The report found that transfer of Parole Commission functions to the judiciary would result in a serious dilution and reallocation of already scarce judicial resources, creating a disruptive and detrimental impact on the administration of justice. It would also be the most costly and inefficient option. For example, the U.S. Marshals Service estimated that it could incur as much as $41 million over the next four fiscal years just for the transportation, housing, and staffing costs related to transferring prisoners for parole hearings (or more than double the cost of continuing the Parole Commission for the same period). Beyond this cost, substantial personnel, training and administrative costs would have to be incurred by various components of the judiciary to hold and process the legally required parole hearings. EFFECTS OF A HARD FREEZE Question. Hypothetically, what would be the impact on the judicial system of this country if a real freeze at the 1996 level was imposed? Answer. The fiscal year 1996 appropriated level for the court's Salaries and Expenses account would fall far short of supporting a fiscal year 1997 current services level and the base adjustments for the uncontrollable costs of inflation, space rental, pay increases, etc. Sixty-three percent of the Salaries and Expenses budget is directed to salaries and benefits. An additional 20 percent is for rent and other utilities which, in the short run, are uncontrollable. The remaining 17 percent provides for all other expenses of the judiciary, including travel, contracts, automation, supplies and equipment. Again, not much room exists in these areas to achieve significant savings. As a result, funding for mandatory costs would have to be absorbed by drastically reducing personnel. Funding at levels drastically below the current services level would require reductions in personnel, undoubtedly resulting in involuntary separations or furloughs. The judiciary has identified savings that will carry forward into fiscal year 1996, helping to offset our fiscal year 1997 appropriation needs. However, the availability of these funds will not completely offset the funds needed to maintain the current level of services in fiscal year 1997 if the appropriation is frozen at the fiscal year 1996 level. Specifically, the courts would be forced to absorb over $160 million to maintain the 1996 level of services. An impact of this amount could result in a reduction in staffing of approximately 2,500 positions. The courts are currently operating at only 84 percent of the level required by the staffing formula. At a time when caseload in all areas is increasing, the courts would be forced to operate at 70 percent of the staffing formula. At the current 84 percent level, the courts are struggling to keep up with the demands placed on them. Any additional reduction in staffing levels would further frustrate the operations of the courts. For example: -A reduction in the number of probation officers would make it more difficult to control an increasingly high-risk population under supervision and provide deterrence. The reduced amount of supervision will place the public at large in an increasingly dangerous environment. -Pretrial services officers would be unable to provide supervision to defendants, forcing a reduction in the use of alternatives to detention. This would lead to high-risk defendants being released without special conditions or would further exacerbate the overcrowding of prisons with defendants awaiting trial. -Severe staff shortages in bankruptcy clerks' offices would result in delaying discharges for debtors and payments to creditors. -Reduction in staff in district courts will lead to reduced hours of public access, an increased backlog in pending cases as courtroom deputy support is limited, and delayed docketing of orders and judgments. In summary, action to restrict fiscal year 1997 appropriations to the fiscal year 1996 appropriations levels would have a grave impact on the citizens of the United States who rely on the judiciary. A freeze would severely reduce current levels of operations and would frustrate the judiciary's ability to comply with its constitutional mandate. Unlike many other federal agencies, the courts cannot control the workload to which they must respond. The judiciary conscientiously generates savings to offset the requirement for direct appropriations in the succeeding year. It should be pointed out, however, that the judiciary's use of savings to offset appropriation needs creates an unfunded liability in the following fiscal year. In other words, for every dollar in savings used to offset the judiciary's appropriation, a dollar will need to be requested in the following year's budget to restore this funding source through appropriated dollars. The effect of this restoration line item is that it appears to display the judiciary's budget request as being out of line with today's fiscal climate. In reality, the judiciary has made great strides to keep its budget request down. If the effect of the res toration to base line items in the fiscal year 1997 budget request were negated, the judiciary's requested increase would have been a modest 8 percent over fiscal year 1996. SUBCOMMITTEE RECESS Senator GREGG. Thank you. If there is nothing further, the subcommittee will recess. [Whereupon, at 2:53 p.m., Thursday, May 2, the subcommittee was recessed, to reconvene subject to the call of the Chair.] DEPARTMENTS OF COMMERCE, JUSTICE, AND STATE, THE JUDICIARY, AND RELATED APPROPRIATIONS FOR FISCAL AGENCIES YEAR 1997 WEDNESDAY, MAY 8, 1996 SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS, U.S. SENATE, Washington, DC. The subcommittee met at 10:17 a.m., in room S-146, the Capitol, Hon. Judd Gregg (chairman) presiding. Present: Senators Gregg, Hollings, and Lautenberg. DEPARTMENT OF COMMERCE SECRETARY OF COMMERCE STATEMENT OF HON. MICHAEL KANTOR, SECRETARY ACCOMPANIED BY: RAYMOND G. KAMMER, JR., ACTING CHIEF FINANCIAL OFFICER/ ASSISTANT SECRETARY FOR ADMINISTRATION NANCY LEAMOND, COUNSELOR TO THE SECRETARY JANE BOBBITT, ASSISTANT SECRETARY FOR LEGISLATION AND INTERGOVERNMENTAL AFFAIRS MARK E. BROWN, DIRECTOR, OFFICE OF BUDGET OPENING REMARKS Senator GREGG. Secretary Kantor, we certainly appreciate your appearance today before our subcommittee. And I thank our ranking member for participating also, obviously as he always does. We especially understand the tragic circumstances that brought you into this position and please know that our respect for your predecessor was very high. We enjoyed working with him. Secretary Brown was, I thought, a very efficient, responsive, and effective Secretary of Commerce, and his loss is a tremendous loss to the country, in my opinion, and we understand that you have had to step into this position not necessarily uninformed, because your background is obviously unique and extraordinary. As our trade representative, you have done an exceptional job. But still, it is always difficult to be thrust into a role like this, especially during difficult times like you were confronted with and have been confronted with due to the loss of Secretary Brown, and we greatly respect that. What we would like to talk about today, of course, is your agenda, recognizing that you are still in the process of evolving that, and specifically some of the dollar figures that we will be dealing with as we go into the 1997 budget, and we look forward to getting your remarks in whatever form you wish to present them. And I have some remarks I will be submitting for the record. And I turn now to Senator Hollings. Senator HOLLINGS. Thank you, Mr. Chairman. I would only reaffirm your generous comments about our good friend, former Secretary Brown. I have been through, I guess, 15 or 16 Secretaries of Commerce in my time here in the Senate. Each of them, really, in essence were the President's nominee to solicit contributions from business. Ron Brown is the first Secretary in years who really was out there soliciting business for business. He was out hustling, working in tandem with you while you were at USTR. So, it is not a strange role that you now enter upon in coming to Commerce. ing congratulate the President on your selection. I do not think there could be a better choice, and I am confident that you are totally familiar with all of the various elements of the Department of Commerce, because the special trade representative has to depend upon the economic section to corral the various factors for your negotiations and the International Trade Administration. Thank you very much, Mr. Chairman. Senator GREGG. Thank you, Senator Hollings. OPENING REMARKS Secretary KANTOR. Thank you, Mr. Chairman. Thank you, Senator Hollings. Let me just say, Ron Brown was my friend for 20 years. We were partners both in private life, as lawyers, and then later in politics, ending up in 1992, sharing, what you might say, a partnership in the President's election, as I chaired the President's campaign, and he chaired the Democratic National Committee. Of course, in these jobs where our relationship not only blossomed, our families become very close. So no one feels the loss more profoundly than I do, nor feels the obligations and responsibilities that I take on in filling these very large shoes. I cannot replace Ron Brown but I can only succeed him. But I am going to do the best job I can, and all I can commit to this committee, to both of you and your staff, is that I will work with you. and try to be reasonable in most cases. Sometimes I am not as reasonable as I should be but that is only because I think I am right. PREPARED STATEMENT If I could just make a couple opening remarks, Mr. Chairman, I would like to submit my full statement for the record. I have two statements, one a full statement and a shorter one, but I thought I might even try to truncate the shorter one and not take too much of the committee's time and allow for more questions and more interchange between us, if that is appropriate. Senator GREGG. Whatever you wish. [The statement follows:] PREPARED STATEMENT OF MICHAEL KANTOR Mr. Chairman, we are all sadly aware of the tragic circumstances that led to my being here today. Ron Brown was a powerful and highly effective advocate for American business and industry, both here and overseas. He was dedicated to the President's mission, that we can work together to ensure expanding economic opportunity for every American. Ron Brown was an inspirational leader to the Department of Commerce and to the businesses and communities we serve, and he established a benchmark of performance that will be difficult to match. Ron Brown was also my friend and partner. We will all miss him greatly. I know that the best way we can honor his memory is to remain focused on the goals that he and the President have set over the last three years, and to continue to pursue them on behalf of the American people. We have lost a dedicated public servant, but Ron Brown would be the last person to want our Nation to miss a step on our continuing road to economic expansion. The other Commerce Department public servants, as well as the private sector executives and military personnel who were on that plane, shared the vision that Ron championed of supporting American businesses in their efforts to revive the economies of the world sorely in need of our help. All of them were special individuals, doing work that they believed in. If anything good has come out of this tragedy, it's that the news coverage about the purposes of Secretary Brown's trip helped the American people learn about this Administration's successful trade development efforts. Citizens now know that government and business can work together, for everyone's benefit. So I appear today, Mr. Chairman and members of the Subcommittee, to present and testify on behalf of the President's fiscal year 1997 budget for the Department of Commerce. The President's fiscal year 1997 request for Commerce is $4.27 billion. I'll discuss the details of our request in a moment, Mr. Chairman, but first I want to talk about the vital importance of the request itself, and what it provides for American businesses, workers, and their communities. In his State of the Union address, the President said: "Now we move to an age of technology, information, and global competition. These changes have opened vast new opportunities, but they have also presented us with stiff challenges." And in presenting the fiscal year 1997 budget in February, the Vice President said: “Americans also understand that in a global economy, the only way to maintain America's competitive edge is to lead the world in innovation and new technologies. Investments in science and technology mean better jobs, higher wages, and a growing economy." These words help to make clear the role of the Commerce Department: to help keep America as the world's technology leader, to help American companies compete globally, to enable communities to conquer economic challenges, to stimulate the growth of high-pay, high-quality jobs, to preserve and protect environmental resources, and to provide information vital for good business and policy decisions. The President has committed himself to a plan that will balance the Federal budget in 7 years. I support that effort, and I believe that it can be attained most effectively for the American people through economic growth-the creation of new jobs, the flourishing of new technology, and continued increases in exports. Working in tandem, these priorities will strengthen our dynamic economy and remain essential to the Nation's economic success. Helping to drive this engine of economic growth are the priorities of the Commerce Department. The President is very clear on the fact that he believes Commerce plays a critical role in fostering the Nation's economic growth, and he has encouraged us to seek fiscal year 1997 resources for our programs that have the highest payoff for the American people. He's made careful choices with the Administration's fiscal year 1997 budget requests, and supports an increase for Commerce, even when other agencies are being reduced. In crafting our fiscal year 1997 budget request, Commerce has paid careful attention to the President's balanced budget plan, and our request is very much in line with that plan. The increases we're seeking are reasonable ones-we're focusing our resources on the areas that do the most for job creation, technological development, and economic expansion. The Commerce Department staff is very much aware of our dual role in supporting growth in the American economy and in holding down Federal spending-we want to do our best to support the Nation's economic growth, but in order to control Federal spending, we will have to do our job with the lowest reasonable amount of resources. We are stressing the fact that Commerce has to “give at the office”—we're |