It’s time to provide those responsible for implementing child nutrition programs with the flexibility they need to ensure taxpayer dollars are well spent and students are well served. I am confident learning from your experiences, observations, and recommendations will inform our efforts to accomplish just that.
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One of the most difficult challenges we face as a country is a lack of real retirement security for America’s families. The defined benefit pension system continues to experience a decades-long decline, while many workers are still rebuilding the savings they lost in the recent recession. Due to these and other challenges – including a persistently weak economy – too many workers are retiring without the means necessary to ensure their financial security.
Our goal as policymakers should be to advance bold, bipartisan solutions that will help more Americans plan, invest, and save for retirement. Regrettably, the department’s fiduciary regulation would move our country in the opposite direction. It would cut off a vital source of support many low- and middle-income families and small business owners rely on, and that is the help of a trusted financial advisor.
Four years ago, the subcommittee examined a similar proposal that was later withdrawn under intense bipartisan opposition. I said at the time that anyone who provides investment assistance should be well trained, committed to high ethical and professional standards, and devoted to the best interests of those they are serving.
That is why financial advisors have long been subject to a host of securities, tax, and disclosure requirements. It is a complex system of rules and regulations, but it is an important one that has worked well for decades. That does not mean we shouldn’t look for opportunities to improve current standards. But we cannot – in any way – make it harder for workers, retirees, and small business owners to receive the financial advice they may need.
Yet that is precisely what this regulatory proposal would do. Offering some of the most basic assistance would be prohibited, such as advice on rolling over funds from a 401(k) to an IRA. Financial advisors would no longer be able to assist individuals in how to manage their funds upon retirement. And small business owners would be denied help in selecting the right investment options for their workforce, which will lead to fewer employees enrolled in a retirement plan.
It has been suggested on numerous occasions that this proposal will simply apply to financial advisors the same standard recognized in the medical profession. Mr. Secretary, I believe you have drawn that comparison from time to time. It is a clever talking point, but one that couldn’t be more flawed.
As a physician with more than 30 years of experience treating patients, let me just say that the approach reflected in this proposal would destroy what’s left of our health care system. Imagine what would happen if doctors were prohibited from receiving compensation, or were required to sign a contract with each patient before delivering services, or were forced to publish online each and every treatment that had been prescribed the following year. No doctor could run a successful practice under this type of regulatory regime, and no responsible financial advisor will be able to either.
Make no mistake, if this rule goes into effect, a lot of people will quickly learn that their financial adviser – someone they may have known and trusted for years – will no longer be able to take their call. And it is important to note that low- and middle-income families are the ones who will bear the brunt of this misguided proposal. They will lose access to the personal service they rely on and be forced to find suitable advice online or simply fend for themselves.
As is often the case with big government schemes, the wealthiest Americans will do just fine and those we want to help will be hurt the most. Mr. Secretary, this latest fiduciary proposal will lead to the same harmful consequences as the first and should suffer the same fate: Please withdraw this proposal and work with this committee on a responsible, bipartisan approach that will strengthen protections for investors and preserve robust access to financial advice. Our nation’s workers and retirees deserve nothing less.
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I saw these challenges firsthand during my visit to the Prior Lake School District in Savage, Minnesota. Students described smaller portion sizes and limited options that left students hungry and more likely to buy junk food. After students petitioned the school board, Prior Lake has decided to drop out of the school meals program next school year. It is the only way the school can meet the needs of its students.
And the problems with the law do not stop there. The Office of Inspector General for the Department of Agriculture and the GAO identified examples of programs misusing taxpayer dollars, raising serious concerns about whether or not we are actually assisting those in need.
As we work to reauthorize federal child nutrition programs, we must find solutions that will ensure taxpayer dollars are well spent and children are well served. We know developing a one-size-fits-all approach is not the answer. More mandates and more money aren’t the answer either. Instead, we should look to improve these programs by giving states and school districts the flexibility they need to fulfill the promise of child nutrition assistance.
Duke Storen from the not-for-profit organization Share Our Strength advised at a recent hearing, “It’s critical … to remove bureaucratic barriers and create efficiencies that will allow us to reach those kids who currently go without.” I look forward to discussing how we can achieve just that without imposing more burdens on our schools.
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The president’s appointees at the NLRB have undermined employee free choice through an ambush election scheme, stifled employee freedom through micro-unions, and restricted employee access to secret ballot union elections. Now the board is setting its sights on the freedom and choice provided to employees under state right-to-work laws.
Chairman Kline’s remarks were delivered at a hearing that examined an NLRB effort to force nonunion employees in right-to-work states to pay union grievance fees. Just like every other Big Labor scheme, the board’s unprecedented attack on right to work will ultimately end up hurting workers the most. As the following press reports highlight, Wednesday’s hearing revealed a number of ways the board’s actions would harm the nation’s workers and workplaces:
The Obama administration must decide whether it will continue to be at the beck and call of its Big Labor allies, or protect the rights of America's workers. As Chairman Kline argued during the hearing, “Every worker has a fundamental right to decide whether or not to join a union. Those who decide not to join a union shouldn’t be punished for that decision, especially when the punishment denies a worker the chance to provide for his or her family.”
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When you’re talking about a program of this size and cost, making sure that it is operating as efficiently and effectively as possible is imperative. Concerns have been raised that FECA benefits are too generous and can discourage an employee’s return to work. So we are here today to explore how Congress can modernize the FECA program, to ensure taxpayer dollars are being used in a smart and responsible way, and to make certain this program is serving federal employees as intended.
Fortunately, we’re not starting from scratch. Reforming the FECA program is something members in Congress and those in the administration have been working on in recent years. During the 112th Congress, Chairman Kline and I, along with our former Democratic colleagues George Miller and Lynn Woolsey, introduced the Federal Workers’ Compensation Modernization and Improvement Act to begin addressing reforms proposed by the administration. That bill passed the House by a voice vote in 2011 and was accompanied by a request to GAO to examine the potential impacts of certain reforms.
Unfortunately, the bill was never considered in the Senate, but since then, we’ve continued to examine reforms the Department of Labor has put forward. Strengthening the law remains a priority for this committee, and today, we will hear from the department, GAO, and others to see what the path to reform looks like now and how the administration’s proposals would affect the program and its beneficiaries. By fully understanding the options and impacts related to reform, we will be better positioned to modernize the FECA program, improve its integrity, and enhance its efficiency.
As with any reform process, updating the FECA program will require some tough choices, but I think we can agree that something needs to be done. Our challenge will be reforming the program in a way that will use taxpayer dollars more wisely while ensuring the programs continues to support those it was set up to assist. Throughout this process, it’s important that we keep in mind both our responsibility to taxpayers and our commitment to the men and women who make up our federal workforce. Striking a balance between the two is not easy, but I believe it can be done.
I am hopeful that the insights and analysis of those here today will help us better understand the department’s proposal and continue to build on past bipartisan efforts to better meet the needs of a 21st century workforce and more effectively use taxpayer dollars. With that, I will now recognize the senior Democratic member of the subcommittee, Representative Frederica Wilson, for her opening remarks.
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The federal government has long invested taxpayer dollars in programs that provide healthy meals and snacks to low-income students and families. Through the Richard B. Russell National School Lunch Act and the Child Nutrition Act, it is estimated Congress will spend over $21 billion this fiscal year on a number of programs that include the Supplemental Nutritional Program for Women, Infants, and Children or WIC, the National School Lunch Program, and the School Breakfast Program.
Congress has a responsibility to ensure taxpayer dollars are well-spent. That’s why we are here today. Recent reports from independent government watchdogs raise concerns about waste, fraud, and abuse in the administration of these programs. These concerns should be shared by every member of the committee for two important reasons.
First, taxpayer dollars are being misdirected toward individuals who do not need, or are eligible for, federal assistance. The Government Accountability Office has uncovered several troubling examples of fraud and abuse in the WIC program. Reports have also found WIC recipients and vendors reselling supplemental foods to non-WIC eligible individuals, defrauding the federally funded program for millions of dollars.
Unfortunately, the misuse of taxpayer dollars does not stop there. In the first review of payment errors since 2007, the Department of Agriculture found that in just one school year it made $2.7 billion of improper payments under the school lunch and breakfast programs. According to the Wall Street Journal, the majority of improper payments stemmed from individuals who received benefits for which they did not qualify. American taxpayers deserve better management and oversight, especially at a time when the national debt continues to reach new heights.
This brings me to the second reason why we are here today, and it is just as important. Each and every dollar spent on a federal program should have a direct, meaningful, and lasting impact on those it is intended to serve – not those looking to cheat the system. We must ensure federal nutrition programs effectively and efficiently serve the low-income children and families who desperately need this assistance. As a witness from last month’s child nutrition hearing so aptly put it, “When we aren’t able to give our children the nutrition they need, we fail them.”
Again, it is Congress’ responsibility to ensure this multi-billion dollar investment in child nutrition is in fact reaching the students who need it most. This committee is committed to that goal as it works to reauthorize these important programs. We look forward to learning from our witnesses about how to improve the fiscal integrity of federal child nutrition programs in order to serve our nation’s mothers, infants, children, and students that are most in need.
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I’d like to begin by thanking Dr. Roessel and Mr. Mendoza for participating in this hearing. We are disappointed that Kevin Washburn, Assistant Secretary of Indian Affairs, declined an invitation to join us this morning. Mr. Washburn would bring an important perspective to this discussion, and it is unfortunate the public and members of the committee will not hear from him today. However, we are pleased to have a distinguished panel of witnesses and look forward to your testimonies.
Today’s hearing is part of an effort to begin addressing the challenges facing Native American schools. In recent months, the nation has learned a great deal about the deplorable conditions affecting Native American schools. A crisis has been festering for decades, and thanks in large part to the investigative work of the Minnesota Star Tribune and others, it is finally receiving the national attention it deserves.
The details we have learned are shocking: falling ceilings; broken water heaters; electrical hazards; rotten floors; and rodent-infested classrooms. At a school I visited earlier this year, blankets hang over the doors in a desperate attempt to keep out the cold air. In fact, thin metal walls are all that separate students from harsh winters in states like Minnesota and South Dakota. Meanwhile, classrooms lack the most basic school supplies, such as desks, chairs, and textbooks.
At a recent oversight hearing, we also learned that a bungling bureaucracy is undermining the health and safety of these Native American students, as well as their education. The nonpartisan Government Accountability Office notes that a disorganized bureaucracy and poor communication make it difficult – if not impossible – for schools to receive the services and support they need, and GAO warns that if these issues are not addressed, “it will be difficult for Indian Affairs to ensure the long-term success of a generation of students.”
More than a century ago, the federal government promised to provide Native American students a quality education in a manner that preserves their heritage, and we are failing to keep that promise. If these were our loved ones going to these schools, there is little doubt we would march down Pennsylvania Avenue to demand real change.
Jill Burcum, an editorial writer for the Star Tribune, said this at last month’s hearing: “As a mom, I thought many times that I would not be comfortable sending my children to school in these buildings … unfortunately, mothers of BIE students don’t have a choice, which is why action is required.”
The purpose of today’s hearing is not to assign blame. There is plenty of blame to go around. Instead, the purpose of this hearing is to understand the root causes of these persistent challenges and to demand better results. That is why we are pleased to have representatives from the Departments of Interior and Education. We are especially pleased to hear from you, Dr. Roessel, since you and your staff are on the front lines.
We understand the department plans to implement a number of internal changes intended to fix the system. We welcome that effort and are interested to learn more about it. Questions have been raised about whether this effort will address the fundamental problems facing the system or simply rearrange the chairs at the department. Questions have also been raised about whether this reorganization is taking place in a timely manner or being delayed by the same bureaucratic wrangling that has plagued these schools for decades.
The administration has a responsibility to answer these and other important questions, and to assure this committee, Congress, and the country that we are finally moving in a new direction. These vulnerable children and their families deserve no less.
In closing, I would note that there are tough challenges facing Native American students outside the jurisdiction of the Department of Interior, challenges that demand our attention as well. That is one reason why the Student Success Act provides greater flexibility to all public schools, so they can more effectively serve their unique student populations, including Native American students. Policies in place today assume every school faces the same set of challenges, but we know that’s not the case, and the Student Success Act would ensure federal policies reflect that reality.
Replacing No Child Left Behind continues to be a top priority and one that I am hopeful we will finish before the end of the year. However, the challenges facing these particular Native American students have been neglected for far too long and by members on both sides of the aisle. I encourage my colleagues to avoid political distractions that would merely shift the focus away from these unique, vulnerable children – they have waited long enough for the federal government to live up to its promises.
Every child in every school should receive an excellent education. That is the goal we are all working toward, and today’s hearing is an important part of that effort. With that, I will now recognize Ranking Member Scott for his opening remarks.
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