Grassley Statement on EEOICP at Energy Committee Hearing

Statement of Sen. Chuck Grassley, of Iowa

U.S. Senate Committee on Energy and Water

Oversight of the Energy Employees Occupational Illness Compensation Program

Thank you for holding this oversight hearing and inviting my testimony. Chairman Domenici and others on your committee have expressed their commitment to resolving problems with the Energy Employees Occupational Illness Compensation program. This hearing is a first step. In addition to my testimony, I would like to respond to questions that anyone on this committee has for me in writing.

Congress passed the Energy Employees Occupational Illness Compensation Act of 2000 to provide benefits and compensation to employees and contractors of the Department of Energy who developed cancer and other illnesses after they were exposed to toxic substances or radiation through their work. Subtitle B of that act is administered by the Department of Labor. It provides a lump-sum payment to former employees and contractors for certain illnesses.

Subtitle D is administered by the Department of Energy. It is intended to help former employees and contractors to file state workers compensation claims for illnesses that were caused by exposure to toxic substances. The subject of today's hearing is Subtitle D and mismanagement of it by the Department of Energy. The federal government's implementation of this program has been an insult to the Americans who served our country working the ammunition plants of the U.S. military. These people worked in ultra-hazardous facilities assembling our nation's nuclear deterrent during the Cold War.

There are two facilities in Iowa that are covered under Subtitle D of the Act. There are many more in at least 15 other states across the country. To date, over 600 claims have been filed by former employees of the Army Ammunition Plant located in Middletown, Iowa. In Iowa, these former ammunition plant workers may have been made ill - and some of them made terminally ill - by exposure to toxic substances at the plant. To the best of my knowledge, not one of these 600 claims has been reviewed by a physician panel of the Department of Energy. Instead, the Iowans who are sick and battling life-threatening illnesses are left to wait and rely on what have so far been empty promises from the Department of Energy.

The federal government has told these veterans of the Cold War that help is on the way. But the reality is that the prospect of meaningful assistance from the Department of Energy does not appear any closer today that it did the day Congress passed the law.

Let me tell you why I say that. According to information from the Department of Energy, between August 2002 - when the Department of Energy finalized its rule - and April 2003, a mere 14 of 15,000 claims had been processed to the physician panels. In addition, on April 1, 2003, the Department of Energy had not even touched almost half of the 15,000 claims because fewer than 15 claims were being processed every week. At that rate, it would take about 20 years for the Department of Energy to get through these claims. That's unacceptable.

When I learned of this situation in April, I immediately contacted the Secretary of Energy. I wanted to let him know that the situation had to be fixed and that I wanted to help fix it. Secretary Abraham expressed his support for the program and his commitment to fully implement the law in a way that was both efficient and effective. He also said that the Department of Energy had made progress in developing a system to gather information and process applications. He said the goal was to be able to render final determinations on 100 claims per week by August 2003.

Three months later, in July, I discovered that the Department of Energy was processing fewer than 40 claims a week. What's more, the Department of Energy had by now received almost 19,000 claims altogether. Of these 19,000 claims, more than 10,000 of them had never been touched. And, only 53 claims had made it to the physician panels.

So I asked more questions. In late July, Energy UnderSecretary Bob Card told me that in order to reach the goal of processing 100 claims a week, the Department of Energy would need another $20 million on top of its current budget of $16 million. I also learned of a separate proposal within the Department of Energy to expedite the processing of all the backlogged claims by re-programming $43 million. This proposal said that by using $16 million in fiscal year 2004 funds plus $43 million in reprogrammed funds, the Department of Energy could clear every claim in one year. Now this made sense to me until I saw that the Department of Energy was still processing claims at an abysmally slow rate.

On September 15, the independent General Accounting Office released preliminary findings from its investigation of the program. Subtitle D required that the General Accounting Office assess the effectiveness of the benefit program. I had also asked the General Accounting Office to look at the program and the Department of Energy's performance. The findings of the General Accounting Office were stunning even though they were unfortunately not surprising. As of June 30, only six percent of claims had been completely processed. More than 50 percent were untouched. More than 90 percent of claims filed after September 2002 remain untouched.

On top of it all, the General Accounting Office said that increased funding alone would probably not result in more timely determination. In other words, more money was not the solution to the problem of endless delays.

Clearly, the Department of Energy had a sub-standard operation when it came to implementing this important compensation program. The people Congress wanted to help deserved so much better.

In response, I offered an amendment in September to the Energy and Water appropriations bill. Sen. Lisa Murkowski co-sponsored this amendment. It would have transferred the responsibility for processing claims under Subtitle D from the Department of Energy to the Department of Labor. There were two main reasons to make this change. One, the General Accounting Office had told us in its preliminary report that most of the claims made to the Department of Energy had also made claims with the Department of Labor. Two, the Department of Labor had demonstrated its competence in processing claims for four other such compensation programs. For example, under Subtitle B of the Energy Employees Occupational Illness Compensation program, the Department of Labor has closed more than 94 percent of the 35,000 cases filed.

The Grassley-Murkowski amendment was accepted by the two managers of the appropriations bill. They agreed to both authorize and fund the Department of Labor to administer Subtitle D. They agreed that the Department of Energy should transfer every record to the Department of Labor. The Senate voted on the bill and we continued to fine tune the amendment so that there would be no delay in transferring these responsibilities. We worked hard to accommodate the technical recommendations made by officials from the Department of Labor. We wanted to make sure the amendment was just right.

By this time, there was strong bipartisan support in the Senate for making this transfer. Sen. Murkowski and I wrote a letter to conferees on behalf of our amendment, and seven senators added their signatures to our letter. Those senators were Sens. Voinovich, Bunning, Bingaman, Cantwell, DeWine, Kennedy and Hollings. I ask that our letter be placed in the committee record.

Unfortunately, we were up against opposition from the Department of Energy, its contractor and the Office of Management and Budget. We could not overcome that opposition, and our amendment was knocked out of the conference report.

The only public statement of opposition made by the Office of Management and Budget about the Grassley-Murkowski amendment was a letter from the director to the House Appropriations Committee Chairman. In an October 16 letter, Director Bolton said that the administration would object strongly if our amendment was included in the final bill. His letter said, "The Subtitle D program should work to help beneficiaries, but the provision would create an unworkable and overly complex administrative structure that may detract from the program's service delivery."

Now, remember that at this time the Department of Energy has fully processed only 81 of the now 20,000. The Department of Energy hasn't even started what it calls claims development on more than 74 percent of the claims it had received. The General Accounting Office is estimating that the Department of Energy is going to need seven years to work off the backlog. Yet, we have the Office of Management and Budget expressing concern that our amendment would "create an unworkable and overly complex administrative structure that may detract from the program's service delivery." Mr. Chairman, that is out of touch with reality.

I wasn't willing to give up, and I asked the administration to commit to a reasonable benchmark if it could not support the Grassley-Murkowski amendment. Surely they could agree that the Department of Energy needed to demonstrate that it could do a better job. I got a response on November 6 in a letter from the Office of Management and Budget. Director Bolten wrote that the Department of Energy had committed to fully process 25 percent or more of the existing Part D claims within six months of receiving funding for fiscal year 2004.

Now, keep in mind that the Department of Energy had said in July that its goal was to process all 15,000 backlogged claims in one year by reprogramming $43 million. Congress had already approved $9.7 million and is likely to approve the remaining $33 million request when it's received. At this rate, one might expect the Department of Energy to process all claims in one year.

So, how high is a benchmark of 25 percent in six months? It's a snail's pace. It's an insult to the Americans who worked in these plants. It's an insult to their family members who are left behind. Processing 25 percent of claims in six months is about 156 claims a week. To clear the backlog, the Department of Energy needs to process 288 claims a week. So, I'm not going to applaud the Department of Energy six months down the road because it manages to process 25 percent of the claims. Instead, I'm going to ask the Department of Energy how it intends to process an average of 469 claims a week during the next six months to clear the backlog within its own time line.

I hope that the committee is beginning to understand the frustration I've experienced with the Department of Energy's failure to take responsibility for its abysmal performance. I'll note that it' not just my opinion or even the findings of the General Accounting Office.

The Department of Energy hired an independent consultant, the Hays Group, to assess this compensation program and make recommendations for improvements. The findings of the Hays Group further reinforce the need to move claims processing from the Department of Energy to the Department of Labor, as the Grassley-Murkowski amendment sought to do.

Many of the nearly 50 recommendations in the draft Hays report are what I call no-brainer recommendations. It's fair to ask why the Department of Energy and its contractor haven't been doing these things from the beginning.

Overall, the Hays report says this compensation program was set up all wrong in the first place, but it's too late to fix it, so now we have to make do with a flawed system. The Hays report says that the Department of Energy uses at least three different computer systems to process claims, but those computer systems don't talk with each other. Does that make any sense?

In addition, the Hayes Report debunks one of the myths used to oppose the Grassley-Murkowski amendment to move responsibility for processing claims to the Labor Department. Some argued that my amendment would not help the supposed backlog at the physician panels. Well, first, my amendment moved those panels to the Labor Department where they would be managed better. More importantly, the draft report found that only 60 of the 105 doctors available for the physician panels were working. I don't know why you have a backlog when about half the doctors don't have work to do.

Finally, the report states, "when making recommendations for the system, we can't focus on a simple amplification of resources in the existing process." That statement is consultant-speak for "more money alone is not going to fix the problem."

I've dedicated a majority of my time today to describe what I believe are the fundamental flaws in the Department of Energy's ability to process claims both efficiently and effectively. Unfortunately, there are other problems with this compensation program. One of those is the matter of a lack of a "willing payor" in many states, including Iowa. The lack of a "willing payer" likely will prevent a significant number of eligible claimants from ever receiving compensation.

But first we need to get to the bottom of the problem created by the bureaucratic maze that the Department of Energy has created. The bottom line is that the Department of Energy is ill-equipped to deal with this compensation program. It has demonstrated that reality time and again. I'm willing to keep challenging bureaucrats, fighting for amendments and making the case to the leaders who serve on this committee as long as it takes. But in the meantime, we have former nuclear ammunition plant workers and their survivors who don't have the help their owed or even an answer yes or no. That's not right.

Again, this hearing is an important step forward. The expert witnesses you've assembled will provide important testimony. I look forward to continuing to work with you and with the administration to fix this program. Thank you for the opportunity to testify today.