More 25 more time added to get their job done, and that to me says were not staffed correctly, one, or were managed improperly. Well, i think that the staffing at the in the Academy Locations is adequate for the mission at hand. At the headquarters in my environment, the staff i manage, we have a very lightfoot fri fo. If you bring somebody in to train, they know how to train or you wouldnt have brought them in to train, and to sit here and make the point that they got to have two extra hours at the end of the day to prepare for tomorrow in terms of training when theyre not consuming the whole eight hours during the training anyway just doesnt make sense. It doesnt pass the smell test to me. Again, i dont want any cut in pay. I want this stuff restored. My question is, is the assumptions under which were doing all this dont pass muster for common sense. Your testimony is that everybody at the Border Patrol needs an extra two hours a day to get their job done, and thats whether theyre on the border or theyre not, and im not sure even with your statement that you can justify it. Mr. Miles, how many allegations of auo abuse at cpb has your office received . 16 at 16 different locations dating back to 2007. And what percentage of those case s did a whistleblower allege not only that overtime wases about misbilled but it was not being worked by some agents whether they left early or were doing nonwork activities like watching tv, surfing the internet, or hanging out. Some variation of that disclosure was made in eight of those cases. Have you been satisfied with cpbs reports concluding they can not substantiate allegations that agents were billing hours they did not actually work . Not give you a direct yes or no but weve i dont want to get that going. Ill withdraw that question. In some of the allegations substantiated by cpb involve cases where cpb agents were working alongside cpb officers or civilians who were not entitled to overtime pay. You talked about that. Right. Didnt the agents have the same job as those who were not cp b agents . Yes. Thats why i think the framework has been helpful for this conversation. We can go into more detail about the Training Facility and, for example, the Border Patrol agents who testified they were in the instructor position said they needed ten hours a day in order to get the work done. Sorry for the acronym, but as customs and Border Protection officer cbpo who is not eligible for overtime but is in the same instructor position, they routinely testify they can get the work done within eight hours thats my point. Has management ever tried to stop them from working past eight hours a day. Im not aware of any. Mr. Hamrick, describe for me your investigation of the osg referrals in terms of those people who were not working. How did you go about the investigation to substantiate or to not substantiate those claims . The office of internal affairs conducted six separate investigations regarding allegations of auo misuse by cbp employees. In each of those investigations our internal Affairs Agents collected all the relevant documentary evidence that was available. We conducted interviews with all the relevant employees, interviewed complaint ents where the complainants were identified, interviewed all available witnesses as well as employees who were alleged to be misusing the auo compensation system. Documented those investigative steps in in at least one case conducted surveillance in the field. Describe that. Our agents were actually in the field watching employees at were the employees aware . No, no, covert surveillance, sir. Watching the employees to see what time they reported to work, what time they left work, and then comparing those activities with the hours that were documented. Okay. Once our investigations were complete, all the investigative activities were fully documented. The investigative reports went through a series of management reviews within the office of internal affairs both at the Field Office Level as well as headquarters. Once our internal Affairs Managers were satisfied that the investigations were adequate and complete, the investigative reports were subject to a second level of review at the office of chief counsel at cbp and once that level of review was complete, the reports were forwarded through the leadership to the office of special counsel. But the employees in general were aware that auo was a hot topic. Sir this had been in the press. Yes, sir. Yeah. So basically observing agents at work you determined that Everything Else that the whistleblower said other than eligibility wasnt accurate. In most instances. In each of the six investigations that we conducted regarding allegations of auo misuse what we confirmed were the hours claimed were being worked. We also confirmed that those hours that were worked were not properly compensated under auo provisions and that another overtime compensation mechanism should have been used. Okay. Im way over time. Senator tester, sorry to take thats perfectly all right. Ill just start out a little bit talking about the benefits of the bill and then well get into some meat in a second. I think all of us can agree this is an antiquated pay system set up 40 years ago that doesnt meet the needs today. I think the Border Patrol has come to us asking for some reforms. I think its appropriate that we listen to their work that theyre doing in the field. I went through border stations several times but i have to tell you ive never packed a gun on a northern border and face what you guys face putting your lives on the line every day, but yet coming to us in support of the pay cut, and well get into that in a second, i would just say that one thing that this bill does, and it does many, many things is it gives stability to the hours that they need, and i think that stability in hours is very, very important when you have folks up there. The last thing you need to be thinking about is when the shift goes off. But at any rate, i would ask you, deputy chief vitiello has the cpb supported this legislation . Yes, sir. How about you, mr. Judd . Is your organization supportive . Yes, sir. For both judd and vitiello, do you believe this legislation increases the Border Patrols operational capacity and its effectiveness . It will. I dont believe it will. I know it will. Okay. Will it help or hurt recruitment and retention of Border Patrol agents . I think it will help. It will help. Does it provide more certainty for the agents and their families . Both of you . Agree. It does. Absolutely. And were probably going to get into cost savings in a minute, but does your group and your agency believe that this saves money . It does. The key provision of eliminating flsa for overtime work as the workforce is now entitled would save us considerably. Okay. I want to talk about training for just a little bit. Mr. Vitiello, who do you use for training . Theres a variety of assignments at the academy, but some of the instructors are, in fact, Border Patrol agents that teach operational aspects of the work in the academy setting. Okay. And you said these are eighthour sessions . The curriculum is eight hours plus lunch, et cetera. Okay. One thing that i would really like to point out is that if im a northern border and somebody asks me to become a trainer, and by the way i applaud the fact you guys are using Border Patrol agents to train with, theres no way im going to take a reduction in pay to come here, and i think, furthermore, if, in fact, if, in fact, youre using agents, that solves a problem that i have with a lot of the agencies around here that actually have people in training positions that dont know whats going on out in the field. Youre using folks that know whats going on in the field to train the folks that are going to be out in the field. That is correct . Correct. We use lawyers to teach the law. We use pt instructors to teach physical techniques. We use Border Patrol agents who have driven in the field and know how to operate our vehicles and systems, et cetera, and then the whole range of operational techniques are taught by agents as well. Okay. Senator, may i sure. I taught at the academy. I would have never went to the academy if i was going to lose 25 of my pay. Wouldnt have happened. Okay. Were currently in this day and age using i hate to bring it up but Unmanned Aircraft and drones to secure our borders, and weve been successful using technology to fight against terrorism. The question is, is with this age of technology, why do we need more agents . Go ahead. Senator, the technology is fantastic, but the technology doesnt arrest anybody. When im dealing with groups of illegal aliens or drug smugglers, im dealing with anywhere between 20 to 40 persons, and those drones cannot put hands on those individuals to arerest them. Normally when im dealing with these groups its me and one other person. So the drones do a phenomenal job of spotting the groups, but now i have to get to the groups and i have to actually arrest them. Those drones cant do that. Thats why we have to have the manpower to effectuate the arrests. Okay. Mr. Miles, i believe in your testimony you said that the research bore out that five tenhour shorts correct me if im wrong, five tenhour shifts is optimal. We received a report back, and again a very epful report from oia discussing the san diego sector. The managers there im sorry, laredo north. They do an extension discussion on the costs and benefit of doing a tenhour shift versus an eighthour shift and i think thats a legitimate area for congress to consider. What the report confirms is that the tenhour shift is being compensated with auo and thats not lawful. We have to figure out if ten hours really is the best way in that and the reason its not lawful is because when au o was set up, it was set up for conditions that were unpredictable, correct . Correct. If it had been set up and said were going to make it predictable use it whenever you want, it would have been fact. But the fact is unpredictability. Right. Thats why we wanted to flag that because its worth understanding from the cbp witnesses why ten hours is the most costeffective approach to securing the border. Okay. Mr. Judd, when discussing pay reform, and were discussing this bill, were talking about how much money its going to save, why would your folks be in favor of it . Because the alternative is worse. What weve found is, again, mr. Miles has testified that what were doing is not actual auo. Mr. Hamrick has testified that the hours are being worked, but its being improperly compensated. If it was properly compensated youd actually be paying me more money than what auo pays. Id love to keep auo. In fact, if i could convince you to amend the auo laws, i would do that, but, unfortunately, we have this budgetary constraint where nobody is willing to consider time and a half overtime system and, therefore, were asking you for this. Jo fin fine. Were going to have several rounds, right . So my time is up. About halfway through my questioning when i yielded to dr. Coburn. I want to come back and pick up where i left off. And the question the next question, weve talked about this a little bit but i want to talk about it some more. The question i would ask, start with you mr. Miles and come from my right to my left, but what concerns have been raised about lets go back. What concerns were raised by the original policy thats been in place for a number of years. What concerns have been raised and how does this legislation address those concerns . Use your mike. Yeah. So i think ill three separate concerns. One, that auo is unlawful because its being used routinely instead of for unpredictable work. Two, a lot of whistleblowers were concerned auo is being used in an Office Setting or an administrative setting and by managers in those types of settings. And, three, which we have discussed in some detail, that auo is being claimed for hours that arent worked at all or while people are doing various things. So the legislation would clearly address the first issue on whether or not the hours that are being worked that can be scheduled in advance, it would provide a Legal Framework for compensating the individuals who are working those hours. All right. Mr. Hamrick, same question, please. I would echo mr. Miles. The legislation will allow cbp to properly compensate employees for their overtime work which they are entitled to while alleviating the issues that we are currently experiencing with the limitations on auo and what type of overtime hours can be worked under auo and how those can be paid. Okay. Mr. Judd . Simply, this would make what we do legal. I dont know how better to state it. All right. Mr. Vitiello. I agree. There are specific Mission Requirements that in a system like whats contemplated in the legislation would allow for us to do, and then if and avoid some of the transactions that occur if you were on a fee for service issue. You would change what the expectations are of both managers and individual agents and they would always be watching the clock versus what we can accomplish now which is to continue the work until the end of the shift. Okay. Im just going to lay out an example. Lets say instead of senator coburn and senator and myself and senator tester being senators, lets just say were Border Patrol officers and well say dr. Coburn is in california along the border there. Maybe im in tucson sector and mr. Tester is in south texas, and theres not much going on along the california border and after eight hours mr. Coburn is done. Im in a part of the border where theres a lot going on, and we have maybe 20 people im tracking across the border and trying to catch up with. Im working well beyond my shift, maybe work an extra four hours to track them down and hold them until somebody can come and relieve me. Mr. Tester is going the other way down into across the border and trying to apprehend somebody who slipped back across the border, and he uses up an extra two or three hours. Why i think most people who are familiar with overtime issues know that people work in similar kinds of jobs dont always have to work as long every day. So common sense, my dad used to say, just use some common sense. I think somebody using some common sense would say somebody is working dr. Coburn over here officer coburn over here is working extra four hours to track down and hold 20 people or i am and hes not, whatever, why dont we just pay people along those lines . I think i know the answer, but id like to hear you say it anyway. If you would, id like to take that question. Please. In fact, i want each of you to. If you were a Border Patrol agent, you would love your job. You might not like where you live, but you love your job. What weve seen again since weve cut the number of hours, weve seen that these criminal cartels are exploiting the holes that weve created. Just because youre in a patrol function and you might not be arresting somebody doesnt mean that youre not performing an essential job. What youre doing is actually deterring the entrance of illegal aliens. If youre out there and patrolling the border, just because youre not putting hands on somebody who is committing crime, youre letting them know that your presence is there and that you are ready to put hands on them if need be, and when i say put hands on them, im talking in a legal and lawful way. But were ready and were prepared to deal with the threat that will present itself if were there. Let me hear from others, please. So in the simple example in san diego, before you were done with the assignment at the line even if there isnt anything specifically spectacular going on, we want someone to a relieve you. There needs to be a compensation mechanism that allows for that relief so i can use a threeshift model to expand the deployment versus some kind of four or fiveshift model where theres an overlap before the end of your ship. Auo is not suited and weve been called on that administratively and in the Legal Framework for using it as relief so you cant. Auo is not specifically for that. In the tracking example in laredo or elsewhere, thats pretty straight forward. Thats what auo is designed to do. In the auo construct when you have 85 1 2 hours, were going to pay you more for the extra hours beyond 85 1 2. Thats what flsa compensation in the law allows for. It would be more expensive from that point Going Forward. Its not just the 25 . It gets you up to 25 and once you get beyond that 85 1 2 hours, then youre getting closer to a time and a half model versus whats contemplated in the legislation which is straight pay for the first ten hours. Mr. Miles, mr. Hamrick, can you add or take away to this, please . So i think the only thing we would want to add to the conversation is a fourth and a fifth example. Its the instructor at the Training Facility and the paralegal in san diego, and i think mr. Judd makes really good arguments from a recruitment and retention standpoint, maybe you cant get a Border Patrol agent to go to georgia if hes not going to get a promised ninth and tenth hour, but thats really a cost benefit analysis that we dont feel comfortable making but just wanted to flag that issue and put it out there. As far as whether in all three of our examples plus the additional two administrative or Office Settings or training settings, whether thats something that should be institutionalized. Couldnt we just say if someone you want to have somebody who is really experienced out of the field, make a good instructor in order to induce him or her to come and be an instructor, pay them a stipend, something extra. Whats wrong with that . I think that would work in a general sense. Were just not equipped the tools dont exist for us to do that now. Okay. Any before i yield to dr. Coburn, just very briefly, unintended consequences. Any unintended consequence that is would flow from the legislation that senators tester and mccain have worked on, please . Mr. Judd . Weve looked at this every way imaginable. This is a fouryear process that were seeing, and i think that weve attacked this the best we possibly can and i just dont see any unintended consequences. Others, please . I would just say that weve learned from the mistakes and the problems with auo. This legislation borrows from existing structures. The rest of federal Law Enforcement use the model which is 25 compensation for those formats. So weve looked at that. It resonates a bit in this, but this is, i think, a better scenario forc cbp and the borde patrol because it contemplates not being available but actually being assigned. Okay. Mr. Hamrick, mr. Miles, please, and then i will yield. I have nothing to add, sir. Okay. Mr. Miles . And weve tried to flag the issues that we think are worth all of you considering as you debate and discuss this bill, so dont want to go into those again. Okay. When i come back, id like to talk about dr. Coburn may already raise this issue, but the issue of the calculation of pensions and how it work the out now and how it would change under this legislation. Dr. Coburn . Chief vitiello, would you support the number of agents getting 100 at 90 until an audit is done that would say you needed to go above that . So, i think whats contemplated in the legislation is for us to have a baseline requirement in every location at least 90 of the core workforce to be at the level one, which is maximum capability. We think thats important for stability and projection of costs. Yeah. You mentioned availability pay by the fbi, Social Security i mean secret service and some of these other Law Enforcement agencies but arent they required to be available on a 24hour basis to get that availability pay . They are required but the difference between that statute and my understanding of it, because i dont administer it, and whats contemplated here is this compels a tenhour day. L. E. A. P. Does not. I wanted to put something in the record. In 2013 we had 21,391 Border Patrol. In 2005 we had 11,264. Arrests were 420, 789 in 2013. Technology has helped us a great deal but we have doubled the Border Patrol and yet our arrests are down. Part of that is because we dont have the ingress, i would think you would agree. It had decreased for a period of time due to the economic condition that we went under. The other thing i want to enter into the record is the Border Patrol gross earnings and agency costs, this is a comparison. Auo versus flsa and the bill as put forward. It does document some savings that will be there and ill come back again to you, chief. Until we can know just from a common sense standpoint who really needs within your organization i agree that the 90 number is a good number, jon. I dont have any problem. I have a problem getting above that in some of these other areas where it would not seem fair to people that work in other areas of the federal government that were going to compensate people who are not doing things that are required extra time that they get paid in that. So you dont have in your written answers to our committee, you said that you would support that. Im trying to get you to answer that question now. So i think its appropriate given your description of the growth over the last several years that the Border Patrol, cbp, and the department take time now to refine how we use the hours that are available. I prefer maximum capability in every location, and i also we are building a system by which we can show you and others how many hours are spent at each location and not only that but in discrete categories of work. So i think thats important and were happy to be a part of a demonstration to this body and others that says, here are where all the 21,000 agents here is where they spent their time hour by hour. Thats a refinement were pursuing. We think its important given the growth weve had, the increase in capability. We totally agree the environment has changed, but it is still a dynamic place and overtime wed like to be in a position that says here is where all those hours were and wed be i think it would be easy for us to substantiate maximum capability. Does that tie in with the study you all are doing now in terms of the auo and everything in terms youre trying to get a better management handle by metrics and by location and by area, does that tie in with what the secretary has asked in terms of an auo evaluation and the study that you all are doing now . Theyre independent in the sense that one was started in mind to reform the situation that were in and to the extent that we can improve the auo condition, were going to do that. The management requirements determination process will support our effort to refine and demonstrate to you the capabilities that are being used and how theyre being used, but it will also inform the secretarys work and the task that hes given us to reform this issue Going Forward. Well be able to quantify and justify the hours as theyre being used. Okay. All right. I have just a couple other pieces of paper id like to put into the record. Without objection. And i have no other questions. Senator tester. Yeah, thank you, mr. Chairman. A couple questions for mr. Miles real quick. Weve got two special counsel report that is outline the abuse and misuses of auo. Your office has published two reports on the issue. Do you think dhs has provided adequate redress during the five years the agency has known about the problem . I think our october letter outlined a lot of concerns with the pace that dhs was making reforms and, for example, in 2007 and 2008 dhs committed to issuing a departmentwide directive to direct the auo issue and then in the 2013 communication we noted that the directive was still lacking. However, in the last since january, since you held your hearing on auo, they have taken a lot of productive steps and a lot of those are making a difference. I want to talk a little bit about a suggestion that senator coburn brought up in his opening remarks. And you guys can add to it. He talked about just changing the base pay, not doing all this what were doing in this bill but just changing the base pay, and my take on that is that we do need to address the extra hours needed on the border, that that would not address. And we need to address the overtime issue that that would not address. And we need to provide some stability in the schedule because the previous two that would not address. Would either judd or vitiello want to add to that at all . In essence we are, in fact, changing the base pay. The overtime hours, although its beyond eight hours, its still being paid at straight time, so in essence you are just changing the base pay. What youre doing is youre guaranteeing youre putting a guarantee in there that this is what we are going to make which is what we dont currently have. So you are changing the base pay. This will become part of the base package. Mr. Vitiello. The Current System wors irregular work. Whats contemplated better supports irregular work but it also gives us Management Controls that i dont have now in the self deployable overtime and it gives us greater accountability with regard to where people are in relation to their base pay and then the extra hours that theyre putting in each day. Mr. Hamrick, do you believe and i dont want to put words in your mouth but do you think part of the problem with auo is just bad management . No, senator tester. I believe that the Biggest Issue is the challenge in identifying what overtime hours are legally compensated through auo and what overtime hours are not. I once was an auo earner myself many years ago before the leap law came into effect, and in nearly 28 years in federal Law Enforcement, i have learned more about leap or auo in the past 12 months than i ever knew as an auo earner. So its a complicated pay system that is difficult to navigate. Would you agree this would simplify that pay system. Yes, sir. Make it easier to audit . Yes, sir. I want to talk about retention and recruitment for just a second. I have about 75 miles, 80 miles south of the northern border. What impact do you think you already said this would help with retention and recruitment, mr. Judd, and senator coburn always says he doesnt want to reduce pay, and i believe both of you, okay . The question becomes if we im very concerned about retention and recruitment, and kind of, mr. Judd, give me your take on how this will be accepted versus completely redoing the system and not giving the kind of predictability that i think this bill does. Senator, its very simple. Back in 1997 when i pursued a career with the Border Patrol, i was in the process of two other local Law Enforcement agencies. These local Law Enforcement agencies were in very desirable locations in which to live. The only reason that i took the Border Patrol job was because with the auo, it was more money. I moved to a very well, frankly, a less desirable location to live, but i did that because i was making more money and over the long term and with retirement, it would have been better for me. If you get rid of this 25 , you will not be able to recruit quality individuals to do this job. I appreciate that. I would just like to make one real quick statement. It deals with making the floor of the cap that senator coburn had talked about, and i would just say we really depend on customs and Border Patrol and the folks out in the field to determine what their needs are the same way we detepend upon t military to tell us what their needs are and we act. Were hearing from the agency and the folks working on the ground that 90 is a reasonable floor, and i think it would be i think it would be dangerous to use it as a cap because these are the guys that are out there, they know the impacts that are happening every day. They know the kind of intrusions on that border that, quite frankly, i dont hear about and most of the folks that live closer to the border than i do dont hear about. I dont speak for senator mccain, and thats too bad he isnt here. If there wanted to be an audit done and that audit showed that that 90 floor was too high or not high enough, that might be a way to go, but i think it pout to put it as a ceiling would be dangerous. Okay. I yield. I just have a couple other questions for mr. Hamrick. Osc has referred ten cases of auo abuse and six of those are under your office. Thats my understanding. Is that right . My office has conducted six investigations that were referred to us by the osc. There were ten total referrals, right . Thats the number. Okay. Where are the other four cases and who is investigating those . Because there was an allegation of auo misuse against the office of internal affairs, our agents are no longer conducting those investigations. Theyve been referred to the ig, to the Inspector General. Thank you. I want to go back in time a couple of years i think to 2012, and i know the problem with administratively uncontrollable overtime is not a new one. In fact, i think the president i want to say his fiscal 2012 budget request included a legislative proposal that attempted to address this problem by putting Border Patrol into a system, as you know, known as the Law Enforcement availability pay or l. E. A. P. As i understand it, the Law Enforcement availability pay proposal generally applies to criminal investigators such as the fbi, such as the Drug Enforcement agency or secret service agents. Gives them a 25 increase in their base salary based on the expectation that they will be available to work as needed. And that was a proposal in 2012. Congress failed to act. Let me just ask, if i could, mr. Vitiello and then mr. Judd, could you explain to us what happened in 2012 with this legislative proposal and, if you would, please explain why you believe the tester mccain bill is an improvement over the 2012 legislative proposal to put Border Patrol on l. E. A. P. Along with dea and the fbi and secret service. Mr. Vitiello . So the agency and through the request advocated for conversion to l. E. A. P. In the sense that it did offer the same kind of savings that are contemplated here. But there were several voices of stakeholders not he namerred of the way l. E. A. P. Is used what might those stakeholders be . The national Border Patrol council among others. Seated to my left. Okay. What were their reservations. Well, like whats contemplated here, flsa was not going to be remuneration Going Forward and they were concerned and ill let brandon speak for themselves but the concerns we heard was there wasnt a threshold to which to manage against or two. And they were concerned what is contemplated are thresholds and unilateral ability for management right to assign folks to keep them below or at the threshold, and so what is here is much improved from that experience. This borrows a lot from l. E. A. P. In the sense that it solidifies the macrobudget picture. It allows us to forecast Going Forward without usingf lsa as an unpredictable cost in the future. Mr. Judd . Do you agree did you approve this message . I absolutely agreed that it was the national Border Patrol council that was adamantly lly opposed to l. E. A. P. Because this whole notion that all you have to do is be available to be paid, somebody needs to go back and read the law and i think you need to start investigating some other agencies. In fact, the law specifically states that you must maintain certain number of hours that you have to be scheduled. The problem with l. E. A. P. Is you can schedule me for ten hours but if i work over ten hours for that day, its free. Its free. And there is no mechanism to force them to let me go after ten hours. So, in other words, in a real world sense, if im in a certain area on the border and the relief that is going to relieve me for today calls in sick, the agency could call me up and say, hey, your relief just called in sick, we didnt schedule this to happen, we need you to work a double shift, and, by the way, that double shift is now going to be free. So we needed a mechanism to ensure that the agency was not going to work us beyond ten hours per day and work us for free and thats what this legislation does. This gives us what we call back end protections to ensure that we get compensated for the work that we do. Okay. Thanks. I have another question if i can get a couple more let me use my time and i will yield back to you, senator tester, if youd like to take more time. A question on operational tempo, the number of shifts worked per day, if i could. And i think ill probably address these couple questions to you in this regard, to you, mr. Vitiello, but i understand that one of the most widespread misuses of administratively uncontrollable overtime at the Border Patrol has been to pay for the extra time it takes employees to transition from one shift to another, and this has allowed the Border Patrol to use three tenhour shifts at many locations rather than four eighthour shifts. In fact, the office of special counsel noted that Border Patrol, this is a quote i think, managers insist that employing three tenhour shifts is a more costeffective approach to securing the border even if administratively uncontrollable overtime may not properly be used for routine activities. Thats a quote. And a couple questions, if i could. Mr. Vitiello, id like you to explain why the Border Patrol believes that using three shifts instead of four is a more costeffective approach to securing the border. So i agree with the managers in san diego who pointed that out in this in those interviews. In an ideal setting 24 by 7, 7 day a week workload along the border, you would have to transition between shifts however they are and its better to have three with the overhead, the managers, and the supervisors versus four or five to predict and then schedule that overlap. Its better to have a threeshift model. When you have a threeshift model, the shifts have to transfer information to each other before one starts and the other and people have to be relieved. Under the Current System auo is not designed the rubric doesnt allow for relief to be paid for using auo. Whatever system we went Going Forward, its always better to have three shifts instead of four. You have better capability that way, but you would still need to figure out how to transfer that knowledge and that means time. Let me follow up. You address it at least in part but im going to ask it anyway. What would be the impact on your operations and your ability to secure the border if you were forced to move to four shifts across the border as a result of not being able to use administratively uncontrollable overtime to pay for shift changes . You would just need more agents to do the same amount of work. We would prefer and its most advantageous to the organization as it relates to predicting costs and future stability that you have three shifts instead of four. Its more costeffective. Youd have to hire more agents to get the same level of deployment across the 24hour period. And, finally, mr. Vitiello, how will the tester mccain bill were considering today impact your ability to schedule fewer shifts and thus deploy additional agents to the border each day . Whats contemplated is it would allow for using this model to compensate people for this relief. There are lots of missions that occur after the shift is over, transferring information, developing trends to inform the next days deployment, the next shifts deployment, the trends happening in real time. We want agents to record and transfer that at the end of the shift so the next shift is more capable and so as they deploy the next day theyre smarter about where they plates their assets and how supervisors move people from one side of a deployment area to another. You need to have that transfer of knowledge. You need that overlap not for the physical not only for the physical presence but for the information and the Rapid Response thats required based on the information that they develop while in their shift. Thanks very much. Senator tester. Thank you, mr. Chairman. I want to thank each one of the Witnesses Today for your testimony and for your straightforward answers. I would just like to say it is seldom in the u. S. Senate that we get a bill that makes the situation simpler, that the agencies want, that the people that are employed by the agencies want, that saves money, that increases efficiency, that increases predictability, and we dont throw it out of here as quick as we can. We have a problem. I think all four of the witnesses have pointed out what the problem is, and i think that if the senate does what it does so very well, and that is talk it to death and delay it to death, we wont get this Problem Solved. And the ultimate thing that will happen if we dont get this Problem Solved is our borders will be less secure, well be looking around pointing our fingers at you guys saying, why didnt you do this or why didnt you do that when, in fact, its our obligation to make sure you have the tools to be able to do your job to protect the border in a way that you know how it needs to be protected. With that, mr. Chairman, i would say that we are in the first or second week in june. If we dont get this bill out of committee and if things go upside down on our border, we can reconvene this committee of Homeland Security and talk about how we have screwed up. With that, mr. Chairman, i will ask you when will there be a markup on this bill . Im going to confer with dr. Coburn. Well let you know later this week. Later this week we ought to have a markup on this bill, mr. Chairman. Ill confer with dr. Coburn, well let you know later this week and well invite you to be part of that conversation along with senator mccain. Let me make it very, very clear. This is not something we should screw around with. Weve got people out here that were probably watching us on cspan right now wanting to know what were going to do. We have folks who work for cbp that like their job, are proud of their job, and that if we dont set some certainty down for these folks, theyre going to go to work somewhere else. We need to fix it so it can be audited, so we know what were doing, and so that these folks have some predictability. We can put it off to the end of the month, but keep in mind the lornger we put this off, we have to get it off the senate floor. Weve got to see if the house can get it done, and then we need to get it implemented, and time is awaiting. We have 11 weeks left. I think senator tester, you know that theres been a lot of discussion about whether or not if this bill saves as much money as were told it might, there might be available to serve as an offset to strengthen our cyber appreciate that. So believe me, i understand the need for moving it along. Mr. Chairman, if this bill doesnt save one thin dime, if its revenue neutral, we ought to do it. Fair enough. I hope it saves more than a few thin dimes. And i thank you very much for all the work that you and your staff and that of senator mccain have done on this. I wish he could be here. I understand he couldnt, but well put our Heads Together and talk this week and if we can do it early this week, well do it early this week. Im free tomorrow afternoon, just so you know. Thats good. Im getting your drift. All right. This might be my last question. It deals with the surge that weve seen in unauthorized migration from Central America particularly the record numbers of unaccompanied minors that ar coming, and the effect theyre having on the Border Patrols ability to carry out other parts of its mission, specifically i think he noted that the surge were seeing is, i think this is a quote, compromising dhss capabilities to address other transborder criminal activity such as human smuggling and trafficking, illicit drugs, weapons and commercial and financial operations. Who is this . Mr. Batello im going to ask you to please expand on this for us, if you would. What exactly has the impact of this current surge in unauthorized migration been on the Border Patrols capacity to carry out its mission . Start with that and then ill ask a second question. So as it relates to the conditions specifically in the rio grande valley, we are facing a situation where the facilities that are available the eight stations that are in the valley are insufficiently large enough to accommodate the number of people who we find ourselves arresting. And so, given the time frame that we need to book people in, and to treat juveniles via the statute to turn them over to hhs before the 72hour clock runs out, we were insufficiently prepared to do that, given the space thats available there. Thats why the secretary immediately designated it as a level four event. Made myself the coordinator for the dhs response and the liaison with the interagency and then the president since has designated as a humanitarian event, and put administrator fugate into the federal coordination role to drive more resources as we started, to the valley, to do what fema calls Wraparound Services for our facilities in the valley. And then to make the system work more efficiently, to have more placement for these children, and what it means to the operations is that we had we were using enforcement resources in order to do this care, and to make these facilities as safe and as useful as possible, and to provide the right setting for the people who were custody. That help is downrange considerably, its changed considerably since the end of may and early june and since the president s designation as administrator fugate to coordinate the agency it has gotten much better. We were concern ed the text tha you speak of is a draft that my staff had prepared for me. We had not sent it to the interagency coordinating group, but it was a concern that has been existent in the valley for awhile and weve moved forward to improve those conditions since the time of that writing. All right. Let me follow up with this. I understand that due to budgetary constraints in the past couple of years the Border Patrol has had to reduce the amount of hours worked by its agents to reduce overtime costs. What impact has this had on Border Patrols capacity to deal with the surge in migration were currently seeing as well as other threats in the border region . And i think youve addressed this at least in part, if you want to take a another shot at it and im going to ask mr. Judd if he would share his thoughts with us. So in late 12 we looked at the 13 and 14 budget picture before sequestration and recognized that there was some savings based on our emerging awareness, and understanding of the challenge we had with the group and we decided that we could take some risk in reducing hours in order to drive savings from those accounts. We decided in 13 to do that as an experiment to see how well we could monitor what is by statute uncontrollable. I think we did a fair job of that. Before and after sequester, and the sequester plans made that ultimately more difficult. In 14 we drive for more savings. But what that means really is shrinking hours of agent deployment. So the overlaps. You go there a three shift model to a four shift model or more. And then youre pulling hours out of the workforce in order not to make payments to agencies so youre reducing capability. We think that those risks that we were taking were adequate and substantial but, manageable and in the situation as it relates to rgb we recognize now that that cant be the way forward. The work set thats down there, and in other places, we cant continue to do that. So, weve reduced those costs for to meet the targets in 13 and attempted to do the same in 14, but there are certain locations where thats just not acceptable risk anymore. Your comments on this . Absolutely. To those that are watching on cspan, to keep this in laymans terms, what were seeing with this surge thats coming over in rgb, its pulling agents out of the field. Theyre no longer patrolling the border. Theyre having to deal with this huge influx of mine nors that are coming in. Theyre having to process them, watch them, feed them, theyre having to do all of these Different Things instead of actually being out and patrolling the border. Not only is that happening in rgb but because they dont have the facilities to manage the influx of crossings, theyre now sending them to places like el paso, the tucson sector, and what thats doing, thats also pulling resources out of the field, Border Patrol agents out of the field that would normally be patrolling the border and theyre now having to do those same things, process these illegal aliens, theyre having to watch wash them, feed them, take care of all of the needs while theyre in our custody and what its doing is its straining to the breaking point, the number of agents that were able to deploy out into the field. And its hurting us. All right. Thanks. How will the tester mccain bill address this issue . Or these issues . So specifically the hours passed, the fsla remuneration is not part of the compensation package Going Forward. So straight time for the assigned ten hours through the shift. That would give us more capability. Its in essence giving us nearly 1500 agents more capability along the borders with current staffing levels. So it allows us to flex in that overlap, it allows us to have a core capability across the force so i dont have to shrink hours in order to reduce those payments that budget picture. In essence, youll be paying me the same amount of money to work ten hours, as what youre currently paying me to work 9. 3 hours. And thats why the additional 1,000, 1200 agents comes in. Because youre paying the flsa right now im only able to work 9. 3 hours because we have this overtime budget and we cant exceed that overtime budget. The senator mccain and senator tester bill will allow me to work ten hours for the exact same amount of pay as what i would work at 9. 3, 9. 25 hours. Okay. Last question i have is relates to something dr. Coburn said to me early in the hearing. And it dealt with calculation of pension benefits for those that are caught that work under this kind of arrangement. And he suggested that the it would save he thought it would save money in the near term, but in the longterm, may cost money, because of additional pension payments. Can Somebody Just speak to in fact all of you are welcome to address that if youd like. Mr. Miles do you have anything you want to say on that front . No, sir. No, sir. Why not . I have nothing to add, sir. All right. Mr. Judd . Thats absolutely incorrect. Our pension right now is based upon 25 auo plus our base pay. This would this would keep everything exactly the same. This wouldnt change anything. It wouldnt cost more. It wouldnt cost less. The pension would be the same. It isnt a change as it relates to auo payments or other statutes that are out there like leap. Okay. I think we have to start some votes and were i think with that i want to thank each of you for coming today. And thanks for making time to be with us, on short notice. One of you at least very short notice. And we appreciate your testimony, we appreciate your answering our questions. The hearing record is going to remain open for 15 days, thats until june 24th at 5 00 p. M. For this mission of statements and questions for the record. Im going to urge my colleagues to have any additional questions to send it well before june 24th so that we can get a very prompt answers to those questions. But with that having been said its been a good hearing and im appreciative of the time thats been invested by our witnesses, by our staff, and by the members that this hearing is adjourned. Thanks so much. Next up here on cspan3, the House Budget Committee will be looking into the impact of federal aid programs in reducing poverty. Among the witnesses scheduled to testify, House Assistant minority leader james clyburn, American Enterprise institute poverty studies fellow robert doar, and from the center for social law and policy, executive director olive gentleman golden. This year marks the 50th anniversary of president Lyndon Johnsons declaration of the war on poverty, and the signing of the Economic Opportunity act. Chris van hollen the ranking democrat coming into the room, as is the chairman paul ryan, live here on cspan3. Hearing will come to order. Good morning, everybody. And welcome. This is the fourth in our series of hearings on the war on poverty here in the House Budget Committee. Weve been talking about how to promote upward mobility in america in the 21st century, and today were going to pick up where we left off last time. Last time we heard from people fighting poverty on the front lines. Today, we are going to hear from people who have worked on the supply lines. Were going to look at how the states and federal governments can better support the fight against poverty. Because if weve learned anything, its that theres room for improvement. Each year we spend nearly 800 billion on 92 different programs to fight poverty. And yet the official poverty rate hasnt budged in years. If were going to people they can get help if they fall into poverty but far too many people still cant earn enough to get out of poverty and over the past three years deep poverty has been the highest since its been recorded. Clearly somethings not working and we need to try something new. And given our history id say were due for an adjustment. The last time we made big changes was welfare reform in 1996. That was almost 20 years ago. We all know what happened. Poverty among children of single mothers fell by double digits. We also learned and our witnesses are unanimous on this point, that work is crucial to fighting poverty. And theres another takeaway. Before congress began drafting legislation, it allowed states to try out new ideas. The National Evaluation of welfaretowork Strategies Program tested a number of different approaches for Work Programs, Education Programs and different mixes between the two. I think that approach, with an emphasis on results, on concrete evidence, on what works, is just the mindset that we need today. But times have changed. Today the biggest means tested programs are medicaid, s. N. A. P. And the earned income tax credit. We spend more on earned income housing, and we havent made serious reforms in almost two decades. Pofr if i is a very complex problem. And deep poverty is especially difficult. Many people in deep poverty face serious challenges like addiction, homelessness, disability, and all of these challenges are interrelated. But the Current System is too fragmented to give them the care that they need. If we can provide better coordinated care, we can help more people actually get out of poverty. Today we will hear from two panels. On the first is our colleague, a leader here in the house, the esteemed democratic leader congressman james clyburn. He is going to brief us on the 10, 20, 30 plan that hes been discussing. And to make sure we have enough time to hear from all of our witnesses we will not take questions from mr. Clyburn. On the second panel we will hear from three people who have extensive experience working with aid programs at the federal, state and local level. First we have jason turner who worked with wisconsin governor Tommy Thompson to reform our states welfare program. Then we have robert doar who served as commissioner of the new york citys Human Resources administration under mayor michael bloomberg. Finally, we have olivia golden who led the d. C. Children and Family Services agency from 2001 to 2004. I want to thank all of our witnesses for being here today and sharing your expertise. The question i want answered today is how can we improve. What are some ideas to do a better job . How can we better focus and target, interrelate these programs . How can we make these programs better . How can we get more bang for our buck . And how can we get more people involved . I said we need to hear from people with different points of view, and from different walks of life. Today well hear from people who have firsthand knowledge of the challenges we face, and with that id like to recognize the Ranking Member for his opening remarks. Thank you, mr. Chairman. And im glad to have another opportunity to talk about what additional measures we should and can take to fight poverty in america. Lets begin on a point of agreement that for all those who can work the best antipoverty measure is a job. And many of us believe that if someone works hard all day, all year around, that he or she should be able to earn enough to keep their family out of poverty. Thats why the president and democrats in congress have proposed to raise the minimum wage, which has less purchasing power today than when harry truman was president. And according to the Congressional Budget Office, that measure would lift over 1 million hardworking americans out of poverty and raise low wages for another 15 million working americans. Here in the house, speaker boehners refused to even allow a vote on that measure to raise the minimum wage just as he continues to refuse a vote to extend emergency Unemployment Compensation to 3 million americans. But we all know that even if we raise the minimum wage, huge challenges remain. And we must examine the past to chart the best way forward. A january report from the council of economic advisers did just that. It found that about 50 million americans remain in poverty. An unacceptably high number. But it also found that steps weve taken over the last 50 years have cut poverty in half from what it would otherwise be. That over 40 million americans who otherwise would be in poverty are not. Thats why, mr. Chairman, we cannot understand the disconnect between these hearings on poverty, and the republican budget that was recently adopted. That budget is full of trojan horse policies that are heavy on sound bites but actually shred the social safety net and push more americans into poverty. The republican plan undermines the existing supports for the most vulnerable, the elderly, the disabled and children. It guts food and nutrition programs, it slashes 700 billion there the base Medicaid Program which primarily serves these vulnerable populations. And it repeals the optional state expansion under the Affordable Care act. All told, two thirds of the budget cuts in the republican budget come from initiatives to help middle and lower income individuals. Now by what logic do we reduce poverty for the millions of americans in poverty today by cutting programs that have helped lift about 45 million americans out of poverty . Its bad enough that the republican budget targets these programs, but it does add insult to injury to do so to protect special interest tax breaks for powerful wealthy elites at the expense of middle class families and those working to climb into the middle class. The republican budget passed this spring calls for a onethird cut in the tax rate for millionaires and refuses to close a single special interest tax break to help reduce the deficit. Not one. But it doesnt just slash Safety Net Programs designed to prevent people from hitting rock bottom. It also slashes programs that provide opportunities to climb out of poverty. It cuts deeply into early education. It cuts deeply into k through 12 and cuts very deeply into higher Education Programs like pell grants, and student loan programs. And just this week while the president and many of us are working to try and reduce the debt burden being faced by college students, here in the house, were talking about permanent unpaid for tax break extensions for businesses. Allowing future generations to foot the bill. So, in the end, mr. Chairman, the republican budget will not create jobs, it will not make people more employable. It will not reduce the poverty. It will reduce the ladder of opportunity, and shred the social safety net as part of a trickledown ideology obsessed with cutting tax rates for the wealthy at the expense of all the other priorities. When you get to the top in the republican budget, you pull the ladder up, after you. So i hope, mr. Chairman, that today we can really get to the bottom of some issues here on moving forward, and we have a tremendous witness with us right now, the assistant democratic leader mr. Clyburn who has spent his life working to improve the lives of those living in poverty, particularly in communities that have had persistently high poverty rates. We couldnt ask for a better person to be before the committee, and im proud to join you, mr. Chairman, in welcoming mr. Clyburn to the Budget Committee. Now that we set a nice bipartisan tone for productive conversation, the floor is yours. Thank you very much, mr. Chairman. Lets hope we can keep it that way for awhile. Mr. Chairman and Ranking Member van hollen, members of the committee, good morning, and thank you very much for having me here today. I want to thank the chair lady of the Congressional Black Caucus first and other members of the Congressional Black Caucus who have adopted this formula as an appropriate way to tackle this issue of persistent poverty. I know that all of us know that it is no secret that there are major disagreements among the members of this committee, and our respective parties, over the role the federal government should play in fighting poverty and confronting many other national challenges. These disagreements put simply come down to a question of federal resources. I believe that we should target more resources to impoverished communities. Than you proposed budgets allocate. And i believe you can do see efficiently and effectively. I was privileged to have the opportunity to work through some of these disagreements with you, mr. Chairman, last year, as a member of the budget conference committee, and the results, while not 100 of what either of us wanted, was a reasonable compromise on federal spending through the end of the next fiscal year. I was proud to support that agreement. Now that we have determined how much the federal government will spend, we must determine how to spend it most effectively. It is on this latter question, how to allocate finite federal resources to get the most bang for the buck that i believe we need to work a little harder, and more creatively to find Common Ground to make real strides in combatting persistent poverty in america. Now mr. Chairman there are currently 4 8 persistent poverty counties in america. So defined because 20 of the population live below the poverty line for the last 30 years or more. Theyre diverse, including counties in states like kentucky, and west virginia, native American Communities in states like alaska, and south dakota, latino communities in states like arizona and texas, africanAmerican Communities in states like south carolina, mississippi, and alabama. There are urban communities in the northeast, and Rural Communities in americaaries heartland. 139 of these counties are represented in this august body by democrats. 331 of these counties are represented by republicans. And 18 are split between the two parties. From that impersistent poverty should matter to all of us, regardless of party, geography, or race and ethnicity. In early 2009 when we were putting to the the recovery act, i proposed language to require at least 10 of funds in Rural Development account to be directed to projects in these persistent poverty counties. This requirement was enacted in law. In light of the definition of persistent poverty counties having at least 20 poverty rates over 30 years, this position became known as the 102030 initiative. This provision bore dividends, as Economic Development projects proliferated in persistent poverty counties across the country. The recovery act funded a total of 4,655 projects in persistent poverty counties totalling 1. 7 billion. I saw firsthand the positive effects of these efforts in my congressional district. Projects were undertaken that would have otherwise gone lacking, and jobs were created that would have otherwise gone wanting. Among these investments was a 5. Le million grant, and 2 million loan to construct 51 miles of water lines in a community in marion county. Which i represented at the time, but today is represented by our colleague, who silts on this committee, mr. Rice. In lyons county, mississippi, 17. 5 million was spent to install a water line, elevated tank, and two waste water pump stations, providing Potable Water to mississippians and created badly needed construction jobs. The special utility district in brasso county, texas, received a 538,000 loan to contract more than nine miles of new water distribution lines, and connect over 50 pauseholds to a new water source. I come before the Budget Committee today to ask that as you decide how to allocate federal resources, you expand 102030 to other federal agencies. In 2011, i joined with our former republican colleague thenrepresentative Joann Emerson of missouri to introduce an amendment to the continuing resolution that would have continued 102030 for rule development, and expanded it to 11 additional accounts throughout the federal budget affecting Economic Development, education, job training, health, justice, the environment, and more. I hope to work with members of this committee to include similar language in future budget resolutions and other legislation. And i want to be clear about two things. Number one, 102030 is not a license to be applied to an inadequate budget. And number two, it does not, i want to repeat this, mr. Chair, 102030 does not add one dime to the deficit. It simply targets funds already authorized or appropriated to needy communities. Over the past 30 years, the National Economy has risen, and fallen, multiple times. During each economic downturn, while we have been rightly focused on getting our economy as a whole back on track, we have not given attention to these communities that are suffering from chronic distress, and depressionera levels of joblessness. As a result, they have suffered even in good economic times. The 102030 approach will provide a mechanism to address this depravation in time of want and times of plenty, in times of federal investments, and in times of fiscal austerity. I published an article on 102030 in the most recent issue of the harvard journal on legislation. In that article i discussed the history of our nations efforts to address chronic poverty, and more fully lay out the case for broadly implementing 102030 in a bipartisan fashion. I have included the full article in my written testimony so that it appears in the record. Without objection it will be included in the record. Thank you, mr. Chair. And i encourage the members of this committee to please read it when you have the opportunity. I look forward to discussing this issue further and working with you to eliminate the scourge of persistent poverty in these distressed communities. Thank you so much for having me here today. Thank you very much, mr. Clyburn. I understand your schedule is very busy and you have to move on. But this very appreciated and thank you for your contribution to this and thank you for all your hard work on this issue. Thank you very much, mr. Chair. Well now move to our second panel. Jason turner, the executive director of the secretarys Innovation Group. Robert doar the morgridge fellow in poverty studies at the American Enterprise institute. And olivia golden, the executive director of class. To make sure that every witness knows that it is against the law to provide false testimony to a committee of congress, we are going to begin a new committee practice, which is occurring in every committee here, of swearing in all the witnesses. This does not reflect any mistrust we have in a witness. We are taking this step only because of recent legal guidance we have been given from the department of justice. So please raise your right hand. Do you solemnly swear to affirm that the testimony you are about to give will be the truth, the whole truth, and nothing but the truth. I do. I do. I do. Let the record reflect that the witnesses have answered in the affirmative. Thank you. Why dont we just proceed from our left to right, and mr. Turner. Why dont we start with you. A couple of seconds. Can you hear me . Testing. Okay. There you go. Mr. Chairman, thank you for the opportunity to appear before this committee. Im the executive director of the secretarys Innovation Group made up of 17 state secretaries of Human Services from around the country. Reporting to their governors, and representing 34 of population of america. Our Group Exchanges ideas, and examples of state program innovations, and we press for National Solutions which favor work, healthy families, economic growth, and budget responsibility. In 2012 our members proposed a policy recommendation which would rebalance the relationship between states and federal government, and these remarks are adapted from our policy as developed and agreed upon by our 17 member sents. Whenever our Organization Meets with congress, mr. Chairman, our secretaries always ask for less money, and more accountability. To take an example, our members requested through our food stamp policy proposal a fixed allocation, a bloc grant, with a 50 federal and state shared risk, benefits going up or down either way, rather than the 100 risk borne currently by the federal government. Adapting this proposal in a legislative Initiative Last year we proposed that the House Agriculture Committee allow willing states to 100 selffund a new food stamp work program comparable to tanf for similarly situated s. N. A. P. Recipients with benefit savings resulting from increased work levels and independently verified shared 50 50. Our members were pleased to advance this proposal in partnership with representative Steve Sullivan and which as the members of this committee know passed the house in modified form without the shared risk funding mechanism we had advanced was enacted into law the first new federal work Program Since 1996. In two other proposals our members have made for ui and for disability we proposed federal state share risk financial models on an optin basis. With the states designing and owning the overall system to be to better run the program. In fact, the federal state shared risk model could be adapted to any program with entitlement based expenditures going to individual citizens. Our member secretaries constitute a pool of proven risk managers who, through example of our own proposed reforms are willing and able to consider shared risk models as proposed by congress in exchange for Program Management and operating control. The adoption of tanif unleashed energy. Adults newly finding and taking jobs, case workers oriented to work first, time limits inducing urgency, new Program Purposes such as the promotion of twoparent families. Its an example of how its possible for the states under a proper federal state partnership to make major improvements to poverty, dependency and employment. Why did it work so well . Well, first it eliminated the individual entitlement to forever benefits. Second, it combined new and appropriate federal Program Objectives such as work and marriage. Third, it set constructive federal measurements such as work activation and participation while allowing States Credit for positive outcomes such as dependency reductions resulting from employment. It permitted states operational freedom to experiment with multiple approaches, it permitted states which reduced caseloads to reuse the benefit money for more constructive purposes than cash payments. In fact, only 29 of the current tanf budget is allocated for cash benefits. The rest is going to Supportive Services and other constructive, more constructive purposes. And finally its fixed allocation capped the growth in the program as compared to the former Entitlement Program formula and induced, therefore, greater budget discipline. I saw that in my own home state, in wisconsin, where after the program, tanf Program Began to grow again under the subsequent governor, the instructions came down for the agency to redouble its effort to get people employed, and to manage the case load better and that occurred. My written testimony contains specific examples of what tanflike authority could do. But and i will leave that in my written testimony. Here i would like to share our proposal to the committee in which we would propose that states implement demonstrations and adaptations of tanf to other programs. The simplest ill have you to do in my q a because i want to make sure we have enough time for the other witnesses. So ill give you time for that in q a. Very good. Were going to try to stick to five minute rules to get to everybodys questions. Mr. Doar. Thank you chairman ryan and Ranking Member van hollen for inviting me to testify today. It is now 50 years since president johnsons ambitious call for a Great Society and 18 years since the signing of welfare reform that promised to change welfare as we know it. And while we made significant progross, notably in support for the elderly, reducing material depravation, increasing Labor Force Participation for nevermarried mothers and promoting important work supports that make work pay there is still great frustration and disappointment with the current status of our nations war on poverty. With 47 million americans classified as poor, too Many Americans are not earning their own way above the poverty line. But almost as sad as the stubborn persistence of this problem is that at least based on our experience in new york city, where i worked for the last 18 years in antipoverty programs throughout the state and city, we know what worked to reduce poverty and increase community. Work works. If you rigorously implement work strategies not only focusing on what government can do to help but also on what recipients can do by working, you will make Real Progress in reducing welfare caseloads, increasing Labor Force Participation, and reducing child poverty. We dont need to get too creative. The keys to success are work requirements and expectations in return for assistance. Work supports that shore up lower wages like the earned income tax credit, food stamp benefits for working people, and medicaid. State flexibility to address the particular needs of individual states. Not being afraid in addition to talk about family, especially importance of fathers and two parents and raising children, and we need to do everything we can to nurture a job producing economy that produces jobs. Doing all of that, heres what we accomplished in new york. We reduced welfare case loads from 1. 1 million to 346,000 in 2013. We increased Labor Force Participation significantly for single mothers, and we reduced poverty. And during the most recent period of the last period between 2000, 2012 of the 20 largest states in america new york city was the only one that saw no increase in poverty during that period. While the nation, and with regard to Labor Force Participation, while ours went up, the nations went backwards. We also were not afraid to speak honestly about the implications of good decisions, and twoparent families with Public Service awareness initiatives which told the truth about the consequences of teen pregnancy, and raising children in singleparent families. Going forward we need to focus on where we are weakest now. And that concerns low income men who are left out of both of the rigor of welfare reform work requirements. There is no ability for state and local agencies to bring them in to the workforce in the way that welfare reform allowed us to work with single parents. And theyre left out with the work of the work supports that allow us to shore up low wages. We need to reinvigorate tanf. My experience since joining ai and looking at whats happened across the country is that the focus on work and work participation rates has been lost and the messages that are coming from washington. We need to look at the extent to which the s. N. A. P. Program has replaced work, not supplemented work for some portions of its caseload. And we need to consider strongly work support work requirements for portions of that population. We need to look at the Affordable Care act impact on work incentives, because of the disincentive to adjourn additional dollars mainly because they would lose their Affordable Care act benefits, making People Choose not to work more or not to work at all. That is a terribly problematic problem and we need to do everything we can to reduce disincentives to hiring in our economy. And finally, i think given the differences in the strengths of the economy across the country, we need to consider Relocation Assistance that allows for people in certain areas where there are opportunity where the opportunity is weak because of the economy to move to other areas where there are greater opportunities. My general impression after 18 years of working for both governor pataki and mayor bloomberg is that the lessons of welfare reform are good lessons and we dont need to turn away from them. Work requirements, work supports for low income working people, a strong nurturing a Strong Economy that doesnt disincentive employers to hire people, and not being afraid to be honest about the consequences of raising children without two involved parents in their lives. We put so much on what government can do to replace parents, replace the effects of parents in childrens lives. Its more than what my colleagues in new york city or new york city could absorb. We need strong families, as well as better policies. Thank you. Thank you. Ms. Golden . Good morning. Chairman ryan, Ranking Member van hollen, and members of the committee. Thank you so much for the opportunity to testify. Im olivia golden, 9 executive director of clsp, an antipoverty organization that works at both state and federal levels, and in addition i bring experience directly administering these programs in new york state, massachusetts, the district of columbia, and as assistant secretary for children and families at hhs in the Clinton Administration. In my written testimony, i begin by highlighting several accomplishments on the war on poverty and describing todays federal state work support programs. Just a few themes from this longer discussion. Researchers find that the war on poverty programs cut the poverty rate almost in half in 2012, and that they have dramatically changed the lives of low income families, particularly by improving childrens access to health and nutrition. And that matters a great deal because Research Shows life long positive impacts from children for children who get this help in their early years. At the same time that the war on poverty programs had made a crucial difference to low income families, so have dramatic increases in work effort by families themselves. In 1975, fewer than half of all mothers and a third of mothers with a child under age 3, were in the labor force. By 2012, 70 of all mothers, and 60 of mothers with a child under 3. However, trends in lowwage work and in the economy more broadly have created an enormous headwind for public policy. Leaving one in five children poorer today, most in families with at least one worker. In addition, and i think robert highlighted this, low income workers without dependents, including many youth and noncustodial parents, receive far less support than families in achieving Economic Security. And finally, even among low income working families with children, too many do not receive a full package of programs they qualify for and need to succeed. The next section of my testimony highlights five Lessons Learned from the war on poverty programs. Crucial to take into account as we design the next steps. First the core programs that have evolved in the war on poverty are now designed to support work, not discourage it. Key reforms in the 1990s, the expansion of the eitc, changes to child care medicaid and s. N. A. P. , ensured that the todays package of federal Safety Net Program supports work. Research shows that when low income working families can get and keep this full package of programs, they are better able to keep a job, move up, and help their children thrive. At clsp were working closely with six states, colorado, idaho, illinois, north carolina, rhode island, and south carolina, that are influenced by this research and their own experience to improve working families active to s. N. A. P. , health insurance, and child care subsidies. Governor otto of idaho writes that his state has sought to quote reduce the impediments to receiving these services in order to achieve its goal of helping families enter and succeed in the workforce. Second, Effective Programs help children thrive, and parents work. Since the war on poverty began, weve seen not only dramatic increases in mothers work, but also major breakthroughs in the underlying science about young childrens development. Yet while there has been progress, support for child care and Early Childhood programs has lagged far behind whats needed leaving large gaps in support. Third, effective Safety Net Programs like s. N. A. P. And medicaid are countercyclical, meaning that during an economic downturn, resources to the states and to families automatically go up. By contrast, bloc grants like tanf and child care subsidies do not respond well to recession and didnt respond well to the one just passed. Fourth, states with both parties are seizing the opportunities today under current federal law to integrate the major Safety Net Programs into a coherent package for children and families, and address gaps in coverage. And fifth, achieving strong outcomes for children, families, and the nation requires a blend of flexibility in daytoday implementation, National Accountability to achieve consistent results, and sufficient funding to meet desired goals. Flexibility does not compensate for inadequate funding, the child care bloc grant, one of the most flexible of Safety Net Programs has hit more than a decade low in the pump beurre of Children Service because of capped funding. In conclusion i propose five next steps in the written testimony, strengthening Economic Security for low wage workers, enabling parents to work and care for children, improving access to work support benefits, strengthening the safety net for youth and childless adults, and strengthening our response to deeply poor families. I look forward to talking about all of these in the question and answer period. Perfect. All done within five minutes. Thank you. That was good. Thanks. Okay, so mr. Turner mr. Turner, let me pick up where you left off, because i cut you off to stick with the five minutes. What im interested in particularly is the example, i think you wanted to get into, but i want to get your sense on how it would be more effective to ask states to help coordinate assistance programming. How theyre so interrelated. And then lets start with the example you want to mention and then talk about how states can better help coordinate assistance. By all means. By all means. Why dont i do the second one first i think if were able to states are able to manage under a system which they own and control and can focus on the right things, instead of the ancillary things, then i think wed see one, consolidation of overlapping programs, into units that make more sense. An example would be wia, s. N. A. P. , and tanf. And you could add to that public housing, as well, where these programs are all operating separately, and with parallel but overlapping objectives. Secondly you could introduce Competition Among Program Providers in government. Right now, sometimes the federal law says only this can be done by nonprofits, or by government employees, and what we found in new york city, for example, under commissioner doar and also mayor giuliani is that when we told the vendors to actually get paid for people going to work the first year after we did that, the total amount of the budget that we used for that purpose went down by a third, and employment jobs doubled. You can permit lower levels of government such as counties to innovate. Like for instance, pennsylvania did that in 2012. They allowed inferior levels of government to petition the state to actually run their own program, including policies in tanf. You could do that. You could reorient programs to place energy and focus on the true sources of social dissolution that mr. Doar referred to. You could shift Program Emphasis from amelioration to prevention, and work activation. You could require universal engagement in appropriate work activities. You could reduce expenditures through aggressive detection of ineligible recipients which is precluded by federal law for instance under s. N. A. P. In certain cases. You can recommit savings from to from Effective Program administration, for other purposes, including supports to working families. These are all kinds of things that you could do if you had the proper shifting. So now ill be quick, because i know that i know theres a time constraint. Excuse me for coughing. The secretarys Innovation Group has proposed that states be able to implement demonstrations that the adaptation of tanf and other programs, and the simplest way to think about this is that its the reverse of the current law which is hows tanf funds to go to other programs, for instance transferring funds into social services bloc grant. But this would be the reverse. The principle is if funds could be transferred from other programs like food stamps and housing into a tanf special account with individuals who had been eligible for the former benefits now eligible for similar benefits. But with some of the components of tanf such as work as other provisions integrated into the merged program, and finally, mr. Chairman, id like to commend to this committee hr4206 which has been proposed as introduced by representative reed of work state, and that proposal would do many of the things that our member sents would like to see having to do with experimentation and consolidation. Thank you. Thank you. Mr. Doar i want to ask you a couple quick questions. Sure. Ill start with my last one first. Eitc childless adults. This is a particular area, especially with Labor Force Participation rates, that im not sure what that is. Never mind i guess. Childless adults. This is an area where we are particularly concerned about low Labor Force Participation, its especially problematic for young men. What is your take on how or if we should modify the eitc for childless adults. And then i want to ask you another question the difference in the benefit is very significant. Its tax average for adults something a little bit less than 500 for households with children it gets up to over 5,000. So it doesnt have the same effect in promoting and supporting work. And this group, particularly for young men, between the ages of about 18 and 25 who are really out of the workforce, i believe it could be an important way to help them get in to and stay in the workforce and to make work pay. Mayor bloomberg proposed something about this back when i first joined bloomberg administration, and i thought that it was something to do. The only issue with eitc that is a problem is the error rate. I ran welfare programs, cash assistance, medicaid, im familiar with error rates. And the error rate in the eitc is too high. Whats the best way to deal with that . Well, i think that the irs has to take it more seriously and gather more information and do more data matches against their samples of returns that they receive. May i add to that . But there has to be a solution, because you cant expand a program that has an error rate of 20 . Reputation in the program itself suffers as a result and therefore its Popular Support is undermined and lost as well. Did you want to add to that . Yeah, i just wanted to add two things on the eitc for childless adults and for younger men, im not sure if that was in your proposal but in the president s also bringing the age down i think we share believing that thats important and it also has the potential for addressing some of the issues of marriage and family formation because theres certainly some evidence there. On the error rates, my experience broadly in operating a range of the programs, and in reading the Inspector General and gao reports is that errors often arrive from complexity, and one of the insights about the earned income tax credit is that one area of complexity is who has custody of minor children and is entitled to claim them so that single adults is probably less likely. But more broadly i think the lesson is that clarity and explaining and training are key aspects of reducing errors. Is this something ways and means can take up . This is definitely an area we want to get into. That was a flood warning. Dont worry, were not under any imminent threats here. Mr. Doar since were on the second floor. Could you i want you to expand on reducing disincentives to hiring and Relocation Assistance. Can you expand the points you were trying to make there . Well, under mayor bloomberg in new york city, the mayor never made any apologies for all of the things he did to create jobs of all kind, and to have an environment in which employers were comfortable about hiring. So that included possibility jobs, retail jobs, and tourism jobs, and health care jobs, some of which wages may not have been as high but the encouragement was always on hiring. Increasing hiring. And i think that there are some aspects of the Affordable Care act particularly higher up the income ladder that the and on businesses, that they are reluctant to hire to the extent that they might have given the uncertainty or the requirements in the program. And thats just very difficult for people who are on welfare programs trying to help low income people get into jobs. Because, sometimes those jobs are discretionary hires. You know, they may not really need them or may not want to necessarily do it but they need to have an environment where theyre comfortable and happy and positive about hiring people of all kinds of skills. And i think that we dont have enough of that in the country, and thats part of the reason why people are not in. And frankly, particularly on men who have struggled in the labor force a significant increase in the minimum wage up to 10. 10 nationwide, regardless of the economic circumstances of a particular area, is not helpful to encourage their employment. So thats another disincentive to hiring. Mr. Turner, one minute. Provider competition. This is something im very enamored with, which is a lot of times we have, you know, one vendor, or one unit of government providing a benefit measured based on inputs not on outcomes. Can you give me an example basically of how provider competition can help improve outcomes . Absolutely. Yes, mr. Chairman. Im pleased to note that the proposed compromise on wia includes a provision which would require the wia boards to issue rfps. Thats currently not the practice. And states get waivers from that, local boards do, and its not helpful, because they put out a costplus contract in which people get paid whether they get somebody a job or not. In a pay for performance contract, you only get paid for putting somebody in a job that lasts at least 30 days, and then you get paid more if they remain in the job for six months. So those are the two indicators. And what that does, weve seen that in new york, in particular, it mobilizes the agencies around not only placement but following up with the employer, finding out if theres problems on the job because as you know, with many people who are not used to working, getting up and going to work and coming back, day after day after day, its a work habit that they dont have, not necessarily a work skill. So, the best way to move that forward is to continue to work with people up through at least for six months. Thank you. I think thats very, very important. Mr. Van hollen . Thank you, mr. Chairman. And i thank all of you for your testimony. Mr. Turner, with respect to your idea of having a jumbo tanf grant where you put other programs into that, are you proposing to include medicaid as part of that . No. The reason i ask that is so you know, medicaid is the largest of our means tested programs that we look at here in the Budget Committee. Of course. Lots in the budget. Now dr. Golden mentioned that one of the benefits of programs like medicaid, and s. N. A. P. Is that when you have any kind of recession or depression, you have a countercyclical impact. And the concern many of us have with a strict bloc Grant Program is that you are providing a fixed amount of federal support to the states in both good times, but also very bad times. How would your proposal address try and hope with the poverty and an economy goes through a cycle that collapses, isnt that a legitimate concern and how would you address that . One way to address that is you can include as tanif does now, a provision if Unemployment Rate goes up, there is an automatic adjustment to the bloc grant. A program that is oftentimes remarked upon as being good for anticyclical reasons has created lots of problems. Thats food stamps. In 2001, there were 2. 3 million total nonworking food stamp house holds, and yet in 2006, a good economic year, that had gone up 4. 2 and now its 8. 5 million. Holds, and yet in 2006, good economic year, that had gone up 4. 2 and now its 8. 5 million. I dont see how cutting a swath deep into the middle class with food stamps and the growth of food stamps has been helpful for work. Though it may appear to be anticyclical, its anticyclical in a dependencyinducing way. First of all, if you look at the Congressional Budget Office projections for snap, if you look over the coming years, they project significant reductions to snap because they expect more people to get back into the work force as the economy improves. Their assessment of our nonpartisan analysts is very different. Secondly, and theres been a lot of misinformation about this. What the Congressional Budget Office tells us and dr. Golden, if you could respond, is that currently four out of the five individuals who receives snap are either children and the elderly or disabled who are not expected to work or people who are working, but theyre in a job where they dont earn enough income to be in the middle class, and therefore, are eligible for food programs which we would hope we would want to provide to them and their families. Yeah. Let me say a little about the accurate facts on snap and talk about your original question which is what is the consequence when you have a cap program in a recession. So snap, as you say, the cbo notes that its increase has been due to the recession. Some other evidence that suggests that is that case loads are starting to go down. They stabilized and are now starting to go down. When you look state by state at the increases and the impact of the recession, they fit together. The largest increases were the largest recessions. A large share of those snap households that arent elderly, disabled or children are working, so that a key effective snap is i mentioned in my written testimony and briefly in my oral that among poor children, fully 1 3 live with somebody who is working full time, full year and still cant bring the family out of poverty. About 70 live with someone who is working, even if in 2012 they werent able to work full year. There are a lot of people that need supplement to their work. Snap responded in the way it was meant to. Tanif and the childcare bloc grant were capped and unable to respond to the recession. In the childcare block grant led by a paper in my colleagues class we are down lower than a decade, in tnff its led to case loads that barely responded to the recession overall, went down overall since the good times. And that puts states in a bind where their family need goes up when state budget goes down, and therefore, states made choices that constrain children. The spread among states got larger. Just from my experience in new york city, we came out of the recession much earlier than the rest of the country. We were large proponents of food stamps as work supports for lowincome people. Our case load grows to 1. 9 million. As we came out of the recession it did not drop. I dont think there isnt any question while there are a lot of people working and receiving food stamps, and there are elderly and children, there are an increasing number of people who are not working and still getting food stamps. It is a problem. It may not be as severe as mr. Turner said but not something we can ignore. Let me ask you on that point, mr. Doar. With respect to ablebodied adults, we have time limits on how long they can be on food stamps. I think its three months out that requirement was waived almost entirely by the Obama Administration except in new york city where we kept it in place. Let me ask you a question. Sure. Thanks. We all would like to encourage work. As i said in my opening statement, a job is the best antipoverty program. I hope we can all agree on that. We agree on that. If you are going to say in order to get food and nutrition assistance for a family, for example, working below the minimum wage, or another family you should work, okay, are you willing when you have 6 , 7 , 8 unemployment to ensure they have a job . During the recession in the recovery bill there was a provision for states to allow public federal dollars to help provide work. In fact, governor barber of mississippi was a big advocate of that. If you are going to require people to work as a condition of getting food and nutrition assistance when the economy is sinking, are you also going to make sure those who want to work have a job . The way the work requirements work in tanf and abod, you need to be engaged in activities that lead to work. There are alternatives not necessarily having a job, job search, certain work fair program. It doesnt depend on the exact existence of a job right away. In a low wage economy there is a tremendous amount of churn and change. I would say in my experience running these programs in new york city with very good job placement agencies, that if you leave people out of the requirement or the expectation they get into work, youre really harming them because you are not encouraging them and bringing them in to this fold that allows a Case Management person and an organization that is helping them move into work. If i could ask dr. Golden we want to encourage people to work. What do do you . Two comments. My perspective on whats happened in tanif is the assistant secretary in the Clinton Administration implementing it, states had resources both within tanif and childcare medicaid snap to invest in families and have a good economy. Today what youve heard from mr. Doar is not typical of states as a whole. States are different from each other. With a bloc grant, not only is cash assistance at a low level, investments in any of the work and training activities is at a low level. I had a chance to look at current state expenditures. What happened in the recession, states shifted money to fill holes in other parts of their budgets. They were under enormous stress. It was hard for them not to. This is exactly the concern, right . We all want to encourage people to get in the work force. At the same time, states are cutting back on their programs. Last point i want to make, mr. Doar mentioned eitc. We want to expand for ablebodied adults. That costs money. The president s proposed that in his budget. Its about 60 billion. As we have this discussion, our concern is we remain focused on trying to address the poverty issues. If you save money as a byproduct of that, thats one thing. But starting with the assumption you are going to save hundreds of billions of dollars and then working backwards is not the way you do it. Thank you. Gentlemans time expired. Dr. Price. Thank you. I want to thank you for holding this hearing on an important topic and one going on a long time. America is a generous country full of compassionate people. For many folks the big picture is frustrating. We spent nearly 20 trillion in the last 50 years in the war on poverty. Rates have come down somewhat, most people looking at that amount of expenditure would say we should have gotten, as some folks have said, a greater bang for our buck. Mr. Clyburn in his testimony talked about finite resources. We agree with that. It seems that the question ought to be how do we improve the programs that are in place . Are they working . Are they working as well as they can . What can we do to make them work more efficiently . Mr. Doar, you mentioned snap oftentimes replaces work. I wish you would expand on that. Well, the feeling in the period after the end of the recession in new york city was that we had pushed the snap enrollment efforts as a work support and countercyclical efforts to help people going through difficult times to such an extent that the case load, then as the economy recovered, that there were maybe households and families and individuals taking advantage of the benefit and not working to the extent they could have. We actually tried to, using volunteer programs, and we had a work requirement, to push people into our Work Programs to help them get the jobs. If you do look at the data there is a portion of the case load that is not seniors, its not
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