<DOC>
[106th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:62841.wais]
H.R. 2376, GRANT WAIVERS AND STREAMLINING THE PROCESS
=======================================================================
JOINT HEARING
before the
SUBCOMMITTEE ON NATIONAL ECONOMIC GROWTH,
NATURAL RESOURCES, AND REGULATORY AFFAIRS
and the
SUBCOMMITTEE ON GOVERNMENT MANAGEMENT,
INFORMATION, AND TECHNOLOGY
of the
COMMITTEE ON GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
FIRST SESSION
ON
H.R. 2376
TO REQUIRE EXECUTIVE AGENCIES TO ESTABLISH EXPEDITED REVIEW PROCEDURES
FOR GRANTING A WAIVER TO A STATE UNDER A GRANT PROGRAM ADMINISTERED BY
THE AGENCY IF ANOTHER STATE HAS ALREADY BEEN GRANTED A SIMILAR WAIVER
BY THE AGENCY UNDER SUCH PROGRAM
__________
SEPTEMBER 30, 1999
__________
Serial No. 106-88
__________
Printed for the use of the Committee on Government Reform
Available via the World Wide Web: http://www.house.gov/reform
______
U.S. GOVERNMENT PRINTING OFFICE
62-841 WASHINGTON : 2000
COMMITTEE ON GOVERNMENT REFORM
DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York HENRY A. WAXMAN, California
CONSTANCE A. MORELLA, Maryland TOM LANTOS, California
CHRISTOPHER SHAYS, Connecticut ROBERT E. WISE, Jr., West Virginia
ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York
JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York
STEPHEN HORN, California PAUL E. KANJORSKI, Pennsylvania
JOHN L. MICA, Florida PATSY T. MINK, Hawaii
THOMAS M. DAVIS, Virginia CAROLYN B. MALONEY, New York
DAVID M. McINTOSH, Indiana ELEANOR HOLMES NORTON, Washington,
MARK E. SOUDER, Indiana DC
JOE SCARBOROUGH, Florida CHAKA FATTAH, Pennsylvania
STEVEN C. LaTOURETTE, Ohio ELIJAH E. CUMMINGS, Maryland
MARSHALL ``MARK'' SANFORD, South DENNIS J. KUCINICH, Ohio
Carolina ROD R. BLAGOJEVICH, Illinois
BOB BARR, Georgia DANNY K. DAVIS, Illinois
DAN MILLER, Florida JOHN F. TIERNEY, Massachusetts
ASA HUTCHINSON, Arkansas JIM TURNER, Texas
LEE TERRY, Nebraska THOMAS H. ALLEN, Maine
JUDY BIGGERT, Illinois HAROLD E. FORD, Jr., Tennessee
GREG WALDEN, Oregon JANICE D. SCHAKOWSKY, Illinois
DOUG OSE, California ------
PAUL RYAN, Wisconsin BERNARD SANDERS, Vermont
HELEN CHENOWETH, Idaho (Independent)
DAVID VITTER, Louisiana
Kevin Binger, Staff Director
Daniel R. Moll, Deputy Staff Director
David A. Kass, Deputy Counsel and Parliamentarian
Carla J. Martin, Chief Clerk
Phil Schiliro, Minority Staff Director
Subcommittee on National Economic Growth, Natural Resources, and
Regulatory Affairs
DAVID M. McINTOSH, Indiana, Chairman
PAUL RYAN, Wisconsin DENNIS J. KUCINICH, Ohio
BOB BARR, Georgia TOM LANTOS, California
LEE TERRY, Nebraska PAUL E. KANJORSKI, Pennsylvania
GREG WALDEN, Oregon BERNARD SANDERS, Vermont
HELEN CHENOWETH, Idaho HAROLD E. FORD, Jr., Tennessee
DAVID VITTER, Louisiana
Ex Officio
DAN BURTON, Indiana HENRY A. WAXMAN, California
Marlo Lewis, Jr., Staff Director
Barbara F. Kahlow, Professional Staff Member
Gabriel Neil Rubin, Clerk
Elizabeth Mundinger, Minority Counsel
Subcommittee on Government Management, Information, and Technology
STEPHEN HORN, California, Chairman
JUDY BIGGERT, Illinois JIM TURNER, Texas
THOMAS M. DAVIS, Virginia PAUL E. KANJORSKI, Pennsylvania
GREG WALDEN, Oregon MAJOR R. OWENS, New York
DOUG OSE, California PATSY T. MINK, Hawaii
PAUL RYAN, Wisconsin CAROLYN B. MALONEY, New York
Ex Officio
DAN BURTON, Indiana HENRY A. WAXMAN, California
J. Russell George, Staff Director and Chief Counsel
Randy Kaplan, Counsel
Chip Ahlswede, Clerk
Trey Henderson, Minority Counsel
C O N T E N T S
----------
Page
Hearing held on September 30, 1999............................... 1
Text of H.R. 2376................................................ 5
Statement of:
Callahan, John J., Assistant Secretary and Chief Financial
Officer, Department of Health and Human Services; Samuel
Chambers, Jr., Administrator, Food and Nutrition Service,
Department of Agriculture; and Raymond L. Bramucci,
Assistant Secretary, Employment and Training
Administration, Department of Labor........................ 68
Green, Hon. Mark, a Representative in Congress from the State
of Wisconsin............................................... 22
Scheppach, Raymond C., executive director, National
Governors' Association; and William T. Pound, executive
director, National Conference of State Legislatures........ 40
Letters, statements, et cetera, submitted for the record by:
Bramucci, Raymond L., Assistant Secretary, Employment and
Training Administration, Department of Labor, prepared
statement of............................................... 133
Callahan, John J., Assistant Secretary and Chief Financial
Officer, Department of Health and Human Services, prepared
statement of............................................... 71
Chambers, Samuel, Jr., Administrator, Food and Nutrition
Service, Department of Agriculture, prepared statement of.. 127
Green, Hon. Mark, a Representative in Congress from the State
of Wisconsin, prepared statement of........................ 25
Horn, Hon. Stephen, a Representative in Congress from the
State of California, prepared statement of................. 3
Kucinich, Hon. Dennis J., a Representative in Congress from
the State of Ohio, prepared statement of................... 20
Pound, William T., executive director, National Conference of
State Legislatures, prepared statement of.................. 55
Ryan, Hon. Paul, a Representative in Congress from the State
of Wisconsin:
Prepared statement of.................................... 11
Prepared statement of Governor Tommy Thompson............ 35
Scheppach, Raymond C., executive director, National
Governors' Association, prepared statement of.............. 43
Turner, Hon. Jim, a Representative in Congress from the State
of Texas, prepared statement of............................ 17
H.R. 2376, GRANT WAIVERS AND STREAMLINING THE PROCESS
----------
THURSDAY, SEPTEMBER 30, 1999
House of Representatives, Subcommittee on National
Economic Growth, Natural Resources, and
Regulatory Affairs, joint with the Subcommittee
on Government Management, Information, and
Technology, Committee on Government Reform,
Washington, DC.
The subcommittees met, pursuant to notice, at 2:04 p.m., in
room 2247, Rayburn House Office Building, Hon. Stephen Horn
(chairman of the Subcommittee on Government Management,
Information, and Technology) presiding.
Present from the Subcommittee on National Economic Growth,
Natural Resources, and Regulatory Affairs: Representatives
Ryan, Terry, Vitter, and Kucinich.
Present from the Subcommittee on Government Management,
Information, and Technology: Representatives Horn, Biggert,
Ose, Ryan, Turner, and Owens.
Staff present from the Subcommittee on National Economic
Growth, Natural Resources, and Regulatory Affairs: Marlo Lewis,
Jr., staff director; Barbara F. Kahlow, professional staff
member; Gabriel Neil Rubin, clerk; and Elizabeth Mundinger,
minority counsel.
Staff present from the Subcommittee on Government
Management, Information, and Technology: J. Russell George,
staff director and chief counsel; Randy Kaplan, counsel; Bonnie
Heald, director of communications; Chip Ahlswede, clerk; P.J.
Caceres and Deborah Oppenheim, interns; Trey Henderson,
minority counsel; and Jean Gosa, minority staff assistant.
Mr. Horn. A quorum being present, the subcommittees will
come to order.
The purpose of today's hearing is to examine the process
Federal departments and agencies follow when considering State
requests to waive statutory or regulatory requirements
associated with Federal grants.
Billions of dollars each year flow to State and local
governments through Federal grants. Currently, Federal
departments and agencies award these grants through nearly 600
categorical block grant and open entitlement programs. In 1998,
Federal grants amounted to more than $267 billion. Thinking
back to 1965, that is what Lyndon Johnson spent to run the
Great Society and the Vietnam war. Although 23 agencies award
Federal grants, the U.S. Department of Health and Human
Services handles nearly 60 percent of all Federal grant money.
Several grant programs, including Medicaid and Temporary
Assistance for Needy Families, allow States to circumvent
certain statutory or regulatory requirements of the programs
through waivers. In large part, States apply for these waivers
to give them greater flexibility to find alternative ways to
achieve more effective program results.
Federal agencies generally approve these State requests.
However, the cost, complexity, and delays experienced during
the application process often impede a State's ability to
implement a program designed specifically for the needs of its
residents.
For example, in 1994, officials in my home State of
California wanted to lower the State's welfare benefits to new
residents. At that time, California's welfare payments were
more generous than those offered by many other States. However,
this change in California's welfare reform project required a
Federal waiver.
California applied for the waiver on August 26, 1994. It
was approved, but not until August 19, 1996, a full year and 9
months later, almost 2 years.
We have with us today a number of knowledgeable witnesses
who will assist us in identifying the problems within the grant
waiver process, and who will offer proposals to make the
process more efficient.
First, we will hear from Representative Mark Green of
Wisconsin, who has introduced H.R. 2376, a bill designed to
streamline the application process and increase the
availability of waivers to State governments. It is a freshman
bill. The bill specifically would require Federal departments
and agencies to establish expedited review procedures for
granting a State waiver if the same agency had previously
granted a similar waiver to another State.
In addition, we will hear from representatives of the
National Governors' Association and the National Conference of
State Legislatures. They will provide a State perspective of
the grant waiver process.
Finally, we will hear from representatives of three of the
largest grant-awarding departments, the Departments of Health
and Human Services, Agriculture, and Labor. These witnesses
will provide the Federal perspective of the grant waiver
process as it applies to their agencies.
I welcome all of you witnesses today and look forward to
the testimony. I now yield to the co-chair of today's hearing,
the National Economic Growth, Natural Resources, and Regulatory
Affairs Subcommittee vice chairman, Paul Ryan, for an opening
statement.
[The prepared statement of Hon. Stephen Horn and the text
of H.R. 2376 follow:]
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Mr. Ryan. Thank you, Mr. Co-Chairman. I appreciate it. I
thank everyone for coming.
Today we are here to discuss an issue that may seem largely
procedural. However, it has implications for many, many States.
States are often the ones which take the initiative for major
reform efforts. They often end up being the experimental
laboratories of democracy, as Justice Brandeis once referred to
them. For the rest of the country, the States are out there
putting together programs and reforms that are leading the
country.
These reform efforts, performed on a small scale, often
lead to a nationwide overhaul of outdated systems. In recent
years, we have seen examples of this in the area of welfare and
health care systems. Currently, some States are exploring
options for bringing the disabled into the work force and
providing long-term care coverage, just to name a few, and that
is something we are working on in my own home State of
Wisconsin, as well.
It is important for the Federal Government not only to
encourage these social experiments but also to provide an
environment that will foster these types of initiatives. State
and local governments often understand the needs of their
constituents and the problems they face better than the Federal
Government does. They are more familiar with the unique
problems that must be addressed in implementing any new system.
The focus of today's hearing will be on ways in which we in
the Federal Government can create an environment that will
encourage State and local governments to explore alternative
solutions to social problems. Today we will examine agency
processes for the review of State requests for waivers of
statutory and/or regulatory requirements of Federal grant
programs, agency track records in processing such State
requests, and ways to streamline the agency processes for the
States.
This hearing will allow the sponsor of H.R. 2376, a bill
intended to streamline the processing of similar State
requests, the two major organizations representing State
elected officials, and three major Federal grantmaking
agencies, to discuss State experiences and suggestions for
streamlining the grant waiver process for the States.
I want to welcome my freshman colleague, Mark Green, the
author of H.R. 2376, who also, as you may not know, represents
Green Bay who just won over the Minnesota Vikings last week, so
I just wanted to get that inserted in the record if I could.
I would also like to welcome the National Governor's
Association executive director, Raymond Scheppach--please
forgive me if I didn't pronounce that correctly--and the
National Conference of State Legislatures executive director,
William T. Pound, who will ably represent the States' views
today.
I also want to mention that the USDA's Under Secretary for
Food, Nutrition and Consumer Services, Shirley Robinson
Watkins, has an illness, so we have somebody filling in for
Shirley.
I would also like to welcome the Assistant Secretary and
Chief Financial Officer for HHS, John J. Callahan, and the
Labor Assistant Secretary for Employment and Training
Administration, Raymond Bramucci, who will represent their
agencies and present the Federal agencies' views today.
Currently, the Federal department and agency processes for
reviewing State waiver requests are time-consuming and costly,
diverting time and dollars from program delivery of services to
those in need. President Reagan's federalism policies
recognized the partnership between the Federal Government and
State and local governments in the implementation of certain
Federal programs. His federalism policies were premised on
recognition of the competence of State and local governments
and their readiness to assume more responsibility. I believe
that we should focus on these federalism principles, keeping
them in mind during today's hearing.
H.R. 2376, ``to require executive agencies to establish
expedited review procedures for granting a waiver to a State
under a grant program administered by the agency if another
State has already been granted a similar waiver by the agency
under such program,'' will be considered today. This bill
provides expedited consideration if a second State applies for
a waiver similar to that already approved for another State.
Mr. Green will discuss the specific problem which resulted in
the bill's introduction.
Currently, Federal agencies make awards to State and local
governments under almost 600 categorical block grant and open-
ended entitlement grant programs. In 1998 these awards totaled
$267.3 billion, which is more than all Federal procurement for
goods and services.
Although 23 Federal departments and agencies make grant
awards, six departments account for 96 percent of all grant
award dollars. HHS carries the brunt of the burden with 58
percent; Transportation, 11 percent; HUD, 9 percent; Education,
8 percent; Agriculture, 7 percent; and Labor, 3 percent. The
top 20 programs account for 78 percent of all grant award
dollars. The top 27 programs, all programs over $1 billion
each, account for 87 percent.
Several of these programs allow waivers of key statutory
and/or regulatory requirements, including Medicaid, which is
the largest grant program, accounting for 39 percent of total
dollars; welfare, which is the third largest grant program. And
Food Stamps, which is the 21st largest Federal grant program;
however, the grant award only covers the administrative
expenses for State administration of the program. If both the
administrative expenses and benefit portions are included, the
grant program would rate between the second and third largest
grant program in size.
Besides considering H.R. 2376, the hearing will also
consider other ideas for improving agency grant waiver
processes, such as setting deadlines for agency review of State
waiver requests; providing broad flexibility to waive many
statutory requirements for States; allowing State certification
of compliance with certain statutory requirements; and, for
accountability, requiring quarterly publication of all waiver
activity. Finally, this hearing will also consider ways to
ensure budget neutrality for the open-ended entitlement
programs.
On August 3rd of this year, this subcommittee wrote all of
the departments and agencies with Federal grantmaking programs
where States are eligible recipients, to identify their
statutory and regulatory waiver processes and to review their
track record in responding to State waiver requests, including
those that are similar to another State's already approved
request.
The Department of Defense did not provide any of the
requested information. The Department of Transportation, which
is the second largest grantmaking agency, only provided some of
the requested information. One of the questions that we want to
find out from this committee is what, if anything, are these
departments hiding, and why aren't they giving us all of the
full information that we have been asking for?
Sixteen of the 24 departments and agencies had any
statutory waiver provisions. Twelve of the 24 had any
regulatory waiver provisions. Over the last 3 years, 12 of the
17 agencies with any statutory or regulatory waiver provisions
received waiver applications from the States. Five of the 12
agencies--the Departments of Energy, Justice, Treasury, the
Appalachian Regional Commission, and the Corporation for
National Service--approved all such requests.
This leaves us with seven agencies--the Departments of
Agriculture, Education, HHS, HUD, Labor, Transportation, and
the Environmental Protection Agency--that denied some waiver
requests. Of the 1,801 waiver applications Government-wide
which were reported to the subcommittee, only 5 similar
applications, or less than one-third of 1 percent, were denied.
We would like to hear from the witnesses the considerations
that arose in reviewing waiver applications, including ensuring
budget neutrality in the open-ended entitlement programs such
as the HHS, Medicaid, and the Food Stamp Program from
Agriculture.
The bottom line is that 85 percent of all State waiver
requests during this period were approved. Two agencies, the
Departments of Labor and Agriculture, both of which will be
testifying today, had the highest proportion of denials, 29
percent and 13 percent, respectively. We would like to hear
from them why their track record differs from other agencies.
We would also like to hear from Labor and Agriculture why
Republican Governors received a higher proportion of denials,
31 percent and 16 percent, respectively, than Democratic
Governors, 23 and 8 percent, respectively, a coincidence which
sounds very interesting.
Statutory waiver provisions are very diverse. For example,
some allow waivers relating to program financing, such as both
the grantee matching funds and maintenance of effort
requirements for State pollution control agencies implementing
the Clean Air Act; the maintenance of effort requirement under
certain Education programs; and the grantee matching funds
requirements under the Corporation for National Services' Learn
and Serve and AmeriCorp programs.
Besides program financing, some statutory provisions allow
waiver of programmatic provisions. For example, the Social
Security Act authorizes the Secretary of HHS to waive
compliance with certain program requirements for an
experimental, pilot, or demonstration program under Medicaid
and the former Aid to Families with Dependent Children welfare
program.
I welcome an open discussion today about the ways to
streamline agency processes for waiver requests by the States,
since States, as partners of the Federal Government in
implementing many of the Federal programs, deserve a simpler
process.
The States and local governments are our laboratories of
democracy. It is up to us to try and make sure that they are
flourishing, and that our waiver program is one that doesn't
hold them back but lets them go into experimenting with
programs that work for their people, so that government which
governs closest to the people can govern the best.
With that, I yield back the balance of my time.
[The prepared statement of Hon. Paul Ryan follows:]
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Mr. Horn. Thank you very much. We now call on the gentleman
from Texas, Mr. Jim Turner, the ranking member on the
Government Management, Information, and Technology
Subcommittee. Mr. Turner.
Mr. Turner. Thank you, Mr. Chairman. This is a very
important hearing. Having served in the Texas House and the
Texas Senate for 10 years, as well as chief of staff to a
former Texas Governor, I know how frustrated State officials
can be with the Federal agencies once they have applied for
waivers. This bill is designed to try to encourage an expedited
procedure in cases where a State has been previously granted a
waiver for a program.
As we look at this issue, it is important to keep in mind
that while the concept of an expedited waiver is good, it
should not mean an automatic waiver. There are differing
circumstances for each application that always must be
considered. So I look forward to hearing the testimony of our
witnesses and the concerns that they may have regarding this
bill. I think all of us can concur at the outset of this
hearing, that anything we can do to improve the efficiency of
our Federal agencies in dealing with our State governments
would be a step in the right direction.
So, thank you, Mr. Chairman, and I look forward to our
testimony.
[The prepared statement of Hon. Jim Turner follows:]
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Mr. Horn. I thank the gentleman, and now ask the gentleman
from Nebraska, Mr. Lee Terry, if he would like to make an
opening statement.
Mr. Terry. I have no opening statement.
Mr. Horn. And the gentlewoman from Illinois, Mrs. Biggert,
the vice chairman for the Government Management, Information,
and Technology Subcommittee, if you would like to make an
opening statement.
Mrs. Biggert. Thank you very much, Mr. Chairman. Today's
hearing is a particularly important one. We are focusing on
efforts to streamline and improve the Federal Government's
processes for granting State waiver requests.
Having served several terms in the Illinois State
Legislature, I can certainly understand the negative
consequences constraints can have on State efforts to serve the
unintended populations. It has been said many times before, but
each State is unique demographically. What practices might work
on one State, might not necessarily work in another.
As such, I believe the Federal Government should make every
effort to accommodate waiver requests made by the States in
order to help those in need. It is for this reason that I am a
co-sponsor of Representative Mark Green's legislation to
require executive agencies to establish expedited review
procedures for granting State waivers in cases where another
State has granted a similar waiver. I think this is what we did
in the State of Illinois when school districts came forward
with waivers, that then other school districts came in and
received the same waivers, so I am glad to see that this bill
is being talked about here today.
So I commend you for holding the hearings and look forward
to hearing from the witnesses.
Mr. Horn. Thank you very much. I see the gentleman from
Ohio has just come in.
Mr. Kucinich. Hello, everybody.
Mr. Horn. Would you like to make an opening statement?
Mr. Kucinich. I sure would.
Mr. Horn. Well, you have excellent timing.
Mr. Kucinich. It is part of being here, I guess.
Mr. Chairman, I am always appreciative for a chance to join
you, having had the honor of serving with you on the Government
Management, Information, and Technology Subcommittee, and I
also pay my regards to the rest of the members on this
committee. I want to thank you for holding this hearing on H.R.
2376 and the waiver process.
Agencies have the discretion to waive statutory and
regulatory program requirements applicable to the States in a
variety of circumstances. With these waivers, States are able
to tailor the program to meet the unique needs of their
individual populations. Waivers also serve as testing grounds
for innovative solutions which could be adopted nationwide.
Therefore, I welcome the opportunity to learn how we can
streamline the process by which agencies review waiver
applications.
However, it is important to remember that waivers can
exempt States from the eligibility requirements, terms,
conditions and guidelines for important programs such as
Medicaid, welfare, Food Stamps, and employment training.
Waivers could jeopardize whether or not intended beneficiaries
ultimately receive the help and protections our laws are
intended to guarantee. Therefore, the decision to grant a
waiver should not be taken lightly.
For instance, I believe that we need to ensure that
potential opponents of the waiver have notice and opportunity
to comment on the waiver before it is considered. I also
believe agencies should evaluate the benefits and drawbacks of
any similar waivers that were granted in the past.
Furthermore, the granting of waivers should not become an
automatic exercise. Each State is unique and each waiver
application needs to be considered on its own merits. If a
particular requirement merits a waiver on every occasion, the
requirement itself, not the waiver process, should be
reevaluated.
In conclusion, we should investigate ways to streamline the
process without jeopardizing a thorough review of each
application.
I look forward to hearing the testimony, and I again thank
the Chair for his leadership.
[The prepared statement of Hon. Dennis J. Kucinich
follows:]
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Mr. Horn. Thank you very much, and we now go to panel one,
which is the Honorable Mark Green of Wisconsin, and we are
delighted to have you here, Mark.
STATEMENT OF HON. MARK GREEN, A REPRESENTATIVE IN CONGRESS FROM
THE STATE OF WISCONSIN
Mr. Green. Thank you, Mr. Chairman, members of the
subcommittees. I want to thank you. I am very grateful that you
are holding this hearing here today. I am grateful for the
opportunity to testify on the Federal waiver process in
general, and specifically our proposal, H.R. 2376.
According to information supplied to this committee, from
1997 through August 1999, my home State of Wisconsin applied
for some 70 waivers from Federal agencies. Now, as has been
alluded to previously, these waivers were not because Wisconsin
couldn't or wouldn't meet Federal policy objectives, but like
so many other States, Wisconsin has wanted to try new
innovative approaches to meeting long-standing policy
challenges.
Each of these waiver requests required extensive paperwork
and man-hours to meet burdensome application requirements. Even
after the necessary forms were filled out, the response and
processing time from the agencies added further burdens,
burdens of uncertainty and suspended policymaking. In some
instances, it took over 18 months to get approval of a waiver
request.
Now, of course not all of Wisconsin's waiver requests were
approved, but the burdens and costs Wisconsin encountered,
regardless of whether they were approved, were as great either
way. Let me give you an example of the burdens Wisconsin has
faced in the waiver process, and I know that other States can
tell similar stories.
In 1997 Governor Tommy Thompson sought to implement a
program known as BadgerCare. This innovative proposal, which
passed our State legislature on a very wide bipartisan vote,
aims to ensure access to health care for low-income children
and families. According to Wisconsin's projections, BadgerCare
is expected to cover an additional 46,200 uninsured low-income
residents, including 23,900 children and 22,300 parents.
Even though the Wisconsin legislature endorsed BadgerCare
in 1997, and even though both Republicans and Democrats from
our own congressional delegation repeatedly asked for swift
consideration of the waiver request, it took HHS until 1999 to
finally approve this request. The great shame in this was that
during that delay, those thousands of low-income families lost
out on access to health care, health care that they so
desperately needed.
I would like to reemphasize at this point that there are
really two separate issues. One, of course, is whether or not a
waiver should be granted. In most cases I am one of those who
would come down on the side of allowing a State to experiment,
to be creative, to be entrepreneurial in their policymaking.
However, what I am more concerned with here today are the
unnecessary costs, time, paperwork, manpower, which the waiver
process itself entails, often regardless of the eventual
results. Those costs are not reflected in the numbers the
agencies have supplied. Their numbers deal with the eventual
outcome, but they don't truly reflect the burden, the costs,
that States have to bear.
Now, I have a poster here which I would like to show you,
and we will make handout copies of this and supply them to the
committee afterwards. This was a poster put together called
``The Waiver Game,'' which is designed in a somewhat humorous
way to show the Federal waiver process and the headaches that
States have to go through.
And what it does, this particular poster uses welfare
reform as the example. First, the State has to pass welfare
reform. Then they have to submit a 150-page waiver request. The
agency responds with 10 pages of questions. Once the State
answers those questions, the agency submits terms and
conditions. Negotiations take place, there is a 6-month delay,
and so on and so forth.
It really is a game, although probably to neither party
terribly humorous at the time. Every time a State takes a step
forward on this board game, they seem to take a step back. The
delays and the red tape are unreasonable, and I think we all
agree should be greatly reduced.
Last week I attended a hearing held by the Budget
Committee. I heard in that hearing Governor Jeb Bush of Florida
testify on some of his new education proposals. One thing
really stuck out for me. According to Governor Jeb Bush, 40
percent of the man-hours at the Florida Department of
Education, that is 40 percent, are spent wholly on filling out
Federal paperwork. Surely we can find more productive uses for
their time and taxpayers' money. Clearly this is a case in
point for simplifying the waiver process and setting up
expedited procedures.
And that of course brings me to my legislation, H.R. 2376.
This bill, in a very modest, common sense way, would help
streamline the complicated and time-consuming Federal waiver
process. Simply put, it directs Federal agencies to establish
an expedited review procedure for State-requested waiver if the
agency previously authorized a similar waiver for another
State.
The inspiration for this bill came out of an effort that I,
along with a number of my freshman colleagues, several of whom
are here today, have made to reach out to Governors, both
Democrat and Republican. In fact, the most recent response we
received was from a Democratic Governor, the Governor of
Kentucky. We have asked them, we have tried to find out from
them what steps we could all take as a Congress to help them be
innovative and creative in their policymaking.
The Governors have told us that the costs and burdens of
the waiver process restrict them in their efforts to meet their
constituents' needs in innovative ways. This bill I think is a
first small step in a larger effort to offer a helping hand, or
at least help get government out of the way where its
restrictions are unnecessary or overly burdensome.
This legislation would allow any State to take advantage of
the creative policymaking in another State, and to obtain a
Federal waiver under an expedited, streamlined review. Should
my legislation pass, I hope and believe that States would be
more active in taking those opportunities, in borrowing from
other States. Where they see a success story, hopefully that
success story can serve as a benchmark. After all, it is the
State and local leaders who know best, perhaps, what is best
for their immediate constituents.
Thank you for the opportunity to be here today, and I would
be pleased to take any questions you might have. Thank you, Mr.
Chairman.
[The prepared statement of Hon. Mark Green follows:]
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Mr. Horn. Well, thank you, and let me first yield time on
our side to the ranking minority member. Oh, Mr. Turner went
out. Well, let's go to the vice chairman of the Regulatory
Subcommittee.
Mr. Ryan. Thank you.
Mr. Horn. Let me say there is a 5-minute questioning limit
on all these. It will come back to him. We alternate between
parties.
Mr. Ryan. Thank you. Thank you, Mr. Co-Chair.
Mark, let me ask you this: What do you see as the biggest
problem, based on your Wisconsin experience, as a Wisconsin
legislator prior to serving in Congress, with the waiver
process for States?
Mr. Green. I was in the Wisconsin Legislature for 6 years,
actually during the height of welfare reform, the
experimentation that really became a national model, and I
think it was the uncertainty that the waiver process created.
Again, legislation, the welfare reform movement in
Wisconsin was completely nonpartisan, passed on wide bipartisan
margins, and then once the waiver process started, it was as if
the State was in suspended animation, not quite sure how to
meet evolving needs because there was no predictability. I
mean, we didn't know if a waiver was going to be granted, if it
would be granted in part; if it was granted only in part, would
the part granted be sufficient to carry out the intent of the
legislature; what to do if it wasn't granted.
That was very burdensome to our policymaking. I think the
administration would tell you that their problem was literally
the costs of having employees fill out all those forms and
trying to stay in touch with whatever agency they were applying
to, again to try to find out what was going to happen and when.
Mr. Ryan. So it is not just granting one waiver for one
BadgerCare initiative. There are several waivers included in
getting BadgerCare implemented, something like that. Is that
not correct?
Mr. Green. Yes. In the case of BadgerCare, it was actually
lumped into one waiver. Maybe a better case would be
FamilyCare. We all have very catchy names. FamilyCare is the
latest program for which a waiver has been requested, and there
are over 40 requests for that.
In the past, and I am sure other States are the same way,
you will get a percentage of your waiver request, particular
waiver provisions granted, and again that brings you back to
this whole idea of whether or not sufficient to fulfill the
legislative intent.
Mr. Ryan. What are some of the waivers that Wisconsin has
applied for in recent years, in addition to those two?
Mr. Green. Well, there have been some in the education
area, but the original BrideFare; LearnFare, which required
welfare recipients to attend school, the children to attend
school; really the whole gamut of welfare reform. And like many
States, in the health care area there have been a number of
waiver requests.
Mr. Ryan. I assume you have had a chance to look at some of
the written testimony of other witnesses. After reviewing the
other testimony, are there any other recommendations you would
have from some ideas you have heard for streamlining the waiver
process?
Mr. Green. Well, the National Governors' Association is
suggesting that we need to undertake a full-blown study. I
think a step that would be very helpful, and I would be
interested in working with the committee, is to add a provision
to this bill which would require agencies to publish
periodically, quarterly, whatever period we choose, the status
of waivers. In other words, how many waiver request
applications they have received, how many have been denied, how
many have been granted, how long that they have been hanging
out there. I think that would help all of us really find out
what the States are facing. So I think that is an excellent one
in particular. I think that is a good idea.
Mr. Ryan. I want to go back to the partial waiver approval
again. You spoke about waivers being approved in part. Is that
a common problem that we are seeing, that you get maybe three-
fourths of your waivers for a program? And what kind of
problems is that going to create? Are we going to be unable to
go forward with a program if we only get, say, three out of
four of the waivers approved? Is that something that you see as
a common problem that we are experiencing?
Mr. Green. I don't know if it is a common problem. It is a
hard one, based on my limited experience, to comment. But what
I will say is it does create tremendous uncertainty. I think
agencies, State agencies plan on the success of their waiver in
terms of designing their program and, again, oftentimes they
are waiting with bated breath to get this reaction from
whatever Federal agency is involved.
They get the decision back, and then it takes them a long
time to study the full impact and to make a calculation. In
some cases they have to go back to the legislature. But they
have to make a calculation as to whether or not the program can
even work. Can they meet the original objectives that everyone
has agreed to? And, again, I think that creates tremendous
uncertainty, and it can handcuff State leaders in many ways.
Mr. Ryan. Thank you, Mr. Chairman. I yield.
Mr. Horn. Thank you. We now turn to the gentleman from Ohio
for 5 minutes of questioning.
Mr. Kucinich. I just have a comment, and then I would be
glad to yield any time to Mr. Owens.
I wanted to first of all congratulate Congressman Green for
his presentation, and also for the creativity of the Waiver
Game.
Mr. Green. No pride of authorship. It didn't come from me,
but I kind of like it, too.
Mr. Kucinich. What I was wondering about it is if you have
to roll the dice to play the game, or do you roll the dice when
you don't play it?
Mr. Green. Chutes and Ladders, looks like.
Mr. Kucinich. We will have to think about that. But anyhow,
you know, I am still interested in hearing more about this, and
I appreciate you taking the time to come here.
Mr. Green. Thank you.
Mr. Kucinich. I will be glad to yield any time to Mr.
Owens.
Mr. Owens. Two questions I think were asked on the previous
occasion when this was being considered. If there is an attempt
to further streamline the waiver process, do you feel it is
important that the opponents of the waiver have an opportunity
to express their views?
Mr. Green. Yes. I don't think that waiver requests should
be made in the dark of night. I actually agree with what a
number of people have said. I don't believe that where in my
case it is a similar waiver, I don't think that the granting
should be automatic, because I think States do have differing
local conditions. I think there needs to be an opportunity to
review those conditions.
That is why in this bill I think we have given maximum
flexibility to the agencies. We have asked them to create an
expedited waiver review process. We didn't mandate precisely
what it had to be, because we understand that there isn't a
one-size-fits-all solution here. I think they do need the
opportunity to examine both pros and cons.
Mr. Owens. Do you think it is in order for an agency to
evaluate similar waivers that have already been granted before
granting some new waiver in the same area?
Mr. Green. Well, I mean, I think that if an agency receives
a similar--a waiver request that is similar to a previous one,
presumably since that previous one was the first blush, they
will have performed a lot of review and scrutiny of the waiver
request. I would assume that they would rely upon at least some
of their previous work. I think that is appropriate.
Mr. Owens. Thank you. I yield.
Mr. Horn. I thank the gentleman. I now yield time to the
vice chairman of the Government Management, Information, and
Technology Subcommittee, Mrs. Biggert of Illinois.
Mrs. Biggert. Thank you, Mr. Chairman. In my opening
remarks I spoke briefly about the State of Illinois having a
waiver procedure which for a while caused us a couple of
problems, and I want to see if this is something that has been
addressed in this.
No. 1, at some point we felt like we were the school board,
sitting at a large school board, overseeing what various local
school boards were doing when they came in for their requests.
You know, I just have--will these agencies have the background
and everything to really look at the different conditions in
each of these States, really have the background, because it is
not one-size-fits-all.
But when we sat, we had to approve the waivers after they
had made the request, or disapprove them, and so we felt like
we were making decisions for a local level that we at the State
would not be doing. How did you work that out so that the
Federal agency doesn't feel like they are really involved too
much into the State situation?
Mr. Green. Well, we don't deal with that directly. Again,
we do provide a lot of discretion and flexibility to the
agencies. I think there is always a risk, and I think you are
right, I think it is Federal versus State and State versus
local, to pass judgment on what the ``lower'' elected body has
done. I think that is inappropriate unless you have a clear
conflict and preemption.
We don't deal with that directly. I would certainly be
willing to work with you to find ways to address that, but we
don't deal with that directly.
Mrs. Biggert. Then the other thing was that once we had
granted a waiver for one school district, while we thought
that, you know, we would look at the others, it became almost
automatic that we then granted the waivers to other school
districts, and in effect really kind of abolished the law on
the books for that.
And I am thinking of a couple of issues, and the only one I
can think of is really one that we didn't grant because it was
a couple of school districts came in and asked for waivers on,
they call it the sprinkling system, when they were building an
addition and they didn't have the money to finish that up for
the year, so they wanted a waiver for the rest of the year to
do that.
And I think the first time we granted that and then really
worried that we had really created an unsafe situation, and
other school districts started pouring in, saying, ``Well, we
don't have the money, either.'' So we had to go back and really
kind of change that. But I think you have to be careful that an
agency doesn't think, if they granted that waiver for one, then
they have to do it for another.
Mr. Green. Yes, and that is why, again, the idea of making
it an automatic approval, I would be a little hesitant about
that. But a least I think if we have the expedited review
process, what I am hoping it will do is encourage States to
borrow from each other.
I think you are going to hear the agencies testify that
they actually get very few similar waiver requests, and they
have actually used that as logic for saying this bill may be
unnecessary. I actually look at it the other way. I think that
is a bad thing.
We want States to borrow from each other. I mean, if we see
California putting into place an innovative health care plan
that meets the needs of an impoverished segment of society, I
would hope that my State of Wisconsin would say, ``What are
they doing? Can't we do this?''
I would like that to happen more and more and more. So I am
hoping one of the long-term consequences of this will be that
there will be many more requests, and I don't think they should
be granted automatically, but hopefully the expedited review
will be so much less burdensome in costs and time that it will
encourage States to borrow from each other.
Mrs. Biggert. Thank you.
Thank you, Mr. Chairman.
Mr. Horn. Thank you. Does the gentleman from New York have
any questions he would like to ask at this point?
Mr. Owens. No questions.
Mr. Horn. Well, I think everybody has been satisfied at
this point. Let me just ask one question.
I recall in the Department of Agriculture testimony that
will occur later this afternoon, they say your bill is
unnecessary because ``while waiver requests may appear to be
similar, each State situation is unique,'' and therefore
requires individual attention. How would you respond to this
statement?
Mr. Green. I would respond by saying that our legislation
preserves enough flexibility for the agencies that they can
take into account the fact that you have different conditions.
I mean, again, California is quite dissimilar to the State of
Wisconsin, my home State, and I don't think that because
something has been done in California, it should automatically
be granted.
The agencies, if I may expound upon it a bit, have also
suggested that this is unnecessary because of Executive orders
which have directed a streamlined review process. I would point
out that all of the data that I testified and supplied,
including the frustration that Wisconsin had with welfare
reform, all occurred subsequent to the most sweeping Executive
order directing that there be an expedited waiver process.
So while I think agencies are trying, I think we need to
give them a bit of a nudge in moving in the direction of
streamlining and lowering those burdens, and I think we can do
this through this bill in a way that allows them to maintain
the needs to or the flexibility to look at individual
conditions.
Mr. Ryan. Mr. Chairman.
Mr. Horn. Yes, Mr. Ryan.
Mr. Ryan. If I could add to that, I notice that the
agencies claim that they have a new Executive order which
streamlines the waiver application process and approval
process.
Looking at the Executive order that has been cited as that
streamlining proposal, it goes back to the President's
Executive order on October 26, 1993, where it said ``each
agency shall, to the fullest extent practicable and permitted
by law, render a decision upon a complete application for
waiver within 120 days,'' and it goes on from there. Well, that
was the Executive order in 1993, but since 1993 we have a whole
rash of slowed down, delayed waiver processes, waivers that
have either been denied or have been slowed, or maybe not
applied for at all because of the process.
Well, the new Executive order which a lot of the agencies
claim fixes this, basically says the same thing. It says ``each
agency shall, to the extent practicable and permitted by law,
render a decision upon a complete application for a waiver
within 120 days of receipt of such application by an agency.''
So it doesn't seem as if this new Executive order fixes the
problem.
Since 1993 we have had these problems getting waivers
approved, getting them approved in an expedited manner. This
new Executive order is really no different than the prior one,
so I think that is, of all things, a very important
justification for the need for this type of legislation.
With that, I yield.
Mr. Horn. I thank the gentleman, and I thank the gentleman
from Wisconsin. It is a very creative effort that you and your
colleagues have undertaken.
Mr. Green. Thank you.
Mr. Horn. So thank you for coming, again.
Mr. Green. Thanks very much, again, for the opportunity to
testimony.
Mr. Horn. You are quite welcome.
We now go to panel two, which is Mr. Raymond Scheppach,
executive director, National Governors' Association, and Mr.
William T. Pound, executive director, National Conference of
State Legislatures. So, if you gentlemen will come in, we will
swear you in. This is an investigative subcommittee of the
Government Reform Committee, and we swear in all witnesses but
Members.
[Witnesses sworn.]
Mr. Horn. Both witnesses, the clerk will note, have
affirmed the oath, and let's start with the National Governors'
Association.
Mr. Ryan. Mr. Chairman, if I could, at this point I would
like to ask unanimous consent to include in the record a
statement from Governor Tommy Thompson, the Governor of
Wisconsin, on behalf of the Council of State Governments, for
which he serves as the president.
Mr. Horn. Without objection, so ordered.
Mr. Ryan. Thank you.
[The prepared statement of Mr. Thompson follows:]
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Mr. Horn. Let's start in with the National Governors'
Association, just in the order on the agenda.
STATEMENTS OF RAYMOND C. SCHEPPACH, EXECUTIVE DIRECTOR,
NATIONAL GOVERNORS' ASSOCIATION; AND WILLIAM T. POUND,
EXECUTIVE DIRECTOR, NATIONAL CONFERENCE OF STATE LEGISLATURES
Mr. Scheppach. Thank you, Mr. Chairman. I appreciate being
here on behalf of the Nation's Governors to both talk about our
recent waiver experiences as well as H.R. 2376. I would like to
submit my full statement for the record, and I will summarize
it in a few minutes.
Mr. Horn. I might add that every witness's statement is
immediately put in when we introduce them.
Mr. Scheppach. Thank you, Mr. Chairman.
Overall, the purpose of waivers is essentially twofold. No.
1, it allows States to tailor specific programs to the needs of
the citizens, but perhaps more important, it is to stimulate
innovative approaches, which is really key.
If we look back at what has happened over the last 6 to 7
years, we would probably say when President Clinton took office
there was a very important meeting in the White House in 1992
with the 50 Governors that focused essentially on this waiver
issue. Over the next several years, our sense was that the
administration was quite good in terms of pushing the envelope
with respect to waivers.
In the welfare area, they approved 90 waivers for 44
States; in the Medicaid area, 21 waivers that helped to hold
down the rate of increase in spending. I would argue that to
some extent those particular waivers, particularly in welfare,
led to the welfare reform bill. I think more recently, in the
last several years, we've had more trouble in the waiver
process.
I'm going to talk a little bit about some of the specifics
because I believe you actually have to get into some of the
major waivers in order to get a sense of the substance. The
first are the so-called 1115 waivers, which are the Medicaid
demonstrations. These are the large ones that are very, very
important to States.
These are normally approved for 5 years but you have a 1-
year renewal period, and if you look around, you'll find that
some States have had these for 10 or 15 years, which means once
they're approved, every single year you come back for renewal.
I would argue that these often take the longest amount of time
to approve because they are the most significant waivers. It is
not unusual to have them take a year, a year and a half, or
even 2 years.
The second waiver is the so-called 1915(b), which are the
managed care waivers. These, initially get approval for 2 years
but they are a 2-year renewal process. I would argue the
progress here is more mixed, although I think the Department
has been getting better recently. These take normally several
months to approve, they could be up to a year, but I would put
those as sort of medium responsiveness to the Department.
The third category is the so-called 1915(c) which are the
long-term care waivers for home and community-based care. These
are 5 years with a 1-year renewal. I would compliment the
agency on these. They have done a rather good job in this area.
Most of those are probably approved within a 30-day period.
When these get hung up, I would argue that it's over the whole
question of budget neutrality, and I'll come back to that in a
minute.
The other area I'd like to mention is Food Stamps. What has
happened at the State level is that States have moved to
integrate services for low-income individuals, and I think the
stimulus for this essentially was welfare reform, the so-called
TANF, and it has changed the culture in States, as States have
gone from welfare subsidies to employment and training
programs.
States would like to integrate Food Stamps into that
general approach. You'd like to go to case management, so that
when the person comes in to a welfare office, one person can
talk about child care, employment and training, TANF, Medicaid,
as well as Food Stamps, all at one place.
The Food Stamp progress is not very good. First off, the
basic underlying legislation does not allow a lot of
flexibility for waivers. Second, I would argue that this agency
is probably one of the worst in terms of their willingness to
work with us, because I think they look at it as a Federal
program, as a stand-alone program, as opposed to something that
should be integrated into welfare reform.
If you get into the children's health area, specifically I
think the legislation built-in the possibility of 1115
demonstration waivers. A number of States had interest in doing
that but we're told it could not be done for a year, so
essentially that one has been shut down.
I have included in my testimony a couple of pages from
Wiscon- sin Governor Thompson on his experience with
BadgerCare. We've included in the testimony some of the State
of Massachusetts' expe- rience in some of the 1115's which took
2\1/2\ years to approve. I would, however, argue that the
problems with the waivers are both congressional and
administrative; that Congress often-times does not provide
enough flexibility in the authorizing legislation.
A perfect example: the old AFDC programs needed waivers
while the TANF block grants provide the States with a lot of
flexibility to tailor the programs. Essentially when Congress
enacts flexible legislation, they don't need to have a detailed
waiver process. Second, a lot of the requirements built into
the legislation with respect to waivers are overly restrictive,
so at times the agencies' flexibility is curtailed.
The second problem, however, is the agencies. Some do a
relatively good job. Others are much more difficult to work
with.
For suggestions, we don't have a detailed policy, but we'd
be happy to get a couple Governors together, even with a couple
of State legislators, to come back to the committee with some
fairly detailed recommendations. But some suggestions are as
follows.
One problem is this whole question of budget neutrality;
when OMB looks at it, they look at it with respect to a
specific program for a specific year. So, if we're coming
forward with a Medicaid waiver, there may be long-run savings
in the next 4 years that would offset the increase in that
particular year, but it's ruled out because you're essentially
looking at a 1-year timeframe.
Similarly, a Medicaid waiver might have savings for
Medicare, but again, any time we have any impact on Medicare,
we're automatically declared out of order. So on this issue of
budget neutral- ity, we feel it should be expanded in a couple
of ways--in terms of the timeframe and looking at offsets with
respect to other programs.
Second, when I look at the various waivers, you'll find
that some of them are for 3 years, some are 5 years, with a 5-
year renewal, some a 1-year renewal, some a 3-year renewal. It
seems to make a certain amount of sense in moving toward some
kind of a consistent renewal basis, perhaps even including
where it's a standard renewal and putting it in a State plan,
as opposed to doing it through a normal waiver process.
Third, we need to find some way of changing the incentive
mechanism for agencies and how it's coordinated with OMB. It
has to become a higher priority within the Federal Government.
Whether that can be done by saying waivers automatically go
into effect unless people take positive action to stop it, and
has to be the Director of OMB, or some way of changing that
incentive, which will force people to the table.
I agree with some of the previous comments that a lot of
the cost is waiting, and it's the uncertainty. Particularly
when talking about demonstration waivers; it means the State
legislation can't go into effect because it is dependent upon a
waiver. Legislatures sometimes only meet every 2 years, so if
you miss that cycle, you've got a very substantial long-term
problem.
With respect to H.R. 2376, it obviously would be helpful.
It is consistent with the Executive order. The new one has been
adopted only a couple of months. We don't yet know whether they
are working on an implementation process.
However, I would say that the particular bill here is
relatively narrow. It deals only with discretionary grants, and
I would argue that 80 to 90 percent of our problems are in the
entitlement areas of Food Stamps and Medicaid. And we've got to
find a way, again, to look toward integrating Federal programs
with State programs. There is really a revolution out there
with respect to integration of services, and if the Federal
Government continues to look at funding stovepipes Food Stamp
Program where you can't integrate it, we're going to have
continual problems in providing good programs for low-income
individuals.
I'd be happy to answer any questions.
[The prepared statement of Mr. Scheppach follows:]
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Mr. Horn. Does the gentleman from New York have any
questions on this? Oh, excuse me, we need Mr. Pound's opening
first. Then we'll question both and have a dialog between the
two of you.
William T. Pound is the executive director of the National
Conference of State Legislatures. Mr. Pound.
Mr. Pound. Thank you, Chairman Horn and members of the
subcommittee. First of all I would like to begin by saying
thank you to the House and the Government Reform Committee for
everything they have done this year in moving toward improving
the State-Federal partnership through this whole area of which
the waiver activity is, I think, but one aspect. Not only the
House but the full Congress and the administration, in the
Executive order and the changes and the attempt to move in the
right direction, we think, on an expedited waiver process and
other aspects of this.
My remarks are in the record. Let me just summarize a
couple of things.
First of all, this may seem to be primarily an
administrative issue. Obviously the administrative branch of
State government is where waivers generally originate, but
frequently they originate there because of action the
legislature may have taken or may be considering as it tries to
conform itself or improve Federal-State-local programs.
So there is a significant legislative interest at the State
level in this whole problem, and it is one that we frequently
hear about, particularly the frustration of the timeliness of
the waiver process, and in many cases the difficulty of
obtaining in one State what appears to have been granted in
another State or in a very similar situation, but having to go
through all the same hoops over and over again.
It seems to me that there are several things we should look
at in this; that we clearly want to maximize opportunities for
State flexibility in these programs, and particularly to
provide benefits and deliver services; that we ought to
maximize the use of limited resources, particularly so that
they go to the services as much as possible, and perhaps to the
administration of them in a lesser proportion.
We need the waiver process streamlined to the maximum
extent possible, and we need one that will create productive,
collaborative State-Federal partnerships, not adversarial ones,
if we can. I think one of the problems is, all too often this
process may breed rubbing the cat's fur backward occasionally
as we go through it, rather than trying to more forward
collaboratively.
We need to keep people accountable for their actions at
both the Federal and the State level, and I think we need to
encourage duplication to the extent that we can. As we look at
what we might do in this process, it seems to us in our
discussion with State legislators that we need to make program
waivers available across as many discretionary and mandatory
State-Federal programs as possible, again in the remarks Mr.
Scheppach just made.
It would be ideal if we could maximize program flexibility
by statute in the actual legislative process, and I hope you
will do that. But, realistically, the waiver process will
always be a very important part of this procedure.
If we could simplify, some modifications that might
simplify this process would be perhaps to make waiver
modification self-certifying when States comply with all
application requirements. This assumes that this is a
collaborative process across the Federal-State lines.
A second would be to place time limits on the waiver
application review process. The 120 days that has been
mentioned and is in the Executive order, and I believe is also
in NGA recommendations, is certainly something that we support.
It is obvious that there may be exceptions to that rule, and it
seems to me that an exception process could be developed where
circumstances do not permit the realization of a 120-day
timetable. In addition, to the extent feasible we should make
waiver application forms uniform across the agencies and move
toward greater technology, particularly electronic application
processes, in this relationship.
Third, waivers granted for one State we would recommend be
automatically approved for other States whenever they are
similar. Obviously, there is difficulty probably in the
definition of ``similar,'' but I think those are things that
could be worked out.
To the extent possible, waiver periods should be uniform
and renewal processes ought to be the same across agencies. I
think from the legislative standpoint, again, one of the great
difficulties is an understanding of this process a lot of the
time on the part of people who are in it, even when they're
working closely with their State executive branch people
through the process.
Too often, the waiver process appears to be idiosyncratic.
When you talk to legislators, you hear that it all depends on
who so often rather than on a procedure; who reviews it, their
sympathy, their understanding in State government.
And I guess last I would say that on the Federal side, we
think that intensive participation from the regional and State
offices of Federal agencies is essential. Several witnesses
have brought up the subject of the differences between States.
That is one way to deal with that, with a sense that the
regional office should have a greater understanding of the
individual needs of States, even within a region, and sharing
similar conditions.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Pound follows:]
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Mr. Horn. Thank you very much. I will now yield to the vice
chairman of the National Economic Growth, Natural Resources,
and Regulatory Affiars Subcommittee, Mr. Ryan, for 5 minutes of
questioning. Then we will go to the minority.
Mr. Ryan. Thank you. Thank you, Mr. Pound and Mr.
Scheppach. I apologize if I mispronounced your name.
Mr. Scheppach. That's fine. Scheppach.
Mr. Ryan. Both of you said something that was very
interesting, and it seemed to come down to this: that there is
discretionary decisionmaking in these agencies. It doesn't
matter which agency as much as it matters who you call.
Can you expand on that a little bit? Have States been
discouraged by Federal agencies from filing waiver requests, by
people at the other end of the telephone in certain agencies?
If so, which agencies are doing this kind of thing? Also, have
States been asking for quid pro quos, meaning alter the waiver
in this way and we will do that? Could you expand on those
areas?
Mr. Scheppach. Well, I don't know whether it's agency or
program specific. I think the areas where we've had the
greatest problems are in Food Stamps and in CHIP, there's been
a reluctance there. You know, the word gets around pretty
quickly when two or three States submit waivers and they're
turned down, and people aren't willing to negotiate. And so the
message goes around and the rest of the 47 other States saying,
you know, they're not interested in waivers it's not worth our
time.
So those program areas tend to be the bigger areas. I think
HHS, where the big ones are concerned, is somewhat mixed. They
do a very good job on the home and community-based. It's more
mixed in the managed care area, and more difficult on the broad
demonstrations.
But I'd also concede that those areas where you're talking
about fairly major restructuring of programs, where the
innovation comes, and they are sometimes restricted by the
budget neutrality question. But it does depend on the culture
of the agency and the people you're dealing with.
Mr. Ryan. Mr. Pound.
Mr. Pound. I would concur with that. I think that the Food
Stamp Program is an area and the Department of Agriculture is
an area where there have been problems with that, particularly
in some of the experimentation or waiver requests around the
broad area of welfare reform. There are I think several
instances that we're aware of where the--what we hear is, you
pass a bipartisan program in a State legislature that envisions
certain experimentation, and that there has been a very
difficult time obtaining the waiver, particularly where it
relates to some of the Food Stamp aspects, and in one case at
least being successful only upon the intervention of the
President.
Mr. Ryan. Well, what do you think is the primary reason, if
you can? I know this may be difficult to answer, but what would
be the primary reason for waiver denial, across the board? What
is the driving reason?
Mr. Scheppach. Probably the budget neutrality.
Mr. Ryan. The budget neutrality?
Mr. Pound. Yes.
Mr. Ryan. What about the time line? Have the States
estimated on average what the average processing time has been
for the Federal agencies to review the State request for a
waiver, to get an answer? Do you know the average time for,
say, Food Stamps, or waivers from HHS or Labor, Medicaid? Have
you calculated that?
Mr. Scheppach. Again, my sense on the demonstrations, the
big ones, the average is probably a year or more.
Mr. Ryan. So over the 120-day level----
Mr. Scheppach. Yes.
Mr. Ryan [continuing]. That the Executive order strives to
achieve?
Mr. Scheppach. That's right, but again, those are the big
ones. I think the long-term care ones probably average less
than 30 days, you know, because a lot of those are very, very
quick. And managed care is probably 4 to 6 months, in that ball
park. Now, Agriculture, I'm not sure, since I'm not sure we've
had any approved.
Mr. Ryan. Mr. Pound.
Mr. Pound. I don't know the specifics of that. I would
suggest, though, that this is a good reason why the study or
the cooperative effort on a program in the future might be
built into this legislation, where we would look and see what
kind of a model can we develop here and what are the obstacles,
working together between Congress, the agencies, the executive
and legislative branch and State government. And I would second
Mr. Scheppach's remarks about our willingness to actively
participate in that.
Mr. Ryan. OK, so let me just go beyond just H.R. 2376. What
are some other ideas you think we ought to include in a model,
in a waiver-expediting process? What do you think about a
statutory deadline for processing a waiver request application
from a State, or giving more broad statutory flexibility to
more statutory provisions, something like the Ed Flex bill
which I am sure you are very familiar with, that process? What
do you think of, you know, a provision allowing State
certification for financial requirements like maintenance-of-
effort, matching funds set-asides, cost caps? Or a requirement
requiring quarterly publication, like HUD does, for waiver
applications or denials or the status of waiver applications?
What do you think of things like that?
Mr. Scheppach. Well, I think a lot of those could be
helpful, but again we've got to remember that for the most part
those go to discretionary programs, and our major problem
continues to be in the entitlement area.
I know it's not under your jurisdiction, but perhaps a
package of amendments that comes forward from this committee,
that's recommended to the other committees, might well be
helpful. Also some guidelines in terms of future legislation,
of the areas where waivers make sense and what are some
guidelines, so that when new legislation comes forward, people
can look to it.
I'd have to argue that well over 80 percent of our problem
is in the entitlement area, and again, it's the ability to sort
of combine and integrate these programs.
Mr. Ryan. That is very helpful. Thank you.
Mr. Horn. Yes. Thank you. We now yield to the gentleman
from New York, Major Owens.
Mr. Owens. I have no questions, Mr. Chairman.
Mr. Horn. OK. Mrs. Biggert, do you have any? The
gentlewoman from Illinois.
Mrs. Biggert. Thank you, Mr. Chairman.
Mr. Pound, did you say that you thought that there should
be in the law a definite period of time by which waiver
requests should be--I guess what I am driving at is that in
this, the bill that we have in front of us, it really is that
each of the--each agency will establish the rules and
regulations. Do you think that there should be uniform rules
and regulations across the board for Federal agencies, or that
each agency should promulgate its own rules?
Mr. Pound. I think uniformity is desirable. I do think you
need a possible safety valve procedure.
Mrs. Biggert. Would that be like a model, or would that be
an absolute within this law?
Mr. Pound. Well, if you've got a safety valve, it seems to
me you have not an absolute but a way for exceptions.
Mrs. Biggert. For exceptions. Then what is involved in a
waiver. States make a request. Is it a lot of paperwork? Right
now, is there applications, or is it a definite way to fill
out, or is it just something that each State must decide when
they're making that waiver, that they kind of make up their own
application?
Mr. Pound. Ray.
Mr. Scheppach. Well, generally there's a procedure and a
form, but oftentimes it's an intricate type of thing because
you'll submit the form and then you get a list of questions
back, and then you've got to answer those questions, and then
you get another list of questions, and then you go back and
forth for a period of time. And then there'll often be
negotiating sessions where a number of people will come in from
the State and try to sit down with perhaps people from the
regional office as well as people from the agencies here, to
see whether they can work it out.
Mrs. Biggert. Do you think, then, to maybe try and expedite
this would be, one way would be to have an application that
would have the questions that would usually come up in a
request for a waiver, or is that too hard to do?
Mr. Scheppach. I think it's kind of hard, because the
questions come out, I mean, there are legitimate questions with
respect to it, and the agencies do provide what information
they need. It's just that it gets stretched out because it's an
iterative process over a fairly long period of time, and at
times I don't know that there's enough incentive to get closure
on it, and it's the length of time that tends to be the
problem.
Mr. Pound. We could overreach by trying to overstandardize
some of this, because there are enough differences in enough
things that I think you could----
Mrs. Biggert. Well, that was my concern with what you said,
Mr. Pound, about having kind of a uniform rules and
regulations, that in some respects it appears to be that some
of these different areas, some are much more complex than
others and much more detailed. That might cause problems with
that. I think that's something that we will have to look at.
But looking at the requests for waivers from the different
States and looking at Illinois, it doesn't seem like we have
made that many requests, actually. I have--in the Department of
Agriculture and in EPA seem to be the most, and most of these
have been--well, in the one area have been granted. In another
there has been like 7 percent denials, so that doesn't seem to
be such a problem, but it doesn't give the amount of time.
Mr. Scheppach. Well, again, you've got to be careful with
just looking at the numbers because, as I say, if an agency has
turned down seven other States and Illinois wants to do that,
they're not going to submit a waiver when the feeling is
they're just not going to get it. So it's hard to just look at
the actual numbers.
Mrs. Biggert. Thank you.
Mr. Horn. The ``more questions'' routine that you two had a
dialog on sort of reminded me of Lucy and Charlie Brown and the
football, where an agency just keeps sort of holding it out
there that he might kick it this year, and there are just more
questions, more questions. And that kind of bureaucracy does
not impress me, I must say.
In your testimony, Mr. Scheppach, you discussed the problem
of budget neutrality and how multiple year waivers might cause
problems with OMB's budget process. Just so we can get a feel
as to what reality is in this regard, could you sort of make up
an example of how we--one, how it overlaps on the multiple
year, and then the Federal year and the State year and all
that, and what suggestions you would have to how we could deal
with that?
Mr. Scheppach. Well, you know, sometimes what happens is
that the State may want to make an investment. Let's assume
that they want to make an investment in child care that helps a
welfare person get off welfare. Therefore there's an increase
in child care but there are savings in TANF in the next 4
years, so there's an offset. I think under the general rules
you can't do that kind of thing. In other words, they're
looking at a specific program for a specific year.
Or there may be a Medicaid change that may have some
savings to Medicare. I mean, we have significant overlap in the
so-called dual eligibles for low-income people between Medicare
and Medicaid, and those two programs are getting increasingly
interwoven. It's possible that whatever policy change at the
State level might save the Federal Government money in
totality, although it might cost more in Medicaid, and lower
the costs in Medicare.
And all I'm suggesting is a little more flexibility on
netting all Federal programs, perhaps, and looking at a broader
5-year timeframe as opposed to that 1 year. It's just
worthwhile looking at and perhaps experimenting with, because
right now a very high percentage of these do get kicked out
because of the budget neutrality question, and yet there may be
long-run budget savings.
Mr. Horn. Mr. Pound, do you want to add anything to that
discussion?
Mr. Pound. No. I would agree with what he said. I think it
is a frustration at the--the whole Federal budget process is a
frustration at the State level a lot of the time, but----
Mr. Horn. You can add the national to it.
Mr. Pound. I know, but to the extent that you can consider
the longer run horizon savings and the tradeoffs in programs,
it would only be beneficial to this process.
Mr. Horn. I think you have got a good point there. Let me
ask if there are any other points you would like to make,
because if there are not, well, we will move to the next panel.
Well, the gentlewoman from Illinois.
Mrs. Biggert. Thank you. Just from your point of view or
from the State's point of view, what are the reasons usually
given for a denial of a waiver, or why do you think they are
denied?
Mr. Scheppach. Well, as I said, I think the reasons are
often the budget neutrality reasons.
Mrs. Biggert. Well, I guess the reason I am asking this, do
you think that politics get into this at all?
Mr. Scheppach. Not in a big way, in all honesty, from what
I've seen.
Mr. Pound. It depends. It relates to the idiosyncratic
nature of some of this, I think. I think the answer is
sometimes yes, but maybe frequently no.
Mrs. Biggert. And with some of these denials, are sometimes
a partial waiver given to a State? I mean, is there somewhere
that the Federal Government says you can do this but the other
part is----
Mr. Scheppach. Yes. I mean, there is negotiation and
sometimes there is a partial, and the question is whether the
partial works. Sometimes it just doesn't work, so the State
says, you know, ``I need to integrate the entire thing. If you
give me part of it, it doesn't work, so it's not helpful to
me.''
Mrs. Biggert. Thank you.
Thank you, Mr. Chairman.
Mr. Horn. Thank you. Well, unless you have any additional
comments you think we ought to ask about and didn't, let us
know. If not, on the way back to your offices, feel free to
write us a note and we will put it in the record.
Mr. Scheppach. Thank you.
Mr. Pound. Thank you.
Mr. Horn. Thank you for coming, very much.
And so we will now move to the agencies, and that is panel
three. Mr. Samuel Chambers, Jr., the Food and Nutrition Service
Administrator, is testifying in the absence of Under Secretary
for Food, Nutrition and Consumer Services Shirley Robinson
Watkins of the Department of Agriculture. Mr. Raymond L.
Bramucci, the Assistant Secretary, Employment and Training
Administration, Department of Labor. Mr. John J. Callahan,
Assistant Secretary, Chief Financial Officer, Department of
Health and Human Services.
And gentlemen, if you will, just stand, raise your right
hand. If you have any staff back of you that is also going to
give you advice, I want them under oath also. Anybody stand up
who is going to advise them. OK. One, two, three, four, five,
six. That is about the Pentagon ratio.
[Witnesses sworn.]
Mr. Horn. OK, the six supporters and the three principals
are fine. I am going to have to turn over now to Mr. Ryan a bit
for this, because of other commitments, and Mr. Ryan will be
the Chair of the meeting. And I don't know if you want to
preside from here or preside from there, whatever you would
like.
Mr. Ryan. This is fine.
Mr. Horn. You seem very comfortable there.
So, gentlemen, if we could just proceed then as the agenda
is with Mr. Chambers, and just work our way through, we have
the statements. We would like you to sort of spread it over
between 5 to 8 minutes and get it on the record. It is
automatically in the record, but get the high points from it so
there is more chance for a dialog by the various members of the
committee on both sides.
So with that, I am going to have to leave for another
meeting.
Mr. Ryan [presiding]. Why don't we start with Mr. Callahan?
I think that is the way we had it on the panel. That is
probably the way you expected it, so we will just get started
with Mr. Callahan.
STATEMENTS OF JOHN J. CALLAHAN, ASSISTANT SECRETARY AND CHIEF
FINANCIAL OFFICER, DEPARTMENT OF HEALTH AND HUMAN SERVICES;
SAMUEL CHAMBERS, JR., ADMINISTRATOR, FOOD AND NUTRITION
SERVICE, DEPARTMENT OF AGRICULTURE; AND RAYMOND L. BRAMUCCI,
ASSISTANT SECRETARY, EMPLOYMENT AND TRAINING ADMINISTRATION,
DEPARTMENT OF LABOR
Mr. Callahan. Thank you very much, Congressman Ryan.
Congressman Ryan, Chairman Horn, Congresswoman Biggert,
Congressman Owens, thank you very much for inviting the
Department to testify here today about our review waivers of
Federal law and regulations.
We believe the HHS waiver process has been successful in
approving nearly 684 waivers in the time of the Clinton
administration. These include State-wide research and
demonstration Medicaid waivers; 1915(b) Medicaid program
waivers; 1915(c) Medicaid waivers; welfare reform waivers;
child welfare waivers; refugee assistance waivers; and child
support waivers.
Every State in the Union; every State, I repeat, has
applied for a waiver and received at least one HCFA and ACF
waiver during the current administration. Indeed, I might add
as a note, under the Medicaid 1115 State-wide demonstration
authority for waivers, which has been in existence since 1960,
during the Reagan administration starting in 1980, one State-
wide waiver was approved. In 1988 under the Bush
administration, during the time he was in office, there were no
waivers approved. And there were 20 waivers approved under the
current administration.
We believe that the waiver process is one of constructive
engagement between Federal and State governments. Our goal at
the Federal level is to work with States as partners, emphasize
State flexibility, and work with States to develop a smooth
implementation process.
Indeed, as part of that effort, as you know, the Department
and the National Governors' Association reached agreement in
1994, in a Federal Register notice that is part of my formal
testimony. This agreement indicates first that there will be a
collaborative effort in the waiver process in order to help
States develop research and demonstration waivers in areas
consistent with the Department's policy goals; second, the
Department will consider proposals that test alternatives that
diverge from those policy goals; and finally to consider a
State's ability to implement the research and demonstration
project.
The NGA agreement also stated principles related to
evaluation, duration of waivers, budget and cost neutrality,
and State notice procedures, so that all the constituencies in
the State would be aware of the waiver that was being submitted
to the Federal Government. This agreement is also contained in
my formal testimony.
Prior to the enactment of national welfare reform, HHS used
waiver authority broadly to give States flexibility to run
their welfare programs. Most welfare reform waivers were
approved within 4 months, many within 2 months.
And in 1995 the Administration on Children and Families
developed and announced an expedited 30-day review and approval
process for waiver proposals that helped States address five
major areas of helping welfare recipients become self-
sufficient. Copies of this guidance are also included in my
testimony.
In HCFA the length of review time differs according to the
type of waiver that is requested. Approvals and renewals for
program waivers and home- and community-based waivers are time
limited. They have to be acted on within 90 days, and our
indication is that in these particular waivers--these are
1915(c) waivers, I believe--that they are generally approved
within a period of 60 to 75 days.
The longer-term demonstrations which are the complex ones,
the State-wide Medicaid demonstration waivers, do take a longer
time. Indeed, I have some information, I believe, which has
been supplied to me by the HCFA administration, that of 18
States we averaged about 10 months to approve these waivers,
and in 7 States they were approved in 6 months or less.
And I might also add, as a point of reference vis-a-vis Mr.
Scheppach's testimony, that with regard to budget neutrality,
we do not do budget neutrality on a 1-year basis. We do it on
the basis of the duration of the demonstration. So in the case
of the demonstrations that are forwarded to us from the States,
they're generally 5 years in length, so the budget neutrality
calculations are for 5 years, not for 1 year. And indeed
they're renewed for 3 years: the budget neutrality calculation
will continue for the full length of the demonstration. So
budget neutrality is not calculated on a year-by-year basis.
Throughout this process, as I have indicated, the
administration works cooperatively with a State, and provides
technical assistance, urges the State to provide a public
notice process to all its citizens, when it submits a waiver
request; negotiates budget neutrality, et cetera.
Let me just say that there are a couple of principles that
guide our waiver process. Waivers are in fact like contract
negotiations. They are not easy, but there is a mutual desire,
I believe, on both sides, on the Federal and the State side, to
attain a mutual goal of creating program innovation and
flexibility.
But we must realize we have to protect program integrity,
and oftentimes the entitlement nature of the program. Medicaid
is an entitlement as well, as some of the other programs that
we're talking about. And we have at the Department a fiduciary
and programmatic responsibility to do two things. One is to
make sure that the demonstration is fiscally prudent, that is,
it fits within the budget neutrality concept which was agreed
by us and NGA; and the other is to ensure that we protect
vulnerable populations.
In the Medicaid demonstrations that we have dealt with over
the years, we have added 1.1 million new eligibles to the
Medicaid population. These are cooperative efforts, again,
between the Federal Government and the State. We have also
moved 4 million Medicaid beneficiaries to managed care. We
believe this is positive, as well.
But we have to be concerned also in the area of managed
care, because in some cases people have indicated that
individuals, and adults and children with special needs, may
not always get the appropriate treatment under managed care.
This is something that we have to be very careful about,
because if the beneficiaries are Medicaid-eligible, they should
receive appropriate care under either a current program or a
revised program. So we have to deal with cost neutrality and,
at the same time, make sure that the beneficiaries are
protected.
So those are the basic concepts that we use in our
demonstrations. We feel we do approve them within a reasonable
period of time, and we believe that our record indicates, with
the 700 waivers we have approved, that we have a process that
works and will continue to work over time.
Thank you very much. I would be pleased to answer any
questions.
[The prepared statement of Mr. Callahan follows:]
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Mr. Ryan. Mr. Chambers.
Mr. Chambers. Good afternoon, members of the committee. I
am Samuel Chambers, Jr., Administrator of the Food and
Nutrition Services at the U.S. Department of Agriculture. I am
pleased to speak to you this afternoon about how the Food and
Nutrition Service [FNS] manages the Federal grant funds for the
Nation's Federal domestic nutrition assistance programs, as
well as how FNS implements grant waivers. I would also like to
share the Department's comments on the bill before you.
The Food and Nutrition Services administers 15 domestic
nutrition assistance programs. We believe that these programs
form a nutritional safety net for America's low-income
families, providing the Nation's children and their families
with access to a more nutritious diet and encouraging better
eating choices.
Each of these 15 programs is targeted at populations with
specific nutritional needs, and all of these programs operate
under Federal assistance awards to States who agree to operate
them under requirements established in the authorizing
legislation and through regulations, formal instructions,
policies and procedures.
The largest nutrition assistance program FNS administers is
the Food Stamp Program. Currently, approximately 18 million
Americans receive nutrition assistance in the form of Food
Stamp coupons or electronic benefit transfer [ebt] payments in
order to purchase their food.
The Food Stamp Program consists of two parts: benefits
provided to households, and an administrative grant that
provides funding to State agencies for administering the
program. Benefits, of course, are 100 percent federally funded,
while most administrative expenses are at a 50-50 match ratio.
Now, our agency has authority granted for three types of
waiver situations in the Food Stamp Program. The first, of
course, is program administration. The second is with regard to
work requirements, and that is the one that probably gets the
most attention. And then, of course, demonstration projects.
In the first area, administrative waivers, our regulations
allow us to waive Food Stamp Program requirements so long as
such a waiver is consistent with the provisions of the Food
Stamp Act, and of course does not result in material impairment
to participants or applicants.
Now, to give you an example, we recently approved a waiver
for the State of Maryland concerning when a household must
report income changes. Under the new procedure, a household
will be required to report new employment within 10 days of the
start of employment, instead of 10 days after the household is
aware of that new employment. This waiver we believe will help
households better understand when they need to report a change
in earned income due to a new job, and will also make it easier
for caseworkers in that State to determine when a household
should report a change and whether that household is complying
with the change report requirements.
Now, in this area as well as the other two areas, our
standard for responding to waiver requests, once they are filed
with one of our seven regions, is 60 days--not 6 months but 60
days.
In the second area, the one that I referred to as being
probably the one that's most popular, that having to do with
work requirement waivers, the Personal Responsibility and Work
Opportunity Reconciliation Act of 1996 restricts participation
in the Food Stamp Program to 3 months during any 3-year or 36-
month period for certain able-bodied adults between the ages of
18 and 50. FNS may waive this requirement when an area has an
unemployment rate greater than 10 percent or insufficient job
opportunities. Currently, FNS has approved 39 State requests
for such waivers.
Again, we currently act and our standard for acting on
these waiver requests is also 60 days. When a State agency can
certify data from the Bureau of Labor Statistics showing an
unemployment rate above 10 percent in a specified area, FNS
actually allows those States to operate under that waiver
starting at the time that they actually request the waiver, so
that those happen in a much, much shorter period of time than
the 60-day standard that we normally provide.
The third category, which is, of course, demonstration
grants, allows us to permit States to conduct pilots or
experimental projects. Currently, 13 States are operating
demonstration projects so that they can test new techniques to
increase the efficiency of the Food Stamp Program or to improve
delivery of benefits to eligible households.
Under this authority, FNS is required by statute to respond
to waiver requests, again within 60 days from receiving the
request, by either approving or denying the request or by
requesting clarification of a particular request. If we fail to
respond within that 60-day timeframe, the waiver is approved
unless its approval is specifically prohibited by statute. So
again, you're talking about the same 60-day span that is
applied across all three categories of waivers.
The Food and Nutrition Services uses its waiver authority
appropriately, giving prompt and careful consideration to each
State's proposed changes in program requirements. Because the
Food Stamp Program and other programs that we administer
comprise a nutritional safety net for millions of low-income
families and are national in scope, each change in program
rules has the potential to affect the health and well-being of
millions of Americans. Recognizing this, the Department
approves many waivers each year, allowing States to experiment
with changing program requirements in the interests of
improving the effectiveness of program administration and
service to our Nation's families.
As an aside, I don't know if Mr. Scheppach has left, but he
mentioned during his testimony that he was not aware that our
agency had approved any waiver requests, and I think we've
submitted information to the committee already but I'd like to
at least clarify for his benefit, if not others, that for the
year 1999 we approved 116 requests, waiver requests, for 47
States. For 1998, the year before, we approved 163 waivers for,
again, 47 States.
Mr. Ryan. How many denials?
Mr. Chambers. In both of those years, in 1999 we denied 17,
and in 1998 we denied 25, so overwhelmingly the great majority
of the waiver requests that we received in each case from the
majority of States, 47 States, were responded to in the
affirmative.
On occasions, different States may seek waivers from our
agency to test a familiar programmatic change, which is
something that's been referred to here. FNS believes it is
necessary to test the waiver of a program requirement first in
a particular geographic area or in a limited population, so
that its effects can be thoroughly evaluated before additional
waivers are granted.
You heard previously numerous individuals testified that no
State is created entirely equal to another, and that is one of
the reasons that we try to be very judicious in our review of
waivers, to make certain that the externalities, if you will,
or spillover effects of a particular waiver that is proposed in
one particular State and approved, is tested thoroughly and
documented as being not only in support of the programs mission
goals and objectives, but that it does not create an undue
hardship on either the State that is administering that change
or the individuals who are in fact the recipients, intended
recipients of those benefits.
The committee is considering a bill today which would
require agencies such as ours to expedite its review of a
State's waiver request. The Department believes that this
proposed legislation is unnecessary, and I don't think I need
to say anything more about that except to reiterate that the--
that has already been indicated.
While the waiver requests FNS receives from States may
appear to be similar, again, each State situation is unique. In
giving each waiver request prompt and careful consideration,
FNS must not only consider the requesting State's particular
circumstances, but we believe we must also, if the proposed
change is already being tested and evaluated elsewhere, under
what circumstances.
In this way, we are able to support State innovation while
at the same time providing the necessary oversight to ensure
that programmatic changes are effective and beneficial. When an
approved waiver unexpectedly results in problems for a State or
its recipients, the impact is limited in scope, and the
Department and other States are able to learn from that test
case.
Mr. Chairman, this concludes my prepared remarks, and I
would be pleased to answer any questions that you or other
Members may have at this time. Thank you very much.
[The prepared statement of Mr. Chambers, Jr., follows:]
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Mr. Ryan. Thank you, Mr. Chambers.
Mr. Bramucci.
Mr. Bramucci. Mr. Chairman, members of the subcommittee, my
old friend Major Owens, I am pleased to be here to talk about
Federal grant waivers. I will summarize my testimony and it's
pretty straightforward. We believe in waivers. We are using
waiver authority to the maximum in terms of sound policy, and
we are pushing the envelope whenever and wherever it is sound
to do so, actively looking for ways to grant waivers rather
than reject them, or to work with States to help them
accomplish their goals in other ways.
We are doing business in a new way at the Department of
Labor, and it's very much in keeping with the spirit of the
Workforce Investment Act. This act was unique, in that it
brought members of both parties together in agreeing that the
best job training or worker assistance programs are those that
are designed at the local level.
Mr. Chairman, since we responded to Chairman McIntosh's
August 3rd request, we've continued to analyze, and my formal
testimony provides you with more detailed information, but it
boils down to this: Under the Secretary's waiver authority for
1997 and 1998, 40 States and one Territory requested and were
granted waivers of JTPA and Wagner-Peyser requirements. We
approved 423 waiver requests; 26 other requests were not needed
because States could do what they were requesting. We didn't
have the legal authority to waive 98 requests, and we
disapproved 54 requests. So we were approving about 9 out of
10.
My written testimony describes in detail our use of waiver
authority, with a special emphasis on waivers under the JTPA
program. With due respect to that law, it's history.
I became Assistant Secretary of Labor for Employment and
Training the day the Workforce Investment Act was passed.
Before that, I spent 4 years as New Jersey's Commissioner of
Labor, and I know how important it is to partner with States
and with local communities to make good things happen, and I
witnessed firsthand the wariness of State officials to Federal
officials, and I witnessed also the wariness of local officials
to State officials and Federal officials.
We are working hard to ensure that our actions reflect the
spirit of partnership and the flexibility that is inherent in
the act, and the best way the States can ensure they have the
flexibility they need is to take the authority to set their own
course that the Workforce Investment Act gives them by moving
expeditiously to write a State WIA plan and submit it.
Our current policy on waivers is grounded in the work
started by Senator Mark Hatfield of Oregon. He worked on one
State waiver authority with Oregon State and local officials,
and we worked with them to try to figure out how to help them
improve job training and employment programs. When Senator
Hatfield expanded the waiver authority under JTPA, he agreed
that certain key features of the program, such as eligibility,
allocation of funds, and labor protections, should not be
waived. I wholeheartedly support the Hatfield doctrine.
One of the principles of the President's ``GI Bill for
American Workers'' which evolved into and was enacted as the
Workforce Investment Act, was State and local flexibility.
Accordingly, the administration proposal included a
codification of Senator Hatfield's waiver authority that has
been contained in annual appropriation bills.
Under Welfare-to-Work, the Secretary has the authority to
waive the statutory requirement that programs at the local
level be administered by the Private Industry Council if the
State shows that designating an alternative agency would
improve service. In 1998, a total of 20 requests from 5 States
was received for waivers, and they were approved.
Getting back to the Workforce Investment Act, one of its
key principles is State and local flexibility. The form and
substance of the interim final rule for WIA reflects our
commitment to regulatory reform and to writing regulations that
are user-friendly, and in a question and answer format to make
them easier to use. And to provide greater flexibility, the
regulations do not include all of the procedures mandated under
JTPA. As a result, they were only half the length that JTPA's
were, as they were published in the Federal Register, and we
used far more ``mays'' than ``shalls.''
Under WIA, 90 percent of the waivers granted in the past
won't be necessary. Since WIA is inherently more flexible than
JTPA, we won't get as many waiver requests and the ones we get
will be handled faster. But there are limitations to what we'll
allow. We won't allow waivers of the basic purposes of title I
of the act: establishment and functions of local areas and
local boards; review and approval of local plans; and worker
rights, participation and protection.
Mr. Chairman, I thank you for the opportunity to present
the Department of Labor's point of view, and stand ready to
answer any of your questions.
[The prepared statement of Mr. Bramucci follows:]
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Mr. Ryan. Great. Thank you, Mr. Bramucci.
Let me start with you, Mr. Callahan, and then the other two
witnesses. With the letter you sent here to the subcommittee,
you stated, ``Waiver applications are highly individual, in
that each embraces matters grounded in the specifics of the
State's current plans, demographics, needs, resources and
priorities. Therefore, each application is considered
individually and not in comparison with other applications.''
I think that is a very valid point and it is a very
noteworthy point, but does HHS streamline its review process in
any way for a State waiver application which is similar to that
approved of another State? If not, can you explain that more
fully? I mean, aren't there some cases where some of these
things do resemble other cases, other States, or is every
single one clearly and distinctly different.
Mr. Callahan. Well, I think there's always differences in
probably virtually every State waiver that comes in. I think
your point may be correct that there's not major differences in
every application----
Mr. Ryan. Right.
Mr. Callahan [continuing]. And that's a valid point. But I
think one of the things that probably ought to be kept in mind
here is, when the waiver is finally approved, it is for a
rather long period of time.
So, for example, on the major demonstrations that you're
concerned about, the 1115's, when a State waiver is approved,
it's approved for 5 years. It's also renewed for 3 years. And
the other ones that we're talking about, they're generally
approved for 2 or 3 years and renewed for 2 or 3 years.
So the key thing here is, aside from the streamlining that
you're concerned about, is to have a constructive process so
that you get a good, solid waiver, and once it's agreed to,
it's locked in for a long period of time. So I guess our
feeling on this would be, the important thing is the end goal,
which is to get to the approval of a waiver that both sides----
Mr. Ryan. A quality waiver.
Mr. Callahan. A quality waiver. That's a good point.
Mr. Ryan. Sure.
Mr. Callahan. And I think the record would indicate, again
given the number of waivers, we've achieved that.
Mr. Ryan. Well, and I think you will find no disagreement
on the fact that we want to achieve a quality waiver so it is a
program that can be locked in, but aren't there similar quality
waiver requests coming, and aren't there some coming in 1 day,
and then a few days down the road or a year down the road, very
similar waiver requests that are structured the same way
because another State got them in just as quickly?
Mr. Callahan. Undoubtedly that may occur. Obviously, not
having sat in front of those 685 waivers that have been
approved, I can't give you a very specific answer. But I do
think we are mindful of time. Not only are the State people,
the State officials that deal with us are mindful of time,
we're mindful of time as well.
But we want to make sure, when we approve that waiver, that
we do the two things that I talked about earlier. It has to be
budget-neutral, and that was agreed with us by the National
Governors' Association. They signed on to that agreement. And,
second, we have to make sure that the people that are served
under these programs are well served, and that's the thing that
we're aiming at.
Mr. Ryan. Well, and that is our question with Wisconsin.
Had BadgerCare been approved a year earlier, we could have
served all those extra low-income people, had it been approved
earlier. So the consequences of not acting, not granting
approval, are fairly dire as well.
Have you estimated a ball park timeframe as to what the
average approval process is at HHS?
Mr. Callahan. We will supply that for the record in detail,
but let me say it's my general understanding that in the area
of the major demonstrations, which are the 1115's, there have
been some that have taken a long time. The New York case was a
long time. I think you've already eloquently stated that the
Wisconsin case took a long time. Some of the other major
demonstrations took as little as 3 months, sometimes more, in
the 6 or 7 month timeframe.
Mr. Ryan. Well, as you know, the Executive order says 120
days is the goal.
Mr. Callahan. Right, but again, these are the most complex
ones because they deal with revisions in the Medicaid program.
It is very clear, because the Medicaid program is an
entitlement program, we're not going to push people who are
entitled to Medicaid out of it.
And, second, we do have to do these budget neutrality
calculations, which are complex, which apply to a 5 year
period, and we work with the States to determine what we call
the ``without waiver baseline'' which is the projection of what
we believe a normal projection of Medicaid expenditures without
the waiver would be for 5 years.
So these are more complex, and I would suggest that I'm not
sure you'd want to do those in 90 or 120 days, because if you
set a very arbitrary standard, saying, ``OK, we've got to
conclude it in 90 days,'' and we agree to say, ``OK, we'll
either approve it or deny it within 90 days,'' you might get
more denials.
I guess my point here is, it's better to keep the parties
at the table, and that's what we're aiming for.
Mr. Ryan. Sure, but wouldn't you agree that it could be
done a little faster? I mean, given the fact that the
administration's own Executive order says we want to do this
within 120 days? I agree, an arbitrary date may increase the
possibility of denials, but can't progress be made.
Mr. Callahan. Yes, I don't deny that progress can be made,
and we have on our part put out a lot of technical assistance
guidelines to the States to indicate the things that we're
concerned about when we come to the table. We would hope that
sort of technical assistance will create a situation where
we'll come to the table as quickly as possible and get these
things approved as quickly.
Mr. Ryan. We will go to another round of questions, but I
would like to ask my colleague, Mr. Owens, if he would like to
ask any questions at this time.
Mr. Owens. Yes. Thank you very much. I hate to sound like
an old-fashioned Democrat liberal, but the assumption is being
made that the more freely waivers are granted, the more
improved government, and I think that both the White House and
the Republican majority in the Congress agree with that
assumption and are pushing very hard, and your record
demonstrates that. I think you--had we been talking about this
10 years ago, the record would be quite different in terms of
the kind of waivers, number of waivers and kind of waivers
granted.
But I really have some problems with the assumption that
automatically things are done better at the State and local
level. You know, we have a scandal in New York where a clerk
for the last 7 years has been taking bribes to marry people
without making them follow the proper requirements, and some
folks are wondering whether they are married or not, you know,
appropriately. We have a situation where 20,000 kids were
forced to go to summer school because there were blunders on
the testing, the process of scoring the test. We have a
Governor of the State of New York under investigation and
scrutiny because of some ethical questions, ranging from his
fee, the fees he collects for his speeches, to the way they let
contracts.
And on and on it goes. Corruption at the local level, you
know, I know we are all familiar with. I think, Mr. Bramucci,
you were with State government. I know that local government is
the same thing. You would concede that it isn't the most
efficient and the cleanest form of government. We had a
situation recently where the mayor of New York had to be
ordered by the Federal court to stop abusing potential welfare
recipients and Food Stamp recipients.
So, I just wonder, in this process of rushing to grant
waivers and place our faith in the State governments, do we
have some safeguards? And can we have more safeguards and some
stringent penalties for people who violate the law because the
waivers give them a situation where nobody will be watching,
monitoring, holding them accountable?
We have large amounts of money not being spent, that we
think ought to be spent for job training, day care. We have a
situation where large amounts of money are being saved by
adopting certain policies, because the Federal share is part of
it and there is a State and local share, and therefore these
waivers give the government a chance to save a lot of money on
the backs of people who are in great need, and they are being
denied things that they really are due according to the
legislation and they are eligible for.
So I wonder if you would comment on any safeguards that we
might need, like penalties in the law which really put people
in jail for violating the law. After they have been given all
this freedom, if they are caught violating the law, they really
have to pay a price. Or some other means of making certain that
while we give this greater flexibility and freedom, we don't
undermine the real purpose of the laws, mostly the safety net
laws that people want to push for waivers with. And I just
wonder if you want to, each one of you might want to comment on
that?
Mr. Bramucci. Since the Workforce Investment Act envisions
the greatest transfer of authority and initiative to the local
level under State auspices, remember I said in my testimony
that notwithstanding that transfer and that new partnership
from the bottom up, we would not give waivers on eligibility
for benefits and for programs, allocation of funds, nor labor
protection. We'll be watching that very closely, because what
we're not trying to do here is have an excuse for less people
being trained, but for more, and to do it more expeditiously,
however, by having fewer rules and regulations and more
flexibility on the part of local communities to design the kind
of programs they need for the local citizens.
But the aim is to expand the availability of training and
education to people who direly need it in our economy. We'd be
sweeping things under the rug to take that--to take a point of
view that we're trying to save money here on services. We're
trying to save money on red tape. We're trying to extend the
availability of the service to eligible workers, Congressman.
Mr. Owens. Now I would like to see about that waiver for
truck drivers in New York City.
Mr. Bramucci. Yes. You asked me about that before.
Mr. Chambers. I'd like to make a few comments in response
to that question. I've had 31 years of experience in
government, all of that time in human services, working with
Food Stamps and similar programs, TANF, the old AFDC program.
I've been a caseworker, a child welfare worker. I've been a
supervisor, manager. I've done constituency services. I've been
a county director, I've worked at the county level, I've worked
at the State level. I've only had 1 year of experience at the
Federal level, and I can tell you, I've seen in that 31 years
some of everything. I think when I'll retire I'll write a book
and call it ``Anything You Never Want To Know About Government,
And Then Some.''
But, at the same time, I've seen some absolutely wonderful,
creative work done at every level of this American government,
and I have to believe that my collective experience over that
period of time at the three levels of government, at least in
the human services, suggests to me that in the main the people
who are managing these programs and who are carrying out the
directives of the administration and Congress really are people
of good will and intent and tremendous talent and expertise.
I believe, and I think it would be my--hopefully my
colleagues' perspective also, that the waiver authority that we
currently have granted to us allows us a lot of opportunity to
do real partnership and collaboration with our peers. And by
virtue of the fact that we have been able to do waivers, I
think, and meet many of their requests, in fact, in the
majority of cases, their requests for innovation and
creativity, I think we pretty much feel that we've got our
hands pretty well firmly on the throttle here.
I think in terms of situations where experiments go awry or
perhaps the results that are achieved are not precisely what
others or individuals might have hoped, I think there are means
that we have at our disposal for addressing that, both in terms
of negotiating with those States that have gotten the waivers,
changes in those provisions so that the problems can in fact be
corrected and the results can in fact be improved.
So I think as long as we can maintain a spirit of
collaboration, partnership and cooperation in this regard
without the rancor that sometimes pervades discussions between
advocate groups and States as well as the Federal agencies, and
then even our customer constituents, as long as we can somehow
get past all that, I think we have a real opportunity for real
success here in terms of reinventing government and making a
positive step for quality of life for all of our citizens, the
ones that we represent who are here as well as those that are
not here, that need our services. So, thank you, that's my
perspective.
Mr. Owens. Thank you.
Mr. Callahan. I think with regard to the waiver process,
your point is a correct one. These are waivers, these are time-
limited waivers, so it is incumbent upon all the agencies that
have the waivers, including our own, to look at and evaluate
these waivers not only to see whether they made improvements in
the program, but clearly that there were no adverse effects on
the beneficiaries of the program. And that's the basic
philosophy that we use in dealing with the waivers, so your
point is a correct one.
Mr. Ryan. Mr. Owens, let me respond. As an old classical
liberal, I guess as a young classical liberal, I just think it
is important to quote Winston Churchill at this time, who said
that democracy is the worst possible form of government except
for all other forms of government. It is a sloppy process. You
do have graft and corruption. You do have unintended results.
But the foundation of democracy, from my perspective, is
the idea that government which governs closest to the people,
governs best. That way you have those who are right there in
the streets, in the schools, in the hospitals, on the front
lines of the fight for reviving our society, helping make the
decisions on how to improve the conditions in our society.
And I think what we're trying to achieve here is a good
cooperation, not a Federal Government hunkering down on top of
the State governments or the local governments. And, Mr.
Chambers, I think what you said was a wonderful statement,
which is, we are not trying to achieve finger-pointing, we are
just trying to achieve results.
I think everybody that works at all of these departments
and in these State governments, and here in Congress for that
matter, are well-intentioned people trying to achieve good
results for their citizens, their fellow citizens. Our
constituents, your constituents, are all citizens of the United
States of America.
But, having said that, we do have this wonderful thing in
America, and that is, we have these institutions of democracy,
State and local governments, all over the country who have a
good, in most cases better perspective on how to help and care
for people in their areas. The whole purpose of waivers is to
try and get those tools in the hands of those local
governments, those State governments.
Mr. Owens. Would the gentleman yield?
Mr. Ryan. I would be happy to yield.
Mr. Owens. I have to run, but I just want to say I have
served at all three levels of government, and I don't agree
with you at all.
Mr. Ryan. Well, thank you, Mr. Owens. I appreciate that. I
think we are just going to agree to disagree on some of these
things.
Let me go to you, Mr. Callahan. I wanted to ask you a few
specific questions, because we were going down the path on the
some of the health care programs that you administer, and in
NGA's written testimony they explain that Texas and Michigan's
applications to combine waivers under Section 1915(b) managed
care and Section 1915(c) long-term care, to create managed
long-term care programs under Medicaid, required more paperwork
and more staff resources than if they had requested separate
waivers for each section.
Why was this the case? I mean, why did HHS require more
paperwork for a combined application than for separate
applications?
Mr. Callahan. Well, I haven't had the benefit of seeing Mr
Scheppach's testimony, and I will have to supply that answer
for the record.
Mr. Ryan. If you could, please.
Mr. Callahan. Yes, sir.
Mr. Ryan. Let me go on and let me ask you, maybe you can do
this in written followup, but later in their testimony they
said, ``Currently many States are interested in pursuing
coordinated care options for individuals who currently have a
fragmented health care delivery system''--that is something we
are experiencing here in my home State of Wisconsin--``those
frail seniors eligible for both Medicaid and Medicare. Several
States have engaged in protracted negotiations with HCFA''--the
Health Care Financing Administration within HHS--``but have
ultimately, and for several years in some cases, withdrawn
their application.''
The goal of State experimentation, State improvement in my
State is to try and get at all slices of society, to make sure
no one is slipping through the cracks. We do have different
health care policies, different health care services out there
that people can at the same time qualify for, yet it is sort of
a stovepipe viewpoint from the Federal Government.
Mr. Callahan. I understand the concerns that you have
raised about the seamlessness of care. However, we do have to
acknowledge the fact that Medicare and Medicaid are two very
different programs.
Mr. Ryan. Clearly.
Mr. Callahan. In Medicare, there are concerns that we have
to deal with vis-a-vis the trust fund on Medicare, in terms of,
for example, if there were a basically a waiver that was
designed just hypothetically, say, to save Medicaid funds but
expand Medicare funds. That has an impact on the Medicare trust
fund. I think that's something that actually the Congress would
have to consider, as well.
Mr. Ryan. Are the budget neutrality----
Mr. Callahan. If I could just finish----
Mr. Ryan. Oh, sure.
Mr. Callahan [continuing]. There are a couple of other
things, too. There are differences in the Medicare and Medicaid
beneficiaries, in eligibility rules. For example, in Medicaid
programs we have permitted waiving freedom of choice in
providers of programs. That is, States as part of their
demonstrations have put a lot of Medicaid beneficiaries in
managed care programs.
A Medicare beneficiary is free to choose. A Medicare
beneficiary is free to choose as to whether he or she wants to
be in fee-for-service or whether he or she wants to be in
managed care. That's part of the basic statute.
So those sorts of things have to be weighed in these
matters, and I think it's those, among other considerations,
that I think are legitimate concerns we'd have to deal with
before we resolve the problem along the lines that have been
suggested.
Mr. Ryan. Do you have any thoughts on how we can resolve
that, any statutory changes or anything like that?
Mr. Callahan. Well, I think you'd have to look at changes
in both the underlying authorizing statutes, both Medicaid and
Medicare. I think one of the points that your colleagues made
here which is a good one, if these things become so routine and
accepted over time, maybe what we have to do is, go back and
change the basic underlying statute. And insofar as this
committee can look into that and can suggest that, then I think
that's something you should----
Mr. Ryan. Yes, I think that is a very--that is what we did
with welfare reform.
Mr. Callahan. Right.
Mr. Ryan. I think it is a very, very valid point.
The CHIP program, I know the CHIP program is relatively new
and waivers have been set aside for a year.
Mr. Callahan. Right.
Mr. Ryan. What is the status of that right now?
Mr. Callahan. As you know, in the CHIP program, I think
it's within the last 4 to 6 weeks we had the last two States
finally come in and have their CHIP programs approved, so all
States now have either a separate CHIP program or, as you know,
what they call the M-CHIP program, where they cover the
children under Medicaid expansion as opposed to the CHIP
program per se, the S-CHIP program.
And, as you know, we estimate that somewhere in the order
of 1.3 million children are now covered under the CHIP program.
The President has asked and directed our agency to go out and
actually visit all 50 States, right now which we're finishing
up, to see why we aren't getting more kids that are Medicaid
eligible and/or CHIP eligible, enrolled in Medicaid and CHIP.
I'm sure some of your State legislators have talked to you
about that.
So I think we want to be in the process of getting this
overall program up and running at a fairly high rate before we
get back into the waiver process. I think we will get into the
waiver process at some point.
Mr. Ryan. Do you have any idea what the time line is?
Mr. Callahan. I'd like to supply that for the record,
because I----
Mr. Ryan. Because I think the legislation had some
requirements within it that----
Mr. Callahan. Oh, I understand.
Mr. Ryan. A specific time line.
Mr. Callahan. Right. I understand, but I'd like to confer
with the HCFA administrator on that.
Mr. Ryan. If you could, I would appreciate that.
Mr. Bramucci, I just wanted to ask you a quick question. I
was intrigued with your testimony, but I also notice that,
looking at the statistics that the Department supplied the
subcommittee and the other departments supplied the
subcommittee, that the Department of Labor has the highest
denial rate of any other department in the Federal Government,
a 29 percent denial rate.
Could you--you briefly touched on some of the denial
reasons, but could you go into a little more specific why your
Department is the highest, has the highest denial rate, and
what are the reasons for the bulk of these denials?
Mr. Bramucci. Well, statutorily we have--the biggest number
that you saw in our graph. By the way, this has been added to
our testimony. You'll notice that the biggest number on
negativity are the ``no authority to waive.'' That isn't a
denial, it's simply a denial of authority under the statute.
We simply--54 cases are all that we denied over those
years, and in most instances we're eager--I mean, some of the
things talked about here, when we have a request for a waiver,
for instance, that's on our website. We publish not only the
request for a waiver but the answer, so that States can pick up
information as to what is OK and what isn't, in order to
facilitate discussion.
We have detailed meetings with our partners all over the
country on these issues. And, you know, I've been around the
country now. I've been on this job 14 months. I have traversed
hundreds of programs out there with all kinds of officials.
I've never heard an official, Republican, Democrat, or a
Ventura-ite, ever question our waiver objectivity. I have
never----
Mr. Ryan. Jesse Ventura has never questioned your waiver?
Mr. Bramucci. No, he has not.
Mr. Ryan. OK.
Mr. Bramucci. No, they have not questioned our--in all the
time I've been in this office, 14 months, not one person has
accosted me or said to me, ``Bramucci, the Labor Department is
not doing its job properly.''
Mr. Ryan. Let me ask you about the 54 discretionary waiver
denials or the 54--I just saw your chart for the first time
here--where the waiver was disapproved. Is there a pattern
there? Is there a systematic pattern? Is there a reason why
those were disapproved? It sounds like those were disapproved
by discretionary decisionmaking within the Department of Labor.
Mr. Bramucci. Basically it's commingling of funds or
requests to waive outcomes or performance data that we found we
couldn't live with. It would just not be proper under our
stewardship of the law. You know, Congress just didn't say,
``Here, send the money out and there are no requirements,'' and
so we're the referee. We have to call it.
And we would like to say yes because we have an active
partnership going. But I will point out to you, Congressman,
that most of that is all moot because we have moved to a new
era. We're out of the business of doing----
Mr. Ryan. With the new law?
Mr. Bramucci. With the new law. Ninety percent of the
requests and approvals we made would not be germane today.
Mr. Ryan. I think that's a very good point. The new law
hopefully will take hold, and hopefully we can take care of
this experimentation.
Mr. Bramucci. We've got to get the States to file their
plans, and we've got I think 16 in the house now, because this
is a massive enterprise of passing authority and initiative out
to the States and to the local communities. And we think it's
going to work, and there is an enormous push for it, and it
will remove a tremendous amount of frustration at
intergovernmental relations.
Mr. Ryan. Well, let me ask each of the three of you this:
To get a better handle on the 85 percent approval rate reported
by the agencies to the subcommittees, 85 percent of the waivers
being approved, were any State waiver requests only partially
approved by each of your agencies? And if so, what percent of
your agencies' approvals were partial approvals, and can you
give me the nature of the partial approval process? Let's just
go down the line. Mr. Callahan?
Mr. Callahan. In terms of partial approval, I suppose the
question may be a definitional one. And you'll forgive me for a
moment, but if a State comes in and puts in a waiver request,
and then we negotiate with them and we come out with a
different product in the end, is that--do you determine that to
be a partial waiver?
Mr. Ryan. I would think so.
Mr. Callahan. Well, why?
Mr. Ryan. Well, the input is, the State legislature passes
a program. Let's take BadgerCare, our own program back home. It
requires so many waivers. The output is something that looks
different than what the State government passed.
Mr. Callahan. So in essence, then, if I may, in that case
I'd have to give you precise information as to whether the
initial waiver was not approved in its entirety, as opposed to
whether a different waiver was approved, and we'd have to do
that. That would take quite a bit of work.
Mr. Ryan. I think a better question would be, in the
approval where it ends up becoming a partial approval, are
there cases where with other States they did get approval, and
another State did not get approval, for very similar provisions
or waivers that were being requested?
Mr. Callahan. Well, that would require a detailed
examination of all these 684 waivers that we've approved.
Mr. Ryan. Just off the top of your head, as an
administrator.
Mr. Callahan. I would say by and large for a lot of these
waivers, the 1915 (b)'s and (c)'s, a lot of them were probably
approved in very close conformance with the original
submissions. The 1115's, which are the more complex waivers,
probably under your definition would be viewed as ``partial''
waivers. They're very complex and----
Mr. Ryan. Do you think there is, do you have, are you
applying a consistent application of scrutiny to waivers coming
in, regardless of the States.
Mr. Callahan. Yes, absolutely.
Mr. Ryan. Mr. Chambers.
Mr. Chambers. Unfortunately, the information that I have
available to me here today does not include that breakout, so
I'm going to have to get back to you for the record.
Mr. Ryan. OK.
Mr. Bramucci. I don't think so. Generally we get a package
of waiver requests, and to the extent that we would approve--
that a State did 40 requests and we approve 35, if we find--
that would be partial in terms of their package of requests.
But what our practice has been, Mr. Chairman, is to take a look
at the ones that are borderline and negotiate that with the
State, to say, ``If you do this, we will be able to do this,''
or ``If you change these words or that word, we will be able to
do it.'' We don't believe that there is an issue on the part of
our partners in the States in that regard.
And to the argument about whether or not we have ever
denied a State a waiver where we had granted a similar waiver
previously, the answer is yes, in one case. That involved the
State of Florida. The then-Governor was Lawton Chiles, and we
had an ongoing dispute with them on their JTPA review process,
and we were not, because of the legal nature of the dispute, we
were not capable of approving that request. That's the only
request I know of where we have taken a similar request,
granted it in one State and denied it in another.
Mr. Ryan. Well, let me ask the three of you gentlemen this,
and then we'll close. Do you think that denials or the
negotiations that are entered into to restructure waiver
requests can serve or are serving as disincentives for other
States to go under the same process? Or let's say three States
give you a waiver for a program, they are denied, do you think,
as the NGA testifies, that that is a disincentive to other
States to go down the complicated, expensive and timely task of
looking for a waiver?
Mr. Callahan. I would say emphatically not.
Mr. Ryan. Why?
Mr. Callahan. And the reason is 684 waivers that are
approved over the last several years. That's a lot of waivers
that are approved, and I think when our colleagues at the State
level or at the local level want to do something innovative and
constructive and they believe in it, they're going to pursue
it.
So, for example, even in the case of Wisconsin where we did
have differences, we kept working and working and working. And
the ultimate result was that the kids, under the ultimate
BadgerCare demonstration that was approved, were approved under
the M-CHIP program for an enhanced match for services; and the
families, the adults, were approved under the Medicaid program,
the State Medicaid program.
Mr. Ryan. Yes.
Mr. Callahan. So in the end, the people were served. So I
would believe, my feeling is that for those waivers where there
is strong State support for their waivers to serve their
constituents and our common constituents, that they will pursue
the waiver process.
Mr. Ryan. Well, for the record, in the end they were served
2 years after the legislation passed, but I appreciate your
comment.
Let me ask just this quick question. We have talked about
some different ideas, different ideas for streamlining the
waiver process. What are your thoughts on these ideas? A
statutory deadline, I think, Mr. Callahan, I got your
impression on a statutory deadline for processing waiver
requests. What about broad statutory flexibility to waive most
statutory provisions, like the Ed Flex bill?
I don't know, given that that doesn't necessarily affect
each of your agencies, you may not have a clear opinion on that
one, but what about statutory provisions allowing State
certification for financial requirements like maintenance of
effort, matching funds, set-asides, cost caps, or a statutory
requirement for quarterly publication of approvals and denials
and a processing time for each, like what HUD does with its
waivers? What are your thoughts on reforms like that? We will
start with Mr. Bramucci.
Mr. Bramucci. Well, built into the Workforce Investment Act
is a requirement that we turn around these requests in 90 days.
We've done better than that most of the time. Our record with
Welfare-to-Work, a highly--an extensive program, $3 billion
over 2 years, we had 20 requests, we turned them around in
weeks, for waivers. I don't see, and this isn't----
Mr. Ryan. So you like the statutory deadline, or----
Mr. Bramucci. No. I think that--I think things in our
Department are running fine. I think we're very attuned to the
need to turn around decisions and to work closely with State
and local partners. And the old philosophy, ``If it ain't
broke, don't fix it,'' ours ain't broke, and I'm confident that
we're doing the right thing and we have excellent lines of
communication with our partners.
Mr. Ryan. So you don't think there is anything we can do to
further streamline the waiver process?
Mr. Bramucci. I'm talking about the Labor Department, and
in the Labor Department, with the change of legislation which
is dramatic in that, it is an enormous transfer of authority
and discretion to local and State governments. Therefore, the
whole issue becomes moot in terms of how you treat us. Our
rules are different, because our rules now are to approve the
State's mechanism for taking clear title to this power and
authority, so our relationship changes. Waivers are now less
and less important. Maybe that's the answer.
Mr. Ryan. Very good point. Thank you.
Yes, Mr. Chambers.
Mr. Chambers. Let me say that I really need to think more
about the substance of your question, but I will say this much.
After my review of this whole situation, I think--I have a
couple thoughts.
One, I think we have adequate, if you will, direction
within the statute and regulations, that we are required to
conform to the 60-day standard that we apply, we meet in the
majority of cases, except in a few cases where because of lack
of information or the timely receipt of that information,
deliberations may go on, negotiations may go on somewhat
longer. But I think that our overall track record is one that
would support the fact that the system is not broke, it is
functioning.
If I would make any recommendation at all, and this is
based on my work both at the State and county level as well as
now at the Federal level, and being able to compare
relationships across those three levels, I would say that the
one thing that we could do that would help our overall
administration of these programs, regardless of where you
happen to sit, in which part of the king's court you happen to
sit, would be if we could somehow dispel the notion that, one,
the States are intimidated by the Federal agencies. My
experience of 31 years is that there are very few elected or
appointed people in State governments who are intimidated by
Federal agencies. My experience over the last years is
certainly anything less than that.
Second, I believe we need to encourage and support, as I
think the committee is trying to do today, the negotiation, the
ongoing dialog, and the collaboration between all levels of
government, with the understanding that we can achieve more
working together than we will ever be able to achieve taking
cheap shots at one another.
I think, unlike the testimony, at least my review of some
of the testimony that's been given here by at least one
individual, that the environment that we exist in is a much
healthier one than some would suggest. There is ongoing dialog.
Our agency continues to have dialog with multiple
constituencies about our programs, including State
representatives, people who are members of and participate with
the American Public Human Services Association [APHSA], for
example.
We will have staff at their national meeting this next week
in Park City, UT, there not for the purpose of engaging in
conflict but for the purpose of showing support for the States'
efforts as regards the Food Stamp Program, which is our
flagship program, but at the same time hopefully responding to
some of the issues that the States have been discussing with us
over the last year, particularly in the area of program
integrity and access to program benefits, so on and so forth.
So I think there is in fact a healthy dialog that we need
to support and reinforce and fuel wherever we possibly can.
Mr. Ryan. Mr. Callahan.
Mr. Callahan. I would say in general four things. One, some
of the time deadlines that are in some of the statutes and
regulations are helpful. Second, I think the agreement that we
have with the NGA is a helpful guideline to evaluating these
waivers.
And then the last two things is, I think it is very
important that we maintain fiscal stewardship along the lines
of cost neutrality; and, second, that we basically uphold the
congressional statutes that have been passed, especially vis-a-
vis the entitlement status for the individuals under these
programs, whether it's Medicaid or welfare or child welfare.
Mr. Ryan. It seems like each of you are more or less saying
that statutory changes may be necessary as well. I think
clearly, Mr. Bramucci, that is what you were saying. That is
just an observation. I am not necessarily asking you a
question.
Are there any other statutory requirements that you think
would add to that, to addressing those needs that you just
mentioned, Mr. Callahan?
Mr. Callahan. I'm sorry. Vis-a-vis what, what statutory
changes? Vis-a-vis the process, or----
Mr. Ryan. Yes.
Mr. Callahan. Well, I just--I would respectfully say that I
don't think the process is broken. I've maintained in my
testimony, both the oral and the written testimony, that I
believe what we have is a process of constructive engagement.
Now, maybe this chart is an oversimplification, and none of
us likes complication, whether it's in our daily life or what
have you. But you all know, both members and staff, that
government is complicated. People come to this with a lot of
different views.
And we at the Federal level have an obligation to uphold
the Federal laws as they are passed, which you pass and we have
to administer, and we have an obligation also to be prudent
fiscal stewards in this regard. And I think the waiver process
that we have put into effect, which has approved these 685
waivers over these last several years, has tried to meet those
two goals.
Mr. Ryan. Well, I think what I would like to have the three
of you leave with is basically this, that there is another side
to this story; that the Governors are frustrated, that the
State legislatures are frustrated. The NGA, through their
testimony, I would ask you to read their testimony, are
frustrated; that they see other States getting waivers, they
are coming up with similar waivers, and it still takes a heck
of a long time, longer than the 120 days as called for in the
Executive order.
So all I am asking is, please think it through a little
bit. This legislation will continue to move down the tracks,
and the intent here is not to undermine existing Federal
legislation. The intent is to get good answers at good,
reasonable pace of time, to better serve the very people we are
trying to serve.
BadgerCare is a good example. We would like to have had
BadgerCare in law in 1997 when we passed it and conceived of it
in Wisconsin, but it is just now becoming implemented.
Meanwhile, thousands of people were without health care in the
low income part of the State.
So it is frustrating, and there is a lot of frustration out
there from the other levels of government, specifically the
Governors and the States. So I just ask you to take a look at
that. We will submit everybody's questions and statements in
the record.
With that, the hearing is adjourned, and I want to thank
everybody for coming.
[Whereupon, at 4:25 p.m., the subcommittees were
adjourned.]
[Additional information submitted for the hearing record
follows:]
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