California Institute - March 30, 2007 - California Capitol Hill Bulletin

To expand communications between Washington and California, the California Institute provides periodic bulletins regarding current activity on Capitol Hill that affects our state. Bulletins are published weekly during sessions of Congress, and occasionally during other periods.

On March 29, 2007, the Senate Committee on the Environment and Public Works, chaired by Sen. Barbara Boxer, reported its Water Resources Development Act (WRDA) of 2007. The bill contains Corps of Engineer project authorizations, modifications and deauthorizations, programs revisions and policy initiatives, and other related provisions involving Corps activities. The Committee reported the bill by voice vote.

The last WRDA bill was enacted as P.L. 106-541 in 2000. Last Congress, on July 14, 2005, the House passed H.R. 2864, the Water Resources Development Act of 2005, by a vote of 406-14. The Senate passed H.R. 2864, with an amendment, by voice vote on July 19, 2006. However, the House and the Senate were unable to resolve their differences in Conference before the end of the 109tth Congress.

This year, the House Transportation and Infrastructure Committee reported its WRDA bill, H.R. 1495, on March 15, 2007. <I>See, Bulletin, Vol. 14, No. 10 (3/16/07) . </I>Supporters of the legislation hope that floor action on both bills will occur in the near future.

The House Natural Resources Subcommittee on Fisheries, Wildlife, and Oceans held a hearing on March 29, 2007 to examine the state of U.S. oceans policy priorities. Witnesses before the Subcommittee were: Honorable Leon Panetta and Admiral James D. Watkins, Co-chairs, Joint Ocean Commission Initiative; and Mary M. Glackin, Assistant Administrator for Program Planning and Integration, National Oceanic and Atmospheric Administration, U.S. Department of Commerce.

Mr. Panetta stressed that the worlds oceans are in crisis and argued that lack of attention to the problem will negatively impact health, nutrition, recreation, and the economy in the United States. He emphasized several areas where action must be taken, including: strengthening coordinated governance of national ocean policy among federal, state, and local governments, as well as individual and regional stakeholders; expanding ocean science research education; recognizing the impact of climate change on the oceans and including oceans policy in any climate change legislation; codifying NOAA in law; approving the Law of the Seas Treaty; and providing full funding for core ocean and coastal programs.

During the question and answer period, Rep. Lois Capps (Santa Barbara) focused on the lack of adequate funding for NOAA and the National Marine Fisheries Sanctuaries. Rep. Sam Farr (Carmel), who sat with the subcommittee for this hearing, discussed the importance of coordinated governance efforts at all levels and noted that his bill, H.R. 21, incorporates the recommendations made by the Joint Ocean Commission Initiative in its report, <I>From Sea To Shining Sea. </I>

On March 27, 2007, the Senate Finance Committee held a hearing on Opportunities and Challenges in the U.S.-China Economic Relationship. This is the Committees third hearing on international trade this year, and was followed by a fourth hearing this week on Chinas currency policy and its negative impact on U.S. trade.

The Committee heard from a number of witnesses, including Steven Chu, Director, Lawrence Berkeley National Lab, who is also Co-Chair of an InterAcademy Council study panel on Transitioning to Sustainable Energy. The InterAcademy Council was created by the worlds academies of sciences to bring together the best scientists and engineers worldwide to provide high quality advice to international governmental and non-governmental organizations. Mr. Chu informed the Committee that China is now the worlds second largest energy consumer after the United States, with much of this growth attributable to its remarkable two decades of rapid economic growth, which has averaged approximately 10% per year. With this in mind, his testimony focused on the potential for a U.S.-China relationship on energy, and he made the following points:

– China’s and the United States’ rapidly growing reliance on coal as the core energy source has substantially added to global emissions of CO2 and the threat of yet greater climate change in the future.

– China’s desire to guarantee access to its future oil and natural gas supply could potentially lead to future conflict with the United States and the rest of the developed world, as we too seek to guarantee our access to energy supplies.

– In the Western United States, Sierra Nevada Mountain Range monitoring stations have measured and identified particulates from north China as part of huge clouds of pollution that travel over the Pacific to the United States. California’s mercury deposition is now increasingly from emissions from Chinese coal fired plants. Director Chu noted that the U.S. environmental technologies industry is well advanced and urged it to assist China in identifying opportunities to help clean its air and water.

– China uses roughly 15% of total global energy while the US consumes approximately 25% of the energy. Almost half of the world CO2 emissions are due to these two countries. While U.S. energy efficiency, as measured by the energy consumed per GDP is significantly better than China, on a per person basis, the US consumes about 8 times the energy as China. As Chinas economy rapidly advances and begins to approach the GDP per capita of the OECD countries, it is essential that China improve its energy efficiency, defined as the GDP divided by energy use.

– Just as the US must significantly reduce its carbon footprint, China must strive to achieve higher energy efficiencies as its economy grows.

– Between 1980 to 2000, the economy of China quadrupled while its energy consumption only doubled, twice the improvement of the US. However, Dr. Chu argued, as free market forces in China were unleashed, the energy demand is now increasing at one and a half times the rate of economic growth. The central government of China has announced in 2006 an ambitious plan to decrease energy intensity by 20% by 2010, but it is already falling behind these goals, Chu stated. It is in the best interests of the US to more aggressively help China achieve its goals.

Air Force Projects Increased Need for Airlift Capacity, But Absence of Funding Still Imperils C-17 Production

On March 20, 2007, the Chief of Staff for the U.S. Air Force testified before the Senate Armed Services Committee that the nations military will likely need more airlift aircraft than is currently projected. The comments were good news for supporters of the C-17 Globemaster, which is built in Long Beach and is one of the last major DoD production lines in the state of California.

The C-17 is the militarys primary airlifter in ongoing production. However, despite the projected needs, the FY 2008 White House budget lacked funding for any new C-17s — thereby leading contractors and the customer to begin planning for a shut-down of the operation. Last year, Congress provided new funding for additional aircraft, but officials are concerned that further orders may not come for 2008.

Senator Daniel Inouye (HI), who chairs the Senate Appropriations Subcommittee on Defense, has been reported to be supportive of providing funds to maintain operations and add new airlift capacity.

A large, bipartisan cross-section of the California Congressional delegation has supported maintaining the C-17 production line.

House Subcommittee on Early Childhood, Elementary and Secondary Education Discusses English Language Learners And NCLB

On March 23, 2007, the House Committee on Education and Labor Subcommittee on Early Childhood, Elementary and Secondary Education held a hearing entitled The Impact of NCLB on English Language Learners. The discussion was held to address the strategies and programs of No Child Left Behind (NCLB) and its impact on English Language Learning (ELL) students. Approximately 10 percent of the nations public school students are ELL and three quarters of ELL students are Spanish-speaking. Yet, 76 percent of elementary school ELL students are natural born U.S. citizens. The hearing featured testimony from witnesses representing the Government Accountability Office (GAO), Hispanic Education Coalition, California State University System, Southern California School districts and successful bi-lingual education schools. The witnesses discussed study results, successful programs, challenges to those programs, and the unique challenge California faces with ELL students.

– July 2006 GAO report shows ELL students did not make annual yearly progress (AYP) for 75% of U.S. states

– GAO found that ELL student data is not accurate for Title III provisions of NCLB

– 66% of ELL students are also low-income and have a significantly higher dropout group than any other subgroup

– 60% of California teachers and 10% of the nations teachers graduate from the California State University system

– In California, 25% of the public school students are ELL students, 85% of ELL students speak Spanish as their primary language

– California State University Teacher Certification programs infuse ELL teaching methods in standard teaching preparation

– In Promise Initiative counties (San Bernardino, Ventura, Los Angeles, Orange, and San Diego) ELL students are twice as likely to have an underqualified teacher

– NCLB accountability provisions (interventions and sanctions) are not effective enough for helping ELL students

– NCLB needs increased flexibility and accountability (interventions and sanctions need to be based on research specifically targeting failing student subgroups)

– Definition of Highly Qualified Teachers (HQT) needs to be reformed, under California standards teachers are Highly Qualified before they even complete their certificates

House Financial Services Subcommittee on Housing and Community Opportunity, chaired by Rep. Maxine Waters (Los Angeles) held a hearing on March 27, 2007 on natural disaster insurance. The subcommittee heard from a number of witnesses including members of Congress from Florida, the insurance industry, and the housing and community development sectors.

Mr. Gary Thomas, a realtor from Aliso Viejo, California and former President of the California Association of Realtors, testified on behalf of the National Association of Realtors (NAR). He stressed the need for a comprehensive, forward-looking natural disaster policy that would successfully address the lack of available and affordable property insurance currently plaguing disaster-prone areas. He addressed several areas that NAR believes must be addressed in a comprehensive policy, including:

– ensuring that transparent and comprehensive insurance coverage is available and affordable, with premiums being reflective of the risk involved;

– acknowledging the importance of personal responsibility of those living in high-risk areas to undertake mitigation measures, including the purchase of adequate insurance;

– providing adequate incentives to undertake mitigation measures where and when appropriate;

– acknowledging the importance of building codes and smart land use decisions while also emphasizing that proper enforcement of both is best left in the hands of state and local governments;

– recognizing the role of States as the appropriate regulators of property insurance markets while identifying the proper role of federal government intervention in cases of massive catastrophes; and

– reinforcing the proper role of all levels of government for investing in and maintaining critical infrastructure including levees, dams, and bridges.

The Foreign Affairs Subcommittee on Terrorism, Nonproliferation and Trade held a hearing on March 28, 2007 on Trade, Foreign Policy and the American Worker. In his opening remarks, Chairman Brad Sherman (Sherman Oaks) argued that During the Nixon administration, the U.S. dramatically changed its trade policy with the implementation of Fast Track. Before this, we had a rising standard of living and balanced trade. It is under the trade promotion authority given by Fast Track that the United States has entered into the largest trade imbalance in our history, and last year the federal trade deficit hit $764 billion. Chairman Sherman also proffered that NAFTA, permanent normal trade relations with China, and the failure to substantially increase U.S. exports have all led to the United States worsening trade deficit, the loss of manufacturing jobs, and the offshoring of jobs.

The Subcommittee heard from a number of witnesses, including: Lou Dobbs, Anchor and Managing Editor, CNNs Lou Dobbs Tonight; The Honorable Carla A. Hills, Chair and CEO, Hills & Company, Former United States Trade Representative; Mr. Scott N. Paul, Executive Director, Alliance for American Manufacturing; Ms. Thea Lee, Policy Director, AFL-CIO; and Ms. Yvette Pena Lopes, Legislative Representative, International Brotherhood of Teamsters.

Ms. Hills disagreed with the Chairmans assessment, stating that: [U.S.] experience proves that increased economic interdependence boosts economic growth and encourages political stability. The results to date have been spectacular. World trade has exploded and standards of living have soared at home and abroad. Economist Gary Hufbauer in a comprehensive study published in 2005 by the Institute for International Economics, now the Peterson Institute for International Economics, calculates that 50 years of globalization, defined as the free flow of goods, services, capital, and ideas, has made the United States richer by $1 trillion per year or about $9,000 added wealth per year for the average U.S. household. Dr. Hufbauers studies calculate that, going forward, open global trade would raise U.S. income by $500 billion per year, making the average U.S. household richer by an additional $4,500 per year. No other policy decision could come close to having such a positive impact on U.S. economic well-being.

Ms. Lee, however, countered that: U.S. national interests are not well served by the enormous and growing imbalance between our imports and exports. Our trade deficit hit a staggering $764 billion in 2006. Real median wages and family income continue to stagnate, while productivity growth soars. We have lost more than 3 million manufacturing jobs since 2000many of them to tradeand good white-collar jobs that pay well are increasingly vulnerable. Estimates range from 14 million to 42 million service-sector jobs that could be subject to offshoring over the next decade — offsetting many of the promised benefits of trade liberalization.

House Subcommittee on Early Childhood, Elementary and Secondary Education Discusses Disabled Students and NCLB

On March 29, 2007, the House Committee on Education and Labor Subcommittee on Early Childhood, Elementary and Secondary Education held a hearing entitled How NCLB Affects Students with Disabilities. The discussion was held to address the strategies and programs of No Child Left Behind (NCLB) and its effects on disabled students. NCLB operates on the premise that all children can learn. The disabled student subgroup includes children with special education needs, physical disabilities, and mental disabilities. The average general classroom teacher has 4 disabled students in the class. The hearing featured testimony from witnesses representing state and local programs for disabled students. The witnesses recommended changes to NCLB to improve the access and performance of disabled students.

– Disabled students fall into multiple areas of learning and require individually tailored learning plans, different from those of the general student population

– Teacher training does not include preparation for disabled students unless specifically trained as a disabled student instructor

– Ensure that a requirement to annually assess student proficiency does not lead to a testing frenzy and promote family involvement in schools

– Encourage a challenging standard for all students and encourage high expectations for disabled students

– Modify the four year graduation standard for disabled students, since many disabled students need extra time and instruction to learn the material

House Committee on Highways and Transit Evaluate the Structure of the Federal Fuel Tax

On March 27, 2007, the House Committee on Transportation and Infrastructure Subcommittee on Highways and Transit held a hearing entitled Structure of the Federal Fuel Tax and the Long-Term Viability of the Highway Trust Fund. The Federal-Aid Highway Program (Federal highway program) is a federally-assisted, state-run program in which the states plan, design, and construct highway projects as well as operate and maintain major roads. A primary role of the federal government in this program is to provide financial resources and technical assistance to state departments of transportation. The discussion was held to examine how the federal excise tax on motor fuels structure affects the long-term financial viability of the Highway Trust fund, which contributes most of the funding for the Federal-Aid Highway Program. Approximately 90 percent of the revenue for the Highway Trust Fund is generated from the federal excise tax on motor fuels.

– Economic growth increases fuel purchases and tax revenue for the Highway Trust Fund

– Revenue from the federal excise fuel tax has decreased by 1.5% for the past several years

– Witnesses suggested a repeal or restructuring of the tax structure such as: reducing exemptions to the tax, tax based on road usage (miles driven, times driven, areas driven), or tax fuels based on the level of carbon output produced

– Californias carbon standard combines carbon credits and tax credits with low emission legislation: a combination of tactics considered by the committee

The Senate Homeland Security and Governmental Affairs Subcommittee on Oversight of Government Management, the Federal Workforce, and the District of Columbia, held a hearing on March 26, 2007 to review the REAL ID Act of 2005 aimed at securing drivers’ licenses and identification cards. The Subcommittee heard from several witnesses, including: The Honorable Richard Barth, Ph. D. , Assistant Secretary for the Office of Policy Development , U.S. Department of Homeland Security; and Mr. David Quam, Director of Federal Relations, National Governors Association.

Dr. Barth reported that DHS has proposed regulations requiring all states to meet minimum standards on drivers licenses and identification cards by May 11, 2008. The proposal provides for a five-year phase-in and also allows states to request a delay in complying with the regs until December 31, 2009, if necessary. Barth noted that DHS has worked with the states in drafting its proposal and adjusted the rules requirements to meet concerns raised by the states. In conjunction with this, DHS has also announced that it will allow a state to use up to 20 percent of its Homeland Security Grant Program funds to implement the rules. Barth stressed that the program would not create a national identity card, arguing that the federal government would have no greater access to information on individuals than it has had in the past. In conclusion, he testified that despite potential challenges when first implemented the REAL ID program is feasible and will have potential benefits beyond national security, such as prevention of identity theft, as well as reducing unlawful employment, underage drinking, and voter fraud.

Mr. Quam testified that although DHS incorporated several recommendations made by the states prior to publishing the notice of proposed rulemaking, four requirements continue to present critical challenges for states: 1) the need to re-enroll all 245 million drivers license/identification card holders over five years; 2) increased verification requirements for identification documents; 3) new document design mandates; and 4) changes to business and support practices that reduce efficiencies and customer service. As a result of these challenges, the National Governors Association is recommending additional time for the states to fully comply with REAL ID once the rule has been finalized. NGA also recommends that Congress amend Real ID to specifically allow states to use existing verification practices until all necessary federal and state verification systems are fully operational and deployed. Finally, he stressed that the regulations should be flexible enough to all states to develop innovative systems, and that full federal funding must be forthcoming to reimburse the states for the costs of implementing the new system.

California Health Care Foundation and Californias SCHIP Director Host Briefing

On March 23, 2007, the California Health Care Foundation held a briefing entitled SCHIP Comes to Washington discussing the findings of the recent report Funding Californias SCHIP Coverage: What Will it Cost? The State Children’s Health Insurance Program (SCHIP) is a federal program of grants to states intended to provide health insurance to uninsured children in low-income families. In California, SCHIP funds are the main support for Healthy Families programs. Currently, Californias SCHIP programs cover children up to 250% of the Federal Poverty line. However, the recent budget proposed by Governor Schwarzenegger wants to expand coverage to children up to 300% of the Federal Poverty line. The report by the California Health Care Foundation demonstrates the shortfalls in Californias SCHIP funds and projects how much federal aid will be needed to meet the continued needs of the program.

– 58% of the subscribers are Latino, 12% White, 12% Asian/Pacific Islander, and 2% African American (16% not reported)

– The average income of California SCHIP subscribers from 2006-2007 is 163% of the Federal Poverty line

– The number of uninsured children in California under the age of 19 and under 300% of the federal poverty level has been steadily decreasing since 2001 with 914,000 uninsured children in 2001 to 637,000 uninsured children in 2005

– The annual cost of a Healthy Families Program member is $77 vs $515 per Medi-Cal/Medicaid member

– California needs $7 to $8 billion over 5 years compared to the current $4 billion level to maintain the current eligibility level at 250% of the federal poverty line

On March 27, 2007, the Public Policy Institute of California (PPIC) in conjunction with the California Institute hosted a Congressional briefing on immigration and its effect on wages and employment for U.S. native Californians. The briefing featured Givoanni Peri, an associate professor of economics at the University of California, Davis. Peri discussed the results of his most recent study published in the latest issue of PPICs California Counts series. He presented data illustrating that the arrival of immigrants in California between 1960 and 2004 has not worsened the employment opportunities of native U.S. Californians, but in fact, has increased wages of native U.S. citizens.

– 28% of the California population is foreign born, and over 33% of the California workforce is foreign born

– Immigrants do not cause a decline or displacement of U.S. native workers in California, but rather tend to create higher-paying job opportunities for U.S. born workers

-A very significant positive association was found between the number of immigrant workers entering a sector and the wages of native workers in that sector

– Previous immigrants are more likely to be the victims of competition with new immigrant workers rather than native American workers

The Public Policy Institute of Californias most recent Statewide Survey found that just under half (49%) of all Californians and slightly over half (52%) of likely voters think moving Californias primary date forward is a good thing. Moreover, residents are equally lukewarm, the Survey found, about one effect of the move holding three elections in 2008: Half (50%) of residents and fewer likely voters (46%) like the idea of going to the polls three different times next year.

– Over two-thirds of likely voters (68%) believe term limits, on the books since 1990, have been a good thing for the state. And a strong majority of them (64%) oppose a term limits reform initiative that proponents hope to put on the February 2008 primary ballot. That resistance is unambiguous across party lines, with majorities of Republicans (70%), independents (68%), and Democrats (61%) saying they would oppose the initiative.

– A full two-thirds (66%) of likely voters think the current redistricting process needs at least minor changes. Nearly four in 10 (39%) believe it needs major changes. And 66 percent say they would favor the reform that gives an independent commission of citizens the power to determine legislative districts.

– Fifty-one percent of all Californians and 56 percent of likely voters approve of the governor’s job performance (a 7% and 5% decline, respectively, since January). The legislature is also doing relatively well in the eyes of residents and voters in fact, according to the Survey, the legislature’s approval ratings among all adults (41%) are nearing their highest point in recent years (43% in October 2004). While approval is lower among likely voters (39% approve, 47% disapprove), it remains significantly higher than it was one year ago (23% approve, 65% disapprove).

– A majority (53%) of likely voters approve of the job performance so far of Speaker of the House Nancy Pelosi. Equal numbers of likely voters (53%) approve of the job Senator Barbara Boxer is doing, and somewhat greater numbers (59%) say Senator Dianne Feinstein is handling her job well.

– However, Californians feelings about the national leadership in general is low.. President Bushs approval ratings have reached an all-time low in the state, with just 28 percent of residents approving of the job he is doing and 69 percent saying they disapprove. Level of trust in the federal government is strongly linked to opinions of the president. Among Californians who disapprove of President Bushs performance, only 19 percent say they trust the federal government at least most of the time; whereas 51 percent of those who do approve of his performance say they trust the federal government most of the time. Broadly, Californians trust in the federal government has deteriorated considerably. Only 28 percent believe they can trust the government at least most of the time a 10 point drop since February 2003. In addition, 68 percent of Californians think the federal government wastes a lot of their tax money.

– An even larger proportion of Californians disagrees with the way the President is handling foreign policy. When asked how were doing against the axis of evil, majorities say they disapprove of the way President Bush is handling the situations in Iraq (74%), Iran (68%), and North Korea (54%). Although there are sharp partisan differences over Iraq, Republican support (56% approve, 40% disapprove) is not nearly as clearcut as opposition from Democrats (9% approve, 90% disapprove) or independents (18% approve, 78% disapprove). Substantial majorities of all Californians (62%) and likely voters (59%) oppose the administrations recent move to increase the number of U.S. troops in Iraq. Californians by and large do not want the U.S. to follow the same path with Iran as it has so far with Iraq. Likely voters say it is more important to avoid a military conflict with Iran (54%) than it is to take a firm stand against Iranian actions (39%). However, Democrats and independents largely prefer avoiding military conflict (68% and 61% respectively), while a majority of Republicans (62%) say it is more important to take a firm stand.

– Findings re individuals own Members of Congress remained stable, according to the report, When asked to rate their own representative in the U.S. House, 55 percent of all adults and 59 percent of likely voters say they approve. These findings are nearly identical to Septembers (55% all adults, 60% likely voters), and ratings have remained at similar levels since we began asking this question in October 2005. Today, more residents approve of their representatives than disapprove in all regions, with more residents approving in the San Francisco Bay Area (60%) and the Central Valley (58%) than in the other major regions of the state. Democrats and Republicans are equally favorable toward their representative (59% each), with independents slightly less approving (53%). Latinos (56%) and whites (57%) are similarly positive about their House representative, while more men (57%) than women (52%) approve.

For the full results of the PPIC Statewide Survey, visit to http://www.ppic.org . In addition to the current survey, new tools now allow PPIC website visitors to dynamically compare survey findings longitudinally, thereby illuminating differences and voter attitude changes over time.

On March 27, 2007, the California Institute held the first in its 2007 series of Advisory Board Member breakfasts, welcoming Rep. Jerry McNerney (Tracy). The Congressman was elected in 2006 to represent California’s 11th Congressional District which includes all or part of San Joaquin, Alameda, Contra Costa and Santa Clara counties. Rep. McNerney serves on the Transportation and Infrastructure Committee, Science and Technology Committee, and the Veterans Affairs Committee. Prior to his election to Congress, Congressman McNerney, with a doctorate in engineering, worked for many years in the wind energy industry and became CEO of a start-up company that manufactures wind turbines.

The bipartisan delegation breakfasts, a series supported primarily by PG&E and sometimes by other members of the Institutes Advisory Board, are a forum for the California Institute Advisory Board to hear the views of members of the California delegation. McNerney commented briefly about upcoming issues for the State and the 11th district including Livermore lab partnerships, energy and global warming, bipartisan cooperation, and working with the Governor’s infrastructure and health care proposals. McNerney also fielded questions discussing the anticipated timing of climate change legislation, Representative Zoe Lofgren’s immigration package, and federal support for science and education.

For more information about the California Institute, please visit: http://www.calinst.org .

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