The Honorable Dan Burton
Chairman, Committee on Government Reform and Oversight
2157 Rayburn House Office Building
Washington, D.C. 20515

The Honorable William M. Thomas
Chairman, Committee on House Oversight
1309 Longworth House Office Building
Washington, D.C. 20515

Dear Chairman Burton and Chairman Thomas:

In accordance with the requirements of Clause 2 of Rule X of the rules of the House of Representatives, the following is a list of oversight hearings and other oversight-related activities which the Committee on Ways and Means and its subcommittees plan to conduct during the 105th Congress. The list has been broken down by Subcommittee, and is prioritized to reflect the likely order in which the listed activities are expected to occur. This list is not intended to be exclusive; the Committee anticipates that additional oversight activities will be scheduled as issues arise or as time permits.

Full Committee

1. Tax Proposals in Administration's Fiscal Year 1998 Budget. The full Committee will hold a series of hearings beginning on February 11, 1997, to examine the tax proposals in the Administration's Fiscal Year 1998 budget.

2. Fundamental Tax Reform. The full Committee will hold a series of hearings throughout 1997 to examine the impact of replacing the current income tax with a broad-based consumption tax.

Subcommittee on Trade

1. World Trade Organization ("WTO"). The Subcommittee will hold a hearing on February 26, 1997, to examine the outcome of the WTO Singapore Ministerial Meeting and the future direction of the WTO.

2. Budget Issues. The Subcommittee will hold a hearing in early spring to consider biannual authorizations for the United States Trade Representative, the Customs Service, and the International Trade Commission as well as the portions of the budget of other agencies that have functions within the oversight jurisdiction of the Committee on Ways and Means, such as the Commerce Department, State Department, etc.

3. Trade Policy. The Subcommittee will hold a hearing in early spring to consider U.S. trade policy objectives in Latin America, in the Pacific Basin, with Japan, and with newly emerging markets; to review anti-competitive practices (particularly bribery and corruption) as it affects trade agreements; and to examine the extent to which benefits to U.S. businesses derived from existing agreements to which the United States is a party may be eroded by agreements to which the United States is not a party, such as MERCOSUR.

4. China Most-Favored Nation Status. The Subcommittee will hold a hearing in early summer to consider whether the annual renewal process of China's most-favored-nation status under the Jackson-Vanik provision continues to be effective or whether new options should be considered.

5. North American Free Trade Agreement ("NAFTA") Accession Issues. The Subcommittee will hold a hearing in the spring to consider appropriate mechanisms for approving the agreement by which Chile or other countries will accede to the NAFTA, either under the terms of a renewed broad fast-track authority, special authority for this particular agreement once concluded, or regular legislative procedures.

6. NAFTA Overview. The Subcommittee will hold a hearing in early summer to consider the Administration's legislatively mandated overview of the NAFTA, due June 30, and to review its effectiveness and operation.

7. Trade Expansion. The Subcommittee will hold a hearing in the spring to consider expansion of trade with sub-Saharan Africa.

8. Antidumping and Countervailing Duty Issues. The Subcommittee will hold a hearing in late spring to examine regulations issued by the Department of Commerce concerning antidumping and countervailing duty investigations.

9. Trade Adjustment Assistance Program. The Subcommittee will hold a hearing in the spring to consider possible extension or reforms of the Trade Adjustment Assistance program.

10. Rules of Origin. The Subcommittee will hold a hearing in late summer/early fall to review rules of origin and country of origin marking to determine if they reflect current business production, sales, and distribution practices, and whether U.S. laws and practices are effective in preventing unlawful transshipment.

11. Oversight of Customs Laws and Practices. The Subcommittee will hold a hearing in late summer/early fall to review customs laws and practices to ensure that they are not creating an unnecessary burden and cost to U.S. producers and users; to review overtime and nighttime pay for Customs inspectors; and to review Customs' accounting for drug interdiction and investigation costs and verification of operational enhancements.

Subcommittee on Health

1. Medicare Proposals in the President's Fiscal Year 1998 Budget. The Subcommittee will hold a hearing on February 13, 1997 to examine the Medicare proposals included in the President's FY 1998 budget. This hearing will assess the effect that the President's FY 1998 budget proposals will have on the financial stability of the Medicare Hospital Insurance ("HI") Trust Fund and the Supplementary Medical Insurance ("SMI") Trust Fund. It will also provide an opportunity to inquire concerning many aspects of the current operations of Medicare.

2. Medicare Health Maintenance Organization ("HMO") Payment Policy. The Subcommittee will hold a hearing on February 25, 1997 to examine Medicare HMO payment policy. This hearing will assess concerns about current HMO payment policy for Medicare beneficiaries and solutions to this issue offered by the President's FY 1998 budget, the Prospective Payment Assessment Commission and the Physician Payment Review Commission, and the Balanced Budget Act of 1995.

3. Medicare Home Health and Skilled Nursing Facility Payment Policies. The Subcommittee will hold a hearing in late winter/early spring to examine reforms of payment policies for Medicare home health and skilled nursing facility services. Medicare home health and skilled nursing facility services are two of the fastest growing sectors of Medicare spending. Concern over potential fraud and abuse regarding these services and excessive or unjustified spending have resulted in reform proposals from the President in his FY 1998 budget, the Prospective Payment Assessment Commission, and in the Balanced Budget Act of 1995. The hearing will consider the extent of the problems cited by the General Accounting Office and others and review proposed solutions.

4. Medicare HMO Regulation. The Subcommittee will hold a hearing in late winter/ early spring to examine developments in Medicare HMO regulation. Medicare currently contracts with over 350 HMOs. This hearing will examine the Health Care Financing Administration's ("HCFA") oversight of these contracts to ensure quality of care and protect consumers. The hearing will compare oversight of contracts by HCFA with mechanisms for oversight of health plans providing coverage in the private sector.

5. Medicare Payments for Teaching and Disproportionate Share Hospitals. The Subcommittee will hold a hearing in late winter/early spring to examine Medicare payments for Teaching and Disproportionate Share Hospitals. Medicare currently provides special payments to teaching hospitals and hospitals which provide care to a disproportionate share of indigents. Concerns have been raised about the levels of these payment adjustments and the correct relevance of the formula used for setting these payments to the goals of the law which established these payments. The hearing will assess these concerns and review proposals to resolve these concerns.

6. Medicare Coverage for Preventative Benefits. The Subcommittee will hold a hearing in late winter/early spring to examine concerns which have been raised about the lack of Medicare coverage for certain preventative benefits. This hearing will review the cost effectiveness of benefits not currently covered and the implications of covering these benefits. It will specifically focus on the benefits which would be included in Medicare under the "Medicare Preventive Benefit Improvement Act of 1997," H.R. 15.

7. Medicare Oversight Reports. The Subcommittee will hold a hearing in late winter/ early spring to examine the annual reports of the Prospective Payment Assessment Commission ("ProPAC") and the Physician Payment Review Commission ("PPRC") (Late Winter, 1997). ProPac and PPRC provide guidance regarding Medicare to the Congress and its Committees with jurisdiction over the program. The Commissions annually review Medicare payment policy and make recommendations for improvement in these policies. This hearing will focus on concerns regarding hospital and physician payment.

8. Medicare Coverage Policy. The Subcommittee will hold a hearing in the spring to examine Medicare coverage policy. Medicare policy regarding payment for new or changing treatments and procedures is not formally promulgated in regulation and does vary under certain circumstances between the carriers and intermediaries that actually pay for the services provided to Medicare beneficiaries. The hearing will examine current HCFA policy regarding coverage, and certain recent coverage decisions made by HCFA.

9. Medicare Provider Sponsored Organizations. The Subcommittee will hold a hearing in the spring to examine Medicare Provider Sponsored Organizations. Medicare currently allows beneficiaries to join HMOs which are state licensed and meet other regulatory requirements. Concerns have been raised by hospitals and physicians that they are unable under current law to form such health plans. This hearing will examine the possible constraints to the organization of hospitals and physicians forming for the purpose of providing risk-based coverage for Medicare beneficiaries.

10. Other Issues. Further hearings will be scheduled as time permits to examine certain additional aspects of Medicare program management.

Subcommittee on Oversight

A. Subcommittee Hearings for 1997.

1. Taxpayer Advocate Report. The Subcommittee will hold a hearing on February 25, 1997, to examine the first annual report of the Internal Revenue Service ("IRS") Taxpayer Advocate to the tax-writing committees. This report, which was mandated by the Taxpayer Bill of Rights 2 ("TBOR2"), requires the Taxpayer Advocate to identify initiatives undertaken to improve taxpayer services and IRS responsiveness, and to provide recommendations from the Problem Resolution Officers in IRS District Offices on ways to resolve problems which taxpayers experience in their dealings with the IRS. Any additional taxpayer protections proposed by the Administration as part of its FY 1998 budget submission to the Congress also will be evaluated as part of the hearing.

2. IRS Fiscal Year 1998 Budget/1997 Tax Return Filing Season. The Subcommittee will hold a hearing in March to review the Administration's request for the IRS FY 1998 budget and the status of the 1997 tax return filing season. Among other things, the Subcommittee will review IRS's plans for contracting out development of Tax Systems Modernization to the private sector, IRS taxpayer services activities (including telephone tax assistance, walk-in service, distribution of forms and publications), and IRS lock-box operations. Information developed at the hearing will be used as background in preparing the full Committee's recommendations to the Appropriations Committee regarding funding priorities for the IRS for FY 1998.

3. General Accounting Office ("GAO") "High Risk" Report. The Subcommittee will hold a hearing in March to receive testimony from GAO and the Inspectors General from agencies under the Committee's jurisdiction, regarding high risk programs (i.e., programs vulnerable to waste, fraud or abuse) within the Committee's jurisdiction. The information obtained at this hearing about high risk programs (e.g., Medicare claims fraud, IRS Accounts Receivable) will lay the groundwork for additional oversight activities in the 105th Congress.

4. TBOR2 Studies. TBOR2 required the Department of the Treasury and GAO to conduct studies evaluating: (1) problems that divorced taxpayers experience under the U.S. tax system's joint and several liability scheme; and (2) the manner in which IRS has implemented (or failed to implement) a system for comprehensive netting of interest on overpayments and underpayments and the policy and administrative implications of global interest netting. These studies were due on January 31, 1997, and the Subcommittee will hold hearings in the spring on them as the first stage in developing recommendations to the full Committee.

5. Low-Income Housing Credit. At the request of Chairman Archer, GAO has been conducting a study of how the States and the IRS administer the low-income housing credit. GAO is expected to issue a report presenting its findings in March and the Subcommittee will hold hearings in the spring with a view toward developing bipartisan recommendations to the full Committee for possible legislative revisions to the credit.

6. Oversight of IRS Tax Debt Collection Issues. The Subcommittee will hold a hearing in late spring to continue the Subcommittee's examination of various tax debt collection issues, including status of the IRS Accounts Receivable Dollar Inventory, oversight of the ongoing IRS private debt collection pilot program, and oversight of the IRS's tax refund offset program, particularly as it relates to collection of past-due child support payments.

7. Electronic Federal Tax Payment System. The Subcommittee will hold a hearing to examine the IRS's implementation of a provision in the North American Free Trade Agreement ("NAFTA") which required IRS to implement a nationwide system for receiving federal depository taxes electronically. The "Electronic Federal Tax Payment System ("EFTPS"), is intended to replace the paper coupon system used to pay federal depository taxes. IRS was required to phase-in EFTPS from 1994-1999 and to collect a statutorily specified percentage of business taxes through electronic payment in each year. The third phase of the program, in which approximately 1.2 million small to medium-sized businesses will be required to enroll in EFTPS, is now being implemented. Concerns were raised last year about whether EFTPS was going to be operational in time to enroll the 1.2 million mandated taxpayers by the end of 1996. To address these concerns, a provision was included in the Small Business Jobs Protection Act of 1996 delaying the deadline for enrolling new mandated taxpayers in EFTPS until July 1, 1997. The Subcommittee will hold an oversight hearing in the spring to examine the implementation of EFTPS by the IRS and the costs and benefits to small businesses of this mandatory program.

8. Impact of the Tax Laws on Land Use Decisions. The Subcommittee will continue its examination of the impact of the tax laws on land use decisions (a hearing was held on this issue in July, 1996), including evaluation of tax legislative proposals to establish conservation easements to preserve open spaces, encourage clean-up of "brownfields" (contaminated industrial sites), and encourage economic development in inner cities and rural areas. A Subcommittee hearing will be held in June, with follow-up hearings later in the year if necessary.

9. Report of the National Commission on Restructuring the IRS. The National Commission on Restructuring the IRS is examining ways to restructure the IRS in order to improve the quality of the agency's service to the nation's taxpayers and to ensure greater accountability for financial management and meeting performance goals in connection with the agency's mission. The Commission Report is expected on July 1, 1997, and portions of the Commission's recommendations which are within the jurisdiction of Committee on Ways and Means will be evaluated by the Subcommittee in a July hearing.

10. IRS Employee Misconduct Report. TBOR2 required the IRS to establish a system for monitoring taxpayer complaints about IRS employee misconduct, and to begin providing an annual report to the tax-writing committees beginning July 1, 1997, regarding the Service's handling of such cases. The Subcommittee will likely hold a hearing in July to review the report and the effectiveness of IRS' complaint monitoring system in improving IRS's accountability for addressing taxpayer complaints about IRS employee misconduct.

B. Other Oversight Subcommittee Activities.

1. Year 2000 Crisis. The Subcommittee will meet with senior officials from agencies under the jurisdiction of the Committee on Ways and Means (e.g., IRS, Social Security Administration) to be briefed on their plans for managing the risks posed by the so-called "Year 2000 crisis," the world-wide problem of computers needing to be reprogrammed for the next century. For the IRS, for example, millions of lines of computer code will need to be reprogrammed, posing significant risks for the stability of IRS's legacy computer systems.

2. Earned Income Credit (EIC). The Subcommittee will continue its review of administrative issues relating to the EIC in meetings with officials from Treasury, IRS, and GAO, plus a cross-section of tax professionals. The Subcommittee will examine, among other things, recent IRS data regarding overpayments and other refund fraud problems, the adequacy of IRS efforts to assist taxpayers in claiming the EIC, the status of IRS plans for addressing fraud and errors in the 1997 filing season, the complexity of eligibility rules for the credit and possible options for simplification, and the complexity of EIC forms and instructions and whether these can be simplified. A Subcommittee hearing may be scheduled as time permits.

3. Small Business Tax Simplification. The Subcommittee is concerned that the current income tax system and the rules which have been designed to accurately measure income and track transactions undertaken by large corporations place an extraordinary compliance burden on the nation's small businesses. The Subcommittee is interested in reviewing options for simplifying those provisions of the Internal Revenue Code that are particularly burdensome for small business (e.g., rules relating to employee pension plans and stock ownership programs, rules governing the choice of accounting methods or conventions, the alternative minimum tax, etc.). Subcommittee hearings may be scheduled as time permits.

4. Worker Classification Issues. The Subcommittee will continue its examination of issues relating to the classification of workers for tax purposes and the IRS's enforcement activities in this area. Two hearings were held by the Subcommittee on these issues in 1996. The Subcommittee also will examine the employee benefits aspects of worker classification, and explore the development of legislation to establish an objective test for classifying workers both as employees and as independent contractors. Additional Subcommittee hearings may be scheduled as time permits.

5. Pension and Retiree Health Issues. The Subcommittee will conduct oversight activities with respect to workers' pension benefits, including an examination of Federal pension plan enforcement activities at the Departments of Labor and Treasury and the Pension Benefit Guaranty Corporation, funding levels of Federally-insured plans, and the sufficiency of protections for retirees receiving pension benefits through insurance annuities. The Subcommittee may also examine recent trends with regard to terminations of employer-provided retiree health plans, their implications for retiree health insurance coverage, and options for addressing this issue. Subcommittee hearings may be scheduled as time permits.

6. Tax Exempt Organizations. The Subcommittee will conduct oversight activities with regard to certain tax exempt organization issues, including: (1) mergers and joint venture activity between non-profit hospitals and for-profit entities and managed care organizations; (2) the recently-issued GAO report on Indian gaming; (3) the adequacy of Form 990 and other public information relating to tax-exempt organization activities; (4) and selected unrelated business income tax ("UBIT") issues. Subcommittee hearings may be scheduled as time permits.

7. Other Issues. The Subcommittee will examine other issues in support of the full Committee's activities as they arise (through briefings, meetings, or hearings if appropriate), including, among other things, any forthcoming Administration proposals to simplify the tax laws which relate to IRS practice and procedural rules, and the administrative and policy implications of the Administration's educational and job training tax incentives and other expiring tax provisions.

8. Field Investigations and Hearings. The Subcommittee will conduct such field investigations and hearings as Committee staffing and budget resources permit, and as are necessary for purposes of evaluating the effectiveness of and compliance with the programs and laws under the jurisdiction of the Committee on Ways and Means.

Subcommittee on Human Resources

1. Welfare Reform. The subcommittee plans to hold hearings throughout 1997 on implementation of last year's welfare reform legislation, the "Personal Responsibility and Work Opportunity Reconciliation Act of 1996." Hearing topics for early in 1997 will include work programs, job availability, anti-illegitimacy provisions, benefits for noncitizens, and Supplemental Security Income benefits for children. Later in the year, the Subcommittee is likely to consider issues including state use of waivers, data processing, the effect of time limits, and overall program evaluation during the first year of the new Temporary Assistance for Needy Families program.

2. Child Support. As part of its welfare reform oversight hearings, the Subcommittee intends to hold several hearings on implementation of child support provisions of the new law. The first hearing will take place in late winter/early spring. Following the Department of Health and Human Services' submission of written suggestions for reforming the child support incentive system (expected by mid-summer), the Subcommittee may consider legislation to reform the incentive system.

3. Unemployment Insurance. The Subcommittee intends to conduct a series of hearings, beginning in the spring, on the nation's unemployment insurance (UI) system. Several issues, including comprehensive reform proposals increasing state flexibility in program design and state authority to set base periods for determining benefit eligibility, will be examined in detail.

4. Adoption Incentives. The Subcommittee will hold a hearing to investigate barriers to adoption and specific state-level solutions; further oversight hearings may be held as the Subcommittee considers legislation throughout 1997 in this area.

5. Welfare and Drugs. The Subcommittee may conduct a hearing late in 1997 on the frequency of drug use by welfare parents, the relationship between drug use and child abuse and neglect, and possible approaches to both detecting drug use and reducing its frequency and consequences.

6. Job Development. During mid-1997, the Subcommittee intends to consider strategies for encouraging job creation in areas heavily impacted by welfare reform. One or more hearings on tax incentives, jobs programs, and related issues is likely.

7. Budget Issues. The Subcommittee will conduct a hearing on February 13, 1997, regarding the impact of the President Clinton's budget proposal on programs under the Subcommittee's jurisdiction.

Subcommittee on Social Security

1. Social Security Trust Fund Solvency Issues. The Subcommittee will hold a series of hearings beginning in the spring to examine the long-term solvency of the Social Security Trust Funds. According to the 1996 Trustees' Report, the Trust Funds are now projected to become insolvent in 2029. The Subcommittee will examine the recommendations of the Advisory Council on Social Security and receive testimony from other invited witnesses.

2. Social Security Disability Insurance Trust Fund Solvency and Process. The Subcommittee will hold a series of hearings beginning in the spring to continue its examination of the solvency of the Social Security Disability Insurance Trust Fund, as well as process issues. In particular, the Subcommittee will examine the effectiveness of the Social Security Administration's ("SSA") continuing disability review ("CDR") program plus efforts to help beneficiaries return to work. Last year, Congress authorized more than $4 billion in additional funding over the next seven years for SSA to conduct continuing disability reviews. SSA plans to eliminate the Social Security CDR backlog over this period. The hearings will focus on SSA's progress in this regard, suggestions to improve the CDR process, and the effectiveness of work incentives available to disability recipients under current law.

3. Social Security Disability Appeals Process. The Subcommittee will hold a hearing in the summer to examine the Social Security disability appeals process. This hearing will focus on the extent of SSA's backlog of appealed cases, reasons for the growth of the backlog, how SSA is addressing the backlog, and what needs to be done in both the short and long term so that the public is better served in the disability appeals process.

4. Social Security Disability Claims Process. The Subcommittee will continue its oversight into the progress SSA is making in redesigning the disability determination claims process to reduce administrative costs and improve public service. Subcommittee hearings are tentatively scheduled for the fall.

5. Progress of Social Security Administration as an Independent Agency. The Subcommittee will hold an oversight hearing to examine the continued progress of SSA as an independent agency, with a specific focus on the role of the Advisory Board. This Subcommittee hearing is tentatively scheduled for the fall.

6. Taxpayer-financed Union Activity. The Subcommittee will hold an oversight hearing to examine the report of the SSA Office of Inspector General regarding taxpayer-financed union activity at SSA. This Subcommittee hearing is tentatively scheduled for the fall.

7. SSA Administrative Oversight. The Subcommittee also plans to hold a number of general SSA administrative oversight hearings during 1997 and 1998.