The committee will come to order. Without objection, chairs authorized to declare a recess at any time. Secretary ross is with us, hell be joining us momentarily. Ill recognize myself for an Opening Statement and then my friend from maryland. The census is constitutionally required. It is what insures that just as every vote should be counted, every person should be counted. This is a conditioned precedent for accurate redistricting and accurate reapportionment. The census is not only important for purposes of constituting our government, its also important for apportioning the resources and services of our government. So the census is vitally important for a number of reasons. It is also eminently predictable. There are a few things that can be foreseen quite like the census. It happens every ten years whether youre ready or not. So its incredibly important beginning with the fundamental truth of counting every one of our fellow citizens, and we know well in advance when its coming. So we cant complain that we were caught off guard, and we cant complain that we didnt see it. So we have a couple more years before we actually count everyone, but now is the time to make sure that we are ready to count everyone with accuracy, with security and with professionalism. Were all concerned with cost. Our fellow citizens are hearing about cuts in a number of areas, and theres concern about the deficit and the debt, so cost is important. But its also very important that we get this done right, accurately, professionally with security and in a fashion worthy of the worlds great democracy. What would be even worse than unexpectedly high costs is unexpectedly high costs coupled with less than full success. So we want to make sure the census is a success. We dont want to appropriate money on this committee, but we do help make sure the right questions are asked in a timely fashion. So for secretary ross, i appreciate his time and i appreciate the time, frankly, that hes given our committee before today as well as his appearance today. We live in a countries that is increasingly country that is increasingly skeptical of whether or not we can get things done right, in a timely fashion and in a credible, responsible way. I think our country as a whole, irrespective of the region in which you may live or your political ideation, would appreciate a good news story. A story of how a Government Entity was prepared, efficient and exceeded their expectations. So 2020 may seem like a long ways off, but its coming. And when it comes, were going to have to have counted 303 million plus people accurately. So i think time is of the essence even today. So with that, i would welcome all of our witnesses, especially secretary ross, and would yield the remainder of my time to my friend from North Carolina, the chairman of the subcommittee, mr. Meadows. Thank you, mr. Chairman. Thank you for your leadership on this particular issue. And as we go into this hearing today, i think its critically important that we all realize that while 2020 is a good ways off, we have already missed critical dates, critical testing and critical implementation that should have already been done according to our own schedule that we have had in previous hearings. Of the i. T. Systems that are out there, there are some 43 i. T. Systems that need to be implemented. And yet today only four have actually been fully implemented. Another 31 are only partially done, and 18 have not been delivered in any form or fashion. And yet we continue to have hearings over and over and over again about the critical nature of making sure that we not only get these systems implemented, but tested and that we do endtoend testing on a basis to make sure that cybersecurity, other fumbles do not happen. And yet here we are today on another hearing, and i am concerned that the focus will be on the 3 billion in terms of a budget shortfall and not on the other Critical Mission steps that have to be addressed. And so lets today focus not on the 3 billion, but on the Management Issues that must be done. And in doing so, were talking a whole lot about Disaster Relief and every other area. Today is a day that we need to Start Talking about Disaster Relief for what will be a disaster if we dont get on this today. And so, mr. Secretary, thank you for coming. For our second panel of witnesses, thank you for coming. Ive been informed by some of your staff, mr. Secretary, that you are on this and that you plan to make sure this is not just a budget tear component budgetary component, that it is a component that actually looks at the management, from curement and otherwise. And i was pleasantly assured of that this morning. But we look forward to hearing more from you. I thank you, mr. Chairman, for your leadership. And as we get this right, i look forward for this to be a good story in the months and years to come. I yield back. Gentleman from North Carolina yields back. The gentleman from maryland is recognized. Thank you very much, mr. Chairman. If theres one key point we can get across to those watching todays hearing, i believe it is simply this the Census Bureau is dangerously underfunded and has been for years. And unless we do something about it right now not yesterday, not today, but right this moment this massive deficiency could imperil the fairness and accuracy of the census itself. Americans expect us to be able to do things right, and i think the chairman would agree with me, i think he just said it. We want to be effective and efficient in whatever we do. Mr. Meadows is right. Weve got to its not just a thing of money, its a thing of operation and is making sure that things are done properly. So this is not a partisan observation. Both progressives and conservatives agree that current budget projections are way, way, way, way, way too low. The president of the R Street Institute wrote an oped just this tuesday warning that the census is, quote, understaffed and underfunded, end of quote. And that, quote, america is in serious danger of the census going wrong. End of quote. Ladies and gentlemen, we cannot afford to allow that to happen. This is the United States of america, the exceptional nation. If we cannot count the 300plus Million People who are in our country, i dont know how exceptional well be determined to be. Last month the conservative American Enterprise institute joined with the center on budget and policy priorities in Warning Congress that current level of flat or near flat funding, quote, is up precedented and would unprecedented and would significantly undercut efforts to conduct an accurate survey, end of quote. They warned that, quote, shortchanging the census is penny wide and pound foolish. That it, quote, jeopardizes the bureaus ability to implement Cost Effective new technologies, end of quote. And it, quote, could backfire, costing taxpayers more in the long run. End of quote. I say that we are better than that. Id like to show a few charts that illustrate this urgent problem. It wont show up on screen but, members, it will show up on your screens at your desks. First, as we all know, funding for the Census Bureau certainly increases dramatically in years 810 of each decade to accommodate the rampup in activities for the census in year 10. The first chart shows funding for the last four decades in inflationadjusted dollars. For the 1990 census, the bureau increased from 596 million to 3 billion over the last four years. For the 2000 census, it increased from 535 million to 6. 9 billion over this period. For the 2010 census, it increased from 1. 1 billion to 8. 4 billion over this period. But what are we doing now . We are basically flatlining. The Trump Administration did not request a significant increase for 2018. You can see the same trends when you look at the budget from a percentage basis which is what this next chart shows. The 1990s census had a massive increase in the last four years of the cycle. As did the 2000 census. And the 2010 census, but here is where we are now. The administration is not on track to match past increases for 020. 2020. If we use these historical trends to project forward, total seven cuts Bureau FundingCensus Bureau funding would be increasing over the next several years. But that is not what is happening. As this last chart shows, theres a shortfall of about 760 million when you compare what the administration is requesting to past trends. I say that we are better than that. Now, Congress Shares part of the blame, no doubt about it. In 2012 congress insisted that the Census Bureau spend less on the 2020 census than it spent on the 2010 census. Congress refused to acknowledge or budget for two of the most senate and predictable drivers of Cost Increases that occur between each di seven yall census, inflation and population growth. Aggravating this problem even more, congress appropriated even less than the Census Bureau requested in every single year since 2012. Now, some people will argue that the Census Bureau was supposed to save billions of dollars this time around by using new i. T. Innovations to reduce the number of workers it needs to hire and increase the number of people who submit their forms online. The problem is that when you starve the Census Bureau year after year after year, it cannot make the investments needed to implement these innovations. Explain to the Washington Post just this week, had we been funded to do everything we asked for then we would be much farther ahead. He continued, quote, at this point they have to go back and do some of it the old way with her and pencil. End of quote. With paper and pencil. This is the exceptional nation, the one that over and over and over again. I want to thank you for being here today and Briefing Members of the committee. I understand you have limitations on your time but we beg you the chairman will emphasize this. We have members that are very interested in this subject. Unless your meeting with the president i hope you can spare a few moments because we want to have members ask and as i close i know you will get into this during your testimony but i appreciate your own teams review you recommend the administration increase its request for 2018 x 100 87 million and thank you for doing that because so often we have secretaries come in and dont say what they need to get people upset. This is too important. I commend you for taking the step and you understand the. Of this issue as a former enumerator yourself. Even this request is too low. Too low. Especially given the number of tests have been canceled and extremely low number of hires at the moment. I know you are constrained, the office of management and budget rejected your request for 50 million for contingencies that are certain to occur. Nevertheless we have a responsibility under the constitution of the United States to ensure the census is funded adequately and for Census Bureau has resources to conduct a fair and accurate census. This should matter to each and every one of us. Why we certainly discuss minority and immigrant populations, low income and Rural Communities are also at risk of being missed particularly in a digital census. I joined my colleague representative maloney who chairs the conventional census caucus, to fund the bureau at 1. 93 5 billion this year. An amount that reflects budgets from the bureaus fiscal year 2017 budget and an extra 135 million for increases in funds to the seek apps program. We recognize the gravity of the situation we are facing. You have taken this matter very seriously. You said earlier we had a very important meeting with the secretary. That helped lay the foundations of this hearing and i look forward to your testimony, thank you for your indulgence. We want to welcome you, mister secretary, pursuant we will administer the oath. Raise your right hand. Do you solemnly affirm the testimony are about to give is the truth, the whole truth and nothing but the truth so help you god . May the record reflect the witness answered in the affirmative. Take your seats. Your entire Opening Statement will be made part of the record. You have five minutes to summarize that. As Mister Cummings said we appreciate that there are other demands on your time and we want to be good stewards on your time. This is one of the unusual entities that is squarely in the jurisdiction of this committee and lots of members have questions. What i ask of my colleagues on both sides is to exercise selfrestraint of getting your questions done in five minutes. I am notoriously slow on the gavel, hard to unlock the mysteries of the world in five minutes but i ask my colleagues to selfdiscipline, get it done within five minutes so everyone has a chance to interact with you and to be a good steward of your time. I invite you to turn on the microphone and you are recognized for your Opening Statement. Thank you very much. Ranking member cummings, members of the committee, thank you for your continued support, your discerning oversight, thank you also for allowing the Opening Statements to be read while i was reviewing the newly developed material to comment on it myself. And official 20 20 census that provides a full, fair and accurate count has been one of my highest priorities since being confirmed in february. I myself was an enumerator as i worked my way through Business School so i have a strong appreciation for the responsibilities and unique challenges of counting everyone in the United States once every ten years. Any operations that must hire and manage half 1 million temporary employees with complex and new technological systems and rigid completion dates is bound to be a difficult undertaking for even the most experienced manager. It has been clear to me from the beginning of my tenure at census would be one of the most challenging aspects of the commerce portfolio. I agree with members of this committee, the census is the bedrock upon which we construct our system of democratic representation. It provides redistricting, the distribution of hundreds of billions of dollars of federal funding. Accordingly the first meetings as newly confirmed secretary of commerce with the commerce staff. In those meetings i sought to identify and address the key issues faced by the decennial census. My early concerns were heightened when only two months into my tenure for Census Bureau suddenly announced a 40 cost overrun in one component, namely the census Enterprise Data correction and processing program. A critical part of the Technology Infrastructure for the 2020 census. In terms of the broader decennial census the Prior Administration lifecycle cost estimate, october 2015, was 12. 5 billion. When testifying before congress in june i did not accept that figure. Instead, i vowed to return to congress after a thorough review with a fetid 2020 census lifecycle cost that i could support. The product of that review is what brings me here today. As promised we assembled a team of experts to conduct an independent review of the estimates. They have come back with numbers as we continue our preparation for 2020. Team is comprised of Financial Management experts from the department of commerce, the office of management and budget, former census employees, two former Technology Executives with experience rolling out complex systems as well as other experts with extensive privatesector experience. In conducting our review we looked at the many concerns raised by the gao and members of congress including those on this committee about the Census Bureaus cost estimate. Im aware of the funding statistics presented by Ranking Member cummings and can assure you the 760 billion budget shortfall and its impact is encompassed with our new lifecycle projections. We will hear testimony from both the gao and commerce ig about their concerns prior to thousand 15 lifecycle cost estimate. For example, the gao estimated the the it budget would be at least 4. 8 billion. Our estimate is 4. 96 billion, so 160 million over the floor the gao estimated would be the correct number rather than the previously used one. I shared her concern and their testimony will underline the need for justification for the new lifecycle cost estimate. Ga all gao points out there are 43 Technology Systems involved in the 2018 end to end test. Only four of those systems had completed development and integration tests as of august 2017. Of the 39, a portion of the functionality has been deployed in the 2018 end to end test but that is not yet true for the remaining 18. With so much still under development, the need for a contingency to address possible overruns seems selfevident. These are just a few examples. The ig provided another example regarding address candidacy where they found it would cost at least three times the amount for Census Bureau estimated in 2015. We agree with that and we have incorporated that into our numbers. On the whole we found the Prior Administration provided congress and the public with overly optimistic assessments of both the ease of implementing new technologies and the cost savings they would provide. These issues were undo