STATEMENT OF TERENCE C. GOLDEN, ADMINISTRATOR OF GENERAL SERVICES, GENERAL SERVICES ADMINISTRATION, ACCOMPANIED BY RAYMOND A. FONTAINE, COMPTROLLER Mr. GOLDEN. Thank you very much, Mr. Chairman, and members of the committee. I have to say for my part that I have particularly enjoyed working with this committee. We at GSA have received tremendous support from the Government Operations Committee on a number of issues. And I am referring particularly to FTS 2000 and the day care activities that we have underway now. We have had our differences, but I think, despite many commentaries in the press, it's been a very friendly and amicable relationship and we have been able to work together. And I think we've accomplished a tremendous amount as a result of that. I appreciate personally all the considerations I've been given by Government Operations, and I really commend this group. And I also want to mention, Mr. Chairman, that you have a tremendous staff as well. We would be making a mistake if we ignored the work done both by the majority and minority staff on the committee. They've been very easy to work with. And I think, more than any other committee, we've had great communications. It's my pleasure today to present my views on H.R. 3932, the Presidential Transitions Effectiveness Act. I would like to submit a written statement for the record, and just make a few brief opening comments, if that's all right with you. Mr. BROOKS. Without objection. Mr. GOLDEN. If I could, I would also like to limit my remarks to those related to the costs of transition and their adjustment for inflation. The Deputy Director of OMB, Joe Wright, is here, and he will deal with the other policy issues. OMB really has had the experience with these issues. And Joe Wright, particularly, has had experience with the transition and can talk to those issues. Just as a point of information, I think it's very interesting to understand where the money is currently being expended-the $2 million that is available for the Presidential transition of the incoming administration and the million dollars that is available for the transition of the President back into private life. We didn't show two separate diagrams for this, because what we discovered when we looked at it is that for both the incoming and outgoing President, in terms of percentages, the expenditures are very similar. The average expenditures for the 1981 Reagan/Carter transition indicated that approximately 65 percent of the expenditures were for personnel. The next major item is travel at 9 percent. Rent at 4 percent. Communications, printing, and miscellaneous services at 14 percent, and supplies and equipment at 9 percent. So, you can see the majority of the expenditures are on personnel. For the incoming President, it really represents only a portion of the overall personnel that are involved. I think, of some 1,600 people that were involved in the transition of President Reagan, only some 300 received compensation in Federal funds. As far as the expenditures themselves are concerned, we see very amply the reasons for a need for an increase in expenditures. As you can see, for the incoming President, legislation in 1976 author ized some $2 million. If you were just to adjust that for the Consumer Price Index between 1976 and today, you would, in fact, need $3.9 million of today's dollars to have the equivalent spending power to what was authorized in 1976. So from my perspective, looking at the situation of the incoming President and the suggestion that the amounts be increased to $3.5 million, it seems reasonable, if not a little bit low, given the cost of living and the increases that have occurred during that time. I guess the other point that we wanted to make is that we've incurred the same kind of cost changes for the outgoing President. The legislation permits $1 million. If you adjusted that $1 million in 1976 to today's costs and adjusted it through the Consumer Price Index, the amount today would be $1.9 million. So the change in the legislation that we would propose, would be to increase the amount for the outgoing President from $1 million to at least $1.5 million, and that, in my estimation, is probably on the low side of what's actually required. I also would point out, given the fact that today we're making an adjustment almost 12 years later, that it is very important that whatever is done, that it be tied to the Consumer Price Index, so that we don't suffer this gap in the future and that we do inflate costs to reflect changes in the cost structure in our country. Mr. Chairman, that concludes my remarks. I'd be happy to answer questions, and I know Ray Fontaine, our Comptroller, who has had a tremendous amount of experience in this area, would also be happy to discuss any questions that you might have. [Mr. Golden's prepared statement follows:] OPENING STATEMENT TERENCE C. GOLDEN ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION MARCH 16, 1988 Mr. Chairman and Members of the Committee: I am pleased to appear before this Committee today to offer my views concerning the Presidential Transitions Effectiveness Act, H.R. 3932. I am accompanied by GSA's Comptroller, Raymond Fontaine, who has a more detailed statement concerning the proposed legislation. As this Committee is aware, I have announced my intention to resign as Administrator of General Services, effective March 18, 1988. I wanted to take this opportunity to acknowledge the positive working relationships between the members of this Committee and the General Services Administration (GSA). Due to your collective efforts, we have made substantial progress in a number of areas for which GSA is responsible. The Presidential Transition Act was enacted by Congress to promote the orderly transfer of power. The Nation's public elections, and the orderly transfer of power and responsibilities among elected officials, represent the underpinnings of our democratic form of Government. I want to offer my personal support for one change that is proposed under H.R. 3932. The proposed transition level of $3.5 million for the incoming President and Vice President, which represents an increase of $1.5 million above existing levels, is needed to compensate for the inflation that has occurred since 1976. Further, a commensurate increase, from $1.0 million to at least $1.5 million, is needed for the outgoing President and Vice President. That concludes my formal statement. I am pleased to answer any questions that the Subcommittee may have. Mr. BROOKS. Thank you very much, Mr. Administrator. In GSA's view, will an increase in funding for the President-elect and the Vice President-elect's transition expenses from $2 to $3.5 million be adequate to cover those operations without requiring them to resort to private fundraising? Do you think they can make it? Mr. GOLDEN. My sense of it is, as you can see from the charts, that going to $3.5 million just barely makes it in terms of adjusting for the increases. And I would also point out that there are additional expenses that are being incurred in the private sector beyond what's being covered through Federal funds, so that to assume that for $3.5 million a complete transition could take place, I'm not sure is realistic. Mr. BROOKS. Do you believe that the provision index in transition funding to inflation and actual expenses of transition activity is correct, or would a broader measure of inflation, such as the Consumer Price Index, be more accurate? Mr. GOLDEN. Well, it would be our recommendation that we, in fact, use the Consumer Price Index to reflect those adjustments. Mr. BROOKS. You would use the CPI? Mr. GOLDEN. It's straightforward, and I think when you look at the breadbasket of expenses being covered, that it's really reflective of overall costs in our economy, and I think for a lot of different reasons that it makes sense to use the CPI. Mr. BROOKS. You think that would be more effective than using the actual components of the transition activities? Mr. GOLDEN. From my point of view, I don't think there's going to be a big difference between the two. Mr. BROOKS. This is simple, you don't have as many judgments to make. Mr. GOLDEN. That's right. Mr. BROOKS. All right. Do you support the amendment to the Transition Act that is contained in H.R. 3932 allowing the provision of aircraft to transition personnel on a reimbursable basis? Mr. GOLDEN. Yes, we do. Mr. BROOKS. That would probably be pretty expensive, but still it's easier sometimes when they have to go, I guess, if they have emergencies. Mr. Horton. Mr. HORTON. Thank you, Mr. Chairman. I have a number of questions, not very many, that I will just submit to you, and then you can give us your answers in writing for the record. [Mr. Golden's submissions to Mr. Horton's questions for the record follow:] MR. HORTON'S QUESTIONS FOR THE RECORD 1. 2. 3. 4. You have indicated that you believe the proposed authorization of $3.5 million for the incoming President and Vice President is appropriate. In addition, you have stated that an increase should also be provided for the out-going administration. A. B. On what basis did you arrive at the figure of $1.5 million for the We recommended at least $1.5 million. We do not know the exact Do you believe it would be preferable to transfer to the Former Yes, since it would place all provisions of law pertaining to You have expressed support for the general concept of adjusting these sums for inflation. H.R. 3932 calls for an increase by an inflation-adjusted amount based on an estimate by the Administrator of General Services of transition cost increases. A. B. Can you give us some idea about how you might calculate the inflation- If the intent of this bill is to keep the funding levels adjusted by Do you believe we need to be more specific and tie the increase to future Yes, it would save us many problems in the future if the bill is specific. The major difference between our bill, H.R. 3932, and the Senate version is the provision in S. 2037 for pre-election transition planning expenses. What is your opinion about the authorization of pre-election transition planning expenses? It is agreed that the major party candidates might well give attention to planning for a transition before the general election. However, it is questioned whether these pre-election costs should be paid for with Federal funds. In H.R. 3932, we are proposing a requirement that information about private transition contributions be disclosed as a precondition for receiving public transition funds. You have acknowledged this provision in your statement, but I do not believe you have taken a position. A. Do you think that this disclosure requirement is appropriate? |