Transcripts For CSPAN3 Politics Public Policy Today 20140620

Performance award, whatever you want to call that, do you is not sending veterans to the outside to private care, is that part of the metric . And no one has answered that question. Is it yes or no . Congressman, i dont know. And ill take that for the record. Okay. Thank you for that. You mention, at least its in the evaluations that you have, the elements outlined for as leading change, leading people, business acumen, building coalitions and results driven. Those are the metrics that you go by. What are the specifics in there . I mean, how they set up. Thats fine. I mean, all that sounds good. But what do you actually have to do to get a 10,000 or in some cases 60,000 bonus . Congressman, in each of the performance plans, there is a template that goes out that says the guidance for the strategy of v. A. And what the employees must do to tie their organization and individual performance to the strategies of v. A. That is how it is determined. And if they exceed, there are different critical elements. Who decides that . It starts with the secretary who will put out v. A. s Strategy Plan and guidance. And then it is give ton to the administrations. They put additional metrics into their template. Let me ask you this question. Fraudulent, if you knowingly cooked the books, which is apparently what happened in arizona, because if you do that with the irs, let me give you an example. If you falsely put your claim out with the irs and claim deductions you dont have, let me tell you whats going to happen to you. Youre going to get penalized. Youre going to pay the taxes. And you might go to jail. Do you think that that should happen to people who fraudulently put out information that led to the deaths of people . A lot worse than not paying your taxes. Do you think that should be part of what we should be doing here today, to look at people who absolutely played, gamed the system so that they could make some extra money, and veterans didnt get care . Because thats what will happen to you in other government agencies. Congressman, i believe when these investigations are complete, that the acting secretary will ensure there will be accountability for those actions. Thats not an answer. I mean, my answer is, somebody who who i mean, accountability to what . What does that mean . The question i ask is, right now today in the irs, you know this. If you and i put something down wrong and were audited, you know whats going to happen. Were going to pay back taxes. Were going to pay penalties. And we might go to jail if its been if its really bad. So the question i have is, is that should that metric, that same standard apply to people who are in the v. A. Who fraudulently done this, if they have . If given that authority, im sure it would be used, congressman. Thank you. Mr. Chairman, i yield back. Mr. Takano, youre recognized for five minutes. Thank you, mr. Chairman. Ms. Farrisee, can you tell me how many employees under title 5 title 5 is what were talking about. The title 5 employees who were involved in the bonus system. I know theres title 38. But the title 5 employees are the ones who were in charge of managing and responsible for the scheduling. How many employees received bonuses . Across the complete v. A. Or only ses . Well, its the well, give me the ses number first. Actually received of the about 78 of the ses. But that includes title 5 and title 38. Okay. And there are title 5 and title 38 employees at the Medical Centers. Okay. But with regard to the the accountability for the gaming of the system, im trying to get a handle on how how many employees are, sort of, accountable for that. I mean, im thinking the title 38 are the providers that you know, the medical practitioners that for other reasons are getting pay beyond their base pay, right . Correct. But that is possible there are some title 38 employees involved in the scheduling as well. Okay. But just give me an idea of how many employees are involved. Involved overall . I dont have that number but ill take it for the record. Okay. The ig has not completed their investigation. We really probably do not have the final number right now. Okay. Well, how much of the i mean, weve talked somewhat about how the incentives maybe should be based on outcomes rather than these metrics. But im trying to get a handle on why the metrics, we lost control of them. Ive heard testimony it had to do with the technology. That we didnt have we had a scheduling system that was easy to game. Is that your assessment, too . I dont know enough about the scheduling system to make that assessment. Okay. Well, because i im just wondering if the number of employees that were involved just made it very difficult for anyone to, you know, look at how people were scheduled, how veterans were scheduled. And if theres a lot of employees, i can imagine that the that that the scheduling component of the vista system apparently was was vulnerable to this sort of gaming. But you dont have this is not in your expertise . Unfortunately, it is not, congressman. Well, what other incentives could the v. A. Use to recruit and retain Health Care Providers beyond bonuses and performance pay . We have recruiting insentiments, relocation, pension incentives once they are on board. We have authorities from opm to give those type of incentives. For hiring difficult to fill positions, difficult locations sometimes and skills. Well, we know that the va loses Health Care Providers to the d. O. D. Why hasnt the v. A. Considered increasing the base pay of of the v. A. Health care employees so that they receive comparable pay to the d. O. D. . Im not aware that its not comparable pay to d. O. D. Ill have to look at that. Okay. Id appreciate that. Thanks. I want to know if thats true. Has the v. A. Considered offering other incentives such as loan repayment or increased pay for v. A. Providers willing to work in rural and underserved areas . We have not looked at that, congressman. Well, thats interesting. So so my understanding is the rural areas rural areas and underserved areas, is this typically well, we dont know enough about the investigation to know how this gaming the system sort of matches up, whether were seeing the manipulation of wait times sort of be more prevalent in these underserved or rural areas. What additional professional opportunities could the v. A. Offer its Health Care Providers to recruit and retain those who are dedicated to serving veterans . I think we are doing things like market pay, which gives them an additional pay to the base pay. The performance pay, the contracts that they do with their individual superiors. All of that gives them additional pay for us to try to meet the external payments. Well never meet it, but we do try to make it more attractive. Thank you. Thank you, mr. Takano. Mr. Runion, youre recognized for five minutes. Thank you, mr. Chairman. Just really two observations, and i want to say theres probably not a lot of people in the basis of all, what all these discussions were having, i dont think theres a lot of people on this committee that really have much faith in a lot of the metrics that we use v. A. Wide. Because i know we all go to whether its our Health Centers or our Regional Offices. And are totally confused by any metric they throw at us. And to be able to award performance awards off of those type of metrics are mind numbing to me. And to go back to what dr. Roe really said, and i think you testified to it, youre setting out a template. The secretary is setting out a template. How low is that bar really . Obviously, in my past career, we have performance incentives all the time. We had several tiers of it. We would we would have two categories. Would be likely to be earned and unlikely to be earned. And it would actually count against the salary cap of that team. It wasnt either all in or all out. There were tiers to it. But i just wanted just and ill end here. And i really dont have a question. I just want to say to to be able to have something youre going to set a bar that low, and not be able to really truly measure it, you know, incentives are great. And i dont think anybody here would agree that uniformly across the v. A. That theyre being applied equally. And youve said it, too. Its very subjective. The basis of it is getting the facts. And i think were so far away from that at this point. I really dont even have a question for you, because until we fix that, having the discussion about performance incentives, you cant even have the discussion because theres no basis of fact to have it on. So that i yield back, chairman. Thank you very much. Ms. Custer, youre recognized for five minutes. Thank you very much, mr. Chairman. And thank you for your testimony before us today. Im feeling like were experiencing what they would call in the academic world grade inflation or what garris and keeler would refer to as all of the children are above average. Coming from the private sector, its hard for me to believe that 80 of employees can be either outstanding or this other category that is above and beyond what the expectation is. And it makes me feel like the expectation is lowered to a place that doesnt serve our veterans the way we had wished. But i want to focus in on where we go from here and how we can fix this problem. Because obviously this is a bipartisan issue. We are all concerned. Fortunately, this is one of the few bipartisan committees where we can Work Together and make a difference. My concern lies in how we can fix this situation or help the v. A. To fix this situation. Because it doesnt appear that the policies provide for a methodology to make this kind of change. And by that, what i mean is that we have had some oversight. But at the end of the day, it doesnt seem to change. And i just want to make reference to the vha is unable to assure that all though they identify problems, that the problems will be corrected and do not recur. This is a review of one Medical Center a year later found the identical problems. That it doesnt you dont end up with a change. And i want to focus in on, is there ever an opportunity in the system that we have now where 80 of the people get enhanced pay, is there ever an opportunity for reduction or denial of this enhanced pay . And just moving forward, now that we know what we do know, what will be the consequences to people that, frankly, were lying and cheating and stealing, both Veterans Health care and taxpayers hard earned dollars. Yes, congresswoman. Thank you for that question. I do believe theres room for change. Part of that change will come with more training of our Senior Executives. Them understanding our critical elements that are put in the performance plans in establishing very real goals. And the metrics we have talked about. And ensuring that our metrics are not too low. That, in fact, you must perform to reach that exceeds and that outstanding rating. That we pay much more attention. We have now automated the system of the performance appraisal system. I personally could not see them until they came into hard copy previously. This is the first year its an automated system. Well have a chance to look at all the metrics in advance. We will do a lot more training with our Senior Executives on what these critical elements mean and how our Performance Review committees and Performance Review boards need to view these metrics. I am certain and what about lack of performance . Can someone lose their job . Can they can they get docked pay . Is there is there any capacity in this system to take action when performance is less than stellar, which apparently it is for 80 of the people . Yes, congressman. There is absolutely a process to do that. You can what does that entail . How someone would get fired . It entails proposal of removal, if we are talking about removing somebody from the federal government. That employee would have a right to respond. They get a 30day notice period. Then they can respond, say if theres any mitigating circumstances. That paper then goes to the deciding official who would take into consideration what the employee says. Then a Decision Maker will make within 30 days a decision on the personal action to happen. Depending on what the evidence is for what the employee has done wrong, there is a range of things you can do to an employee. Can i ask you, would criminal conduct be evidence of lack of performance . It would be misconduct. And would the misconduct be sufficient for someone to lose their position . If the evidence proves that through investigation, yes, that is possible. And how about lying to the extent that it wasnt a crime, but it was certainly harmful to veterans being able to get access to care . There is certainly a range of punishment, and depending on all of the details of that, it is possible they could be proposed for removal. Depending again on the evidence and details. Thank you very much. My time has expired. Ms. Kuster, thank you very much. Dr. Ben scheck, youre recognized for five minutes. Thank you, mr. Chairman. Thank you for being here, ms. Farrisee. Dr. Petzel testified in february of this year in the subcommittee on health that six ses employees had been involuntarily removed in the last two years. However, weve tried to get the information as to what the details are of that, and we havent gotten that. Are you aware of this . Congressman, you did receive that yesterday. I know it just came yesterday, but the committee did receive that from the v. A. Yesterday. Okay. So if thats correct that six people were removed and not a Single Person in the ses received less than a satisfactory rating, how did that removal take place . Removals once they were removed, they did not receive a rating. So they would not show up in having received a less than satisfactory rating. So when you see numbers that show no unsatisfactory ratings, its a little misleading. Because those employees then did not get followed up with a rating so youre telling me that there is actually unsatisfactory ratings, but theyre just not listed. Congressman, once somebody departs, they do not thats not thats not accurately depicting whats really going on. That is true, congressman. Im kind of concerned, too. Let me ask you this question. This is from my briefing here. An ses employee works with their supervisor to create a Performance Review plan for each fiscal year. And then they rate their own performance on each critical element at the end of each fiscal year. Yes, congressman. And then so then thats then reviewed by their direct supervisor. By their direct supervisor. The rating official. And then so they rate themselves . They they put down all of their accomplishments. Right. They rate themselves according to this, right . That process is reviewed by their direct supervisor. It is. Thats then approved or disapproved by the direct supervisor. Correct. Then the direct supervisor doesnt actually write the Performance Review themselves. The actual employee writes the Performance Review and the supervisor just okays it or just allows it. Is that what happens . The the portion on the appraisal, there is a selfassessment on there that is optional. So the employee can put a selfassessment in there. But the rating does that usually occur . Im sorry. Does that usually occur . In some of the ratings. Not all of them. Have you ever been involved in this process personally . I am just being involved in it since ive arrived at the v. A. Personally. Ive just finished doing my own ses appraisal plan. We are at the point of turning in our plans right now. How long have you been with the i guess i dont know this. How long have you been there . Since september in this role. So you havent been a direct supervisor to anyone thats done their own plan yourself . Im just doing that now. Youre doing your own plan, but are you actually supervise a direct supervisor . I am. And my deputy has provided to me his plan. We are not to the point of writing the final appraisal yet. Do you think this is a good idea that the the employee themselves writes their own plan . It seems to me that would lead to an 80 percentage of people getting good results. Congressman, i understand. But before that plan is written, there is discussion with the ratee and the rater. They dont just go off and write a plan without some sort of discussion of whats reasonable and what should be considered exceptional. Thats what you say, but the process seems to indicate that the guy writes his own plan, if i do this, this and this over the next year, ill be successful. Then he accomplishes that. And even better. And then he gets a superior rating. You know, i mean, this whole i mean, the questions that have been previously brought up here in the committee, you know, tends to think theres not a real rating going on here. Its just everybodys getting a good rating. You know, im very concerned over the fact that people are writing their own review plan. And it just gets checked by their supervisor. And then the numbers that you present to us arent accurate. And zero you know, zero percent, and theres six people removed. Theres inconsistencies in your testimony. And the testimony of dr. Petzel. Its very disturbing to me that here we are in the middle of trying to reform the v. A. , and we get inconsistent answers. And it makes us not want to trust anything that comes from you people. Mr. Congressman, the numbers that that we provided as far as the ratings are when theres actually an appraisal plan, we did not do those on the individuals who departed. Thats why they dont show up in the numbers. Well, its very disappointing to me to you know, to get these answers from you two today. I think im out of time. Thank you, dr. Benishek. Maam, you said that the the selfevaluation or Senior Executive selfassessment is optional. Are you sure its optional . As part of that plan, there is im looking at the performance appraisal form. Senior executive performance appraisal form. The 3482 . Yes. 3482. And there are rating official narrative that is i guess what im looking at, the only place i see thats optional is if the person is asking for a higher level review for their pay. Or its optional to put a letter of input. But the other two sections, section 3, Senior Executive selfassessment, does not appear to be optional. Form 3482. Section 3. Senior executive selfassessment. Describe your accomplishments, outcomes and results. I think you just told dr. Benishek that was optional. Im going to take that back and say i may have misspoken. Can i get back with you on this, chairman . Yes, you can. Thank you very much. Ms. Brown . Five minutes. Thank you, mr. Chairman. And thank you, ms. Farrisee. So now i understand youve been in this position for a short period of time. Were you in Human Resources with the v. A. Prior to . I was not. I retired from the army. Thank you. So its been widely reported in newspapers that regional director in pittsburgh, i think, received a performance pay award of 62,000. Youre aware of that. I am aware of that. So im just trying to do the calculations here. And i will add, 62,000, the Median Income in the county that i represent is 76,000. So i just want to state that for the record. So if you if this employee received 62,000 and a bonus, and your testimony you said that the performance pay cannot exceed 20 of the base salary for an ses employee, then if you do the math on that, then the base salary is is over 300,000. Yes, congressman. That award was because of a president ial rank award. And whats special about that . Very few of those are given each year. So that doesnt follow any of the rules that we have been talking about . And its not an award given by the v. A. I see. So theres i know this hearing is about performance pay. But there is also a retention incentive pay. Yes, congresswoman. And so the process for awarding retention incentives, i presume, differ from performance pay incentives. And so do you have the information on what percentage of ses employees receive retention incentives last year . Is that can they receive both retention pay and performance pay . They can receive both, congresswoman. We currently have 40 sess out of the 470some sess who receive retention incentives. And is there a cannot exceed percent for retention pay . There is. What is that . 25 of their salary per year. And it can be given up to four years. Are there other kinds of awards that were not aware of beyond performance and retention . Relocation incentive. If you are asking reassigning someone, you can offer a relocation incentive. And a recruitment incentive for people new joining the agency. Is there a cannot exceed percentage on all of them. There is a percentage and a number of years it can be grive. That is across the federal government. The in 2010, the v. A. Did its own review. Can you just describe what specific actions the v. A. Took to reform and restructure the ses bonus structure from the result of their own internal review . Ill have to take that for the record, congresswoman. Similarly, a gao report in 2013, and i wanted to know what specific action has the v. A. Taken to improve the performance pay policy since that was issued . We updated our handbook that was missing some very key points that the gao pointed out. And we put out an updated handbook in march to include everything they asked us to include. Can you just describe some of those elements . One of the elements was not meeting a 90day timeframe in which you would counsel and talk about this performance pay. It has to be put in a plan. That has to be done within 90 days. We did not have a timeframe in the handbook. Things were not being done according to policy. And, finally, can you have you as the assistant secretary for Human Resources and administration, and given the situation that we are in currently, have you been able to assess the igs ability to investigate this just in terms of personnel and Human Resources . And do you believe that they have enough resources to do this . Congresswoman, i cannot personally assess it, but i have heard the ig in testimony say that he has enough resources to do this. But you dont do that as a practice to review their resources . The not the igs, no, maam. Thank you. I yield back. Thank you very much. Dr. Winstrop, youre recognized for five minutes. Thank you, mr. Chairman. I have some questions concerning the whole Evaluation System. And i guess id like to compare it to how the military does it for officers. You know, you can do a support form. You fill out a support form for your superiors to talk about what your goals were for the year, whatever the case may be. So as i understand it, that would be part of the process. It is. Currently. And, you know, through the process with the military, you do have meetings periodically with your rater to see, are you achieving those goals . It also gives the rater the opportunity to add other goals that you may want to put in there. Does that take place . That is correct. Okay. Do you think that theres a point in time where the person is just pretty much writing their own evaluation, sending it in electronically, and maybe the rater is just cutting and pasting and putting it in there and sending it off approved . Do you think that happens within the system . I know you havent been there very long. I havent. I cannot comment that does or doesnt happen. Okay. Because that would be a concern of mine, that this is just kind of a network here. Why dont you just fill it out, send it along to me, and well be okay. Im also wondering how much the v. A. s core values come into play when it comes to evaluation. Can you tell everyone what those core values are . We have core values. I care, our integrity commitment, advocacy, expect and excellence. That is part of our performance appraisal plan. Is there a part in there where the rater then can take those values and comment on those values on that person . Yes, there is. Because it seems to me that for some of the people, especially the part on integrity, really fell short. And yet some people got their performance payment. Would that be correct . Congressman, at the time it was written we may not have understood there was an integrity problem. If that were to be written right now, once the investigation is complete, i would expect to see that. Okay. Well, i was really just trying to understand your process more. I thank you, and i yield back. Thank you, congressman. Thank you very much. Dr. Ruiz, youre recognized for five minutes. We know based on the audit that 46,400 veterans who enrolled in the v. A. Health system in the past ten years havent received appointments. And that more than 56,200 veterans have been waiting more than 90 days iffor their first appointment at a v. A. Medical facility. Unconscious bli, Senior Executives who oversaw Health Care Facilities with manipulated data were awarded bonuses based in part on faulty wait times. And as dr. Wenstrup said, clearly demonstrating a lack of integrity. As an emergency physician, i am appalled by the thought of v. A. Officials covering up the fact that they are not providing muchneeded medical care to our veterans and still obtaining bonuses. So in an effort to get to the bottom of this represent henhen behavior and ensure these executives are held responsible, i would like to know in what year bonuses started being tied to scheduling metrics. Ill have to take that for the record. Its important to know because then you can clearly see the difference between prebonus and postbonus. And things dont move very fast in the v. A. Including behaviors and performances. So it would be very important to determine which facilities had had those drastic changes. Also, i spoke to some of my veterans back home. Theres a veteran, major bill young, very well respected man. Good human being. Hes in line with a veteran centered approach which i absolutely agree with. And his question is, are there any bonuses based on Patient Satisfaction feedback . Ill have to take that for the record to see if that is a metric in any of the appraisals. Okay. I think that theres a we need a very drastic cultural change so that when that question is asked again, it should be in the top three answers as to what our v. A. Personnel are measured against. Number one, two and three, a patient centered, patient feedback bonus. Okay . And has there been any analysis of the effect of bonuses on scheduling metrics . There has not been analysis to this point. Okay. What was the exact criteria for awarding these bonuses regarding scheduling metrics . The scheduling metric, to my understanding, was to have the schedule within 14day time period. Okay. And, you know, i think my closing comment here, were talking about bonuses, you know, my my father worked in the fields. Hard manual labor. He was a mechanic. He was a truck driver. He did whatever it took to put food on my table and to pay for our education. Something he didnt have. And he taught me the value of an honest days work. And he said, son, whatever you do in life, just work hard. Be the best at it. And honesty and integrity are the values of this country. And those are the values that america was founded on. And lying to get a bonus flies in the face of our values as americans. And i think that we really need to have some introspection within the v. A. System to come back to those root values that make this country great. Thank you, and i yield back my time. Thank you very much, doctor. Mr. Cook, youre recognized for five minutes. Thank you, mr. Chair. Theres been some conversation about once the evaluation report is written, that you cannot undo that. Cant you have a supplemental or special fitness report, per se, based upon certain circumstances under somebodys watch . Im not aware of doing one in addition to their annual appraisal. So if Something Like this happens that was shows the character or unsatisfactory performance, theres nothing that goes in the jacket of that individual that gets these bonuses or what have you . That would be included in their current year appraisal. No, no. Im talking about because of what happened and things that happened on their watch. That they get a special fitness report based upon unsatisfactory performance. No . Okay. I just want to go on. A couple of things here. We had a number of veterans testify i dont know. Maybe six weeks. And i asked them basically, i was using the comparison of the military being, you know, fully combat ready or noncombat ready. And i used it analogous to the v. A. And everybody was here. And across the board, everybody went down the line and basically said, theyre not mission capable. Which everyone here, i think, has that same agreement. But it seems as though mission and weve talked about Mission Performance standards and everything, but we dont apply them. Were not taking care of veterans. That is the bottom line. And were talking about all these intangibles, and were not doing the job were supposed to do. I want to ask you, have you ever heard the term truth teller. Truth . Teller. Truth teller. In the military, at least in the marine corps, you know, you had grade creep, everybodys outstanding, you know, you write your own evaluation report, you love yourself, blah, blah, blah, blah. A truth teller takes everybody thats in the same rank, whoever is writing the evaluation, and you have to list them. One, two, three, four, five. Because everybodys outstanding. And everybody here is outstanding. But some people are better than others. And that evaluator has to do that. And i dont see that happening. I think you need if youre going to give everybody bonuses on being outstanding, and you rate everybody outstanding. Let me ask you a question. Have you ever heard of the term bennie sug. No, congressman, i havent. Benni sug, i guess if youre old or been around a long time, beni sug meant beneficial suggestion. It was in the marine corps. I thought it was in the army. Its a beneficial suggestion where you might get a promotion, you might get a bonus. And the suggestion normally from one of the troops that knows whats going on, hey, the scheduling system is all screwed up for the following reasons. And this should be changed. Blah, blah, blah, blah, blah. Instead of giving ratings that everybodys outstanding, i think you ought to look at this where the people that deal with this have an incentive to change it instead of an automatic bonus, if you will, that quite frankly when you do that, i i think it makes it ridiculous. When a lot of people in this room, even the veterans themselves, thinks that the Veterans Administration is not performing the services that theyre supposed to. I got a lets see. Going into some of the other things i had in mind. You talked about core values and everything else. Now, in the Evaluation System, going back to Mission Performance standards, about taking care of the the veterans. Is that part or spelled out, is that the bottom line on the evaluation . You know, because integrity is open to interpretation. But this is a yes or no. Is this organization or your organization fully capable of taking care of of veterans . And have they done that . Is that part of the Evaluation System or the evalewetive process. Not stated in those words, but it is part of the process. Its not stated in the exact words you just said. But our mission is to take care of veterans. Do you think thats got to be reinforced in over and over again . Because right now from a cultural standpoint, it doesnt seem to be happening. You go back down there and you start with that premise. Its like we talked a lot about taking care of veterans, taking care of people on the battlefield, band of brothers, band of sisters, et cetera. Thats what holds the military and the veterans together. Congressman, i believe that the majority of our employees do advocate for our veterans. Okay. I yield back. Thank you. Thank you very much, colonel. Mr. O rourke for five minutes. Thank you, mr. Chairman. And id like to start by continuing a line of questioning begun by dr. Roe and mr. Takano and others and look at the local vha facility level, the hospital or the clinic. And so many of us are concerned about provider shortage and what it will take to attract and retain the best talent possible to serve the veterans that we represent. And so id like to understand how salaries and incentives are set for the providers that the doctors, psychiatrists, nurses, Nurse Practitioners and others who actually provide the care to our veterans. It is a complex process of calculations on market pay so that we can look at what the national pay is. And that is used in calculating what we recommend for pay. Its in addition to a base pay. So if we are talking about sess and we talk about a title 5, theres no addition to any of their base pay. Our title 38, which are our physicians and dentists, will receive in addition to that base pay this market pay, which we must do these calculations to. And then also they can receive a performance pay. That has nothing to do with an award performance, but it is a contract and objectives that they must meet in order to receive that performance pay. And so apart from the formulas and the calculations, does the local vha director have discretion to deviate from those formulas to attract or retain somebody whos needed in that community . They can request recruitment incentives. And then request relocation incentives or retention incentives. If its someone that they have already on board, they want to keep, they can request those type of incentives. And is there any i want to make sure im using the right words. We dont use bonus, but any incentive offered to a vha director for returning money back to the v. A. Or coming in annually under budget or not spending a certain amount or over a certain amount in a certain category . Theres not i would not say an incentive. So no part of a vha directors performance incentive is based on how they perform financially . They would need to stay within budget. Absolutely. So theres a penalty for going over, but no reward for coming under . Not that im aware of. Okay. One of the things were trying to figure out in el paso is, i brought this up repeatedly at this committee. We have a Mental Health care crisis. And one that was confirmed by the vha audit released last week that showed that we are the worst in the country for setting an appointment for an existing veteran patient within the va for Mental Health care. Fourth worst for new patients. Second worst for specialty care. For those of us in el paso, its not a surprise. Weve known it for a while. And what weve been told as providers and others within the va in el paso in the vissen 18 that were in, start to come to our office, in many cases anonymously, is a deep concern that the director is not providing those discretionary incentives to attract and retain people. So if we have these terrible Performance Measures in terms of being able to connect a veteran with an appointment, if we have a provider shortage that was 19 1 2 fulltime employees when i started a year and a half ago, it was 13 1 2 as of last month, im wondering how we can provide greater incentives or leverage or discretion to the local director to bonus or incent providers to get them or keep them in the first place. Any thoughts on how you might be able to do that . How the administration might be able to do that . Or how we on the committee who are interested in this might propose if we need to change legislation to do this . I would need to know what incentives they have already attempted to do, if they have. Or if theres anything we can do to help them look at those incentives. We, again, had an acute issue, have an acute issue when it comes to providing Mental Health care at the el paso va. And we were told by an anonymous source within the vizzen that until we really started to push on the director, he had not once deviated from the formula recommendation for what you pay someone to Practice Medicine at the v. A. In el paso. And it was only through our pressure that there was this one deviation that ended up in hiring a muchneeded psychiatrist to el paso. Its very hard to get direct answers from the local vha and even through the administration as weve seen. I look forward to following up with you to find out what those formulas are, how we improve them or change them, what discretion there is and how we hold people accountable for their performance, given the discretionary power that they already have. Yes, congressman. Mr. Chair, i yield back. Thank you very much. Ms. Wuhl lar ski, youre recognized for five minutes. Thank you, mr. Chairman. Thank you, maam, for being here. You talked in your Opening Statement about stringent controls, clear standards. On these performance awards. In your opinion, what happened . On the awards . On the performance awards. How do we go from your Opening Statement of stringent control and clear standards and end up over here with this massive amount of money and the revelation of president ial awards and all these other awards, 20 and 25 of income, the 80 amount of people who receive them. Was there any red flag i know youve only been there since september. But when you came in and just over the past several months, and as you look at this structure, were there any red flags or alarms or inklings or gut feelings or anything that says, wow, this is a lot of money. Or anything to set off a red flag in your mind that something is really, really wrong . Because it seems like it got away from those stringent co controls and clear standards. Congresswoman, what i said in my opening remarks was we needed to have precise and stringent and clear standards. I feel that is what we need to do from here forward. I think we do need more stringent and precise written performance plans so that my question is, were you aware of that prior to this whole blowup in the v. A. . That there was something out of line with the performance bonuses and thats why you needed the stringent controls and clear standards . No. It was because prior to this year we did not have an automated system. You could not see these in advance. Having the opportunity to see these in advance and be able to look at these across the board, prior to the end of the year, i thought would allow us to have a better look and more precisely see if we do have the correct metrics, if the right things are being done. So i have a question on the president ial award. The president ial award doesnt come out of the v. A. Budget, correct . Whose budget does it come out of . Im not sure. Ill come back to you on that. Okay. So is there an allotment of money . Do we know how many employees we have that received the president ial award . Very few. But ill get you that number. Its a very minimum amount across the federal government. Okay. I appreciate it. Could you also then get me for the state of indiana a list of all the seslevel employees . And for the past five years, what their performance bonuses have been as well . I will gather that information. And if it is releasable, absolutely well release it to you. Okay. Do you know how long it will take to get that . Ballpark . A couple weeks. Okay. And so as you look at this, as we move forward and we look at this whole question, you know, i echo representative ruizs question about when these incentives started. When was this thing tied to the metrics of the appointment times. I had heard in some of the news reports this has only been in effect for a couple of years. When we look at, like, a place like phoenix where over the last three years theres been Something Like 10 million in bonuses, i am trying to get my arms around why that didnt send signals or red flags somewhere in the system of the performance the performance bonuses. Its such an inordinate amount of money, even for just one place where this whole thing started with the investigation. Its unbelievable the amount of money that has gone into this system. Ive not confirmed that amount thats been spent in phoenix. So i have to go back and confirm that. Okay. And then also, when you send the information on the president ial bonuses, what i wanted to know is what budget it comes from. Is there a cap on how much money comes from a president ial bonus . How many people have received it . For how many years they get it. Just the details. I would appreciate it. Yes, congresswoman. Thank you. I yield back my time. Thank you very much. Ms. Farrisee, i appreciate your legal answer if its releasable, you will get it to ms. Wohl lar ski. Lets make a deal. If you dont, we will subpoena it. I understand, about awards going to people who may or may not have earned them. The director of vsn 21 which oversees part of nevada put false information on a resume, where see had gone to school or she had gone to school, but rose all the way through the ranks to be the director of that vsn. Thats an enormous task overseeing tens of thousands of veterans that stretches from guam to reno. I wonder if you could tell us how you verify peoples resumes or when they file applications . How do you look to be sure this wouldnt happen again . This woman also received these bonuses as she moved up the ladder. I think shes had to give some of them back now. Could you address that issue for us . Congresswoman, when we receive resumes, we call references, we do background checks. I have just heard of this recently this week. I have not had the opportunity to look into that matter. Well, when you look into it, would you get that back to us . Yes, congresswoman. Thank you. Just along those same lines, the Regional Office in reno serves all the veterans of las vegas, which is where most of the veterans are in the state, but the office is in reno. Im just wondering if given the fact that that was one of the i think it was the fifth worse but one of the worse in the country for the backlog. Backlogs there took over 500 days. The way you reduce the backlog there was brokering out over half of the cases to other places around the country. Youve hired 25 new people, finally after weve been harping about this for a year and a half. Those are now in Southern Nevada but they are overseen over the telephone by somebody still in reno. This persons had a number of problems. Surely, there is not a record of success. Can you tell me if there is anybody in that reno office who has gotten any of these performance bonuses over the last couple of years . Ill have to get back to you on that, congresswoman. Okay. Also recruitment incentives. Id like to find out if theyve gotten any of those incentives in addition to just the bonus. Would you get back to me on that . Yes, i will. Thank you very much. I yield back. Thank you. Mr. Kauffman for five minutes. Thank you for being here before this committee here today. If i understand it correctly, you oversee the personnel system in the department of Veterans Affairs. As part of that this performance pay system or bonus system, am i correct in that . You are correct. Can you tell me how this bonus performance pay system works for veterans when they are serving on active duty . Can you tell me how this process works for them . Some active duty soldiers receive bonuses based on their speciality, but the majority of active duty soldiers dont receive bonuses. On performance, can you tell me how the bonus structure works for performance for active duty military . There is no performance. Can you tell me about your own military service . I spent 34 years in the army. That is amazing you would serve this country in uniform, yet be so tolerant to how this department treats our veterans. I think its absolutely extraordinary. How can somebody go from United States army and this environment, yet not take the values from the United States army into serving our nations veterans. I think its absolutely extraordinary. As you know, bonuses, if we call them that are based strictly on occupational specialities. When people perform in the military, they are rewarded through promotion, theyre rewarded through various awards, but they are not financially driven. As they are in this department you seem to defend this extraordinary system. It seems to be the only thing that the department of Veterans Affairs is effective at doing is writing bonus checks to each other. Those that are in leadership. That is stunning. Certainly not serving our veterans. Not providing a claims process that is at all expedient. Not providing the health care they earned. Certainly fudging wait times to get these bonuses. You dont seem to want to come down on these people for doing. You ought to be outraged. You ought to be outraged. At the manner that these veterans are treated. Based on your own background you ought to be outraged, but you are not. Its alstott yus quo to you. All things are good. Maybe they could be a little better, but things are good. Things arent good. This is the most mismanaged agency in the federal government. Yet it is entrusted with honoring our commitment to those men and women who made extraordinary sacrifices on behalf of this country. Ive got to tell you, i think we are better served as a nation when you were working outside the Veterans Administration, not inside the Veterans Administration. Mr. Chairman, i yield back. Mr. Jolly, you are recognized for five minutes. Thank you, mr. Chairman. As assistant secretary for Human Resources, im sure much of the conversation today is not a case of first impression. The conversation about metrics and what are appropriate metrics and how they are reviewed. I presume there have been many conversations within the Department Already in the wake of the crisis about how performance awards are distributed and based upon which metrics. Is that an accurate assumption . So much so the acting secretary already said there will be no awards for vha. So within those discussions are based on your knowledge, and even if its not factual, even if its hearsay, are you aware of any metric thats been included in any executives bonus or performance award system reducing the incidents of nonva care . Im not aware theyve rewritten metrics other than taking out the 14 day. I dont mean rewritten. From existing bonus plans and identifiable metrics from 2010, 2013 or generally, are you aware of any metric thats been used to award a bonus based on reducing the incident of referral to nonva care . Im not. I have to get back to you on that. Is it something that could be looked at . It certainly can be looked at. To document it for the record, if i were to send a letter, would it be appropriate to send that to you . Yes, congressman. Mr. Orourke asked the question about reducing costs. That is not a metric youre aware of either . That doesnt mean its not there. The last question is this. Maybe you can clarify it a little bit. You refer to almost an expansion of the review process, an additional layer of review built in. Youve been there since september, so maybe its just a question about your impression and this really isnt a va question. I ask the question all the time. A number of constituents do, how does government get so big . It seems there is an awful lot of money being spent on a very dense bureaucratic process to ultimately come out of the back end and provide these performance awards. Can we do better . Is there a better way to streamline this . Can we reduce employees actually assigned to that bonus process . I mean, just based on what you said and maybe you can clarify it, it seems there is a lot of bureaucratic infrastructure behind the process of determining what metrics need to be met and evaluating those metrics, which at the end of the day we heard a thousand times, everybody is on the right side of the curve and everybody is determined to be above average. Can we save money . Congressman, i concur it is worth looking at streamlining this process. Do you know if the acting secretary is looking at streamlining the process . At this time, i dont think thats where his attention is. We will definitely discuss it. Thank you very much. Thank you very much. I appreciate you being here today, madam secretary. Dont you think retaining ones salary is enough incentive for an ses employee to do their job . That would be my personal opinion, but i cannot tell you how everybody feels. I just joined the ranks of the civilian employment. Yeah. And youre here to answer those questions about that. The announcement, can you describe again, about these ses bonuses in future . How will they be handled, suspended, deferred . The acting secretary suspended any awards for 2014 for our sess in our Veterans Health administration. You also state that theyre critical to retention and performance. Does that mean you are going to lose employees and performance will go down with this announcement . There is always that probability. Do you think that will happen . We did that last year with our veterans benefit administration. I do not think we lost a lot of people because of that. Okay. You also made reference earlier to a deferred list on bonuses. Can you describe that again . I didnt understand that. Yes, congressman. At the end of every year once the appraisals are complete, we ensure that we do a check with the ig with eeo to ensure we dont have any of our sess we consider on a bad list, they are under investigation, there is anything possibly derogatory. They provided a list of 13 names. We then defer the rating. They received an appraisal performance, so they have a rating. That rating is held until such time as the investigation is complete, then that will go to the secretary to receive the results of the investigation, to see the original rating that the employee received, and make a determination if that rating should be changed based on the results of the investigation. Until the veterans waiting list is shorter than the deferred bonus list, probably no reason to move forward on the bonuses. May 7, 2013, a mr. Len hagstrom was before the committee. We determined that Committee Hearing a massive failing, the bonus issue came up with him. I believe he was an ses executive. I asked him a lot of questions. I asked him exactly why did he get the bonuses . Massive bonuses for three years. Madam secretary, he said he had no idea. He had no idea. How is there a connection between performance when shazam the bonus just shows up in a paycheck. Are there personal visits every time between the immediate supervisor and folks like len hagstrom or paperwork . There should be a personal visit. I cannot confirm there is. They should have seen the rating and understand the rating they received is what is tied to the award amount. Depending on your rating depends on what percentage of an award you receive. That rating is based on their performance. According to mr. Hagstroms testimony may 7, 13, there was no visitation and no connection between performance and retention and his pretty significant bonuses. Is that required in the rules and regulations that there is an actual meeting . I do not believe a meeting is required. No required meeting. Exactly, how does this improve performance . And no understanding of that. I presume, and youve only been there nine months and most of these, i guess there was end of the year evaluation. Youve been through that with your folks immediately below you, right . No. They were just receiving their final evaluation when i arrived. Midyear evaluations . We are going through that right now, yes, congressman. The december evaluations, i understood, you didnt go through the december evaluations . Who did those . We do mid year about now, in the last 30 days. Its not in december. End of the year is december. What did you do during those evaluations. Did you meet, were there folks that work for you . Thats happening now. Mid year is usually now. You went through this in december though, correct . You came in september. I came in september but no end of year . Not in december. We were just completing our Performance Review committees and Performance Review boards for the end of 2013 fiscal year. You do those in june mid year then theres just once a year . Just one mid year. You can council and discuss. September 30th. So your predecessor went through that. Correct. Your predecessor is how long in the position . It was acting and i think he was there a little over a year. Thank you, mr. Chairman. I yield back. Thank you very much. Thank you, everybody, for being here today. I have two quick questions, if you would. Yesterday after requests being made at three separate hearings by members of this committee, multiple staff requests, va did finally provide us limited information on the six members of the ses who were supposedly fired last year. Subsequent to this information, the staff has requested a briefing on that. Can i have your commitment that that briefing can take place within the week, within a week. Yes, mr. Chairman. Next week we will have this briefing. As the senior hr official at va, can you tell this committee, if you think that susan bowers should have given what we know now, should have given ms. Hellman a fully successful or higher review for last year . Not if she knew what we know now. Begin that the review, ms. Bowers gave of miss hellman was not a true indication of ms. Hellmans performance, would it have been your recommendation that the review given of miss bowers also should be reevalu e reevaluated and any bonus she receive rescinded. Ms. Bowers retired. There is no way to go back after they retire. This is another one of the disciplinary action va takes that allows people to seal their benefits and not have anything taken back. Mr. Chairman, it was her right to retire. Yeah. Okay. Any other questions . Thank you, mr. Chairman. Ask unanimous consent miss kirkpatricks statement be entered into the record as well as Association Letter we received april 19th or june 19th. Without objection. Thank you. Thank you, everybody, for being here today. Thank you for being with us. This hearing is adjourned. Thank you. A discussion now on the Global Economic outlook. Over on the house floor, law makers continuing work on a 570 billion annual spending bill to fund the department of defense. Just under 80 billion is currently included for the war in afghanistan. Final vote on the bill is expected today. Also this morning, irs commissioner appearing before a house panel about potential missing emails in connection to an investigation into irs targeting of conservative groups applying for taxexempt status. That entire hearing will reair tonight 8 00 eastern on cspan. This afternoon we are going to take you to the pentagon for a briefing with press secretary rear admiral john kirby. We expect to hear more about president obamas announcement yesterday that he will be sending 300 military advisors to iraq as violence escalated in the country. That briefing, scheduled for 1 00 p. M. Eastern, will be live here on cspan3. This weekend, American History tv is live from the Gettysburg College civil war institute. Saturday morning starting 8 45 eastern. Youll hear historian Peter Carmichael on robert e. Lee followed by Arizona State University Professor brooks simpson on ulysses s. Grant. A discussion now on the Global Economic outlook with White House Council of Economic Advisors chair james fuhrman. It was part of the wall street journal chief Financial Officers network conference. Good morning, everyone. Thanks to you both for being here. Mr. Furman, i would like to start with you. Talk about the u. S. Economy. Beyond the painful long recovery, there is increasing concern that the long term growth rate is slower than we thought. Over the past half century it averaged about 3 . Now the imf is out with a report that says it will be 2 and thats down from the 2. 8 they predicted just in april. Whats going on and is our future a bit darker than we thought . If you look at economic growth, you could look where we are right at this moment. And we dont want to look in the rear view mirror at the First Quarter. We want to look where things are now. Job growth picked up. We are adding about 220 jobs a month. If we add jobs for the month of june, well have 52 consecutive months of private sector job growth. That will be the longest consecutive streak of job growth weve seen in this country. Then you look forward. There are two components of growth. One is how much you are adding to productivity, your stock of knowledge. The second is how much you are adding to the work force. The first started rising in the mid 90s with the new economy and its continuing strongly. Theres a lot of technology and growth in our future. The second, the labor force, absolutely thats slowing as the baby boomers retiring. That does contribute to an overall Slower Growth rate, but it also highlights why we need to do things like immigration and reform, get more women into the work force and do what we can to go against those demographic trends. Why are the predictions slowing instead of going the other way . We had a First Quarter that was obviously disappointing. Way below what anyone would have thought. Some of that seems to have been due to weather. Some of that seems to have been due to onetime factors. The half year before that was quite strong. All the indications are the Second Quarter is quite strong and that it was an aberration. An aberration that large is going to take down your average growth rate looked at over the course of the whole year. I would like to ask you about emerging economies. I was talking to some cfos last night and emerging economies used to be the answer really for growth. Now thats reversed almost completely. The world bank has a study out that says for the third year in a row, they will deliver disappointing growth under 5 . What can be done to bring them on track and what do you predict . Its disappointing. Disappointing by their own past performance. Growth below 5 , 4. 8 is our figure. That is still in the current Global Scenario is important enough. China is still at over 7 . Compared to what china used to do with great ease, but 7. 5 is handsome growth. 4. 8 is not bad. Brazil is where its gone down quite a bit, but we are keeping our fingers crossed on that. My own expectation is that there are sufficient deep underlying tactonic shifts. Because of those reasons, a lot of the absolute levels, there is no comparison. A lot of the growth leadership will in one or two years go back to emerging economies that develop. The few big ones that are managing to reform and do relatively better in terms of organization. Before we go on, i want to switch to our first question for the cfos. We would like to know which country you think will deliver the biggest economic surprise over the next 12 months. Mr. Furman, one of the xfactors in the economy over the past week now is the escalating violence in iraq. What sort of impact do you think that could have on the u. S. Economy . Obviously, oil prices and does the success of the shale boom insulate news ways it wouldnt have previously . If you look eight years ago, we were importing 12 Million Barrels per day of oil. We cut that down to 6 Million Barrels per day. The about half of that reduction is extra production. We have discovered and increased our production of oil by as much in this country as iraq produces. And about half of that reduction at imports is due to reduced use and fuel efficiency. We have the most fuel efficient fleet. We are more insulated from Global Oil Prices than we were, but no one is fully insulated from them. Even if we didnt import any oil our price would still be determined on a Global Market. That Global Market is very much a function of events around the world. We are in better shape than we would have been a decade ago to withstand an oil shock. We are in a lot better shape than we were 30, 40 years ago in terms of the Oil Intensity of our overall economy. But there is no doubt that its a risk factor and its one we are taking very seriously. Are you doing any modeling in terms of how long it would take to impact the economy . We certainly monitor the situation in oil markets. As the president said last week, would look at the range of responses we could potentially take if there was a disruption in oil prices and we are prepared to do that. Does this change the exports da debate in natural gas . Youre talking about building terminals two, three years from now. I dont think this changes that debate at all. Mr. Basu, you served as Economic Advisor to indias government till 2012. With the modi election there is incredible optimism about india. Are people getting ahead of themselves . What should companies be thinking of when they are thinking of india . Optimism is right. You should not get ahead yourself. Optimism is nevertheless right. If you look at the last couple of years of the previous government, and i was actually in there, the reforms were clear. From 2005 to 2008, india was growing at 9. 5 per annum. To the down turn of the Global Financial crisis it kept up well. The last two years dropped out. There were some Global Factors in place. There was also a slowdown in reforms. There was imminent election. There were corruption scandals breaking, which were affecting the temperament and mood in the country. There was a lot of ordinary civil society, very upset about this. So with the election there comes a burst of expectation. If you look at the manifesto details and things like that, we expect there will be some reforms that will come in and now they dont have to think of the next election for another five years. There is space over here. I actually expect, given that couple of the fundamentals of the economy like the savings rate and investment rate, india now saves and invests the way Eastern Countries used to do in the 70s and 80s. Fundamentals are very strong. If the reforms get into action, i think within a year, 1 1 2 years, the growth figures should pick up actually very clearly. You think in the past, the past few years have been a real disappointment. You were just unable to breakthrough . Disappointment, but there are two things. If you look at indias growth, it was doing between 4. 8 and 6 . Which by any Global Standards since the whole world slowed down massively was not quite as bad. I kept saying in india, one of the best signs was on one Television Interview someone said, mr. Basu, whats happening to the country . Its going to the dogs in india growing at 6 . I paused the interviewer and said this changes in yard stick is the great hope for india. That 6 is treated as disastrous for the economy. You have to slow down the Global Factors did have bearing on the economy, but there was no doubt there was a reform slowdown over the last two years. Therein lies the main hope that our expectations at the reforms will pick up once again. I would like to ask you both to weigh into the austerity debate. It was striking to see earlier this month in the case of the uk that Christine Lagarde apologized to George Osborne for criticizing the uks austerity cuts saying the imf had gone too far. What lesson should we take from this . Is the uk going to emerge as a model for austerity cuts . I would love your thoughts about europe, as well. I, on balance, feel uk actions were right. Austerity management. Begin that the world had changed over the last seven, eight years, if you look at fiscal numbers, europe, the rich countries look much worse than emerging economies. The world was never like that. That being so, fiscal austerity is something that they would have to go for. European countries in particular. The question is that design of this austerity. I think most of the debate ought to be on the design of austerity rather than austerity. Britain did right. They took harsh moves, which did have a slowing down effect. We expect the uk to grow at 3 which for a rich country is pretty good figure. The costs taken through austerity are beginning to pay some dividends over there the euro zone had negative growth last year. Last year the world banks, only two regions had negative growth. Euro zone and mideast and north africa. We are expecting euro zone to climb back. Some countries have not done well, netherlands the First Quarter did not do well. It was pointed out it was too hot. I hesitate when these temperaturebased explanations are given for growth moving in different directions. Euro zone we are expecting will cost 1 this year, which given the performance of the euro zone in recent years is actually a very clear good sign that things are beginning to pick up. Mr. Furman, does the uk hold any lesson for the u. S. . I think you want to look back a little bit further and ask where countries are today compared to where they were prior to the crisis. The United States reattained its per capita gdp that it reached in the end of 2007 within 4 1 2 years after the crisis ended. That was actually remarkably fast period after a financial crisis usually takes about eight years to get back to where you were before it began. I think that was a combination of the extraordinary fiscal and monetary financial housing across the board auto response. Europe isnt back yet. Most of europe isnt back yet. Germany is. I think that tells to you some degree about the difference in those policies. The european economies are starting to strengthen. They are starting to increase aggregate demand. They have challenges how they are intergating banking supervision. They need that engine for growth. You are seeing some of that from the ecb. There probably could be a role for fiscal policy, as well. Lets see what you thought of the Biggest Surprise in the coming months. 33 for india, interesting. 16 for russia. I was speaking to a cfo last night who was worried because he had a half plant built in russia and what to do. How does russia play into year thoughts about the Global Economy and how significant of a shift do you think this is . Russia is the great uncertainty. Along with all the difficulties of making economic forecast, there is political uncertainty. Russia itself has got its growth forecast for this year to 0. 5 . I forget what the one banks forecast for russia is. Its with a big margin around that. If there is political worsening, also ordinary investors begin to worry, is this a country that is going to get embroiled in political difficulty . We can rely until the political situation comes down. Closer to home, theres been a number of m a deals with a practice of tax inversion. Metronic was the latest. How concerned is the administration about the use of tax Advantage Companies have to operate abroad. Do you think this is impetuous to some Corporate Tax reform . This is something we are concerned at. That we are looking hard at. We had tighten up inversions, increase farm ownership and some of the deals wouldnt qualify under that standard. They would still be required to pay tax. This is part of a broader problem with a tax code deeply broken with the United States having the highest Corporate Tax rate, with the United States having an International Tax system that is broken that allows substantial base erosion and greatly interferes with the competitiveness of our companies. So ultimately, the solution here is to reform our tax code. Thats the lesson you heard from senator wyden, senator hatch, both sides of the aisle. I think that is the lesson i would love washington and congress to hear loud and clear, that this is an argument for reforming our tax code. Part will be making america more competitive. As part of that, we need to take measures to address this inversion issue. Do you think that the increasing practice of it will drive the pressure up enough to prompt something . I would have thought the fact the United States became the world record holder in Corporate Tax rate two years ago would have put a ticking clock on our efforts and increase the pressure. This adds to it. There is increasing pressure of views. There are certainly issues with it. There are things we debate, but it has a lot in common in terms of a tax rate in the mid to upper 20s with president obama broadening the base a similar way. A hybrid international system. There is an increased agreement that something needs to be done. There is an increased agreement about what it is that needs to be done. We need to go ahead and do it. Something the president would absolutely love to do. Weve gone an exceptionally long time in our discussion about the Global Economy without talking about china. Mr. Basu, you told me earlier youve come up with a new, some new data on the purchasing power parity index and when exactly china will overtake the u. S. Could you explain . There is a mass iive group tt coordinates that. It is expected to overtake the u. S. Some time this year. My own computation was putting in the numbers. Projecting forward and looking for the date. We have a date which is just a fun figure, 29 september, if you are interested. The day which the u. S. Economy will be overtaken by china. I should immediately tell you this number is mine so i havent talked about it as yet, but the overtaking is known. Its not nearly as momentous as some Media Outlets made it out to be. China is four times the population so it is expected, this is not per capita income. Purchasing power parity correction you make. It means within china you can buy its goods more cheap than you can American Goods within the u. S. If you look at in the International Domain when you are in a third country having to go in there, there the purchasing parity is unimportant because you have to pay the third countrys price. Its not as momentous. Having said that, its going to overtake the 29th of september. My earlier expectation was i did a computation a few months ago. 2nd of november. After that we got the numbers, the u. S. Growth in the First Quarter having gone down. When you project with the lower growth, that also happens a bit earlier. Thats it. Mr. Furman, whats the significance of this and how concerned is the administration about a sense that chinas increasingly protecting its own companies . We should start monitoring gdp on a daily basis. I feel a little behind with our quarterly numbers. As kaushik said, its not that restaurants and haircuts are cheaper in china than in the United States, its how much your money can buy in terms of financial power, in terms of foreign aid, military power, and every one of those depends on the Market Exchange rate. The United States is enormously much larger than china is. Plays a much larger role in the Global Economy. But china is playing a global role. And with that, that brings opportunities. It helps support u. S. Economic growth when growth in china is stronger, that helps us here. It helps our exports. It also creates challenges and frictions. Thats something we are trying to intensively engage with ch a china. Between the spying issues and favoritism to soes, do you sense a shift in china toward their own versus the west . Take the exchange rate. There have been increasing numbers of concerns after some progress made in that area that some of that is slipping. Secretary lew went to china about a month ago to engage with the chinese on that issue. We have a whole bunch of other issue issues they need to rebalance, move away from a very heavily Real Estate Construction credit to one more sustainable and externally balanced. That would be in the interest of the United States, the Global Economy more broadly. Can i put a second comment on china . Of course. Chinas growth forecast we made 7. 6 . There is a worry around that point forecast and the reason jason was alluding to. Chinas financial expansion has been huge. Overall debt is very large whats happening over the last six, seven months is each time there is a sign of the economy slowing down, there is a fresh set of stimulus of some kind coming in. A lot of it is taking the form of more debt. In the month of may itself there was effort towards that, which is good for shortterm growth. Just puts your data reconciling with your financial and borrowing button. Pushes that back a little bit more. When that adjustment comes, there is a bit of a risk china will find it very difficult to manage simply because there is no hard science of financial management. Weve seen that in the u. S. In 2008. China may have to face up to that some time in the coming year, couple of years because of its builtin finance. Id like to open it up for questions. Before i do, we want to throw a question to all of you on your ipads. We are asking where you think the u. S. Economy is going to head in the next 12 months . Less than 2. 5 , 3. 5 or the surprise, over. 5 for the optimistic . Anyone have any questions to start us off . We have a few minutes. Youve already got your response. Okay. Great. Youre fast. It looks like 2. 5 to 3 wins. Very interesting. This is compared to what the president s advisors. Our last forecast was finalized in november, published in february. Obviously, one would update it in light of the events, but i dont think it would be too different from what the majority thinks. In that zone 2. 5 to 3 . Please tell us who you are. Sure. I work with levis as the cfo. I would love to hear your perspective on growth in brazil. Longer term, your views on the potential of the african . Brazils growth has been a disappointment. Its going to remain less than 2. 5 . There are measures brazil needs to take. Where hope lies actually is africa, starting on a low base, but actually its continent has done well. Our expectation is 4. 8 growth in subsahara africa. If you take africa out of it, big slowgrowing region, the rest could grow over 6 . Africa is doing very well. Even in terms of poverty, which we track closely, the last ten years has been good poverty growth. There is one risk i should point to. Africa has been getting, for its gdp base, more foreign flows, not in absolute terms but for its gdp base, more foreign flows than any comparable region. A large part of it is from china. There is one risk from africa is if you get a slowdown in china the next one year, two years, which is not impossible at all, thats going to hit africa badly immediately. So africa is doing well. Its done well over the last couple of years, but there is that one big risk looming over africa. Any further questions . I have one. We havent spoken about japan. They are undergoing a lot of significant reforms there. Are you predicting that abe will be successful and how significant is that . Japan also, there are monetary fiscal reforms going on. One important one which gave it a growth boost, which was the consumption tax increase. That gave an interesting growth boost because people tried to get in before the increase and buy out their goods. Youve got shortterm growth bumpup. What japan is talking about now is entering the Corporate Tax competition a little bit, luring that to get its growth back up. Our expectation for the official expectation is 1. 3 growth in the coming year for japan. Japan needs deeper structure reform. What jason referred to earlier, one of the great strengths of the u. S. Is to its policies in terms of labor. It manages to tap in on cheaper labor, some to immigration. That is the policy for rich countries. Labor underlies a lot of this problem. Rich countries, given the nature of globalization, has to increase in the device methods of using the cheaper labor available in different parts of the world. So japan has some deep reforms to undertake. Some of the shallower reforms to do with Monetary Policy and fiscal policy has done well. Thats the reason why japan after decades of nearly zero growth is back to 3 , 1. 5 . I have a question for mr. Furman from our ipad submission. What do you recommend be done for the Education System in the u. S. , particularly in the inner cities to help create a growing middle class and improve u. S. Competitiveness. This probably gets it also to the income inequality question that seems to loom right now over politics. Yelp. To start with the inequality part. There is a lot of debate, a lot of controversy over what your goals are in terms of inequality. There is no debate we should have a quality of opportunity as a basic bedrock principle. I think its impossible to look at Early Childhood education and say we have the quality of opportunity. Thats the first place to start is high quality preschool for you a. If you look at the enrollment of american 4yearolds in school, in preschool, we are 25th in the world. 25th in the oecd, i mean. That is pathetic. We need to fix that and the president has an initiative that would do that, give high quality preschool to all americans. As we move on from there, from k k12, the Biggest Issue is how we are dealing with educational standards. Common core is something the vast bulk of states are doing. Its encountering unfortunate turbulence. The business communities are behind it. That is one of the most promising things in education reform. Beyond that to college, weve been successful bringing more lowincome people into college. We increased college enrollment. We havent been as good at college completion. Increased enrollment and some of the challenges are some of the issues associated with this large increase in student debt. Some of that is a great thing. Its people going to college. Some of that is people are going to have a hard time repaying. Youve see delinquencies go up in student debt while theyve gone down in every other form of student debt. The answer isnt fewer people in college, its making sure higher quality, higher value added and focus on completion. We need to do everything, prek, k12, college and training beyond that. Lets take one more minute and answer this one additional question. Again to mr. Furman, what are the two or three critical economic initiatives for the obama administration. Please be specific. Again, youve got a minute. Sure. I only have a minute, ill confine myself to ones that begin with the letter i. Immigration reform is number one. That is a Major Economic initiative. It would increase not just the growth of our labor force, but it would increase our innovativeness, entrepreneurialness as an economy, raise what economists call our total factor productivity growth. It does that not just bringing highskilled people but taking the people undocumented in this country today, face significant uncertainty, give them a path to citizenship raises their certainty and increases their ability to invest in education or business. Number two, investing in americas infrastructure. Number three is where ill cheat. Thats business tax reform. The three of those together would have a substantial effect both on our growth rate today, but even more importantly over the medium and long run expanding our investment and equipment, our investment in people and most importantly, our overall knowledge base. We have to leave it there. Thanks very much. Rebecca, you, too. Thank you. Law makers continuing work on a 570 billion annual spending bill to fund the department of defense. Just under 80 billion is currently included for the war in afghanistan. Final vote on the bill is expected today. Irs commissioner appearing before a house panel about potential missing emails in connection to an investigation into irs targeting of conservative groups applying for taxexempt status. That entire hearing will reair tonight 8 00 eastern on cspan. This afternoon we are going to take you to the pentagon for a briefing of secretary rear admiral john kirby and expect to hear more about president obamas announcement yesterday he would send 300 advisors to iraq. That briefing scheduled for 1 00 p. M. Eastern will be live here on cspan3. A look at potential military and political actions the u. S. Should take in iraq. We are pleased to have representative walter jones republican from North Carolina join us for the first time. Congressman jones, you serve on the Armed Services committee. Military debate is going on right now at the house. Do we spend enough, too much or the right amount on our military . The issue is that we continue to spend so much money by sending our men and women around the world to take care of the world. I am a person who believes we need to rebuild the military, but when you look at the fact that we continue, you know pat buchanan has a great quote. Its not civility to borrow from the world to defend the world. We are in a debtor nation. Every so often we have to have debates on the floor of the house to raise the debt ceiling. Under george bush we raised the debt ceiling seven of the eight years he was president of the United States. Under president obama we raised the debt ceiling seven times in five years. That allows our nation, which is in debt, to borrow more and more money to spend and there is no cap to it. This is why we continue to afghanistan, we ought to stop spending money in afghanistan. We ought to spend it here in america on our roads, on our schools, and it just goes on and on. For me personally, i am a person that believes sincerely we need to start rebuilding america and not the world. What would happen if the u. S. Wasnt in afghanistan or didnt go to iraq and try to help the middle east out . Do we just let it happen . I look at the other countries that have just as much at stake as we do. The brits are not going to send any military in iraq. President obama says we are going to send 300 advisors. That sounds like the echos of vietnam again. We in this country need to understand that we need to have a strong military, which is based on the requirements of the constitution. And we used to have a better Foreign Policy and not a Foreign Policy that seems to be wherever there is a problem we need to be there to fix the problem. We cannot do it as colin powell said, we should never have gone into iraq. Colin powell said, if you break it, you own it. Look where we are today. We need to reevaluate our Foreign Policy, in my opinion. And there are people in both parties that feel that way. We need to come back to what is in the best interest in america. With terrorism as a threat to our country, lets continue to rebuild america and have a strong military. Do whats right for our agencies who are trying to protect us from terrorism. When you start sending our troops around the world, putting them in these foreign countries, especially the middle east, you are setting yourself up for trouble. Congressman jones, is it fair to say that you are kind of a contrarian within the House Republican conference . Well, i have been called many things. I guess contrarian is a proper term. I am very strong man of faith. I do what i think is right for the people at the Third District which i have the privilege to serve. Many times i guess i am a contrarian because my system is based on my faith. The Third District includes the outer banks, the coastal area of North Carolina. And Camp Lejeune Marine base. Your father was a democratic congressman prior to you. 26 years. In the same district, basically . More or less, yes. He was on the democratic side. Who did you vote for in the House Republican leadership races yesterday . Yesterday, labrador. The opponent to Kevin Mccarthy. You won one out of two. Why did you not vote for Kevin Mccarthy . We need to change the face of the leadership. I believe eric cantors defeat, which was very sound, sent a message that the leadership, i mean i go back quickly to the debt ceiling issue. We continue to raise the debt ceiling. The last time i voted for debt ceiling increase was 1997. The debt of our nation was 5. 7 trillion. Today it is over 17 trillion. That is, again, why i am a person that believes we cannot continue to fix the problems in afghanistan when we cannot fix the roads in eastern North Carolina. Walter jones is our guest. After the president s announcement yesterday you sent this letter to the president. Ill read a portion to get you to expand on it. The 2002 authorization of the use of military force against iraq authorized the use of military force specifically to defend the National Security of the u. S. Against the continuing threat posed by iraq and enforce all relevant u. N. Security Council Resolutions regarding iraq. The Current Situation in iraq clearly does not meet these criteria as it is obvious from a full reading of the legislation that weapons of mass destruction were the continuing threat being referenced. I have said many times that the worst decision i have made since i became a congressman was to give president bush the authority to bypass congress to send troops into iraq. I say that because i voted for the amuf at the time this had the authorization of military force, aumf. Since that time, that gave the president and continues to give the president , and this time obviously president obama, the authority to make certain military decisions and can bypass congress. I look at just real quickly the fact that we bombed libya. Yes, the president said i contacted the leadership of the house and the senate. You know, the constitution says Congress Shall declare war. We have abdicated our responsibility. I joined to sunset the authorization begin to president bush in 2003 that is now being used by president obama, thats the purpose of the letter. How did you vote on barbara lees amendment . I voted for every one of them. Were you the only republican to vote for ms. Lees amendment . No. It was interesting last night. I have not been able to check the score card, if i could say it that way, today, but i think we begin to see more and more republicans that are voting like im trying to to say that we cannot continue to police the world. We have got to come back to fixing the problems of america. And when you are a detonation, you have no business borrowing more money to spend in afghanistan. We have had in a bipartisan way morning breakfasts with Inspector General of afghan reconstruction. What he tells the public and what he tells us in congress is its worth today in afghanistan than its ever been. We build their roads. We build their schools. And the taliban blows it up. Yet, we cant fix the roads and schools in america. Finally, congressman jones, before we go to calls, who would you like to see as president of the United States . I like rand paul. I like ted cruz. And im sure there are others that would offer themselves. I want a person that will understand that we have to have a strong military. That we need not to have a Foreign Policy where we decide that we need to police every country in the world. Sometimes we hear maybe the simplified argument internationalist versus isolationist. Is that fair . Well, again, definitions apply in some situations and some definitions dont in other situations. The issue is every great nation im not a great historian, but i did study history in college. And every great nation that has from the spanish to the french to the romans in a great nation that started to go around and take other territory around the world eventually failed. And i think we in america in the 11th hour of a 12hour clock, i really do. You look at our monetary problems. You look at the problems here in america. But yet, we continue to want to say that we can bring, you know, sanity to the chaos in iraq. I dont think we can. Lets go the diplomatic route. Lets get other nations to join in this. Lets get other nations to take the lead. We are always taking the lead. But yet, were always having a debate every 12 months to raise the debt ceiling so we can borrow more money to spend. And its also that money that were borrowing to spend goes overseas. Walter jones is our guest. Robert in laurel, maryland, youre the first caller, independent line. Robert, go ahead. Caller good morning. Good morning. Caller ive done a lot of research on the afghanistan situation. To add to your point about the chaos, the money the New York Times reported that our contractors from the United States have to bribe taliban. So were bribing the taliban to let us build roads or schools or hospitals, and then they go in and destroy them. Its a lose lose situation. Same thing with iraq. It looks like the media and politicians are aiming at going back into iraq. Its a big mistake. Robert, your point and understanding is so correct. That is what i mean, john sopco, he has been on shows. I think hes been on cspan. He has articulated your concern and your point. This is what does not make sense. I have camp lejeune down in the district. I talk to the marines. I dont have that kind of background. But i talk to the marines. I went over to walter reed three weeks ago. I went over there to see two marin marines. It turned out we were in the rehabilitation area where they teach them how to walk without legs and things they can do when theyve lost body parts. And i saw three army fellows from ft. Bragg, which is not in my district, robert, but i saw three. They had lost one leg each. Then the first marine i saw from camp lejeune, and his father there from louisiana, had lost two legs and an arm. And hes on kind of a bed in the rehabilitation area sitting up. I look in the eyes of the father, and what i see in the eyes of the father, hurt, sadness, pain, and worry. Heres the father of a 23yearold son thats lost both legs and an arm. I dont know why he had to go there. I dont know what we think were going to change. The taliban, most of them, are pos tunes. This is their country. They live in a different century. We cannot bring them to our century. They dont want to be us. Theyve got their own religion. And another point about my visit, a young marine had lost both legs, had stepped on a 40pound ied in february of this year. February of 2014. He was talking about his little baby, whos 8 months old, talking about his wife. They were not there, but he was talking about them. You know, you wonder what were doing to our military. Lets reinforce our military. Lets do whats necessary to have a strong military. Lets be prepared to go out to those who hate us. But lets not try to police the world and change these cultures in the middle east. Well never change them. History has proven that. Would you be okay as a member of the u. S. Congress if iraq split into three countries . I truthfully came out against the iraq war in 2005. It was an unnecessary war to begin with, and i made a bad mistake, which ive already explained, in voting for the resolution. Absolutely. I think joe biden Vice President biden was a United States senator. He was a strong advocate of dividing the country into sunnis, shias and kurds. I think thats whats going to happen. I dont think anyone knows what tomorrows going to bring in iraq. Thats for sure. But thats a possibility. John tweets into you, congressman, i am your constituent, and i admire your character, but youre way too moderate for me. Chris is calling in from newport richie, florida, on our republican line. Hi, chris. Caller yes. Good morning, gentlemen. Good morning, congressman jones. Good morning. Caller long admired you, first of all. I need to clarify. Im a huge ron paul supporter. I am too. Caller yeah, i know that. And of course im going to support rand paul as our republican nominee in 2016 for the office of the president of the United States. I wanted to point out something that a comment im troubled by. Then ill go into the gist of why i was calling. I dont think ted cruz is eligible to be the candidate for the presidency because he is a canadian. Both of his parents are canadian. I dont believe, even though he just relinquished his canadian citizenship, i dont believe that qualifies him for being a candidate. Okay. That out of the way, i wanted to talk about Kevin Mccarthy. Im pleased to hear that you were backing mr. Labrador. I think hes probably would have been our best guy to put in there. I dont know a whole lot about him, but what i do know i like. Because i think heses in defe of our liberty. Im sorry Kevin Mccarthy made it. Then i wanted to go quickly chris, got to make it quick now. Caller okay. I want you to talk a little bit about your work with the other guy on the other side of the fence about promoting some information on saudi connections to 9 11. Thank you. All right. You got ron paul, ted cruz, Kevin Mccarthy, and saudi connections to 9 11. Okay. Chris, first of all, my comment was a response to about whom may be your choices to be the president. I could add other people. I was just responding to peters question about whom i would like to see run for the presidency on the republican side. The second, pete, im sorry. Ted cruz being canadian. I dont know if you want to address that or not. Well, that will take care of itself as we move forward, truthfully. Kevin mccarthy. Whats your relationship . My belief is that we need to change the face of the house leadership. I believe sincerely, including the speaker of the house, i think we need a new look. We need a new direction, and i think, quite frankly i mean, i was one of the 12 that voted for i voted for david walker to be speaker of the house. And so my belief has nothing to do with personalities or my feelings. I respect both of them. But i think their direction for our nation, for our party is going is not what we need at this particular time. The 28 pages that chris made reference to, the 9 11 commission classified 28 pages that they said needed to stay classified. Members of congress can read those pages with authorization from the Intelligence Committee in the house. Ive been given permission to read. Steve lynch, whos a democrat from massachusetts, and i, along with thomas massey, have put in a resolution calling on the president to release the 28 pages. The 28 pages have nothing to do with security, nothing. It has more to do with relationships. Thats about all i can say. But the families of the 9 11 have been calling for this. Senator bob graham has been way up front on this calling for these 28 pages to be declassified. And he was on the 9 11 commission. To me, there is no freedom if the American People dont know the truth about one of the worst days in the history of our country. Jerry, henderson, North Carolina, democrat. Is henderson in your district,