you to think about the opportunities in reentry. we give out a lot of competitive grants every year. we work closely with the department of justice. there are competitive grant opportunities for you to innovate in this important space. in terms of community colleges they are the secret sauce of success in my experience. i refer oftentimes at the department of labor as match.com. job seekers want to punch their ticket to the middle class with businesses who want to grow their business. the secret sauce is community colleges who is so adept at devising programs in partnership with businesses. we must always be demand driven. that's the first principle of effective work force development. we don't train widget makers if there's isn't a business hiring widget makers anymore. the community college system has worked well. one of the big differences between ten years ago and now in why this is working well is the

level of business engagement. if you go to front range community college where i've been in colorado you will see they have an advanced manufacturing partnership. it's a partnership between the federal state and local government. you see that the curriculum is being devised in partnership with industry. you actually see that there are businesses whose workers are professors. and what they tell me is one of the reasons they love teaching is they cherry pick the best students. and that's fine. that's how you build your talent pipeline. and so we need to continue the efforts. and, again governor fallin thank you for your leadership on behalf of community colleges. we had four years' worth of what we call tax grants. we have since dismissed our acronym director because it's a clumsy acronym. what it stands for is using community colleges to catalyze change in the work force system.

what i learned from these grants is that oftentimes businesses weren't talking enough to educators. and so in los angeles, for instance, we gave a grant to the six community colleges in los angeles for health related focus. and what happened there was, it turned out they had seldom been coordinating with each other. if you took a nursing 101 course in community college a the curriculum was not necessarily the same as community college b. and it wasn't aligned with what the needs of the employers were. these sorts of grants helped to catalyze that partnership and by the way, they then learned they had other career opportunities. because their demand needs in the allied health professions were there these community college grants are catalytic. we don't have around five right

now. we've been working with our colleagues in congress. there is overwhelming bipartisan support for this. i want to thank you by the way, for the feedback we've gotten from nga and other key stakeholders. i'm a big believer that the most important thing you can do when you're implementing a law is to listen and bring a healthy dose of humility to the venture. we think we have some knowledge but we know that all of you and remarkable knowledge. and it's been really helpful. but one of my biggest frustrations to be frank, is that we've had four rounds of grants. they've been wildly successful. we know what works. we know what needs to be scaled. we need to make sure that we can do the continued investments. because for every federal dollar of investment and apprenticeship there's a $27 returned. that's a pretty good roi. we need to continue our

conversations about round five. we want to continue and sustain the momentum that exists across the country. and in order to do so we need the investments. and so i want to stop because i really want to engage in dialogue. and before i stop i did want to mention that as part of the trade promotion authority that was passed recently there was a reauthorize of the trade adjustment act. the reason i bring it up is because it's a important resource for you. because there are literally tens of thousands of people across this country who have lost their jobs either through globalization or through trade related activity. this is an important feature of the work force system. and one aspect of the trade adjustment act you may not be aware of, it is retroactive to january first, 2014. there are various versions of the trade adjustment act that have been in place. the version that was in place

since 2014, was the stripped down version. the version that was passed in the end of june is a much more robust version. it's a really important tool in your tool kit. and you are partners with us in the implementation of that. we've been working closely to identify folks who lost their jobs a year ago. i have spoken to folks who lost their job in a steel plant and now with the retraining from taa, they're working in advanced manufacturing. they've punched their ticket to the middle class again. they've gotten their dignity and mojo back. it's a important investment. as you go back, again, taa is a really important resource that's in your arsenal. i would encourage you to make sure that your colleague is doing the work force investment work in your state are certainly well-aware of the fact that we have an important new tool that's back in our arsenal. we look forward to working with you together. let me stop there.

i think we could talk about so many on ramp and off ramps on this skilled super highway. i come to you with an unrelenting sense of optimism and gratitude. i think the wind is at our back. this is a remarkable moment. we've got to turn this moment into a movement. it's a movement that will help workers and businesses and our nation alike. a movement to make sure that everybody has the skills to compete for today's jobs and tomorrow's jobs. thank you, again governor. >> thank you very much mr. secretary. [ applause ] >> i'm going to open it up to questions. i'm going to just kick off a question to you and then i can see governor markel has one. secretary perez we want to thank you for the presentation. we greatly appreciate your efforts to make state job training the focus of the department's ready to work

initiative. and one critical federal tool for all of us as governors is that we'll allow us to innovate is that 15% work force set aside in the work force innovation and opportunity act. and we know you are not a congressional appropriator. but we know you be been around to a lot of our states working with a lot of states. i wonder if you could just give us a little bit of a sense from your viewpoint what that 15% set aside would do for flexibility for governors, what kinds of things we could see in our states? >> i'm a big fan of the 15%. i know what we did with it when i was in maryland weempt. we catalyzed innovation and we scaled some of that innovation we catalyzed. you have a strong supporter in that 15% fund in me. we've been able tool gradually ramp up. the challenge as we ramp back up to 15% that we want to make sure that we are mindful of, is we do not want -- i think it would be

potentially zero sum if we ramp up the 15% fund at the expense of formula dollars that go into the local work force system. we want to make sure we are able to try and do both. what i hear from folks in the local work force system is we have a lot of innovation underway. it's been very successful. we want to continue to be catalytic catalytic. and scaling and that area as well. that's the one challenge that we have. that's why we've been trying to do the gradual ramp up and make sure we don't pit state governments against local governments. that's a false choice. and we should ignore that. but i'm a big fan of t.it. i can give you chapter and verse of uses that you've made of it. >> thank you. governor markell. great presentation. you really covered the waterfront which i appreciate. and you tied a lot of things together that needed to be tied

together. i want to make a couple of comments. i appreciate your focus on reentry. you know, 97% of the people in our prisons at least in delaware are coming out. and i have to say one of the most inspiring events i go to is the high school graduation within the prison. i went a couple few weeks ago. and it is astonishing, you know, to meet these men i happen to be in a men's prison, who came in with varying degrees of education. amongst other thing husbands had to learn algebra 2 while in prison. the determination it takes for them to get their high school diploma while in prison is remarkable. and in a budget year we have very few additional resources, one of the places we did put the money was additional vocational opportunities within our prisons. that being said, i mean, one of the places -- this has been such

a issue of i think really difficult -- we live in this world where there is probably never been a better time to be somebody with the right skills. and we also live in a world where there haven't been too many times when it's been a worse time to be somebody without the right skills. there are so many people who are caught in this cycle of crime, drug dealing and the like, who, frankly, would be pretty happy to be able to hold down a job. and yet many of the jobs that were around 20 years ago, 30 years ago that didn't require a lot of additional skills beyond high school, you know a lot of them are gone. and i think it's one of the things i am very eager to learn from my other governors and folks like you if there is some best practices. i think, you know, this is just -- we're doing really well growing the technology jobs. and we're doing well, you know growing some a number of other jobs which require a lot of

skills. this has been a particular point orph of frustration. related to that, if you're talking about reentry. one of the thing weez talk about is preentry and trying to avoid the need for reentry investments in the first place. i couldn't let this opportunity or any educational work force development hearing or meeting committee to go by without mentioning programs like the one that we've talked about before, jobs for america's graduates. now it's in 30 some states, bipartisan. very effective. 93% success rate of keeping the most at risk kids in school. and, you know really significantly increasing the chances they'll have a job a year out. i know i think governor sandoval has done an unbelievable job in nevada increasing the program there. we're grateful to a number of our folk whose have really helped this grow in a number of states, usa funds as well as

others. the last point i wanted to make, on apprenticeships you mentioned switzerland specifically. i was over there a couple months ago. we've got a phenomenal u.s. ambassador to switzerland. susie lavine. who took me to a couple of swiss companies so i could see the apprenticeship programs in action. you mentioned being at boeing, a lot of these -- in switzerland, the apprenticeships go so far beyond the sort of the typical manufacturing field. so when i got back i spoke to the north american ceo of one of the big swiss banks. this is a top notch banker. and he started his career as an apprentice in switzerland. we are working very hard in delaware to try to follow that lead. and we're very -- we've invested significantly, we're increasing 15 fold over the next year the

number of what we call our career pathways for high school juniors and seniors to get hands on experience while in high school get college degree, college credits under their belt and to graduate with real certificates of tangible credentials and skills and the like. so this is -- i thought there is so much going on in this field, as it should be. when i visit you know, delaware businesses and i have probably done 1,500 since i became governor. i ask one question, which is what can we do to facilitate your success. the overwhelming majority 95% of them the answer has to do with having access to a skilled work force. so i appreciate the focus that you bring, and certainly any insights you may have about programs that are working effectively around the country particularly that at risk population folks who would say you know, they would love to have a job. when they -- for lack of skill

and lots of other reasons end up doing things they shouldn't be doing and get caught in a vicious cycle which is bad for all of us. >> thank you for your observation and leadership. a couple quick points. the ceo of zurich insurance company started out as an apprentice. now with the help of zurich and community college in chicago we'll be putting in an apprenticeship program for the insurance industry. so again the main observation i would make is to think broadly about the application of this model. because it applies invirtually every sector where you have a demand need in your community. and you can get folks in at a very young age. in terms of the point about former offenders i have done a lot of work in the space in

maryland and now nationally. and you have a bully pulpit opportunity. we do a number of champions for change events where we use our bully pulpit to highlight employers. monday i'll be at the white house. we're doing an event for employers who have done remarkable work with people with disabilities. what i've learns in the space as it relates to highereing hiring former offenders, you have employers like hopkins who are going gang buster and they're very proud to talk about it publicly. i've met other employers who are doing it and they prefer not to talk about it publicly. and that's fine. i think it's -- i totally respect whatever choice they made. then there are other employers who are thinking about doing it. and they need a nudge.

and that's why your bully pulpit is a remarkable opportunity. when they go to an event and they see that johns hopkins the anchor of baltimore city is doing it and they see the construction company. i have found that in the construction industry, i have met a lot of employers who have such shortages of skilled trades that this issue of whether you have a record is of no moment. and one thing to keep in mind this is a tool in your tool box right now. if an employer comes to you and says i'm a little worried, this guy has a record for theft. you have a tool in your tool box. we used it with great success. it's called a surety bond. the work force tool box that you currently have, you can say to that employer okay if that's your major concern y will insure you against that concern. and i guarantee you, that once that employer employs one person

they will then hire more. that's been my experience. i would certainly urge you to use your tool kit. the last observation i would make, and this is a longer term observation, governor. when we -- when the president rolled out the my brother's keeper initiative to address the chronic opportunity gaps confronting young men of color we had a meeting at the white house before the formal public event. we had a lot of ceos there who were making commitments we had a number of experts there. a question was asked of the experts by the ceo who said i want to do something in this space. but i don't know what to do. what are the interventions in a community that could be the biggest difference makers, kind of on the prevention side of this, to produce a pipeline of talent that we have enough data to say work? without missing a beat, the two folks in the room who were asked

that question said you should replicate the six year high school model that has been put in place in a number of cities. we funded this to the tune of $150 million in competitive grant programs with the department of ed. this model, there's a p tech academy in brooklyn. sarah good academy in chicago. the basic model is a six year high school. grade 9-14. ibm has been the lead corporate sponsor. they have built a stem model where the curriculum is totally open source. and you have -- you're partnered with an employer so you have a mentor at ibm. you're not only learning in the classroom through a rigorous and validated curriculum but you're getting those opportunities to see what it's like. because when i was at frederick douglas high school in west

baltimore, the thing that sticks in my mind most was the kid who was a high school senior who said you know i'm smart i'm doing well in school but i don't have any ap courses here i don't have any opportunity. you go to places like sarah good and p tech and you see young kids of color. what sarah good has in common with p tech, you have high minority, high performing, that's what they're doing. they building the pipeline to the future. giving kids opportunity squmpt. that's not a panacea. if you're thinking about how to build educational opportunity, and to take and apply the principles we know work, the principle of partnership, demand driven, the principle of a stem foundation, these programs work. they're open source. you can pick up the phone and call ibm, i guarantee you stan lith ow will take your call and be out the next plane to visit

your community and will brainstorm with you about how to build a program. it may be it's a healthcare focus in your city or a aerospace focus somewhere else. whatever the focus is to meet the demand. these are battle tested investments. and states and local governments are really helping to catalyze this sort of innovation. i think it helps prevent that cycle. >> thank you. governor branstead. >> secretary perez, first of all i want to thank you for your emphasis on apprenticeships. last year the state of iowa tripled our funding for apprenticeships and we got significant dollars from your department. from the department -- i want you to know they're being used -- you mentioned it. they're being used it and advanced manufacturing as well as construction. because of our success and economic development we have big

construction projects i think governor hassan mentioned we have facebook and google as well as microsoft that are building data centers in my state that in the millions -- well actually in excess of -- because they're now in like, the third or fourth building it's over a billion dollars investment. we have fertilizer plants and all of that. the shortage the skill shortage is what the lieutenant governor and i hear everywhere we go. we go all the counties every year and visit with the employers. that's the big thing. and apprenticeships and convincing parents -- i think you mentioned this. these are great careers. they pay well. and you don't end up with a huge amount of college debt. so i think the more we can partner on that and encourage apprenticeships, the better. another area that we found to

try to find skilled workers, we passed a home based iowa to make iowa more attractive for military veterans. we know there's a major reduction going on in the military. there's a lot of skilled people that have great work ethic and great skills. and so those are a couple of places that we think are some real opportunities to help build the work force of the future. people are going to have careers. and, obviously my lieutenant governor is also hitting up the governor stem council and we're focusing on preparing the kids in our schools in engineering and math and technology. i want you to know how much we appreciate the assistance we're getting for umrom the department of labor. >> thank you. we are dramatically reengineering ourselves as we work together with you. the old model of apprenticeship at the department of labor, our

primary role -- it was an important role and continues to be an important role. we were a quality control officer. making a apprenticeship is rigorous. that is important and will toirn continue. we are also now -- we are a facilitator. we are attempting to catalyze public private partnerships. we are working with the business community. we're working with states we're working with local governments educators, non-profit partners, to make sure that we can, indeed, dramatically expand. we're working with the leola system. i've looked at apprenticeship maps around the country. they're structured different in different states. sometimes they tend to be off on their own. one take away i would recommend that you consider is figure out where apprenticeship is in your state. there really is a wide array of

structure. and i'm not recommending one structure over another. but it's what i am recommending is you take a close look at it and make sure it's embedded somehow into your work force system. it really is a critical work force tool. >> our experience was when we were advocating for this, we were able to get a rare coalition of the building and construction trades and unions and the non-union contractors who critically need people, as well as the manufacturing business community. all on board. and consequently we were able to get through my split slairtslegislates broad based bipartisan support. it's working extremely well. our department of work force development is playing a key role in coordinating all of that and especially the federal dollars as they're coming from you. thank you. >> you're absolutely right. thank you. >> i think we have time for one

more question in governor fallin i think you had one. >> thank you. we appreciate your chairmanship and secretary perez, we appreciate you being here today. and visiting with us on all the great ideas you're seeing across the nation. i want to thank you for the the flexibility you're giving the states. as you've heard from various governors and models you've listed earlier, there are a lot of great things happening and our governor hassan listed earlier. there are a lot of great things happening with the governors on work force investment programs. we appreciate having the 15% set aside to get the money for that. one of the things we've done in oklahoma -- i appreciate your mentioning of our programs. we launched a program called oklahoma works. in which we took a work force investment boards, developed it into eight different regions of the state. you were talking about how different areas of the nation have different needs as far as work force. so do different areas of the

states. analyze specific metric data within our department of commerce about the types of job openings we have. we worked with our college and career techs to see what types of course and career certificates their offering to make sure we're not producing some types of degrees and certificates that don't go to jobs that are out there or vice versa. we've been working hard within the individual communities. not only to bring together the k-12, the career techs the colleges but also social services department of correctionss rehabilitations services. disabilities and people who need jobs our veterans returning from war. a couple other things we've done on the legislative side was for inmates offenders coming out of our correctional facilities. we changed a portion of our law to bail out and to get licenses. and certain professions. many times you come out of a correctional institution and you can't get a commercial truck

driver's license or something else. that we deem wouldn't be a threat to public society. that we changed our licensing, which really helped. veterans returning to war, they've got a lot of skill sets that they may not have college hours or may not have career tech hours. now we give them hours for that so that will apply towards a two year community college degree or even towards a career in technology certificate to be able to help with that. and then the other thing i wanted to ask you about -- and maybe this is already being done. with unemployment, and the latest figures i heard was about -- you know this better than i do. how many people in america that could work but choose not to work. in other words how many people are in the work force. we hear from our employers we need more workers. but from what i understand the latest number may have been around 60% of the people who could work are only working in our work force.

of you might be able to verify that. i think it's 62%. those who work but do and don't in the work force. on the unemployment benefits, is there a way -- maybe this already happens in our nation, that we could work with employers who need workers yet we have these people who are unemployed in between jobs that are receiving unemployment benefits to work to encourage our employers to, i don't know, be it grant to say if you'll hire this unemployed person instead of giving that person the money to stay home basically because they're unemployed and looking for work to give it to the employer to give them a try to see if they would work out in that job. is there any way of doing that with unemployment benefits? >> you ask a number of good questions. let me start with your last one first. i talked to you about another important tool ipn your tool box. it's called on-the-job training. you have the ability right now

to subsidize the wage of certain workers who are looking for work. i didn't a visit with the vice president to new hampshire and governor hassle was there. they had 15 employees and there were two people we met of note. one was an engineer who lost his job in the great recession. and he was what employers often call a 70 per center. he had 70% of what they needed but not 100%. with this tool, his wage was subsidized for a period of i think it was six or seven months. at the end of that it's up to the employer to keep them on. i can tell you the data is overwhelming. employers love this. it has worked swimmingly in every corner of the country.

there was another person who she was a receptionist and had lost her job. and, again, they used the ojt funds. and she's going gang busters and she's moving up a career ladder at that company. that's a tool that's in your tool box right now. and i certainly encourage you to take a very careful look at that. because we've seen its use in a number of different sectors to great, great advantage. and your other points are smart on. what i'm observing is employers -- the worse force system has become more demand driven. we're not training people to be widget makers unless we know someone is hiring widget makers. employers have more skin in the game. we have to encourage them to be more involved in local work force systems and more involved in the design of curriculum. i still hear people are coming out with degrees but they're not translating into competencies. we've got work to do there.

we have got to get employers and educators working together there. i see dramatic improvement in understanding what i think is a core principle of success, which is taking the job seeker where you find him or her. the best example i can think of is in north carolina. i was with virginia fox. folks from your department of commerce and we were at a community college outside of winston-salem. they were producing tomorrow's work force in the science field. and one of the biggest barriers to folks who wanted to upskill was they had to take a lab. and the lab is like, four hours a week. and these are folks who have commitments. when i say you've got to take the job seeker where you find him or her. people have kids. people have parents to care for. people have other responsibilities. and so what they did -- i think it was forsythe community

college was the lab is open from like 8:00 a.m. to 10:00 p.m. six days a week. you call ahead within an hour and do your four hour lab and it allows people to work around life. and the constraints that exist. that is a wonderful example of the principle that if we're going to succeed in helping everybody punch their ticket to the middle class we've got to understand the station in life that people are in. some people have transportation challenges. some people have family commitments. some people have a criminal record. some people have whatever the barrier is. we've got tools for that. and we've got the creativity around this country and around this table to address it. and that's what people in oklahoma are doing. and that's what we have to do at scale across the country. and we can. i see success everywhere i go. it's very inspiring.

and anything you all need from us, any feedback you have for us about how we can do better i hope you continue to give it to us. we've got a lot more work to do. the skill super highway is looking like a highway but we have fortification of these on ramps we need to do. >> meeting the hours of when the workers need the education i think is one of the major areas where academia needs to adjust. we're going to be budgeting our community colleges like our k-12 took summers off. you can't take summers off anymore. when someone's unemployed they can't wait for academia to take two or three months off. and that's -- you've got to work after hours not academic hours. 9:00 to 4:00. that's the big change that academia has to adjust to commerce times and people's

time. and that's going to be also true in universities and in k-12. >> thank you governor. and thank you mr. secretary. thanks to -- i'm happy to share what we're doing in new hampshire on return to work. it's one of the things governor fallin was asking about. we can't thank you enough for your time, expoor teats and all the things you're doing across the country and helping us help america's workers, thanks so much. >> thank you. [ applause ] now it is my pleasure to be joined by crystal bonds and

herald levy. we are honored today to have two individuals who have spent their careers ensuring that students receive the knowledge and support necessary to have a successful life. herald levy is the executive director of the jack kent cook foundation. he's the first non-educator chancellor of new york city schools serving for three years starting in 2000, including during 9/11. prior to working for the foundation, mr. levy headed the investment practice of venture capital firm and was special counsel hedge fund. he served as the executive vice president of cap laninc. and as the director of global compliance and associate general counsel at citigroup. he received a bs from cornell university in industry and labor relations an ma in philosophy

economic and politics. and a law degree from cornell law school. crystal bonds is principal for the high school at the city college of new york. one of nine specialized high schools in new york city. she assumed leadership of the school in 2011. after serving for eight years as an assistant principal at brooklyn technical high school. crystal's school is recognized as one of the top high schools in the nation and ranked among the top high schools in new york city and new york state. in 2012, "the new york times" recognized ms. bonds' school as the most diverse public school in new york city. crystal bonds earned her undergraduate degree in business marketing from the state university of new york and holds master's degrees in education, school administration and supervision. on behalf of the nation's governors, welcome and thank you for being with us today.

>> good afternoon. it is truly an honor and pleasure to be here before you. thank you for inviting us. i am as you just heard the principal of the high school for math, science and engineering at city college of new york in harlem. over 30,000 students take an exam to enter into one of the nine specialized high schools for three thousand seats offered. again, the u.s. news and world report has recognized this as a top school. we have 100% of our seniors who graduate. 100% of them go to college. 70% of them are enrolled in -- declaring a stem major and attending some of the most prestigious colleges in the country. all of our students earn college credit, all are required to take advanced placement courses. and we have the largest german program in new york state.

i'm also the president of a new non-profit organization called the class coalition. which is a coalition for leaders of advanced student success. which is a coalition of more than 100 principals from the top highly selected schools nationwide. many of which are stem. the goals of the organization are to provide an advocate for high achieving low income students and to work with high schools, post secondary schools colleges and universities to engage corporations and policymakers as partners to create systematic ways to develop pipe lines for our youth from schools to the workforce. all of these align synergistically with secretary perez's concept of the skill's superhighway and the job driven initiative. we recognize the demands of a 21st century work force are

changing. with stem jobs more prevalent, each one of our skills are implementing policies that connect our students with real life training, skills that will matter in the workplaces. according to the national science foundation, students with a parent in stem or research are twice as likely to go into those fields. for those who don't have parents in those fields, how are those students supposed to be exposed? there becomes an opportunity gap. the class coalition schools believe in exposing all students to a body of knowledge. combined with skills to prepare them for major concentrations in college with a skill that is transferrable tool a work force. i'd like to share with you a few examples of some thing husband we do at the high school for math science and engineering. we begin with a concept called an opportunity gap iep. inform, expose and to prepare. because for our youth some of them don't even know what they

don't know. we believe in exposing them to all. one of the examples are we host a monthly lunch and learn. and this is a particular corporation will present to and dialogue with our students for an entire week during their lunch period. and then they will provide lunch because we know that teens love to eat. and then each day a different professional from the company presents to give insight to his or her job or career path. attending these work shops serves as a prerequisite for a summer internship with the company. another idea that we have and that we actually implement is we host a monthly advisories where industry partners and our pencil partner meets with students to give insight on industry prospectives. discussions may include resume writing, honing your elevator speech. personal branding, goal setting or how to interview. we also have our career and

technical education programs referred to as cte. who partners with project lead the way for career educational classes. we also have a work based learning coordinator school based who helps our students get internships. this helps us to not only keep a pulse on industry but at the high school level, we can create, adopt, and infuse these skills and concepts in our classes. we realize the importance and the value of engineering and computer science. which we expose every student to. we also partner with colleges and universities. the university of michigan and carnegie melon love the preparedness of our engineering students. they know we have highly skilled teachers who were former engineers, architects and acchew wares. who give real world experiences

in the classroom. through our german program, i have travelled to germany to learn about the educational system and apprenticeships. and have seen the concept of the earn while you learn programs. we partner with the the girt institute and the german consulate to send our students to germany and create opportunities for them. many of these practices are not unique just to us. many of the schools are doing many of the same things and more to engage their students. prior to being at high school for math science and engineering, i was an assistant principal at brooklyn high school. the largest high school in the country. and now that i'm at the high school for math science and engineering with the approximately 500 students and 40 employees. whether large or small the job of a school leader or principal

has evolved. it is no longer just about getting students in and out and to graduate but to create pathways. >> not just about educating but also about being a connector and making cessionsonnections for them. mga has made great strides in recognizing the importance of strengthing the pipeline and identifying better ways to connect employers students and educator. insuring america has more skilled workers is extremely important. by starting at the high school level, it is key. we have learned and we have students who have the propensity to reach beyond our wildest dreams. and i am excited that the department of labor and the administration believes in this concept and has laurnnched the apprenticeship competition and the white house summit on america apprenticeships.

class hopes to work with mga and department of labor to sport them -- support them to better prepare students for the twenty-first century careers. we want to help our nation take back its rightful place in leading the world in economic growth wealth creation and technological innovation. in some cases we may be preparing students for jobs that haven't been created yet. together bringing all parties to the table we will create a platform where policymakers secondary and post secondary school leaders practitioners and industry partners meet to discuss what are the specific skills that are needed in this fast changing industry. and infuse these skills to our curriculum. as secretary perez has mentioned, we should include educators, at the table and communication. so having school leaders and principals at the table actually

gives you another perspective through a different lens. and to engage policymakers -- it helps us to do our job better. through class you have access to many of the top public schools around the country. and this will help to bridge the gap between conceptual and reality of what concepially work and what reality makes it work. and reality makes it work. i realize that there is some hesitancy with some industry partners about hiring students and having internships for under the age of 18. or with the lack of internal champions at the companies who will own these projects and advocate for them. internships and apprenticeships could be difficult to execute. but whether it is a hiybrid model of pain or non-paid. whether we look for things that will allow us to work with

apprenticeships. time and effort to staff to this important topic is worth while. we at the class coalition call on governors to serve as the bridge between educators and business leaders and to encourage more partners to engage with schools to work towards this labor mobility movement. together, i know that we can figure this out. thank you. [ applause ] >> governor, thank you for your leadership in this process. sessions like this give us an opportunity to really think about the core issues behind education, open up questions that are otherwise rarely addressed. i very much appreciate the

opportunity that you've given us thank you. as you heard i'm the executive director of thejack kent cook foundation. the way to think about it is its rhodes scholars for poor kids. the cook scholarship is the largest scholarship available. i say that without hesitation of being contradicted. it's up to $50,000 a year last dollar scholarship in goods and services. we give it in the sevents grade for high school. in the 12th grade for undergrads and most relevant to this -- the secretary's comments to transfer students from community colleges seeking a four year degree. i can tell you that as we sit here today, we've got three students going to oxford next year. we have a relationship with the university. and two of those started off in

community college. it's actually quite fascinating. because if you get a cook scholarship in the seventh grade, and you carry it on to grad school it could mean up to half a million dollars. it puts in perspective both the cost of education and the fact that we have lots and lots of extremely talented kids who wind up in community colleges. and perhaps are capable of going to four year institutions. but don't go there for other reasons. secretary perez spoke eloquently about the demand driven training the skills superhighway and employer needs and certainly apprenticeship and crystal bonds spoke very eloquently about her efforts to bridge the gap among employers

and government leaders. i want to shift the conversation a little bit and talk about a different kind of gap. not the skills gap, but the excellence gap and it relates. what is the excellence gap? it is the disparity in the percentage of low income versus high income students who reach advanced levels of academic performance despite having identical capacity. what's that about? the data here is pretty devastating. and i must say i did not understand this when i was schools chancellor in new york. if you take the kids in the top 25% on reading scores in the tenth grade and of those kids take the kids who are in the bottom 25% financially, whether by wealth or income so you've got very smart, very poor kids, fully 22% of them do not take the a.c.t. or s.a.t. and 23% do

not go to college. i found that stunning.college. i found that stunning. i felt if you were poor and smart you could write your own ticket. that turns out to be simply not true. the reason it's not true is that these kids feel they don't see themselves going to college. they have pulls on them by family. and it is quite an extraordinary thing in this country. what we pride ourselves on the american dream of social mobility, that these kids do not have a chance. and it's almost a fifth of the poor kids at the very top of capacity. and it's not just that they are not going to school. the ones who do go to school as i alluded to before are undermatched.

they're often not going to the best schools that they're capable of getting into. the numbers of how many go to the selective highly selected colleges is quite extraordinary. if you're a high income kid and you're in the top echelon, about 46% go to the highly selective schools. and if you're a poor kid, 17%. that's not america. the numbers continue. they're ugly. the amount of time it takes to get through college, longer if you're poor. the number of kids who actually graduate fewer if you're poor. and the number who go to graduate school, about 20% fewer if you're poor. that means they're not becoming architects, lawyers, accountants. it is a serious, serious

problem. i say again if i had known this data when i was schools chancellor, if it had been generated, i would have done things very differently. the kids, these high performing, low income kids turn out to be extremely fragile. they drop out because they think they don't belong in college. it's too expensive. they look at sticker shock. they see the number and don't understand in fact, there's a discount factor. and i must say i know some of this firsthand. the quality of counseling in the high schools. i don't need to tell you guys this. is abyss mal. the case loads are too large. the training is too poor. and the kids don't have a tense of outreach or embracing. the workforce ramifications are pretty awful. national economy weakened. the american dream of social

mobility, in some cases denied. and it reduces our economic creativity. there's one point i want to make which doesn't get talked about a lot. as the second alluded to the eisenhower moment i can't resist. there's a national security component to this as well. the defense industry can't import workers from abroad the way we did at citigroup. defense industry workers need national security clearance. they're not approximate going to get it if they're coming from abroad. you only need to look at the cyber attacks we read about in today a's paper to quietly think, are we we going get enough people out there to train them for us. if we don't train them, if they don't stick with the math, science, and engineering program, they are not going to

be there. cyber attacks on the government personnel files and on the sony corporation did more harm than sputnik ever did and eisenhower got into the national defense student loan business. and that was why. and that was why. it is an eisenhower moment, i submit, but for different reason. i want to add -- i want to think about these issues of a apprenticeship slightly differently. i was a schools chancellor of the largest system in america. it was 1.1 million children when i was there. i focused relentlessly on the bottom. i wanted to get as many as i could to pass the exit exams to get a high school diploma.

we know it means better life better health better family, less criminalization. that's what a high school diploma represents. but it's not enough. by focusing exclusively of getting kids to proficiency we lose sight of the poor. we need competency based but that's not enough. we need nimbleness of mind. we need to run to where the ball is thrown and not to where it is today. career preparedness does not mean static training. today's employer needs must be met. but the 'ememployer doesn't know himself or herself what they will need. i submit to you we need

identification pathways and accountability. it is intellectual development, not just labor preparedness. it's both. thank you. [ applause ]. >> thank you very much, both of you. i regret to say that i've just been passed multiple notes saying we are running out of time in this session. so i don't think there will be time for governor questions. i would encourage my colleagues to talk with you both outside of this. i find it very illuminating. i thank you both for the important work you're doing. sit important to your country and your state. >> thank you governor. >> it's less than a week before the voters first forum in manchester new hampshire. c-span is partnering to hear

from all the republican presidential candidates. questions will come from the audience and members of the public. our live coverage will be on c-span, c-span radio and c-span.org and your reaction by phone, facebook, and twitter. >> the c-span city tour working with cable affiliates, visited cities across the country. we are joined by comcast to learn about the literally life and history of augusta, georgia. awarded the carnegie medal. >> we are sitting here in the augusta museum of history. and about 10 years ago a decision was made to do a military display a permanent military display to honor jimmy dias. when i did my research on the

book, i went through over 9,000 recipients recipients. and the 3,500 or so medal of honor since the civil war. turns out he's the only person to earn the award. >> he might point out to somebody else who was more heroic than he was. he was very humble. he never talked about the carnegie medal. and when i interviewed people who knew him people knew him well. i said, tell me what about the carnegie medal when he was 19. they didn't know anything about it. i have known a lot of medal of honor recipients. most of them will tell you i didn't deserve this medal. it should have been given to somebody else. it's a piece of humility we can all learn from. we visit the home of our 28th president woodrow wilson.

>> president wilson moved to augusta as a child when he was just a year old, lived in another house. and then moved to this house when he was 3. president wilson's first memory was in 1860 before he was 4 years old. he was standing on the front gate out in front of the house and two men came by in a hurry with very excited tones of voice. they said abraham lincoln has just been elected president and there's going to be a war. so young tommy ran inside to ask his family what was war. what did that mean? why were they so excited. we think it is remarkable his very first memory was about another president, abraham lincoln, and about another war, the civil war. of course wilson would have to lead the country through world war i >> see all our programs saturday at noon eastern on book tv.

and sunday afternoon at 2:00 on american history tv on c-span3. looking ahead here on c-span3, health and human services secretary sylvia burwell testifies on capitol hill about reports that consumers are intentionalley falsifying information to get subsidyies on the health care exchange. and legal challenges to the health care long. wisconsin governor scott walker meets with voters in iowa. >> and later a discussion on combatting prescription drug abuse at the state level. obama administration officials were babbling on capitol hill testifying on the iran nuclear agreement. we see here in politico the four-hour hearing turned testy at times. in one bit of sparring, scott perrey of pennsylvania said iran

is like a crocodile or shark that's about to be given more teeth. and they should have thought of a stronger agreement, such as a treaty, no matter what iran's leaders wanted. here is the congressman in another exchange with secretary of state john kerry. >> -- said we don't have a better option. people are saying you haven't provided a better option. >> congressman -- >> mr. secretary, with all due respect, it is not congress's job. this is the administration. if you would use the treaty process as provided by the constitution, maybe we wouldn't be in this situation. furthermore, you say, well, this is the only deal we could get. there's no better deal. congress has a long history of instituting better deals. 200 treaties including 80 multilateral modified by congress, including the arms control agreement, salt 2 and the threshold test ban treaty that failed to reach a vote and were modified. so there is a history for that

of getting a better deal. if the ayatollah doesn't like it and doesn't want to negotiate it oh boo hoo. we represent america. we stand for america. with with that being said -- in another interview, if you don't get a majority in congress to support the deal doesn't that undermine the deal. your statement, they don't care as long as a deal is implemented. so do you care more about this deal or the you know's approval or american sovereignty and the approval of the american people through their duly elected representatives. >> mr. congress. >> mr. secretary. >> i don't need any representation from you. i fought since i was out of college. >> god bless you for doing that. >> let me make it crystal clear to you.

this is america's interest. because america is the principle guarantor of security in the region. and particularly with respect to some of our closest friends. now, we believe that iran was marching towards a weapon or the capacity to have a weapon and we've rolled that back. >> okay. that's your opinion. >> that is in disputable. >> you can see all of that hearing in our companion network c-span overnight programming or any time at c-span.org. tomorrow, defense secretary ashton carter and joint chiefs of staff will also be on capitol hill testifying on how the iran nuclear agreement still affects the military balance in the middle east. 9:45 a.m. eastern time on c-span3. health and human services secretary sylvia burwell testified on capitol hill today that they are not aware of any

consumers intense alley falsifying information to get subsidies for insurance exchange coverage under the health care law. modern health care writes this comes day after the government accountability office issued a preliminary report that documented how its investigators were able to sign up for coverage, get insurance subsidies and reenroll with made-up information. that's about a two-hour hearing we're about to watch. there are numerous barriers to prevent such abuse. and in the first quarter of this year, hhs kicked 117,000 people off the exchange after it couldn't verify information that was submitted.

>> we will come to order. good morning, secretary burwell. >> good morning. >> thank you for joining us to review the policies of the department of health and human services. we have a lot of ground to cover in a short period of time. that is especially true for a department this big. hhs is expected to spend $1 trillion tkpheupb strering numerous programs, including child care welfare health care, early childhood development at a time families are being squeezed we have an urgent responsibility to make sure federal government is operating efficiently and effectively.

last year the committee helped champion by patterson reforms for health and safety and improve the quality of care. this final program helped countless mom sps dads provide for their families and we hope they are on track to implement changes quickly and in line with congressional intent. another is head start. earlier this year the committee outlined key principles for strengthening the program reducing regulatory burdens and local innovation and better engaging with the parents. it was in the midst that the department decided to launch a regulatory restructuring of the program. some of the departments proposed changes will help improve the program. however, the sheer scope and cost of the rule making raises concerns and has led to some uncertainty among providers who serve the vulnerable children.

i haven't even provided information on the 1996 welfare and older americans act. secretary burwell on the minds of most members with the challenge of the country continue to face because of the present health care law. families and workers are learning more and more about the horrible consequences of this flawed law. patients have fewer access to doctors. insurance plans on the health care exchanges have 34% fewer providers than nonexchange plans including 32% fewer primary care doctors and 42% oncologies and cardiologists. the law is plagued by abuse. in 2014 investigators with a nonpartisan government accountability used fake identity to enroll 12 in the

health care change. and 11 of the 12 fake individuals are still enrolled and seeing tax payer subsidyiessubsidies. roughly 25% more than the administration expected in the worst-case scenario. according to the associated press, 4.7 million individuals are notified that their insurance plans were canceled because they did not abide by the rigid mandates established under the law. nonpartisan congressional office ruts 2.5 million fewer jobs. employers have no chance but to cut hours or delay hiring because of the burden some ban date. according to the "new york times", health insurance companies are seeking rate increases of 20% to 40% or more. markets are still adjusting to the shock waves set off by the affordable care act. finally, after all the mandates

fraud, loss of coverage fewer jobs, myer costs and $2 trillion in new government spending, it is estimated 25 million individuals will still fight basic health care coverage. last month president obama said the law "worked out better than some of us anticipated". of course for those who oppose this government takeover of health care, which is praoes pre sighsly why the american people deserve a better approach. in closing madam secretary i want to thank you again for joining us this morning. it is our responsibility to hold you and the administration accountable when we believe the country is moving in the wrong direction. however, there are areas i believe we can find common ground and advance positive solutions on behalf of the american people. i look forward to our discussion. with that, i will now yield to ranking member bobby scott for his opening remarks. >> thank you, chairman clyne. welcome, secretary burwell. thank you for being with us

today. look forward to your testimony. today we will hear about the president's fiscal year 2016 budget proposal and budget priorities. the budget was released months ago. i'm pleased to see the word "priority" is accused in the title of today's hearing. budgeting requires making tough choices. budget is a reflection of priorities. as legislators we decide what our priorities are and how best to invest in our country. it was reflective of many important priorities, such as protecting access to health care insurance for all americans, giving all children a chance to succeed, and reducing in equality around the country 37. in many areas i believe we made great progress on these priorities. the passage of the affordable care act has given millions of americans access to health coverage, some for the first time in their lives. aca has helped slow the growth in health care costs closed the doughnut hole for seniors, and

improved access to mental health services and preventive care. weeks ago the supreme court decided in another case pertaining to the affordable care act the legality of subsidies for those obtaining health insurance from the federal marketplace was upheld. the affordable care act was structured and designed to improve health care coverage in access across the speier country and it has. and now those living in virginia have enjoyed access to insurance subsidies just like someone in minnesota. because of the outcome of the case, they will continue to do so. i want to thank secretary better well for the department's hard work and implementing the aca. i recognize the challenge that your agency faces in implementing a law with limited resources and unlimited attacks. despite these challenges, the aca is working. i was also pleased to see the president's budget request gives

all children a chance to succeed by ensuring robust funding through increase to and access of quality learning of early childhood programs. the budget adopted by the house earlier this year is not reflective of these national priorities despite research showing that for every dollar spent on early education there is a return of $7 and reduced costs in other parts of the budget. you must invest in early adequate learning programs because all children should start kindergarten with early success. the first five years of life is instrumental in cognitive functioning and emotional and physical health. all too often, low income working families a lack a access to high quality affordable child care and early childhood education. these children tend to fall behind. in addition to achievement gap, children who don't participate

in high quality early learning programs are more likely to have weaker educational outcomes, increased involvement in the criminal justice system and increased teen pregnancy. affordable high quality child care is not just critical for children but for working parents. it is a two generational program. parents of young children need child care to go to work or go to school. and a a lack of stable care is associated with job interruptions for parents. child care ought to be a national priority for america's children and help grow our economy. just two programs the bulk of federal -- the bulk of the federal law in early education, held start and childhood development block grant. because of limited funding too few children have access. this unmet need continues to grow. only 4 out of 10 eligible children have access to head start. only 1 out of 6 federally

eligible families receive child care subsidies. we have decades of evidence that investing in programs like head start and the child care development block program work. and the time is to invest in these programs and ensure we are giving all children the chance to succeed. lastly, it is pastime to raise the spending caps. they are stunting the progress we could make in areas like health and education. these caps threaten nearly every program on the jurisdiction of this committee for low income home energy assistance program to older americans act and others. it's a question that led to woefully and indiana adequate needs. investing in our nation's future should be congress's number one priority not corporate tax breaks or lowering the estate tax. our focus should remain on

strengthening our nation's middle class and help hard working families get ahead. so thank you, mr. chairman and secretary burwell for being here today. >> thank you gentlemen. pursuant to rule 7c all members will be permitted to submit written statements in the permanent hearing record. without objection the hearing will remain open for 14 days to allow statements and other extraneous material to be officially submitted to the record. it is my pleasure to introduce our distinguished witness. honorable sylvia matthews burwell, secretary of health and human services. prior to joining in june 2014, secretary burwell served at the office of math and budget. during the clinton administration, secretary burwell served as deputy director deputy chief of staff to the president chief of staff to the secretary of the treasury and staff director to the economic council. welcome, madam secretary.

i will now ask the secretary to stand and raise your right hand. thank you. do you swear your testimony will be the truth the whole truth and nothing but the truth. the witness answered in the affirmative. let me briefly remind you or more importantly my colleague of our lighting system. we typically allow five minutes for each witness to present. although i will be flexible on this timeline given you are the only witness and you are cabinet secretary. i would ask you, though, to try to limit your remarks because we have a lot of members who want to get to questions. and i will be strictly enforcing the five-minute rule. and perhaps the four-minute rule. the secretary has a hard stop time at 1:00. i will honor that. i would ask my colleagues to be patient. again, when you start and we'll put the timer on.

but you can effectively ignore it if you would like. it will be green and turn yellow. and then red when the five-minute mark is over. and that applies only to the secretary. to my colleagues, when five minutes is up, five minutes is up. now you're recognized, madam secretary. >> thank you, mr. chairman ranking member scott and members of the committee. thank you for the opportunity to discuss the president's budget for the health and human services. i believe firmly we all share common interests. therefore we have a number of opportunities to find common grouped. we saw the power of common ground in the reauthorization of the child care and development block grant and development block grant that happened last fall as well as the bipartisan sgr repeal earlier this year. and i appreciate all of your work to get that passed. the president's budget proposes reversing it for domestic

priorities in 2016 matched by equal dollar increases for the department of defense. without further congressional action see quester will return in full. we need a whole of government solution. and i hope both parties can work together to achieve a balanced and common sense approach. the budget before you makes critical investments in health care, science, innovation, public health, and human services. it maintains our responsible stewardship of the taxpayer's dollar. it strengthens our work together with congress to prepare for tee challenges at home and abroad. for hhs, the budget proposes 88.3 in budget authority. the $4.8 billion increase will allow our departments to deliver impact today and lay a stronger foundation for the nation for tomorrow. it is is a fiscally responsible

budget which could save a net estimated $250 billion. the budget is projected to continue slowing the growth in medicare by securing $423 billion in savings as we build a better smarter, healthier delivery system. in terms of providing all americans with access to affordable quality health care, it builds on historic progress and improving coverage for families who already have insurance. the budget supports our efforts to move towards a health delivery system that delivers better care, spends dollars in a smarter way and puts the patients at the center of the care to keep them healthy. the budget also improves access for native americans. to support communities throughout the country, the budget makes critical investment in health centers and our nation's health care workforce.

particularly in rural and other high need areas. the budget increases nih funding by $1 billion to advance biomedical and medical research by other priorities. it invests in precision medicine. a new effort focused on development treatments diagnostics tailored to genetic characteristics of a patient. in providing americans with the building blocks of healthy and productive lines, it outlines a plan to make affordable child care available to working and middle class families. specifically, it builds on important legislation passed by congress last fall to create a continuum of early learning, opportunities from birth to age 5. it would guarantee quality child

care for working families, grow the supply of learning opportunities for young children and expand investments in evidence-based home visiting programs to keep americans safe and healthy, the budget strengthens public infrastructure with $975 million for domestic and international preparedness. it also invests in behavioral health services, including $99 million in new funding to combat prescription opioid and heroin abuse. initiatives are projected to yield $22 billion in gross savings. the budget addresses the department medicare backlog with a coordinated approach. it also makes a significant investment is in the security of the department information technology and cybersecurity. i want to exact by taking a moment to say how proud i am of the hhs team and the employees

that work on ebola. their work every day and their commitment every day. i want to assure you i am personally committed to a responsive and open dialogue with members of this committee, as well as with your colleagues. i look forward to working closely with you and i welcome your questions. thank you. >> thank you, madam secretary. the light didn't even turn red. i'm unprepared now. i'm at a loss. seriously, i want to thank you madam secretary, for your yon going efforts to keep us informed about the department's progress and implementing the child block care act of 2014 as well as for staff to communicate directly to your staff. can you update us briefly on the timeline for the release of guidance in accordance with the act? >> with regard to i think our staff has had an opportunity to go back and forth. that's helpful as we produce the guidelines. i'm hopeful.

i'm not sure examine particularly piece you're referring to. i want to make sure. and we can follow-up on that. overall, we're making progress and hope to get them out. one piece i would like on the authorities that you all gave us there is an important piece of the budget that is related to the implementation. and one of the things that we were told with regard to the authorities is improve the quality and the safety. and also improve our ability to serve communities that sometimes aren't being served, such as parents that work in different hours. and so there is funding in the budget we're talking about today on the discretionary side that i think is important to do that. i want to raise a that as part of this conversation. there is some funding to do that. >> okay. i'm not sure that's exactly what i was getting at but that's good. >> and back on the specifics of this. >> just time to get a better feel for the timeline. >> exactly. >> again i very much appreciate

the exchange between staffs. it's very, very helpful. i want to take the reminder of my time, no doubt, and i will try to be brief. but there is an issue having to do with the affordable care act that is just sitting out there that really, really needs to be addressed. and that's the maximum amount of pocket limits for cost sharing that i'm sure you've heard about. i've heard from several employers about this unilateral exchange maximum out of pocket limits. we can't seem to determine where this is coming from. the statute is pretty clear. two separate and distinct types of coverage. self and other than self. each with out of pocket limits. before this new rule any combination of family members out-of-pocket costs count towards the maximum of out of pocket limits. in 2016, the individual out of

pocket limit applies first before the family limit applies. that means the cost of the employer will increase because insurance will pay 100% of the out-of-pocket costs sooner. i understand you're aware i've been led to believe that you're aware of these concerns. they have raised this with you and your staff directly. they have with us many times. we would like to understand under which statutory authority you did that. then i would like to convey grave concerns for the new imbedded maximum out of pocket limit rule. the letters also convey that compliance will not be possible by 2016 given that employers plans are already set for next year. it wasn't until may when additional guidance was issued

that they knew the change applied to them. there was rule confusion. i'm fairly confident you're hearing this directly. but i want to make sure you heard from me. can you commit to at least delay the impact of this really significant rule change for at least a year? and if not why not? >> with regard to the issue of the question of delays, we are now hearing and receiving feedback. we want to take and in corporate that and determine what we should do. i think it's important to note why the change was put in place. and the change was actually put in place about the consumer. and the fact that when one consumer in a family hits that individual limit and the question of should they hit that family limit and whether you should aggregate for the individual. i think actually when consumers purchase and how the consumer thinks about this issue, i hear and understand and we are hearing from the companies in terms of how they think about the question of maximum out of pocket limit. but if you are an individual and family, do you think that is

your individual limit? and then there is a broader family limit for all. so once you have hit your individual limit what would happen is you would keep going s. so you would not have those things paid for. you signed up for in a place you thought your individual limit was your individual limit and the family limit was for all members of the family. that's how the consumers have tended to think of it. at least from the consumer side. that is why we have gone forward. we are hearing comments. we want to in corporate those comments and understand if it is implementable. >> i understand the point of view of the consumer here. i'm not making light of that. but the statute we think is pretty clear. and because there is so much confusion out there and there is the uncertain and arguably the in ability to comply we are hopeful that you will commit sooner rather than later to a delay of this rule change. and i'm going to try to -- it's already too late. the light has turned red for me. mr. scott, you're recognized.

>> secretary burwell, thank you for being with us today. i want to ask a few questions about the affordable care out. i want to thank you for the department's outreach efforts. the regional director in my area has just been outstanding. and outer reach into the community, making sure that people know about it. and during the sign-up period was all over my district. i'm sure she was all over the region. >> can you say a word what the affordable care act does and nobody lock. >> two different things that i think it does. with regard to pre-existing conditions, it creates a situation where anyone with a pre-existing condition is able to get insurance. so whether it's the people i met traveling across the country who are concerned as a child gets over, if the child has asthma. or someone who has gotten cancer

and gotten well. so pre-existing conditions are no longer something that creates both health and financial worry for people in the system. and with regard to the question of lockout job lock, there are many people who wouldn't make changes pause of their fear of losing coverage. and that is a part of the numbers the chairman stated in terms of the changes that occurred. with regard to the employer-based market we have not in the two years that the affordable care act has been up have seen that from employer based coverage. we haven't seen that shift. and some of the estimates are about people, though, who will choose to make a decision to go down something entrepreneurial if they want to make a business or make other changes in their lives. it was created because they were fearful of losing coverage doesn't exist because they have an option and that is through the marketplace. >> what happened to the growth in health care costs since the passage of the aca?

>> with regard to the growth of health care costs, we have had some of the lowest price growth per capita we have seen in 50 years in terms of slowing up that growth. when discussing the question of growth while it's hard to look at what was released recently in the medicare trustees report which is let's reflect on the public sector cost of this growth, we saw 1.2% over the period of the last four years. what we saw in that period before then was 3.6% growth. and so what we have seen is a slowing in both the public and the private of that growth. >> and the program under your jurisdiction, can you say a word about the effect of the sequestration. >> so as we look at this issue of being funded at the lowest level in a decade when one

accounts for inflation, it is across the entire department. and whether that's an issue of head start or child care that will focus on in this committee it also is in places like the nih or the cdc, who has been so active this year in so many ways, whether that's ebola or measles. and also in places like the fda, doing things like making sure our food and safe and we are watching and taking care and that our drugs and diagnostics are safe. it is across the entire department. and another place this particular committee is interested in is older americans. and the programs we have to support older americans around food and transportation as well as elder justice. >> thank you. head start is not in the department of education. it's in the department of health and human services. can you explain why and what the services that low income children get by remaining in

health and human services they would not be available in just an educational program and why head start is so important? >> i think the program of head start, we have it as part of our continuum at hhs. it starts with home visiting. thank you to all of you all who supported the sustainable growth bill that had the extension of the home visiting and evidence based program that starts with the care in the home, visiting the home and helping start children on the right track. we believe that continuum as well as the changes in the authorizations of head start that you all have done to push to improve quality. it is all part of continuum. it is related to the issues we work on broadly at hhs. whether that's starting the mother on the right trajectory and then continuing that early care starting that learning early and that brain development. the science that we know and having a 5 and 7-year-old of how quickly that neural development is occurring and how fast

they're learning. sometimes it surprises me. but it is what we believe is a continuum of heating and the building blocks of healthy productive lives we use at hhs. >> thank you, gentlemen. dr. fox. >> thank you, mr. chairman. and madam secretary, welcome to our hearing. madam secretary, i appreciate you bringing up the older americans act. we're looking at -- the committee is looking at ways to promote best practices to combat elder abuse. and i wonder if you could talk about how the department is working with other agency toss protect vulnerable elders. >> the department of justice is partnered with some of the work we do. whether it's our departments and states as well as other stakeholders, the white house conference on aging, we took an approach this year where we actually went out to communities across the country.

and this was one of the pillars and issues we focused on. and used that as an opportunity to bring in the engagement and involvement of both ideas as well as how we can implement better as a department in terms of the issue of elder abuse. so we are seeking that input to improve what we're doing both within the u.s. government but also with a number of players that implement. those are stakeholders on the ground and states. many of the programs are actually delivered and implemented at that level. >> and would you discuss a little bit those delivery models and what makes them work well. working with other agencyings i'm sure does -- is the right thing to be doing. are there ways to implement similar delivery models across other programs across the country. and how is the department providing leadership to do that.

>> so i think there are many things but i will focus two things that are important in this space. but is the awareness of the issue. elder abuse is something that is not an issue that many focus on and whether these providers and the organizations in the community are a part of recognizing the issue. it is a little like our issue that is also the victims in trafficking. creating a greater awareness of it is an important thing to do. i think the other thing we think is an important thing to do. when these acts occur, that justice is served. so that people know when they are taking advantage of the elderly. and that's a place where we need to continue to work with state and local officials on that as well as federal. and i think one very specific example of that is the recent takedown that was done on medicare. you all probably know that our most recent takedown a jointest with us, doj, the fbi hhs, oig,

and cmf, it was over $700 million in false billing. many were around elder justice issues. patients were being told they were treated for dementia and were simply being moved from one location to another, being charged for that. and medicare was therefore charged. i think it is the combination of those things we try and bring together. >> thank you very much for that. we know that you are -- scott brought up head start performance standards. we know that head start is the largest program we have at working with young children. but we are concerned about the impact of the regulations that you are putting out there. we wanted you to not -- reauthorization of 2007 required you to have regulatory revisions not result in the elimination

of -- or reduction in quality of scope of services. but you are talking about a reduction of 122,000 children's slots, elimination of 10,000 teacher jobs. how can you ensure that the revisions you are proposing are in compliance with the 2007 law? >> we have done three issues of regulations with regard to implementing the law. the first in terms of we make sure they are serving low income communitiesment the other making sure there were reviews. the grantees. we set standards. this is the third part. in this part we are using evidence-based studies to improve the quality and safety which we believe that the authorization is what it told us to do. one of the things that the chair mentioned is we got rid of one-third of the guidelines in terms of simplifying and making it easier. with regard to some of the

things you're referring to, you're referring to the extension of the day and the year. and the evidence that we have seen, all the scientific evidence shows moving from three and a half hours to six hours is an important effort to provide the quality that we need to provide. and the summers, having two children right now going through their summer what they lose if they do not have is that kind of continued education. we propose the amount of money it would take in our budget. we hope we can move forward on that. if they can't meet that, there is waiverability. thank you. >> the gentlemenlady's time has expired. >> thank you chairman clyne. and ranking member scott. i strongly support the health and human service budget request and ask that we work together to forge a consensus on how to ensure that your families continue to have a access to quality health care coverage and adequate funding for head start.

we can invest in our preschool programs today or in juvenile detention tomorrow. won't have heard pope francis deliver a very strong message all over the world urging leaders like us. the pope says we must make the right amount of investments to address poverty found in older senior persons and children in low income families. thank you for your testimony on the aoe normal act we have made since the enactment of aca. today my congressional district because the affordable care act there are over 100,000 individuals who now have health insurance. and 88,000 seniors who are now eligible for medicare preventive services without paying any

co-pays, co-insurance or deductible. we know that another program, head start is a crucial development of program in my congressional district. this program serves between 15,000 to 20,000 children and families. head start has made a significant impact on improving the opportunities for eligible children, especially our nation's latino and african-american youth. thank you for your strong budget support for this program. my first question, what is at stake for our nation if we ignore the ever growing body of research and we fail to sufficiently fail to invest in early childhood learning. >> we discussed the head start portion of it. but there's also the child care proposal. and part of the child care proposal on the discretionary

side comes to part of the chairman's question in terms of implementing the authorization. that's on the discretionary side. the broader proposal that we have, which is a larger mandatory proposal is about making sure there's access on this continuum. so what we do is take care of that child from the moment of that home visiting and the pregnancy through those early years of education and we do that both for those at the lowest level of income. head start is focused on that. but child care. that's a part of what wire processing child care for working families. there's supplement so they can afford that up through the school age. what we are trying to do is create a continuum, which we think is a part of the authorization and part of the concepts of the authorization. this budget funds it fully. we believe it's one of the most important priorities. as we review the budget and put it together, it's where we make choices, prioritize and put a lot of our dollars. it is important to the long-term

health of those children and the well-being of our society. >> i agree with you. and i recommend that you consider asiding more on early reading and writing in children from cradle through the fourth year so they can love books and improve their vocabulary and be able to stay at grade level and do well. in my district the majority of the uninsured population falls under the medicaid coverage gap and does not qualify for assistance in the health care marketplace. according to the kaiser family foundation, up to 950,000 uninsured people would gain health care coverage if the state of texas decided to expand medicaid. what justification, if any, have you heard or received and how has hhs responded to discussions that you have had with the governors like abbott in texas?

>> so with regard to the conversation with the governors i spent the weekend at the national governsors association and the year before that i did as well. we want to expand the program in the way that implements the statute, which is about expanding access and doing it for low income population so is it's affordable. we want to do that in ways that work for states. i think in terms of answering concerns and questions whether it's the negotiations we did with governor pence and i personally participated in a number of other governors so we can make sure we do this in a way a that serves the citizens, the state, that may have different needs. so in terms of one of the issues that comes up, i want to clearly arctic want to work with governors in their state. >> thank you. i yield back. >> the gentleman yields back. i will yield to dr. rowe. i want to give members a heads-up. we are looking at a clock and time. i will recognize dr. rowe for five minutes.

and probably ms. davis maybe mr. wahlberg and a after that we will have to start dropping down. we will go to four minutes. i'm trying not to go to three or two. but i want to give everybody a chance to be involved in this conversation. dr. rowe? >> thank you mr. chairman. thank you madam secretary, for being here. there are some questions i want to bring up to begin with. then we will get to the questions. these are things i want your shop to answer. one are the medicare wage indexes. if you look at those around the country, it was never intended to be like that. 20 of the highest are in california and massachusetts. 14 of the lowest are in alabama and tennessee. for instance, what you get paid in santa cruz california is 1.7 with a medicare wage index. and .73 where i live. it's putting us out of business. that needs to desperately be looked at.

the second thing, and i want to know your solution to that. certainly we're all against fraud and abuse. but in my state the medicare comes in, does these audits withholds the payments. we win 72% of them. and we now the backlog is so long, you can't get in front of anybody to get your money back that you have earned. and that's unfair. and i think you absolutely need to re-do the audits. and thirdly, this is a much deeper one. and it may take some time. but medicare is on an unsustainable course as you well know. last year 2014, medicare spent $613 billion. and we took in $304 billion. that's unsustainable. and since its inception, $3.6 trillion negative of premiums over what we have spent on the practice. i would like to know what your recommendations are to put this on a more sustainable course.

2.9 over the budget number. it's a start. but i would like to know what the other issues are. and regrettably i've got to ask some questions i don't like asking but i think are extremely important to ask. also one last thing, question was on ipad. do you think one person that would you you now, should have the power to determine how medicare dollars are spent if it goes over this formula? i would like to know that. because there's nobody on that 15-panel board right now. recently we have seen two videos that showed planned parenthood physicians having wine and eating a salad, bargaining over the harvesting and sale of dismembered baby parts. i found it incredibly offensive as an obstetrician.

have you seen the videos? >> i have not. i have read the articles. >> you couldn't comment because you hadn't seen it. but you need to see those as quickly as you can. it's only 8 or 10 minutes. you need to look at those and see what the rest of us have looked at. and given planned parenthood's horrific conduct, americans may be troubled to realize that planned parenthood gets over $500 million a year much of it through you. medicaid and title x funding. with a significant financial relationship, can you tell us what you have done to investigate these activities. >> so first, i would just -- because it's so related to the budget issues we're discussing today, the rack issues and the backlogs, we put together a strategy that includes -- because it is such an important issue. extending the number of people that we can have to review the appeals because there are legal

judges that we have to bring in. second, there are statutory changes. on the senate side the bill is moving to make changes that will help us. third, administrative actions. i want to raise that because it's important. to the broader issue that you have raised, with regard to the issue i want to start by this is an important issue that people have passion deeply on both sides of the issue. whether that is the issues of research that are important for eyes degenerative diseases, down syndrome autism. >> my time is about up. have you had any contact with planned parenthood? >> with regard to the -- i'm sorry? >> with regard to this issue? this sale of the -- >> no. planned parenthood's funding. and 500 million that you mentioned i think is a state number. with regard to medicaid and states, those are issues -- >> 41% of their funding comes

through the federal tax payers. let me just say before my time runs out because we are limited i found it absolutely amazing to me that planned parenthood could complain about a woman having an ultra surround before she terminates her pregnancy and using ultrasound to harvest body parts for fetal issue. i find that absolutely astonish astonishing astonishing. i yield back. >> the gentleman yields back. you're recognized. >> i'm sure there will be plenty of investigations on that by my colleagues. i want to go on and ask for unanimous concept that a repeal of the affordable care act adding $137 billion to the deficit in the next decade, that this report be entered into the record. thank you, mr. chairman. >> thank you very much, madam secretary, for being here for your service and for joining with us today. you mentioned mih earlier. i know that you care deeply that

we continue to fund this at higher rates. we absolutely cannot fall behind the global community and how we address science and innovation. so i think is that's very, very pleased that the president has increased that funding. but i also wanted to talk about not just the innovation piece of it, but really the access piece, and affordability. and particularly focus on the changes that you have recommended in reforming medicare part d. and specifically, in ways that you call for in the budget request in terms of reducing medicare costs both for the government and the consumer and looking at the question of giving authority to you and to the department to negotiate drug prices in medicare part d. can you talk a little bit about that and why that is part of the

budget and why you think that this is so important? >> i think that we believe that the ability as we look and address the issue, one of the issues that was brought up as a q -- or the question of the long term health of medicare and how we work on that is we look at some of the issues that will be driving cost. in the out year we believe that drug costs are a part of that. we see that happening. we see that both in the terms of the numbers and in out year projections and also hear it from the private sector. the belief is, having come from the private sector and actually having come from a company that is known for its negotiating on price, walmart, the idea that we use market mechanisms to try and put downward pressure on price is something we think is important. that's why we've asked for those authorities, so that we can try and work with the pharmaceuticals and negotiate to keep downward pressure on that price. that's what we hope we can do. we see it as part of the overall issues that we are being asked about how we transform the system for the long term.

we believe there are things we need to do and pressure we need to future. >> what do you see as some of the key problems that you are going to be having as you try and move forward with this? >> i think with regard to this particular issue it's not one you know, it is a elect lative and a statutory issue. it will take a statutory change to grant the authorities to be able to negotiate. that's not something that administratively we can do. so it is something where the action will sit with the congress. >> uh-huh yeah. thank you for working on that. i know it's not simple way of moving forward but it does seem to make a difference. and there have been so many stories lately about how the high cost of really not just bankrupted families but made it very difficult for people the access important life-saving drugs. i wanted to just for a moment also talk about the increasing access for folks here at home. and we know that the aca really has been a huge success in helping to reduce a number of

the uninsured. i actually have a constituent in my district who was going regularly down to tijuana to get the medications that she needs. and this now means, as a result of her being insured that she doesn't have to do that any longer. and it's been a big difference in her life. so i wondered if you could just talk a little bit about how dramatic the increase in the amateur population has been since the implementation of the aca and what this additional coverage has meant in terms of increasing patient outcomes? >> with regard to that in terms of numerically the number i think you know is over 16 million in the number of the reduction in the uninsured. with regard, what tells the story better are the individuals, whether that's anne ha, a woman who was 26 uninsured. her mother told her to sign up. she needed insurance she didn't but in the end she listened to her mom a. plont later she

discovered she had stomach cancer and had the coverage. that helped her and she is now recently married. in addition to that the financial security in terms of her business and ability to continue on in that way. i think it is the individual stories combined with the numbers in terms of what we are seeing of what the extended coverage means. >> right. yeah. i particularly have heard about that when it comes to type 2 die beats and the prevention that's made a real difference for those folks. thank you very much for your service. >> the gentle lady's time has expired. mr. walberg you are recognized for five minutes. >> thank you mr. chairman. thank you madam secretary for being here. thank you for reaching out to us before this as well. i want to ask you, first question, how many fictitious claims have been paid since the enactment of obama care and how much has been lost due to this

fraud. to bring it into context. early whier this month gao released a report that investigative health care.gov threw yearious tests performed throughout the 2014 coverage year. the report revealed stunning things, that the marketplace approved subsidized coverage for 11 out of 12 fictitious applicants created by gao resulting in a payment of about $30,000 to insurers on behalf of these fake enrollees. for seven of the 11 fictitious applicants gao intentionally did not submit all the verification documents to the marketplace. and the marketplace even then did not cancel subsidized coverage for these applicants despite the inconsistent and incomplete information. so subsequent to that how many fictitious claims have been paid since the enactment of obama

care? and how much has been lost due to the fraud? >> so with regard to the example, we take very seriously the issue of program integrity and want to continue to improve it. we look forward to the gao's recommendations out of that study. we haven't seen those yet. we look forward to understanding what they are. with regard to the question i'm answering the number because the gao didn't find actually there were fictitious claims. when they had -- they tried to come through electronically. and then they came through through the phones. that's where they got through. at that point because they are gao, they were able to do thing that for everyone else would be perjury that would have a $250,000 fine afill kuwaited. >> and were successful. >> that's the key, breaking the law in terms of what they were doing to go through. with regard to the next step -- and there are a number of gates. there is the gate at health

care.gov in terms of that was where it was caught. got through at the point in term of the confirmation of information. then because they did not file taxes what will happen to these individuals is in this year as per statute, they will no longer be able to get subsidies in the next year because at that point the irs will let us know they have not filed taxes. >> we don't know how many fictitious claims have been filed already other than gao. >> we know 11 gao. >> 12 examples, 11 got through. >> with regard to those are the only examples we know of because as gao said in the report they didn't know of other examples other than those they had created. >> they don't, but you don't know either. >> what we do know is we have a number of steps in place. within 90 to 95 days we go through data matching this. year already 117,000 people who have not -- we don't know that they are fictitious.

we know they have not provided the right documentation. and the first quarter of this year, 117,000 people came off. several other hundred thousand people, over close to 200,000 people received information saying we did not have enough justification for their income. and therefore their aptc, their tax credit, would be adjusted downward. so we are on a constant path of making sure we have the information that aligns with what we have been told. if not we are taking action. >> without getting into specifics of the cases that were successful, again, which shows that there should be concern, can you explain to the committee what processes likely failed to allow these fictitious applicants to gain subsidies? >> there are a series of processes that occur. in terms of the gates, when people have lied about their information, it's something that can happen in the system. it can happen in all of our

systems. the way we catch that is in the data matching and information. so it depends on whether they have lied about which part, and that could have to do with immigration -- >> which ones failed? >> pardon me? >> do we know which ones i failed that allowed these? >> no because we have not seen the gao examples. one thing that would be helpful is to see the. >> kpa. all we know is what you said. if we have the information then we can fine where the system may not be working. right now -- >> what's keeping you from getting examples then if that's the case? this came out earlier in july. >> at this point, the gao has neither given us recommendations or -- >> have you asked for it? >> we have asked the gao in terms of can we understand how you did this? they believe they are protecting their sources and methods. >> gentleman's time has expired. mr. grijalva, you are recognized for five minutes. >> thank you mr. chairman and thank you madam secretary.

with regard to the gao question you just received the gaming of the system and the process, is this such a ramp ant phenomenon that it is undercutting the very pittings of the affordable care act? are we dealing with an issue in which as you get more information you deal with it? >> at this point there are a number of gates and efforts on program integrity in place. and that's the initial information gathering which we check at the hub at that point. when this that goes through, when we don't have data matching as i said within 90 to 95 days we review those tai cases we take action. at the point of the filing of taxes and the examples that were given, folks didn't file their taxes, that's the next place where that would occur. and the next gate will occur in terms of if people chose not to file their taxes for some reason. that's the point at which subsidies will go away.