want to work closely with you and other Members on the reauthorization to promote work and strengthen families working toward independence. WRITTEN QUESTIONS FROM SENATOR SARBANES TO SECRETARY THOMPSON AND THE RESPONSES Question: What are your views on the importance of the FDA consolidation and the Administration's commitment to this project? Answer: FDA consolidation at the White Oak, Maryland site remains a high priority for the Administration. FDA Headquarters currently occupies approximately 39 buildings in more than 16 locations. It is important for an Agency, entrusted with protecting the Nation's food supply and approving pharmaceuticals, biologic products and medical devices, to have modern facilities and be able to work effectively and efficiently. Assistant Secretary for Administration and Management, Edward Sontag, has already attended one of the local community's Labquest meetings at White Oak and has seen first hand the local support the FDA consolidation project has gained. Hopefully, any further delays to this important project can be minimized. Question: FDA's Fiscal Year 2003 budget justification includes $159 million for counter terrorism which would fund almost 900 new employees. I am advised that for those assigned to the Washington area, one possibility for housing them would be to quickly renovate the existing main building at White Oak, which was formerly the Navy headquarters building. If funds could be made available for that purpose, would HHS support such an initiative? Answer: We understand from GSA, that in the revised master plan for White Oak, Building One (the existing main building) takes on a more prominent role. Building One has been designated as the "front door" of the FDA campus. This structure would be revitalized and an architectural forecourt, consisting of two flanking buildings and a circular pedestrian plaza, would be established. Providing funds for Building One's renovation would be beneficial to the long-term development of the site, and could accommodate increased review staff and new counter terrorism personnel being employed by FDA's Center for Drug Evaluation and Research. The new FDA counter terrorism employees are spread among the headquarters organizations and the Office of Regulatory Affairs; therefore co-locating all of these new employees in a single building may not be the most efficient deployment of these personnel. THE EFFECTS OF THE PRESIDENT'S FISCAL YEAR 2003 BUDGET PROPOSAL ON THE ARMY CORPS OF ENGINEERS, THE FEDERAL HIGHWAY ADMINISTRATION, AND THE DEPARTMENT OF EDUCATION TUESDAY, FEBRUARY 26, 2002 UNITED STATES SENATE, The committee met, pursuant to notice, at 10:01 a.m., in room SD-608, Dirksen Senate Office Building, Hon. Kent Conrad (chairman of the committee) presiding. Present: Senators Conrad, Murray, Domenici, and Bond. Staff Present: Mary Ann Naylor, staff director; Bonnie Galvin, analyst; Sarah Kuehl, analyst; and Shelley Amdur, senior analyst. For the minority: G. William Hoagland, staff director; Margaret Stewart, senior analyst; James O'Keeffe, senior analyst; and Walter Hearne, junior analyst. OPENING STATEMENT OF CHAIRMAN CONRAD Chairman CONRAD. The committee will come to order. We want to welcome the witnesses who are here with us today to share their expertise. Today we are going to look at the President's budget and its impact on three major areas of the Federal Government: highway and bridge-building programs, the construction projects of the Corps of Engineers, and education. We have two panels this morning, and, unfortunately, the Senate is scheduled to vote at 10 o'clock. That vote is now underway, but my intention is to make my opening statement, and then recess briefly so we can vote. I apologize to the witnesses, but this is part of what has happened in the Senate when votes are scheduled at the last moment. I would just start with this chart. We have all said what a difference a year makes. Last year we were all told that we were going to see budget surpluses as far as the eye can see, and now we see budget deficits as far as the eye can see, certainly trust fund deficits that continue throughout the next decade. And there are very large deficits. Let's go to the next chart. Last year we were told that outside the trust funds we would have some $2.7 trillion of surpluses over the next decade. Now we see, instead of surpluses outside the trust funds, deficits of $2.2 trillion. That means $2.2 trillion will be coming out of the trust funds of Social Security and Medicare. Many of us think that is unwise given the fact the baby boomers start to retire in just 6 years. But that is the factual circumstance we face. The areas that we are going to examine today include the construction programs for highways and bridges. We see in the President's budget about a 27 percent cut from last year. Last year we provided roughly $32 billion. This budget will be roughly $23 billion, so about a $9 billion cut-actually, something a little bit less than that. It is a 27 percent reduction, and we will go into some of the reasons for that. Earlier this month, the OMB Director said that these proposed highway cuts were not a policy decision, but the results of a simple calculation based on the law. The fact is there is nothing in TEA21 and nothing in the Budget Act that prevents the President or the Congress from providing additional funding for the highway and bridge program beyond the funding levels that are guaranteed in TEA-21. We can add, the President could have added, so that we would be reducing the level of cut that is before us. I am concerned that the President's proposed highway and bridge-building budgets will force a loss of over 300,000 jobs across the country, just as the economy is starting to rebound. In addition, the President's budget will significantly reduce Federal funding for highway construction and maintenance at the same time as nearly 40 States are being forced to scale back their State budgets in light of their constitutional requirements to run balanced budgets. The second area that we will examine is how the President's budget would reduce the Army Corps of Engineers' ability to carry out and complete crucial water and flood control projects across the country. Within the total for the Army Corps, the budget provides $1.4 billion for the primary project construction account, and this is roughly $300 million less, or an 18 percent cut from the 2002 enacted level of $1.7 billion. Now, what does that mean? For people in the community of Grand Forks, North Dakota, in my home State, it means they will have to wait an additional 2 to 3 years to be safe from floods. That is not a result any of us wants, and we need to work together to see if we can't do better. I am afraid that my State's story is not unique. Projects from Texas to Missouri to Washington State will also be funded substantially below what is needed to get the job done in a cost-efficient way. Not only are projects being delayed, but in order to stay within the proposed 2003 funding level, the Corps may actually have to terminate ongoing construction contracts at a cost of up to $190 million to taxpayers. So, again, we have got to find a way to work together here to address these challenges. In education, which is the third area that we will examine today, the President's education budget promises to leave no child behind. At a time when more is being demanded from our schools, more accountability, more testing, better results, I was particularly disappointed to find that just one month after the President signed into law the landmark education reform bill, No Child Left Behind, his budget actually cuts funding for these programs by $90 million. Again, I want to thank our witnesses for being here to testify. I will go to my colleague, Senator Bond, for any opening statement that he would like to make. OPENING STATEMENT OF SENATOR BOND Senator BOND. Well, thank you very much, Mr. Chairman, and welcome to our witnesses today. Mr. Chairman, I would agree with you on the first part of your macroeconomic analysis. It looked a year ago that we were going to be running surpluses. But, frankly, we have now found that the recession that started back early in the year 2000 has continued. Certainly it took an even greater dip with the tragedies of September 11th. And it is clear that we are going to be running a deficit. But when we are in a recession like this, I think that for the long-term health of our trust funds, the Social Security fund and everything else, we have got to restore economic growth. Economic growth is far more important right now than trying to be Herbert Hoover and run a surplus when we are in a recession. You and I, Mr. Chairman, started out with the Deficit Reduction Caucus when we first got here in 1987, a lonely little group, and all of a sudden we found that we were getting spending under control. We happened to disagree a little bit on how we got there. You think it was tax increases; I think it was budget cuts. But we got to where we wanted to be. Now, with an economic downturn, it is time to put our foot back on the accelerator, not the brake. And I share the concerns-I know Senator Domenici is going to talk about highway funding. I was very proud in TEA-21 to be the author with the late Senator John Chafee. We call it the Bond-Chafee proposal in Missouri. I guess elsewhere it is called the Chafee-Bond proposal in the other 49 States and Washington. It said that what we get in ought to be paid out, and we have been for many years suffering from deficits in that trust fund. Now, because of the wild swings, we potentially suffer significant disruption in highway construction. Frankly, I can think of nothing more important to helping get our economy to grow than to continue with investments in highways and water transportation. And that brings me to Secretary Parker. I was going to say some really nasty things about this budget, and I felt bad about it, until I was told by my staff that Secretary Parker in his previous transmogrification had similar and stronger things to say when totally ineffective and inadequate budgets were proposed for the Corps. So I am emboldened by that, Mr. Secretary. I was just going to lay out some questions, and you can think about them. I don't think you would be permitted to answer them. But knowing how injurious the budget requested by OMB is to the Corps of Engineers, if Congress actually passed the Administration's budget for the Corps-and I guarantee you it will not-would you recommend the President veto it? You might think about that one. And let me ask you to consider some things. I think you know, but I don't think the people at OMB know. Am I wrong to say the President supports economic growth, the President wants to put people back to work, the President supports trade, and the President knows that trade will help restore economic growth and jobs? The President knows that you can't FedEx or e-mail grain to overseas customers. The President knows that there is a relationship between efficient shipping and international competitiveness. The President knows that water transportation is the artery of the Midwest to the world markets. And he supports the competitive shipping options for United States exporters. He knows that water transportation is safe and efficient and environmentally friendly and burns less fuel and creates less congestion and less pollution, and that one medium-sized hull can carry the grain of 900 trucks. We know that he went down the Mississippi River corridor for a reason in New Orleans, and it wasn't just for Mardi Gras. I think he was interested in seeing how we ship grain to the overseas markets. And I think he understands that you can't support big river navigation without supporting the smaller ports and tributaries that feed traffic to the big rivers. If I am wrong on that, please advise me. Two years ago, the Corps testified that a sloppy budget sent up by the previous Administration, if enacted, would conservatively result in an estimated $376 million increased cost to the Federal Government and $3.9 billion in foregone benefits. And I might ask you, in terms of cost inflation, delays, and resulting flood damage, if you could tell us how much this budget, with their cuts, will cost us. As I said, you might think back to some of the comments you made when you were on the House Energy and Water Appropriations Subcommittee. As a matter of fact, I am going to suggest to Chairman Reid, our Energy and Water Appropriations Chairman, that he consider bringing up the OMB staff since they wrote the budget for the Corps, and maybe they could explain it. For the record, Mr. Chairman, I wonder if we can get the names of the staff people at OMB who write the Corps budget and find out how long they have been in the natural resources section at OMB, because I think we need some budget reform to reduce waste. And I think we can start by saving the Corps the cost and burden of submitting budgets to OMB because it is a waste of time. And we can perhaps eliminate the positions at OMB who work on the Corps budget because, since Congress totally has to rewrite it, the positions are a total waste of the taxpayers' money. Chairman CONRAD. I think you got the attention of people at OMB this morning, Senator Bond. Senator BOND. I have written them letters. I have talked to them. I have sent out letters. I don't know what else to do. Maybe I can walk in on stilts. But at least I am going to find out who is doing these dumb things and why and what their explanation for it is. And I am sure that Secretary Parker has been told to say some things, but he is not the one who did it. I know General Flowers didn't do it. Chairman CONRAD. Again, it can't stand. I mean, it doesn't-it just doesn't make any sense. It doesn't make any economic sense. Let me just say in response to Senator Bond that we were allies at the time that this country desperately needed deficit reduction, |