lOVERNMENT SHUTDOWN WHAT'S ESSENTIAL? I: Y 4. G 74/7; SH 9 Governnent Sbutdoun I: Hhat's Essei. .. HEARINGS BEFORE THE SUBCOMMITTEE OX CML SER\n:CE OF THE COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT HOUSE OF REPRESENTATIVES ONE HUNDRED FOURTH CONGRESS FIRST SESSION DECEMBER 6, AND 14, 1995 Printed for the use of the Committee on Government Reform and Oversight GOVERNMENT SHUTDOWN WHAT'S ESSENTIAL? I: HEARINGS BEFORE THE SUBCOMMITTEE ON CIVIL SERVICE OF THE COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT HOUSE OP REPRESENTATIVES ONE HUNDRED FOURTH CONGRESS FIRST SESSION DECEMBER 6, AND 14, 1995 Printed for the use of the Committee on Government Reform and Oversight U.S. GOVERNMENT PRINTING OFFICE 40-190CC WASHINGTON 1997 : ForsalebytheU.S.GovernmentPrintingOffice SuperintendentofDocuments,CongressionalSalesOffice,Washington,DC 2O402 ISBN 0-16-055139-0 COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT WILLIAM F. CLINGER, Jr., Pennsylvania, Chairman BENJAMIN A. OILMAN, New York CARDISS COLLINS, IlUnois DAN BURTON, Indiana HENRY A. WAXMAN, CaUfomia J. DENNIS HASTERT, Illinois TOM LANTOS, California CONSTANCE A. MORELLA, Maryland ROBERT E. WISE, Jr., West Virginia CHRISTOPHER SHAYS, Connecticut MAJOR R. OWENS, New York STEVEN SCHIFF, New Mexico EDOLPHUS TOWNS, New York ILEANA ROS-LEHTINEN, Florida JOHN M. SPRATT, Jr., South CaroUna WILLIAM H. ZELIFF, Jr., New Hampshire LOUISE MCINTOSH SLAUGHTER, New JOHN M. McHUGH, New York York STEPHEN HORN, CaUfomia PAUL E. KANJORSKI, Pennsylvania JOHN L. MICA, Florida GARY A. CONDIT, CaUfomia PETER BLUTE, Massachusetts COLLIN C. PETERSON, Minnesota THOMAS M. DAVIS, Virginia KAREN L. THURMAN, Florida DAVID M. Mcintosh, Indiana CAROLYN B. MALONEY, New York JON D. FOX, Pennsylvania THOMAS M. BARRETT, Wisconsin RANDY TATE, Washington GENE TAYLOR, Mississippi DICK CHRYSLER, Michigan BARBARA-ROSE COLLINS, Michigan GIL GUTKNECHT, Minnesota ELEANOR HOLMES NORTON, District of MARK E. SOUDER. Indiana Columbia WILLIAM J. MARTINI, New Jersey JAMES P. MORAN, Virginia JOE SCARBOROUGH, Florida GENE GREEN, Texas JOHN B. SHADEGG, Arizona CARRIE P. MEEK, Florida MICHAEL PATRICK FLANAGAN, IlUnois CHAKA FATTAH, Pennsylvania CHARLES F. BASS, New Hampshire BILL BREWSTER, Oklahoma STEVEN C. LaTOURETTE, Ohio TIM HOLDEN, Pennsylvania MARSHALL "MARK" SANFORD, South Carolina BERNARD SANDERS, Vermont ROBERT L. EHRLICH, Jr., Maryland (Independent) James L. Clarke, StaffDirector Kevin Sabo, General Counsel Judith McCoy, ChiefClerk Bud Myers, Minority StaffDirector Subcommittee on Civil Service JOHN L. MICA, Florida, Chairman CHARLES F. BASS, New Hampshire JAMES P. MORAN, Virginia BENJAMIN A. OILMAN, New York BERNARD SANDERS, Vermont (Ind.) DAN BURTON, Indiana TIM HOLDEN, Pennsylvania CONSTANCE A. MORELLA, Maryland Ex Officio WILLIAM F. CLINGER. Jr., Pennsylvania CARDISS COLLINS, lUinois George Nesterczuk, StaffDirector Ned Lynch, Professional StaffMember Caroline Fiel, Clerk Cedric Hendricks, Minority Professional Staff (II) CONTENTS Hearing held on: December6, 1995 1 December 14, 1995 491 Statement of: Bachus, Hon. Spencer, a Representative in Congress from the State of Alabama; Hon. Peter Hoekstra, a Representative in Congress from the State ofMichigan; Hon. Ken Calvert, a Representative in Congress from the State ofCalifornia; and Hon. J.D. Hayworth, a Representative in Congress from the State ofArizona 509 Broadnax, Walter, Deputy Secretary, Department of Health and Human Services; Dwight Robinson, acting Deputy Secretary, Department of Housing and Urban Development; Thomas P. Glynn, Deputy Secretary, Department of Labor; George Munoz, Assistant Secretary for Manage- ment and ChiefFinancial Officer, Department ofthe Treasury; Eugene A. Brickhouse, Assistant Secretary for Human Resources and Adminis- tration, Department ofVeterans Affairs; and Shirley Chater, Commis- sioner, Social SecurityAdministration 22 Hoyer, Hon. Steny, a Representative in Congress from the State ofMary- land; Hon. George Gekas, a Representative in Congress from the State of Pennsylvania; Hon. Glen Browder, a Representative in Congress from the State ofAlabama; Hon. Joe Barton, a Representative in Con- gress from the State ofTexas; Hon. Karen McCarthy, a Representative in Congress from the State ofMissouri; and Hon. Sonny Bono, a Rep- resentative in Congress from the State ofCalifornia 580 Koskinen, John A., Deputy Director for Management, Office of Manage- ment and Budget; Christopher H. Schroeder, Deputy Assistant Attor- ney General, Office of Legal Policy, Department ofJustice; and Allan D. Heuerman, Associate Director for Human Resources, Office ofPer- sonnel Management 219 Letters, statements, etc., submitted forthe record by: Bass, Hon. Charles F., a Representative in Congress from the State ofNew Hampshire, prepared statement of 15 Bachus, Hon. Spencer, a Representative in Congress from the State of Alabama, prepared statement of 512 Barton, Hon. Joe, a Representative in Congreess from the State ofTexas, prepared statementof 596 Boehner, Hon. John A., a Representative in Congress from the State ofOhio, prepared statement of 505 Bono, Hon. Sonny, a Representative in Congress from the State ofCali- fornia, prepared statement of 605 Brickhouse, Eugene A., Assistant Secretary for Human Resources and Administration, Department ofVeterans Affairs: Information concerninglawn care workers 210 Prepared statementof 68 Broadnax, Walter, Deputy Secretary, Department ofHealth and Human Services, prepared statement of 25 Browder, Hon. Glen, a Representative in Congress from the State of Alabama, prepared statement of 592 Calvert, Hon. Ken, a Representative in Congress from the State ofCali- fornia, prepared statement of 522 Chater, Shirley, Commissioner, Social Security Administration, prepared statement of 186 (III) rv Page — Letters, statements, etc., submitted forthe record by Continued dinger, Hon. William F., Jr., a Representative in Congress from the State of Pennsylvania, letter to Mr. Panetta, regarding management functions of0MB, dated June 21, 1994 11 Collins, Hon. Cardiss, a Representative in Congress from the State of Illinois, prepared statementof 20 Ensign, Hon. John, a Representative in Congress from the State of Ne- vada, prepared statementof 508 Gekas, Hon. George, a Representative in Congress from the State of Pennsylvania, prepared statementof 588 Glynn, Thomas P., Deputy Secretary, Department of Labor, prepared statement of 36 Hayworth, Hon. J.D., a Representative in Congress from the State of Arizona, prepared statement of 556 Hoekstra, Hon. Peter, a Representative in Congress from the State of Michigan: Letters concerning Department of Labor's activities during recent lapse in funding 567 Prepared statement of 551 Horn, Hon. Stephen, a Representative in Congress from the State of California: Information concerningexcepted and furloughed employees 209 Prepared statementof 17 Hoyer, Hon. Steny, a Representative in Congress from the State ofMary- land, prepared statementof 583 Heuerman, Allan D., Associate Director for Human Resources, Office ofPersonnel Management 244 Koskinen, John A., Deputy Director for Management, Office of Manage- ment and Budget, prepared statementof 225 Lazio, Hon. Rick A., a Representative in Congress from the State of NewYork, prepared statementof 500 McCarthy, Hon. Karen, a Representative in Congress from the State ofMissouri, prepared statementof 601 Mica, Hon. John L., a Representative in Congress from the State of Florida: Information concerningovertime 210 Open letterto Federal employees 493 Prepared statementof 495 Moran, Hon. James P., a Representative in Congress from the State ofVirginia, prepared statement of 6 Morella, Hon. Constance A., a Representative in Congress from the State ofMaryland, prepared statementof 560 Munoz, George, Assistant Secretary for Management and ChiefFinancial Officer, Department oftheTreasury, prepared statementof 47 Schroeder, Christopher H., Deputy Assistant Attorney General, Office ofLegal Policy, DepartmentofJustice, prepared statementof 238 Thompson, Hon. Bennie G., a Representative in Congress from the State ofMississippi, prepared statementof 502 GOVERNMENT SHUTDOWN WHAT'S I: ESSENTIAL? WEDNESDAY, DECEMBER 6, 1995 House of Representatives, Subcommittee on Civil Service, Committee on Government Reform and Oversight, Washington, DC. The subcommittee met, pursuant to notice, at 9:10 a.m., in room 2154, Rayburn House Office Building, Hon. John L. Mica (chair- man ofthe subcommittee) presiding. Present: Representatives Mica, Morella, Bass, and Moran. Ex officio present: Representative CUnger. Also present: Representative Horn. Staff present: George Nesterczuk, staff director; Garry Ewing, counsel; Ned Lynch, professional staffmember; Caroline Fiel, clerk; Cedric Hendricks, minority professional staff; and Elisabeth Camp- bell, minority staff. Mr. Mica. Good morning. I would like to call this meeting ofthe House Subcommittee on Civil Service to order. The subject of today's hearing is government shutdown and what is essential? I will begin this hearing by welcoming our witnesses, guests and fellow colleagues. I have an opening statement, then we will hear from some ofthe other Members. Today the subcommittee will be reviewing the government shut- down, both as it affected our Federal work force recently and what might happen in the event of a future government lapse in appro- priations. Any review of the government shutdown must center on which activities ofthe Federal Government are essential and which are nonessential. The Constitution of the United States is clear in Article I, Sec- tion 9, that "No money shall be drawn from the treasury but in consequence of an appropriation made by law." Despite this con- stitutional restriction, we recognize that certain functions of our government are, in fact, essential, and its work force must continue to operate even when appropriations do lapse. By tradition, it is the President, together with 0MB and the indi- vidual agencies, that have been allowed to decide which functions in agencies are essential and which, in fact, are to be shut down. Part of the reason that I, and other new Members, sought election to Congress was really to come here with the intention ofexploring these issues in a broader context. In our attempt to balance the Federal budget, we deal with this issue directly as we decide what, in fact, are essential national functions and activities. That, of course, is part of a larger question as we consider the proper role (1) of our Federal Government, including alternatives such as privatizing, downsizing, or shifting responsibilities to State and local authorities. No one can deny the fact that taxpayers and the average citizen outside the Beltway must ask some very serious questions when large segments ofour Federal Government close down and they see no appreciable differences in their lives. Inside the Beltway, many people spoke of assessing blame for the government shutdown of nonessential services. Outside the Beltway, many citizens and taxpayers applauded closing down nonessential government activities. Others outside the Beltway, who have grown dependent on Federal Government benefits and services, were, in fact, appalled and dismayed, and had their lives severely disrupted by the shutdown. In this hearing today, I hope we can review, first, what took place in the recent shutdown; and, second, what plans are under consideration for any future government closure. It is important to note that the shutdown itself has not been a new idea to this ad- ministration. I believe it was part of a calculated strategy by the administration to close down the government this year. Planning for this supposedly spontaneous shutdown began as early as July of this year. In September, agencies were required to submit shutdown plans to 0MB. This was in marked contrast to the first shutdown, which occurred under President Reagan in 1981, when the first 0MB guidance to agencies was issued less than a week before employees were sent home. In spite of the current administration's advanced planning, it is unfortunate that the execution of the shutdown was, in many in- stances, disorganized and illogical, at best, and oftentimes chaotic experience. Let me cite a couple of examples here, and we have people that will speak to this as witnesses. The Department of Housing and Urban Development [HUD], ini- tially released all but 136 of nearly 12,000 employees. As a result, some housing programs were shut down, even though funds were available for many major housing programs. Even with a 90 per- cent retention rate at the Department of Veterans Affairs, the ad- ministration announced that the processing of new applications for some major veterans benefits programs would be suspended. With- in a week of the shutdown, the White House announced the recall ofmore than 1,700 DVA employees. The Department of Education, as another example, furloughed 86 percent of its work force, while the Bureau of Alcohol, Tobacco, and Firearms found it necessary to retain, so-called "essential," 15 of 23 public affairs officers. The Social Security Administration fur- loughed 90 percent of its work force. Retirement claims processing ceased. At the same time, retirement claims for civil service retir- ees, at the Office of Personnel Management, were being processed at 100 percent capacity and activity rate. Three days into the furlough, the President initiated a recall of more than 50,000 Social Security personnel, raising questions about whether they should have been furloughed in the first place. Furthermore, in the middle of the shutdown, the President de- clared some activities nonessential on Monday, when on Friday these same functions were suddenly termed "essential." It's important that we look at the discrepancies and review the agencies, and see what is, in fact, a priority activity. We must also examine what activities are more costly to close down than to con- tinue. Finally, we must consider Federal employees whose lives are severely disrupted by this disorderly process. This may have been a well-planned shutdown, but I fmd some of the results very confusing. We heard a lot of rhetoric, and saw a lot of posturing and grandstanding from the administration. As cold reality set in, we saw backpedaling and the recall of employ- ees. And what about the question, what is essential? The adminis- tration seems not to have defined this consistently among its var- ious agencies. Was this poor management or premeditation? Should Congress have established better criteria or better defined guidelines? The priorities seem evident to me. First and foremost, we have a re- sponsibility to ensure national security. We have a duty to provide for the effective enforcement of our laws. We must take adequate measures to guarantee the public safety, health, and welfare. Next, we must ensure that those who cannot sustain themselves are pro- vided for adequately. Most of these functions were deemed essential last month. Most were carried out with only minor interruptions. But it is important that we look at the discrepancies in the implementation of the ad- ministration's first shutdown, ifonly to make certain that we avoid these problems in the future. We face the prospect of another shutdown within just a matter of 10 days affecting several of the agencies represented here today. We remain committed to approving legislation that will continue operations, but if another veto does shut down these agencies, we hope this hearing will result in a more consistent criteria for clo- sures and more effective operations ofcontinuing activities. To explore these issues, we have assembled a panel of senior offi- cials who have responsibility for the management ofmajor agencies that have implemented the shutdown in a variety ofways. They include Dr. Walter Broadnax, the Deputy Secretary of the Department of Health and Human Services; Mr. Dwight Robinson, Acting Deputy Secretary of the Department of Housing and Urban Development; Mr. Thomas Glynn, Deputy Secretary of the Depart- ment ofLabor; Mr. George Muiioz, Assistant Secretary for Manage- ment and Chief Financial Officer of the Department of the Treas- ury; Mr. Eugene Brickhouse, Assistant Secretary for Human Re- sources and Administration of the Department of Veterans Affairs; and Ms. Shirley Chater, Commissioner of the Social Security Ad- ministration. Our second panel includes Mr. John Koskinen, Deputy Director of the Office of Management and Budget; Mr. Christopher Schroe- der. Deputy Assistant Attorney General in the Office of Legal Pol- icy at the Department ofJustice; and Mr. Allan Heuerman, Associ- ate Director for Human Resource Systems Service in the Office of Personnel Management. Those are my opening remarks and comments. I will yield now to the ranking member of our panel, the distinguished gentleman from Virginia, Mr. Moran. Mr. MORAN. Thank you, Mr. Chairman. I am glad you are having this hearing on the government shutdown that never should have happened. In my view, it was clearly the Congress' fault. We did not get our appropriations bills passed in time. We had a year to do it, and we didn't do it. There was only 1, in my recollection, out of 13 bills that was enacted. There were a lot of complaints over the fact that the President vetoed the legislative branch appropriations bill, but thank God he did. That would have been the worst thing to have had the Con- gress paid and none of the rest of the government paid because we took care of our own salaries and operation expenses before the rest ofthe government. So I'm glad he vetoed that. But the fact is that we didn't get the appropriations bills passed. That's why we had the government shutdown. And then we delib- erately sent a continuing resolution to the President, calculated to draw a veto. Now, I grant you that the Speaker tried to lend some insight into why that happened by going into the fact that he didn't get a window seat on the plane to the Middle East, or he went out the wrong door, or something. I don't think it was so much the personal snubbing that he per- ceived occurred as the fact that the legislative branch did not act in an efficient and effective way. The reconciliation bill is far less important than getting these appropriations bills signed, and that, in the future, should be our highest priority. But 40 percent of the government did not operate, as a result, for 4 days. And I think that's something we should be ashamed of. We also ought to be embarrassed at the fact that we spent $700 million of taxpayers' money and got no work out of it, no return from the Federal employees who were furloughed, all of whom wanted to be at work performing their jobs; none of them wanted to be getting paid for doing nothing, but 800,000 were sent home. I think that we need to clarify what is essential an—d nonessential in the first place. The definition that suggests that and, in fact, I have the directive here, "essential employees are only those where, ifthey were unable to perform their jobs, the failure to per- form those functions would result in an imminent threat to the safety ofhuman life or the protection ofproperty." There's an inconsistent application of that criteria, but the func- tioning ofthe Federal Government goes far beyond that. Obviously, national park officials, for example, are not going to be involved in the safety ofhuman life or protection of property, for the most part, but they are important for the proper functioning of the Federal Government. The peopl—e who issue visas. We had any number of p—eople in my jurisdiction I'm sure they are throughout the country who need- ed visas, who needed to be able to travel, but couldn't get them. One woman's family member was dying and she couldn't get there because the people who would have issued her a visa were not able to get to work. The Social Security applications, the applications for veterans benefits were not processed when they were supposed to be, when people were eligible. The fact is that millions of dollars was wasted every day that should have been collected and wasn't. I know we're going to find a number ofdiscrepancies between the various Federal agencies in the way that they interpreted the