DPC | April 26, 2007

Senate Oversight Highlights Week of April 16, 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, April 17, 2007: Senate Armed Services Committee

“Hearing to Receive Testimony on Whether the Army and Marine Corps Are Properly Sized, Organized, and Equipped to Respond to the Most Likely Missions Over the Next Two Decades While Retaining Adequate Capability to Respond to All Contingencies Along the Spectrum of Combat”

• Our military is being broken, and is at risk of becoming a hollow force. 
   
• Our National Guard and Reserve are not adequately sized and resourced to meet the current demands of Bush Administration policies and fulfill their national security role at home.
   
• Witnesses called for revamping Bush Administration recruitment strategies to ensure that the quality of our military forces is not compromised as we move to increase the end strength of the Army and Marine Corps.
   

Tuesday, April 17, 2007: Senate Committee on Health, Education, Labor, and Pensions, Subcommittee on Employment and Workplace Safety

"Too Much, Too Long? Domestic Violence in the Workplace”

• More than just a private matter, domestic violence often spills into the workplace, which places at risk not only the safety and independence of the victim, but also the safety of his/her employer and co-workers.
   
• Many domestic violence victims are blamed for the acts of their abuser and/or are not given the necessary leave-time to pursue a legal remedy, which often results in the loss of their job or, worse, their inability to separate from their abuser.
   
• Though current state and federal law has helped millions of victims and law enforcement agencies combat domestic violence, it has fallen short of addressing how employers and employees deal with domestic violence in the workplace.
   

Tuesday, April 17, 2007: Senate Commerce, Science, and Transportation Committee

“A hearing on the proposed merger of the satellite radio operations of XM and SIRIUS.”

• Proponents of the merger “have a steep hill to climb” in convincing the Senate that consumers would benefit and not suffer from the proposed merger.
   
• The Chief Executive Officer of SIRIUS Satellite Radio promised not to raise prices and argued that the proposed merger would help consumers. 
   
• Consumer groups and a representative of the broadcasting industry argued that the proposed merger would lead to rising prices, reduced consumer choice, and less innovation.

 

Tuesday, April 17, 2007: Senate Committee on Appropriations, Subcommittee on Labor, Health and Human Services, Education, and Related Agencies

“Combating Autism: Undertaking a Coordinated Response” 

·The Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies is examining how best to alleviate the burdens that autism places on patients and their families. 

·Federal officials described the complexity and magnitude of the challenge of combating autism. 

·Witnesses described the need for research into the cause of autism, but also emphasized the immediate need for services to those currently diagnosed with the disorder.

 

Tuesday, April 17, 2007: Senate Banking, Housing, and Urban Affairs Committee, Subcommittee on Securities, Insurance, and Investment
“Subprime Mortgage Market Turmoil: Examining the Role of Securitization”

·Witnesses disagreed over whether credit rating agencies and mortgage investment banks have contributed to the current crisis. 

·Industry witnesses insisted that the “market correction” that is underway is sufficient to address problems with future loans. 

·Meanwhile, academic witnesses insisted that new measures must be undertaken.

 

Wednesday, April 18, 2007: Senate Armed Committee, Subcommittee on Personnel and Subcommittee on Readiness and Management Support

“To Receive Testimony on the Readiness Impact of Quality of Life and Family Support Programs to Assist Families of Active Duty, National Guard, and Reserve Military Personnel in Review of the Defense Authorization Request for Fiscal Year 2008 and the Future Years Defense Program”

• Senators and witnesses emphasized that support for military families is a critical factor in military readiness and retention. 
   
• The President’s decision to extend Army tours of active duty from 12 to 15 months and increased demands on the National Guard have placed even greater strains on both military families and military readiness. 
   
• Administration policies have exacerbated a history of cutbacks to critical military family support services. 

 

Wednesday, April 18, 2007: Senate Finance Committee
“Examining the Administration’s Plan for Reducing the Tax Gap: What are the Goals, Benchmarks and Timetables?”

·Senators are committed to closing the tax gap, which, since 2001, represents a failure to collect more than $2 trillion in legally-owed taxes. 

·Chairman Baucus asked Secretary Paulson to develop a plan to reach 90 percent voluntary compliance by the year 2017. 

·Secretary Paulson disagreed with Senators over how much can be done to close the tax gap.

 

Wednesday, April 18, 2007: Senate Commerce, Science, and Transportation Committee, Subcommittee on Interstate Commerce, Trade, and Tourism
“Is ‘Free Trade’ Working?”

·Some witnesses urged a change in trade policy that takes into account the change in the rules of the global economy. 

·While witnesses disagreed about the impact of current trade policies, they recognized that the benefits of trade do not reach every American equally. 

·A witness raised important questions about U.S. competitiveness in the globalized economy.

 

Thursday, April 19, 2007: Senate Judiciary Committee

“Department of Justice Oversight”

·Months of “misstatements” about and mismanagement of the U.S. Attorney firings have called into question Attorney General Alberto Gonzales’s ability to lead the Justice Department and have undermined his credibility with Senators of both parties and with the American public. 

·After weeks of preparation, and after assuring Senators that he is a strong leader, Attorney General Gonzales apparently has “no recollection” regarding the “who, what, when, how, and why”of the U.S. Attorney firings. 

·Republican and Democratic Senators agree that by the Attorney General’s own standards, he should be fired for his “poor management” and “questionable judgment” with respect to the U.S. Attorney firings and investigation.

 

Thursday, April 19, 2007: Senate Armed Services Committee

“Hearing to Receive Testimony on the Department of Defense’s Management of Costs Under the Logistics Civil Augmentation Program (LOGCAP) Contract in Iraq.”

• Senator Dorgan described the key findings from oversight hearings on Halliburton’s performance under the LOGCAP contract, highlighting a record of outrageous abuses.

  

Our military is being broken, and is at risk of becoming a hollow force.

Dr. Andrew F. Krepinevich, Jr., President, Center for Strategic and Budgetary Assessments: I think there, at last, is a fairly high level of agreement among the Defense Department, the Congress, and the strategic studies community that while the Army continues to perform effectively in Afghanistan and Iraq, it is under great stress. And what’s even more worrisome is a lot of the trend lines, a lot of the metrics and indicators that have been alluded to today, are almost uniformly moving in a more worrisome direction, the direction that could lead our ground forces to cross that red line that separates a ready army from a hollow army.

… 

General Barry R. McCaffrey, U.S. Army (Ret.); President, BR McCaffrey Associates LLC: [The National Guard is] being broken by a policy that essentially uses it as an alternative to the standing army. In the coming year, I think we’ll be forced to call up as many as nine National Guard combat brigades for second involuntary tours, never mind the combat support and combat service support units that have got to come out of the Reserve components. 

Our National Guard and Reserve are not adequately sized and resourced to meet the current demands of Bush Administration policies and fulfill their national security role at home.

GEN. MCCAFFREY: Well, you know, I personally believe that a robust National Guard is essential to America’s security. You start looking around a state – pick a state at random – there will be 2,000 or 3,000 state police. You look at the nation, a whole 12,000 local sheriffs’ departments and local police forces. If you’ve got a problem, you need the National Guard, the Air Guard and the ground Guard in particular. And in particular, engineering, signal, medical, transportation – the tools that a governor needs to deal with Katrina, or with a radiological attack. So I would actually argue the National Guard is too small, and the Reserve forces are too small. I think we’ve had a role problem. We can’t allow them to fulfill their mission unless the active forces are capable of picking up these responsibilities, and we were looking at an army of 490,000 people trying to maintain this rate of deployment, and it’s simply incapable of doing so. 

… 

DR. KREPENEVICH: But when you ask, is the current Army too reliant on the Guard and Reserve, I think using the Army’s own metrics, you have to say yes. The Army strives for a six-to-one rotation rate for Guard and Reserve forces, which is to say for every six Guard brigades you have, only one would be on deployment at any given time. And we’ve seen over the last four or five years that the Army has fallen below that ratio. So by the Army’s own definition, just as the active force is overstressed, the reserve force is overstressed as well. And I think when you look at the fact that the Army has concentrated a lot of its support elements in the Reserve forces and in the National Guard, you also – if you believe as I do – that a lot of the contingencies we’re going to see the most likely, as the chairman points out, are irregular warfare, stability operations, counterinsurgency, then these are the kinds of forces you’re going to need more of. Not only that, but when you do talk about things like homeland security disaster relief, as General McCaffrey said, it’s not a matter of if, it’s a matter of when we’re going to get hit here at home. You’re going to need those kinds of forces, not only for these external operations that deal with irregular warfare, but also here on the home front as well. 

… 

Major General Robert H. Scales, Jr., U.S. Army (Ret.); President, Colgen, Inc.: The Guard has now become absolutely essential to our future military strategy, and frankly, I don’t think – and I agree with General McCaffrey – I don’t think we have enough Guardsmen now to perform both of those functions, the governor’s militia as well as this quasi-professional force. And we certainly haven’t given them the equipment and the training and the education that they need, to my mind, to perform either one of those.

Witnesses called for revamping Bush Administration recruitment strategies to ensure that the quality of our military forces is not compromised as we move to increase the end strength of the Army and Marine Corps.

GEN. MCCAFFREY: …lowering the standards is the last thing we ought to do. I talk to command sergeant majors now in motor pools, they’ll say 10, 20 percent of these kids we’re bringing in right now simply shouldn’t be in uniform. And that’s going to be a problem to us, because they’re going to be our staff sergeants six, seven years from now in the next crisis. We shouldn’t lower our standards. We should increase the size. 

… 

GEN. SCALES: …my concern is that we haven’t been imaginative enough in using the tools that we have at our disposal, other than lowering standards…. So my suggestion is, number one, is we need to change our policy on pay and allowances. Why can’t we pay, for instance, soldiers not only for their skills, but for their risk? In other words, why can’t we pay them a lot more for doing the dirty filthy job of close combat? If we did that, I think we would be able to accelerate that curve of accessions without diminishing the quality of the force. 

Dr. Lawrence Korb warned that we have a moral obligation to provide our troops in Iraq with the best training before they are sent into the battlefield.

Dr. Lawrence J. Korb, Senior Fellow, Center for American Progress: We often talk about the fact that we cannot leave Iraq precipitously, because we have a moral obligation to the Iraqi people, having overthrown their government. And certainly, there is merit to that argument. We also have a moral responsibility to the young men and young women that we take into the service to ensure before we put them in harm’s way that in fact they are trained to the best of our ability to do so. 

General McCaffrey said that the Administration’s military escalation strategy will not achieve U.S. objectives in Iraq; success requires a political and economic plan. 

SEN. REED: General McCaffrey, you seem to indicate that the possibility of success of the latest development, that the surge is constrained by inadequate resources in terms of manpower, in terms of support. Is that a fair estimate? 

GEN. MCCAFFREY: It may be fair, but it’s probably less important than other assertions one could make. Because… it’s not clear to me that we’re fighting a counterinsurgency campaign in Iraq. I think it’s a civil war we’re trying to tamp down. And when we do tamp it down, the end result won’t be delivered by five brigades, one a month from now through June, but instead by political reconciliation, by leverage of economic tools which are lacking in the current plan. 

The Bush Administration is failing to adequately equip the Afghan and Iraqi security forces, an objective that is critical to securing those countries and allowing U.S. troops to come home. 

GEN. MCCAFFREY: Finally, probably most importantly, a necessary but not sufficient reason for us to succeed in our goal in Iraq and Afghanistan withdrawal is to equip appropriately Afghan and Iraqi security forces. We have not done this. It’s appalling to me. We look at the Iraqi security forces, they’re going to have 70 Soviet helicopters at the end of this process, six C-130s, one squadron of ground-attack aircraft, a collection of junked Soviet armor -- some new, admittedly, I think 800 BTR-80s and Cougar Fighting Vehicles. What are we thinking of? We can’t get out of there until these people can step forth. If we’ve got 800 helicopters in Iraq, why do we think 70 Soviet helicopters can allow them to control this giant country? So I think we need to re-look, lend-lease to our new allies so we can get out of there.

General McCaffrey believes that the debate over the future of our Iraq policy is helping to advance U.S. objectives in Iraq.

GEN. MCCAFFREY: Senator, one comment, certainly on that supplemental, I personally believe that the intense debate over the future of the war here in Washington is helping Ambassador Crocker and General Petraeus. I think it has put the fear of God into the Maliki government. I think their Sunni tribal leaders are saying, “My gosh, what if these people actually pull out in two years? We’re 16 percent of the population. We’re going to get slaughtered.” So I think the political debate is a good thing, not a bad thing, in terms of the situation on the ground in Iraq. 

 

More than just a private matter, domestic violence often spills into the workplace, which places at risk not only the safety and independence of the victim, but also the safety of his/her employer and co-workers. 

SEN. MURRAY: [D]omestic violence doesn't stay at home. It follows people into their workplace – posing safety, financial, and legal problems for victims, employers and other workers…. When domestic violence follows victims into the workplace, it reveals a key connection between safety and economic independence. For many victims of domestic violence, a steady paycheck is the only thing that keeps them from relying on an abuser. In fact, economic security and independence is the most accurate indicator of whether a victim will be able to stay away from an abuser. But too often, victims are entirely dependent on their abuser for food and shelter for themselves and their families. And too often, abusers try to undermine a victim's ability to work, harass their victims in the workplace, or worse. 

… 

KATHY RODGERS, PRESIDENT, LEGAL MOMENTUM: Seventy percent [of domestic violence victims] report being harassed [at work] by telephone or in person by their abuser….The prevalence of sexual assault and other violence against women at work is also dramatic. About 36,500 individuals, 80% of whom are women, were raped or sexually assaulted in the workplace each year from 1993 through 1999…. And 44% of employed adults report personally experiencing the effects of domestic violence in their workplace. 

… 

YVETTE CADE, SURVIVOR, DOMESTIC VIOLENCE IN THE WORKPLACE: In the fall of 2005, I was employed by T-Mobile and was working in a store in Clinton, Maryland. I had notified my employers during that summer of my concerns about my husband and informed them that I had a protective order. They were not supportive; my concerns were not taken seriously. When my then-husband walked in, I was agitated because I had told him to stay away from me. I was actually a short distance from him, and was picking up paper off the printer. I went and sat down, and he approached me and began pouring some sort of liquid from a Sprite bottle on me. Initially, I thought that he was just trying to humiliate me. I threw my hands in the air, trying to protect my face. And I got up and ran to the back of the store. He chased me, and I ran out the back door. He caught me, and stomped on my foot, crushing all the bones in it. I fell to my knees, and that’s when I felt this intense heat on my back, and I knew at that point, that I was on fire. 

… 

LAURA A. FORTMAN, COMMISSIONER, MAINE DEPARTMENT OF LABOR: [A] survivor study [conducted by the Maine Department of Labor and Maine Coalition to End Domestic Violence] also demonstrated the significant impact of domestic violence in the workplace. Participants in the study were a self selected group of 120 women who were recruited through outreach to employers, press releases, posters, visits to shelters, etc. They were employed by a diverse group of employers and industries in Maine. Highlights from the report include: 

·60% of domestic violence victims/survivors lost their job (43% fired, 57% quit); 

·13% reported the abuser assaulted them at work; 

·83% were harassed at work by the abuser who repeatedly called their workplace; 

·78% reported being late to work as a result of the abuse; 

·47% were assaulted before going to work; 

·46% reported [that their] abuser stalked them at [their] workplace; 

·23% of abusers violated a court order by contacting the victim at work.
 

Many domestic violence victims are blamed for the acts of their abuser and/or are not given the necessary leave-time to pursue a legal remedy, which often results in the loss of their job or, worse, their inability to separate from their abuser. 

MS. RODGERS: Forty percent of Americans working for private industries have no paid leave. [Low-wage workers, who tend to be at greater risk for domestic and sexual violence, are even less likely to have paid time off – one study found that 76% of low-wage workers have no paid sick leave.] Thus, taking a single day off from work to go to court to get a protective order can mean that a victim will lose her job – and with it the economic security she needs to separate from her abuser. 

Additionally, victims of domestic violence and sexual assault often face harassment at the workplace. As many as 96% of employed domestic violence victims experience problems at work due to their abuse or abuser. 

The combination of necessary absences related to the violence and harassment or discrimination at work means many victims lose their jobs. According to a 1998 report of the U.S. General Accounting Office, between 25% and 50% of domestic violence victims in three studies reported that they lost a job due, at least in part, to domestic violence. Similarly, almost 50% of sexual assault survivors lose their jobs or are forced to quit in the aftermath of the assaults. 

In addition to being a safety-concern, domestic violence in the workplace negatively impacts the bottom line, costing employers billions of dollars.

SEN. MURRAY: Domestic violence impacts the productivity of employees and the success of businesses. Each year, domestic violence results in an estimated 8 million missed days of work nationwide. 

… 

MS. RODGERS: Domestic violence also affects perpetrators’ ability to work. A recent study found that 48% of abusers reported having difficulty concentrating at work and 42% reported being late to work. Seventy-eight percent reported using their own company’s resources in connection with the abusive relationship…. 

Domestic violence costs employers at least $3 to $5 billion a year in missed days of work and reduced productivity. These figures do not begin to address the costs of additional security, liability, and employee assistance benefits, or the toll violence takes on women’s personal economic security. In addition to costs associated with diminished productivity, businesses often lose valuable employees when those employees are victimized. Losing loyal and experienced employees generates substantial hiring and training costs, which would be largely avoided by addressing the impact of domestic and sexual violence in the workplace. 

Though aware of the problem, many employers are failing in their response to domestic violence.

MS. RODGERS: Recognition of the costs that domestic and sexual violence impose on businesses is growing. Sixty-six percent of corporate leaders identified domestic violence as a major social issue and one that affect business functioning and the “bottom line.”Seventy-eight percent of human resources professionals consider intimate partner violence a serious workplace issue. Ninety-four percent of corporate security and safety directors at companies nationwide rank domestic violence as a high security concern…. 

However, according to a 2006 study by the Bureau of Labor Statistics, more than 70% of United States workplaces have no formal program or policy that addresses workplace violence, including domestic violence that spills into the workplace. In fact, only 4% of employers provide training on domestic violence…. 

[Some] supervisors or human resources personnel may subscribe to common stereotypes regarding domestic violence, which blame victims for the violence against them. [Other] employers may not realize that there are other steps that they can take against the abuser – such as reporting harassment to the police or, in states that authorize it, seeking a workplace restraining order – to address harassing or disruptive conduct, rather than firing the victim of the violence. Likewise, employers may mistakenly believe that firing a victim is the only way to ensure that the violence does not spill over into the workplace. 

Though current state and federal law has helped millions of victims and law enforcement agencies combat domestic violence, it has fallen short of addressing how employers and employees deal with domestic violence in the workplace. 

MS. RODGERS: The [Violence Against Women Act of 1994] has dramatically improved the response of the police and the criminal and civil justice systems to victims of domestic and sexual violence and the availability of shelters, counseling, and other essential services for them. But far too many working women and men who are victims of domestic and sexual violence remain unable to access these services simply because they cannot take any time off from work…. 

Many victims, knowing their safety depends on an independent income stream even more than other safety-enhancing measures such as a protective order, forego services rather than risk their employment. Responding to this reality, more than half of the states have passed laws that permit crime victims time off to attend court proceedings and laws specifically addressing the needs of domestic and sexual violence victims. Thirty-two states (AL, AK, AZ, AR, CO, CT, DE, FL, GA, HI, IN, IA, MD, MA, MI, MN, MS, MO, MT, NY, NV, ND, OH, PA, RI, SC, TN, UT, VT, VI, VA, WI, WY) and the Virgin Islands have laws specifically permitting an employee who is a victim of a crime to take time off from work attend court, at least under certain circumstances. These laws obviously can be a great help to some victims of domestic or sexual violence – but they are not sufficient. Many of the laws only apply if the victim is subpoenaed to appear. They do not address the specific needs of victims of these particular crimes to take a range of other steps, such as finding safe housing, in addition to attending court proceedings related to the crime. In fact, since generally a victim can seek a protective order only in civil court (a criminal protective order may sometimes be issued in conjunction with a criminal prosecution, but a victim does not determine whether a given case is prosecuted), crime victim leave laws do not even ensure that a victim may take time off from work to get a protective order. And of course, they offer no protection at all to individuals who live in the twenty-eight states that do not have any kind of crime victim leave law. 

As of April 2007, California, Colorado, Hawaii, Illinois, Kansas, and Maine provide an affirmative right to victims of domestic violence (and in some of these states, sexual assault) to take unpaid leave to go to court, seek medical treatment, obtain counseling, or take other steps to address the effects of such violence. New York and North Carolina provide victims time off to seek civil protective orders but do not address the need of victims to take other steps related to the violence. These state laws can provide workable models for federal legislation providing victims time off from work. The state laws have ensured that victims can take necessary steps to address the violence, while appropriately protecting business interests by specifying appropriate forms of certification that victims can use to demonstrate their eligibility for these protections. In most state laws, the leave is unpaid, although victims may use available paid leave in its place. This likewise helps ensure that the provisions are not abused. Survivors who have only unpaid leave need the income to maintain their independence and those who have paid leave tend to safeguard it for crisis situations. 

Importantly, the protections provided under the federal Family and Medical Leave Act (FMLA) are not adequate to meet the many of the needs of survivors of domestic or sexual violence. Of course, victims of domestic or sexual violence will in certain circumstances be able to take time off to address medical conditions under the FMLA. However, many of the typical injuries caused by domestic or sexual violence – such as a badly-swollen eye from a punch in the face or a sprained ankle from a push down the stairs – may not qualify as “serious health conditions” under the FMLA but could nevertheless require that an individual miss a day of work. Additionally, many victims work for employers who are too small to be required to provide FMLA leave. 

… 

MS. CADE: The Congress took an important first step in acknowledging [the workplace problem] when they reauthorized the Violence Against Women Act in December of 2005. One of the new programs that was created is a resource center to help employers learn how to support their employees, and provide them with model policies and other materials. Hopefully, these materials will help employers understand how to respond and support their employees who have protection orders, although that did not happen for me. This resource center is a terrific first step, and I hope that it will receive funding. But more remains to be done, and I hope this Congress will continue to lead the way to ensuring that victims of domestic and sexual violence, regardless of where they live, will enjoy the same level of security with regard to domestic and sexual violence in the workplace.
 

Senate Democrats have introduced legislation that would help employers and victims fully address domestic violence in the workplace -- nationwide. 

SEN. MURRAY: Let me share four ways [S. 1136,] the Survivors' Empowerment and Economic Security Act will help. First, it allows victims to take time off from work, without penalty from their employers, to appear in court, seek legal assistance, and get help with safety planning. Second, it ensures that if a victim must leave a job because of abuse, that person is eligible for unemployment compensation. Third, it prohibits employers or insurance providers from basing hiring or coverage decisions on a victim's history of abuse. Too many victims can't get a job or the insurance they need because insurance companies reject abuse victims. Finally, the bill addresses the punitive elements of the welfare system that can penalize victims who are fleeing dangerous situations, also called the Family Violence Option…. We owe it to the millions of victims of domestic violence, sexual violence, and stalking to address this problem head on. People should not be forced to choose between financial security and physical security. Together we can stop the cycle of violence and the toll it takes on families, communities and our society, but we have to change the law and that's what I hope we can do together starting with this hearing.

Proponents of the merger “have a steep hill to climb” in convincing the Senate that consumers would benefit and not suffer from the proposed merger.

SEN. INOUYE: While satellite radio is relatively new, it has grown rapidly. Today, XM and SIRIUS provide audio entertainment services to more than 13 million Americans. These subscribers listen to satellite radio primarily while driving in their cars, but some also listen in their offices, homes, and on portable devices. Despite such successes, SIRIUS and XM now argue they should be permitted to merge into a single satellite radio provider – a result that was explicitly prohibited when the FCC adopted service rules in 1997. In the eyes of satellite radio operators, such a restriction is out of date given the availability of programming via alternatives like digital over-the-air radio, MP3 players and other means of receiving audio entertainment. But to merger opponents, these arguments ring hollow. In their view, satellite radio offers a unique collection of nationwide programming that – as a whole – cannot be effectively replicated. As such, these alternatives complement, rather than compete with, satellite radio. Thus, to merger opponents, a satellite radio monopoly puts at risk the benefits of low prices and high quality services that only accrue from competing service providers. Today’s hearing presents us with an opportunity to test these claims. While we welcome this discussion, I believe that the merger proponents, in this case, have a steep hill to climb. Indeed, given the public interest in promoting competition and maximizing a diversity of media outlets, we should be skeptical of claims that new technologies necessarily “change the equation” and provide competition sufficient to restrain monopoly power.
 

The Chief Executive Officer of SIRIUS Satellite Radio promised not to raise prices and argued that the proposed merger would help consumers.

Mel Karmazin, Chief Executive Officer, SIRIUS Satellite Radio: A SIRIUS/XM merger will generate concrete and significant benefits for consumers. Today, SIRIUS and XM each provide consumers one service offering at one price – $12.95 per month. Consumers have only a limited ability to tailor their service, and those seeking programming from both SIRIUS and XM must subscribe to both services for a combined payment of $25.90 per month. The merger of SIRIUS and XM will enable the combined company to enhance these offerings through: better pricing[;]….More choices[;]…. Empowering consumers…. Despite the speculation to the contrary, the combined company will not raise prices. After the merger, consumers who want to continue to receive substantially the same channel lineup of either SIRIUS or XM may continue to do so at the same price – $12.95 per month.

 

The CEO of SIRIUS Satellite Radio testified that the proposed merger would not result in a monopoly because satellite radio faces a wide range of competition in a rapidly evolving marketplace.

MR. KARMAZIN: Satellite radio competes intensely with free terrestrial radio and a host of other audio entertainment providers. The key to getting more subscribers will not be to widen the price gap between free and what satellite radio charges. Instead, it will be to offer consumers a better value. We are prepared at the appropriate time to discuss each of the issues with regulators and to guarantee these benefits as a condition of our merger approval. The market for audio entertainment in the United States is robustly competitive and rapidly evolving. SIRIUS and XM compete directly and intensely with a host of other audio providers for consumer attention. As a result, although satellite radio has proven to be an appealing and popular new product, its market penetration remains quite limited. A recent Arbitron study found that SIRIUS and XM account for just 3.4 percent of all radio listening, spread out among the approximately 300 channels that the two companies currently offer…. [T]he audio entertainment market today is vibrant, competitive, and innovative, and every indication is that it will be even more so in the future. We believe that the combination of SIRIUS and XM will be good for consumers as it will intensify this competition, expand the choices for consumers, and reduce prices.

 

Consumer groups and a representative of the broadcasting industry argued that the proposed merger would lead to rising prices, reduced consumer choice, and less innovation.

W. Russell Withers, Jr., President, Withers Broadcasting Companies; on behalf of the National Association of Broadcasters: My message this morning could not be simpler. The proposed merger to monopoly of XM Radio and SIRIUS Satellite Radio must be rejected. A monopoly in satellite radio would clearly harm consumers by inviting subscription price increases, stifling innovation and reducing program diversity. This monopoly would also jeopardize the valuable free over-the-air, advertiser-supported services provided by local radio stations. Free, over-the-air broadcasters are currently investing in new technologies, including digital audio broadcasting, which will enhance their stations’competitiveness and ability to serve local communities and audiences. All local stations ask is for a fair opportunity to compete in today’s digital marketplace on a level playing field. 

… 

GENE KIMMELMAN, VICE PRESIDENT, FEDERAL AND INTERNATIONAL AFFAIRS, CONSUMERS UNION: Common Cause, Consumers Union, Consumer Federation of America, Free Press, and the Media Access Project urge the Congress, the Federal Communications Commission and antitrust authorities to hold the line against the growing threat to an increasingly homogenized and concentrated media sector: mergers that concentrate ownership in too few hands. The XM-SIRIUS Radio merger exacerbates longstanding concerns regarding excessive concentration in the media market and the effects of concentration on programmer access and consumer choice. But concerns regarding this merger extend beyond general media consolidation: based on the evidence available today, the proposed transaction is a merger to monopoly in a distinct product market that threatens to increase consumer costs, reduce consumer choice and impede competition. Simply put, this merger is not in the public interest.

 

A representative of a public interest organization testified that the merger should only be approved if conditions to protect consumers are guaranteed.

Gigi Sohn, President, Public Knowledge: The salient question for policymakers is this: if this merger is simply denied, will consumers be better off? Given the financial state of both companies, the slowing growth of their customer base and the increasing competition in the marketplace, it appears likely that in the absence of a merger, both services will continue to limp along instead of investing in new and diverse programming. Might it not be better for consumers to permit the merger under conditions that provide expanded programming and pricing choice, along with temporary measures to keep prices in check? After a great deal of discussion with my public interest colleagues, former regulators and antitrust experts, I believe that the latter is the best course. Thus, the XM and SIRIUS Satellite radio merger should be approved only if it is subject to the following three conditions: 

·The new company makes available pricing choices such as tiered programming. 

·The new company makes 5% of its capacity available to non-commercial educational and informational programming over which it has no editorial control. 

·The new company agrees not to raise prices for its combined programming package (as opposed to each individual company’s current programming package) for three years after the merger is approved. 

 

A financial analyst testified in favor in the merger, but acknowledged that he was uncertain whether consumers would benefit.

David Bank, Managing Director of Equity Research, RBC Capital Markets: I hope to put the proposed XM and SIRIUS merger into context with respect to issues that the capital markets are focused on. Of these issues, the first and foremost of them would be the potential synergies and subsequent savings that we believe are possible in an XM and SIRIUS merger. We estimate the value of these synergies to be somewhere between $5 billion and $6 billion dollars. While it is unclear to us how, if at all, the combined entity might pass on savings and value creation to consumers, there are three primary constituencies that stand to benefit from the $5 - $6 billion of savings financially: 1) the employees of each of the companies as the viability of the combined entity becomes stronger, 2) the customers which could potentially benefit from greater innovation, more flexibility in pricing and a more diverse selection of content and 3) shareholders, who will see value creation from increased long-term earnings potential…. We believe that the satellite Industry is a viable one with or without this merger. However, we would note that as competition is increasing for the mobile entertainment consumer, as illustrated by the evolution of the iPod to the iPhone, broadcast audio and video over cell phones and MP3 integration into the automobile, broader adoption of over-the-air HD radio, we believe that the industry would be in a much healthier and stronger position should the proposed merger occur. 

The Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies is examining how best to alleviate the burdens that autism places on patients and their families. 

SEN. HARKIN: The Centers for Disease Control and Prevention estimates that 1 of every 157 children born this year will be diagnosed with autism. Millions of families across the country are facing the very real difficulties in coping with this disease. It’s tough on parents, who would do anything to help their children at home, while at the same time fighting to find the supportive services that their children so badly need. We hear the heartbreaking stories, day after day, about families just trying to get the best treatments for their children, and wondering why it’s their family that faces this ordeal…. 

This hearing will address a number of questions. First, is the prevalence of autism on the rise, both in the U.S. and other countries? If so, why is that? Is there really an increase in children with autism or is the disease being better diagnosed? I keep hearing both sides of that. Secondly, of course, what causes autism? Is it environmental? Is it a combination of both?…. Third, what therapies work best for children with autism? Are parents able to find the services they need for their kids, and at what cost?

 

Witnesses emphasized the complexity and magnitude of the challenge of combating this disease.

JULIE L. GERBERDING, DIRECTOR, CENTERS FOR DISEASE CONTROL: It’s important to appreciate that we recognize that we’re talking about a spectrum of disease here, not a single disease. We’re talking about autism, per se, about pervasive developmental disorders, and some other conditions that have characteristics in common with autism, Asperger’s Disorder, and some other conditions. And these are diseases that are not diagnosed by a test; they’re diseases that are diagnosed by observing behaviors and watching behaviors change and develop over time. So there’s a lot of difficulty in making a distinction between who has what, and where one of these conditions leaves off and the other begins. 

We know that autism has a tremendous impact on children who are affected, as well as their families and the people who care for them. The diseases are characterized primarily by difficulties in forming relationships and engaging in the kind of social interactions and communications that enrich life and allow people to effectively communicate with one another. 

Many of these children also have differences in the way they respond to stimuli in the environment, the way they learn, the way they play, and the way they experience their life overall. The bottom line is there is no cure for autism now, and these affects can last a lifetime. We also know that the sooner we make the diagnosis of autism spectrum disorders, the more likely children are to benefit form interventions, and so it’s imperative that we not wait until the full-blown syndrome has evolved but that we have early detection and characterization. 

THOMAS R. INSEL, DIRECTOR, NATIONAL INSTITUTE OF MENTAL HEALTH: [W]hat you have before you are what I think are the four most important points that we can use as a baseline for the knowledge base…. The first point to make, and it may seem obvious, but it’s actually a fairly complicated point, is that autism is a developmental brain disorder. Yes, it involves other organs of the body, and the gut is one that has been implicated, as you mentioned, Senator Harkin. But it’s important for us to focus on this as a brain disorder that evolves through development. And the reason I stress that is because when you think about developmental brain disorders, it’s not simply what happened or where it happened; it’s when it happened that may be really critical. 

So much of what we need to understand is when the train goes off the tracks in brain development…. It changes the way we think about this a little bit because it suggests also that there could be multiple causes that if they occur at the same point in time --and many of us think that that point may be prenatal -- it sets up a set of trajectory that’s abnormal that leads to this very, as you mentioned, devastating disorder. 

Point number two: You’ll hear from constituents, and you’ll read in the press, “Is this really genetic? Is this really environmental?” and the answer is it’s both, that with this disorder, as with so many of these developmental disorders that we study now, we’ve, in the scientific world, gotten beyond the point of arguing between genes and environment. It’s like the old nature-nurture debate. 

The debate now is about how genes and environment interact to result in this disorder. We do know there’s an important genetic component, no question about that, from what we have from twins studies. But we also know that that doesn’t explain the entire disorder, and it certainly wouldn’t explain any potential increase in the prevalence or increase even in the incidence over the last decade. 

So lots of interest in what the environmental factors might be, but to understand those we will need to drill down and get a very good understanding of who has the genetic risk to be responsive to that environmental factor. So much interest now in trying to understand the complicated interaction of these two factors. 

Third: This is, as Dr. Gerberding mentioned, important to have early detection, early interventions. There are treatments; there’s treatments that work. They don’t work for all children. Perhaps 25, 30 percent of children respond beautifully to behavioral interventions, but they respond best with early detection and early intervention, particularly before age three. As Dr. Gerberding mentioned, many of these children aren’t even diagnosed until sometime thereafter. 

And finally, the current science, more and more, is telling us that this is not one illness. This is a group of disorders. Much the way we think about hypertension, much the way we think about other classes of disorders, this increasing one -- and the way that we perhaps once talked about mental retardation, it’s likely we’re going to find many, many disorders within this overall rubric.

 

Witnesses described the need for research into the cause of autism, but also emphasized the immediate need for services to those currently diagnosed with the disorder.

JUDITH FAVELL, CHIEF EXECUTIVE OFFICER, ADVOSERV; EXECUTIVE DIRECTOR, THE CELESTE FOUNDATION: While research on the cause and course of autism continues, while the incidence and prevalence is tracked, while basic research on the underlying mechanisms of the disorder is conducted, we cannot lose sight, as just been said, of the 1.5 million children and adults today living with autism, who need help today. Today, they are seeking services that will allow them to gain the skills and resolve the behavioral challenges that will enable them to live and enjoy the fullest life possible. 

Fortunately, across the last years, major advancements have been made in the development of educational and behavioral strategies to teach these skills and to treat these problems. These methods have been tested across, literally, decades of scientific research and confirm that children and adults with autism can indeed be helped in meaningful and substantial ways. They can learn to communicate. They can learn to care for themselves. They can achieve academic and job goals. They can reciprocate love with friends and family. 

Likewise, people experiencing autism need not engage in behavior problems that hurt themselves or harm others. In short, effective treatment and teaching methods designed to help people with autism, notably those based on learning theory and applied behavior analysis, are available today, and each day are becoming more effective with continued research. 

So this picture is a decidedly optimistic one, however, effective methods of instruction and behavioral treatment area clearly not enough. To impact the lives of people with autism, and equally important issue must be addressed, and that is how to actually make these services available to people who need them. 

There exists not just a gap, but a chasm, between what we know and what consumers actually receive. For example, we know it has been said that to be optimally effective, services should begin as early in a child’s life as possible, and be intensive, that is, encompass as many hours as possible. And yet, as we hear, families lose precious months, years, waiting for services, and then too often must settle for a fraction of what their child needs. 

BRADLEY WHITFORD, VOLUNTEER SPOKESPERSON, AUTISM SPEAKS: [Autism] is even more than just a tragedy for these kids, many of whom… we now know to be of extraordinary intelligence, but trapped in bodies which do not allow them to effectively communicate or interact with the rest of us. It’s also a tragedy for our families and for our country. 

A mother of an autistic child recently told me, through her tears, that she had been forced to abandon her beloved life’s work as a nurse, not mainly to give her more time with her autistic child, but rather to purposely make her family poor enough to qualify for the payment of some of the services her child so desperately needs. She had said, “The one thing I won’t do, even though I have friends who have, is get divorced, just to qualify for additional benefits.” 

And then there are the cases which don’t make national news but which echo loudly among people in the autistic community. About once a month, somewhere in America, the father of an autistic child kills the child, and himself, to end the despair…. 
 

Witnesses expressed the need for increased funding to combat autism. 

ROBERT WRIGHT, CO-FOUNDER, AUTISM SPEAKS: Here’s what we do know about autism: The numbers that Dr. Gerberding talked about, 1 in 150 children in the United States, 1 in 94 boys, that’s the ratio. A decade ago, the experts estimated the prevalence in autism to be 1 in 2,500. This year, more children will be diagnosed with autism than with AIDS, diabetes and cancer combined. 

Autism costs the American society approximately $35 billion in direct and indirect expenses each year, according to a Harvard School of Public Health study. And caring for a child with autism can cost over $3 million over a person’s lifetime. Those are the estimates. 

Frankly, Mr. Chairman, we were shocked that a disorder this prevalent commands so little in terms of resources devoted to research and treatment, when compared to other less common disorders. For example, leukemia affects 1 in 25,000 children but receives $300 million-plus a year of support from the NIH. Pediatric AIDS affects 1 in 8,000 and is about $400 million a year. And autism affects 1 in 150, and funding level is approximately $100 million…. 

[The Combating Autism Act] authorizes $920 million, over five years, for research in autism surveillance, awareness, early identification, and authorizes a 50 percent increase in the Department of Health and Human Services’ spending on autism. For fiscal ‘08, the Combating Autism Act authorizes a spending level of a total of $168,000 to the Health and Human Services secretary, for autism activities, and within that total provides for three distinct autism-specific items: $16.5 million to the Centers for Disease Control and Prevention to conduct developmental disabilities surveillance and research program, which Dr. Gerberding outlined; $37 million for Health Resources and Services Administration to carry out an autism education, early detection, intervention program; and $114 million for NIH-funded research…. 

The Combating Autism Act also creates new and innovative state- based programs in autism education, detection and early intervention. Early intervention, as we’ve heard here, can lead to improvements in speech relating to learning…. 

Mr. Chairman, the funding increases recommended by the Combating Autism Act are relatively modest, at only $25 million more than the Congressional Budget Office’s baseline estimate for HHS’ autism activities. But the impact this subcommittee would have by not just matching those increases, but by dictating how those funds would be spent, would be historic. By doing so, Mr. Chairman, this subcommittee would take a giant step toward fulfilling the promise offered to hundreds of thousands of children, and their families, when Congress passed the Combating Autism Act. 

MARGUERITE COLSTON, SPOKESPERSON, AUTISM SOCIETY OF AMERICA: One of the things we can do for Americans living autism is fund the Combating Autism Act, and encourage the resulting research to be treatment-guided, not just causation specific. Funding the CAA also means funding the Interagency Autism Coordinating Committee, and they have a wonderful roadmap for services. 

We can also pass, and then fund, the Autism Services Bill put forward by Senators Clinton and Allard last month, and which the House introduced today. As a parent, I strongly support those bills. As a staff member for the Autism Society, I can assure you that we, our chapters and our members will work tirelessly to advance legislation that improves research, services and supports for individuals with autism.

 

Dr. Gerberding described the early symptoms of autism and what parents should do if they observe them.

SEN. SPECTER: Autism is characterized, as the experts have written, by three distinctive behaviors: difficulties with social interaction, display problems with verbal and non-verbal communications, and the exhibition of repetitive behavior or narrow obsessive interests. It is well known, Dr. Gerberding, and you’ve noted it, that the early detection of these behavioral disorders can produce improvements. What should parents do as soon as they observe some of these behavioral disorders? 

DR. GERBERDING: You know, when you have a child, you’re used to thinking about what is its weight, what is his or her height, what is their head circumference? We’re used to measuring those physical development milestones, but there are behavioral milestones just like that. You know early age, a child ought to make eye contact. If you play peek-a-boo with a child, they should engage your attention. 

… 

I’m quoting from Newsweek Magazine…. “By seven months, a normal child ought to be able to turn its head when its name is called and smile at another person. If your child is a year old, usually they can wave bye-bye, and they can make sounds like, ‘mom and dad’ or ‘ma and da’, and they can clap when you clap. At 18 months, a child ought to be able to pretend, like pretend to talk on a telephone or to look at objects when you point to them. And by two years, a child ought to be able to make simple sentences with several words in a phrase, and follow simple instructions,” and I think, most importantly, engage socially with other children. They’ll play.” 

… 

If a parent is concerned about their child’s development, the pediatrician or the family doctor is absolutely the first place to go. And we have really been pushing information. About 85,000 kits have gone out to pediatricians around the country. So parents go in, express their concern when they’re bringing the child in for well baby care or for the immunization clinic visit. And the most important thing to the parent is, don’t give up. 

If the doctor says, “Oh, no, maybe your child is just a little slower to catch on,” ask for the doctor to do a screen. And if there’s any worry, make sure that you get a second opinion or ask the child to be seen by someone with more expertise. 

Senators explored the role of securitization in the subprime mortgage debacle.

SEN. REED: [W]hat happens when it does not work as well as it should? Does the complex structure of mortgage backed securities and the servicer’s duty to act on behalf of different investors limit the servicer’s ability to provide loan workout options for the borrower?...[I]s it possible that securitization can create perverse incentives, such as an erosion of underwriting standards or the development of exotic loan products that do more harm than good? 

SEN. MENENDEZ: [A]s we move forward today, we must remember that these are not just numbers—they are a single mother struggling to make ends meet, an elderly couple facing the depletion of their life savings, or a minority family crushed with the reality that they may lose their first home. This is a financial nightmare for families all across America and I fear it is only going to get worse. think it is time for all parties involved to take responsibility—to change their behavior in order to prevent these predatory loans. In the Banking hearing last month, regulators were forced to stand up and say that they “did too little too late” and today I ask you to take responsibility for your part in this disaster and see how we can improve the securitization process. 
 

Witnesses disagreed over whether credit rating agencies and mortgage investment banks have contributed to the current crisis.

Gyan Sinha, Senior Managing Director and Head of ABS and CDO Research, Bear Sterns & Co. Inc.:[Mortgage investors] generally do not dictate what types of loans are effectively made. 

Warren Kornfeld, Managing Director, Residential Mortgage-Backed Securities Rating Group, Moody’s Investors Service:The rating agency’s role is to express an opinion….A rating is not a pass/fail. A rating is probability of potential losses to bondholders…. As Moody’s loss expectation has steadily increased over the last few years, the amount of loss protection on bonds we have rated have also increased. We believe that performance of these mortgages would need to deteriorate significantly for the vast majority of the bonds we have rated ‘A’or higher to be at risk of loss.

SEN. MENENDEZ: As I listen to your testimony, it sounds that you are as chagrined about defaults and you suggest that for securitizers that is clearly not a good thing, but it certainly seems to me that securitizers have looked the other way, fueling a market that has very little discipline over itself. 

… 

Kurt Eggert, Professor of Law, Chapman University School of Law:Some aspects of the current meltdown of the subprime market, the increased default rate and threat of rising foreclosures, as well as the difficulty of crafting an adequate response to that meltdown, may be attributed to the effects of securitization…. Rating agencies and other securitizing entities have an interest in increasing the number of loan pools that are securitized, since that is how the securitizers increase their income. This self-interest encourages rating agencies and other securitizers to focus excessively on the quantity of loans securitized, in contrast to traditional regulatory agencies, which focus more on the quality of loans made by depository institutions. Rating agencies do of course also examine the quality of loans in the pools that they rate. However, the recent loosening of underwriting standards and the accompanying defaults demonstrates that that examination has not been sufficient.

 

Industry witnesses insisted that the “market correction” that is underway is sufficient to address problems with future loans.

David Sherr, Managing Director and Head of Securitized Products, Lehman Brothers:Because none of the participants in the securitization process benefit from foreclosures, the market has evolved, and will continue to evolve, so as to minimize the number of foreclosures...In short, we expect that the subprime mortgage securitization process will continue to create opportunities for a long-ignored segment of the population to join and remain in the ranks of American homeowners. 

MR. SINHA: At this juncture, we are witnessing a significant correction in the MBS market for nonprime loans. A number of originators have exited the industry or been sold to larger, better-capitalized entities. The risk-profile of the loans being considered for funding in the nonprime market has generally improved as loan originators have moved to change loan-to-value limits, require multiple appraisals on collateral property, and enhanced verification of borrower income. Valuations appear to have stabilized, but are at lower levels than at the beginning of the year. For those that remain in the market, significant challenges will persist…. Loan modifications present one of the most viable vehicles for mitigating foreclosures under appropriate circumstances. However, it is important to note that there is considerable variation based on tax law and contractual requirements across securitization transactions with respect to the scope of permissible loss mitigation options. Despite these various limitations, servicers are undertaking various loss mitigation steps within the flexibility that they have under existing securitization agreements, including loan modification. 

Susan Barnes, Managing Director of Ratings Services, Standard and Poor’s:For several reasons, we continue to urge that Congress exercise caution in crafting any legislative response to the current subprime lending situation. It is important to ensure that subprime borrowers continue to have access to fair and appropriate mortgage loans…. If a lending law imposes certain forbearance requirements [obligations to renegotiate the loans and/or reduce principal amount of the debt] intended to benefit borrowers or liability on purchasers or assignees of loans [can cause] potential purchasers and assignees to reduce, or even cease, their purchasing of those loans to avoid liability under the law…. From S&P’s perspective, a second solution often proposed, a lending law that imposes liability on purchasers or assignees of mortgage loans (“assignee liability”) to monitor and reduce unsafe practices in the lending market, also has significant downside risk.

 

Meanwhile, academic witnesses insisted that new measures must be undertaken.

MR. EGGERT: Some claim that the market can correct itself. However, it is clear that structural characteristics of the securitization process can cause harm to borrowers, and that borrowers are too little protected in a subprime industry that closely heeds the mandates of rating agencies and investors and is too little overseen by governmental regulators…. To be effective, any regulation that protects consumers from inappropriate loans must affect the actions of the Wall Street players that direct the securitization of subprime loans. A regulatory regime that purports to limit the harmful affects of predatory loans or loans unsuited to borrowers must include not only the lenders that originate the loans, but also the rating agencies and investment houses that create the loan products and determine the underwriting standards, and the servicers who put into effect the loss mitigation techniques that may determine whether borrowers save their homes or lose them to foreclosure. 

Mr. Christopher L. Peterson, Assistant Professor of Law, Levin College of Law, University of Florida: Unfortunately, there is no simple, silver bullet solution to the current mortgage market problem. For example, I do not believe that an agreement by key industry insiders to new best practices will change these structural problems. Nor do I believe that a “wait and see” approach of hoping that stabilization in home prices will solve these problems. The recent downturn in home prices only exposed the underlying inefficiencies in the market that have been festering for some time. Instead, I believe it is time for the Congress to consider adopting comprehensive reform of the nation’s consumer lending laws. In my view, these reforms should include four policy areas: servicing reform, disclosure and closing reform, price regulatory reform, and liability reform. 

Senators and witnesses emphasized that support for military families is a critical factor in military readiness and retention.

SEN. AKAKA: I know that it is not only our men and women in uniform but also their families who serve our nation and who bear the brunt of the heavy demands placed on our military. Just as we are responsible for the well-being of our service members, likewise we have a responsibility to their families. As Chairman of the Readiness subcommittee, I asked that we hold this hearing today because I am convinced that how well we care for the families of our service members directly affects the quality of our military. 

… 

SEN. BEN NELSON: We all understand that our military personnel cannot focus on the mission at hand if they are distracted with worries about whether their families are being taken care of. Taking good care of military families translates directly to improved military readiness. It is our intent to support policies and programs that foster a family-friendly environment for our military families. 

… 

Dr. Lynda C. Davis, Deputy Assistant Secretary of the Navy for Military Personnel Policy: Department of the Navy family programs are a vital part of our overall personnel readiness and are key to recruiting and retention. When a Sailor or Marine knows that his/her family is being cared for, he or she can concentrate on their mission. 

… 

John McLaurin, Deputy Assistant Secretary of the Army for Human Resources: Family wellbeing and quality of life are critical to the readiness of our Soldiers and have a profound effect on decisions regarding whether the Soldiers will remain in the Army or leave it when their enlistments or obligations are over. 

… 

Lieutenant General Roger A. Brady, Deputy Chief of Staff for Manpower and Personnel, U.S. Air Force: The statement, “We recruit the member, but we retain the family” is not a cliché but has been a reality in the Air Force for many years. The quality of life we provide for our Airmen and their families is a distinct determining factor in how long they remain in our service.

 

The President’s decision to extend Army tours of active duty from 12 to 15 months and increased demands on the National Guard have placed even greater strains on both military families and military readiness.

Michael L. Dominguez, Principal Deputy Under Secretary of Defense for Personnel and Readiness: Last week, Secretary of Defense Gates announced his decision to extend from 12 to 15 months the tours for active Army soldiers in Central Command. That was a difficult decision for the Secretary as these longer tours will be hard on Army families. While a 15 month tour is an unpleasant prospect, we hope this decision will allow most soldiers a full year at home between deployments and will preclude the need for unplanned tour extensions during a deployment. 

… 

Joyce Wessel Raezer, Chief Operating Officer, National Military Family Association (NMFA): As we speak, policy changes are being implemented that will affect many military families. The Army is extending active duty deployments by three months, from one year to 15 months. Several National Guard units are being readied for a second deployment, on an accelerated timetable from the guideline calling for one year deployed and five years at home. Readiness is threatened because of a shortage of equipment for training and the fact that training itself is being shortened. The readiness of the world’s greatest fighting force is being threatened. 

… 

SEN. NELSON: Military parents have the very difficult and challenging task of raising children during these highly stressful times of deployment, redeployment, extended deployment and reintegration into home life upon return from deployment. The Secretary of Defense just recently announced that Army combat tours will be extended from 12 to 15 months. What impact will this have on our military families? I will be interested in hearing whether the Army is making a special effort to address the needs of the families of the service members who just learned that they will be coming home three months later than they and their families had planned on. What will the families have to say about this recent change? Parenting is challenging enough without these additional stresses. Military parents need help, especially during these trying times.

 

Multiple deployments have taken a significant toll on military families.

MS. Raezer: In this sixth year of the Global War on Terror, as many service members and families are experiencing their second or third deployments, family readiness is more imperative than ever…. The effect of multiple deployments is burning out many volunteers and families. At high operational tempo installations such as Fort Bragg, Camp Pendleton, and Fort Drum, volunteers and staff are constantly on alert, dealing with families at multiple stages of deployment. Sustaining a high level of engagement with families at rear detachment and installation commands is extremely draining. New challenges seem to constantly appear, including: the grief of unit families when a service member is wounded or killed, extensions, and reductions in funds and support staff. Many spouses who hear military and political leaders’ pronouncements of a long war wonder if there is ever a light at the end of the tunnel.

 

Administration policies have exacerbated a history of cutbacks to critical military family support services.

MS. Raezer: Shortages in base operations funding are nothing new. What seems to make the crisis worse now is that war needs have exacerbated the negative effects of a long history of cutbacks. Deployed service members expect their installation quality of life services, facilities, and programs to be resourced at a level to meet the needs of their families. Cutbacks hit families hard. They are a blow to their morale, a sign that perhaps their Service or their nation does not understand or value their sacrifice. They also pile on another stressor to the long list of deployment-related challenges by making accessing services more difficult. Families are being told the cutbacks are necessary in order to ensure funds are available for the war, and in the case of Army communities, the ongoing Army transformation. Just when they need quality of life programs most, families should not be asked to do without. Their commanders should not have to make the choice between paying installation utility bills or providing family support services.

 

The failure to adequately provide for the health care of our wounded warriors has hurt service members, veterans, and their families.

MS. Raezer: We ask you to recognize that the military health care system, which showed signs of stress even before the start of the Global War on Terror, is now significantly taxed…. As revealed in the series of articles about Walter Reed Army Medical Center, post-deployment transitions to and from a variety of DOD, VA, and civilian medical facilities and between military and civilian life can be especially problematic for injured service members and their families. NMFA asserts that behind every wounded service member is a wounded family. Spouses, children, parents, and siblings of service members injured defending our country experience many uncertainties. Fear of the unknown and what lies ahead in future weeks, months, and even years, weighs heavily on their minds. Other concerns include the injured service member’s return and reunion with their family, financial stresses, and navigating the transition process to the VA. The system should alleviate, not heighten these concerns, and provide for coordination of care that starts when the family is notified the service member has been injured and ends with the DOD and VA working together to create a seamless transition as the injured service member transfers from active duty status to veteran.

 

The Administration’s funding of the war through emergency supplemental appropriations has hurt military families.

MS. Raezer: Military family support and quality of life facilities and programs require dedicated funding, not emergency funding. Military families are being asked to sustain their readiness. The least their country can do is make sure their support structure is consistently sustained as well. Strong families equal a strong force. Family readiness is integral to service member readiness. The cost of that readiness is an integral part of the cost of the war and a National responsibility. 

 

Senators are committed to closing the tax gap, which, since 2001, represents a failure to collect more than $2 trillion in legally-owed taxes.

SEN. BAUCUS: In 2005, the rate of voluntary tax compliance was 85 percent. But in 2006, it dropped to 83.7 percent. That’s a drop of more than a full percentage point in one year. Each percentage point drop in the rate amounts to a $25 billion increase in the annual tax gap. Since 2001, the Government has failed to collect more than $2 trillion in legally-owed taxes.… Let us challenge more taxpayers to comply with the law. Let us challenge the Treasury Department to find ways to make it so. And let us together work to restore the integrity of our tax system. 

SEN. LINCOLN: I continue to be astounded at the amount of taxes that are owed and not paid. We aren’t talking about a small amount of revenue loss here – we’re talking hundreds of billions of dollars. 

Any progress we can make in closing the gap is going to be significant and will make it so much easier for us to continue advancing our policy objectives – whatever they may be. For instance, I recently heard from a constituent that is desperately working to ensure adequate funding for a low-income senior housing center. Whether it be low-income housing, children’s health insurance, education or veteran’s care – these are all priorities that we must address. 

This issue must be a priority for the Senate and it must be a priority for this Administration – an approach that considers legislative options as well as administrative ones… we here in the Finance Committee – no matter how hard we try – can’t solve the problem on our own. We need cooperation, real cooperation, from Treasury and the IRS.

 

Chairman Baucus asked Secretary Paulson to develop a plan to reach 90 percent voluntary compliance by the year 2017. 

SEN. BAUCUS: The American people have a right to expect that their government will have a goal and a credible plan to reduce this tax gap. And it is the Treasury’s job to fix it. Yet the Administration does not appear to take the job seriously…. [I]t astounds me that the Treasury does not have a comprehensive, credible plan for the tax gap. I will not wait any longer. I am going to set the goal for you, today. I am setting a goal of 90 percent voluntary compliance by the year 2017. That is six percentage points higher than today’s rate. This is a realistic goal. It is achievable, within 10 years. When it is reached, collections of taxes legally owed will increase by at least $150 billion each year.

 It is up to the Treasury Department to develop and present to this Committee a plan that will achieve this 90 percent compliance goal. I invite the Secretary to appear before this Committee in 90 days – on July 18, 2007 – to deliver his plan, complete with benchmarks and timetables. 

I know that there is no magic solution to the tax gap. But that doesn’t mean there is no solution to the tax gap. 

… 

HENRY M. PAULSON, JR., SECRETARY OF THE TREASURY: You’ve got a plan now. 

SEN. BAUCUS: I want a plan that’s a real plan that gets us to 90 percent. 

… 

SECRETARY PAULSON: I don’t want to put forth something that would mislead the American people…. I value my credibility too much to promise something when I don’t see the steps to get there…. I would like to be able to say with some credibility and without fooling people that there is a clear path to 90 percent…. I can’t see the steps we can take and I haven’t heard from you or anyone else as set of steps that could be taken… to close that gap all the way to 90 percent.

 

Secretary Paulson disagreed with Senators over how much can be done to close the tax gap.

SECRETARY PAULSON: To substantially improve compliance in this regard, Congress would have to mandate additional requirements, which would affect not only those who don’t report all of their income, but also those who already do. I have come to the conclusion that there is a big part of the tax gap we simply won’t be able to reach without adding draconian and painful requirements on all taxpayers. And I don’t believe any of us really want to do that. We must remember that the tax gap is simply not a pot of gold that we can dip into every time we want to pay for a new or expanded program. Nor should it be viewed as an easy solution to existing challenges, such as the alternative minimum tax. 

… 

SEN. SCHUMER: The Administration’s approach to the tax gap issue, with all due respect, is a little insulting. As the Chairman mentioned, you have proposed in your budget to close one percent of the tax gap over 10 years. One percent. You say that as “big part” of the tax gap cannot be reached without, quote, “draconian and painful requirements on all tax payers.” Is this “big part” that you say cannot be reached without draconian measures really 99 percent? Are you telling us there is no middle ground between one percent and 100 percent? You couldn’t close 10 percent of the tax gap over 10 years? 20 percent?...You really can’t do any better than one percent over 10 years without imposing undue burdens on taxpayers? 

SECRETARY PAULSON: I have a goal, we all have an aspirational goal to achieve 90 percent or higher, but to put forward something, I believe that it is incumbent upon me to make sure that we have got an aggressive plan that is balanced and is base upon tangible steps we are taking…. I’d like to fund our budget, pass the 16 legislative proposals, and I know we’ll get the 1 percent or better…. We’re clearly going to push forward… and we’re pleased to work on this jointly…. 

SEN. BAUCUS: I’d just like to remind everybody that those proposals total one cent on the dollar. Some are in the supplemental [appropriations bill], we’re working with you on the others but the total is only one cent on the dollar. 

Chairman Dorgan convened the hearing to examine the effectiveness of the Administration’s current trade policy.

SEN. DORGAN: We will be confronting some trade decisions in the coming months. The president has requested that we extend fast track which has been renamed TPA….Let me clear, I support trade, believe in trade, and believe we ought to be engaged in plenty of trade. I insist it be fair trade. I believe that so-called“free trade’ is not working and I’m going to be asking questions about that today. I know members of this panel will have different views of this but I think that whatever one’s views, I would suspect that this issue is very, very important…. The question is what are the rules for trade in a global economy and are the rules for trade rules that are beneficial for this country’s long-term viability. And I submit that the answer under current circumstances is “no” and that change is necessary. 
 

Some witnesses urged a change in trade policy that takes into account the change in the rules of the global economy.

SEN. DORGAN: This country invented the light bulb and the telephone, the personal computer and the Internet. We put a man on the moon. And we built an economy that was the envy of the world. But we will not remain an economic superpower if we trade away the things that make us strong…. The global economy has galloped forward without the rules of the game keeping up. 

… 

Leo Hindery, Jr., Managing Director, InterMedia Partners: How well the Executive Branch and Congress respond to the significant challenges confronting the American economy will substantially determine whether our nation continues to be the preeminent economic power in the world, or whether it will experience declining political influence and economic leadership. Only by fully understanding how globalization and current U.S. trade policies are affecting America’s economic well-being can we craft future policies that will advance the welfare of all Americans. 

John Johnston,Partner, Modern Metal Cutting, LLC:Our recent economic difficulties have sparked a major burst of community development initiatives and coalition-building involving business, the public sector, and the non-profit sector [in Ohio]. Nevertheless, our efforts must be complemented with major changes at the federal level, and nothing is more essential than an overhaul of Washington’s approach to a broad range of international trade-related issues. The U.S. role in the global economy is Washington’s responsibility – especially because we live in a world in which foreign governments fight hard for the interests of their businesses and have no reluctance to use all the resources and influence at their disposal to get this job done. Indeed, under the Constitution, the right to regulate foreign commerce rests with the Congress. Thank you for taking that responsibility seriously at this Committee.
 

While witnesses disagreed about the impact of current trade policies, they recognized that the benefits of trade do not reach every American equally.

Edward Gresser,Director, Trade and Global Markets Project, Progressive Policy Institute:Is free trade working? In fact, neither the U.S. nor the world has achieved an academic ideal of ‘free trade.’ Sixty years of trade liberalization, combined with technological change and logistical innovation, has created a far more open and integrated world. Flows of goods, services and ideas – into our country, out of it, and around it – are larger than ever before, certainly in absolute terms and almost certainly relative to the U.S. and global economies. But trade policy has also exempted some industries and missed some important parts of the world. A look at both the changes liberalization has brought, and the experience of the industries and regions where trade has not been liberalized, helps to shed some light on the Subcommittee’s question. 

MR. Hindery: In recent days, the Executive Branch has, finally, begun to wake up to some of the specific trade problems with China and to initiate some long overdue responses. But as we go forward, the Administration, working closely with Congress, must take additional steps to ensure that our trade agreements with all countries are fair and vigorously enforced, that high value-added jobs in the U.S. grow, and that there continue to be substantial investments in worker skills. 

Christopher Wenk, Senior Director, International Policy, U.S. Chamber of Commerce:The facts show that while some are hurt – and should be helped – the overwhelming majority of Americans derive great benefits from international trade and investment…. The opportunities trade presents are clear, but there are challenges as well. In recent years, Congress has engaged in a dialogue about how to ensure that U.S. workers and workers in developing countries can benefit from increased trade and investment flows. The U.S. business community encourages these discussions as well as efforts to provide American workers with the tools they need to raise their productivity. The Chamber welcomes new ideas on ways to improve Trade Adjustment Assistance programs, and hopes that Congress will also consider new programs that will assist American workers in remaining competitive and highly productive.

 

A witness raised important questions about U.S. competitiveness in the globalized economy.

MR. GRESSER: [A]nxiety about American prospects in the new century are justified….We do enter a period of transition and structural change with considerable strengths. America’s open society, world-class university system, high quality of life, strong intellectual property laws and other national assets are powerful advantages in global competition. But our new competitors have great strengths as well, in low costs, financial resources, and wealthy and well-educated diasporas around the world – and the U.S. has weaknesses that are widely recognized but still unsolved. 

One example is the return of structural fiscal deficits, which has joined with high energy costs and inflexible currency rates in China and other developing countries to create a trade and current-account imbalance with little historic precedent. Another are shortcomings in the human-resource and science policies important to our leadership in technology and innovation. These include low graduation rates in science and engineering, restrictions on the ability of innovative companies to recruit the best international talent, and long-term declines in federal commitment to basic research in chemistry, physics, computers and other hard sciences. None of these problems are insoluble, but none are likely to solve themselves. 

Months of “misstatements” about and mismanagement of the U.S. Attorney firings have called into question Attorney General Alberto Gonzales’s ability to lead the Justice Department and have undermined his credibility with Senators of both parties and with the American public. 

SEN. SPECTER: As I see it, you come to this hearing with a heavy burden of proof to do three things: first, to reestablish your credibility; second, to justify the replacement of these United States Attorneys; and third, to demonstrate that you can provide the leadership to the United States Department of Justice which has such a vital role in protecting our national interests and so many lives…. 

You early said that you were not involved in any discussions, and then your subordinates testified to the contrary: that you were at meetings where discussions were undertaken about the replacement of these U.S. Attorneys. You then said that you did not see memoranda, and again your subordinates have testified under oath that you were at meetings where documents, memoranda, were distributed. And then you modified your statement about the discussions to say that you were not involved in deliberations. And again, the testimony of three of your key subordinates –your Chief of Staff, Kyle Sampson, the Acting Associate Attorney General, Bill Mercer, and the director of the Executive Office of U.S. Attorneys, Michael Battle – have said that you were involved in deliberations and have done so with some particularity…. 

So that this is your opportunity, Mr. Attorney General, to tackle that burden of proof – the heavy burden of proof to re-establish your credibility here…. [T]his is as important a hearing as I can recall, short of the confirmation of Supreme Court justices; more important than your confirmation hearing. In a sense, it is a reconfirmation hearing. 

… 

SEN. GRASSLEY: I don’t know if the U.S. Attorneys were fired because they were pursuing or not pursuing investigations or prosecutions based on political motivation, but once the Administration started to make representations to Congress and the American people about how or why the firings came about, those representations had to be accurate and complete. Yet documents produced by your department are inconsistent with public statements and congressional testimony of other officials, and we just don’t have a straight story on what transpired and whether the motivations for what happened were pure…. We shouldn’t be getting conflicting statements from the Attorney General and/or his staff. We shouldn’t be getting conflicting statements at all. The story needs to be consistent, complete, and, of course, it must be the truth. We and the American people expect nothing less from our top law enforcement officials. 

… 

SEN. LEAHY: [P]art of my problem is we’ve had a number of statements about the dismissal of these eight U.S. Attorneys. I just want to know which one is the accurate one. Your January 18 testimony? Your March 7 op-ed in USA Today? Or your March 13 press conference? Or your March 26 interview with Pete Williams on MSNBC? Or your written testimony that was submitted in advance today? Or your live testimony here today? Which one is – which one is the one we should grab hold of and say,“This is the accurate statement. This is the one we can go to the bank with”?

 

Having the right to fire eight U.S. Attorneys without cause and it being rightto fight eight U.S. Attorneys without cause or, worse, for an improper or illegal cause are vastly different things. 

SEN. SPECTER: With respect to the removal of United States Attorneys, there is no doubt that the President can remove U.S. Attorneys for no reason at all…. But there cannot be a removal for a bad reason; that is if, as suggestions have been made, that U.S. Attorney Lam in San Diego was replaced because she was hot on the trail of confederates of former Congressman Duke Cunningham, who is now serving eight years in jail. Or a U.S. Attorney may not be replaced if, as the allegations are made… that U.S. Attorney Iglesias in New Mexico was removed because he would not initiate prosecutions which in his discretion felt were unwarranted. 

… 

SEN. SCHUMER: I hope we won’t hear the Attorney General continually repeat like a mantra, as if it’s some sort of defense against all inquiry, that the President can dismiss a U.S. Attorney for almost any reason. If the President suddenly ordered the firing of every U.S. Attorney with an I.Q. over 120 because he didn’t want smart people in the job, he’s certainly legally permitted to do so. But a Congress that did not challenge such a silly plan would not be doing its job. And an Attorney General who unquestionably – who would unquestioningly execute it shouldn’t keep his job. The issue is not whether the Administration has the legal power to fire U.S. Attorneys. It’s about how that power has been exercised. Was it used for proper, prudent reasons or improper political ones? Was it used wisely or crassly? Was it used with the best of intentions or the worst? 
 

After weeks of preparation, and after assuring Senators that he is a strong leader, Attorney General Gonzales apparently has “no recollection” regarding the “who, what, when, how, and why” of the United States Attorney firings.

The Attorney General has no idea how and by whom each U.S. Attorney was selected to be fired.

SEN. FEINSTEIN: Kyle Sampson, your former Chief of Staff – I’m going to talk about the senior so-called leadership of the department – and the person you said you delegated this task to testified that he didn’t put people on the list. He said, quote, “It wasn’t like that. It wasn’t that I wanted names on the list. I was the aggregator.” That’s page 184 of his transcript. Mike Battle, director of the Executive Office of the United States Attorneys, said, “I had no input. Nobody asked me for my input.” That’s the interview, page 82. Bill Mercer, Acting Associate Attorney General and number three at DOJ [Department of Justice], said, “I didn’t understand there was a list. I didn’t keep a list. It was just that any time I had a particular concern, I made that known to different people.” And you testified this morning that you didn’t know the reasons U.S. Attorneys were put on the list until after you decided to fire them…. 

ATTORNEY GENERAL ALBERTO GONZALES: Let me respond to a couple of things that you said. First of all, I haven’t read the transcript for Mr. Battle.

SEN. FEINSTEIN: Well, it’s pretty accurate. And I gave you the pages. So your staff can check it out.

ATTY. GEN. GONZALES: Thank you. I don’t know that I testified that I didn’t know the reasons when I made the decision. I recall knowing reasons as to five, but I don’t recall remembering the reason as to two…

SEN. FEINSTEIN: I would like to know who selected the individuals that were on that list. 

ATTY. GEN. GONZALES: Senator...

 SEN. FEINSTEIN: Somebody had to. A human being had to.

ATTY. GEN. GONZALES: Senator, I’m not going to characterize Mr. Sampson’s testimony. Let me tell you what I understood, and what I expected, was that Mr. Sampson would speak with the senior leadership in the department, people that knew about the performance of United States Attorneys, and that he would come to me with a recommendation, a consensus recommendation, including his views. That is what I understood. And that’s what I understood was coming to me. Because Mr. Sampson was...

SEN. FEINSTEIN: But Mr. Sampson testified he didn’t; he was just the aggregator. 

ATTY. GEN. GONZALES: No, and I’m not saying – that – if that’s what he testified, I’m sure that’s his perception of his role. What I’m testifying today is, what I viewed Mr. Sampson’s role was, was to get information but to present to me a recommendation that also included his own...

SEN. FEINSTEIN: And seven out of the eight were involved in public prosecutions, public corruption prosecutions. And yet nobody knows who selected them for this unusual thing, to this very moment….

[I]f I were you, I would want to know who selected this individual. And what was their thinking? Why did they put that individual on this list? Everybody knew from the plan that it was going to be heavy going, that there were going to be problems. It would just seem to me that you would want to know these things.

 

The Attorney General still doesn’t remember if he attended certain meetings or read certain strategy memos.

SEN. SESSIONS: I think the thing that caused a lot of us concern was, you had a press conference at the Department of Justice. It was a formal matter to address these issues. And in that press conference you stated, “I was not involved in seeing any memos; was not involved in any discussions about what was going on.” And in a later press conference you said, “I don’t recall being involved in deliberations involving the question of whether or not a United States Attorney should or should not be asked to resign. I didn’t focus on specific concerns about individuals.” Now, Mr. Sampson then had testified that there was a meeting, a final meeting, I guess, when this was discussed in some detail and that you were present. Do you recall that meeting and where it took place?

ATTY. GEN. GONZALES: Senator, I have searched my memory. I have no recollection of the meeting. My schedule shows a meeting for 9:00 on November 27, but I have no recollection of that meeting. My understanding is, as I reviewed Mr. Sampson’s public testimony, was that he had hazy recollections about it as well. But, in any event, I have no recollection of that meeting.

SEN. SESSIONS: Well, do you recall who Mr. Sampson said was there present along with you?

ATTY. GEN. GONZALES: Senator, I recall looking at the documentation about – on the calendar – who would be there.

ATTY. GEN. GONZALES: It would be the Deputy Attorney General. And I have no memory...

SEN. SESSIONS: McNulty?

ATTY. GEN. GONZALES: Yes. I have no memory of this, but I think the calendar shows that the invitees were the Deputy Attorney General; the principal Associate Deputy Attorney General, Mr. Will Moschella; Kyle Sampson, the Chief of Staff; Mike Battle, the Executive Director of the Executive Office of United States Attorneys; Monica Goodling, senior counselor in the Attorney General’s Office; and myself.

SEN. SESSIONS: And this was not that long ago. This was in November of last year?

ATTY. GEN. GONZALES: According to my calendar, November 27.

SEN. SESSIONS: And Mr. Sampson seemed to indicate that he really – he understood it was a momentous decision, that there would probably be political backlash. He even performed some outline about how that should be managed. And you don’t recall any of that?

ATTY. GEN. GONZALES: Senator, I can only testify as to what I recall. Believe me, I’ve searched my mind about this meeting. I’d have no reason not to talk about this meeting. At some point, of course, Mr. Sampson presented to me the recommendations. And at some point I understood what the implementation plan was. But I don’t recall the contents of this meeting, Senator. I’m not suggesting that the meeting did not happen.

SEN. SESSIONS: I know. But I’m worried about it. And Mr. Battle, who was there, testified that you were there. And he thought you were there most of the time. Would you dispute Mr. Battle?

ATTY. GEN. GONZALES: Well, Senator, putting aside the issue, of course, sometimes people’s recollections are different, I have no reason to doubt Mr. Battle’s testimony.

SEN. SESSIONS: Well, I guess I’m concerned about your recollection, really, because it’s not that long ago. It was an important issue. And that’s troubling to me, I’ve got to tell you.
 

Attorney General Gonzales doesn’t remember if Kyle Sampson ever discussed firing Patrick Fitzgerald with him.

SEN. DURBIN: Are you aware of the fact that Kyle Sampson testified under oath that he recommended to Harriet Miers that Patrick Fitzgerald also be removed as a U.S. Attorney as part of this purge?

ATTY. GEN. GONZALES: Senator, I’m aware of what he said. I remember reading the transcript. I’m not sure if it was a recommendation per se. I’m aware of what he said in his testimony, yes, sir.

SEN. DURBIN: Did he speak to you before he made that recommendation and tell you that he was going to ask for Patrick Fitzgerald to be removed in the middle of this investigation of the White House?

ATTY. GEN. GONZALES: I don’t recall him speaking to me about that, sir.

SEN. DURBIN: It didn’t happen, it did happen, or you don’t recall?

ATTY. GEN. GONZALES: Senator, again, you’re talking about events that happened over two years, thousands of conversations. I don’t think that conversation occurred.

SEN. DURBIN: Now, Mr. Gonzales, this is the highest-profile U.S. Attorney...

ATTY. GEN. GONZALES: Yes.

SEN. DURBIN: …in America. He’s investigating the White House, including people that you have worked with for years. And now your Chief of Staff is going to make a recommendation to the President’s White House Counsel that he be removed as U.S. Attorney, and you can’t remember that conversation?

ATTY. GEN. GONZALES: Senator, I don’t think that conversation happened. I don’t think he ever made that recommendation to me or raised it. And I wouldn’t characterize it as a recommendation. I would refer you back to his testimony. But whatever it was, I don’t think that – I don’t think he raised it with me.
 

Mr. Gonzales irresponsibly abdicated his responsibility to make sound judgments on behalf of the Justice Department to subordinates.

At the time of the firings, the Attorney General did not know the basis on which his deputies made their recommendations. He fired the U.S. Attorneys on an assumption. 

ATTY. GEN. GONZALES: Obviously, when this began, I did not – I was not the person in the department who had the most information about the performance and qualification of U.S. Attorneys. There were many other people, particularly the Deputy Attorney General. And I charged Mr. Sampson, my Chief of Staff – then my Deputy Chief of Staff – to engage in a review…. And what I understood and what I expected is he would talk to people like the Deputy Attorney General to ascertain how U.S. Attorneys were performing. And, of course, when the recommendation was presented to me, I understood it recommended the consensus view of the senior leadership of the department. 

SEN. KENNEDY: Well, I’m going to ask you, how can you know that none of them were removed for improper reasons? How can you give us those assurances, since you had a limited involvement, the process wasn’t vigorous, and you left it, basically, to somebody else?

ATTY. GEN. GONZALES: Well, Senator, since then, of course, I have gone back and looked at the documents made available to Congress. I also had a conversation with the Deputy...

SEN. KENNEDY: This is since then?

ATTY. GEN. GONZALES: Yes, sir.

SEN. KENNEDY: But when you made the judgment and decision – when you made the judgment and decision, you didn’t know, did you?

ATTY. GEN. GONZALES: On December 7 – I know the basis on which I made the decision, no reasons that would be characterized as improper. I think I was justified...

SEN. KENNEDY: But you didn’t know whether those decisions were proper or improper, since you’ve said you had limited involvement, the progress (sic) was not vigorous, and you basically gave the assignment to Mr. Sampson....
 

As it turns out, the Attorney General and his subordinates are not on the same page about why each U.S. Attorney was fired. 

SEN. LEAHY: Justice Department officials, including your principal Associate Deputy, Mr. Moschella, said that one of the reasons Mr. Iglesias was replaced because, in their words, he was an absentee landlord. But I understand he continues his service as an officer in the Naval Reserve, and that fulfilling his Naval Reserve responsibilities take him out of the office approximately 40 days a year. You are aware, I assume, that the Uniformed Services Employment and Reemployment Rights Act and other laws prohibit employers from denying an individual employment benefits because of their military service.

ALBERTO GONZALES, UNITED STATES ATTORNEY GENERAL: I am aware of that. I support it strongly. We enforce that act.

SEN. LEAHY: When, how and by whom did this absentee landlord rationale for replacing Mr. Iglesias arise?

ATTY. GEN. GONZALES: Senator, that rationale was not in my mind, as I recall, when I accepted the recommendation. We have, of course, several other United States Attorneys who perform military service. I applaud it and I support it. It would not be a reason that I would ask a United States Attorney to leave.

 

The Attorney General failed to independently review the performance records of each U.S. Attorneys before he fired them.

 

SEN. KENNEDY: Let me ask about the process, if I could, please. The Department of Justice has a process. It’s called the EARS process. It’s been in effectively for the evaluation of U.S. Attorneys. It’s been there for years and years. Am I correct? That’s the Department of Justice periodic comprehensive evaluation, U.S. Attorneys. It’s called E-A-R-S reports, for evaluation and report – staff reports.

ATTY. GEN. GONZALES: Sir, that evaluation is an evaluation that occurs of United States Attorney offices. It occurs every three or five years. It is a peer review, Senator. It is a review conducted by Assistant United States Attorneys.

SEN. KENNEDY: I’m asking you, did you have an opportunity – since it does review the performance of U.S. Attorneys, did you have an opportunity to review that document which is the standard document for the Justice Department in the evaluation of U.S. Attorneys?

ATTY. GEN. GONZALES: Senator, I did not review the document but, however, it would be just one of many factors, I think...

SEN. KENNEDY: All right.

ATTY. GEN. GONZALES: ...should be appropriately considered in evaluating the performance of a United States Attorney….

SEN. KENNEDY: Did you speak personally with any of the – have you spoken with any of the replaced U.S. Attorneys about their performance? Have you, at this time, talked to any of the U.S. Attorneys that were replaced?

ATTY. GEN. GONZALES: Who were replaced?

SEN. KENNEDY: Yes.

ATTY. GEN. GONZALES: I have spoken with Mr. Bogden.

SEN. KENNEDY: He’s the only one?

ATTY. GEN. GONZALES: He is the only one, yes.

SEN. KENNEDY: Did you speak with any of the Assistant U.S. Attorneys in the effected offices of the U.S. Attorneys? Did you talk to any of the Assistant U.S. Attorneys, those that are serving with the U.S. Attorneys that have been replaced? Did you speak with any of them?

ATTY. GEN. GONZALES: I certainly did it with respect to San Diego. There may be Assistant United States Attorneys who may be serving as the Acting U.S. Attorney that I may have met with in connection with my visit to visit with the United States Attorneys sometime in the weeks of March 12 and thereafter.

SEN. KENNEDY: So you may have met with someone that was in one of the different offices?

ATTY. GEN. GONZALES: I believe that I probably met with everyone who was serving in the affected offices, who was serving as – in the Acting U.S. Attorney capacity. And certainly with respect to San Diego, I did visit the San Diego office and I spoke to the office.

SEN. KENNEDY: This was before the firings?

ATTY. GEN. GONZALES: Oh no, sir. This is well after the firings.

 

Whether the Attorney General fired the U.S. Attorneys for improper political reasons himself or was so removed from the process that he allowed his staff the opportunity to do so, his ability to lead the Department of Justice is in doubt.

 

SEN. SPECTER: In your effort to remove yourself or distance yourself as you have appeared to have done, denying discussions, denying deliberations, denying memoranda, you face, really, the horns of a dilemma. And that is, if you [sic] were removed and actions were taken which were inappropriate that you were not really part of, although you have articulated your overall responsibility as CEO, but not responsible on the judgments, from the other horn of the dilemma of how you can provide the leadership if you are detached on such really important matters. It’s a very, very tough dilemma, I think, that you face.

 

…

 

SEN. SCHUMER: Now, Kyle Sampson wrote that – wrote to Harriet Miers last September – that’s what he wrote – he wrote that they wanted to do this plan of getting around the Senate and appointing interim U.S. Attorneys. And he also told Congress that the White House never rejected the idea of evading the Senate confirmation in the Eastern District of Arkansas. According to Kyle Sampson, you became aware of this idea or plan in early December of 2006. He told you about it; you did not reject it. Then on December 19, Kyle Sampson is promoting this astonishingly perverse plan. He’s going forward with it…. He lays out a specific plan for running out the clock: The Department of Justice should ask Arkansas Senators to meet Tim Griffin, give him a chance; after that, the Administration to pledge to desire a Senate-confirmed U.S. Attorney and so forth. The plan was to use these tactics of delay so Griffin could stay in, without Senate confirmation, until the end of the President’s term.

 

But now, four days before Kyle Sampson sends that plan, you personally talked with Senator Pryor. Kyle Sampson testifies that he was in the room – you talked to him twice, he was in the room on one of those occasions – about Tim Griffin…. And you said to Senator Pryor that you wanted to go through a Senate confirmation. This is in December.

 

ATTY. GEN. GONZALES: Yes.

SEN. SCHUMER: Well, what would you think if you’re in Senator Pryor’s shoes…?On December 19, a memo was sent to implement it. Yet, on December 15, you’re on the phone with Senator Pryor saying oh, no, no, you’re going to get confirmation. So, which is it? Again, did Kyle Sampson put out this memo completely on his own?

ATTY. GEN. GONZALES: Senator...

SEN. SCHUMER: And if he did – I mean, you can’t have it both ways. If your Chief of Staff is implementing a major plan that contradicts what you just told the U.S. Senator from that state, in my view, you shouldn’t be Attorney General. And if, on the other hand, what you said to Senator Pryor contradicts the plan, you also shouldn’t be Attorney General. Can you explain what happened here?

 

…
 

SEN. GRAHAM: From your point of view, how do you reconcile the conversation with Senator Pryor…?

ATTY. GEN. GONZALES: Senator, it’s difficult for me to reconcile the conversation. All I know is what I communicated to Senator Pryor, in good faith.

 

The Attorney General’s continued assertion that the U.S. Attorneys were fired for performance-related reasons isn’t supported by facts or common sense.

 

SEN. FEINSTEIN: When Mr. McNulty came and briefed us in the Judiciary room on the second floor, he mentioned the reasons were performance. And then we began to ask to see the EARS reports that Senator Kennedy referred to this morning. And I believe we’ve all taken a look at them. And we see stellar professional performance reports. We pick up USA Today and we see a ranking that they did placed seven of them in the top 10 U.S. Attorneys in the United States.

 

…

 

SEN. GRAHAM: I guess what I’m trying to wonder, is this really performance-based or did these people just run afoul of personality conflicts in the office and we were trying to make up reasons to fire them because we wanted to get rid of them?

ATTY. GEN. GONZALES: Sir, I think if you look at the documentation, I think you can see that there is documentation supporting these decisions.

SEN. GRAHAM: Mr. Attorney General, most of this is a stretch. I think it’s clear to me that some of these people just had personality conflicts with people in your office or at the White House and, you know, we made up reasons to fire them. Some of it sounds good. Some of it doesn’t.

 

In the face of all evidence to the contrary, the Attorney General still believes, and reiterated, that he was right to fire all eight U.S. Attorneys.

 

SEN. SESSIONS: It does appear that your statements given at the Department of Justice at a press conference incorrectly minimized your involvement in this matter. I believe that you should have been more involved in the entire process. I believe, frankly, you should have said no. I do not believe this was a necessary process, particularly the way it was conducted. I do remember your Chief of Staff toward the end of the hearing said this: “In hindsight, I wish that the department had not gone down this road and I regret my role in it.”

 

…

 

ATTY. GEN. GONZALES: What I have concluded is that although the process was nowhere near as rigorous or structured as it should have been, and while reasonable people might decide things differently, my decision to ask for the resignations of these U.S. Attorneys is justified and should stand.

 

…

 

SEN. KENNEDY: In your opening statement you indicated, as Senator Specter mentioned, that you had a limited involvement and that the process was not vigorous. The question is –and then you say, “My decision is justified and should stand.” Well, since you apparently knew very little about the performance of the replaced U.S. Attorneys, how can you testify that the judgment ought to stand? What’s the basis for that?

 

ATTY. GEN. GONZALES: I think that’s a fair question, Senator.

 

…

 

SEN. CARDIN: But I think what concerns me the most is after reviewing all the facts involved in dismissal of the U.S. Attorneys, having a chance now to really go into detail and understand all the problems that have developed, you stand by the decision to remove these U.S. Attorneys. You’ve acknowledged, and rightly so, that dismissing U.S. Attorneys would be wrong if it interferes with or influence a particular prosecution for partisan political gains. Your former Chief of Staff, Mr. Sampson, stated basically the same thing when he said it would be wrong if it was an effort to interfere with or influence a prosecution of a particular case for political or partisan advantage. Yet Mr. Sampson acknowledged that a factor that was used in the consideration would be losing the trust and confidence of important local constituencies in law enforcement or government. Mr. Sampson confirmed a question that I asked him, that local political concerns from partisans may have been influential in the firing. You’ve said a couple times that you had confidence in the process that had been set up. How did you know that wrong political considerations weren’t being used in the advice that was being given to you on the firing of these U.S. Attorneys?

 

ATTY. GEN. GONZALES: Senator, I think that’s a fair question. I certainly know the reasons on which I made my decision. And I, quite frankly, relied upon people that I trusted to make a recommendation to me…. I’m not aware of anything in the documentation or anything with respect to testimony that would support the allegation that it was anything that was improper that happened here….

SEN. CARDIN: I know, but I asked Mr. Sampson at a hearing in this committee, “What safeguards did you have in the process to make sure that that wasn’t being done?” that is, improper political considerations. Mr. Sampson replied, “I don’t feel like I had any safeguards in the process.”

 

ATTY. GEN. GONZALES: Senator, I would never ask someone to leave a position as United States Attorney for an improper reason….

 

SEN. CARDIN: But the person who is giving you the advice, who puts it all together, says there’s no safeguards in the process to filter out improper local political pressure that may have been exerted to influence who’s on that list. And yet you’ve said in your testimony, “I also have no basis that anyone involved in the process sought the removal of U.S. Attorneys for improper reasons.” How do you know that?

 

At the end of the day, the Attorney General still didn’t understand what all the fuss was about – the independence of U.S. Attorneys and the credibility of the American justice system.

 

SEN. WHITEHOUSE: [O]ver and over again you’ve used the word “improper” as sort of your target word as to where the boundary is, to where you should and shouldn’t go. But your definition of improper is almost exactly the same as Kyle Sampson’s. He came in here and testified, he said, without consulting with anybody, and said that the improper reasons include an effort, and I quote, “to interfere with or influence the investigation or prosecution of a particular case for political or partisan advantage.” And your testimony is, “...to interfere with or influence a particular prosecution for partisan political gain.” You’ve loaded up those words. You’ve used them repeatedly. And I think that the definition of where impropriety lies, clearly that would be improper. That would be grotesquely improper.

 

But I think you’ve set the bar way low for yourself, if that’s your standard of where impropriety is, because – and I’d like to hear you comment on this – I think any effort to add any partisan or political dimension into a U.S. Attorney’s conduct of his office, irrespective of whether it’s intended to affect a particular case or not, is something that we need to react to firmly, strongly, resolutely, and without any tolerance for it. And yet you’ve set the bar so that it’s not impropriety until it affects a particular case. Why did you do that?

 

ATTY. GEN. GONZALES: Senator, because the accusations that have been made primarily, certainly as an initial matter, was that there was something improper; we were trying to interfere with particular cases. And that’s why certainly the focus in my mind was to focus on: OK, well, what is the legal standard? And I think it’s important for us to understand, as an initial matter: What is the legal standard; what would be inappropriate or improper?

SEN. WHITEHOUSE: But something a lot less than that would be improper would it not? I mean, when Admiral Byng got hanged there was the famous comment: Every once in a while you got to hang an admiral just to encourage all the others. You know, if you hang a U.S. Attorney every once in a while just to discourage all the others, even if your intention is not to affect a particular case, you have to agree that would be highly improper.

 

ATTY. GEN. GONZALES: Senator – well, it may be improper as a matter of management. Some would have to wonder: Is that really an appropriate way to manage the department?…

SEN. WHITEHOUSE: Well, otherwise it would be obstruction of justice, correct?

ATTY. GEN. GONZALES: Now, clearly, as a management issue, there is value added to a person who has served as a United States Attorney in terms of experience, expertise. And so, those things are very important.

SEN. WHITEHOUSE: It’s more than just a management issue. It’s an issue about the structure through which justice is administered in this country. And when it’s broken and when it’s damaged and when the Attorney General of the United States says the only place where impropriety exists is when political and partisan influence has risen to the point that it’s intended to affect a particular case, but otherwise it’s fine, I have a real problem. And I think everybody in America should have a real problem with that. 

… 

SEN. KYL: And I think what Senator Whitehouse just did was to set out two very important points well. I’m not sure that the last point was adequately answered. In addition to being wrong if you affected a particular corruption case, would it not also be an improper firing if it was for the purpose of generally affecting or influencing political corruption cases? 

ATTY. GEN. GONZALES: That would trouble me, Senator, because...

SEN. KYL: Wouldn’t it more than trouble you?

ATTY. GEN. GONZALES: Yes, I think that would be wrong.

SEN. KYL: OK, thank you.
 

The Bush Administration purposely lowered the long-standing wall of separation between the White House and the Department of Justice.
 

SEN. WHITEHOUSE: Back to structure again, Attorney General Gonzales. I assume that we can agree with the proposition that in the enforcement of the laws the Department of Justice should be independent. 

ATTY. GEN. GONZALES: Yes, sir. 

SEN. WHITEHOUSE: Can we also agree that one of the institutions of government that the Department of Justice needs to be independent from in the enforcement of the law is the White House?

ATTY. GEN. GONZALES: No question about it, Senator….

SEN. WHITEHOUSE: And, indeed, over long history there have been concerns about influence from the White House to the Department of Justice, and people, indeed members of this committee, have expressed concern about the White House-Justice connection over many years. Is that not also correct?

ATTY. GEN. GONZALES: I think that’s a legitimate concern. I think that’s very important. I think it’s one of the reasons, for example, that Attorney General Ashcroft recused himself in connection with the Plame investigation.

SEN. WHITEHOUSE: The documents that I have given you are two letters. One is from Attorney General Reno to Lloyd Cutler, the Special Counsel of the President, dated September 29, 1994. It lays out the policy for contacts between the White House and the Department of Justice in the Clinton Administration…. And what it does – the language is behind me – it says that, with regard to initial contacts involving criminal or civil matters, they should only involve the White House Counsel or Deputy Counsel, or the President or Vice President, and the Attorney General or Deputy or Associate Attorney General, period.

 

The more recent memorandum, the other document that you have in front of you is from April 15, 2002. It represents the policy of the Bush Administration regarding White House-Department of Justice contacts. And there, in the highlighted part on the front, it says that these contacts regarding pending criminal investigations and criminal cases should take place only between the office of the Deputy Attorney General and the office of the Counsel to the President. And then, if you flip back to the very last page, there’s sort of an exemption paragraph that exempts further the President, the Vice President, the Counsel to the President, national security and Homeland Security officials, staff members of the office of the Attorney General as so designated, and staff of the office of the President, the office of the Vice President, the office of the Counsel to the President, the National Security Council and the office of Homeland Security. 

So I asked my staff to take a look at what the difference was between those two in effect, and if you could. This is in effect during the previous Administration. This is the Clinton protocol. And there were four people – the President, the Vice President, the Deputy White House Counsel and the White House Counsel – who could participate in these kind of discussions about cases and matters and initiate them with the Department of Justice. And on the Department of Justice side, the only people who were qualified to engage in those discussions were the Attorney General, the Deputy Attorney General and the Associate Attorney General. So they had narrowed very carefully the field of people who could have these discussions, which I think is a very important safeguard – to narrow that porthole, to police it. It’s almost like there’s an airlock there for those communications. 

Now, here’s the result that I asked my staff to put together, if you count all the people who are eligible under the new program. That, to me – your staff can check on exactly how accurately we’ve done it – but there are… 417 folks in the White House who are eligible to have these contacts and.... About 30-some in the Department of Justice…. 

What possible interest in the administration of justice is there to kick the porthole so wide open that this many people now can engage directly about criminal cases and matters, compared to before? 

ATTY. GEN. GONZALES: Senator, I think you’ve raised a good point here, one that I was concerned about at the Counsel’s office and I remain concerned as Attorney General, in terms of making sure that communications from the White House and the Department of Justice remain in the appropriate channels. I do recall being concerned about that as White House Counsel.

SEN. WHITEHOUSE: Quite a pronounced change, isn’t it?

ATTY. GEN. GONZALES: Well, it is a pronounced change…. Senator, let me say this. I am not aware that there are initial contacts between the White House and the Department of Justice as an initial matter with respect to specific criminal cases. Or if there are – let me put it this way: I don’t think they should be. I think it’s very, very important – I agree with you. It is important to try to limit the communications about specific criminal cases between the Counsel’s office and the Department of Justice.

SEN. WHITEHOUSE: But when I see the rules opened this much, it makes me wonder to what extent this safeguard is considered significant in this Administration.

 

Republican and Democratic Senators agree that by the Attorney General’s own standards, he should be fired for his “poor management” and “questionable judgment” with respect to the U.S. Attorney firings and investigation. 

ATTY. GEN. GONZALES: There is nothing improper in making a change for poor management, policy differences or questionable judgment, or simply to have another qualified individual serve. 

… 

SEN. COBURN: I think the damage to the Justice Department… has been significant. Several people’s reputations have been harmed, including Bud Cummins’. Communication has been terrible. Its management has been terrible. You were asked by Senator Cardin if you would make this decision again and you said yes, because you thought it was the right decision…. 

Why should you not be judged by the same standards at which you judged these dismissed U.S. Attorneys? 

ATTY. GEN. GONZALES: Senator, again, I’ve identified my mistakes…. We all make mistakes. And I’m committed to addressing those mistakes and working with you to make our country even stronger. 

SEN. COBURN: Well, I believe there are [sic] consequences to a mistake. I was quoted in the paper as saying I think this has been handled in a very incompetent manner. And I believe most people – I don’t care which side of the aisle they are – would agree with that. 

U.S. Attorneys’reputations that were involved have been harmed. The confidence in U.S. Attorneys throughout this country has been damaged. The reputation of the Attorney General’s office has been tarnished and brought into question…. Mr. Attorney General, it’s my considered opinion that the exact same standards should be applied to you in how this was handled. 

And it was handled incompetently. The communication was atrocious. It was inconsistent. It’s generous to say that there were misstatements. That’s a generous statement. And I believe you ought to suffer the consequences that these others have suffered. 

And I believe that the best way to put this behind us is your resignation. 

Senator Dorgan described the key findings from oversight hearings on Halliburton’s performance under the LOGCAP contract, highlighting a record of outrageous abuses.

SEN. DORGAN: Under the LOGCAP contract, Halliburton allowed our troops in Iraq to shower, bathe, and sometimes brush their teeth with water that was tested positive for e. coli and coliform bacteria, and was more contaminated than raw water from the highly polluted Euphrates River…. 

Halliburton served the troops food that had spoiled or passed its expiration date….Halliburton charged taxpayers for services it never provided and tens of thousands of meals that it never served…. Halliburton sent unarmed truck drivers into a known combat zone without warning them of the danger, resulting in the deaths of six truck drivers and two soldiers.

DPC