Doing more with less in the U.S. House
In 2010, as the new majority took control of the U.S. House of Representatives, I organized a team of lawmakers to look at every aspect of how the House operates, and make recommendations for reform. A key recommendation of this transition team was to reduce the operating budgets of House committees, leadership offices, and individual member offices. We made a promise to reduce spending, and it was only right for the House to lead by example.
The very first measure passed by the new Congress in January 2011 cut the operating budget of the House by five percent, saving taxpayers an estimated $35 million in the first year alone.
In the three years since our team made those recommendations, we are on track save taxpayers more than $400 million in House operations by the end of this fiscal year. I’m proud to have led this effort to save taxpayers and keep our promise to the American people.
21st town hall of the year held in La Pine
Last weekend, I kicked off a visit to central Oregon with lunch with community leaders in Redmond, including Mayor George Endicott. Then it was on to tour the Central Oregon Truck Company, one of the largest employers in central Oregon. I heard about how much the new health care law is negatively impacting both employers and employees alike, creating uncertainty about the effect of the new red tape and taxes on people’s health care. Anyone who gets health insurance from their employer will be affected by these changes, and I’m working with my colleagues in the U.S. House to carefully watch the new taxes and red tape coming out of Washington, D.C. due to the new law. Thanks to CEO Rick Williams, CFO Paul Coil (standing next to me below) and all of the dedicated employees for hosting the tour.
On Saturday, it was down to La Pine for my 21sttown hall of the year. Last year, I helped pass a bill into law to facilitate a land exchange in La Pine to spur job creation, and I received an update on its progress from Mayor Ken Mulenex and other community leaders. Here I am as Deschutes County presents the deed for the senior center to center leaders.
Then it was down to Klamath Falls for the annual Klamath-Lake CARES banquet. Klamath-Lake CARES is an organization dedicated to providing medical care to abused children, and educating their community about reporting and preventing child abuse.
According to Ken Morton, Director of CARES, the organization saw an increase in reporting from the local community, but at the same time an 18 percent decrease in the number of children in need of treatment. That means the work they’re doing is making a difference – more people are engaging in their local community, while fewer kids are being abused. I was proud to attend their banquet, and it was great to see the big turnout. Former Miss America Katie Harmon Ebner even helped headline the show!
Walden opening statement: "The Lifeline Fund: Money Well Spent?"
Statement of the Honorable Greg Walden
Chairman, Subcommittee on Communications and Technology
"The Lifeline Fund: Money Well Spent?"
April 25, 2013
When the government spends other people’s money, it has an ongoing obligation to ask a fundamental question: has it spent that money wisely? After all, the people whose money it is spending might have preferred to do something different with it, especially in these tight economic times. And if the answer to the fundamental question of whether the money is being well spent is “no,” the government must ask a second question: how should it fix the situation?
Last year, the FCC spent $2.2 billion of other people’s money on the Lifeline program. Specifically, it spent $2.2 billion of your money, my money—virtually every American’s money—since the Lifeline program and the entire Universal Service Fund is paid for through a charge on phone bills. Carriers provide discounted service and collect the difference from the program. Some give away phones to gain the subscribers and the recurring revenue. But at the end of the day, it is still the same taxpaying people who bear the cost, since 96 percent of the country has phone service and see a fee on their bill.
The fund has increased 266 percent since 2008 and grown almost six-fold since 1998, all while the cost of phone service has gone down. Despite the limit of one subsidized subscriber per household, published reports suggest some subscribers have eight or more phones with subsidized service, with one woman saying that to get one “she just goes across the street and gets it.” One man has claimed to have a bag full of 20 phones on the program that he sells “for about 10, 15, 20 bucks” each. Our hearing today is to determine what can be done to curb these kinds of potential abuses.
And it’s not clear the money is even really helping low-income families. According to some reports, as many as 41 percent of those receiving Lifeline support either could not demonstrate eligibility for the subsidy or refused to respond to requests for certification. Moreover, 92 percent of low-income households have phone service but only about 58 percent of those households participate in the program, so many low-income homes apparently obtain phone service without the subsidy. And despite spending $7 billion on the program over the last five years, the phone penetration rate among low-income households has only grown two percent, with only some of that growth likely attributable to the Lifeline program since at least one-third of low-income phone households don’t use the subsidy.
There may be a number of ways to interpret these and other data, but it certainly does not paint a picture of success. So as far as that first fundamental question goes, there is near unanimity among the FCC, both parties of Congress, and almost anyone familiar with the program that the Lifeline fund has been fraught with waste, fraud, and abuse and that the money has not been spent as wisely as it should have been.
There is more than enough blame to go around. The path we have found ourselves on was paved by many people, presumably with the best of intentions. But it does not change the fact that we are spending large sums of money and probably squandering much of it. Which brings us to the second question: how to fix the situation.
Senators McCaskill and Coburn say eliminate the program. Indeed, as recently as last month Senator McCaskill concluded that “there's just no reason this program should continue, given its history of extensive waste and abuse.” Senator Pryor and Congressman Griffin say exclude wireless providers from the program. Congresswoman Matsui, Ranking Members Waxman and Eshoo, and a number of their colleagues say expand it to broadband. Whatever we do, staying on the present course seems out of the question.
To the FCC’s credit, the agency has embarked on a number of reforms since 2011. For example, to ensure only eligible households participate and to combat duplicative subsidies to a single household or even a single user, the FCC is moving forward with beefed up certification processes and creation of eligibility and duplication databases. It has also imposed independent audit requirements on carriers receiving more than $5 million a year in Lifeline funding. The FCC says its efforts will save $2 billion over the next three years, but are the steps the Commission is taking enough? With only a 58 percent penetration rate, the fund may still continue to grow, especially if it is expanded to cover broadband. Should the program be eliminated? If not, should a freeze be put in place until reforms are complete? Should the program be placed under a cap or budget? (I note that the 2012 FCC reform order suggested the agency would establish a budget by early 2013, but disappointingly I see no mention of such a budget in today’s FCC testimony.) Should subscriber co-payments be required? Should the program be moved to a voucher system so the subsidy goes directly to the user rather than through a carrier? Should the FCC reconsider the waivers allowing participation by non-facilities based carriers? These are among the questions many in industry, in the press, in Congress and in the public are asking and they are among the issues we will examine today.
I thank the witnesses for being here. Your testimony and expertise are welcome and we look forward to your ideas about this program gone awry.
It didn't have to be this way
The Oregonian has a story up tonight “Mandatory spending cuts could be felt in Oregon in ways big and small, White House warns.” Click here to read it. When asked by the Oregonian to comment on the White House’s warnings, here is how I responded, in full, along with links to the facts if you’d like to read more:
"It didn't have to be this way. The President and the Democrats in the Senate could have supported our efforts in the House to offset the sequester with common sense spending reductions. Both in May and in December House Republicans passed legislation that replaced the sequester with smarter spending reductions, but the President and the Senate sat on their hands. Now it appears the Administration is going out of its way to make a bad situation worse by cutting programs and people who actually provide services. And remember, according the Congressional Budget Office, the federal government will get more tax revenue in 2013 than ever in the history of our country. Meanwhile, it's been nearly four years since the Democrat-controlled Senate has bothered to pass a budget, and once again this year, the President is nearly a month late submitting his budget. "
On May 10, 2012—nearly 10 months ago—the House passed H.R. 5652, the Sequester Replacement Act. Click here for a summary. On December 20, 2012—two months ago—the House passed H.R. 6684, the Spending Reduction Act of 2012. Click here for a summary. Neither bill has been taken up by the U.S. Senate, nor has the Senate passed or even considered a bill to replace the sequester. It’s time for the Senate to act—to put a plan on the table to replace the sequester with smarter spending reductions. But what should we expect when they haven’t even passed a budget in nearly four years?
Protecting health care options for those who've served
For the past few months, I’ve told you about reports that the Pentagon has planned to do away with TRICARE Prime, a popular health insurance option for many military retirees, including several thousand in Oregon. I teamed up with fellow Oregon Rep. Suzanne Bonamici to pass legislation to force the Pentagon to detail and address these changed publically.
This month, the Pentagon officially announced that the TRICARE Prime option would be eliminated for 171,000 military retirees nationwide beginning on October 1. While it is good news they have delayed the changes for six months, I remain concerned about the effect this change could have on military retirees and their families in Oregon.Thousands could lose access to their health care provider, which could mean higher out of pocket costs and longer drives for many in Oregon.
Don’t just take my word for it. The Mail-Tribune in Medford reported that one retired Marine Corps colonel, Dave Dotterrer, is concerned about the lack of options for him and his family with the elimination of the program. Click here to read the Mail-Tribune’s article.
The Pentagon has to provide more information about these proposed changed, and ensure health care access for military retirees in Oregon. These heroes have put their lives on the line for our freedom. They deserve the very best care our nation has to offer.
I can also help our veterans and active duty military on an individual basis. I recently heard from a former Army staff sergeant in southern Oregon who was honorably discharged from the Army and awarded a service connected disability by the Veterans Administration (VA) in early 2012.
Due to several moves around the country, several of his benefit checks were returned as undeliverable. He was having trouble recovering the benefits he was promised, and contacted my office. Within a few days, the veteran received word that the VA had reactivated the disability benefits he has earned. If you or a loved one are having a problem with the VA or another federal agency, call my office in Oregon toll free at 800-533-3303. I’ll do everything I can to get results for you.
Town hall update- 1/29/13
I started this year with a 571-mile, five-day swing with eight town hall meetings in eight counties in the Gorge and northeastern Oregon. Then after the inaugural week in Washington, D.C. I’m back on a nine-days-in-a-row trip through other parts of our district. I enjoy working with our local communities to find solutions to local problems, and these town hall meetings help me keep my “to do” list fresh.
As you can imagine, I heard about practically everything under the sun in these eight counties, from reducing our debt and growing our economy to boosting our farm and ranch economies to improving management of our federal forests to taking care of those who wear—or have worn—our nation’s uniform.
The week began with a town hall meeting in The Dalles. Before the meeting, Columbia Gorge Community College President Dr. Frank Toda gave me a tour of the site for the new Readiness Center where construction is well under way. I can’t think of a project I worked harder on for many years, and we finally secured approval for construction in December 2011.
When completed, the Readiness Center will be a great training center for members of the Oregon Guard—we owe the very best training and equipment possible to the men and women who volunteer to serve the nation in uniform (more on my work on that a little further down).
From The Dalles, we drove on some very snowy roads for town hall meetings in Moro, Condon, Fossil, Mt. Vernon, Hermiston, Boardman and, finally, my hometown of Hood River. Click here to check out my Facebook page for pictures of some of these meetings.
This week, I’m holding eight town hall meetings in central, eastern, and southern Oregon. I’ll cover more than 1,500 miles, hold a total of 35 meetings in 10 counties. We began with three town halls in Deschutes, Crook, and Jefferson counties before heading up to Union and Wallowa counties then down to southern Oregon for town hall meetings in Josephine, Jackson, Klamath counties. Click here for details on the eight town hall meetings.I hope you can join us!
I’m working on setting up others in Lake, Baker, Malheur, and Harney counties… and will have visited at least eighteen of the twenty counties in the Second District by the end of February.
When the House reconvenes in a week, my subcommittee on Commerce and Technology will hold a hearing in conjunction with two subcommittees from the Foreign Affairs Committee on legislation we’re drafting to make American policy clear that we don’t want foreign governments via the United Nations regulating the Internet. The UN hosted a conference at the end of last year that considered a treaty—rejected by the United States and 55 other nations—but agreed to by 89 countries that would have changed how the Internet is managed.
This is a dangerous move—led by countries like Russia—to allow oppressive regimes to have power over the privacy, content and management of one of the world’s greatest sources of free speech, democracy and information. You can watch our hearing on February 5th by visiting http://energycommerce.house.gov.
Permanent tax relief for Oregon families and small businesses
As we ring in the New Year, I’d like to take a moment to update you on the so-called “fiscal cliff” and the plan passed by Congress yesterday to avert the cliff and permanently extend tax relief for all Americans.
If nothing were done, the law said that taxes would go up on everyone on January 1 to the tune of more than $3,000 for the average family in Oregon. Millions of middle class families would have been hit by the alternative minimum tax (AMT). Thousands of farmers and ranchers would have been hit by the death tax. Doctors would have seen a 27% cut in Medicare reimbursements, putting care for seniors in jeopardy. Oh, and did I mention milk prices would have doubled as the farm bill expired?
Clearly, something had to be done.
The plan that passed wasn’t perfect—in order to balance the budget, we need to do more to cut spending and grow our economy. But my principle has always been to secure tax relief for the most number of Americans as possible. And yesterday I voted to do that.
The plan that I supported permanently stops a tax increase for 99% of taxpayers and makes permanent nearly 90% of the current tax policy so that families and small businesses can plan for their future. I’ve owned a small business in Oregon with my wife since 1986. I know that families and businesses need certainty about the tax code as they make decisions for coming years. This plan gives them that.
Here are the facts on what the plan does:
- Makes income tax rates permanent for 99% of taxpayers: The plan makes permanent current tax rates for all income up to $400,000 for individuals and $450,000 for married couples. These rates are six brackets at 10%, 15%, 25%, 28%, 33%, and 35%. If nothing were done, the 10% bracket for the lowest-income Americans would have been eliminated, and the rates would have been at 15%, 28%, 31%, 36%, and 39.6%.
- Permanently holds down the death tax: If nothing were done, the death tax would have risen to 55% with a $1 million exemption for 2013. The plan I supported makes permanent a 40% top rate with a $5 million exemption per person. This permanently protects thousands of farmers, ranchers, and family businesses from needing to sell the business or split up the farm to pay the IRS upon the death of a loved one.
- Permanently patches the alternative minimum tax (AMT): If nothing were done, millions of middle class families would have been hit by the AMT this year. This plan permanently indexes and patches the AMT for inflation.
- Holds down capital gains and dividends tax rates: The plan makes permanent 15% top capital gains and dividends rate up to $400,000 for individuals and $450,000 for married couples; 20% rate for both above that threshold. Had we not acted, the top dividend rate would have reached 39.6% and the top capital gains tax rate would have reached 20%.
- Repeals a flawed entitlement program: The plan repeals a flawed new entitlement program created in Obamacare which even the Obama Administration admitted was “totally unsustainable” after the bill was rushed to passage.
- Stops planned Medicare cut for doctors: If nothing were done, health care providers would have seen a 27% reduction in reimbursements from Medicare, forcing many doctors to stop seeing Medicare patients.
- Extends the 2008 farm bill: The plan provides for a one year extension of the 2008 farm bill at no additional cost to the taxpayer. This prevents a doubling of milk prices brought about by the farm bill’s expiration.
I’m frustrated nothing was done to effectively cut spending. It didn’t have to be this way. Earlier this year, the House passed a plan to stop the government from going over the fiscal cliff, and the bills sat for months waiting for the Senate to act.
Now that tax relief has been extended, it’s time for the President to work with Congress to get our nation’s fiscal house in order by addressing the underlying problem, which is spending. The national debt is currently $16 trillion and climbing, over $50,000 for every American. We must cut spending and grow our economy to avoid passing on an even bigger debt burden to our children and grandchildren.
Update on Barry Point fire recovery
I just got off the phone with Kent Connaughton, the Forest Service’s Regional Forester for Oregon. In September, I brought Kent to Lakeview to meet with landowners who suffered horrible losses of timber and livestock during the Barry Point fire. These landowners are very concerned with how the Forest Service fought the fire and are trying to figure out how to cope with the losses they’ve suffered.
Kent gave me a status update tonight, and here is what I learned:
1) The Forest Service is conducting an independent review of its own operations during the Barry Point fire. It is still in the works, but Kent believes it raises a number of unanswered questions, and he has asked for a more formal review by the states of Oregon and California. He will share a copy of the report once it is completed next month, and I look forward to getting to the bottom of these unanswered questions.
2) Kent has sent a special team into the Fremont-Winema National Forest to ensure there is no disruption in timber supply due to the fires. The Forest Service has also announced it will make 30 million board feet of timber available for each of the next two years, double the current production.
3) Kent also gave me an update on the Forest Service’s work with affected ranchers and landowners on recovery and repair to fences and property damaged during the fire. The Forest Service is putting $100,000 into the repair of fences destroyed during firefighting, and an additional $350,000 for materials to repair fences destroyed by the fire. Additionally, the Farm Services Administration is making $196,000 available to landowners for use in repairs.
It is good news that this fire recovery work continues, but we need to see it through to the finish. I will continue to work with citizens recovering from these wildfire disasters and make sure that all levels of government are helping with recovery as quickly as possible.
Increasing exports to create jobs in Oregon
Ensuring a level playing field for Oregon farmers and businesses and increasing exports to create jobs
Last week, I supported a bill to boost American exports to Russia—a plan that passed the U.S. House overwhelmingly with bipartisan support. If passed by the Senate and signed into law by the President, the legislation will allow American farmers, small businesses, and manufacturers greater access to Russian markets and the opportunity to compete fairly in the global marketplace and create jobs here at home in Oregon.
Earlier this year, Russia joined the World Trade Organization (WTO), an organization of 157 countries that governs global trade. In order for U.S. exporters to take full advantage of growing markets and reduced tariffs in Russia, Congress has to reverse a now obsolete Cold War-era law we have on the books.
This legislation accomplishes that, ensuring that Russia will not be allowed to impose tariffs on American goods while products from other WTO countries could enter the Russian marketplace with greater ease. In order to join the WTO, Russia had to make favorable trade concessions, including reducing tariffs on pears and cherries from 10% to 5%.
Passage of this law would allow Oregon farmers and businesses to increase exports to Russia. Exports from Oregon to Russia totaled about $105 million in 2011 and directly supported approximately 250 jobs. If this legislation is passed, those numbers are expected to grow.
I was pleased to hear support for this bill from Oregon’s agriculture and business groups. The Oregon Farm Bureau told me that the bill will provide “significant commercial opportunities for U.S. agriculture,” especially Oregon beef.
Oregon potato growers told me that over 50% of all potatoes grown in Oregon are exported to other countries, so easing access to Russia will help them export more potatoes. And Oregon fruit growers told me that yearly Pacific Northwest tree fruit exports to Russia now exceed $20 million, and that this bill would support Oregon pear and cherry growers.
I support greater trade with other countries to create jobs in Oregon. But when a country is cheating in the marketplace, they should be called out on it. This month—after urging from me and the entire Oregon congressional delegation—the U.S. Department of Commerce announced they would investigate illegal Chinese subsidies to plywood manufacturers.
A coalition of U.S. plywood manufacturers—including Columbia Forest Products in Klamath Falls—brought a complaint that China was subsidizing its plywood industry in violation of international trade agreements. Because of the artificially low price of Chinese plywood, American manufacturers are priced out of the market and unable to compete.
The Department of Commerce found a “reasonable indication” that this was occurring, and is now proceeding with an investigation which could result in penalties for the Chinese plywood imports. I joined the entire Oregon Congressional Delegation in applauding the decision by the Department of Commerce.
Working together to avert the "fiscal cliff"
Work has resumed on coming up with a bipartisan alternative to going off the so called “fiscal cliff.”
The combination of tax hikes and arbitrary spending cuts to important domestic and defense priorities could, according to the independent Congressional Budget Office, push our economy back into a recession.
If Congress doesn’t act, taxes will go up an average of $3,205 per tax return in Oregon, according to one study. Another study found that hundreds of thousands of American jobs—including 8,800 in Oregon—will be lost.
With Oregon’s unemployment rate stubbornly stuck above the national average, Oregon families can’t afford another recession, higher unemployment, or higher taxes.
If there’s a mandate coming out of the election, it’s a mandate to work together. We must come together to find common ground to stop our government from going over the fiscal cliff and to begin to solve the federal government’s budget crisis.
Part of the way to do this is by reforming our tax code to close loopholes, lower rates, and spur economic growth. Our tax code is way too complex and bloated. Citizens and businesses spend over six billion hours and over $160 billion per year trying to navigate it—time and money that should be spent tending to their families and businesses.
It doesn’t have to be this way. We can make it simpler and create jobs. The tax reform that President Reagan signed in 1986 created thousands of new jobs and paved the way for the economic growth of the 1990’s. We can do that again.
Will doing this be easy? No. If this work were easy, we would have done it already. But America has always risen to the challenge and met it. I know that we can do so again.