CORPORATION FOR NATIONAL AND COMMUNITY SERVICE

STATEMENT OF ELI SEGAL, CHIEF EXECUTIVE OFFICER

ACCOMPANIED BY TERRY RUSSELL, GENERAL COUNSEL

STATEMENT OF SENATOR BOND

Senator BOND. Now we would like to call forth Mr. Eli Segal from National Service.

I note in the audience my old friend Nick Lowry, a graduate of a fine institution here in Washington and former place kicker and a very valued member of the Kansas City, MO, and Kansas community who obviously has played a role in this.

Let me say before we begin, Mr. Segal-and I am sure it does not come as a surprise to you that I am a skeptic. I did not support authorization of the program because at the time I did not believe that we could afford to establish a brand-new spending program when we were running $200 billion deficits each year.

We are now in a position where we have to reduce spending significantly over the next 7 years, and we have to ask a threshold question: Is this program so valuable to us that we will be willing to tax our children to pay for it? We are still running deficits, and we are still borrowing money to pay for programs like national service. We could say that the true cost of the program is actually higher because we have to factor in the interest that will be paid now and our children will have to be paying in the future.

I need to be convinced that AmeriCorps meets that test, and I do not argue and I have heard from many Missourians and others-that there are positive contributions from AmeriCorps members. I am sure, Mr. Segal, you can well present us with some good information on children immunized, river fronts restored, meals delivered, recycling projects accomplished, but it is not within our means to fund every good idea that comes along.

There are many programs within the Federal budget I would like to see fully funded, WIC, community health centers, and many others, but we are simply short of money. Until now we have been unable to make the hard decisions to keep our books in balance, and the result is that we are saddling our children with significant debt.

The recent Washington Times article detailed a lifetime net tax rate for people born in various years. According to the National Center for Policy Analysis, if current trends continue, a child born in 1994 can expect a lifetime net tax rate of about 84.4 percent. Obviously, we are not going to go that far. We have to do something to get out of it.

PREPARED STATEMENT

So, I think we are going to have to continue to look very hard at these programs and I say that up front because it is within that context I am going to have to view the request you put forward today.

PREPARED STATEMENT OF CHRISTOPHER S. BOND

BOND WEIGHS FUTURE OF CNCS AGAINST TAXING OUR CHILDREN TO FUND IT

U.S. Senator Christopher S. "Kit" Bond, Chairman of the Appropriations Subcommittee on VA-HUD and Independent Agencies, today assessed the future of the Corporation for National and Community Service (CNCS) during a hearing on the agency's budget. In turning to the CNCS portion of the hearing, Bond said that considering the lifetime burden of debt we have already placed on our children, there is simply no longer enough money "to fund every good idea we can propose.

"As we begin the tough process to cut spending significantly over the next seven years to reach a balanced federal budget," explained Bond, "we have to assess our future funding priorities. The threshold question remains: Is the program so valuable to us that we will make the decision to tax our children to pay for it? We are still running deficits. Thus, we are still borrowing money to pay for programs like National Service. So, the true cost of the program is actually several times higher than what we are considering here, factoring in interest we and our children will pay to keep it running.

"I shall have to be convinced that Americorps meets the above test," continued Bond. "I do not argue that Americorps Members are making positive contributions in Missouri and throughout the nation. But, we can no longer fund every good idea we can propose.

"There are many programs within the federal budget that I support and would like to see fully funded, including WIC, community health centers and many others. But we simply do not have the money. Until now, we have been unable to make the hard decisions to keep our books in balance, and the result is that we have saddled our children with a lifetime of debt," said Bond.

Senator BOND. Senator Mikulski, do you wish to add anything? You have already made an eloquent statement, but I would be happy to have you

Senator MIKULSKI. Mr. Chairman, I think that in the interest of time, before the vote, if Mr. Segal could present his testimony, we could go and vote, because I would like to hear what he has to say, and then engage in a question and answer back and forth.

Senator BOND. All right.

Mr. Segal.

STATEMENT OF ELI SEGAL

Mr. SEGAL. Thank you, Mr. Chairman. I would like to thank you first for the opportunity to appear before you today. I know of your strong support of many fine volunteer organizations in Missouri, and I wanted especially to thank Senator Mikulski, the well deserved godmother of National Service, for all she has done for this initiative and for our country.

Mr. Chairman and members of the committee, as a businessman I appreciate the difficulty of the task you are grappling with as you face increasing national challenges and decreasing fiscal resources. I want to focus on the pivotal questions all of us have posed under these circumstances. In a time of tight budgets, why does AmeriCorps deserve increased taxpayer investment?

The short answer is that AmeriCorps works, and when I say that AmeriCorps works, I mean that it is an investment, something with a benefit greater than its cost.

Therefore, my comments today are going to focus on three things. First, why AmeriCorps works; that is, what makes it unique and what steps we have taken to keep the investment value high. Second, the evidence that shows AmeriCorps' success, and third, how I think AmeriCorps can be model for other reform efforts.

As you know, AmeriCorps is less than 9 months old. Until recently we have seen AmeriCorps' value only through the anecdotal accomplishments of individual programs and individual members and the response of community and corporate leaders. Today, in addition to referencing some of those matters, I will present some objective facts, the results of two major studies of AmeriCorps. We have submitted those studies and other materials to you for the record.

Senator BOND. They will be accepted.

Mr. SEGAL. Thank you, Mr. Chairman.

It is not coincidental that Newsweek's recent cover story on grassroots American success stories opened with a full-page picture of what AmeriCorps members do under the banner headline "What Works."

AmeriCorps members have already attracted attention in the toughest of circumstances, on the frontlines of forest fires and other disaster relief efforts, on some of the grittiest police beats, and in many of our most challenging classrooms. You will find validation of their value in the comments we have included as attachments 3 through 9 in your packet, which I hope can be added to the record as well.

Senator BOND. They will be accepted.

Mr. SEGAL. AmeriCorps' results can be seen up the road in Baltimore where the University of Maryland's ENABLE program has dropped health care costs up to 40 percent for working families. You can see results in Louisiana where 113 AmeriCorps*NCCC members, especially trained in disaster relief, staffed the Red Cross service centers, helping more than 30,000 families in the wake of the recent savage floods. You could ask police chiefs Harmon in St. Louis or Bishop in Kansas City if AmeriCorps is getting things done there.

INDEPENDENT EVALUATIONS

These examples are statistically reinforced by an independent evaluation of AmeriCorps conducted by Aguirre International, a firm headed by President Ford's Commissioner of Education, Ed Aguirre. The report, which I would also like to submit for the record

Senator BOND. It will be accepted.

Mr. SEGAL. [continuing]. Is a random sampling of 8 percent of AmeriCorps sites, covering less than one-half of this first year of service. The results are extremely impressive and they represent just a tiny fraction of the lives touched, the communities improved, the hard and vital work done in just these first 5 months.

Aguirre International's random sample offers an encouraging snapshot of AmeriCorps' value, but it does not calculate the return on Federal investment. As you know, Mr. Chairman, cost-benefit analyses are still rare in the public policy arena, and rarer still are those done with the economic precision required in the marketplace

from private sector companies. That is why the analysis I would. like to discuss briefly with you now is so meaningful and which I would also like to be submitted for the record.

Senator BOND. That will be accepted.

Mr. SEGAL. Attachment 11 in your packet is an independent benefits and costs analysis done by a panel of noted economists commissioned by three major U.S. foundations: the IBM Foundation, the Irvine Foundation, and the Dana Foundation. As you would expect from economists of the Chicago school, this study is conservative in methodology and conclusions, but important in its implications. Simply put, they conclude AmeriCorps is a great investment. Taxpayers are not supporting a feel-good exercise, but a proven problem-solver that provides a great return on investment.

This cost-benefit analysis is exceptionally detailed and puts dollar values on three AmeriCorps programs across the United States that are representative of the range of AmeriCorps programs. The study concludes that we have measured benefits to be $1.60 to $2.60 per dollar of Federal outlay and these measured benefits are understated.

The study shows that AmeriCorps is a wise investment on its own merits, and beyond that, AmeriCorps we hope can be a tool for a broad range of reform efforts. Already AmeriCorps is on the cutting edge of reform areas as diverse as community policing and environmental cleanup, and reform arenas from the classroom to the welfare system. It is new. It is flexible. It is locally based and driven by the power of ordinary citizens intent on solving their own problems.

AmeriCorps' potential, Mr. Chairman, and your evaluation of our efforts, and the results achieved by 20,000 AmeriCorps members turn on what national service is and what it is not.

National service is not antivolunteer. Surely, the Nation's best charities are the best judge of that. They have seen that AmeriCorps members actually increase the number and effectiveness of unpaid volunteers. Our own data actually show that on average each AmeriCorps member generates 12 volunteers.

National service is not political. Remember that the bulk of programs this appropriation will fund will be selected by appointees of Governors, over 30 of whom now are Republicans, and that the overwhelming majority of AmeriCorps programs are run by organizations that all Americans support, with the business community and others giving their vote of confidence in the clearest terms of all, hard cash support.

National service is not an entitlement. Individuals and programs have to compete, and the competition, I must say, has been fierce. Last, national service is not not bureaucratic or wasteful. AmeriCorps' overhead is low and its members are in the field, not in offices. That is true even for the one-ninth of our grant funds that, pursuant to law, go to programs managed by the Federal agencies as partners with youth corps and other small community organizations. On a maximum living allowance of $600 a month, the AmeriCorps members' service involves sacrifice, and the value of this focused, full-time help is clear to charities and communities around the country.