Financial Services and General Government Appropriations for 2022
Summary
Hearings, Financial Services and General Government Appropriations for 2022, before a Subcommittee of the Committee on Appropriations, House of Representatives, 117th Congress, 1st Session, Part 5. Mike Quigley is listed as Chairman of the Subcommittee on Financial Services and General Government. The contents list Election Assistance Commission, Internal Revenue Service, The Judiciary, U.S. Postal Service, The Need for Universal Broadband: Lessons from the Pandemic, Department of the Treasury, Small Business Administration, and Office of Management and Budget. The opening pages show Mr. Quigley welcoming ranking member Mr. Womack to the first hearing of the subcommittee.
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“Financial Services and General Government Appropriations for 2022.”
Original at www.govinfo.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/chrg-chrg-117hhrg45633-chrg-117hhrg45633/
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FINANCIAL SERVICES AND GENERAL
GOVERNMENT APPROPRIATIONS FOR 2022
HEARINGS
BEFORE A
SUBCOMMITTEE OF THE
COMMITTEE ON APPROPRIATIONS
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
SUBCOMMITTEE ON FINANCIAL SERVICES AND GENERAL GOVERNMENT
MIKE QUIGLEY, Illinois, Chairman
MATT CARTWRIGHT, Pennsylvania STEVE WOMACK, Arkansas
SANFORD D. BISHOP, JR., Georgia MARK E. AMODEI, Nevada
MARK POCAN, Wisconsin CHRIS STEWART, Utah
BRENDA L. LAWRENCE, Michigan DAVID P. JOYCE, Ohio
NORMA J. TORRES, California
ANN KIRKPATRICK, Arizona
NOTE: Under committee rules, Ms. DeLauro, as chair of the full committee, and Ms. Granger, as ranking
minority member of the full committee, are authorized to sit as members of all subcommittees.
MATT SMITH, LAURA CYLKE, MARYBETH NASSIF, ELLIOT DOOMES,
AALOK MEHTA, and PARKER VAN DE WATER
Subcommittee Staff
PART 5
Page
Election Assistance Commission ......................................... 1
Internal Revenue Service ...................................................... 25
The Judiciary ........................................................................... 57
U.S. Postal Service .................................................................. 83
The Need for Universal Broadband: Lessons from the
Pandemic ................................................................................ 111
Securites and Exchange Commission ................................. 139
Department of the Treasury ................................................. 157
Small Business Administration ............................................ 183
Office of Management and Budget ...................................... 207
(
Printed for the use of the Committee on Appropriations
U.S. GOVERNMENT PUBLISHING OFFICE
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COMMITTEE ON APPROPRIATIONS
ROSA L. DELAURO, Connecticut, Chair
MARCY KAPTUR, Ohio KAY GRANGER, Texas
DAVID E. PRICE, North Carolina HAROLD ROGERS, Kentucky
LUCILLE ROYBAL-ALLARD, California ROBERT B. ADERHOLT, Alabama
SANFORD D. BISHOP, JR., Georgia MICHAEL K. SIMPSON, Idaho
BARBARA LEE, California JOHN R. CARTER, Texas
BETTY MCCOLLUM, Minnesota KEN CALVERT, California
TIM RYAN, Ohio TOM COLE, Oklahoma
C. A. DUTCH RUPPERSBERGER, Maryland MARIO DIAZ-BALART, Florida
DEBBIE WASSERMAN SCHULTZ, Florida STEVE WOMACK, Arkansas
HENRY CUELLAR, Texas JEFF FORTENBERRY, Nebraska
CHELLIE PINGREE, Maine CHUCK FLEISCHMANN, Tennessee
MIKE QUIGLEY, Illinois JAIME HERRERA BEUTLER, Washington
DEREK KILMER, Washington DAVID P. JOYCE, Ohio
MATT CARTWRIGHT, Pennsylvania ANDY HARRIS, Maryland
GRACE MENG, New York MARK E. AMODEI, Nevada
MARK POCAN, Wisconsin CHRIS STEWART, Utah
KATHERINE M. CLARK, Massachusetts STEVEN M. PALAZZO, Mississippi
PETE AGUILAR, California DAVID G. VALADAO, California
LOIS FRANKEL, Florida DAN NEWHOUSE, Washington
CHERI BUSTOS, Illinois JOHN R. MOOLENAAR, Michigan
BONNIE WATSON COLEMAN, New Jersey JOHN H. RUTHERFORD, Florida
BRENDA L. LAWRENCE, Michigan BEN CLINE, Virginia
NORMA J. TORRES, California GUY RESCHENTHALER, Pennsylvania
CHARLIE CRIST, Florida MIKE GARCIA, California
ANN KIRKPATRICK, Arizona ASHLEY HINSON, Iowa
ED CASE, Hawaii TONY GONZALES, Texas
ADRIANO ESPAILLAT, New York
JOSH HARDER, California
JENNIFER WEXTON, Virginia
DAVID J. TRONE, Maryland
LAUREN UNDERWOOD, Illinois
SUSIE LEE, Nevada
ROBIN JULIANO, Clerk and Staff Director
(II)
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FINANCIAL SERVICES AND GENERAL
GOVERNMENT APPROPRIATIONS FOR 2022
TUESDAY, FEBRUARY 16, 2021.
ELECTION ASSISTANCE COMMISSION OVERSIGHT
HEARING
WITNESS
BENJAMIN HOVLAND, CHAIRMAN, UNITED STATES ELECTION ASSIST-
ANCE COMMISSION
Mr. QUIGLEY. This hearing will come to order.
As this hearing is fully virtual, we must address a few house-
keeping matters. For today’s meeting, the chair or staff designated
by the chair may mute participants’ microphones when they are
not under recognition, for the purposes of eliminating inadvertent
background noise.
Members are responsible for muting and unmuting themselves.
If we have noticed that you have not unmuted yourself, I will ask
you if you would like the staff to unmute you. If you indicate ap-
proval by nodding, staff will unmute your microphone.
I remind all members and witnesses that the 5-minute clock still
applies. If there is a technology issue, we will move to the next
member until the issue is resolved, and you will retain the balance
of your time. You will notice a clock on your screen that will show
how much time is remaining. At 1 minute remaining, the clock will
turn to yellow. At 30 seconds remaining, I will gently tap the gavel
to remind members that their time is almost expired. When your
time has expired, the clock will turn red and I will begin to recog-
nize the next member.
In terms of the speaking order, we will follow the order set forth
in the House rules, beginning with the chair and ranking member,
then members present at the time the hearing is called to order to
be recognized in order of seniority; and finally, members not
present at the time the hearing is called.
Finally, House rules require me to remind you that we have set
up an email address to which members can send anything they
wish to submit in writing at any of our hearings or markups. That
email address has been provided in advance to your staff.
Before I give my remarks, I would like to welcome our ranking
member, Mr. Womack, for his very first hearing with our sub-
committee. We have gained a few new members to our sub-
committee this Congress, Mr. Pocan, Mrs. Lawrence. I would like
to welcome them as well, and our returning subcommittee mem-
bers.
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I will keep my opening statement brief so we can get right into
the questions. This morning, we welcome Benjamin Hovland, chair-
man of the Election Assistance Commission, to testify on EAC’s
work to ensure our Federal elections are fair, secure, and acces-
sible.
Chairman Hovland, thank you for being here today.
It is well-known that our foreign adversaries have made at-
tempts and even breached our U.S. election system to varying de-
grees in 2016, 2018, and 2020 elections. U.S. officials at all levels
of government have worked tirelessly to address vulnerabilities in
our election systems. As a result, the 2020 election was declared,
quote, ‘‘the most secure in American history,’’ by the previous ad-
ministration’s own Department of Homeland Security.
The fact that those dedicated election officials were able to
achieve this feat amid a global pandemic is even more remarkable.
However, now is not the time to proclaim mission accomplished.
Even though the 2020 election was secure, we know there was ma-
licious activity from foreign adversaries leading up to Election Day.
The threats to our democracy are constant and ever-evolving. Our
enemies will not be taking a break, so neither can we.
This subcommittee has helped lead Congress’ efforts to address
this issue. Since fiscal year 2018, we provided $805 million in
grants to States to improve election security. We provided an addi-
tional $400 million last year to help States prepare for the 2020
elections during the pandemic.
As we know, EAC administers this funding to the States. Mr.
Hovland, I hope you can help us better understand what the States
still need and how they are currently spending the money.
We have made significant and important investments in these
grants, but it seems the sporadic nature of these funds has ham-
pered the ability of States to spend the money more quickly. I am
curious to know your thoughts on how consistent year-after-year
funding could help improve the rate at which States spend, and
other ideas you might have to incentivize States to get money out
the door faster?
We also want to hear about EAC’s work to help election officials
improve the administration of elections, and help Americans par-
ticipate in the voting process. We must ensure the agency has suffi-
cient funds to do so.
After their funding was slashed nearly in half between 2010 and
2019, EAC received a significant infusion of funds in fiscal year
2020. Fiscal year 2021 sustained that upward trend, providing the
agency with $17 million. As the U.S. continues to face threats to
our elections, now more than ever, we must ensure that EAC has
the necessary resources to provide the vital support to States and
the voting public.
I look forward to hearing from Commissioner Hovland this morn-
ing on the election security grants and what additional tools, re-
sources, and need for safety, security, and accessibility of our elec-
tions.
Before I would turn to our witness for his statement, I would like
to recognize our ranking member, Mr. Womack, for his opening re-
marks.
Do we need to unmute you, sir?
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Mr. WOMACK. Hello. Can you hear me?
Mr. QUIGLEY. We sure can.
Mr. WOMACK. Okay, good, good. I apologize. It may have been my
ear pods that were denying my audio from going through.
Hey, thanks, Mr. Chairman, and it is great to be with everybody
this morning. I notice that Chairwoman DeLauro talked about
freezing rain in Connecticut this morning. I think northwest Ar-
kansas is winning the prize today. If I heard correctly to our news
this morning, the previous overnight low in northwest Arkansas
was about 4 degrees. That was the previous record. This morning,
right before 6 o’clock, when I went to my breakfast table for my
morning coffee, our temperature this morning in Rogers, Arkansas,
was minus 15, 15 below zero.
Mr. QUIGLEY. That is Chicago home.
Mr. WOMACK. That is pretty Chicago, that is correct, which ex-
plains a lot about Chicago. But nonetheless, we got 4 to 6 inches
of snow over the last couple of days. We are going to get hit again
tonight with another 3 or 4 inches of snow before we get into a
warming trend by weekend. But it is great to be with you and,
Chairman, thank you for your kind words.
And I want to say hello, a big shout-out to our witness this morn-
ing, who happens to hail from my district. He is a Eureka Springs
native and went to college at the University of Central Arkansas,
and we are delighted to have him here today.
It is a great honor to be the ranking member on Financial Serv-
ices and General Government. This subcommittee is charged with
funding programs that impact nearly every American in our Na-
tion, with a range of jurisdiction over sanctions enforcement, tax
administration, the White House, Federal courts, and a lot more.
I look forward to working with my friend chairman Quigley and all
of the members of the subcommittee.
At the end of last year, despite our political differences, the com-
mittee was able to fulfill our article I duty, completing 12 Approps
bills, along with the needed COVID relief, which was enacted into
law on a bipartisan and bicameral basis. That spirt of unity and
consensus should be continued as we work to advance appropria-
tions bills in the coming months.
As we turn to today’s hearing, I know each of us recognizes the
importance of ensuring the security and integrity of our Nation’s
elections. It is fundamental to our democracy. In Arkansas, we are
blessed to have an effective and reliable system when we go to the
polls. The Election Assistance Commission has an important job as-
sisting State and local election officials, by administering grants to
States, developing best practices, and acting as a clearinghouse of
election administration information. We are grateful for that.
The coronavirus pandemic challenged State and local election of-
ficials across the country as they worked to modify their election
processes to ensure voters could exercise their rights in a safe envi-
ronment. As they navigated these new circumstances, they also
maintained focus on potential cybersecurity vulnerabilities to voter
registration systems, voting machines, and systems that tabulate
and display election results.
I am pleased the Commission has worked closely with the De-
partment of Homeland Security’s Cybersecurity and Infrastructure
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Security Agency, as well as Cyber Command, to make sure State
and local officials better understand the threats they face and how
to mitigate them.
I hope these partnerships between the Federal Government and
State and local election officials continue to grow. However, I don’t
want to see the heavy hand of Washington bureaucrats dictate to
State and local officials how their elections must be administered,
or what equipment to use. Keeping the administration of elections
in control of the States is part of the bedrock system that has
served America since its founding.
I also believe States should be responsible for funding the costs
of voting machines and election execution. Not only does it
incentivize effective management and decision-making, but with
our national debt in excess of $28 trillion and growing, it also rec-
ognizes the harsh fiscal trajectory faced by unbridled spending. We
need to be targeted and direct Federal tax dollars to the areas of
the greatest need.
I thank the chairman for holding this hearing. I look forward to
hearing from our witness, and I yield back the balance of my time.
Mr. QUIGLEY. Thank you, sir.
And before we go to our witness, we are honored to be joined by
the chairwoman of the full Appropriations Committee, Chairwoman
DeLauro. There she is.
The CHAIR. Good morning. Good morning, good morning.
Mr. QUIGLEY. Good morning.
The CHAIR. Wonderful to be with you, and I thank you. I am, ob-
viously, honored to be chair of the full Appropriations Committee,
and I am going to try to make as many of the committee hearings
as I possibly can. But it is a pleasure to join with all of you today.
And I want to recognize Chairman Mike Quigley, Ranking Mem-
ber Steve Womack, for organizing the hearing. And I thank the
Election Assistance Commissioner, Mr. Hovland, who will testify
this morning.
I think the subject of today’s hearing is so critical, and that we
need to look at the steps that we have taken to secure our demo-
cratic systems, and I know that is what we are going to hear about
this morning.
Almost 400 years ago, our democracy was founded on the
premise that all people are created equal. The right to vote would
grow with each generation to ensure that democracy. And today, in
some respects, we have seen that challenged.
For 4 years now, our right to vote has been threatened by foreign
adversaries, and this year, by challenges that we had at the State
level. And this hearing is an opportunity to discuss the EAC’s re-
surgence after years of the agency being underfunded in previous
Congresses.
I look forward to hearing more about EAC’s plans to continue to
expand their ability, to support State efforts, to enhance election
security, increase access to the polls and other activities to improve
the administration of Federal elections.
It was not that long ago that we had these conversations. The
Help America Vote Act of 2002 made broad reforms to the adminis-
tration of Federal elections, and the Act established the EAC to
quell many of these vulnerabilities.
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As the chairman pointed out a moment ago, to our detriment, be-
tween 2010 and 2019, the EAC’s annual funding was cut by nearly
50 percent. This inconsistent, insufficient Federal funding has hin-
dered the ability of EAC and State and local election officials to
combat very real threats to election security. The rise of misin-
formation and the coronavirus pandemic have only further com-
plicated these efforts.
I want to say a thank you to Chairman Quigley for a significant
allocation of funds to enable the EAC to begin to increase staffing
and to expand the agency’s support to election officials in 2020.
Again, in fiscal year 2021, the chairman and ranking member fur-
ther increased the EAC’s funding to $17 million.
The increases have enabled the EAC to begin to rebuild the staff-
ing, which has already doubled in the past year, and expanded the
agency’s support to State election officials. And that is just a start.
There is still considerable room for improvement, as many States
lack the funds to implement necessary election security measures.
But no voter should ever have to choose between their health and
their right to vote.
One of our core responsibilities on this committee is to ensure
that the agencies under, our purview, safeguard America’s election
processes and our democracy. And the EAC is a national clearing-
house for information on election administration and accessibility,
and the only, the only Federal agency completely dedicated to elec-
tion administration.
So, now more than ever, we need to provide the necessary re-
sources, support that protection of our democracy, secure our elec-
tion.
I want to say, again, thank you for your work, and I look forward
to hearing the testimony on this very important subject.
And I thank you and I yield back, Mr. Chair.
Mr. QUIGLEY. Thank you, Madam Chair. We appreciate your
being here. We look forward to your leadership.
Now, I would like to bring on our featured guest today, the chair-
man of the Election Assistance Commission, Benjamin Hovland.
Sir, thank you for being here. Please go forward with your open-
ing statement.
Mr. HOVLAND. Thank you, Chairman Quigley, Chairwoman
DeLauro, Ranking Member Womack and members of the sub-
committee. I am Ben Hovland, Chairman of the U.S. Election As-
sistance Commission, or EAC. I appreciate the subcommittee’s invi-
tation to testify on the work of the EAC and the impact of the elec-
tion security and pandemic response grants provided by Congress
to the States.
The story of election administration in 2020 should not be told
without acknowledging the tremendous job that State and local
election officials did to run their elections while facing unprece-
dented challenges. With a record of nearly 160 million Americans
voting in the November general election in the middle of a global
pandemic, the effort required to conduct this election was Hercu-
lean, and the officials who managed this task deserve our thanks
and praise.
While politics in the aftermath of the November election have
distracted many from how the election was run, I can unequivo-
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cally say this was the best administered election that I have seen
in my career. There are many reasons for this success story, but
first and foremost, is that the public servants that run elections in
cities and counties across the country put their personal health on
the line and worked countless hours for their voters and our de-
mocracy.
Federal grant money also played an essential role in assisting
election officials with some of the challenges they faced. Since 2018,
Congress has appropriated $805 million for election security. This
has helped replace outdated and paperless voting machines, replace
or harden statewide voter registration databases, create innovative
new programs, like Cyber Navigators, that address head-on, some
of the resource disparity challenges of our decentralized election
system, and provided for countless hours of training for staff to be
on alert and prepare and respond to common attack vectors.
The critical impact of this funding, combined with the impressive
efforts of State, local, and Federal partners, gave me complete con-
fidence when joining the statement from the elections infrastruc-
ture government and sector coordinating executive committees that
the November 3rd election was the most secure in our Nation’s his-
tory.
Additionally, the $400 million provided as part of the CARES Act
in April of 2020 helped election officials address some of the addi-
tional costs associated with running both the largest mail and ab-
sentee ballot election most jurisdictions had ever experienced, and
making polling places as safe as possible for voters and election
workers.
EAC was proud of the work we did to distribute and administer
these grants to the States and appreciate this committee’s trust in
us to do the job. The recent funding increase to the EAC from Con-
gress also increased our capacity to assist election officials during
this challenging time.
From an all-time low operating budget of $7.95 million in fiscal
year 2019, the increase in fiscal year 2020 made for an exciting
time at the EAC. We expanded the EAC workforce by hiring ex-
perts in important areas of our work, including numerous mission-
critical positions across departments.
Throughout the 2020 primaries and general election, the EAC
provided much-needed assistance to election officials. By chairing
the ElectionInfrastructure Joint COVID–19 Working Group, we
were able to leverage partnerships with State, local, and Federal
partners to quickly respond with guidance on the challenges pre-
sented by the pandemic.
We also developed new guidance, posted public forums on pan-
demic-related concerns, and closely monitored innovative State
preparations, encouraging election officials to share their successes
and challenges. These efforts included dozens of educational videos,
materials for election officials highlighting proven best practices,
addressing specific concerns related to COVID–19 and the use of
CARES Act funding.
Other new efforts included creating the EAC’s new Cyber Access
and Security Program, which provided security training, best prac-
tices, and other assistance for election officials tasked with pro-
tecting critical election infrastructure. EAC also established the
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first ever National Poll Worker Recruitment Day, galvanizing na-
tional recruitment efforts and alleviating concerns about a signifi-
cant shortage in poll workers due to the pandemic.
While we acknowledge the success of the State and local election
officials to administer the 2020 election, it is also clear that there
is much work to be done. If the 2020 election has taught us any-
thing, it is that our democracy is precious, we must invest in it to
make it stronger, and we must constantly seek to improve it. As
the Election Infrastructure Sector-Specific Plan notes, ‘‘a govern-
ment wide approach to funding elections and election security is
needed. Viewing the Subsector as an infrastructure of our democ-
racy is important to understanding the need for consistent invest-
ment and maintenance to ensure the system is strong.’’
We appreciate your interest in the EAC’s ongoing efforts. With
its limited resources, the EAC has helped assist State and local of-
ficials through this unprecedented time. But the job ahead requires
the proper level of investment to ensure lasting success. The EAC
is prepared to play an increased role in this pursuit, and we look
forward to our continued partnership with the subcommittee and
with Congress.
Thank you, Mr. Chairman, and members of the subcommittee. I
am happy to answer any questions you may have.
Mr. QUIGLEY. Thank you so much. We are starting to have these
hearings in rapid succession, so some members have conflicts. I am
going to let Mr. Bishop go first, just because he has one and then
another, one occurring now and then shortly thereafter. So I will
recognize Mr. Bishop.
Mr. BISHOP. Thank you. Thank you very much, Mr. Chairman.
And thank you, Chairman Hovland, for your testimony and all
of the work that the EAC has done over the past year and few
months.
Let me get right into the questions, and I will try to be very
brief, if I can.
I want to talk about the mail-in voting. With the ongoing
coronavirus pandemic, there have been many challenges in admin-
istering the 2020 elections, and to minimize exposure, about 100
million Americans voted early. You mentioned that the CARES Act
provided $400 million in emergency funding. Can you tell us how
this funding was used by States to improve their mail-in and ab-
sentee voting procedures?
And the flexibility was crucial in keeping Americans safe, but
many opted to vote in person. So tell us how the EAC supported
in-person voting in the 2020 election?
And finally, another subject that is very, very near and dear to
me, I had a conversation and a meeting just yesterday with the Na-
tional Federation of the Blind. And they raised serious concerns
about accessibility for voters with disabilities, and they particularly
were concerned with legislation that could ensure that Americans
with disabilities have the same opportunity to vote freely and inde-
pendently as other voters.
And they indicated that with the absentee and the mail-in vote,
that sometimes it is very, very difficult for them to access that. Of
course, obviously, it is not in Braille. And they would like for the
EAC and for Congress to look at some way to assure that they can
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be communicated with actively and accurately and effectively, and
that they can respond, because they found the current processes for
absentee mail-in ballots to be somewhat onerous for them.
Thank you very much. If you can handle that, I will yield back.
Mr. HOVLAND. Thank you, Congressman Bishop. You know, as
mentioned, the CARES Act was a big deal for States and localities
to get this money during the pandemic. As I mentioned in my testi-
mony, most jurisdictions were facing the largest mail-in absentee
ballot election they had ever had.
Now, that doesn’t mean people aren’t used to having mail-in ab-
sentee ballots. You know, we know from the Election Administra-
tion and Voting Survey, that about 25 percent of Americans voted
that way in 2016. This year, it will be closer to 50 percent. But
some of the things that the importance of getting that money out
and getting it early, like it was, allowed people to make equipment
upgrades. You know, possibly some things that were done manu-
ally were able to be done automated to handle that volume in-
crease.
I mentioned the COVID–19 Joint Working Group. That worked
with election officials and the private sector election space to iden-
tify best practices.
You know, one of the benefits of decentralized elections was you
had election officials from Washington and Oregon and Utah and
Colorado, who had been implementing vote by mail and expanded
absentee balloting for decades and were able to share some of those
lessons learned with their colleagues that didn’t have that luxury
at the time to ramp that up. And so, that made a humongous dif-
ference in those preparations. At the EAC, we did videos with those
officials to share with people, again, produced various guides. But
a lot of it also was getting that money early to take into account
some of those procurement timelines.
You also mentioned the in-person, making that as safe as pos-
sible. Again, the Joint Working Group addressed a lot of those
issues. We also worked with the CDC to issue guidance on how you
make polling places as safe as possible for voters and poll workers.
And you saw a lot of innovation, from one-time use pens to reduce
contact, regular contact surfaces. We saw the ″I voted″ pen make
an appearance this year in some places instead of the I voted stick-
er.
And I just want to make sure I leave time to address your ques-
tion about accessibility. Absolutely agree with that. You know, the
Help America Vote Act that created the Election Assistance Com-
mission was, in many ways, a piece of accessibility legislation,
making sure that Americans could vote independently and pri-
vately.
We work to share best practices around that. I think there is
more that we can do to make, for example, mail-in absentee ballot
accessible to more Americans. Different States have implemented
this different ways.
You also have something I think we can go farther than. It is
probably a resource issue. But the MOVE Act required that each
State have a portal for a blank ballot delivery for military and
overseas voters. You know, I think we can do a lot to possibly ei-
ther build a template, or encourage those to become both—you
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know, make sure those are secure and accessible so they can be
used for our military and overseas voters, but also as a great way
to deliver blank ballots for accessibility purposes as well.
Mr. BISHOP. Thank you very much, Mr. Chairman.
Mr. HOVLAND. Thank you.
Mr. QUIGLEY. I recognize Ranking Member Mr. Womack.
Mr. WOMACK. Once again, thank you, Mr. Chairman, and thanks
to our witness. Just a couple of questions related to Federal spend-
ing on elections.
The CARES Act, if my numbers are correct, CARES Act had
$400 million allocated to States for the 2020 election cycle related
to COVID. The Speaker’s HEROES Act, which wasn’t enacted but
did pass in the House twice on partisan votes, would have provided
an additional $3.6 billion for this purpose. Based on initial data re-
ported by the States, it is my understanding that States only used
about $270 million, or about 68 percent of the $400 million pro-
vided in the CARES package.
So it begs this question, Mr. Chairman: Was the $400 million
provided in CARES more—was it more than what the States actu-
ally needed if, in fact, only about 68 percent of what was provided
was actually used?
Mr. HOVLAND. Thank you, Ranking Member Womack. You are
right on those numbers. I would say the $270 million that we have,
that was preliminary, based on the 20-day reports that the CARES
Act language required.
The FFRs on that are due on February 28th. So that will give
us a more complete picture. I think when you look at that number,
again, the low number, the low bar on that is going to be about 70
percent of that money being used, which was important.
There were some issues, as you know. There was a 20 percent
match requirement. That also triggered a lot of State legislative ap-
proval to use the money. So in some States, that led to delays or
challenges. You know, when this money went out the door, it was
toward the end of some State legislative cycles, or some had al-
ready ended. So there were some issues with that as far as getting
funding out the door. You know, what the number was exactly,
again, this was probably the most expensive election that we have
ever seen.
You did see some private philanthropy come in that I don’t recol-
lect ever seeing. Mark Zuckerberg and Priscilla Chan spent about
$400 million. And, again, I have talked to the people who distrib-
uted that at the Center for Tech and Civic Life and election offi-
cials who received it, and that was going for the basics. You know,
that was going for PPE. That was going to disinfect and clean and
to procure significantly, or enough polling locations, places that had
closed down because maybe they were senior centers and weren’t
available, also locations that had enough room to social distance,
both for voters and staff.
Getting the right number is a little bit tricky. I am happy to dive
down into some of the consistent issues that the chairman men-
tioned. But I think that is really what you look at as far as the
CARES Act money went this year.
Mr. WOMACK. So if we go back to the HEROES package that I
referenced just a minute ago, based on just some basic Arkansas
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math here, it was an amount nine times greater than the $400 mil-
lion in the CARES package.
So let’s just, for the sake of the argument, assume that the HE-
ROES Act was enacted into law. What in the heck would we have
been spending $3.6 billion on?
Mr. HOVLAND. Well, as you mentioned, I am a proud graduate of
Eureka Springs, Arkansas, High School, so I am good at Arkansas
math. And I will say that—go, Highlanders—you know, again, I
think that any time you look at Federal election funding, the de-
tails matter; the expiration dates matter; the structure matters.
You know, when you look at—and we can talk about this more
with some of the security grants—but the way that most of these
grants are structured is that they go to the State. Well, State and
localities have very different expenses and very different needs in
the election space. The bulk of expenses with election administra-
tion in most States is borne out at the local level, and so, that is
important.
You know, I think one of the things that I have seen in some of
the House appropriations bills has been a piece that mentions 50
percent in cash, or in kind, going to the locals. I think that is very
important.
Unfortunately, it hasn’t made it through the Senate side yet, but
that really recognizes the costs that are primarily borne out at the
local level, but also allows for that flexibility, because we do have
top-down and bottom-up States in the way that they structure elec-
tion administration around the country.
Mr. WOMACK. You know, one of my concerns as an appropri-
ator—and this has been the case for the 10 years, 10-plus years
that I have served in Congress—is that invariably, States, and
even further down on the local level, State and county levels, they
all want more of our money. They all want more Federal taxpayer
money to execute missions that I think are incumbent on them to
command. Elections is part of that.
Now, I am not going to discount the fact that we shouldn’t have
a role in helping people through technical assistance and what
have you on elections, but it just goes without saying that the more
we give them—and in this particular case, because of a COVID sit-
uation, it was maybe more of a one-off than normal, than normal.
The more we give, the more they become reliant on those kinds of
funding packages, which lessens the need, in their respective opin-
ions, to be able to cough up the money locally.
And I have always believed—and I am a former mayor—that if
it is our money that is in play, we are going to be very effective
in how we administer that money. But if it is our money, we are
going to make sure that it is spent for all the right reasons. If the
money is gifted to us by another agency, sometimes it can be used
a little more loosely.
So I just want us to understand, I want all my colleagues on this
committee to understand that we have got this significant debt
hanging over future generations’ head, and we have got to be care-
ful not to allow more and more of the Federal tax dollars to go for
what is normally paid for at the more local level.
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And I got a lot more to say about that. I will reserve that for an-
other time. And I appreciate the opportunity to engage in a con-
versation today. Thank you, and I am going to yield back.
Mr. QUIGLEY. Thank you.
I recognize the chairwoman of the full committee, Ms. DeLauro,
if she has any questions.
The CHAIR. Mr. Chairman, I don’t. I am just interested in listen-
ing to the questions of our colleagues on both sides of the aisle.
And, you know, thank you for this important hearing.
So, as I said, I will try to continue to be present at these hear-
ings, but I don’t want to detract from what our colleagues on the
subcommittee want to get at, the core of this issue. So thank you
very, very much, and I yield back. Thank you.
Mr. QUIGLEY. Thank you.
And, Chairman, let me go ahead and ask a few questions here.
We talked about the money not being used and certainly the timing
of that. You referenced certain issues. One of them was there is a
matching issue. It comes at the end. Some General Assemblies
don’t meet very often, have opportunities.
But you also gleaned, or do you hear from them that some of the
other issues why this isn’t happening, is it because they went so
long without that is it, to an extent, they are almost hoarding this
so that they can level off the spending over a period of time, recog-
nizing that, you know, next year they may get zero from the Fed-
eral Government, or other reasons?
Mr. HOVLAND. Thank you, Chairman. Yeah. And I will distin-
guish there a little bit between the CARES Act funding and the
HAVA security grant money, because I think there are a little bit
of differences.
But on the security grants, in particular, that is exactly right.
You know, for a long time, we went without any HAVA, additional
HAVA money until 2018. So certainly, you know, that, you know,
I know a lot of States wonder is this the end of Federal money?
You know, do I need to hold onto some of this? But I think a bigger
part of it is, frankly, some of the timelines that we are on.
So, again, you have seen a lot of the fiscal year 2018 money be
spent, but you also have, you know, the fiscal year 2020 money
came at the end of 2019. We were a few weeks from the Iowa cau-
cuses, and getting right into the Presidential cycle. For major pro-
curements, both, it is difficult to do in an election year, but you
also don’t want to be making major equipment changes in the mid-
dle of a Presidential election, because of unintended consequences,
or possibly bugs with those systems.
And, so, you see that there are States—you know, I will use—
well, I will give you two examples. Delaware replaced its paperless
equipment using the fiscal year 2018 money. Delaware got $3 mil-
lion, the minimum in fiscal year 2018, and they used all of that to
assist with a $13 million purchase of equipment. And Delaware has
three counties.
You look at Louisiana. They are in the process of procuring a
new statewide system. You know, the projections look at that as
being about a $95 to $100 million purchase to cover their 64 par-
ishes. And their Federal portion from all of the security money,
both the 2018 and 2020, adds up to about $12.5 million.
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So, again, a significant portion, but they are still looking, you
know, to get a significant State and local investment. And as soon
as that procurement goes through, as soon as that contract goes
through, you know, they will have spent down to zero.
And, so, you have sort of these buckets. Arkansas, Arkansas sent
grants to a lot of their counties, and that was spent on new equip-
ment. Arkansas used all of its money.
A different category, Illinois, a new innovative program called
Cyber Navigators, where you recognize that some counties just
don’t have the need or resources to have a dedicated cyber profes-
sional, so you have State employees that have regional responsibil-
ities. You know, they have a handful of counties that they are re-
sponsible for. But that is a program that is designed to last over
time, and respond to the consistent nature of cybersecurity chal-
lenges. And, so, the spend-down rate on that is slow.
And then you have the category that I mentioned earlier that
Louisiana is in, where they are just on the verge of a major pro-
curement. Another example of that, I heard from a State election
director recently, they expect to use up all their money, their re-
maining money replacing their statewide voter registration data-
base. But, again, that wasn’t something they wanted to do in the
middle of a Presidential election cycle.
Mr. QUIGLEY. And just for the record, let me ask, do you get an
exact runout of how each State spends its money?
Mr. HOVLAND. Yes, we get that reported to us. Again, we get it
on the fiscal year. So, you know, we have reporting through Sep-
tember 30th of 2020, and then they have until the end of the year
to provide that for us. We are still working with a couple States
to make sure that their numbers are right and that we have got
that accurately, and then we will provide a report.
But, again, when you look at the whole picture, you can see that
the money is significant, though it isn’t enough to cover some of the
major purchases, like total equipment replacement, or voting ma-
chine replacement.
And, so, what a lot of jurisdictions are doing, you have many op-
tions and they are going through and prioritizing. You know,
maybe that is replacing paperless equipment; maybe it is imple-
menting audits; cybersecurity training for staff; implementing pro-
grams, like I mentioned, with Illinois, the Cyber Navigators Pro-
gram. But, again, a lot of that is making choices and priorities
about each State’s individual risks.
Mr. QUIGLEY. Okay, thank you.
Mr. Amodei is recognized.
Mr. AMODEI. I am just enjoying the education, Mr. Chairman, so
I yield back.
Mr. QUIGLEY. Thank you.
Mr. Pocan.
Mr. POCAN. Thank you very much, Mr. Chairman. And I am
looking forward to being on this committee in the 117th, so appre-
ciate it.
Chairman Hovland, thank you very much for being here. I just
have a question around the last election, but really moving forward
from it on voter misinformation. There was a Quinnipiac poll last
month that found 37 percent of voters think that there was wide-
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spread fraud in the 2020 elections. And, of course, we saw what
happened, what that manifested to on January 6 in some ways.
So I have a three-part question regarding: One, what is the role
of the Commission in combating misinformation about elections?
Two, are there some proactive steps that we are taking between
now and the 2022 midterms to give Americans confidence in our
election systems? And, three, do you need any resources to help to-
wards that end for 2022 and 2024?
Mr. HOVLAND. Thank you for that. Absolutely a great question,
very important. You know, as I mentioned earlier, I think there are
a lot of benefits that we get through our decentralized election sys-
tem midyear.
The assistance from the vote by mail States on how to ramp up
was important, but one of the real challenges that we have to rec-
ognize is the decentralized system makes us more susceptible to
misinformation and disinformation. It is just harder to combat
that, because each State runs elections a little bit differently.
And, so, I think, you know, when we look at what we need to do
on that, there were efforts this year that I think were important.
The National Association of Secretaries of State drove a
TrustedInfo 2020, trying to get their election information from
State and local election officials. That was important, but I think
we can do a lot more.
You know, we get a lot of calls, a lot of fact-checking at the EAC.
Our Election Administration and Voting Survey, you know, has a
lot of real facts about how elections are actually run.
I think with the resources, and with adequate resources, I would
love to see us establish a one-stop shop website that helps with
voter education, helps with fact-checking, you know, has that infor-
mation directly from the States about the various ways that—you
know, what is your registration deadline? When do you have to re-
quest a mail or absentee ballot? Those rules of the road for voting
in one place, but also that could help direct people to their State
or local election official.
I think that our effort to create National Poll Worker Recruit-
ment Day, where we had the HelpAmericaVote.gov website, showed
that you could have national campaigns that pointed people to one
central location like HelpAmericaVote.gov, but then that website
gave people basic information and then got them to their State and
local election official.
And I think that is a model for how we can do that with broader
election information, and help educate the public around the proc-
ess part of the voting, and it can get them the accurate information
to their State, to their jurisdiction. But that will take more re-
sources.
Mr. POCAN. Thank you. And just a question as far as, in your
opinion, are we capable of anticipating threats and are States capa-
ble of doing that, or do we need to provide any infrastructure help
for any States right now that aren’t up to speed?
Mr. HOVLAND. You know, I think we have done a great job on
information sharing. Again, part of why I was comfortable making
that statement about the security of the 2020 election is we are
really seeing a sea change in information-sharing with the State,
local, and Federal level. Things like critical infrastructure designa-
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tion have helped with that. There has been the creation of an Elec-
tion Infrastructure Information Sharing and Analysis Center. That
has got almost 3,000 members in it.
You really have a level of visibility and communication in the
election space that we have never had before. That is—you know,
Chairman Quigley hit on it earlier, and it was the mention about
an annual funding stream. You know, I think that is one piece of
this.
The nature of cybersecurity threats, the ongoing nature of those
threats, and the fact that it is a national security issue means
there is real value to having, you know, a piece of Federal funding
that is known, that is dependable, that can be planned around so
it is efficient.
And also, that said, you know, there is a Federal portion of the
ballot. This is a national security issue. Here is the Federal piece.
State and locals, you are primarily responsible for running elec-
tions. You are primarily responsible for funding elections. You
know, you need to come up with the rest.
And I think that is what the sector-specific plan really envisions
in its funding section, where it talks about that whole-of-govern-
ment approach to funding our elections.
Mr. POCAN. Thank you, Mr. Chairman. I yield back.
Mr. QUIGLEY. Thank you.
And I yield to Mrs. Lawrence.
Mrs. Lawrence.
Mrs. LAWRENCE. Yes. Hello, everyone. I want to first of all take
this time to thank our electors across the country.
I have a question for you, Mr. Hovland. Back in October, two
right-wing individuals were charged in connection to racist
robocalls aimed to dissuade and discourage around 12,000 black
residents in Detroit and other U.S. cities from voting in the Novem-
ber election, telling them that voting by mail in the upcoming elec-
tion was subject to their arrest, debt collection, and a forced vac-
cine.
What do we need to do to fight misinformation campaigns from
our citizens, particularly in the underserved or the communities in
the Black and Brown communities? What public engagement cam-
paigns is the EAC employing to combat this disinformation? And
we know that election security and what we struggled with the
most in this last election was misinformation. I would like a re-
sponse to that. Thank you.
Mr. HOVLAND. Thank you, Representative Lawrence. Great ques-
tion. You know, that is absolutely, I think, one of the biggest chal-
lenges. You know, I think there were a lot of things that you hit
on there that are important to dive down into.
One, you know, we see more and more misinformation and
disinformation, you know, both that is domestic, but, also, ampli-
fied by foreign adversaries that often mirrors traditional voter sup-
pression tactics. That is a real concern. Obviously, if it is domestic,
that should be enforced by the DOJ or local prosecutors.
But to your main point, I think, we can do more around the voter
education space. I mentioned the one-stop shop website. I think
that is a big deal. You know, getting that trusted source informa-
tion to voters, having one place that you can point people to.
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You know, another thing I didn’t mention earlier, we are in an
interagency agreement with GSA on vote.gov. That is around voter
registration, but I think that is something that can be expanded
on. I think you can have basic voter education videos there to help
reduce barriers to entry, or we know from various studies that, you
know, a lot of people aren’t comfortable participating, because they
are not familiar with the process. You know, they don’t want to go
into the polling place and not understand what is happening, or
maybe they don’t know how mail-in absentee balloting works.
And even at the national level, I think we can do basic voter edu-
cation videos to reduce that, reduce people’s potential for being in-
timidated with things like you described. Again, I think there is a
lot of work we can do there to address voter education.
And on a lot of these things, you know, when you think about
the fiscal impact, you know, I recognize what the ranking member
said, but when we can find those areas at the EAC, where you
have a 50-State impact or close to it, a dollar invested at the Fed-
eral Government can save taxpayers’ dollars around the country,
because you are not reinventing the wheel.
You get the economies of scale of a national approach and the
ability to utilize other organizations to amplify those messages at
the national scale and have, you know, again, like a lot of success
with National Poll Worker Recruitment Day, getting amplified on
a number of different places, you know, by celebrities, by various
groups. And you really saw a new generation of poll workers step
up. And, so, in many ways, I think that is a model, and we could
use it on voter education.
Mrs. LAWRENCE. If I may, I am looking for a commitment for a
public engagement campaign for misinformation. So you hit upon
a couple of those things, you know, partnering with the Secretary
of State, so that there could be automatic campaigns that address
misinformation. The website is good, but these are robocalls going
into homes.
So just to be committed financially to your budget, and a commit-
ment that you can make, because misinformation, if we don’t at-
tack that and change that, we are never going to get our election
process to be sustainable. And we fought through it this time, and
I am so proud of all the engagement.
And, so, you named some of the private entities that you are
working with. And I just want to be on the record that the targeted
groups are usually those who are minority groups and underserved,
and there is a benefit to not having it cut off. So thank you so
much, and I yield back.
Mr. QUIGLEY. Thank you. And I apologize if I went out of order.
I didn’t realize Mr. Stewart had joined us. He is now recognized.
Mr. STEWART. Yes, thanks. I have actually been on the whole
time. And sometimes, Mr. Quigley, some of us may not have our
cameras on the whole time, so that may make it——
Mr. QUIGLEY. Sorry about that.
Mr. STEWART. Yeah. Hey, no worries at all.
I had a few things if I could, Mr. Chairman. Thanks for being
with us, and, again, Mr. Quigley and Ranking Member, thanks for
hosting.
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Let me ask my two questions and then allow you to respond.
They are a little bit different. One is many of us are familiar with
SolarWinds. It is a catastrophe, actually, in the cyber world.
I need to understand, did we have any evidence that any of our
processes in elections were violated or compromised at all by
SolarWinds, especially knowing that it has been out there for a
long time?
The second question is, you mentioned, Mr. Chairman, Mr.
Zuckerberg’s—he said $400 million. It was actually about $420 mil-
lion he contributed to nonprofit organizations, private organiza-
tions, Safe Elections Project being one of them, but there were oth-
ers as well.
My concern is, and my question to you is, do you know how that
money was spent? And was it spent evenly? For example, if we
have private individuals or companies that are coming in and
spending hundreds of millions of dollars, in some places, maybe
more than the Federal Government is spending, but say they tar-
get blue-leaning districts, or blue-leaning States, or, perhaps, an-
other group comes in and targets red districts or red States? I
think that would be problematic. That would be very obvious to
both of us.
Talk to us about that, the funding of these private groups, our
ability to know how that money is being spent, and is that actually
influencing the outcome, or could it potentially influence the out-
come if it is spent in one district or another?
Mr. HOVLAND. Thank you for the question. First, on the
SolarWinds. I haven’t seen any evidence that the election or any
tallies were impacted again. Some of the things that were in place
this year that were crucially important to that confidence was you
had about 95 percent of Americans vote on a paper ballot, or a
paper audit trail. Obviously, in a number of the close States, we
saw exhaustive audits and recounts, a hand inspection in Georgia
that reconfirmed the machine tallies. And all of that was very im-
portant to having confidence in the elections.
You know, I think that SolarWinds is just such a reminder of the
evolving nature of these challenges, and basically, that we can’t—
you know, I think that election officials did an amazing job this
year. Again, there has been a sea change in information sharing at
the Federal level. But, really, it is just a great reminder that the
work has to continue, the investment has to continue. That is the
nature of these threats and challenges.
As far as the private philanthropy money to cover some of the
COVID expenses, you know, I have had briefings on that. It was
available to jurisdictions all over the country. You know, it went
to counties run by Democrats, Republicans, Independents. It was
available to every——
Mr. STEWART. Do you know how that money was spent, though?
Can you say that X amount was spent in these States and X
amount spent in another?
Mr. HOVLAND. I don’t have those breakdowns, because that
wasn’t money we distributed. You know, I think that it is impor-
tant that that money came in, given the pandemic, but, on a bal-
ance, I view it as a failure of government that States and jurisdic-
tions had to rely on the philanthropy of billionaires to be able to
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buy some of the basics, some of the PPE expenses they had, some
of the disinfectant equipment expenses they had, some of the
States to adequately socially distance their staff as they put their
own personal health on the line to run our elections.
And, so, you know, again, I think that I am glad it was there for
the jurisdictions that needed it this year, but I hope we can remedy
that in the future so that we don’t have to rely on private philan-
thropy in this space.
Mr. STEWART. Well, I agree and I think we should. And, by the
way, I am asking you if you would try to find that information for
us. Could you do that?
Mr. HOVLAND. I am absolutely happy to have conversations and
look into that and reach out for more information.
Mr. STEWART. Find out. And if we can’t find out that information,
that is a problem. And we should be able to know that. If someone
is contributing in ways that are election-oriented, we should know
how that money is spent and where that money is spent.
And the second thing is, to your point, Chairman, this is pri-
marily to preclude or to help with some of the expenses of COVID
and precluding a bad outcome there, but I worry that it sets a
precedent that will continue into the future. In 4 years, hopefully,
you know, God willing, we are not dealing with COVID.
And now, though, do we think that we have set a precedent
where you have private individuals who come in with hundreds of
millions of dollars and, again, are targeting specific districts or
States? And, look, that would be a real problem. It would be a real
problem for either side. And I think we need to know if that is a
problem, or it potentially could be.
The first way to deal with that is to know where that money was
spent. So, again, we would really appreciate if you would get back
with us on that.
Mr. QUIGLEY. Thank you.
Mrs. Torres, you are recognized.
Mrs. TORRES. I am sorry, Mr. Chairman, did you say Torres?
Mr. QUIGLEY. Yes.
Mrs. TORRES. Thank you. First of all, I want to welcome Election
Assistance Commission Chairman Hovland to our committee.
Thank you for being here with us today.
I must stress that there is a great need for you to work together
with other Federal agencies, other Federal Secretaries, to ensure
that everyone is working toward the same goal when it comes to
election security, when it comes to delivery of ballots.
So, with that in mind, I have three issues that I would like to
address with you: And that is the Postal Service. The Postal Serv-
ice was severely handicapped, reduced, attacked, whatever word
you may wish to use to describe what happened in those last 2
months before Election Day.
You know, it caused a lot of delays of mail-in ballots due to the
pandemic. So, State deadlines did not align with the reality of the
mail system that was set up. It was really a setup for voters to fail
to deliver their ballots on time.
So what role has the EAC played, and, moving forward, what
role can the EAC play to ensure that State voting deadlines, num-
ber one, align with the reality of the USPS; and what additional
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steps can Congress take to ensure the USPS guarantees on-time
delivery of all domestic mail-in ballots sent before the Saturday be-
fore Election Day?
On that same note, given the issues surrounding postal delays in
this last election, it is imperative that voters have alternative ways
of returning their mail-in ballots, such as drop boxes.
However, we must ensure that drop-off boxes are placed in loca-
tions that are secure and that we establish minimum guidelines. In
my home State of California, for example, the GOP placed more
than 50 drop-off ballot boxes in Los Angeles, Fresno, and Orange
Counties, which were fraudulently labeled as official ballot boxes.
The other issue was already mentioned by a previous colleague
as it relates to people with disabilities. There are 7 million eligible
voters who live with visual impairments. All of these voters have
a legal right to vote under the Americans with Disabilities Act and
Help America Vote.
So what are you looking to do to help ensure that ballots some-
day are available in Braille, to ensure that we have a voting sys-
tem that is truly a personal vote and doesn’t have to be disclosed
simply because someone needs assistance from either their care-
giver to fill out their ballot?
Mr. HOVLAND. Thank you for those questions, Representative. On
the USPS issue, you know, we work fairly closely with USPS. The
specific issue you mentioned on the State deadlines, that isn’t new.
There was, obviously, a little more focus on it this year. You know,
that is certainly something that State lawmakers balance how, you
know, on one hand, you want to make absentee ballots available
to people who may not have another option. But, again, if you
allow, for example, some States allow for a request 3 days before
the election. Well, it is not realistic that that is going to make it
both ways in transit.
You, obviously, then, also have different States that either have
postcard or a postal indicator deadline, or a received-by-election-
day deadline. And, so, those make a difference. You know, again,
I think we will continue to work on best practices. Again, I think
maybe——
Mrs. TORRES. If I could interrupt you there, because we cannot
abandon our responsibility to ensure that a Federal election is—
happened, and that voters are not disenfranchised. So, that is your
task. So, I hope that you will come back to our committee and pro-
vide some input on what we can do to ensure there are minimum
requirements for States to meet these guidelines.
Mr. HOVLAND. Well, one real—I will give you a quick thing that
I think will make a huge difference. A few years ago, the Federal
Voting Assistance Program, or FVAP, did a pilot program with the
USPS on full end-to-end tracking for UOCAVA ballots, informing
overseas citizens. And my understanding is that to go full
UOCAVA, and in turn, basically, full domestic tracking, for about
$8 million to the Post Office, not only would that help election offi-
cials understand where ballots are, seek problems that can be iden-
tified immediately if there is a pallet of ballots on a loading dock
that is getting delayed, but it would also help voters have that con-
fidence if they can see in transit both ways.
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And a lot of States have done that. We saw that as a big im-
provement this year. But I think if you have a uniform system of
that implemented by the USPS, then people could build apps off
that, people can do more off that baseline because it would be uni-
form across the country. I think that is an immediate improvement
that can happen.
Mr. QUIGLEY. Thank you. Mrs. Kirkpatrick is recognized.
Mrs. KIRKPATRICK. Thank you, Chairman, for being here. As you
know, in Arizona, over 90 percent of our vote is vote by mail and
so—which is a good thing. I mean, we have really seen an improve-
ment in voter participation because of that. But we have many
Tribal areas and rural areas that don’t have everyday mail service.
And so my question is, what are you doing to address those really
rural areas, especially Tribal areas where they don’t have daily
mail service?
Mr. HOVLAND. Thank you for that. Again, a hugely important
issue. You are right. Arizona’s permanent early voting list has led
to significant expansion into mail-in absentee ballot in there, and
that helps a lot of people, but it does—there are challenges with
USPS delivery. Certainly, that is something we are aware of. You
know, we continue to highlight best practices.
You know, but one of the things—and that is a hugely important
issue—but I think one of the things that is important to recognize,
too, is the nature of the EAC. You, know, we are a small agency.
It was mentioned that we were at an all-time low in 2019 of an
operating budget of $7.95 million. And this year, there was 17, but
we passed through about 11⁄2 of that NIST.
So, we have a $15.5 million operating budget. That means we are
almost to where we were—we are a little below where we were
with inflation a decade ago. And you look at a sister agency like,
the Federal Election Commission that does campaign finance, they
are at $70 million. You look at the election—the election program
at CISA, that is $40 million as part of a $1.5 billion subagency.
And, so, when you look at our 50-State jurisdiction and the
breadth of the challenges to election administration in this country,
all—being an election administrator has never been harder than it
is right now, and elections are chronically under-resourced all
across the country at the State and local level, and also at the Fed-
eral level. I wouldn’t hesitate to say that we should be $100 million
agency to take on the challenges that people expect of us.
And I know that doesn’t happen overnight, but I think this is a
great example of one of those issues that needs to be tackled. And
just when we look at our statutory mandates, when we look at the
things that we are required to do under the Help America Vote Act,
you know this is important, and we want to work on it and work
on best practices, but there is also a reality to what we are able
to do with the resources that Congress has given us.
Mrs. KIRKPATRICK. My follow-up question has to do with violence
at polling places. And, so, this was an emotional election. We had
marches in Arizona. We had people angry, angry crowds marching
to the polls. And I just wondered if—two things, are you seeing
that having a chilling effect on volunteers who work the polls? And
do you think it is actually having a chilling effect on the turnout?
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Mr. HOVLAND. I think what we saw more of this year, there was
certainly—you know, absolutely Arizona had, you know, was a
hotspot in many ways. I think we saw more of that in the after-
math. A number of election officials, you know, receiving death
threats, totally unacceptable. Again, these are public servants that
put their personal health on the line in service of our democracy.
People that care more about the integrity of our elections than any-
one else. And, so, really completely unacceptable, really unfortu-
nate. You know, I hope that it—it doesn’t deter people from getting
in this space.
I do think it was an extremely stressful year, and there is a level
of burnout amongst election officials. But it is one more reason that
we need to recognize the work they do, provide sufficient resources.
You know, again, the job has never been harder, and that is both
the administration pieces. But, then, the challenges that you are
alluding to, as far as around voter education to the process. You
know, more people saw more of the process this year than probably
ever before. You know, most people tune in election night, see the
preliminary results, and tune out. But this year we saw, we saw
the audits; we saw, you know, people going through provisional bal-
lots to figure out if someone was eligible or not; we saw the canvass
and certification process. And I think that was important, but
clearly, we can do more to educate people around that, and we can
clearly do more to support our election officials around the country.
Mrs. KIRKPATRICK. Thank you very much, Mr. Chairman. I yield
back.
Mr. QUIGLEY. Thank you. Question, Chairman, is there anything
you would suggest that we would do to incentivize the States to
move the money out quicker, if need be?
Mr. HOVLAND. So, I think that—a few things. On the security
grant money, you know, that—I think that there is a lot that ties
into the timeline I mentioned. I think if people knew there was a
consistent annual funding stream coming, it would allow for them
to plan for that accordingly. You know, you could look at—you
could look at expiration dates. The 2018 and 2020 money doesn’t
have expirations. And, again, only because that was the first real
money to come in a long time. You know, I don’t know that people
have confidence that there will be more. But, then, you saw, at the
same time, the expiration of CARES Act money was maybe a little
too short. And so I think we are happy. You know, our [inaudible]
Team does a great job working with all the States. We are happy
to work with your staff and try to work on some of those details,
you know, of course, and should involve talking to State and local
election officials and recognizing part of—part of the difference I
mentioned before in costs that are born out at the State level and
those that are born out at the local level. But I think there is a
lot we can do, and they are happy to work on that with you.
Mr. QUIGLEY. Sure. Mr. Womack, do you have a follow-up ques-
tion?
I am trying to do this on a hybrid on the second round, we don’t
have as much time, but I do want folks on this thing if they had
something they wanted to finish up, they had the opportunity.
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Mr. WOMACK. Yeah, I do, Mr. Chairman, and thank you. And,
Chairman Hovland, I do appreciate the information you are giving
us today.
This is a question about misuse of funding. How are you orga-
nized, set up, and how—because this comes back to kind of our
oversight piece—how are we able to discern the misuse of funds,
if and when it happens? And then, what actions are then taken—
what prompt, say an IG report, that would have the ability to re-
cover the misuse of funds? So, if you can talk, generally, about that
particular subject?
Mr. HOVLAND. Yeah, I am happy to. And, actually, when I men-
tioned our budget earlier, one piece that is important in there is
that we spend about $1 million a year on our inspector general. For
an agency our size, that is a huge portion of our budget.
Again, even when our budget was down to $8 million, $1 million
of that was going to our inspector general. And that is because our
inspector general’s office audits all of this HAVA money. You know,
they contract out for a lot of that, but to audit this money, usually
it is about five or six States a year, sometimes a little bit more.
This year, actually, Arkansas, Florida, Kentucky, Massachusetts,
New Mexico, and West Virginia were all audited.
And, so, we are looking back at that money, we are looking how
it is spent, looking at the receipts, making sure that it falls into
categories that are allowed by Congress, you know, qualifying ex-
penses, and then we provide those reports to you. You know, we
will continue to do that, move across the country, and make it
through that. And in those efforts, we are looking at CARES
money, we are looking at security money, we are looking at the old
HAVA money for any States that still have that.
And, so, a big part of our role is both helping States and jurisdic-
tions on the front end, you know, providing information, resources,
you know, webinars on allowed expenses, or ways that people can
use the money. But then, of course, on the back end, also auditing
that to making sure that it has been used correctly.
Mr. WOMACK. My final question, Mr. Chairman, would be this:
And that is, in education, we have accreditation standards, and we
have accreditation facilities set up of which to be able to monitor
and judge just how effective our educational institutions are. Is
there an accreditation standard, and is there an accreditation plat-
form by which our States are judged as to how they carry out their
mission on elections?
Mr. HOVLAND. So, again, with our decentralized elections, I
wouldn’t say there is—there is certainly no Federal standard. Obvi-
ously, we have a decentralized election system. The EAC is largely
nonregulatory. You, know, in a small agency, you do see things
that are created, things like the Election Performance Index that
is now housed out of the MIT election lab. It was created by the
Pugh Charitable Trusts. But that is a ranking of different cat-
egories that use a lot of election administration and survey data in
that.
There is a number of different ways that you can look at it. I
think a little different than a ranking standard. But to your ques-
tion earlier on resourcing and how we get there, you know, one of
the great things about the Election Assistance Commission when
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Congress created the Help America Vote Act was the Federal clear-
inghouse responsibility. There is so much more that we can do with
that. But one of the big areas that I would like to see us expand
into more of is doing trainings, because that does—you know, shar-
ing those best practices that election officials discover across the
country, but doing trainings around that to really help, you know,
everyone get better, and the efficiencies that we can realize
through that, the tax dollars that we can save through that, you
know, I think are significant. And I think that is a critical mission
for the agency in the future.
Mr. WOMACK. Thank you, Mr. Chairman.
Mr. QUIGLEY. Thank you. And then as we try to do a hyphenated
second round, I recognize Mrs. Torres, if she has a follow-up.
Mrs. TORRES. I do not, Mr. Chairman. I will put a letter together
for the chairman. Thank you.
Mr. QUIGLEY. Very good. Thank you. Mrs. Kirkpatrick?
Mrs. KIRKPATRICK. I do have a follow-up.
Mr. QUIGLEY. Can you get a little closer, please, to your micro-
phone.
Mrs. KIRKPATRICK. Sure. Is that better?
Mr. QUIGLEY. Yeah.
Mrs. KIRKPATRICK. Yeah, my question is what are your concerns
about violence at the polling places? You know, I am [audio mal-
function]. My question has to do with making sure that we have
got adequate poll workers and turnout in every election. And,
again, you know, do you see threats of violence as having a chilling
effect on that, being able to recruit volunteers?
Mr. HOVLAND. You know, I think that one of the things—you
know, one of the real silver linings that I saw in this year’s elec-
tion, you know, in the primaries you saw a lot of dropout around
poll workers. We know from the Election Administration and Vot-
ing Survey that the majority of poll workers are over age 60. And
we know that recruiting poll workers is always challenging. In
2018, about 70 percent of jurisdictions had at least some difficulty
finding enough poll workers.
And, so, in the primaries, you saw, in particularly some of the
States that had primaries right in the early days of the pandemic,
like Wisconsin, had a huge dropout, had to shut down a lot of poll-
ing places. You know, and, so, it became clear that it was going to
be critical to have enough poll workers. That was part of why we
launched the National Poll Worker Recruitment Day. There were
also a lot of other efforts, Power of the Polls, Poll Heroes Project.
You saw employers giving people the day off.
And what it really resulted in this year was a new generation of
Americans stepping up and serving as poll workers. And it is my
hope—I have served as a poll worker a number of times—and it is
my hope that their experience was similar to mine, that they real-
ize that they were the customer service face of our democracy. And
what they were there to do didn’t have anything to do with who
people were voting for, but simply that they were there, and it was
your opportunity to make their experience of the process be a good
one. You know, help that 18-year-old who was a little bit nervous,
or the senior citizen that has been voting longer than you have
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been alive, give them a little extra assistance, and give them the
‘‘I Voted’’ sticker and thank them for coming out.
I know that was the experience I had as a poll worker, and I am
hopeful that this new generation had that experience as well, and
we will see that make a difference in 2022 and 2024, because poll
worker recruitment has been a challenge for a long time, and I
think it is something we need to continue to amplify.
I think we learned this year that a lot of people didn’t know it
was the way they could serve in their community. And so, I think
we are going to continue to push those efforts, but it is crucial.
Mrs. KIRKPATRICK. Thank you so much, and I yield back.
Mr. QUIGLEY. Thank you. Mr. Amodei, you didn’t have a question
the first time, do you do the second round? I am not sure if he is
still with us, but we will ask Mr. Stewart the same question, if he
is not there. Either way, they are no longer with us, or it is a nega-
tive. So what we will do is we will wrap up.
Chairman, I want to thank you for your service, for your work,
and for your willingness to participate with us today.
Mr. Ranking Member, do you have anything else you want to say
in closing?
Mr. WOMACK. No, not at all. But again, good to have Chairman
Hovland with us. A good Carroll County product from Arkansas,
and a UCA product, and it is good to have him here.
And the next time you are back in the Third District of Arkan-
sas, make sure I get a call, let me know.
Mr. HOVLAND. All right. That sounds good.
Mr. QUIGLEY. I want to thank all who helped put this together,
all those who participated. The staff was outstanding.
These are difficult times. I look forward to seeing you all in per-
son as we do this next time. And we will see you all soon. We are
adjourned. Thank you.
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TUESDAY, FEBRUARY 23, 2021.
OVERSIGHT HEARING—INTERNAL REVENUE SERVICE
WITNESS
HON. CHARLES P. RETTIG, COMMISSIONER, INTERNAL REVENUE
SERVICE
Mr. QUIGLEY. And as if you haven’t had enough early warnings
about everything, we will commence and I will give you some more.
As this hearing is fully virtual, we must address a few house-
keeping matters. I would like to remind members that for today’s
meeting the chair or staff designated by the chair may mute partic-
ipant microphones when they are not under recognition for the pur-
pose of eliminating inadvertent or advertent background noise.
Members are responsible for muting and unmuting themselves.
If we notice that you have not unmuted yourself, I will ask if you
would like the staff to unmute you. If you indicate approval by nod-
ding, staff will unmute your microphone.
You will get three warnings and then a demerit. Three demer-
its—this is where we are heading, folks. I am just kidding.
I remind all members and witnesses that the 5-minute clock still
applies. If there is a technology issue, we will move to the next
member until the issue is resolved and you will retain the balance
of your time.
You will notice a clock on your screen that will show you how
much time is remaining. At 1 minute remaining, the clock will turn
to yellow. At 30 seconds remaining, I will gently tap the gavel to
remind members that their time is almost expired. When your time
is expired, the clock will turn red and I will begin to recognize the
next member.
Finally, House rules require me to remind you that we have set
up an email address to which members can send anything they
wish to submit in writing at any of our hearings or markups. That
email address has been provided to you in advance, to your staff.
I will keep my opening statement brief so we can get right into
the questions.
This morning we welcome the Commissioner of the Internal Rev-
enue Service, Charles Rettig, to testify on the state of the IRS.
Commissioner, thank you for being here today.
The past year has tested the strength, patience, and resolve of
the American people. The coronavirus pandemic is a public health
crisis that has caused an economic crisis. Many Americans have
lost their jobs and are facing food insecurity and struggling to pay
their bills.
Congress quickly jumped into action, passing multiple relief
packages, which in part tasked the IRS with the Herculean effort
of implementing these policies in a very short period of time.
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I commend the IRS for what they have been able to accomplish.
They have issued over 300 hundred million Economic Impact Pay-
ments totaling more than $400 billion to help taxpayers during
these trying times.
For many, these payments have been a lifeline, enabling families
to put food on the table, gas in the cars, which is why I want to
make sure that every American who is entitled to this money re-
ceives it. I am troubled that there are people who have not received
these checks.
President Biden immediately got to work to provide additional
relief to the American people. His American Rescue Plan includes
the remaining $1,400 checks that people were promised. It also
temporarily expands the Child Tax Credit, which could help cut
child poverty in the U.S. by as much as 50 percent. I fully support
the $397 million for the IRS to implement this effort.
Right now, we are 12 days into the 2020 filing season. In a nor-
mal year providing quality customer service and timely refunds is
a challenge, but these tasks are now compounded and the IRS is
stretched thin.
With an unprecedented backlog of over 8.7 million unprocessed
tax returns, staffing shortages due to safety concerns in IRS proc-
essing centers, outdated IRS IT systems, and the IRS’ new role in
administering stimulus payments and the Child Tax Credit, I
would like to hear from you, Commissioner, on the IRS’ readiness
for this season and if any additional resources are needed.
Recently, the IRS published its first Taxpayer First Act report,
which describes a 6-year plan to modernize the IRS, improve cus-
tomer service, reorganize the IRS with servicing the taxpayer as its
central focus. I am eager to hear more about the benefits of this
plan and how the IRS can move forward to accomplish these goals.
Lastly, as the IRS is managing these multiple efforts simulta-
neously, I want to emphasize the importance of ensuring the safety
of its workforce.
With close to 80,000 IRS employees, many of which are required
to work onsite during the filing season, it is crucial that the IRS
adhere to COVID safety protocols and continued communication
with the union and staff on all COVID matters.
With that in mind, I want to take this time to thank the hard-
working staff at the IRS for their continued commitment, expertise,
and dedication to the mission.
Mr. Commissioner, I look forward to having a robust conversa-
tion today on all these important issues.
And I will now turn to the ranking member, Mr. Womack, for his
opening remarks.
Mr. WOMACK. Thank you, Chairman Quigley.
And, Commish, welcome to this hearing. It is great to have you
here today.
I would like to acknowledge you and all of your employees at the
IRS for the work that you have done over the past year, things like
getting multiple economic relief payments to Americans, imple-
menting the other Tax Code changes included in the various
COVID relief bills, dealing with the impact of COVID on your staff
and their families, and doing your core missions of collecting taxes
and processing annual tax returns.
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While the IRS, like any other Federal agency, has made mistakes
over the year, I want to recognize that the agency has been asked
to do a lot under extremely difficult circumstances. We appreciate
your effort.
There are many topics we can cover today at this oversight hear-
ing, such as how the IRS plans to address the backlog of unopened
mail and unprocessed returns; improper payments, which has al-
ways been something that I have been interested in, including back
when we passed—when I was Budget chair and we did the last
budget that passed out of Committee in the House; the plan on
modernization of your technology; and how will you ensure that the
inappropriate spending and political targeting scandals that oc-
curred in the not-too-distant past have not reoccurred and shall not
reoccur.
Those are the kinds of things that are on our mind today, and
I look forward to your testimony and the Q&A that will follow.
And I am going to yield back the balance of my time. Thanks.
Mr. QUIGLEY. Thank you, Mr. Ranking Member.
Commissioner Rettig, thank you for being here today. As you
know, you don’t need an introduction anymore as you have become
an increasingly popular figure during the pandemic in disbursing
the coveted COVID stimulus checks.
But in all seriousness, while we might not agree on everything,
I appreciate our working relationship and how available you have
been to me and your staff.
Without objection, your full written testimony will be entered
into the record. With that in mind, we would ask you to please
summarize your opening statement in about 5 minutes. Please go
ahead.
Mr. RETTIG. Thank you, Chairman Quigley, Ranking Member
Womack, and the members of the subcommittee. Thank you for the
opportunity to discuss IRS operations and our efforts to help tax-
payers during the COVID–19 pandemic.
Your comments and appreciation for our employees are very well
received throughout our entire agency. And following these hear-
ings, I get numerous emails from employees commenting about
what you all mentioned on their behalf. And so it really is taken
to heart, and I want you to know that myself, as well as every em-
ployee of the IRS, really appreciates your comments.
The importance of the IRS to every American has become espe-
cially apparent since last spring as our Nation has faced unprece-
dented challenges. The IRS has been at the forefront of successfully
providing rapid economic relief to taxpayers during COVID–19. IRS
employees worked around the clock since mid-March to implement
major provisions of the CARES Act, and especially the first round
of the Economic Impact Payments to help millions of Americans.
By the end of 2020, we had delivered a total of more than 160
million in the first round of Economic Impact Payments totaling
more than $280 billion. During 2020, we also processed more than
163 million individual returns, including more than 125 million re-
funds, totaling more than $320 billion, to individuals.
IRS employees once again moved quickly to implement a second
round of EIPs that was signed into law on December 27. These
payments started posting to bank accounts just 2 days after enact-
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ment due to the efforts of our employees to monitor and the ad-
vance preparation as we were watching the different variations of
legislation move forward that gave us the ability for a quick turn-
around. A second round of payments went out 2 days after the leg-
islation was enacted, and it was 147 million payments totaling
$142 billion.
We made some mistakes throughout. We had learning lessons
throughout. We learned a lot in EIP 1 that we applied in EIP 2
that we think prepares us. Should Congress and the White House,
President Biden, enact an EIP 3, we think we are prepared to ap-
propriately serve the American people.
But we know that we can do more, and we know that we are
being called upon to do more and more. And let me assure you that
our employees want to do more. We take our tasks to heart. We
appreciate the privilege and the opportunity that we have to actu-
ally represent the people of this country, and we will not let you
down.
We did not have a pandemic playbook for how to respond to a
pandemic that shut down or slowed wide segments of the U.S.
economy. Nonetheless, thanks to the agility and flexibility of our
workforce, we were able to move forward, rapidly switching to a
virtual work environment and shifting the majority of our employ-
ees to be able to work remotely. At various times, we have had as
many as 61,000 employees teleworking.
Our IT division also provided the equipment necessary to allow
thousands of our customer service representatives to telework, and
we could not have done this without the support, and the financial
support, of Congress throughout. For that, we are most appre-
ciative.
During the summer of 2020, we began bringing back a limited
number of our employees to the offices to perform nonportable
work, including opening mail and processing paper returns. At one
point we had a backlog of more than 20 million pieces of mail, but
we have been steadily working through that backlog and we are
now current.
We realize our phased-in reopening has been difficult for Mem-
bers of Congress, for your staff, for taxpayers, and others, and we
appreciate everyone’s patience and understanding of the situation
that we were placed in as a result of the pandemic. However, the
health and safety of our employees, as well as those we interact
with, had to remain paramount throughout. Our employees shared
the same health and safety concerns as shared by every other
American for themselves, their communities, and others.
Turning to the 2021 filing season, and in closing, I am pleased
to report the successful opening of the filing season. At the first
week in, we received 55 million submissions, and at the peak we
were receiving 335 submissions per second.
We opened the filing season slightly later than in previous years
to give us additional time to do additional programming and test-
ing of our systems, and we are confident in the systems and in the
status that we find ourselves in today.
Chairman Quigley, Ranking Member Womack, and members of
the subcommittee, this concludes my statement, and I would be
happy to take questions.
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Mr. QUIGLEY. So we do appreciate this. And as was said over and
over again, I want you to appreciate the fact that we rarely in our
offices get calls from constituents when they get their payment, we
rarely do, but we always do when they don’t.
So if you could do a bit of a deep dive explaining why there are
still those who have not got those payments, what those reasons
could be, and where the problems exist, and how we move forward
to make sure everyone who is entitled gets those payments.
Mr. RETTIG. There is a number of reasons. I can touch on the
outreach side of it. Let me touch more on the technical side of it.
The CARES Act—both acts, actually, for EIPs—dictated a look at
the 2019 tax returns, and then, if the 2019 returns were not filed,
a look at the 2018 returns. So I think the concept was well placed.
There are tens of millions of people who do not have filing re-
quirements. And so during the issuance of EIP 1, we reached out
and coordinated our efforts with both the VA and the SSA because
most of the beneficiaries of their payments actually do not have fil-
ing requirements. And so we coordinated a programming for their
folks so that we could get payments.
And we actually reached out to more than 11,000 different orga-
nizations around the country with respect to homeless organiza-
tions, unsheltered homeless and whatnot.
From what we have seen so far, if I can sort of a lessons learned,
in the folks who have not received payments, they may not be fil-
ers. They may be filers and their returns may be caught up in a
variety of situations. It is a pitch, if you will, for electronic filing,
because, as I said, we had more than 20 million pieces of mail
stored at one point, and so we couldn’t use those returns that
might have been in those storages at that time to determine the
returns.
But for folks who actually electronically filed, we got over 90 per-
cent of those payments out timely, including their refunds. And
keep in mind that the individual refunds, and including EITC re-
funds and in many cases the CTC refunds, exceeded the amounts
of the EIPs that were being issued.
But, nonetheless, a lot of returns, less than 10 percent, but some
of the returns hit various filters that we have. And we have iden-
tity theft. We have situations where we have asked for additional
information from people.
So that would be a situation where maybe the 2019 return would
not have been processed, and ‘‘been processed’’ means actually post-
ed to the account so that we could draw the information from that
return.
From a staffing and a contact perspective, we have 13,760 CSRs,
customer service representatives, who essentially is our phone
bank. Through the year we did and we do provide, when requested
by FEMA, as many as 3,000 of our phone bank representatives
when there is a hurricane, a natural disaster, wildfires, and what-
not.
And I should indicate that we just got a request from FEMA this
week for 200 of our CSRs to participate with assistance down in
Texas. And essentially we flip a switch and our people go from
being IRS CSRs to doing intake for FEMA.
So we get called upon for a lot of different tasks.
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We did well overall when you get into the 90-plus percent range,
but it is easy and appropriate to turn it around and say there was
the 10 percent or so that we have been trying to connect with.
I will say that personally I touch base with hundreds of different
organizations around the country. We coordinated efforts with Low-
Income Taxpayer Clinics and actually provided them with the au-
thority to prepare returns for people who did not have returns such
that they could get Economic Impact Payments.
And it is easy for me to talk about the successes, and we are very
proud about our successes. But, similarly, we want to do more. Our
people live in the communities and are reflective of the commu-
nities and we are very proud of that. And it is not acceptable to
us that any person did not receive a payment.
I will say that the outreach and the organizations that we
interacted with, including more than 400 different Federal and
State agencies throughout the country, were invaluable in helping
us get the word out. Our outreach materials, really associated with
private practitioners, assisted us in getting our outreach materials
out for EIP in more than 35 different languages. We prepared tool
kits. We delivered 541 tool kits to the Hill, giving people the infor-
mation of what might be needed.
And none of this and none of my comments should be reflective
as an effort for an excuse. We understand the importance of getting
the payments out to people. There is a variety of different things
with respect to staffing at the Internal Revenue Service.
I will say that I am very proud of our employees who worked.
Our IT department and our Wage and Investment folks literally
worked 15-, 17-hour days from March. I don’t think our CIO has
slept since March. And we had a filing season, and EIP 1, and EIP
2, to go with our normal functions. And I am the guy, as some of
you have heard me say before, who shut down 511 of our facilities
and then had to figure out how to get back, and we had to balance
those responsibilities with everything else.
And I would also like to express our appreciation to NTEU, as
well as personally to Tony Reardon. During much of 2020, I was
on weekly calls with Tony Reardon, who is president of NTEU, and
we were totally in sync in terms of protecting our employees and
recognizing the duty that we had to the country.
So we could go down a lot of different lanes. The bottom line
is——
Mr. QUIGLEY. And we will have time. I just want to get to the
other members. And I appreciate that. And, look, I appreciate your
answering, your candid manner, and, again, your staff. But not to
cut you off, but I want to be a good example and let the other mem-
bers ask their questions, beginning with Mr. Womack.
Mr. WOMACK. Yeah. Hey, thanks, Mike.
Look, I understand that my colleague, Chris Stewart from Utah,
may have a hard time, that he has got to get out. And if that is
the case, I would be willing to defer any questions I have for the
Commissioner if Chris wants to chime in and get his questions out
of the way, because I think he has got a flight to catch.
Chris, are you on there? Do you want to take a moment here to
ask a couple of questions?
Well, I am not hearing Chris. Maybe he has already logged off.
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Mr. QUIGLEY. Well, if he comes on and you want to defer in the
middle of yours, we will abide, whatever works for you.
Mr. WOMACK. Yeah. I just saw he had logged on and I wanted
to make sure he had an opportunity to get involved in the Q&A.
Mr. QUIGLEY. Sure.
Mr. WOMACK. Thanks again, Commissioner, for being here.
I have always been concerned—and I have kind of put this under
the headline of mission creep—when Federal agencies get beyond
their core functions, and it always bothers me a little bit, and I
think it becomes an expensive issue for the agency.
I have picked on the VA because when they build hospitals—they
are not in the business of building hospitals—or developing IT in-
frastructure and they have IT problems. There are other organiza-
tions that do that better.
For the IRS, when ObamaCare was created, you guys were re-
quired to issue a tax penalty to Americans who didn’t purchase cer-
tain health insurance.
Now, in the reconciliation package that is before the House now
it has language in it about IRS issuing monthly checks to parents
to address child poverty, activities that I believe are outside the
core mission.
So I know that you are going to say that the IRS is going to do
whatever Congress asks of them. However, I want to ask these
questions.
When Congress directs you to focus on new things, such as
healthcare and children, the impact it has on your core mission of
collecting, performing audits, and processing returns, how much of
that attention and the attention of everyone in the agency will shift
from your core mission of collecting taxes to implementing monthly
payments to children? And would it hurt your ability to reduce the
backlog that we have already talked about?
Now, you mentioned that sometimes your agency is picked off by
another agency, like FEMA, to go from your core mission to mis-
sions involving another Federal agency. So that fits directly into
my question here.
So help me understand how we can be assured that your core
mission gets executed without the interference from other outside
distractions laid upon you by Congress.
Mr. RETTIG. You are correct that in my first comment that the
IRS stands ready to serve. The IRS [inaudible] its challenges. The
IRS receives, long before I came on board, numerous challenges
and I think for the benefit of the employees has a history of rising
to those challenges, certainly doing the best that it can, and the
best that it can under the circumstances.
For any new endeavor provided to the Internal Revenue Service,
funding, staffing, training are critical. Multiyear, consistent, ade-
quate funding is critical. One-year funding not followed up the next
year does put a stress on our resources as we end up having to bor-
row from one—to the extent we can—borrow from one side to help
fund another portion of the agency.
And we are an administrative agency. We don’t choose our chal-
lenges. I am confident in our people. But we need the support, both
financial and staff and training, and we need to have it in an ongo-
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ing manner as long as we are called upon to do any of these chal-
lenges.
Mr. WOMACK. In the fall, you and I discussed a delay in proc-
essing the Form 8849. This is a petroleum marketers refund issue.
Small and medium-size petroleum marketers rely on these refunds
to support their day-to-day, and it has impacted some marketers in
my particular district.
Can you update me quickly on how these refunds are being proc-
essed, how they are being processed? And is there a backlog that
we should be concerned about?
Mr. RETTIG. Yeah. We actually, as you would expect and as you
would hope and I believe as we talked about before, we prioritized
refunds for everyone. We prioritized refunds for individuals as well
as prioritizing refunds for businesses and whatnot during the pan-
demic. We made the right—what we believe is the right business
decisions and certainly I believe is the right business decisions.
December 17, we had an inventory on the 8849s of 7,405. We
currently have a backlog. We have reduced it by 4,800. And we
have a backlog of 2,565, which we expect to be cleared out by the
end of March. And, again, we put extra staff, we provide overtime,
weekends, and whatnot, to try to accomplish this, but we have
made significant headway.
Mr. WOMACK. Well, I know you did, and you sent a letter out on
the issue after our conversation. I just want you to know how much
I appreciate that, and that is the kind of response that we all really
want from our Federal agencies and, in this particular case, your
delivering. So thank you so much.
And, Mr. Chair, I will yield back that 12 seconds I have.
Mr. QUIGLEY. Thank you so much.
Mr. Cartwright is recognized.
Mr. CARTWRIGHT. Thank you, Mr. Chairman.
And thank you, Commissioner Rettig, for coming back and join-
ing us.
Mr. RETTIG. Thank you.
Mr. CARTWRIGHT. Thank you for your hard work. And thank you
also for the hard work of all the line employees of the IRS to try
to take on all of this additional responsibility during the pandemic.
And, finally, thank you for acknowledging mistakes—we don’t
hear enough of that in Washington—and that you are learning
from them. That is very encouraging.
And I want to ask, I want to get out a bunch of questions right
off and get you to answer them.
In the first two rounds of the EIPs, the Economic Impact Pay-
ments, millions of people received their stimulus via a prepaid
debit card. And from what we are hearing from my constituents in
northeastern Pennsylvania, we got an awful lot of complaints that
they threw those debit cards away because they weren’t giving
proper notice, that they didn’t have the heads-up that this was
money and these were payments from the IRS for stimulus.
How is it determined that this particular group of Americans was
singled out for prepaid cards when most people received checks or
direct deposits? What steps were taken to ensure that the requests
to replace those cards that were lost or stolen or thrown away were
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fulfilled? And are there any major changes to the disbursement of
Economic Impact Payments for the future?
In particular, I want to help ensure we help Americans get these
stimulus payments as quickly and as early as possible, and I want
to give you the opportunity really to help them arm themselves.
For people that have had issues receiving their first or second
stimulus payment, what steps can they take today to ensure they
don’t have continuing issues receiving a potential third round of
payments?
Commissioner?
Mr. RETTIG. Yeah, the IRS was not the decisionmaker, and it
really wasn’t even in our area as far as who would receive paper
checks and who would receive prepaid debit cards. That was a deci-
sion between Treasury and Bureau of Fiscal Services. I think you
are aware that the IRS provides payment files to BFS, and then
BFS is actually the agency that issues the payments. We were
asked to adequately check.
So if we did not have and Fiscal did not have direct deposit infor-
mation, we were asked to provide separate files, which were the,
if you will, paper check files, and from that we were asked to do
certain pieces of that, which they pulled out to do in the form of
debit cards.
I think the interest in doing the debit cards was to try to get the
payments out quicker. Fiscal Services can only do between 5 and
7 million paper checks per week. That is their capacity. That is in
excess of the VA and the SSA. So in order to sort of shorten the
length of those 5 to 7 million weekly payment checks, I think the
effort was to try to do the debit cards. And certainly a lot could
have been learned with respect—and has been learned—with re-
spect to the debit card situation.
One of the comments, one of the questions you had is, what can
be done going forward? We and others—and I think Treasury
would join me in this, as well as Fiscal—can always do a better job
in terms of outreach and communications. Interestingly, a lot of
people tend to believe, gee, if we put it on our IRS.gov or we do
our normal channels that we would historically do in the tax world,
those are sort of for tax people, tax practitioners and whatnot.
But the person on the street is not looking at IRS.gov. They are
not necessarily interacting with a CPA or a lawyer or a profes-
sional organization. They are on the street. The person digging the
ditch, the person running the electricals and whatnot, really are
the target area of the outreach that we did during 2020, which we
refer to as people outside of our normal channels of communication.
I think I mentioned we did partner with more than 11,500 different
organizations, tenant rights groups and whatnot.
I think the bottom line—and I don’t know whether there would
be a similar decision on the debit cards going forward if there was
to be an EIP 3. Again, that would be between Treasury and Bureau
of Fiscal Services. I respect the decision to try to get the payments
out earlier. But we were equally concerned for the fact that a lot
of people shredded them, did not knowing they were coming, et
cetera, et cetera.
What can people do? They could file electronically and file as
early as possible. Our filing season is open. Getting a return in
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that has direct deposit information, the bank information in their
return, allows us to essentially flip a switch and issue those pay-
ments, which is what we used December 29 on EIP 2 when we
issued 147 million payments totaling $142 billion 2 days after the
date of enactment. We had that direct deposit information.
And so getting that information to us in the form of a tax return
is critical. For those who don’t have—Mr. Chair, if I may finish one
thought? I see I am out of time.
For those that don’t have a filing requirement, we do have the
Non-Filers portal where they can provide that information to us,
and that would help us significantly.
Mr. CARTWRIGHT. Thank you, Commissioner.
I yield back, Mr. Chairman.
Mr. QUIGLEY. Thank you.
Mr. Womack, you were trying to accommodate Mr. Stewart be-
cause of a flight. Do you still wish to do that? Do you know if he
is on?
Mr. WOMACK. Mike, I got a text from him, and he was en route
to the airport. He is listening but just not in a position to engage.
But I do appreciate the opportunity.
Mr. QUIGLEY. Okay. No problem.
Then I think we will move on to Mr. Joyce.
Mr. JOYCE. Thank you, Mr. Chairman. I appreciate the recogni-
tion.
And also a quick shout-out to Mr. Cartwright, because that is
commercial-like quality that he is engaged in there while doing
his——
Mr. CARTWRIGHT. Thank you, Mr. Joyce. Your cat filter is on.
Mr. JOYCE. Commissioner, I appreciate all the hard work you
have been doing.
I have a question. As you know, with the increase in unemploy-
ment benefits made available in the last year, unfortunately, has
come along with some increased fraud that I have taken notice of,
[inaudible] At least $300 million in fraudulent unemployment bene-
fits were paid in 2020.
This is a problem not only for the integrity of the unemployment
insurance system but also, unfortunately, the taxpayers who were
victim of the fraud. And as you mentioned, with the mail system,
sometimes they are now just becoming aware as they are receiving
this notice that they were, in fact, defrauded and their security was
compromised.
Unknowingly, these people have taken the unemployment bene-
fits, had those shipped somewhere else, but the bill coming due for
their taxes is coming home to roost with them.
Is the IRS taking any action to allow flexibility for States that
need additional time to sort out the fraudulent benefits paid and
holding those individual victims of this fraud harmless for taxes
owed on unemployment benefits that they have never received?
Mr. RETTIG. We are working with the States. And regardless of
anything else—I am going to make this specific here—but regard-
less of anything else, because this was expanded this year because
of the volume, but it is not unusual for folks to have identity theft
and other things where there are issues that are hitting their ac-
count which are not theirs, is to file an accurate return.
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So even though there is a 1099–G that might indicate somebody
got funds, if you did not receive those funds, file an accurate re-
turn, reach out to the State and ask for a corrected 1099–G, which
will be in a zero dollars received capacity.
But even if they are unable to contact the State on their indi-
vidual income tax return, do not report funds you did not receive.
You are only required to report your accurate income. If you did
not receive it because of identity theft or some other scenario, it is
not income to the taxpayer.
We actually, as have the States—and like I said, we have been
working closely with the States—but we posted something again on
IRS.gov. We are doing our best to message through our normal
channels, and now our expanded family, if you will, of communica-
tions getting out to people.
But we are very sensitive to this. We are taking a hard look at
it. And in terms of your question about flexibilities, we are an ad-
ministrator. We can’t determine what is or is not taxable.
For Federal tax purposes, unemployment benefits are taxable. I
think there are 14 States where it is not taxable, and so people also
need to be aware of the difference between Federal and State.
And we are taking a look at it. And I think at the end of the day
you can expect us to get this one right. It is on our plate. It is on
my radar screen.
For folks who did, if I may, who did actually receive the unem-
ployment benefits but who were unaware that it was taxable, file,
report the benefits. You can actually even online do a payment
agreement with us. You can request financial hardship. There is a
whole host of payment relief that we have available.
And, again, our employees have gone through the same pandemic
as everybody else. We are understanding and sensitive to the envi-
ronment for the past year and for the foreseeable future.
So folks who received it, actually received it who did not under-
stand that it was taxable, I would hope that they would reach out
to us for some flexibilities in terms of payment arrangements.
And I will say that every frontline IRS employee who they would
interact with, whether it is through a CSR or in a more direct col-
lection format, is aware of the comments that I just made, and I
expect our people to be understanding, patient, and to do the ap-
propriate thing for the people of this country.
Mr. JOYCE. Thank you. At least we have something to go back
to the constituents who are calling in about going back to the State
and having that cured.
I want to move on to another question regarding legal cannabis
businesses. They are unable, as you know, to utilize our banking
systems, and as a consequence of these arcane restrictions busi-
nesses are forced to hire armored vehicles to transport their tax
payments in cash to the local IRS.
This is inefficient for business and the IRS alike, obviously, not
to mention ample opportunity for fraud and the abuse it creates,
as well as potential for criminal acts as far as robbing and stealing
from those.
How do you recommend we address this problem for your agen-
cy? And I am talking about legal businesses, ones that have been
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defined as ongoing concerns meeting all of the statutory require-
ments of the States that they do business in?
Mr. RETTIG. Yeah. You know, the IRS would prefer direct depos-
its more so than receiving actual cash payments. It is a security
issue for the IRS. It is a security issue for our employees. In our
Taxpayer Assistance Centers is actually where we receive these
payments, and we created special facilities in these, in the TACs,
to receive the payments, and then we similarly have to transport
the payments themselves.
So, again, money is fungible. We have to receive it. And we don’t
make a determination as to what is or is not legal. But the tax pay-
ments do come in, and we would rather have direct deposits if we
could.
Mr. JOYCE. And no one who is sending you over $10,000 in cash
to pay their bill is receiving a SARs, are they?
Mr. RETTIG. You know, those are—that is on the banking side of
the house and I am just the tax guy.
Mr. JOYCE. Thank you. I am out of time.
Mr. RETTIG. Yeah. Thank you.
Mr. QUIGLEY. Thank you, Mr. Joyce.
Mr. Bishop.
Mr. BISHOP. Thank you, Mr. Chairman.
And thank you, Commissioner Rettig, for all of the work that you
and the wonderful people at IRS have done, particularly through
this pandemic.
The Volunteer Income Tax Assistance program that is managed
by IRS has been a tremendous success over the years, and this pro-
gram helps Americans who make $57,000 or less, are disabled, or
limited English speakers to file a tax return for free. In 2020, the
program had about 10,000 fewer volunteers and prepared a million
fewer tax returns due to the pandemic.
Some experts worry that changes to the program due to the pan-
demic will leave millions of Americans without the help they need
to file in a time when submitting a tax return is extremely impor-
tant, especially to these low-income people.
Our most vulnerable Americans are being hurt the most by these
changes, especially those that don’t have access to high-speed inter-
net or to a computer as many sites shift to online appointments.
Can you speak to how the IRS will ensure that every American
has access to the VITA program during the pandemic, including
those in rural areas and those without high-speed internet?
And I guess I will go ahead and ask my second question quickly
so that you can get to it. It has to do with the IRS rule on farming
cooperatives.
Many of the farmers in my district and across the country are
members of agriculture cooperatives where the farmers pool their
resources to enhance their economic market power.
Earlier this year, the IRS finalized the rule that limited the
qualified business deduction that is allowed by cooperatives solely
to patronage income. Cooperatives often pass these deductions to
individual farmers. So the rule effectively raised taxes on the farm-
ers themselves across the country.
Is the IRS planning to review this rule that raised the taxes on
the farmers and was finalized by the Trump administration?
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Mr. RETTIG. So let me start with your second one, which I will
get back to you, and I will have our staff work with your staff on
those specifics for that so that I can get more direct and I think
more appropriate responses for you. A lot of the rules—keep in
mind, at IRS we are tax administrators, and policy occurs, like I
said, next door, it occurs at the Treasury Department.
But let me personally find out more information on that. I know
we have talked outside of hearings before, and we will get back to
you on that. And I appreciate the importance of the issue, particu-
larly to farmers during a year such as what we had this year.
So the importance of that, sir, is not lost on me.
Mr. BISHOP. Thank you.
Mr. RETTIG. With respect to VITA—and, by the way, I extend it
to all members to reach out to me, or to your staff to reach out to
me, and where we can help and where we can provide additional
information, I would encourage you to do so and look forward to it.
It is a privilege to be in this position as Commissioner and to inter-
act with you and to try to get things as positive as we can for the
people that we are all serving.
As far as VITA and Tax Counselling for the Elderly and military
tax, and in addition, beyond VITA, the Low-Income Taxpayer Clin-
ics now have authority through at least April 15 to prepare re-
turns.
Certainly, the pandemic was not something that I think anybody
foresaw. There are 11,000 VITA sites which are staffed by volun-
teers, and it would have been a stretch to assume that volunteers
during the pandemic were going to have actual in-person inter-
actions with anybody. I mean, taxpayers did not seek out in-person
interactions, and it would be difficult to encourage the VITA sites
to do so, and we did not and I did not.
We took a position that closing sites—we run the program. We
don’t run the sites. But we were supportive of the VITA sites clos-
ing their sites and keeping their volunteers safe and keeping the
taxpayers safe.
We have moved into, to the extent possible, a virtual environ-
ment. That does not solve the issues with respect to rural commu-
nities, and we are very sensitive to rural communities.
You hear a lot come out of the Internal Revenue Service with re-
spect to digitalization of pretty much everything we are doing, the
modernization of our processes. But, I think as you are aware, I
was on the outside for 36 years representing individuals, and the
IRS will never lose its traditional lines of communication, which
are in person, telephone, and such.
Where we do not have staffing in communities, we tend to, what
we refer to as circuit ride. Out of 358 TACs, we have 14 that we
do not have staff for because where people have retired, they tend
to be in rural communities, and we try to hire and staff those com-
munities. But when we don’t have it staffed, we have to circuit
ride, bringing people in from a different location to staff that.
So we have our eyes on the VITA and TCE and military tax sites
in terms of filing season 2021. It is not lost on us. I can tell you
that in the last 3 weeks I have participated in training sessions,
I think, for maybe six or seven different VITA sites around the
country, including I had a huge honor of participating with 21
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VITA sites outside the country, military VITA sites, including a
base that my son, who is an Army captain, had deployed to.
So VITA not only—it does provide for individuals and taxpayers,
but it also provides a tremendous service for military personnel, all
of which are important.
But, sir, to your question, I, and we, have our sights on the im-
pact of the pandemic and the need for VITA sites to have some
type of in-person interaction. So we do have our sights on that.
Mr. BISHOP. Thank you, sir.
Mr. QUIGLEY. Thank you.
Mr. Pocan is recognized.
Mr. POCAN. Thank you very much, Mr. Chairman.
Thank you, Mr. Commissioner, for being here. I also want to
send my kudos to your employees for all the hard work they have
been doing.
I want to get to three areas. I know it is tough, so I am going
to get right to the questions.
Mr. RETTIG. I will try to make shorter answers.
Mr. QUIGLEY. We will have a second round.
Mr. POCAN. All right.
The first question is, on behalf of the Appropriations chair, Rep-
resentative DeLauro, you recently predicted the agency would be
able to transition the Child Tax Credit payments to a monthly
schedule. That would be awesome, to have permanent, fully refund-
able and paid out monthly. It has been a priority for the chair.
Heartened by your prediction.
Wondering what resources you would need to make the monthly
Child Tax Credit payments a success?
Mr. RETTIG. We have actually—our folks have met with staff,
and we have actually provided the figures for that. If I am not mis-
taken, the one for the monthly child credit, I think, is about $397
million.
We not only need the funding to implement to actually determine
the requirements and to do the programming, but we also need the
funding to staff and to train our staff to do it.
In the first tranche of funding includes the design and delivery
of a portal, and I know a lot of people have looked to our Non-Fil-
ers portal and saying, we will just use that.
The Non-Filers portal was created by industry, by private indus-
try, and it belongs to private industry. The Free File Alliance was
critical in helping us launch that portal within 10 days following
EIP 1.
So there are a lot of constraints in terms of a launch, if you will,
staffing, training, and funding, but also this agency, as much as
any other—but, you know, I am biased because I am here—con-
sistent, timely, adequate multiyear funding allows the agency to
rise to the challenges.
And don’t forget about us. Once we get something don’t forget
about us in terms of the future years for funding. Because we ac-
knowledge the importance. It will be a challenge to modify the
amounts of these payments. We are very thankful, from what we
have seen, there are some flexibilities built into it.
Mr. POCAN. Great. Thank you. Yes.
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You just brought up the Non-Filer portal, and I know you men-
tioned earlier in Mr. Cartwright’s question. That is one area where
you guys have done a tremendous job, I think, in getting the stim-
ulus checks out, but that is one area that we still have constitu-
ents, as Mr. Quigley said, that we hear from those folks when they
don’t get their checks.
When will the IRS be reopening that portal? And do you have a
specific date?
Mr. RETTIG. We don’t have a specific date with respect to the
Non-Filers portal. People will be able to—what we are focused on
now, because people need to know the amount of their EIP 1 and
the amount of their EIP 2, when they provide—file the return to
get the Recovery Rebate Credit, and, you know, we sent out letters,
1444 letters with the first EIP and 1444-B with the second EIP,
and we are actually going to get one number on a tax return.
And because of the structure of these in terms of if there was an
overpayment on EIP 1, we are not allowed to claw that back. But
with respect to EIP 2 and the Recovery Rebate—and, you know, I
will say this was a challenge, which is incumbent, I should add, as
to why the filing—opening season filing date was February 12.
And having it be February 12, I know a lot of people—and I have
read comments about a condensed filing season. It is not a con-
densed filing season. The industry partners opened on January 15
and others, Free File opened January 15——
Mr. POCAN. Yeah. No, I hear you. Perhaps reopening that, as I
can tell you, I know Mike in my office for one would be enormously
happy, because that is still probably the number one problem we
have with folks on stimulus.
Third area, if I can get to in a minute. We are currently losing
about $574 billion per year for unpaid taxes. As you mentioned,
you want to make sure we give you staffing resources as you abso-
lutely need, in addition to the Child Tax Credit.
But we also know that you are looking at people who have the
Earned Income Tax Credit are audited at about the same rate as
the top 1 percent. How do we know, if we give you additional
funds, that it will be used in a different ratio so that we are really
looking at where the vast majority of those dollars are as opposed
to the Earned Income Tax Credit earners?
Mr. RETTIG. Well, let me finish actually something that came to
mind, finish the first question, which is the folks on the Non-Filers
portal, we would actually encourage the folks to use Free File or
the equivalent that are out there because beyond—from the Non-
Filers portal, we can only capture information for the EIP, right,
the real return recovery rebate.
A lot of these folks are also entitled to the Earned Income Tax
Credit and the Child Tax Credit. And if they do the Free File and
put a return in and they are entitled to all three, they can get all
three, whereas if they just use a Non-Filers portal, they would only
get the EIP and miss out on what may be a much more significant
amount.
In terms of the EITC and the audit rates, I would encourage peo-
ple to look at our 2019 Data Book, page 34, table 17a, and let it
run, look at all of it.
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The hardline data is that we only audit—and it is correspond-
ence audits—1.1 percent of the EITC claims, whereas for the high-
er income taxpayers, taxpayers over $10 million, we audit 8.16 per-
cent, $5 to $10 million, 4.39 percent, and $1 to $5 million, 2.39 per-
cent.
Substantially, every experienced revenue agent is working a
high-income taxpayer or our most egregious cases, which would be
fraud cases.
So we are focused on that. We are required by IPERA to come
up with the—oh, gosh, the word escapes me—but the improper
payment rate associated with refundable credits. That is what
causes the Internal Revenue Service to actually look at—have to
look at 1.1 percent.
We do it in as polite a manner as you could think. We send out
letters and we ask for information. It is a very complex situation.
We would love to work with staff on the Hill—I know this goes
back to 1975—but to try to work out a less complex situation for
EITC.
My personal reaction is those funds are getting to the right peo-
ple. The roadway is a little complex. And I think this is the year
that people really have an understanding to help others. It is our
mutual responsibility to help these folks, and I think it is a privi-
lege. And, collectively, we have the ability to change it.
Mr. QUIGLEY. And, again, we have to move on and make sure all
our——
Mr. RETTIG. That was my shorter version of an answer. Sorry.
I am trying.
Mr. QUIGLEY. Okay. Thank you.
Mrs. Torres.
Mrs. TORRES. Thank you, Mr. Chairman.
And, Commissioner Rettig, welcome to our committee and thank
you for being here with us.
I am going to focus on not-for-profit organizations. I was dis-
appointed to see a 501(c)(5) in my district, the Pomona Fairplex,
abuse its tax-exempt status.
In addition to straying from its mission of horticultural enhance-
ment, a 2016 report by the California State auditor revealed that
the executive director was receiving over a million in compensation
and excessive gifts, far above most other salaries for executives at
similar organizations.
To be fair, he was not the only one. The top three executives
were grossly overcompensated, and the board of executives received
thousands of dollars in gifts, travel, which included fine dining and
wine.
While the organization was audited and several changes were
forced to avoid having penalties—I thank the IRS for that—the
taxpayers, once again, absorbed the losses of previous years. This
year, in the FSGG fiscal year 2021 report, I included language di-
rected to the IRS to improve its oversight of nonprofits that do not
comply with their tax compliance statuses.
So my first question is, what is the IRS doing to improve over-
sight of tax organizations, such as the Fairplex, that abuse their
tax compliance status?
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And my second question is that on February 17, the Treasury In-
spector General for Tax Administration released an audit entitled
‘‘Noncompliant Activity by Exempt Organizations.’’ The audit found
that the chance of a tax-exempt organization being audited is 1 out
of 742. It also found that nearly 20 percent of tax-exempt organiza-
tions returns selected for examination were not examined.
So my second question to you is, why are organizations that were
selected for examination not examined?
Mr. RETTIG. So those are the two questions, right? So on the first
question——
Mrs. TORRES. Yes. How are you improving it and—yes.
Mr. RETTIG. On the first question, obviously, I cannot speak to
specifics as to any taxpayer and whatnot.
I can tell you that we have a robust system in terms of identi-
fying. And we get a lot of referrals from other parts of our agency.
We get referrals from the outside. As you can imagine, also our em-
ployees read newspapers and magazines, and we see reports. And
we get assistance from TIGTA. We get assistance from GAO. We
get assistance from the Hill.
And our people appreciate the fact that we live in a country that
has nonprofits and charitable organizations that provide a lot of so-
cial benefits that might otherwise not be provided or certainly
might not be provided by the government and certainly not maybe
to the level and quality.
So I can assure you that we look at these situations as you would
hope. If you were sitting in my chair, I think you would be proud
of what we are able to do.
To the question with respect to where we are not examining, I
would draw the attention to the staffing and resources of the Inter-
nal Revenue Service in 2010 compared to many of the most recent
years. We have to sort of pick our battles.
Unfortunately, a lot of the decisions we make are resource driv-
en. We do use—my terminology—an empty police car. You see a lot
of my speeches involve where we are going. I say be forewarned,
we are coming here.
That doesn’t mean we are coming with a thousand agents or we
are coming with a hundred agents, but we do have to have pres-
ence, I believe, in every community, which is defined by type of tax-
payer, as well as income levels, as well always geographic and
whatnot.
I will say that about 20 percent of tax-exempt governmental enti-
ties’ casework comes from the rest of the Internal Revenue Service,
but that those sources, those referrals, if you will, generate about
40 percent of the examination results that are there. As much as
we would like to do a full examination on every taxpayer that we
select for examination, we have resource constraints.
Mrs. TORRES. I understand. I understand all of that, Commis-
sioner. And I appreciate you coming forward and seeking more re-
sources, because I do understand that you are understaffed, that
you don’t have the manpower to do the job that you need to do.
But instead of targeting the core, what I am asking is, will the
IRS commit to focusing more resources toward auditing, auditing
organizations that are, you are absolutely correct, their purpose is
to provide and offset services in our communities. But when the
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only people that are primarily benefiting from these are their top
executives or board of directors, where does it stop?
Mr. RETTIG. Yeah. I will say that the public wouldn’t know
whether we did or didn’t touch an executive from an organization.
Only if the executive actually took us to court, that is the first time
it becomes public, so whether we did or didn’t touch somebody.
And I will say, with respect to the returns that we might select
for examination but not examine, we do reviews. So we make deci-
sions out of the pool that we have of which would have the highest
audit potential.
But people should not believe that we are not touching—this is
not specific to the entity that you referenced. But we are doing our
best, and I do not have resources to reallocate to this issue.
Mrs. TORRES. Mr. Chairman, I will yield back and wait for the
second round.
Mr. QUIGLEY. Very good. Thank you.
Mrs. Kirkpatrick, who is always so patient.
Mrs. KIRKPATRICK. Thank you, Mr. Chairman.
And thank you, Commissioner.
I just want to follow up on the Congresswoman’s line of ques-
tioning.
We appreciate the challenges that COVID–19 has presented to
IRS, be that related to staffing and continuing operations or imple-
menting COVID relief measures. But I really want to know what
you are doing to ensure tax compliance among high-income individ-
uals.
That is a top priority of mine. This is certainly a welcome devel-
opment. But I would like to hear more about how you are doing
that and how that is working out.
Mr. RETTIG. Yeah. I have probably said, in the past 2 years, I
have probably said a hundred times I consider myself not only a
service person with eyes and friends on the street, if you will, but
also an enforcement guy. And a strong enforcement program and
a strong enforcement and a visible enforcement program supports
the compliant taxpayer.
The compliant taxpayers need to know that we actually have
eyes on and are creating risk for the folks who do not comply, and
particularly the higher income taxpayers.
During the past 2 years, we have created an Office of Fraud En-
forcement, which is designed to actually bring fraudulent cases on
the civil context and look and refer those cases for criminal inves-
tigation. It has been highly impactful. It is service-wide. That did
not previously exist.
We actually this past year created an Office of Promoter Inves-
tigations, because it tends to be the higher income folks who get
involved in abuse of transactions.
I think you can see a lot of information during the course of the
past year with respect to our efforts on abuse of syndicated con-
servation easements, abuse of micro captive arrangements, virtual
currencies, both domestic and foreign situations, and a lot of what
you might consider to be aggressive taxpayer work.
We are using artificial intelligence data and analytics to go after
folks in that regard. Our modernization program is 3 years in. In
each of the first 3 years we received about half of the funding that
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we requested. So we have had to pull funds. In order to stay on
target, to the extent we can, we have had to pull funds in from
other programs to get us there.
For high-income nonfilers, which is among the most abusive sce-
narios, prior to the pandemic, we did what we call revenue officer
compliance sweeps, which is essentially just a revenue officer—a
team of revenue officers showing up and knocking on somebody’s
door. We have information, but we also need the resources to be
able to do this. We did a variation of the in-person ROCS during
the pandemic, and we are continuing that.
I will say that during the pandemic, our People First Initiative,
we pulled back and provided a lot of relief to taxpayers. We did not
pull back enforcement efforts for higher income taxpayers. We kept
the pressure on. It had to be in a virtual environment, as you
would imagine, but we did not let up, and we did not let up on our
behind-the-scene efforts to coordinate what we have.
So we have a high focus on high-income/high-asset individuals.
And I will say, again, every experienced revenue agent that we
have is on the higher income taxpayers and the abusive trans-
actions, and we could use more experienced revenue agents.
We did have a hiring freeze from 2011 to 2018 which created a
gap. I can’t hire a revenue agent and then the next year have that
person be, with 5 years of experience, trained to go out against the
high-income taxpayer community. And also it takes our more expe-
rienced people offline to train the people that we do hire, and it be-
comes very difficult.
So staffing, taking a look at us and providing support in terms
of staffing, funding for training, and overall funding, you guys have
been great. The Appropriations Committee has been, I think, su-
perb. I couldn’t ask for more. And our people appreciate it. And
keeping us in that lane, I think, would help.
We can be impactful, and we are working really hard to be
impactful. There have been some noteworthy criminal cases.
We investigate tax crimes. Our Criminal Investigation Division
investigates tax crimes. And we make the referral to the Depart-
ment of Justice for prosecution. But we work very closely with the
Tax Division of the Department of Justice, and we appreciate the
relationships that we have. I have regular meetings with them on
the criminal prosecutions. So we are engaged.
That is probably more than you wanted to hear.
Mrs. KIRKPATRICK. Thank you.
You know, on a very practical matter, when I was practicing law
I did business law and tax law, and the auditors would just show
up at the business.
Mr. RETTIG. Well, we are hiring, if you are looking.
Mrs. KIRKPATRICK. No, not right now.
But what kind of notice do you give these people that they are
going to be audited? I mean, it was very stressful for my clients
because the IRS would just show up on their doorstep and seize all
of their records with no notice whatsoever.
Mr. QUIGLEY. We will let him answer this question, then we will
move on to the second round.
Mrs. KIRKPATRICK. Okay. Thank you. Thank you, Mr. Chairman.
Mr. QUIGLEY. Certainly.
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Mr. RETTIG. Yeah. I don’t know about the cases that you had, but
we do not just show up, we send letters. In part because of scams
and everything else, we also don’t place the calls to initiate an
audit and all of that. But we send letters, and people are given 30
or more days. They schedule—you know, now it is virtual—but
meetings with us.
I would like to talk to you about your experience at some point
because if that was going on, it should not.
Mrs. KIRKPATRICK. Yeah. That was a long time ago, but thank
you. Thank you for being sensitive to that. I appreciate it.
Thank you, Mr. Chairman.
Mr. QUIGLEY. Thank you.
Commissioner, we are going to try to wing through perhaps a
quicker, shorter second round, so——
Mrs. LAWRENCE. I would like to go first.
Mr. QUIGLEY. Oh, I am sorry. They don’t have your name on
here. They didn’t bring you back. I am sorry.
Mrs. Lawrence.
Mrs. LAWRENCE. Okay. Thank you.
Mr. QUIGLEY. I apologize.
Mrs. LAWRENCE. Okay. My question—thank you for this hear-
ing—is that taxpayers continue to face frustrations of reaching a
live representative seeking help from the IRS to ensure that they
are complying with their tax obligation.
We know that the account management lines are only handling
14 percent of the calls, which is down from 61 percent.
What resources do you think are needed to improve the taxpayer
customer service interactions with the IRS?
Mr. RETTIG. This, what we refer to as level of service, is very im-
portant to not only the Internal Revenue Service as an agency, but
to the people of the Internal Revenue Service, the employees, and,
obviously, to Members of Congress, as well as to taxpayers, rep-
resented and unrepresented taxpayers. The IRS needs to be able to
answer the phones and coordinate things for people.
We have a lot of online and other processes. But at the end of
the day, I think many people are comfortable with the ability to get
somebody on the phone and have somebody say that.
Mrs. LAWRENCE. Do you agree with the 14 percent number, that
that is all that you are answering right now, 14 percent of the
calls?
Mr. RETTIG. No. We have different lines, so I would have—I can
get you the actual statistics. We have different lines. We have 89
different toll-free lines. And so if you are looking at a certain one,
it is going to be something.
But let me add that the percentages of our phone calls, every—
you know, I like to ask people, not to you specifically, ma’am, but
how many calls do you think the IRS and the IRS employees want
to answer out of 10? The answer is readily 10. It is math at the
end of the day that——
Mrs. LAWRENCE. But at the end of the day, how can we improve
this number? Because that is the challenge. I am not questioning
your loyalty, but I am questioning your efficiency.
Mr. RETTIG. I am with you, and I appreciate your question.
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Every 10 percent increase in level of service is $100 million. So
we target—you know, we are now targeting for 2023. This is part
of how we got into the situation of having our phone answering
drop below 5 out of 10, which is the target.
We request 75 percent, the ability to answer 7.5 out of 10 calls.
We got funded for 5 out 10 for what is the current year. But that
happened 2 years ago, that funding happened, which was pre-pan-
demic, which was pre-EIP 1, pre-EIP 2, and everything associated
with the pandemic.
So we got funded to have a certain number of what we refer to
as customer service representatives, which is 13,760.
We just brought on seasonals, which we refer to as CSRs, 3,800.
We made a request for another thousand. But the math, for
20,000—it would take 20,000 CSRs to give us a 75 percent level of
service, and it is dollars in.
And I am not allowed to take funds, if you will, from enforcement
or op support and replenish and hire. And it takes us 3 months to
train the average CSR to get them on line, and they do need to be
trained——
Mrs. LAWRENCE. So are you asking for more funding? Because
my objective is to increase that number. Fourteen percent is unac-
ceptable. So what do you need to get there?
Mr. RETTIG. I would like to have our people have a discussion
with you, and we can show the metrics to get us where we want
to get, and we would greatly appreciate your support. I think you
are on the right line here, and I appreciate it.
Mrs. LAWRENCE. So I have a minute left. I am going to ask the
question about modernization. I think that leads to what I was just
speaking about.
You collected $3.5 trillion on the budget. IRS also relied on IT
to process and disburse the Economic Impact Payments.
What critical IT investments are needed to fulfill the agency’s
critical role of supporting tax support for our communities?
And that goes back to probably my other question. Is it funding?
Because we can talk about what is happening, but how do we make
it better?
Mr. RETTIG. Funding. That is my shorthand and my longhand
answer, it is funding. We do have our business modernization plan
that is in its third year, and like I said earlier, each year we got
funded for half of what we requested. It is a 6-year plan of $2.3
billion to modernize.
We did get funding, CARES Act funding, that allowed us to be
as agile as we were, that allowed us to on-board people during the
pandemic. The pandemic moved very fast. It came out of nowhere.
It hit the private sector as well as government agencies quite
quickly. And, unfortunately, it hit us during the filing season,
which made it more difficult. And then we inherited the EIP 1 and
the EIP 2.
I would really appreciate the opportunity for me to sit with your
staff and others, and we can provide you with specific information.
But at the end of the day, it is funding, staffing, and training,
as well as some of the modernization.
And just to quickly give you something that is in my mind, which
is we are going into this year with the concept of chatbots, where
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people contact us online. One CSR can answer one phone call at
a time.
And during the pandemic, I should add, our phone call time has
gone to, like, 17 minutes from 12 minutes, because the issues are
more complex and the people who call in want to talk, and we want
our people to talk frequently. We are their only contact with the
government.
But I will say in terms of chatbot, one CSR can handle one phone
call, but they can handle four incoming on the chatbots. So the
ability to leverage the people we have is also very important.
Mrs. LAWRENCE. Okay. I will definitely work with you to im-
prove——
Mr. RETTIG. Yes, we will be in touch.
Mrs. LAWRENCE. Thank you. I yield back.
Mr. RETTIG. Thank you.
Mr. QUIGLEY. Thank you, Mrs. Lawrence.
And we are going to go through this lightning round where we
are now asking folks to do 3 minutes. And we appreciate, Commis-
sioner, you hanging on.
I know this is a lot about resources. One of the issues we have
concerns about relating to that is the—you tell me if this number
is right. We have 8.7 million unprocessed tax returns from the
2019 filing system. Is that accurate, roughly?
Mr. RETTIG. We have 6 million. They are all in process, so they
have all entered the stream to be processed. At the end of the
stream, they get what is called posted to the account.
So we have 6 million returns in process; 5 million of the 6 mil-
lion, we have actually asked taxpayers for information, and we are
waiting.
And I think you are aware, during the People First Initiative we
extended the timeframe for people to respond to us, not that we de-
serve a pat on the back, for obvious reasons. It is during the pan-
demic. You know, mail and other things were slow.
But 5 of the 6 million got pulled out either because of an identity
theft situation where we need the person to verify who they are,
and we have two different online abilities, plus we have in-person
abilities for people who are not comfortable dealing with us online.
Similarly, if we got a return and it is not consistent, which is the
extent I can really go on this one with you for reasons—I can get
more specific off—individually with all of you. But if we get a re-
turn electronically and it is not consistent with the information for
a prior year return, it will kick out as maybe being an ID theft re-
turn. So we need verification on this is actually the person.
And then there are some that people needed to file an additional
form with respect to some of the refundable credits. So we sent the
forms out to individuals.
So all of those are in process.
Mr. QUIGLEY. Is this a typical—is this typical, the numbers that
we are talking about, into the next year, that there is what you are
describing, having this many returns still being processed, or, as
you describe, a significant number waiting for additional informa-
tion? Is this about average?
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Mr. RETTIG. No. This is high for us. This is probably a few mil-
lion high. I can probably get you a specific—a year-to-date specific
on that. I probably have it on my desk here.
Mr. QUIGLEY. And I get that. So, in other words, I assume that
this is something you prioritize going into the new year?
Mr. RETTIG. That is right.
Mr. QUIGLEY. And you also prioritize the 2020 returns that con-
tain a Recovery Rebate Credit? Is that in your system?
Mr. RETTIG. Absolutely, absolutely.
Mr. QUIGLEY. All right.
Mr. Womack.
Mr. WOMACK. Thank you.
Real quickly, the 2021 Approps Act gave an additional $400-plus
million over 2020. Various COVID relief packages have given the
IRS an additional $1.3 billion, majority’s reconciliation package
about $2 billion more.
Before your time, Commish, not too long ago, the IRS had some
much celebrated—that is probably not the right word. There were
some issues going on. Let’s just leave it at that.
With this influx of funding, convince me that this money is going
to be treated, as it should be, with the highest amount of respect,
because, I mean, we are talking about a lot of additional funding.
And I know when you throw a lot of money at the wall, some of
it has the chance to be spent on things that are not necessarily all
that important.
So help me understand how we are going to curb wasteful spend-
ing.
Mr. RETTIG. Yeah. I think you are aware I came on board be-
cause of some of the issues that you are talking about and my re-
spect not only for the country but for tax administration. I did not
come on board to go get my next dream job. I left my dream job
with my best friends and moved to Washington, DC, with my wife
in order to try to make things better.
We, and I, do treat the funds—one, we are very respectful and
appreciative of the funds we do get. But we do treat these funds
and understand that we are really the trustees of funds collected
from taxpayers and others, and we are very specific as to where
funds are spent and really efforts.
There is a difference—and I was aware of this on the outside, I
am very aware on the inside—between having power and exer-
cising that power. We don’t have a lot of discretion in certain areas.
But you should know—and I would be more than willing to sit with
you and others one on one, virtually, or however people would want
to do it, to go through the specifics of how we spend money.
We do not throw money over the wall just to see what would
happen. We are accountable. I am accountable for it. We have a lot
of people here who are accountable for it.
And it is very important to get us from where we are to, I think,
where the American people deserve to have their agency. We are
way beyond a tax administration, tax collection agency, and I think
we demonstrated that this year. We provide a lot of services to the
American people, and we are proud to do so.
And that is not to say that we are without mistakes. That is not
to say that foot faults or others don’t occur. I have 80,000-plus em-
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ployees under a highly stressed situation in a pandemic where,
with others, we were pushing our people very hard, continuing to
do so. And sometimes when you swing for the fences, things hap-
pen.
But I did not come on board with the Internal Revenue Service
to leave the agency at the end of my term in the scenario that it
was when I got on board. That is not disrespectful to any prior
commissioner. It is just, I think, collectively and with you and with
others up on the Hill.
We want tax administration to be better. It needs to be trans-
parent. And myself and others here are and need to be accountable.
So whatever controls people want—I gave an explanation I think
a year or so ago, and I believe it was in front of your committee,
that I am actually supportive of funding that comes our way, as
long as it is multiyear.
But funding that comes our way—and I gave the example of peo-
ple who build a house. And you go to the bank, and the bank
doesn’t give you $500,000 day one to build the house. They give you
money for the flooring, the structure, the drywall, the roofing, the
paint as you go through it.
And I think Congress would be impressed if they saw how we
dealt with our responsibilities for these funds. We would need to
know that the funds would be there at the end of the day for our
projects, otherwise we would pull up short, as you can imagine.
But your question is well received and appreciated. I am hopeful
that we are quite respectful with respect to the funds we do re-
ceive.
And I should add, if we don’t get something right you all should
expect us to come up and tell you: We didn’t get it right. You
shouldn’t be reading about it somewhere. And I think we have done
a fairly good job of that, particularly during the pandemic. And we
did not do everything right.
Mr. WOMACK. I appreciate your responses. Please share my
thanks and appreciation to your team, and also for the service of
your son who is in our great military.
Mr. RETTIG. Thank you.
Mr. WOMACK. Thank you so much. And I yield back.
Mr. RETTIG. I appreciate that.
Mr. QUIGLEY. Thank you.
We echo, the entire committee echoes the response, especially the
added words to the service of your son.
Mr. Cartwright.
Mr. CARTWRIGHT. Thank you, Mr. Chairman.
Commissioner Rettig, I really liked Mr. Womack’s questions, and
I associate myself with them. We have to make sure that money
is being spent well, if it is being spent at all.
We really identified in this hearing two areas where it looks like
you need more money. Congresswoman Lawrence focused in on
CSRs and how many of the phone calls are being returned and
whether it is 14 percent or more.
But you came up with a very important metric that I wrote
down. You need a hundred million dollar increase for every 10 per-
cent of increased calls returned. I think that is helpful, and it is
helpful in responding to Mr. Womack’s questions.
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But the other area is tax cheats, okay, and that is something
Congressman Pocan talked about, Congresswoman Kirkpatrick
talked about.
First off, the tax cheat number Mr. Pocan threw out, in excess
of $500 billion a year, is that a fair number, Commissioner?
Mr. RETTIG. Well, I think for that he is drawing off of the tax
gap. And if you take the last tax gap we did for tax years 2011 to
2013, the net tax gap was about $381 million—excuse me—$381
billion per year of what is due but not paid and not reported. And
people have extrapolated that into the present day.
Mr. CARTWRIGHT. Gotcha. Let me stop you there. I understand
what you are saying.
And I prefer ‘‘tax cheats’’ to ‘‘tax gaps.’’ I think a tax gap is a
euphemism. People that aren’t paying their taxes are tax cheats.
Here is what I want to know. Can you come up with a metric
about how much additional money you need per every 10 percent
of unpaid taxes that we want to haul in? Can you do that? That
will help Mr. Womack in his question as well.
Mr. RETTIG. We will be with you—keep in mind, the tax gap is
not individuals. It is how this metric is determined.
But let me also add what people are missing is 2011 to 2013 was
the last study that we did. We are actually working very hard with
our research inside to create a forecast to be able to go forward,
because 2013 is not reflective of 2020 and 2021.
If you just think in terms of virtual currencies that did not exist
in 2013 that are prevalent in 2020 and 2021 and that were de-
signed essentially to be anonymous and stay off the radar screen,
so if you think that part of the economy is compliant, we are all
mistaken, and I think the number could be significantly greater.
And I will come to you, to all of you, with information about
where we could use funds for enforcement. And, again, at the end
of the day, it is systems, it is data, analytics, artificial intelligence.
I have had a lot of communications in the private sector on those
issues. It is also staffing and training.
And you are going to see something come up where we talk about
the buckets. Unfortunately, sometimes we get enforcement money,
and it goes into the enforcement bucket, but I can’t use 5,000
agents if I also in our op support budget can’t get phones and com-
puters and whatnot. So sometimes we get funding for staff, but I
don’t get the phones and computers.
Mr. CARTWRIGHT. Understood.
Thank you, Commissioner. That is helpful. Give us the metrics
and we will help get you the money.
Mr. RETTIG. We really appreciate your comments and questions
today, from all of you.
Mr. QUIGLEY. Thank you. And I remind everyone we are in the
3-minute round.
And I will move on to Mr. Joyce.
Mr. JOYCE. Thank you, sir.
Commissioner, I want to go back to the Recovery Rebate Credits.
Many Ohioans have expressed confusion over who is eligible for the
Recovery Rebate Credit. And I understand that eligible individuals
who did not receive these credits as advanced Economic Impact
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Payments may be able to claim the Recovery Rebate Credit on
their 2020 return.
I know that many folks, such as those that were claimed as a de-
pendent in 2019 but will not be claimed as a dependent in 2020,
are hoping to claim the Recovery Rebate Credit when they file their
tax returns this year.
Now that the season is underway, can you first discuss the proc-
ess a taxpayer should go through to claim this credit on their 2020
return? And also comment on whether certain groups of people who
did not receive an Economic Impact Payment but may be eligible
to claim the Recovery Rebate Credit.
Mr. RETTIG. Keep in mind that the EIP 1 and EIP 2 were ad-
vance payments of the Recovery Rebate Credit, so everything trues
up on the 2020 return.
If an individual was claimed as a dependent for 2019, but is not
claimed as a dependent for 2020, that individual is entitled—the
answer, yes—they are entitled to the return recovery rebate on
their 2020 return. And I would suggest that they file that electroni-
cally and they do so as quickly as possible.
On IRS.gov we have a special Recovery Rebate Credit page that
will walk people through the information. The 2020 return—which
I am proud to say is actually in both English and Spanish for the
first time in the history of the United States—the 2020 return has
a return recovery rebate worksheet. And there is a specific page
where they would enter one single number once they have what-
ever they got for EIP 1, EIP 2, and they would put the information
in there. And the phaseouts were different for EIP 1 and EIP 2.
But we will do that calculation, and we will issue a notice and
we will issue those credits. And they are refundable credits. People
are entitled to those. And we are anxious to be able to get those
back out to people as quickly as possible.
Mr. JOYCE. Great. Thank you.
Mr. QUIGLEY. Are you through, Mr. Joyce?
Mr. JOYCE. Mr. Chairman, yes. I will send back whatever little
time I have remaining.
Mr. QUIGLEY. Well, we certainly appreciate it.
Mr. Bishop.
Mr. BISHOP. Thank you very much, Mr. Chairman.
I would like to ask the Commissioner if he would speak a little
bit about cybersecurity and identification fraud.
I think it was in December of last year that the Service allowed
individual identity protection personal identification numbers rel-
ative to the cybersecurity and the ID fraud and impersonations.
Can you speak to that and to how well that has been received
and if there is something that we need to do by way of getting in-
formation out to our constituents or whether you should do that,
follow up on that?
Mr. RETTIG. We should both follow up on that. It is our privilege
and responsibility to get this information out to the community. We
can certainly provide some information that you can send out
through your local offices to get out to people.
This is a very significant issue. We have been successful. From
2015 to 2020, the ID theft numbers, the victims of ID theft went
from 1.4 million to 96,000. But it is still 96,000.
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We saw a lot of frauds going on, scams and whatnot, during the
pandemic. A lot of people felt that IRS and taxpayers were vulner-
able and tried to take advantage of that. I think many of you saw
it in the—the most visible was the people applying for PPP loans
that didn’t even have a business. But it happened at individual lev-
els and it hit individual taxpayers.
So the Taxpayer Protection Program and the expanded IP PIN,
we expanded the IP PIN nationwide where individuals can actually
get a six-digit number to use in association with their Social Secu-
rity number so that we know it is them.
The ID thieves tend to file early so that the refunds go out to
them and the other individuals might file their return a little later,
and refunds, as you know, would go out as returns are being proc-
essed.
So we would encourage folks to use the IP PIN. We would en-
courage folks to file early. I think so far this year we have issued
about 5 million IP PINs. But I would appreciate the opportunity to
get some information to you all and to others up on the Hill to be
able to disseminate.
It has been a successful program, but the fact is it is still 96,000
people and we need to keep our eye on it. Each one of those folks
will have a difficult year or 2 years if their ID gets stolen. So we
look at the individuals who have the issues, not the ones that we
have been able to avoid having the issues.
Mr. BISHOP. Thank you, Commissioner.
I yield back.
Mr. RETTIG. Thank you, sir.
Mr. QUIGLEY. Thank you.
Mr. Pocan.
Mr. POCAN. Thank you, Mr. Chairman.
Mr. Commissioner, I will ask two questions just so you have got
a little more time with it.
Mr. RETTIG. I will try to be brief.
Mr. POCAN. I am sorry if I ask anything—I had to go to a concur-
rent hearing.
First of all, there was a Treasury Inspector General for Tax Ad-
ministration report about the credit and debit card companies and
other third parties that verify income for individuals and busi-
nesses, and they talked about the enforcement on that. It looks like
there were 300,000 business taxpayers with over $335 billion in in-
come who the IRS knew should have filed tax returns but they
failed to do so.
Just wondering, as you collect the 1099–K information in order
to ensure the accuracy of what taxpayers voluntarily report, why
aren’t we using that information to narrow the tax gap and what
changes you might be looking at based on that report?
And the second question—and I don’t know if you addressed
this—is will the IRS be extending the filing deadline this year?
Mr. RETTIG. On your second question, we are looking at extend-
ing the filing deadline. But understand that there is a lot of confu-
sion for taxpayers when we do extend the filing deadline. Presently
we don’t see a need to extend the filing deadline. Individuals can
get an extension to October 15. And what happened to us last year
when we extended into July.
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So in terms of the filing season, we have no present plans to ex-
tend the filing season. Keep in mind, it creates a lot of confusion
for taxpayers. It also backs up the Internal Revenue Service. As
many of you know, for over a month we actually shut down our
system to import stuff from the prior year so we could have a
smooth filing season in the succeeding year.
And so we have our eyes on it. We are aware of it. We are aware
of people who are asking for it. But I will say that the private sec-
tor, I probably know several thousand accountants on a first name
basis, and the private sector went into tax season by the second
week of January. They are well into it.
The real concern for folks is really the people who get refundable
credits, EITC, CTC, and I think we did a good job of messaging
that, although we opened on February 12, we——
Mr. POCAN. Gotcha. Mr. Commissioner, in the remaining 30 sec-
onds, on the 1099–K reports.
Mr. RETTIG. 1099–K reports, we have our eyes on it. A lot of
times the reports that you see from TIGTA are more in the vein
of a Polaroid snapshot, not of a movie. And we operate in a movie,
so if we didn’t get something completed by the time that they are
there.
We can get back in touch with you, but rest assured we have our
eyes on it.
Mr. POCAN. Should I yield back my 3 seconds?
Mr. QUIGLEY. You can keep them.
Mrs. Torres.
Mrs. TORRES. Thank you, Mr. Chairman.
Commissioner, I know you have covered this a little bit, but I
might have missed some of it. You mentioned that the IRS has
dealt with a 20 million backlog, but there have been reports that
refunds from last year are still unprocessed.
An issue that my office, my district office, has been dealing with
is that many of my constituents filed paper tax returns, and when
filing amendments to their taxes they have waited over 6 months
without a change to their tax status.
When pressing the IRS liaisons for more information, they were
told that the backlog was so burdensome that there were trailers
full of paper returns just languishing without any attempt to ad-
dress the problem.
Can you tell us a little bit about that and what you need to en-
sure that this backlog is completed and behind us?
Mr. RETTIG. There were trailers in June. There are no trailers
today. We are current on our mail backlog.
And then in terms of returns, we have 6 million returns in proc-
ess. So we have identified the returns. We have started moving
them through the system.
Of the 6 million, 5 million require additional information, wheth-
er it is verifying the taxpayer’s identity, whether it is verifying that
that return actually is consistent, which is different than ID
verification. For people with some of the credits there were forms
missing, so there was outreach to get the forms.
What I would suggest is we separately set up a call with your
folks, get whoever you have that you are not getting responses to.
I will get on the call with our key people, and we will go through
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your people, make sure that you have the authority for us to actu-
ally talk about the people.
But we will do the calls. We have done quite a bit of those. And
we want to make sure, one, that we serve you, but also that we
serve your folks and that we get it right.
So I will be available, and we will coordinate that.
Mrs. TORRES. Thank you.
And I yield back, Mr. Chairman.
Mr. QUIGLEY. Thank you.
Mrs. Kirkpatrick.
Mrs. KIRKPATRICK. Thank you, Mr. Chairman.
And thank you, Commissioner.
I just have a follow-up to my previous question. Do you have an
estimate as to how much tax revenue is lost due to lack of enforce-
ment, especially from high-income individuals?
Mr. RETTIG. The only estimate—and I don’t subscribe to this esti-
mate—the only estimate that is out there publicly is the tax gap
number. The tax gap number was based on 2011 to 2013, and it
doesn’t include certainly the whole virtual currency world, which
has a market cap of about a trillion dollars a year. And virtual cur-
rencies are designed to sort of be off the radar screen, if you will.
So we believe that the numbers that are out there are not reflec-
tive to reality. The net tax gap for 2013 was $381 billion per year.
If you gross that up, like people have said, it is 521.
I didn’t know if I was out of time. I heard something.
Mr. QUIGLEY. No, you are fine.
Mrs. KIRKPATRICK. Thank you, Commissioner. I just want to
thank you and all your employees. This is a tough time, and I just
appreciate all the work that you are doing. It is so necessary, and
I just want you to know my personal appreciation for what you are
doing.
Mr. RETTIG. We appreciate your comments. And our people do
watch these hearings, and they critique me. I get a whole bunch
of emails—you didn’t do this, you didn’t do that. But your com-
ments and the comments of everybody on the committee, I can ab-
solutely verify and confirm, go well to our employees. And our peo-
ple work really hard.
Mrs. KIRKPATRICK. They do.
Mr. RETTIG. And it is inspiring to be with our people, I have to
tell you.
Mrs. KIRKPATRICK. They do work really hard, and I thank you for
that.
One more question. In your view, would increasing funding for
tax enforcement, especially on the wealthy, increase overall rev-
enue for the Federal Government?
Mr. RETTIG. Enforcement is a component of compliance. And so
we need to increase what we are doing on the front end in terms
of guidance and related, as well as enforcement. So the two go to-
gether.
Most people file a return and try to get it right. I am incredibly
proud that during 2020, during the pandemic, during the EIP 1,
during the EIP 2, and the rest, is that we actually came up and
for the first time, I mentioned earlier, have a tax return for 2020
that is going to be in English and Spanish.
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We have a Schedule LEP that allows the individual to check 20
different boxes of what language they want us to interact with
them. Our translation services for folks who call in on the phones
is in 350 different languages.
That is part of it as well, because the communities that want to
get it right, we need to help them get it right, and getting in lan-
guage is very important.
A lot of people are bilingual, but they are not tax bilingual, and
so being able to communicate with them in language, on writing,
online, and whatnot, is very important to us. And that helps the
front end, which helps the voluntary compliance rate.
And the enforcement, us being out there on the streets, enforce-
ment happens by audits, but we get there often by modernization,
which is our use of data, analytics, and artificial intelligence.
So it is staffing, training, modernization, and guidance, and it
goes together. We must support the people who are trying to get
it right, and we must go after the people who really are working
against us and remain noncompliant.
Mrs. KIRKPATRICK. Thank you. Thank you so much.
I represent a southern Arizona district that borders Mexico, and
so many of my constituents speak Spanish, and many of them only
Spanish. So I appreciate your efforts in that regard, I really do.
Thank you.
Mr. RETTIG. You may know, and I think other members of the
committee know, not only was I proud of my son—and I do appre-
ciate that. And I am sure he is going to watch and think that he
was the star of your guys’ comments. But much appreciated, not
just for him but for all of the military people who are serving do-
mestically and around the world. They and their families give up
an awful lot.
But the second part, in terms of languages and such, I am not
only proud to be the first commissioner whose son or daughter is
Active Duty in the United States military, but I am also the first
commissioner whose wife came into this country as a refugee. And
my in-laws live in Little Saigon in southern California and are not
fluent in English.
So we have a line of sight, if you will, to the curves, and I very
much appreciate it. My nephews live in Arizona, and I very much
appreciate it. And growing up in Los Angeles I understand Spanish
fluently, and I can speak Spanish fairly decently.
Mr. QUIGLEY. Well, thank you, Mr. Pocan.
Thank you, Mrs. Kirkpatrick.
Mrs. KIRKPATRICK. Thank you.
Mr. QUIGLEY. I want to afford the ranking member an oppor-
tunity to close if he wishes.
Anything you want to add, sir?
Mr. WOMACK. No. Look, I appreciate the Commissioner for his
responses today. He has been very thorough in everything that he
has been asked.
And now that we know that we have got a lot of IRS people that
are on the call, I want them to know how much we deeply appre-
ciate their responses as well—or their work as well—under very
adverse circumstances, as I said in my opening remarks. And we
truly appreciate it.
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And thanks for the hearing. And, Mr. Chairman, I am going to
yield back my time.
Mr. QUIGLEY. Thank you.
Mr. RETTIG. Thank you.
Mr. QUIGLEY. We are about to conclude today’s hearing. I would
ask any members who have additional questions to submit them in
writing.
And, Commissioner, we ask you to respond in a timely manner
if they come in. And, again, we appreciate your generous time
today and your candidness and the great work you do and all those
who work with you at the Service.
With that, the committee stands adjourned.
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WEDNESDAY, FEBRUARY 24, 2021.
THE JUDICIARY’S BUDGET REQUEST FOR FISCAL YEAR
2022
WITNESSES
HON. JOHN W. LUNGSTRUM, CHAIR, JUDICIAL CONFERENCE COM-
MITTEE ON THE BUDGET
HON. ROSLYNN R. MAUSKOPF, DIRECTOR, ADMINISTRATIVE OFFICE
OF THE U.S. COURTS
Mr. QUIGLEY. We are called to order.
As this hearing is fully virtual, I want to refresh everyone on a
few housekeeping matters. It has been 22 hours since our last
hearing, so I am sure some of you might have forgotten.
For today’s meeting, the chair or staff designated by the chair
may mute participants’ microphones when they are not under rec-
ognition for the purposes of eliminating inadvertent background
noise.
Members are responsible for muting and unmuting yourselves. If
I notice that you have not unmuted yourself, I will ask you if you
would like the staff to unmute you. If you indicate approval by nod-
ding, staff will unmute you.
I remind all members and witnesses that the 5-minute clock still
applies. You will notice the clock on your screen. It will show how
much time is remaining. When your time is expired, the clock will
turn red, and I will recognize the next member.
Finally, House rules require me to remind you that you have set
up an email address to which members can send anything they
wish to submit in writing at any of the hearings and markups.
That email address has been provided in advance to your staff.
I will keep my opening statement brief so we can get right to
questions.
This morning, we welcome the Honorable Roslynn Mauskopf, the
newly appointed director of the Administrative Office of the U.S.
Courts—welcome—and the Honorable John W. Lungstrum—chair-
man of the Judicial Conference Committee on Budget, to testify on
the Judiciary’s fiscal year 2022 budget.
I would like to start this hearing by talking about transparency.
At a time when faith in our institutions is at an all-time low, gov-
ernment transparency is critically important. From my years in the
courtroom, I believe that the greater public access to Federal courts
increases accountability in the judicial system and, in turn,
strengthens transparency and helps restore faith in our democracy.
I am pleased that the Judicial Conference has expanded their
policies to live stream audio in circuit courts and selected pro-
ceedings in civil cases. And, in March 2020, the CARES Act author-
ized the Judiciary to live stream video for specific criminal pro-
ceedings.
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These are all steps in the right direction. However, I am con-
cerned that these measures are seen as a temporary fix to continue
judicial operations during the pandemic. I wish to encourage the
Judicial Conference to explore the benefits of permanently expand-
ing its live-streaming policies, creating more ways for the American
people to view and understand our democracy in action, and it is
absolutely critical to our success.
Turning to the reason for this hearing, the budget, we appreciate
the submission of your fiscal year 2022 request, totalling 8.1 bil-
lion. I have long been an advocate for ensuring the Judiciary is
properly funded. Sufficient funds for our judicial system should not
be a partisan issue.
I look forward to discussing how the requested funding supports
the Judiciary’s priorities. I am interested in learning more about
the defender program in light of last year’s Supreme Court decision
that has referred a substantial number of State cases to Federal
prosecutors, thereby flooding the Federal Defender system.
And I would like to learn more about the progress made on im-
proving workplace misconduct procedures at the Judiciary and on
standing up a robust new Office of Judicial Integrity. I know this
budget was prepared close to 2 years ago when the thought of tele-
working was a novel idea and not a necessity, so I hope we can use
this time today to discuss evolving IT needs.
We also need to talk about physical security needs and any nec-
essary supplemental funds. Just as it did for the legislative branch,
the insurrection on the Capitol on January 6th raised some serious
concerns about the safety and security of our hardworking judges
and staff and physical security needs, in and outside the court-
room, as we saw with the tragic shooting at the Federal judge’s
home in New Jersey.
Once again, I thank you for joining us this morning, and look for-
ward to your testimony.
I now turn to our ranking member, Mr. Womack, for his opening
remarks.
Mr. WOMACK. Thank you, Chairman Quigley.
Judge Lungstrum and Judge Mauskopf, thank you for appearing
before our subcommittee today.
The rule of law is the bedrock of American society. Our Founders
wisely designed our judicial branch to protect our constitutional
rights, and both faithfully and impartially uphold justice for all.
An independent Judiciary that holds the trust and respect of our
citizens that can resolve criminal, civil, and bankruptcy disputes in
a fair and expeditious manner is fundamental to our Nation. In ad-
dition, each year, the Judiciary’s Probation and Pretrial Service of-
ficers perform a critical public safety mission by supervising over
200,000 offenders and defendants living in our communities.
I know that the COVID pandemic has had significant impact on
court operations. In the midst of great uncertainty, judges and
court staff have worked diligently to continue the work of the
American people.
Regarding the Judiciary’s budget request, I will work with Chair-
man Quigley to ensure you have the resources needed to accom-
plish your important mission. However, let me say that, with a na-
tional debt approaching $28 trillion and certain to grow exponen-
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tially in the future, I believe this committee must take a careful
look at all Federal spending and responsibly reduce expenditures
where we can. And, where we can’t, we have got to make sure that
we are completely accountable.
We have a moral obligation to future generations to get our fiscal
house in order. That will certainly mean making some tough
choices and discerning carefully between the wants and the needs
of the Federal bureaucracy. I appreciate the important work the
Judiciary performs, and I look forward to your testimony.
And, Chairman Quigley, I will yield back the balance of my time.
Mr. QUIGLEY. Thank you, Mr. Womack.
And we now turn to our witnesses. Without objection, your full
written testimonies will be entered into the record. With that in
mind, we would ask you to please summarize your opening state-
ment in approximately 5 minutes.
We will start with Judge Mauskopf’s statement.
Judge MAUSKOPF. Thank you very much, Chairman Quigley.
And, to you, Chairman Quigley and Ranking Member Womack
and to the members of the subcommittee, I am pleased to appear
before you today for the very first time as director of the Adminis-
trative Office of United States Courts, a position I assumed only 3
weeks ago.
I have been a district judge in the Eastern District of New York
for over 13 years, serving as chief judge for the last year. I have
been in public service for over 38 years and look forward to con-
tinuing that service in my new role as director.
I am here today to present the Administrative Office’s fiscal year
2022 budget request, which totals $100.3 million, and it is dis-
cussed in detail in my full written statement.
These funds will enable us to continue our work facilitating na-
tional programs and policy processes, and supporting courts, proba-
tion and pretrial offices, and Federal Defender organizations
around the country.
Some of our recent accomplishments include supporting the
branch’s response to the COVID–19 pandemic, improving policies
and procedures relating to workplace conduct, and furthering ef-
forts on diversity and inclusion in our branch.
I also serve as the secretary to the Judicial Conference, and, in
that role, I offer my support for the budget request of the entire
branch and ask for the subcommittee’s assistance on a few Judicial
Conference priorities beyond the Judiciary’s budget.
The first of these requests is the continued extension of eight
temporary district judgeships whose authorizations would other-
wise expire in 2022. In the absence of a comprehensive Article III
judgeship bill and to avoid significant disruptions and workload
burdens that would follow from the loss of these temporary judge-
ships, this subcommittee has worked with us to extend them in
your bill each year, and we are grateful for your past support for
these extensions and continue to ask for that support in fiscal year
2022.
The second Judicial Conference request is the provision of the
necessary resources to the General Services Administration so that
they can execute the Judiciary space priorities adequately. In fiscal
year 2022, those priorities include funding for a capitol security
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project in Augusta, Georgia, and the construction of a courthouse
annex pursuant to a judicial space emergency in San Juan, Puerto
Rico.
We also seek the continued funding of two new courthouses and
sufficient repair and alteration funding to begin addressing GSA’s
backlog of deferred maintenance projects at Judiciary occupied fa-
cilities.
The final Judicial Conference request relates to judicial security.
And, as Chairman Quigley noted, 7 months ago, an aggrieved liti-
gant murdered the son of U.S. District Court Judge Esther Salas
and critically wounded her husband. This incident came amidst a
trend of rising threats against judges, as well as sustained civil un-
rest and several violent incidents occurring at or near Federal
courthouses.
Focused on the need for urgent security upgrades, the Judicial
Conference approved and transmitted to Congress last summer a
number of proposed improvements and included both authorizing
legislation and a request for additional funds for the Marshals
Service and the Federal Protective Service to better protect judges
both in and outside of the courthouse. We have made progress on
several of these items and hope to build on it this year.
And, while these improvements are largely outside your jurisdic-
tion, we would still value your support as we pursue them with the
relevant subcommittees.
And, finally, we have also identified additional resource needs in
the Judiciary’s court security appropriation following lessons
learned from the January 6th assault. These requirements came
too late to be included in our fiscal year 2022 request, but we hope
to work with you going forward to find a way to address them.
Let me again thank you, Chairman Quigley and Ranking Mem-
ber Womack and all of the members of the subcommittee for your
ongoing support of the Administrative Office and the entire judicial
branch. And, as you make the difficult choices to apportion the re-
sources at your disposal, I would ask that you keep in mind the
unique constitutional role of the Judiciary and the importance of
its effective functioning to our democracy.
Thank you very much for the invitation to testify, and I would
be happy to answer questions.
Mr. QUIGLEY. Thank you, Judge. Three weeks. We welcome you.
We want a full report on those 3 weeks.
Judge MAUSKOPF. It has been an honor. It has been a real honor.
Mr. QUIGLEY. In the meantime we are glad you are here.
And we now—we would like to hear from Judge Lungstrum.
Judge LUNGSTRUM. Thank you.
Chairman Quigley, Ranking Member Womack, and members of
the subcommittee, I am pleased to appear again before the sub-
committee, this year to present the fiscal year 2022 budget request
of the Federal Judiciary.
I am a senior judge in the district of Kansas, but I am appearing
today as chair of the Judicial Conference Committee on the Budget.
I will briefly summarize my prepared testimony about our discre-
tionary appropriations requirements and our long-standing cost
containment program.
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I would like to begin by thanking the subcommittee for its strong
and consistent support of the judicial branch. We are particularly
grateful for the funding we received in the fiscal year 2021 omni-
bus appropriations bill. We know that you had many difficult deci-
sions to make in constructing that bill, and we appreciate how we
came out in all of that.
Like other institutions throughout the world, the operations of
the Federal Judiciary continue to be significantly disrupted by the
COVID–19 pandemic. Most Judiciary personnel are teleworking,
many grand jury proceedings and jury trials have been postponed,
civil litigation has slowed, courts and Federal Defenders are using
video and teleconferencing technology for criminal and civil pro-
ceedings, and probation and pretrial officers are using innovative
approaches to supervise offenders released from prison and defend-
ants awaiting trial.
The judicial branch has more than 33,000 dedicated profes-
sionals, like public- and private-sector workers everywhere really,
continue to perform their duties admirably during this period of
great uncertainty.
Although the impact on the nature of our workload has been sig-
nificant—for example, filing of new criminal cases were down 11
percent, filings of bankruptcy cases were down 12 percent, and ap-
pointed counsel representations in our defender services programs
were down 19 percent, commensurate with that decline in the filing
of new cases——
Not only do we anticipate the workload in these areas will re-
bound in 2021 as we continue to adapt our processes to keep dock-
ets moving and as vaccinations become more spread—more wide-
spread, allowing a gradual return to normalcy, but also certain
pandemic aspects have created additional work that fill in some of
those holes.
In addition to the challenges of estimating workload during an
ongoing pandemic, there is also a new administration. His prosecu-
torial policies and other criminal justice and immigration policies,
which will directly impact the Judiciary’s workload, have not yet
been fully implemented. Despite these uncertainties, we have en-
deavored to submit a budget request based on the best information
available to us at this time. As new information becomes available,
we will advise the subcommittee in a budget re-estimate of any
changes to our fiscal year 2022 appropriations requirements.
The Judiciary’s fiscal year 2022 request of $8.1 billion in discre-
tionary appropriations represents an overall 5.2 percent increase
above fiscal year 2021. Nearly 85 percent of the requested increase
is required just to maintain current services; in other words, the
inflationary and must-pay adjustments to our budget needed to
maintain current staffing and service levels in the courts and Fed-
eral Defender offices.
One example, of course, is a 4 percent rent increase from the
General Services Administration, which amounts to approximately
$38 million, over half of which is to pay for enhanced cleaning of
courthouses as a result of the pandemic. This is a cost we must
pay.
The remaining 15 percent of our requested increase is for tar-
geted enhancements. We are seeking $29 million for additional
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staff in district courts, probation offices, and Federal Defender of-
fices to address projected workload increases.
We request $13 million for courthouse security improvements
and additional security officers. Three million dollars will fund six
additional magistrate judges and related costs, $9 million is to en-
sure courts have the latest IT firewall technology, $2 million is to
restore funds for in-person training programs for judges and court
personnel, and $5 million is for other initiatives, including further
strengthening our risk management and contracting and procure-
ment programs.
Finally, I want to emphasize the high priority we placed on cost
containment. As detailed in my written statement, we have
achieved significant savings by reducing space, requiring each judi-
cial circuit to offset new space needs with reductions elsewhere.
And, through our partnership with GSA to address cost and service
issues, we continue to expand the sharing of administrative serv-
ices to resist duplication.
And we are also achieving significant savings by promoting elec-
tronic noticing to litigants in bankruptcy cases instead of mailed
notices. And we are looking at lessons learned from the pandemic
for economies and process improvements that may be viable for the
longer term. For example, a greater reliance on video conference for
meetings and conferences and perhaps to reduce travel time for de-
fenders and appointed counsel.
Again, thank you for the opportunity to appear today and for
your continued support of the Judiciary. I ask that you make a part
of the record my statement and the statements provided by other
Judiciary entities on whose behalf we submit requests.
And I would, of course, be pleased to answer any questions the
subcommittee may have.
Mr. QUIGLEY. Without objection. Thank you, Your Honor.
Judge Lungstrum, can you tell me a little bit more about your
thoughts on the Judiciary’s progress for bringing video and live-
stream audio into the courts and their help in creating additional
transparency? We have seen some progress, but obviously a lot of
that seems to be that which was necessitated by the pandemic.
Judge LUNGSTRUM. Yeah. I think Judge Mauskopf can speak to
that in an overarching way better than I can actually, so if you
don’t mind Mr. Chairman I——
Mr. QUIGLEY. However you want to split it up is fine with me.
Judge LUNGSTRUM. I have got to lateral this one over to her.
Judge MAUSKOPF. I am happy to address that. Thank you, Judge
Lungstrum, and thank you for that question.
The transparency and openness is one of the hallmarks of our de-
mocracy and of our Federal courts. And, during the pandemic, our
courts have made remarkable efforts to continue public access and
transparency by using technology.
We have been conducting—all of the Courts of Appeals have been
live-streaming their arguments. District courts have been live—
have been providing audio access to civil proceedings and, through
the CARES Act, both audio and video of certain criminal pro-
ceedings.
So we have learned a lot, I think, both good and not so good. We
need to take that information, but we need to really explore how
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we can continue to use technology to bring public access and trans-
parency.
There are lots of things that I think we need to address based
on our experience. There are technological challenges. One of the
things we have—courts have very quickly stood up access, and not
everyone is using the same types of technologies, and not all tech-
nologies work as well.
There are resource constraints and budgetary impacts that need
to be considered, I think not just on our end, but there—we have
encountered executive branch issues in that realm.
We also have to recognize that, during the pandemic, we have
been operating with a bit of a reduced caseload, and we have been
conducting limited proceedings.
So how our experience during the pandemic will translate into
the future use of technology, I think, is something that we will ex-
plore and see where it takes us. And we do need to ensure that,
whatever we do, whatever practices we employ, they don’t interfere
with the proceedings, they don’t undermine the integrity of those
proceedings, and always ensure the fairness of those proceedings.
Mr. QUIGLEY. No. And I understand that. I guess the next ques-
tion would be: Is there anything that has happened during the pan-
demic, during the streaming that we have seen, that would make
you say, ″Well, we can’t do this when the pandemic is over″? I
mean, are they going to continue at least where we are at this
level?
Judge MAUSKOPF. So I think, at the trial level—and this really
comes from my experience as a chief judge. I took over, again, a
few weeks before the pandemic hit. So my timing is never good on
these things. But there are real challenges. Proceedings take a lot
longer. Judges—because of the limitations at the Bureau of Pris-
ons, while we may be saving——
Mr. QUIGLEY. It may take longer anyway because of the pan-
demic, not just—not because of the streaming?
Judge MAUSKOPF. Well, I think they take longer because of the
technological challenges. People don’t always tune in right away.
The Bureau of Prisons has challenges producing defendants to the
room, sometimes the single room where the video is located. The
Bureau of Prisons has severely limited in many districts the type
of technology that can be used, so that there are ways that we may
be able to employ technology to save time, to save resources. But
we really need to think about what has worked and what hasn’t
worked during the course of the pandemic.
Mr. QUIGLEY. You know, I—look, I say this with the greatest re-
spect. Everybody on this side of this hearing is—during most com-
mittees and certainly when we are on the floor, everything we say
and do is shut out, and the beauty of our democracy, works as all,
is that transparency. So I just stress that it doesn’t always look
good. The trains don’t always run on time, but it is still important.
So we would like as much information from all of you as we can
so that we know what you need—what resources you need to move
this forward rather than hear respectfully that it can’t be done. But
I appreciate your answers.
And we now turn to the ranking member, Mr. Womack.
Mr. WOMACK. Thanks, Mr. Chairman.
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I am going to lead with a question on Probation and Pretrial
Services, and I am going to throw this open to either of the two
witnesses that we have today.
Specifically interested in how this pandemic has affected our pro-
bation and pretrial service programs, and here are the two or three
pieces of this question: How has the pandemic impacted their abil-
ity to help offenders, because we have a couple of hundred thou-
sand of these that we supervise? How is the pandemic affecting
basic things, like housing, job training, employment opportunities?
How has the pandemic impacted the ability of offenders to receive
necessary drug and mental health treatment, which is huge?
I have a question about recidivism rates. How have they been
impacted during the pandemic, and how has the cost of providing
effective supervision changed during the pandemic?
So there you have a menu of several questions under this um-
brella of pandemic impact on our system of Probation and Pretrial
Services, and I am going to just allow both of you if you care to,
or either of you to comment on those questions.
Judge LUNGSTRUM. Well, I will lead off, Ranking Member
Womack, and the director can jump in whenever she feels appro-
priate, of course.
But the pandemic has had a definite impact on the way Proba-
tion and Pretrial Services have to manage their work load. Much
of what, prior to the pandemic, was an in-person function, going
out to people’s homes, or bringing people into the courthouse or
wherever the probation office may be located to meet with officers.
Individual drug treatment, individual mental health treatment,
things like that that might be taking place in group settings, all
involve interaction with people.
And, because of the—what has resulted from the pandemic, that
has all had to be changed, and it has created quite a difference.
Probation offices now are trying to minimize in-person contacts
by using such things as individual drug treatment or individual
mental health treatment instead of group. Of course that is more
expensive to do it that way.
They have had to do more, like, interaction by FaceTime or Zoom
or some other virtual process to deal with offenders, which has its
own challenges to it, including utilizing the defenders themselves
sometimes to install monitoring equipment and that kind of thing
to eliminate the interpersonal contact.
So it has had a big impact, and it has had a cost element to it,
especially—the best illustration of that is changing from group to
individual drug testing.
As you point out, most of the folks that come out of the peniten-
tiary have been there with underlying drug or mental health
issues, in my experience, and I have been doing this for almost 30
years. And so, therefore, in the post-release supervision world, ad-
dressing those issues is the most important thing perhaps for get-
ting people on the right path to not re-offend.
Another component of that also is often we find that folks really
have not developed the same, shall we say, world view, moral com-
pass, whatever, and so such things as moral recognition therapy,
where people are taught one on one often, or in group settings
about just the right way to behave and who not to hang out with
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and all of that sort of good stuff. Again, the way in which that is
conducted has to be different.
I think it is too early to say what the impact on recidivism may
be. I certainly have not seen individually myself any increase in
revocations of supervised release that I think are in any way re-
lated to the change in doing business during the pandemic. But it
is really too soon probably to know whether there is going to be
any long-term increase.
We are very proud of our work, and ability to have brought re-
cidivism down. We have a better record than the State courts gen-
erally, a decrease of somewhere between 4 to 7 percent from what
would otherwise be expected of folks.
And we are dealing with a higher-risk population these days that
are coming out. One of the things that has been done, both because
of the pandemic and for cost containment, has been to terminate
supervised release for low-risk offenders early. That of course
means the mix of the population is higher risk.
And, as more people have come out in the higher-risk category
as a result of such things as the Fair Sentencing Act, the First
Step Act, and so forth, that has increased the criminal history cat-
egories and the complications for supervision of the population.
So there is a bit of a wait and see here to that process.
Mr. WOMACK. Totally understand. I know I am out of time, but
this recidivism issue, I think, is something that we need to really
pay attention to in the ensuing months and years once we are—
we have got the pandemic in our rearview mirror.
I will yield back.
Mr. QUIGLEY. Thank you, sir.
Mr. Cartwright is recognized.
Mr. CARTWRIGHT. Thank you, Mr. Chairman.
And I want to welcome Director Mauskopf and mention what a
wonderful thing to have the first woman head of the AO and to
have you testifying before us within your first 3 weeks. They are
already putting you through your paces, I can see. Congratulations
on that.
I notice that you come from the storied Eastern District of New
York, and a lot of great judges came out of there. Congratulations
for that.
One of my favorites was Jack Weinstein, who wrote Weinstein’s
Evidence, a treatise that I relied on for 25 years of Federal court
practice and trials. And I think that may be what is—what con-
nects the two of you, Judge Mauskopf and Judge Lungstrum. Judge
Weinstein retired, and he lives in Kansas. Is that right, Judge
Lungstrum?
Judge LUNGSTRUM. Well, he is from Wichita, Kansas originally,
but I didn’t know that he had come home, honestly, but he is a
Kansan by birth, of which we are very proud, of course.
Mr. CARTWRIGHT. Of course. All right. Well, I want to jump into
the issue of security.
As you both know, we got a rude awakening here in Washington
about the importance of security for public officials on January 6,
and I dare say you saw that on television. It is something that
doesn’t stop with legislators, though. It includes the Judiciary.
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And here is what I want to ask. And, Director Mauskopf, I am
going to invite you to answer these questions in whatever order you
want to take them.
Without disclosing any specific security measures you have al-
ready taken, what would you say your biggest concerns are regard-
ing the personal safety of the judges, as well as of court staff?
What are your biggest concerns regarding the safety of court
buildings and offices? Are there any immediate steps we can take
better to protect the courts? And how do you envision the Judiciary
changing better physically to protect those in the court system?
Judge MAUSKOPF. So thank you very much, Representative Cart-
wright, for that question.
Security is one of our biggest priorities, as it is for so many of
us. I think the key—a key issue for judges is the fact that their
personally identifiable information is readily available on the inter-
net. And we saw what can happen in the tragic events with respect
to Judge Salas and her family when that information can be
accessed and, indeed, weaponized by a disgruntled litigant or some-
one that has some reason to target a judge or even a member of
our court staff.
And the legislation that was proposed last summer, which had
very broad bipartisan support, focused on efforts to try and remove
personally identifiable information—PII, as it is known—in order
to prevent or help prevent these types of attacks. Of course you will
never be able to prevent entirely these types of incidents, but re-
moving PII is a key aspect of prevention.
There are other—there are resources necessary also within the
Marshals Service. Some have already been given to the Marshals
Service to enhance their ability to assess threats and react to
threats. But one of the things that would be critical is to stand up
a resource within the Judiciary itself to help identify that informa-
tion that is out there on the internet, to educate judges better. And
one of the things that we have proposed and that we seek is a re-
source to proactively monitor for online threats made against the
Judiciary.
There has been additional funding provided for home-intrusion
detection systems at judges’ homes. There are things that we need
to do to harden the perimeters of buildings. And, actually, protec-
tion of buildings is actually protection of judges, court staff, and ev-
eryone who uses our courts.
And so we are hopeful that we can seek upgrades through the
Federal Protective Service to the camera systems outside. We have
identified since January 6th some additional resources that would
be helpful to hardening the perimeter. Many of our courthouses
have glass fronts and screening areas that are set back from the
entrance to courthouses, mine included, and we have always been
concerned about malicious actors or large groups breaching the
front of the entrances to our courthouses.
Of course additional marshals, funding for additional marshals in
the marshals budget can also go a long way to helping with all of
the issues that we are concerned about and that—we share those
concerns.
Mr. CARTWRIGHT. Well, good. We can talk further offline about
things you don’t want to be public.
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And, with that, I yield back, Mr. Chairman.
Mr. QUIGLEY. Thank you.
Mr. Womack, Mr. Amodei is next, but I understand he isn’t cur-
rently with us, so if it is all right, I suspect you would like us to
move on to Mr. Stewart?
Mr. WOMACK. I see Amodei—oh, he is on—he must be on another
hearing, so that is what the problem is. Okay. Yeah, we can move
on.
Mr. QUIGLEY. I just want to make sure I don’t skip him if that
is not the case.
Mr. WOMACK. Well, I am looking at him, sadly, but I think he
is on another hearing, so——
Mr. QUIGLEY. Okay. Then we will move on to Mr. Stewart.
Mr. STEWART. All right. Well thank you all.
And you know what? As a sidebar, I will note something that I
saw yesterday on this hearing. As Mr. Womack so graciously tried
to yield to me, I was actually traveling in my car at the time, and
it turned out Webex mutes you and turns off your video if you are
moving. So, if any of you have that experience, don’t try to log in
while you are driving. It won’t work. You can listen, but you can’t
participate. So I am glad I am just sitting in my office today.
To all of our witnesses, thank you. Much has been said so far
about security. I don’t want to ask a question regarding that, be-
cause I think you have answered that, and we have emphasized
that.
I would like to say, though, I do have some personal experience
with this. One of my brothers is a U.S. Federal judge. It has been
something that he has been concerned about, you know, as all of
you have been for quite some time.
I could review the list of those who have been assaulted or, in
some cases, killed who are associated with our Judiciary over the
last year. And much has been said about security here at the Cap-
itol.
I would just like to emphasize that security of our Judiciary is
equally important, and it is just not getting the same degree of at-
tention, and I think it should. And part of that is making sure that
you have resources to provide that security that our U.S. marshals
and others are able to do that.
We want to work with you to make sure that that takes place.
Once again, an assault on our Judiciary is as important as an as-
sault on our legislative members, and I think we have to treat it
that way.
My question regards how we have responded during the pan-
demic. Again, using my brother and other Federal judges that I am
associated with, many of them have not been to the courthouses for
a long time. They are holding their hearings, as we are today,
through the electronic means. And I am just curious what kind of
feedback you are getting from that. If I were a defense attorney or
perhaps a prosecutor, I would wonder whether it has the same ef-
fect and whether it can be as effective holding a hearing like that
when you are not in person.
And I am wondering what you are hearing from our judges. Are
they concerned about it? And how quickly are we going to be able
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to get back to where they are holding their hearings in courtrooms
rather than via the web, like we are today?
Judge LUNGSTRUM. I could lead off with that if you like since,
like your brother, I am in the Tenth Circuit area. You know, I
think all of us would prefer to go back to life as it used to be in
terms of in-person hearings. I think that—that is clearly preferable
to most all judges I have talked to.
What we have found is that, for certain kinds of proceedings,
whether they be first appearances, or whether they be status con-
ferences, or even revocations of supervised release, or something
else where there has been some agreement entered into between
the government and the defense counsel as to what the disposition
ought to be, the efficiencies of it have been appreciated, and, really,
the feedback from defense counsel has been, maybe perhaps sur-
prisingly, they find it very positive.
So I think we haven’t lost anything really in translation, but we
haven’t been doing jury trials or perhaps suppression hearings or
things like that, that we are going to need to get back to doing.
One thing about the—that I think a lot of us have commented
on, much like this proceeding today where you and I are literally
looking at each other eye to eye in a way that, in a congressional
hearing room, there is a great gulf of distance between the dais
where you all are sitting and the tables where the witnesses are
sitting, similarly, in a proceeding that we might have virtually in
a courtroom, the difference between looking at that individual eye
to eye just like this, in some respects, I feel closer to that indi-
vidual who is in front of me than I do perhaps seated across the
courtroom by 20 yards or however far it is.
So I don’t know if I am expressing myself very well about that,
but I think there are some aspects of it that are not all that bad,
if you will. And I think that perhaps has factored into why the de-
fense bar has not been negative about it.
Mr. STEWART. Yeah. Mr. Lungstrum, I appreciate that, and you
are right. I mean, you can be, I think, fairly effective in this for-
mat. Some, it depends on how they are managed, and Mr. Quigley,
for example, does a good job.
But—and I know my time has expired, but I need to make this
point, because it is something that I think is very important. That
is, we have had no jury trials.
Judge LUNGSTRUM. Right. Right.
Mr. STEWART. And that means—I mean, that means significant
legal proceedings have been delayed.
Judge LUNGSTRUM. Sure. Absolutely.
Mr. STEWART. How long can you keep doing that? I mean, that
is a big deal when you say we haven’t held a jury trial in our Fed-
eral courts for probably a year now. And, once again, that is an
enormously important consideration that, we need to be going for-
ward with these cases and we have got to recognize that.
Judge LUNGSTRUM. In the district of Kansas, we anticipate being
able to conduct jury trials in April. Now, the caveat to that is that
we have to have proper screening. We have to have proper social
distancing. We have to have certain plexiglas installations, things
that protect the participants.
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I conducted a civil jury trial in September. We conducted two or
three civil jury trials in September here in the district of Kansas
when there was that little dip in the way the pandemic was going.
But criminal jury trials, because there is so many more witnesses
involved, so many more jurors involved and all, have been where
the real holdup has been.
And there is a pent-up demand that, as soon as that safety, you
know, green flag goes up, I think there are going to be a ton of jury
trials, sooner rather than later.
Mr. STEWART. Yeah. Well, again, my time has expired, but I hope
you all understand the importance of this. And thank you, sir.
Judge LUNGSTRUM. Sure. Yes, sir.
Mr. QUIGLEY. Thank you, Mr. Stewart.
And we move on to Mr. Bishop.
Mr. BISHOP. Thank you very much, Mr. Chairman, and let me
thank Judge Mauskopf and Judge Lungstrum for appearing before
us today.
I want to talk about two topics, diversity fellowships and fellow
employee issues, because even after taking into account recent im-
provements, the legal profession, on the other hand, is one of the
least diverse of all of the professions in the country.
For example, African American representation among lawyers is
only around 5 percent despite the count of the 13 percent of the
general population.
And I want to commend the Judiciary for recently establishing
the Federal Defender Diversity Fellowship Program, which will
supplement the pipeline of attorneys from all backgrounds who are
qualified to join a Federal Defender organization or district Crimi-
nal Justice Act panel, or Federal capital defense team.
Judge Mauskopf, can you provide us with an update on the roll-
out of this new fellowship and provide us with some insight on how
much, if any, of the participants’ costs will be offset with the pro-
gram project? Will the funding for the fellowship be used to help
cover the high costs of living and transportation that often burden
people from low-income and rural backgrounds?
And the second question, quickly, according to the Office of Per-
sonnel Management, the Federal workforce is 2.1 million civil
workers, and of course I believe it is incumbent upon Congress to
ensure that the workforce has a safe and respectful workspace.
Recently, at the direction of the Chief Justice, you established a
working group to evaluate the Judiciary’s attendance of conduct
and procedures for investigating and correcting inappropriate
workplace conduct.
Can you tell us what progress has the working group made in
this regard to improve the workplace environment within the Judi-
ciary, and where do you see room for future improvement?
Judge MAUSKOPF. Thank you, Congressman Bishop. Those are
two very, very important areas, two very high priorities in the Ju-
diciary, and I am happy to address them both.
Let me start with diversity. One of the privileges that I have had
is to serve on the Judicial Conference’s Judicial Resources Com-
mittee. And, as part of the committee, we have a Diversity Sub-
committee, and the Diversity Subcommittee has been on the fore-
front of diversity and inclusion initiatives within the Judiciary.
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Through that, I have also participated in the Judiciary—in the
formulation of the Judiciary’s strategic plan. And it was clear that,
across components of the Federal Judiciary, everyone was focused
on improving diversity, whether it was the probation and pretrial
offices, Federal Defender offices, in the bankruptcy community,
bankruptcy judges, and magistrate judges.
And one of the things we will be doing shortly is convening a
roundtable, or a summit, bringing together all of those pieces from
across the Judiciary to share best practices and to see what we can
do moving forward to improve the diversity of the Federal work-
force and among magistrate judges and bankruptcy judges, which
is the aspect of the bench in which the Judiciary is directly in-
volved.
As you indicate, one of the new initiatives is the Defender Serv-
ices Diversity Fellowship Program, and it is designed to bring law-
yers—younger lawyers in their career to help work on capital and
noncapital cases within the Federal Defender system.
One of the hallmarks of the program is that it will not be cen-
tralized here in Washington. Fellows will reside in Federal De-
fender offices across the country, will be hosted there, will be
mentored by Federal Defenders, CJA lawyers, Capital Resource
Council, and others involved in the provision of defense services,
which will hopefully address your concerns about the high cost of
living in particular areas. We hope to have these fellows in areas
where the need is greatest.
And of course the program is open to all, but the—it is designed
to have targeted outreach to communities that are not well rep-
resented across the Federal Defender system and the CJA system,
and we hope that, through the fellowship, lawyers will then be
committed to taking what they have learned back to their commu-
nities, serve the populations that we serve, and reflect the commu-
nities that we serve.
With respect to workplace conduct, so, too, my service on the Ju-
dicial Resources Committee has involved me in many of the initia-
tives that are ongoing in the Judiciary, and I must say that the Ju-
diciary, from my perspective, has made tremendous progress in
standing up a new and much-improved system across the Judiciary
to address issues of workplace conduct.
There have been updates to the employee dispute resolution poli-
cies, and I am happy to report that all circuits and 80 percent of
the district courts, across the country, have adopted the new model
EDR plan that has been proposed since the working group rec-
ommended changes.
There have been changes to the judicial conduct and disability
process that will greatly improve that aspect of addressing work-
place issues. We have created the Office of Judicial Integrity, and
we have sought additional resources to provide additional staffing
to that office. It is one of the ways—one of the new, more flexible
mechanisms to report workplace conduct.
So, too, 11 circuits have created the position of director of work-
place relations. They have become central points in addressing
issues within circuits of workplace conduct. They too are a new and
independent avenue of reporting. They are instrumental in assess-
ing additional needs within circuits and providing training and ex-
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plaining resources and doing outreach to the court community in
order to ensure that judges and employees know about our proc-
esses, that know where they can seek resources, know how they
can report.
Of course——
Mr. QUIGLEY. Judge, I am sorry. I have tried to give everybody
leeway, but I have got to make sure everybody gets their first op-
portunity. And then, you know, we will have a second, quicker
round for the opportunities, so I apologize. If we could move on,
please. I am sorry.
Mr. BISHOP. Thank you.
Mr. QUIGLEY. And I understand Mr. Amodei is still not available.
If that is the case, we will move on to Mr. Joyce.
Mr. JOYCE. Thank you, Chairman Quigley.
Your Honor, I would like to—sort of a variance on the theme that
has already been brought up by my colleagues, Mr. Cartwright and
Mr. Stewart.
As a former prosecutor, on January 6th, unfortunately some
madness descended upon our Capitol and tried to obstruct the con-
stitutional process in which we took place. And you can imagine,
as a prosecutor, I look at that as a crime scene and say, ‘‘Well, wait
a minute. We have got to cordon off the crime scene,’’ because, as
I try to explain it to folks at home, it is like dropping change on
the ground. If you pick it up and drop it again, it never drops the
same way. You have only one shot to do it right.
However, I understood and agreed with the idea that we had to
move forward and show the country that we have moving forward
and that madness wasn’t going to stop us from our constitutional
duties.
Unfortunately, the same degree of madness is now trying to in-
fluence the Judiciary and the things that are taking place. I was
wondering what if—in the integrity of the Federal court operations
and the decisions that are being made, what have you done to let
these people know that you will not be impacted by the violence
and the threats and the incidence of violence?
Judge MAUSKOPF. When you think, the best way that we do that
is by doing our jobs and doing it the way we have always done it—
fairly, with integrity, objectively. And, during the pandemic, I think
it is critical to make sure that the public knows that nothing has
deterred us, whether it is the virus, whether it is the protests that
we experienced in the Eastern District of New York with thousands
of people gathering in the park across from our courthouse. We had
sufficient security. We could always use more. But we did not expe-
rience any issues.
I think, by continuing to do what we do, to—we have earned the
respect of those who may—we have earned that respect, and, by
continuing to do what we do, I think we send a good message to
those who would seek to try and influence or impair the integrity
of our courts.
Mr. JOYCE. Well, I know judges are in a tough spot, because you
can’t really get out and broadcast that, and however we can be of
assistance in doing that to ways you think of in putting together
the protection systems, I think it is important to let people know
that you will not be swayed.
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Thank you, Mr. Chairman. I yield back.
Mr. QUIGLEY. Thank you.
Mrs. Torres.
Mrs. TORRES. Thank you, Mr. Chairman. And I want to thank
our guests for being here with us.
Judge Mauskopf, I want to emphasize to you how important it
is that the Administrative Office and the Judicial Conference takes
sexual harassment and workplace misconduct seriously.
Your appropriations request discusses steps taken to bolster the
AO’s trouble Office of Judicial Integrity, but I am concerned by
your assurance that—and I quote—‘‘the AO is confident the Judici-
ary has enough resources to protect judicial branch employees.’’
So, in the last few years alone, multiple Federal judges have re-
signed because of years-long patterns of sexual harassment and
abusive conduct. Whistleblowers have raised concerns about the Of-
fice of Judicial Integrity. Your appropriations request mentions
that a new judicial integrity officer came on board earlier this
month. But, as you know, his predecessor resigned after less than
a year on the job, and the position has been left vacant for months.
Fiscal year 2021, I included—of this year, I included report lan-
guage directing the Judiciary to expand its comprehensive training
program on workplace behavior and by standard intervention and
encouraged the Judiciary to expand and report on its confidential
nationwide reporting system to document employee misconduct
complaints.
Help me understand how you plan to abide by that request and
provide an exemplary workplace and protect every judge and every
court employee from sexual harassment, discrimination, and retal-
iation. Tell us how the Judiciary has the resources that it needs
to actually do this job and protect its employees.
Judge MAUSKOPF. Thank you very much for that question, and
I share and as does everyone in the Judiciary shares your commit-
ment, our commitment to creating an exemplary workplace. And
again, as I have said before, I have been involved in some of these
issues to date, and I am looking forward to playing a different role
as director in those issues.
If I may, I would just like to correct the record slightly. Jill Lang-
ley, who was the first head of the Office of Judicial Integrity, had
continued in that role while we searched for her successor. Her suc-
cessor has now been hired. Jill has facilitated and continues to fa-
cilitate the transition to her successor, and——
Mrs. TORRES. Have you filled the job that that person, Jill Lang-
ley, had?
Judge MAUSKOPF. She is leaving the Office of Judicial Integrity
to go back home to her district. I am sorry, to her circuit, the Tenth
Circuit, where she serves as the Director of Workplace Relations
for the Tenth Circuit. So those were the circumstances of her tran-
sition.
Our new head of the Office of Judicial Integrity is Michael
Henry, and he has served in a variety of capacities dealing with
issues of sexual harassment and workplace conduct. And one of his
main areas in which he worked, he stood up the office at the
United States Center for Safe Sport, which is——
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Mrs. TORRES. I don’t want to interrupt you, Judge, but my ques-
tion is about the resources. How do you plan—do you have enough
resources? Is that why you have not asked for additional resources?
Judge MAUSKOPF. So I think we are at the point where we are
seeking to augment the staffing in the Office of Judicial Integrity,
and we have sought resources for that. The circuits have found re-
sources to hire the directors of workplace relations, and all courts
have employed dispute resolution coordinators. Those are often col-
lateral duties, but they seem to work well, but it is something
that—so they seem to work well. I think where——
Mrs. TORRES. So pardon me again. These coordinators, they are
insiders. And how are you going to make sure that this job or this
responsibility is not being given to an abuser? How can we be con-
fident in that?
Judge MAUSKOPF. The EDR coordinator—in our experience, the
coordinators, whether they are in the circuits or whether they are
in the district courts, I don’t think we have ever had a cir-
cumstance where they have been involved, or at least not to my
knowledge, where they have been involved in a workplace conduct
matter. The new model——
Mrs. TORRES. That is really great information to hear, since we
have not been privy to any of those complaints. That is why the
report language is requesting that.
My time has expired, but I look forward to hearing you expand
more on my questions in the second round.
And I yield back.
Judge MAUSKOPF. All right.
Mr. QUIGLEY. Thank you.
Mr. Amodei, please.
Mr. Womack, do you know if he is available at this point? Is he
still in the other hearing?
Mr. AMODEI. Hey, Mr. Chairman, it is Mark Amodei.
Mr. QUIGLEY. Oh, there you are. Please go ahead.
Mr. AMODEI. Thanks for your patience with me.
Mr. QUIGLEY. I was patient. Mr. Womack, he was ready to cut
you loose.
Mr. AMODEI. You know, he is kind of cranky. I think it comes
from that Gulf Coast area that kind of has an impact on him some
days.
Mr. QUIGLEY. We can get into that later, I don’t want to eat up
your time.
Mr. AMODEI. Okay. So here is what I am—first of all, I would
like to know from Judge Blanton as well as Ms. Szpindor is where
are we at in the Federal Courts in terms of your employees being
vaccinated for COVID?
I am assuming that in those jurisdictions where your district,
your trial courts and your appellate courts are, are those people
vaccinated?
Judge MAUSKOPF. So, Congressman, as you may know, the Fed-
eral Government, through HHS, has created certain categories of
prioritization that help inform State governments as to how to dis-
pense the vaccine.
Mr. AMODEI. Correct.
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Judge MAUSKOPF. But it is largely up to the State authorities to
determine their own priorities. And as a result of that, there are
widespread differences across the country.
In some States, Federal judges and court employees have been
vaccinated. In my State, New York, we do not fall under the State’s
priorities. Probation and pretrial officers can come under the law
enforcement prioritization, which has been made in most, if not all,
jurisdictions.
And one of the other key constituencies within the Federal Judi-
ciary are our Federal Defenders. And I think they are—again, in
my State, that is a big issue. Although the Bureau of Prisons has
been given an allocation of vaccine for its staff and for defendants
who are incarcerated, the Federal Defenders who are their lawyers
still need to rely on remote technology in order to safely meet with
their clients, for the most part.
So we do not have one single, single standard across the Federal
Judiciary for who can get vaccinated and who can’t.
Mr AMODEI. Judge, do you have any——
Mr. QUIGLEY. I want to say this, that you raised an excellent
point. And I think that Mr. Stewart’s question and other questions
about speedy trials—and I won’t eat up your time here—you know,
all get back to this. You know, as you know, we have been vac-
cinated.
And I think that I would like to talk about this with Mr.
Womack of going forward of talking as a committee about, if we are
talking about justice moving forward, finding out a way for the
Federal Government to play a role in making sure that this moves
forward.
Sorry to eat up your time. I will give you as much as you need.
Mr. AMODEI. Hey, Mr. Chairman, I appreciate that.
To make it really clear here, it is becoming more and more frus-
trating to know—and you have hit the nail on the head. My staff
in Nevada can get vaccinated. And they have made appointments
and they are going to do it.
Now, mind you, each State is different, as Ms. Mauskopf has in-
dicated. But I am sitting here going, there is no consistency in the
Federal Judiciary. And I am not blaming the Judiciary. I am just
saying at some point in time as we are getting ready to open it up
for everybody else, at some point in time I think we need to take
care of business in terms of those core functions.
And, obviously, the function of the judicial branch is one of those
as well as, Mr. Chairman, just the function of our own staffs, who
are basically here. I mean, I was just on a hearing with the Admin-
istrative Office of the Courts. The AOC people who have to work
in the building, guess what, they are not vaccinated. They can’t
work from home.
And so as we are sitting here getting towards this point in time,
I don’t think it is to the point where it is, like, hey, somebody is
better than somebody else. I think a good faith objective look at the
functions that these various folks provide is something that, quite
frankly, ought to get them into the, okay, we have done everything
we can for you. You know, we are talking about the mental health
of everybody. Well, COVID is a piece of that.
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And I won’t go on beyond that. Thank you, I look forward to
working with you.
The only other thing I want to say is, for both of these witnesses
is, I know that different judicial districts are different and all that
other sort of stuff, but one of the things that is kind of coming for-
ward, at least in terms of our own neck of the woods is, are we
building in silos in all this security, at least for purposes of commu-
nication, because whether it is, you know, the Library of Congress
or the Federal courthouse or the whatever, the one thing that I
would ask is that we think about not only what the
interconnectivity is, in terms of the Marshal’s office or whomever,
but also their ability to cross-thread, if you will, with other local
law enforcement, whether they be other Feds as well as the State
and local folks, since the idea is to have all assets available.
And so that is one of the things that we are going to be keeping
on an eye on when we talk about, okay, we got to up our game on
security, but one of the things we need to do is make sure that
there is not a silo between the Federal courthouse and the local
sheriff’s office or the local FBI as well as the U.S. Marshals and
all that other sort of stuff. So I just want to put that on the radar
screen.
Mr. QUIGLEY. No, we will. And I will allow the judges to respond.
That will be the first part of the next round. But Mrs. Kirkpatrick
has been so patient, I will let her proceed. And then we will get
to a follow up on your point as well.
Mr. AMODEI. Good. Thank you.
Mrs. KIRKPATRICK. Thank you, Chairman Quigley and thank you
Ranking Member Womack. As you know, this is a really important
hearing to me.
Mr. QUIGLEY. Mrs. Kirkpatrick, I believe your screen froze. Were
you able to help Mrs. Kirkpatrick with the technical difficulties?
STAFF. Mr. Chairman, we will work on that.
Mr. QUIGLEY. Okay.
Mr. WOMACK. May I suggest we move on until she can free up.
Mr. QUIGLEY. As soon as Mrs. Kirkpatrick is back. So what we
are going to do is we are going to the second round and then give
her all the time she needs when we come back.
So very quickly, and I will ask my colleagues and those respond-
ing, let’s try to do 3 minutes this time.
And I do want to afford you the opportunity to respond to, if you
desire, what was brought up at the end about security, but also,
you all put forward a security stimulus request of $122.5 million,
with $10 million for additional staff and $112 million to conduct a
physical security assessment.
Can you briefly, whomever you decide to answer, give us your
sense of this and why it is important and what it would do?
Judge LUNGSTRUM. Do you want to start with that, Judge
Mauskopf?
Judge MAUSKOPF. Sure. I think these are evolving needs that
have largely come from the lessons learned from January 6. We
have always been concerned about finding ways to harden the
entryways of our courthouses. As we have talked about, we have
always been focused on mitigating vulnerabilities before they can
be exploited.
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And so $113 million of that request is to secure entrances and
screening areas; and the additional $10 million, which does require
authorizing legislation in addition to funding, is to enhance the Ju-
diciary’s threat vulnerability management.
And this is the Judiciary’s effort. This is to fund the Judiciary’s
effort to identify and remove that personally identifiable informa-
tion before it can be used against a judge.
And currently, we don’t have resources to stand up that type of
vulnerability management program, and it would be a complement
to what the Marshals do in actually once a threat is identified and
investigated by the Marshals.
STAFF. Chairman you are muted.
Mr. QUIGLEY. Judge, do you want to add to that?
Judge LUNGSTRUM. No. I think the director covered that quite
well.
Mr. QUIGLEY. Okay. Mrs. Kirkpatrick, is she back on?
STAFF. Not yet, Mr. Chairman.
Mr. QUIGLEY. If not, Mr. Womack, please.
Mr. WOMACK. Thank you.
My last question is going to be on cybersecurity. The request is
a $9.1 million increase for internet firewall services. You know, we
all know what happened on the SolarWinds debacle.
To the extent that you can say it in public, if you can say any-
thing, has the Judiciary been impacted by the SolarWinds breach
and, if so, what steps are you taking to mitigate?
And then as followups, how closely does the Judiciary work with
cybersecurity experts and the executive branch to ensure that you
guys are all connected to the latest threats, supply chain concerns,
mitigation techniques, all of that kind of stuff? And then how will
funding in your request enhance your cyber protections, and is it
sufficient to address the growing cyber threats? And I will leave it
there.
Judge MAUSKOPF. And I can start.
Judge LUNGSTRUM. I’ll—or Judge will lead. Either one.
Judge MAUSKOPF. I was going to start generally by saying that,
unfortunately, it looks like we are in good company with respect to
the issues related to SolarWinds, but I do have to be very careful
with what we say.
We have been working with law enforcement actively, but there
are two things that I can speak about: First, we are working with
the Department of Homeland Security’s Cybersecurity and Infra-
structure Security Agency, CISA. They are conducting a forensic in-
vestigation of the impact or any impact of the SolarWinds situa-
tion, and those findings are pending the results of that forensic in-
vestigation.
We have also given guidance to the courts proactively while we
are trying to understand what the impact may have been to protect
highly sensitive documents, sensitive documents that could harm
the United States, harm the Judiciary, litigants or others.
These are documents that are generally in most cases—in fact,
I think in all cases—sealed, and so we don’t anticipate any type of
public access issues. But we have counseled courts to look at their
practices and to adopt orders to ensure that those documents are
maintained either in hard copy or on some type of a standalone
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computer system that isn’t connected to the internet or any other
system that could be compromised.
So we are working actively to identify any impacts from
SolarWinds and to take the necessary steps to understand that and
to protect the information, the very valuable information that is
housed within our systems.
And I will leave the fiscal issues to Judge Lungstrum.
Mr. QUIGLEY. Sir, and if you could, please go ahead somewhat
quickly, as we are trying to get through the second round, sir.
Judge LUNGSTRUM. I think it is really all in the materials there.
And Ranking Member Womack mentioned the increase that we are
requesting. And it is our best assessment of what we are able to
do if we had that funding to be able to shore up our security on
the internet stage.
Mr. QUIGLEY. Any followup, Mr. Womack?
Mr. WOMACK. No, that is it, other than to send my condolences
to Judge Lungstrum on the loss by Kansas last night in the——
Judge LUNGSTRUM. God, it was a heartbreaker.
Mr. WOMACK. As an aficionado of basketball. But, hey, the silver
lining is Kansas State won. I know you probably could care less
about them, but there you go.
Judge LUNGSTRUM. That is not a silver lining for a Jayhawk.
Now, come on.
Mr. QUIGLEY. We are going to go back to Mrs. Kirkpatrick.
For all you Kansas folks, if this makes you feel at home.
We will go back to Mrs. Kirkpatrick. She is still on the first
round. We are sorry for her issues.
Mrs. KIRKPATRICK. Thank you, Chairman Quigley. I think we
have got it all worked out now.
Mr. QUIGLEY. Okay.
Mrs. KIRKPATRICK. So I want to thank Chair Lungstrum and Di-
rector Mauskopf for appearing before the committee. As you know,
I represent a border district in southern Arizona. So we are espe-
cially interested in immigration-related issues.
I understand that surges in immigration-related cases leads to
increased need in Federal Defender services staffing. So could you
please talk through staffing needs, especially in regard to immigra-
tion, and how the 7 percent increase in funding you have requested
could meet those needs?
Judge LUNGSTRUM. Thank you, Mrs. Kirkpatrick. As you know,
the really disproportionate number of criminal defendants arise out
of the five border court districts, much of that having to do with
immigration workload. And that particular workload did not de-
crease during the pandemic as much as some other criminal filings
were. So as a result, the burden on defenders, both the Federal De-
fenders offices and the Criminal Justice Act appointees, continue to
build.
We think that the work measurement formula that has been de-
veloped for defenders adequately captures those needs. Now, we
this past—for fiscal year 2021, because of some unanticipated
needs, such as the McGirt versus Oklahoma decision, which altered
the way in which certain Indian Nations were treated under State
versus Federal law in Oklahoma, and also Arizona’s being adopted
into the opt-in program for fast tracking capital habeas cases, some
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resources were reallocated among Federal Defenders offices accord-
ingly.
We are trying to catch back up with that in our 2022 request,
which would take our Federal Defenders up to a 98 percent of their
staffing formula, which would be about as much as practically they
would be able to maintain just in the ordinary course of hiring peo-
ple and people leaving and that sort of thing.
So it is always a huge issue. Our defender program is I think one
of the jewels in the crown, if you will, of the Federal judicial sys-
tem. And there are particular needs in the border courts that we
are trying very much to address.
Mrs. KIRKPATRICK. Well, we really rely on the defender services
in southern Arizona. So I want you to know that is a top priority
of mine. Anything I can do to help with funding there, let me know
about that.
So, you know, you have already pretty much addressed the secu-
rity measures. I just want to highlight a little bit, I have a rural
district, largely rural district in southern Arizona. And so, you
know, what kind of online services are being offered to my rural
folks? And I would like to hear about measures taken to increase
cybersecurity in rural areas.
Judge MAUSKOPF. I think rural versus urban or metropolitan
doesn’t make a difference in the areas that you have highlighted.
We are making proceedings accessible to the public in rural areas
as we are—in rural areas or courts that serve rural areas as we
are in others.
I think sometimes—and we even see this in urban areas—the
technology available to the public is not often good. And so some
of the things that have been done is to, if courthouses are still open
and if we can have a limited number of people in the courthouse,
we still make a video. We make a courtroom available with a video
monitor, so people can still come if they don’t have the technology
to join.
So I think that we don’t recognize those distinctions. We just use
different technology, different ways to achieve the same results in
courts that service rural areas as we do across the rest of the coun-
try.
Mrs. KIRKPATRICK. So one of the problems we have seen with
cyber is interoperability. Is that a problem that you are having to
deal with in rural parts of the country?
Judge MAUSKOPF. Honestly, that is an issue that I don’t feel
well-prepared to address. And if I could get back to you on that,
I would really appreciate it.
Mr. QUIGLEY. Sure. Just send it back to the committee, and we
will make sure every member has access to your response.
Mrs. KIRKPATRICK. Thank you so much. Thank you, Mr. Chair-
man.
Mr. QUIGLEY. Absolutely.
Mrs. KIRKPATRICK. I yield back.
Mr. QUIGLEY. Mr. Cartwright.
Mr. CARTWRIGHT. Thank you, Mr. Chairman.
And Director Mauskopf, again, I want to congratulate you on the
new position. You certainly have big shoes to fill replacing Jim
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Duff, whom we got to know, but it looks like you are on a good tra-
jectory toward acquitting yourself very well in the position.
Judge MAUSKOPF. Thank you.
Mr. CARTWRIGHT. And, you know, 3 weeks into the job, I under-
stand, but we expect you to fill up your bookcase a little more the
next time we see you. But actually——
Mr. QUIGLEY. No background shaming.
Mr. CARTWRIGHT. One thing that I will say I have thought for
decades about the Federal Courts is that they have carried the
proud mantle of preeminence, really, in both technology and in
speed of adjudicating civil cases. In fact, they have made a great
effort over the years of keeping track of statistics along those lines,
particularly with expeditiously moving civil cases.
But my colleague Chris Stewart and I have both mentioned now
about the concern about the civil backlog, because of the lack of
Federal jury trials happening. Obviously, there is going to be a big
pile of cases in your inboxes, all of the Federal district court judges.
Can you share with us what your ideas have been about how to
move those? Are you going to use magistrate judges more? Are you
going to do summary jury trials? You folks are masters at innova-
tion, and I would like to hear some of your ideas so far.
Judge MAUSKOPF. So—go ahead, Judge Lungstrum, why don’t
you start.
Judge LUNGSTRUM. No, you go ahead. Go ahead. I like to look at
your bookcase.
Judge MAUSKOPF. So on the civil side, I think judges and liti-
gants have approached the issue even during the pandemic in cre-
ative ways. There have been Zoom trials on the civil side in com-
plex patent cases, in other commercial cases. There haven’t been a
lot of them. I am not sure if we have had jury trials on the civil
side. But litigants——
Judge LUNGSTRUM. They have in western Washington.
Judge MAUSKOPF. Yes.
Judge LUNGSTRUM. Western District of Washington, yeah.
Judge MAUSKOPF. So some courts are experimenting with that,
and I would expect that to continue. And so people are trying to
be creative.
In terms of when we really start going, I think we will have to
think about using magistrate judges, about using our visiting judge
program, about seeing about the ways that we can use technology,
perhaps to try and increase the number of cases we can do. But
there is only so much you can do, I think. And that backlog will
take some time to dig out from.
Judge LUNGSTRUM. One of the real—sorry.
Mr. QUIGLEY. Go ahead, Judge.
Judge LUNGSTRUM. I was going to say, one of the real problems
in moving the civil cases now as the logjam breaks is the priority
we need to give to criminal jury trials.
And the courtroom space is more limited, because we only can
hold proceedings in certain size courtrooms to accommodate folks
and be socially distanced and put in the personal protection infra-
structure and so forth. That is probably the biggest impediment to
actually getting civil trials conducted. But we are going to do our
best. It is important.
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Mr. CARTWRIGHT. Mr. Quigley and I are a phone call away, so
we are here to help.
And I yield back, Mr. Chairman.
Mr. QUIGLEY. Thank you.
Mr. Bishop. And, again, we are in the 3-minute rounds, so please
try to fit your questions and answers into that slot, please. Thank
you.
Mr. BISHOP. Mr. Chairman, as a long time member of the com-
mittee, I take pride in being a responsible steward of Federal
spending. I believe we have to strike a balance between adequately
funding our programs with responsible constraints on the national
debt.
And I was very pleased to hear Judge Mauskopf, as you men-
tioned a number of the steps that the Judiciary has undertaken for
cost containment measures. I thought that was remarkable.
Can you just tell me whether or not there is any additional sup-
port that we can provide in Congress to help you with these suc-
cesses?
You went through a long list of items that you have been able
to undertake for cost containment. Is there something else that we
can do to help in that regard?
Judge LUNGSTRUM. If I can jump in there on that, Congressman
Bishop, in our request in specifics, we have a $10 million request
to help with our No Net New Program, which is in the space area,
where we have a rule that you can’t add space without taking
space off the books. But sometimes to be able to do that, there are
renovations that have to take place.
So we have requested $10 million in this 2022 budget to continue
that program. And it is taking money off the books enough that
more than pays for it over time, but we have to make an up-front
expenditure. That is the kind of thing that you all can assist with
through the appropriations process for sure.
Mr. BISHOP. Thank you.
I yield back, Mr. Chairman.
Mr. QUIGLEY. Thank you, sir.
Mrs. Torres is recognized again.
Mrs. TORRES. Thank you, Mr. Chairman.
And Judge Mauskopf, just to go back to our conversation earlier,
it seems that many of the recent concerns with the Judiciary has
to do with the lack of transparency. Sexual harassment flourished
in the darkness and judge’s chambers are notoriously closed off.
Similarly, many of the rules that apply to other Federal agencies
don’t apply to the AO and the Judiciary. You are not bound by the
same Federal contracting rules, for example, as the executive
branch and you don’t have an Inspector General.
I am happy to see your request to build out an Office of Compli-
ance and Risk to bolster the AO’s ability to address internal control
weaknesses and other audit recommendations, but I am very con-
cerned that the office work will be undermined unless we know
what is going on.
So will you commit to making those audit recommendations pub-
lic? And if you can expand on my previous questions.
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Judge MAUSKOPF. Congresswoman Torres, I am not prepared to
commit to making public the audit findings. I just don’t know
enough about the process yet, and I hope you can appreciate that.
I don’t want to do any or commit to something that might be in
violation of law. But I certainly understand Congress’ oversight
role of the Judiciary and its oversight and this subcommittee’s
oversight over the resources that it provides to the Judiciary.
And we are very mindful of that, respect it tremendously, and
will ensure that you have the information that you need, consistent
with what we can turn over to allow you to exercise that oversight
function.
Mrs. TORRES. It is unfortunate that you cannot commit, Judge,
to basic transparency and accountability: I think that is the nexus
of the issues that have been brought forward, but the lack of pro-
tection for whistleblowers, the lack of respect for employees and the
sexual misconduct allegations that we have seen.
I have 35 seconds left. I am going to turn that time over to you
and hope that you can be a little bit more transparent.
Judge MAUSKOPF. I am committed and we are committed to
transparency, to transparency and to ensuring a safe workforce.
We do have provisions that address retaliation. You cannot retali-
ate against someone for bringing a complaint forward.
The judicial conduct and disability rules require judges to come
forward if they know about misconduct within the Judiciary, in-
cluding involving a judge, and if they don’t it is grounds for a mis-
conduct finding.
So there are strengthened rules, strengthened procedures to ad-
dress all of the issues that you raise. Of course, we can always do
more and we are committed to doing more.
Mrs. TORRES. So we need to do more, because the issues con-
tinue.
And I am out of time, so I am going to yield back.
Mr. QUIGLEY. Mrs. Torres, you are out of time, but the discussion
will continue. And I pledge that we will continue to work with you
and continue to communicate with the judge on this matter, to the
extent we can as we learn more. As you know, she is 3 weeks on
the job. So let’s continue the dialogue.
Mrs. TORRES. That is why I was kind and nice, Chairman. Thank
you.
Mr. QUIGLEY. No, I understand. I appreciate that.
Mr. Womack, do you have anything to add, sir?
Mr. WOMACK. I do not, and ready to go eat.
Mr. QUIGLEY. Me too.
Without objection, I have a question for the record on the Abra-
ham A. Ribicoff Federal Building and the U.S. Courthouse and
Hartford Courthouse, and a letter from the Federal Law Enforce-
ment Officers Association that I am submitting for the record.
Mr. QUIGLEY. We will now conclude today’s hearing. I ask mem-
bers to submit any remaining questions in writing for the record.
Judge and Director, we want to thank you so much for your serv-
ice and for your assistance today, and if you will respond to any
other additional written questions in a timely fashion.
With that, this hearing is adjourned, and thank you all.
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THURSDAY, MARCH 11, 2021.
OVERSIGHT HEARING—U.S. POSTAL SERVICE
WITNESS
HON. LOUIS DEJOY, POSTMASTER GENERAL, UNITED STATES POSTAL
SERVICE
Mr. QUIGLEY. The hearing will come to order.
As this hearing is fully virtual, we must address a few house-
keeping matters. I understand the boss is going to be on the call,
so I have to follow all the rules.
I would like to remind members that for today’s meeting the
chair, or staff designated by the chair, may mute participants’
microphones when they are not under recognition, for the purpose
of eliminating inadvertent background noise.
Members are responsible for muting and unmuting themselves.
If I notice you have not unmuted yourself, I will ask you if you
would like the staff to unmute you. If you indicate approval by nod-
ding, staff will unmute your microphone.
I remind all members and witnesses that the 5-minute clock still
applies. If there is a technology issue, we will move to the next
member until the issue is resolved and you will retain the balance
of your time.
And to our guest, I will just suggest that, given the 5 minutes,
please try to allocate—and I know it is difficult, and I apologize—
if you can, sort of to the point of recognizing each member has 5
minutes in their question. And as difficult as that is, we appreciate
it.
You will notice a clock on your screen that will show how much
time is remaining. With 1 minute remaining, the clock will turn
yellow. With 30 seconds remaining, I will gently tap the gavel to
remind members that their time is almost expired. When your time
has expired, the clock will turn red, and I will begin to recognize
the next member.
Finally, House rules require me to remind you that we have set
up an email address to which members can send anything they
wish to submit in writing at any of our hearings or markups. That
email address has been provided in advance to your staff.
I am going to keep this opening statement very brief so we can
leave ample time for questions.
It should be noted that we are glad to welcome, honored to wel-
come the 75th Postmaster General of the United States, Louis
DeJoy, today. Appointed by the Board of Governors of the Postal
Service, he started his tenure in June 2020.
We want to thank you, sir, for being here today.
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The reason I said it is special notice, it has been nearly 20 years
since the U.S. Postal Service has testified before this sub-
committee. So there is 20 years of catching up to do.
Obviously, this hearing could not have come at a more important
time. Given the extraordinarily vital role of the USPS during the
pandemic, we are glad to have this hearing today.
By delivering food, medicine, personal protective equipment, and
other essential equipment during the pandemic, it has literally
saved lives by helping Americans maintain social distance, limiting
the spread of COVID, and allowing people to vote safely.
Let me say this. Mr. DeJoy, you and I spoke the other day. We
recognize there are a lot of issues. Let this be a hearing where we
talk about those issues and solutions and, in a sense, cut to the
chase. I have had a thousand postal cases in my district since the
beginning of the year. We typically have 500 in a year.
That being said, I will tell you that I want to help. I know this
committee and Congress want to help. We want to find solutions
working with you. It is imperative that we restore the effectiveness
to the full point necessary and possible for the Postal Service.
So with that, I would now refer to Mr. Womack for his opening.
Mr. WOMACK. Thank you, Chairman Quigley.
Welcome to the committee, Postmaster DeJoy.
Over the past year, the Postal Service has faced a lot of chal-
lenges, including the coronavirus and its impact on the health of
postal employees and their families; a significant decline in mail
volume, coupled with a significant increase in package volume; a
shortage in airplane and truck capacity; significant winter storms,
making mail delivery all the more difficult.
I will commend the Postal Service employees for their hard work
and commitment to deliver mail regardless of the challenges they
face. And I have seen it firsthand. Just the other day, after a major
snowfall in northwest Arkansas, I was alerted to some traffic com-
ing down my driveway. And there, trudging through the snow, was
the U.S. Postal Service.
I have got to hand it to my postmaster, or my mail deliverer,
Jesse, who braved the elements to make sure that I had service
that day. And I know it was a complicated route that he was run-
ning.
We are all appreciative of the efforts of these critically essential
workers to help Americans during these difficult times.
Yet, there are several areas where the Postal Service needs some
improvement. Delivery standards have declined, resulting in holi-
day gifts arriving after the holidays; payments sent through the
mail arriving late, resulting in fees and interest charges for many
Americans; and challenges for businesses that use the Postal Serv-
ice to receive supplies and deliver products.
In addition, the Postal Service is not on a sustainable fiscal path.
While the Postal Service does not rely on taxpayer dollars to fund
most of its operations, revenues from the sale of postage, products,
and services haven’t kept up with the cost.
Since 2007, USPS has recorded significant net losses each year,
including 9.2 billion in 2020. I understand that without significant
reforms, you are projecting to lose 160 billion over the next 10
years.
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The majority’s HEROES bills from this past summer proposed
providing the Postal Service with billions of dollars of taxpayer
funds without requiring structural reforms. I am on record as op-
posing such taxpayer-funded bailouts.
I understand you, along with the Postal Service Board of Gov-
ernors, intend to release a 10-year strategy to get the Postal Serv-
ice on a sustainable path. It is a welcomed first step, and I look
forward to seeing it.
The Postal Service has a great history, which began with the
Continental Congress appointing Ben Franklin—Benjamin Frank-
lin—as the first Postmaster General.
I want to work with you, Chairman Quigley, and the authorizing
committee to ensure that the Postal Service becomes financially
stable and continues its long history of providing a high level of
service.
And with that, I look forward to our Q&A, and I yield back the
balance of my time.
Mr. QUIGLEY. Thank you, Mr. Ranking Member.
I now recognize the chairwoman of the full Appropriations Com-
mittee, Ms. DeLauro.
The CHAIR. Thank you very much, Chairman Quigley and Rank-
ing Member Womack, for holding this vital hearing.
It has been almost a year since the United States Postal Service
Board of Governors selected you, Mr. DeJoy, as the 75th Post-
master General of the United States.
Since then, the Postal Service has, frankly, become wholly unrec-
ognizable from what it once was. Under your leadership, on-time
delivery for something as simple as a letter to a loved one declined
to just 60 percent and has still not fully recovered.
Because of the COVID–19 pandemic, Americans are now relying
on the Postal Service for everything—medications, food, bills, and
even livestock. But even as this pandemic was putting an enor-
mous strain on the Postal Service, you implemented a number of
new rules that led to severe and unnecessary mail delays.
We have all heard the stories from our constituents. Some have
been forced to pay interest or extra fees because their bills were
not delivered on time. Small business owners are losing money in
the mail. And those who are sick are waiting days, if not weeks,
for lifesaving medications.
In my own district, I heard from a veteran whose insulin arrived
3 days late and who had to get to the VA to provide the dosage
he needed in order to survive.
An immunosuppressed constituent of mine waited 17 days for a
shipment of medication to go from Main Street in East Haven, CT,
to New Haven, CT, 4 miles away.
And I heard from a small business owner in Milford who is fac-
ing financial hardship because hundreds of client payments have
never arrived.
Though he has since been able to track down 80 pieces of mail,
50 of which were client payments, and 30 of which were bills he
had to scramble to pay, about 200 pieces of mail are still missing.
I want to take a page from what my colleague Congressman
Womack said. I want to commend our postal workers. They know
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how to deliver the mail. They have been doing it for a very, very
long time.
What has happened at the post office is unacceptable. And,
frankly, your leadership of the Postal Service, in my view, has been
an utter disgrace.
It is simply inexcusable that even after all this hardship you are
working on a new strategic plan that would permanently slow
First-Class Mail and abandon current service standards.
And perhaps even more outrageous, even after Congress provided
$10 billion to the Postal Service in the CARES Act to help address
the impacts of this pandemic, you continued to put the health and
safety of your employees at risk.
It is my understanding that almost 56,000 postal employees have
tested positive and 170 have died. I am appalled. My constituents
are as well.
It is time for to you put an end to these delays, restore service
and reliability, and prioritize the health and the safety of the
American people.
And if you cannot do that, if you do not want to actually make
the Postal Service better, then I do call into question why you took
on this job.
I am pleased with President Biden’s decision to nominate three
new members of the Postal Service Board of Governors late last
month, and I urge the Senate to quickly confirm their appointment,
ensuring oversight to stop the damage that I believe you are caus-
ing.
And with that, let me say thank you to Chairman Quigley and
to Ranking Member Womack, and I yield back.
Mr. QUIGLEY. Thank you, Madam Chairman.
Again, Postmaster General, we appreciate your being here today.
Without objection, your full written testimony will be entered into
the record. With that in mind, please summarize your opening
statement in 5 minutes, if you could. Thank you, sir.
Mr. DEJOY. Thank you.
Good afternoon, Chairman Quigley, Ranking Member Womack,
Chair DeLauro, and members of the subcommittee. Thank you for
calling this important hearing concerning the Postal Service’s fiscal
year 2022 budget request.
I appreciate the opportunity to also discuss the actions we are
taking to put the organization on firm financial footing to ensure
that we can fulfill our vital universal service mission and to pro-
vide the American people with the service that they expect and de-
serve in a self-sufficient manner.
It is important to note that the Postal Service is an independent
establishment which by design is supposed to be self-sustaining. In
concept, we are required to fund our operations and to fulfill our
public service mission through sale of our products and services.
It is a common misperception that we are supported by taxpayer
dollars. To the contrary, with a narrow few exceptions, the expecta-
tion that is built into law is that we will run our business effi-
ciently and in a manner that produces enough revenue to pay our
own way.
One of the narrow exceptions is that when Congress created the
U.S. Postal Service in 1970, it pledged to appropriate funds to pay
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for the cost of certain subsidized postage that it deemed worthy of
public support, such as free mail for the blind and overseas voting.
I view this promise as consistent with the mandate that we be
self-sustaining, since if Congress required us to undercharge for
certain services or to provide other services for free for the public—
for public policy reasons, it makes sense that Congress should pay
for those services or make up the difference.
My written testimony details our fiscal year 2022 budget request
for these reimbursements, which total $330 million and includes
revenue foregone amounts.
Let me place our relatively modest but no less justified budget
request in context: Much more comprehensive action must be taken
if we are to have any hope of revitalizing the Postal Service.
The hard reality is that years of financial stress, underinvest-
ment, unachievable service standards, and the lack of operational
precision have resulted in a system that does not have adequate re-
siliency to adjust and adapt to changing circumstances.
I expect and do not shy away from your own observations and
questions about recent service performance in your home districts.
Confronting and understanding the problems with service is an es-
sential diagnostic step toward finding solutions. My time at the
Postal Service has been focused on just such a diagnostic process.
I acknowledge that our current service performance is unaccept-
able and that the status quo should be acceptable to no one, but
I also believe that the solutions are within reach if we can agree
to work together.
In that regard, we have developed and will soon announce a plan
to revitalize the Postal Service and ensure financial stability and
service excellence that embraces our vital public service mission
and the continuation of 6-day delivery.
Our 10-year strategy will reenforce the Postal Service’s obvious
strengths and address our obvious weaknesses and enable us to
continue to meet the needs and expectations of the American peo-
ple and our universal service mission.
The key commitments of this plan will include, No. 1, a commit-
ment to 6- and 7-day-a-week delivery service to every address in
the Nation, not just because it is a law, but because it is a key in-
gredient to our future success.
Number 2, a commitment to stabilizing and strengthening our
workforce, especially for our associates who are not yet in a career
position. We want every postal employee to have the tools, training,
and supportive environment necessary to enjoy a long-term career
with us.
Number 3, a commitment to investing in our network infrastruc-
ture, including vehicles, technology, and package sortation equip-
ment.
In the weeks ahead, I look forward to sharing more information
and engaging in discussions about this strategy with public policy-
makers, our unions and management associations, our employees,
our stakeholders, and with the American people.
There is difficult work that is ahead of us to fix the systemic
problems that have plagued the Postal Service. But I am confident
that together those problems can be solved, and I see a bright fu-
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ture ahead for the Postal Service and the public we serve if we
have the collective courage to act.
Thank you, Chairman Quigley and Ranking Member Womack,
for the opportunity to testify in support of full funding for our fiscal
2022 budget request. I welcome any questions you and the sub-
committee may have.
Mr. QUIGLEY. Thank you. We will begin with questions.
Let me just talk about Chicago, because so many of the problems
seem to be playing out throughout the whole country, the same
issues.
Let me ask you point blank, the fact that we have mail service
problems, people not getting mail for long periods of time, are in-
sufficient, and all the other complaints you got, can you be as spe-
cific as possible, is this a workforce shortage? Is this, to a large ex-
tent, being backed up because the Service couldn’t handle the dra-
matic increase in package delivery? Is this because of air service
issues? Is it because of anything else mechanical, distribution cen-
ters, processing equipment of any sort?
So to the extent you can be as specific as possible, in Chicago,
and as it plays out the same way to the rest of the country, why
are we having—why do we have these severe problems near the
holiday, and why are they still playing out?
Mr. DEJOY. Thank you. And that is a fair question. And given
the time, I can address it in a robust manner.
Number one, our network and financial condition and service
have been eroding for years. We have been in a bad business model
that has been allowed to exist both by the Congress and by our reg-
ulators, and by efforts by previous management teams, for the
most part, have been stymied, and in some cases their own reluc-
tance to take on the challenges that needed to be taken on to ad-
dress the change.
Our performance during this peak period is a result of extreme
change in the dynamics of our market, meaning packages, signifi-
cant, significant increase in package volume, which from a cubic
movement standpoint, which is how we go about moving—deliv-
ering our service. A tractor trailer of mail would hold 500,000
pieces. A tractor trailer of packages would hold 5,000 pieces.
We do not have the air, ground transport, or physical distribu-
tion capabilities both from a space standpoint or equipment stand-
point to handle this. And there have been extreme delays through-
out the whole system, starting from the peak period.
Also, we have had significant—historically have had significant
turnover in the pre-career aspects of our workforce. This year we
hired 200,000 people and didn’t move the top-line number of
650,000 employees an inch.
Many of the career employees who have lead and were, in fact,
had to deal with the growing, growing reach of the pandemic as we
have moved from last—from March of last year into the end of this
year, it spread more around the country. And we had tremendous
more employee availability problems and absenteeism, which was
filled by temporary hires.
These almost got to a point where there were day workers asked
to operate our machinery in our plants. And they walk in our
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plants and they see the type of environment that they need to work
in, and many just turned around and went home.
We had pockets, like in Chicago, Detroit, Philadelphia, we have
750 routes. We only had 400 carriers to go out on a day. The Postal
Service experienced the pandemic like everyone else.
And the final thing is, if we got mail and packages for the most
part throughout the Nation to our delivery units, we delivered 90—
over 98 percent of the time, over 97 percent of the time. That is
the strength of the organization. And that is part of why I am opti-
mistic about how we go about fixing it.
But we had days where I delivered 40 million packages in 1 day,
and the next day could only do 30, yet we had 150 million packages
in the system, because we could not get it to the delivery units.
They were caught up in plants, they were caught up in trucks, they
were caught up on terminal handling processes with airports, and
so forth.
And with those packages moves—goes mail. And we threw every-
thing we had at it, and it just wasn’t enough. Just the system
was——
Mr. QUIGLEY. I appreciate that. I am going to abide by my own
rules and move on. And the next questions will be by the ranking
member, Mr. Womack.
Mr. WOMACK. So mail volume down 42 percent, package volume
up 120 percent. You have already spoken to how that has impacted
your organization. So, I mean, those are numbers that speak for
themselves.
So my question is, what is it—and maybe I am asking you to
kind of give us a glimpse into your 10-year plan—what is it that
we need to do in order—because, you know, coronavirus has caused
a lot of people to shop online. I get that. I am an ex-mayor, so, I
mean, I know the shopping habits of people. And that being the
case, I think we have trained people now to shop more online.
I am not optimistic that the traffic at the malls that once upon
a time was pretty robust is ever going to get back to that number
because people now are comfortable shopping in pajamas by log-
ging onto their computer.
So what are you doing, what should we be doing in order to be
able to adjust to this change in mail volume?
Mr. DEJOY. Thank you. Thank you for that.
The first thing I would say, sir, is that while we—everybody rec-
ognizes the decline in mail volume that has been happening over
the last 10 years, over 40 percent, and is projected to continue to
decline another 35 to 40 percent over the next 10 years.
We have not adjusted adequately enough for that change in our
operating structure. We still have many, many mail sortation ma-
chines in our plants. We have transportation that runs 30 percent
utilized around the country to deliver mail. So we have to recognize
that and make the changes that are necessary to address that.
The second thing is the package volume, which is tremendous
more cubic volume that is moving around the country. And as you
note, the projections are anywhere from over the next 10 years—
you know, 6 years, 7 years, could double. We see consumers order-
ing smaller things online, getting more into consumables, and so
forth.
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And this is where I am optimistic about how we move forward.
Our carriers reach, even during the pandemic, 161 million address-
es every single day. And we do that at a 98-plus percent hit rate,
which is an unbelievable accomplishment, the strength of the orga-
nization. And yet our package delivery volume is we only deliver
about 35 percent of the packages that are delivered in the country.
We need to reorganize ourselves, which is part of what this plan
will do, to address the marketplace. But we also need to get better
at operating our network as a whole.
And this plan is about service, you know, service excellence mov-
ing forward at affordable prices. As I said, I am committed to main-
taining 6- and 7-day-a-week delivery. It is about investing in the
organization. Our plan will have some big numbers investing into
the organization and workforce, approaching $40 billion. It is spur-
ring innovation for growth, which we, prior to the pandemic, we
were losing ground on the package market. And it is about fol-
lowing the law and becoming self-sustaining.
And some of that requires legislation. Chairwoman Maloney is
working on her bill to integrate Medicare, which is something that
is an unfair burden on the organization, and we would look for ev-
eryone’s support on that.
So I am optimistic.
Mr. WOMACK. I want to move to the second part of my question,
and I call it price-to-delivery model. Is our price-to-delivery model
right? Is it up to date? Is it sustainable?
And maybe I am not using the right term, but I call it price-to-
delivery because there is a certain amount of cost that goes into
getting a package or a letter wherever, from point A to point B.
So speak to that for me.
Mr. DEJOY. So we have two types of—two areas that we have.
We have competitive pricing, which gets reviewed by—which is
pretty much in our control. We have the market-dominant pricing,
which was part of the legislation in 2006 and a big, big part of our
problem over the last 14 years.
This was an experiment which really—we were frozen in the
business model, pricing and volume relationships and cost relation-
ships that were established in 2006. Subsequent to 2006 mail vol-
ume dropped out. The American geography expanded where people
live, about a million addresses a year. And our cost relationships
were totally out of whack. And we were pretty much price capped
to CPI.
After 10 years we were supposed to get a ruling. It took 4 years
to study that. We finally got the ruling last December, which ad-
dressed a lot of the issues going backwards in terms of recognizing
the reduction in mail flow, but during that process it left an ex-
treme amount of damage to the organization. And had this be-
come——
Mr. WOMACK. All right. I am out of time. I get it. Thank you very
much.
I will yield.
Mr. QUIGLEY. Thank you, sir.
I now yield to the chairwoman of the full committee, Ms.
DeLauro.
The CHAIR. Thank you, Mr. Chairman.
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Just for the record, and I just looked this up, in 2019 the Postal
Service delivered 800 million packages between Thanksgiving and
Christmas.
The ability of the Postal Service to handle packages is well-
known with what they have done at holiday times. The post office
delivers more packages to homes than any other shipper.
So this notion that packages then have slowed up this process
appears to fly in the face of the actual data with regard to the post
office. I believe there was an attempted assault on the post office
service by the previous administration.
I appreciate the efforts of the hardworking men and women in
the Postal Service to ensure that an unprecedented number of
mail-in ballots were delivered on time, an increase of 22 million
from the 2016 election. However, these efforts relied heavily on,
quote, ‘‘extraordinary measures,’’ like extra transportation and
overtime, to handle the surge.
Let me ask you, does the strategic plan that you are set to re-
lease shortly include changes that will allow the Postal Service to
better scale its operation of increased use of mail-in voting is the
new normal?
And in a recent report, your Office of the Inspector General said
that you were only able to measure service performance of just over
half of the ballots. What steps are you taking to increase that num-
ber and ensure that there is visibility for all ballots?
Mr. DEJOY. Well, Chair, I thank you for recognizing our ability
to deliver packages. We delivered 1.1 billion packages this holiday
season, but were tendered probably about 1.5 billion packages,
which is what resulted in delays.
As with regard to measurement, we have processes to measure,
but this is also part of the election process throughout the States.
All 50 States have different rules, regulations, they have different
types of mail that they tender to us.
If you have a bar code on a ballot, we can track it.
The CHAIR. If you just give me a second, because I want to abide
by what the chair is doing with regard to time.
But my question is, what is your plan going to do with regard
to allowing the Postal Service to better scale its operations if, as
I believe is the case, there will be the increased use of mail-in vot-
ing, if that is the new normal? What are you doing to change your
operation to deal with that fact?
Mr. DEJOY. Ma’am, we dealt with the—the mail-in voting, record
mail-in voting that we had last year, some 25 percent or something
higher than the 2018 election, we had a 99, 98 percent, very, very
high performance level. It is about 2 percent of our mail during the
process.
The capacity to process election voting is there, as I stated,
throughout the whole election cycle. And the bigger focus we need
to have is on the overall operations so it doesn’t continue to erode
our performance.
But the election—any amount of election mail that we have, we
can handle.
The CHAIR. But your own inspector general said that you are
only able to measure service performance in just over half the bal-
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lots. Again, my issue is not what has happened in the past, but
where are you going in the future with your strategic plan.
Because as I take a look at the commentary on your strategic
plan, you plan to eliminate a tier of First-Class Mail in an area
that is already struggling, and you plan to prevent First-Class Mail
from being shipped by airplane.
It doesn’t sound to me—you need to let us know what you are
doing to deal with what have been the delays, the shortfalls, et
cetera, going forward. That is all we want to know, is what is going
to be different going forward than we have in the recent past.
Mr. DEJOY. Again, I want to stress the fact that we are ade-
quately prepared to handle election mail. If the chair would like to
see higher measurement, that report, I am familiar with that re-
port, and there is—that report is, in general, talking about we need
to work with election boards to get a more collaborative method-
ology to tender the ballots.
We did that quite extensively last year, and we continue to—will
continue to do that in the future. But I can only measure what is
prepared to be measured. And with regard to the plan, the plan
will be forthcoming.
And one last thing, with regard to service standard change. Over
80 percent of the mail will stay in the same—especially, our 2-day
product will remain 2 days. We think we are adequately prepared
for any election going forward.
The CHAIR. Well, we will look carefully at the IG report and then
deal with the recommendations.
And with that, I apologize to the chair. I have overstepped my
time and I yield back.
Mr. QUIGLEY. Never a problem. Thank you.
Mr. Amodei.
Mr. AMODEI. Thank you, Mr. Chairman. We have kind of touched
on the stuff that I was interested in, so I am going to go ahead and
yield back.
Mr. QUIGLEY. Thank you, sir.
Mr. Cartwright.
Mr. CARTWRIGHT. Thank you, Mr. Chairman.
Mr. DeJoy, many of the problems that USPS faces can be traced
all the way back to last summer. The chairwoman is correct. Last
summer there were efforts to dismantle mail-sorting machines, cut
overtime, restrict deliveries, remove blue mailboxes, all in the
name of operational efficiency.
I have no doubt you will attempt to deny these actions or justify
them, as you have previously, but we have all seen the report. And
my constituents did not experience an increase in efficiency in any
way. Instead, they experienced delays, as well as missing and
missed delivered mail.
And yet you want to try this again. You propose more service
cuts, doubling down, instituting higher and region-specific pricing
and lower delivery expectation.
So I have three questions for you.
Number 1, Americans are clearly relying more than ever on the
United States Postal Service than before the pandemic. Why are
you doubling down on the policies that have led to massive delays?
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Number 2, how would doubling down on these policies that
helped create these issues help Americans receive their mail on
time?
And, No. 3, given the severe issues that the Postal Service has
faced since you were appointed Postmaster General, can you ex-
plain why you think you are still qualified to hold that position?
Mr. DEJOY. So, Congressman, first of all, I don’t agree with the
premise that you introduced the question on with regard to
changes that I have implemented have caused these issues. As I
said earlier, our network and the financial condition of the Postal
Service have been eroding substantially, and we did have to oper-
ate in the pandemic just like every other operation in the Nation.
With regard to the changes that we are looking to make, we are
looking to capitalize on our strengths and address our obvious
weaknesses. And this plan, the changes that we will make, are
about service excellence and affordable prices. It is about maintain-
ing 6- and 7-day-a-week delivery. It is about investing in the orga-
nization and spurring on innovation to grow.
And, importantly, what this Congress continuously fails to recog-
nize, part of the law is to be self-sustaining. And that is what this
board and this management team is trying to address. We suffered
almost $10 billion of losses last year. We suffered almost $80 bil-
lion of losses over the last 7 years. If I paid all my bills, I would
be out of money tomorrow.
And I am trying to take this board, and myself and this manage-
ment team are trying to take seriously the issues that face us, is
that we are in a broken business model and changes need to hap-
pen.
When we roll out our plan, I think any reasonable person will
understand the challenges that we face. But they will also see the
optimism of the plan.
And why should I stay? Because I am committed to seeing this
change, I have the expertise to do so, and I have the tenacity and
the stamina to undergo this type of questioning.
Mr. CARTWRIGHT. Well, Mr. DeJoy, on December 21, 2020, I
wrote you a letter asking how you had planned to improve delivery
standards given the many concerns that the people in my district,
in northeastern Pennsylvania, have shared with me about their
mail service. I received your response, which stated you were doing
everything you could to provide timely and efficient service.
That was December. Christmas is over. The election is over. It
is now March, and things are simply not getting better in north-
eastern Pennsylvania.
What is it that has caused these delays to continue well into
March? What is the USPS doing to ensure these delays are re-
solved as soon as possible? And, specifically, how are you dealing
with staff shortages to ensure there are enough workers to do the
work that is necessary?
Mr. DEJOY. A fair question. Throughout the country, in different,
especially in urban areas, we have had absentee issues with regard
to carriers. But for the most part throughout the Nation if mail and
packages got to our carriers, we delivered at over 98 percent of the
time.
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We have hired over 200,000 people in less than a year trying to
fill positions. We have converted 10,000 people in December. We
have not converted people in many, many, many years.
So we are very committed to try and stabilize the workforce. It
is my number one thing I am focusing on. I have been working
with our union leadership on this to change the trajectory of our
turnover in that area.
But the rest of the problem, sir, is not at the delivery units. It
is in our network. We have standards that require flying planes.
We don’t own any planes. We overwhelmed all the aircraft that we
could have. We are significantly short on aircraft to move volume
around.
Our trucking network is problematic, but we also overwhelmed
that in terms of capacity. We bought every piece, every bit of trans-
portation we could get, and it just wasn’t enough.
Now, with regard to March, we were still delivering peak season
volume all through January. We delivered 1.1 billion pieces up to
the end of year and had significant—it took us January to work it
down.
And then we got hit with the storms. I woke up, I came in one
morning, and the winter storm was there, 71 million addresses po-
tentially impacted. And many of our hubs—that got down to about
20 million—many of our hubs were frozen. We could not get in mail
and packages through the network.
So the problem, sir, is bigger than just your locality. It is a net-
work operation, and our network is in bad shape.
Mr. AMODEI. Mr. Chairman, I have no further questions for the
witness.
Mr. QUIGLEY. Thank you.
Mr. Stewart, please.
Mr. STEWART. Thanks to the chairman and ranking member,
and, of course, to the Postmaster General.
I do have a couple questions. Before I do that, I would like to ex-
press the view that I recognize you took on an enormous challenge,
and perhaps there have been mistakes made along the way. I think
that is probably true of any of us who would take on such a big
challenge. I do think some of the criticism that you have received
here today is probably exaggerated, some of it is unfounded.
Again, I think we can do better. I hope you can do better. I think
you are clearly committed to doing better.
But, in my view, too, it is a little bit like assigning a new captain
to the Titanic after it has hit the iceberg and then blaming that
captain for the damage and the catastrophe that took place before.
I mean, the challenge of the Postal Service is a generational chal-
lenge. This is something that has been years and years in the mak-
ing, and it is going to take a little time to fix it.
So, once again, I want and encourage you to continue to make
the reforms that are necessary, but I feel a little bad that some of
the criticism that you have received here today I just think is un-
founded and, as I said, exaggerated.
Having said that, let me ask you a couple of questions. And I can
ask you both, and then let you answer.
The first is, the ability of someone in China to create malicious
drugs, very deadly drugs, Fentanyl being the worst example be-
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cause it is so compressed and so easily shipped via mail. And the
reality is, is that many times that is shipped through the U.S.
Postal Service. In fact, it is probably the primary vehicle for these
deadly drugs that are created and manufactured overseas to be
brought into the country.
And I would like you to address how and what you have done
already and how you intend to address that in the future how you
are going to stop the Fentanyl particularly and other drugs from
coming in.
And then, very briefly, address in your plan how you are going
to protect rural postal service. It is very important to my district,
it is important to the West, and rural parts of the country. And we
have got to show our constituents that their rural service will not
be interrupted.
Mr. DEJOY. Well, thank you. Thank you for your question. Con-
gressman. I will start with the second one first with regard to rural
Americans.
As I said, I am committed to 6- and 7-day-a-week delivery to
every address in America, and our board is committed. This is a
very strong position that we are taking in our 10-year plan.
And as you know, sir, when the pandemic hit, we saw that many
of these areas, these rural areas, were not delivered to by many
private enterprises. And that is what the essence of the Postal
Service was founded around, is trying to serve every American.
So with regard to that, our plan stays committed to 6- and 7-day-
a-week delivery. And so that is that one.
With regard to China, as you know, the STOP Act, we have been
working with Senator Portman, the CBP, the State Department,
everybody, on the STOP Act, and have been monitoring the traffic
coming in. Our Inspection Service is very, very involved in moni-
toring traffic coming in from overseas.
And, quite frankly, it really has come down from China. I don’t
know all the—I don’t remember all the specific numbers. I get
briefings every month. Most of the volume now is coming in—winds
up coming in through southern border and through the mail, I be-
lieve.
But we are very close. We extended—the STOP Act was sup-
posed to be implemented at the end of the year. It got pushed out
to March 31. It is a multiple agency, all of government type of ini-
tiative that is going on.
And we are very close to having a sampling plan, an identifica-
tion plan, a compliance measurement system to really address for-
eign entry into the mail system. We still have domestic issues that
we have to confront.
Mr. STEWART. Okay. Well, again, my time has expired. I hope
you will concentrate on that. I think it is incredibly important to
our culture and society that we not have access to such deadly
drugs simply a mailbox away. And, again, the rural communities
are so dependent on you.
So thank you.
I apologize if my video is not working.
Mr. QUIGLEY. It is on now. Thank you.
We move to Mr. Pocan, please.
Mr. POCAN. Thank you, Mr. Chairman. Appreciate it.
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And thank you, Mr. Postmaster, for being with us.
Mr. Postmaster, what was your first day on the job? What was
that date?
Mr. DEJOY. July 15, 2016.
Mr. POCAN. Okay. So you have got about 8 months, 9 months
under your belt?
Mr. DEJOY. Yes, sir.
Mr. POCAN. What grade, on a scale of A to F, would you give
your performance as of——
Mr. DEJOY. I don’t give grades. I look forward.
Mr. POCAN. Just go ahead and try. I mean, do you think you
have done a good job.
Mr. DEJOY. I don’t want to. I don’t want to. Why don’t you give
me a grade?
Mr. POCAN. Well, I am going to ask you what grade. Are you ex-
cellent?
Mr. DEJOY. I am not going to give myself a grade.
Mr. POCAN. Are you satisfactory? Would you say you have done
a satisfactory job?
Mr. WOMACK. Cartwright needs to mute his microphone. We are
getting feedback.
Mr. POCAN. Mr. Postmaster General?
Mr. DEJOY. I am sorry. I didn’t hear the question when he—
Mr. POCAN. I was just trying to ask what grade, wanted you to
assess the performance you have done.
Mr. DEJOY. What is the grade spectrum you want me to grade
myself on?
Mr. POCAN. A, B, C, D, F.
Mr. DEJOY. Okay. I would give myself an A for bringing strategy
and the planning and effort to here. And as I did in my last testi-
mony in Congress, as the leader of the organization I take respon-
sibility for how we have delivered during this season.
And I apologized to the American public. And my apology was
not just on behalf of this organization. My apology was on behalf
of the regulatory boards that have overseen this and this Congress.
Mr. POCAN. Mr. Chairman, I would just like to reclaim my time.
So you are saying an A. That would be excellent.
So I am looking at the inspector general report about your per-
formance. They said that you communicated primarily orally,
which resulted in confusion and inconsistent application of oper-
ational changes. They said you implemented changes without com-
pleting a study or analysis of the impact of changes.
They looked at performance of First-Class postage delivered.
Went down to below 80 percent. First-Class presort, First-Class
packages, and Priority all declined in performance.
When there was a court order asking you to roll back some of
those changes, we actually improved the delivery times on these
changes that you made, from dismantling equipment, to not paying
overtime, to not hiring an adequate amount of people at holiday
season, your organizational structure, and more.
So let me ask two questions. And I will ask them together, you
can answer them together.
The first one is, do you really think that that is excellent service,
for the first question?
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And the second question is, let me ask you specifically about my
State of Wisconsin, because, unfortunately, my numbers were
worse than the national numbers.
So in Wisconsin our First-Class Mail delivery dropped to a low
of 63.69 percent the week of December 19. And outside of some
challenges from the holidays, the week of September 19 it was 77
percent while the national rate was at 84 percent.
So the first question is, do you think you deserve an excellent
grade? Second, are there specific problems that are causing delays
in Wisconsin, and what are you doing to address those?
Mr. DEJOY. So I will take the second one.
There are specific things that are affecting mail being delivered
in Wisconsin and mail being delivered around the rest of the Na-
tion. I can’t get the mail there. I have more mail than I have abil-
ity to transport it throughout the Nation. I have more mail and
packages than I have the ability to process in our plants. And as
we were coming off that big peak volume, we ran into a—we had
a storm.
So that is the majority of the reasons why——
Mr. POCAN. If I can just interrupt for a second, Mr. Postmaster
General. So we do get storms in Wisconsin. We have had them
since I had hair. You and I have similar haircuts. I think you know
what I am talking about timeline-wise. It has been a while.
But——
Mr. DEJOY. So therefore this situation is new to you about hav-
ing bad mail service in Wisconsin?
Mr. POCAN. No. It is new, the bad service. Snow isn’t new in Wis-
consin. But under your leadership bad performance has been, un-
fortunately, increased in Wisconsin. And I am trying to get that.
I know that you have taken—and some of this happened prior to
you—taken some of the sorting processing outside of various parts
of the State. But it was pretty clear that our rates are pretty awful.
So your excellent, your grade A service, why is it having such a
bad impact to Wisconsin?
Mr. DEJOY. Well, first of all, I disagree with how you interpreted
the OIG’s report and what the OIG’s report says. Okay? Because
many of these things, with removing collection boxes, removing
sorting machines—which were 30 percent underutilized, even the
collection boxes that were moved.
There are regional and local practices that enable those things
to happen. It had been going on for many, many years before I got
here. And it was incorrectly associated with my directive and had
no impact on mail delivery. So we are focused on the wrong things.
The thing that I did do, the thing that I did do, sir, was try and
get the trucks to run on time. We had the COO, seven area VPs,
they put together a plan to try and run the trucks on time. It
failed. They would be eventually recovered after 2 or 3 weeks. It
had nothing to do with Federal orders, judge orders, and so forth.
So you are putting together a whole bunch of activity which the
Postal Service does endeavor in. We have 650,000 people and de-
liver to 161 million addresses a day. And you are conflating a lot
of things, sir, to come to my grade. And I want to stay with my
position.
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Mr. QUIGLEY. And I appreciate that. Let me move on to Mr.
Joyce, please.
Mr. JOYCE. There we go. Thank you, Mr. Chairman.
Postmaster DeJoy, first off, let me say, in northern Ohio, accord-
ing to your own statistics, we were the third worst in the country
in the third quarter last year.
But I am not going to beat a dead horse. I understand that you
had problems. And I understand what you are saying, it was the
symptoms of that problem.
However, during Christmastime the local TV station was show-
ing trucks lined up outside the Cleveland main post office. And
then internally there was mail stacked on top of each other, and
a problem with workers, or whatever, and people receiving those
delays.
I know that you are working on a 10-year system of trying to get
the strategy, trying to cure many of the problems we are hearing
here today. Would you enlighten us on what that 10-year strategy
looks like?
Mr. DEJOY. I can. The plan focuses on service reliability at af-
fordable prices, and it maintains 6- and 7-day-a-week delivery.
As we back up from that, we have had significant issues in the
alignment of our network. Most of our network is built out to serv-
ice mail. And we have an increasing package business, a package
business that we think—we know will continue to grow. And the
American people have shown through the pandemic that they like
to use the United States Postal Service for package delivery.
So we have a significant alignment to make in how we run our
network. And I am optimistic it is doable, but we have to make
change. It we don’t make change, this will continue.
The pandemic and the service impacts that we had over the last
several months are a few of what is to come if we don’t make
change. We could be running trucks around the country with 10
pieces of mail on it and continue to have package business erode,
as it was doing before the pandemic.
So we need to make some big changes. It involves investment, in-
vestment of larger facilities, new equipment, new package sortation
equipment.
It does involve a service standard change. The service standards
that we have now have not been met in the last 7 or 8 years. They
are not achievable in the current environment. We cannot go to
California from New York in 3 days without going on planes, and
we don’t own planes.
Mr. JOYCE. Fair enough. I get those logistic problems. But if I am
not mistaken, part of the business model with packages has been
the last leg, if you will, and working those packages into the rural
areas where it is not cost-efficient for UPS or FedEx or Amazon or
other delivery services to go.
What is your plan for the rural—if you are trying to condense the
system, what is your plan for those areas in your 10-year strategy?
Mr. DEJOY. I am very, very committed, sir, to the rural areas.
And the plan that you are talking about with regard to density, the
private carriers were going after dense areas and packages and
leaving the Postal Service to do rural.
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And that is where I get back to the standard, that we are only
doing 35 percent of the deliveries in the Nation. Our plan is about
growing in that business. And the rural areas will be—we are
very—this board, myself, and this management team are very, very
committed to keeping our service to rural America.
And when we roll out the plan, you will see that a big part of
this is to attain financial sustainability and have revenue growth
to help offset—to become self-sustaining, which is part of the mis-
sion.
There are two things in the legislation that we have: be self-sus-
taining and deliver 6 days a week. And we are going to continue
to do that. And we think that those are very—those are things to
be proud of as an organization, and they are achievable. But we
need to make other change. We cannot stay where we are right
now.
Mr. JOYCE. Thank you, Mr. Chairman. I will yield back at this
time.
Mr. QUIGLEY. Thank you.
Mrs. Lawrence, please.
Mrs. TORRES. She is not there.
Mr. QUIGLEY. Okay.
Mrs. Torres.
Mrs. TORRES. Thank you, Mr. Chairman.
First of all, thank you for coming before our committee.
I want to associate myself with the concerns of my colleagues re-
garding mail delivery and the unraveling of machines during a
time where we needed them the most, even though you say that
30 percent of—they were not being utilized at 30 percent of the
time.
I want to move on, though, from that and try to make you a little
more comfortable and address other issues. You are our guest in
our committee.
You know, our committee is in charge of appropriating the funds
that you need in order to operate the post office. So I want to bring
up two issues.
Number one, my experience has been that people—you know, the
poorest of the poor have a much higher use for the post office. They
receive a lot of their mail, their checks—payments through checks
in the mail. They utilize it more because many of them do not have
bank accounts or other means of delivery. They don’t have set-up
accounts with other services.
My hometown of Pomona, a city, when I was the mayor, of
163,000—population of 163,000 people; an adjacent city, population
of about 30,000 people. We are looking at two cities, an affluent
middle class and a very low working-class community.
On the one community where I live, a post office, a small commu-
nity post office, was shut down completely. The only post office that
is left in my community is in a terrible, dilapidated state. Here are,
you know, some of the photos: We have mailboxes that are out of
service. This is the welcoming that they get in my community.
Versus the beautiful post office in an affluent city with 30,000 resi-
dents.
Additionally, the hours, the hours of operation, are not the same.
So you have people that are having to drive 40, 50, 60 miles one
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way to work and, you know, don’t get home till about 7:00, 8:00 at
night, and the post office is closed. So limited access for them. I am
very concerned about that.
I am very concerned at the post office denial to clean up this
mess. You know, the post office represents—the image of the post
office represents the Federal Government. That is not the image
that I want of the Federal Government in my community.
And, without objection, I would like to ask that these photo-
graphs be submitted for the record.
Mr. QUIGLEY. Without objection.
Mrs. TORRES. I don’t know if you can answer this question, but
I do want to put it on the record, because I would like to have a
conversation with you, moving forward.
I have serious concerns about the workplace environment at the
Santa Ana District USPS, which serves much of my district. Over
the years, I have spoken with employees who have voiced concerns
over numerous issues—workplace harassment; retaliation for filing
complaints with HR; supervisors who are not properly trained
when they are promoted—instead of holding them accountable for
retaliating against employees, they are rewarded by giving them
promotions; an ongoing issue of managers having relationships,
personal relationships, with employees, which is, you know—that is
unacceptable. That is unacceptable behavior.
So what is being done at the national level to address this work-
place misconduct? Obviously, we need proper training, improved
training. And we cannot simply move a bad employee and transfer
them to another facility for them to continue to sexually harass or
abuse other employees.
So those are my concerns. I am going to give you—you know,
there is not much time. I hope that we can follow up and have a
longer conversation around it.
Mr. DEJOY. Well, I mean, the points that you make are very,
very important ones and are reflective of historical circumstances
and something that we are very much focused on, moving forward.
Underinvestment in our retail facilities around the Nation is
something I am very—this board and the management team, we
are very, very concerned about, and that is in our plan.
Our employee turnover is unacceptable, and it is something that
has been around for a number of years, and it is something I am
very committed to working on.
And I would love to hear your thoughts, going forward, and we
can set up a phone call or something.
Mrs. TORRES. I would like to do that.
Mr. DEJOY. I think we will see that we are pretty aligned on try-
ing to make improvements to the organization.
Mrs. TORRES. I would like to follow up personally with you, sir,
because I understand these are sensitive concerns that I have, but,
you know, my role here on the Appropriations Committee is to sup-
port a budget request moving forward, and I want to be on the
record that I cannot do that given the circumstances that I have
experienced.
I yield back.
Mr. DEJOY. But if I could add to that just one thing, and hope-
fully you will reconsider.
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Part of the reason for the situation that we are in is we lost al-
most $10 billion last year, $8 billion the year before, and on and
on and on. We have many unfunded mandates that are put on by
us by Congress. There are many limitations that are put on us by
Congress and our regulatory board.
So I would ask that you reconsider—this is a small amount of
money here for the blind and for overseas voters. And I understand
all your concerns, and, look, I can assure you we are trying to ad-
dress them. But pulling money away from us is really not going to
help as we move forward.
Mr. QUIGLEY. We encourage and thank you for agreeing to fur-
ther communication. I do need to go forward.
Mrs. Lawrence is now recognized.
Mrs. LAWRENCE. Thank you so much.
Postmaster General, thank you for being here again.
It is my understanding, last week, the United States Postal Serv-
ice announced the following organizational changes: You are con-
solidating 67 postal districts into 50. New district territories will be
aligned with State boundaries. Districts will align with the commu-
nities the Postal Service serves and provide similar boundaries for
employees and customers. It goes on and on.
Your predecessor, when she had a plan to change and reorganize
the Postal Service, she actually came and gave a briefing to the
Oversight Committee, which you know I am on, which gives over-
sight and approves the operational issues with the Postal Service.
You have denied us that. And it continues to question your leader-
ship, because you are new to the Postal Service, but you are doing
this massive, sweeping organizational change.
I know what that feels like because I was with the Postal Service
for 30 years. When you reorganize at that scale, you are literally
slowing down operations. Everyone is trying to figure out who is
on first; you have to go through a whole selection process for new
people. And you are doing this on top of you already being chal-
lenged with not figuring out why you continue to have the service
issues—which, sir, I have to disagree with you, we have never had
the service issues that I am seeing. I have worked with the Postal
Service. I have never seen trucks backed up for miles to get into
a facility.
And the responsibility of all these things that you have men-
tioned does rest on your shoulders. I would give you the grace pe-
riod—and I want to be very clear about this—if you wanted to cor-
rect your problems with retention so you could have a stable work-
force before you are going in and just tearing everything up. You
know you were hit hard because, in the middle of an election and
in a pandemic, you were taking out boxes, you were changing over-
time policies, and all these things.
And the entire country responded to that and said, what are you
doing? Because, unlike the United States Congress, the Postal
Service has over a 90 percent approval rating. It is because the
Postal Service touched every American 7 days a week and they
trust that delivery. And now I get calls, and you have gotten them
too, where we literally have not delivered mail but once or twice
a week to a community. And, for them, that is unsettling, that is
not the norm.
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And, at minimum, Mr. Postmaster General, the courtesy and the
respect of the organizational structure, to come into the Postal
Service and do a—I mean, into the United States Congress, to give
a briefing, and not subject us to sitting at home reading a press
conference or seeing it on TV.
Because right now we are all talking to you about our challenges
in our communities and in this country, and all you have, ‘‘I have
a plan.’’ No one here knows what it is.
And can you tell me, in my time that is left, where is the anal-
ysis of your changes will have on morale? Because we already, you
said, we have this issue, we have this turnover—on morale? On
sustaining delivery?
Because while you are redrawing the lines and talking about
trucks and our vehicle inventory, while you are restructuring these
lines—because every time you change—and you know this. Every
time you change a logistical process for a truck to deliver mail to
a facility, you have built in mistakes, missed deliveries, because
you have to connect all of those logistical changes, those boundaries
that I talked about, you have to change processes within the plant
to allow that dispatch to meet the delivery of the truck.
And I haven’t gotten anything like that from you. And I sit also
on this committee that has the responsibility to appropriate funds
and on Government Oversight for the Postal Service.
So I will ask that question and tell you, I am going to use all
the power I have to require you to stop doing press releases on
massive changes and to at least give the United States Congress
the courtesy of knowing your plan.
Mr. DEJOY. Congresswoman, you are well-known and respected
within the Postal Service for your career and your position today.
But, honestly, the Postal Service of today and the condition we are
in is not the Postal Service of 2008 when you retired. We are
in——
Mrs. LAWRENCE. I remember——
Mr. DEJOY [continuing]. Dire, dire financial crisis. And
change——
Mrs. LAWRENCE. But, sir, when I left the Postal Service——
Mr. DEJOY. And we are not positioned—and we are not posi-
tioned to serve the market that——
Mrs. LAWRENCE [continuing]. Continue to monitor what is hap-
pening. So I am not naive, sir.
Mr. DEJOY. I didn’t hear you. I am sorry.
Mrs. LAWRENCE. I said I am not naive. When I left the Postal
Service, I came to Congress and have had responsibility for 8 years
of the operations of the Postal Service and had my thumbprint on
what is going on. So please don’t imply that I am ignorant to what
is going on.
Mr. DEJOY. I am not saying you are naive.
Mrs. LAWRENCE [continuing]. Responsibility of hearing the voices
of the people in the United States cry about the service.
Mr. DEJOY. With regard to the organizational change, this has
been worked since August by leadership in the organization, estab-
lished, 30-year people within the organization.
The previous organization structure has led to many of the prob-
lems that we have today. You know, there is a number of reasons
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that basically had 7 or 8 people running a 600,000-person organiza-
tion, which created a lot of confusion, lack of clarity, and inability
to implement change.
This has all been worked on through many, many people
throughout the organization, has been planned. And we did the
proper notice that we were supposed to do, you know, to the Con-
gress.
But the point I am making with 2008 is, we don’t have another
10 years ahead of us if we don’t get moving on change. And that
is why——
Mr. QUIGLEY. I am sorry. I just have to make sure as we try to
get to a mini-second-round. So I need to move on to Mrs. Kirk-
patrick.
Mrs. KIRKPATRICK. Thank you, Mr. Chairman. Thank you for
having this hearing.
And thank you, Mr. DeJoy, for being here and helping us out
with the committee.
As you may know, I represent southern Arizona, including parts
of Tucson. So, back in 2011, the Postal Service moved to consoli-
date the Cherrybell Processing Center in Tucson and targeted it for
permanent closure. Fortunately, this closure did not come to fru-
ition, thanks to a coordinated effort in Tucson and throughout the
State to demonstrate Cherrybell’s value. That said, the facility lost
its postmark in 2013 and has been threatened with further consoli-
dation ever since.
Further, the U.S. Postal Service has chosen to ship postage from
Tucson to Phoenix for processing, and then it goes back to Tucson.
So this means the whole State relies on the processing in Phoenix,
which has led to problems that were exacerbated by the pandemic.
These problems will only get worse as the population in Tucson
and throughout Arizona continues to grow at a rapid pace. In my
view, it is no longer feasible to forego a processing operation in
Tucson itself.
So, last week, I joined with Senator Sinema and other members
of our delegation to send you a letter that goes into greater detail
on this issue. The letter requests that you move to reserve the par-
tial consolidation of Cherrybell in Tucson in light of the problems
we identified in our letter.
So I have three questions, Mr. Chairman. My first question is,
will you commit to refraining from further consolidations at
Cherrybell and give serious consideration to reversing the consoli-
dation that has already occurred?
Mr. DEJOY. Congresswoman, no, I will not commit to anything,
but we are very, very engaged in evaluating, you know, growing
and future conditions of population and how we service that popu-
lation. And while, as you said, Arizona was a growing State, we
plan to get on that, we plan to have all our service, as we design
it, to be at 95 percent, and we will appropriately position facilities,
transportation, and resources to, you know, get to that level.
With regard to a specific site and where it is right now and what
happened in 2011, I would need to get back to you on that. But,
I mean, the big thing to take away from this: If there are people
and need, we are going to reach them, at a high performance level.
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But we do need to recast that expectation of what it is that we are
able to do, because we are losing a lot of money.
Mrs. KIRKPATRICK. Thank you for your answer. I appreciate that.
I appreciate the budgetary concerns that you have.
My second question is—and you have partially answered this:
Will you commit to taking in population growth when you are con-
sidering further consolidation or closures?
Mr. DEJOY. Absolutely. We love population growth. We know we
have to go where there are people. And that is a big part of how
we plan to grow.
In this plan, I will say—and this plan has some $20 billion of
growth. And it is reaching—it is dealing with the changing econ-
omy and reaching out to where the people are with the appropriate
services and a reliable timeframe. So I suspect, based on what I
hear and know, that Arizonais going to be in good shape, going for-
ward.
Mrs. KIRKPATRICK. Yeah. Well, good.
And, you know, part my district is rural, and I represent lots of
veterans who live in rural Arizona, and they rely on the Postal
Service to get their medications. Many of them live in areas where
there is no community health center and no doctor. And you have
just done a really good job for our veterans, and I want to applaud
you with that.
So, you know, my third question is, do you think it is efficient
to ship Tucson’s postage up to Phoenix for processing and then ship
it back to Tucson for distribution?
Mr. DEJOY. So it may be, when we are done with our analytics.
It depends on, you know, the density of mail, the traffic flows that
we have.
But the key thing that we want to be committed to is, what is
our service standard, and are we making it 95 percent of the time?
And from that—and as I said earlier, if we get mail and packages
to our carriers, to our delivery units, it is going to get there. Nine-
ty-eight percent of the time, it is getting there.
And the problem and the cost of our network—I mean, that is
costly to do that, but that is legislated, and that is something we
are committed to. The cost of moving mail and packages around
and not having the right equipment and network and running un-
derutilized is what drives up our costs.
So it may be that that is the solution for getting the 2-day, you
know, mail there. But, as you begin to grow, as the communities
begin to grow, we change.
And that is a key thing. We have failed to evolve over the last
10 years in terms of our strategy. If we did incremental things
every year as this was happening, more incremental, we would be
in a better shape, and it wouldn’t have to be, you know, where we
are at right now.
Mr. QUIGLEY. I am sorry. I thank you, Mr. Postmaster. We are
going to try to do a third round.
And to my colleagues, please try to stick to a 3-minute question
period, if you could, please, so we can get as many people to be able
to ask questions as possible.
Mr. Postmaster, very quickly, there has been much talk about
your new fleet and the fact that such a small percentage of it is
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an electric fleet. And I know that there are limitations, as you have
described, in terms of the infrastructure to have the charging and
so forth. But, you know, it seems that we have tied our hands, you
know, if we purchase a fleet that is really meant for the last 100
years, right? And by the time this fleet will have served its pur-
pose, very few cars will be operating in the same manner.
And, at the same time, you know, here we are, as a Congress,
talking about an infrastructure package. It would seem that, before
you go forward and lock things into a plan that is hard to change,
you would have the communication with us to talk about how to
work together toward this end.
And I know there is an issue between where these vehicles are
built. That is not the question here. The question is——
Mr. DEJOY. And I am very——
Mr. QUIGLEY [continuing]. Moving forward.
Mr. DEJOY. I am very, very glad you asked me that question. I
think there is a misunderstanding out there. In fact, I penned a
letter to Congress to explain.
We are very, very excited about having a full fleet, or to the
greatest extent we can, you know, electric fleet. And the decision
that—but we are also facing, we have a 30-year-old fleet, and they
are catching on fire, and we need trucks.
The 10 percent was getting us in a position to engage in elec-
trification of our fleet. We have a year to decide what the actual
volume is. But the 10 percent was about $500 million, which we
don’t have, to kick off the study of engineering and the plant-build-
ing for an electric fleet.
These drivetrains are convertible, so if we were able to get the
funding, we would be able to maybe, of the first buy, go 50 percent
electric. But there is a huge infrastructure cost associated with
that——
Mr. QUIGLEY. No, I get that. And let me cut to the chase. And
I get what you are saying. You are talking about unfolding a plan
as well. Some of the things that you have supposed in that plan
may alter, given your discussions with Congress.
So this is just one example, and we are very limited on time. And
I ask that you consider that, as you unveil your plan for the future,
that you take into consideration that some of those assumptions
you might have would be altered if Congress said, well, that is not
what we want, and we are willing to help to avoid that eventuality.
That is the only point.
Mr. DEJOY. And we would welcome the help with regard to that
matter, sir. Thank you.
Mr. QUIGLEY. Okay.
Mr. Womack.
Mr. WOMACK. Mr. Chairman, I don’t have any further questions,
and, in the interest of time, I am going to yield my time back and
thank the Postmaster General for his time today. Thank you.
Mr. QUIGLEY. Thank you.
I would move on to Mr. Cartwright.
Mr. CARTWRIGHT. Just one question, Mr. DeJoy.
The USPS has this prefunding requirement for healthcare and
pensions for many years into the future. That was enacted in 2006.
Successive members of top management at the Postal Service have
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expressed a wish that that were not the case, which is a burden
that no other governmental-related agency faces.
And, last year, in the U.S. House, we passed the USPS Fairness
Act, which had more than 300 cosponsors, including more than five
dozen Republicans. What is your position on that, Mr. DeJoy? Do
you think it is advisable that we pass that, and will it help with
budgetary problems?
Mr. DEJOY. That is a very important question and a big part of
our plan, sir.
I have been working with our team here, with our union leader-
ship, to get two things out of legislation. One is the integration of
Medicare, and eliminating the prefunding requirement.
I have been up to the Senate side, on the House side, speaking
with different Members. It is very important. It is about $50 billion
to us over the next 10 years. And we hope that the Congress sees
this through. It is very, very important to our future.
Mr. CARTWRIGHT. Thank you.
I yield back, Mr. Chairman.
Mr. QUIGLEY. Thank you, sir.
Mr. Joyce.
Mr. WOMACK. I don’t think he had any other questions.
Mr. QUIGLEY. Okay.
Mr. Pocan.
Mr. POCAN. Thank you, Mr. Chairman.
Thank you, Mr. Postmaster General.
Let me just—I just want to make sure I am clear on that last
part, because I do think we have this unusual requirement that
you have to have about prefunding health benefits 75 years into
the future.
I have been a businessperson for over 30 years. You have been
a longtime businessperson. I don’t know of another Federal agency
or, quite honestly, a business that requires 75-year prefunding of
health benefits. And that creates an artificial problem for your
agency.
So are you committed to getting rid of that prefunding if Con-
gress would work with you?
Mr. DEJOY. I—sir, very, very important. And the steps are im-
portant too. And thanks for the opportunity here.
The first, most important thing is requiring the integration of
Medicare. That is going to be somewhere in the $30 billion range.
That is the first step. And then the second step is eliminating the
prefunding requirement, which is about $13 billion to us over the
next 10 years.
Anything you can do to help us with that the whole organization
would really, really appreciate. And it is a big part of our plan, and
we are working it hard.
Mr. POCAN. I give you an ‘‘A’’ grade on that answer. I want you
to know that.
Mr. DEJOY. I will take it.
Mr. POCAN. One last thing, and I will yield back after this. You
know, very happy that the contract for the vehicles is going to Osh-
kosh, Wisconsin. They are an excellent provider, and we are strong-
ly supportive of that. So thank you.
I yield back, Mr. Chairman.
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Mr. DEJOY. Thank you, sir. Thank you.
Mr. QUIGLEY. Mr. Pocan, are you through?
Mr. POCAN. Yeah, I yielded back, Mr. Chair.
Mr. QUIGLEY. Oh, I am sorry. It broke up for a second.
Mrs. Lawrence.
Mrs. LAWRENCE. Yes.
You said something really important, Mr. DeJoy. You said that
you wanted to work with the Postal Service when it came to legis-
lation that will have an impact on your financial obligation when
it comes to funding/prefunding of Medicare and Medicaid for your
employees.
That is the point. If you don’t walk away with anything else—
and, lately, you have been pretty combatant when you have come
to these hearings—the one thing I want to stress to you is that you
do need to work with Congress.
The Postal Service is an independent agency, and I am very
much aware of that. But when you make independent decisions—
and every Member you talk to has had the discussion and calls to
our office to tell us how they are not satisfied with the service. We
and I have been working very hard to relieve you of that financial
burden so the Postal Service can become stable.
But if your position is that we have no value—you insult the fact
that we are not sitting in the Postal Service. You have only been
there for a few months. You retired from your industry in 2018 or
whenever you left. To say that you were not qualified because of
all the experience that you had left when you left your organiza-
tion, you would feel offended and tell me how qualified you are to
sit in the seat you are in.
So I am telling you that this has to be a partnership. And, again,
I will stress, coming before Congress and the Oversight Committee
and to this body to lay out your plan—if your plan is one that will
work, improve standards—because what we were told is that you
are going to reduce the delivery standard and suggest that we raise
the cost of postage, and that is not acceptable. But if there is a
plan that supports modernization of the Postal Service, if it is a
plan that is going to help us to keep a workforce, then we can work
together.
I don’t want to be in this position again where we are going tit-
for-tat and you seem annoyed and arrogant about answering the
questions. We must work together, because the Postal Service is
bigger than you and I, in the short period of time that you will be
serving and the 30 years that I put into it.
And I pledge to you today that my objective, sir, is to make it
where we have a Postal Service that works for the American citi-
zens and one that we both can be proud of.
And I will yield back, sir.
Mr. QUIGLEY. Thank you.
Mr. DEJOY. I appreciate those comments, Congresswoman, and I
will work to have further discussion with the Congress as we move
forward with the plan. And happy to meet with you.
And, yes, there are times when, where I leave these sessions, I
am a little embarrassed about my behavior. But I would also
offer—I have been accused of many, many, many things every time
I come in front of the Congress. And I am a human being, and I
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am trying to do the right thing. And I apologize to you if I offended
you in some way. I didn’t really mean to. I meant to get my points
across, because they are very, very important, you know, to the or-
ganization.
So I look forward to speaking with you again in the future on the
details of our plan, and thank you for your comments.
Mr. QUIGLEY. I appreciate both of your comments. It is helpful.
Mrs. Torres, please.
Mrs. TORRES. Thank you, Mr. Chairman.
I just want to yield some time to our guest to, you know—we
didn’t have a whole lot of time for you to answer my concerns. And
I understand that they are delicate and we may not be able to dis-
cuss them openly. But I want to yield my time to you, in case you
want to cover anything.
Certainly the dilapidated state of the post office in my home city
and, you know, threats to close another post office in the city of On-
tario, that has the community, you know, very nervous.
Mr. DEJOY. Yes, ma’am. I will go back and look at the details
of your district. But I will say, on all those aspects—and you are
talking about employee morale, which leads to employee behavior,
you are talking about how we represent ourselves and our physical
assets, you know, for communities, and it gets up into our service—
this is where the organization is at right now, right? And it has
been a long time coming.
And I think, when we get our—our plan is about improving every
aspect of that. So there is a tremendous amount—we are ear-
marking $40 billion to reinvest into the organization. A great deal
of that is in our retail centers. Trying to get our pre-career turn-
over rate down to under 40-something percent. Which is where,
perhaps, the situations that you are talking about, where they real-
ly begin to—where they happen the most. It might not be in our
long-term career employees. But we have basically a two-tier sys-
tem. And while it should be an apprenticeship that leads to long-
term success and we need the structure for viability, financial via-
bility, we could have managed it a whole lot better and are going
to, you know, as we move forward.
Long term, we are looking at our interaction with the American
public. We are trusted, but I want to be used. This plan is about
being used more and about being modern and being reliable at 95
percent and everything that we say that we do.
So I sense your—I appreciate your concern, and I sense your in-
terest and empathy for that environment. And I promise you that
this is something on the top of our list and our plan. And I look
forward to working with you to get some more insight on, you
know, the specifics of what you are talking about.
Mrs. TORRES. Thank you, sir.
Mr. Chairman, I yield back.
Mr. QUIGLEY. Thank you so much.
Mr. Womack, do you have any concluding remarks?
Mr. WOMACK. I am finished for the week.
Mr. QUIGLEY. I completely understand.
Mr. Postmaster General, we want to thank you for being here
today. I think you can understand the passion and the interest this
issue has created. And we have our moments, but I do believe there
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was some connection today and some communication, and that is
extraordinarily important. So we want to thank you for being here.
We will now conclude today’s hearing. I ask members to submit
any remaining questions into the record.
Mr. DeJoy, I ask that you respond to the additional written ques-
tions in a timely fashion.
Mr. QUIGLEY. And, with that, the subcommittee stands ad-
journed. Thank you all.
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TUESDAY, MAY 18, 2021.
OVERSIGHT HEARING—THE NEED FOR UNIVERSAL
BROADBAND: LESSONS FROM THE COVID–19 PANDEMIC
WITNESSES
JOI CHANEY, EXECUTIVE DIRECTOR OF THE WASHINGTON BUREAU
AND SENIOR VICE PRESIDENT FOR POLICY AND ADVOCACY, NA-
TIONAL URBAN LEAGUE
MATT DUNNE, FOUNDER AND EXECUTIVE DIRECTOR, CENTER ON
RURAL INNOVATION
MAX STIER, PRESIDENT AND CEO, PARTNERSHIP FOR PUBLIC SERV-
ICE
LANG ZIMMERMAN, VICE PRESIDENT, YELCOT TELEPHONE COMPANY
AND MOUNTAIN VIEW TELEPHONE COMPANY, ON BEHALF OF NTCA
Mr. QUIGLEY. This hearing will come to order.
Since this hearing is virtual, we must address a few house-
keeping matters.
For today’s meeting, the chair or staff designated by the chair
may mute participants’ microphones when they are not under rec-
ognition for the purposes of eliminating inadvertent background
noise or advertent background noise. Members are responsible for
muting and unmuting yourself. If I notice you have not unmuted
yourself, I will ask you if you would like the staff to unmute you.
If you indicate approval by nodding, the staff will unmute your
microphone.
I remind all members and witnesses that the 5-minute clock still
applies. If there is a technology issue, we will move on to the next
member until the issue is resolved and you will retain the balance
of your precious time. You will notice a clock on your screen that
will show you how much time is remaining. At 1 minute remaining,
the clock will turn yellow. At 30 seconds remaining, I will gently
tap the gavel to remind members that your time is almost expired.
When your time is expired, the clock will turn red, and I will recog-
nize the next member.
In terms of the speaking order, we will follow the order set forth
in the House rules, beginning with the chair and ranking member.
Then members present at the time the hearing is called to order
will be recognized in order of seniority, and finally, members not
present at the time the hearing is called to order. We will deviate
from that if the ranking member has someone who needs to move
up or adjust, as I will within our ranks at the same time.
Finally, House rules require that we have set up an email ad-
dress to which members can send items they wish to submit in
writing at any of our hearings or markups. That email address has
been provided to you in advance.
This morning, we welcome four individuals with expertise in
broadband: Matt Dunne of the Center on Rural Innovation; Max
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Stier of the Partnership for Public Service; Ms. Joi Chaney from
the National Urban League, and Mr. Lang Zimmerman of Yelcot
Communications.
They are here to discuss one of the most important issues of our
time: ensuring that all Americans have the connectivity to fully
participate in our economy and society.
Broadband has been an enormous benefit to our country. It is a
key driver of our economic growth and innovation, has democra-
tized access to educational resources and new job opportunities,
and has broadened availability of health care and social services.
But during COVID, broadband became much more than that. It be-
came a matter of, literally, life and death.
People with reliable broadband at home were more easily able to
socially distance by transitioning to telecommuting and remote
learning. They could use video conferencing to keep in touch with
friends and family, access health care services, order essential sup-
plies and medicines, and use government services. In other words,
the pandemic has made it abundantly clear that access to reliable
broadband is not a luxury, but a necessity. Broadband is as impor-
tant to modern life as electricity or running water.
Unfortunately, not everyone is so fortunate. Many of our rural
communities have no connectivity or remain reliant on outdated
technologies that don’t provide sufficient bandwidth. Communities
of color have also been disproportionately affected. It has limited
access to jobs, left many students of color struggling to keep up
with their schoolwork, and put many people of color at higher risk
of catching the virus.
As the subcommittee that oversees the Federal Communications
Commission, we have been working on these issues for years, and
we ramped up our efforts during the pandemic. We helped secure
billions in funding to provide devices and connectivity for at-home
learning and telemedicine. We have provided substantial resources
for better broadband maps and given states the flexibility to use
virus relief funds on broadband.
And we are excited that just last week the FCC launched the
Emergency Broadband Benefit, a $3.2 billion program to provide
discounted broadband services and devices to low-income Ameri-
cans, including people affected by the pandemic.
These efforts are just the beginning. There is bipartisan agree-
ment about the importance of ensuring universal broadband access,
and the administration has made it clear that broadband is one of
the main priorities in an infrastructure package.
Today, we will learn more about how the lack of broadband af-
fects rural communities, the connectivity issues facing communities
of color, and the challenges of small internet providers. And we will
hear about an issue dear to me and my fellow appropriators—how
broadband might make the federal government more efficient and
effective.
These insights will help ensure that we fully incorporate lessons
from the pandemic into our infrastructure discussions and ensure
we get the most value for each dollar we invest. I look forward to
the discussion.
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Before I turn to each of the witnesses for their statements, I
would like to recognize the ranking member, Mr. Womack, our
friend, for his opening remarks.
Mr. WOMACK. Thank you, Mr. Chairman, and thanks for holding
this very important hearing on a truly bipartisan topic, broadband.
When the pandemic began, as the chairman so stipulated, our
businesses and schools closed, many Americans began to work from
home, increased their online purchases, and school classrooms be-
came virtual. Our nation’s broadband providers stepped up to the
challenge to meet the increase in demand on our information net-
works. According to the Information Technology and Innovation
Foundation, the jump in demand has seen peak traffic roughly 20
to 30 percent higher than before the pandemic.
Thankfully, the increase in broadband traffic was within the an-
ticipated growth and demand operators could already accommo-
date. As such, U.S. broadband networks were able to accommodate
these changes with virtually no drop in performance.
The facilities-based competition model in the United States,
which relies on incentivizing providers to invest in infrastructure,
passed the COVID–19 network stress test, performing better than
internet infrastructure in many other countries. The dynamic
broadband competition in the United States has driven billions of
dollars into network capacity that met the surge in demand. The
light-touch regulatory approach also allowed for network operators
to flexibly adjust interconnection levels to meet new changes in de-
mand.
While the pandemic showed the strength of our nation’s
broadband networks, it also highlighted that more work needs to
be done to provide reliable and accessible internet service to many
rural and urban areas. In America, your employment opportunities
and education should not be limited by your ability to access the
internet.
I would like to welcome our witnesses today. We will look for-
ward to hearing your ideas on improving broadband accessibility.
Specifically, let me recognize Lang Zimmerman, the vice president
of Yelcot Telephone Company and Mountain View Telephone Com-
pany, which provide broadband service to northern Arkansas, in-
cluding parts of my district.
During the pandemic, Yelcot and Mountain View demonstrated
their commitment to the communities by ensuring struggling cus-
tomers remain connected to broadband services and connecting new
customers to broadband. I am pleased that he is with us today to
provide the perspective of a service provider who has been working
to expand broadband accessibility in rural Arkansas, actually boots
on the ground.
Currently, the federal government has dedicated tens of billions
of dollars to broadband and 5G expansion through the Universal
Service Fund, the various COVID relief bills, and the Department
of Agriculture. We would like to hear if these resources are improv-
ing accessibility, if more funding is going to be needed, and that
there are regulatory changes that could speed expansion and re-
duce costs.
I want to thank the witnesses for participating today, and I yield
back the balance of my time.
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Mr. QUIGLEY. Thank you, Mr. Womack.
Our first witness is Matt Dunne, founder and executive director
of the Center on Rural Innovation.
Please go ahead.
Mr. DUNNE. Chairman Quigley, Ranking Member Womack, and
members of the subcommittee, thank you for this opportunity to
appear before you today.
My name is Matt Dunne, and I am the founder and executive di-
rector of the Center on Rural Innovation, a nonprofit action tank
that was founded in 2017 to close the rural opportunity gap. Today,
we are working with small towns across 20 states, including rural
Tennessee, Wisconsin, Utah, Arkansas, and Nevada to help them
become successful in economic development and entrepreneurship
in the 21st century.
The rural-urban divide that has emerged since the Great Reces-
sion was driven by automation and a decline in entrepreneurship.
As of January of 2020, less than half of all rural countries had re-
turned to their pre-recession economies, and COVID–19 only
knocked these counties to new lows.
Specifically driving the divide is the fact that high-paying, resil-
ient digital economy jobs, like computer programmers, cybersecu-
rity analysts, and IT specialists are not distributed equitably across
the country. Rural America represents 15 percent of the nation’s
workforce, but only 5 percent of the digital economy jobs.
As you can imagine, central to closing this gap is accelerating ac-
cess to world-class broadband in rural America. And we help that
by providing support to communities, policymakers, and others
seeking to build future-proof broadband infrastructure. And as the
past year has shown us, this work has never been more important.
Broadband is no longer a luxury. It is a necessary piece of infra-
structure to ensure there is equal access to health care, education,
and jobs. And COVID has created a moment where there is the mo-
tivation and momentum to close the broadband gap.
We need to take a lesson from the rural electrification effort a
century ago and do this right. If we do not focus on delivering fu-
ture-proof broadband, we will be back here five years and billions
of dollars later discussing, once again, the inequity in broadband
connectivity.
Even before the pandemic, rural America struggled with the
broadband gap. There is a small town near our headquarters that
has a fantastic library. You drive by on Sundays and the parking
lot would be full, which wouldn’t be so odd if the library wasn’t
closed on Sundays. That parking lot was full of people working on
their homework or their day jobs from their cars, making the most
of the wifi leaking from the library windows.
This story was no longer funny once COVID hit. The pandemic
laid bare the depth and severity of the digital divide. More than
20 percent of rural Americans don’t have access to broadband, a
figure that is even worse for communities of color. It is estimated
that 46 percent of rural black residents don’t have broadband ac-
cess at home.
During the pandemic, millions of children couldn’t participate in
remote school. Superintendents reported losing touch completely
with many of their at-risk students. People who could work re-
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motely would sit in running cars trying to use hot spots hastily put
up by schools or police stations. Seniors, unable to access new tele-
health technologies due to poor broadband, were forced to risk in-
fection to visit clinics for routine checkups.
However, this wasn’t the case in every rural community. The
small towns that had capitalized on municipal electric companies,
coops, public-private partnerships, or collaborated with small tele-
phone providers to build out future-proof fiber broadband had dif-
ferent experiences during the pandemic. These places benefitted
from city dwellers who brought their jobs with them to beautiful
rural settings, reversing the population declines of the last decade.
Powered by great broadband, tech startups in communities we
work with have grown, received investment, and found new mar-
kets without needing to leave the places they love.
We all know there are models to deliver sustainable, world-class
broadband to small town America. We have seen the power of
unleashing rural innovation in education and economic develop-
ment when broadband is available.
I wanted to offer six recommendations for this once-in-a-lifetime
moment to ensure we build future-proof broadband in the most effi-
cient way possible.
One, require ISPs to provide the FCC with accurate and vali-
dated data; no excused.
Two, focus on fast responses with hot spots and some wireless,
but, then, focus most of the resources and money on fiber to the
home.
Three, predicate federal broadband funding on states allowing
municipal, coop, and public-private broadband solutions.
Four, resist the temptation of reverse auctions and have funding
follow plans, such as USDA ReConnect, that are driven by states
and regions.
Five, invest in programs to build the 250,000-person labor force
needed for broadband deployment.
Six, create enforcement mechanisms that hold providers who re-
ceive funding accountable.
Thank you for your time and consideration of this important
issue. You have the momentum and historic opportunity to bring
broadband to all Americans once and for all. Rural America is
ready to make this happen. And I am happy to answer any ques-
tions you may have.
Mr. QUIGLEY. Thank you.
Our next witness is Max Stier, president and CEO of the Part-
nership for Public Service.
Mr. STIER. So, I just want to start by saying thank you so much,
Chairman Quigley and Ranking Member Womack, for inviting me
to testify.
As you mentioned, I am the president of the Partnership for Pub-
lic Service, a nonpartisan, nonprofit organization focused on trying
to make the federal government work better.
It is terrific that you are having this hearing on the need for uni-
versal broadband. High-speed internet access is not itself the end,
but an essential tool for Americans to thrive in today’s world, as
you said, like water and electricity. I will try to offer some context
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on why this matters so much right now and provide recommenda-
tions on the path forward.
So, as more services move online, the federal government needs
to address the digital divide to ensure everyone has access to its
critical services. Many people who rely on government do not have
high-speed internet, such as more than 41 percent of Medicare
beneficiaries, 35 percent of the population on rural tribal lands, 42
percent of rural veterans, and 60 percent of U.S. farmers and
ranchers do not believe they have adequate internet connectivity.
We need a government that is, in fact, even more available. A
government that serves the public using modern online tools is
going to be more effective, efficient, user-friendly, and secure. So,
some examples on this.
On the efficiency side, it costs the IRS $41 to field every phone
call it gets, as opposed to pennies for online transactions.
Second, providing an online option to report a lost or stolen pass-
port resulted in a 46 percent increase in reporting, helping the
State Department ensure the security of its passports.
And the third example, a mobile app increased the accuracy and
frequency of wage information reported to the Social Security Ad-
ministration, which meant that it was able to reduce improper pay-
ments.
Now the pandemic supercharged the need for the government to
serve the public through modern online interactions. Many agen-
cies rose to the challenge. Again, a couple of examples.
The Veterans Health Administration delivered a thousand per-
cent increase in video health care visits.
The USDA adopted new digital tools for electronic signatures and
online file sharing for farm loans.
Which leads me now to my five recommendations:
First, we need to enhance the efficiency of government through
collaboration across agencies to address the digital divide. The dig-
ital divide is a complex challenge that no one agency can solve. We
have heard already that, while lots of agencies are involved in
funding, options include creating a cross-agency council. One ex-
isted during the Obama years, the Broadband Opportunity Council.
Or a second opportunity would be to work with OMB, which is
truly the center of government and a vital actor in bringing to-
gether the different pieces, the connectivity across government.
Second, we need to leverage public-private partnerships. And
again, an example here, the Veterans Health Administration has a
partnership with Microsoft and internet providers to bring high-
speed internet to rural veterans.
Third, we need to improve the customer experience. Access alone
is not enough. Services need to be easy to use, even for those with
low digital literacy, and agencies need to consider people who not
only lack high-speed internet, but want other options. So, the VA,
for example, sent internet-enabled tablets to veterans. And cus-
tomers should have choices. For example, the ability to call to
speak to someone, even if there is an option for doing something
online.
Fourth, and very important from our perspective, we need to give
the federal workforce the tools and flexibility they need to serve the
public effectively. The pandemic has revealed digital gaps in gov-
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ernment itself, and we need to see more investment in modern IT
systems, including secure cloud-based environments. And we need
the government to build off of what it has learned through the pan-
demic to continue to enable a lot of remote work, so that it can ac-
tually access the best-in-class talent across the entire country and
enable them to continue to work remotely.
Fifth, and finally, we need, actually, agencies to regularly collect
and report on data around access, use, and satisfaction with serv-
ices. There are two specific pieces of legislation to mention here.
Congress should pass the FACE Act, which will streamline the
process for collecting customer feedback and require publicly re-
ported customer service measures across agencies, and then, sec-
ond, ensure the implementation of the 21st century IDEA Act,
which sets the usability standards for federal websites. We need
OMB to put out the implementing regulations.
Thank you for this opportunity. I look forward to the conversa-
tion after the rest of the witnesses.
Mr. QUIGLEY. Thank you.
Now we will hear from Joi Chaney, executive director of the
Washington Bureau and senior vice president for policy and advo-
cacy at the National Urban League.
Ms. CHANEY. Thank you, Mr. Chairman.
Subcommittee Chairman Quigley, Ranking Member Womack,
members of the subcommittee, and in their absence, full Committee
Chairwoman DeLauro, Ranking Member Granger. Thank you for
having this hearing and for the opportunity to present the views
of the National Urban League.
As you said, my name is Joi Chaney, and I serve as senior vice
president of policy and advocacy and executive director of the
Washington Bureau of the Urban League. I bring you greetings on
behalf of Marc Morial, our president and CEO.
I am honored to testify about the need for universal broadband
and how we can leverage the lessons learned by the COVID–19
pandemic for a more inclusive and 21st century society.
Prior to the COVID–19 pandemic, many individuals, families,
and children relied on their schools, places of work, and other,
quote-unquote, ‘‘third spaces,’’ like libraries, churches, internet
cafes, and coffee shops, to connect to the internet because they did
not have a broadband internet connection in the home—with a dis-
proportionate number of these Americans being from communities
of color or low-income communities. Overnight, third spaces dis-
appeared at a time when we needed connection the most.
The pandemic accelerated the ongoing migration to remote every-
thing, particularly for essential activities, such as employment,
health care, and education. The benefits of being connected grew
even faster, but so did the costs to communities who were not con-
nected. The COVID–19 pandemic proved that broadband was no
longer a nicety; it has become a necessity, as you have said, Mr.
Chairman, as necessary as electricity and running water.
Far beyond the, quote-unquote, ‘‘homework gap,’’ when schools
were forced to close the districts that had the resources to provide
computers and hot spots to students and educators, they were able
to transition to online learning fairly quickly, but those who did not
were left scrambling. Philadelphia Public Schools initially decided
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not to provide remote learning instruction, citing inequity in access
to computers and high-speed internet as the main reason. And that
is just an example.
In health care, we know that the lack of broadband access is
leading to inequality in obtaining the COVID–19 vaccine, yes, but
that telehealth has become a critical necessity since the start of the
pandemic. Some estimates show that health care providers are see-
ing 50 to 175 times more patients using telehealth than they did
immediately before the pandemic. We don’t simply expect this
trend to reverse post-pandemic because of the benefits telehealth
provides to those who cannot easily visit a doctor in person. Never-
theless, telehealth is out of reach for those Americans without in-
home broadband and/or a proper device.
And while these examples focus on those who cannot afford or do
not have available broadband service on demand in the home, there
are those who could have it, but who lack the digital literacy to use
internet services, including a disproportionate number of older
Americans. Moreover, even if you have broadband and you know
how to use it, we need our public institutions to improve utiliza-
tion. The costs of not doing so are borne disproportionately by those
who rely most on government services, often at their time of need.
In my home State of Florida, hundreds of Floridians risked their
safety to line up during a pandemic to obtain an unemployment
form because the State’s website crashed, making it painfully obvi-
ous that the public sector is still far behind where it should be in
terms of providing services over the internet.
These examples underscore the need for universal broadband and
the need for overdue investments towards closing the digital divide,
as a matter of civil rights and as a matter of human rights. It is
also why the Urban League released our Comprehensive Lewis
Latimer Plan for Digital Equity and Inclusion. The plan describes
and offers solutions for closing several gaps: refocus on expanding
availability, ensuring affordability, lowering barriers to adoption,
improving utilization, and extending access to economic oppor-
tunity for communities of color.
One thing in this moment that would put us a long way towards
addressing these gaps is to build on the work fo the ongoing Emer-
gency Broadband Benefit and establish a long-term or permanent
broadband benefit program. Any such program must set minimum
standards that will regularly be reevaluated and adjusted to re-
main current, and we must ensure greater accountability from
internet service providers.
Moreover, we know that costs cannot fall only on the American
taxpayer. We need appropriations, especially in the beginning, so
that the neediest in our society won’t have to wait. But, ultimately,
we also need the industry to put skin in the game. One idea is a
digital equity fund that could be the repository of contributions, in-
cluding from special auction proceeds.
But whatever we, whatever you, as Congress, does, the National
Urban League charges you with doing something to ensure those
who receive emergency broadband now don’t go back to not having
it once the emergency is over. Because as bad as the former gaps
were, the gaps will only be much larger in the future. The COVID–
19 pandemic has forever changed the way we do work, learn, and
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connect with others in society. If we do not close the digital divide,
our communities will continue to fall behind at the speed of each
innovation, and with them, our nation in the global marketplace.
Thank you for the opportunity to testify, and I look forward to
answering any of your questions.
Mr. QUIGLEY. Thank you so much.
Our fourth witness, and final witness, is Lang Zimmerman, vice
president of Yelcot Communications.
Please go ahead.
Mr. ZIMMERMAN. Thank you, and good morning. Chairman
Quigley, Ranking Member Womack, and members of the sub-
committee, thank you for this opportunity to testify about lessons
learned from providing broadband during the COVID–19 pandemic.
My name is Lang Zimmerman. I am vice president of the Yelcot
Telephone Company and Mountain View Telephone Company. We
are a small rural broadband and voice provider located in north
central Arkansas. And my remarks today are on behalf of those two
companies as well as NTCA, the rural broadband association which
represents about 850 small rural telecom carriers in 45 states.
The pandemic has altered society as we know it and highlighted
the importance of access to reliable, high-speed broadband
connectivity. I am proud to report that, as offices and schools closed
over a year ago in response to the pandemic, Yelcot and Mountain
View joined hundreds of other small broadband providers in mak-
ing every effort to connect and keep connected to everyone in rural
communities who wanted and needed high-speed broadband.
If I had to identify one lesson learned from the pandemic, it
would be that investments in broadband infrastructure and afford-
ability are essential so that everyone will experience the telehealth,
telework, distance learning, and other benefits of such connectivity.
And how do we move forward from here? Nearly 70 percent of
NTCA member customers are already connected to fiber broadband
and can access speeds of 100 megabits or more. While we are proud
of this work that has been done, the job is, obviously, not finished.
Too many Americans are still waiting for reliable broadband serv-
ice, many of whom are not served by community-based broadband
providers. Those who lack access probably live in a rural area that
provides no business case for deploying and maintaining an ad-
vanced telecom network.
The USF High-Cost Program will remain essential to incentivizes
deployment in these areas and to help keep rates more affordable,
but USF alone is not enough because it does not pay for the net-
work construction. It does not provide capital to build networks.
Congress has already appropriated considerable sums to the
USDA ReConnect Program to help connect unserved areas, and
Yelcot and Mountain View, each are working toward our comple-
tion of fiber broadband deployment projects, thanks, in part, to Re-
Connect awards.
But additional support from the government is needed to help fi-
nance the deployment of networks and provide the business case to
operate them on an ongoing basis. Thankfully, both the administra-
tion and Congress have acknowledged that broadband should be an
essential component of any major infrastructure plan. As work con-
tinues to agreement, several key objectives should be kept in mind.
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First, broadband is essential and consumer bandwidth demands
are increasing at a staggering pace. So, why not support the most
robust and reliable infrastructure? It is time to put resources to-
ward more fiber broadband connections that could be readily up-
graded to meet future demand and relied on, regardless of terrain
or weather conditions.
Number 2, at the same time, new investments must be coordi-
nated with existing networks and ongoing deployments instead of
backing a second network in an area where there is not a business
case for even one network. This will be helped by prioritizing areas
most lacking in broadband and putting at least some new infra-
structure dollars in current programs such as ReConnect, which
has been highly effective with a record of accountability and re-
sults.
Number 3, support should go to broadband providers with proven
track records in delivering measurable, real-world results.
Number four, we should look local and leverage the expertise and
experience of community-based providers like Yelcot and Mountain
View, regardless of their corporate form, when it comes to imple-
menting broadband solutions.
Cost is not the only barrier to broadband deployment. Carriers
must secure approvals across government and privately owned
lands, and the process for doing so can be very time-consuming and
expensive, further delaying broadband installations that customers
badly need.
The standardization of permitting procedures across federal
agencies should be a high priority, and Congress should also allo-
cate the resources needed to timely complete reviews and establish
reasonable, but firm timelines for doing so.
In addition, Congress should monitor supply chains and ensure
agencies work closely with suppliers, as already considerable
delays in order fulfillment for critical communications equipment
could become increasingly more problematic as more phones flow
for deployment.
Finally, broadband must be both available and affordable for the
customer. Yelcot and Mountain View are pleased to be partici-
pating in the new Emergency Broadband Benefit Program to en-
sure that service is affordable for all. I encourage Congress to take
the lessons learned from the EBB and apply them to a permanent
broadband affordability program with predictable and sufficient
funding.
And I thank the subcommittee for holding this hearing and for
your interest in determining the most effective ways to ensure ev-
eryone gets and stays connected to broadband. And we at my com-
panies and NTCA companies are eager to work with you, and we
will answer any questions.
Mr. QUIGLEY. Thank you. And I want to thank our witnesses.
We are turning to questions, and as we do, I would just ask those
asking and answering questions to keep in mind the 5-minute allo-
cation, so that we can make sure everyone gets an opportunity to
participate. And given the time constraints, we may go out of order
for a few.
In this case, we will begin with Mrs. Lawrence.
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Mrs. LAWRENCE. Good morning, and thank you, Chair Quigley
and Ranking Member.
In the city of Detroit that I proudly represent, approximately 40
percent do not have a wired, high-speed connection, and 26 percent
of Detroiters don’t have internet of any kind, ultimately, excluding
thousands of people from opportunities for access to health care,
education, and employment.
We must continue to address the digital divide. I am proud to
hear or relieved to hear that discussion includes affordability, be-
cause we know the infrastructure is in place in some major areas,
urban areas, but it is an issue of affordability. Affordability is a
concern for my constituents in Detroit.
My question is, Do you have any recommendations of how to ad-
dress the affordability specifically for cities with high poverty
rates? And any of the panel can answer.
Mr. ZIMMERMAN. I will take a shot at that.
The Emergency Broadband Benefit Program that is starting
right now, it has funds that are only supposed to last an estimated
six months, and that won’t do anybody any good to get on, and
then, get kicked off after six months. I think what it can do,
though, is show the demand. I understand the website for people
to try to sign up for the EBB has crashed because of demand.
There is obviously a demand for it.
What we need to do is learn from that and make sure that we
can maybe extend that or make it permanent. There is currently
a Lifeline Program for voice communications that is accessible for
both landline and cell phone, and broadband probably needs a life-
line program of its own.
Ms. CHANEY. This is Joi Chaney from the Urban League, Con-
gresswoman.
And I am not sure if you are still there, but I wanted to jump
to say I agree, we need some kind of long-term broadband benefit.
Mrs. LAWRENCE. Yes.
Ms. CHANEY. And I address that in my testimony as well. If you
look at my longer testimony, our Latimer Plan, we also come up
with an alternative. I don’t think it is as good as a long-term
broadband benefit, but we came up with some lifeline adjustments
for mobile and broadband around health, education, and workforce
that could also be an alternative and a solution.
But I think your point is that we are saying, I think on a bipar-
tisan level, that we must have funds that are allocated for those
who simply do not have the resources, really almost at any amount,
any low-cost program, to meet the needs of having broadband in
the home. We need to have a Broadband Benefit Program through
FCC.
Mr. DUNNE. Yes, Congresswoman, if I could add just two addi-
tional points to the excellent comments that were just made?
Mrs. LAWRENCE. Yes.
Mr. DUNNE. The two things are states who coordinated their ef-
forts to try to help bulk purchase the subsidies and be able to work
in a coordinated way with social service agencies and others to de-
liver those, so that you took the friction out of someone having to
figure out how to access the subsidy, how to then utilize it, have
it applied retrospectively or prospectively, because they were all
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different, saw a lot faster utilization and allowed for people to take
advantage of the subsidies that were available, either from indi-
vidual providers or that were available through state and federal
subsidy. And it is worth considering that coordination.
The other piece that I would mention is that we have rec-
ommended——
Mrs. LAWRENCE. If I could——
Mr. DUNNE. Oh, sorry.
Mrs. LAWRENCE. If I could just interject, in the city of Detroit we
have Connect 313. It is a citywide, data-driven, data-inclusion
strategy that brings organizations together to make Detroit a na-
tional model for digital inclusion and ensure all Detroiters can ac-
cess the digital. What can we do in Congress to support these in-
clusion efforts at the local level? And with that, if you will answer
the question?
And, Mr. Chair, I will yield back after their answers.
You can continue, sir.
Mr. DUNNE. Thank you.
Just the other thing that I would suggest—and there has been
talk of this—is the idea of leveraging national service to be able to
help support the kinds of efforts that it sounds like Detroit is tak-
ing a leadership role in coordinating. The opportunity for a
broadband corps that is focused on making sure that people are
aware of subsidies, understand how to sign up, and also, how, if
they avail themselves of broadband services, they can save money
in other parts of their life work, is really powerful. And the Urban
League has done an excellent job of laying out the kinds of things
that need to happen, and I think there is a moment for national
service through a numerical program specifically on broadband
support that could be powerful. And we have recommended that to
a couple of states over the last year.
Ms. CHANEY. Thanks so much, Matt. I was going to say yes, we
certainly endorse some kind of digital navigators program that
would help people not only learn how to get online and to get the
access of whatever resources are available to them, federal or local,
but, then, also learning how to get on, how to use, and how to real-
ly benefit from the internet.
Thanks.
Mr. QUIGLEY. Thank you.
And we are going to have to move on to the next questioner. We
will get back to you if there is anything left within the questions
asked, just to make sure. We have several that are on tighter dead-
lines.
And toward that, I believe that the ranking member wants me
to recognize Mr. Joyce first.
Mr. JOYCE. Thank you, Mr. Chairman. And thank you, Ranking
Member Womack, for conceding to me.
Over the last year, Americans have relied more on services which
allow them to connect remotely than ever before. Unfortunately, far
too many Buckeyes in rural areas completely lack access to ade-
quate broadband services.
A 2019 study funded by the Appalachian Regional Commission
across eight Ohio counties found that, in rural areas with 20 or
fewer households per square mile, 80 to 90 percent of the house-
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holds had no access to broadband whatsoever. We know that strong
public-private partnerships will be critical to building out the
broadband infrastructure to these currently underserved commu-
nities.
Mr. Zimmerman, given your experience of getting private opera-
tors to work with local stakeholders, can you provide any insight
into what kind of practices have worked? And just as important,
what practices have not worked in forming strong public-private
partnerships to deploy broadband to underserved or unserved
areas?
Mr. ZIMMERMAN. Yes. Arkansas has used a large chunk of its
CARES money to do a broadband grant program. And that grant
program was driven by community involvement, as in, if it was a
municipality, the mayor had to sign off on the application. Or if it
was a county, the county judge had to sign off. And if it was both
of those guys, they both signed off on it. So, that was very effective
in getting some areas involved and seeking out this money that
was there, because, as you know, sometimes mayors are very pro-
gressive and know about these programs; sometimes mayors or
county judges do not know. With the public-private partnerships,
we were able to approach some areas that we knew were under-
served and encourage them to apply with us.
And so, I think Arkansas set aside $125 million and went
through it fairly quickly with some really good projects in the State
of Arkansas. So, I would encourage Ohio to look at some grant pro-
grams to take some of this broadband money, or if it is infrastruc-
ture money they are calling it, you can still apply to broadband in
Ohio.
Mr. JOYCE. There are several well-known factors that might di-
minish the broadband providers’ willingness to invest in new infra-
structure in communities which don’t have sufficient access. These
factors include low population density, challenging natural features
of the land, and building some government regulations. Mr. Zim-
merman, are there factors which policymakers should be aware of
that limit broadband investments in unserved areas?
Mr. ZIMMERMAN. Well, yes. Some of the things that can make it
tough on the companies to develop, we sometimes have to get per-
mits from federal agencies to cross their land. And, in fact, on a
couple of projects, one, in particular, we made a conscious decision
to bypass a federal piece of property that would have been a faster
route just because we didn’t want to get bogged down in the proc-
ess.
So, what we would encourage is a streamlined permit process
across all federal agencies that control land, as well as what we
call a ‘‘shop clock,’’ so that an application doesn’t sit on someone’s
desk or an agency’s desk for a long period of time. We need some-
thing that says, if it is not approved in 90 days, or something like
that, it is deemed approved.
We also have rights-of-way issues with railroads, which, obvi-
ously, the feds can’t just wave a magic wand and fix, but that is
one issue we face, as well as pole attachments, which are large hin-
drances in a number of areas. There are some pole owners that
enjoy federal exemption from the FCC pole attachment rules and
make it very expensive to attach to their poles to get to some of
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these areas that need broadband. So, those are some of the things
that can also hinder the expansion.
In my area, Mountain View, we have got down to five people per
square mile or five households per square mile. So, we are very
rural, but we won some of these ReConnect grants and we are
going out there and doing it.
Mr. JOYCE. Yes, it, unfortunately, really took something like the
pandemic to drive home the fact that there are many areas of my
district that were being unserved completely. And you only had to
go by the closed McDonald’s to see all the people using their
broadband in the parking lot to realize just how bad the problem
was.
Thank you all for being here and communicating.
Thank you, Mr. Chairman and Ranking Member, for allowing me
to go. And I yield back the rest of my time.
Mr. QUIGLEY. Thank you, sir.
I will address Ms. Chaney on this. Obviously, there is strong sup-
port for providing funding to build out future networks, but we are
also concerned about getting the most out of our limited federal
dollars. What protections or conditions should we be placing on
funding to ensure that we are really protecting consumers at the
same time? For example, not just on the affordability issues, but
redlining, abusive data collection practices, as they use networks
that the federal government helps build?
Ms. CHANEY. I don’t know if someone else is going to go first, but
I shall then.
Absolutely, I think that this is a time of incredible opportunity,
but sometimes in these moments, especially when we are in an
emergency, we forget to have all of the backstops that we need.
And you addressed many of them there.
I mean, one of the things that we also want to make sure is that
service providers aren’t doing any kind of abusive activities as well,
inadvertently or intentionally. And so, we will need to do that to
protect privacy; to make sure that people, when they get on, under-
stand what that means and that the exposures they are having.
And I think one of the things that the Latimer Plan also talks
about is making sure that, in our rush to expand broadband and
increase availability, and all of the things, that we don’t allow com-
munities of color to sort of miss out on the economic opportunity
that is happening as well. We want to make sure that, as we are
setting up, you know, the funding is going out and we are building,
that business owners of color are able to access some of that eco-
nomic opportunity that is being created. It would be a shame to get
on the other side of this and to find that we have created more
gaps than we actually have closed.
And I yield the rest, but I think that it is very important to be
thinking about that as well.
Mr. QUIGLEY. Mr. Dunne.
Mr. DUNNE. Mr. Chairman, I would say there are three areas
that I would really focus in on.
One is on the importance of having enforcement after funds are
allocated. We have seen in the past that goal posts have moved;
that funding has been given to be able to deliver some quality of
broadband to a certain region that has not actually happened, and
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then, there is a waiver that comes after it. And that sets up a bad
dynamic, particularly for those companies that are actually doing
the work and not receiving the funding, and then, are having to see
that someone who doesn’t succeed gets it, and then, is given a
waiver.
The second area is on data. It is a very strange thing that large
incumbents are not required to deliver absolutely up-to-the mo-
ment data on what is available and what isn’t. And when there are
so many programs, including the RDOF auction that took place re-
cently, that are dependent on that data to show what is served and
not served, to be able to show accessibility, you ended up with situ-
ations where some areas in a place like Pine Bluff, Arkansas, that
didn’t have broadband access were shown to be served. And so, it
couldn’t get the money. And some places that were already served,
but showed as not being served, did actually get awarded re-
sources. So, there is real importance on making sure that that data
is taken care of.
The final piece is focusing on future-proof broadband, what Mr.
Zimmerman was talking about, which is fiber to the home. You
have got to get some emergency resources out there to get people
connected in the short term, but for the long-term value and effi-
ciency, you really want to make sure you are bringing fiber to the
home. It is the only thing that is future-proof and will allow for
scale, since the demand of broadband is projected to increase in
terms of upload speeds of 20 to 30 percent per year. And we just
don’t want to be here again in five years saying we have still got
a broadband divide after we have spent billions and billions of dol-
lars on too many short-term solutions.
Mr. QUIGLEY. Thank you both.
Mr. Womack.
Mr. WOMACK. Thank you, Mr. Chairman.
Mr. Zimmerman, local permitting, licensing issues, environ-
mental and historical preservation reviews, all slow down
broadband expansion, as it has already been noted, and makes it
more costly. Give us an example as to how you make, and how we
can make, broadband services affordable to those who live in re-
mote areas?
And I took note of the fact that you said five families per square
mile in your rural area. I would also be curious to know, when you
do get service out in the areas, is it something that some people
decide, ‘‘Well, even though it is here, I don’t want it. I am out here
in the rural area for a reason.’’? So, what is your experience rate
with people hooking up when the service is made available or de-
ciding not to?
Mr. ZIMMERMAN. Well, that is a really key point. The differences
between availability and affordability are very different. And a lot
of times, someone says, they will say school kids don’t have inter-
net at home. Well, there may be internet available right inside
their front door, but the cost to subscribe can be prohibitive to the
family. So, I like to say you can lead a horse to the water, but you
can’t make him buy a broadband internet. Some people want it;
some people got to have it; some people could care less.
Our hospital, I am the chairman of the board of Baxter Regional
Hospital, and we just did a COVID sign-up. And we had to have
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phone banks. We were going to try to do it all online, but there are
too many especially senior citizens that do not have an internet
connection or they don’t have a computer. Either they think they
are too old to learn or they just don’t want to. And we had to set
up a phone bank, so people could call in. So, people’s take rates are
much lower than the availability usually.
Mr. WOMACK. Mr. Stier, we have thrown a ton of money at a lot
of different things here at the federal government level. And as the
former chairman of the Budget Committee, I am always interested
in making sure that we are getting the maximum amount of ben-
efit out of the fewest dollars possible, because I know a lot of this
is borrowed money; most of it is borrowed money. Maybe all of it
is borrowed money that is going on the credit card for our
grandkids and our grandkids’ grandkids to pay.
So, this question is back to your testimony where you talked
about the need maybe for, I think you called it a cross-agency sort
of entity. And I am also enamored, always enamored with the idea
of the P3s out there. Whenever you can leverage federal dollars
with other money, first of all, it gives us an opportunity to do more
with what we have at the federal level, but, also, when people have
skin in the game, they seem to want to make sure that it is done
properly and responsibly, and that sort of thing. So, can you com-
ment on that just a little bit more?
Mr. STIER. Great. Thank you so much.
And I think you are 100 percent right that, in essence, there is
a collaboration need on multiple levels. There is a collaboration
within the federal government itself. You note that there are a
whole bunch of entities that are providing financial support for
broadband access, but I would go out in the field there and say that
it is also about the services themselves that are being provided
using that broadband. And we need to see better collaboration on
both fronts, because there are ways to generate very large effi-
ciencies if agencies work better together.
My view is there is sometimes a tendency to think about restruc-
turing government, you know, trying to build a new agency by put-
ting a bunch together. I think that the better investment is actu-
ally getting them to work better together. And as you noted, one
way of doing that is the council, or OMB, in my view, is an essen-
tial actor. You have jurisdiction over OMB, and this is a place
where their role as connective tissue is fundamental.
Your point on the public-private partnerships I also think is vital
here. So, you need collaboration within the federal government.
You need it intragovernmental with the federal, state, and local,
and then, you need it, obviously, with the government and the pri-
vate sector. The more that can be done to encourage it, as you sug-
gest, you get people who are skin in the game, but also knowledge
about how to actually make this effective.
And then, to bring you all around—this point was made earlier—
a lot of this is about getting real-time data about what is hap-
pening, so that you can make sure that resources are being spent
right and improve it. And that is part of our push on moving the
government to pay more attention to customer experience. We need
to hear from the customer in order to make sure that the services
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being provided are actually the ones that are creating the most
value for those that need them.
Mr. WOMACK. Thank you.
I know, Mr. Chairman, my time is up.
I am a big subscriber to the old notion that you measure twice
and you cut once to make sure that you are not wasting anything.
And if we have another round, I may want to come back with a
capacity issue because I think it would be just a crying shame if
we threw all this money at this problem right now, and five years
from now we are still talking about this gap that was mentioned
earlier.
Anyway, again, thanks to all the witnesses.
I yield back.
Mr. QUIGLEY. Thank you, sir.
Mr. Cartwright.
Mr. CARTWRIGHT. Thank you, Mr. Chairman. And thank you, Mr.
Chairman, for holding this hearing, and to the ranking member as
well.
I couldn’t agree more with the idea of not wasting money and
making sure whatever we spend is still going to be effective five
years from now. And I like that point about fiber optic connections.
Mr. Dunne, my questions this morning are for you. We have been
talking about the importance of connecting rural places, and I don’t
think anybody on this call, this hearing, has failed to mention the
importance of connecting rural areas. I know the FCC has taken
some steps in recent years to work on that problem.
In 2018, it conducted Auction 903 allocating Connect America
Fund Phase II support to certain eligible areas across the United
States. At that time, 103 bidders won $1.49 billion over 10 years
to provide fixed broadband and voice services to over 700,000 loca-
tions in 45 states.
In 2020, the FCC adopted the framework for the $20.4 billion
Rural Digital Opportunity Fund to bring high-speed, fixed
broadband service to rural homes and small businesses. The Rural
Digital Opportunity Fund Phase I auction, Auction 904, awarded
$9.2 billion over 10 years to service providers that committed to
offer voice and broadband services to 5.2 million locations in
unserved, high-cost areas.
On October 27, 2020, the FCC adopted a report and order estab-
lishing the 5G Fund for Rural America, which will make up to $9
billion available to bring 5G mobile broadband service to rural
areas that would, otherwise, be unlikely to see deployment of 5G
broadband service, based on new mobile coverage data submitted
in the FCC’s broadband data collection.
Two questions I have for you. No. 1, can you speak to the ade-
quacy of these efforts and what more the FCC should be doing to
ensure broadband is truly universal for millions of Americans liv-
ing in rural areas? And No. 2, how do we ensure that additional
infrastructure resources that are made available under the Amer-
ican Jobs Act build on, rather than duplicate or even adversely af-
fect, these ongoing efforts by the FCC?
Mr. DUNNE. Mr. Congressman, thank you for that question and
the detail.
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There have been a lot of resources that have been put against
this really vexing problem over the last five years, and most re-
cently, the effort of Congress, and now the current FCC is working
on getting those data issues handled. Because a lot of the ineffi-
ciency of deploying funding to where it could make the most impact
in broadband came down to bad maps. In fact, if you look at some
states that went out on their own and did their own maps, like in
Georgia, they had the map that was provided by the FCC, and
then, the did their own ground trooping and found that it was fun-
damentally different.
And when those are, then, the guidelines for Washington-based
deployments of dollars in a reverse auction or other kinds of mech-
anism, it means that the funding doesn’t necessarily get to the
places where it is needed most, or that folks on the ground would
know we need resources here to get to the last mile, and not have
a situation where a provider might cherry-pick: ‘‘I only want the
communities that are in a densely populated area of a rural place.
We will leave everything else to those who are left,’’ whether it is
a small telephone company, like the one Mr. Zimmerman works
with, or it is a municipal entity, or anything else.
So, I would say that the overall problem to be able to solve for
the long term is in the neighborhood of $80 to $100 billion over a
period of time to really solve fiber to the home in the way that the
United States solved rural electrification, right? It was not a small
investment, but it was also about doing something that would have
lasting impact and not have us come back later.
So, I think it is important that we stay focused on that data
being accurate, and then, do resource allocations that focus on the
regions and leverage the knowledge of the local providers and the
local leadership to get to that last mile. Reverse auctions have a
lot of benefits in terms of efficiency, particularly when it comes to
something that is more or less ubiquitous like a wireless spectrum
allocation, but it is much tougher when it is being used to give di-
rectly to providers to meet the needs of individual residents in a
particular Census block.
So, doing allocations like ReConnect, ensuring that there is plan-
ning that goes along with it, and that the regions and states are
involved in saying, ‘‘Yes, we need these resources to bring future-
proof fiber to the last mile,’’ is going to be what is critical in deliv-
ering that value.
Mr. CARTWRIGHT. Well, thank you for that answer, and I really
like your repeated references to the Rural Electrification Project.
That is a reminder to all of us that we can do this; we can get this
right.
Mr. Chairman, I yield back.
Mr. QUIGLEY. Thank you.
Mr. Stewart, please.
Mr. STEWART. Thank you, Mr. Chairman.
And to the witnesses, again, thank you for being here and for
helping us understand this important, very important issue.
The one thing that has been pointed out here by some of my col-
leagues, Mr. Womack and others, is that we have spent a boatload
of money on this issue, and we should. There is a definite need,
and as people have said, infrastructure has been redefined from
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what it was in the ’70s or the ’80s. And I don’t regret that the fed-
eral government has a role here to play.
My concern is that, as we provide these billions of dollars—and
by the way, much of that is to rural parts of our nation, which in-
clude a vast part of my district in rural Utah. I think I represent
probably some of the most rural parts of the nation, with the excep-
tion maybe of Mr. Amodei, who will be speaking here shortly. And
we want to provide those people with the opportunities and school-
children and hospitals, and others as well.
The question that I have—and I guess this is probably for you,
Mr. Zimmerman, but I would be interested in anyone’s input—I am
troubled by recent broadband funding proposals that seem to give
preferences to government-owned networks. And I think we see in
many cases there are too many examples where government-owned
networks have ultimately failed.
And there is an example in my home State of Utah where IProvo
was a government-funded attempt and it failed fairly miserably. I
think there are other examples that we could turn to where govern-
ment-owned networks haven’t done what they promised to do.
And my question is, (a) Is there a preference? In this government
funding, are we giving a preference to government-owned or gov-
ernment-controlled entities, and should we? Or should we allow the
market to work on this, and for the government to provide ade-
quate funding, but not only give the money to other government-
controlled entities who are trying to provide the broadband?
And, Mr. Zimmerman, I would be interested in your thoughts on
that.
Mr. ZIMMERMAN. I think that is a great question. Some of the
municipal examples around the country have failed spectacularly.
You have also seen Google try to go in and put fiber in different
cities like Kansas City and pull out. It is a hard thing to do. It is
an expensive and hard thing to do. And I think some of the munici-
palities have done it based on unreasonable take rates, which that
has killed a lot of projects. You can build it, but you can’t make
people pay for it.
I think one of the key things is, in the past, some of these things
like CAF II funding or RDOF have been based on very low
broadband speed minimums, and they have been asynchronous, as
in 25/3, 25 down and 3 up. I think any kind of funding you do for
any kind of plan should be 100 by 100. It should be 100 up and
100 down. And that will help make some of these investments go
to fiber networks, which are the only networks that can reasonably
handle that speed and can reasonably be upgraded to them.
We have had some things where some of the wireless wins have
been because they wanted like 25/3; they are good at sending stuff
down to you, but they can’t send stuff up to you. And the reason
that upload speed is important to you, you have got things like
home security networks; you have got people working from home;
you have got kids playing games, and there is a lot of data going
both ways. So, if you guys could make sure government plans re-
quire 100 by 100 minimum for bids, it will direct more of the
money to a fiber-based system that is what we call future-proof.
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So, I think that Mr. Dunne mentioned the speeds and how much
they are progressing. Right now, the average U.S. fixed broadband
speed is 179 down by 65 up, but——
Mr. STEWART. Mr. Zimmerman.
Mr. ZIMMERMAN. Yes.
Mr. STEWART. I am going to interrupt you because I only have
a minute left.
Mr. ZIMMERMAN. Yes, sir.
Mr. STEWART. And I appreciate your comments on the speeds,
and I don’t discount that at all. But, in the few seconds I have left,
I want to reemphasize, once again, this principle that, again, I
think you agreed with me. And that is the government has a re-
sponsibility in some cases to help fund these organizations, but I
don’t think we should defer to government entities in order to pro-
vide the service. I think the market could do that much more effi-
ciently. Just a yes or no, do you agree with that?
Mr. ZIMMERMAN. Absolutely. We are boots on the ground; we
know where things need to go.
Mr. STEWART. Yes, exactly.
And I will conclude in the last 16 seconds I have with just an
observation. And that is, we often hear of the urgency, but local
permitting, licensing issues, environmental concerns, historical
preservation—there are so many obstacles that are place in the
way. And I would look forward to a regulatory review as well, so
that we don’t deny people access while we go through a seven-year
historical review. That has got to be part of this as well.
And with that, Mr. Chairman, I would yield back. Thank you.
Mr. QUIGLEY. Thank you.
Mr. Pocan.
Mr. POCAN. Thank you, Mr. Chairman.
Thank you to the witnesses.
So, this is an interesting conversation, and I come at this from
a bit of a different perspective, but a very similar background as
Mr. Stewart. I have a lot of very rural parts in my district. One
of my counties, the growing population is Amish. Just to give you
an idea, I live in a rural town of 850 or so people. There is no town
center. There is a townhall. I first got broadband three years ago.
Prior to that, I got the half-priced sale on a dish for $300 a month
for 40 measured gigs a month, and about an hour on Netflix is 2.5
gigs. I make $174,000. I could kind of afford it; most people
couldn’t.
So, here’s where I am at, and I helped form a Rural Broadband
Caucus, bipartisan, around this. I am very curious. To me, when
we all say it is like water and electricity, I want to ask, Why don’t
we really mean that? If we really mean that, wouldn’t that argue
that we would put this under Title II, so that a regular like com-
mon carrier can provide greater access to people, rather than the
system that we currently have where like my town had to wait
until the one company got free money to put it into my town, be-
cause we had a state law that didn’t allow coops or local commu-
nities to do this. And I know, Mr. Dunne, you brought that up spe-
cifically, point No. 3. I heard what you said.
So, my question to Mr. Dunne and Ms. Chaney specifically is
around, What about this idea about Title II and what else? Because
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I am kind of tired of the conversation about—I am sorry, when, Mr.
Zimmerman, you said some people couldn’t care less about
broadband, I call that my BS meter, right? Even my 92-year-old
mother who doesn’t work on a computer talks to her Alexa, right?
And without that, she is not getting the weather or the joke of the
day.
So, Mr. Dunne, Ms. Chaney, if you could just address the Title
II question, and then, the question about cooperatives and munis
and others? How do we really get this done? Because I feel like we
say ‘‘water and electricity,’’ but we don’t mean it.
Ms. Chaney, do you want to go first? I see you smiling. [Laugh-
ter.]
Ms. CHANEY. Sure. I am smiling, in part, because, I mean, we
are not really focused on what section it comes out of or, frankly,
whether or not you focus on municipalities, or whether we let the
market handle it. The truth is, we think that in some places it
works for there to be municipal governments who are in on cre-
ating something, and in some places it would not work, right, and
it would be a failure. So, both can happen. We want to make sure
that we don’t have any bars to doing any of it. Because, ultimately,
we want what works in order to get people broadband.
I tend to agree with you. Just really quickly, I smiled because I
agree with you; everyone wants broadband. I have heard this argu-
ment that there is someone who doesn’t want it. Yes, that might
be true for a small group. Vast majorities of people want it. And
if they knew what it would get them, they would want it even
more. So, I think we have to let some of that go. It is a fantasy.
Mr. POCAN. Mr. Dunne, let me just add this one sentence. We
also have the second most expensive broadband on the planet. So,
if you could address my questions in that regard, too?
Mr. DUNNE. So, there are a couple of directions that you go. Be-
fore you get to Title II and needing to create it as a regulated mo-
nopoly, I think there are a number of steps that can be taken on
ensuring that there is more active participation. And the biggest
one that I mentioned before is predicating the next tranche of fed-
eral funding—and there should be because now is the moment—on
states adopting laws that allow for public-private partnerships, in-
cluding with municipalities and cooperatives. It seems crazy that
there would be actual state laws preventing the same entities that
allow the electricity to come to rural places to prevent the ‘‘elec-
tricity of our time.’’
So, that is where I would just emphasize the focus and the effort
right now. If that still isn’t sufficient, when you have the plans in
place and you have a commitment to getting to the last mile of
those communities, then starting to explore that next step I think
makes sense.
The cost factor actually has to do with structures that allow for
competition, and competition where it makes sense does help in
driving down cost. In Europe, they have a different model, which
is the common ownership of the actual infrastructure, and then,
ISPs can provide and they compete with each other on pricing.
That is a very different model than we have adopted in the
United States, and shifting to that would be challenging. But what
we have seen is that in places where there are multiple providers,
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where we are fortunate enough, not in rural places where it doesn’t
really make sense for multiple providers most of the time, but
where there is, you see prices go down.
Mr. POCAN. Thank you, and I yield back, Mr. Chairman.
Mr. QUIGLEY. Mrs. Kirkpatrick.
Mrs. KIRKPATRICK. Thank you, Mr. Chairman.
And thank you to all witnesses for joining us today to discuss
these important issues.
I represent a district in southern Arizona. However, as Arizona’s
only Representative on the Appropriations Committee, I see it as
my responsibility to advocate for the whole State. As you probably
know, Arizona has strong Native American communities, including
a number of tribal colleges throughout the State. These tribal col-
leges provide critical higher education opportunities to significantly
underserved areas.
That is why I was proud that the fiscal year 2021 consolidated
appropriations bill included $285 million to create a new Office of
Minority Broadband Initiatives at the National Telecommuni-
cations and Information Administration that will support minority-
serving institutions, including tribal colleges and universities.
So, I only have time for one question because I have to jump onto
another committee. But my first question to any of our witnesses
who feel comfortable responding. Can you talk about some of the
unique challenges tribal colleges and universities face when it
comes to broadband connectivity, both for students on and off cam-
pus? And given these challenges, how important is it that we con-
tinue to ensure tribal colleges and universities, as well as Native
American communities more broadly, are given specific allocations
for broadband deployment?
Mr. DUNNE. I am happy to take a first stab at this. And, Con-
gresswoman, thank you for bringing up this important category of
communities, if you want to put it that way.
I can’t speak as specifically to tribal colleges and universities, al-
though they face, since many of them are in rural places, they face
the same challenges of being able to get broadband deployment as
most other rural colleges and universities.
But what I will say is that, when indigenous or tribal college stu-
dents go home, their situation is usually quite challenging. As we
know, tribal communities are very different across the country,
whether they are living on reservations or they are actually in
other kinds of setups in other parts of the country. And so, it can
vary dramatically how remote, how much challenge there is for get-
ting connectivity there, and then, how much of a challenge it is to
get it to individual homes. And in some cases, you know, pueblos
and others, are incredibly remote and don’t have the intermediate
infrastructure to be even able to get that kind of connectivity there.
So, I would just say that it is really, really important for indige-
nous and tribal communities to be able to get additional resources,
to get that middle-mile infrastructure, and then, get full deploy-
ment, to make sure that they are on equal footing, since not every-
one learns while they are on campus at a university or college, and
that is certainly true for tribal universities and colleges. You want
to make sure that they have access to that connectivity at home
and to close that homework gap and make sure that there is real
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connectivity throughout those regions serving our tribal commu-
nities.
Ms. CHANEY. Congresswoman, our Latimer Plan actually does
speak directly to tribal colleges and tribal communities. One of the
things we have done is we have endorsed the digital equity and in-
clusion bill because we think there should be plans that are created
at the state and local level and at the tribal level for ensuring
broadband and digital inclusion in those spaces.
And another thing we ask for and call for is that universities are
used as digital navigators to make sure they are actually helping
their communities, whoever they serve, HBCUs, Hispanic-serving
institutions, Asian-American-serving institutions, and tribal col-
leges and universities, to make sure that they are being utilized
and getting the resources that will help them, but also helping
their communities. So that both students when they go back home,
but also their families have greater access to broadband.
I will follow up with your staff to make sure that they know
what we have said about tribal communities.
Mrs. KIRKPATRICK. Thank you. I really appreciate that. Thank
you so much.
Mr. QUIGLEY. Thank you.
Mrs. Torres, please.
Mrs. TORRES. Thank you, Mr. Chairman, for hosting this meet-
ing.
And thank you go our panel for staying this long.
Mr. Zimmerman, a reliable internet connection has always been
important, but it became especially vital, as you have heard
throughout the hearing, during the pandemic, when it became nec-
essary to work from home, remote school, or even just continuing
to be engaged with our loved ones. My constituents face repeated
outages which have made it very difficult to do any of those things.
But, more important than even all of that is the concern that I
have regarding access to 911 during outages. As you know, tele-
phone providers have moved to voice over the internet. Many of
those companies, although it is the law that they are supposed to
admonish their customers that, should there be an outage, they
could not have or they may not have access to 911 services, the
seniors in my community are very concerned about this issue be-
cause many of them are dependent on panic alarms, on being able
to dial 911 when they have an emergency. And when outages occur,
none of that could happen.
So, what steps have you taken to increase your ability to respond
to outages? And as we think about providing additional funding for
broadband, are there additional regulations or guidelines that
should be in place to improve reliability in the mindset of emer-
gency services availability and response?
Mr. ZIMMERMAN. Yes, it would be nice to say we go back to the
good old days on a landline. We used to send electricity down the
landline, and that is how, if the power is out, your phone still
works and you can call 911 even if the power is out.
So, the current, you dial 911 and it goes over a voice-over-inter-
net circuit. If the power goes out and if you don’t have enough bat-
tery backup, then, yes, the power can die. What is required is for
network providers, which is what we do here at Yelcot, is we have
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different routes out. If the fiber gets cut over on the east side of
town, we can reroute it to the west side of town. That does cost
money to make what are called alternate routes. So, that is an
added expense to the network provider, but it is something that
you can require to make sure that 911 does not get cut. So, that
way, you can have alternate routes to 911. And they call it piece
app where the 911 calls are answered.
Mrs. TORRES. I was a 911 dispatcher for 17 and a half years. So,
I know very intimately the subject and the hardships that occur.
Part of my district is a concrete jungle; the other part is wanting
to be that, but not quite yet. It is a suburb of Los Angeles. How-
ever, the internet challenges are still there.
There is this redlining that has been brought out by some of my
other colleagues, the fact that internet providers are not investing
in communities like mine because they don’t see the return for
their investment. So, I think it is a responsibility, when that
doesn’t happen, for the federal government to step in and help im-
prove conditions, not just for quality-of-life issues, for convenience,
but for commerce and for emergency services.
So, I wonder, Ms. Chaney, do you have anything to add on this
issue?
Ms. CHANEY. Sorry, say it one more time? It cut off a little bit
and wasn’t able to hear you fully. I apologize.
Mrs. TORRES. Reliability for internet; the lack of investment from
internet providers in communities, you know, the working poor; the
redlining that we continue to see—it is so obvious—and the respon-
sibility of the federal government to ensure that we are responding
to the need of all of our constituents.
Ms. CHANEY. That is right. I mean, I am so glad that you
brought that up. I mean, one of the things that we talk about in
the plan is that—I mean, we talked a lot around this here today—
we are talking a lot about availability, and that is important. But
we also have to talk about affordability and what has been hap-
pening in communities where they have broadband all around
them, but they can’t access it because they can’t afford it. Or they
have broadband in areas that are near them, right, but not nec-
essarily—they are sort of in a desert in the middle of all of this ac-
cess.
So, yes, we have to have greater controls over that, greater ac-
countability. One of the things we are concerned about is making
sure that, as we are making these much-needed generational in-
vestments, we aren’t doing it in a way that over-enriches compa-
nies without putting any kind of limits on them in a way or guard-
rails or regulations that make sure that they are actually doing
what we are investing for them to do. So, we agree completely.
Mrs. TORRES. Thank you. My time is up. Mr. Chairman, I yield
back.
Mr. QUIGLEY. Thank you.
Mr. Bishop.
Mr. BISHOP. Thank you very much, Mr. Chairman.
And let me thank the witnesses for being here, and let me offer
my apologies. I had another commitment earlier in the hearing.
And so, I apologize if I become redundant in my questions.
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Let me ask, Ms. Chaney, your organization recently released a
comprehensive plan discussing the challenge that is facing low-in-
come areas and communities of color and notes that, in order to ad-
dress the gaps in availability, we have to prioritize producing an
accurate map of broadband availability that pinpoints those
unserved by broadband services. The need for accurate maps is
something that we recognize in Georgia. The CyberArch Program
at the University of Georgia created a statewide map that allows
us to identify broadband dead zones down to single addresses.
Can you speak to the importance of updating the FCC’s
broadband maps and how we can use updated maps to guide our
policymaking?
Ms. CHANEY. Absolutely. I mean, yes, we have what we call
‘‘broad-dated maps’’. We have been calling for updated maps, so
many have been calling for them for quite a long time.
One of the things that I think, hopefully, the other witnesses will
agree is that we need to have some public-private partnerships
here. It is not just the FCC. There are other government agencies
that have maps or information that we can use to have an im-
proved understanding of where we need service and where the
strength of that service is. Also, private institutions, private com-
pany who have information to this data, they are not relying on old
maps and materials to make their investments.
We should be coming together and figuring out [audio inter-
ference]——
Mr. QUIGLEY. Thank you.
Ms. CHANEY. Okay. Thank you so much. Someone else has
chimed in.
Mr. BISHOP. Ms. Chaney, you recently released a comprehensive
plan that identified principal barriers to achieving digital equity in-
clusion. And one of those is affordability. And, of course, in our ap-
propriations bill last year, Congress allocated $3.2 billion for an
Emergency Broadband Benefit Program to connect low-income
households. The funds are used to subsidize broadband cost up to
$50 a month for low-income households.
While it is clearly in the early implementation, do you believe
that the EBB Program is properly targeted to help close the afford-
ability gap? And should we make this program permanent?
Ms. CHANEY. I definitely think we need to make the program
permanent. I definitely think we need to learn the lessons from
this current rollout. So, we will know more, right, about how well
it is doing, where it is targeted, what needs to be adjusted, as we
go through the program. But I think that the good outweighs what-
ever concerns we might have, including about the cost. It is so es-
sential.
The vast majority of people who are not engaged in broadband
who have it available to them, right, is not so much—the vast ma-
jority of people who don’t have broadband, actually, it is not that
they don’t have it available; they can’t afford it. And so, we want
to make sure that we hone in on that. We definitely want to focus
on availability as the first part of our plan, but if we do that, and
we don’t deal with the fact that the majority of people who don’t
have broadband simply don’t have it because they can’t meet the
financial requirements, you know, we will still be here not just 5
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of 10 years from now; we will be here next year talking about it
again.
Mr. BISHOP. Thank you.
Ms. CHANEY. Yes, thank you.
Mr. BISHOP. Thank you very much.
Mr. Zimmerman, since the FCC announced the winning bidders
in round one of the Rural Digital Opportunity Reverse Auction,
many have voiced concerns over the ability of certain providers to
perform as promised. For example, I have heard from local
broadband providers that their bids were undercut by large na-
tional providers at price points that they believe could not be met.
But what guardrails can we implement to ensure that winning bid-
ders perform as promised and allow local providers the same oppor-
tunity to meet the needs of our constituents?
Mr. ZIMMERMAN. That is really good question. My company bid
on some areas and won a small bid, but we lost some to some very,
very low bids. And there are concerns about the technology that
was proposed in these bids. The FCC is currently looking through
the long-form applications that these companies made to prove
their capabilities. We would prefer that bidders on anything like
this have to prove they are bona fides before they bid, rather than
afterwards. You don’t want to give out this money based on some-
one’s hopes and dreams that this one weird radio frequency might
just work, when it might not. So, we prefer that people be vetted
upfront about their technological capabilities, rather than getting
awarded and a couple of years later we find out they couldn’t do
it.
Mr. BISHOP. Thank you, Mr. Zimmerman.
I think my time has expired. Thank you, Mr. Chairman. I yield
back.
Mr. QUIGLEY. Thank you.
Mr. Womack, have we heard from everyone on your side as well?
Mr. WOMACK. I believe we have, Mr. Chairman.
Mr. QUIGLEY. Now I know that you had sort of a hanging ques-
tion at the end of yours. We are not going to go through a whole
other second round, but in lieu perhaps of—you have a right to
close, anyway. If you wanted to finish up with that question it will
be just fine.
Mr. WOMACK. Just one quick question. And since Mark Amodei
hasn’t taken any questions, asked any questions today, and instead
has had to do a staff call——
Mr. QUIGLEY. You are channeling your inner Mr. Amodei?
Mr. WOMACK. Yes.
Mr. QUIGLEY. Good luck with that.
Mr. WOMACK. And now, he is awake. [Laughter.]
Mr. AMODEI. Hey, can I say something, Mr. Ranking Member?
Mr. WOMACK. Oh, please do.
Mr. AMODEI. That is all I wanted to say. Thank you, Mr. Chair-
man. I yield back. [Laughter.]
Mr. WOMACK. There you go.
Look, here is the remaining question, and maybe it fits in the ca-
pacity question. I don’t know, but I am going to ask this. Hearing
proposals to open up broadband for 100/100 service, we still have
communities that don’t have the basic, even the most basic 25/3
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