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DEPARTMENTS OF VETERANS AFFAIRS AND HOUSING AND URBAN DEVELOPMENT AND INDEPENDENT AGENCIES APPROPRIATIONS FOR FISCAL YEAR 1996

WEDNESDAY, JUNE 7, 1995

U.S. SENATE,

SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS,

Washington, DC.

The subcommittee met at 9:33 a.m., in room SD-192, Dirksen Senate Office Building, Hon. Christopher S. Bond (chairman) presiding.

Present: Senators Bond, Mikulski, Leahy, and Kerrey.

SELECTIVE SERVICE SYSTEM

STATEMENT OF GIL CORONADO, DIRECTOR

ACCOMPANIED BY:

G. HUNTINGTON BANISTER, EXECUTIVE DIRECTOR

LEWIS C. BRODSKY, DIRECTOR FOR PUBLIC AND CONGRESSIONAL AFFAIRS

OPENING STATEMENT OF SENATOR BOND

Senator BOND. Good morning. The VA, HUD, and Independent Agencies Subcommittee hearing will come to order.

This is our final regular hearing on the budget for fiscal year 1996. I confess that I have been looking forward to being able to say that if only because this has been an extraordinarily hectic and demanding start to a new cycle, and the budget that Congress is going to have to deal with.

Unfortunately, we have to acknowledge that we have only begun to grapple with some of the daunting challenges facing this Congress and particularly the Federal programs within the jurisdiction of this subcommittee. So far we have passed two rescission bills. We are preparing to go to conference on the budget resolution. That we expect will be very difficult conference.

That too, however, is only a precursor of the real work at hand, and that task is to write the legislation making appropriations for individual programs and activities in the upcoming fiscal year and beyond.

Some months ago, the chairman of the House Appropriations Committee was quoted as saying that the new legislative agenda might be frustrated in a number of ways, but that through the appropriations process, real change was inevitable. Since no money

can be withdrawn from the Treasury unless an appropriation is enacted into law, affirmative approval of this Congress is necessary to continue activities of Government.

We are about to be tested on that premise, and today we will hear from two agencies which, for very different political reasons, may well represent case studies for students of Government for many years to come.

First is the Selective Service System. In some ways it may be called a vestige of the divisive nature of the Vietnam war and the cold war. The continued existence of this agency involves a perception of the potential military threats faced by our Nation and how our society addresses the requirements of obtaining the service of its citizens for war and other national emergencies.

Second is the Corporation for National and Community Service. The amount of the funding reduction for this agency in the current year is still at issue in the pending rescission bill, but both the House and Senate-passed budget resolutions for fiscal year 1996 call for its termination. Here too we are confronted with policy questions as to the nature of voluntary service and the Government's role in promoting such valuable and important activities by our citizens.

This debate, however, must be conducted in the context of a looming budgetary crisis and a dramatic shift in Federal spending patterns. In the last 7 years, discretionary spending increased 64 percent. Under both the House and the Senate-passed budget resolutions, this trend will be reversed and we will reduce discretionary spending by 11 percent in the next 7 years in addition to the 25percent impact of inflation.

For our subcommittee, these reductions will be dramatic and profound. We already have cut current year budget authority by about 12 percent in the rescission bill. Based on the assumptions of the budget resolutions, we are facing between a 10- and 14-percent reduction again in fiscal year 1996.

The magnitude of these cuts, I must be quite honest, does not make for happy choices. Moreover, many programs under the jurisdiction of this subcommittee, although classified as discretionary, are clearly not easy to control. For example, we have long-term housing commitments requiring increasing amounts of subsidy to maintain. Continuing current levels of service in the veterans medical care system generally requires an additional $1 billion each year. To the extent that these programs are exempted from cuts, the impact on remaining activities in our appropriations bills are greatly magnified. So, I do not believe that they can be exempted. In any event, given the size of these cuts and the fact that they are part of a multiyear program of spending reductions, it simply makes no sense even to pretend that we can continue to do all that was undertaken in the past when budgets were rising. In the rescission bill, we terminated as many new housing commitments as we could identify and redirected resources toward culling out failed and failing housing developments from the subsidized inventory. For fiscal year 1996, I anticipate we will not only consolidate dozens of programs into block grants, but we will terminate many

more.

On the chopping block are not bad programs or activities which have outlived their usefulness. There will be programs that we simply can no longer afford to maintain. Some of them are programs which I and the ranking member sponsored, and which I would certainly like to be able to fund. As I said, these are not easy choices, but they must be made if the more critical and essential needs of our Nation are to be addressed.

With that, I would like to turn to my ranking member, Senator Mikulski.

STATEMENT OF SENATOR MIKULSKI

Senator MIKULSKI. Thank you very much, Mr. Chairman. I look forward to hearing the testimony of our witnesses today, Mr. Coronado, the Director of the Selective Service System, and Mr. Segal, the president of the Corporation for National and Community Service.

We spent so much time during the first 6 months of this year rescinding prior programs. I was never sure when we would get to our fiscal year 1996 budget. I know that we will now be faced with a rescission package that we will have to revisit.

Quite frankly, Mr. Chairman, I hope, you like me, hope that the President does not now decide to submit yet one more alternative budget. I support the President's budget priorities. I support the President's commitment here to national service.

But we cannot get ourselves all embroiled in a whole lot of process here because I believe that the real issue that lies before us is the markup that we will have to be undertaking in the next few weeks. Facing the possibility of at least $2 billion less in this subcommittee, or a 14-percent cut, I think is going to make us have really very serious decisions to be made.

That is why we look forward to hearing what the Selective Service has to say because I know both the Selective Service and National Service are often two of the agencies talked about being on the chopping block for this subcommittee's work. I hope that before we chop or block, that we really look at what is the call to duty within the United States of America and how we can reinforce the concept of service. No. 1, how we can stand ready for when the President might have to mobilize a new generation of Americans, and also to look at national service which I know has been under a great deal of criticism.

However, National Service has been in existence a very short amount of time. It has only now begun to ramp up so that we can see the effect hands-on of whether it is accomplishing its mission in the community. It had two jobs. One was to give help to those who practice self-help, a goal that I believe is shared by both parties, that says for those Americans who want to practice self-help and yet are faced with the ever-increasing closing doors of the American dream, the ability to pay for higher education.

This would accomplish two objectives. We would have volunteer services performed in our community. A new generation would learn civic virtue and habits of the heart, and at the same time, they would be able to earn a voucher to reduce their student debt. This to me is probably one of the most populaced, pragmatic programs that has been put forth in this Congress. I would hope that

whatever the budgetary determination, that are made, we would give National Service at least 1 more year to prove its mettle in the community. The feedback is already very important, showing the very important role that they are playing in grassroots communities in being able to perform national service.

So, we look forward to the testimony. I know there will be a vote at 10:15, and we will want to move ahead with the Selective Service testimony.

But I know we have tough decisions to make, but I think we have to look at what our priorities are. I think giving help to those who practice self-help needs to be one of our most crucial and the ability to also stand ready to mobilize because we have people who have no sense of duty, no sense of devotion, no sense of obligation, whether they have to register for the draft-and I know our colleague in the House, Mr. Solomon, and I, who often would be viewed as an odd couple, feel very strongly about this. Yet, at the same time, National Service does this.

I really would commend to the chairman an interesting article written by a Marine major at Quantico in today's Washington Times. He is not crazy about National Service, but he says you cannot run the world on Adam Smith's invisible hand because pretty soon you are going to have invisible people with no sense of civic virtue or a sense of a greater good.

Senator BOND. Thank you, Senator Mikulski.

I think Adam Smith also probably understood about the invisible wallet too when the money runs out. That is part of the problem. I share your concerns, and we are going to have to work very hard to accommodate these.

For the benefit of the witnesses and our other guests today, we do have a vote at 10:15. I would ask our two main presenters if they can confine their opening statements to 10 minutes. We will accept the full statements and all of the materials for the record. You have been very generous and very thorough in those written statements. We have reviewed those.

I will ask that we limit our questions to 5 minutes in the opening rounds to see if we need to accommodate additional members of the subcommittee. We have had a very long schedule of subcommittee hearings, and our other members have their special subcommittee responsibilities as well, but I can assure you they will be following the record very closely.

We would like to conclude all of the hearings today by 11:30, and I hope that we can conclude the Selective Service portion prior to the 10:15 vote.

With that, I would like to call on Gil Coronado, the Director of the Selective Service System. Welcome, Mr. Coronado.

STATEMENT OF GIL CORONADO

Mr. CORONADO. Senator Bond, thank you. It is good to see you again. Senator Mikulski, Senator Bond, Mr. Chairman, I have a written statement I would like to submit for the record, if that meets with your approval.

Senator BOND. It will be accepted.

Mr. CORONADO. Mr. Chairman, before I begin my remarks, I would like to introduce the agency officials who are seated next to

me. On my right is Mr. Hunt Banister, the Acting Director at the agency for about 9 months during one of the most critical periods in our history. Hunt Banister was faced with and made some very difficult decisions on the budget, personnel reductions, and the closing of three regions. Mr. Banister provided outstanding leadership and I am pleased to say that he remains at our agency as the Executive Director.

On my left is Lew Brodsky who is our Director of Public and Congressional Affairs. Lew Brodsky is well-known to the Members of the Congress. He has accompanied me on many visits, and he has been wearing two hats for the last 2 years. He is an outstanding professional who serves as the link between the Congress, the media, the public, and our agency.

Our agency is also fortunate to have a number of key professional and dedicated senior staff in place.

Mr. Chairman, last May the President explained to the Congress why it is important to fund this agency and the peacetime registration program for America's men. And the Congress agreed.

FISCAL YEAR 1996 BUDGET REQUEST

The President's budget request for fiscal year 1996 proposes a Selective Service System budget of $23,304,000, an increase of some $374,000 over the 1995 appropriation. This small increase is needed to provide current services, to fund a study to design a new computer system, to accommodate pay raises, and to keep up with inflation.

Included in my written statement is a chart which depicts a year-by-year fiscal history of the Selective Service System from fiscal year 1982 to fiscal year 1996. The severity of these significant reductions that have occurred is well illustrated. Our fiscal year 1996 budget request is more than 20-percent below the funding level of fiscal year 1993.

We expedited many planned changes and we cut costs of operations to arrive at today's minimum essential funding level. Our requested budget allows us to prepare for meeting the new DOD post-cold war requirements. We are confident we will be able to conduct a fair and equitable draft in a crisis that would permit the potential draftees to organize personal affairs prior to the induction.

I will conclude by noting that the Selective Service System is the only part of the VA, HUD, and Independent Agencies' budget that directly supports a component of national defense readiness. It is with your continued support that our agency provides this Nation with a very inexpensive defense manpower insurance policy in a still dangerous and uncertain world.

PREPARED STATEMENT

Mr. Chairman, I would be happy to respond to any questions. from you or other members of this committee.

[The statement follows:]

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