Thursday, April 11, 2013.
DEPARTMENT OF THE INTERIOR 2014 BUDGET REQUEST
WITNESSES
HON. KEN SALAZAR, SECRETARY OF THE INTERIOR
RHEA SUH, ASSISTANT SECRETARY, POLICY, MANAGEMENT, AND BUDGET
PAMELA HAZE, DEPUTY ASSISTANT SECRETARY, BUDGET, FINANCE, PERFORMANCE,
AND ACQUISITION
Opening Remarks of Chairman Simpson
Mr. Simpson. Mr. Secretary, welcome back. You must be a
glutton for punishment to want to come back so soon. But as I
mentioned earlier, the nominee got confirmed yesterday, as you
know, in the Senate in an 87-to-11 vote, so have you got a
plane ticket back to Colorado pretty quickly?
Secretary Salazar. Tomorrow at 1:33.
Mr. Simpson. Well, welcome back. And I appreciate you
taking the opportunity to come back and present the budget for
fiscal year 2014 before us. I had a long glowing statement I
was going to make. We are going to have votes at about 1:30 to
1:45 that will take us about a half-hour to 45 minutes, which
might be problematic. I do not know. So I am not going to go
through a long statement other than to say that I have truly
enjoyed working with you. You have been willing to sit and talk
to us and discuss issues and you explain your point of view and
listen to our point of view sometimes, and so I have truly
appreciated that. And frankly, we are going to miss you at the
Department of Interior and I am going to miss working with you
in that capacity.
But I was also going to go into the issue of sequestration
and what happened in the Senate and the fact that they decided
it was a good idea to take it down beyond the sequestration
level, which I thought was devastating, but I am not going to
go into that. I was going to chew them out a little bit but I
hope they are getting the message. But it was unnecessary,
frankly, to do that. And that was one of the reasons, and in
fact the reason that I voted against the CR even though it was
my chairman's bill. But I told him beforehand that that was
problematic what they did with the Department of Interior in
the CR and the Senate.
So without getting into a long statement or anything like
that, again, welcome. And Mr. Moran?
Opening Remarks of Mr. Moran
Mr. Moran. Yes, thank you, Mike. And I want to echo your
statements about the Secretary. I think you have been a
terrific Secretary and I am really sorry to see you leave. We
are going to miss you.
I do have a few comments. Rick Healy and Tim Aiken did such
a nice job getting some thoughts together. I am not going to
suppress those. But you are known around town for wearing your
cowboy hat but, as the Secretary, you have worn many different
hats that reflect the multitude of responsibilities entrusted
to the Interior Department and you have carried out all those
responsibilities admirably. You put a good staff together, many
folks you have kept like Pam, and Rhea, all of the folks,
David, that we have had the privilege of working with have been
terrific.
But speaking of that cowboy hat, we understand there was an
unveiling recently of your secretarial portrait, and in that
portrait you are wearing that cowboy hat as well. But also
included is your family in the picture, and their presence
certainly is a recognition not only of the support they have
provided you put a reminder to all of us that the decisions we
make today impact our children and grandchildren for
generations to come. As that great Republican President and
conservationist Teddy Roosevelt noted, ``the Nation behaves
well if it treats its natural resources as assets, which it
must turn over to the next generation increased and not
impaired in value.''
Mr. Secretary, there is much to like in the fiscal year
2014 budget request for the Interior Department. It carries
forth that stewardship legacy that President Roosevelt spoke
about. The request attempts to turn the corner and put behind
us the mindless sequester that we are now dealing with, and I
know you share with us concern about the impact of these
sequester cuts not only on the natural and historical resources
entrusted to the Department but also its impact on your
dedicated employees, who in many ways are bearing the brunt of
this sequester through furloughs and program cuts. We can only
hope that as fiscal year 2014 goes forward, we can restore some
sanity to the budget process and provide the Department with
the fiscal tools it needs to carry out its important work.
So Mr. Secretary, I want to again congratulate you on a job
very well done. We will miss you, although we expect that
Interior will remain in capable hands with your successor Sally
Jewell, as Mike said, who was just confirmed.
Thank you, Mr. Chairman.
Mr. Moran. Mr. Chairman, Ms. Lowey is here as well.
Mr. Simpson. We have the ranking member of the full
committee with us today. Thank you for coming, Ms. Lowey.
Opening Remarks of Mrs. Lowey
Mrs. Lowey. Thank you very much, Mr. Chairman. And I am
impressed. I understand this is your last day and you are here
before this committee, and I regret I have not had the
opportunity to work directly with you, but there are many good
things you did that I am well aware of and I will just take a
moment or two to thank you for your service to your country, to
wish you good luck in your future endeavors. You look relaxed
already, ready to move on.
I really do want to thank you for your service to your
country, to the State of Colorado. You really have worked to
restore the integrity of the Department of Interior. You have
invested in renewable energy on public lands, you have led an
ambitious initiative to harness offshore wind energy and forged
a clear path in response to the Deepwater Horizon incident that
rightly prioritized the recovery of the Gulf and instituted
reforms to help prevent such an event from ever happening
again.
I personally want to thank you for your attention to the
damage on Ellis and Liberty Islands, Gateway National
Recreation Area as a result of Hurricane Sandy. And turning to
the budget, I was pleased to see that the Department recognizes
the critical role that conservation and outdoor recreation can
play in promoting job creation and economic growth through the
America's Great Outdoors Initiative. However, I am very
concerned about the drastic cut to the National Heritage Areas
program.
My district is in the Hudson Valley and it utilizes the
National Heritage area program for tourism and economic
development, getting people outdoors, interacting with their
community and natural environment. It is an important program
and popular among my constituents. So I am hoping that as I
work with my colleagues on the Committee and the incoming
Secretary to continue to review the President's budget request
and ensure that we adequately fund the initiatives that are so
important for preserving our wild and scenic places while
promoting economic development and job creation.
So good luck to you. And I hope we will meet again in the
near future. Thank you for your service.
Mr. Simpson. Mr. Secretary.
Opening Remarks of Secretary Salazar
Secretary Salazar. Thank you very much, Chairman Simpson
and Ranking Member Moran, Ranking Member Lowey, Congresswoman
Pingree, Congressman Serrano, Congressman Calvert, Congressman
Cole, Congresswoman Herrera Beutler, and who do I have here?
And Congressman Joyce, thank you so much for being here.
Let me first say to this full committee that it has been a
true honor for me to serve the United States and our citizens
and to work with all of you. My own frank view of Washington,
D.C., and our Nation's capital is that it would work well if
the rest of the Congress worked the way that this committee
works, and so I just very much want to applaud you for your
bipartisanship here, for the great leadership and expertise of
both the majority and the minority staff. It has been an honor
for us to work with you.
Pam Haze, who has been here for a long time with multiple
Secretaries, continues to guide our budget at the Department of
Interior, and today, I am joined also by the Assistant
Secretary for Policy, Management, and Budget, Rhea Suh. Thank
you for your positive comments about them.
Let me be very short in my opening statement and simply say
the following. Our work together the last 4 plus years as been
truly an extraordinary journey. We have done a lot. We have
moved forward in a new energy world where we are harnessing
conventional energy in the Gulf of Mexico and offshore of the
United States. So, we move forward with a renewable energy
revolution on public lands as well as on the ocean floor, our
work together as we have moved forward with the conservation
agenda making sure people understand there is an economic nexus
between conservation and outdoor recreation and a healthy
economy. Some six million jobs a year come just from outdoor
recreation.
And as you know, Mr. Chairman, Idaho is a great place for
national parks and for the public icons that bring people to
your State. Even in urban places, as you were saying,
Congresswoman Lowey, when you think about the Statue of Liberty
and the people who come to New York because of the Statue of
Liberty and Gateway and so many other wonderful places there,
we appreciate the work that all of you have done to help us
implement that agenda.
First Americans and Alaska natives, I cannot think of a
more wonderful champion than Congressman Cole and the work of
this committee in addressing Cobell and water rights
settlements around the country, law and order issues, and
education. You have been a champion supported by the members of
this committee as you have moved forward on that agenda.
Water, I am proud of the work that we have done. There are
a number of different initiatives on water, understanding that
we have some very tough times coming up, especially in key
basins like the Colorado River basin and the Rio Grande basin.
It will be a continuing challenge for us in the future.
Finally, our commitment to young people. Because of the
leadership of this committee, we have been able to provide jobs
over the last 4 years in the 21st Century Conservation Corps to
some 84,000 young people around America. I am very proud of
what we have been able to do in that vein as well.
Now, fast forward to where we are today, and part of the
reason I wanted personally to come to the Committee in the
waning hours of my time as Secretary of Interior is to tell you
that I am concerned. I am concerned, frankly, because we will
not be able to do the job that has been assigned to us by the
United States Government unless we are able to get the
appropriate resources into the Department of Interior. As you
noted in your opening comments, Chairman Simpson, we at the
Department today are in the ditch, frankly, because of the
sequester, and then you include on top of that over $200
million in cuts from the Continuing Resolution.
So to put that in the most stark of terms for me as the
manager of the Department of Interior, we essentially are
having to take an almost 10 percent cut just to implement the
sequester in the remaining months that we have in this budget
year between now and the end of October. When you add on top of
that another $200 million plus in cuts, it starts having real
consequences all across the United States of America.
Now, I will only point to two or three examples that I
think will tell that story. One is our payments to the States,
Payments in Lieu of Taxes, and Mineral Revenue Payments that go
out to many of the States around the country. You know,
Governor Mead from Wyoming is not happy and we are not able to
send out the money that Wyoming believes it is entitled to, but
under the sequester we cannot do that. It is having impacts
throughout the United States where we have to send out those
payments to state and local governments, and they will be
impacted significantly this year.
Number two, here in Washington and New York and in San
Francisco and places all around the country where our United
States Park Police stands up to provide law and order to some
of the most important icons and most important events in our
Nation, we are seeing what is happening with the Park Police
today in a very dramatic fashion. On average, our Park Police
will have to take 14 days of furlough between now and October
1. That is 14 days of furlough without pay. The consequence of
that is whether it is the Statue of Liberty or whether it is
the 30 million visitors that come to the National Mall every
year here in Washington or those visitors that go to Gateway,
to Golden Gate in San Francisco, we are not going to be able to
provide the same level of security because we will not have the
same kind of presence that we have had in the past. The Park
Police, where we have made tremendous headway in recruiting
some of the most highly talented people, including veterans who
are returning from Afghanistan and Iraq, into the ranks of the
United States Park Police, we have canceled the class for this
fiscal year because we simply cannot afford it.
Finally, just to show another place where I think the cuts
have been declining and are having an impact, you have joined
me in what I think is a moral undertaking in terms of providing
opportunity for young people to come and work in national parks
and wildlife refuges and the Bureau of Reclamation and all of
our facilities around the country. I am very proud of the fact
that those opportunities have been available because of the
resources that you have provided. Over 22,000 young people were
hired last year. This fiscal year, there are going to be
several thousand less, somewhere between 3,000 and 5,000 fewer
young people we will be able to hire to help do the great work,
on the Hudson or the great work at some of the wildlife refuges
in Oklahoma, wherever we are around the country.
The sequester, coupled with the $200 million plus cut in
the CR has made it very difficult for the Department of
Interior. As I said in my informal meeting with this committee
a few weeks ago, I think the number one issue that faces my
successor Sally Jewell is the fiscal crunch that we are having
to go through at this point in time.
Finally, just a word about this budget. The President's
budget is a good one. It is a thoughtful and a balanced one
from my point of view. We worked very hard in putting it
together, and if that budget is adopted by the United States
Congress, it will take us out of the ditch that we find
ourselves in and put us on a course that is more sustainable to
fulfill the missions assigned to the Department of the
Interior.
Putting it in the macro sense because I know many of you on
this committee and certainly the staff on this committee know
the history of the budget of the Department of Interior. But
right now, the budget we are dealing with today at Interior is
essentially the budget that funded all of our programs back in
about 2006 and 2007.
Consider the growth that has taken place in the United
States of America from that time until today. If you consider
how much more activity we are doing with respect to energy,
both oil and gas as well as renewable, if you think about
places like the Bakken formation where we are trying to assign
BLM employees to help in the permitting there in the Dakotas,
it is tough to deal with the realities of the responsibilities
that have been placed on the Department of Interior today when
we are facing such a shortage in terms of the resources now in
2013.
The 2014 budget proposal helps us get back on the right
track and I hope that this committee, Mr. Chairman and ranking
member, seriously considers the proposal that the President has
put on the table.
[The statement of Ken Salazar follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
BUDGET REDUCTIONS
Mr. Simpson. Thank you, Mr. Secretary. And since you have
been frank with us, I will be frank with you, too. I happen to
agree with you that we got some real challenges and some real
problems that are being faced because obviously sequestration
and other things. We continue to focus on cutting spending on
the \1/3\ of the budget, the discretionary spending that we
have been cutting. And that seems like all we ever do is just
keep cutting that \1/3\ of the budget and pretty soon you get
down to where, under the budget resolution that passed, I do
not know what our allocation will be at the $966 billion level
down from $1042 billion but it will not be pretty. And I do not
know that we can pass a budget at that level.
And at some point in time--and I would like your thoughts
on this--we have got to start asking ourselves are we going to
try to do everything we do in this budget and do--I am trying
to think of a good word--the word I used you would not want on
the web--a less-than-good job at doing everything, or do we
come to the point where we say there are just some things we
are not going to do and eliminate them and at least concentrate
on the parts that we do do well? And that is a tough choice.
When you look at our entire budget, it is not only the
Department of Interior, it is the Forest Service, it is a lot
of smaller agencies like the National Endowment for the Arts
and National Endowment for Humanities, the Woodrow Wilson
Center, the Holocaust Museum, you can go through all these
other ones, you could eliminate all those and you are not going
to get a ton of money to try to fund some of these other
programs within the Department of Interior, but I think we are
getting to the point where we are going to have to make that
kind of determination about where we are headed. Or do we take
some functions that Department of Interior does and say we are
just not going to do those anymore? I do not know.
It is a frustrating situation we find ourselves in and I
understand the need that we have got to get this budget deficit
under control. We have got to quit managing the budget deficit
from appropriation to appropriation and from fiscal crisis to
fiscal crisis and the debt ceiling to debt ceiling and put
together something that is in the long-term interest of solving
this problem so that we can continue to do those things that we
should do. I do not know that we will get there, at least very
quickly.
But I do have some concerns with some of your budget
obviously. One of the things that happened during the
consideration of the CR is the Senate decided we did not really
need to fund wildfires at the level we had put in there, which
means come fire season we are going to be draining other
accounts that are already low to fund wildfire suppression. And
then within the budget we have also reduced the proposed
hazardous fuels reduction by $87 million, which means we are
not addressing the long-term problem and trying to reduce
forest fire costs. What are your thoughts on that?
Secretary Salazar. First of all, Mr. Chairman, I very much
agree with your broad assessment of what is happening here with
this budget and the fiscal debate that is going on, and I think
that is why it is so important for leaders like yourself and
others to come together with a long-term solution so we stop
the stop and start going from one crisis to another as we deal
with these budgeting issues. It is very difficult to run a
government and manage operations when you have to go through
the kind of fiscal times we have been through.
I also agree that when you are looking at only the
discretionary part of the budget, it is a very small amount. If
you look at the Department of Interior's dollars that come from
the appropriations process, I understand from Pam it is less
than 1 percent of the entire Federal budget, and yet it has
this kind of consequence all across America. Dealing with these
issues in the broad frame which you suggest I think is
something that very much does have to be done.
WILDLAND FIRE
Specifically with respect to the Wildland Fire Program, I
am concerned, and that is another issue to watch carefully
because of the consequence of the sequester and the CR. When we
just think about last summer and the huge fires in Idaho
monitored out of Boise, the great fires we saw in almost every
one of the western States including my home State of Colorado.
Our expectation is the wildfire season is going to be even
worse this year than it was last year because of the drought
conditions that we are seeing throughout that entire area of
the Rocky Mountains, as well as into the western part of the
country. The consequence of not having enough money to be able
to fight those fires and to do the preventive side of things
with respect to hazardous fuels reduction is something that is
of great concern. Our hope is that as we move forward we can
find a way of addressing it.
Mr. Simpson. What do you do when you've got accounts that
are already substantially reduced from what they have been in
the past and all of a sudden you have these major wildfires and
you have to start draining some of those accounts? What does
that do to the other functions that the Department of Interior
has to deal with?
And one thing you did not mention that also concerns me but
I am sure it concerns you also is that this committee in a
bipartisan way has tried to meet our obligations in Indian
health, and Indian education. And after the CR, frankly, we
have not been able to fully fund the contract support costs
that we have an obligation to do and we put money in last
year's budget for one additional school. Imagine that, one
additional school in Indian Country, and we had that taken out
in the CR by the Senate. It is problematic. But it is going to
have a lasting impact.
It is easy to vote for a really serious conservative slash-
and-burn budget on the theoretical, but then when you get down
to individual appropriations and what it means, I do not know
that we can pass any of our appropriation bills at the level
that we have set our overall budget at.
So anyway, Mr. Moran.
Mr. Moran. Yes, thank you, Mr. Chairman.
FRACKING RULE
In January, BLM pulled back on its proposed rules on
fracking. It said that it would issue a revised proposal by
March 31. I do not think we have got that. I believe that the
deadline has passed. What is the status of that proposed rule?
And maybe you can just give little insight into how it is going
to balance protection of the environment with its economic
growth objectives.
Secretary Salazar. Congressman Moran, it is a matter we are
taking very seriously and have been working very hard. We have
a proposed rule that would address disclosure of chemicals used
in fracking. It would address wellbore integrity to make sure
that water quality is protected and would address flow back of
water into the hydraulic fracking process. We believe hydraulic
fracking can be done safely but we believe the rules we have
been working on will allow us to make sure we are fully
developing the oil and natural gas potential of our public
lands. The rule is imminent and I expect my successor will be
announcing it in the very near future.
OIL AND GAS REFORMS
Mr. Moran. Very good. You have got a number of legislative
proposals for the Federal Oil and Gas Program. Can you just
very briefly elaborate on those a little bit to see what we
might be able to reflect in the Interior?
Secretary Salazar. There are a number of them.
Mr. Moran. Just the principle.
Secretary Salazar. The principle essentially that we are
working on, and is included in the budget, is making sure what
we are doing is achieving the goal of getting a fair return to
the taxpayers and doing it in a cost-efficient way. For
example, one of the components you will find in the budget is
royalty simplification. We believe that through royalty
simplification we can go ahead and find significant additional
dollars that would get a better return back to the taxpayers.
The principle that is driving the legislative proposals
relating to oil and gas here are the efforts to try to get a
fair return to the American taxpayer.
Mr. Moran. Okay. Mr. Chairman, I know we have got a vote,
so I do not want to take any longer. We will try to get in as
many questions as you can. So that will be up to Mr. Calvert.
Mr. Calvert. Okay. Thank you, Mr. Salazar. And I thank you
for your service. I appreciate the sacrifice you have gone
through the last few years. I am sure you are looking forward
to getting back to Colorado.
WILDLAND FIRE
We mentioned wildfire, and of course, from California we
have had our share of fires, too. And the hazardous fuel
program has been, in my opinion, very successful and it is
cost-effective because for every dollar in reducing these
hazardous fuels is I think at the end of the game it costs a
lot less to not have a fire than to have a fire. And we saw
that in the San Bernardino National Forest in California and
other places.
And I see the budget is cutting it by $87 million, which is
a substantial cut, almost to half of that account. And I know
the budget is under a lot of stress, but saying that these
fires cost a lot of money once they start, we have got a fuel
that has been built up over the years that is all over the
West, and I hope you take another look at that as we move
through this process that we can work together on some kind of
modification on that.
NATURAL GAS PRODUCTION
The other issue, of course, is one of the great things that
has happened, as you mentioned in your testimony, is natural
gas production in the United States. And most of that increase,
as you know, is on private lands. We are still having
difficulties getting into public lands for natural gas
production. There are a lot of companies in Europe and Asia
that quite frankly want to go back to the United States and to
hire people again because our natural gas prices are now
significantly lower both in Europe and Asia, chemical
companies, other types of industries that are dependent on
natural gas. So I would hope that we could work towards
streamlining the permit process for natural gas production on
some of these public properties.
And with that, I will leave this for your comment.
Secretary Salazar. If I can I will be very, very quick. One
of the areas, Congressman Calvert, that we are most proud of is
the fact we have implemented truly an all-of-the-above energy
strategy. Even having lived through the oil spill, which you
lived through with me day by day, our production is up. We have
more rigs. I think it is 10 more rigs working in the Gulf of
Mexico today than before the oil spill. We are continuing to
lease significant acreage on the onshore for both oil and gas
production. We have the stats here that there are millions and
millions of acres that are under lease already to oil and gas
companies. There are about 7,000 permits that oil and gas
companies have today in hand ready to move forward. We are
finding ways to streamline the process even further.
So some of the proposals, and partly in response to
Congressman Moran's question as well, one of the things we have
been trying to do is to move to electronic permitting because
much of the delay is caused in receiving the permit, for both
offshore as well as onshore, has to do with the paperwork that
goes back and forth. In today's world of electronic
communications, we can significantly shorten the amount of time
it will take to process permits. We hope to be able to
implement that program under this budget.
HYDRAULIC FRACTURING
Mr. Calvert. And just one last comment--I know you probably
know \2/3\ of the frackable oil in the United States is located
in the State of California. It has been there a long time. It
is heavy crude, expensive to extract. California, you may have
read, had some financial difficulties and we are hoping that we
can work with the Department of Interior and others to obtain
that resource to help the State of California and the country
forward. So that is the last comment. I thought I would point
that out.
Secretary Salazar. Thank you.
Mr. Simpson. Mrs. Lowey.
HERITAGE AREAS
Mrs. Lowey. Thank you. Mr. Secretary, as you know, the
National Heritage areas will be funded at $9 million in the
request, a 50 percent reduction. Earlier this year, the
National Park Service released a report stating that the 49
heritage areas contribute $12.9 billion annually to the
national economy, contribute to 148,000 jobs generating $1.2
billion in federal tax receipts. In my region, the Hudson River
Valley heritage area contributes $538 million to the State's
economy, supports 6,530 jobs, generates $66.6 million in tax
revenue. Frankly, I was very surprised when I saw that cut.
Considering the budget's emphasis on supporting another great
program, the Great Outdoor Initiative, and we are all trying to
focus on jobs, economic opportunity, if you can explain to us
why the proposed cut to the program is so drastic, and are you
as concerned as some of us are about that?
Secretary Salazar. This is a tough choices budget, and one
of the things that I did not go into detail on are the hundreds
of millions of dollars of cuts that we have made to the
Department of Interior. It includes everything from travel to
conferences to a whole host of efficiencies that we have been
able to find. Having said that, when you look at specific
programs, Congresswoman Lowey, I can tell you that this one for
me is a very difficult and painful and indeed even a tearful
one because I have been a champion of National Heritage Areas.
I was a promoter and successfully completed some when I was a
U.S. Senator. I do strongly believe the economic statistics
which you use are absolutely correct.
Is $9 million enough for what I think are 49 heritage areas
that we have around the country? The answer to that is
absolutely not. It is my hope that somehow we can get to a
broad fiscal agreement that allows us to invest in these kinds
of economic creators because I have visited many of them and I
know the impact they have on job creation and local
communities, as you explained it in your area.
Mrs. Lowey. Well, I will repeat your statement over and
over again, so hopefully, we can adjust that because it is a
real concern to many of us.
HURRICANE SANDY RECOVERY
Another point I just wanted to bring up I have been so
grateful for all the work that has been done with the Army
Corps and local communities rebuilding beaches and dunes in
protected areas. I just wonder if there are any issues or
disputes over how to proceed. Are you satisfied with the speed
of recovery? Is there something else we can do? And do you have
enough money in there to complete the job?
Secretary Salazar. The answer is yes, we do because of the
action that you all took to provide the recovery monies for
Hurricane Sandy. You will be very pleased that the work that
will happen in New York and along the Atlantic Coast will
address the kind of improvements that need to be made there.
I will note only in passing for the entire committee that I
believe that often in front of this committee I have spoken
about the Everglades as one of the most significant
conservation efforts we have going on in America. What we will
see in the years ahead will be the entire conservation effort
that is now underway in Jamaica Bay and New York and all along
the Atlantic Coast.
In addition to that, Congressman Simpson and members of the
committee, what will happen in the Gulf of Mexico and the
restoration of the Gulf and the Mississippi River Delta will
probably become the most significant conservation restoration
effort in the history of humankind, and that is because of the
penalties that will be flowing into conservation as a result of
the oil spill. The Fish and Wildlife Foundation is now in
charge, working closely with the States and already have about
$2.6 billion in the restoration effort. We have another billion
dollars on early restoration from BP. My expectation is that
there is a lot more to come.
Mrs. Lowey. Well, thank you so very much. And thank you
again, Mr. Chairman and Mr. Ranking, for all your good work.
Mr. Simpson. Yes, thank you. We have votes on. We have
about 2 minutes left on the vote so we need to go over and do
that. Some members have questions, you may want to stay around
for a little bit.
Secretary Salazar. For you, Congressman, because it is my
last hearing I will gladly do whatever you say.
Mr. Simpson. I do not know what it is but every time you
come they call votes. We will go vote and be back as quickly as
possible. Thank you.
Secretary Salazar. Thank you. Thank you very much.
[Recess.]
WILD HORSES AND BURROS
Mr. Moran. The budget includes $2 million I think for
research on wild horses and burros for the National Academy of
Science to do the study. I really am interested to know what
the Department's long-term plan to humanely deal with wild
horses and burros is so that we avoid all the fits and starts
that have really plagued this program, Mr. Secretary.
Secretary Salazar. Ranking Member Moran, the work on wild
horses and burros is something which we have taken very
seriously from day one. The Bureau of Land Management has put
out a plan that we continue to implement. We have two north
stars to guide us with the wild horse and burro plan. The first
is that horses are treated humanely and we try to do that in
every way we can; number two, that we are also protecting the
public range. We have a problem. The problem is the number of
horses we have in many of the areas of the West are simply too
many for the amount of forage available. The State of Nevada,
for example, has about 17,000 more wild horses and burros than
can be carried in that range. So it is a problem which we have
been working on for a long time.
We have implemented programs to put birth-control measures
in place. Some of them have been effective and what we are
doing now is also looking at the National Academy of Sciences
as we have brought them in to help us figure out what the
solutions are for the long-term. The request in the budget for
$2 million is to help us with the National Academy of Sciences
to address the problem for the long-term.
Mr. Moran. I support that. I sometimes wonder the extent of
the commitment that BLM shares with that objective, but, you
know, I will not pursue it. And I am certainly not going to
give you a hard time on your last day, Mr. Secretary. You have
been fine but we have had some problems with BLM's commitment
to that program. We will see what the $2 million study yields
and I hope it will do something we can all embrace. Some of the
problem I think is we have severely diminished the rangeland
that is available, but there is also a population control
problem. I do not want to see a solution, one of slaughtering
the young and healthy horses, particularly the wild Mustangs.
Secretary Salazar. Well, we have, if I may, Ranking Member
Moran, have made progress. For example, just this last year BLM
opened a wild horse sanctuary in the State of Wyoming where we
have several hundred wild horses. We will continue to work very
hard on it. It is an ongoing issue and one I am certain my
successor will be dealing with for the next 4 years.
Mr. Moran. And they will get a gut full of it.
Mr. Simpson. Do we do any of adoptions out of this program?
Many?
Secretary Salazar. We do. Chairman Simpson, the adoption
program of the BLM is a great program and there are many, many
horses adopted over time. There has been an issue the last
couple of years because horse adoptions are down in large part
because the cost of feed has gone so sky high. When you are
thinking about adopting a horse the requirements are you have
to take care of the horse, you have to sign up and make sure
you have the capacity to take care of the horse, and fewer
people are signing up in part because of the cost of hay these
days, as you know in Idaho.
SECURE RURAL SCHOOLS AND PILT
Mr. Simpson. One of the things I heard about this last week
when I was out in Idaho the last couple weeks visiting with
some county commissioners are two things that they are really
concerned about with sequestration--Secure Rural Schools
funding, which comes out of the Forest Service, and PILT
payments and the reduction that is going to occur to the
counties. What is the amount of the reduction going to be?
Secretary Salazar. Chairman Simpson, the amount is
significant, and I personally communicated this to the
governors who were here for the National Association meeting,
as well as the Western Governors when they met in my office.
Let me have Rhea or Pam give you the specifics on the numbers.
Ms. Haze. We will make PILT payments in June. We notified
the county folks and the governors that the reduction to PILT
will be 5.1 percent, or about 20 million nationwide, and that
will be spread across all 1,900 county payments. We are in the
process of calculating the payments so we do not know precisely
county by county yet.
Mr. Simpson. And it will be about 5.1 percent?
Ms. Haze. Yes.
Mr. Simpson. And then you throw on top of that a lot of the
school districts and counties that get Secure Rural Schools
funding from the Forest Service and that is another cut by
point something percent or $18 million, I think, nationwide.
Ms. Haze. For Secure Rural Schools, which BLM pays, the
total amount was 40 million, that was a reduction of 5.1
percent or 2 million. We made most of the payment.
Mr. Simpson. I had thought that BLM did Secure Rural
Schools, too.
Ms. Haze. They do. They do the 18 Oregon counties.
Mr. Simpson. I was thinking of BLM as that rangeland out
there and Forest Service as that tree land out there but I
forget that sometimes they intermix.
Ms. Haze. Yes, we have got a little piece. The Forest
Service has a much bigger piece.
Mr. Simpson. Yes. Ms. Pingree. We were just asking some
questions while we were waiting for people to come back.
Ms. Pingree. I was finding my way back.
Well, Secretary Salazar, thank you again. I know we had a
chance to informally thank you and people have heaped on the
praise this afternoon, as well they should, but I just wanted
to once again thank you for your public service, the work you
have done with us in Maine and the chance to get to know you a
little bit in this line of work.
WILDLIFE REFUGES BUDGET
I will just ask a couple of questions because there are a
lot of things I am still getting to know. In looking over the
budget, one of the things I am interested in is the wildlife
refuge budgets. We have I think 10 or 11 of them in the State
of Maine and some of them like the Rachel Carson Refuge are
spectacular and covering a great part of a fairly populated
area of our State. So I am grateful that there is a slight
actual increase in the budget but I know there is a deep level
of need in there. I am just kind of encouraged but also
concerned about how are we going to be able to accomplish all
of our goals? I know we are talking about a lot of areas where
there are deep cuts but can you give me a little bit of
background on what we are doing with that and what we are going
to be able to do with that amount of money?
Secretary Salazar. Congresswoman, the budget that we have
put forward for 2014 would get the funding to levels that we
can live with in the United States Fish and Wildlife Service
refuge system. The funding cuts we are laboring with right now
under both sequestration, as well as the Senate CR causes
significant problems for us. We are having to determine what
kind of visitation hours, cutbacks, and indeed potential
closure of some of these wildlife refuges. But the President's
budget itself as presented to the Congress yesterday will get
us to a level where we feel comfortable operating the refuge
system.
Ms. Pingree. Great. So we will be able to eliminate some of
the cutbacks in hours and then the security cuts and things
that are in the sequester?
Secretary Salazar. Indeed.
CLIMATE CHANGE
Ms. Pingree. Great. Another area that I am interested in
that you addressed a little bit but also of great concern to us
in Maine and one of my concerns nationally is the work we are
doing or not doing on climate change. And I am interested to
see if you can get me a little background about some of the
things that USGS is doing around climate change and how we are
spending our money to work on this issue and some of the things
I can tell people back home that we are actually trying to do
to deal with the big challenges that we are already facing,
particularly given that I represent so many coastal
communities, and the impact on our fisheries and raising ocean
levels already being felt.
Secretary Salazar. It is a great question. I am going to
have Assistant Secretary Rhea Suh follow-up but let me
introduce the response.
Our work at Interior is huge on climate change because we
really are the ones who are at the front end of some of the
impacts of climate change, whether it is a drought and dealing
with the bark beetle issues in places like Idaho and Colorado,
or whether it is the rising sea levels in places along the
Atlantic or in the Gulf of Mexico to disappearance of the
glaciers at Glacier National Park, which will be gone by 2020.
What is happening to the arctic seas and in the North Slope of
Alaska where I have spent a lot of time, you see the dramatic
impacts of climate change on the lands, on wildlife, and on the
people who live in those areas are being impacted by climate
change.
We know, for example, the water supply issues which are so
important to all of the States that share the Colorado River
and the Rio Grande River shared by Colorado, New Mexico, and
Texas that we will see declines in precipitation there that
will be as high as 20 percent in the years ahead. In fact, in
the Rio Grande basin today we are seeing the driest period of
record in 1,000 years.
Ms. Pingree. Amazing.
Secretary Salazar. It takes you back to the times when
people wondered what happened to the Anasazis and what happened
to those populations who lived at the time.
So our job at Interior really is to develop the science and
we do that through our Climate Science Centers through USGS and
then also working with our other agencies making sure that we
are implementing the changes needed to be able to adapt to the
changing climate. Rhea works on these issues so I want her to
also respond to the question.
Ms. Suh. Thank you, Mr. Secretary.
Let me just point out a couple of pieces of the USGS budget
in particular that are directly applicable to your question.
The first piece that Secretary Salazar mentioned is a $14.5
million increase to the WaterSMART program. This is the program
that enables USGS to look at water availability and to make
more accurate projections of availability certainly in the
Western States with respect to climate change but throughout
the United States in terms of both monitoring of current water
and projections of fresh water availability moving forward.
That is one key part of how we are looking at climate change.
The other, as the Secretary mentioned, is our work in the
Climate Science Centers that are collaborative with
universities across the country. These are long-term scientific
efforts to really try to answer more of the specific questions
associated with the climate change impacts to the United
States. What I will say is in addition to the broader science
and more basic science research that is undertaken by the
Climate Science Centers, we have robust adaptive management
efforts happening with all the land management agencies.
Specifically with the Landscape Conservation Cooperatives, run
primarily through the Fish and Wildlife Service, we are working
hard and in a very collaborative manner to try to address the
very real, very immediate consequences of climate change on the
landscapes and be proactive about how we reorient our
management systems around them.
Ms. Pingree. Great. Well, thank you for that. I know that
you do not have domain over the fisheries but I just want to
say quickly I had a group of fishermen and fish scientists in
my office last week and I represent a lot of coastal
communities. Lobster fishing is an $80 million business. It is
a huge impact to our communities and to our fisheries business.
Given the fact that there has been about 2 or 3 degrees rise in
the ocean, which I think does not sound like a lot, especially
since the water in Maine is only about 60 degrees, you know,
you think it is kind of a good thing, but our lobsters shed
early last year. It was devastating to the industry because we
could not process them or sell them.
This year, it looks like they are already starting to shed,
which is 5 to 6 months early. People are throwing up their
hands in confusion not knowing exactly what is going on and how
could it happen so quickly. But it could potentially have a
huge impact, as well as ocean acidification, which is already
impacting our clams' abilities to make shells.
And, you know, all of these things that I think we keep
thinking are way out in the future are already about to harm a
lot of our communities. Some of the southern Maine communities
are already losing their fisheries altogether because the
species are moving north. So there are just so many impacts
that I know some belong in one department, some belong in
another, but it all has to do with something complicated going
on with the weather where there is not enough water in some
places, too much in others, and some of it is just too warm.
So anyway, I appreciate the work you are doing. Thank you
for your thoughts and I look forward to continuing work with
the Department.
Secretary Salazar. Thank you very much.
HAZARDOUS FUELS
Mr. Simpson. Before I go to Tom, I was just handed a note
and I would like your response to this. OMB, my favorite
agency--and you will never have to deal with them again--is
that a wonderful--you know, this is a good day, is not it? OMB
told the staff today that there is not enough evidence that
hazardous fuels removal is effective. Do you agree with this?
Secretary Salazar. No.
Mr. Simpson. Okay. I do not know that they have ever been
out and looked at hazardous fuels reduction on the ground.
Where they would come up with that analysis is bizarre to me,
which is why I do not want them managing public lands, which is
why I do not want them doing anything with the budgets frankly.
But Tom?
Mr. Cole. I just want to say for the record it is
bipartisan. It does not matter who the administration is, it is
always the same.
INDIAN COUNTRY
I have some questions but I do want in the record to echo
some of the remarks the chairman and ranking member made. And
I, Mr. Secretary, just really--I was thinking last night about
this session and I thought of all the things that you have been
part of just in Indian Country. I thought of Cobell and I
thought of tribal law and order and, you know, surface leasing
where you guys have done some really incredible things and the
tribal provisions in VAWA and frankly the whole attitude of the
administration in terms of the Tribal Nations Summit and how it
reached Indian Country, and it is exceptional.
I cannot think of another Secretary of the Interior that
has done more for Indian Country and has done more to empower
individual Indians and tribal governments. This was never a
paternalistic type of relationship. It was always about keeping
the commitments from the federal side and what can we do to try
and make you more self-sufficient, more self-governing, more
able to look after your own citizens?
It has been an extraordinary effort on your part. You have
had a great team around you--Pam, Rhea, and David are just
exceptional. You have had two excellent assistant secretaries
in Larry Echo Hawk and now in Kevin Washburn. And I just want
to tell you just thanks for an extraordinary job. And I think
that is a bipartisan sense on this committee, and boy, it is
certainly felt and known widely in Indian Country. So just
thank you for what you have done.
Last point on this, you know, because I always seem to
focus obviously on the Native American stuff, but that is true
across the board. Look, I am very aware of the mess you
inherited, particularly in mineral leasings when you walked in
the door and some of the shenanigans that had gone on there.
You guys tackled that professionally and cleaned up a real mess
for this country that had not happened on your watch for sure.
And so I think across the board you have been exceptionally
transparent. You have always been accountable.
You have worked with this committee, been very forthright
with us and very professional and, you know, I just think of
the things you done in Indian Country and then I start thinking
of all of these other multiple responsibilities that you have.
To manage 20 percent of the land surface of the United States
with, as Pam said, that is pretty extraordinary. I will match
your management record dollars per management achievement with
anybody else in the Federal Government or anybody else that has
come before you. So just thank you for an exceptional job.
Secretary Salazar. If I may, Mr. Chairman, Congressman
Cole, in all humility, the reality is our progress in all those
areas has come about in large part because of your personal
leadership, your attendance at the annual tribal conferences
that we have had with the President, your leadership on each of
those pieces of legislation. It frankly would not happen
without you. And I do think that that whole area is one where
we as Americans, Democrats and Republicans, can celebrate where
you showed a tremendous amount of bipartisan cooperation, and I
think it is a great template for so many other issues that the
Congress works on all the time. So my hat is off to you. In
fact, I am probably going to get one of my hats and give it to
you on the range in Oklahoma.
Mr. Cole. I tell you what, cowboy hats on Indians is a
pretty risky deal where I am from. But I would be honored to
frame it.
SUBSURFACE LEASING
I do have two things and they are not directly budget-
related. I have some more questions if we have more time, but
there are two areas I would like to get your thoughts on the
record both for the Congress and for your successor because
these are areas where, when, I know you have been working on
subsurface leasing rights for drives where, again, I think you
have done groundbreaking work on the surface leasing rights. I
would like sort of a review of that because I do think some of
our poorest tribes are sitting on resources that, if they can
develop them, are going to make an enormous difference in the
lives of their citizens and make a great contribution to the
country in energy independence and independence in other areas.
So kind of where are we at on that?
CARCIERI
The second area--and I want to particularly commend Mr.
Moran and Mr. Simpson on this. We were able because of both of
them in this committee to deal with Carcieri. Now, we did it in
a pretty unconventional way. Obviously, we were legislating on
an appropriations bill. I remember when then-Chairman Moran was
kind enough that we were over our Indian thing and he said if
you will propose it, I will do it. I think we should do it but
I better go call Simpson. And I did and I came back and I said,
well, I would like to do this. And he said, well, we are
legislating on an appropriations bill. We do not do that,
unless we do. I am all for it. And we kind of got out of here
with a 14-to-0 vote and got through and we got it over to the
other side.
But this is an issue that continues to fester. And I know
that this committee, if it were allowed to do it, would
probably do exactly what it did before. But I would like your
thoughts because I am beginning to hear more and more from
tribes and it is exactly what everybody predicted was going to
be happening. They are being harassed by state and local
governments. They are facing incredible litigation. They have
got property they thought was in trust for decades and people
are raising issues about. You have got to somehow keep track of
what are now effectively two different kinds of Indian tribes
because you can do certain things for some that you cannot do--
at least we have questions as whether you can do for others.
So your thoughts on not only what we should do--I think we
would probably agree on that--but particularly for the record
the kinds of challenges you see for both tribal nations. I
think it would be helpful for people to hear that.
Secretary Salazar. Thank you, Congressman Cole. On Carcieri
it is high priority to get it fixed. The President is strongly
behind getting it fixed. The Department has specified a
supportive fix and we appreciate all the efforts you yourself
personally have exercised along with members of this committee.
It does create significant problems because you end up having
to go through an analysis of the tribes. Are you a pre-Carcieri
tribe or a post-Carcieri tribe and the complexity involved in
terms of tribal trust lands and it just makes it even more
difficult. It is something very important, something included
actually in the 2014 budget. Hopefully, it is something the
United States Congress will act on as soon as possible.
SUBSURFACE LEASING
On subsurface mineral rights and especially with respect to
energy, you will find in the budget that there are some
additional funds requested to be able to do more with energy on
Indian lands. My own view is informed very much by my multiple
visits to North Dakota to the Bakken and to the Three
Affiliated Tribes at Fort Berthold. When I went there 4 years
ago, it was a dead zone on the reservation because there was no
development that had occurred. Today, if you go to the Three
Affiliated Tribes, there is huge economic development that is
lifting up the tribe to have a great economic future.
In addition to that, I was at Fort Berthold signing the
documents that allowed the Three Affiliated Tribes to move
forward with the first oil and gas refinery I believe in the
last 40 years, on the mainland of the United States. My
understanding is that they are getting ready to move forward to
do groundbreaking on that here in the next several months.
Away from the Bakken and the Three Affiliated Tribes, I
believe there is huge potential because of the 54 million acres
held in trust by the United States on behalf of tribes and how
we can develop a much more robust energy program for both
conventional, as well as renewable, is something that is a very
high priority for me and for Assistant Secretary Washburn. I am
certain they will continue to be of high priority for my
successor Sally Jewell. This is a presidential initiative which
is a high priority to the President. I know it is a high
priority personally to almost-Secretary Jewell, and I am sure
she will look forward to working with you, Congressman Cole, to
also get your ideas.
This is an area, frankly, where I think we need to do a lot
more to make sure we are thinking about what is out there. I
will give you just one example. I will give you lots of
examples but this is one example. We have been permitting all
of these renewable energy projects in Nevada, California, and
Arizona for solar. There was a point about a year-and-a-half
ago where I asked my staff, well, how come none of these
renewable energy projects are creating lots of jobs but also
lots of revenue? Why are they not located on Indian lands given
the huge acreage of Indian lands and those solar-rich areas of
the Southwest? We put together a strike team and worked with
the Moapa Tribe in Nevada and now today we finally are seeing
the first large-scale commercial utility solar power plant
springing up out of the deserts on those tribal lands.
It is an area which will receive continuing attention and
increased attention from the Department of Interior.
Mr. Cole. Well, I appreciate the progress that has been
made. And I have had the opportunity to work with Mr. Price on
this on a couple of occasions. And just for the record--and I
just put this out here as a point to look at going forward
because I actually ran this by tribes and there is tribal
resistance to this, so it would have to be something that they
decided to do. But one of the ideas that was put in front of me
by a gentleman Harold Hamm who helped develop the Bakken shale,
so he is heavily involved. It is a company called Continental
Resources based in Oklahoma City, very successful. And he said,
look, for years we developed right up to Indian land and it is
just the permitting process which is so much easier on the
other side. It was just there were a lot of regulations, a lot
of problems. He said if you asked me, he said, I understand
this would take a compacting arrangement between the tribe and
the state but if it is good regulatory policies for the state,
maybe they should compact and that should be extended in the
regulatory function.
Now, there is, as you know, deep suspicion between tribal
and state governments in these areas and there is a lot of
resistance to that. But it might be something that we should at
least give the tribe the option to do and sort of get the feds
a little bit out of the regulatory area. In Oklahoma we have a
regulatory regime that obviously covers the state because we
have no reservations. We are pretty good at it. And I expected
South Dakota they are probably pretty good at what they do, in
North Dakota and in these areas. But at least I raise that as
an idea worth thinking about looking about from a departmental
standpoint.
Now, I would always leave the decision in tribal hands. I
think it is up to them. If they want to maintain what they have
got, if they want to develop the capacity, which is hard to do
but some of them want to do that, that is fine by me. Or if
they wanted to look at this as an option and it might even heal
some of the historic divisions out there. I do not know. And
again, I put that forward saying I know it is very
controversial and that would need to be studied, but I will
reserve my other questions. And again, thank you very much for
your service.
Mr. Simpson. Ms. McCollum.
Ms. McCollum. Thank you. I too want to thank you for all
the work that you have done with this committee and thank you
for fighting a good battle with me that did not come up quite
the way I had hoped it would and I think the Park Service hoped
it would in Minnesota. But you were there protecting our
natural resources all the way and I thank you for your service
on that.
INDIAN COUNTRY
I want to follow up a little bit about what Mr. Cole said
about Indian Country. I am so proud of your work, the
administration's work, your staff's work. You know, I can speak
easier with the relationship with my 11 tribes in Minnesota and
I can with some of the tribes I have gotten to know and to work
in partnership with since being elected to Congress, but it is
a breath of fresh air that they feel that they have a partner,
someone that recognizes and appreciates their ability to make
their own decisions, governing their own people, and, you know,
really work nation to nation. And that credit goes to the
person who sets the tone, the President of the United States,
and then somebody who decided that they were going to also move
in that direction with great, great clarity and great passion
and you set the tone for that as well, so thank you for your
work.
We are at a crossroads now, especially with sequestration
with what happened. A lot of the gains had been wiped out, and
I think part of the reason why sequestration in particular is
that part of the budget that you oversee for Indian Country,
and so when decisions are made in the Recovery Act for helping
at schools and school children, we found the Bureau of Indian
Affairs' schools not being included in that, because people
just were not thinking big picture when it comes to Indian
Country. The unfortunate decision, done with no malice of
Indian health not being protected in sequestration, impacts aid
for the children who attend schools, and that is because the
budget is so spread out. I mean everybody comes to Interior and
looks at Interior but you are in the Department of Agriculture
with outreach to Indian Country there. It is in the Department
of Education, it is in the Department of Health, it is in all
these other areas.
And so one of the things that the chairman has been very
supportive and our staff has been working on with OMB, I might
add, is what they could do trying to come up with more of a
unified Indian Country budget so that we are looking at all the
big pieces at the same time. So any suggestions you might have
for this committee in either working with other agencies would
be helpful. So that is one reflection I would like from you.
ASIAN CARP
And the other reflection is, you know, air knows no
boundaries, water knows no boundaries, and Asian carp does not
stop to look at boundaries. And they are coming up the
Mississippi River. There are the other river systems. We are
worried about them even getting in a treasured natural resource
between the Mille Lacs Band and the residents of Minnesota with
walleye fish in Mille Lacs Lake as this moves and spreads
forward.
So one of the things that I have been working on and it has
been bipartisan and it has been a real treasure to get to meet
people on the other side of the aisle on this is talking about
Asian carp as an invasive species. If part of it is going to be
climate change, it is not necessarily going to be an invasive
species; it is going to be a species moving because of climate
change. Some of it is going to be us doing better regulation,
which, with budgets being as tight as they are, ideas that you
might have for--and here again it is going to be an interagency
cooperate, U.S. Fish and Wildlife and Army Corps and others,
some ideas that you could give us on how we should be looking
to work with you, with other agencies, and then we are going to
have to work with other appropriations committees as well as
policy committees to address this. And we have not done a good
job but both the chairman and ranking member here are very
interested in how we work forward on that.
So if you could maybe give me a few reflections. And I
would love to talk to you about water shortages but I am not
going to have the opportunity to do this in this limited time.
So I want to thank the USGS for the great job that they did in
Minnesota.
INDIAN COUNTRY
Secretary Salazar. Congresswoman McCollum, I very much
appreciate both questions. First, let me say that I think we
can do a better job and should take a look at it both with OMB
and with Departments across the government to see how we can
come up with a more unified way of explaining the federal
resources that ultimately go into support of Indian Country. I
will take that as an assignment for Rhea and Pam--and we are
working with OMB. Hopefully, we can do a better job.
One of the things that has come out of our annual tribal
conferences now with the President is this sense of the whole
government coming together to talk about tribal issues, so we
will have the Department of Justice, Department of Health and
Human Services, all the agencies coming together at the top
level, and it would be cabinet officers speaking to these
issues. I will take that as an assignment for what will
hopefully be a next tribal conference, but that may be one of
the things we can work on. Certainly, it is the kind of thing
OMB--and yes, they do some things we might disagree with them.
In fact, very often, Chairman Simpson, these are some of the
areas that I know they are very interested in. I think with
respect to a unified Indian Country budget, there are some
things we ought to be able to work on there.
ASIAN CARP
On the Asian carp issue, obviously, it is a huge issue. It
obviously unites the world in a bipartisan way on trying to
deal with the Asian carp. Our role has been to develop the
science and to help make sure we do not have a spread of this
invasive species. According to Pam, we have $5.9 million in the
Fish and Wildlife Service budget for Asian carp and another $3
million in USGS. It is a kind of challenge for us that really
does require, again, the whole government be united in our
approach to dealing with Asian carp.
Mr. Simpson. Ms. Herrera Beutler.
Ms. Herrera Beutler. I want to thank you, Mr. Chairman. I
do not know anything about Asian carp but I know when I hear
Asian carp I hear bad stuff is happening. So to your credit it
is definitely a bipartisan issue. Those of us in Washington
State who do not--obviously, we have other invasive species
that I am familiar with but I have coastal properties as well.
It is funny to me though. I know that there are invasive
species called Asian carp. Totally off my subject. I do not
have the same experience that most of the committee does, not
having worked with you over the past several years and
everybody has different things to say thank you for. I do thank
you for your service.
DECLINING BUDGETS
I am learning a bit since I came to Congress I think in
just about every committee hearing I have been in and I have
heard about the declining budget situation. It is the reality
we live in. And one of the things you talked about since 2007,
I will say I was a little confused because you talked about the
growth that has taken place since 2007, and in my mind that was
when everything went down or began. That was the foreshadowing
of 2008, 2009, 2010, which in my neck of the woods meant that
we had 10 percent, 20 percent unemployment in all of my
counties. So all of the budgets in our area shrank
significantly. And I would expect that the federal budget would
be in step with that. Now, do I think we are going to balance
the budget on the discretionary side? No. Do I think we should?
No. So I agree with that.
But at this time we are here now we are dealing with what
we are dealing with right now, and we all hope that we are
going to generate more job growth in the private sector and
there will be more tax revenue and so on and so forth and
things will ease, but this is where we are. And one of the
things that I think is important in a situation like this and
every family that I know has had to do is prioritize within
that budget. And each budget request reflects the priorities of
the person putting it forward, and I recognize the one word I
keep hearing from people who are talking about the President's
budget from the administration is balance. Balance, balance. I
heard it this morning from Mr. Tidwell. I suspect we will hear
it from some of the other agency heads who are coming in to
talk about it.
And I would say there are some areas that I have some
concerns. We have any budget that you are putting forward for
your successor--I do not know quite how to say that--will be
defending, right?
Secretary Salazar. It is still my budget for the day.
Ms. Herrera Beutler. It is still your budget for the rest
of the day until five o'clock.
Secretary Salazar. It is actually the President's budget.
Ms. Herrera Beutler. It is true that you are the one who is
here to tell us about the positives and why we should fund it,
right?
Secretary Salazar. Right.
Ms. Herrera Beutler. You are the messenger.
Secretary Salazar. Yes, ma'am.
NPS BUDGET
Ms. Herrera Beutler. With that, there are increases in BLM
and Fish and Wildlife and National Park Service, all good
things, important things, but I would argue at a time when we
have some real challenges--let me put it this way: Park
Service. Let us talk about this. Now, would we have these huge
maintenance backlogs if we were increasing some of these land
purchases? It makes me say wait a minute. Should we be making
sure that everything that we own right now is best maintained
before we increase those acquisitions? I will give you an
example sticking with the land purchase side. We have a
national park in Fort Vancouver--Vancouver, Washington, and
southwest Washington around the Columbia River across from
Portland.
Secretary Salazar. Um-hum.
Ms. Herrera Beutler. Hudson's Bay Company. It was the
beginning of our community. We are having some real challenges
with this. And I will be meeting with Director Jarvis today and
then again tomorrow when he comes in. The park itself has
several areas that it owns that, because it does not have the
budget, has boarded up these different historic buildings,
completely boarded up. I mean you cannot go in them, you cannot
use them. In partnership with the city, the city manages some
of those historic officers' houses. Those houses are beautiful.
Because of that partnership, they are able to manage things and
bring in some additional outside revenue. They are open, they
are used, they are bringing in revenue, and they are
maintained. They are all historic buildings. We want to see
them maintained for the community.
I guess I would say would the $60-plus million Park Service
budget, that increase might be better used, rather than buying
more land, would it not be best used to maybe un-board those
windows and utilize and open up that property to the public?
And so in my mind it comes down to a question of priorities and
I would like to hear your thoughts on increasing what the
Federal Government owns versus well maintaining to the best of
your ability with the dollars you have, recognizing they are
limited, using that money to maintain.
Secretary Salazar. Congresswoman, I appreciate the question
very much and let me first say that with respect to the 2006,
2007 timeframe, frankly, if you look at the budget of the
Department of Interior from 2000 to 2006, 2007, it was
atrophying for whatever reason. It just was a very anemic
budget. So the progress, frankly, that this committee has made
over the last several years until we got to sequestration and
to the CR had been getting us back to the point where we could
live up to the responsibilities that had been assigned to us by
the history of the United States and the mission given to the
Department.
Number two, our approach to the budget at the Department of
Interior has been to do as much as we can with whatever it is
we have. What that has meant is, first of all, looking at
places where we can cut and looking at places where we can be
more efficient. Right here in this area we have cut about $600
million in programs that we have looked at where we have made
determinations that things could be done much more effectively
than they were in the past. Travel has been significantly cut;
employees are doing a lot more videoconferencing than they ever
did before. We have saved millions of dollars in information
technology. We are leasing less space in order to save now I
think it is over $150 million. So a whole host of things where
our approach to budgeting has been let's make sure that we are
running as lean and mean a machine as we possibly can.
To your question on acquisitions versus maintenance, I
would make two points. The first is that the maintenance
backlog of the United States National Park Service is probably
north of $9 billion, maybe even north of $10 billion at this
point in time. The needs are there. They are huge needs. We
recognize that maintenance is something we need to work on. We
also, in terms of looking at the reality of what we face, have
also developed a whole host of public-private partnerships with
friends groups all around the country. You see the scaffolding
going up around the Washington Monument. That is the damage
caused by the earthquake a year or so ago. Part of that cost,
which is going to be in the neighborhood of $14 million, at
least this first part of it, is being put up by a private
donor. So we do a lot of that all over the country.
New York, even as we implement Hurricane Sandy relief, we
are doing it hand-in-hand with the City of New York as well as
the private foundation that support Ellis Island and the Statue
of Liberty.
LAND ACQUISITION
Now, with respect to land acquisition, I will say it is
often Republican Members of Congress and the Senate who come to
me and tell me there are places like the Grand Teton National
Park where we have the land holdings that are about ready to be
developed; they want to protect these crown jewels of America
forever. So you start seeing then where it is that land
acquisition does become important with respect to land holdings
and buffer areas and a whole host of other things.
My own view--and you and I may frankly disagree on this--is
we are in a position today in 2013 where we are getting ready
to celebrate the Centennial of the National Park Service. And I
would expect that this committee will play a key role in the
celebration of the Centennial. Ken Burns and Dayton Duncan were
putting together their documentary 2 years ago and called the
National Parks: America's Best Idea. You have to think about
the economics that come from tourism from all over the world as
people come to the United States of America to visit the icons
of Vancouver or Seattle or New York or Idaho, and we have the
magnets, the assets of America. How we take care of them is
important. I would hope that we continue to fund in an
appropriate way the needs of our national----
Ms. Herrera Beutler. Let me jump in on that last point
because I agree 100 percent with you that these are treasures,
and where we can pull in these public-private partnerships, it
is a win-win. You know, we have declining budgets. We have got
groups who are vested in these--community groups are vested in
a certain area and say, yeah, we want to raise money into this
and help keep it as a public resource that is open and
available. I agree with you 100 percent.
I wish I could bottle that little piece that you are saying
and I probably will take it into my meeting today and then
tomorrow with Director Jarvis because our exact issue is we
have a public-private partnership that is being for all intents
and purposes shut down by the National Park Service over what I
think has become--I do not know if it is a personality complex,
but they have the law on their side and so my community, with
this public-private partnership that has operated for almost--I
want to say the best part of 30 years where they have raised
money into it and the Park service has owned it and there has
been a great collaboration, is completely shutting down and we
now have closed buildings.
So exactly what you said, I am with you on. I think our
challenge is there are different places where I am going to be
perhaps quoting you a little bit later.
Secretary Salazar. The great part of this job is that it
takes me from sea to shining sea and out into the ocean so
often, and there are no doubt problems we have in some places
that sometimes with some leadership we can figure out a way of
resolving a private-public partnership, and I am certain that
Director Jarvis would be more than happy to sit down with you
and talk about the specifics of the park.
Ms. Herrera Beutler. Thank you. Thank you.
Mr. Simpson. Before I go to Mr. Valadao, Tom is going to
take over for me. I have to actually go over to the doctor so I
have got to leave before you do today. I have got one of those
doctor's appointments where he only comes once a month. But I
just again wanted to thank you for your service. I look forward
to seeing you out in Colorado when I come through there, and
when you see John, tell him hi from all of us and we really
miss him.
Secretary Salazar. Chairman Simpson, it has simply been an
honor. Thank you.
Mr. Simpson. It is been an honor for me.
Secretary Salazar. Thank you.
Mr. Simpson. Thank you.
Mr. Valadao. Thank you, Mr. Chair, Mr. Secretary.
SCIENCE IN DECISION-MAKING
The administration has been ardent about science leading
decision-making but on many issues science has failed to
deliver a clear answer and decision-making has been stymied.
How would you propose to make decisions in the face of
scientific uncertainty when maintaining the status quo is
simply untenable such as in the California Bay Delta? And what
do you see is the potential for problem-solving through
scientific collaboration between federal agencies, state
agencies, and other regional or local interests with the
appropriate expertise?
Secretary Salazar. Congressman Valadao, first, let me thank
you for the question and say that in my view the Department of
Interior has upheld the principal and the goal of scientific
integrity. During my time as Secretary of Interior, the
decisions we make oftentimes are not popular. Sometimes,
neither the left nor the right agree with us, they will
disagree with us, but I will tell them what has guided us is
the best science and the best information.
The California Bay-Delta and the water issues and the
science issues you raise are very important issues. I would say
that in my time as Secretary, there is no single water issue we
have spent more time on trying to untie the Gordian Knot of the
California Bay-Delta and the water issues which have been such
a problem in California. Governor Schwarzenegger and now
Governor Brown have worked very closely with my Deputy
Secretary David Hayes along with Mike Connor, the head of the
Bureau of Reclamation, to see how we can move forward on a plan
that ultimately will bring about the equal goals that were
articulated several years ago with the Bay-Delta. One is to
provide a certainty for water supply, and the second is to
address the restoration and conservation needs of the San
Francisco Bay-Delta.
As that process moves forward and the contractors who have
been working with the State of California and with us as that
whole process moves forward, they will be guided by the science
in terms of what is probably one of the most important
infrastructure decisions that will have to be made relative to
the conveyance system that is being considered right now. It
will be one of the greatest infrastructure projects, one of the
most significant ones in the country if it is to pass. But the
science will guide where ultimately that project will go.
Mr. Valadao. If I may, one more?
Mr. Cole [presiding]. Yes.
LAND USE
Mr. Valadao. While I understand the resource protection is
a priority, Interior must strike a balance when determining
land use in obviously areas of public claims that are suitable
for use. What have you done to ensure that this important form
of recreation retains appropriate access and what are you doing
to advise your successor to promote access for the millions of
Americans who wish to participate in motorized recreation?
Secretary Salazar. So motorized recreation is something
that is very important. It is part of what we support in many
of the places of the nearly 500 million acres which we manage.
I myself visited the Imperial Sand Dunes in your State, not in
your district but in Southern California, where I spent a lot
of time with the off-road vehicle, four-wheel community. It is
something we support and we believe it ought to be done in the
right places, and there are a lot of jobs that actually come
from the off-road vehicle industry and we very much appreciate
the contribution and the opportunity that we provide.
Mr. Cole. The gentleman from Georgia, Mr. Graves.
Mr. Graves. Thank you, Mr. Chairman.
OFF ROAD VEHICLES
Mr. Secretary, thank you. And just to follow up on Mr.
Valadao, I also offer my support for the use of off-road or
recreational vehicles in public lands. You are right. So many
families enjoy the recreation opportunities, and oftentimes the
only places they have to go are public lands, so I appreciate
your good counsel to your successor in continuing that
opportunity or even expanding those opportunities.
ATLANTIC SEISMIC ENVIRONMENTAL IMPACT STUDY
A couple of questions I had, one, there were a group of
members including myself that sent a letter to you in regards
to the Atlantic Seismic Environmental Impact Study, and I do
not know if we have yet got the response, but I know that that
study was long overdue and I just wanted to see if you had any
update before your departure on a potential timeline of when we
might know the results.
Secretary Salazar. Congressman Graves, I would be happy to
get back to you with the specific timing. I do not have that
with me.
[The information follows:]
Atlantic Programmatic Environmental Impact Statement
The Bureau of Ocean Energy Management is evaluating the potential
effects of seismic and other geological and geophysical activities in
the Mid and South Atlantic, as well as mitigation and monitoring
measures that will reduce or eliminate potential impacts. The final
Programmatic Environmental Impact Statement is expected to be completed
later this year.
Mr. Graves. Okay.
Secretary Salazar. I will articulate what I think is
probably the more important thing what our policy objective is
with the programmatic environmental impact statement on the
Atlantic, and that is the President, as part of our all-of-the-
above energy strategy, has felt that it is important for us to
know what the resources are we have, including those resources
on the Outer Continental Shelf. It is why even along the
Atlantic we have been gathering this geologic information that
will allow us to make informed decisions about the future of
the OCS.
Mr. Graves. Okay. So you suspect that that may be evident,
I guess, the outcome of that at some point, the report----
Secretary Salazar. It should be because I actually went
somewhere I think in Virginia to announce that, and I think
that was a year or so ago, so we will get back to you on the
timing of it.
OIL AND GAS DEVELOPMENT
Mr. Graves. Okay. Thank you. And then one more, Mr.
Chairman, if you do not mind. Just along the same lines, it
seems like with all the new technology that has come about with
exploration for new energy and then so much of it being in the
private sector on private lands, it seems to be that Georgia is
one of the States that folks are looking at for opportunities
in the energy field, whether it be shale oil gas, whatever the
component might be. From a permitting perspective or from a
forecasting perspective, how do you see it? And being from
Georgia that is why I have the interest. How do you see it
impacting--and previously, maybe were not even considered or
there were no exploration opportunities, but currently in
looking forward do you see more opportunities in states that
maybe had not been paid attention to previously?
Secretary Salazar. I do. I think one of the things you will
see is that even in the eastern states where the Bureau of Land
Management controls the mineral estate, in some places, the
surface estate, we are holding oil and gas lease auctions. I
think what will happen is the technology unfolds as we continue
to learn more as we have in the last 4 or 5 years that you will
see many of these lands coming into availability for oil and
gas production. We did it 3 years ago. People did not think too
much about the Bakken and what would happen in the Dakotas and
Montana, and yet today, you see what is happening there. One of
the things I am very proud of and I think the United States
should be very proud of is the fact we are now importing less
than 45 percent--in fact, the last figure I saw was about 41
percent of our oil from foreign countries. When I came to the
Senate in 2005 I remember giving a speech on the floor of the
U.S. Senate. At that time we were north of 60 and on our way to
70 percent.
We have come a long way, and in large part, it has happened
because of the technological innovations pushed by industry,
which have included horizontal drilling, which is doing some
incredible things in the country today that are good for the
environment as well as good as a tax resource. Second, the
process of hydraulic fracturing is making a significant amount
of the resource available today that was not available even 5,
6 years ago.
Mr. Graves. So in the State of Georgia do you see
opportunity there? Have you seen some new developments on or
offshore?
Secretary Salazar. Frankly, I would have to get back to you
on that with respect specifically to the State of Georgia. I do
not know your State on this issue frankly as well as I know
most of the other States.
[The information follows:]
Oil and Gas Potential in the State of Georgia
The Bureau of Land Management is not able to provide to a forecast
of oil and gas development potential in Georgia. There are little or no
federal minerals in Georgia and there is no federal oil and gas
development there. The Bureau of Land Management does not develop or
monitor forecasts for oil and gas resource development on fee or State
lands or mineral estate.
Mr. Graves. Sure. Thank you very much. Thank you, Mr.
Chairman.
Mr. Cole. I am going to get everybody one quick round. You
have been very generous with your time and waited on us. I have
been so nice. I have to quit being nice here. I do have a
question I would like you to address or a couple actually. One,
I was looking at the administration budget and I noticed we
have an overall 5 percent request for increase. Of course, I
immediately go down to the BIA and it is 1.2. So I would like
to get some of the thinking behind that because I always argue
that this part of the budget where we are really actually
directly impacting people's lives in a very direct way.
INDIAN SCHOOLS
The second one is one that I know causes the chairman agree
deal of concern and this committee a great deal of concern, and
we have had some great off-the-record discussions about the
challenges here, so I am not trying to put you on a hard spot,
but I think probably in a bipartisan sense we are disappointed
at the construction budget that is being proposed for Indian
schools. We are in the middle of a very large expansion and
modernization of schools for military kids, another place where
the Federal Government has a direct responsibility for the
facilities. I know our former chairman of this committee, Norm
Dicks, was a major player. Now, I was, too. I have military
schools being built in my area. I think those kids are a
special responsibility of the Federal Government.
I feel the same way, and I know you do too, about Native
American children, and yet there seems to be two different
approaches by the administration. We have a significant
investment in schools infrastructure for the children of
military families. Last 3 years in a row, you know, the
Department of Interior has not proposed much in the way of
additional construction. Now, we may have this, as we have
talked before, in the wrong area of the budget. There is a lot
to talk about here so I am again not trying to be critical, but
we do seem to have a disparity of interest and I would like
your thoughts on that.
Secretary Salazar. Well, first, I am going to ask the
Assistant Secretary to comment a little bit specifically on the
schools in the overall BIA budget. I will say this: we have
done everything we can, Congressman Cole, to protect the
budgets for the impact on Native Americans in Interior, and
frankly, I think if you look at a composite of the last 4
years, the hits have been taken by other parts of the Interior
budget because this is an area which, frankly, effects the most
impoverished and the most in need people in our entire Nation.
This budget, in particular the 1.2 percent increase you
talk about with BIA, you know, it is a tough, tough fiscal
climate that we are navigating. It is not what I would like to
have in the budget in an ideal world, and if I had the purse
strings with respect to schools, I can tell you that we would
do a lot more in terms of construction. We did, because of the
Recovery program, put significant investments in the schools in
Indian Country, but I know there is additional work to do and I
would like the Assistant Secretary to comment on it.
Mr. Cole. Absolutely.
Ms. Suh. Thank you, Mr. Secretary. So maybe just start off
with the BIE schools issue. You are correct. The 2014 budget
does not include any new funding for construction, but as you
know, over the last 10 years, particularly as it relates to the
Recovery Act, BIA was able to spend over $2 billion on
construction, specifically school construction for construction
improvement and repair. There was quite a big opportunity. That
certainly does not mean there is not existing need and existing
opportunity, and we very much appreciate the reminder of the
importance of this.
INDIAN AFFAIRS BUDGET
If I could just remark more generally on both the
Department of Interior's perspective with respect to BIE and
BIA budgets. There probably has not been a greater emphasis on
any other bureau than those two bureaus, at least during my
tenure, in ensuring that the basic services that we provide
Indian Country are upheld and are strengthened. While we may
not have been able to increase the budget as significantly as
we may have hoped, the 2014 budget still represents an
increase. I think it is about a $32 million increase overall,
and again, just to underscore, I think you have all of our very
strong personal commitments and I believe the commitment of the
incoming Secretary of the Interior around these issues and
fundamentally around adequate budgets for all of these issues.
Mr. Cole. Well, again, I do not want any questions I have
raised to leave any doubt about my appreciation for what you
have done because I think it has been exceptional and it has
been a great bipartisan partnership in this committee and then
a partnership between this committee and the administration. I
am sure when Mr. Moran headed this committee and it is true
when Mr. Simpson had that we fight about a lot of other stuff;
we do not fight about Indians very much except we both usually
fight for a little bit more. And we appreciate again all that
you have done, Mr. Secretary.
Mr. Moran.
OIL AND GAS PRODUCTION
Mr. Moran. Thank you, Mr. Chairman. I do not have a
question but I do have a fact that I want to put on the record
thanks to Rick Healy, and that is that we are producing more
oil and gas on public lands now than we were during the last
years of the Bush Administration. But what is really
interesting is that as production has gone up, litigation has
gone down because the Interior Department is making better and
smarter decisions on leasing and issuing drilling permits. So
that is a real feather in your cap and it should be more
acknowledged than I suspect that it is. So thank you for that.
Well done.
Secretary Salazar. Thank you.
Mr. Moran. That is all I have to say, Mr. Chair.
Mr. Cole. Thank you, Ranking Member. Mr. Graves, do you
have any further questions?
Mr. Graves. No.
Mr. Cole. Ms. Pingree.
Ms. Pingree. No, thank you very much.
Mr. Cole. Well, I am glad I got to be in the chair in your
very last grilling here, and again, I think I have expressed
the sentiments and you certainly know that from the comments
here today of all concerned. Just thank you for your superb
tenure as Secretary of the Interior on a bipartisan basis. You
have been terrific to work with. You have got a lot to be proud
of and what was then an already extraordinarily distinguished
public career before this. But I hope it is not a capstone. I
hope you go do something else and I suspect you will. But
regardless, this will always be something in your professional
life that I hope you look back with as much pride and
satisfaction for your performance as all of us have and having
had the opportunity to work with you. So thank you, Mr.
Secretary.
Secretary Salazar. Chairman Cole and Congressman Moran,
Congresswoman Pingree, and Congressman Graves and to all the
members, I want to say if I may, just two final things because
this will be my last official act and my last official
statement as Secretary of the Interior. The first, I want to
say to your staff on both sides that they are terrific. David
does a wonderful job for this Committee. And right at his side
with Rick and all the rest of the team, Darren and Erica and
Missy and everybody who was part of this team, we have very
much enjoyed the relationship, the work you do with Assistant
Secretary Rhea Suh and with Pam Haze and our entire budget
staff from the Department of Interior, thank you to your staff.
And second, to all of you. I do think that somehow all the
rest of the Congress should watch this Committee in action
because you do it right and you do it together. You stand up
for first Americans in a way as you have described, in a way
that does not happen as often as it should here. So thank you
very much for your service and I hope to be able to continue to
see you never as a lobbyist but always as a friend. Thank you.
Mr. Cole. With that, we are adjourned.
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I N D E X
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Indian Education Oversight Hearing
February 27, 2013, 10:00 AM, B-308 Rayburn
Page
Administrative Costs............................................. 172
Beatrice Raffert School.......................................... 54
BIE School Construction.......................................... 55
BIE School Governance............................................ 52
Broken Promises, Broken Schools: Report ot the No Child Left
Behind School Facilities and Construction Negotiated Rulemaking
Committee...................................................... 79
Capital Vs. Operating Budget..................................... 51
Communication between BIE and DASM............................... 64
Consideration of Department of Education Role.................... 44
Cooperation between BIE Schools and TCUS......................... 59
Coordination Challenges.......................................... 174
DOD Schools...................................................... 53
Expansion of Grades at Existing Schools.......................... 57
Expectations for Indian Country.................................. 43
Federal Collaboration............................................ 60
Federal Trust Responsibilities................................... 63
Funding Allocation............................................... 172
Guns in Indian Schools........................................... 56
Indian and Non-Indian Educational Spending....................... 49
Joint Ventures................................................... 60
Legislative Language Proposals................................... 58
Opening Remarks of Assistant Secretary Washburn.................. 4
Opening Remarks of Chairman Simpson..............................1, 168
Opening Remarks of Congresswoman McCollum........................ 3
Opening Remarks of Dr. Heather Shotton........................... 35
Opening Remarks of Mr. George Scott.............................. 17
Questions for the Record for Assistant Secretary Washburn from
Chairman Simpson............................................... 65
Questions for the Record for Assistant Secretary Washburn from
Mr. Valadao.................................................... 77
Questions for the Record for Assistant Secretary Washburn from
Ms. McCollum................................................... 76
Questions for the Record for Dr. Shotton from Chairman Simpson... 168
Questions for the Record for Dr. Shotton from Mr. Valadao........ 174
Questions for the Record for Mr. Scott from Chairman Simpson..... 160
Questions for the Record for Mr. Scott from Mr. Valadao.......... 167
School Condition................................................. 168
School Construction and Maintenance.............................. 169
Sequestration and Indian Education............................... 46
Tribal Consultation, Replacement School Construction............. 47
Water Infrastructure Finance Oversight Hearing
March 13, 2013, 9:30 AM, B-308 Rayburn
Additional Subsidization......................................... 362
Asset Management...............................................261, 364
Chesapeake Bay Restoration....................................... 266
Clean Water Act Regulations...................................... 267
Clean Water Infrastructure Funding Backlog....................... 259
Cost of Regulations.............................................. 351
Development of the Needs Assessment.............................. 353
Disaster Relief.................................................. 263
Financing Tools.................................................. 336
Funding Arrangements............................................. 267
Future Water Infrastructure Issues............................... 341
GAP Analysis...................................................346, 360
Green Infrastructure............................................. 265
Opening Remarks of Chairman Simpson.............................. 217
Opening Remarks of Mr. Alfredo Gomez............................. 233
Opening Remarks of Mr. Aurel Arndt............................... 272
Opening Remarks of Mr. Benjamin Grumbles......................... 284
Opening Remarks of Mr. Howard Neukrug............................ 294
Opening Remarks of Mr. Jeffry Sterba............................. 305
Opening Remarks of Mr. Mike Shapiro.............................. 221
Opening Remarks of Mr. Moran..................................... 219
Opening Remarks of Mr. Thad Wilson............................... 317
Private Activity Bonds..........................371, 380, 387, 397, 404
Public-Private Partnerships...........362, 369, 378, 385, 388, 395, 403
Questions for the Record for Mr. Arndt from Chairman Simpson..... 365
Questions for the Record for Mr. Gomez from Chairman Simpson..... 357
Questions for the Record for Mr. Grumbles from Chairman Simpson.. 399
Questions for the Record for Mr. Neukrug from Chairman Simpson... 372
Questions for the Record for Mr. Shapiro from Chairman Simpson... 346
Questions for the Record for Mr. Shapiro from Mr. Valadao........ 354
Questions for the Record for Mr. Shapiro from Ms. Pingree........ 356
Questions for the Record for Mr. Sterba from Chairman Simpson.... 381
Questions for the Record for Mr. Sterba from Mr. Rogers.......... 388
Questions for the Record for Mr. Wilson from Chairman Simpson.... 391
Reducing Costs/New Technologies.......346, 357, 365, 372, 381, 391, 399
Regulatory Costs................................................. 263
Rural Community Water Infrastructure............................. 270
Rural Water Coordination......................................... 360
State Private Equity Bonds....................................... 336
Top Water Issue for your Organization...........368, 378, 384, 394, 403
Water Infrastructure Management.................................. 339
What should be Congress' Top Priority?..........367, 376, 384, 393, 402
Oversight of Indian Health
March 19, 2013, 1:30 PM, B-308 Rayburn
Affordable Care Act.............................................. 428
Appointments..................................................... 442
Catastrophic Health Emergency Fund............................... 500
Charitable Physician Services.................................... 522
CHEF and CHS..................................................... 417
Children.............................................494, 517, 530, 536
Contract Health Services.......................................489, 511
Dental Health.............................................497, 518, 536
Dentistry Challenges............................................. 477
Domestic Violence Prevention...................................427, 502
Educational Programs............................................. 442
Emerging Issues......................................499, 520, 533, 538
Forward Funding and Sequestration................................ 422
Funding and Program Performance...........................486, 508, 525
Funding Barriers................................................. 479
Genetics and Disease............................................. 421
GPRA............................................................. 418
Health Disparities...................................482, 505, 523, 534
Health Education at Reservation Schools.......................... 420
Healthcare Professions........................................... 477
HHS Initiatives.................................................. 443
IHS Funding Comparison Chart and CSC............................. 423
Indian Health Funding............................................ 478
Indian Health Service Mortality Disparity Table.................. 504
Joint Venture.................................................... 424
Loan Repayment................................................... 444
Opening Remarks of Chairman Simpson.............................. 405
Opening Remarks of Dr. Henry Fields.............................. 467
Opening Remarks of Dr. Kelly Moore............................... 430
Opening Remarks of Dr. Yvette Roubideaux......................... 407
Opening Remarks of Mr. D'Shane Barnett........................... 459
Opening Remarks of Mr. Moran..................................... 406
Opening Remarks of Mr. Rex Lee Jim............................... 445
Personal Property................................................ 501
Questions for the Record for Dr. Roubideaux from Chairman Simpson 482
Questions for the Record for Dr. Roubideaux from Mr. Valadao..... 500
Questions for the Record for Dr. Fields from Chairman Simpson.... 534
Questions for the Record for Mr. Barnett from Chairman Simpson... 523
Questions for the Record for Mr. Jim from Chairman Simpson....... 505
Questions for the Record for Mr. Jim from Mr. Valadao............ 522
Recruitment and Retention........................................ 425
Reinstate Health Research and Monitoring Trends.................. 428
School Assault and Domestic Violence Prevention.................. 478
Sequestration.............................................488, 510, 526
Sequestration Percentage......................................... 426
Staff Vacancies................................................491, 514
Successful Programs.............................................. 443
Teen Suicide..............................................493, 517, 532
Underfunded IHCIA Provisions..................................... 427
Unfiled Positions................................................ 419
Urban Indian Health.......................................492, 516, 527
Veterans Affairs................................................. 420
Water Sanitation................................................. 420
YRTC in California............................................... 421
Department of the Interior 2014 Budget Request
April 11, 2013 Rayburn, B-308
Asian Carp.....................................................599, 600
Atlantic Seismic Environmental Impact Statement.................. 606
Atlantic Seismic Environmental Impact Study...................... 605
BIA/BIE Construction............................................. 613
Budget Reductions................................................ 586
Carcieri......................................................... 596
Climate Change................................................... 593
Declining Budgets................................................ 601
Delta Bay Conservation Plan...................................... 615
Fracking Rule.................................................... 587
Hazardous Fuels.................................................. 594
Heritage Areas................................................... 589
Hurricane Sandy Recovery......................................... 589
Hydraulic Fracturing............................................. 588
Hydraulic Fracturing/Energy...................................... 611
Indian Affairs Budget............................................ 608
Indian Country.................................................595, 598
Indian Schools................................................... 607
Land Acquisition................................................. 603
Land Use......................................................... 604
Natural Gas Production........................................... 588
NPS Budget....................................................... 601
Off Road Vehicles................................................ 605
Off-highway Vehicle Recreation................................... 616
Oil and Gas Development.......................................... 606
Oil and Gas Potential in the State of Florida.................... 607
Oil and Gas Production........................................... 609
Oil and Gas Reforms.............................................. 587
Opening Remarks of Chairman Simpson.............................. 551
Opening Remarks of Mr. Moran..................................... 551
Opening Remarks of Mrs. Lowey.................................... 552
Opening Remarks of Secretary Salazar............................. 553
Questions for the Record from Mr. Cole........................... 611
Questions for the Record from Mr. Valadao........................ 615
Science in Decision-Making....................................... 604
Secure Rural Schools and PILT.................................... 591
Subsurface Leasing.............................................596, 597
Wild Horses and Burros........................................... 600
Wildland Fire.................................................... 586
Wildland Fire.................................................... 587
Wildlife Refuges Budget.......................................... 592