House Ways and Means Committee - Board of Trustees 2004 Annual Report

Federal News Service March 24, 2004 Wednesday

March 24, 2004 Wednesday

HEADLINE: HEARING OF THE HOUSE WAYS AND MEANS COMMITTEE

SUBJECT: BOARD OF TRUSTEES 2004 ANNUAL REPORTS

CHAIRED BY: REPRESENTATIVE WILLIAM M. THOMAS (R-CA)

WITNESSES: PANEL I:

JOHN W. SNOW, SECRETARY, DEPARTMENT OF THE TREASURY;

PANEL II:

RICK FOSTER, CHIEF ACTUARY, CENTERS FOR MEDICARE AND MEDICAID SERVICES;

STEPHEN C. GOSS, CHIEF ACTUARY, SOCIAL SECURITY ADMINISTRATION; DOUGLAS HOLTZ-EAKIN, PH.D., DIRECTOR, CONGRESSIONAL BUDGET OFFICE LOCATION: 1100 LONGWORTH HOUSE OFFICE BUILDING, WASHINGTON, D.C.

BREAK IN TRANSCRIPT

REP. LLOYD DOGGETT (D-TX): Thank you.

And thank you very much for your integrity, sir. No one has suggested that the work of the Congressional Budget Office was fraudulent. What is fraudulent is willful interference with your professional judgment, secreting and hiding critical information, and willful disregard of the Congressional Budget Act. The question I would have to you is, to be sure I'm clear, Mr. Foster, Tom Scully had your best professional judgment as an independent actuary that the true cost of this Medicare bill would far exceed the $400 billion ceiling that the Bush administration had established. You gave him that information last June?

MR. FOSTER: For earlier versions of the legislation last June, and then for later versions from time to time.

REP. DOGGETT: And you gave the same information to Doug Badger, the top White House official who occupies a position at the White House similar to Condoleezza Rice on security matters, he's the top health official who briefs President Bush. He had that information that the administration's bill exceeded the cost of $400 billion by about a third, from you back in June of last year?

MR. FOSTER: Yes, the information back in June, that's correct.

REP. DOGGETT: And you provided the same information to the top health official at the Office of Management and Budget, the top legislative health secretary or acting secretary at Health and Human Services, you made that information widely available to the Bush administration last June. And let me ask you if you have become aware, through any source, whether any members of Congress or any members of the staff of this committee or any other congressional staff gained access to your estimates before this near all night session of the House that it took to cajole enough people to pass the bill?

MR. FOSTER: I really don't know who had access to it, sir.

REP. DOGGETT: Now, you did discuss-you've indicated and the chairman has indicated participation rates with him for certain aspects of the plan last June, did you not?

MR. FOSTER: Yes.

REP. DOGGETT: And I believe Mr. McManus with his staff had one of the additional requests for estimated participation rates, that you were told you'd be fired if you provided it.

MR. FOSTER: That's correct.

REP. DOGGETT: And those participation rates are the building blocks from which you get the cost estimates, are they not?

MR. FOSTER: Yes, sir.

REP. DOGGETT: So there's not just idle academic concern, if someone knows there's a great variance in participation rates, then it doesn't take a very bright person to recognize there's going to be a great variation in the cost, correct?

MR. FOSTER: Other things being equal, yes, sir.

REP. DOGGETT: And you also testified that you attempted, after these threats to fire you, to discuss-I believe your words were, attempted to discuss with other members of the administration the demands that had been placed on you to secret what you considered important and vital information for the Congress to have, but which Mr. Scully's improper order denied you the right to submit. Would you identify each of the individuals in the administration with whom you discussed this problem and their titles?

MR. FOSTER: Sure. Following the blow up involving Mr. Thomas' request, Scott Whitaker, who's the HHS chief of staff, called me to express concern and support both for himself and on behalf of Secretary Thompson. And we discussed the issue about the provision and what steps we could take to improve the situation. In addition, a few weeks after that Peter Urbanowicz, who at the time was the deputy director of the Office of the General Counsel at HHS, called similarly to express support and to help figure out what could be done.

REP. DOGGETT: You responded to Mr. Tanner with regard to Mr. Scully's comments on the responsibility as reflected, I believe, in the language that accompanied the Budget Act. Could you tell the committee as best you recall what Mr. Scully's words were with regard to that subject?

MR. FOSTER: In various discussions going back as far as June 2001 about the role of the Office of the Actuary in providing assistance to Congress, technical assistance, I had tried to make the case with Mr. Scully that you all valued this, using as one piece of evidence the conference language from the Balanced Budget Act, where it's fairly clearly laid out what the expectations are and the value placed on that. I also tried just the logical argument, that the nation's top policy makers should have the best information available.

And when I say that, I don't mean that the CBO information is not good, it's very good. But there are many situations where CBO might not be in a position to do a special analysis because of their other workloads, or in some rarer cases we might have a special expertise to make a contribution if requested. So we had these discussions, or I had these discussions with Mr. Scully. He's not an easy person to have a discussion with --

REP. DOGGETT: We've found that to be true also.

MR. FOSTER: So he generally was not interested in what was in the conference language. He did early on want to maintain good relations with Congress, and from June 2001 to June 2003 we had a system in place where we could respond directly to your requests.

REP. DOGGETT: And what were --

REP. THOMAS: The gentleman's time has expired.

REP. DOGGETT: I just want the answer to the last question.

What were Mr. Scully's words about the conference report, as best you recall them?

MR. FOSTER: Well, I think on at least one occasion his exact words were unprintable, and I certainly wouldn't want to repeat them in this setting.

REP. DOGGETT: Were unprintable you say? Thank you.