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Statement of Anthony J. Principi Subcommittee on Economic Opportunity December 7, 2006
Chairman Boozman, Ranking Member Herseth, members of the subcommittee, you honor Vice Chairman Wincup and me by inviting us to testify. Indeed this is the Committee that serves our most precious and unique national resource – the 1.5 million of America’s sons and daughters who wear the uniform of the United States. Selfless individuals who represent the very best in character, commitment and resolve. Ordinary Americans who we ask to do extraordinary things in our defense both on the world stage and here at home. ******** My statement is divided into four parts: (1) who we serve in transition assistance programs; (2) highlights of Commission recommendations enacted into law; (3) recommendations proposed for further action with respect to education and training; and (4) recommendations proposed for further action regarding employment and workforce development. Modern-day version of the Omar Bradley Commission… Mr. Chairman, Congress chartered the commission on October 9, 1996, as part of Public Law 104-275. Indeed the Commission’s work represented the most comprehensive review of veterans’ benefits and services since the 1956 Omar Bradley Commission. The Commission performed its work through issue panels on veterans’ benefits, servicemembers/employment, and healthcare. General J. B. Davis, USAF (Ret) chaired the veterans’ benefits panel assisted by Commissioners Mack Fleming, Chris Jehn, and the late Richard Johnson. Ronald Drach chaired the servicemembers/employment panel, assisted by Lt. General Edgar Chavarric, USAF (Ret), Brigadier General Robert Stevens, USA (Ret), and Michael Blecker. The excellent work of our healthcare panel chaired by Lt. Colonel Renee Priori, USA (Ret) is not topical to today’s hearing. So, I’ll forego it. Commissioner Thomas Harvey and Vice Chairman Wincup served on the healthcare panel. I. WHO WE SERVE IN TRANSITION ASSISTANCE PROGRAMS Like the 19-year olds of generation’s past who scaled the cliffs of Normandy, our millennium generation’s greatness exceeds only its selflessness while in harm’s way. Disciplined by duty and enlightened through experience…
Disciplined by duty and enlightened through experience, our All-Volunteer Force indeed represents America’s most resourceful of individuals; a place literally that grows leaders; not just for their military time but for a lifetime. In the transition assistance programs that help our servicemembers obtain post-service jobs, we indeed are serving individuals – leaders -- in which Americans have the greatest of confidence. I am not aware that the national media have expressed interest in this data. But I think the data add value for this subcommittee because of the high degree of confidence the public has in the individuals the subcommittee ultimately serves through its policies. I’d ask the subcommittee to incorporate the published results of the Yankelovich, Inc. survey into the published hearing record. II. COMMISSION RECOMMENDATIONS ENACTED INTO LAW Very responsive, bipartisan Congressional leadership… Mr. Chairman, we have not surveyed the Commission’s former members. However, Vice Chairman Wincup and I believe that any reasonable standard of review would conclude that Congressional enactment of Commission recommendations represents very responsive, bipartisan leadership. Indeed much of the enacting legislation emerged from the rostrum in this historic room. Table One furnishes some examples. The listing is not a comprehensive one. Table One
Source: Commission and HVAC Reports
Mr. Chairman, Senators Specter, Rockefeller, and Graham indeed provided significant leadership in the enactment of the education and employment provisions listed above; and Senators Snowe and Kerry joined them in the entrepreneurship legislation. For today’s hearing, I limit my focus to the House role. A few brief comments on the magnitude of this subcommittee’s responsive work in enacting into law Commission recommendations, as highlighted in the table: • HR 1291. In 2001, I testified before this subcommittee as Secretary of Veterans Affairs and Vice Chairman Wincup testified on behalf of the Commission, on HR 1291, The 21st Century Montgomery GI Bill Enhancement Act (enacted as Veterans Benefits and Expansion Act of 2001). When combined with PL 106-419 in 2000, HR 1291 produced the largest increase in the 16-year history of the Montgomery GI Bill ($528 in 1999 to $985 in 2004). The CBO officially estimated that veterans would use such increases over 10 years in the amount of $6.8 billion. The current MGIB monthly benefit is $1,075. • HR 2297. The provision to make disabled veteran-owned businesses eligible for federal sole source and restricted competition contracts indeed was some 23 years in the making. The 1980 White House Conference on Small Business convened by President Jimmy Carter first made this recommendation. In addition, many larger companies have developed forward-leaning policies that are designed to help promote the growth and development of veteran-owned and disabled veteran-owned small businesses though contracting or sub-contracting arrangements. • S 2486. HR 1716, The Veterans Earn and Learn Act constitutes title I of Public Law 108-454. The Commission made no specific recommendation in this regard. However, it is my understanding that the Commission’s focus on the Navy’s National Apprenticeship Program in which in 1999 41,000 sailors were participating while on active duty in 94 DOL-certified apprenticable trades; and 3,000 Marines enrolled in apprenticeships in 27 trades, inspired the Committee’s interest in this area. ******** Mr. Chairman, in your invitation letter you asked me to describe any major issues still requiring action. I’ll begin with education and then turn to employment. III. PROPOSED ADDITIONAL RECOMMENDATIONS: EDUCATION AND TRAINING If employment is the door to a successful transition to civilian life, education will be the key to employment especially in today’s technological age. That education starts the moment the servicemember puts on the uniform of the United States; because Congress indeed sees to it that we have the best-educated, best-informed, most-effective fighting force in the world. Our military is America’s largest university, far exceeding the “Ivy League”… Longstanding assertions that America’s sons and daughters who make up our All-Volunteer, professional force are college dropouts, or somehow are not considered college material or serve due to no other options, do not comport with fact. To the contrary, our highly engaging and resourceful military represents America’s largest university. Larger than all the “Ivy League” schools combined, for example. The FY 05 Department of Defense Voluntary Education Fact Sheet (http://voled.doded.mil/voled_web/voledhome.asp) shows that in fiscal year 2005 an impressive 819,526 servicemembers were pursuing associate, bachelor’s, master’s or doctoral degrees during off-duty hours; most of them as first-term enlistees who will not make the military a career. Voluntary Education is a congressionally-driven program in which the Department of Defense in fiscal year 2005 paid $461.4 million in college tuition costs for the 800,000 plus servicemembers. Our military are the most motivated of Americans who will do whatever our Nation asks. They’re smart, too; 36,415 received college degrees in fiscal year 2005 while carrying out their military duties on a full-time basis. Mr. Chairman, I’d note as well, the Department of Veterans Affairs 2007 Congressional Budget Submission at page 3A-17 states that during fiscal year 2005 another 20,607 active-duty servicemembers were pursuing college degrees during off-duty hours while using their Montgomery GI Bill, at a cost of $61.6 million. Further, the Submission also states that 87,589 Reservists were pursuing degrees through their Montgomery GI Bill, at a cost of $183.7 million. Make no mistake, none of these numbers reflect schools operated by the individual service branches that train servicemembers in their military specialties. And these students are not ROTC or service academy cadets. On-base, on-ship, and on-line… These are our computer-literate, technologically-savvy sons and daughters who are stationed in the U.S. and in some 120 countries throughout the world. A consortium of some 1,800 American colleges and universities administered since 1972 by the American Association of State Colleges and Universities offers them rigorous degree programs, up to and including the doctoral level on-base, on-ship and on-line. Fourteen other national higher education associations participate in the consortium officially known as Servicemembers Opportunity Colleges. I know of few entities in our society that grow leaders and educate our people as adroitly and effectively, as do civil servants who are part of the United States Department of Defense. The Department’s commitment to learning and professional growth and development is real; and it is tangible. The Department operates 305 education centers at our military bases world-wide; 1,700 DoD education professionals coordinate the degree programs, including in Bosnia, Saudi Arabia, and Afghanistan. Simply stated, the complexities of modern warfare require smart soldiers. And our soldiers are world-class. Mr. Chairman, I’d like to close this section by sharing with the subcommittee a brief observation based on my visits with our soldiers, sailors, airmen and Marines in the Middle East; and the commission’s visit to the 38th parallel in Korea. Our servicemembers are young Americans who are mature beyond their years. They are not daunted at being part of something so much bigger than themselves. Many have seen first-hand the insidious effects of tyranny over freedom and dictatorship over democracy. Our soldiers are inspiring and extraordinary people. As the late General Creighton Abrams often would say, “Soldiers are not in the Army. Soldiers are the Army.” And we owe them the very best of help when they conclude their service and return home. ******** Mr. Chairman, turning now to the Montgomery GI Bill; about 97 percent of servicemembers sign-up for the Montgomery GI when they join our military. They pay-in $1,200 in order to gain $38,700 in benefits. As of September 2006, 1,514, 638 veterans have used the Montgomery GI Bill; 1,290,337 for college-level training and 224,301 for technical degrees in specialized technologies, or for on-the-job training, apprenticeships, correspondence, and flight training. Financial aid abounds for those who choose not to serve in our military. As a matter of national policy, we give away about $12 billion in Pell grants annually for which no service to the nation is required. For those who serve in our military, the Commission is unaware of any other student aid program in which the student himself/herself pay-ins $1,200 in cold cash to become eligible. The Commission’s review of the legislative history of the Montgomery GI Bill revealed that HR 1400, the proposed Veterans’ Educational Assistance Act of 1981, as introduced by the visionary GV Montgomery and colleagues on January 28, 1981, did not include – or contemplate in any way – a pay reduction on the part of the servicemember, as an eligibility requirement. Mr. Chairman, I might add, under the leadership of Bob Foglesong, Ph.D., General, USAF (Ret) who is President of Mississippi State University, the university recently inaugurated the GV Montgomery Center for America’s Veterans. What a fitting tribute to an American icon. A man who according to his 2003 official biography Sonny Montgomery: The Veteran’s Champion, written by Michael Ballard and Craig Piper, spent each Christmas from 1966 through 1973 with our soldiers in the field in the Republic of Vietnam. He was a man who also understood the art of legislative leadership. During the 7-year legislative journey of the Montgomery GI Bill, Mr. Montgomery was an island of calm in what at times was a sea of contentiousness. Mr. Wincup and I witnessed his leadership, first-hand. Recommendation One: Repeal the $1,200 servicemember pay-reduction requirement to become eligible for the Montgomery GI Bill; or increase the MGIB monthly educational assistance allowance in an amount equal to the increase in direct spending occasioned by the $1,200 repeal. Mr. Chairman, structured on-the-job training and apprenticeships represent a part of the Montgomery GI Bill and other VA educational assistance programs that I think we overlook, as a first-rate career transition tool. VA pays veterans to earn-while-they-learn for up to 2 years for OJT and generally up to 5 years for apprenticeships. The Department of Labor reports 858 occupations in the U.S. economy that offer apprenticeships. Apprenticable occupations range from boilermaker to bricklayer, carpenter to cook, electrician to EMT; and pipe fitter to police officer. During my tenure as Secretary of Veterans Affairs, Chairman Christopher Smith placed a statement in the April 10, 2003 Congressional Record that I found helpful. Here are some excerpts:
25 labor unions commended for leadership… Lastly, former Chairman Smith’s statement commends some 25 labor unions, the Pennsylvania Department of Education, the National Association of State Approving Agencies, the Departments of Labor and Veterans Affairs, the Helmets to Hard Hats Building and Construction Trades Program, the US Military Apprenticeship Program, the US Army Ordnance Corps, the US Chamber of Commerce, the Veterans of Foreign Wars of the United States, and the Non-Commissioned Officers’ Association of the United States for their leadership and interest in enhancing OJT and apprenticeship as a transition tool. Given that in 2004 Congress updated VA’s OJT and apprenticeship program to reflect such programs in business and industry today, it seems the next step would be to elevate the usage in these programs, especially for 20-24 year old veterans. Recommendation Two: Convene either legislatively or administratively through the Secretaries of Veterans Affairs, Labor, and Defense – with consultation from the Secretaries of Education -- a work group or task force to determine how to increase participation of recently-separated veterans in OJT and apprenticeship opportunities. Require the group to present to the appropriate committees of Congress within 9 months, a concrete, specific plan and measurable objectives for informing, placing, and retaining veterans in such earn and learn opportunities. IV. PROPOSED ADDITIONAL RECOMMENDATIONS: EMPLOYMENT Mr. Chairman, turning now to employment, I appreciate the efforts of the dedicated professionals who provide employment and training services to America’s veterans through the public labor exchange. They are the professionals serving veterans at Job Service offices and one-stop career centers across America. As I understand it, due to their efforts the Secretary of Labor reports that for Program Year 2005 the entered-employment rate for veterans is about 61 percent. I also understand that this improvement may be a combination of both better reporting and better results by the States. In any case, the 61 percent is a demonstrable step forward from the rather woeful rate the Commission had no choice but to cite in its 1999 report: “The Commission is outraged by the fact that, according to DOL’s 1997 Annual Report, nine States meet DOL performance standards while placing fewer than 10 percent of veteran registrants.” Let’s remove any ambiguity as to the reasons for the improved entered-employment rate. Recommendation Three: As part of the mandatory study of the implementation of the Jobs for Veterans Act in section seven, ask the General Accountability Office to determine whether the 61 percent entered-employment rate is the net effect of better services/results; better reporting; or a combination of the two; and the implication for better delivery of job-placement services, if any. Congress created a policy of no reward for success or penalty for failure… Thanks to The Jobs for Veterans Act, I am hopeful the days of “no reward for success or penalty for failure” are closer to ending, with respect to results and accountability in the public labor exchange administered by the States. As you know, the Commission’s report focused heavily on these two themes, as well as those of flexibility and incentives in service delivery by the States. Prior to the Act, the Congress unwittingly trapped good people -- especially DVOPS and LVERs -- in a bad system, as I testified to this Committee on July 12, 2000, during the subcommittee’s deliberation on the proposed 21st Century Veterans Employment and Training Act; the 2002 forerunner of the Jobs for Veterans Act. A nationwide workforce development system absent needed accountability, flexibility, incentives and results in service delivery – as the Commission recommended -- impedes the performance of employees on the business-end of such policies. Notwithstanding earnest, and I think generally effective effort on the part of the Department of Labor and the States in implementing the The Jobs for Veterans Act enacted on November 7, 2002, veterans’ unemployment in the 20-24 cohort is worse today than when the Commission issued its 1999 report. In its 1999 report, the Commission noted “It is absolutely unacceptable that the unemployment rate for newly-separated veterans, men and women who are dedicated, mature, skilled, trained, disciplined, experienced, trustworthy, and drug free, exceeds that of non-veterans of the same age by over 20 percent.” It’s a ‘disconnect’ between the human capital/basket of skills that 20-to-24 year old former servicemembers bring to our domestic economy; and our ability as a nation to place these engaging and resourceful individuals in our free-enterprise system that their very service has sustained. Table Two 2003 2004 2005 20063Q
Source: Bureau of Labor Statistics
Unemployment is much more than a veteran who’s not working. Nationally, it represents lost productivity and lost tax revenue that cannot be recouped. It represents less-than-full usage of veterans as a competitive business asset. For many veterans, unemployment brings lost financial assets, periods without healthcare coverage, increased family stress, and diminished self-esteem. The Bar Chart below is substantively identical to Table Two but with a focus only on the veterans in the 20-24 age cohort.
Bar Chart
Percentage of age 20-24 veterans and non-veterans unemployed, 2003 to 2006
Mr. Chairman, I think the question to ask is what do the numbers in the two illustrations really mean, as to the depth/breadth of the unemployment problem of veterans age 20-24 For example, if the numbers reflect recently-separated veterans receiving unemployment compensation for a few months while the veteran waits for a new semester to begin so as to start classes on the Montgomery GI Bill, that’s one scenario. But that scenario is quite different, for example, from one in which a job-ready veteran is unemployed for an extended period and exhausts unemployment compensation. Further, to what extent do the States make unemployed, 20-24 year old veterans aware of their first-in-line priority in all DOL-funded workforce development programs, which was a Commission recommendation? Having such data would seem helpful in targeting services to veterans who are most in need. Recommendation Four: Ask the Secretaries of Labor and Veterans Affairs -- or the General Accountability Office -- to survey 20-24 age veterans and/or determine through existing DOL databases: (a) length of unemployment, (b) reason for unemployment, and (c) extent of awareness of veteran first-in-line priority in DOL-funded workforce development job training programs. Recommendation Five: So as to gain additional feedback data with respect to the first-in-line priority, ask the Secretaries of Labor and Veterans Affairs to mail information directly to disabled veterans of any age, as well as dependent spouses/children of 100 percent disabled veterans or veterans who incurred a service-connected death, with respect to their first-in-line priority placement in DOL-funded workforce development programs. Do so in a phased manner, starting with younger beneficiaries first, and in a way that the workforce development system in the States would be positioned to accommodate beneficiaries who may wish to apply for such training. ******** Mr. Chairman, I’d like to focus now on employers. The data show that some employers hire veterans because doing so fundamentally is a good business decision while many others see know reason to recruit veterans at all. When Congress allowed the authority for the President’s National Hire Veterans Committee to expire last year, not only did veterans lose a valued voice at the highest councils of government but employers themselves lost a voice from their own peers, as to the unique contribution veterans can make to their economic success. Only about one quarter of employers actively recruit veterans… The Commission engaged The Gallup Organization in reaching out to employers. Let me reiterate from the Commission’s 1999 report what we learned from them:
Veterans personify economic strength… By contrast, several Fortune 150 corporations -- members of The Business Roundtable -- that I understand generate about $3.3 trillion in wages in our domestic economy annually have emphatically expressed their views with respect to veterans as a competitive business asset. Notes Mr. Bob Lutz, Vice Chairman of General Motors:
Observes Mr. Steve Wohlwend, Senior Division Manager for John Deere & Company, a 167-year old global enterprise that I understand ranking member Lane Evans has worked with extensively:
Mr. Kevin Horigan, Group Vice President, Public Services, PeopleSoft, Inc. says:
Mr. Chairman, this variance in employer views was what prompted the Commission to recommend an “ongoing, independent, Presidentially-appointed, non-partisan Veterans’ Employment Network, supported by minimal staff and contract marketing.” Congress enacted the Commission’s recommendation as the President’s National Hire Veterans Committee with statutory purposes to (1) raise employer awareness of the skills of veterans and benefits of hiring veterans; (2) furnish information to employers on the advantages accorded them in hiring such individuals; and (3) facilitate the employment of veterans and disabled veterans. Congress created an authorization of funds of $3 million per year for fiscal years 2003 through 2005 but did not appropriate such funds. My impression is that both the Commission and the Congress envisioned The Committee as a needed national marketing and employment facilitation tool – not as a direct, job-placement activity. Mr. Chairman, I’d note as well that this type of Committee reaches back as far as President Nixon when he created the President’s Jobs for Veterans Committee on November 24, 1970. The Committee’s purpose was to “mobilize the entire Nation in the private sector, business, labor unions, and other organizations, so that jobs will be available for these men who have served the Nation.” President Nixon named James F. Oates, former chief executive officer of the Equitable Life Assurance Company to head the Committee: “…A man of great organizational ability…he will be able to speak to leaders all over the nation, within Government and out of Government, with great impact.” Following the President’s remarks, Mr. Oates, Secretary of Labor James D. Hodgson, Secretary of Defense Melvin Laird, and Administrator of Veterans Affairs Donald E. Johnson held a news briefing on the program. See The American Presidency Project at americanpresidency.org and http://www.presidency.ucsb.edu/ws/index.php. Recommendation Six: Reestablish the President’s National Hire Veterans Committee for 5 years with an authorized appropriation level of $750,000 annually. A sustained national marketing program can favorably influence employer perceptions of veterans; and hence hiring decisions. Direct the Committee to focus its efforts primarily on younger veterans and focus on the one percent of employers, who employ about one-half of all civilian employees; as proposed by the Commission’s report. Mr. Chairman, my concluding issue is the Veterans and Servicemembers Internet Site (VASIS). First, let me note that as I understand it, the Department of Defense is developing a new Transition Assistance Web Portal with the help of Monster dot com and its Federal partners. As I understand it, the Portal will focus on specific National Guard and Reserve requirements, but will also serve the active component as well as retirees, the severely injured and spouses. The portal will be available 24 hours a day and 7 days a week for servicemembers unable to attend TAP information briefings prior to separation. Easy access to timely job and labor market information is essential for successful career transition. Web-based services are particularly important to servicemembers prior to separation and to veterans at the time of their separation because they cannot “network” while on active duty and are transient immediately after separation. While I understand that accommodations were made for VA and DoD to use DOL’s America’s Job Bank (AJB) platform, a customized and separate site was not created. However, more significantly, I now understand that DOL has proposed to discontinue maintaining its AJB. This decision underscores the importance of jointly creating and maintaining a servicemember and veteran-specific electronic job board and resume bank. Recommendation 7: Encourage the Departments of Labor, Defense, and Veterans Affairs to revisit the proposed Veterans and Servicemembers Internet Site (VASIS) concept to ensure that a specific applicant/job search capability for employers and veterans is maintained and enhanced. This veteran-specific site should take advantage of new technologies and service delivery modalities that offer opportunities for enhancing services to younger veterans who are highly computer-literate. Mr. Chairman, on behalf of Vice Chairman Wincup, Commission members, executive director Mr. Bob Stein and staff, I honor the memory of Terence “Terry” Lynch who come to the Commission’s staff from the Senate Intelligence Committee and served us so well. Terry died at the Pentagon on September 11, 2001. I also paid tribute to Commissioner Richard W. “Dick” Johnson, USMC (Ret)., a valued colleague and innovator. Dick furnished a lifetime of leadership to the Non-Commissioned Officers’ Association of the United States. Mr. Johnson died on July 4, 2004. I also salute two longstanding, enduring leaders of this committee who have passed away, Chairman Bob Stump and Representative Floyd Spence. Lastly, I offer our kindest regards and gratitude to ranking member Lane Evans, who is retiring following 22 years of vigilant leadership on this Committee. We know of no member of Congress who has authored more provisions of law enhancing the Montgomery GI Bill than Representative Evans. Semper Fi. Thank you, Mr. Chairman.
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