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Everyones information there will not be endorsements from the panelists today one important thing i want to clear up because i think it is important for context of this discussion is that the impression you have in organizations in working on this because in washington d. C. People say on the 6 00 news on the sunday talk shows where is the compromise . Where are the people in the middle that can split the baby and come up with legislation . I think that youre going to hear loud and clear from us but is this about compromise or is this about working towards shared values of principled people on both the left and the rig right . All the reasonable people thought this was the way to respond to everything. Left right coalitions and criminal Justice Reform have been successful. Work because curved led so if they led the same fight it wouldnt work. Im not sure i trust everybody but on a right Left Coalition there is no compromise on principles. We are working to do the same thing perhaps for different reasons, maybe different life experiences, different senses of what works and what doesnt. But when you sit down with the guys they are very serious about having criminal intent. They think this is an important thing. Other guys on the left who arent. There are people men and women on the left of principle who actually think rule of law matters and they get scared at the idea and that they are the target of the regulator. This is not right left get together and do something stupid but half way from where they want it to be. How do we get people out of prison so that they dont come back into prison. Cops come stop your car and say we think you might have drugs. Sell your car and now they take the money out of your bank account. Unless there is a conviction. If you are convicted and there was proceeds of bank robbery, good, but they shouldnt steal it unless you have been convicted of something. You saw the numbers. There is more money taken away from americans in civil Asset Forfeiture last year. It is a big deal and very sad big number. All of these reforms are ones people of principle can agree on. We dont agree on everything. There are a bunch of criminal justice things we are not working on. The ones we can agree and we can pass legislation it is not a question of sacrificing principles. There isnt a bill we look at there is other good stuff in there where that is not the deal here. This is not a compromise with stupid ideas. This is working with people who we can agree with. I want to reinforce that i cant imagine a bill passing that showed an increase in crime. There has been no evidence and the states with every reform that they have passed have done much better job of tracking things. Every proposal from the right and left and every bill that has gotten traction has improved Public Safety. I think that gets lost in the debate. Is this a compromise of the american conservative unions values or a chance to express your values and find them attractive to a broader audience . I think your first question related to the legislative process. Can left and right compromise . I just want to reiterate that so much of what is going on now within the criminal justice sphere is not legislative in orientation. It should lead politics and should control the people. That runs counter to founding of our nation as staff knows well we believe that sovereignty resides in the person and our whole constiitution begins with not just we the states or Founding Fathers but we the people. There is a conflict now where it is the left pushing the bureaucracy to move ahead of the people so it creates these laws outside of that political process. By political process i do not mean partisan process but how people govern themselves and as we have seen the legislative branch diminish in stature. One consequence we need to Congress Needs to take its rightful place in this process and we need to return to a place where members of congress can Work Together to address issues and take control of this process and take it back from the bureaucracy and then as members of Congress Move forward understand that everything they do needs to be based on the idea that the liberty of the individual is paramount and should be abridged when somebody committed something really bad. A prison fellowship we applaud things by saying amen. Amen. Right of crime is involved with coalitions involved with the states experienced. You have been around to see the results of the work and to see it play out. Right on crime is a principled player or do you feel willing to compromise principle. In terms of a spectrum of ideology we are not just groups meeting in the middle it is more of a u. We just happen to overlap on these particular issues. Great example of this coming from texas in 2015 prior to we were one of two states part of the criminal Justice System. For skipping school if you are asked to relate i always make the joke that this would have made me equivalent of bonnie and clyde. It it was one of two states that use that. Through a concerted effort between us on the right we were able to overlap on this particular issue with the same exact policy prescription. Neither of us compromising values. They are advocating for pay day lender reform and school to prison pipeline reform and things that we are not advocating for. On the criminal justice interlude into School Discipline we were 100 in agreement on. This is just one example of where we find that issue as opposed to changing what texas apple seed stands for. You see that across the spectrum. Another great example of that in michigan, you saw the center and the michigan chapter of aclu both shoulder to shoulder. This might show that the federal process tends to be a little detached from it. Both of them had natural constituencies that were affected by this law. You find these uncommon allies overlapping on these particular issues and then they move forward on that without changing the core of their beliefs. The next question it seems and the elephant in the room, if you will, for a member of congress you have a template that to be successful politically whether running as republican or democratic to lock people up for longer periods of time and more people in prison is the safe move. And to do the opposite is a political risky move. We are seeing evidence that these reforms reduce new crime. Has that changed the political dynamic in america . Is a no vote on reforms that address fiscal oversight, liberty issues, performance of the system . Whats a member of Congress Looking at when presented with bills that have the research and the support in front of them now . I think you hit the good and the bad on the head in that question. You have generally a policy issue. Criminal justice and criminal Justice Reform requires an elevator speech. It doesnt sound byte very well. However, here we have this litany of successes in the states and across a variety of programs. I think the fruits of it poetically speaking i think that is diminishing if not gone. You have seen in recent campaign cycles is where the crime has been invoked you tend to be a death rattle as opposed to a tip of the spear and when it has aired it has not found footing. You also see that all the polling that goes on in tandem, in texas we have been polling on this issue since 2013. 2013 we were a good five years on from our reforms in 2007. So we wanted to look at what about the hearts and minds . Are the hearts and minds with us on this program. We found that not only does the effect of people wanting to see common sense reform and conservative reform, not only did we see that very strongly supported we have seen very incredible effects on there. We actually saw that conservative identification actually predicted decent amount of ones affinity towards rehabilitation. You see that tends to drive a lot of public preference. That is not to say there isnt a punitive element to that. That is overshadowed by rehabilitation and then a lot of people say we need to have a strong deterrent system. When polled it gets at most 7 of people saying this should be the purpose of our criminal Justice System. Its not that they dont want to punish. They dont want to be its just that it is simply not what drives it. We find people two to one would rather spend money on effective rehabilitation programs than prison or jail . That persists across the board. This is in texas. This isnt what the average person thinks. This is what people in tyler think. This is what people think. I think when we look at what is going on in the states it is really giving a better sense of where the american political policy imagination is on this. Grover, you mentioned in your remarks already about the performance of governmental institutions and that conservatives have looked at going after the things they consider unnecessary or overstepping the proper role of government. This is an area where there is probably consensus on the right and left but there hasnt been a lot of scrutiny. My dear wife stacy at home sometimes better at summing up political issue s and policy issues than i am. She would simply say hospitals are supposed to make people healthier. Classrooms are supposed to make people smarter. The criminal Justice System is supposed to reduce crime, hold people accountable. What is your take on the performance of the system from taxpayers perspective . It hasnt done a very good job. It has gotten extremely expensive because people dont focus on it. We are spending 50,000 a year in california to put an adult in prison for 25,000. These are pretty significant numbers. If you can punish somebody and or rehabilitate them in ten years instead of 15 it is a lot of money that has been saved. If you can keep someone out of going to prison without keeping them away from crime that saves a whole bunch of money. The other thing you do is take a parent out of a household that could be earning support for the family. Doesnt do any good to have a fatherless household. Its very tough on kids. A lot of damage is done and we need to figure out how to punish crime, deter crime, work on rehabilitating people who have been bad and could do better at the least amount of damage, not just dollar cost but damage that we do. We dont do that well because we are not focussed on it. You guys passed a law against people raping each other in prison. For how long is that a punch line in jokes . Thats kind of sad. So i think if we focus on getting it done. We can do a lot better than we have done. Just one thing to add. Sometimes people say there was a spike in putting people in prison and maybe that is responsible for actually some of the drop in crime. Crime has continued to fall as we have moved away from spiebing the number of people in prison. What the drop in physical violence, physical crimes, rape, murder, assault, the drop in those crimes is matched with passage of concealed carry legislation in the states. They passed it state by state so you can compare states that did it ten years ago and states that did it 15 years ago and states that did it five years ago. That is where you are seeing people steal your car but in conceal carry states they are less likely to mug you. That is one reason you are seeing the drop. When people say the drop is because of crime they are trying to get away from the fact that you can track conceal carry passage and the number of people with conceal carry permits with the drop in physical violence. 14. 2 million americans with active permit im not surprised we have seen that kind of crime decrease. Thank you. I reserve my right to interject and i will say one thing before i go to dan on statistics of what grover said. One casualty of passage of locking more people up from early 70s up through a few years ago was the actual arrest and conviction clearance rate of murder in Violent Crime rates. Senator tom cotton cited in an arkansas paper that the Current System leaves 47 of the murders go without having arrests. No time served, no sentence, no probation, no reentry or collateral consequences. Where im from they run about 50 arrest rate in chicago. In 2012 running 30 arrest rate for murder in chicago. In the 60s before we started focussing on locking up more people for lesser crimes the arrest rate for murder was significantly higher, in some years into the 90 percentile. Statistically we have moved our focus away from where i think america would think the members of congress have focussed on who they are arresting. Dan, my question for you as the oldest and one of the most respected conservative voices in america, the american conservative union, from your Vantage Point how do you believe that we got here . What brought us to this point where we are having this debate in Congress Today . I was looking around the audience earlier and im not going to ask people to raise their hands, but how many of you are 50 years of age or older . Please dont raise your hands. My guess is that maybe a fourth or a fifth of you all are 50 years or older. For those of you under 50 you may not recall the time when the mantra changed from crime never pays to crime does pay. There was a period in our nations history was the focus you can get a crime and get away with it. Congress started to get tough on crime. That was a phrase that was often used in 70s and 80s. It was a phrase supposed to mean we are going to pursue justice for victims, but i think the pendulum has swung so far in the other direction that we now have all of these cases where young man from detroit moving to hollywood. He wanted to be a video producer but atf boarded the train in new mexico and they couldnt figure out why a young black man had 40,000 on him. Atf thought he does not deserve to have 40,000. He must be up to no good. So atf took this young mans 40,000 under the Asset Forfeiture law. The young man has to hire a lawyer to prove his innocence. He is guilty. His money is guilty. His money was taken from him. We have swung so far in the other direction, the young man who earned 40,000 to begin his life has to hire lawyers and go through years of trial to get his money back. This is obscene. Fortunately we have people who are fighting hard to reform these asset fortunateture laws but across the board we have seen this extreme move where the individual is no longer thought to be sovereign where it is the state who controls the individual. I think this whole election that we are approaching is asking this question. Does government control the person or person control government. As a conservative i think we need to restore the rights of the individual. We need to pull back on these extreme criminal laws that turn everybody into a criminal. Thank you. We have a few more minutes together here i believe. Im getting a nod. And we are going to talk about some of the issues, not endorsing any specific bills but some of the things that the members of congress are confronted with today. I will give my commentary as somebody who reviews the bills in both chambers that by and large if you divided the criminal Justice System into three parts, sentencing, while somebody is paying their debt back serving their time, if you will, and then post release. Most of the congressional bills that are being debated and where there is a strong desire for passage or consideration this year before a new congress and new president relate to the first two either sentencing or the conditions of confinement, duration of confinement, when people can leave a federal institution. So you have heard the panelists talk about mensrea and civil Asset Forfeiture throughout their remarks but specific to those policies lets go a little briefer here with those two, with all the panelists talking about the importance of Congress Addressing those. We just have a little tutorial today on mens rea, the reason Hillary Clinton is putting what was supposed to be secure documents on email is okay and not a crime according to the fbi director is because, quote, there was no intentional misconduct in connection with that sorting effort. Now, i think that might be an extension a little bit far, but here you have a White Collar Crime being told that no intention, no crime. Somewhere between 300,000 federal regulations that can put you in prison and it is not attached to most of them. People in prison because they filled up paperwork wrong, plastic instead of paper when there was no reason to use either. Just the law. Step one, lets give everybody the hillary rule. All laws need mensrea. Everybody should be treated as well as Hillary Clinton including business men and women. The other is the overcriminalization issue. Its not in one of the bills but it was put together by the late senator specter and i would recommend it to a congressman or senator to pick it up. That is a base closing bill for federal crimes. Remember the closing bill you have commission of military guys and get together and determine what bases the pentagon doesnt need. That lets everybody off the hook for base closing in their state because pentagon didnt want it. Lets do the same thing for federal laws. We have 2,000 to 4,000 federal laws, if we have several thousand federal laws lets allow judges to get together and look at which ones are redundant and yesterdays news. Federal law carjacking, all 57 states already make carjacking a crime. Somebody wanted to headline so they had a federal law and now a federal crime and not just illegal in all states. There are real opportunities to peel that back. I think the base closing approach would allow us to do that for federal overcriminalization in the same way we are able to pull back bases that were not part of National Defense but were expensive. And civil Asset Forfeiture the president tomorrow could solve the problem by telling them the feds wont goat involved when new mexico in our packet, a list of who has done good stuff and who hasnt. One best state is new mexico. You have to be convicted before they can steal your stuff. And when they steal your stuff it goes into the state budget, not to the sheriff which is a bad incentive when the money goes to the guy who took your stuff. Better to have it go to general budget because then they take it if it is really a bad idea and doesnt enrich them. In new mexico the local cops can go and bring the feds in on the bust and then the money goes to the federal government and comes back. And the Administration Stopped that temporarily and now it is back open again. That is a pipeline around civil Asset Forfeiture in the states. The president could stop that tomorrow. We really need to even without a law but a law would be helpful. To that point on civil Asset Forfeiture and with your legal background we believe it is a moral hazard for the staff at the local level. My question for you is at the federal level is it proper for the federal government to chime in . Is it civil rights that the congress can talk about standard for civil Asset Forfeiture that they believe is consistent with the constitution or would that be overstepping for congress to get involved . I suspect most people dont know the history of civil Asset Forfeiture. If you ever watched miami vice in the early 80s you would know the speed boats would run drugs up from mexico or that is how it was portrayed on tv. Lets stop the drug flow by taking away the property of the bad guys. That seemed like a great idea but instead of asking who is indicted when somebodys assets are taken because nobody is indicted, but what is guilty of the crime . The asset is. Its the 40,000 in cash that that young man had that is apparently guilty of the crime. So is it constitutional . I didnt know that boats and cash had Constitutional Rights. But the owners of those properties have Constitutional Rights and their rights to property are being violated. Let me also kind of go back and address some broader. You addressed sentencing reform. Judge prior has been the leader in sentencing reform included among 11 candidates that donald trump might select for appointment to Supreme Court if trump were elected to president. He has done a great job. Before he was a federal judge he led on sentencing reform. Post release explained long ago that what makes america truly unique is voluntary society how we take care of each other. This is an area where conservatives have really dropped the ball. Voluntary society. I encourage everybody to engage in their communities with more. Terms of confinement there is one bad idea floating around which is for the federal government to take over the Bail Bond Program our constitution con templates that bail has to be set at an appropriate rate and not too high. The idea that government would take over the function is a bad idea. But while somebody is incarcerated maybe we go back to law School Experience one last time. In my criminal law class i was asked what is the purpose of partnershi prison. Is it retribution . What is the purpose . Is it to get even . Is it rehabilitation . I think as a nation we need to its just we need to do a much better job actually helping people become productive members of society. What do members need to see . Which issues with the clock running on this congress and this president what do you think would be most impactful . All of the above. Specifically i really think that we are at a water shed moment on the issues tat you mention as far as sentencing. I echo your sentiment that we need to do a better job. When we abolish federal parole we are going to knife off our ability to monitor people who might pose Public Safety risk in the community. Not only tough on crime but reckless. I think that several examples have under scored that point. I think the civil Asset Forfeiture debate, that is something that the federal government does provide an end around for that causes trouble and takes away from the Actual Police powers of the states. That needs to be addressed. However, to look to the federal government and expect it to be addressed i think is a bit too far. What you need to do to combat that is you need state individual reforms. States can put handcuffs on their Law Enforcement agencies in dealing with equitable sharing agreements. They can run these particular agreements through the attorney general one possible example of many that really gets away from offering that shot for even if the legislature says we want to protect Property Rights through allowing other individuals to go around that. Thank you. We are going to bring this part of our discussion to a close here. To set the stage for your questions i think the panelists we know from our experience in working on these issues with members of congress but also in the states that there are only two ways to effect the number of people that are currently in the federal prison system. That is the number you sent into the prison and the number you let out of prison. And we didnt get a chance to talk much about the post release but i did want to be clear in my comments that that is currently not prominent in any congressional bills being discussed now. So you can ask questions related to that, but as grover encouraged members of congress i know we have a number of Staff Members in attendance here today to dust off a criminal Task Force Bill but i encourage the members and the staff to look at what can be done post release as prison fellowship the core of what we believe the criminal Justice System exists for is restoration for those affected by crime and incarceration. You cant do that if somebody pays back debt and and never allowed to pay back. State your name, too. I am director of campaign for fair sentencing of youth. Thank you for being here for your leadership on these important issues. I am wondering what each organization would advise our presumptive nominees for president on what their priorities should be on criminal Justice Reform in the coming years. Were going to i didnt set the stage well enough so i will set it now. We have about 20 more minutes together and we want to get to as many people in the audience so where possible direct it to one of the panelists and if it is to all of us i will ask us to be short or we can just say pass. Prison fellowship believes thank you for the question. Prison fellowship believes each human being is created in the image of god. My friendsb on the left in secular worlds that i run in in criminal Justice Reform equate that with fairness and say people are equal and our founding documents speak to that. When you talk about presumption of Different Things i think it is something that laws have been passed to ease the prosecution and the processing of people almost in a spreadsheet manner in america which is not consistent with American Values of each life having a value. Before we take away somebodys life, liberty, pursuit of happiness we should slow down enough to take that individual case seriously. Im not trying to offer we are not endorsing specific things on this panel, sweeping legislation. Im saying that is the corner that we should fight out of and we should go as far as we can. This is something the government should be in the business of doing but it shouldnt reduce the value of the people that are going before this process for efficiency. Anybody else want to chime in on this one . Maybe one or two sentences. At the federal level 90 of instances of prosecutorial misconduct come out of justice. 10 of prosecutors work out of justice. The next president of the United States i hope their attorney general would take control of that office a few blocks away and get control of it. The state level i dont there may be instances where people are trying to further futures at the expense of peoples liberty. Thank you. I would like to ask grover this. What are we doing about our judges . We have 10,000 people a year who go to jail illegally. 22 days i snuck out documents to get out. There is nowhere for me to go for help. All of my complaints have been ignored. Judges are running wild. Nobody is pleasing them. I twauwant to know what you thi can be done because we seem to be thinking there is a conflict of interest to hold them accountable. We have three judges who have retired early that we will all pay for especially Richard Roberts here in d. C. Who raped a 16 year old. We are going to all pay for him to retire. To the issue. To the issue, real challenges. I have heard stories of judicial abuse. Im not sure what the best legislative approach is, but we need to look at it all. We shouldnt go prosecutor is always right. We shouldnt go the judge is always right or defendant is always right. Too often different individuals or the whole system takes the position that prosecutors never make a mistake or judges never make mistakes. They do and i dont know the answer to your question but we have to focus on it. One thing i would bring up is in texas we have a case involving a gentleman who you might have heard of. The judge and the prosecutor obstructed dna testing for six years which exonerated him. Both of them have been sanctioned by judicial conduct commission. We need to strengthen those remedi remedies. Sometimes you dont realize someone committing misconduct and wrongfully convicting. You mentioned solitary confinement. A lot of states have reduced solitary confinement. We still have, for example, people in texas, new mexico and other states discharged from solitary confinement to the public. That is a practice we need to end and reduce the number of people because it is proven to lead to higher resitivism once they are released to the public. I want you to know i am sympathetic to the situation. I was a prosecutor for 2 1 2 years. There is no oversight for prosecutors that choose to go after somebody because they have a blank check without a boss. I didnt want you to get i understand i didnt want to be dismissive of it. It is a very serious issue. Its not currently being contemplated. It is an issue that would be nice for the federal government to look into in the future. If i may i think one bigger issue here in that this really under lines a lot of what people on this panel and here in this room believe is that the reason we do have abuses in the criminal Justice System at whatever level by whatever function is because we have a very poorly prescribed idea of what the criminal Justice System is supposed to accomplish. Is it supposed to be this instrument of force for the state . Some think it is or isnt. Should it be garrenter of Rehabilitative Services . We need to have a conversation on what the true role of criminal justice is. The pendulum has swung so far that we have gotten into this reaction where we are going to say tough on crime. I think that is starting to go away. This is the political reality of this is we become much more of deliberate consideration as opposed to knee jerk policy response. And a question behind you. All the way from the chairmans table. I really appreciate you joining us. My question is trying to be concise. We heard from members that have issue with retroactivity. What would you say to some of those individuals who think that we shouldnt do reforms to those parts of our criminal Justice System which has put so many people in prison . The question was i think retro activity and mandatory so it is two questions. On in both, for both of those questions i guess i get back to the idea that the presumption has to be that we preserve peoples liberty. Thats where we always have to start. So on retro activity what is the goal here . Is the goal to lock up as many people as we can . To reach back and grab as many people as we can . Or is the idea to preserve the rule of law and lock up only the people that we really deem as committing heinous things . On mandatory minimums is the idea to have a cookie cutter approach where there is no discretion, where its you check off this box, this box, this box and that is what the result is . That i think flies in the face of the idea that the first presumption is that we have to protect peoples individual rights and sovereignty. One other problem is you dont consider the persons risk level, dont consider what the person wants which in many cases is restitution and instead politicians are setting without knowing facts of the case substituting judgment for that of the judge. And so with regard to retro activity it is happenstance whether the crime was committed yesterday or five years ago. A number of states that have updating drug laws to reduce penalties have made it retroactive and the sky hasnt fallen. It is easier for people to get a job now that it is a misdemeanor instead of a felony. I understand i have heard prosecutors say if you reduce penalties for Violent Crime that is tough for me to go to a victim and say this isnt what we told you it was. That i understand and we can have a discussion about that. When we are talking about making reductions and i dont see how anyone can possibly object to that. I dont see how anyone can object to that. Take a look and see if you think its wise to reform the mandatory minimum and just to victims as well as general society. If it is, retroactivity is not that big a problem. If youre going to decide that youre changing the law, changing it back makes sense. If it doesnt make sense to fix the mandatory minimum, a lot of them are too long and theres too much rigidity, dont do it. It makes sense two years ago and two years from now. Theres one more question behind you. Im sitting here because im 74 years old, i think, not because im part of the committee. A short question, i think, for norville. One of the pieces of legislation they keep talking about is a constitutional amendment on parents rights. To lose a child because of your economic position which is in ways is a lifetime if not two or three generational punishment. What is your own view that have kind of legislation and does it have any chance of bipartisan support . Youre talking about the parent being taken away or the child . I didnt the sin is that some middle class person comes and makes a judgment and takes the child away from the parents despite the parents intention to raise the best he can. Taking the child away. I serve on the board of directors of the parent rights organization, which supports the parental rights amendment, so this is a softball, i guess. I think its a great idea. And i commend to your attention and to your boss attention the constitutional amendment, parental rights amendment, that puts into the constitution the idea that parents have the right to raise their own kids. As the late Justice Scalia said there ought to be a right like that but its not in the constitution. Im not going to see it if its not written down. I think its a good idea to put that into the federal constitution and parental rights amendment. Its a great idea. Can i mention real quick it does come up. I was testifying years ago and this woman had gone to jail for a small amount of marijuana and she lost her child, her child was put in some center up in east texas, and she couldnt get the child back even after she was discharged. And so she told me, she testified that they said, well, my child is depressed. She said, well, hes depressed because he doesnt have his mother. A lot of the average woman in prison has two and a half children. A lot of bread winners as fathers are incarcerated as well and their children miss out on their father. So this is a huge issue within the criminal Justice System as well. Thank you. At least one more. Thank you. My name is james ross. Youve mentioned this sort of left right coalition in doing sort of criminal Justice Reform work and my question is there is broad bipartisan support in the senate for the Senate Reform and corrections act and its passage through the judiciary. My question would be what is necessary at this point to get senator mcconnell to bring it to the floor, and is there anything that people in this room can be doing to help move that forward . Well, thats, again, not speaking to the advocacy of any particular bill at this panel, reporting to this audience my understanding of what is going on is that there is a very large number of United States senators that do, in fact, support that legislation just as the various bills in the house, theres a very large number of members of the house of representatives from both parties that support those bills. And the gentleman who asked the question is properly noting what the hurdle is. What does it take to get the leadership if either chamber, i with would add, to actually move legislation so it would have time to pass before we seat a new congress . And ill let others comment on that, too, but from our view at mriz on fellowship, its the ageold issue that congress has a limited number of things that they can bring up to that level and while this is a significant priority to many americans, its competing with other priorities. So to be specific about what would work, what ive seen work on any number of bills is when people bring in the values part of the discussion and theyre not trying to convince their member of congress on a new set of values but theyre trying to remind their members of congress this is the values that they campaign on, that theyre their own values and its an opportunity to express that. The second, this is a very real, human consequence in that we are talking about increasing Public Safety and reducing crime and theres nothing more respectful to victims that we can do than to improve the criminal Justice System so we have less crime in america, and the federal government can contribute to that now if they in the remainder of this session take steps forward with a have a var bills available for them and how they express that. And so from there its the traditional advocacy but as youve seen here this panel was convened to show that the base of folks on one particular side of the aisle very much thinks this should be on the top of the agenda and this is something leadership should take up. Sorry i went a little long, my friends. Just quickly, theres a lot of consensus on what we can do. There are some of our friend on the hard left to dont lick mensrea. The rest of the country, not gist Hillary Clinton, should have it in the laws that they face. And the idea that regulations passed by some bureaucrat somewhere dont have protection and the first lady just was granted it properly, that you have to know what youre doing. But its very important that mensrea be part of this and those standing in the way are standing in the way of reform and go talk to them. Again, to elaborate what we have heard is public. Speaker ryan would like to bring this to the floor. It would have a huge number. That would put weight behind it in the senate to overcome the voices on the other side. Having that huge overwhelming numbers which you can only get through the comprehensive package out of the house i think would bode very well whether its before the election or even in the lame duck session. The biggest challenge there are very few working days left as all of you know. The house bill with mens rea should pass with strong bipartisan support. Mens rea has it. In the senate a few people can be obstructive. I would just add that, you know, mark and i on this panel we can its almost flippant to say but we can claim beltway outsider status, were on the i35 beltway down in austin. One thing youre seeing, hopefully the polling data has met out is regardless of what the stumbling block be not enough days on the calendar, not enough hours in the day, this is a very, very, very safe issue and is representative of the voter base no matter how you slice it up. You see it pan ideological across the ages, across genders, too. You generally see this not modulated at all by party affiliation. It simply is a safe issue. Dan . Do you want to close us out . Maybe ill quickly respond to that. The host of cpac, the annual conference for conservatives. We had a panel on the main stage on criminal Justice Reform, what are the prospects of it. You might be interested in that. We had one democrat and three republicans on the panel, and the democrat was the one most aggressively not wanting any reforms. A couple of the republicans were saying some modest reforms, and the third republican on the panel was saying aggressive reforms. So i dont think its such a binary thing. Mcconnell, why doesnt he just bring it up . Like most legislation, its complicated and there are different people who have different priorities and different interests. Maybe thats why i keep on stressing some of the fi philosophical questions so that informs the thinking Going Forward that we have to respect the sovereignty and the dignity of the individual. We have to presume innocence until proven guilt. These are some bedrock principles that i think we need to restore as well as the first branch of government. The first branch of government needs to be doing oversight of federal agencies and judges. Federal judges have been impeached in the past for wrongdoing. Congress needs to take back its rightful place and we need to return to our foundation al principles. Thank you. Joe . Yeah, lets thank our panelists, please. [ applause ] and i do want to go back to that last question. A big part of the reason we held this in the rayburn building today, i think the senate bill has gotten a lot of attention. Its really the house bill thats looking like its going to move. Theyre telling us the house bill will move first. House people, the question is when are we going to start moving things over here . I just want to thank you for helping us get this room, although the next time i think well need a bigger room. I want to thank the americans for tax reform. They were helpful today. We need add few more hands on deck since a handful are usually in austin. Hopefully have a few of them here as well. I think hopefully you got the message today that conservatives have been and will continue to be the real champions of successful criminal Justice Reform. And when i say that, i want you to remember the successful part. The successful reforms are the conservative reforms. It takes principles for the system to work. And conservatives in the states have known this for years as mark mentioned and i hope that our presentation helps shed a light on that. For those of you who want to learn more, we have a handful of materials in the back. In particular one that you hear about sentencing reform. I think its particularly good because i wrote it. We also have our website right on crime. Com as well as criminalintentfacts. Com that talks about the mens rea. Feel free to reach out to me. Im actually based here in washington, so feel free he to reach out to me and, of course, feel free to get in touch with any of our speakers. Im obligate iing you all to do that as well. Its an important issue for them. Its an important issue everywhere. Thank you for being here. Have a great afternoon. You will be able to watch this event again later today on our website cspan. Org. Earlier today fbi director james comey announced he would recommend to the Justice Department that no charges be brought against Hillary Clinton for her email case. Heres some of what he had to say. Although we did not find clear evidence that secretary clinton or her colleagues intended to violate laws governing the handling of classified information, there is evidence that they were extremely careless in their handling of very sensitive, highly classified information. For example, seven email chains concerned maters that were classified at the Top Secret Special Access Program at the time they were sent and received. Those chains involved secretary clinton both sending emails and receiving emails about the same matters. There is evidence to support a conclusion that any reasonable person in secretary clintons position or in the position of those with whom she was corresponding about those matters should have known that an unclassified system was no place for that conversation. In addition to this highly Sensitive Information we also found information that was properly classified as secret by the u. S. Intelligence community at the time it was discussed on email. That is excluding any later up classified emails. None of these emails should have been on any kind of unclassified system, but their presence is especially concerning because all of these emails were housed on unclassified personal servers not even supported by fulltime security staff like those found at agencies of the United States government or even like gmail. I think its also important it to Say Something about the marking of classified information. Only a very small number of the emails here containing classified information bore m k markings that indicated classified information. But even if information is not marked classified in an email, participants who know or should know that the subject matter is classified are still obligated to protect it. And while not the focus of our investigation, evidence that the Security Culture of the state department in general and with respect to the use of unclassified systems in particular was generally lacking in the kind of classified information thats found elsewhere in the u. S. Government. With respect to potential computer intrusion by hostile actors, we did not find direct evidence that secretary clintons personal email domain in its various configurations since 2009 was hacked successfully. Given the nature of the system and of the actors potentially involved, we assessed we will be unlike ly to see such evidence. We do assess that hostile actors gained access to the private commercial email accounts of people with whom secretary clinton was in regular contact from her personal account. We also assess that her use of a personal email domain was known by a large number of people and readily apparent. She also used her personal email extensively while outside the United States including sending and receiving workrelated emails in the territory of sophisticated adversaries. Given that combination of factors, we assess it is possible that who hostile actor gained access to secretary lynn lens personal email account. Although there is evidence of potential violations of the statutes regarding the handling of classified information, our judgment is that no reasonable prosecutor would bring such a case. Prosecutors necessarily weigh a number of factors before deciding whether to bring charges. Their obvious consideration like the strength of the evidence especially regarding intent, responsible decisions also consider the consequences and how similar situations have been handled in the past. In looking back at our investigations into the mishandling or removal of classified information, we cannot find a case that would support bringing criminal charges on these facts. All the cases prosecuted involved some combination of clearly intentional and willful mishandling of classified information or vast quantities of information exposed in such a way as to have intentional misconduct or indications of disloyalty to the United States or efforts to obstruct justice. We do not see those things here. To be clear, this is not to suggest that in similar circumstances a person who engaged in this activity would face no consequences. To the contrary, those individuals are often subject to security or administrative sanctions but thats not the what were deciding now. As a result, although the department of justice makes final decisions on matters like this, we are expressing our view no charges are appropriate in this case. Shortly after fbi director comeys announcement, donald trump tweeted, fbi director said crooked hillary compromised our national security. No charges. Wow donald trump and senator bob corker of tennessee will Campaign Together today in raleigh, North Carolina. Theyll be at the Duke Energy Center for the performing arts live at 7 00 p. M. Eastern time on cspan2. Senator cork er met with donald trump in may and has been mentioned as a possible Vice President ial pick. Real clear politics polls show North Carolina as a tossup state. The hard fought 2016 primary season is over. With historic conventions to follow this summer. Colorado. Florida. Texas. Hi ohio. Watch cspan as they consider the first woman ever to head a Major Political party, and the first nonpolitician in several decades. Watch live on cspan. Listen on the cspan radio app or get video on demand at cspan. Org. You have a front row seat to every minute of both conventions on cspan all beginning monday, july 18. In less than two weeks cspan will have live coverage of every minute of the 2016 Republican National convention followed by the democratic National Convention. And every saturday night at 8 00 p. M. Eastern well take a look at past conventions and the president ial candidates who went on to win their nomination. Well focus on incumbent president s, dwight eisenhower, the 1964 Democratic Convention in Atlantic City with lyndon johnson, Richard Nixon at the 1972 Republican Convention in miami beach, 1980 Democratic Convention with jimmy carter in new york city, the 1984 Republican Convention in dallas with ronald reagan, george h. W. Bush at the 1992 Republican Convention in houston, bill clinton in chicago for the 1996 Democratic Convention, and the 2004 Republican Convention in new york city with george w. Bush. Saturday night at 8 00 p. M. Eastern on cspan. Dr. Patrick conway, chief medical officer for medicare and Medicaid Services testifies on proposed changes to medicare payments. Dr. Conway, who also heads the Innovation Center for cms outlined the fiveyear Pilot Program changing how hospitals and doctors are reimbursed for outpatient drugs. He testified last week before the Senate Finance committee. Id like to welcome everyone to this mornings hearing that will allow the proposed Medicare Part b demonstration. I would particularly like to thank dr. Patrick conway for the center of medicare and Medicaid Services for testifying. Todays topic is very important. The proposed cms demonstration project would radically alter the ways in which medicare pays for drugs and buy logics, treatments physicians prescribe and administer in the outpatient settings that are covered under part b. Typically these are drugs and treatments that are tested in a Physicians Office or hospital. Theyre used to treat vulnerable beneficiaries with serious medical conditions such as cancer, macular degeneration, rheumatoid arthritis, and a number of rare illnesses. From the day cms made their proposed demonstration public this past march, ive made my opinion very clear. I believe this experiment is ill conceived and likely to harm beneficiaries. It is an overreach on the part of cms that, in my opinion, goes beyond the agencys Statutory Authority, extends nationwide, and requires all Medicare Part b providers to participate. As we all know, the experiment would change the part b Payment System in two phases, both of which are very troubling and thats putting it kindly. Given these inherent concerns, i would like to hear an explanation from cms as to why they believe their new payment changes will not harm Medicare Beneficiaries. So far what theyve given us lacks any such explanation or just fication, and thats not all thats missing from the elements of the demonstration that have been made public. Indeed this proposal is troubling and, again, im being kind with that description not only for what is in it but what has been left out. For example, with its proposal cms has not indicated the conditions in which the physician can describe a high or low cost drug that has the same patient benefit. In addition cms has not provided an analysis of how many physicians including those in small and rural practices would lose money purchasing needed drugs. They have not provided analysis of how often physicians would have to refer beneficiaries to the less convenient, more costly hospital outpatient setting. Cms has not yet indicated how it will assess beneficiary access and quality both during the course of the demonstration and the formal evaluation of it. Not surprisingly the proposed experiment has been widely condemned by experts and stakeholders. Almost immediate ly after the proposed demonstration was released we received a letter from over 300 stakeholder organizations asking for our help in getting cms to with dra the proposal. Now these organizations included the arthritis foundation, the caregiver action network, the immune deficiency foundation, the lung cancer alliance, the National Alliance for mental illness. The organizations that have reached out with concerns about how this proposal represents patients who suffer from the diseases treated by these drugs including cancer, arthritis, meantal illness and hiv, they represent the physicians who treat the patients with these devastating conditions including oncologists, rheumatologists and ophthalmologists. Ive heard many of these same concerns from my constituents in utah. Many feel the proposed demonstration would deprive them from the drugs that best treat their conditions and require them to have to travel great distances to receive the needed care. Obviously utah is not alone here. Patients and providers from virtually every state have weighed in on this matter which prompted all of the republican members of the finance committee to send a letter urging the withdrawal of the proposal. Thats right, 14 senators from the only Senate Committee with oversight jurisdiction sent a detailed and thoughtful letter to cms about their proposal. And how did the agency respond . We received what essentially amounts to a form letter thanking the Committee Members for sharing their views and noting cms will consider all Public Comments. It could monot have been more dismissive. The seriousness cms described from congress and, sadly, this is not an isolated incident. For seven years now the entire Obama Administration has patronized, stonewalled or flatout ignored efforts on the part of republicans. There are countless examples. Sometimes the agency showed disregard for the law like when they refused to provide any meaningful response to numerous inquiries about illegal reinsurance payments issued and other times they discount our rule entirely like when they denied staff access to last weeks medicare and the Trustees Report. Until the press conference putting the administrations own misleading spin on the reports are well under way. I have on numerous occasions in writing during these hearings like this and elsewhere expressed my hope that the administration as a whole would be more transparent. Ive asked countless nominee to commit to being responsive to senators inquiries. This it level of disregard has continued unabated. Given the short time left with this administration, i wont renew these calls for more cooperation and responsiveness today. Given that we have a highranking Administration Official before us today, i hope that we can finally get straight answers raised by cms part b proposal. I note that our witness stated in early may interview on the proposed demonstration that cms will interact with congress and take feedback and make adjustments as necessary, unquote. And i do hope that our conversation today will be more consistent with that sentiment than a dismissive response letter shortly after the statement was made. The senators on this committee, and more importantly the constituents we represent deserve at least that much. Now with that ill turn to senator wiwyden. What underlie this is debate we are entering an era where there are going to be miracle treatments and there are going to be cures. There are drugs on the market and close on the horizon that were Science Fiction not very long ago. The foremost question is whether or not the American People are going to be able to afford these medicines. With business as usual, too many of these treatments are going to clobber too many Family Budgets and threaten Health Programs across the country. And that was one of the big takeaways, colleagues, from the 18 months investigation senator grassley and i conducted on a bipartisan basis into the rollout of one blockbuster drug. It was a drug that treats hepatitis c and had a list price of 1,000 a pill. And i think this is going to be the pattern, colleagues, for years and years to come absent reform. Lots of cures and a big, big question mark when it comes to access and affordability. Now the hepatitis c drugs that senator grassley and i did our bipartisan inquiry into are not the primary focus of todays hearing. Today the committee is going to examine a demonstration project set to begin in Medicare Part b which, of course, is the Medicare Program that covers outpatient care. Part b pays for a small share of the drugs many seniors are prescribed and the demonstration would affect the way those drugs are paid for. The demonstration has brought to the forefront additional, major questions about how the country is going to afford to address the trend of escalating pharmaceutical prices. The fact is too many seniors are getting pounded today by Prescription Drug bills. Theres an enormous amount of work that has to be done to guarantee seniors have Affordable Access to the medications they need. In Medicare Part b, seniors are often hit especially heart because their share of drug costs is a coinsurance instead of a copay. That means rather than a flat, manageable fee, some older people face a huge burden stuck paying a percentage of a drugs total cost. I look at that burden the same way i look at the rising out of pocket cost for older people in Medicare Part d. For part d i propose legislation that would establish an out of pocket cap to help protect older people and in my view this committee ought to take a close look at ways it to make sure seniors dont get pounded under part b as well. All of the democrats and i sent a letter in april. The acting administrate for Medicaid Services outlining the key concerns we had about the impact the project is going to have on patients. At their core our concerns are about making sure that older people who are especially vulnerable have access to lifesaving medications, protecting access is especially important in Rural America where Seniors Today so often face fewer choices and lower quality of care. It is extremely important as well that the project not result in patients being told they have to get treatment at the hospital where treatment is often more costly and less convenient. Finally our letter said this demonstrate project has to be in sink with the effort medicare is making to move towards treatment based on value rather than volume. When you focus on the value and efficiency, theres the potential to raise quality of care for older people while saving money at the same time. I hope the committee will examine these issues as it looks at the Medicare Part b dell on strags. I want to thank dr. Conway for joining the committee. We look forward to his testimony and members having the chance to ask questions. Thank you. Thank you, senator. Dr. Patrick conway is here on behalf of the centers for medicare and Medicaid Services. Dr. Conway holds a number of highranking titles at cms. He has responsibility for overseeing Health Programs, providing services to over 100 million people. Two of his roles in serving as the agencys chief medical officer make him well suited to ste testify on the drug demonstration. Prior to coming to cms he was the director of hospital medicine and associate professor at cincinnati Childrens Hospital. Dr. Conway earned his degree from baylor and completed his res d residency at Childrens Hospital boston. I want to thank you for taking the time to appear here today and well be glad to take your statement timt. Thank you, sir. Chairman hatch and members of the committee, thank you for the invitation to discuss medicare and medicaid initiatives, improving how medicare pays for part b drugs, to support if physicians in delivering Higher Quality care to beneficiaries in the Medicare Program. We very much value the input and feedback we receive from congress and members of this committee and we are carefully reviewing the comments from you and the public. Drug spend iing has increased or time. The cost and value of drugs. The aim of improving patient care and the value of drug spending. This alliance with the statutory goal to test Service Delivery models, preserving and enhancing the quality of care. The proposal is part of the administrations broader strategy to encourage better care, smarter spending and healthier people by paying for what works and finding new ways to coordinate and integrate care to improve quality. Cms values public input and comments and looks forward to working with stakeholders in an ongoing manner to maximize the value and learning from the proposed model. We have received feedback from a wide range of stakeholders on several issues including the size of the model, Patient Access and small practices in rural areas and the importance of patient output. We are reviewing all comments closely to determine whether adjustments are needed. Our goal is to be responsive to the Public Comments and input from congress. Under the Current System those furnished are paid based on the average sales price or asp, plus 6 addon payment. The rule outlines a new drug payment model that would test whether alternative drug payment designs may improve how Medicare Part b pays for Prescription Drugs and helps deliver Higher Quality care. Physicians can choose among several drugs and the current methodology can create disincentives for doctors to select lower cost drugs. Even when the drugs are as good or better for patients based on the evidence. The elimination of certain incentives that work against a selection of highperforming drugs as well as the creation of posive incentives. Including reducing or eliminating patient cost sharing to improve Patient Access and use of effective drugs. In the first phase of the model, whether changing the current 6 addon payment to 2. 5 plus a flat fee of 16. 80 per drug per day changes prescribing incentives, leads to quality of value. The flat fee is calculated so that it is budget neutral. The second is on Better Outcomes and improve drug payments by value based pricing tools currently employed by private health plans, hospitals and other entities. Having highquaul care and treatment is always at the forefront of cms work. Beneficiaries would have access to the same drugs and would retain freedom of choice of doctors, hospitals, and other providers or suppliers. The proposed model would not affect drug coverage or any other drug benefits. It includes a number of beneficiary protections. For example, the model would include a new preappeals exception process. In addition to the standard appeals process that would allow provid provider supplier to explain why the value based pricing policy is not appropriate for a given beneficiary and to seek an exception from the pricing approach under phase two. In addition, cms would closely monitor beneficiary access and Health Outcomes during the model. This would help ensure beneficiaries will continue to have access to part b drugs. Millions of americans rely on medications to manage chronic illnesses and treat acute conditions. Cms is committed to making sure they have and maintain access to the highquality treatments. Moving forward hhs and cms are committed to listening and working together with congress and other stakeholders to advance ideas that improve access so all americans have access to the breakthroughs ahead. There are no easy answers to these multifaceted challenges but there is a significant benefit to all of us of working together to find a solution. I appreciate the committees interest and look forward to answering your questions. Thank you for having me. We appreciate you appearing before the committee and perhaps you can be of great help in understanding some of these things. Some people feels the cms wants to undermine the success of the part d drug program. By waveri waiving the drug prices. Such an undertaking would be a massive overreach beyond cms authority. As weve seen the Obama Administration doesnt always feel bound by the clear limits that are provided in the statue. That being the case, i take the specific speculation about part d very seriously. Therefore, i feel compelled to ask is the Innovation Center working on any project or initiative that with allow the government to renegotiate prices or on any other part d change related to drug prices . And as you are the head of the Innovation Center, i would like to have a direct answer on that if i could. We have no part b proposals at this time. We are constantly listening and engaging with stakeholders across the Health Care System so we have payers, manufacturers, providers, others that bring e ideas to us across Health Care Including in the drug space. We view it as our role to engage with those stakeholders, to listen to ideas whether they come from congress or providers or payers or others so we engage deeply on our Statutory Mission which is to engage in testing, payment and Service Delivery models with the high likelihood of improving quality and maintaining or lessening expenditures. Well, doctor, my stated position what cms needs to withdraw you know, that cms needs to withdraw this rule is shared by many. Once again over 300 stakeholder groups weighed in and called for the proposal to be withdrawn almost immediately upon its release. Without objection the letter i referenced signed over by over 300 organizations will be included in this record. In addition to these stakeholders nearly 300 members, republicans and democrats alike, have asked to withdraw the proposal. Many of the 1,300 Public Comments cms received pointed out serious flaws. Considering all of this backlash seems pretty obvious if cms moves forward with this experiment it would be doing so against the interests and judgment of the vast majority of experts and policymakers in this field. Now are you willing to acknowledge this widespread opposition, that there is widespread opposition and withdraw this proposed rule . We take the input from congress and from stakeholders across the Health System very seriously. That is why we proceeded through the rulemaking process, which is the most public and transparent of processes that we can engage in. We are reviewing the comments now and plan to make adjustments in the final rule. We are deep currently we have over 1,300 Public Comments. We want to review those closely, carefully, and thoroughly so that we can be as responsive and thoughtful as possible to the public input and the input from congress. Well, it seems that with this rule cms is operating under a premise that physicians are knowingly and purposefully prescribing higher cost drugs when a lower cost equivalent drug is available. Now the agencys view is apparently that most physicians, clinical decisions are driven by maximizing profit instead of patient welfare. Now this is, it seems toplistict theyre doing. Given that youre a doctor, can you tell us the prescribing changes that physicians are expected to make under the phase one Payment Scheme and, please, if you will, provide specific conditions and drugs if you could do that for us. Yes. So i am a practicing physician. I think the vast majority of physicians make prescribing decisions based on Patient Interest and i want to say clearly i would want every physicians and clings to prescribe the medicine needed for their patient and we believe this proposal allows that to happen and we are looking closely at whether adjustments are needed because access to medications, as you allude d to is a first priority. In terms of the reason we proposed this test, the Current System can have disincentives for physicians that may use lower cost medication so, for example, if a physician prescribes a 10 medication, the current 6 addon is only 60 cents, and that may not cover the cost of acquiring and administering that medication. And so we were proposing this test to test a proposal that we think would remove some of the current disincentives in the system to allow physicians and clinicians to make prescribing decisions without regard to financial incentives and we clearly want ifphysicians and clinicians to prescribe the medicines their patients need and for patients to receive those medicines. Senator wyden . Thank you, mr. Chairman. Dr. Wconway, lets go right to the question of Prescription Drug prices. For so many older people they feel theyre getting hit by a wrecking ball. Many drug spending more than doubled between 2005 and 2015. Increasing from 9. 4 billion in 2005 to 22 billion in 2015. Now medicare has, as you know, begun to move towards paying for quality and value rather than the volume of services. Thats been something that has been recommended for ages. And, finally, it is under way. But, so far, Prescription Drugs have largely been left out of that equation, that move towards paying for value rather than volume. Ive been working on these issues since the days when i was codirector of the oregon gray panthers, and i think its appropriate to ask now if the issue of Prescription Drug prices isnt addressed, arent the costs going to be increasingly unaffordable for older people and really put at risk the medicare guarantee, because thats what medicare is. Its a guarantee. Wont they put it at risk for future generations . Thank you, senator wyden. You correctly note the growth in part b drug spending and its been an over 8 growth year on year since 2007. I share your concern on access to medications. The current environment, as you noted with coinsurance and potential for 20 coinsurance, as you can imagine for seniors on a fixed income, you know, 20 of the 10,000 cost or whatever it might be can be a substantial Financial Hardship and can limit access to medications. We also did propose this test because we had not to date had a proposal directly in the drugs based in paying for value. We do think paying for value is important, as you said, across the Health System including in the drug space, and so we hence, we made this proposal. We have others that include drugs as a part of the proposal but we do think for paying for value in drugs is important similar it to how it is important whether its hospitals, physicians, et cetera. Does this threaten the sustainability of the program for future generations, absent reforms . So, you know, the reason it does have the potential, the cost of the Medicare Program has the potential to threaten the program and drugs are a substantial part of that cost and the reason i do this job, quite frankly, is my i care deeply about the 55 plus million americans in medicare including my own mother, and i want medicare to be around for my four children and i think we have to make major positive changes in the Delivery System reform for that to be the case. Now i appreciate the agencys interest in looking at strategies to improve quality and value in all aspects of the Health System including Prescription Drugs. But one of the concerns that has been brought to members, certainly members on our side, is that especially in a rural area, a small, rural area with not exactly a large practice, physicians can be put in a position where the cost of the drugs is higher than the medicare payment, and so what were getting told on our side is that it wouldnt be possible to afford to provide the medications to the patients. Id be interested in your response to this and, also, if in responding you could tell us what happens if thats the case where the provider sends their patient to a hospital outpatient program, which means then you have higher overall costs for both the older people and for medicare. Tell me your response to that because i know members on our side have heard that and have brought it up. Weve all talked about it. I assume colleagues on the other side as well. Your reaction to that. Thank you for the question. So we proposed to include rural providers and small practices, however, we noted concern about some of these issues in the proposal about making sure that we have both access to medications and treatment while we propose these changes. We will look closely at the Public Comments and determine whether any adjustments are needed for rural practices or small practices. Were doing that review now and the type of things we would look at are maintain access to medications. In addition we proposed a monitoring plan similar to what weve used in other programs which can include real time, claims data monitoring. Were monitoring for access, Patient Outcomes, and shifts inside service. So we would monitor that and if we needed to make adjustments both at the macro level and the policy, if you will, but also an exceptions process where we could make adjustments down to the individual patient or practice level if needed. Thank you, mr. Chairman. I only have two questions, but before i ask those, dr. Conway, i want to thank you for coming today. And as you have heard there are many people concerned about this ill conceived experiment. Additionally the administration has not been responsive to congressional inquiries. In addition to the letter signed by every republican on the committee, i sent my own letter to secretary burwell april 29. I have not yet received an adequate response. In my letter i asked for clarification about the whether the proposal constitutes human subject research. Im submit iting that letter fo the record, and i hope that you would expedite an answer to that. Number one question, among the many concerns i have over this proposal is the result it will have on practices that it are small, particularly in rural r areas like most of my state of iowa or for those patients with Rare Diseases. The first question, what safeguards does cms have with regard to treating patients served by smaller practices, those in rural areas, and those with Rare Diseases . Yes. So, senator, i share your commitment to small and rural practices. I grew up in a small town in texas with a twoperson family practice, practice caring for our family. We did propose to include rural and small practices, but we also noted in the proposed rule that we were concerned that and focused on the access issues and we would address access issues if needed. So we sought comment about whether any adjustments or exclusions or other changes were needed either for smaller rural practices, so we will assess the comments and determine whether any adjustments are needed. Okay. Number two, weve heard from a number of groups that many patients and providers concerns in the proposal could have been avoided if patients had been included in the design of the demo at the front end. What plans have you put in place to involve small practices, rural, and rare disease stakeholders in the future . Yes. So we proposed a process for phase two that would include input at multiple points including patient input. Were looking at the comments now to determine if any adjustments or enhancements are needed for that process. To give you a tangible example i personally met with 20 plus patient and consumer groups and do that routinely. That was about two weeks ago. They gave input on this proposal and things across the Innovation Center. So that Patient Consumer input is probably the most critical input we get into these models because our focus needs to be on the beneficiary, on the patient, on the consumer at all times. Okay. Mr. Chairman, ill yield back my time. Thank you very much, mr. Conway. Thank you, sir. Senator stabenow . Well, thank you. Thank you very much, mr. Chairman, and Ranking Member and dr. Conway. We appreciate your time. We appreciate your leadership on so many issues that affect all of us and our constituents and just to underscore what has been talked about first and our Ranking Member talking about the letter that a number of us sent to you. I am concerned that the scope of the current proposal seems broader than is typical of a demonstration project. And just to underscore the concerns that have been raised about rural communities. I also share that. And i understand the proposal is to drive providers towards prescribing more generic drugs in order to produce cost savings, and produce cost savings. I fully support that objective, but i think as we look at those savings there are other questions that i have about things we should be focused on more in order to be able to do that. So that leads me to questions in a broader sense. First of all, the Medicare Trustees report released last week, i want to underscore for all of us that once again part b premiums could be impacted by new enrollees and those dual eligibles, that who qualify for medicare and medicaid. A situation well learn more about this fall as it relates to the Social Security cost of living adjustments impact on part b. I know well follow this closely. Im very concerned about what could happen in terms of seniors and unintended increases in premiums related to that. I want to get that out there, this is something we need to be very involved in. Another issue raised by the Trustees Report is part d which has been talked about. As you noted in your testimony in 2015, cms and seniors paid 22 billion in part b drugs, and according to Trustees Report, nearly 89. 5 billion in part d. If we are talking about the elephant in the room, the area where we should be most focused is on part d in terms of the cost for seniors. Part d spending increased last year 8. 3 , the year before 8. 6 , part b, which we are talking about today, 2. 4 . So when we are talking about 3. 5 times more growth, this is the area we need to be focused. Dr. Conway, if the goal is to drive down Prescription Drug costs for seniors, beneficiaries on the Medicare Program in general, are we focusing on the right part when we say part b or shouldnt we be paying more attention to part d costs . Yes. So in terms of part d, of course in the president s budget are a number of proposals for congress to consider in the part d space. We are open to ideas including a part d at all times, so weve had manufacturers come us to and with ideas around part d and valuebased arrangements in part d. Similarly, we had providers, for example, in our next generation aco program. Talk about how they want to bring in arrangements that are voluntary between the provider and part d plans for new payment models. We are open to ideas from congress, from you, senator, from stakeholders across the Health System on ideas of what we should be doing in the part d space as well. Thank you. Just to underscore what our Ranking Member said who has been such a champion on these issues, ive heard from three constituents in the last few months that have had hepatitisc. They werent sick enough to get their Insurance Company to pay for the expensive drug treatment, but they had insurance so they didnt qualify for charity care. One case we were able to help someone be able to get the medication that he needed, frankly, to cure his disease, but in the other two instances, that has not happened yet. Its not a very good system when someone has to call their United States senator to intervening for them to get the medicine that they need to be able to save their life. And so this is a huge, huge issue. Whether its medicare, medicaid, private insurance we have to do much better. I hope we will be doing actually a hearing on part d where the focus of the costs are in the areas seniors are most concerned. Thank you, chairman. Thank you, senator. Senator roberts. Thank you, mr. Chairman. I would like to ask unanimous consent that a letter here from over 20 patient groups, including the National Alliance on mental illness, arthritis foundation, Lupus Foundation of america, Veterans Health council and Age Institute to the finance committee highlighting concerns of opposition to the demonstration project be included in the record. Without objection. When this committee was debating the Affordable Health care act, i was concerned about several provisions. I believe that would decrease individual choice, open the door to government rationing. There are four rationing, im not sure what to call them, but groups, and you are one of them. It was one of the creations of this proposal. We have before us a proposed demonstration projector test as the agencys press release called it that could disrupt care from some of medicares most vulnerable patients. By the way, dr. Conway, thank you for being here today. I wanted to first share with you some comments and questions from a couple of constituents in kansas. Eileen suffers from anemia and lupus. Is anyone looking at the possible effect of such a demonstration on the people it will impact . Do any of them care good honest americans will die without access to these treatments or are they merely trying to save money by cutting costs . Their proposed access will at least cause a degraded Overall Health outlook for many rhumetology and sign death warrants for patients like me. Another wrote the cms experiment is an intrusion on the close relationship our doctors have with patients and their clinical decisionmaking. This experiment will backfire costing patients and taxpayers even more for cancer care. Now, according to the statute, cmi is to test innovative payment and Service Delivery models to reduced Program Expenditures while preserving or enhancing the quality of care. Thats where i think we are running smack into trouble. How are you going to ensure the beneficiaries dont have trouble accessing appropriate timely treatments in the setting they prefer against example of a patient going to a rural oncology doctor in a rural area sent to a hospital about 100 miles away. There is any data indicating these proposed payment changes will improve quality of care or Patient Outcomes . Yes. So first, the goal of the Innovation Center is to improve quality, as you said, or maintain quality. Ill say i, and this is what ive been doing 20 plus years in the public and private sector, the paramount importance is proving quality and better Patient Outcomes. It also is to maintain and reduce expenditures. In this specific proposal, we are proposing a valuebased framework in phase two, which from the private sector from private payers, from pharmacy benefit managers, from providers, has been demonstrated to focus on paying for value and medications, proposing to test that in Medicare Part b. We do believe it can maintain or improve quality. That is our primary focus on the equality side of the equation. Pardon me for interrupting, but i have limited time. Under the aca, the secretary is prohibited from using comparative effect any of Research Findings and determining medicare coverage. However in phase two, cms plans to test paying for drugs based on how effectively it treats different conditions. Does cmi believe it has the authority to waive this prohibition . Are you doing what you shouldnt be doing . So in terms of cmmi or Innovation Center, we are proposing to pay for value which can be things like risk base sharing arrangements based on outcomes so we it is consistent with the Statutory Authority that tests new payment and Service Delivery models. I would highlight on cmmi broadly. Weve got thousands of providers in every state in the nation engaged in Delivery System reform. Weve got millions of patients that have received in many instances demonstrated by independent evaluation reports, improved outcomes, improved care experience, and we can talk about that more. I appreciate that. Let me say you have said the Public Comment period for the proposed rule concluded on may 9. Cms is carefully considering all the Public Comments received by the Comment Period. We value public input, look forward to working with stakeholders and learning from this model. I think it was mainly about medicare pricing facts, and that is in direct conflict with the letter we have here from 32 patient groups that say there was a lack of stakeholders input from the beginning of this process, and many of the problems with the demonstration could have been mitigated had patient groups been involved on the front end. I think what we have here is a failure to communicate. I remain gravely concerned about how this demonstration or test as Administration Calls it will impact Patient Access to care. I would like to reaffirm my request as all of this side of the aisle requested. I would like to reaffirm my request that cms simply withdrawal this proposal. Thank you, mr. Chairman. Thank you. Senator menendez is not here. Senator thune . Senator portman, youre next. Chairman, thanks very much. I appreciate you being here dr. Conway and for your service. Thank you. My wife is very involved and vice chair and incoming chair of one of our great Childrens Hospitals. I wish i could say the same things about this proposal that i can about Childrens Hospital. I am concerned about it. Im concerned about it for reasons stated already. I want to ask you about one specific deep concern i have about the specific proposal. First its called a demonstration, yet my understanding it will cover about 75 of part b medications which is hardly an experiment. The control group is 25 . I was just looking through some of the correspondence and emails i got from my constituents. Tom clark, his wife is a cancer patient. Hes worried about her ability to get her cancer treatments. Barbara lasky writes me a long letter about her immuno deficiency disease. She is applying for disability now. She wanted to do infusions at home. She fainted at home. She has to go to her doctor. She goes to the hospital, it will be much more expensive and or they wont be able to afford to provide it. Just a lot of deep concerns about it. The specific concern im hearing from ohio is more about these Community Health centers and rural health centers. We lost over 50 practices, physicians practices, as you know because youve been in ohio going to the big hospitals. This will continue that and accelerate it. I think this proposal, which is again not a demonstration hardly, if its 75 coverage, but its a wholesale change, is going to really dislocate a lot of the people i represent and cause a huge concern among some of these smaller practices that are already having a tough time making it in the Current Health care environment with the Affordable Care act. Let me ask you about something that concerns me about your specific proposal that perhaps youre not aware of. I assume if you were aware of it, you wouldnt be doing it. But this is a revenueneutral proposal. You cut reimbursement for some of these, again, Outpatient Clinics we are talking about. Some of the rural providers and so on who are going to have a tough time making it. You increase reimbursement in other areas to make it revenue neutral. One of the patients you increase reimbursement is with regard to Prescription Drugs that are used for pain management. Specifically, you have a dramatic increase in reimbursement incentives for the kinds of pain medication that is addictive and that is causing much of the problem we have now with this opiod epidemic in ohio and around the country. On the expected impact on Interventional Pain management medication youre seeing an increase of 46. 9 and 33. 7 versus a cut on hemotology drugs, oncology minus 0. 6 . I think the basis of your proposal is that if the reimbursement is cut, theres going to be less utilization right . Thats part of how youre trying to save money. On the other hand, you are increasing reimbursements at a time when i think there is a general sense in the administration, certainly hhs because we worked with them closely, there is too much overprescribing of certain kinds of pain medication that is addictive that is causing so much of the opiate crisis. The comprehensive Addiction Recovery act which passed 941 is drug monitoring. Is there a view this is a problem. We work closely with them. Senator whitehouse and i are coauthors of that legislation. This runs counter to that. All the concerns you hear from other colleagues as you did is a concern of mine. I have this bigger concern under this proposed rule which you say is to drive the prescribing of the most effective drugs, the reimbursement for this particular kind of opiods could have a negative impact and increase the problem with this opiod epidemic it is believed 45 heroin addicts overdosing today, 129 will lose their lives today on average 45 started with Prescription Drugs. Often it was for pain medication. It was a prescription they got because of a procedure. Could you briefly respond to that, dr. Conway . Yes. Three quick responses. One on the scope we are evaluating the comments and will determine whether adjustments are needed. Two on the practice issue. Overall, it is budget neutral as you described. Overall is there a slight shift in the impact tables towards the physician, clinician space. Specific thank you for your focus on the opiod epidemic. As you know, for the first time in u. S. History we have zip codes in the u. S. Where Life Expectancy is going down and a large portion is driven by opiod issues. We will evaluate comments including specific classes of drugs. What youve named here is the fixed fee. Because the fixed fee is 16. 80 is proposed, there is some low cost where the percentage increase looks large. Well have to look at that specifically and determine across classes of drugs and you named one, are any adjustments needed in the proposals . Sorry, mr. Chairman, one comment. Fentanyl is a big problem around the country. Its believed it is causing more overdoses in ohio than heroin is right now. Its a synthetic form of heroin. As i look at this, it receives a 2,000 increase reimbursement under this model alone. Fentanyl. Im very concerned we are going to incentivize increased utilization. That is from the fixed fee. We can give you a formal answer to that. Its from the 16 fixed fee. Thank you, dr. Conway. Senator thune. Thank you, mr. Chairman. Thank you, dr. Conway, for being here. As many of my colleagues pointed out, the lack of consultation with stakeholders is striking and further indicates not only the flawed nature of this demonstration but cmmis entity. I want to draw attention to one section of chmis author zazing statute which states that cmmi shall consult representatives relevant federal agencies. We know at the federal level there is hhs rural task force, hhs National Advisory committee on rural health and Human Services and newlycreated rural Health Council dedicated to Rural Health Policy. Cms coordinates with the office to ensure Health Care Providers Rural American function to the best of their ability within the boundaries of our statutory and regulatory frameworks. The question i have is can you inform as to whether cmmi as statutorily required to do dedicated to Rural Health Policy to ensure that what many of us believe is a flawed Demonstration Program would not adversely impact care delivery in rural areas . Yes. Cmmi works closely across the federal government. This proposal went through the standard clearance and interaction processes. You mentioned the cms Rural Health Policy task force that we established. We think that is critical for rural issues. We made a proposal in rural areas, but we also noted we were focused on access in rural areas and access to medications, and so we are going to review the Public Comments now and determine whether any adjustments are needed in rural areas. Dr. Conway, could you detail the feedback you receive from these entities that i mentioned after this hearing or provide the committee with any documents you might have regarding thain put . Yes. We can provide impnput on the process. It would be nice to know if in fact those entities were consulted and what their feedback consisted of. I understand. Its well known not all drugs utilize for the treatment of cancer have cheaper alternatives. The question is how will beneficiaries who need these life saving treatments have better access to care when the best treatment option may force their provider into a situation where he or she can no longer afford to provide it . So we would want, and i would want personally any doctor, including any cancer doctor to provide the medication their patient needs. We believe this proposal maintains access through paying the average sales price plus a 2. 5 addon fee plus a fixed fee p. However these are the comments we would like closely at. If a physician or clinician can show this is an access concern during the Comment Period where adjustments are needed, we would consider that. We propose an exceptions process where we proposed practices or patients if the proposal created an access issue we could make adjustments. Sorry to give a little long answer. I was asked earlier, i personally get emails all the time today from Medicare Beneficiaries that cant access their medications. As a practicing physician, i care about that deeply and i want patients to have access to the right medicine it. Want every patient to get the medicine they need. I want every doctor to be able to prescribe the medicine they need for their patients. So those are the type of comments we will look very closely at. I would just add, too, if youve got a provider that can no longer able to afford the drug and youve got a senior who must receive treatment at a hospitals Outpatient Department as a consequence of that, then how is that going to, that increase cost sharing going to impact that patients ability to continue to receive the treatment . I thing first i would, well review what comments came in, but also if you think about a practice, i hope people are in the practices looking at it across the board as opposed to one individual drug. If reimbursement goes up for some Oncology Programs in terms of the asp program, thats revenue to a practice. We are going to look overall to access of medications and the aggregate from the policy and whether adjustments are needed. Then also in the specifics, medpac put out information on this and what different ideas they had and access numbers that they think are covered by different asp plus 2. 5, 3. 5 permutations. Well look at Public Comments closely and in the public domain. Senator carper. Nice to see you. Thank you for joining us today. Thanks for your hard work and of that your staff. You have a tough job. We acknowledge that and admire the energy and intellect you bring to a tough challenge. Thank you. Among the comments i heard about the demonstration is why is it so big . You normally think of demonstrations, we think of the states as laboratories of democracy and do it in a state before throughout the entire country why. Such a large expansive demonstration, please . So first, it is a proposal. Well seek comments on the scope. Many people noted that. What we think about in terms of proposal is first and primarily the Statutory Mission which is proposed models with a high likelihood of lowering costs. We need to think about three issues primarily. One areas are big enough that most practices are going to be in the majority of the practices within an area. The geographic size. The goal is to evaluate models and determine whether they meet criteria improving quality and lowering costs. You have to have a sufficiently large sample so you can evaluate the model. And three, that you are able to have Comparison Groups. Geography allows you to compare to other comparable geographies. We will look at Public Comments and determine based on those criteria and public input whether adjustments are needed. Thank you. My staff gave me a briefing sheet. I want to read a short paragraph of the briefing memo. Cms expects that this is phase one, okay . Cms expects this phase of proposed demonstration project to to incentivize physicians to prescribe drugs that lead to savings. Certain doctors who often prescribe highercost drugs will receive lower payments under this demonstration, while primary care physicians who may prescribe lower cost drugs will likely receive higher payments. Is that correct assessment . Would you talk about that . Is that correct . You want to modify that . What would you have to say about that paragraph . Yes. That is from the impact table. It is correct there are relatively modest, it was quoted earlier, adjustments for oncology and rheaumetology. Theres also adjustments up in the primary care arenas. If adjustments are made we would publish a final impact table with the effects across practice types, also urban, rural, et cetera. These are the type of issues we care deeply about and want to be transparent. Thanks. Last year Medicare Part b spent about 2 billion, is that right . Yes. Several Drug Companies have proposed valuebased payment models to ensure patients and medicare are getting the best value and outcomes in return for a fair reimbursement. My question is, does the proposed part b demonstration project help cms effectively evaluate valuebased payment models for Prescription Drugs . The second half of that is, is the first phase of Demonstration Program necessary for advancing these alternative premium models for Prescription Drugs . Yes. So the approach is two separate arms of the intervention. The second phase directly builds from what we are hearing from the private sector about the desire to test valuebased arrangements such as outcomesbased pricing and other methodologies that incentivize higher outcomes, hence our proposal. You ask a lot of questions you anticipated. Was there a question you wish had been asked that has not been asked . What would be a good question, why didnt he ask me that one . I see your staff writing feverishly behind me. They will probably give a better answer later and ill feel bad. I think one, we havent noted the innovation specifically congress wrote in the Innovation Center statute, and i will not get the statutory language exactly right, that we cannot limit any benefit to Medicare Beneficiaries. And we are not limiting benefits to Medicare Beneficiaries. I said this, but to reiterate it, we care deeply about access to medications, innovation and better Health Outcomes. The question we collectively have to work on is how do we propose tests and models that help us achieve those outcomes. Sorry for a long answer. The Current System today i literally get contacted daily from beneficiaries that dont have access to a given medication or dont have access to care in a given area. If we think the status quo is optimal, i think we are mistaken, and we need to test new payment and Service Delivery models to improve care for millions of americans. I think were on a learning path today thats much better than it was three years ago. Thanks so much. Senator toomey. Thank you, senator wyden. Just a couple of questions. We are running well into the vote here. I want to move quickly i do want to go back to the scope issue because it is something thats a concern raised by many of my constituents and by my reading of the statute. The Affordable Care act states cmmi has the authority to test a model addressing, and i quote, a defined population for which there are deficits in care. But this rule would change the terms of reimbursement for 75 of all docs who administer part b drugs under the asp plus six approach. And every single drug that is subject to the asp plus six reimbursement, as i understand it. How could that be consistent with the congressional intent of a defined population . It just seems almost universal, which is not the same as a defined population. How is it a defined population . As you noted, the Innovation Center authority proposes new tests to Payment Delivery Service models. We define Population Based on geography. We are looking at comments now. The scope of that geography is a key issue well evaluate. Just so i understand, its true as i understand it, there are these different subsets that will undergo different experiments, but almost everybody is involved in this broader experiment in some degree. So the current proposal has three arms, and therefore, does have as you noted, 75 approximately of the country in intervention arms. We will evaluate the comments and determine, look at key issues around the number of arms or interventions in the study and the Geographic Scope and whether adjustments are needed. I would just strongly urge you to focus on that particular issue. I wasnt here when the Affordable Care act was written, but i think a laymans reading suggests something much narrower than contemplated here. The next question goes to the purpose as i understand, one of the stated purposes is to make sure there is no incentive to drive physician toward a more expensive alternative than some other alternative, which the Current System seems to suggest. In its june report, medpac listed 10 drugs with the highest part b expenditures. Do you know how many had fdaapproved generic alternatives . I dont want to quote a number and be wrong. The answer is sgrero among the top ten. It strikes me clearly its not the payment mod thael drives the docs to prescribe the ten highest expenditure drugs, its the fact there is no alternative. Is there a concern it could create incentive for physicians to experiment with off label use . Was that a consideration . A few comments. So one, the proposal does not just focus on drugs where there are interchangeables, if you will. As you noted interchangeable to generic. We are proposing to pay the average sales price which is the average cost of the drug plus 2. 5 plus a fixed fee. We are going to look at the Public Comments to determine if theres adjustments that are needed in that formula overall or in certain settings. So the goal is for both high cost drugs and low cost drugs that we are paying appropriately for those drugs, the Current System does have a disincentive we heard about from medpac and others on the low cost drugs where if its 10 drug and 60 cents, real questions about whether that covers the cost of the physician or clinician prescribing said medication. We are trying to remove the financial incentive but still pay appropriately for the provision of drugs that you named or other drugs. Once again, we would want the oncologists or physicians, clinicians to prescribe the medicine they need us to pay, and the physician or patient to receive the medicine they need. Thanks, mr. Chairman. I thank my colleague. Dr. Conway, we are at the point in the hearing where the choice is really for me to either filibuster till my colleagues get back or to offer a couple of additional questions. Im going to opt for the second route. And ask how this proposal interacts with other payment proposals. Theres been progress made overall to moving the Health Care System to one that moves away from volume, that incentivizes quality and value. You all reached the target of making 30 medicare payments through alternative payment models. Thats a plus nine months earlier than expected. Obviously, whats called the macra legislation, medicare access bill that replaced this hugely flawed fgr program with a Payment System that rewards doctors for providing high quality, Cost Effective care to patients. I have heard from some providers that the proposed part b drug demonstration could unintentionally discourage participation in the new payment delivery and reform models such as the oncology care model and the alternative payment models incentivized by the major medicare legislation. What would be your response to those concerns . How do you envision making sure this demonstration doesnt in any way discourage participation in these other model programs you all are looking at . Thank you, senator wyden. We think this proposal aligns with those programs. So specifically to give you an example, the basic construct of macra was to pay physicians and clinicians based on value. So quality resource use, clinical practice improvement and use of technology. This proposal also aligns with patient physicians and clinicians based on value. We think they would actually work well together. We do in the evaluation also through difference and different methods evaluating where one model and to a Comparison Group in another area where its not can estimate the effects of various models. We think this part b model will align with macra and encourage participation in these new alternative payment models. I will not filibuster go ahead given given your leadership and this committees leadership on Delivery System reform has been hugely important. The care choices model where i was with the hospice and p paliatve caliatve care communic. It would be helpful if you could explain in something reassembling english how medicare choices work. This is something i had really been dreaming would be done almost since those gray panther days. As i understand it, what you all are doing with medicare care choices is trying to make sure eventually, because this is a big pilot now, eventually every senior in america could have the opportunity to get hospice without giving up the prospect of curetive care. You are a physician and skilled one, i gather this would make it easier for patients and families to time the kind of choices they make so its best for them. Could you explain how that works . You are correct. We are Pilot Testing the ability for patients and families to choose concurrent hospice and Palliative Care and socalled curative care. It allows for much more Patient Center choices. If its okay, ill use not my own words but in that panel i had the pleasure of sitting between tulakwande to talked about this as one of the positive changes in hospice care in u. S. History. We will continue to modify and learn and refine based on input from congress and others, about you a Huge Positive step as a son and physician, ive been through that with family members and patients. It enables much more patients to have choice. I sat on the other side of me a gentleman whose wife passed away and said if this had been available for her, they would have been able to make better choices that would have more aligned with their goals of care. At the end of the day its about patients and families, as you know well and have been a leader making choices of them. I want to recognize senator cardin. I want it understood that program to provide more choices for older people, that was really born in this room. During the Affordable Care act and my colleagues remember this discussion. We constantly heard this nonsense about how there were death panels. There were no death panels. Now with medicare care choices, its very clear older people are going to have a wide array of choices that allow them to choose whats best for them, in line with their views about health and religion and morals, and all of the other factors. I appreciate you taking us through it. Senator cardin. Thank you, senator wyden. Dr. Conway, thank you very much. I want to drill down little bit as to what your objectives are, particularly as you move towards the second phase of the demonstration. As i understand the first phase and i was listening to senator portmans questioning, its revenue neutral. You have winners and losers. I understand what you are trying to achieve and trying to do it in a way that uses current resources more effectively in dealing with the reasonable costs associated with administering these drugs. The second phase im not quite as clear as to your objectives. That is, is it your anticipation that it will save projected costs, and if its going to save projected costs do you know the range youre trying to get to in that second phase . Yes. We believe both phases have the potential to maintain or generate savings and improve quality for patients. The second phase, as we put in the proposal, we would come forward with, in the future, the specifics around drug classes and the various arrangements. We had different tools so outcomes based pricing, risk sharing arrangements, indication base payment, we would get patient intut, consumer input, input from congress and others on those proposals to give you a tangible answer thats come to us from outside cms. Entities that want to do risk sharing arrangements. If a given drug may lower costs in the part a and b space, we think about how that could have benefits across the health care sector. Improved quality and lower costs. We have lower cost sharing for beneficiaries that are selecting certain medications as one of the proposed cools. The goal is to test an array of tools used in the private sector to improve quality and lower costs to test them in the Medicare Part b program. We have seen in previous efforts to impose Delivery System changes that are more Cost Effective, give you better value, that the budget can prevent it from being implemented the way it is intended because you need to produce a certain amount of cost savings since everyone has to share in the realities of the budget. Do you build into this demonstration the confidence and credibility that you really are looking for value and not just a cut of the cost issues here . When we think about patient quality tests we lead with patient quality outcomes. Our goal is to improve outcomes for patients and maintain lesson expenditures. The statute improves the program to maintain expenditures but that can meet criteria for expansion. How do you include the stakeholders going through the two phases here . We are reviewing the comments now. I would say the principles we will try to put in place, which is true across the Innovation Center is robust patient and consumer input into the models. Input from providers and stakeholders, input from congress. At the end of the day we know that broad input and transparent processes are critical to shaping this work. I mentioned this earlier but we now have innovations in our models in all 50 states, thousands of providers, millions of beneficiaries. Its deep engagement with the various participants. Our bundled payment model, our voluntary model, 48 states, over 1,500 hospitals, physicians groups and others redesigning care for patients and improving care and care coordination. Thats the engagement we want. Thank you. Does my colleague have any additional questions . I have a lot of comments. I think related to this subject, one of the issues we will need to talk about is the impact it has on each state including my own state. Its different for maryland. Yes. My principle objective is to get better outcome. I always am concerned that the pressures on the budget are used at times to use well intended programs but just to produce savings. Dr. Conway, i take you for your word what you said thats not the objective here. We obviously will be watching this pretty closely. Thank you. I thank my colleague. One last question. So phase two of the demonstration seeks to move into this valuebased arena which youve heard that i and certainly others this has been something thats had support on both sides of the aisle for some time. Brief is constructive moving away from clunky, volumedriven medicine. Thats what phase two builds on. How does it coordinate with the other laudable goal of pursuing medicine . You all seek to make sure drugs and treatments and whats striking about this is this means what it sounds like. Is tailored to the needs of a pick individual recognizing one particular drug or therapy doesnt affect george and harry the same way and certainly george and sally the same way. Tell us if you would so we have a sense of where youre going, how does phase two in particular, in effect, build on the Precision Medicine initiative in the administration . We think thank you for the question. We think it very much aligns with Precision Medicine and supports Precision Medicine. Let me explain how. For example, if you had a new therapy that generated significantly Better Outcomes for patients, and youre paying based on outcomes and value that actually supports paying for that therapy and the innovation and better Patient Outcomes that deliver. You can imagine if you can really tease apart for which patients is this therapy maximally effective then pay appropriately for that, it really incentivizes Better Outcomes for specific patients that will benefit from specific therapies. We think a very exciting place to work across the Health Care System. Manufacturers, payers, providers, patient groups in support of Precision Medicine and paying for value and better Patient Outcomes. Senator burn . Thank you. I have great admiration for the role you play. Its got to be extremely tough for a doc to defend an agency who says we can determine treatment better than the attending physician because i think thats what this part b rule, in fact, does. You stated that you met regularly with patient and provider groups. Have any of those groups that you met with been supportive of this rule . So we continually meet with patient groups, consumer groups, provider groups question simple. Have any of them been supportive of part b rule, yes or no . Yes. Would you provide for this committee the list of those groups who have come in and said were supportive of this part b rule . Yes. I believe we may have even received another letter recently, but yes, we can provide that information. Is cms considering withdrawing this rule, yes or no . We are evaluating the Public Comments now and intend to take those comments into account in finalizing the rule. Is cms considering withdrawing the rule . We intend to take the Public Comments into account into finalizing the rule. Are you doing this to save money or reach a Better Health outcome . We are doing it because we believe it can both reach a Better Health outcome and maintain or lessen expenditures. Does cms believe they can design a better treatment pathway than a physician can . I believe, as you noted, im a practicing physician. I believe physicians care about their patients. And i want physicians and clinicians to make impeachment decisions based on whats best for their patients. I would like and the agency focused on maintaining that a patient, a beneficiary should receive the medicine they need and that a physician clinician should prescribe in all instances the medicine that is best for their patient. Would you agree the location they get that at is important . I believe it is important in medicare. When you limit the rule access to these life saving treatments, have you, in fact, bettered the outcome . We do not want to limit access including rural areas. Many of my family members are private practice physicians. We support physician, clinician practice. We are proposing a model we think can support independent physician clinician practice, including rural and small practices. You dont consider it a disincentive for a local based delivery point when youre saying if you go to the hospital well pay you more money . This proposal proposed to pay the same asp plus 2. 5 plus a fix feed both in the hospital, outpatient and physician setting. Dr. Conway four years ago i authored the advancing breakthrough therapies for patient acts with the chairman and my good friend from colorado senator bennett. Our objective was to bring forward promising breakthrough therapies as fast as possible, including those that would be impacted by what cms is proposing. This bipartisan law saw remarkable success, particularly bringing forward cancer treatments even faster. Over 130 drugs have been designated as breakthrough and more than 45 drugs have been approved by fda so far. I fear that this demonstration project will jeopardize access to these breakthrough drugs just as they are becoming available. Can you assure the committee today that your proposal will not negatively impact the success of the breakthrough therapy legislation . We believe the proposal aligns with innovative breakthrough therapies that improve Patient Outcomes because the proposal is about focusing on paying for drugs and therapies that generate Better Outcomes for patients. My constituents have written me expressing concerns about this cms proposal from. A ceo of an Oncology Clinic in hick tor hickory, North Carolina, he said physicians and caregivers are not prescribing medications to profit themselves. This team is prescribing medications and therapies because they work. Do you fear that providers are profiting themselves versus providing the therapies because they work . I would want those physicians to continue to providing the therapies that work for their patients. If they feel like this in some way, shape or form takes their ability away from them, you would see a need to change this legislation . We want to review theirs and any other Public Comments because we want the proposal to support access to meks for beneficiaries. The time of the gentleman expired. Why dont you have one last question. Thank you. A north carolinian suffered from primary immune deficiency writes, members of my community on medicare and the providers who care for them already face complexities assessing accessing medical care and treems. They should not have to face the consequences of an initiative that eliminates their treatment options. This costcutting measure would become a lifecutting measure. I urge you to intervene to stop this proposed reimbursement model. Thats a patient. I think a patient probably heard from a provider that if this goes through, heres the impact on you. What do you say as a doc to that patient with an immune deficiency disorder . I would say as a doctor to that patient, i want them to receive the medicine they need. I would say to the physician, i want them to prescribe the right medicine to their patient at all times, like all physicians should. I urge you to look at this proposed rule. Thank you, mr. Chairman. Senator scott. Thank you, mr. Chairman. Thank you, dr. Conway for being here today. Certainly youre from a rural part of texas. Im from a very rural part of South Carolina. We have an appreciation and affinity for Health Care Costs and challenges of People Living in rural areas that are absolutely severe. The thing i heard from my constituents consistently as it relates to this demonstration project is fear. Theyre scared. Picture, if you will, i know your mother is on medicare and mine is as well. Picture, if you will, Senior Citizens living in rural South Carolina scared. Theyre on fixed incomes and we now have a demonstration project that covers the entire nation. What they see as a result of this experiment will be higher prices, less access and perhaps in order to receive the lifesaving treatment they need desperately to stay alive to see their grandkids one more time is a two or three hour drive from manning, South Carolina to charleston. And so with great uncertainty, feeling confused and afraid, they write into our offices, and one of the more difficult things to do in Congress Today is to find a way to unite republicans and democrats on a topic. This demonstration project has done a very good job of creating and getting concerns from republicans and democrats that all sound fairly similar save one component of the discussion. And my questions arent that different than the questions youve heard so far. They are around rural access. They are around Rare Diseases, the impact on the folks who are socioeconomically challenged and folks who are concerned that now were seeing the government pricing medicine and determining value as opposed to the doctors and the patients working together to figure out what truly is the Value Proposition of their visit to the doctor. I think, dr. Conway, you and i can agree these concerns are at least valid concerns given the scope, the magnitude, the impact on citizens. I believe your desires, your intentions are good. Frankly, youre looking for a way as you said earlier to help medicare be there not only for your mother who is currently receiving the benefits, but for your four kids. I think we share the same concern, perhaps with a different outcome. I hope, i would even plead with you on behalf of the citizens of South Carolina who are so concerned about this project to take a second look, a step back from a nationwide implementation that could have dire effects on folks depending on their very certain paychecks or their certain benefit from Social Security. To highlight a couple of areas, one question being the question in rare disease arena, where patients in my state, sickle cell is a very powerful weapon against so many folks in my state. For patients with sickle cell and other Rare Diseases, blood transfusions are one of the methods of treatment. It is unclear if they will be excluded during phase two of the demonstration. Can you clarify for my folks at home . So youre right on blood products, they are proposed to be excluded from phase one. In phase two, if we were ever to propose blood products we put out a proposal for phase two that we would come forward with a specific drug classes or areas for phase two that plan to addr receive comment in those areas, both public input, Patient Consumer input, so our goal is to engage with congress and public and specifically Patient Consumers, and if we did note in the proposed rule if there were specific classes or other issues that needed to be addressed and Rare Diseases was an example we named, that we would look to those Public Comments and consider how best to address those issues. Mr. Chairman, do you have time for me to ask another question . Everyone else has gotten an extra one or two, so please feel free, senator scott. Thank you, sir. Really appreciate the extra ten minutes. I really appreciate that, sir. I didnt think that was that funny, but well go on anyways. I certainly have appreciated the fact that the concern for my constituents about the amount of time that they could spend on the road trying to find the right practitioner, perhaps the right hospital to go to and looking for manning sumpter or drive into columbia or charleston, its just not a hop, skip and a jump. Its more serious proposition, and i also note that obamacare is going to provide a partnership, a Ridesharing Service for young folks to sign up for the health care law. How can we justify the Department Going out of its way to transport the young adults to sign up for obamacare when the program youre proposing will limit access for some of our most vulnerable like the elderly and the disabled . Have we figured out a transportationsharing program that would help with the impact of transportation in rural areas . So, for the proposal we would want the proposal to maintain access, including in rural areas smaller practices, et cetera. We you know, for patients and physicians who want to deliver medicines, we want them to receive the medicines when and where and how they want to receive said medicines. You know, we we put forward the proposal because we thought the proposal maintained access and improved quality and could maintain or lower expenditures, but well be looking closely at the Public Comments, including on smaller physician practice issues and rural issues and determining whether adjustments are needed. Once again, mr. Chairman, ill stop where i started. I dont doubt the sincerity of the intentions dr. Conway or anyone within his employ. I do want to echo my concerns for my citizens, particularly those in rural areas, those with Rare Diseases, sickle cell being among them, those folks who are just financially strapped. I like the socially economically challenged, it sounds cool, but the fact of the matter is you have too much month for the money that we have, so were talking about people who are seriously challenge d and now very concerned, and as youve heard echoed throughout the hearing today, the concerns are real because while the intentions are good, the access issues are still real concerns and frankly the pricing where you may have a static number, 1680 of the impact on those numbers on the actual costs can be quite high. Thank you, dr. Conway. Thank you. Thank you, senator scott. Dr. Conway, i just want to make sure, you are a pediatrician. You are a career employee in the department. You are not a political appointee. I know youve been published in some of the countrys leading medical journals, and you are a career employee. Is that correct . Yes, sir. Im a career employee. All right. On behalf of chairman hatch, i would ask for colleagues and staff that are here that any written questions for the record be submitted by tuesday, july 12th, 2016. With that, the finance committee is adjourned. President obama campaigned with democratic president ial candidate Hillary Clinton today for the first time this election cycle. Pictured there getting off air force one in charlotte, North Carolina. You can see the appearance later at cspan. Org. This happened just hours after fbi director james comey announced that hes recommending no criminal charges against Hillary Clinton for using private email servers while secretary of state. Heres some of what the fbi director said. While there is evidence of potential violations of the statutes regarding the handling of classified information, our judgment is that no reasonable prosecutor would bring such a case. Prosecutors necessarily weigh a number of factors before deciding whether to bring charges. There are obvious considerations like the strength of evidence, especially regarding intent. Responsible decisions also consider the context of a persons actions and how similar situations have been handled in the past. In looking back at our investigations into the mishandling or removal of classified information, we cannot find a case that would support bringing criminal charges on these facts. All the cases prosecuted involved some combination of clearly intentional and willful mishandling of classified information or vast quantities of information exposed in such a way to support an inference of intentional misconduct or indications of disloyalty to the United States or efforts to obstruct justice. We do not see those things here. To be clear, this is not to suggest that in similar circumstances a person who engaged in this activity would face no consequences. To the contrary. Those individuals are often subject to security or administrative sanctions but thats not what were deciding now. As a result,ing a the department of justice makes final decisions on matters like this, we are expressing to justice our view that no charges are appropriate in this case. You can see all of fbi director comeys briefing at cspan. Org. House speaker tweeted his reactions saying while i respect the professionals as the fbi this, announcement defies explanation. No one should be above the law. Meanwhile, the house is changing its schedule for the week. Gun legislations scheduled for debate tomorrow is now considered only possible this week, and the House Rules Committee that had planned to come up with the rules for debate on the bill has postponed bringing the bill to committee. We still plan to go live to the rules Committee Meeting momentarily, and well see if the gun debate comes up. Theres more live political live Coverage Later on with Donald Trump Holding a rally with tennessee senator bob coaching live at 7 00 p. M. Eastern on our champion network, cspan 2. In less than two weeks cspan will have live coverage of every minute of the 2016 Republican National convention followed by the democratic National Convention and every saturday night at 8 00 eastern well take a look at past conventions and the president ial candidates who went on to win their partys nomination. This saturday well focus on incumbent president s who ran for reelection, dwightine hour at the 1956 Republican Convention in san francisco. The 1964 Democratic Convention in Atlantic City with lyndon johnson. Richard nixon, at the 1972 Republican Convention in miami beach. 1980 Democratic Convention with jimmy carter in new york city, the 1984 Republican National convention in dallas with ronald reagan. George h. W. Bush at the 1992 Republican Convention in houston, bill clinton in chicago for the 1996 Democratic Convention and the 2004 Republican Convention in new york city with george w. Bush. Past republican and democratic National Conventions, saturday night at 8 00 eastern on cspan. And here were live before the House Rules Committee. The panel was splitted to consider a couple of bills including a gun proposal that would allow the attorney general to delay the sale of guns to those on the terrorist watch list but its not going to come up after all. Consideration. Bill has been postponed, but well see if Committee Members say anything about it. At this point the pending business before the results committee is a Cyber Security bill that would allow the heads of federal agencies to allow access to limit risk to Information Technology. In the room you may be seeing congressman chaffetz who is the chair of the Oversight Committee who will be testifying along with District Of Columbia delegate Eleanor Holmes norton. Were waiting momentarily to begin this House Rules Committee session. We are live here on cspan 3, and we can see that congressman sessions, the chair of the committee, is speaking to the ranking democrat. Thats louise slater, and well just be standing by to find out we know that they will probably be debating the Cyber Security bill, but it looks like the gun bill debate has been postponed. The Rule Committee will comb to order and good afternoon. I hope everybody had a fruitful district work period. I know we couldnt get wait to get back, father, to see you. Thank you. We appreciate you being here, and i know that many of you were able to take a look at people back home and wish them a happy birthday for our country and hopefully to thank a veteran for their service to protect this great nation of first responders. I had a great time and it even rained in dallas, texas, over the weekend. Today the rules committee will consider hr43661, the federal Information System safe act of 2016, hr 4361 is a legislative package from the oversight and Government Reform Committee and it enacts what i believe is muchneeded Good Government provisions at different governmental agencies. Hardworking americans should not have their tax dollars wasted to compensate poor performing Senior Executives. Under this bill Senior Executives will be subject to suspensions without pay for up to two weeks in cases of misconduct and the same penalty as other Civil Service employees are already eligible to receive with misconduct. This legislation also prohibits federal agencies from proposing or finalizing major midnight rules after the election day through Inauguration Day with the exception of issues related to national security. Studies have shown that outgoing president s from both parties have rushed through proposing or finalizing rules at the end of their term in the last minute, so we believe that regulatory review by the office of information and Regulatory Affairs should be understood and that we should not allow this. Since 1948 the volume of rules promulgated by outgoing administrations during lame duck period averaged 17 higher than the volume and rules typically issued during the same calendar period. Now once you get to the very end, it increases dramatically. This bill restores accountability of the executive bench by providing those rushed in ill thoughts from becoming rules that are promulgated during lame duck sessions this. Legislation also addresses the reports of Government Employees viewing pornography while at work. And the release of the records by the irs, so i think theres retention of information that will be in the interest of the taxpayer is being well served by this legislation. I want to welcome our first panel. Obviously the gentleman, the chairman from utah, chairman Jason Chaffetz and the gentleman gentleman from virginia that i suppose is you, mr. Conley. Thank you, and the gentle woman from the District Of Columbia, our delegate, Eleanor Holmes norton. I want to thank all three of you for being on the first panel. Before we come to you, i want to say that anything you brought in writing without objection will be entered into the record, and i would like to defer, if i can at this time, to the gentle woman, the Ranking Member. Thank you very much, mr. Chairman. I dont have any questions and just looking forward to testimony from my colleagues and ready to get back to work. Here we go, good. Well, here we go, mr. Chairman. Youre recognized. Thank you, chairman sessions, and the Ranking Member miss slaughter, and i thiank the ruls committee to speak about hr4361. As amended this bill combines seven Good Government bills each of which have been reported by the government and Oversight Committee. Broadly speaking these bills address three key issue, enhancing federal Information Technology security, modernizing the federal workforce and addressing federal regulatory burdens. The first topic, enhancing i. T. Security, is addressed through the first bill and is a cause championed by representative gary palmer who is also the sponsor of the underlying bill that you are considering now. Specifically title i of the bill addresses the federal Labor Relations Authority Determination that was based on an incorrect interpretation of the federal Information Security management act, also known as fisma. This prevents federal employee unions from delaying agencies from implementing timely and necessary cybersecurity actions like blocking access to dangerous websites until the agencies first negotiate with unions over these changes. The second topic, is federal workforce modernization is covered which titles 2, 3, 4 and 5 of the legislation. Title 2 includes the text of hr901, a bill induced by representative mark medos and it prohibits access to explicit websites from federal Government Computers unless such access is necessary for investigative purposes. Its embarrass and hard to believe that this committee and the Congress Actually has to firm up this law, but the committee has heard numerous examples of federal employees spending significant amount of time viewing explicit materials on their federal computer during federal workforce hours and being paid by federal taxpayers. This included one individual identified by the epa, Environmental Protection agency, inspector general, who was watching this person was watching two to six hours of pornography per day on a dale basis for an extended period of time. Weve heard from the epa administrator herself. They have a very difficult time in dismissing these employees. Title 3 includes the text of hr3023, a bill introduced by Representative Ken Buck to lengthen the probationary period for federal employees to two years after training is completed. Currently federal employees have a probationary period of just one year which often does not give managers significant time to evaluate onthejob performance and determine whether the candidate is suitable for Permanent Employment in Civil Service. Title 4 includes the title of hr4328, to modernize the elite straightors of the federal government. Specifically the bill will increase the probationary period for ses members for two years and make ses members subject to the same authority misconduct as other employees. Title 5 includes text of hr3023, a bill introduced by representative dennis ross to require the office of Personnel Management to release an annual report on the use of official time by agencies. Official time is when federal employees perform representational work for a union in lieu of normally assigned work. While opm has provided some statistics on the use of official time throughout the federal government, the data is often untimely and does not help congress in overseeing exercising is its oversight duties this. Would be an annual report. The third topic aing regulatory burdens is covered by the final two titles of the bill, titles 6 and 7. Title 6 includes text of hr4612, a bill introduced by representative tim wahlberg, to prohibit agencies from proposing or finalizing rules in the period between the day of a president ial election and the Inauguration Day of a new president. This provision will address a recurring problem on both sides of the aisle where sitting president s from both parties rush through the regulations at the end of their term which have been known as midnight regulations. To counter the problem of midnight regulations, every president since president reagan, who was taken over from the opposite party, has issued an immediate regulatory moratorium to pause the regulatory process until it can be reviewed. Rather than forcing an incoming president to handle a torrent of regulations endorsed by the outgoing president they will be able to move forward on new regulations a they deem appropriate. Next is a bill introduced by representative mark walker to require the irs, the Internal Revenue service to mirror what the Agency Requires of taxpayers in its own recordkeeping requirements. Specifically the irs requires taxpayers to keep their tax year information for three years after filing. Under the bill if the irs requests any of the information it requests to be preserved by taxpayers, the irs, too, should be required to keep that information as well as any records generated as a result of that information for at least three years. And in close, these bills make significant reforms to improve how our government works. We had a good open process in our committee. Were pleased to present this to the results committee today. Mr. Chairman, thank you very much. Mr. Conley, youre recognized. Thank, mr. Chairman and thank you and the members of the committee for your courtesy in receiving us. I appreciate it. I appreciate the opportunity to testify on hr4361, the government reform and improvement act of 2016 this. Legislation is a selection of seven antifederal employee and regulatory measures that the democrats on the committee strongly oppose. This legislation is not about government reform. Rather, it is an attack on federal employees and the president. It would undermine federal employee due process protections, enable retaliation against whistleblowers, override collective bargaining rights and block the president from exercising his Constitutional Authority to finalize rules in his last month in office. If hes a lame duck so are many in the office. That idea because hes a lame duck would also presumably members of congress who arent seeking reelection or defeated. Maybe we should take away their vote. None of us would agree with that. Were duly elected and constitutionally sworn, as is the president , until the set date in the constitution. United states. Titles 3 and 4 would reduce due process protections of new employees and Senior Executives. Title 3 and a provision in title 4 extend the probationary period for one to two years for new federal employees and executives making them essentially atwill employees during this period with limited due process or appeal rights if they are fired or disciplined. The Oversight Committees investigation of whistleblower complaints have confirmed that extending the probationary period who make it easier for agencies to retaliate against employees. I dont believe thats the purpose but its an example. For example, the Oversight Committee held hearing that examined the extent of whistleblower retaliation in the Transportation Security Administration and the department of interior. Extending the probationary period by making them atwill employ eds further exacerbates a problem that could clearly exist across a variety of agent significance. Theres also no evidence that an acrosstheboard extension of the probationary period for all federal employees in all occupations is required. The Oversight Committee has held no hearings on that matter. Both the merit Systems Protection Board and the Government Accountability office have studied agency use of the current oneyear probationary period. Interestingly what they found was the that managers and supervisors have not been effectively using that oneeye probationary period to identify and remove underperforming employees. So why should Congress Actually double that probationary period from federal employees if msbp and gao are telling us that mappingers are not even making sufficient use of the Current Authority of a oneyear probationary period . Shouldnt congress be exploring ways to encourage managers to fuille outlize that interesting probationary period before we double it without empirical evidence to justify . Were also troubled by the constitutional deficiencies in section 407 in title 4 that would allow Senior Agency executives to be removed almost immediately with only minimal appeal rights. It would presume guilt by allowing for removal before a Senior Agency executive is given an opportunity to challenge the charges. It would also not allow the administrative judges decision to be appealed to the board member of the msbp in violation of the appointments clause and the agencys decision would become final by default if the judge is unable to issue a decision within 21 days. Indentical provisions in the veterans access choice and accountability act in 2014 are currently being challenged in the federal Circuit Court of appeals and the department of justice recently announced it will not defend the constitutionality of some of those provigs. Title 6, title 6 would bar major regulations from being proposed or finalized during the last few months of a president s term, as we just heard. This moratorium would apply no matter how long a rule has been in the rulemaking process. Some rules have been in the works for years, and yet this rule would block those rules simply to operate the president s outgoing loy employees. Senate republicans will refuse to hold a hearing on president obamas Supreme Court nomination, unprecedented. These actions cannot be viewed as anything other than another set of attacks on this president s authority to act through the end of his term in january 2017. I remind the complimenty that section 1 of the 20th amendment states the terms of the president and Vice President shall end at noon on the 20th day of january. Until that time, the president and his administration have the responsibility and the authority as duly elected by the people of this country, to continue to protect our health, safety, environment and economy. As do lame duck elected members of congress. As for the remaining titles of the bill, titles 1, 2, 5 and 7, let me just quickly mention that they are unnecessary in our view because there are existing policies, practices and rules that address those issues. These provisions from our point of view do nothing to advance reform. I urge the committee to adopt an open rule for hr4361, that the committee instead chooses to adopt a structured route. I ask that the amendment submitted by my friend who from whom youre about to hear, Eleanor Holmes norton, from the District Of Columbia, to strike the problematic sections of this bill be made in order. I also ask that the committee make the three amendments submitted by representative Bonnie Watson coleman, also a member of our committee, also in order. One amendment would require gao to do a study on whether an extension. Probationary period is in fact required. The Second Amendment would exempt from the moratorium imposed by title 6 any rule thats been included in the u. S. Regulatory agenda for at least one year. The third amendment would strike the language in title 5 requiring the office of Personnel Management to include in its annual report an official time, a description of any space designated at agencies for official time activities. Mr. Chair, in anticipation of a hopeful response on approving those amendments, i have myself restrained myself and offered no amendments to this bill. I thank you for your patience and your understanding. Mr. Connolly, thank you very much. Miss holmes norton, youre now recognized. Welcome. Thank you very much, mr. Chairman, and may i say how delighted i am to be before this committee on a matter not involving the interference with the rights of the District Of Columbia. My amendment would strike certain sections of the bill, 402, 405, 405b, 406, 407 and 408. While some reforms to the Senior Executives service surely must be necessary, we should be looking for them, these sections could much too far by rolling back significant Due Process Rights for federal employees and raise potential constitutional issues. In fact, this bill is replete with constitutional issues. Section who 402 which lengthens the probationary period for ses employees from one years to two years is patently unnecessary. Theres no evidence to support it, and the agencies who who want to deal with poor performers in the work play, according to a 2015 gao report, already use probationary periods but gao says they could use them more effectively. This is within our grasp to make han. Of the 350 hundred federal employees that were dismissed in 2013, the majority were dissies wered during the probationary. Supervisors are at pains to get rid of such people when its easyiest to do so so instead extending the period we should be looking for ways for use by its employees to make sure that the federal workplace is operating at its best. A secretary 405b is even more problematic this. Section would allow an agency to remove an ses employee from Civil Service entirely for poor performance. Now, we know how the Civil Service works. Youre promoted up the ladder. Under current law, poor performing employees instead are downgraded to a gs position, a level at which they might perform very well even if in this test period they prove to be poor per foermgs at the ses level. Remember, we have invested considerably in these employees by the time they are even for the ses level. This would also change the notice in, blower from 30 days to 40 days because it makes it extremely difficult for exemployees to exercise their Due Process Rights. Section 406 raises a serious constitutional issues by giving authorities to place an ses employee on mandatory leave. Thats all right, but forcing the employees to use their own vested agiroccrued leave is not right. This violates basic constitutional principles. Its likely the taking of an earned vested property right or in the alternative its a suspension that triggers Due Process Rights. This mandatory leave provision has little chance of withstanding constitutional scrutiny and should be struck now. Section 407, the employees eDue Process Rights. This the expedites the removal and appeals process and adopts provisions of other federal law that are currently beinged in t circuit. Why are we rushing . Lets hear what the court has to say. Section 408 requires reassignment of ses employees to different geographical locations which is arbitrary and flexible and ignores the needs of individual agencies. This provision is unnecessary, given act that the president has already taken by sirening an executive order in november of 20145 that would strengthen the Senior Executive service by requiring agency heads to develop a twoyear plan for increasing the mobility of ses employees. We are not saying they should not be removed but tocism i up and arbitrarily move them halfway around the country without the kind thoughtful process the executive order envisions is terribly problematic and unnecessary. Therefore, mr. Chairman, i urge you to make my amendments in order, and, again, i say im quite open to reform legislation to deal with poor performance. That is not an issue for me, but we cannot do so by willynilly rolling back due process protections for federal employees who after all are covered by the constitution of the United States. I thank you, mr. Chairman, and i yield back. Thank you very much. I would like to note that we have there was a prior conversation with the chairman chaffetz who indicated that he would need to be at a 5 30 meeting and i advised him that he needed to have someone here who knew what they were talking about, and one of the authors of up of these sections from the bill, mr. Meadows from North Carolina, has appeared, and i was aware that you would be here. Mr. Meadows, welcome to the hearing, and so were going to four take questions. Did the gentleman wish to make any opening statement. Ive got a question if i can, please, maam. You spoke about section 404, and i note the changes that were made are two. Section 404. Yes, maam. There were two changes. One was made striking the two words on, or and by adding the words not later than 30 calendar days. On, or and and what was added was, perhaps mr. Meadows, this was your work, more specifically not more than 30 calendar days. On or, not later than 30 calendar days. Isnt that more specific, to be specific about the performance appraisal . Instead of on or they added not later than 30 calendar days. You took exception to that. Yeah. My exception was from 15 to 30 days. Section 404. Im looking at section 404 here, section 404 on page 10. Im looking at my testimony for 404 and i do not see 404 discussed. I can see, the second was by inserting the word in writing as opposed to communicating. Ill ask that the clerk take that down. I spoke 402, 405, 407 and 408. I heard you speak of section 404. I only spoke on my amendments. I marked it as you were going down and i thought you referred to section 404. Mine only involved certain amendments and 404 was not one of them. Thank you very much. Thank you, mr. Chairman. I appreciate our colleagues for being here today and presenting this good legislation. I do not have any questions, and i yield back. Thank you very much. Mrs. Slaughter. Thank you, mr. Chairman. I read hastily here, but what i saw was the reduction of something from 30 to 15. Is that what you were talking about . On removal . Yeah. I think mr. Connolly needs to speak to that because frankly i didnt have 404 as an amendment. I ask that they be made in order. Youre asking me to address something i dont think i addressed. If i am wrong, im wrong. I heard the words section 404 and some dialogue related to it and i went and looked at it. Thats the one first one to talk about it. Im not trying to make an issue if the gentle woman did not bring it up. I can go bring it up. I didnt bring it up. Im perfectly willing to say thank you very much. Shall i go ahead . Just as a matter of my information because im really not aware of it but i dont recall any time in the many years that ive been here that we ever micromanaged employment like that. Is that appropriate . Is that what we do . You have to have legislation to determine how long probation is and what people do on their spare time and all that sort thing . Is that i guess, but let me preface the question is do you expect Senate Action on this bill . Well, certainly i would hope do you have any indication that the senate will take it up . Obviously there are components of this bill that we have talked to some of our Senate Counterparts and they find it real interesting. One of the particular functions is some of this legislation actually comes out of talking with the rank and file. As you probably know did you. But is it a function of congress is really my issue . Well, the prohibition against, what we have been led to believe, is that there are many people who would manage their own agency better if some of these issues were not in there. Give you a prime example. I can understand why thats possible because weve all seen agencies dewith improve. Do we do that legislative, or is there some other system by how they determine how they function with their employees . I can tell you ive reached out on a number of cases to try to make administrative fixes, and its only as a last resort because of the laborious process of actually passing legislation that we would actually defer to a piece of legislation. Many of these are because of problems that are inherent within the agencies or in the case of the length of time for probation, to give you air Traffic Controllers as a prime example. Their training process is actually longer than their probationary process and we dont even have a chance to evaluate them until they are already a fulltime employee so it addresses some of those issues. Obviously weve tried to do that in the least restrictive and least cumbersome way that we can. Well, i have to tell you a couple agencies that have some problems. I just heard the craziest story i heard since ive been in government that weve got the fugt so much for the irs that one of the employees had a black clock up on the wall, electric clock you mean one like ive got in my office. Hand hefrgs fell down and broke and theres not enough in the budget toe release that clock. Oh, so there are a lot of problems here, but a lot of them start in the congress, the way we handle our money and the budget and what we can. I can assure the Ranking Member that i look forward to working with her on nih fanneding. Its been something very near and dear to me. The infrastructure in my part of the country is desperate, desperate. Im looking forward to work with you in a bipartisan manner. They just tested lead water in all the schools in my district which has always been pretty well to do and taking good care of things and the lead problem there is pretty serious. Im pretty sure the city of rochester has a lot of water pipes that are break and over 100 years old. We share that going back to burnsville. I would rather we spend time on that, let me just be quite blunt it, than this. The gentle womans point is well made. Thank you. I yield back. The gentle woman has yielded back. Thank you very much. Chairman cole. Thank you, mr. Chairman. Its always good to see my Three Friends but Oklahoma City lost kevin durant yesterday so im in mourning and i have no questions. I yield back the gentleman yields back his time. Well, father conroy is here so he may be able to console you a little bit there, tom. Well, these are big issues. Thats a big issue. Kevin durant is a good basketball player. Im sorry. Gentleman from georgia. Weve got fine agencies in the state of georgia and have the cdc down there and the list goes on and on. I have to tell you it disappointed for me to hear this bill describe as a blatant attack on federal employees. I would tell you that the most disappointing thing that i hear from the federal employees in my distrirkts i certainly dont have as many as mr. Connolly does, but they work awfully hard and they do good work. Its its about morale and what a rotten thing it is to show for the cdc every day working hard to do things that everyone in this room believes in and is going to benefit from and getting tarred with a do nothing, watching pornography, cant ever be fired wasting the taxpayer dollar. The federal Government Employee labels. All federal Government Employees are not created equal and to not even be able to look at someone posttraining won a probationary period i would have thought would have been one of those things that brought us together rather than divided to us. I say to my friend from new york, lots of other things we could be legislating on, but, yes, we put into law oneyear probationary periods in order for the faa to let the training process finish before it evaluates someones success, and in the spirit of due process i think we should let the training process finish before we judge whether or not someone is able to complete their job requires a change in federal statute. We put it the in there to begin with, and the only way to fix it is to change this. I would ask mr. Meadows. Certainly see a lot of executive actions that do things. I dont think we can change a u. S. Statute of this kind with the executive action. Well, we cant. Ive looked at that from a administrative standpoint and the gentleman from georgia says it well. Weve painted a very broad brush for many of our federal workers and ive been trying to work very closely with my good friend from virginia to make sure that we change that, and part of what im hearing is that many sometimes the bad actors get away with really what the agency and the workers around them would not allow to happen, and weve got to address that hopefully in a bipartisan way, but its time that we acknowledge the great work that so many of our federal employees do, but if we could do this administratively, i think it would have already been done. Would my friend yield . I thank my friend from North Carolina, and, you know, i dont know that theres a lot of daylight between us on those goals, and yours, and mine. As you indicated i think i represent the Third Largest federal Government Employees in the United States and obviously performance metrics matter and having the flexibility to respond when something untoward occurs in the workplace is very important. But candidly the problem my constituents describe is not a whole bunch of people watching pornography at the office. They do, you want morale problems, mr. Woodall, its about questration and its about the threat of government shutdowns. That is a morale killer, and id be glad, to you know, make my constituents available to share those morale problems were any member of congress that would like to discuss it. I thank my friend for yielding. I hear conflicting statements. On the one hand i hear that a oneyear probationary period is plenty of time to determine whether or not someone is quality. We dont need to extend it to two and then on the other hand i hear that these other folks, who have already passed their probationary period, who are now enrolled in management, are apt to use a longer probationary period for nefarious goals that they cant be trusted to use a longer probationary period because they would use it for for to thwart someones due process right. I would say either one or two things would be true. Either we missed a few bad apples and gotten them up into the management time where they are trying to bend the rules to thwart employees rights, not because they are bad employees because they have an ax to grind in which case we need to go after middle management or we have a junior employee who is not ready. I just, again, seems like an area that we could come together on, would i say to my friend, miss holmes north onl. You mention the the ses positions as if we were going to run someone out of Civil Service all together instead of just demoting them to a place in Civil Service where they could perhaps perform better. They say we all get promoted one level above our competency so i recognize how bringing somebody down could make it work, but my reading. Bill is not as issued as described. Number two, it would certainly allow nokes to be demoted into Civil Service if they so if thats what management decided, but it also allowed someone to be removed from Civil Service all together for misconduct defined as collective diet, malfeasance and failure to accept a directed reassignment. Were not talking about folks who just underperformed because they were promote toad rapidly. Were talking about folks who were involved in malfeasance who could be demoted to Civil Service but for whom there could be malfeasance that is so grand we would now allow a new system to remove someone from Civil Service all together because doesnt it seem odd that you would commit an act so egregious that your punishment is that were just going to give you a different job. Instead, shouldnt there be some acts that you could commit that we should agree that, you know what, the federal government is not for you. We should be able to look somebody in the eye and say the taxpayer deserves the best and youre not youre not it, and and if i guess my question is that not a place of agreement . Can we not agree that there should be some nokes, some actions that are so egregious we should allow once due process has been fired to remove someone from federal service permanently rather than to simply slap them on the wrist and demote them for this egregious act. I would think, again, we could find agreement there. I would think so. For example, the operative word in your question was egregious. If there is an egregious matter involving a federal employee, they shouldnt be downgraded. Were talking about and here are the operative words in my statement. That segment allows an agency to remove an employee from Civil Service entirely for poor performance. We have an employee who was a great employee where he was and do a request guesstimate that we would be great above that. Its only poor performance that my amountment was involved and i agree are with you. If this person has committed acts which are egregious in some way it should use the governments right to in fact eplim nate that employee entirely from thor is vicious and i was not trying to protect that employee in my amendment, and i think we could get together on my amendment. Because as i read the language, it says exactly what you describe it as say, under misconduct, if the head, the agency head, so removes such an individual the employee mayfield trancer in the employees from Senior Executive position tofully grade of the general for which the employ is qualified. My amendment says that ought to be the first way to handle poor performance, not to take years of investment in that employee and off with his head. Go the downgrade and thats all my my my amendment would say. If in fact more is required, nothing would stand in the way of the agency head in fact getting rid of that employee. Were talking about only poor performance. Geez youre a good employee. Were you doing such a good job at the gs14 level, but youre not ready to be a manager. Thats a very different set of skills, and often it is impossible to judge that skill before someone takes the helm. Now, mr. Woodall, i must say to you that it was amazing to hear you talk about the morale of the federal workforce and then to talk about people talking about people sitting and doing pornography as if some of the issues that mr. Connolly wasnt really on federal employees minds. Do you realize how badgered our federal workforce feels . This is the finest public workforce in the world. These are highly educated people, overeducated people, and yet time and again they become the object of the brickbacks. Majority so their morale is not down because of people who have been misusing Government Computers for morale. I say off with their heads. Their morale is down because of pay cuts, because of pension cuts, because of sequester and because, frankly, they feel undervalued so i wish this committee would help us to raise the morale of this very valuable, this invaluable workforce that were so fortunate to have. I have always said that if we spent more time working on those things that wring us together we would have more energy and more trust on thinks on which we would work apart. I would think that reading the caricatures of the federal workworse would be something that brought us together. It does bring us together. Lets get rid of the pornographers. Mr. Meadows. Mr. Woodall, i want to stress two things. One is i didnt hear anywhere in your questioning a disparaging remark about the federal workforce and i appreciate that. I think the underlying message that needs to go out is the that we do appreciate our federal workforce, but perhaps the best context for this debate is actually from the federal workforce. In 2015, i pore over the surveys that our federal workers put forward and in 2015 that survey, and let me quote, in my work unit steps are taken to deal with a poor performer who cannot or will not improve. Only 29 of federal workers agree with that statement. So that is not the gentleman from georgia saying it. It is not the gentleman from North Carolina or virginia or the it is it is. It is our federal workforce says that 29 of our federal workforce thinks we deal with poor performers adequately and its something that we have to address. I hope well find some Common Ground here in order for a full debate tomorrow. Senator holmes norton. Thank i you. I appreciate mr. Woodalls comments and ask him to look closely at my amendments and who is theres some that could be made in order. Otherwise i was just handed this paper which says if the president was presented with pr with h. R. 4361, his senior advisors would recommend that he veto the bill. Lets do a bill that he wont veto. Thank you very much. Mr. Mcgovern. I want to thank the witnesses for being here. I was on the floor. Im going to spare you my questions. Il ask consent to insert this in the record so its here and i hope nortons anticipates as many anticipates as possible could be made in order. Thank you for my time. Dr. Burgess. I too was on the floor. I missed the better part of the debate. Thank your witnesses for beak here. Ill reserve my questions for later. Thank you very much. Does any other republican seek time . Gentleman from ohio. Thank you, mr. Chairman. I appreciate you holding this hearing and appreciate the great witnesses for being here and id like to ask the gentleman from the North Carolina because i heard some comments about gee, congress is micromanaging when we create a twoyear probationary period. Wouldnt you think of Congress Like the board of directors of the United States and dont board of directors set out big policies and then let the managers and the agencies run the agencies . And isnt establishing a twoyear probationary period a policy that a board of directors ore a body like this should engage in and then let the agencies decide individual decisions . This isnt micromanaging. This is setting a poles, isnt it . Well, the gentleman says and states it well. Heres the interesting issue is when you set these overarching principles and you trust the federal workforce, whether it be at the Management Level or indeed at the rank and file level to improve the agency, what i have found is that overwhelmingly, they come up with the best ideas, they come up with the most progressive ideas. And honestly, want their ideas implemented. One of the interesting things on the best places to work, on the survey is we look at that, they get points for actually implementing the ideas within the agencies. Nasa performs extremely well. There are others who do well and the gentleman from virginia and i have focused on that. I took some criticism early on because i had the worst places to work. We changed the title. Weve gone through that to make sure were rewarding those best performers. So the gentleman states it well. This is overarching principles that would be pragmatic in any Business Environment and certainly one that we expect our federal workforce and managers to carry out. I yield back. Thank you. To the gentle lady from the District Of Columbia i was just looking through your amendment which is pretty simple. It strikes five sections of the bill, one subsection and four whole sections of the bill. Tell me why help me understand again why you dont think congress should set a policy like this. You just think this is punitive or i dont want to put words in your mouth. Tell me why you help me understand. Your whole amendment that strikes section 402, 405 b, 406, 407, 408. Which says that the problem is not with the length of the period but with the use of the period. And therefore, i would like to see the period used oversight seems to me without a change in law could get that done. So back to the gentleman from North Carolina. I know one of the other members asked, that cant happen without a change in the law, can it . It cant happen without a change in law. I think the gentle woman, her reference would be that she wants us in oversight to micromanage it more than were doing. This is setting overarching policies without us going in to say and certainly if we see abuses of that, im willing to work in a very bipartisan manner. I can tell you some of my newest found friends are those of the federal workforce and in doing that, trying to make sure that we encourage them to not only do a good job, which i believe they are, but also acknowledge that. And certainly that is preaching to the choir on my side of the aisle. Were trying to do this. But this cannot be fixed administratively. Thats why we need to legislation. I agree with the gentleman, it cant be fixed administratively because it doesnt need to be fixed. Again, im relying on an objective source, not the democrats or republicans with the gao looked at this issue and we are in the business, sir, of oversight. So if they indeed are not using the probationary period as effectively as they might, and even though 3500 federal employees were dismissed, for example in, 2013, then what oversight is for is bringing the agency and saying, how come, let me hear your response to the gao report, which says you are ineffective in using the Time Available to you. So to disregard the gao report and say all i need to do is add more time to it is not to give a reason or a fix for what is wrong with the probationary period. Since i havent read the gao report, ill ask the gentle lady from the District Of Columbia does the report, those two things are not mutually exclusive. Just because youre not using the probationary period to your greatest impact or effect does not mean the length of period does not need to increase. Those are two separate and zing issues. I dont think that i would necessarily agree or disagree with you. If the gao says theyre not using the period to its full impact and effect and not using it to the best of their ability, that may very well be true, but did the gao report explicitly that we dont feed to extend the period . Because i dont think it did, but i havent read it. It certainly did not. But the whole point of looking at the probationary period was to make recommendations. It did not recommend that the probationary period be extended. It did recommend federal oversight, sir, of the use of the existing probationary period. Look what youre doing. Youre making these into at will employees. All of them now. You ought to have a very good reason for doing that. When a small number of them may need the kind of oversight supervisors are paid to give. So the gao looks at what we ask them to look at, and i dont know what they were asked to look at. They probably were asked to look at whether the periods were effective in their current form and they probably werent asked to look at whether the probationary periods should be extended. Or maybe they werent but if they werent asked to specifically look at that, the gao doesnt look at things that we dont tell them to look at. Theyre an arm of congress that looks at what we ask them to look at. So again, im at a disadvantage because i havent had a chance to look at the report. But at the beginning of every gao report it says what they were tasked to do. Il take a look at that. I am disappointed that we cant get our arms around in a bipartisan way how we can help make the federal workforce better because frankly, we have a lot of the incredible, hard working men and women in the federal workforce in all of our districts all around this country and i respect them, but i think it does a disservice to them when we spend too much time fighting about maybe the bad employees and we should be honoring and figuring out how to laud accolades on the effective good servants and rid ourselves as the gentle lady from the District Of Columbia said of the people who are cheating the the federal government or just not effective and not doing their job. So i would hope that we can all Work Together to do both of those things because i dont think those things are mutually exclusi exclusive. I would look forward to trying to work with the gentle lady from the district, the gentleman from virginia and the janlt from the North Carolina because i think we can do those things together and i hope we will. I yield back. Go ahead. Could i simply say i appreciate your remarks and why i do not remember but i am almost certain that you are correct that they were asked to look at the probationary period. So i would think that the answer to bring us together would be to ask them to look at the length of the probationary period and to say to the chairman confident subcommittee whether enlarging the length of the probationary period might help to improve performance of the agency and of probationary employees, not to the with no, with no evidence whatsoever to assume that the answer must be to lengthen it to twice what it is at the moment. Thank you. And the only thing i would say and i respect that and appreciate your comments. Im not sure that it does harm to anybody who is a good federal employee to lengthen the probationary period. Theres nothing to be feared of a probationary period if youre doing a good job and youre a hard worker and learning your job and youre serving the taxpayers. Theres nothing to fear is what i would say. I would yield, yes, sir. I thank my friend. I think you raise some good points as to mr. Woodall in terms of accountability and performance. As somebody who ran a county, that matters to me in governments. But stipulating that everybody involved here is trying to do the right thing, surely you can understand at least some of the concern of the democrats who did not support this bill. If we want a bipartisan bill, lets make it bipartisan. We dont support this bill. The president s threatened to reit veto it. It isnt just about bad actors and pornography in the workplace. There are other provisions here that are troubling to us and protecting the rights of workers is not a tribal issue not for any of us. If were going to make the federal government an attractive career path for the next generation, weve got to make sure that it is perceived as a fair workplace, not an arbitrary workplace. Its hard enough right now given the punching bag the federal workforce has been made into in the last number of years to, frankly, attract the talent of the future in sufficient numbers. You know . And your point about shouldnt we have the ability to in an extended period of time, which is a little odd, yeah, gao wasnt asked, well, given the fact that you have looked at one year and found that its underout utilized and not even used properly as a management tool, how about we double it then . Why not make it ten years while were at it . Why not provide no protection whatsoever to the Civil Service and return ourselves, i know youre not saying that, mr. Stivers but im asking the question to make the point. Protections are in place for a reason. Abuses occur on the other side, too. Our committee had hearings. As my friend from the North Carolina knows the apply the of people who are subject to arbitrary treatment by managers. There was an argue just yesterday i think in the Washington Post about such an example in the National Park service. Cape canaveral, grand canyon. So it happens. So making sure protections are in place, theres a reason why congress did that years ago and theres a reason why we should tread carefully on those rights and the right of due process, the right of appeal, protection from arbitrary removal by maybe a prejudiced or a politicized manager. Theres a reason for it. So i think we could find Common Ground. Sadly, i dont think this bill does it. Thank you. I appreciate that. And you know, i live in a employment at will state. So private sector employees in ohio and i think about 30 states across the country have no protections. And it used to be when i was growing up and when my father was in the workforce, people would go to the Public Sector to the federal government because it might pay a little less but it actually provided more employment protections. It still provides a lot more employment protections than the private sector but today and im surprised to hear my friend from virginia say that the federal workforce is some place that people dont want to come. If you look at studies today, the federal workforce not only has better protections, it pays better than the private sector. So it is its a great career. And we have a lot of the incredible people going into the federal workforce and want to keep those. But i dont think it should be such a partisan issue to get rid of the bad ones. So im sorry its devolved into that. Maybe we can find some Common Ground in the future on this, but i do think this is a good bill. I yield back the balance of my time, mr. Chairman. Thank you very much. The gentleman from the state of washington, mr. New house. Thank you, mr. Chairman. Good to see you coming back from the fourth of july break. I do have to say i relate to the gentleman from oklahoma mourning the loss of a player has got to be terrible. We in the Pacific Northwest are still mourning the loss of a whole team which the gentleman from oklahoma knows something about. The gentleman yields. Id be happy to. You want some free advice . Bid them a new stadium. Our taxpayers had Something Different to say about that. About you, well, this has been a certainly i appreciate the gentle lady from the District Of Columbia coming to help i think perfect a bill, an important issue that seems like we all do have some Common Ground on. The issue of due process has piqued my attention. Thats something we all hold dear, we all strive to protect and been a great discourse back and forth about that. I just wanted to you know, miss holmes norton, you did make a couple of points within your comments about due process being tread upon here. And i wanted to ask if i could the gentleman from North Carolina to expound a little bit about your response to the good ladys concerns about due process in her in the underlying bill. I thank the gentleman for his question. Obviously as we looked at crafting most of these bills, the interesting aspect that we seem to be debating back and forth here has to do over a probationary period that would not only not trample on due process but part of that gao report that the gentleman from the ohio was talking about was that as we started to look at that, being under utilized was the fact that managers typically didnt use that. They didnt want to make a decision. They wished they had a little bit longer period in order to evaluate. So the causal effect is one of two things. Either you do nothing or you make an arbitrary decision to let someone go during the oneyear probationary period, which may not be in the best interests of the agency or the employee. And so while the gentle woman makes those claims, i would suggest that in the text of this particular bill, that it actually allows for additional protections for our federal workforce in every way. You know, being one who will probably debate due process this week, it is something that is near and dear to my heart and if it were something that we were overreaching on, it would be something that i would stand up and join the woman, the gentle woman in a bipartisan way to oppose, but i dont see that in the underlying bill. Could i respond . Please do. Because of the various sections i estimate in order to be sure one had to do with extending the probationary period. Let me say for the record, that does not raise a constitutional issue. When a constitutional that is in our discretion. And i concede that. Where a constitutional issue was raised, i said so. For example, this is an interesting one. But it would be interesting to see how the government, how the court would treat it. Employees are required to take mandatory leave often while theyre being investigated. Thats one thing. But to force an employee to use their vested accrued leave is quite another. Now, its vested. Its accrued. Its earned. Suppose the employee says, ill take my mandatory time. Thats whats required. You can give me that. You cant take my leave. Thats money, thats what i have earned. Thats my time off. I think that raises a real constitutional issue and could be a taking if presented to the courts. Why not . Lets come to a way to deal with that. Why not give the employee an opportunity to use his vested leave or be put on mandatory leave without using his vested leave . Give him the choice. Well, can i add one more thing if my colleague would yield . That would be great. You know, there are other constitutional issues i think in this bill. And were kind of not talking about some of them. One of them is block the president from issuing rules during his last months in office. I believe thats on its face an unconstitutional impediment. It goes right at separation of powers. And as i said in my testimony, if were going to apply that to the executive, why wouldnt we apply it to ourselves which would also be unconstitutional. But i mean, why is his action as a lame duck but duly elect and sworn in president of the United States somehow less valid than the actions of our colleagues who are not returning for whatever reason in a lame duck session of congress. I believe on its face, thats an unconstitutional provision if youre looking for constitutional issues, thats one. Reclaiming my time. Actually, im taking, im borrowing from her time. Which came from me. Yeah. Which is due process i think. Id now ask the gentleman if hell yield into well, i just wanted to my interest was around the due process issue whether its constitutional or not to limit the president s ability it out pursue rules or it wasnt something i was interested in at this point, are but i wanted to focus more on the due process issue and make sure that you know, federal employees certainly theres been a lot of great things said about them. Ive got federal employees in my district and i would wholeheartedly agree theyre very hard working individuals. American citizens and they deserve every protection that we can afford them just like anybody else does. That was my main concern. I appreciate the gentleman from North Carolinas perspective. That helps me through my decision process. But i also, like i said, i do appreciate very much the good lady from the District Of Columbia raising that concern because i agree with her that it is something we should all be very concerned with. And but with that, mr. Chairman, i appreciate very much. The gentleman yields back his time. Thank you very much. I want to thank all three of you for not only your time today but your interest in making sure that the quality and the proper management techniques including the ability to save good employees and to work with those who might need help is included in our discussion and i want to thank all three of you very much for taking time to be here. We have an awesome stenographer here. If youll please make sure you leave anything you brought in writing for her. She speaks tex and. Shes learning North Carolina stuff. We love it. It doesnt need a big interpreter. This way we can shook at the real words you wrote down and try and copy those, too. Well said, mr. Chairman. Thank the entire committee. Thank you all for being here. Is there any other member that would seek to be heard on h. R. 4361 . Any other member that would seem to give testimony on h. R. 4361 . Seeing none, this now closes the hearing portion of h. R. 4361. Chairman will now be in repeat from the younging from oklahoma. I move the federal Information System safeguards act of 2016 the structured rule provides one hour of general debate equally divided and controlled by the chair and ranking minority member of the committee on oversight and government reform. The rule waves all points of order against consideration of the bill. The rule makes an order as original text for the purpose of the anticipate, an amendment in the nature ive substitute consisting of the text of the rules Committee Print 11459 and provides that it shall be considered as read. Rule waives all points of order against the amendment and the nature of a substitute. Rule makes all, makes an order only those further amendments printed in the rules committee report. Each such amendment may be offered only in the order printed in the report. May be offered only by a member designated in the report shall be are canned as read, shall be debatable for the times testified in the report equally divided and controlled by the proponent and unopponent. Shall not be subject to amendment and not subject to a demand for the question. The rule waives all points of order against the anticipates printed in the report and provides one motion to recommittee with or without secs. Section 2 of the rule provides it shall be in order at any time on legislative day of july 7th, 2016 or julyth, 2016 for the speaker to entertain motions that the house suspend the rules as though under clause 1 of rule 15 relating to measures addressing the federal aviation administration. Youve now heard the motion for the gentleman from the oklahoma. Is there amendment or discussion to that . Seeing none, the vote will now be on the motion from the gentleman. Those in favor signify by saying aye. Those opposed no. The ayes have it. Accordingly, im sorry . Roll call. Gentleman askeds for a roll call vote. Miss fox of. Aye. Aye. Mr. Cole. Aye. Mr. Coal aye. Mr. Woodall, aye. Mr. Burgess. Aye. Mr. Burgess, eye. Mr. Stivers. Mr. Collins aye. Mr. Collins, aye. Mr. Byrne, mr. New house aye. Miss slaughter, mr. Mcgovern, no. Mr. Hastings, mr. Chairman. Why . Mr. Chairman why. Eight yeas, one no. The motion is agreed to. According thely the gentleman mr. Woodall will be handling this for republicans and mr. Polis for democrats. I have just one announcement to make and then well noouns announce our next meeting. Id like to recognize that we at least two members of my intern staff that have not been here previous to today. I see a couple members that have been here. Abby cally son everyone plano, texas, baylor university, a senior, Political Science major and indicate lynn smith from dallas, texas, who goes to the university of texas at austin, one of toms favorite schools for playing football. And she has a history and philosophy major. I want to welcome indicate lynn and abby to the rules committee and thank them for taking time to be here with us today. The last point that i would like to bring up is we were scheduled to meet tomorrow at 3 00 p. M. On the Senate Version of the defense bill to you facilitate getting into the conference and any other items which may be added. Is there any other work that is to be brought to the rules committee at this time . Yes, sir. Have you decided when you guys are going to schedule your gun vote . You know, thats a good question. The answer to that is that we are back after being gone a week. I anticipate that there there will be discussions that will be held tomorrow. There will be a conference of the republican conference. Were trying to make sure that our members not only understand but have feedback to that. And so that i would anticipate that as soon as that is done, that the majority leader will be announcing that schedule. Good question. Thank you very much. Welcome back to my colleagues after a workweek back home. And this completes our work for the day. As you just heard, the House Rules Committee has approved rules for debate on a bill to allow heads of federal agencies to limit risk to their Information Technology. The committee did not debate the gun bill that was on the schedule today. Its been postponed but it is possible it could come up later this week in fact, questioned at meeting close, the chair said to expect more on that tomorrow from the House Majority leader. Meantime, a couple of stories on the gun debate. The New York Times writes that representative kevin mccarthy, the House Majority leader, said today that democrats who protested the lack of votes on Gun Legislation by essentially seizing the house floor for more than 24 hours recently may be punished for breaking house rules. Mr. Mccarthy said the behavior was not becoming of the u. S. Congress. And politico reports House Republican leadership is probing allegations that certain democratic lawmakers intimidated professional staff and knocked things out of their hands during the day long sitin. That also from House Majority leader mccarthy. The story says that mr. Mccarthy said he and Speaker Paul Ryan would be meeting with with the sergeant at arms to discuss the matter. Theyre looking for video evidence, too. Mccarthy added noting hes already spoke within several eyewitnesss. Cspans road to the white house coverage continues later today with the Donald Trump Campaign rally in North Carolina. Hell be joined by tennessee senator bob corker who also serves as Foreign Relations committee chair. See those remarks live from raleigh today at 7 00 p. M. Eastern on cspan2. The hard fought 2016 primary season is over with historic conventions to follow this summer. Colorado. Florida. Texas. Ohio. Watch cspan as the delegates consider account nomination of the first woman ever to head a Major Political party. And the first nonpolitician in several decades. Watch live on cspan. Listen on the cspan radio app or get video on demand at cspan. Org. You have a front row seat to every minute of both conventions on cspan all boo beginning on monday, july 18th. Beginning on monday, july 18th. Beginning on monday, july 18th. Beginning on monday, july 18th. Beginning on monday, july 18th. The now, labor secretary thomas perez outlines president obamas labor policies including expanding overtime pay for federal workers. This is an hour. Our guest today is believed to be the only National Press Club Luncheon speaker to ever work hauling trash off the streets. Now the u. S. Labor secretary thomas e. Perez worked for a time on a garbage truck in his hometown of buffalo while he was in college. Perhaps that helped his career that culminated in perez becoming the working persons top man in the Obama Administration. Didnt know i was going to read that, did you . He embraced that role with vigor bringing the Labor Department out of the shadows into the headlines. Under his leadership, the department recently updated federal overtime rules in a way that will make over 4 million workers eligible for extra pay. In addition, the department issued new rules on exposure to silica in the workplace that could save up to 600 lives a year. Also the Labor Department issued a fishery rule that will require Financial Advisors to put their customers interests first. Adding it up, the three years that he has spent at the Labor Department have been nothing if not attention grabbing and they seem to have grabbed the attention after Hillary Clinton, the Presumptive Democratic president ial nominee. The wall street journal reported that perez is one of nine names on clintons short list for the vice presidency. For perez, thats the latest milestone in a lifetime full of them. He went from Brown University to harvard law school. He chose a career in Public Service that focused on civil rights and workers rights. He worked as a civil rights lawyer in the clinton administration. He was senator ted kennedys top advisor on civil rights, criminal justice and constitutional issues. Now, as labor secretary, hes fond of saying hes so busy at his job, he wont have another weekend off until january. Of course, the real question is whether perez will spend the next few months working in the Labor Departments cinder block headquarters or in the tinderbox of a president ial campaign. For now perez is here and to tell us more about the Obama Administrations agenda for working people. Ladies and gentlemen, lets have a warm National Press club welcome for labor secretary, tom perez. [ applause ] thank you for coming today, tom. Thank you for your kind introduction. Jerry we grew up in buffalo, new york. Jerry writes for the buffalo news. We share affinity for the bills where our mantra is false hope is better than no hope at all. I checked the paper this morning. Were undefeated. We havent lost in almost six months. And thats a good thing. And thank you whoever made the rosy the riveter cookies. That was something new for me, as well. A few weeks ago, the New York Times had a piece with the following headline that caught my attention when did optimism become uncool . I must confess that as a chronic optiist, i took it a little bit personally. I know my teenage kids think im uncool and they do in fact, have some factual basis for that belief. But the times story hit on something that is darker within our politics, the fact that some politicians find it expedient to exploit peoples worst fears to accentuate the negative and eliminate the positive to, turn people against each other instead of toward each other. For those who are peddling what i believe is fictioning that america is on the decline, i would invite them to join me on one of my many house calls. In the department of labor as the secretary of labor, i make a ton of house calls because i learn. I travel to the country to meet with workers, businesses and local officials hosh are shaping a Brighter Future for all of us. I would invite the naysayers to turn off the cable news, tear up the talking points and take a look around america at its best. I see america at its best when i meet somebody like my good friend, cory mccray. Cory is right here. Cory lives in the remarkable resilient charmed city of baltimore, maryland. Cory is here with me because he is a firstterm delegate in the Maryland State House and in his short time in office, hes already made some big moves. First term delegates arent supposed to get legislation passed. And cory has done just that. Sponsoring a bill among others to restore Voting Rights to some 40,000 people coming out of prison in maryland enacted over the governors veto. [ applause ] but corys story could he have gone a different way. You all know the narrative of the city kid, the youk person of color. He grew up in a tough neighborhood, made some bad choices and got involved in the juvenile Justice System. Cory spent his 18th birthday in a jail cell. When he got out, his mother presented him with a list of apprenticeship opportunities that she found through the state Labor Department, the place which are used to work in pld and made him pick one. He asked his mother why do you still believe in me . Sley said until you believe in yourself. So cory chose a fiveyear Apprenticeship Program through the ibew and he graduated with flying colors because hes got game. And reflecting on that opportunity, cory said, and i quote, it was a vehicling for me to achieve my dreams. It literally saved my life. But it didnt just save his life. It led him down a path that has positively affected the lives of thousands of people in his community and across the state of maryland and for that, i know i am grateful and the residents of maryland are grateful. My house calls to cory and so many others tell me that america is at its best when it is a place where we recognize that every Single Person is gifted and talented. Where we invest in our people and their potential. Where a middle class life is within the reach of everyone willing to work with it. Where businesses who embrace shared prosperity succeed and thrive and where zip code never determines destiny. But i also know, i was born at night but i wasnt born last night. And in my other house calls, they show me an america that can do better and in fact, must do better. Because i met some young people in corys hometown of baltimore last year after the tragic unrest. Theyve also got game but they want to be more involved. I met a person who said, you know what . Theres no a. P. Course inside my high school. Im smart. I want to succeed but they didnt get opportunity. Theyve got game but they dont have a rolodex. When im with young people, ive got to explain what a rolodex is. But i digress. A young woman told me that she is sometimes late for school because she has trouble sleeping at night because of the gunshots. Stories like theirs keep me up at night. But the opportunity to help them gets me out of bed in the morning with a hop in my step. Everything i see in these house calls an america at its best, an america that can and must do better inspires me. And over the last seven years, the Obama Administration has used every tool in our tool kit to create more stories like corys and were acutely aware that government cant do it alone. We forged remarkable partnerships with the Business Community and others to ensure that prosperity is broadly shared. So i want to talk to you about what my house calls have taught me and shown me about how we build the best america and how we sustain that progress after we leave office and i do in fact, have 212 days till the weekend. And im not just counting the days but were working to make every day count. Before we can talk about the best america, its critical to understand that america is doing remarkably better than we were backing in 2009. All those people who say, optimism is uncool frequently deny some of the facts. Despite what the eyor caucus often wants to you to believe, weve come a long way from the economic crisis. Thanks to the American People combined with the leadership from the private sector, sound policy decision asks by the Obama Administration, tough votes tony act the stimulus bill, we are back on our feet as a nation. In the three months before the president took office, we lost 2. 3 million jobs. The Auto Industry was on life support and there were a number of people saying pull the plug. The Unemployment Rate was inching toward 10 . Weekly firsttime claims for unemployment were over 600,000. Today, the Unemployment Rate is below 5 . Were in the middle of the longest streak of private sector job growth on record. 75 consecutive months to the tune of 14. 5 million jobs. Initial claims for Unemployment Benefits have remain under 300,000 less than half of those 2009 levels for 67 consecutive weeks. Thats the longest streak since 1973. According to the latest data, job openings are as high as theyve been since we started keeping track of this data. 5. 8 million jobs. In the depths of the recession, roughly seven job seekers for every job opening. Today 1. 4 job seekers for every job opening. Auto industry is stronger than ever. It added nearly 670,000 jobs since mid2009 and auto sales were at a record high last year. Our auto exports are 85 above 2009 levels. And yet, despite this progress, there are some who have found it expedient to tell you and make the argument that were worse off than when the president took office. That famous newspaper the onion, president obama turns 50 over republican opposition. You might hear from some and i have heard from some that the Unemployment Rate is Something Like 40 . Its not what it really is. Well, i guess thats true if you counted your 9 yearold grandmother or the 11. 9 million americans over 80. Your high school freshmen, i have one coming up or the americans aged 10 to 14. You might hear other countries are choosing to invest elsewhere. You might hear that putting a republican in the white house is the only way to create jobs. Well, frankly, you know, facts matter. And the facts prove the ey op r caucus wrong every single time. In the first five years of the recovery, the u. S. Put nearly twice as many people back to work as the uk, germany, france and japan combined. The Affordable Care act turned out not to be that job killer that so many folks predicted. Quite the contrary since march of 2010, weve added 1. 8 million jobs in health care while transforming and saving even more lives. After five years of the Affordable Care act, more than 16 million americans have gained coverage. The uninsured rate is the lowest ever record and we just had a pleating of the Social Security and medicare board of directors today on which i served. The Medicare Trust fund is more solvent today because the aca continues to bend the cost curve. We remain a magnet for investors. Study after study it, Boston Consulting Group shows that a majority of Business Leaders say america is the best place in the world to invest. And to claim that job creation under president obama has been anemic, once again, lets do the math. If you go all the way back to 1981, and add up all of the private sector jobs that have been added under republican and democratic president s im talking about net new job growth, jobs gained minus jobs lost, under the leadership of president clinton and obama which is 15 years and change, and the change is 212 days, i dont know whether the 20th counts as half a day. American businesses have added a net of 31. 3 million jobs compared to 15. 8 million net new jobs added under president s reagan, bush 1, and bush 23. 20 years of republican rule, 15. 8 million jobs. 15 years and change of democratic rule, 31. 3 million jobs. Nearly double the number of jobs created under a democratic administration. And these are good jobs, too. Exactly what we would expect in a solid sustained recovery. The jobs that have been created in recent years weve seen strong growth in middle and high wage jobs. And my house calls affirm this good news. We still have the greatest and most resilient workforce in the world. We have remarkably innovative Business Leaders and they give us the tools we need to and we have the tools we need to to succeed and prosper. I truly believe that america is at its best when we make sure that we offer a hand to working people who have gotten knocked down and undeniably millions got knocked down people like Catherine Hackett who i met. She had done everything right. Single mother of two. Both her kids serving in the u. S. Military with distinction. Walked into work one day, was told your services are no longer needed. When i met her, catherine told me sheep wore a winter coat in her home in connecticut because she had it turn the heat down to 58 degrees. She talked about what she referred to and these are her words, not mine, her poverty of spirit because the dignity of work is more than simply a paycheck. Its everything that comes with it. And her spirits were lifted from the assistance she got from the workforce system. I often refer to the department of labor as match. Com. We match job seekers to want to punch their ticket to the middle class was employer whos want to grow their business. She got back on her feet and i love visiting her a year or so ago with governor dan malloy from connecticut. Shes been promoted. Shes back on her feet. Americas at its best when workers get a chance to share in the prosperity that they helped to create. In a town i have to talk about a new york story in, new berlin, new york, you can visit the chobani yogurt factor. We contributor a lot to their success in my family. Their ceo, ham dil, he grew up in a small village in turkey and came to america to study english and take a few business courses. Looks like he could teach a few business courses, my friends, because with almost no experience in 2005, he took a big risk. He purchased a yogurt factor that was being closed by kraft foods and over the ensuing years, he and a loyal group of employees grew chobani into the top selling is yogurt brand in the United States. And earlier this year, he naunlsed their 2,000 workers would receive shares wore the up to 10 of the company. When it goes public or is sold. Top state the obvious, that aint pocket change. Chobani is believed to be worth billions of dollars. And reflecting on that decision, bless you, bless all of you for that matter, he said ive built something that i never thought would be a success. I cannot think of chobani being built without all these people. And hamdi isnt the only adherent to the stakeholder model. Everywhere i go i meet Business Leaders who reject that false choice that you either take care of your worker or you take care of your shareholder. They understand that shareholders are best served when all stakeholders including but not limited to your workers are well served. Its no accident that glass doors best places to work outperformed the overall market year after year. According to most recent reports, the companies on that list beat the return on s p 500 but as much as 122 between 2009 and 200014. The high road is indeed the smart road, my friends. America is at its best when we look ahead instead of fighting yesterdays battles understanding that change is a constant in america. I saw this firsthand when i visited Eastern Kentucky where the loss of coal jobs continues to create challenges for so many generationally employed families and as a kid who grew up in buffalo, new york, i understand what theyre going through. But theres a fledgling hitech industry starting to emerge. They call it the silicon holler. Theres a company that i went to called bit source which is training former coal miner whos write code and to thrive in these software jobs. One guy that i met that week, he had gotten a call the week before i was there from the mine saying come on back. We got a job for you. He told them no because you know what . Ive got a future here at bit source because we are going from coal to code. Thats mayor motto. I met another person who had a screen save ser shot of his 1yearold and he said you know what . When that son of mine comes to me and says dad, i cant do something, im going to tell him, you know what, i couldnt turn a computer on a few years ago. Now i am a coder. You can do anything you put your mind to. Thats why i am optimistic. I meet people all the time every corner of this country who have grit and determination, businesses who are forward leaning. And i meet so many businesses whos understand that america is at its best when we give people a second chance. Corys story shows us that the right resources at the right time can transform a life and a community. Thats why account administration has invested so much in innovative programs to help people get out of the criminal Justice System. And i made a house call to Montgomery County correctional facility up in pennsylvania. They have a behind the fence program for inmates so that they can get a chance at a good job upon release. The best way to reduce residism in this country, my friends, is to make sure that people coming out of correctional facilities have the skills to compete when they get out. And i met a young man there named scott farina who took advantage of the program and got a great job at a v mechanical when he got out. Hes back on the pathway to success and selfsufficiency. And there is remarkable bipartisan consensus emerging around easing former inmates reentry into the workforce. You might not have the heard as much about it because its not flashy. So the reality though is that he brought together van jones, the koch brothers, newt gingrich. When youve done that, you might be on to something. Criminal Justice Reform i think is an issue that is at long last meeting its moments. I firmly believe that americas at its best when of has a voice in the workplace. Innovators is like is your rita gupta are getting us there. Is your rita leads two organizations all about helping workers speak up together for better wages and benefits. Through her efforts for jobs for justice and crass generations she reminds us the work of caregiverers is the work that makes all other work possible. Everyone in the industry deserves a say in the decisions that affect them. And those of us in the Obama Administration could not agree more than thats why one of the things im most proud of is when we issued a final rule to extend minimum wage and overtime protections to nearly 2 Million Home Health care workers, the overwhelming majority of whom are women of color on food stamps. Doing gods work but not getting paid a fair wage. [ applause ] we are also at our best when people get the tools they need to succeed at work and at home. Ive seen it in the many house calls ive made to the florida avenue grill. Both in my official capacity as a secretary of labor and in my personal capacity as someone who loves great food and loves to spend his money at a place where i know the owner imar hutch ins takes care of his workers and puts his workers at the center of his universe. Hes here with me today. What i love about imar is he rejected the fiction that food service has to be a low wage nothing benefit industry. He pays well bob the minimum wage. He offers paid sick leave. He just told me today that hes initiating a 401 k program. He hires people who have been involved in the criminal Justice System and by the way, he is a nice guy. Dont get me wrong but he doesnt do it because he just wants to be a nice guy. Its in his enlightened selfinterests and he figured out attrition has a real cost. When is you have a loyal workforce, you have a productive workforce. Finally, americas at its best when we fully enforce the laws that protect workers. I dont have to make a house call to be inspired by the dedicated Public Servants at the department of labor ive spent the majority of my career in the federal enforcement business, d. O. J. , hhs and dol. The dedicated career staff at all of these places are truly the backbone of these organizations. And it frosts me to know end when politicians go after the dedicated career professionals who work in federal, state and local governments. Every day, they help millions of people punch their ticket to the middle class. [ applause ] since 2009, we have recovered in our wage and Hour Division alone nearly 1. 6 billion in back wages for more than 1. 7 million workers. And in just the last few months, we have completed historic rule making on issues at the heart of what it means to be middle class in america. Worker safety, wages, retirement security, the rule that limtz worker exposure to deadly silica dust has quite literally been decades in the making. Frances perkins convened a National Conference on it in 1938, to go to our website, you can hear her talk in 1938 about the dangers of silica. Here we were in 2016 finally Public Policy caught up with the science. Because you know what . Were protecting 2. 3 million worker who are exposed to crystal ta lean silica. We updated our overtime rules so more people get extra pay for extra work. When i grew up in buffalo, my friends whose parents were managers, those were middle class jobs. And middle class jobs should pay a middle class wage. Our rule more than doubled the salary threshold helping 4. 2 people become newly eligible for overtime and it will raise americans pay by an estimated 12 billion over the next teen years. By the way, and there were a few folks and im using fdrs term when he referred to the fair labor standards act. He referred to the calamity hollers who say it will be the end of the world as we to it. It the total payroll increases associated with this rule are well under. 1 of 1 of total payroll costs. 1 of 1 . This rule again stands for the idea that low wages and no benefits are not, and i repeat not, the cost of doing business in the 21st century america. Our conflict of interest rule established a fundamental principle of Consumer Protection in the American Retirement marketplace. Your best interests should come before your visors financial interests. The three most important decisions we make, medical, legal and financial in our lives when you go to your doctor or lawyer, they have a legal and ethical obligation to put your interests first. Financial advisors should have the same obligation and they do now as a result of this rule which is akin to a 20 billion tax cut for working families who are trying to save for retirement. Traveling around the country and meeting these people and keeping a eye on these economic karats absolutely shows me america at its best. But as i said earlier, i also see an americaing that can and must do better because for all of the hamdis who understand that prosperity must it be broadly shared there are still some trapped in what one Business Leader called the quart by quart results vortex and refuse to make investments in the longterm health of their company because it wont show up in the Balance Sheet right away. Another ceo once told me a renegade shareholder who wasnt interested in thinking long thermand whether he she tried to reason with him by telling that person that this would be good for the company because we will be wealthy in the longterm instead of thinking short term and he said, and i quote, id rather be rich than right. For all the is your rita guptas and the chris owenss from the National Employment law program who are fighting for people to have a voice at work, weve got to be honest. There are a lot of folks seeking to quash it. Last year a prominent conservative was caught on tape boasting that he wakes up every morning trying to figure out how to screw with unions. When you screw with unions in my opinion, you screw with the middle class. And with the livelihoods of millions of working people across the nation. Because for all the leaders like imar who are providing made leaf and most and necessarily and spotify, there are way too many people out there when faced with the untenable choice between the job that they need and the family that they love and you shouldnt have to win the lottery to get access to paid leave or a decent wage or the geographic lottery. I met a woman in connecticut named coreen. She gave birth via csection. Shes a bus driver. And because of the absence of paid leave, her only choice was to go back on that school bus a couple weeks after her child was born and put that newborn on that front row and all the little kids who i have the sniffles were getting on than bus, as well. We can do better than that. I met a woman named alicia in detroit who works a fulltime job but shes barely making ends meet. She leapt in her car with her three children the night before i met her. We can do better. We can do better by all of these people. And in the year 2016, it is unconscionable were still having these debates. We will must move forward but regrettably, we have not had a dance partner in the republican congress. Thats why the Obama Administration has used every tool in our tool kit to make change. I believe the question before sus whether we can sustain and scale this progress that weve made during the Obama Administration or whether were going to turn the clock back. And you know, as i reflect on history, this is not the first time we have been at a crossroads like this. Weve seen this movie before. I remember the no Nothing Movement of the mid19th century which ran on a platform of fear and ignorance. It was anticatholic, antiimmigrant. It failed because it was fundamentally unamerican. In the 1880s, Congress Passed a law called the chinese exclusion act. A few decades later the senate was gripped by a communist witch hunt. Every time we have been at the crossroads we have appealed to our better angels of opportunity and optimism and returned to the first principles. One of my favorite people is walter isaacson. He tells the story of einstein who came to the u. S. From germany the year hitler took power. And during the mccarthy era, walter tells the story of a letter that einstein wrote to his son because he was very worried about the direction of this nation, the United States. He felt like mccarthy was no different than hitler. And he said he had seen it before and he was worried he was going to see it again because that brand of hysteria was all too familiar. Then as the movement fizzled, he wrote another letter to his son and he said, and i quote, theres something amazing about americas democracy. Its got a sigh row scope and just when you think its going to go off the cliff it, rights itself. But heres the thing about the gyroscope, my friends. It doesnt kick into high gear by accident. It recenters us only when we come together. It takes all of us standing together to help keep america moving toward at that time best america. It takes the collective power of we, the two word barack obama rightfully calls the most important word in the democracy. Over the last seven years, we materially improved the lives of working families, millions of them. Weve been able to bounce back from the worst economic crisis of our lifetime and protect people in their retirement space but we didnt do it alone, we had partners in this courtroom and partners across america and we cant do it alone. Im so appreciative of so many leaders in the Business Community that supported our conflict of interest rule, people like jake boggle who said i learned this business when i put my customer first, its great for my customer and its great for business. He knows a little bit about the retirement space. Ive met so many Business Leaders who understand the importance of the stake holder model of governance, the ceo of the Container Store and Going Forward we need leaders like kip and like so many others to be the rule and not the exception. We have to scale the progress that i see across the country and the progress that our fact basis notes. Thats why i spent time going to Business Schools and law schools talking to tomorrows leaders about the fact we can do better as a nation. You dont have an obligation to genuflekt at the alter of quarterly earnings. It takes innovation, forethought, fearlessness and leadership that involves thinking long term, rejecting those false choices and understanding that idealism and prag ma tix are not mutually exclusive. Ive seen that work done by my former boss, senator kennedy and see the work done by my current boss, barack obama on so many issues. Innovation means moving forward without leaving anyone behind no no vags weve learned to be americas middle name. To make sure innovation is indeed inclusive innovation that benefits everyone. Innovation i see in people like dan tarren who founded a startup, the quintessential 21st century startup. Dan insist that all of his employees be w2s and have access to training opportunities and get stock options. Thats what its about. He understands that culture matters in every workplace and he has built that culture of inclusion into a very, very successful Business Model. Forethought means seeing around corners and playing chess instead of checkers and not allowing the challenges of today to blind your ability to envision a better tomorrow. I saw that forethought when i visited ford. They were in a crisis in 2006, coming together ford and the uaw were able to develop a vision of shared prosperity and shared sacrifice in days of the great recession. I had the privilege recently of spending time with the cwa and ibew and folks at verizon and verizon and its workers understand that they are stronger together. It was a tough 13 days but we got through it. Collective bargaining con sometimes be a little messy but you know what, i believe to my core the collective bargaining is one of the single most important forces that has brought us middle class prosperity in our nations history. We need to keep being that way. We need to keep being fearless. Fearless is craig bowen, the ceo of heb grocery chain, a 23 billion grocery chain competing in a low margin industry and craig was one of the strongest supporters of our overtime rule. He supported it because he understands that his workers are at the center of his Business Model and understands it because he believes that the low road is a dangerous road. And we need to take the high road. All of these people fuel my chronic optimism. But people will also tell me that you know what, you need to be impatient as well, im chronically impatient as well as chronically optimistic. Because i meet a lot of people every single day who are running out of time. Alicia in detroit, so many others. Im confident that as we approach this crossroad and choose our path, when we summon and continue to summon our leadership innovation and forethought and fearlessness, we can move forward and scale and sustain our progress because thats what its all about. Building upon the foundation, scaling it and sustaining it and make sure that we build an america that works for everyone. An america of shared prosperity for all. Not simply prosperity for a few at the top. Thats the Unfinished Business of this recovery. Ive got 212 days to keep working on it and im going to try my hardest every single day to wake up making sure that were helping on the road to shared prosperity. Thank you so much and i look forward to your questions. [ applause ] it almost seems like youre running for a certain job out there. Many states and cities raised the minimum wage significantly already. What has been the impact so far . Well, you know, whats interesting a few years ago if you talk about the fight for 15 Movement People laughed about it, thats sea tack in washington state. That brush fire turned into a prairie fire thats been a wildfire. Now roughly 20 of the u. S. Population lives in a state or locality that either has passed or about to pass a 15 minimum wage. I talked to a lot of my republicans friends here in d. C. , boy, that 1010 you refused to pass it looks like pocket change now, doesnt it . We need a federal floor. A federal floor which vindicates the basic principle of the fair labor standards act that nobody who works a fulltime job should have to live in poverty and the proposal from bobby scott and patty murray does just that and opportunity for state and local governments to go higher than the floor to reflect whats happening in their communities. Weve been actively involved at the president s direction with state and local efforts to go above the federal floor. Its unfortunate that our politics are broken here because the minimum wage historically has been a bipartisan issue, every president except two since fdr has signed an increase in minimum wage and i hope the president will not make it to the third person on that list. Well try like heck to make sure we do pass one this year. Thank you. Lets say its friday morning. You wake up and learn the United Kingdom voted in favor of brexit. What do you do next . Are there white house emergency meetings planned for friday to handle a brexit exit . I believe the premise of the question will be wrong because i believe in moments like this its not simply people here in the United States that summon our better angels of inclusion and opportunity and come together as opposed to tearing apart, the country that just elected the first muslim mayor of london is the country that will send an Important Message to the world. Weve been monitoring it very carefully. The folks in the uk need to make those judgments and i am confident that in the end of the ta day they are going to make a judgment that they are stronger together and thats while again were preparing for the worst, we believe that the worst will not come to bear. Lets say youre wrong. What what does a brexit leave vote do to American Workers. Well have to exam all of that . Theres a lot of trade relationships, not just American Workers but what does it do to folks in the joining countries to the uk . And thats why i think were going to succeed because the reason the no Nothing Movement fizzled we were able to summon our better angels. It is not the first time in World History or in our nations history that were going through a moment like this. And i think that gyroscope will calibrate in a positive direction in the uk and elsewhere. Thank you, law 360 a recently agreed to drop noncompete agreements with its employees. How important is it that this decision for working people and what types of broader change would you like to see Going Forward on noncompete agreements . I have real issues with noncompete agreements and let me give you one example. Jimmy johns, you know, they sell sandwiches, they have a noncompete with every employee. You leave because subway will pay you more, you signed a noncompete with jimmy johns. I rest my case, your honor. They are not right. We need to make sure that we have leveled the Playing Field for workers and i cant for the life of me understand either that one or really any of the others in what we have right now is a patch work quilt of state laws. In every state where i think they do have one, i think it really creates an unlevel Playing Field for workers. What do you think for the trend for workers to ask employees about to lose their jobs to sign an agreement not to sue . As job losses usually accompanied by a one time payment. You know, when you are about to lose your job, youre not exactly in a position of advantage. When you add insult to injury saying you cant sue me, that borders on unfairness as a matter of law. So i have real issues with that and sometimes there will be a settlement that is an arms length settlement and both parties agree to it and nonsuit is part of that settlement. And so that may be useful in some context but ivet

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