<DOC>
[109 Senate Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:28245.wais]
S. Hrg. 109-657
NOMINATION OF HON. ROBERT J. PORTMAN
=======================================================================
HEARING
before the
COMMITTEE ON
HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
ONE HUNDRED NINTH CONGRESS
SECOND SESSION
ON THE
NOMINATION OF THE HON. ROBERT J. PORTMAN TO BE DIRECTOR, OFFICE OF
MANAGEMENT AND BUDGET
__________
MAY 17, 2006
__________
Printed for the use of the
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COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
SUSAN M. COLLINS, Maine, Chairman
TED STEVENS, Alaska JOSEPH I. LIEBERMAN, Connecticut
GEORGE V. VOINOVICH, Ohio CARL LEVIN, Michigan
NORM COLEMAN, Minnesota DANIEL K. AKAKA, Hawaii
TOM COBURN, Oklahoma THOMAS R. CARPER, Delaware
LINCOLN D. CHAFEE, Rhode Island MARK DAYTON, Minnesota
ROBERT F. BENNETT, Utah FRANK LAUTENBERG, New Jersey
PETE V. DOMENICI, New Mexico MARK PRYOR, Arkansas
JOHN W. WARNER, Virginia
Michael D. Bopp, Staff Director and Chief Counsel
Jennifer A. Hemingway, Professional Staff Member
Michael L. Alexander, Minority Staff Director
Adam R. Sedgewick, Minority Professional Staff Member
Trina Driessnack Tyrer, Chief Clerk
C O N T E N T S
------
Opening statements:
Page
Senator Collins.............................................. 1
Senator Lieberman............................................ 2
Senator Voinovich............................................ 5
Senator Akaka................................................ 6
Senator Coleman.............................................. 8
Senator Dayton............................................... 8
Senator Coburn............................................... 9
Senator Lautenberg........................................... 10
Senator Warner............................................... 11
Senator Bennett.............................................. 12
Senator Levin................................................ 22
Senator Carper............................................... 29
WITNESS
Wednesday, May 17, 2006
Hon. Robert J. Portman, to be Director, Office of Management and
Budget:
Testimony.................................................... 13
Prepared statement........................................... 45
Biographical and professional information.................... 47
Letter from U.S. Office of Government Ethics................. 53
Responses to pre-hearing questions........................... 54
Responses to post-hearing questions.......................... 99
APPENDIX
Article titled ``The Return of Voodoo Economics,'' submitted by
Senator Voinovich.............................................. 43
NOMINATION OF THE HON. ROBERT J. PORTMAN
----------
WEDNESDAY, MAY 17, 2006
U.S. Senate,
Committee on Homeland Security
and Governmental Affairs,
Washington, DC.
The Committee met, pursuant to notice, at 10:18 a.m., in
room SD-342, Dirksen Senate Office Building, Hon. Susan M.
Collins, Chairman of the Committee, presiding.
Present: Senators Collins, Voinovich, Coleman, Coburn,
Bennett, Warner, Lieberman, Levin, Akaka, Carper, Dayton,
Lautenberg, and Pryor.
OPENING STATEMENT OF CHAIRMAN COLLINS
Chairman Collins. The Committee will come to order.
First let me explain the delay in starting the Committee's
nomination hearing today. We just had a roll call vote. I know
that our nominee is very familiar with roll call votes and the
fact that chairmen cannot control what happens on the floor. So
I appreciate everyone's indulgence in the delay in beginning
this important hearing.
Today the Committee will consider the nomination of former
Congressman and Ambassador Robert Portman to be the Director of
the Office of Management and Budget.
The mission of OMB is to assist the President in preparing
the Federal budget and to oversee its execution by Executive
Branch agencies. In carrying out this mission, the OMB
evaluates the effectiveness of agency programs, assesses
competing funding demands, and sets priorities. The Agency is
also on the front lines of the Federal Government's efforts
against waste, fraud, and abuse as it evaluates the
effectiveness of Federal programs and pursues management
reforms.
Another responsibility of the OMB is to ensure that Agency
rules, testimony, and proposed legislation are consistent with
the President's budget and with the Administration's
priorities.
These responsibilities place the OMB at a critical juncture
within the Federal Government as the link between the Executive
Branch and Congress. The OMB can exert a powerful influence on
public policy through its budgetary, legislative, managerial,
and regulatory mandates.
The current pressures on the Federal budget are
extraordinary. The American people are very concerned about the
size of the Federal deficit and the spiraling increases in the
Federal debt. Some of this increase is attributable to the war
on terrorism and to unprecedented natural disasters like
Hurricane Katrina. But even without these factors, our Nation
faces an ongoing structural deficit that will become an
increasing challenge in coming years.
While the President's budget estimates that the Federal
deficit will decline to $205 billion by 2011, total debt is
expected to increase to more than $11 trillion that same year.
As alarming as these figures are, this level of debt will
be reached even before the retirement of the baby boomers'
generation, which will present our Nation with its most serious
challenge yet with respect to funding Social Security,
Medicare, and other entitlement programs.
Our economy, fortunately, is strong. And as the new Federal
Reserve Chairman has put it, it has always shown a remarkable
ability to ``absorb shocks of all kinds, to recover, and to
continue to grow.'' The economic growth since the terrorist
attacks of September 11 is a striking demonstration of this
resiliency.
And yet even a small change in our economy's growth rate
can dramatically affect the deficit and the revenues we need to
support critical social programs. According to the
Congressional Budget Office, a change of just 0.1 percent in
the growth rate over a 10-year period would change Federal
revenues by $224 billion and spending by $48 billion for a
total net impact of $272 billion on the deficit.
While growth above projections would be very welcome news,
we must be prepared for the possibility that the slightest
slowdown in our economic growth rate can present us with even
greater budgetary challenges than we predict today. Clearly the
decisions that we make now about tax relief and spending
increases will have profound repercussions far into the future.
To impose fiscal discipline, I believe that Congress should
once again adopt the PAYGO rules. By requiring offsets for
entitlement spending increases and for tax cuts, a requirement
that cannot be waived without a super majority of 60 senators,
PAYGO would provide a powerful tool for budget restraint. I
believe it is critical to apply the principles of PAYGO to the
tough choices Congress must make this year and in the years to
come.
Given all of these extraordinary challenges, never before
has it been more important to have an individual as experienced
and as qualified and capable as Ambassador Portman at the helm
of OMB. We are very fortunate to have such an extraordinary
nominee for this critical position.
Prior to his confirmation last year as the U.S. Trade
Representative, Ambassador Portman served six terms in the
House of Representatives, including service on the Ways and
Means Committee and as Vice Chairman of the House Budget
Committee. He understands the budget, and he understands
Congress.
I welcome him to the Committee, and I look forward to his
testimony this morning.
Senator Lieberman.
OPENING STATEMENT OF SENATOR LIEBERMAN
Senator Lieberman. Thank you very much, Madam Chairman.
Welcome to you, Ambassador Portman, and members of your family.
Congratulations on your nomination.
Your experience in the House as Vice Chairman of the Budget
Committee, your membership on the Ways and Means Committee, and
most recently your service as the White House trade negotiator,
I think, give you excellent credentials and a unique
perspective as you prepare to become Director of the Office of
Management and Budget.
I also appreciated your pledge, when the President
announced your nomination, to ``work closely with Congress on a
bipartisan basis'' as we try to get our exploding Federal
deficit under control. That is very important.
Madam Chairman, on what might be called a point of personal
privilege, I do want to note at the outset that I have a very
special personal bond with Ambassador Portman. You may or may
not know that during the 2000 presidential campaign, as now
Vice President Cheney prepared for our vice presidential
debate, Rob Portman played the then Democratic vice
presidential candidate--me. So Rob, I may, during the question
and answer period, ask you to ask yourself the questions that
you think I might ask you. [Laughter.]
In any case, let me help in preparing you for that dual
responsibility by outlining some areas that I have concern
about with regard to OMB.
Obviously, you are this Administration's third Director.
You will not be writing on a blank slate. But your performance
will be judged by how well you come to grips with some of the
problems that face us now.
I begin by quoting President Bush, who has said, ``A budget
is more than a collection of numbers. A budget is a reflection
of a Nation's priorities, its needs, and its promise.''
I agree, but I would add that a budget must also be about
balancing our revenues and expenditures and delivering on those
priorities, needs, and promises, or else it really is a
collection of numbers without meaning or mission or ultimately
without responsibility. And I mean the responsibility that
comes with good fiscal management.
Your job, as you know, is to help the President first
prepare the budget and then execute it across 14 cabinet
agencies and more than 100 executive agencies, boards and
commissions. As OMB Director, you will recommend how and where
every dollar of our budget is spent, how each agency's programs
are managed, and you will oversee the review of vital rules for
public health and safety.
I have concerns about how these responsibilities have been
carried out. Let me start with the budget. We obviously need to
get our national budget in order. We are heading, by one
estimate, toward $10 trillion of long-term debt. This is a
great country and a strong country, and I do not favor
apocalyptic views. But the obvious reality is we are spending a
lot more than we are taking in. And we are thereby placing on
our children, grandchildren, and beyond an enormous burden of
interest payments on the debt that is a result of our failure
to impose balance.
If we are going to get our fiscal house in order, I agree
with the Chairman, we have to do some of the things that have
been talked about. We have to go back to pay-as-you-go
budgeting. I am in favor of the idea of a line item veto.
But ultimately this is done by tough decisionmaking to
simply, but strongly, balance revenue and expenditures. And in
doing that, everything has to be on the table and up for
discussion, spending and taxing, in my opinion.
We recently passed a $70 billion tax package that gives tax
breaks to the Nation's wealthiest who do not need help and to
the oil industry, which is recording record profits and thereby
increasing the already enormous national debt. It also leads to
a lack of resources to adequately fund some vital programs that
are essential to our Nation's priorities, needs, and promises,
as the President said in that statement.
For instance, I continue to believe that we are drastically
underfunding education, particularly the No Child Left Behind
Act, which has, in a lot of places around the country, become a
bad word. But it is a law with a very worthy purpose that was
adopted with bipartisan support. We just have not given the
local educators enough support to carry it out.
As a matter of fact, under the budget that the President
has proposed this year, Title I budgets--which is education
assistance for low income school districts across the country--
will be frozen or cut. In Connecticut, by my tally, 122 out of
166 school districts will actually see Title I cuts this year.
Second, this Committee is the Homeland Security and
Governmental Affairs Committee. I believe that we have not
adequately funded homeland security yet. Has our support of
homeland security grown? Yes, it has, obviously in the
aftermath of the tragedy of September 11, 2001. But I continue
to believe that we are still not spending enough to meet the
government's fundamental obligation to protect our citizens. I
am thinking here particularly of port security, interoperable
communications, and bioterrorism preparedness. The same is true
as we learned in this Committee's investigation of Hurricane
Katrina and the recommendations we have made.
Finally, in a somewhat different vein, I want to bring to
your attention a matter of budget process that I am concerned
about: The way we are using supplemental budgets to fund the
wars in Iraq and Afghanistan. I believe that harms us in two
ways. First, it may conceal the true costs of our total
national defense by putting a large part of the cost off the
budget. And that reduces the scrutiny and discipline our
Defense Department needs and adds to the bill again that our
children are going to pay.
Second, it has had the effect of encouraging the military
to put core programs into the supplemental budget. My fear is
that when, and I would say when, not if, the supplementals come
to an end, some of these critically necessary national defense
programs will face the possibility that they will be defunded.
And that will be to our national detriment.
I do not agree that the costs of Iraq and Afghanistan are
currently unknowable and that we cannot budget for them. I do
agree that the budget is a statement of our priorities, needs,
and promises. But without the kind of balance in the beginning
that Chairman Collins and I have talked about and good
execution afterward with proper priorities recognized, a budget
can become just numbers with no meaning or mission. And that
means it fails the American people and it fails our best values
of fiscal responsibility.
Those are some of the serious challenges you will face
when, as I trust, you will be confirmed as Director of OMB. And
I look forward to working together with you on them in the
bipartisan spirit that you have committed yourself to.
Thank you very much.
Chairman Collins. Thank you. Senator Voinovich.
OPENING STATEMENT OF SENATOR VOINOVICH
Senator Voinovich. Thank you, Madam Chairman. I was
scheduled to introduce Mr. Portman, and in order to expedite
the hearing, I will do that as part of my opening statement.
Chairman Collins. Thank you.
Senator Voinovich. It is an honor for me to be here to
introduce my good friend, Rob Portman.
Madam Chairman, as you know, this is the second Committee
that Rob Portman has to appear before for this nomination. That
underscores the great importance of the position for which he
has been nominated.
The Director of the Office of the Management and Budget is
the President's aide of all macro level budget and management
issues in the Executive Branch. It is an extraordinarily
important position.
Ambassador Portman, former Congressman Portman, is an
excellent pick for the job of Director of the Office of
Management and Budget. I have no doubt that Rob is more than
well-qualified for this weighty position, and if confirmed, he
will do an excellent job.
I urge the Committee to speedily confirm his nomination so
that he may take up his duties at this critical time.
Rob served in the House, as the Chairman has mentioned, for
12 years. He served on the Ways and Means Committee, and he was
Vice Chairman of the Budget Committee. He also served as
Chairman of the House Republican Leadership.
Prior to his election to Congress he was an associate in
the Washington law firm of Patton Boggs, specializing in
international law. He then returned to his home town of
Cincinnati to work as a partner in the firm of Braydon, Head
and Ritchey. From 1989 to 1991 he served in George H. W. Bush's
White House as Associate Counsel to the President and then
Director of the White House Office of Legislative Affairs.
In short, he understands Capitol Hill and the White House,
and I have no doubt that he will work hard to foster cordial
and productive relationships between OMB and Congress, which is
important to the success of the OMB Director.
Most recently, he has served our Nation as U.S. Trade
Representative. I have mixed emotions about his departure from
USTR because he was doing such a good job in that office. He
worked to expand global free trade and markets for American
businesses. I am especially grateful to him because, as an
Ohioan, he understands as well as anyone the impact trade has
on manufacturing. While free trade is vital to Ohio and this
country, so is ensuring that our international trade partners
abide by the rules we have all agreed upon.
Rob has been a good friend and colleague for many years. We
have collaborated on legislative matters going back to my days
as Governor of Ohio, including unfunded mandates relief
legislation. He led the House on this issue and did a fabulous
job. We also worked together on advocating for Cleveland's NASA
Glenn, legislation to defend the rights of States to offer tax
incentives to promote economic development, and the Senate
version of the Portman-Cardin bill.
I have complete faith that he will serve our Nation as
Director of OMB with intelligence, enthusiasm, and strength
that have marked his time in Congress and the Executive Branch.
I am also confident that he has the courage and the moral
fortitude to advise the President as clearly as he possibly
can. And of course, once giving the President his advice, doing
what the President directs.
It is important that somebody understand the programs that
these dollars fund and look beyond just the numbers in terms of
their significance.
Rob also has excellent interpersonal skills and treats
people with dignity and respect. He is a good man with a
wonderful, understanding wife, Jane, and they have three
children. I appreciate, Jane, your sacrifice. But I hope you
will see more of him now than you did when he was with USTR.
I know that Rob appreciates the government management
issues that are of high interest to this Committee and the
Subcommittee on Oversight of Government Management, which I
chair. I am confident that, if confirmed as OMB Director, Rob
will continue the fine and unappreciated efforts--unappreciated
efforts--of the Bush Administration to improve the operations
and effectiveness of Federal departments and agencies.
When I came to the Senate I said there was no ``M'' in the
OMB. Clay Johnson has really done a good job of bringing the M
back into OMB. As you know, Mr. Portman, I am interested in
human capital management, and I look forward to engaging you on
that issue.
You are going to have your hands full with the budget side
of OMB, and I think that your service as Vice Chairman of the
House Budget Committee will certainly prove valuable to you.
As we recently discussed in my office, our Nation has a
number of great challenges before it, and this Administration
and this Congress will have to wrestle with how to prioritize
and balance these competing interests with limited resources.
Madam Chairman, I agree with you. If our friend from
Oklahoma had voted with us, we would have had PAYGO. I think it
is absolutely essential that we go back to PAYGO for spending
and taxes.
I am confident that Rob will bring strong leadership to
this new role, just as he has done in Congress, at USTR, and
his previous positions at the White House.
I ask this Committee to advance his nomination swiftly so
he can get to work. Thank you.
Chairman Collins. Thank you for your introduction of the
nominee. Senator Akaka.
OPENING STATEMENT OF SENATOR AKAKA
Senator Akaka. Thank you very much, Madam Chairman. I want
to thank you and the Ranking Member for conducting this
hearing.
Ambassador Portman, welcome to the Committee. I welcome you
and your family, and I want to also say thank you to your
family for sharing you with the Nation. I met your lovely wife,
Jane, this morning. And also I notice your dad is here, as
well, and other members of the family. I want to welcome all of
you here.
During this time of severe budgetary constraint, I know
that the job to which you have been nominated will not be an
easy one. But I feel strongly that your background on the Hill
will serve you and us well, and I look forward to working with
you in a bipartisan manner.
As you stated in response to pre-hearing questions posed by
our Committee, as Director of the Office of Management and
Budget, you will seek to ensure that the Nation's resources are
properly aligned with its challenges and priorities.
I hope this is so, Mr. Ambassador, because many of us are
deeply disturbed over the direction our country has taken and
continues to follow under current fiscal policies.
Our country has only been out of debt for 2 years in its
long history, in 1834 and 1835. Before and after those notable
years more than 170 years ago, the main cause of debt
accumulation was war expenditures, which is similar to what we
are facing today with U.S. operations in Iraq and Afghanistan.
I firmly believe we must continue to support our brave men
and women in the Armed Forces and help them to complete their
missions. However, the Federal dollar is also being stretched
to meet the needs of those whose lives were disrupted by
Hurricanes Katrina and Rita and to continue the active stance
on the global war on terror.
The government has tried to absorb all of these costs, but
we are facing a declining pot of resources. Since January 2001,
according to the Center on Budget and Policy Priorities'
calculations of Congressional Budget Office data, in terms of
projected costs from 2002 to 2011, a third of the cost of
legislation adding to deficits relates to defense, homeland
security, and international matters.
But 50 percent are tax cuts, which is why I voted against
last week's Tax Reconciliation Conference Report that included
an astonishing $70 billion cut in taxes. It is wrong to lay the
heavy costs on current and future taxpayers. As you know, our
country has been running deficits near $300 billion. In March,
the Federal debt limit was raised to a record of about $9
trillion.
As noted by Senator Kent Conrad, Budget Committee ranking
member, the national debt in just the first 5 years of the Bush
Administration has increased by $3 trillion. Quite simply, this
country is outspending what is being brought in as revenue. And
our children, grandchildren, and generations beyond will be
left to pay the bill.
Although I agree with you that we must align our country's
resources and balance them to meet its challenges and
priorities, I just do not see that happening under our current
fiscal policies.
Ambassador Portman, I look forward to hearing your views
and, of course, as I said, look forward to working with you in
a bipartisan manner to meet the budgetary crisis we are in now.
And I want to wish you well. Thank you very much.
Chairman Collins. Thank you. Senator Coleman.
OPENING STATEMENT OF SENATOR COLEMAN
Senator Coleman. Thank you, Madam Chairman.
Madam Chairman, I am very pleased the President has chosen
to nominate Ambassador Portman as Director of the Office of
Management and Budget.
I have to apologize. I will be going to another hearing on
rural broadband technology right after this, but I wanted to
make a brief opening statement.
I have had the opportunity to work with the Ambassador on
trade issues. I was in Hong Kong during a brief rate of time
during the discussions on WTO. We worked on CAFTA together. He
is a man of extraordinary intellect. He brings balance, he
brings judgment. He has the personal skills, the abilities to
work with people, which is important. This is a relationship
business, a relationship town. It is not all about green
eyeshades. You have to understand how programs work and their
importance to the people who are impacted by them.
We can have a healthy debate on this Committee about
deficits. Clearly we are all deeply concerned about mounting
deficits and the impact on the next generation. We can debate
whether tax cuts are good or bad things. I believe they
stimulate growth and in the end cut into the deficit.
But I do want to at least urge the nominee, with that good
heart that he has and that good mind, to bring a sense of
balance to this, as the ranking member talked about. I am a
former mayor. And every year we get recommendations on CDBG
from OMB, and in an overwhelming manner this Congress says we
need to go in another direction. We need to support those
programs. We have the same thing with the COPS program that we
get a recommendation from the Administration and then this
Congress says we really need this.
So, this is the challenge--and I know you are up to it. I
wholeheartedly endorse and support this nomination, and I urge
my colleagues to.
But I would just urge the Ambassador to have that sense of
balance. And if there is a way up front to avoid perhaps some
of these battles that we have between the Administration and
friends in Congress on issues like CDBG and the COPS programs.
We are going to be working on a Farm Bill next year, a Farm
Bill that has served this country well in the time, the
existing bill. Now we have to look to the future.
So with that, the President has made an outstanding choice.
I look forward to working with the Ambassador. And I think the
skills that he has are the ones that are needed at this time.
As I said before, I wholeheartedly endorse and support this
nomination.
Chairman Collins. Thank you. Senator Dayton.
OPENING STATEMENT OF SENATOR DAYTON
Senator Dayton. Thank you, Madam Chairman. I will also be
following my colleague to the Agriculture hearing, and I also
would second what he said about the excellent choice the
President has made in your selection, sir.
Anyone who is willing to trade in international trade
negotiations for Congressional committees has a proven
commitment to public service, which I think is laudatory. You
have proven that throughout your career. I think you will be an
excellent leader, and I will support your nomination.
Thank you, Madam Chairman.
Chairman Collins. Senator Coburn.
OPENING STATEMENT OF SENATOR COBURN
Senator Coburn. Thank you, Madam Chairman. Welcome, Mr.
Portman.
I had the great pleasure of serving with Ambassador Portman
in the House, and I, too, know his skills and his ability, and
he is ultimately respected by all of those that he has dealt
with. I have not met anybody that has not. I feel very
confident he will be confirmed.
The problems that face our country are not just with the
budget. The problems that face our country are with the Senate
and the House and failure to do oversight.
I just want to put in perspective--I am a believer in PAYGO
as long as we do not bias spending against tax cuts, but we do.
One billion seconds ago was 1959. That is what a billion
seconds ago was. A billion minutes ago a guy by the name of
Jesus walked on the face of this earth, a billion minutes ago.
$1 billion ago was 3 hours ago, the rate at which the Federal
Government spends money.
I know the Ambassador has some important thoughts on EITC,
which we overpay from somewhere between $9.6 billion and $11.4
billion a year. We know the Defense Department paid $6 billion
out last year in performance bonuses to companies that did not
meet the performance bonus requirements. We know there is
another $34 billion worth of waste, fraud, and abuse in the
Pentagon. There is $40 billion in overpayments by Medicare.
There is at least that much in Medicaid, of which $15 billion
in New York State alone. We have another $8 billion that we are
spending on maintaining buildings that we do not want. And we
have another $100 billion on pure waste, fraud, and abuse
throughout the rest of the government.
You add all that up, and then you consider the tax gap,
which is estimated by the IRS now at $350 billion, and that
comes to $585 billion. We would not have a deficit if we were
doing our jobs.
My goal is to make sure that we put sunshine on everything
we do. Sometimes we do not have the courage to do what we need
to. But when we are held accountable through methods of
sunshine, where the American people realize what we are doing
or what we are not doing, we are held to better account.
And so my great concerns and my belief in Ambassador
Portman in this job is that accountability will be the number
one thing that comes forward. And that can only happen if we
have great transparency.
I would tell you this week I asked for the budget for the
Architect of the Capitol, and I was told I could not have it,
that they would not give it to me. And that is the kind of
problems that we deal with. As a sitting U.S. Senator, I cannot
see the budget for the Architect of the Capitol?
There are real problems in our government. Sunshine cures
almost every one of them. Sunshine in the agencies, sunshine in
Congress, and knowing that the American people, if they have
the information, will help us solve the problems that we are
dealing with and will put policy ahead of politics foremost in
our mind so that we address the real issues.
I appreciate our Chairman, Senator Voinovich, and Senator
Lieberman because they have the same desire as I do, as not to
lay a load on the next two generations that is really going to
change for the first time and create opportunities that are
less for our grandchildren than what we have experienced.
My hope is that we will come across the line and do the
hard work, the very hard work of oversight, and then
translating that oversight into legislative changes that make a
difference.
So I will be with you on PAYGO as long as we start
responding to the things that we are finding that are not fixed
that are wrong. But I can never be for a PAYGO that advantages
spending to the detriment of our tax dollars today and our
grandchildren's tax dollars tomorrow.
My hope is that the leadership that I know Ambassador
Portman has will shine over the next 2\1/2\ to 3 years so that
we address the very real problems that are in front of us. My
hope is that he will be a leader in making that sunshine be
available to the American public. Thank you, Madam Chairman.
Chairman Collins. Thank you. Senator Lautenberg.
OPENING STATEMENT OF SENATOR LAUTENBERG
Senator Lautenberg. Thank you, Madam Chairman, for holding
this important hearing to meet and talk with Ambassador Rob
Portman as he is proposed for the directorship of the Office of
Management and Budget.
The management side often gets less attention than the
budget side, and frankly, I think it is even a more important
part of the assignment.
If we look at the numbers as they are now, under this
Administration, the deficit has soared and we are passing more
and more debt and problems along to future generations. And it
does not have to be that way. I know we can do better. We all
believe that we can because we have done better in the past.
I was the ranking member on the Budget Committee when we
balanced the budget and actually began to pay down the Federal
debt. It took tough choices to balance the budget, but making
hard choices is what leadership is supposed to be about.
The tax cuts that the Senate passed last week will give
those with incomes exceeding $1 million an average tax cut of
$41,977. But they will give the middle-class Americans just
$46, on average. There is something so outrageous about that
relationship.
And we just heard that maybe programs like EITC are
spending too much money, $7 billion to $9 billion. Well my
gosh, those who earn $1 million a year will be the recipient of
$14.5 billion worth of tax breaks and cost to this government.
Whenever we talk about this, and I stand on my record and
my past as chairman of one of America's most successful
companies. You, Rob Portman, know the company very well, having
known the last CEO.
So I am not embarrassed to talk about these things without
risking the accusation of class warfare. That is such an unfair
designation. Because if there is class warfare, it is against
those who are struggling to make a living.
For what we spent last week to give wealthy Americans more
tax cuts, we could have enabled another 2.8 million youngsters
to attend a public college. We could have provided health
insurance for every uninsured child in America. We could have
hired 225,000 public school teachers and still had enough left
over to scan every cargo container coming through our ports.
In the business world, where I come from, a company that
followed the fiscal policies as this Administration is doing
would have soon been out of business.
Now President Bush has presided over the largest fiscal
reversal in our Nation's history, from a $236 billion surplus
in 2000 to a projected $423 billion deficit in 2006. During his
5 years in office, the total national debt has increased by 50
percent and is now approaching $9 trillion.
Saddling our children and grandchildren with this burden is
wrongheaded. We all know we can do better. But at the very
least, we can hope that Mr. Portman, with his knowledge and
experience, will help change the direction we are taking now
and bring us to a point of fiscal fairness, to the people who
look to government for assistance at critical moments in their
lives.
And I welcome Mr. Portman to this job. He is someone who
has skill and experience that is hardly matched, but we would
like him to look at the things that I just mentioned. Thank you
very much.
Chairman Collins. Thank you. Senator Warner.
OPENING STATEMENT OF SENATOR WARNER
Senator Warner. Thank you, Madam Chairman, and
distinguished Ranking Member.
Mr. Portman, I join others in saying the country is
fortunate that you and your family will continue to accept
those commitments for further public service. I was very
pleased when I heard that you were appointed, and I must say my
wife, who is proud of her roots in Ohio, sends her best this
morning, particularly to your lovely wife, knowing of the
commitments of the family.
I was quite intrigued with your responses to the questions.
Madam Chairman, they were a very good series of questions that
the Committee propounded to our nominee about the line item
veto. And looking back over your distinguished record in the
House of Representatives, obviously you are going to be a loyal
supporter of the President. He desires it. But what stances did
you take in the House?
Ambassador Portman. Senator, I was in support of the line
item veto. At that time we did not have the same legislative
line item veto that has been proposed. And I look forward to
talking to you more about that, perhaps in the questioning.
Senator Warner. It will be interesting how you go about
this.
But I want to pick up on the comments made by my
distinguished colleague, who serves with me on the Armed
Services Committee. That is about the supplementals regarding
our military. They are absolutely essential. But it has gotten
to the point where not only do we experience the true cost not
being reflected in the budget, but we are losing valuable
oversight.
How well you understand, being a Member of the Congress,
the bifurcating of the responsibilities of the several
committees, and the Armed Services Committee that I am
privileged to serve on with several Members of this Committee,
we have a subcommittee structure that goes over an issue first,
then the full committee goes over the issue, and it is
carefully reviewed in the context of the overall military
budget and the balances are made within that.
That is lost. It has gone by the wayside. And that concerns
me a great deal.
I would hope that in the future we can, while necessary to
have this emergency spending, we will begin to recognize the
downside of the enormity of these supplementals and the fact
that they carry many items that would normally be under the
oversight structure.
Last, the estate tax. On that question I will wait to the
round of questions to get into it in more detail, but that is
going to be a tough one for this Senator. As much as I feel
that there is an inequity about taxing so many times the hard-
earned earnings of individuals and their families, the impact
on the budget is quite significant in terms of loss of income.
And you have got to keep an eye on that loss of income to
the United States. The estimate is as high as $500 billion over
10 years if it were to come about this fiscal year or the next.
So Madam Chairman, that is a full platter for this nominee.
We wish him well. You are going to have my support. Thank you.
Chairman Collins. Thank you. Senator Bennett.
OPENING STATEMENT OF SENATOR BENNETT
Senator Bennett. Thank you very much, Madam Chairman.
Mr. Ambassador, we welcome you and salute you for your
willingness to serve. I join with my colleagues in extending my
best to you and your family for that.
I simply, as I listened to the opening statements that have
little or nothing to do with your job, decided I will fit right
in and give an opening statement that has little or nothing to
do with your job.
As our friend Senator Moynihan used to say--I am not sure
whether he created it, but he is associated with it--everyone
is entitled to his own opinion but not to his own facts.
I would simply like to state, for the record, in case
anybody is paying any attention, that the deficit is coming
down, not going up. It is coming down in absolute dollars. And
more importantly, it is coming down as a percentage of GDP.
We have heard the figure that it is projected to be $423
billion in 2006. That is an old projection. The current
projection out of CBO is $300 billion. And as percentage of GDP
in 2004 the deficit was 2.8 percent. As a percentage of GDP in
2005 it was 2.6 percent. And if CBO is correct with its current
projection, in 2006 it will be 2.3 percent. And that projection
includes passage of the supplemental at the President's number
and the passage of the tax extenders that the Senate acted on.
So I recognize all of the problems that we face long term.
But I think the record, at least in this debate, ought to be
fairly clear that the deficit is coming down, both in nominal
dollars and as a percentage of GDP. And we ought to keep
repeating that, rather than the canard that somehow the economy
is out of control.
The current growth of GDP is higher than the averages of
growth in the 1990s, the 1980s, the 1970s, and the 1960s. This
is an economic performance with which I am happy to be
associated.
With that, Mr. Ambassador, we will now return to the issues
facing your tenure as manager of OMB.
Chairman Collins. Thank you, Senator.
Ambassador Portman has filed responses to a biographical
and financial information. He has answered pre-hearing
questions submitted by this Committee and had his financial
statements reviewed by the Office of Government Ethics.\1\
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\1\ The biographical and financial information and pre-hearing
questions appear in the Appendix on page 47.
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Without objection, this information will be made part of
the hearing record with the exception of the financial data,
which are on file and available for public inspection in the
Committee's offices.
Ambassador, our Committee's rules require that all
witnesses at nomination hearings give their testimony under
oath, so I would ask that you please stand and raise your right
hand.
Do you swear that the testimony you are about to give the
Committee will be the truth, the whole truth, and nothing but
the truth, so help you, God?
Ambassador Portman. I do, Madam Chairman.
Chairman Collins. Thank you.
Ambassador, we have referred to some of your family members
who are present here today, but I would invite you to present
them to the Committee at this time.
TESTIMONY OF HON. ROBERT J. PORTMAN,\2\ A NOMINEE TO BE
DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET
Ambassador Portman. Thank you very much, Madam Chairman.
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\2\ The prepared statement of Mr. Portman appears in the Appendix
on page 45.
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It has already been mentioned that I am fortunate enough to
have some of my family here who came from our home in
Cincinnati. Luckily the hearing was postponed a few minutes
because they were postponed as well by traffic around the
Beltway. But I am very proud to formally introduce them.
First my wife, Jane, who is behind me. It has already been
mentioned about the sacrifices those of us in public service
make, and I appreciate more than you know those comments. But
Jane, along with our three children, has been wonderfully
patient with me and supportive of me in my public service
career. And I could not do this job without that support and
love and patience. I thank her for being here.
My father is also with us. Bill Portman is here. He
celebrates his 84th birthday in July. And his integrity and his
decency and his judgment inspire me every day. I will need that
inspiration in this new job. So Dad, thank you for being here,
too.
Madam Chairman and Senator Lieberman and other Members of
the Committee, I very much appreciated your opening statements.
I listened very carefully to them, and I look forward to having
a dialogue as we get into the question and answer period on
some of the specific issues you raised.
I also want to thank you and other Members of the Committee
who are not here for meeting with me or speaking with me before
this hearing. It was a great opportunity for me to get your
input and have an opportunity to better understand your
priorities and your concerns.
To my friend, former Ohio Governor, now Senator George
Voinovich, thank you for those kind words and the advice that
you are never hesitant to give me. To me, Senator Voinovich
represents the very best of public service. I have admired him
and sought his counsel throughout my career, including when my
career included working for him as a volunteer. Now I get to
work with him to ensure, as he said, that the M in OMB gets the
attention that it properly deserves.
Madam Chairman, I do not believe there is any other
position in the Federal Government that is responsible for such
a broad portfolio of issues, as was evident by the opening
comments, as Director of the Office of Management and Budget.
It is a tough job. It is a serious responsibility. If
confirmed, I will take that responsibility very seriously and
work hard on behalf of the taxpayer to ensure that tax dollars
are spent wisely.
As the Committee knows, I have served as U.S. Trade
Representative for just over a year. It has been a great
privilege to work with some of you on the Committee on those
trade issues and to work with a very skilled and talented team
at USTR. And I have been very proud to represent our country in
trade negotiations around the world.
Prior to that, as was noted, I did represent the Second
District of Ohio for about 12 years, serving on the Budget and
Ways and Means Committees.
Also not mentioned, I was on the House Leadership Committee
to draft the Homeland Security Department legislation, which is
something I hesitate to mention because it may lead us into
some tough homeland security questions. But it was a very
interesting experience, and I focused, with Senator Voinovich
and others, on some of the human capital issues.
This morning, thus, I find myself returning to some
familiar territory, budget, taxes, entitlements, and how to
make our government work better through better program
oversight.
I do understand, as Senator Lieberman indicated, the
importance of open lines of communication with Congress. If
confirmed, I will prioritize consultation, just as I have at
USTR. And I do because I believe it is essential to addressing
the very real opportunities we have to work together but also
the very serious challenges that we face. There is no other way
to do it.
OMB has this unique and important role in our system of
government. As the Chairman said, all spending decisions go
through OMB, as well as major regulatory changes and, of
special interest to this Committee as was noted, the overseeing
of the management of the Executive Branch.
I do believe that President Bush has helped reprioritize
the M for management in OMB. Should I be confirmed, I look
forward to working with this Committee on both sides of the
aisle to build on the good work you have done.
Senator Voinovich mentioned the Deputy Director for
Management, Clay Johnson. I think the team at OMB has
reprioritized that management aspect of the job. And I
strongly, as you know Senator Voinovich, support that and want
to continue to build on that.
I see opportunities for us to work together, to try to get
even better results for the taxpayers' money. This includes
efforts in the Executive Branch to further streamline programs
and make them work better, improve them so that government
services are as effective and efficient as possible. I think it
also means budget process reforms. I believe in a workable
legislative line item veto. Senator Warner has asked me. I
believe and accept that it can help reduce some wasteful
spending. And I think it can improve accountability through
transparency.
I do believe it can be workable, working with this
Committee and others, and I would be happy to talk more about
that if there are additional questions.
I also believe earmark reform is important. I think it is
an additional way to bring transparency to government spending
so that people know how their hard-earned dollars are being
spent.
On the budget side of OMB, I see challenges but also
opportunities. Working together I think we can create a better
legacy for our children and our grandchildren. In the past 5
years our country and the Federal budget, as Senator Collins
has noted, have faced very serious challenges. From the stock
market bubble to the recession in 2001, the corporate scandals
to the September 11 attack, the ensuing war on terror, and of
course the unprecedented natural disasters of Hurricanes
Katrina and Rita.
In facing these challenges the American people and our
economy have proven up to the task. Senator Collins talked
about resiliency. I think with bold steps the President took
early on, this resilient economy has bounced back. Senator
Bennett talked a little bit about some of those indicators.
Senator Collins talked about the importance of this economic
growth to deficits and debt, and she is absolutely right. We
are now experiencing strong and positive growth in our economy
in general and in jobs and revenue in particular.
We have added jobs for 31 months in a row now, over 5
million new jobs. The unemployment rate has fallen to 4.7
percent, lower than the average of the past three decades. The
job market for college graduates is at its best in years.
The economy is growing. GDP is a healthy 4.8 percent growth
in the first quarter. This follows economic growth of 3.5
percent in 2005. As U.S. Trade Representative, I note that this
is the fastest growth, considerably faster than our other trade
partners in the industrialized world.
In the first quarter productivity is up at 3.2 percent. We
had a 5.7 percent increase in the hourly compensation rate,
also, in the first quarter, which was very welcome.
So as a result of this economic growth, what has happened?
Revenue is up. Tax receipts for 2005 grew by 14.5 percent. That
is the fastest growth, I am told, in 24 years. In February OMB
estimated that receipts would grow again in 2006, even after
the 14.5 percent growth last year. The estimate was 6.1
percent.
Last week the U.S. Treasury Department reported that
revenues in the first 7 months of this fiscal year are at an
all-time high and substantially exceeding that 6.1 percent
estimate. We will see how it goes in the final 5 months, but it
looks like we are going to have another year of very high
growth in revenues.
The high revenue growth, thanks in part to tax relief, will
have a positive effect, of course, on deficits, as Senator
Collins has said.
All of this means, from a budget perspective, I do believe
we are on track to meet the President's target of cutting the
deficit in half by 2009. I think we have done this by working
closely with Congress to focus on national priorities while
reducing spending elsewhere.
I also think we have a lot more work to do. If confirmed, I
look forward to working with the Committee to restrain spending
while continuing to protect Americans at home and, as noted,
fight terrorism abroad.
Restraining discretionary spending, as we have done in
recent years, is an essential part of deficit reduction. But it
is the unsustainable growth in the entitlement programs, as has
been noted here this morning, including Medicare, Medicaid, and
Social Security, that poses the greatest long-term fiscal
danger.
It is absolutely critical that we work together now to
develop sound policies that put these programs on a sustainable
footing for future generations. There, too, I welcome your
input.
With the good news on the economy, growing tax revenues,
and continued spending restraint, our short-term deficit
picture does look better, but there is clearly a lot of hard
work ahead to ensure our fiscal house is in order for the
future.
I am an optimist. I believe working together we can address
these very real budgetary challenges and improve the management
of our Federal Government in ways that serve the people we
represent.
Again, I appreciate the Committee's consideration of my
nomination, and I very much look forward to your input and
questions.
Chairman Collins. Thank you very much.
I am going to begin my questioning with the standard
questions that we ask of all nominees.
First, is there anything you are aware of in your
background which might present a conflict of interest with the
duties of the office for which you have been nominated?
Ambassador Portman. There is none.
Chairman Collins. Second, do you know of anything personal
or otherwise that would in any way prevent you from fully and
honorably discharging the responsibilities of the office?
Ambassador Portman. No.
Chairman Collins. And third, do you agree without
reservation to respond to any reasonable summons to appear and
testify before any duly constituted committee of Congress if
you are confirmed?
Ambassador Portman. Yes.
Chairman Collins. You passed the test. Those were the right
answers for the first three questions.
I would inform my colleagues that we are going to do two
rounds of questions so we will start with a 6-minute round, and
I am going to ask everyone to adhere to the time limit because
there will be a second round.
Mr. Ambassador, I want to turn first to the issue of pay-
as-you-go budgeting, in other words, the PAYGO rules, that many
of us mentioned in our opening statements.
I believe that PAYGO rules provide much needed constraints
for Congress as we wrestle with fiscal decisions. The
Administration has indicated an openness to imposing PAYGO on
the spending side of the budget but not the tax side.
I question how you can apply PAYGO rules to only one side
of the ledger? Does it not make more sense to look at both
spending and revenues since both affect the size of the
deficit?
Ambassador Portman. Madam Chairman, it is a fair question,
and I noted it came up during the opening statements, and there
was a good debate here on the Committee. I would say a couple
of things.
One is the way we would currently operate PAYGO, unless we
change the scoring rules, it is true that there is a bias, in
my view, for spending and a bias against tax relief. Why?
Because we assume that programs go out indefinitely on the
spending side.
For instance the Farm Bill, which was mentioned, which
would expire in 2007, would be assumed to continue as would
other mandatory spending programs.
Whereas on the tax side we assume that tax relief would not
continue. In other words the expiration, for instance, on the
relief on the investment side, capital gains side, would be
assumed to end, even after the President signs the legislation
you all recently passed. That would assume to end in 2010. The
same with the other tax relief.
So if you apply PAYGO to that sort of a system, I do think
it is a little unfair because I do think you are biasing the
spending side in a positive way and disadvantaging the tax
relief side.
Second, I guess it is just a philosophical question. Are we
overtaxed? And is it something that we want to establish as a
potential incentive for us to raise taxes, particularly to pay
for mandatory spending? And I have concerns there, and I know
the Administration has expressed that.
As a percentage of our economy, taxes have been relatively
low from 2001 until recently. Because of the recession, because
of the economy being less vigorous and not growing as fast, and
also because of the tax relief.
But frankly, we are back up to the historical level if the
revenue projections that Treasury made last week continue. In
fact, a little above the 40-year average, which is 18.2 percent
of our economy.
So I think we need to look at those figures carefully and
be sure that we are not burdening our economy just as we are
beginning to get out of the trough we were in with the 2001
recession and all of the challenges that you noted, but also as
we are beginning to see that impact on our deficits and
eventually our debt, which is to say higher revenues from the
tax relief.
Chairman Collins. This Committee recently concluded a 7-
month investigation into the response to Hurricane Katrina, and
we found widespread waste of taxpayers' dollars, whether it was
on wasted commodities like ice that was intended for the
victims and instead ended up in my home State of Maine, fraud
in the individual assistance program because of a lack of
internal controls, an unnecessary reliance on sole source
contracting that boosted the price that was paid for a whole
host of services and items, or the hasty purchase of $750
million worth of manufactured housing that cannot be installed
in flood plains and is sitting unused in Hope, Arkansas.
Our Committee has documented waste, fraud, and abuse that
exceeds $1 billion. The real number is probably much more.
This Committee tried to be proactive on this front. We very
early on passed legislation to create a chief financial officer
to oversee the spending in the Gulf region. And we passed
legislation to create a special inspector general to look for
waste, fraud, and abuse. Unfortunately and, in my view,
inexplicably, the OMB opposed both pieces of legislation. And
thus, they were never considered by the full Senate.
Now obviously you were not involved in any way in that
decision, or I am sure if you were a far wiser decision would
have been reached. What can we do in the future to ensure that
when there is a disaster or an unanticipated need for a massive
infusion of Federal funds we have better controls in place to
protect the taxpayer's investment?
Ambassador Portman. Well, Madam Chairman, thank you. You
have raised some very troubling issues and you raised them well
in your report, ``Hurricane Katrina: A Nation Still
Unprepared.'' I read the summary as recently as last night.
You lay out a lot of the troubling facts that you have
cited today but also some recommendations for better financial
management, ways in which we can reduce waste, fraud, and abuse
next time around because we will have future natural disasters
that require very immediate attention.
On the sole source contracting, I am particularly
interested in that issue and look forward to working with you
on that. My understanding is that it is done only in very
limited cases and should be limited to extraordinary
circumstances and then should be recompeted. That certainly
would be my point of view.
On the CFO and IG issues that you raise, I am happy to look
at those issues carefully with the Committee. My sense there is
we also want to be sure that the agencies most responsible, in
this case the Department of Homeland Security or the Army Corps
or other agencies or departments that had to respond quickly,
the military, that they need to have accountability within
their own IG systems and their own CFO systems as well.
We want to be careful not to remove that accountability
from the agency structure and, in a sense, take them off the
hook. So that would be one of my concerns as I begin this
review with you and other Members of the Committee, should I be
confirmed. I do not know if you have any thoughts on that this
morning, but I do want to be sure that accountability is really
felt at the agency level.
Chairman Collins. Thank you. Senator Lieberman.
Senator Lieberman. Thanks, Madam Chairman. Thanks again,
Ambassador.
I want to talk to you first about the long-term fiscal
crisis that many of us mentioned in our opening statements.
In December of last year, the Congressional Budget Office
warned that without change, ``At some point the economy will be
unable to provide enough resources for the government to pay
interest on the debt.''
At that time, outgoing CBO Director Holtz-Eakin stated,
``It is impossible for the economy to grow its way out of this
problem. It is too big.''
Obviously the economic growth numbers are heartening to all
of us. But I want to ask you, in so far as the economy is
growing, it helps us deal with the long-term fiscal imbalances
we have talked about. But do you agree with the former CBO
Director that we cannot just grow our way out of the problem,
that it is too big, that we have to impose some restraint on
both directions to get back to balance in our Federal books?
Ambassador Portman. I do. I think I was on the Budget
Committee when he made some of those statements. I guess the
one caveat that I would add to that is that it is not so much
the domestic discretionary side, where I think this Congress
has done a good job in the last couple of years of keeping
restraints in place. We can talk about the supplementals, which
is a concern I share with you, Senator, and others. But in
general, we have been able to keep the domestic discretionary
spending within inflation.
It is on the mandatory side and the entitlement side where
I think Director Holtz-Eakin focused more. Those are the long-
term problems you talk about. And there it is not sustainable.
Not only cannot we grow our way out of it, we cannot tax our
way out of it in my view.
If you look at some of these numbers, as I did again this
morning, by 2030 the mandatory or entitlement side of the
budget will grow by about 50 percent compared to where it is
now. As you know now, roughly 20 percent defense, roughly 19
percent domestic discretionary, and the rest, about 61 percent,
is entitlements and debt service.
By 2040 it would, as I read it, exceed all revenues. In
other words, entitlements would be all of our budget, assuming
we stay roughly within the same percentage of our economy on
the revenue side.
So we have a long-term problem here that, as I mentioned in
my opening statement, we can address best now so we do not come
to that precipice and have to make very hard decisions that
have severe impacts on the people we represent.
So I look forward to working with you on that, and I do
agree with you, there needs to be changes legislatively in
order to address it.
Senator Lieberman. I agree. I guess I would say, just to
wind up my response to that answer, which I appreciate, is that
the challenge for us, as I think Senator Coburn said, is not
just to deal with the numbers but to deal with the increasing
political paralysis here in Washington. Because we must
confront the problem you have just described, which we all know
is coming. We have entitlement programs that are humane
programs that people count on. And yet, they are on an
unsustainable course.
To deal with that unpleasant and ultimately painful reality
is going to require real leadership in both the Executive
Branch and the Congress, Republicans and Democrats. And I say
leadership in the sense that you do not solve a problem like
this without doing some things that are difficult and may be
unpopular or are probably inherently unpopular.
But you do it because our future requires it. So I welcome
you, I challenge you to work with us and the Administration on
that.
I have just got a couple of minutes left. I want to ask you
to speak a bit about what Senator Warner and I both talked
about, which is what I think is the overuse of supplemental
budgets by the Pentagon. And I want to ask you what your
opinion generally is on that. I have indicated the reasons why
I think it is problematic. And whether you have any plans to
work with the Pentagon and with Congress to take some of the
elements of the supplemental budgets, which allegedly are for
Iraq and Afghanistan, and move it into the regular budget
process and therefore, as Senator Warner pointed out, into the
regular oversight process, perhaps hopefully bringing more
efficiency and cost-effectiveness to those programs.
Ambassador Portman. Senator, if I am confirmed, I would
look forward to working with Senator Warner, you, and others
who have a concern about this. I share your concern. Honestly
when I was in the House, I was advocating for more in the
budget and less in the supplemental.
I was very pleased thus this year to see that the
Administration included in the 2007 budget the $50 billion as
an allowance for Iraq and Afghanistan. That was the first time,
as you know, since those operations began that the
Administration included a base amount.
It is not going to be enough. The question is how much is
enough? I do think there is a level of uncertainty here. None
of us knows precisely, we cannot. The budget is put together,
as you know, 18 months or even 2 years ahead of time.
On the other hand, we know that there will be ongoing
expenditures there. And I think it is important to reflect
that.
In terms of your question about whether some of the
supplemental funding is better put into the base budgeting of
the Pentagon, I am really looking forward to, if confirmed,
rolling up my sleeves and getting into that issue. Because I do
think that is a very serious problem on both sides. You would
not want to put into the base something that was relatively
temporary. In other words, if some of these costs in Iraq can
be reduced through some of the successes we are seeing with the
Iraqi forces taking some of the front-line positions, you would
not necessarily want to see that in the base because then it is
difficult to remove.
On the other hand, as you say, if it is, in fact, long-term
or more permanent programming and therefore not subject to the
oversight that Senator Warner and you have talked about, then
there is a dividing line that should move it more toward the
budget side.
So these are tough decisions, I know, that Congress will
have to make. But I think the Administration can perhaps do a
better job in giving you some guidance there.
Senator Lieberman. Thanks, Ambassador. I appreciate that. I
take that answer to be encouraging and appropriately balanced,
resisting my invitation to directly take on Secretary Rumsfeld
in your confirmation hearing. Thank you very much.
Ambassador Portman. Thanks for letting me off the hook on
that one.
Chairman Collins. Senator Voinovich.
Senator Voinovich. Thank you, Madam Chairman.
As I mentioned in my introductory statement, I have been
impressed by the Bush Administration's focus on management
issues. Clay Johnson has done a pretty good job of bringing the
focus back to management in OMB.
One of the responsibilities that we have on this Committee
is oversight of the High Risk list. GAO puts it out at the
start of every Congress. There are 26 items on that list. One
of the things that I suggested to Mr. Bolton and his
predecessor was that OMB ought to be working on that list.
On that list, 14 items are in the Defense Department; some
of them have been on the list since 1990. Secretary Rumsfeld
says that we can probably save billions of dollars if we could
shape up DOD operations. It is not something that is going to
happen overnight. There are two High Risk areas that I am
paying particular attention to which I call to your attention.
One is the supply chain management, which we are working on
with Ken Krieg at the Department of Defense.
The other one is the security clearance process. I wish I
could say that progress is being made. But we are going to have
a hearing, by the way, this afternoon, and we will examine why
the Defense Security Service suspended processing new
applications for private sector security clearances several
weeks ago.
Even before this, government contractors have been
increasingly frustrated that requests for security clearances
often take more than a year to process. To lure employees who
already have a security clearance, firms have offered large
bonuses and given away luxury vehicles.
That is the kind of thing that should have been noticed by
OMB. I think if you go through and look at a lot of the
agencies you will discover that we are not giving them the
resources they need to do the job that we are asking them to
do. We are just squeezing them to the point where they are not
able to get the job done.
If you give an agency a mission and then do not give it the
resources to get the job done, basically you are telling the
agency that you do not think very much of the job you are
asking it to do. I think that OMB has failed to look at that
issue.
I have similar concerns regarding the people and resources
that are needed to implement the new personnel systems in the
Department of Homeland Security and the Department of Defense.
Those Departments need enough money to get the job done and
implement those new systems as the Administration wants them
to. I would like to have you look at that.
The last issue, and I do not know if you are even aware of
this, but OMB is evaluated under the President's Management
Agenda. Of the five categories for evaluation, OMB has earned a
yellow for strategic human capital management and in E-
government, but continues to have red scores for competitive
sourcing, financial performance, and budget performance and
integration.
What are you going to do to make sure that your own agency
has green in all of those categories? You should be the leader
and the role model in terms of management for the Executive
Branch.
Ambassador Portman. I could not agree with you more.
Leading by example is certainly going to be my intent if I am
confirmed. I have heard about the scorecard. It is the OMB
scorecard applied to other agencies. It should also be applied
to us. And we should be in position to lead by example. So I
will definitely be focused on that.
On the High Risk list, I appreciate your bringing that to
my attention this morning. The issues that you raise are all
issues that I know enough about to know that they deserve
additional focus from OMB. As you know, OMB is a relatively
small entity. It has to depend on the agencies to do a lot of
the oversight and necessary work.
You mentioned the personnel systems at the Department of
Homeland Security and the Department of Defense that you have
worked so hard on. They are working with OPM. OMB has a role.
But it has really got to be within the agencies that the input
is received from the people who will be affected, which I know
is one of your top priorities. So we need to be sure the
resources are there to meet our highest priorities. That
certainly would be a high priority in terms of the changes we
are asking them to undergo.
So I will look into all of these, Senator, with you and
others on the Committee. I will also be sure that this High
Risk list, in general, is something that we can begin to work
down. You say eight have been there since 1990, so clearly it
is an area that needs attention.
Senator Voinovich. Senator Coburn is examining a whole
bunch more. But I really believe that if we attacked the High
Risk list and improved the operations in the Defense
Department, then some of these other issues that you are
concerned about, Senator Coburn, would be addressed.
Ambassador Portman. Thank you, Senator.
Chairman Collins. Senator Levin.
OPENING STATEMENT OF SENATOR LEVIN
Senator Levin. Madam Chairman, thank you very much. Welcome
to you and congratulations to you on your appointment.
We are, I think, going to have a highly qualified person
with great experience to take over this position, and I very
much look forward to your being in it.
First, let me ask you, Mr. Portman, about OIRA. We did not
have a chance to talk about that during your visit to my
office, but I want to spend just a couple of minutes with you
on this issue.
This is, as you know, the Office of Information and
Regulatory Affairs (OIRA), which is in the OMB. OIRA's role is
to review regulations proposed by Federal agencies. Under the
Executive Order that governs, OIRA's review process of proposed
regulations is supposed to be a transparent one.
This was an issue which was very much debated and discussed
in both houses, I believe. It is important that the public know
which proposals come from regulatory agencies and which ones
originate with OIRA. And in particular, this Executive Order,
which is number 12866, requires the public disclosure of
``changes in the regulatory action that were made at the
suggestion or recommendation of OIRA.''
And again, this was a subject which was very intensively
reviewed by Congress before this Executive Order was adopted
because Congress wanted very much to know whether or not it was
the regulatory agency which was making changes or proposed
changes or whether this came through the political folks at the
top, acting through the OMB.
So what happened here is that OIRA has established a
process of informally reviewing agency proposals prior to final
decision-making at the regulatory agency. And according to the
GAO, the number of informal reviews by OIRA has increased
dramatically in recent years, and these reviews ``can have a
substantial effect on the agency's regulatory analysis and
substance of those reviews.''
The changes, however, that are made pursuant to that
informal review process are not made public pursuant to the
Executive Order. So this practice, this informal review
practice, seems to me to frustrate the intent of the Executive
Order. And again, the purpose of that order is to ensure public
disclosure, that the changes are made and where these changes
are coming from.
And so my question is are you familiar with this issue? If
so, would you give us your reaction to these informal reviews?
Because it seems to be inconsistent with the plain language of
the Executive Order for agencies to make significant changes at
the suggestion or recommendation of OIRA without disclosing
that fact to the public.
It is fine to make changes. That is not the issue. The
issue is the transparency issue. Where do these changes come
from? At whose suggestion were they?
Ambassador Portman. Thank you, Senator.
I am aware generally of the issue of how do you balance the
internal deliberative process, which I think Members of
Congress appreciate is an Executive Branch prerogative, with
the need for more transparency. I was not aware of the specific
issue of the informal reviews and your concern that they are
not currently subject to the same transparency concerns.
My overall approach to this will be to try to open it up
more. I think sometimes the secrecy and mystery surrounding
OIRA does not benefit the Congress or the public's interest or
necessarily the Office of Management and Budget. My sense, as I
have looked at this over the last couple of weeks, knowing that
I might be asked to take on this task, is that OIRA works very
well with the agencies and that for the most part, although
there are refinements to a lot of these proposed regulations,
that relationship has improved over time and it is more
professional, more transparent. I would want to encourage that
to continue.
So E.O. 12866, as you know, provides for certain guidance.
I will certainly be taking a look at that and specifically
looking at the issue of the informal reviews.
Senator Levin. To make sure that not just the purpose or
the spirit of the Executive Order but literally the letter, in
this case, of the Executive Order be complied with fully, we
would appreciate your doing that.
I guess one more question before my time is up. We have had
a debate in this Congress over the Advanced Technology Program,
and I think there are differences between Members of this
Committee on the value of the program. I am looking at my
friend, Senator Coburn, when I talk about the differences on
this program. But he is very out front about it, and I have
always admired him for being out front about the issues such as
this where there are differences.
But nonetheless, the majority of the Congress has
appropriated money for this program. The law requires that when
Congress appropriates funds, that unless they are
unappropriated or somehow or other Congress changes the law,
that the Executive Branch is supposed to execute the laws and
not make up the laws.
So this program has a 2006 appropriation, which is not
being spent. I know the Administration wants to zero this
program, and that may have the support of some Members of
Congress. But we do not know what the 2007 budget is going to
be yet, and there will be a battle over that issue as there is
every year.
But until that issue is resolved in 2007, I think the law
needs to be abided by the Executive Branch. It cannot take the
law unto itself. And so I would urge you to take a look at the
2006 appropriation for that program and to make sure that, in
fact, the program is implemented in 2006, as written by
Congress, and that we do not have the funds not spent because
in 2007 the Executive Branch hopes we will not appropriate
more.
That would be a request to you. It is, I think, what the
law does require and maybe you can get back to us on what your
intentions will be relative to those funds in 2006, which are
still there, and to give us the assurance that, in fact, they
will be spent.
Ambassador Portman. Thank you, Senator. I appreciated
talking to you briefly about that the other day.
There are two issues here, as you say. One is the
effectiveness of the program, the appropriateness of it, the
necessity of it going forward, where we may have some honest
differences.
But the second issue is, as you say, a process issue, and I
will look into that as to the 2006 appropriation and get back
to you.
Senator Levin. Thank you. Thank you, Madam Chairman.
Chairman Collins. Thank you. Senator Coburn.
Senator Coburn. Ambassador Portman, this last year, when
the President submitted his budget and the budget
justifications were sent to the Appropriations Committee, they
were made unavailable to other Members of Congress. And I
questioned your predecessor, Josh Bolton.
And he made a commitment to me that next year they will be
made available, not only to Members of Congress, but also
available online. Will you confirm that commitment from OMB
that they will, in fact, the budget justifications, be
available to Members of Congress outside of the Appropriations
Committee, as well as be available online to Americans?
Ambassador Portman. Senator, if Josh Bolton committed to
you, I would not want to go back on anything your friend and my
friend, Josh Bolton, said. So as I said earlier, I think more
information is better. I think it helps.
Senator Coburn. The whole culture of limited knowledge
about where we are spending the money and why cannot help us.
Everybody in America needs to know why the President wants to
spend money a certain way. And to say that we can only give
this to a certain group of Senators or Congressmen belies the
fact that we are an open society and an open government. The
truth will set us free.
If it is something the Administration wants, they ought to
be willing to defend it, and it ought to be publicly open. So
those budget justifications ought to be available to every
Member of Congress and every citizen of this country.
I would just hope that you would make sure that is
implemented in this next year--and it is not to be critical. It
is to have an understanding of where the budget justifications
are coming from.
One of the other things that I think is tremendously
important for us to hold us accountable as elected officials is
to have a Federal procurement database on the Internet that is
transparent and allows the public to see who gets Federal money
and for what. I would like your comments on that and whether or
not you think that is a good idea? And if so, if you would be
supportive of making that happen at OMB?
Ambassador Portman. I will look into that. I know that is
an issue that has come up, thanks to your interest. I think it
makes sense, just as you say with regard to what the
justifications are for our budget numbers, to have procurements
which I assume would be major contract procurements be
available for public inspection.
On the database issue, my understanding is that there may
be some logistical issues as to putting it on one database, and
that is something that I will be looking into if confirmed.
I believe that the agencies currently do provide the
information, but it is not in the same format.
Senator Coburn. The agencies, some do, some do not. USAID,
for example, does not. They are in one program now because we
have insisted on it.
There is a database online today, but it is not accessible,
it is not easily accessible, and it is not comprehensive. It is
just part of sunshine.
And I am not talking about security issues. I do not think
they ought to be out there. I am not talking about things that
do not need to.
But for example, in Katrina one of the things that we have
noticed is there is no transparency on the money that was spent
by FEMA to the Corps past those contractors. You can get to one
contractor but there is none. So consequently, in many of the
things that we did in Katrina, we paid three times what we
should have paid for it because we had all of this layering
which was hidden. It was not transparent.
What I am asking is that the information go to the American
people because basically their collective wisdom is better than
ours. And when they get to see it, they get to be critical of
it. And they cause us to attune to their concerns, which
sometimes we are not concerned with. And they can help us be
better stewards of their money. So that is the motivation
behind that.
The other thing that I would like to see is some teeth to
the terminations list. OMB has done a lot of great work in
looking at--the PART analysis--programs that do not have
effective goals, they do not measure their goals. They are not
accomplishing their purposes. And OMB sends over here routinely
a terminations list. Granted, it is sometimes disputed among
Members of Congress.
But one of the things that OMB can do is advise the
President to veto spending bills, appropriation bills, that
have those terminations list funded. That is the ultimate power
that the President has.
And I wonder what your thoughts are about utilizing a veto
to carry out some of the terminations list that we know are
wasteful. You will have a group that supports any one of those
individual projects because they are localized, they are
regionalized to prospective States or Congressional districts.
But the only way you are ever going to get that solved is if
you use the power of the Executive Branch to limit those.
Ambassador Portman. It is an excellent question. I am just
looking at the budget this year. As you know, there are 141
programs this year that would be proposed in our fiscal year
2007 budget for either termination or substantial reductions. I
think it is a savings of almost $15 billion.
This, of course, leads to the question of how do you veto
individual items in a bill because some of these are relatively
small programs in much larger bills. That goes to the question
of the legislative line item veto we talked about earlier, and
I indicated my support for that, in part to get at some of
these issues and to have more accountability in the system
where those issues are brought up, as you say, to the best
disinfectant, which is the sunshine, which is disclosure.
So I look forward to working with the Committee on this. I
think some of it can be done short of a line-item veto, as you
say, but it would also be helpful in some of these very large
appropriations bills or the omnibus appropriations bills if we
had the ability to pull out these individual programs that are
in the Administration's budget and, from our point of view,
appropriate for termination.
Senator Coburn. Thank you, Madam Chairman. My time has
expired. Will we have another opportunity?
Chairman Collins. Yes. Senator Lautenberg.
Senator Lautenberg. Thanks, Madam Chairman. I apologize for
having been out of the room for so long at another committee,
but I watched with interest what was taking place, the magic of
the television facility is certainly worthwhile, but you have
to kind of divide your thoughts.
Ambassador Portman, you were asked questions, some of which
I had in mind, about the budgeting process and where the
variation comes between what the OMB has come up with and CBO.
You have noted that there were some significant differences.
I wonder whether you could comment on, are the tools that
are used different from one organization to the other? You know
CBO very well, having been the recipient of information from
them when you served in the House. Is it a mechanical thing
that produced the difference? How are these things weighted or
induced? Are they induced to come out one way or another, do
you think?
Ambassador Portman. That is a good question. As you know,
the Chairman talked a little bit about how relatively small
changes in these assumptions can make huge differences down the
road in terms of the CBO or OMB projections on deficits. Right
now, as you know, we are facing a big gap between where OMB is
and where CBO is on the deficit calculation for this fiscal
year. And so that is based on different assumptions and
therefore different models.
There are very slight differences. Senator Collins talked
about how 0.1 percent can mean a $272 billion change in the
deficit over time. I think that accounts for it, Senator.
I do not know that there is a bias in particular. As I said
to you in our conversation yesterday, if you look for a bias
you might see it going back and forth because right now, for
example, CBO believes that revenues will be higher than OMB has
estimated. Or even than some of the Treasury estimates, as I
understand it.
Other years it has been the other way around, where CBO has
been more conservative in its estimates. I do not believe there
is a bias there.
Senator Lautenberg. We discussed it, and it would be
shocking to me, in my business life, to have seen us try to get
two different auditors in there for the same financial
statement, to see them come up with differences.
Ambassador Portman. Good point.
Senator Lautenberg. I do not know whether conferences
between the two are prohibited. I think they should be. But to
iron out and be able to come up with an explanation of why
these differences exist. And I understand and Chairman Collins
knows very well what adjustments can mean. She understands the
process extremely well, lots of things that come before this
Committee.
One of the things that is noted that, as is said in
colloquial English, is beauty is in the eyes of the beholder. I
heard one of our colleagues discuss the pride in our financial
condition and listed several things that he thought indicated
that we were sailing in the right direction.
I look at the deficit, and we heard comments before by
another colleague who said that we could not work our way out
of the debt situation that we were in under present conditions.
Now does it bother us that we have a $9 trillion debt limit
that was pushed through and there was lots of opposition in the
vote in the Senate to that? What are the prospects that we
could be looking for another hike in the debt limit in the not
too distant future? At what point is this a really dangerous
condition for our country?
We are now handing off debt to our kids in substantial
proportion. Can we believe that those debts will disappear
before 15 or 20 years, when our grandchildren are more mature?
Ambassador Portman. It is a serious question. And, as I
said earlier, I do believe our short-term budget projections
are a little better. I do believe that we will meet the
President's target, should there not be another major natural
disaster or other event, because revenues are increasing, the
economy is doing well, and you all are doing a good job in
restraining the domestic discretionary spending, at least in
the last couple of years, working with the Administration.
So, we are on track, and our numbers should go down. That
is what CBO is estimating for this year, as you know.
But you are right, in terms of the long-term, and I would
even say midterm, issues. Why is that? It is because of the
mandatory spending continuing to increase far greater than the
rate of inflation.
If you look at the numbers in terms of the debt you talked
about, the big concern I have is in terms of the so-called
internal debt. In other words, the government to government
debt, which is the Social Security Trust Fund primarily, but
also other trust fund debts. Those are increasing dramatically
because we have not taken some of these hard choices that
Senator Lieberman and others talked about on the entitlement
side.
If we do not do that, we will see that total debt, not the
debt owed to the public, but the total debt, including the
intergovernmental debt, increase.
On the public debt side, which is what most economists
really think affects the economy, and you and I talked a little
about this, we are doing a little better job. If you look at
the historical average of that debt to GDP, we are within the
range now. The projections going forward are that we will begin
to see some reduction in that percentage to the economy,
assuming the economy continues to grow as projected.
But the bigger problem is not the public debt. The bigger
problem is that internal debt, which is really another way of
saying we have got an entitlement problem we need to address.
And if we do not address that, I agree with you, it is not
sustainable.
Senator Lautenberg. Madam Chairman, if I might impose for
just a short minute here, and that is to say that when we look
at the internal debt and we try to estimate what the
consequences of that will be as we try to make the sources from
which we borrowed more reliable for the beneficiaries of the
program, Social Security in particular, Medicare, etc.
But then are we not forced to look at the programs? There
is kind of a rush to the top in our society right now. Wealthy
people are doing very well. I had a successful business, and I
like it better this way than when I was a poor kid growing up
in Paterson, I can tell you.
But I worry about the country at large. The people who
desperately need help from us, I mentioned before, like Head
Start and some of the educational funding, I think is going to
create a penalty that this country is going to suffer from for
many generations unless we do something about it.
Thank you very much. And thank you, Ambassador Portman.
Ambassador Portman. Thank you, Senator.
Senator Lautenberg. Lots of good luck to you.
Ambassador Portman. Thank you, sir.
Chairman Collins. Senator Carper.
OPENING STATEMENT OF SENATOR CARPER
Senator Carper. Thanks, Madam Chairman.
I would like to say we were saving the best for last but I
understand there will be another round of questions so this
will not be the last.
It is good to see you. Welcome. I understand your father is
here?
Ambassador Portman. He is.
Senator Carper. And that he is 84 years young?
Ambassador Portman. He is only 83 now. He is much younger
than that. But he will turn 84 this summer.
Senator Carper. I just want to say to your dad, you and
Rob's mom did good work in raising this kid and instilling the
kinds of values that we would like to see in all of our
children. I just want to start by commending you.
I understand your wife is sitting immediately behind you,
the former Jane Dudley. And I just want to say you took up
where his parents left off, and I think he has turned out
pretty well.
Ambassador Portman. She continues to mold me.
Senator Carper. Thank you for sharing him with all of us.
As my friend, Joe Biden, likes to say for people who put up
with a lot: for you, no purgatory, straight to heaven, Mrs.
Portman. You will get your reward. Thanks for sharing him with
all of us.
I say to your dad, your son is well known and well admired
on both sides of the aisle here in the Congress, in the House
where he served, and in the Senate as well. My guess is that he
is going to be confirmed without any difficulty. He has already
been confirmed once to be our Trade Ambassador, and I think, by
almost every fair account, he has done a very fine job.
His two immediate predecessors were also people that we had
a high regard for around here. One was Mitch Daniels who worked
for a number of years, as I recall, with Dick Lugar? I think he
worked with Senator Dick Lugar and is now the governor of
Indiana. He was held in very high regard.
And subsequent to him Josh Bolton was our OMB Director and
somebody that I like a lot, and I have a high regard for him,
and I know others do, too.
During that time that Mitch served as OMB Director, I think
our budget deficit went up about $900 billion. And under Josh
Bolton, during Mr. Bolton's tenure as OMB Director, I believe
our Nation's debt might have gone up by about $1.5 trillion.
And now we come to our third nominee here, and I just hate
to think how much the deficit is going to go up under his
watch.
We had a good visit yesterday and talked about some of this
stuff, and I just want to mention a couple of points if I may,
and then I would like to ask for your comments.
When I was in the House of Representatives, I mentioned to
you yesterday that I was a co-author of the Balanced Budget
Amendment to the Constitution, which got a whole lot of votes,
I think about 280, which is very close to what you need to
pass.
It was not a balanced budget amendment that mandated a
balanced budget every year. But it was one that said the
President had to propose a balanced budget at a certain date
and that Congress could unbalance the budget, but you needed a
super majority, a three-fifths vote to unbalance the budget and
a three-fifths vote to raise the debt ceiling, as well.
In my State, we always had to propose balanced budgets. My
own experience has been if you did not have a governor who was
showing leadership on fiscal issues, or a mayor or county
executive or president, it is not the nature of a legislative
body to somehow offer the leadership on fiscal issues that the
chief executive does not provide.
In reflecting on a balanced budget amendment, sometimes I
think we only need a balanced budget amendment that says at a
certain date the President has to propose a balanced budget. I
think in providing that kind of leadership and being able to
defend himself or herself with the shield of the Constitution
is still not a bad idea.
I also mentioned to you yesterday, I authored when I was in
the House of Representatives the first statutory line item veto
bill that passed the House, I think by a three to one margin.
It died over here in the Senate.
This is an issue I think whose time is probably going to
come again. I think Senator Kerry was over at the White House
last month with some others sort of endorsing the idea. Our
take on it was just a little different. I am going to lay it
out and then ask you to comment on it.
We called for, in our statute, a 2-year test drive for line
item veto powers. In our proposal, the President was limited in
how much he could rescind in spending. If a program was fully
authorized, he could rescind no more than 25 percent of that
authorization in his proposal. If the program was not
authorized at all, the President could propose a rescission of
100 percent. So there is a difference between programs that are
authorized and unauthorized.
When the President submits his rescission, the problem is
the President can offer rescission messages every day. The
Congress just usually ignores them and has for decades.
In our proposal, the Congress could vote against a
rescission by the President, a proposed reduction in spending,
but they would have to vote. And we had an expedited process
for compelling a vote. We did not require a two-thirds vote to
override a rescission, a simple majority, 51 in the Senate and
218 in the House. And we provide the President with this power
for 2 years. Not forever. It certainly was not part of the
Constitution, but I called it a 2-year test drive.
There were those that were concerned that if we gave the
President this kind of power and there was something that the
President wanted Senator Collins to agree with him on, the
President could say well, I am going to take out your favorite
project in Maine, or for Senator Carper in Delaware, and to use
that as a lever or a wedge to get his way.
So we made it a 2-year test drive and said if the President
abuses it, he will lose it. If he does not abuse it, then maybe
we will restore it beyond that point in time.
Let me just stop and ask you to comment, if you will, on
the idea of line item veto powers, whether it should be in
statute, whether it should be in the Constitution? And what
virtues, if any, do you find in the proposal I just laid out?
Ambassador Portman. First may I say, Senator Carper, I
agree with you on the importance of leadership, particularly
Executive Branch leadership as you saw when you were governor.
It also requires teamwork, and I appreciate the leadership you
have shown on some of these budget process reforms and on
specific initiatives like line item veto or balanced budget
where you have not necessarily been in the majority of your own
party. So it requires leadership on both sides, and I take that
responsibility seriously. So we will see what we can do
together.
On the line item veto, in a sense the line item veto that
you supported was a more powerful tool for the executive than
what we are proposing because, as you know, based on the court
case we have changed the line item veto language to provide
more of a legislative line item veto where the Congress does
have the ability to play a very important role--an up or down
vote which is important but in fact nothing can happen unless
the Congress votes for it. It just brings it to the sunlight we
talked about earlier. But there is not a 2-year test drive in
the President's proposal. It is permanent, as I understand it.
So I think it has some elements to it which I think
Congress, and certainly the courts, would find more consistent
with the separation of powers and the balance between us,
including some time frames, including the way the rescissions
would work. And OMB has already testified I understand recently
that we could perhaps live with even some additional changes
that Congress might think were appropriate. But it is
permanent.
My own thinking would be if we work through something that
makes sense, that provides Congress with the ability to work
its will, but on individual spending decisions, that we should
probably make it permanent subject, of course, to change
Congress to Congress or at any time Congress feels it is not
being used properly. But I am not sure we need to have the test
drive.
Why? I think what you said is true. I think there is more
of an acceptance now of the need for some more discipline on
all of us and another tool for the executive to have the
ability to take some of these leadership stands that you say
are necessary. I think that thinking has evolved since your
days in the House.
Senator Carper. Thanks. My time is expired. I understand
there is going to be a second round, and I will be right back.
Thank you.
Chairman Collins. You are leaving during my second round?
Senator Carper. I am not going anywhere.
Chairman Collins. Ambassador, I want to go back to your
answer to the question about a special inspector general and a
chief financial officer to oversee all of the Katrina spending.
You raised a very valid point about accountability and making
sure that the individual agency IGs and CFOs are not ``being
taken off the hook,'' I think was your term.
The problem, however, is when you have a massive
expenditure of billions of dollars that crosses department
lines and you have no one person who is responsible for
establishing the controls for all of the departments and
agencies involved, whether it is the Army Corps or DHS or HUD
or HHS, you have a situation lacking a uniform approach. I
think this leads to a lack of accountability.
In addition, with DHS, which obviously had the lion's share
of the money, there was another significant problem, and that
is that there is not a permanent CFO in place right now. We
recently held the confirmation hearing for the first permanent
CFO.
I wanted to bring those issues up before going on to some
other issues because I really believe in the future we need a
different approach. I continue to believe that had the
proposals advanced by this Committee been put into place, we
would not have seen so much waste, fraud, and abuse that have
really plagued the recovery. So it is just food for thought for
the future.
I do want to go on to some other issues.
As you know, within the OMB is the Office of Federal
Procurement Policy, a small office but a critical one for
establishing the Federal policy for contracting. We have seen
some real problems with an over reliance on sole source
contracts recently. The Special Inspector General for Iraq
Reconstruction and Recovery has identified numerous cases of an
excessive reliance on sole source contracting, as well as
outright contractor fraud, both of which have resulted in
significant waste of taxpayer dollars.
We have also seen an inability to be able to trace where
money is going and what it has been used for.
Similarly, in the aftermath of Hurricanes Katrina and Rita,
FEMA awarded four large sole source contracts to provide
temporary housing. Originally these big four contracts were
valued at $100 million each. But recently FEMA raised the
ceilings for each of these four contracts to $500 million
without recompeting them.
That is very troubling to me because had we competed these
contracts in the first place and had them on the shelf
available to be implemented in the event of a natural disaster,
I am convinced that we could have saved significant money.
What will you do, as head of OMB, to strengthen the
protections against sole source contracts? You mentioned that
it is supposed to be done only when there is either not another
supplier available or in times of national emergency. But we
are not anticipating natural disasters that we know are going
to occur. And it is possible to negotiate these kinds of
contracts in advance.
Ambassador Portman. You raise very valid concerns. As I
said earlier, my general approaches, of course, will be to
encourage competition and recompeting when it is necessary to
go to a sole source because, as you say, it is the only
contractor that can handle an extraordinary circumstance. And I
think it may be the case in some of these issues with Iraq as
well as with Katrina. And then second, when there is a national
emergency or the urgency is required.
I will be working with, as you say, the Administrator for
Federal Procurement Policy to review not only what happened in
Katrina which, as you say in your report, has resulted in these
caps being raised dramatically, and then the inability to not
only save some taxpayer dollars but also some temporary housing
that ended up not being used for Katrina, so some waste.
But I also think it needs to be looked at more generally,
and I look forward to working with the Committee on that. As
you know, in the procurement area we have made some strides in
terms of transparency, and I think that needs to continue as
well. There are Federal rules and regulations and statutes, as
you say, that do authorize sole source contracts but only in
these limited circumstances. We need to be sure that we are
abiding by those.
Senator Collins. I want to now turn to a question that I
have asked at every OMB Director's hearing since I have been in
the Senate, and it is still an issue. It involves the Low
Income Home Energy Assistance Program (LIHEAP), which is so
important to low income families in my State and in other cold
weather States. It has become even more important given the
cost of energy and the escalation of prices that we have seen
in the last year.
We do not administer this program in the most cost-
effective way. If there were an advance appropriation for this
program, which would mean that for one year you would have to
double fund the LIHEAP program, you would allow States,
community action agencies, and others that are involved to
serve their clients during the summer months when home heating
oil prices are far lower or significantly lower than in the
winter months. And you would be able to stretch that LIHEAP
appropriation further or increase the size of the benefit or
serve more people.
I ask that you work with me to take a look at the way the
LIHEAP program is structured. If, in fact, the bulk of the
purchasing could be done in the summer months rather than
waiting to the height of the winter months when costs are the
highest, we could serve more people or at least stretch the
dollars further. I would ask that you take a look at this.
I raised this issue at Josh Bolton's hearing. I raised it
at Mitch Daniels' hearing. And each time I get a promise to
take a look at this. But I hope that you will not only make
that promise but truly work with us to see if there is a better
way.
Ambassador Portman. I appreciate that. I enjoyed our
conversation about that. And because of that conversation, I
have begun to look at that and, if confirmed, I will do even
more.
One of the issues that I see is the difference between the
emergency funding and the base funding with regard to the
emergency needs. Of course, it would be difficult to know what
we need in advance. But with regard to the base amount, which
is a substantial amount as you say, there I will be interested
in looking at some flexibility options both with regard to the
Federal share but also the State cost share.
So I look forward to working with you on it. I have learned
more about LIHEAP in the last week than I had known previously,
even in my time in Congress. I will be learning even more,
Madam Chairman, at your request.
Chairman Collins. Thank you. Senator Voinovich.
Senator Voinovich. Thank you.
I am sorry that I had to leave for a few minutes. It is
obvious that you will have a full plate, Mr. Portman, and if I
were in your shoes, I would make sure that OMB's management
agenda is thoroughly addressed. Because I think if some of
these management challenges are taken care of, you are going to
be able to do a much better job responding to some of the
issues that we are asking you to address.
You and I have talked about the growing national debt, and
I think the House included in their budget proposal a provision
raising the debt ceiling to almost $10 trillion, which, if it
becomes law this year, would be a 78 percent increase in the
national debt since I came to the Senate in 1999.
You heard Senator Bennett's comments about how these tax
reductions are helping the economy. I am going to send you a
copy of this article, and I would ask that it be inserted into
the record.\1\
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\1\ The article appears in the Appendix on page 43.
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Chairman Collins. Without objection.
Senator Voinovich. It is a Washington Post opinion article
by Sebastian Mallaby. The title of it is ``Return to Voodoo
Economics.'' The article asserts that tax cuts never produce
enough economic activity to make up for the loss of revenue.
If we continue to extend the taxes that were passed in
2001, we are talking about a $2.4 trillion loss in revenue. I
think we have reached a stage where we have to decide how much
of our GDP do we need to run the country? A couple years ago,
Federal taxes were 16.5 percent of GDP. I think Federal taxes
are up to about 18.5 percent of GDP today. But what should the
percentage be? It has historically been around 20 percent. The
question is: What should the percentage be? How do you get
there? I would be interested in your thoughts on that.
Regarding tax reform, the President has talked eloquently
about it in the past, but it looks like it has been placed in
somebody's drawer and forgotten.
The President, in the State of the Union address, talked
about a commission to examine reforms to Social Security,
Medicare, and Medicaid. To my knowledge, that commission has
not been appointed yet--we ought to get on with that.
I believe what we are ignoring is the growing national
debt. We are ignoring the great impact of the coming baby
boomers' retirement. And we are ignoring the costs of homeland
security and the war abroad.
Senator Lieberman believes that we are not spending enough
money on homeland security. But Madam Chairman, I do not know
if you know this or not, but we have doubled the DHS budget
since September 11. If you include other homeland security
money that is coming from other agencies, we have tripled that
budget. So we are spending an enormous sum of money on homeland
security. We are now putting pressure on the nondefense
discretionary budget.
So Mr. Portman, I would be interested in knowing: Where are
you on tax reform? And where are we on this commission that is
going to examine mandatory spending, which we have to address
as soon as possible?
Ambassador Portman. You have touched on all of the big
issues. You and I have had many of these conversations about
the economy and the impact of taxes and particularly on the
deficits. I, as you know, feel strongly that restraining the
spending must go hand-in-hand with a growing economy, and we
need to do everything we can to encourage that. We have seen
it, as you know, in the last couple of years. I mentioned the
fact that our revenues were up last year 14.5 percent. I do not
think it is a coincidence. I think the tax relief that you
ended up supporting and perhaps refining, that became fully
implemented in 2003 correlates incredibly well with the job
growth and the economic growth.
Senator Voinovich. There are some very valid economists
that say that is part of it. But we have also had lower
interest rates, and the confidence has been restored in the
financial markets.
Some Republicans say the economic recovery has all happened
because of the tax cuts. I do not think that is the case. So
there are some differences of opinion here.
But what do we do about the national debt, the growing
mandatory spending, and the fact that we have a tax code that
is absolutely a nightmare? Something should be done about these
things.
Ambassador Portman. You are absolutely right. How do we
take what is a growing economy and a growing share of revenue
as to GDP--by the way, the average over the last 40 years as
18.2 percent? If the Treasury estimates from last week are
accurate, and we have another 5 months in this fiscal year so
we do not know for sure, but if they are accurate, we will be
up to 18.3 percent.
So we are not under taxed historically right now. We are
overspending, slightly overspending which leads to the annual
deficits. And in terms of the long-term costs----
Senator Voinovich. But the problem is that we are spending
so much on the war----
Ambassador Portman. War and Katrina.
Senator Voinovich [continuing]. And on the response to
Katrina and homeland security.
Ambassador Portman. You are absolutely right, substantial
increases.
Senator Voinovich. That is why I have said that to be
responsible, and I know this is controversial, we should go to
the American people and ask them for a temporary tax increase
to cover these temporary costs so we can get the budget back
into balance and adequately fund the nondefense discretionary
budget.
Ambassador Portman. We are getting very close on that. I
honestly believe we will make our 2009 cutting it in half,
which will be down, by the way, Senator, to 1.4 percent of GDP,
which is well below, as you know, the historical average. The
40-year average is 2.3 percent of GDP.
So we are doing OK in the short term. But the issue is the
long-term. I could not agree with you more on tax reform. One
thing we can do in terms of taxes is deal with the AMT and deal
with the tax gap through tax reform.
I think frankly it is a challenge but also an opportunity
right now for us to combine the entitlement reform that you
have supported with tax reform that enables us to raise revenue
in a more efficient way to be able to deal with some of these
long-term problems that you talk about.
And I am eager to roll up my sleeves, if confirmed, and
work with you on all three of these issues. One, being sure
that we have the adequate revenue and that it is being raised
in the proper way, and that is the tax reform side. Two, is
dealing with the budget issues, both short-term and long-term
and domestic discretionary spending. There we have to be sure
we have the right balance. You talked about the concerns we
have right now with homeland security and the war. We need to
figure out which goes into supplementals and which goes into
annual budgets so there is more oversight.
But third, is this longer-term issue of entitlement
spending. It is not sustainable. Medicare, as you know, is just
over 6 percent growth. Medicaid, 7 percent to 8 percent. As I
said, if you look down the road 30 and 40 years, pretty soon
entitlement spending takes up the entire budget, assuming we
keep our revenues to GDP roughly where it is, which is
important to keep the economy growing.
So these are big issues. I am an optimist. As I said in my
opening statement, I took this job, Senator, as you know
because I have talked to you about it, because I believe that
we have a historic opportunity right now to address some of
these issues. I do not know if we are going to be able to do it
in the next few months because we have an important election
coming up, but I do believe that it is time for us to grapple
with these big issues that have tremendous long-term impacts.
If we do it now, then there will be less dislocation both
to our economy but also to our seniors and others who depend on
these entitlement programs.
Senator Voinovich. And our kids.
Ambassador Portman. And our kids.
Chairman Collins. Mr. Ambassador, I know Senator Carper is
coming back for some additional questions, and I have a few
additional ones, as well.
Senator Carper, would you like to do your questions first
or do you want me to proceed?
Senator Carper. I have a group I am trying to meet with,
and they are just going to wait. If I could proceed, that would
be a real help.
Chairman Collins. Then why don't you proceed?
Senator Carper. Thank you very much.
I recall the words in the 2004 campaign, you may recall the
words in the 2004 campaign. One of the candidates for president
was accused of flip-flopping. I forget what the issue was. I do
not know if it was a vote on a supplemental appropriation. But
he said first I was for it and then I was against it or words
to that effect.
We have done some skullduggery and gone back to see how
former Congressman Portman voted. And we all are captives of
our voting records. I am sure you can find things to crucify me
with mine.
But we found out that in 1995 and 1997 you voted for a
budget reconciliation measure, a budget resolution that
apparently included what we call PAYGO, two-sided PAYGO. For
our guests, it means that if Senator Carper or Senator Collins
or Senator Voinovich want to cut taxes we have to come up with
an offset so that the deficit will not get larger. We can
either cut spending someplace to offset it or raise taxes
someplace else.
But some of us fought very hard for a PAYGO approach that
says if anybody is going to do something to make the deficit
bigger, we have got to come up with an offset, whether it
happens to be spending increases or whether it happens to be
revenue cuts.
Let me just ask your views now on this issue, if you do not
mind. How do you feel today about two-sided PAYGO?
Ambassador Portman. It is a very fair question.
As you know, I was Vice Chair of the Budget Committee, and
I took a different point of view. And part of it, honestly, was
informed by the experience that I had. I ran for Congress in
1992 for the first time. At that time, our deficit was 4.6
percent of our economy, which is the way most economists like
to measure it because that is really what they are concerned
about is how much is it affecting the economy, interest rates,
inflation, and so on.
Today, this year, we are probably at about 2.5 percent of
our economy. Is it too large? Do we need to get it down? Yes.
But we were in even worse shape in 1992.
What happened is over that time period of my first 7 or 8
years in Congress, we finally got around to this balanced
budget amendment. We got Democrats and Republicans working
together--you were one of them--to say we need to keep our
spending under control and we need to do some things on the tax
side early, tax increases. But later in 1997, when the economy
really took off, capital gains cuts and other tax relief.
My experience was, when I stood down on the House floor and
said proudly, along with Chairman John Kasich, a friend of
Senator Voinovich's and others, that we were balancing the
budget and we were going to do it by 2002. And doggone it, it
was because we were making all these tough decisions on
spending.
What happened is No. 1, we did not make tough decisions on
spending. Spending continued to increase. But No. 2, we
balanced the budget much sooner than anybody expected. Why?
Because of the economy. We did not do it in 2002-2003. I think
we did it by 1999-2000, we had balanced budgets.
I just sort of became a believer more in the importance--
and Senator Collins talked about this at the outset--of
economic growth being really what is going to drive us to
fiscal sanity here, and that we need to be very careful,
whatever we do, that we do not risk putting in place policies
that could affect economic growth.
I am concerned, frankly, when you look at the way PAYGO
works, right now if you have a spending program it goes on
indefinitely even if it is meant to expire. I mentioned the
Agriculture bill earlier, but other mandatory spending. Whereas
on the tax side you assume it is all going to expire, therefore
there will be tax increases.
So if there was a more level playing field in terms of how
you would apply PAYGO, I frankly would feel differently about
it. But the position I took in the House Budget Committee is
the position that, I think, the Administration takes and I
still take, which is I am for the PAYGO rules as it applies to
mandatory spending. I think it is important. But as to taxes, I
am concerned that if we did that we would risk the economic
growth side.
I do think we need to get to balanced budgets. I do think
we need to increase our revenues. But as I saw in the 1990s,
the way to do that is to be sure we have a strong and growing
economy.
Senator Carper. I think it was Denis Healey who used to be
Chancellor for the Exchequer who used to talk about the theory
of holes. It goes something like this: When you find yourself
in one, stop digging. We need all the tools that we can muster
to stop digging.
I do not know that we will ever have a balanced budget
amendment to the Constitution. We might, but I do not know.
We may or may not have some kind of statutory line item
veto powers for the President. It may happen. It may not.
We have had experience with PAYGO on both the spending side
and the tax side. I think it was to good effect. And I, for
one, would welcome its return. And somewhere along the line
maybe we can convince our friends in the Administration that
the position that some of them supported as recently as 1995
and 1997 is actually not a bad position to support now.
Yesterday when we were meeting, I telegraphed a pitch to
the extent that I said I wanted to talk today a little bit
about the tax gap, and I suspect others have a bit already.
But in a day when we have these huge budget deficits, $300
billion and $400 billion, and we find out that the tax gap last
year apparently was about $290 billion. That is $290 billion
that IRS tells us was owed, and we actually have some idea who
owed it and the kind of taxes that were owed, and we did not
collect the money.
I would just ask your thoughts on what the Administration
would do and what role you will play in trying to make sure we
reduce that $300 billion. Even if we can reduce it about $100
billion, that is real money.
Ambassador Portman. It is a great question, and I know your
Subcommittee has done a lot of good work on this.
As you know, I co-chaired the IRS reform effort with
Senator Bob Kerrey in the 1990s. The tax gap, to me, is a huge
opportunity for us. I mentioned in response to Senator
Voinovich's question about tax reform that should be one of our
drivers. That should be one of the reasons that we look to tax
reform because there are certain things you can do to simplify
the code and to make it easier to enforce the code. We have
done the opposite, as you know, under our watch that will help
to close the tax gap.
So I think it is a great opportunity for us. I think it
should be one of the reasons we look to tax reform. I think
that tax reform ought to, among other things, focus on how to
close that tax gap.
Senator Carper. Thanks very much, and it is good to see
you. Good luck. You are going to need it. And it is just a real
pleasure to meet your family today.
Ambassador Portman. Thank you, Senator.
Senator Carper. Thanks, Madam Chairman.
Chairman Collins. Ambassador, I want to discuss briefly the
need to examine innovative ways of financing essential
programs. Let me give you some examples.
In shipbuilding, the new Chief of Naval Operations (CNO)
has said that we need to be spending on average $13.4 billion
for shipbuilding for many years in order to achieve the 313
ship fleet that the CNO believes is necessary.
One obvious way to achieve that goal is to put in the $13.4
billion that is needed over the next several years. But another
way to achieve the same goal is through incremental funding
where you would recognize that a destroyer, for example, or a
submarine is not constructed all in one year. Thus, you spread
the cost over the construction period and budget an amount that
fully covers the cost in a particular year but does not fully
fund the entire ship or submarine in the initial year.
OMB traditionally has been very reluctant to engage in
incremental funding. Do you have any initial impressions of
whether we should look for more innovative funding techniques
to meet very real needs, needs that have been identified by the
Chief of Naval Operations, in shipbuilding?
Ambassador Portman. I am interested in looking at that. I
know Treasury, OMB, and CBO have all done some analyses of the
particular issue you are talking about and on capital budgeting
generally. There is some concern that has been expressed by at
least some of those entities, maybe all three of them, about
what the impact would be on the taxpayer. Would you end up
spending more or less if it was not subject to what they would
call Treasury financing?
But it is something I am very interested in looking at with
regard to some of those known long-term expenses, and I look
forward to working with you particularly on the Navy ship
issue.
Chairman Collins. Thank you.
Senator Voinovich, I know you need to go shortly. Do you
want to ask any additional questions?
Senator Voinovich. No, I am fine. Thanks for being willing
to take on this job.
Ambassador Portman. Thank you, Senator. It is an honor to
do it.
Senator Voinovich. It is comforting to know that you are
going to be there, and I am sure that you know I will work with
you and this Committee will work with you.
Ambassador Portman. I look forward to it. Thank you.
Chairman Collins. Thank you. You are very fortunate to have
Senator Voinovich as your very strong advocate. He is a
terrific Member of this Committee, and his endorsement and
introduction of you carry great weight with the entire
Committee. So thank you for being here today.
As you may be aware, we are in the midst of a
recapitalization program for the Coast Guard that is known as
the Deepwater Program. Study after study has said that the
Coast Guard vitally needs to rebuild its cutters, its aircraft,
and its communication system. Deepwater is the plan to do so.
That plan, however, stretches over some 20 years, and I
think the Administration actually recently extended
implementation of Deepwater to 22 years.
If we were to recapitalize the Coast Guard over a 10-year
period, we would end up saving more than $1 billion. By
stretching out implementation of Deepwater we are making the
program far more expensive in the long run, as well as delaying
the Coast Guard the use of vitally needed assets.
The Coast Guard, as you are well aware, in the post-
September 11 environment has taken on a much greater mission
for homeland security, for port security, and as a result is
really stretched very thin.
Will you commit to taking a look at whether or not, rather
than stretching out the recapitalization program, we could
achieve significant savings by recapitalizing the Coast Guard
over a shorter period of time?
Ambassador Portman. I certainly will take a look at that.
This is always a difficult balance, looking at the year-to-year
budget numbers and then looking at what some of the long-term
implications are. I think I told you about some of the
experiences I had as a Member of Congress in this regard, with
regard to environmental cleanups where we could shorten the
time and save taxpayers literally billions of dollars, which we
were able to do on one site in the former Congressional
District I represented. But we had to deal with the higher
impact on the budgeting in those earlier years.
Given the situation we are in of trying to reduce our
deficits and eventually our debt, we need to balance that
against some of these long-term needs.
But I certainly will look at that particular issue with you
and, in general, would like to work with you on that to be sure
that we are making wise decisions for the long-term for the
taxpayers.
Chairman Collins. Finally, I have many other questions that
I am going to submit for the record but only one more that I
want to raise here today.
Senator Carper and I have been working together over the
last 3 years on comprehensive legislation to reform the Postal
Service. It implements many of the recommendations of the
President's Commission on the Postal Service and would place
the Postal Service on sound financial footing going forward.
The Postal Service really matters to our economy. It is the
linchpin of a $900 billion mailing industry that employs some 9
million Americans in fields as diverse as financial services,
paper manufacturing, printing, publishing, and catalog
production. It has an enormous impact on our economy. The need
for predictable, affordable postal rates is evident as is the
need to get away from the litigious, lengthy process that we
have now for determining postal rates.
Both the House and the Senate have passed comprehensive
postal reform bills, and we are about to begin our conference.
But the biggest hurdle that we face right now is the
Administration's insistence that the bill that we produce be
budget neutral.
Here is the situation that we face: Over the next 10 years,
the CBO's latest estimate is that this legislation would have
an impact of $1.5 billion on the budget. That is substantially
lower than the original score for this bill, which was $3.9
billion.
But if you look over the long-term you find that this
legislation actually has a beneficial impact on the Federal
budget because we require the Postal Service to pre-fund its
enormous unfunded liabilities for health insurance. And because
that money is paid into Treasury coffers before it is paid out
to retirees, it has a beneficial impact on the Federal budget.
We only do postal reform legislation once every 30 years.
Having dealt with this bill during the last 3 years, I
understand why we only do it every three decades. I would urge
you to work with us on postal reform. We need to get this bill
through. It is an excellent bill, reflecting 3 years of work,
and has passed both the House and the Senate. We need to work
together and to recognize that the long-term impact will not
only put the Postal Service on a sound financial footing and
require it to pay down enormous unfunded liabilities, but also
that the long-term impact will be very positive for the overall
Federal budget.
So I hope you will work with us. We really need to get this
done, and we need to get it done this year.
Ambassador Portman. Thank you, Madam Chairman.
I am impressed with all the projects that this Committee
and you personally have ongoing. And this is a huge one. As you
know, I have in the House had an opportunity to look into this
and to vote on this. The pre-funding of the future retiree
health benefits I know is a huge issue and an overhang that
needs to be dealt with.
I understand the President's budget this year does have a
way to take funding out of escrow and to start to pay down some
of those future liabilities. But I will look forward to working
with you on this with the hopes that we can come up with a
solution. As you say, once every few decades we need to do
this.
I agree with you that the predictability that could come
with that and putting the service on a sound financial footing,
at least for the next couple of decades, is critical. So I look
forward to working with you on it.
Chairman Collins. Thank you very much.
Again, I want to thank you not only for your participation
in this hearing today and fully answering all of our questions,
but for your ongoing commitment to public service. You have
succeeded at every job you have ever taken on, and I feel that
we are very lucky in this country to have an individual with
your talent and skills being willing to take on what I think
may well be the most difficult and thankless job in the Federal
Government. It is a credit to you and speaks well of your
strong commitment to public service.
I thank your family for their commitment, as well, because
I know it means working incredibly long hours. I am confident
in predicting that you are going to have very strong support by
this Committee, and we will work to move your nomination
forward very quickly so that you can begin working instantly on
all of the issues that we have raised today.
Without objection, the hearing record will be kept open
until noon tomorrow for the submission of any additional
written questions and statements for the record. The sooner you
get that information back to us, the sooner we can proceed to a
Committee vote.
I thank you very much for your appearance today and for
your commitment to public service.
Ambassador Portman. Thank you. Madam Chairman, I just want
to thank the staff. The staff interview was very helpful to me.
And I want to thank you particularly for a speedy hearing
and your willingness to expedite the nomination. Thank you.
Senator Collins. Thank you. This hearing is now adjourned.
[Whereupon, at 12:39 p.m., the Committee was adjourned.]
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<all>