her to know we're in the lightning round. i abide by that. with regard to what senator gregg said, i know that california is usually the example cited, and i know he cited other states as well. one feature of that story doesn't often get mentioned, and that's that california had insurance reform that went along with other changes to their system of justice. so that has to be factored into what happened in that big state. but just briefly, i note senator hatch took a lead, gosh, more than a@@@@@ c@ @ @ @ @ @

what kind of award someone should get. i don't believe that a cap of $250 is fair or just. >> $250,000. >> $250,000 is fair or justified. and i think of -- in analyzing this, about certain groups of people. if you happen to be someone who has a limited income for a variety of reasons, or if you have -- if you happen to be someone who is injured at a certain point in your life and you have no earning capacity or limited earning capacity, you aren't a doctor. you aren't a lawyer. you aren't a high income earner. your earning capacity by

definition is limited. that noneconomic question comes into play for you. it limits the kind of recovery you can get. children, of course, if a child is injured, catastrophically and they have their whole life ahead of them, they have -- i just believe that we have to provide for a system where juries can make that determination. sometimes limited by what a judge would do in a post-trial situation. in our state in pennsylvania, we had a debate about this a long time. some of the recent data, i'm pointing to an op-ed published in june of this year. i'm almost done. the patient safety authority in pennsylvania documented 8,645 so-called serious events causing injury or death in hospitals across the state. 19% increase, actually, from

2007. at the same time, about 1,600 lawsuits filed, which is a 40% decrease from 2002 to 2007. so in our state you actually have the number of events or potential suits going up or actions that's lead to suits and the number of lawsuits going down. and i believe if you're injured in this way, you should be awarded compensation for pain and suffering and that's just a basic disagreement we have. thank you very much. are we ready for a vote? >> if i could just answer that to a degree. i practice law in your state. and i can tell you that i saw case after case brought that was frivolous. but still cost a lot of money. i saw some cases that were not

frivolous, where very good judgments should have occurred, and they were almost always settled. and that was the way it was. but to correct the record, the term economic damages means objectively -- this is the language of my amendment. means objectively verifiable monetary losses incurred as a result of a provision of, use of or payment for or failure to provide use or pay for health care services or medical products such as past and future medical expenses, loss of past and future earnings, cost of obtaining domestic services, loss of employment and loss of business or employment opportunities. so the cases you were talking about, we provide that the jury can give huge awards for those. if you, for instance, had a bad result in a hospital or

something, those economic damages would be fairly huge. and this would all be put together. and it would be for anybody. look. we're going to have to face this problem. i understand -- look. and i have to admit. i'm uncomfortable with limits, lids myself. i'd like to work with you brethren and sisters to see if we can find some way of getting rid of the frivolous cases and resolve those that are not frivolous. if we don't, i guarantee you unnecessary defensive medicine is eating us alive. and anybody who really looks at it, i think, has to come to that conclusion, unless they are just looking at economic numbers and aren't looking at the facts. but all of the things that you've talked about, except --

it isn't $250,000. it's $500,000 and $250,000 for limit on punitive damages because some of those have gone way off the charts. and it's a respectable way of trying to bring these matters under control and save billions and billions of dollars every year. and help get some of these health care costs where they are at least manageable. well, i think we've debated enough. i know where the votes are. but i think it has to be debated. i'm very interested in find something way that we can come together as democrats and republicans, irrespective of the legal community. they all know that i support them when they are right. i fought to keep diversity jurisdiction going when it was going to be killed by a few people around here because i think it's right.

and a whole group of other things. i know this is an abused area of the law and anybody who has been there has to know it's an abused area of the law, even though there are legitimate cases as well. and we've got to try and find some way of doing justice in this area and bringing down these costs. and again, i'll go right back to obstetrics and gynecological work. some communities are totally bereft and it's frankly because of this. and i'm just mentioning one area. there are a lot of other areas as well. i just mention that one because it came on the heels of your amendment that was very -- >> and it was appropriate. >> considerate of women. >> i think we've had an excellent discussion on this. we want to thank all participants. i believe we're ready to vote. does the senator from utah want a roll call? >> i know it will be 13-10 so you can do -- >> all in favor -- oh, i guess i

do want a roll call vote. >> i've been told by staff we need a roll call vote. >> senator's staff wants a roll call vote. >> it's a terrible thing. >> the clerk will call the roll on the hatch amendment number 6. >> senator dodd? >> no, by proxy. >> senator harkin? >> no, by proxy. >> senator kulsky? >> no. >> senator biggerman? >> no. >> senator reid? >> no, by proxy. >> senator sanders? >> no, by proxy. >> senator brown. >> no, by proxy. >> senator casey? >> nope. >> senator haguin? >> no. >> senator berkeley? >> no. >> senator whitehouse? >> no. >> senator enzi? >> aye. >> senator gregg. >> aye by proxy. >> senator alexander? >> aye, by proxy. >> senator byrd. >> aye. >> senator mccain? >> aye, by proxy. >> senator hatch? >> aye, by proxy. >> senator coburn. >> aye, by proxy.

>> chairman kennedy? >> no, by proxy. >> 10 ayes, 13 nays. >> catch number six is defeated. we will now be turning to senator bingerman for his amendment. i want to note for the committee we have now been in session since 10:00 this morning. we've completed six amendments. we have 350 amendments pending since tuesday. 200 that are still outstanding. we have a total of 550 amendments pending. and we have a lot to do. so i would hope that before we break at 5:30, if we could even get two amendments done, it would be terrific. but if we can get one down, we'll be satisfied. senator bingerman? >> thank you very much, madam chairman. the amendment i'm calling sup 202, bingerman amendment 202.

currently the legislation requires all individuals to consent to irs disclosure of tax information for the purpose of being screens if they wish to receive a subsidy in the gateway. the amendment i'm offering would clarify that individuals would not have to consent to such disclosure, but, instead, could provide documentation that was specified by the secretary. for example, a prior year tax filing or pay stubbs from their employer. in addition, the secretary could utilize the same system as the medicaid program to verify such information. that's the income and eligibility verification system or ievs system. the amendment i'm proposing, i think, is important to assure that taxpayers have flexibility

about the information that's utilized to determine their eligibility for subsidies, and i urge my colleagues to support it. >> madam president? chairman? >> senator enzi? >> it appears that this makes the bill ripe for fraud. if we eliminate the need to verify income before giving subsidies, won't we increase the cost of this bill, which, of course, already exceeds $600 billion, and a major part of health reform is reducing fraud and abuse. this looks to me like it would enable it. i have some real difficulties with that. i don't see the protections built in there. i do think that flexibility is a good idea, but there still has to be a verification. and if it's just from pay stubs, people get revenue other ways, too. and that should count.

>> well, let me just respond. i think what is intended here is that we would go to the same verification that is used in medicaid when people apply for medicaid. now i know that there's been a lot of talk here about fraud in the medicaid system. but i was attorney general of my state, and i can tell you that the fraud that we prosecuted in the medicaid system, we had a unit in my office that did nothing but prosecute fraud in the medicaid system. and it was fraud perpetrated by providers. there was not a substantial fraud by people applying for medica medicaid. and the secretary has the ability under current law to verify any information provided by medicaid applicants through this income and eligibility verification system.

and all we're saying is that same capability should be available to the secretary to verify information or the eligibility of people for the subsidies. so i don't think this is opening anything up. let me ask david if he could clarify his understanding of the safeguards that would still be in the system to ensure that nobody was obstaining subsidies who was not eligible. currently, the bill does have this requirement to authorize verification based on the tax information for individuals who are claiming subsidies. as i understand it, the amendment would allow the secretary to use other methods, including the methods used under the medicaid program.

i'm not as familiar with that methodology, since that's a finance program. but my understanding is from finance staff that that is obviously in effect. but i wouldn't claim to have great expertise in those exact methods from the bingaman amendment. >> madam chair? >> the senator from georgia? >> i am sympathetic with what the senator from new mexico is trying to do. but i want to raise a couple of points. number one, i would think on line 11, on the second page, if the may was shall, you would be using the federal income tax return from the previous year to be the justification for the eligibility rather than by putting may. >> which line again was that? >> line 11 where it says provide satisfactory documentation of income which shall include a prior year's federal income tax return. >> let me tell you where i'm coming from.

i like the idea of the @@$x0000.l who pays taxes@@2# they make them a loan based on that when the guy was lying. i don't think when you have loose language like this which says may include a federal tax return but it can be satisfactory documentation, then you have navigators who are compensated by the gateway for

the insurance choice that's made or coverage choice that's made by the individual. i was in the sales business for 33 -- any time you let a salesman have wide and broad parameters on documentation of something like that, you are opening yourself up for what happened in the mortgage industry in 2007-2008. so i would just -- i'm not trying to defeat the gentleman's amendment, because i understand completely where he's coming from. but i'm really concerned about that loose a verification system opening the door for people getting subsidies that shouldn't be getting them. >> well, i guess my response would be that we're not authorizing the salesman for the insurance plans to do anything here. we're saying that the secretary has the option of requiring

satisfactory documentation of income and the secretary may include -- may, as part of that, require them to provide their federal income tax return. >> may. >> may. doesn't have to in every case, if it's clear that the documentation already provided has been adequate. but -- so i think having some flexibility there still makes sense. i don't think the threat of someone getting

>> good morning, and thank you all for being here. mexico has long been an important ally and friend of the united states. it is this country's third largest trading partner. as one of the largest economies in the americas, it remains the

third largest source of foreign oil for the united states market. unfortunately, over the past few years, organized crime has made mexico a major producer that transit's state of illegal drug trafficking into the u.s. as much as 90% of cocaine that enters the united states comes to mexico. criminals in mexico are now the largest suppliers of marijuana and methamphetamine. apparently, crime pays. this criminal enterprise is estimated to reduce annual revenues ranging from $25 billion to $40 billion. in december 2006, shortly after taking office, mexican presidents felipe calderon began a major crackdown on the drug cartels operating in his country. since then, almost 11,000

people in mexico have been killed in drug-related violence. almost daily, reports from mexico depict killings, acts of torture, and kidnapping. >> is getting worse. this past june was the deadliest month on record, with over 800 killed in drug-related violence. in short, in mexico, drugs and violence are a growth industry. as a result, mexico is facing one of the most critical security challenges in its history. many who have had the courage to confront the drug cartels have been threatened or killed. this includes police then, soldiers, judges, journalists, and even the clergy. however, there is some basis for optimism. the courageous efforts of

president calderon have resulted in important changes. law enforcement agencies and other federal officials have reported positive developments in their working relationships with the mexican counterparts. they say these changes are having a significant effect in addressing the drug threats posed to both countries. at the same time, there is a front-page article in today's focal washington post," which reads, mexico accused of torture in drug war. army using brutality to fight trafficking. as the effort in mexico to address the drug threat continues, we must be clear that abuses from the state are equally intolerable. i will seek to understand more about the facts related to this article as the committee's investigation continues. nevertheless, i believe the drug cartels and their associated

violence constitute a major threat to security and safety along the southwest border. they have caused major disruptions to commercial activities including international trade. because of my growing concerns about this problem, i sent a bipartisan team of committee investigators to the southwest border to get a firsthand look at what is happening on the ground. our investigators met with numerous federal, state, and local officials, including law enforcement, military intelligence, and others, and observed field operations in both daylight and night. this hearing was designed as a follow-up to the staff field investigation, to provide the committee with an overview of federal efforts to disrupt and the smell the mexican drug

trade and to examine whether federal agencies have sufficient tools and capabilities to do the job required. over the past few years, there have been nagging questions about the effectiveness of federal policy with regard to the southwest border. while it is clear that this administration takes the drug cartel threat very, very seriously, questions remain. just one month ago, the administration published a document entitled "national southwest border counter narcotics strategy." this is a blueprint on how the administration will address the threats posed by mexican drug smuggling. but the key issue remains, who is in charge? we know who is leading the fight in iraq. we know who is leading the fight

in afghanistan. what we do not know is who is leading the fight on our own border? is it the border czar? is it the drug czar? will it be the national guard? perhaps we will obtain a better understanding of this question today. one more thing before we began. with us today are top representatives from keep law enforcement agencies involved in the ongoing struggle to address the mexican drug trafficking. the work they do is critical, both to united states national security into helping mexico in its progress to turning the corner on the threats in now confronts. i commend their efforts, and i look forward to working with them on this critical national security matter. thank you. before i recognize their ranking member for his opening

statement, i would like to thank the minority for its assistance during this investigation, and all the work related to this hearing was conducted on a bipartisan basis. i would like to thank the ranking member for his leadership and his staff for continuing to build on this important relationship. i look forward to continuing to work together on important matters such as today's topic. i will now yield to the ranking member for his opening statement. >> thank you, mr. chairman, but i would have led to go on for as long as you wanted. as the chairman said, this is a bipartisan issue in which there is no distance between the chairman and myself. our staffs did work closely on it and intend to continue. there is no surprise that we will reach different conclusions on some of the fixes and some of the things that should be done.

we will read some differences in the priorities of the administration, including its representatives before us today, and the two of us. when it comes to finding the facts and to agreeing on the portions that can be agreed on, so that we can then disagree on very little, i think this committee is setting a high standard, and i intend to continue that. i ask unanimous consent that my entire opening statement replaced on the record. >> without objection, so ordered. >> with that indulgent, i will take a moment to recognize allen berson. i do not know the rest of you as well, but our new borders are is not new to san diego, and he is not new to dealing with border issues. his work in education and his work on the airport -- the list of work is too long to do as an introduction, but you have been a champion for so many causes in san diego, and i could not be

more delighted that the president has selected you as someone who rises above the politics, rises above either party to do what is right for our country. i look forward to your testimony today. i am particularly pleased that the border as a separate issue is getting attention. i must admit that the reduction of the drug czar from a full cabinet level position concerns me deeply. i think it sends the wrong message at a time in which your efforts and the efforts of the mexican government are going to be critical. the fact that we pulled away to 0.5 years ago from colombia, we curtailed our support for plan columbia, and on a partisan basis, failed to support the colombian free trade initiative. it sends a chilling message to countries who bled so long with us in order to eradicate drugs that once, literally, controlled

the government in colombia. today in mexico we have a very brave president who is fighting the same battle, and so far appears to be making progress. i say that because you are only one key assassination away from a dramatic change in mexico. we need to understand that the death of corruption in mexico -- depth of corruption, when it is in the hands of people with guns and a willingness to use them, 11,000 murders this year alone, says a great deal. we will hear about the spillover or lack thereof, and i believe that people in san diego at the border, the u.s. attorney and others, are doing a good job, doing everything they can to ensure that the activity north of the border is disconnected as much as possible from the activities out of the border. but let's be clear. whether you are in san diego or

st. louis or cleveland, you are directly affected by our failure to stop narcotics from coming into our country. every city in america and many rural areas have organized crime directly linked to those assets being made available and sold. some in my party would say that it is another country's problem alone. i am not one of them. today, with former speaker danny hastert, we announced a drug task force, one that had been somewhat dormant for several years. we felt we needed to work hard to bring new emphasis to this growing problem. but also because we want to make sure that the facts are very clearly stated to the american people. first of all, we are the consumers, and we are the suppliers of money. we all take a certain amount of blame for the fact that our money ultimately leads to these

cartels' operations in other countries. additionally we will hear today about guns going south wall of drugs go north. i have no@@@@@@h tu#g@ @ @ @ @t. if we did not find the drugs going north, where just as

unlikely to find a gun is going south. having said that, i look forward to a lot of information we do not have every day in san diego. i want to thank the chairman, because the only way we will really support the efforts of this administration and hold the administration accountable is on a bipartisan basis. we are off to an incredibly good start, and i expected to continue. i yield back. >> i would now like to recognize mr. turner to make an opening statement if he would like. >> i want to thank you and our witnesses for being here this morning. in march, a subcommittee on national security and foreign affairs had a hearing on the issue of money, guns, and drugs , and whether united states inputs were fueling the violence on the mexican border. we heard testimony about what factors inside the the united states are contributing to the strength of the mexican drug

cartels. they are continuing to -- it will be an endless task if we do not address the other related aspects of the drug trade. more progress needs to be made in drugs, guns, and cash. according to some estimates, as many as 90% of the high caliber weapons being used by drug cartels to perpetrate the violence we of seen in the past few years originated in the united states. the violence threatens the safety of our citizens if we do not halt the flow arms into mexico. this is a significant challenge for the border patrol. we have to check the gun flow at the border as well as in the interior of this country. the second major factor in the drug trade is the cash flow coming in from the united

states. we heard testimony at the march hearing that as much as $25 billion in bulk cash flows into mexico in drug sales in the united states each year. one of our witnesses testified that federal law enforcement is hampered by its efforts to find and stop these cash flows by what he called antiquated legislation. it appeared that there may be a lack of coordination between the various agencies that have jurisdiction in this area. i hope our witnesses today can address those issues in more detail as well. we must address the fact that it is the demand for drugs here in the u.s. that has allowed the cartels to become profitable. 9% of the cocaine, heroin, methamphetamine and marijuana purchased and consumed in the u.s. enters our country from mexico. americans spend as much as $65 billion annually on illegal drugs. there are no simple solutions to the problem. we need to recognize that our internal drug policies and our

success at curbing the use of these substances can have a profound effect on the stability of our neighboring countries and our own national security. there is a global problem, not simply an issue in the united states and mexican border. we heard testimony that cocaine from mexican cartels is now headed to europe and russia. mexican and colombian drug cartels have made inroads in africa as well. our shared border makes the situation a particular concern to us, but it is just one piece of the global puzzle. i hope our discussion can of form -- in former approach with the adjure -- with the other regions as well. >> i yield to congressman bilbray. >> as a lifelong resident of the frontier area, i want to thank you for this hearing. it seems like everyone is talking about wars overseas, we are ignoring our own backyard, where fatalities are skyrocketing and the death rate

among law-enforcement just out of our border was far beyond anything we had seen anywhere else in the world. we just sort of ignored it because it was not on the radar screen for the meeting. i want to apologize to the other two gentlemen. i have to mention my friend mr. berson. when it comes to the choice of our guy in san diego in the western sector, no one could have been a better choice than alan, and i want to thank him for being willing to serve again. it is not an easy job. you knew what you were stepping into, and we do not have time for learning curve here. i want to thank the administration for bringing him back on line. the one thing i have to say is that too often we hear the media talk about the drug cartel. we need to change the terminology to the smuggling cartels, because we are talking about not only drugs going

north, but we are talking about guns and money coming south, and the same cartel is involved in illegal alien smuggling. it is all a network. i grew up in an area where begun in the habit of seeing illegals being used as the meals for the cartel's, and the abuses -- being used as the mules for the cartels. i just want to make sure we understand that we talk about this issue, they are all tied together. the cartels have controlled the border an illegal crossing for much too long. i am glad to see this hearing because too many people on our side of the border think this is a problem that is across the border and not a threat to the american communities. this is a major threat for all of us along the frontier area on both sides of the border. i hope i am able to get you

photos that i do not think we will show in public, but just so the members understand how bad this is, we have a hospital in my county that has someone walking in with two fingers and saying is there any way to preserve these fingers so that when we get the hostages back, we can so them back on? when you have law enforcement that finds the remnants of decapitation, this is the kind of thing we have going on in our neighborhoods, not just in tijuana, but in the san diego county region. it is crossing over, and now is the time to win this battle. present -- president calderon is the bravest elected official i have ever known. we have to give credit to him and throw aside our disagreements with mexico and work with him now. we either fight this battle on mexican soil and win it, are we will be fighting it on american soil at a much higher cost.

i appreciate the chance to be able to be heard today and i yield back. >> i would now like to introduce our first panel of witnesses who will testify today. the director of the office of national drug control policy in the executive office of the president. mr. lanny brewer, criminal division, united states department of justice, and mr. alan berson. he has been praised all day. assistant secretary for international affairs and special represented for border of affairs, united state

department of homeland security. we will go as far as we can. let me just where all be in. please stand and raise your right hand. [reading oath] that the record reflect that all the witnesses entered in the affirmative. >> i practiced all last night announcing your name correctly. >> i am honored to be with you and all committee members that are here today. last month, secretary napolitano, eric holder and i -- this is comprehensive

interagency plan that was developed through the work of the office of national drug control. it was done in a way that ensured all of the partners that you see here today being actively involved in it. this is a plan that is not going to sit on a shelf and gather dust. it is being put into action even as we speak. it is being done in partnership also with the courageous and dedicated work of mexico's president calderon. the commitment of all the federal agencies and the state and local agencies that we have talked to. to ensure it is turned into action, the administration will be announcing a dedicated interagency working group which i will lead to push for the full and effective implementation of the strategy. that framework is being developed. it will put -- we will provide a public report on the implementation of the strategy as part of the administration's

first national drug control strategy which will be published early next year. as part of my oversight responsibilities, my office recently identified overarching national drug control strategy goals to help guide all of the federal agencies as they develop their policy initiatives, the programmatic efforts, and the budget proposals. of the coming months, we will be working with the department of homeland security, justice, state, defense, and others to develop cross agency performance goals and metrics for the stock was border initiative. in addition, as the agencies update their she plans, will be working with omb and the departments and agencies for key southwest border priorities that are identified in the strategy. this will insure accountability and make it clear that combating the flow of drugs and money and weapons across the southwest border must be a core element of our nation's approach to the

entire drug problem. it is essential that we work together as one team to stop the flow of drugs into our country as well as the flow of all currency and weapons that fuel cartel violence. the congress and the ministration will need to work very closely together. i am looking forward to working with this committee, and i know that part of the focus you have identified is accountability, and we are proud to ensure that. -- we are proud -- we are prepared to answer that. i asked the directors of the high intensity drug trafficking areas to meet with me along the southwest border last month. what the director has told me and what i believe the members in this committee already know is that our front-line state and local law enforcement partners have been under enormous strain.

the retiring share of of 50 years of law enforcement has been friends for many years. i listened to this very closely. although the strain is most acute on the border, as the ranking member mentioned, clearly this is a national problem. it affected us in seattle during the nine years i was police chief as well as my colleagues in minnesota and across the country. the administration intends to continue to help those law enforcement agencies who needed and that are on the border and also within the interior. we will keep an intense focus on this threat and make a difference. the knowledge of local law enforcement, meaning the state, county, and city, is a great advantage to the work of the federal government. when it comes to the critical challenge of interdicting this out and flow of weapons and currency, a partnership with those agencies is essential, and i think i can be of great value

in that. state and local law enforcement personnel possess unmatched knowledge about the organizations that operate in their jurisdictions every day. law enforcement operations are most effective when this knowledge is combined with a skilled technology and resources that the federal agencies can bring. all of us in this administration are committed to pursuing a truly national approach to the critical problem. thank you, chairman, and i look forward to answering questions. >> thank you very much. >> chairman and ranking member issa and members of the committee, i appreciate the opportunity to appear before you today to discuss the department of justice's important role in the administration's overall strategy to address the threats posed by the rise of mexican drug cartels, particularly along our southwest border. the justice department's goal is to@@@@@@@ y) @ m@ @ @ @ @ @ @ @ @

the flow of illegal drugs and their illicit proceeds across the southwest border and to reduce the associated crime and violence in the region. i look forward to working with the director and assistant secretary berson and are many

partners to ensure success of the administration's strategy. the department reviewed the justice department plays a central role in supporting the strategy. the department's approach to the mexican drug cartels is to confront them as criminal organizations. to do so, we employ extensive and coordinated intelligence capabilities to target the largest and most dangerous mexican drug cartels and focus law enforcement resources. our intelligence and based, prosecutor led, multi agency task force focused our investigation on the x -- investigation, extradition, prosecution, and prosecution of key cartel leaders. destroying the leadership and

seizing the financial infrastructure of the cartels is critical to dismantling them. stemming the flow iof guns and money from the united states to mexico is an important aspect of the administration's comprehensive approach to the problem. in concerted efforts with the department of homeland security and other law enforcement entities, we are committed to investigating and prosecuting illegal firearms trafficking and currency smuggling from the united states into mexico. another key component to neutralizing the cartels is to work closely with the government of mexico. the department plays an important role in implementing the initiative, including serving as the lead implemented in programs in prosecutorial capacity building, asset forfeiture, extradition training, and forensics. we continue to work closely with mexico to address the issue of

cartel related public corruption, including through investigative assistance. we also work together on extraditions of key cartel leaders and other fugitives. the calderon administration has taken bold steps to confront this threat. we are committed to assisting our mexican partners in this fight. we believe that the department is the right comprehensive and coordinated strategy to disrupt and dismantle the cartel's and stem the southbound flow of firearms and cash. the strengths of the department's approach are illustrated by for example of the tremendous successes of operation accelerator. multinational organizations targeting the sinaloa and gulf cartel's. we recognize there is much more work to do. last month, i traveled to the

southwest border, along with my friend, assistant secretary berson is all the challenges that are brave law enforcement personnel confront on a daily basis. the department is committed to working together with our colleagues and with our state, local, and travel partners and with the government of mexico to build on what we have done so far, and to develop and implement new and refresh our strategies. the recently signed agreements are emblematic of our glover to come a coordinated approach to the threats posed by the mexican drug cartels. by continuing to work together, we can and will rise to the current challenge. again, thank you for your recognition of this important issue and the opportunity to testify today.

i will be happy to answer any questions you may have. >> thank you very much. we have votes on the floor, and we will adjourn for one hour and be able to come back 10 minutes after the last vote, just in case we run into some problems on the floor. i think we should be back in an hour. at that time, we will continue with you. we have to vote around here.

again, we apologize for the delay, but boats are something that we have to do. -- votes for something we have to do. >> members of the committee, thank you for this opportunity. the rise of the mexican drug cartels and u.s. national security poses the critical issue clearly and directly. this is a subject critical to our nation, and one with which i am familiar, having served as the southwest border represented for the department of justice from 1995 to 1998. since my appointment to dhs in mid-april, i have travelled to the border into mexico five times to meet with u.s.

officials at the federal, state, local, and tribal level as well as counterparts in the administration of president felipe calderon. i have also met with advocacy groups and civic and business groups along the border in brownsville, laredo, del rio, a passel, albuquerque, tucson, phoenix, and san diego. my experience living and working on the border has given me an appreciation for the strategic importance of our political and law enforcement relationship with mexico, as well as for the gravity of the crisis that we face presently, given the rise of the drug cartels on the u.s.- mexican border and within mexico itself. it is indeed a crisis, though in using that word, i note that the chinese word for crisis is written in mandarin by combining two characters, the characters for danger and opportunity. our current crisis certainly presents both.

the danger comes from the fact that the mexican cartels or violent and have created a national security threat to the government of mexico, and therefore derivative bleak, to the united states. the power of the cartels is alarming. they have polluted the political system of mexico. that have corrupted the legal system. the second element of danger is the competition among the cartel's along with the mexican government's attempt to combat them. it has led to unprecedented violence in the northern states of mexico. it resulted reportedly in 11,000 deaths in the last 3.5 years. our opportunity arises from the historic and courageous efforts and the heroic efforts of the calderon administration. first to fully knowledge the power of the cartel's, and

second to willingly confront the stark reality and systematic corruption that exist in mexican law enforcement. the united states government has been bold as well, starting with the unqualified acceptance of the consumption of drugs on the u.s. out of the border is a major contributing factor to the power and influence of mexican cartels. for the first time, we view drugs going north and guns and balkhash going south as two ends of the same problem. it is not the occasion for finger-pointing between mexico and the united states. the acknowledgement of a shared problem paves the way for cooperation between dhs along with doj and the government of mexico that would have been unthinkable 10 years ago, and even unsalable three years ago. dhs is working in full partnership with the government of mexico to respond to the dangers and the opportunities

that the current crisis as presented. this is a relationship of trust with verification, and one that is expected by both countries on that basis. on march 24, secretary napolitano and david ogden announced the president's major southwest border initiative, a reallocation of agents, technology, equipment, and attention to the border. those deployments are now complete. dhs is also taking steps to deepen our relationship with partner agencies in the government of mexico. . .

i note to positive changes that we will succeed in our efforts to reduce the power of the smuggling cartels burda first, it teaches provides to give them a better resource capabilities to confront security issues it also has a unified chain of command overseeing and inspection responsibility. secondly, i have been impressed by the cooperation. it is embodied in a relationship

that the director and assistant attorney general have forged in short order. this is particularly true on the initiative, the long-term vehicle for cooperation between u.s./mexican law enforcement agencies. it has been said that the challenge of our time is that the future is not what it used to be. when it comes to u.s./mexican relationships and the prospect for building on that cooperation, to deal with mexican criminal organizations, that is a good thing, a very good thing indeed. i did forward to exploring this matter further with you. thank you. >> thank you for your testimony. we now will move to the question and answer period.

i have a broad question for you. are we winning the war against the mexican cartels? >the mexican drug cartels. >> we are. that is thought to say we didn't have much to do. if you could get the work with respect to operations that we have, whether it is operation accelerator or predict reckoning, where we have systematically gone and prosecuted the cartels, we have attracted enormous blows between lower cartels against the gulf cartels. we have hired letters of extraditions of drugs than ever before. we are making very effective strategies with respect to intelligence base investigations and prosecutions that is not to suggest that we do not have more

to do. the battles among the cartels themselves are showing that the pressure we are putting on them do demonstrate that we are being very effective. >> generally, i agree with mr. brewer that this is a long-term struggle about reducing the power of the cartels from the government of mexico and turning it from what is currently a national security threat and into a more conventional law enforcement problem. measured by that standard, i think we have a ways to go, but i am in accord with mr. brewer for the reason that he stated. we are making progress and it is measurable progress. if we can ints%r@ @ @ @ @ @ @ @

guard troops to the border, who would be in charge of them? >> mr. chairman, the decision whether or not to send the national guard at any border is a decision reserved exclusively for the president. secretary gates and secondary napolitano have been confirming -- conferring and will submit a recommendation to the president. the mission is a function of a presidential decision. i am confident that in due course it will be made one where the other. >> what are the implications for

u.s. national security should the administration fail in its efforts to take on the american drug cartel? what the stakes for both mexico and the united states? >> mr. chairman, in their very significant, certainly for mexico as we have said. they are confronting a national security challenge right now in their battle against the cartels. with respect to us right now, it is absolutely an organized crime challenge. we cannot permit president calderon to fail. this may be a once in a generation opportunity. his courage and willingness to take on the cartels. the consequences are very extraordinary. we need to deploy the appropriate resources and

cooperation to ensure we do everything we can to support the president. >> can i hear you on that as well? >> i am in agreement. secretary of peloton no -- nepal tonneau is referring to the window opportunity. we will continue to see mexico that is systematically corrupt in which decisions and not be made on the merits are being made because there bought and paid for. that kind of a influence political system south of the border presents a whole series of long-term security threats to mexico, which is why it is so important that we use this window of opportunity with the called ron administration to weaken the powers of these criminal organizations. they do enormous damage to our society and even more damage to the mexican society. >> what would victory really

look like? what would really look like, victory for us? >> one thing it would look like this certainly that president called ron eric holder run -- calderon has a highly skilled force to be responsive to the need of protecting the people rather than the heavy use of the military. the other thing that with the cat is has been remarked by representatives from the government of mexico. that is the increasing addiction population, the size of the population involved in drug use. traffickers often pay their careers and product rather than currency. -- their couriers in product

within currency. we have to be willing and a hard look at providing resources that work toward the prevention and end of drug use in the country and the treatment. those are other parts that we hope to play. >> i yield to the prime minister from california. bu>> during your tenure you were known for going after the coyotes, literally stopping those who traffic human beings. along the way you lost a lot of drug charges that they were involved in and the meals they carry. can you give us your opinion of current laws, particular 1326 and 1324, some of the penalties that you have at the border as tools. are they sufficient? >> you raise an important point.

this era has a sharp division that uses -- exists between drug organizations and other organizations has been blurred by the efforts of pressure being brought and the cartels by u.s. enforcement and by mexican enforcement. it is also by the recessionary economy. we began to see a blurring of those lines. certainly speaking from the perspective of 10-years ago, the series of statutes available to prosecutors -- and i will defer immediately to mr. brewer -sendi where a farmer had is a prosecutor -- is that an enforcement official, 1326 and 1325 which is a misdemeanor work well. 1324, which is a penalties for alien smugglers is something

that 10-years ago would lead to require review. it could stand a further review at this time. >> basically, what i'm trying to get to is that we have had the talent at the border that i have observed, which is that the first several times that he kept a trafficker -- you can a trafficker, he gets treated like an amateur who happen to stumble by mistake. it is 60 days to serve. the second time is not much more. we have had cases of the dozens of time in which we cannot get, sometimes because the statute, and the kind of enforcement. do you believe, all three of you, that the congress should be looking into giving you as prosecutors and courts at least a greater ability to have the

upper limits -- have the lower limits raised and/or give them the ability to have tougher sentences on the first or second time? >> thank you. i definitely think it is an issue that needs to be explored. i think what we need to do is that we need to give thit to our attorneys. i think we need to give our u.s. attorneys, particularly in the southwest border states, the discretion antall said that they can effectively and comprehensive peace deal with the issue. i do not think candidly that there is one size fits all. i think we have to get the u.s. attorney's the discretion to prioritize. if we are going to charge under one aspect of the law we have to ensure that we appropriate -- we

have appropriate facilities, whether prison or other. >> let me go through that. california has tens of thousands of people who are petty criminals and illegal aliens. are you saying that if we wanted to incarcerate every coyote, every person who is trafficking either in drugs for human beings, that you do not have the capacity today to incarcerate every single one of the people for a significant amount of time? >> i think there would be terrific challenges. i think to have the appropriate facilities and infrastructure would require a lot. as it did get this comprehensive approach, would we really did what we want to do is give the u.s. attorney's the tools so they can dismantle the very cartels that you are talking about. >> the only truly have the ability to incarcerate.

any tool sort of that is an alternate. if you turn on the rest of your cartel, we will not locked up for 10-years. that is a powerful tool. if you turn on your cartel or you are going to spend 60 days, somehow had nothing that is a horrible tool. i'm asking this for three reasons. should we have it? mr. burton was a more likely to say he would have it at his disposal. it can use it as a tool to get cooperation. the bigger question for us up here is are we clogging the system without having a comprehensive immigration reform, without having relations with mexico that allows us to return more of their citizens sooner with a full faith belief that they will incarcerate them? although my time has expired, i would like it if you looked at

it from that standpoint, because we are the committee of oversight and reform. we are the first top in if there are tools the do not have either north or south the week to begin shedding light on. >> you have identified exactly the issue. we absolutely ought to have comprehensive immigration reform. there is absolutely no question. secondly, and are building -- and are building a relationship with the mexican government, a very effective tool is that we do want to be able to return people to mexico and know that the mexican government is going to treat them appropriately. those are part of the puzzle absolutely. >> i yield to the gentleman from massachusetts. >> to be fully appreciate the amount of corruption and death of corruption? with the large amounts of money

that is indicated that is involved that is going into mexico and the reports so we see about corruption and the police departments and military -- what can we do about this? what are we doing about it? do you have confidence that we will get a grip on this? otherwise, we are just spinning our wheels. >> it is an enormous challenge. you are right. one of the tools that we do have and that we hope to do more of is our ability to work with and train law enforcement in mexico. we are making great strides with respect to training the unit that we have a lot of confidence in. they are not subject to bribery, whether there is subject to polygraphs and the kind of background review. >> your timing of the military as opposed to police? >> i am talking about the

police. >> there is a significant amount of fear among the police, no amount -- no matter how much you pay them. sometimes taking money is a better alternative than having your family violated. >> that is an enormous challenge. there are many courageous law enforcement in mexico. these units are good representation of them. >> the internet to sending about the money? -- don't we have to do something about the money? what are your thoughts about disrupting the cartels by seizing their money? what are we going to do to do that? >> you are right. i defer to my colleagues. what we are doing from the law enforcement point of view, we have levels of seizure of the profits of the money in the

possession of the cartel's members. one of our training programs is to teach and incorporate in mexico the same concept of forfeiture and seizure. >> that we have to do that further back from the line? >> absolutely. >> one of the changes that has taken place daily is the acknowledgement on our end of the bargain that the consumption of drugs in this country that generates the traffic and the kind of sums of money that the current -- that has corrupted mexican politics is something that will continue until we get a better handle on reducing the demand. >> how are we going to further this? >> with regard to the drug demand reduction, the south was border strategy that was unveiled place a heavy emphasis

on that. >> it is still going to be cash. >> the cash is going south. having cbp and border patrol pay attention to that so that for the first time while we haven't in the past, we have systematic checks going south now. this is a project that is very much geared to cooperating with mexico as it builds up its enforcement capacity for the first time. >> a couple months ago, you had sporadic checks southbound. they were much too sporadic to be affected. we may not have the impression it should there to really be affected. -- infrastructure there to really be effective. when the going to do to make sure we have southbound and steady in fact? -- what are you going to do to make sure we have southbound and steady@@@@j@ @ @ @ k)n

but no question. >> what are we going to do about that? >> there is a lot of progress. there are a couple of things intervene them. they are using local law enforcement to help. in seattle we sent officers

trained with canine's along with the sheriff's department. all of these local agencies across the country are more than willing to do their part to help. that is only one part. the other part, at the hyatt trafficking areas are in 20 places around the united states. they often have the roots and mexico. they not only sees the drugs and make the arrests and work with federal prosecutors or local prosecutors, but they also go after the money. you are not stopping the cache of the border. you are starting the cash in seattle and california. there is more progress in training being done. treasury is working very hard and the new credit card act to develop ways of looking at the usage as a card that is going to carry thousands of dollars of cash.

there is a lot more to be done. there is a lot of progress. choking off the money is the key. >> thank you. >> the gentle man from illinois. >> thank you. i know the issue of the national guard was raised earlier. is it accurate? about 500 national guardsmen are in the national border as the speed? >> there are national guard but have been engaged in an ongoing project that has been in existence for more than 22 decades. this is in support of law enforcement activities. i believe that number is one that i need to confirm. i do know that most of the guardsmen are actually away from the border, engaged in intelligence and analytical activities. i will need to confirm whether

it is 400 or some smaller number that are actually physically on the border today. >> the first follow-up would be the activities that they are claiming as to talk about. do they relate to the drug cartel of activities? >> the counter drug program that has been in existence for two decades and that i am very familiar with with my time as a prosecutor is definitely counter dragon nature. that is the basis that congress has authorized the activity. these are activities that involve supporting law enforcement in a variety of ways that are consistent with the division between law enforcement and the military. >> you have probably read about the accounts that discuss the possibility of the administration increasing the number of national guardsmen, perhaps to another 15 under.

is that your understanding? it is still in the planning? >> this is all in the discussion stage, as indicated, between secretary of peloton no, secretary gates. they plan to make a joint recommendation to the president to will make the final decision. >> excuse me if this has been discussed. where between votes. -- we are between votes. we have had in previous hearings about the conflicts between the a and -- between dea and i.t. i anniston there has been an agreement signed. what is the problem and how was it solved? do you sense that it is all this? >> what it shows is that they just entered into a memorandum of understanding. it is fair to say that there is a remarkable commitment to work

to get their and they have been working well together, but now what happens is that they can work together. patients can be designated to pursue drug-related crimes that are border related, but they can do that throughout the country. very importantly, the information that i gathered in the investigations can be shared in a day diffusion center so that all the information from i.c.e a share together. it can be used to go after the cartels. >> there is an information live double follow back and make sure it continues to be the case. >> it is. there is a great commitment. homeland security in the department of justice is making sure if this happens. i am confident it will happen. >> you will have an agent from

immigrations and customs who will speak very treacly to your inquiry -- very directly to your inquiry. >> the third point is that we often hear this figure of 90% of the guns compensated in this conflict come from the united states. given that we are not tracing all of the guns, how are we determining that figure? >> i think the precise number may be a little hard to identify. you are absolutely right. of those guns recover, for which one can trace, the number you identified as the number that has been set. i think that is right. the larger issue that it is

inescapable that a very large percentage of the guns enter mexico to come from the united states. as we are joining with our friends in mexico to combat the battle, that is one of the issues that we will have to confront here ourselves. but why are not more guns traced? is it because some of them are untraceable or is it the volume makes it difficult? >> what may work is in the second panel, billy hoover explained in a better manner than i have. when possible, a good number of them have been trees. he will be in a better position than i to tell you some of the challenges. >> i appreciate that. i suppose it will be easier to control that if we continue with what the clinton

administration did which was a ban on semi-automatic weapons. it is much easier to control of their not being sold. -- if they are not being sold. >> i like to pick up here. i was embarrassed by the performance of our country when the episodes, a terrible episodes, of armed conflict some thought might even bring down the government -- may have been somewhat exaggerated -- guesses supplying the guns? -- guess who was supplying the guns? not only arena configuring -- not only are not considering to find these guns with the most elementary inspection capacity

but the action when we did sporadic outbound inspections, they got their guns out anyway. the notion that this country would have been so central which were in such conduct will supply that it was like an army that the government itself was over from. they had so much weaponry. we know we are not doing much.

we know does not take much to get them to mexico. i'm far more interested in how these funds -- thugs so easily pick up guns in this country. many of these guns are being sold. how the can pick up large amounts of guns, equip yourself as if you work and army with such force that the government for a while there was essentially fighting an internal army supplied in no small part by the united states of america and -- where do these guns come

from? how're they able to pick them up in such large numbers? how are they able to get out would amount to enough guns to arm a virtual small army? many of them are from the united states. regardless of the figures and the notion that a lot of them came from x, y, or z, you know exactly where they came from, mr. brewer. what you might not be able to trace them, and you have law enforcement jurisdiction and united states of america. why are you not keeping these guns from being either bought or otherwise in such large numbers so that they now are a small army?

it is extremely embarrassing for the mexico has been very kind to us. i would have been very angry. i will have been angry of the big kahuna in the north that was essentially shipping down arms to tell my people. they will not do anything about its own weapons ban. nobody knew administration even spoke out about illegal guns and the proliferation of guns in our country except the attorney general who did say something about it. it looks like body had to do is get some guns and you get them across the border very easily and nobody in the united states is doing very much to keep thugs from acquiring those guns in the first place. i am interested in this country what you are doing here before

you get to the border. >> i share your concern. i want to begin by saying there are people who were working very hard. our atf agents are doing an extraordinary job with their resources. >> water they doing? he was selling the guns? -- what are they doing? who is selling the guns? what they are coming from license a fire arms dealers. the power of these calls is extraordinary. -- cartels is extraordinary. in their reach is great. some are coming from a licensed firearms dealers. >> is there nothing you can do? >> our agents are doing a lot. they have limited resources. >> water they doing? what they are visiting -- >> there visiting in doing inspections. >> are they doing any undercover

work? >> yes, they are. they are doing a lot of it. it is not fair to be critical of our agents. they are doing an extraordinary job every day. they are serving the american people well. >> i am critical of your leadership, not your agents. i love the atf. i am talking about what it takes to dismantle the gun cartel and this country that is not only enabling but making possible this. >> your time has expired. let me for thank you for your testimony. i apologize for the delay. i am wondering if you could hold the record open and get some information for us. the rest raid which seems to be very aggressive in what is happening in mexico -- can he get some information on the conviction?

it is one thing to make a lot of arrests, but if we get some information in terms of the percentage of convictions, we would appreciate it. >> absolutely. >> and also the length of sentences. we will hold the record open for that information. thank you very much. >> thank you very much. >> now on to our second panel. >> mr. william hoover? mr. roberts but to introduce our second

panel. anthony pacitto, the assistant commissioner for intelligence and drug enforcement administration bu. welcome. mr. kumar kibell, united

states customs enforcement and homeland security. mr. todd owens, assistant commissioner of field operations, u.s. customs and border protection, u.s. department of homeland security. mr. william hoover, assistant director of field operations, of fear of alcohol and explosives, united states department of justice. mr. robert mcbryan, office of foreign assets control, department of the treasury. it is our committee policy to have five minutes for your presentation and then you allow us an opportunity to raise questions with you. why do not we go right down? we can just go down the line.

mr. owens, you first and then we will go down the line. >> good afternoon. thank you for the opportunity to be here today. i am pleased to be here with my colleagues from many agencies. i would like to express my gratitude to the congress for its support of the mission and people ofcbp, among the numerous parties that were recognized in the investment act of 2009. we provided cbp was $600 million for improvements to our infrastructure to enhance our technical communications equipment and upgrade our inspection technology. it will allow them to more efficiently meet the goals of border security and facilitation. then taken steps to protect americans from the threats that face our nation. i like to focus meyer remarks about the violence on the southwest border.

the campaign of violence is being waged by drug cartels in mexico and remains a major concern. illegal drugs and weapons flow both ways across our border and link the united states and mexico in this battle. the department homeland security has implemented a security strategy and the office of field operations is responsible for implementing the strategy at our ports of entry. we have taken significant action on the southwest border and have enhanced our outbound enforcement efforts with deployment of additional manpower and equipment and technology. teams of officers and border patrol agents and special agents along with local law- enforcement are now conducting outbound inspections of the report of entry with a focus on firearms in currency. the mobile response teams are also utilize to ship personnel between the ports of entry to

further disrupt smuggling efforts. they are supported by non intrusive inspection equipment which allows this to scan for presence of anomalies which may indicate contraband. the currently deployed 227 large-scale systems. many are mobile and are being used in our outbound efforts as well. we are grateful for the hundred million dollars in stimulus money which will allow us to agree their systems. there also deploying canines to detect currency in firearms. we are dying -- it adding additional canines during the summer. these tools will allow our of measures to quickly scan is up on traffic looking for cash and firearms. we are seeing the success of these efforts.

since we began these initiatives on march 12, we have seized more than $15.8 million in currency destined for mexico. there also pursuing activities which increase support in collaboration with their mexican counterparts at u.s. and mexico border crossings. thank you for your support. yet many of our responsibilities. i thank you for the opportunity to be here. >> thank you. >> on behalf but the secretary and assistant secretary, of like to thank you for the sovereignty in helping us secure the borders. as the primary investigative

agency, we target national criminal networks and terrorist organizations that might exploit potential abilities. our partnerships are central to this effort. we recently strengthened to these crucial precious by renegotiating agreements with the dea and ftf. it to approve and enhance information sharing. the violence on the border requires comprehensive and collaborative efforts. on march 24, the department of homeland security announced the southwest border initiative designed to crack down on mexican drug cartels. this was augmented by the recently released 2009 national southwest border strategy. since the announcement, we have seen significant increases in seizures of drugs in currency compared to the same time. in 2008. during the time between the two, together they have increased narcotics seizures by

over 40%. they continue to work with the federal partners to collaborate in various ways. in 2005 they created the border enforcement task force. the 15 best are a series of is led task forces that identified and stroke criminal organizations that oppose some of it again for a. they have reported over 4000 criminal arrests and seized over 2,000 pounds of narcotics, 2500 weapons, and three under 70,000 rounds of ammunition, including $26 million in u.s. currency. one recent success story iled to the indictment of four individuals trying to export weapons of the united states. the ones it tried to purchase included 300 rifles, 300 short barrel tellable rifles, 10

caliber sniper rifles, to 40 millimeter machine guns, and 20 and fans with silencers and a large amount of ammunition. it had a street guy of over five and a thousand dollars. -- $500,000. we have doubled the amount of agents working on the southwest border from 95 to 190. a large number of weapons were recovered in mexico. this must be an urgent priority. in june 2008, ice and other partners launched an operation. it has resulted in the seizure of 1600 weapons, more than $6.4 million and over 108,000 rounds of ammunition.

i says partnered -- ice has partnered in operation fire wall. it has resulted in a seizure over $210 million, including 65 million seized overseas and foreigners in the five arrests. they also recently established a great transparency unit with mexico to identify trade anomalies which are in a thicket of trade based money schemes. -- which are indicative of trade base money schemes. these efforts have led to more than the million dollars in cash seized during the last fiscal year. we proactively act against those performing human trafficking. we have identified various methods used by criminal network

to small people into the u.s. to target these routes, we partnership with the doj strike force. we combined our investigative resources to target and dismantle foreign based criminal travel networks. complementary is the pivotal role they continue to play as a co-chair of the project of the working group on alien smuggling. ice is committed to working with this committee and congress to address the challenges we face to secure the borders to the enforcement of our nation's immigration laws. i am thank the commitment for your support. i would be pleased to answer any questions. >> thank you very much. >> thank you. i appreciate the opportunity to represent the views of the drug enforcement administration on

this issue regarding the rise of criminality in mexican cartels and their implications for u.s. national security. >> please pull your mighty little closer. >> as a lead agency, we are keenly aware of the critical requirement to break the power and impunity of transnational crime groups such as mexican cartels. these groups and a supply enormous quantities of drugs to our country with adverse consequences in terms of addiction, lost productivity, and social costs, but left unchecked, they threaten regional stability because they undermine respect the rule of law, diminish public confidence, and promote lawlessness through violence and corruption. the good news is that together we are highly committed with mexican partners and their the

generous support of congress, we are bringing unprecedented pressure against the cartels and helping fortified mexico's criminal-justice system to ensure that these gains can be sustained over time. the drug trade in mexico has been a ride with violence for decades. intentionally gruesome violence and kidnapping, torture, and murder have remained at elevated levels since president calderon initiative his program to break the power of the cartels. i believe that it distributed some of the photos that demonstrate the extent of that brutality. >> i would ask consent of the would be placed in the record but not shown, because they are a little issue -- too gruesome for public view. >> they have been a spectacular violence despite the fact that all past and san diego are among

some the safest cities in mexico. drug-related killings and mexico have escalated from 1200 in 2006 to more than 6200 in 2008. jennifer six months of this year, there have been 3600 -- during the first clause of this year, there have been 36 under. 3600. law officials are being targeted by the cartels. in an effort intended to break the will of the government to mexico to confront these criminals, the mutilated and decapitated bodies of the victims are frequently left with signs warning of even greater violence. even if this carnage can be confined to mexican territory, it has adverse consequence to u.s. national purity. there is justifiable concern that the violence plenty mexico will spill across our border and

have any more pronounced effect on americans. on americans. the@@@@@@n"!d$vy i would reemphasize that even a combined to mexico, the drug- related violence seriously undermines respect for the rule of law and a great confidence in mexican institutions by extension. they have serious national

security implications here at home as well as adverse consequences in central america and beyond. we continue to work in cooperation with the federal, state, local, and foreign counterparts to address these threats. the organizational attack strategy is an attempt to systematically destroy up and dismantling the command and control elements of this criminal syndicates. he to the strategy sharing information and ordination through the operations division. in mexico, we have the largest u.s. law enforcement presence and our partnership with the administration and melting -- is mounting a sustained attack. it impact the ability these cartels to exercise influence and further destabilize the region.

while these collaborative operations are intended to break the power of the cartels come in the short term, the also exacerbate the violence and mass -- in mexico. and like to address a concern that is highlighted by a the gao. as someone who began my career with u.s. customs service, i want to underscore the importance of cooperation in law-enforcement and dea's unwavering support for the recently signed agreement between dea and i.c.e. this agreement is the most efficient and effective way to promote interagency coordination. the agreement addresses the concerns of both agencies without the need for legislative action by allowing an unlimited number of agents and strengthens

information sharing and ordination protocol. i thank you for the opportunity to testify and stand ready to answer questions. >> thank you very much. mr. hoover? >> thank you. i am william hoover, and deputy director for the poor of paul and explosives. -- bureau of alcohol and explosives. i want to discuss ongoing roles in districting firearms from being illegally traffic in the united states into mexico and working to reduce the violence along the border. for over 30 years, atf has been predicting a communities from criminal organizations by safeguarding them from the illegal use of firearms and explosives. we are responsible for both regulating the fire arms and enforcing the criminal laws relating to those commodities.

atf has experience and commitment to investigate and disrupted groups and individuals to obtain guns in the u.s. and italy traffic them into mexico in facilitation of the director. this is used to combat fire arms trafficking along the u.s. borders and to route our nation. we know we do not fight this battle alone. as we come atf hosted a violent crime and trafficking summit in albuquerque, new mexico and it was monumental in establishing a partnership between atf and i.c.e. a memorandum of understanding was signed, establishing how we will still firearm trafficking. it establishes a notification process that each agency will follow will conducting these investigations. the strategy for disrupting the

flow far to mexico their project gun runner has referred over 882 cases for prosecution those cases include 415 for firearms trafficking, which involve 1135 defendants and 13,000 firearms. atf has said that 90% of the firearms seized in mexico and traced come from the united states. the report those published on june of 2009 concurred with their findings. we of the status of the greatest amount of fire arms originated out of the selfless border. -- south was border. there also reap -- getting firearms mother states. mexican officials have seen an increase in the number of explosive devices used in these violent attacks.

they are trying to identify determine where these devices and opponents become part of the region. there are 148 agents dedicated to dealing with a firearm trafficking and 69th investigators responsible for conducting regulatory inspections of licensed gun dealers. we recently sent over 100 additional personnel to the houston field division to support our efforts against the trafficking of fire arms to mexico. atf has received a total of $25 million in new funding in 2009 and in fiscal year 20104 prada gun runner. as a single agency that regulates them, atf has the authority to inspect and examine the records and inventory of licensees.

we will revoke the license of those that are implicit and firearms trafficking. we use revelatory authority to review the records. a key component of 80 of's strategy is to curtail fire our strategy and trace firearms seized in both countries. our analysis of this that it can reveal trends and networks, showing where the fans are being purchased and who is purchasing them. let me share an example. 80 a's analysis of the trees that at least a man living in a u.s. city willing to three different crime scenes and mexico. further investigation uncovered a huge departure of a fourth virus recovered at another crime scene in mexico. he purchased over 100 guns and seven additional firearms within

a short time span using nine different ffl to should is as sorcerous -- distributors as sources. he learned that he was manufacturing guns and his home. he sold over 100 guns alone to an individual who was suspected of being linked to a cartel. leader being pursued in charges are pending. i would like to mention atf's operational presence at the center located in el paso, texas. we operate what is known as the atf gun desk. we identify and analyze all firearms and explosives related data collected from law enforcement and open source. this would include mexican military and also u.s. law enforcement asset operating on both sides of the border.

we will continue their efforts along the southwest border and will harvest are partnerships -- harness our partnerships and will continue to work with ms. can officials to obtain more information to better understand the flow firearms from our country into theirs. on behalf of the men and women ofatf, i thank you for your staff for your support of our work. reading it to me to fight violent crime -- tweaking and need to fight violent crime in our cities and on the border. >> thank you. >> sorry. i am pleased to be here today on behalf of the office of foreign assets control that the treasury department. i will try to compress the

statement as we go through it. we control. our mission is to enforce economic sanctions in support of u.s. foreign policy and national security. in the particular instance in mexico, we are talking but using the tool of the four narcotics designation acts which we passed in 1999. this act has been used in responding to the threats in mexico since the year 2000. the warning that time by president bush. we have continued to use them since that time. . .

access to the u.s. financial commercial system and demobilizing their resources. they are administrative in nature. the person subject to u.s. jurisdiction violating the censures -- sanctions calls for criminal penalties. every year, the president of the united states has added more things to the list.

it is all mexico although they are roughly the% of those who have been named. -- roughly 50% of those who have been named. president obama moved from the june 1 date and acted early on april 15. he named three of the mexican cartels that are currently at the center of much of the violence that is going on. in june, we named others that were not involved in mexico. these are referred as tier one and traffickers. we have been designated the authority to designate for sanctions controlled by or

assisting tier one traffickers. tier 2 or derivative designations included the money launderers, the family members complacent with the trafficking activities, the criminal members of the organization, the transportation cells, the existence of communication cells that make up the financial network of drug trafficking organizations. since 1999, the president has identified 82 tier 1 traffickers. in that same time, we have identified 251 tier 2 designations in mexico. in addition to that, under the program on which the acts were based, which is up or sanctions

against colombian traffickers under another authority, we have also under the colombian program. in recent times named 30 mexican entities or individuals who are also involved in colombia to mexico market to market drug trade. the total over these last several years is 288 persons and entities that have been named for the blocking of their assets -- assets and the prohibition of their activities. i am going to skip through parts of this and just get down to some of the nitty gritty here. i said at the beginning our objective is to identify and expose and isolate and delegitimize, and mobilize, disrupt, dismantle however we can do it the drug-trafficking

organizations. we do this by going after the heads of the organization, keep players in the organization, and perhaps most important, the networks@@@@@@, heavily integrated with the d e a.

i cannot say enough about the work they have done in helping us carry out our program in mexico. at the same time we are doing administration has come into power. we are working with the administration. we continue to do that. i would like to conclude with noting of the act which provides a powerful mechanism for acting against the threats on the u.s. by foreign cartels. in the case of our southern neighbor. there is a growing opportunity for a partnership to combat these organizations.

>> i am going to have to ask you to summarize. >> yes. that is what i am doing right now. we are supporting mexican authorities. >> your five minutes is up. that is what i am really saying. >> i appreciate that can't, and i thank you for the opportunity to be here today. -- i appreciate that hint. and i thank you for the opportunity to be here today. >> thank you so much for that testimony. i would like to finish the panel. we do not know if there are willing to be some procedural votes. i would like to yield myself two minutes. then i will give you 10 minutes.

we will finish up. let me begin by asking -- the average person has difficulty relating to the fact that we have problems in mexico. what do we say to the average person considering what is happening there? had we explain to them our interests and our concerns that >? >> mexico is important to us. we share a common border and immigration issues, trade,

economy, the water we use for irrigation and agriculture. we are closely intertwined. the violence that threatens us greatly because of our integrated economy and the integrated nature of our society. it is not only a source of much of the drugs that are consumed in the united states. instability and south of our border creates problems on a much broader scale. >> let me ask you this -- from the homeland security standpoint, it represents a vulnerability in terms of our borders. we have to be concerned about any smuggling network that introduces contraband on our borders, we have to be concerned about them.

from those reasons, we need to leverage all of our efforts to shut down these networks collectively. >> i appreciate the comments. >> the laundering of the profits. that is something we do not talk about. the requiring identification open at the time of opening a bank account -- they have been opened with less than secure identification. are we doing anything to shut

down that opportunity to have thousands of bank account opened up to where we really do not know who open to those accounts? are we going back and addressing these issues where we are requiring a viable identification to open an account? anyone want to comment on that? >> i am from treasury. i have to admit that i am not in a position to comment on that because we do not deal with that. you can go to any consulates in getting consulate card and get an identification improve to beat you say you are be. they were condoned about -- condoned by the bush should ministration. why have a law if we're not going to apply it to everybody? i am very concerned about anyone who participates in mexico in

our process, and they and their families are going to be suspect. can we talk about this openly? can we talk about how we are training and supply in mexico to win the war on their side before it gets started? >> excellent question. there was concern for having a plan failed. the mexican partners are very vulnerable. they had taken bold action against the cartels. there is a great deal of work going on. there are plans and training for senior level officials.

there is institution building. that is a long-term peace of this, to build and develop so that they take on this problem internally in their own country and break the impunity of these criminal organizations. >> i know my time has expired. you have to hold the identity of the judge, because they not only assassinate judges, the assassinate families. i think we should bring young people in from the central america into the united states, train them here. we keep them here. as soon as you identify them in mexico, they and their family are at risk. as soon as you leave them for long times in that environment,

they are susceptible to influence on the cartels. i think we need to be serious about bringing them into the united states, training them, keeping them here, and allow them to be in mexico when they need to be there doing their jobs. thank you very much. >> we are running out of time here. what do we do to assist you in making certain that you are very successful in your endeavors? what can congress do? >> i appreciate the question. we support the president's budget. resource constraints are an issue.

there has been little spent on the domestic side of this equation to help the u.s. agencies that must work with them. we are doing the best we can to prioritize our resources and work within the existing budget constraints. >> do you want to comment on the lack of jail space? anybody want to comment on that? we are very deficient. >> the dea and ice are getting along now.

we purposely put it together. >> you are not deporting his mother? that is nice. >> that completes the questioning of this panel. i would like to give the members the opportunity to put their opening statements in the record without objection so ordered. let me thank all of the witnesses and members who attended this hearing today. i enter this binder into the record without objection. thank you. this concludes the hearing. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2009]

>> it looks as though we have about eight people here. if -- and we know a couple on their way. if there's no objection, i would ask that we go ahead and proceed with amendments. i understand senator coburn is ready to go with an amendment. and we recognize senator coburn. >> thank you, mr. chairman.

i have amendment number 205. >> okay. just a minute. all right. we need to keep this down so that we can hear senators when they offer their @@@@@@""rrb get the appropriate heart katherization and

management for the heart condition. these are all published studies. we know that children who are medicaid programs and s-chip have a lower rate of immunization than kids that aren't and an increased rate of hospitalization that doesn't have anything to do with their -- their income level or poverty level. we also know that they have a marked increased risk of hospital readmission. when it comes to adults on medicaid, what we know is their outcomes are poorer, they have a marked increase number of complications that is not core lated with the income status or poverty level. we also know that they have an increased hospital readmission. what else do we know? we know that 40% of the primary care physicians in this country won't see a medicaid patient and 65% of the specialists won't. and we're proposing to put 20 million more americans in a

program that has that kind of outcome data. rather than put those same 20 million people into an insurance program that's comparative and effective and equal to what everybody else in this country has. so what this amendment does -- oh, the other thing i didn't mention, you put 20 million more people into medicaid, you're going to increase the cost shifting to about $2,100 for every family from medicaid to the private insurance bill because we don't pay and as we all heard cbo say yesterday, their 500 billion doesn't include any increase score for increasing the payment rates under medicaid. that's without that. so the presumption has to be that our goal, i think, i would hope that our goal is to give

the same kind of quality access to everybody. to try to lower the costs. to try to allow individual choice when you exclude 40% of the physicians, you've not allowed any individual choice. you have eliminated the choice of 40% of them. and that, in fact, we make health care sustainable. what this amendment says is directs that medicaid not be expanded to 150% of the poverty level. because we can find a better way for the same amount of money to cover these people. and you can buy them all for the same amount of money, buy every one of them a health insurance policy that takes the medicaid stamp off of their forehead to give them access to 100% of the physicians in this country, to the same kind of care and outcomes that everybody else gets and not give them low outcome readmission rates higher, complications higher and higher death rate from similar complications. all this is published data.

so why would we put 20 million americans, 7.5% of the population into a program and then say, everybody else, we'll give you a subsidy to do something better than that? why not give these people if we subsidize and put them into the same kind of level program that we have? why would we not do that? so the whole purpose behind this amendment is to say i know we're trying -- we all want to do the same thing. we all want access for everybody and we want affordable care. but i want to tell you, denied access is denied care. poor quality access is poor quality care. and the statistics are overwhelming. now, that's not to say that lots of people who are caring for medicaid people in this country aren't doing a stellar job, because they are, but when you look at the gross numbers, the total numbers, the outcome numbers are terrible, as compared to everybody else.

and as compared to medicare, because when we study heart bypass surgery, as just compared to medicare, not private pay or not insurance pay, they still have a 50% higher death rate. following heart bypass surgery. and you can go down the numbers on all these highly invasive procedures and see a poor outcome and those have been neutralized for living conditions and poverty rates. so the question i raise is if we're going to give and try to get everybody covered in this country, which we admit that we're going to have over 30 million people, if we don't do this, not covered, 37 million, why are we doing it this way? let's give them real care. let's don't limit their care. let's don't put the program between an individual and their choice of physician or choice of hospital. let's give them real care.

it's real straightforward. we're not going to increase medicaid and we will take the money that costs and try to figure out a different program. i can assure you that for $10,000 on average, $10,000, actually, $9,750, we can insure every medicaid person in this country, not raise taxes on anybody. those numbers have been run several times. that does not include the medicare/medicaid dual eligible. that excepts that group out of there. so the whole purpose behind the amendment is saying let's don't kid this 20 million americans and tell them like we tell the native americans in this country we're going to give you health care except we're going to deny it to you, we're going to call it health care but since you can't get access, you don't really have health care. we're saying that on 40% of available physicians in this country. let's not do that. let's give them real health care. let's give them the same thing that everybody else has.

let's not deny their access. let's not deny them the choice of their physician and let's go back and work this over and figure out a way to get this 20 million in a program, an insured program so nobody ever knows they're on medicaid, yet we've still helped them. in fact, they get better care than what they would have gotten in medicaid. their outcomes are better. and ultimately, their costs are lower because for every readmission that we have, when you have a 20% higher readmission rate, you're spending a ton more money, and so in essence, you get what you pay for. the other point i would make about medicaid, medicaid is worse than medicare as far as paying for prevention, and the lower incomes in our country have higher risk. we know that bmis are greater, we know chronic disease is greater, some of that's lifestyle choice. in oklahoma it's smoking.

but what we do know is that if in fact we move this group of people, my proposal, which we're going to get to hear about as an alternative to this title, moves all of them to private insurance and doesn't raise taxes on anybody in america. so my question is why would we want to tell people we're going to give them access to a system that is less than what we have in terms of quality outcomes, availability of service and choice. why shouldn't they have the same choice we have. why shouldn't they have available to them the same outcome, the same quality, the same low readmission rate, the same low complication rate. they should. the answer to that is they should. if in fact we're really sincere about what we want to accomplish. it's kind of a cute amendment, it's not meant to be a cute amendment. i'm very serious with it. i think we can do better for

this 20 million people and i think we ought to consider how to do it. >> mr. bingaman? >> mr. chairman, let me just respond. i obviously would oppose the amendment based on my understanding of what our choices are. as i understood the cbo testimony, it was that it would be more expensive to cover this group of individuals through the private health insurance system than it would through additions to medicaid, increased eligibility for medicaid. it was also my impression that there were -- there was at least some view that there are some individuals, low income individuals, who are more likely to obtain access if they have that access made available to them through medicaid than if

they are required to go out and try to buy private insurance to obtain that coverage. i would just ask david if he could clarify whether my recollection of that testimony from cbo is accurate or not. >> that matches my recollection of their testimony, yes. >> so i think it's a question of, i mean, many of the amendments that have been offered so far have been focused on the fact that we are putting too much money into providing low income, incomes or subsidies to low income individuals and moderate income individuals. that was the thrust of a lot of testimony. i'm told that the way the bill now stands, 43% of the money that's going into subsidies goes

for this group between 150% and 200% of poverty. i assume if you now say okay, we're going to cover everyone below 150% of medicaid or of the federal poverty line with private insurance also, you're talking about i don't know how many hundreds of billions of dollars additional cost in subsidies. i know there's going to be a cost in medicaid expansion as well that will be dealt with in the finance committee, but -- and they'll decide whether those eligibility increases go to 100% or 125% or 133% or 150% or whatever they set it at. that's their jurisdiction, obviously. but i would just say that i strongly believe we're going to wind up spending a lot more

money trying to do it the way the senator from oklahoma's proposing to than the way the bill proposes to. >> mr. chairman? >> could i ask counsel if that is in fact a correct statement, would it not be cheaper for us to put everybody 400% of poverty and below under medicaid? >> i'm sorry, i'm not sure i fully understand the question. would what be cheaper than what? >> senator bingaman just made the statement that for individuals 100% to 150% of poverty, that it was his recollection that it was cheaper to put them under medicaid than it was under the subsidies stated in this bill. my question is this. would it then not be cheaper for us to put everybody under medicaid that we're subsidizing in this bill versus to subsidize them? >> i think if costs were your only consideration, then the answer to that question would be question.

>> but cost is the only consideration that's being applied to the 100% to 150% category because if we applied any other standard quality of care, access to physicians, then one openly has to admit that when you only allow medicaid beneficiaries to see 60% of the medical providers, you have restricted the ability for them to get the quality of care that they need -- >> my understanding -- i'm sorry. >> i mean, those statistics i think have consensus on because there's not been a study that came out with anything different, that 40% of the doctors refused to take medicaid beneficiaries because the reimbursements aren't sufficient for them to stay in practice doing that. >> well, mr. chairman, the real question is we going to let everybody else have something better than we're going to have

these 20 million people. and we're going to say, we're going to say because it costs too much but we're not going to say if you happen to be at 150% or greater, if you're at 151% of poverty, you get a whole different health care system. you get to choose all your doctors, you get to choose what you're going to have, you get better outcomes, you get better quality, you get less hospital readmissions, you get less death after bypass surgery. we have arbitrarily said because you make between 100% and 150% of poverty, you're stuck with a stamp on your forehead that ultimately as a group implies poorer outcomes and poorer care and less -- no choice for 40% of physicians in the country. that's what we're saying. my point is, let's treat them the same. and if it's money, if it's money, then let's take it from the 250% and above and give it

to these people so they get the same kind of care. rather than to say we're going to -- remember, 400% of poverty is $88,000 a year in this country. that's what it is. that's 80% of the people in thi' er health outcomes? it kind of goes back to what

senator sanders has already said. his single payer argument. everybody gets treated the same under senator sanders' argument. everybody. nobody gets an advantage. but we're artificially putting an advantage, a disadvantage, to somebody that's between 100% and 150%. >> mr. chairman, let me just clarify also, my impression is, and i know there are differences in outcome and i don't dispute those, but my impression is that medicaid is different than private insurance in other ways, too. it is tailored to meet the needs of low income populations specifically. it has a richer benefit package than you see in private insurance, generally. it has minimal cost sharing. it does include benefits that are not in traditional private

insurance policies, and those are all reasons why medicaid is appropriate for some of the folks that are receiving that care. >> i would go back to senator burr. let's put everybody 400% and below on medicaid. poll this country and see if people think a medicaid benefit versus their own private health insurance is a better policy. i think we will probably win that won 99.9 to 1. if i may finish. if in fact what senator bingaman alleges is true, let's put everybody in medicaid. the co-pays are nonexistent in some states because here's how co-pay goes. if you can afford it, pay it, but nobody can force you to pay a co-pay under medicaid. so consequently, nobody pays the co-pays. so there is no co-pay, essentially. so again, i would say we are

arbitrarily taking 20 million people and saying here's the coverage you're going to get, we're going to limit your choice of doctor, we're going to limit your choice of options, we're going to limit your choice of facilities, and we're, by doing that, we're going to make sure that a percentage of you have worse outcomes. and the bill that senator burr and i have proposed allows all those people in medicaid to have a private insurance policy, with no medicaid stamp on their forehead, no discrimination as to their choice of doctor, no discrimination as to the choice of the facility, no discrimination as to the choice of them picking the procedures that they want, without raising taxes in this country. so i don't expect anything other than a 13-10 on this.

i understand that. but i think the point, we have to answer this point. why are we saying that this group of people automatically gets shoved down when we could do a subsidy by eliminating somebody from 66 to 88,000 and give it to these people so they can have insurance. if the subsidy's a good deal, why not these people? why not these people? >> i would just respond very briefly that i don't think eliminating the subsidy above 250% of the federal poverty level begins to pay for what the senator is suggesting ought to be done for low income individuals. the subsidy above 250% of poverty accounts for 27% of the cost of this bill. and you take 27% of that subsidy that cbo identified -- >> how much is that, david?

>> 27% -- approximately $200 billion. >> you can't begin to provide -- >> that's $10,000 per individual. yes, we can. yes, we can. $10,000 per individual, a family of four, that's $40,000 that you can buy a health insurance policy for. >> well, the subsidy in the bill for the folks between 150% and 200% of poverty is 43% of that 723 right now. so if you say everybody in the country below 150% of poverty will be added, and get a similar subsidy -- >> no. what i said is not to take this group. this amendment says don't increase from 100% to 150%.

don't expand medicaid. >> no, i understand. >> we have plenty of money. 27% times $700 billion or $600 billion, you know, is a ton of money, shy of -- >> my impression is that the level of medicaid coverage today for adults is pretty darned low. what is that, david, do you know? >> it varies by states. it can vary from a tiny percent of poverty to, you know, in some states, it's as low as 9%, 10% of poverty for childless adults. so it varies by state and varies by category. >> so if you take everybody from those levels up to 150% of poverty, which is what you're saying, and give them private insurance -- >> or give them subsidized insurance. >> right. a subsidy. essentially have the government pay for their coverage just as

we're paying for their coverage from 150% to 200% of poverty. i'm just saying it's going to cost an awful lot more than lopping off the group from 250% to 400% of poverty. it will increase the cost of this bill very substantially. >> senator bingaman, that's my whole point. we have arbitrarily said that if you make 151% of poverty, you're going to get a subsidy and you're not going to fall into this group. that's my whole point. and if in fact we have $624 billion, david, is it? >> just to clarify the math, if 27% of the exchange subsidies in the bill would be $195 billion, assuming, senator, that the cbo response to senator gregg's letter of $500 billion which i don't know the assumptions of, so that's obviously a difference of about $300 billion that you wouldn't have to make that

expansion. >> here's my point, if i can, for a minute. i may be wrong on my numbers. it's 20 into -- yeah, i'm probably wrong on my numbers. but my point remains the same. somebody making $16,000 will get subsidized. somebody making $15,950 won't. they'll get medicaid. i'm saying can we not work to figure out not to expand medicaid and to get these people in here, and to give them a different level of care. that's my point. >> mr. chairman? i want to go at this just a little different direction

because if we expand medicaid to the 150%, we'll increase the health care costs for all the rest of americans, we'll force millions of americans into a worse health care program which we have already been talking about, and we'll drive states into bankruptcy. three parts are all important when we're looking at what level we raise that to. but to the first point, that it's going to raise the cost for all americans, there's a hidden cost here because medicaid routinely pays physicians and hospitals less than their actual costs, and those providers are then forced to shift those costs on to individuals with private health insurance. there's a cost shift. so we're already all paying more for people on medicaid. now we want to expand it so we have a lot more for us to pay for on medicaid, because inadequate reimbursements by the program such as medicaid and medicare are the annual cost of

covering a family of four, increases the rest of our costs by $1,788. that's according to a report issued by actuarial consulting firm milliman, incorporated. so in total underpayments in programs like medicaid and medicare, it actually increases health care costs for everyone else by $89 billion a year. so expanding medicaid means that we're going to hide the costs again, we're going to shift the costs, we're going to put it on the rest of the people, those with private health insurance, and they're not going to have a better plan. medicaid -- i don't run into anybody who says boy, put me under medicaid because that's such a good deal, such a good plan. they know that 40% of the providers won't take medicaid people anymore. so they really are cheated out of getting the health care that they need. and the medical data shows that it isn't just a function of underlying medical problems.

it's a direct consequence of the program's shortcomings. a study that was published in the journal of american college of cardiology found that medicaid patients were 50% more likely to die after coronary artery bypass than patients with private coverage. three other recent reports showed that medicaid patients presenting with heart attacks or unstable angina received cardiac catheterization less often than medicare or private paying patients. so it does shift them into something different. and then there's the part about the states. the states are required to pay a share of medicaid expense. the national average of that is 43%. now, i understand that in the finance bill, they're going to have some way to at least hide that cost during the ten-year window that we're counting this so that we can hold that down to $500 billion in additional costs. but the state budgets are sagging. senator alexander were here, he would make quite a point out of that because he used to have to

balance this medicaid portion that keeps getting thrust off on the states. so unless we can find a way to keep spending down, cut costs on health care, the medicaid spending will double by 2017. that's an average growth rate of 8% a year. it's the fastest growing federal entitlement program that we have. that's at the current level, not at the 150% level. there's no reason to think that we put anything in here that would slow that growth curve down by including more people in it. so we still have the initial problems that we have not solved, but we're talking about putting them in here which of course is a finance committee thing but we haven't followed that rule here anywhere. but that's the only way we get to the 97% coverage. but we have to remember we're shifting costs to other people when we're doing that.

>> mr. chairman? >> senator casey? >> i know dr. coburn, how much you are concerned about kids and you have demonstrated that over a long period of time. the concern that i have with any kind of limitations on the expansion of medicaid or the effect of this bill in not expanding medicaid coverage is my principal concern is kids. that a, you have, i mean, i'm just handed a report here that was actually a 1999 report, the american academy of pediatrics says, and i'm just reading one sentence here but i think it says all of what we need to say. enrolling medicaid eligible uninsured and underinsured children is a major priority of the academy and one of the things they point to, and something that i pointed to weeks ago in terms of our

discussion here, was when it comes to kids, the benefits they get in the early and periodic screening, diagnosis and treatment, which i know you're well familiar with, there may be several things we can point to as being problematic with medicaid, but i think it's irrefutable or as close to that as you can get that kids do better when they get that kind of mandatory coverage and treatment under medicaid than they might in the private market, or in a situation where, because you have not expanded eligibility or expanded outreach, that you're going to miss kids. poor children, in my judgment, i think the evidence shows this, are better protected under medicaid so i can support an expansion of medicaid just based upon that. even though you might point to