-The Monthly and Annual Nonresidential Permits Survey;

-The Quarterly Trade and Employment and Annual Output, Exports, and Imports Reports;

-The Exports from Manufacturing Establishments and Exporter Database Reports;

-The Survey of Pollution Abatement Costs and Expenditures; and, the Semiannual Investment Plans Surveys.

-Fiscal year 1997 funding for the 1997 Census of Agriculture will be the responsibility of the Department of Agriculture.

-In fiscal year 1997, we will not conduct the Taxable Property Value Phase of the 197 Census of Governments.

Question. What would happen if the Census Bureau doesn't receive its requested funding levels for fiscal year 1997?

Answer. The Census Bureau has several key programs fully funded in the President's budget. This full funding reflects this Administration's commitment to providing both the public and the private sectors the economic and demographic information they need to be competitive into today's global economy.

For example:

Census 2000.-Fiscal year 1997 is a pivotal year in the Census 2000 cycle. This is the year that integral aspects of the 2000 decennial move out of the planning and testing stage and begin full operational implementation. In fiscal year 1997, the Census Bureau will continue its partnerships with the U.S. Postal Service and the U.S. Geological Survey and establish partnerships with state, local, and tribal governments to improve address and map information. Failure to establish these partnerships would force the Census Bureau to resort to many of the tried and failed methodologies of 1990.

Continuous Measurement.-This program will take us into the 21st Century. It will produce accurate, more timely data on the U.S. population and housing (especially for small communities and rural areas) than can be provided by the decennial census. The $19.4 million requested for fiscal year 1997 for this program is the minimum funding needed for the research, development, and testing necessary to implement Continuous Measurement by 1999 when it could be used to benchmark data against the 2000 decennial. Without Continuous Measurement, the Census Bureau will be unable to improve the rural and small community data now provided by the decennial census.

Economic Statistics.-The economy is changing and becoming more complex at a rapid rate and the Bureau's economic statistics must keep up. The Census Bureau needs additional funding to:

-Expand coverage of service industries, the fastest growing sector of the economy, to meet data user needs, for more information on the finance, insurance, and real estate sectors of the economy.

-Remedy deficiencies in economic indicators for nonresidential reconstruction and retail and wholesale trade. These are monthly measures that move markets and affect policy.

-Launch an initiative that will reduce the reporting burden on American business by re-engineering and automating business data programs.

Innovative Technology. Census' Innovative Computer Assisted Survey Information Collection (CASIC) Program is the primary stimulus for changing the way we conduct business by automating the labor intensive activities of data collection, data processing, and data dissemination. Fiscal year 1997 funding will be used for reducing survey cycle time, reducing or containing costs, and enhancing respondent/customer cooperation.

In fiscal year 1997 Census will continue technology investments that allow us to continue an aggressive migration to an open, expandable and cost effective processing environment. The program will continue to focus on support for economic censuses and decennial census data analysis and tabulation.

Question. What initiatives are included in the Department's fiscal year 1997 budget to address needed improvements in Gross Domestic Product (GDP) and other Bureau of Economic Analysis (BEA) data?

Answer. The fiscal year 1997 budget includes a request for funds to implement BEA's Mid-Decade Strategic Plan for maintaining and improving GDP and other economic accounts data and to implement BEA's Information Technology Strategic Plan.

-BEA's Mid-Decade Strategic Plan is based on a comprehensive review of the economic accounts that BEA conducted in 1994 and a draft strategic plan for updating the accounts that was presented and refined at a national symposium of leading economic data users in March 1995. The plan emphasizes updated

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measures of output and prices; more comprehensive measures of investment, saving, and wealth; and improved coverage of international trade and finance. -BEA has begun an ambitious, but critical, program to move to an integrated micro-computer network environment in fiscal year 1997, when it expects to retire its 1970's vintage mainframe computer. The integrated environment will increase the accuracy, reliability, and timeliness of BEA's data through standardized data transfer and on-line interactive editing and processing of source data. In addition, the new environment will increase the timeliness of BEA's data products and accessibility for its customers through Internet and other electronic gateways.

Question. Are there initiatives in the fiscal year 1997 budget designed to fix the understatement in real GDP and productivity growth caused by the understatement of quality changes associated with computers and other "high-tech” products.

Answer. Yes, one of the key priorities in BEA's proposal for improving its measures of output and prices is the extension of its work on quality adjustment. BEA introduced quality-adjusted measures of output and prices for computers in the mid1980's and recently introduced quality-adjusted output and price measures for semiconductors. The fiscal year 1997 budget initiative will provide funds to extend this important work to cover computer software, telecommunications equipment and other "high-tech" products.

SUBCOMMITTEE RECESS

Senator GREGG. If there is nothing further, the subcommittee will stand in recess until Thursday, May 9, at 10 a.m.

[Whereupon, at 12:16 p.m., Wednesday, May 8, the subcommittee was recessed, to reconvene at 10 a.m., Thursday, May 9.]

DEPARTMENTS OF COMMERCE, JUSTICE, AND STATE, THE JUDICIARY, AND RELATED APPROPRIATIONS FOR FISCAL

AGENCIES

YEAR 1997

THURSDAY, MAY 9, 1996

U.S. SENATE,

SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS,

Washington, DC. The subcommittee met at 10:02 a.m., in room S-146, the Capitol, Hon. Judd Gregg (chairman) presiding.

Present: Senator Gregg.

DEPARTMENT OF JUSTICE

BUREAU OF PRISONS

STATEMENT OF KATHLEEN M. HAWK, DIRECTOR

OPENING REMARKS

Senator GREGG. The Subcommittee on Commerce, Justice, State, the Judiciary, and Related Agencies will come to order.

We thank the Director for being here this morning and we appreciate your willingness to go forward. Unfortunately, I find myself in a situation where I have a Budget Committee markup going on at the same time as we are having this hearing, but I would want to give you the opportunity to get on the record the things you are concerned with, thoughts, issues and why don't you just give us your thoughts.

Ms. HAWK. OK, thank you very much.

I am pleased to appear before you today to discuss our 1997 budget request for the Bureau of Prisons, and I want to begin by thanking you, Chairman Gregg, and the other members of the subcommittee for their wonderful support of the Bureau of Prisons over the years.

1997 BUDGET REQUEST

This past year has been a very unusual year for us and I am certainly appreciative of the efforts to ensure the security and uninterrupted operation of the Bureau. Our 1997 request totals $3.2 billion and 35,193 positions. It focuses primarily on adding prison beds and reducing overcrowding.

INMATE DISTURBANCES

The year was unusual for us because beginning in the middle of October 1995 there were inmate disturbances at a number of our Federal institutions within a several day period. The seriousness of the situation required me to order an unprecedented lock-down of all secure institutions throughout our entire system.

While fires were started and staff were assaulted, there were, fortunately, no loss of life, no inmates escaped, and all institutions remained under our control.

We believe we were successful in dealing with this emergency for several reasons. One was the commitment and heroism of our line staff, who are truly the backbone of our institutions, and it is also clear to us the resources that have been provided by Congress and, specifically by this subcommittee, over the last several years have played a very critical role.

Without the additional staff and the new prisons that we were able to open, our overcrowding would have been so severe that it would have been extremely difficult for us to have ever managed the disturbance and to have gotten things back in order so quickly.

REDUCING PRISON OVERCROWDING

As of April 1996, our total population was almost 103,000 inmates. That includes 10,500 housed in contracts outside the Bureau of Prisons and 92,500 in Bureau of Prisons facilities.

I am proud to report that with the resources you have provided, we have made substantial progress in reducing our overcrowding. From the last fiscal year to date, we have brought online 10,300 new prison beds. The 1997 request includes $76 million to activate five new prisons and also two expansions at existing prisons. That is going to give us another approximately 7,000 beds.

While the activation of the new beds in 1997 will reduce our overcrowding, it is not quite enough to keep pace with our projected growth. By the year 2000, our population is going to be approximately 125,000 inmates.

Therefore, we are requesting in this budget an increase of approximately $147 million to complete a new prison that we had some initial moneys for and also to complete a pretrial detention center that had already been approved by Congress in previous budgets with some startup moneys. These will give us some additional 2,200 new beds.

Further, we are requesting a program increase of $1.5 million from the violent crime reduction trust fund. This will add residential drug treatment capacity consistent with the requirements of the 1994 crime bill.

Mr. Chairman, I believe this budget request reflects our efforts to work with Congress and the administration to control the escalating costs of incarceration. It includes only the increases that we feel necessary at this time to add Federal inmate capacity and to meet the requirements of the law.

Again, I would like to thank you, Mr. Chairman, and the members of the subcommittee for your continued support.

This does conclude my remarks and I would be very happy 0 30swer any questions.

[The statement follows:]

PREPARED STATEMENT OF KATHLEEN M. HAWK

Mr. Chairman and Members of the Subcommittee: I am pleased to appear beture you today to present the Administration's 1997 budget request for the Tetersi Sureau of Prisons BOP Let me begin by thanking you. Chairman Gregg Senaur Hollings, and the other members of this Subcommittee for the support you have given the BOP. This has been an unusual year, and I am very apprecazve a mur efforts to ensure the security and uninterrupted operation of the Feders, Prison Sus tem (FPS). Congress has recognized the continuous growth and challenging mature of the inmate population, and addressed significant overcrowding by provùng ne necessary resources which allow us to fulfill our responsibilities within the Feuersi criminal justice system.

The 1997 request focuses on adding prison beds and reducing overcrowùng at BOP facilities. The current systemwide overcrowding level is 23 percent. However, at some facilities the inmate population exceeds bed capacity by over 100 percent, and the population continues to grow. Unfortunately, we are receiving more and more serious offenders, and our medium and high security institutions are berring seriously overcrowded.

Beginning in the middle of October, 1995, there were inmate disturbances at a number of Federal institutions within a several day period. The seriousness of this situation required me to order a temporary lockdown" of inmates throughout the system. While fires were started and staff were assaulted, no loss of late occurred, no inmates escaped, and all institutions remained under our control

We were successful in dealing with this emergency for several reasons. One was the commitment and heroism of our fine staff, who are the backbone of our agency. It is also clear to me that the resources provided by Congress and specifically this Subcommittee, played a key role. Without the additional staff and new prisons which have opened recently, our overcrowding would have been so severe that we might not have been able to manage those disturbances effectively.

We have been carefully analyzing everything that occurred leading up to the disturbances and their aftermath. The underlying causes of these disturbances were complex, and as was the case with previous major BOP disturbances, defined by external factors. It appears that some inmates were involved because of their belief that disparities in cocaine sentencing policies are unfair. Many inmates also regarded recent changes in the criminal justice system, such as mandatory minimum sentences, the restrictions on selected inmate programs and the attendant media focus on perceived racial bias in sentencing and prosecution as highly negative developments. At every institution where these disturbances occurred, there were sig nificant numbers of inmates serving lengthy, non-parolable sentences for drug and weapon offenses, many of whom had gang associations or histories of violence. Regardless of inmate motivations, our mission is to operate safe and secure Federal prisons. Inmates who played key roles in these disturbances will be prosecuted where possible, and most have already been transferred to higher security institutions.

BUDGET REQUEST

The budget request for BOP totals $3,209,240,000 and 35,193 positions. Program increases of $259 million will permit the activation of over 6,900 new inmate beds in 1997, the construction of two new prisons which will house 2,200 inmates and pretrial detainees, and operation of five new residential drug treatment programs. Specifically, for the Salaries and Expenses appropriation, we are requesting an increase of $76 million to activate new and expanded prison facilities including: a high security U.S. Penitentiary in Beaumont, Texas; a medical facility in Butner, North Carolina; and a medium security prison with a satellite minimum security camp in Edgefield, South Carolina; a low security facility with a minimum security camp in Elkton, Ohio; and a pre-trial detention facility in Seattle, Washington. Additionally, our budget requests funds for the activation of two prison expansion projects at Carswell Air Force Base (AFB), Texas and Morgantown, West Virginia.

Further, we are requesting $25 million for drug treatment programs, including a program increase of $1.5 million from the Violent Crime Reduction Trust Fund. This will add residential drug treatment capacity consistent with requirements of the 1994 Violent Crime Control Law Enforcement Act (VCCLEA).