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Testimony on H.R. 4765

Chairman Quinn, Ranking Member Filner, and members of the Subcommittee, I am delighted to appear before you this morning. It’s particularly significant that I come before you in this room where Commissioners first gathered as a group in late 1997, and this same room where I had the good fortune to join Senator Dole in presenting the Commission’s findings and recommendations to the full committee in February two years ago.

Representatives Quinn and Filner, I applaud you mightily for your visionary leadership on this bill. Veterans and the Disabled Veterans Outreach Program Specialists (DVOPs), Local Veterans Employment Representatives (LVERs), Employment Service (ES), and Workforce Investment Act (WIA) One-Stop Career Center staff that serve veterans need your leadership for many different reasons:

• veterans bring a unique combination of skill, discipline, character, and talent to the marketplace;

• although hiring veterans is a good business decision, veterans are indeed a unique national resource that too often goes unrecognized and underused;

• the delivery systems of the past will not meet the demands of the future, as indeed the Wagner-Peyser Act had its genesis in the Great Depression;

• as Vice President Gore has pointed out, while our federal government has long opposed private monopolies, it has deliberately created public ones;

• although our country’s economic, social, and military environment have changed dramatically, the legal framework, policy, and operational direction governing the provision of employment services to veterans remain from an earlier era;

• grants for veterans employment programs are awarded on a noncompetitive basis without financial penalty or reward based on performance or cost effectiveness;

• the current veteran unemployment rate may be more the result of a robust economy than the programs established to help veterans in finding employment;

• veterans employment services are provided in accordance with prescriptive and inflexible process-oriented provisions that have become obsolete as employment service delivery methods have evolved; and

• servicemembers’ and veterans’ employment services, as they are now constituted, organized, and delivered, will not be adequate or effective for helping servicemembers and veterans find jobs in the 21^st Century.

Mr. Chairman, what do unemployed veterans and the dedicated DVOPs, LVERs, and ES staff who serve them need for the 21^st Century? They need a game plan that reflects how the rules and players have changed. One need only look at the preface of the Committee’s bill to appreciate the dimensions of that plan:

to improve employment and training services provided to veterans and disabled veterans by requiring the use of measurable performance outcomes in an era of electronic-based self services and one-stop career centers.

In short, what H.R. 4765 does is nothing short of designing a new, nationwide service delivery system for veterans. The Commission applauds the Committee’s engaging leadership.

Mr. Chairman, despite the dedicated efforts of DVOPs, LVERs and ES personnel, there is irrefutable data to show that veterans in some parts of the country are not receiving effective employment and training services. We have very good employees trapped in an outdated system – a system they did not create. Nor did they create the rules of the game, but the Commission had to make its own judgements as we watched each play unfold. Here are a few examples of the kinds of challenges the Commission reported and I believe the Committee’s legislation will address head-on:

• according to DOL’s 1997 Annual Report, only 12 percent of veterans who registered with the Employment Service obtained permanent employment;

• fewer than one percent of job-seeking veterans receive case management services intended for veterans with barriers to employment;

• according to DOL’s 1997 Annual Report, nine states met DOL performance standards while placing fewer than 10 percent of veteran registrants; and

• the Gallup Organization’s "National survey of employers," commissioned by the Commission, found that only about one quarter (26 percent) of employers actively recruited veterans. When asked where employers looked to hire veterans, almost half (48 percent) incorrectly identified VA, and one-quarter (25 percent) cited the local Job Service office in their State.

The Commission believes that this performance is an inadequate return on taxpayer expenditures of about $180 million per year. Veterans deserve better.

The average "entered employment" rate for Program Year (PY) 1996 was 25.09 percent; for PY 1997 it was 26.6 percent; and for PY 1998 it was 26.71 percent. Sadly, this means that about three of four veterans who seek jobs through the Job Service do not get jobs, at least within 90 days.

Mr. Chairman, ever since the Commission published its report, the Department of Labor has attempted to convince you and others that their performance was better than the numbers indicate. Unfortunately, after three years of woeful complaining, DOL still doesn’t have good data. Neither the Congress or the Commission can legislate integrity in DOL performance data.

How disappointing it is to me, personally, that it has taken a report of the Commission, a 1997 and 1999 report of the GAO, a hearing by the Committee’s Subcommittee on Oversight and Investigations on Effectiveness and Strategic Planning of the VETS’ program, and this Subcommittee’s engaging legislation for the DOL to come forward and report to Congress that its data lack integrity. Further, getting DOL to articulate its vision as to what VETS should look like five years from now has been exasperating. DOL’s response typically has been "the Commission’s vision is flawed." Fine, what is DOL’s vision? GAO’s Ms. Carletta C. Joyner, testifying at Chairman Everett’s July 29, 1999, Subcommittee on Oversight and Investigations hearing said, "…[DOL VETS’s revised 1999 strategic plan and fiscal year 2000 performance plan] lacks vision and clarity and does not provide a roadmap outlining the direction the agency needs to take."

In comparing the Committee’s bill and Commission recommendations, I take a small measure of satisfaction on behalf of Commission members in the number of Commission-identified issues and recommendations that seem to help inform H.R. 4765.

Section 2. Priority of service for veterans in federal employment and training programs. This section of H.R. 4765 would furnish priority of service for veterans with a service-connected disability, a campaign ribbon, and certain spouses in all Federally-funded employment and training programs for which they are eligible. It also requires federal contractors and subcontractors to list employment openings immediately through the appropriate employment delivery system and offer veterans priority referral for such openings.

Mr. Chairman, this is an excellent provision and the Commission especially applauds Ranking Member Filner for his vision on this issue.

Veterans are not another special interest group deserving of a special employment program. Veterans are a diverse group of individuals who have served their country and have diverse transitional employment and training needs. As a matter of United States policy, veterans fundamentally deserve more because they have earned more by virtue of their service to the Nation -- be it three years or 30 years.

The Commission proposed similar legislation that included recently-separated veterans (Public Law 105-220, the Workforce Development Act of 1998, defines "recently separated" veterans as being within 48 months of separation) and veterans with employment barriers.

Section 3. Modernization of Veterans Employment and Training Programs. This section seems to be the essence of H. R. 4765. I’ll describe and comment on selected provisions in two parts.

Part One. In general, this section would require the Secretary of Labor to establish and implement a comprehensive performance accountability system by September 30, 2001, and creates a five-year "demonstration" program characterized by:

• a seven-person advisory panel to advise the Secretary from the perspective of DVOPs, LVERs and others on implementing the demonstration program;

• submission by each State of a five-year strategic plan stating how the State will furnish services to veterans;

• a funding authorization requiring that funds appropriated for veterans’ job services for fiscal year 2001 and each succeeding year be at least equal to fiscal year 2000, plus amounts needed to furnish annual increases in salaries;

• an annual "base" grant of 95 percent of the amount historically provided for DVOP/LVER services the first year, 92.5 percent the second year, and 90 percent in each of succeeding three years to be awarded to the States; establishes an annual "incentive" grant that is the difference between the total amount and the base grant each year;

• a $10 million incentive grant for fiscal year 2001 and each subsequent year; and

• a Labor Market Area pilot program in which a State could propose to offer services through alternative means if veterans employment and training services in that area fail to meet limited performance requirements; if approved by the Secretary, States could solicit applicants competitively to provide such services; no State could compete more than three such areas over five years and not more than ten States could participate, on a first-come, first-serve basis.

Mr. Chairman, the provisions embodied in Part One are conceptually similar to several of the Commission recommendations and we support them. The Commission concluded that:

the Nation has learned that competition and accountability enhance beneficiary-based response service . . . .grants for veterans’ employment programs, however, are awarded on a non-competitive basis without financial penalty or reward based on performance or cost effectiveness.

The Commission proposed competing current DVOP and LVER-furnished services in each State, so that the most cost-effective organizations provide services. Nevertheless, I find the limited, competitive pilots authority embodied in H.R. 4765 as very much worth doing because such pilots will stand or fall on their own merits. Plus, the pilots are discretionary, not required. I note that Congress created the Montgomery GI Bill and the Transition Assistance Program through statutory pilot testing. I suggest the Committee add a formal evaluation of the employment pilots to its legislation.

Apart from the limited pilot authority, I find the Committee’s provision to require the States to compete among themselves for "base" and "incentive" dollars to be excellent because as Vice President Gore has pointed out. . . . it is in service delivery that competition yields results – because competition is the one force that gives public agencies no choice but to improve. All State Employment Security Agencies (SESAs) will have an equal opportunity to excel. States currently not excelling will have a fresh opportunity to do so – and to be rewarded for it through incentive dollars.

Mr. Chairman, even in this robust economy, DOL "entered employment" data for veterans show that over the past three program years (1996, 1997, 1998) four of five veterans that went to Job Service offices in New York and California did not get jobs. Yet in Texas, almost 40 percent got jobs and in Illinois about one in three got jobs. DVOPs and LVERs are resourceful and engaging people. If we challenge and reward them, they will succeed because they believe in what they are doing. The Commission spoke with DVOPs and LVERs firsthand in Baltimore, Denver, Charleston, and Norfolk. These are not running backs who step onto the gridiron waiting for their linemen to open up a hole. DVOPs and LVERs hit the line of scrimmage with full force and make things happen. This bill rewards them for doing so. And the Committee’s approach is fair because it provides greater credit for placing veterans with employment barriers in jobs and takes into consideration prevailing economic conditions that could affect a State’s performance.

The Commission, too, recommended clear outcome measures and revised reporting requirements, basing such measures on GAO’s May 1997 HVAC testimony in this area.

Part 2. Section 3 of H. R. 4765 also makes a number of changes to rather rigid, prescribed administrative processes governing the delivery of veterans’ employment and training services in chapter 41 of title 38, USC. These include, but are not limited to:

• requiring the Secretary of Labor to identify appropriate titles and functions of DVOPs, LVERs, DVETs and ADVETs within 180 days, in light of the WIA and availability of service through America’s Job Bank and America’s Talent Bank, for example;

• removing rigid, inflexible methods for assigning DVOPs/LVERs to local offices;

• removing the DVOP/LVER funding formula that Congress has not used in a decade;

• creating a "virtual" one-stop veterans job service "office" worldwide; and

• requiring that the Deputy Assistant Secretary for Veterans Employment and Training be a career civil service position.

Mr. Chairman, the Commission supports these provisions.

We found that although DVOP and LVER programs were created separately for different purposes, there is, in fact, little difference in the day-to-day customer service provided to veterans by staffs of these programs. DVOP and LVER staff spend most of their time on two tasks: (1) intake and assessment, and (2) job search and referral. The Commission recommended replacing the DVOP and LVER programs with a new Veterans Case Manager program to provide job-seeking skills, job development, and referral services to disabled veterans, veterans facing employment barriers, and a new Veterans Employment Facilitator program to facilitate TAP workshops and market veterans’ employment to local employers.

The Commission was delighted Congress made the Assistant Secretary for Veterans’ Employment and Training an ex officio member of the Commission. The Assistant Secretary participated in all Commission meetings and deliberations and was privy to – and encouraged to comment on -- all working papers, decision papers, and drafts of the report. The Commission sees little value that would be added to the current body of analysis by the Congress requiring the Labor Department to study this matter even further.

H.R. 4765 removes the DVOP/LVER funding formula and the rigid strictures for assigning DVOPs and LVERs. This provision makes sense because indeed one size does not fit all. Washington does not have these answers. SESAs are better positioned to make service-delivery decisions. Instructive in this matter is Commission testimony of Dr. Carol D’Amico, Senior Fellow of the Hudson Institute:

We need to consider government’s role in providing labor market information job placement services, and job training. These (veteran-specific) programs were initiated in 1945 and were created, obviously, for a different era, economy, and worker. Federal job training programs are rooted in the 1960’s and affect such a small percentage of the population. We need to rethink the government’s role in providing labor market, job training and placement services that consider today’s technology and the growth of the private sector in these areas.

My sense is that the SESAs will represent a wellspring of growth and change if Congress unshackles them from overly prescriptive and outdated staffing allocation requirements currently embodied in chapter 41 of title 38, USC. Witness the "bottom-up" leadership of the States in developing their State Job Banks. States’ efforts have contributed to America’s Job Bank and America’s Talent Bank, among other innovative services. Witness, too, the leadership of Mr. Glen Halsey and Mr. Joe Hollingshead of the California Economic Development Department in creating a TAP-type program well before Congress created a pilot TAP program in the late 1980’s.

Making the DASVET a career position would seem to provide the potential for greater continuity of expertise and management accountability at the Veterans’ Employment and Training Service (VETS); it is a sensible provision, in my opinion.

The Committee’s provision creating an Internet-based one-stop job service office for servicemembers and veterans appears conceptually similar to the Commission’s recommendation that the Secretary of Labor create a Veterans’ and Servicemembers’ Internet Site (VASIS). VASIS would be an electronic location designed for both employers seeking veterans and veterans seeking employment.

Mr. Chairman, I can say unequivocally from the discussions fellow commissioners and I had with Army enlistees at the 38^th parallel (Camp Casey) in Korea; Marines at Camp Hanson, Okinawa; sailors at Navy Base Pearl Harbor, Hawaii; airmen at Ramstein Air Base, Germany; and Coast Guard personnel here in Washington, that the Committee’s virtual one-stop Job Service office will be well received by servicemembers.

In Germany, the Commission also spoke with the Deputy Commander-in-Chief for the United States European Command, a four-star general. He offered a telling comment: "It is difficult enough for me as a general officer stationed abroad to make contacts with prospective employers, as I am preparing to retire. Just think of how hard it is for our young soldiers, sailors and airmen to find jobs from military posts so far from home."

Veterans will benefit too from this provision because the Commission found that the majority of America’s all-volunteer military have marketable job skills and are highly employable. Needs of most veterans will be met by giving them informed access to high- tech tools. The virtual one-stop office in this bill should be developed with links to each SESA and should augment – not supplant – what the States are already doing.

Section 4. Committee to Raise Awareness of Skills of Veterans and Benefits of Hiring Veterans. This provision authorizes $3 million to create the President’s National Hire Veterans Committee to market employment attributes of veterans to employers.

Mr. Chairman, this provision is conceptually similar to the Commission’s recommendation that Congress create a Presidential-appointed Veterans’ Employment Network to raise awareness, facilitate employment, and direct and coordinate marketing initiatives. The Commission supports the Committee’s provision.

We believe employers will be more likely to seek out veterans as potential employees and to hire them when they apply for jobs if they know the personal attributes and worker characteristics that servicemembers develop in military life. Each employer who understands that hiring a veteran is a good business decision will create more job opportunities for veterans.

As I said earlier, the Gallup Organization’s "National Survey of Employers Concerning the Hiring and Job Performance of Veterans of the United States Military" conducted during the summer of 1998 found that only about one-quarter (26 percent) of employers actively recruited veterans. What more emphatic statement of United States policy can we make than to create this committee under the auspices from the very highest of level of our government? In addition, what an emphatic message to send to those who have worn the military uniform as to the value our nation places on their positive transition to civilian life.

Mr. Chairman, the Commission takes exception to those who may characterize this as a "feel good" provision. Here’s why:

• The President’s Committee will create jobs for veterans, just as the President’s Jobs for Veterans Committee and the National Alliance of Business during the Vietnam Conflict did.

• The costs avoided in unemployment compensation for recently separated veterans -- and other veterans -- to the service branches and the States, respectively, will geometrically offset the $3 million annual cost.

• The Ad Council generates for the National Committee for Employer Support of the Guard and Reserve tens of millions of dollars in free media messages each year. The Commission believes the President’s Committee would have a similar potential.

Section 5. Sense of Congress Commending Veterans Service Organizations. This section commends these organizations and asks them to make personal computers with access to electronic job placement services available at local posts.

Mr. Chairman, the Commission did not make a recommendation in this regard, but I believe the commendation is appropriate because of the many VSO chapters and posts throughout the U.S. and overseas and their potential to serve veterans.

Further, it is my understanding that the Veterans of Foreign Wars of the United States, for example, has become a financial partner in vetsjobs.com, a veteran-run company that helps veterans find long-term careers. The Non Commissioned Officers Association of the United States sponsors a Job Fair each month for separating servicemembers and veterans, including overseas. I applaud these initiatives.

Section 6. Study on Economic Benefits to the United States of Long-Term Sustained Employment of Veterans. Under this provision, the Secretary of Labor would contract for a study to quantify the economic benefit to our nation attributable to SESAs helping veterans find solid employment.

Mr. Chairman, the Commission supports this provision because veterans are a unique aspect of our nation’s human capital.

Hiring veterans is a good business decision. With enactment of H.R. 4765, SESAs and VETS should be better positioned to attain the job outcomes for veterans that we expect. The Veterans’ Affairs Committees might also be better positioned to be a funding advocate with the Appropriations Committees.

Mr. Chairman, the Commission occasionally heard comments such as (1) there is no significant problem with VETS’ performance because more veterans actually get jobs than VETS data suggest, and (2) funding DVOPs and LVERs in accordance with the chapter 41 formula will fix the problems that may exist. The Commission does not share this view.

Mr. Chairman, what is an "acceptable" figure to the Congress – two of four vets registering with the ES getting jobs instead of one of four? Three of four getting jobs? Four of four? Is the Appropriations Committee likely to furnish more money for an outdated VETS delivery system created by Congress in an era that pre-dated the WIA, GPRA, and the availability of jobs through AJB and ATB without having to visit a Job Service office? The Commission suggests not. "Paving the cow path" is not the answer.

Chairman Quinn and Ranking Member Filner, the Commission recorded the gains and losses as it saw them. If the new millennium is the first quarter of a new gridiron contest, the Commission suggests H. R. 4765 starts off that game with an 80-yard touchdown run. As former Washington Redskins coach George Allen used to say, "the future is now." It’s now because the Committee’s bill will reward the performance of our dedicated DVOPs, LVERs, ES, and One-Stop Career Center personnel who play the game day in and day out in each State. Further, the Committee bill will allow SESA directors, Job Service office and One-Stop Career Center managers to coach the team in a way that unleashes innovation and energy in service delivery rather than constraining it by outdated, process-oriented rules and equal funding for unequal performance.

Mr. Chairman, in closing I’d like to acknowledge and thank four highly-decorated Vietnam combat veterans who essentially led the Commission’s work on veterans’ employment and training matters. The 12 members of the Commission accepted their analysis and recommendations unanimously. I applaud their leadership.

They are Ronald W. Drach, retired national director of employment for the Disabled American Veterans, who was named to the Commission by the Honorable Jay Rockefeller; Michael Blecker, executive director of Swords to Plowshares, Inc., who has served veterans for almost 30 years and was named to the Commission by the Honorable Ronald V. Dellums; Brigadier General Robert L. Stephens, USA (Retired), formerly deputy director of both the West Virginia and Georgia State Employment Security Agencies, who also was named to the Commission by Senator Rockefeller; and Thomas E. Harvey, formerly Chief Counsel of the Senate Committee on Veterans’ Affairs and Deputy Administrator of the Veterans Administration who was named to the Commission by the Honorable Alan Simpson. I am also pleased to acknowledge the invaluable role of the Commission’s Vice Chairman, G. Kim Wincup, who took a special interest in employment and training matters; Mr. Wincup served formerly as Assistant Secretary of the Army for Manpower and Reserve Affairs and as staff director of the House Armed Services Committee.

I appreciate the opportunity to express the Commission’s strong support for H.R. 4765.

Mr. Chairman, this concludes my statement.

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