DPC | February 16, 2007

Senate Oversight Highlights Week of February 12, 2007

It is the proper duty of a representative body to look diligently into every affair of government and to talk much about what it sees. It is meant to be the eyes and the voice, and to embody the wisdom and will of its constituents…” — Woodrow Wilson

Congress has the Constitutional responsibility to perform oversight of the Executive Branch and matters of public interest. This report summarizes highlights from each week’s Senate oversight hearings.

 

Tuesday, February 13, 2007: Senate Veterans’ Affairs Committee

“Hearing on the President’s Veterans’ Affairs Budget”

• The President’s budget underestimates the number of veterans needing health care.
   
• The Administration’s budget fee increases could deny health care to deserving veterans.
   
• Democratic Senators call for more funding for our nation’s veterans.

 

Tuesday, February 13, 2007: Senate Appropriations Committee, Subcommittee on Interior, Environment, and Related Agencies

“Department of Interior’s Oil and Gas Royalty Management”

• Companies extracting 29 percent of the resources available under oil and gas leases from 1998 and 1999, which lacked price thresholds on royalty relief, are not voluntarily renegotiating their leases. 
   
• Those companies that have renegotiated their leases have not yet agreed to pay royalties on oil and gas extracted over the past several years.
   
• Legislative authority may be needed to get companies to renegotiate. 

 

Tuesday, February 14, 2007: Senate Judiciary Committee

“Judicial Security and Independence”

• On February 14, 2007, Associate Justice Anthony Kennedy appeared before the Judiciary Committee to discuss issues that impact judicial independence and the quality and safety of the judicial branch. 
   
• Justice Kennedy testified that inadequate compensation for judges is undermining the quality of the judiciary. 
   
• Justice Kennedy shared Senators’ concerns about recent outrageous attacks on the judiciary, including improper threats of impeachment for unpopular decisions.

 

Tuesday, February 13, 2007: Senate Small Business and Entrepreneurship Committee

“Alternatives for Easing the Small Business Health Care Burden”

• With Democrats in control of Congress, the debate over small business health care moved beyond Association Health Plans (AHPs) as the sole-solution to helping small firms cope with skyrocketing health care costs.
   
• Mary Beth Senkewicz, formerly with the National Association of Insurance Commissioners, testified that in order to ensure affordable, adequate coverage there needs to be larger and more fair and efficient pools for small firms with financial support for low-income workers.
   
• Jon Kingsdale, the head of the Massachusetts board charged with implementing the state’s universal health care plan, testified how their plan seeks to give small businesses the advantages of a large insurance pool. 

 

Wednesday, February 14, 2007: Senate Commerce, Science and Transportation Subcommittee on Oceans, Atmosphere, Fisheries, and Coast Guard

“Hearing on Coast Guard Deepwater Program”

• Flawed contracting and oversight have led to ballooning costs for the Administration’s Coast Guard Deepwater Program without delivering critical ships and aircraft. 
   
• The Deepwater failures have damaged our national security.
   
• Similar concerns have been seen on other Homeland Security programs. 

 

Thursday, February 15, 2007: Senate Armed Services Committee

“To receive testimony on the current and future readiness of the Army and Marine Corps”

• EPA has proposed weakening its rules for toxic air pollution, limiting the public’s knowledge of toxic releases and potentially leading to increased pollution.
   
• EPA has proposed eliminating the current air quality standard for lead, which is a serious and well-documented health hazard.
   
• EPA’s new approach to setting air quality standards injects politics into the process and will likely lead to weaker air standards. 

 

The President’s budget underestimates the number of veterans needing health care.

SEN. MURRAY: With our troops fighting overseas and more veterans being created each and every day, it is critical that we do everything in our power to make sure that the budget we provide provides for our veterans…I am also very concerned that the V.A. is still underestimating the number of veterans from Iraq and Afghanistan that will seek care in the V.A…I, too, was really disconcerted to see the budget request projecting fewer veterans needing inpatient mental health care. I understand the philosophy of trying to do more and more outpatient, reach more people that way, but it just seems to me when one in three Iraq war veterans are estimated now to be seeking mental health care --many of our service members are now in their second or third, some even fourth deployments…It just seems to me that we are going to need more inpatient psychiatric services, not less…My question to you is: Do you really think that we're going to see fewer veterans needing access to inpatient mental health care? 

SECRETARY NICHOLSON: Well, we're projecting that we're going to see somewhat fewer in this time frame. 

John Rowan, national president, Vietnam Veterans of America: we believe that there's a whole host of reasons why we think this initial needs more money into this budget that has been proposed, not the least of which is what we think is an undercount in both numbers of new veterans coming into the system and old veterans coming into the system, many for the first time.

 

The Administration’s budget fee increases could deny health care to deserving veterans.

SEN. MURRAY: I'm very concerned that the budget that we're looking at closes the V.A.'s door to thousands of our nation's veterans. It does -- as has been talked about -- include new fees and increased co-pays that will discourage veterans from accessing the V.A., and it continues to bar Priority 8 veterans from enrolling in the V.A. health care system. 

SEN. AKAKA: A family with two veteran wage earners, each taking an average number of medications and each paying the enrollment fee, would have to pay more than $3,000 in new, out-of-pocket costs if the proposed fees are mandated. I do not believe this is the way to reward the working families who have served our country. 

CARL BLAKE, national legislative director, Paralyzed Veterans of America: we are deeply disappointed that the administration has chosen to once again recommend an increase in prescription drug co-payments and an indexed enrollment fee. Although the V.A. does not overtly explain the impact of these proposals, similar proposals in the past have estimated that nearly 200,000 veterans will leave the system and more than 1 million veterans will choose not to enroll. It is astounding that this administration would continue to recommend policies that would push veterans away from the best health care system in America. Congress has soundly rejected these proposals in the past and we call on you to do so once again.

 

Democratic Senators call for more funding for our nation’s veterans.

SEN. AKAKA: As I said, when you take into account the $2 billion in what the budget calls health care industry needs or trends -- increases due to inflation and other factors -- there does not seem to be any funding left for the top priorities. I'm talking about mental health improvements and ensuring that the needs of returning war veterans are met. 

SEN. MURRAY: And this budget assumes cutbacks in veterans' health care in 2009 and 2010. And I think we need to focus on that, Mr. Chairman, because I think we can't project out the care of some of these veterans in the short term. We have to make sure they are covered in the long term. 

SEN. ROCKEFELLER: And, if you're looking at a budget, obviously everything is in the realm of the possible. But it really should be -- in terms of veterans I think that's kind of different from others -- and that is: Are they getting the health care they actually need and deserve? My sense is that this budget does not do that.

Senator Feinstein noted that companies responsible for 29 percent of oil and gas have not even agreed to negotiate with the Mineral Management Service (MMS).

SEN. FEINSTEIN: And the holdouts are? 

MR. ALLRED: There are a number of them. If I could put up another chart, it probably would be easy to illustrate. 

SEN. FEINSTEIN: I'd just like, if you could, a listing of the companies that are holdouts. 

MR. ALLRED: The major companies are ExxonMobil, which has a small amount, Chevron-Unocal, Devon, Anadarko, Kerr-McGee, Dominion Exploration and Production…and Total, which is Norwegian. And then there are 32 other companies that have small amounts each, but they total 29 percent of estimated production. 

Companies that have renegotiated price thresholds into their contracts have not agreed to pay royalties on oil and gas extracted since the beginning of their leases.

SEN. FEINSTEIN: Thank you. Some of the companies have agreed to begin paying royalties effective October '06. Are they agreeing to pay royalties on sales prior to last October? 

MR. ALLRED: Madame Chairman, in the contract amendment that I negotiated, we reserved that issue. We did not deal with it. 

SEN. FEINSTEIN: So the answer is no, is that correct? 

MR. ALLRED: In the current signed agreements, they do not require them to pay prior to October one, but that is not a resolved issue. 

Legislative authority will likely be needed to bring companies to the negotiating table.

SEN. FEINSTEIN: Thank you. Would legislation to extend the duration of the '98-'99 leases be incentive to the holdouts to start paying royalties? 

MR. ALLRED: Madame Chairman, I believe that it would. In my discussions, and this has not been with all of them, but just speaking about the issue generally, I believe that that would favorably move us forward on changing the agreements. Without specific language, as you are aware, it's hard to get a commitment, but I believe that that would be viewed favorably. 

SEN. REID: The Secretary is in negotiations now with these lease holders to correct the problem because of contract. What leverage does he have in that negotiation and what additional leverage might he use? 

MR. ALLRED: Senator Reid, up until this point in time, I think the leverage we have is that of the goodwill of the companies themselves and the public pressure that they obviously are under with regard to this issue. That's why when asked in the Energy Committee hearing what other tools I would need, that I suggested that it would be very helpful if we had the ability to offer these companies, based on due diligence upon a particular lease, that an extension of three years. And I believe in my discussions in, again, in very general terms, that that would attract many of the companies. 

SEN. REID: Has there ever been consideration to barring these companies from further lease activity if they fail to negotiate. 

MR. ALLRED: Senator, we do not have the ability to do that. 

SEN. REID: That would require legislation? 

MR. ALLRED: That would require legislation.

On February 14, 2007, Associate Justice Anthony Kennedy appeared before the Judiciary Committee to discuss issues that impact judicial independence and the quality and safety of the judicial branch.

SEN. LEAHY: In today's society, our independent judiciary faces many and varied types of threats. We've seen judges' physical security being threatened, but also the institutional security and independence under rhetorical attack by some affiliated with political branches. And there are more subtle threats. As the chief justice recently re-emphasized, there's pervasive uncertainty about the judiciary's financial security and ability to function as an efficient and effective arbiter of justice because of stagnant salaries year after year. It's my hope that, working together, we can make some real progress on these important issues. We need to do our part to ensure that the dedicated women and men of our judiciary have the resources, the security and the independence necessary to fulfill their crucial responsibilities. 

[For starters,] we're going to take up the matter of court security this year by reintroducing legislation that I wish had been enacted last year. The Court Security Improvement Act is a bipartisan measure. I introduced it along with Senator Specter, along with the Majority leader, Senator Durbin, and other members of this committee. I remember as though it was yesterday [Judge Joan Lefkow’s] testimony before this committee. She's a federal judge whose mother and husband were murdered in their home two years ago. And what she told us left a mark on every single member of this committee. And then the shooting last November of a state judge in Nevadaprovided another terrible reminder of the vulnerable position of our nation, state and federal judges. We can't tolerate or excuse violence against judges. No one should seek to minimize what a corrosive effect that has on our system. So we should enact the Court Security Improvement Act as soon as possible. It helps again, in another way, of protecting the independence of our judiciary. Our nation's founders knew that without an independent judiciary to protect individual rights from the political branches of government, those rights and privileges would not be preserved. The courts are the ultimate checks and balance of our system of government.

 

Justice Kennedy testified that inadequate compensation for judges is undermining the quality of the judiciary.

SEN. Durbin: I have supported increases in judicial pay, but I'd like to ask you to bear with me for a moment and comment on another observation of this challenge. At the current time, members of the federal judiciary are compensated by and large at the same level as members of Congress. You also, in the federal judiciary…have a circumstance where a judge can take senior status and receive full pay for the rest of their lives…By most standards, 100 percent pay is…something most…workers would dream of…At the current time, our compensation -- those on the panel, and the compensation of most federal judges -- exceeds the compensation of 95 percent of the people who live in America…[So] I ask you this[,]…[h]ow do we deal with the reality that every day, there are prosecutors and defenders and public sector lawyers who make a conscious decision that they are more committed to public service than they are to compensation? Are we suggesting…that the only way to bring quality people and keep them in the judiciary is to keep a compensation level that is always at the highest level compared to private practice? 

JUSTICE KENNEDY: Senator, as I indicated in my statement and as I said initially, there's no way that we can have…anything approaching a one-on-one ratio with the senior partner of a firm. And you don't…go on the bench to become wealthy. That's not the object…But the statistics are something that we simply must face. I'm losing my best judges, Senator, and I'm not getting the highly qualified judges that I want in the other end coming to entry. That's a fact. That's an economic fact. As I indicated in my statement, judicial resources is a tough sell. Even a rich country needs resources for schools and hospitals and health care and roads…But a functioning, efficient, capable, highly qualified judiciary is part of the infrastructure. It's part of what makes our system --the rule of law work.

 

Justice Kennedy shared Senators’ concerns about recent outrageous attacks on the judiciary, including improper threats of impeachment for unpopular decisions. 

SEN. LEAHY: I've noticed with great apprehension the rise in volume and vehemence on attacks on judges and their decisions, both from outside and sometimes in sides the government. I know Justice O'Connor…has said that this…actually endangers the independence of the judiciary. When you hear rhetoric comparing judges to terrorists, threatening judges with punishment for decisions they don't like, that's irresponsible. And James Dobson compares the Supreme Court to men in white robes -- the Ku Klux Klan. That shows how out of touch he is with American values. When a chief of staff to a United States Senator calls for consideration of mass impeachments, it's wrong. The then-Republican majority leader of the House…espoused an impeachment threat against justices who decided cases in which he disagreed. I think in 32 years, I can point to a lot of cases over the years where I may disagree, and other members of this committee would agree and vice versa. Are we going to…automatically start impeachment procedures? I mean, how do you respond to that? 

JUSTICE KENNEDY: Well, a few things occurred to me[,]…[the] court, since the beginning of our history, has been involved in cases that have political ramifications. So the idea of criticism and disagreement is nothing new…I think that the scurrilous, really shameful remarks that you refer [to] are something that democracy has learned to live with[, but]…[w]e still have to find the right tone so that we have a civil, rational, respectful, principled dialogue…[I] frankly don't think judges are intimidated by some of these remarks[,but] I think they're improper, and coming from attorneys, I think they're wrong. 

SEN. LEAHY: Chief Justice Rehnquist said…"Judges' judicial acts may not serve as a basis for impeachment," and then said, "Any other rule would destroy judicial independence." Do you agree with that, about the judicial acts? 

JUSTICE KENNEDY: Of course…[I]t's been established[,] and it's part of our constitutional tradition[,] that the decisions of the court, as you indicate, Mr. Chairman, are not the bases for impeachment. 

Senator Kerry convened a hearing to evaluate the current health care landscape for small employers and pushed for the Senate to consider comprehensive solutions to address the health care crisis.

SEN. KERRY: Done the right way, health care reform would solve the three health care challenges facing small businesses. It would give them access to functioning insurance markets. It would ensure that they and their employees receive adequate care when they need it, and it would improve the affordability of offering and purchasing insurance…Unfortunately, we have a failure of executive leadership in Washington today – a President that proposes in his budget to limit funding for low-income kids on the CHIP program and make changes to the federal tax law that promote a flawed individual insurance market at the expense of quality health care benefits. 
 

Federal action is needed to ensure affordable, adequate coverage through larger and more efficient pooling for small firms.

MS. SENKEWICZ: More efficient pooling is necessary to help small businesses with health insurance. Larger pools can spread risk across larger populations with those attendant benefits. Larger pools will also have lower administrative costs, one factor in the price of health insurance. The pools can have rules that treat people fairly and don’t kick them when they are down, such as a prohibition against rating up based on health status. The pool can have rules about minimum benefit packages to avoid risk selection. A fair and efficient pooling mechanism will go a long way to stabilizing a market in the long run. 

MS. SENKEWICZ: One common thread running through many of these proposals is subsidies to assist with the purchase of health insurance. The simple fact is health insurance costs a lot of money and a lot of people simply can’t afford it. It’s going to cost tax dollars to provide subsidies so people can become insured and access the health care system most efficiently.

 

In the absence of federal leadership, states are stepping in to provide adequate health care coverage.

MR. KINGSDALE: While most large employers (98 percent nationally) offer health benefits, over 40 percent of small employers do not. (In Massachusetts, small business employs two-thirds of working, uninsured adults.) Group health benefits are designed not only to pool risk, but to subsidize coverage. To encourage group insurance, Massachusettsnow requires that employers of more than 10 employees make a “fair and reasonable” contribution toward their workers’ health benefits, and we will shortly require them to help workers with pre-tax, payroll deduction for the employees’ share of premiums. 

MR. KINGSDALE: Massachusetts’health care reform is based on the principle of shared responsibility: that employers, individuals and government each participate financially in expanding coverage.

 

Flawed contracting and oversight have led to ballooning costs for the Administration’s Coast Guard Deepwater Program without delivering critical ships and aircraft.

SEN. LAUTENBERG: The Deepwater contract beginning $17 billion, final delivery slated for 2018, since ballooned to -- the figures are familiar to everybody, but the surprise is so deep that it's worth repetition -- up to more than $24 billion, nine years longer to complete action…If I've ever seen an example of the fox in the chicken coop, this is it. 

SEN. CANTWELL: I believe that if the current Deepwater contract isn't delivering the results, which I believe it isn't, then we must look for a new approach. I am concerned that the contract gives industry too much authority to grant contracts to itself without open competition. This offers little incentive to control costs and side-blinds the Coast Guard when it comes to oversight. 

STEPHEN CALDWELL, GOVERNMENT ACCOUNTABILITY OFFICE: Since 2001 we have had concerns about the Coast Guard's overall approach to Deepwater in terms of relying on a lead integrator, developing a system of systems and using a performance-based contract. All three of these aspects, if not done with appropriate oversight, could increase the risk of the Coast Guard, we said, to be able to adequately manage an acquisition of this kind of scope and magnitude. 

CAPTAIN KEVIN JARVIS (USCG, RET.): Oversight of the contractor must happen. We're fooling ourselves if we actually believe insight is enough. Greater accountability is needed of how the program decisions are made and what was the basis for those decisions.

 

The Administration failed to serve as responsible stewards of American taxpayers’ hard-earned dollars.

SEN. LAUTENBERG: It's surprising, Madam Chairman, when we look at these setbacks that we have here caused by oversight neglect of the administration. The nine million residents of my home state expect the administration to be smart stewards of our tax dollars, but I'm concerned that they failed in the oversight of the Deepwater program, and it fell so short of the goal. 

SEN. SNOWE: I'm deeply troubled that this mismanagement was a breach of trust with the American people and also undermined a program that is so vitally important to our future. 

SEN. KERRY: Sadly, a structure has been created that isn't working. The Coast Guard's Deepwater program has been plagued by poor engineering, by lax oversight and cost overruns that have cost taxpayers billions of dollars. That's the bottom line. The flawed management structure of the program -- I believe it is a flawed management structure -- has allowed private contractors, specifically Lockheed Martin and Northrop Grumman, to make management decisions that increased their bottom lines at the expense of taxpayers and national security.

 

The Deepwater failures have damaged our national security.

SEN. LAUTENBERG: The impact of this mess and delay, combined with the administration's understaffing and underfunding of the Coast Guard means that the men and women of the Coast Guard don't have the tools to do their jobs, and the men, women and children of America are not as safe as they should be. 

SEN. SNOWE: We're here to discuss the single most vital homeland security acquisition program that's confronting our nation -- that is, of course, Deepwater…Transparency and accountability are essential to any program of this enormity and magnitude, and even more so, given the innovative nature of Deepwater's public-private partnership. And yet the Coast Guard has had considerable difficulties with oversight and execution in the Deepwater acquisition. Here we are, stunned by the scale and the scope of management failures that threaten to derail the entire program.

 

Concerns of Coast Guard engineers were ignored by program leaders.

JARVIS: I was there as the G-S organization, a proven Coast Guard major acquisition engineering and logistic enabler, was shut out of its traditional acquisition specified technical roles. I was there when the Deepwater culture was cemented with thick walls of "Change Agent" -- our ends will justify the means. We have the world's best navy engineers for advice. Only contractor insight is needed, not oversight. And the contractors' engineers' work isn't good enough. Consequently, a thousand years of Coast Guard naval engineering technical capabilities were wasted by the poor strategic judgment of the program's original crafters and the unwillingness of the subsequent program leaders to make the needed deviations. As a result, the tactical trenches of the program -- the integrated process teams -- became cauldrons of mistrust, poor communication, G-D managed unilateral decisions against G-S technical warnings, and the ruthless execution of the published schedule at virtually all costs…This didn't need to happen.

 

Similar concerns have been seen on other Homeland Security programs.

SEN. CANTWELL: Have we seen anything similar to this in other areas of homeland security, or at least this scale? 

CALDWELL: There are two other homeland security programs the GAO is doing work on that we have started to raise similar concerns. One is the SBInet program and the other one is the Safe Flight Program, I believe it's called. 

SEN. CANTWELL: So you're seeing similar issues? 

CALDWELL: We are seeing similar issues, and as Mr. Walker I think recently testified on both of those.

General Conoway, Commandant of the Marine Corps, stated that operations in Iraq have led to decreased readiness at home.

GENERAL CONOWAY: Slow deliveries of needed equipment have forced us to cross-level and redistribute equipment to ensure that our OIF-bound units have their full complement of equipment. This has resulted in home station shortfalls and hindered some stateside units’ ability to train for other missions and contingencies.

 

The current tempo of deployment is straining our military forces, undermining their readiness to conduct missions at home and abroad.

GENERAL CONOWAY: Current wartime deployments dictate a singular focus to prepare units for their next rotations conducting counterinsurgency operations. This focus and the current 1:1 deployment-to-dwell ratio of many units threatens the individual and unit skills needed for Marine Corps missions… 
 

Equipment is being used at many times its intended rate.

GENERAL CONOWAY: The Long War on Terror has resulted in aircraft use rates far greater than designed or programmed on Marine Corps aircraft. All USMC aircraft are operating at two to four times their programmed rates; our unmanned aerial vehicle (UAV) squadrons are flying at ten times their programmed rate.

DPC