[closed captioning provided by espn, inc.] >> next on espnews, is there no stopping the champs? the phils target their tenth straight win in a 13-inning classic against the cubs. and even more help could be on the way. pedro gave himself a vote of confidence. when the phils new could be back in the bigs. the js make a major announcement regarding the future of roy halladay, how it could affect the balance of power in baseball. how roger goodell honors michael vick's future. another commissioner weighs in on the battled qb. next on espnews.

>> it is great to welcome you inside the espnews room. kevin connors, mark morgan a. keeping you current with the latest news, scores and highlights. to be the champs, user got to beat the champs, which has not been easy to do lately. >> that is correct. the phillyings having won nine in a row, include eight 10-1 thumping of the cubs monday night. tuesday night, jimmy rollins, we're showing him to you because he did this in the bottom of the third, breaking a scoreless tie for rich harden, and his first home run in the last 12 games. phillies up 1-0. top of the ninth. tied at 1. tied at 1. and oh, look at the gratuitous bounce to rollins at second. phillies turn the double-play. this one goes extras. we go to the 13 th.

tied at 1, jason werth, off jeff is a mar ja. that is a three-run walkoff homer. the phillies have won ten games in a row for werth, his sixth home run in the month of july. his first career walkoff home run and the phillies 10 straight wins. their longest winning streak since 1991. here's what the herey had to say after the game. >> we've got guyes coming out of the bullpen, throwing 95 all night. so we were able to get to them. >> how about the job of the pitching staff? starting with joe blanton. clarke came in, did one heck ave job. >> those guys have been pitching good all year. the other guys we had to lean on, too. so keep it up. joe pitched a good game. and we've got a great club here, we've just got to keep it going. >> congratulations on your first walkoff. continued success. >> thanks. >> so the phillies are the fifth

world champions to win ten straight games in a season. they also become the first team in 17 years to win the last five games with the all-star break and the first five after it. >> phil he's right-hander faced 54 pitches in four innings in a simulated game. now pedro will throw off the bullpen mound on thursday, if that goes well, he'll have another simulated game. or pitch in a minor league game sunday. after tuesday's performance, martinez graded his effort. >> it's pretty good. basecly, real, real good. >> the first two innings are a little, you know, sluggish a little bit. probably needed a couple more days to settle down. had a little trouble driving. as far as is the physical condition, it's fine.

>> halladay shopping begins july 28. the trade deadline was set tuesday, indicating a deal for halladay is in his words, probably unlikely. baseball's deadline is july 31st, but his deadline is necessary to iron out all facets of the complicated deal. he's asked for the moon and the stars since halladay himself is among the brightest. the cy young winner is 11-3, with a 2.73era. here's peter gammons. >> the most likely destination remains phil phil. now the -- remains ifil fill. now the phillies don't give up he gets a chance to win three consecutive world series. a good chance, sometime around

the 28th. we'll know exactly whether or not that deal will happen. >> all right, yankees opening the night with the share of the division lead. hosting baltimore. bottom try. bases juiced for a-rod. that's got to be a base hit into left. two-run single off rich hill. giving the yankees the 3-2 lead, and they'd not relinquish it for the rest of the night. >> it's robinson, the two-run ride. yankees go on to win it by a final of 6-4. not pictured sergio meet ray who made his first big league start in september of 2007, when five and two-thirds innings, three earned runs. coming back from tommy john surgery, and a 50-game suspension. yankees have enjoyed their time this season. 8 and 3 against baltimore so far on the year. best winning percentage against divisional foes on the year.

mark morgan, june 8 against the yankees. all right. the red sox hoping snap a three-game losing streak, keeping pace with the yankees. bottom 1, no score against the rangers. hank blalock, a two-run single. scores and so does andruw jones, rangers, up 2-0. josh hamilton, that is an r.b.i. single to center. michael young, and the final is 4-2. tommy hunter pickes up the win. hunter, a 1 had the 52era. and the rangers have won 5-7. >> jencks, top #. rays down 2-1. looking to close the door. he loaded the bases and walked pat bureel. jason bartlett scored. and he goes to the bottom.

howell facing swinton, swing and a miss. next batter, jason knicks, swing and a miss. one man on. and gordon beckham, back to howell who nearly fell down. makes the play, and the rays come back, and tampa bay, a team that is expected to make noise here in the second half. they win it by a final of 3-2. and jeff anymoren makes the no decision. the rookie right-hander, clayton richard goes eight innings for the white sox, one earned run seven strikeoutes. >> sources tell chris mortensen and sal paolantonio, that meet a meeting between roger goodell and former quarterback michael vick could take place as early as thursday or friday. sources say a conditional reinstatement appears likely. mortensen explained. >> our sources are telling us that goodell would probably make this decision by next tuesday.

but that would not likely extend beyond next week. the conditional reinstatement aspect of it is interesting. and it's not the first time he'd use this model. goodell would reserve the right to extend or further define vick's indefinite suspension, to go ahead and give him the green light to go to training camp if he signs with an nfl team. >> vick will begin preparing soon for a possible return to the nfl by working out with noted trainer tom shaw. now, if vick doesn't return to the 2348, could he reappear in the united football league which begins play in october? the ufl's commissioner weighs in. >> ezell jibl to play for the orlando team in terms of the designation that we have regionally from teams that fall into the a.f.c.-n.f.c. south that would align him with our orlando team. but we've not made a determination based upon us waiting to see what the status is of his nfl reinstatement.

for us it's a smaller stage on the ufl. and it's intended for players who are not getting the opportunity in the nfl, who see our league as an opportunity to transition back into the nfl. so in keeping with earning your way back on to the nfl field because you've had off the field transgressions or been overlooked, we think those are a number of ways that our league can satisfy some of those cases. each case will be a case by case basis. but there is no question that vick would bring a tremendous amount of exposure to our league as well. >> he wants playing time. so former bills quarterback has signed with the las vegas entry into the ufl. the 28-year-ol8-year-old has st3 gapes for buffalo over the past four seasons. >> much more major league baseball ahead. the astros look to cool off albert pujols as the nl central keeps getting tighter by the day. >> and why reds manager dusty

baker suspended brandon fillp incompetents tuesday. and the surprising response phillips had. >> plus, it's one thing to lose in the present, it's another to lose in the future. what they're saying with regards to top pick, steven strausberg. >> and carlos beers may not be long for utah. and the all-star forward is on

t.a.r.p. but i think you have to give credit where credit is due. i voted against the release of the second to launch which was the only vote on got to have as a member of congress because i didn't feel the accountability

and transparency standards were in place. the fact become house had a framework to allow the senate didn't agree but having said that we were facing a financial systematic financial meltdown last september were we not? >> in the conducting of politics that is an opinion we've heard many times from the flow of credit may still be impeded the fact of the matter is the stability of the financial system, the stress tests on 19 banks for example would seem to suggest some stability has returned to the system lacking as recently as last fall. >> i think we're in a much different situation with last fall and it may well be t.a.r.p. is responsible for that were responsible in part. part of the reason why we do section 3 and talk about all these programs is so that you can have in one place all the difference supports out there that have been in place of which t.a.r.p. is only a small part so

i think that gao has pointed out it is hard to say specifically whether the effect is from t.a.r.p. or a different program. >> it might be fair to say had we not had some intervention of some magnitude such as t.a.r.p. we might have actually faced in much more serious situation. >> who were there at that time including chairman bernanke and former secretary paulson. >> let me ask $300 billion in t.a.r.p. funding was invested directly in systematically important firms to the capitol purchase program, the target investment program and systematically significant failing institution program. the bush administration pretty much opposed giving federal government a voting stake in banks in which the federal government made equity injections. do you think oversight and accountability may have been improved if we had not resisted that? >> i am sorry i missed the last part of the question.

>> i said the bush administration in making the funds available through those programs opposed giving the federal government a stake in banks and which have made equity injections. did we make a mistake in that respect, could oversight accountability have been improved in fact if we had a voting stake in those banks? >> i think oversight and accountability would have been improved if there were more conditions in place and if there were oversight triggering mechanisms that accompanied those conditions. very few conditions put on the initial output of science. whether that condition body don't think that is a policy decision that increase transparency as we look and see what's happened and convince the treasury to give an accounting on the use of funds. i think we can be in a better position to make that evaluation by looking exactly what has happened. that's why we push for transparency that the members of congress can make those determinations. you have all the information available to look back and say

next time we are in a bailout what worked and what didn't work and what was the impact of the decisions. >> let me give an example bank of america now attempting to back out of the federal reserve's freeing financing arrangement. if we had insisted as part of the $118 billion we compton to be a way that one of the tools would have -- would be to have a voting stake in boa would that be helpful from an oversight accountability perspective from your view today? >> is certainly would have an impact on the decision making process. i am not sure voting in particular from our perspective, from sigtarp's perspective, it certainly would make a difference from the treasury perspective to control the actions of the financial institutions. >> thank you. my time is up. >> thank you. i now yield five minutes to the former chair of this could become a gentleman from indiana. >> thank you mr. chairman. i don't want to be redundant because i got here late so i

apologize if i ask questions you already answered but why do you think the treasury department is dismissive of your calculations? >> i don't know. i think that it is -- i hate to try to crawl into the mind of some of the comments that have been made. i think that if they had read the report in total and have read some of the charts and pages they couldn't be singing some of the things they are singing, the decisiveness and the description of numbers and fleeted when all the numbers came from them so i am not sure. >> you haven't had a chance -- i've been told the you have only been able to spend one or two minutes with mr. geithner since he took over; is that right? >> i had several minute meeting with him followed by a larger meeting the public went 45 minutes that included a number of naftali to members of treasury, gao, that was on one occurrence in january. >> did he take into

consideration your positions? >> we didn't have that much time in that meeting. >> did you make some suggestions to him? >> we conveyed where we were late january. at that meeting he announced his adoption of one of the recommendations which was posting t.a.r.p. agreements on the internet so that was progress we saw at that time. >> well, the sigtarp report -- tvd wants to keep any information from the people, is there a deliberate attempt to do that? >> i'm not sure what the attempt is information the taxpayers and members of congress we believe should have as transparent is not being provided. >> you sit here and probably answered this potential federal support could reach up to 23.7. obviously there is some speculation about the liability could reach that amount. >> i think the speculation is it every one of these programs was fully subscribed to that that is the total commitment in

guarantees but i don't think there is speculation why the numbers are. these are numbers provided by the federal government. if every one of these numbers any member of the public could go and and it's all publicly available information. >> if even half of that is correct we have got big problems. >> i think the important caveat we set forth in their report is we don't have 23.7 outstanding right now. right now the number is closer to 3 trillion since the inception of the crisis as we put out in the report the total maximum is 4.7 jolie and but when you add up all the different programs including programs that have been paid back including ones canceled and collateralized programs the total amount of support which is what we are trying to capture this total 23.7 trillion. >> we are concerned about the terrorist problem as one of the top issues the american people are concerned about and i understand sigtarp has recommended the treasury require

its private fund managers to collect information on whether any of their investors are involved in organized crime terrorism or fraud in order to prevent groups from using ppip to guilaume germani, and currently, as currently designed are you confident the obama administration has taken the steps to prevent organized crime and terrorist groups from using ppip money to launder? >> i think they're most of the way but there's more that needs to be done. they are requiring these managers to use the normal procedures in different procedures to screen for that information. we've recommended and they haven't adopted is that the treasury not only receives all the information about all the different investors but also have the unilateral right to kick one out. to use an example let's say a fund manager does all the right diligence but doesn't know that a particular investor is a pending fbi investigation into

them being involved in drug-trafficking organized crime or terrorism. they would accept that individual or institution into the program and wouldn't know any better but we law enforcement partners could run those names and a database, kick something out and reject that investor. we wouldn't necessarily want to tell the ppip manager we have a pending criminal investigation on one of your clients but it's important the treasury have the ability to unilaterally block those folks out of it and that is a recommendation we have made and has now been adopted. >> let me end by asking this, the t.a.r.p. funds that have been allocated by koln chris does not reach the $3 trillion level. what do you think is going to happen? are they going to ask for another bailout? >> congressman, i don't have that crystal ball. >> do you think additional funds will be required to meet their obligations? >> i really can't answer that.

i don't know. i think there is a lot in question what's going to happen to the economy the next three, four, five, six months in the next year and i am not in the position -- >> what would your recommendation be? >> the treasury stated they don't need additional funds, so i think at this point i assume that's where we are. >> the gentleman's time is expired and i now yield to a single member of, congress of an age but years of service. >> thank you very much and happy birthday. this is the beginning of your life mr. barofsky thank you. you have a really important job on behalf of the american people and your staff and we thank you for that. first question what more can we do to help you do your job? >> , chris has been amazingly supportive of our agency since we have begun and we have i think all the necessary tools in place right now. >> your report cannot today most members of congress haven't had a chance to digest it and take

it apart. would you be willing to come back or your staff and help figure out some of the information we feel we still need in an interpretation would you be willing to do that? >> of course my staff will be available to brief your staff and any time this committee or subcommittee is want to hear our testimony we will be available. we are a creation of commerce and it's part of our job to inform the american people through its representatives of everything going on, so of course. >> you have a hot line, 877-sig-2009 come you received 2,000 tips from the american people and were involved in activity they've now reflect on might not have been aboveboard they can report that to you, can't they? >> yes and they should also go to the website www.sigtarp.gov. this is an important aspect have

been the and tips from the hot line. we strongly encourage -- >> some of those steps are good? >> they are very good. >> said the american people have to as well and i think the fact is a free phone number, 877-sig-2009, people ought to use it. and this was network gentry interest knowledge all across america and we need to put together. i can tell in my region of northern ohio mortgage foreclosures are going up, unemployment is coming up and for businesses have told me they can't get credit and these are excellent businesses. the system isn't working at the grass-roots level in ohio. my major, and i voted against the t.a.r.p. and the bailout because i thought it wasn't the right means to resolve the crisis in the mortgage system. we've done that before back in the 80's when we used mark to market accounting we actually

went into the books of troubled institutions using fdic examiners and sec accounting accountants, so we had accountants plus bank examiners and the burden wasn't put on the american people. this was when continental bank be held in italy and the banks in texas went down so when they came up with this concoction of this particular means investing all this power in treasury for converse six weeks before an election i have to tell you i became degree suspicious, and i still am and one of my questions to you is you talk about you have had background in mortgage fraud. have you ever had a background in control fraud? and systemic fraud? >> i don't know how much control fraud or systemic fraud as sort of cases are concerned. i've certainly been involved in securities fraud of some truly

systematically -- would be to a considered systematically significant institutions and looked at some of the accounting frauds. >> i would urge you to look at of course the in the wrong situation, who was hired, the staff you are when to be doing and if people at a high enough level because this goes to institutional structures in our country and ultimately it had international repercussions. but i would urge you to look at the enron situation and think about the kind of staff you might high year in the additional authority is you've been given. >> it's funny you mention that because we recently brought on -- i prosecuted the refco matter and we are bringing on world.

>> bill black of missouri, kansas city, he had worked for the commodity futures corporation back in the early 90's, i don't believe he is for higher but his way of thinking about what went on is very useful and i wish to share that with you. i also want -- to put two issues out. one is warrants, and my deep concern about for instance goldman sachs and their warrant, it is my understanding that the american people have the right to 12.2 million shares of gold according to the numbers i have come and gold and actually has the privilege under the agreement determining when the tax payers have to sell those warrants, so they control the price and timing and i think it's really important of the war -- warrant that you examine these warrant potentials and the timing for the american people because the other day the price

was $1.60 a share and apparently goldman was saying we will sell it for $1.22.9. that difference in yields for injured $50 million if we were to sell today. what if we held it for nine years? nobody's asking those questions and i'm concerned the american people with goldman and other companies get their money back plus. >> we have an ongoing audit in to these issues on the you aren't repurchased process, so that is something pending we are looking at. >> mr. chairman i want to say for the record i don't have time to ask on the 877-sig-2009 warrant -- ppip program, the people involved in inventing the mortgages of prime instrument, then moving it to market, changing from a bond to a security and then creating of the derivative instruments changed the company they were in

but now they are the same people that have gone to the fed and they've gotten these contracts. i think you need to look at people and where they were in the system the last 20 years and what impact that has had on our economy and who is in place in my mind with potential power to cover over some of their own very bad mistakes, and i would urge you to look at those firms closely. thank you. >> the gentleman's time is expired and i now yield to the gentleman from north carolina. >> thank you mr. chairman. the tune of $23,700,000,000,000 worth of taxpayer exposure for the bailout is quite striking and frightening. i appreciate your testimony and frankness and i'm grateful president hasn't fired you like he's fired to other inspector general's. >> me too. >> that's true.

but i do think it is a basic concern the administration is choosing to remove inspectors general because you as well as your colleagues within various inspector general offices across the government to a task of making sure the government accountable to the tax payer and with that i would like to yield to the ranking member. >> i thank and following on that line, you're current capacity i will bring to your attention according to "the wall street journal" some of the private fund managers selected to participate in the ppip may have consulted informally to the obama administration in writing the ppip itself in other words they wrote what they participate on which is not surprising additionally "new york times" reports that black rock ceo lawrence was been chosen as one of the ppip fund managers is a member of larry summers in our sergel program lets him select

fund managers to use 75% of the tax payer money in assets. my question to you is if in fact this and other activities began to look like a cordial relationship where information is being passed, positions are being given because of the friendships of people that go in and out of government are you in the position to investigate that? ..

if we were to cover all the assurances, promises, i'm directing that the government is doing? how many different parts of government? >> if we cannot the institutions i don't have the number at hand position the fdic, federal reserve, pension guaranty, national credit union basically financial services roundtable of ig's to mcavoy can for the seminar on the table and the chairman said vivant increased the size is it fair for us to consider here the fact that when recreated your position recreated a position thinking in terms of a 700 billion in t.a.r.p.. today we're thinking in terms of and into recovery and oversight process that now has dozens or more ig's and loosely associated

not able to a board made their activities and is by design. do you believe that either yourself or it your position or another position should be created that would be the ig's for financial oversight that would be able to bridge all these various ig's and so that, in fact, our systemic risk which is 23 plus $7 trillion over ask cut in french be overseen an accord made by? >> i think the most vital thing that i have a as an inspector general being branded to the inspector general system coming here last december. >> banaa to the inspector private. >> is my independence, it is the most vital thing for inspector general and i think the problem when you have these coalition of ig's is important for us to coordinate with one another and in the t.a.r.p. i informed the councils of a different ig's that touch on t.a.r.p. programs we've made about investigations

and house of committees and that type of coordination is good but we also have a and i will be going on thursday to a regulatory ig, there is some lovely lunch so we are coordinating with each other and i think putting an umbrella over other inspector general that almost invariably a bullet hit on their independence and we are coordinating. >> but in various since we are seeing you it is a princess to be able to give us if you will the results of that accord nations so that we're looking at the entire provincial oversight as we are here today. the me ask you one closing question -- in the case of chrysler it has been reported and i believe this to be true that we have given up $3.8 billion worth of a dieppe -- dip financing we gave them to go through a process and then sold them and took back nothing in return. is that something that needs to be investigated as to whether or

not it was necessary to write off nearly $4 billion of of the last money in a chrysler? >> our report we do tell the members of what has been waived in chrysler and general motors and what has been received on the other side including equity interests here, i think that the facts are what they are on that and certainly open to any fair inquiry as to having add to that situation. >> perhaps it is us to give us the facts. >> certainly something we can look into potentially or one of our oversight partners as an audit as to what that decision making process was given the gentleman's time has expired and i now yield to the gentlewoman from california. >> mr. chairman, i want to say to you on your birthday that yesterday is the pass, tomorrow is the future, but today is a gift from god and that is why it is called the present. happy birthday. >> thank you very much.

>> i want too. >> to the bank of america and thank you so much speak 13 and for being here and being so open with us. according to recent reports bank of america is now trying to avoid paying billions of dollars in fees to the u.s. taxpayers in return for the $118 billion in guarantees they received from the federal government. according to the bank of america the agreement was never signed with the guarantees have been announced as part of the assistance they receive to complete the acquisition of merrill lynch. to you believe that the bank of america benefited from increased investor confidence because of a reception they have it federal incensing other toxic assets? >> i'm reluctant to comment as is by general on an ongoing negotiation between treasury and

bank of america, i think that's the events are they are on that but i think it may be crossing in line as an agency increase our publicly commenting on an ongoing negotiation so respectfully ask your permission not to answer that question. >> we have a former secretary of the chairman in here for five hours last week, it was like trying to unscramble rotten eggs. and it is very frustrating to us. has the treasury department provided to be an explanation for why they did not require bank of america to join the asset guarantee program agreement? >> we haven't gotten that, we have been monitoring the program since it was announced in mid battle little information basically there has been ongoing discussion. we have an audit going out and tracks the fine work of this committee on the bank of america

and its participation in various t.a.r.p. programs which will be presenting in september and i'd be happy to come back to the committee and discuss his findings to the committee if they think that would be helpful. >> yes i would ask the chair to hold a follow-up meeting in due time so that we can follow-up on some of this because you may drive into my next question i wanted to ask. have you discovered any other large scale agreements of the federal government's wish to the federal government has entered into with financial and institutions while filing contrast to force a proper retirement of the taxpayer's investment? so this is a question that you can keep in mind for our follow-up meeting. i do hope it is said that sometime in the very near future. also let me see, in your april quarterly report you noticed the risk of conflicts of interest

and the pollution level of ability is an inherent in the design of the public private investment program, ppip, however, the treasury department has declined to adopt your recommendation to impose an informational barrier between the employee is who do or do not handle ppip funds at the time these funds, the ppip fund managers. apennines, ppip fund managers. can you comment on that or should we wait for a subsequent meeting? >> absolutely we think this is a fundamental deficiency in the current structure of the ppip program. we think it's absolutely essential that there be an informational barrier at the wall that prevents the managers from taking advantage of confidential markets moving information that the fund managers are going to have everything is a problem and

think it's a deficiency in the program. >> thank you and i do believe that treasury department has been willing to impose the measure despite having place similar restrictions on asset managers incomparable federal bailout related programs? >> treasury has provided to us we included in our report a very detailed written description of the edges of occasions and reasonings. in our report we address each and show why we disagree with them. one that has been practical that the design of the program does and it is susceptible soon such and it may very well be that there is a program fundamentally flawed in this design. in such a way in its current structure may be impractical. our response is and that's because it is such an imprint issue for such a variety of reasons that if it is impractical with a current nine fund managers before reflecting days treasury should have

changes criteria are did what was necessary to put in the necessary walls to protect the taxpayer. >> my time is up and mr. chairman are to open our subsequent hearings with mr. barofsky and that we can get these recommendations and get some ideas about how you would assess this standard and functions of such a department. as i thank you nra going to recess? >> no, we are going to continue all the way through to us to give you an update. the house is in recess which makes a good for us and making continue. we are not in recess but the house is in recess so we can do our work. >> thank you mr. chairman. >> i still to the gentleman from california, mr. bilbray. >> thank you mr. chairman, i'd like to join the committee and congratulate you on your birthday and all of us or witnesses to how quickly blew out that can also make and negotiate with mr. waxman for a

term credit for you on that item. [laughter] first of all, i watched this morning, mr. barofsky, the way you were attacked for releasing this committee, and i was like to say to you as one member of this committee thank you for giving us the hard core fax. i disappear member when you get a tax like fats and basically you brought a message to a lot of people didn't want to hear in this town contrary to public believe the ancient egyptian tradition was two always send your best people to give bad news for. because the guys marissa with a good news for sacrifice to thank the gods for the good news. so is to be a credit to you to understand you are attack because you're bringing this up but i want to thank you for that and i'm sure not just this committee by the public at large is going to thank you for your

report to. the hard core faxed to get in trouble. speaking of footprints. the whole concept of looking at black rock and some of the other nine players here where the footprints of the federal government are picking winners in this whole game, do you have any idea and if you don't need to have time i understand because you can get back to us in writing, how did these nine major players get chosen as the winners in this game to be blessed not just by the bureaucracy and the federal government by by all the taxpayers? how did these nine players become the winners in this game as opposed to the other losers pointed out by the former mayor of cleveland and, mr. kucinich? >> the treasury's explanation is they put out applications and

receive john hunter for applications. next up was to remove duplicative applications incomplete and came down to 102. then then apply the criteria which they put on the web site of what they're looking for a in the ideal asset managers and basically those that didn't meet tax cut i think they narrowed the number down 213 and ended a series of interviews and ended up with a final nine. i think those are the numbers and isi members are likely reflected in our report. that is essentially how treasury describe the process came and thank you mr. chairman, i think this report really reinforces the fact that we have entered into a very scary territory, and brave new world or washington decides what happens on wall street and main street and hopefully we can summer in the future of china way to have an exit strategy and remove ourselves from imposing our footprints over the rest of american society and i thank you very much because i think this

report is a dose of reality to make us for together. i yield back mr. chairman. >> thank you very much and i yield five minutes to the gentlewoman from california. >> thank you mr. chairman, and thank you insider general, is a pleasure to have before us in you're short time. you've done an extraordinary time and a thank-you on behalf of the american people. let me first ask this question, did any bank to serve in non participate by returning the survey? >> we had 100% participation. >> very good. should we pass legislation to require the tracking of t.a.r.p. funds since evidently it wasn't required in the actual providing of the money? >> we believe that requiring recipients to tell their use of funds is fundamentally important part of transparency and that is why we think this recommendation is important and as a policy we

don't, we tend not to put the policy recommendations as what congress or the treasury should do. we do say what treasury should thibodaux suggests legislation for congress to us as a policy meant but we certainly do feel it is our obligation to present why we think it is such an important factor of transparency. >> the contracts that the treasury device with the banks for the distribution of t.a.r.p. funds prohibits the use of the money for any purpose? >> different contracts and different programs, there are some restrictions on stock buybacks, and the capital purchase program, on certain restrictions on increasing the level of dividends so there are some restrictions although not many. >> so the fact they would use the money to make investments repay debts or by other banks was all legal under the granting of the t.a.r.p. funds? >> absolutely. >> 23 changes that?

>> as i said that as a policy decision that may soon get main. i think in making that decision we should take a look at both sides of the arguments and part of the rule of transparency as pesto inspector general as we think these are best informed every and transparencies so we can see what happened back into the arguments i've heard of both size of any one of the issues including one of the more controversial says acquisitions and i've heard arguments that is good for the banking system and arguments that it would be inappropriate use of t.a.r.p. funds. >> was sought acquisitions -- swiss banks took the t.a.r.p. money and acquisitions? >> we are going to be publishing necessarily in summary data from each of the responses we received and the reason i say redacted is there is confidential business defamation we would be prohibited by law from making public since we're still on the process of that. i'm reluctant to comment on any specific response that we had and will be making that

information public hopefully within the next 30 days. >> and in terms of the alarms that go off in your head and because of what you have a been able to ascertain their service, what are those alarms that we should be particularly focus on? >> i don't think there is any alarm because when we did this survey we are taking great care not to make any judgments for all the reasons that i've said it. the most alarming thing to me is treasury continues to refuse to adopt this recommendation even airlines of the proof we have in this august. the continue to tell us it is a meaningless survey even though no one from treasury has taken us up on offers to come look of the survey responses and on redacted form, we say take a look of them and see if you think these are meaningless responses that can provide transparency so i think the most alarming to me is the steadfast refusal, the will flow refusal

it to adopt to provide transparency. >> so you are saying that even though you now have over 360 surveys, that provide information on how the t.a.r.p. funds have been news, known from the treasury department has come over to look to this information? >> their refusal to adopt recommendations purely of our audit report, they have not come over. >> i think that is astonishing. i yield back. >> thank you very much. i now yield to congressman souls from illinois. >> thank you mr. chairman, likewise have a birthday on your special day. just know this ain't your election to office in 1983 and someone who is 28 years old and congress, that is a lifetime peridots of thank you for your service. >> i feel it to can i confirm your congressman and the

country, have a birthday. mr. barofsky, i am specifically interested in the exchange in purpose that has occurred under the new administration with the use of t.a.r.p. funds and how that might change your role or add additional responsibilities or how your responsibility as the special inspector general for t.a.r.p. interfaces with our federal government decision to bail out the auto makers, could you speak to that? >> sure, i think in the near term we are addressing that to our audit function and announce an audit of corporate governance which, of course, oversees the fact that we do have a controlling interest in general motors now and minority interest in chrysler financial. of my team is going to be heading out to do try next week to start that process. we are going to be sending representatives of our investigative division as well to make the necessary contacts

and make sure the bridges out including word about our hotline if anyone in these companies those of many misrepresentations there's a whole bunch of reporting required of the federal funds so we will keep a close eye and dedicate the necessary resources to fulfil our oversight role came and so you feel you are being given the latitude in it in terms of allowing your personnel into gm and chrysler to oversee the use of those t.a.r.p. funds. >> i don't anticipate we're going to have a problem. >> okay, the next question is your opinion. when this bill and was sold to congress last fall it was sold on the competitive and on the idea that this money in the words of former treasury secretary hank paulson would be if not all paid back most of it and there was a slim likelihood that we might add to make money on the t.a.r.p. money for the taxpayers. deily the majority will be paid

back? >> i think if you look at the way the program has evolved i think is extremely unlikely we will get $700 billion back. the mark is modification program is $50 billion, there's no anticipation that any of that will come back. that money is paid directly given to market servicers to help convince them to lower mortgage payments and payments that they make on behalf of homeowners so i think it is very unlikely that t.a.r.p. will turn a profit significant on other activities to generate a profit to cover the $50 billion. in addition on the other programs as ranking member noted money has been written off from chrysler. still have to see what happens with equity interests in the company's so certainly possible that more may be retained or turned back over time that maybe even we suspect right now but i think the idea of getting a

dollar for dollar return would be extremely unlikely. >> and then specifically about your conversation and same as earlier about asking basically treasury to detail or basically to collect information from t.a.r.p. principal -- recipients and also to use other taxpayer funds from the tar recipients, in your view why isn't the treasury gets this response that that would be meaningless and really is not necessary. what is your view of that? >> if it was meaningless but i don't understand why treasury does this with respect to bank of america and aig and citigroup, are they including with conditions in the context they believe are meaningless? as hertling help bob. my view is that money is fungible and that is a shrewd concept, but just to use a simple example from my own life

i again direct deposit of my federal pay check and normally i couldn't tell you whether one week whether i buy some groceries whether from one way corps in different weight, it all goes into my checking account, a couple years ago when i won the john marshall warned for my work on the case there was a small cash components and do that was going to be direct deposit into my account and before i get that check and give as go to the money and pay off a piece of my student loan. so when i got its the money given to my account and went to pay office alone so much money is fungible but i kentucky with a great deal of certainty what i did without bonus money that came in. what we see is a fine institutions been able to do the exact same thing. t.a.r.p. was an extreme amount of money and investment and for banks to tell what they did without money, there are responsible companies and budgeting for the fact they're increasing the capital and the fact this is all money that can be verified and tested it.

so much as treasurys compliance system is based on similar self reporting with financial incentives as reporting compliance and treasury comes back and hopefully one day will test. this is no different. the bank says the use the money to acquire another financial institution which i wouldn't have done otherwise, it's certainly a verifiable fact. if they go by an agency mortgage backed securities and say this is what we did with the money we can look at what their total volume of securities for before the t.a.r.p. money and have the written tests in the money so we do believe this is a born part of transparency, and forum for the members of congress american people and a for treasury to know what is going on with the taxpayer funds to i think every much for your testimony and i hope you'll continue to press on team and the time is expired and i now yield five minutes to the gentleman from massachusetts, congressman lynch. >> thank you mr. chairman. mr. barofsky, and thank you for your great torque and i

appreciate the work being done by elizabeth warren as well. conover q2 obviously allows us on the oversight committee to do a lot of our work. let me ask you, one of the programs of the treasury has said that was the assassin guarantee program -- assets guarantee program where treasury will guarantee held by qualifying financial visitations. they have focused mainly on toxic assets purchased by -- held by bank of america and citigroup, i think those of the two big outfits that focus on. have you been able to get information on the specific assets that treasury has acquired a from citibank and bank of america? >> career in the process of putting together an audit that will address that question, we received a letter of request to look into that and right now in the process of putting together

the odd structure that will address this issue of what is in the cash flow and how it came to be and a thorough audit on the entire process and was going out and the citigroup. for bank of america, they indicated to the ceo indicated that they are withdrawing from the program and the contract was never signed and therefore it is not have to lay going to be imposed so we do have a pending audits that we expect to complete in september that addresses bank of america and participation in the t.a.r.p. program so will touch on that there but won't do similar study of the assets given the change of status of the program. >> end of this was instituted in november 2008 and i am wondering what actually was purchased. my question really focuses on a potential exposure, providing a guarantee behind a credit the false log or some complex derivatives. our exposure may be greater and

then went your monetary assessment has been even at $3 trillion, i'm worried about our exposure their. let me share and i certainly anticipate your report in september, that will be great. it let me ask you about german position here. we originally set of the special inspector general for t.a.r.p. in connection with the $700 billion that was allocated in. i did not vote for that, but it went through anyway. a lot of us did not appear to out now originally he riss up to oversee and to save parent the taxpayer money. however, recently and a san the treasury has challenged your authority as an independent oversight body. reportedly treasury has requested an opinion from the

justice department's office of legal counsel. questioning whether here office, in fact, false under treasury's authority. so and can you comment on the treasury's challenge to your independence which you talked about earlier as being so important is integral to your operation there. >> we do think it is potentially an issue that could impair our independence. treasury has sought legal advice from llc and we submit our own submission detail in our position with think it's crystal clear what congress has intends to be an independent agency operating within the treasury department and we are going to wait and see but we think there is a danger that treasury could try to assert to depending on the llc opinion is, the authority to shut down investigations are on its free basing to initiate. we think that would be contrary

to the intent of congress and is something we will let congress know if we get an adverse opinion. i'm pretty confident that a thing this attitude is so clear and intent of congress is so clear. i'm hopeful that llc will see of the right way and i think the only way that makes sense based on how the statute is written and when the state has been that both of the time of enactment and since then and hopefully this issue goes away. i thought this was an unnecessary thing for treasury to do continue to think so. >> if this challenge is diverting the energies of your staff to defend itself then perhaps we in this committee and there are some vehicles that are going through congress right now this is simply amends one of those to clarify that our intent to be independent and conduct oversight and the operations of treasury in connection with this time program. i also for and that's the jury's

decision to challenge to this came in a delay in response to some of your questions regarding the bonus payouts and aig. is that trent? >> that was a timing. i wouldn't go so far to causal relationship because i don't know for sure. it did come up the issue on the eve of an interview that we're going to have with member of treasury general counsel office and executive compensation is to end a 97 certainly was of that time. >> i just want to say that i think it would be a terrible miscarriage of of what congress intent was two have any hamstrung by being put under treasury. riss sali sherrif office to oversee and to protect taxpayer money. and we do not expect you to be

answering to treasury, we expected to be investigating in conducting oversight. >> i yield back the iraqi can't, you don't have any. [laughter] >> thank you reared testimony today. you have made the news with $20.7 trillion announcement in your report. i would like to ask you to unpack that further, that clearly obviously is a full list of potential of taxpayer liability exposure to taxpayer liability. many of us have been operating in the working assumption that that total taxpayer liability was about 12 trillion between the fed and the fdic as well as the treasury department and the other number i thought was significant to said was about

4 trillion in actual expenditures so two questions. let's try to bring this down and categories that are manageable. and tell the american people with that taxpayer liability is located to whom is gifted basically and then under the $4 billion actual expenditures to him that is going and what form. loans and guarantees, by whom to whom? >> you're question and to encapsulates why we have made this entire section of our report because it is obviously some very complicated issues here and in section three of this report read to that break down. the we talk about each of the 3 trillion currently outstanding, the 4.7 trillion and that has been suspended or guaranteeing the in total including money paid back in

cancelled programs. from the initiation of the crisis through june 30th and 90 prius 7 trillion number which is a maximum number every one of the program subscribe to the highest amount coming every guarantee was done and the purpose of this wasn't to make the news and make a splash but we took the fed to programs and that was important to show with the 50 programs or in addition that address the government's support of the financial system and generate is such controversy is just adding up the number who of what the total highest watermark is ready to the 50 programs and that is what is reflective it so it isn't the taxpayer is on the hook, we don't say that and does its assets but that is the maximum and take all the programs initiated since the inception. >> again let's step back and

tries to attain that a little more concisely. this is to endeavor to pages in particular section referring to particular charts that again categorizes this in broad terms of that we can all have a working framework that is usable so we can understand the total liabilities that exists and actually where it is going. >> on page 138i was say any taxpayer or anyone interested that the report is that our web sites www.sigtarp.gov or anyone can download this and see all the facts but if you look a page 130 that has a table with his in time of the incremental financial system support. what we have done it is there is some existing programs i have increasingly haven't been to been to the financial crisis. what we have here is a list the

different sources of with guarantees or support are coming from a list with the current balances, the maximum balance from inception of what the total potential of the support is and is still potential support. as of these entries and this the fdic, treasury, t.a.r.p. and others, you supported subsequently in the report by the other charts so for example if you want to see when the federal reserve portion is two go to the next page and table 3.5 we list of the programs described in the same information, the current balance and the total support related to the crisis. when you add up these to these charts that is where the 23 prints $7 trillion comes from. >> added the 16 trillion is between the federal reserve treasury and the fdic an operating assumption that have

been working off of basically the balance of this year because there was no easily available was well and so this was a significant increase demand that is one of the reasons we've done this and come under some criticism for having done this but every time we will look as if a different newspaper there would be a different paper and it was important to put the time contexts to collect and major numbers and try to do here. >> what level does it go into in terms of actual recipients of the various funds between fdic and treasury as well as fellow reserve? >> because ultimately mrs. t.a.r.p. a contest and given the number went have done is they wanted to paragraph summary. the further information everything is in here is based on publicly available information and stuff we got off the web site to congressional

testimony. getting into the recipient's is a large current many cases what is public a available and beyond our jurisdiction or authority because these are non t.a.r.p. related. >> the gentleman's time has expired and now yield five minutes to the gentleman from massachusetts. >> thank you mr. chairman en thank you mr. barofsky for the work for being here today. i have two lines of questioning -- one results of the term asset backed securities. this is an idea where it ended a triple a rating from two other trading firms and not more than triple a rating from the third firm but we continue to have the rating agencies painted by the issues whose products their rating. you may mention in your report and essentially been by the issues that their rating as a result and then regency has a

high rating to business of the issuer. that is one of the problems that got us where we are and the crises. is to boggle of mines and continue down the path and relying on those as part of the program so you would agree obviously we should be concerned about this but more over which you suggest we should do it as a different methodology for the program and others? >> this is something we have been pushing for severance initial report to congress and it we have some suggestions in the reports. one of our concerns is a race of the bottom. moody's came out, one of the three rating agencies said basically they're losing business because they have been more restrictive than the other two and as a result we haven't investigated that. we think the federal reserve and treasury news to investigate that further. aires is the ultimate issue of a potential base of the bottom and

expanded in the talf atmar is by securities and more rating agencies pick up the number required to get approval and exacerbates the issue of a more rating agencies. i think that when they need to do is two their credit has started to do but to stop relying on rating agencies to do the work, the diligence and the underlying that stands behind these assets back securities. federal reserve is hired to collateral monitor for commercial or is buy securities to come up with his own evaluation as to what the things might be worth an is important to keep pushing in that direction. away from reliance in this process to make sure reared dealing with taxpayer money the the level of protection is higher than what as you correctly state goddess into this in the first place.

>> obviously we are not good two have summit than the other paid and doing this problem. >> i don't think it is not really our policy to advise congress on specific legislation to make the same the legislation to do it would be helpful generally. >> i think it also it is worth noting in the regulatory reform that congress is considering taking a good hard look at whether reforms are for the rating agencies and whether the reforms to the and squarely address the conference of interests that have such disastrous consequences in the financial crisis. kim and the other line has to do with the derivative contracts that aig held with counterparties and financial situation that occurred created a situation with the counter but is created by relating they demanded payment or an additional collateral, aig that lack of liquidity made it that difficult to come up with and

there was a contest between aig and other party is did with that there was money own and how much should be an garrison that was going on on that. before the committee we asked why was he paid 100 percent of the claim. and he said he didn't believe it should have that, in fact, they were saying a consensus among us that and some surprise and he and on tenant that, in fact, in the branch particular that had done a are you looking at that of all and able to tell us what happens that contested claims for over 100%? >> we have a pending audit and that specific issue the credit party agents in the payment of $0.100 to the dollar. i expect that on this will be finalized by september. >> i just have a quick follow-up. are you familiar with the xprl

and are you in a position to help invent this kind of transparency database access to available two agencies that currently are not reporting in a chance brand vashon? >> we are familiar with xprl products. add to my office received a presentation on its ear and it does appear to be a useful type of product to track these types of funds. >> thank you. i yield back mr. chairman. >> i yield to the gentleman from indiana. >> thank you very much and i want to thank congressman i suffer the letter he gave to me. you know, we have mr. parsons -- paulson and bernanke before of the committee a couple of weeks ago in the they have an epidemic of memory loss of a number of issues and mr. paulson was working closely with mr. diner

and the secretary of treasury on a number of issues as well as mr. bernanke end of this whole pattern it really kind of bothers me about how they have. two keep the congress of the u.s. because i can't remember who did what on the maryland steel and the bank of america and how secretary geithner has worked with paulson and i don't see how anybody can get anything out of this letter that we received other than putting the hammer to you. >> off. you say here that on april april 15th mr. knight wrote to the justice a permanent attaching a copy troubled asset relief program and they're asking whether or not it is to fall under the control of the treasury department and it is clear that everybody should be independent because that is what your job is, but then there was

some kind of correspondence between new ended the department of justice and then ask you to read tax a portion of the e-mail exchange brummer o llc. >> i think all of the information that our correspondents -- the response from llc to us which then generated additional response from treasury that we rest to redact that. >> and wonder then ask you to redact can add the sifted reason from llc was the information was indicative of other current thinking on an uncompleted matter. therefore always put some information and so they came to a final resolution. >> i was chairman of this committee for six years and worked on a number of occasions as a matter of fans and they didn't give any information whatsoever thou have to be

redacted. and the reason they did this was because until they made a final determination they didn't want any information out there so when they sent to this information and tell you it has to be redacted and it seems to me that that is, once again, working with the treasury department to keep the hammer on you and hold things in advance so that you'll walk the walk. you have any comment on that? >> i really can't on cordially,. >> and think this is such a blatant attempt to intimidate you and i'm so happy you contacted ranking member is senator grassley because what it has done is eliminate this issue so that these people who are trying to slow you down and out of this information dinow the public domain will be threatened by this. the only thing i will admonish

you is to walk you're back because i am to send you are subject to the president and news services pleasures so i think there should be some reason and they could come up with down the road that would get replaced but in the meantime i want to congratulate you for having the intestinal fortitude and give you other terminology and public to stand up for what to believe in. i think it is great and i'm glad to send this letter, i thank you reymont and i can assure you and the committee that i will not spend a single moment or eight about my job security for my future two continue to do the job it hired to do which is bring the complete transparency as possible and investigate. >> i have not met to be before but i like a man. [laughter] >> i've had a tough couple days so i appreciate that. >> one follow-up question, much has been some of this 23.7 trillion plus or minus a trillion here or there but

because constitutionally we must authorize and appropriate moneys wouldn't be fair to say that we need to have the transparency so we can anticipate in each fiscal year the likely outlays of additional money where risk is a beginning to become recognized by accident that be something that our committee has to be able to access and allow the producers if those funds available presumably because additional losses may still occur in the number of markets including the housing markets? >> i have to confess i don't have intimate knowledge of their argentine authorities and go by that of reserve in authorizing this maximum amounts of what congress role is for authorizing them so i'm not really sure. >> assuming we believe that currently, in our opinion, on beginning that information assuming that we believe we

should appropriate monies in the years in which the loss occurs? >> looking back we have done a bus to bring that information to your attention to the best we can based on publicly available information. >> thank you mr. chairman. >> i like you to do it. in the me just say that you also send -- i don't thank you have a problem because the president has said he is far transparency. every conversation i've never had he talked about the importance of transparency so to me you should be in good shape. >> thank you and having a birthday. >> thank you, happy birthday also. efrain this is making me even older. [laughter] >> mr. barofsky, thank you for being. an accord to your insight on

questions that are asked frequently and as there is a first congressional district. i did not agree with the original press of t.a.r.p. and then still troubled by some results that as a. one of the most important reasons for the legislation was to provide liquidity for businesses and home owners as the ultimate benefit of shoring up the banks and investment houses. we are a single large banks and investment houses experiencing, arizona profits but no relaxation of credit, no significant increase in liquidity. why hasn't liquidity been restored just of small presses is an individual consumers as a result of stabilizing these and do you find that too much of the monies and profits are invested

in treasury then firmed on a? >> i think the lack of transparency and the familiar to adopt our recommendations regarding recurring the recipients to report on the use of funds makes in san that almost impossible. until we know with some degree of precision exactly how the financial institutions are using the money is hard to answer the question of why there are not using to increase lending because we don't know what they are doing. and our survey are audit report which was their responses to your survey we've got answers that lead to some conclusions but the survey, of course, was from a certain point in time. basically march of this year. the base the responded 75 percent said they have not allocated or spend all other t.a.r.p. funds. since the time of the survey another 200 institutions received in t.a.r.p. it money including insurance companies which i don't think anyone and specs will be using the money is

part of their banking subsidiaries that entitled to receive t.a.r.p. funds so is the will to answer of why then not increasing lending if we don't know what they are doing with the money and the only way we can get that on a more timely regular basis is a treasury and dogs are recommendation and commits itself in deed as well as in word. >> one transparency. >> in your crystal ball do you suspect there are perhaps paying out lucrative bonuses were paying off debt? what do you think is happening? >> based on what we saw from my snapshot back in march there are simply using it to pay off debts. in different types of debt is some pain down lines of credit with the federal reserve tarpaulins and was smaller institution reported to us that in substance planning on using the t.a.r.p. funding for one purpose and to increase lending, but revenue of the time the other t.a.r.p. funds the got a

lot of credit that had with another financial institution called in and ended up using all of the t.a.r.p. funds to make good on the money they borrow from another planet to institution and a have had trouble paying back but for the t.a.r.p. funds so we get questions from the dates of our survey as to have been. >> on another subject how do you see the private program of a aig, the systemically significant failing institution program is having worked to the advantages of the taxpayers? aig is a the only company to receive funds under this program. we own 80% that have sales of the most bible assets which are on the insurance side of the companies, why do we do this? >> that is a cousin and think is better address the treasury then to myself. is hard to calculate, to go into

that way back machine and none said they what would have happened if we have not been allowed to the treasury and with the implications would have been serving from some post prospective and those responsible for the bailout and aig were of the consequences would have been disastrous but is trying to really know to know exactly what would happen and will continue to do is to try to take transparency to that decision making progress to what is happening over there and blow continue to do so? >> you think by the recipients of this low dollar deal? moi. >> crisping and assets? they have to disclose some of the sale of assets and it included art in our report to camp and thank you so much for your answer is.

>> thank you very much, mr. chairman, and let me echo my colleagues in this era have a birthday as well mr. barofsky, the carrier testimony. i share the opinion of many of the members of the committee that he should impacts the independent and that's there are challenges with treasury we should certainly be addressing those because the value independence and value the information you provided to de. i like many of my colleagues am astonished by the potential exposure you have identified, but i guess i take a different view. i go to how this may have been prevented and am astonished that so few people were willing to look to the inaction and the failure of regulation to work properly to prevent the almost

collapse of our financial markets. no light at the time was of serving in congress last fall when the market's collapse but has set the time i would have reluctantly supported the t.a.r.p. if only to stabilize the financial institutions and subsequently bowed against because it didn't include the conditions on transparency that some of my colleagues have talked about today. but i go back and i go back to the failure of congress, the failure of previous administrations to mortgage bank securities, to regulate ceos and regulate cl0, and while at the same time the banking industry was suggesting the regulated industry in and the country and there wasn't any need for us to move toward a minute of the same post that are complaining about the exposure also working

against with regulatory firm and financial services so i am struck by most accounts that have been made by some of my colleagues, but specifically what i would like to pursue a line of questioning regarding some of the toxic assets and evaluation. there was an article of that i think was very interesting and they talked about collateralized debt obligation and the fact this was related to the moors bank securities which allows predatory lending to happen. but trying to pull all of these assets the parts and value them in any real way is a herculean task because there are so that is in terms of collateral and capital that is behind them. so how do you from your prospective and looking at the use toxic assets, how do you believe we can best value them?

>> and things that i to read in "the wall street journal" article and the pulling apart of the cdl square and i think it was a great illustration of the problem of the complex securities and his talents that congress has been creating the type of regulatory reform that will ensure oversight so that these types of products don't drink the damaged that they did. i think the valuation issue is a challenge a one and think it is one aphorists and since has got to be done in by the treasury itself to the extent that they have these assets on their books whether through asset guaranty of citigroup, whether in its own collection of assets. it's a complicated structure and then it's a great degree of expertise and a great degree of skepticism and also have to see what happens with the other programs with these complex

start coming across and being in the actual purchase programs or other t.a.r.p. programs that will come to the front two. >> i realize your function is evaluating the way in which t.a.r.p. moneys are being spent but as you look at it and look at the causes of this financial collapse, can you offer advice as to moving foreign? the type of regulation and the thai province we should be looking to regulate as we move toward? >> i think that is outside my lane, i would be uncomfortable offering an opinion on that because when it gets to the core issues of regulatory reform it is fair or us to identify some areas of the credit rating agencies because we are seeing that that when you get into the nuts and bolts of regulatory reform and would be uncomfortable offering that. >> is a fair to say much of their exposure you identified is due to a failure to regulate

appropriately certain products? >> i don't think that short of an audit products or short of a more thorough examination of these causes of would feel comfortable offering that opinion. >> thank you very much. i yield to the ranking member from california kim and thank you mr. chairman and i am going to close, i realize there is a second round but on our side we won't be asking, we think mr. barofsky in -- we will eliminate that. the fact is that you have been very generous with their time and given us a lot of food for thought. i want to close briefly, chris all by thinking that chairman and secondly by asking the chairman with the consider bringing the treasury secretary here to a next close a loop on a lot of a series of transparency that i think treasury deserves an opportunity to tell us from their perspective why they have not yet implemented it these.

.. bridget loves of a bureaucratic nightmare that always nexus between a president, like president obama who's promised transparency and the congress who begs for transparency, viag who helped produce it and the

bureaucracy that stands in the way. so you have our support on a bipartisan basis you will continue to have our support because we agree with you that transparency is the only former disinfectant that's going to prevent government waste. with that i thank you again for the series of good oversight hearings and i thank the witness and look forward to seeing you in about 90 days. >> i now recognize the gentleman from ohio. >> thank you, mr. chairman and i appreciate your endurance mr. barofsky. i want to state for the record of this member and many people she represents believe this is the largest transfer of wealth in history that we've ever seen. from those whose equity has been moved to wall street institutions that now have become even more concentrated. as a result of what has occurred

with the meltdown in the financial sector. and i just want to again shared information. it's interesting to me some of the companies like black rock involved in the resolution are headed by individuals heavily involved formerly went ahead of other companies and inventing the sub prime instrument itself and we don't know where they did all of their handiwork necessarily but i find it very interesting that then now the federal government rewards them in very long transparent process these and i've said to myself could they be handling paper of the invented in traffic ten years ago or 15 years ago. the derivative instrument itself i understand was heavily influenced by a gentleman that is now the chairman of the pnc in that hour, know how you live received a notice our certificate of deposit its bid with national city bank is going

to be transferred to pnc. i don't want pnc owning our assets. that isn't my choice and yet i see this having an impact. ohio now is only left with three money-center banks. national city is disappearing and i see this power gravitating to the very people who caused this problem and the first place. one of my questions has to do with freddie mac's and i could continue on fannie mae and fha because what's happened is all the bad paper is being dumped on the tax payer as you've noted in your report in different ways putting it here and here in the federal government so it's not easily traceable but if one looks at freddie mac which is central in terms of being a dumpster else well as an enabler during the 1990's let me ask you why when i looked in your report i couldn't find the word freddie

mac we have freddie mac and fannie mae been hidden behind the walls of all is at the federal reserve? to you have any role at all in on winding role of kody and all of this going back into the 90's? >> we don't have jurisdiction over freddie mac in any aspect other than the fact treasury has hired them as a financial agent to help to compliance with the mortgage modification program but otherwise because other than that since freddie mac is not involved in t.a.r.p. specifically we don't of jurisdiction. >> i don't know if you're aware of this or if the public is aware but freddie mac had over $500 million of fines placed on it already for fraudulent activity and the fact is that they had during the heyday of their nefarious activity blown up profits over 30% on their

books. the underestimated risk and they've begun to pay a heavy price for that. i am a very interested in your opinion as an auditor do you find it rather interesting that we can to get at the paper even though the american people are of the recipient of all the mistakes? our mortgages are not being worked out of the local level. jpmorgan chase is in my district court in its fifth affiliate, plymouth, and yet they can dump their paper and theoretically a lot of it moves through freddie and fannie coming in to get behind these walls of the fed we can't get at bat and sallai singing to myself as a look of a capable individual like yourself and your staff you are not going to get at the truth because they decided the truth in such a way that you can never tell us the whole. how do you concern to that concern? how do we get the whole truth?

>> i think it should be no surprise at this point that i agree wholeheartedly more transparency is better than less, that the more information that is out there for policymakers and the american people, the better. because it isn't related to a t.a.r.p. program is outside of our work scope and jurisdiction. >> dorcy and is unrelated yet the fed has hired black rock to help resolve means well, and let me quote from "the washington post" bird mac manipulation caused it to understate profit by 30.5% in 2000, and 42.9% in 2002 and to overstate profits by 23.9% in 2001. these manipulations include transactions that shifted windfall -- expectations.

my point is i don't see how we can know the whole truth and this troubles me mr. chairman because even the report today, the sigtarp report today there's some agencies it's like a divvied up into a thousand pieces like they did a terrific if so that we can never know the truth. how do we get our arms around the whole? can you think about that? >> the question is best addressed to the inspector general for the federal reserve as well as inspector general for, excuse me, if h. faf who oversees the conservatorship of frannie and freddie. they would help you find the answers. >> from the federal government's standpoint are you disallowed from working together? >> no, no, no, we do coordinate together. both those inspector general's are part of my t.a.r.p. ing

council because they didn't pack the t.a.r.p. and i am part of the council and we do talk and to coordinate with one another where the interests intersect. here this is sort of apart from the t.a.r.p. programs i don't have an ability to go in and look at that information. >> the gentleman's time is expired but she makes a great case as to why the inspector general should have an independent and i agree when there's 23 weeks $7 trillion at stake i think it's important that we make certain that there are independent. let me thank you, mr. barofsky for your testimony and i appreciate the interest of the members who attended today's hearing. earnings at the largest bank and the bank holding companies such as jpmorgan, goldman sachs are up, get lending remains down. it is unacceptable profits go up while landing goes down. the taxpayers have invested very

large amounts of money in these banks. but what have we gotten in return? at remains unclear. the taxpayers deserve to know how their tax dollars are being spent. the treasury department needs to publish full and detailed information on the use of t.a.r.p. funds and published the portfolio on a monthly basis. they have that information and they should make it public. moreover, treasury also requires the largest banks to file monthly reports showing the dollar value of the new lending. that should be made public also. if treasury does not put this information up on its website this committee will come and treasury does not turn over this information voluntarily, secretary geithner will be brought before the committee to explain why not.

what we have heard today convinces me that one of the best things congress did when they create t.a.r.p. was to also create the inspector general to oversee t.a.r.p. spending. i can now understand why the treasury department would like to rein in sigtarp, but we are all going to let that happen. you heard from the amendments on the committee today in terms of their commitment. again i thank our witness, mr. barofsky. finally, please let the record demonstrate my submission of a binder with documents related to this hearing. without objection i enter this winder into the kennedy records and without objection, the committee stands adjourned. thank you, mr. barofsky, for your time and information you have shared with us. the committee is adjourned. >> thank you, mr. chairman.

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although a senate committee had earlier included money for the f-22 fighter plane the senate voted to 40 today to cut nearly $2 billion for the planes. this portion of the debate is one hour. >> madame president, as we consider the future of the f-22 program it's important to remember the most fundamental goal we have for the defense industry and the way that we have met that goal for many decades, and that is to give our men and women in uniform technology and equipment that is far superior to the enemy so they can protect themselves and defend the nation. it's been a permission from the time of the wright brothers to the times of the era of stealth

technology. but maintaining that superiority has depended on an important partnership, and that is a partnership between the pentagon who determines the needs of the war fighters and industry who do the research and design and build the next generation of military equipment that meet those needs. it is a partnership vital to our military strength, to our economy and to the health of our domestic industrial base. unfortunately it's also a partnership being weakened by amendments like the one we are considering today. madam president instead of treating military procurement like the partnership is, this amendment envisions it as a one-way street. this amendment cancels a vital military program without adequate fault of the men and women we rely on to design and build the equipment our war fighters depend on.

without any consideration of the fact if we and the f-22 program we are cutting a link in technology will not be able to repair overnight. as many of you know this is not the first time i've come to the floor to talk about the erosion of the nation's industrial base. it likely won't be the last, and that's because protecting our domestic base is and about just one company or one program or one state or one industry. this is about our nation's economic stability, about our future military capability and about the ability to maintain skilled family wage jobs in communities throughout the country. now just last week the aerospace industry association issued a major report that finds the pentagon failed to consider industrial affect when choosing strategies.

that report urged the pentagon to take into account the impact decisions like the one to start production of the f-22 take on our manufacturing base. the report also noted the manufacturing base was not taken into account and passed quadrennial defense reviews and when secretary gates unveiled this program cuts in april he specifically said defense industry jobs are not a factor in his decisions. madam president, as our country faces too difficult but not unrelated challenges safeguarding the country and dangerous world and rebuilding its faltering economy ignoring the needs of our industrial base shouldn't be an option. whether it is the scientists designing the next generation of military satellites or the engineers improving radar systems or the machinists assembling warplanes these industries and workers are one

of our greatest strategic assets. what if they all of a sudden were not available? what if we made budgetary and policy decisions that didn't take into account the needs of making sure we have a strong work force, domestic work force in the country? actually is happening today. and we need to be clear about the ramifications like the end and we are considering today. because once we get up on producing this technology, once we say certain research and development is no longer needed we lose that. we'd lose it and cannot just rebuild it overnight. so today, as we consider a critical tool for the future of the military across the globe, we have to also remember the partnership we have built with our industrial base because unless we consider the needs of that partnership we are not only

going to continue to lose best pay and american jobs, we are going to lose the backbone of our military might, supporting continued f-22 production will help defend against potential threats, protect family wage jobs and most importantly, madame president, it will preserve our domestic base. that's important because we don't know what conflict will come in the future. we don't know what our challenges will be ten or 15 or 20 or 30 years from now. if we lose our engineering or production base and face a challenge in the future and go back to rebuild that it will never happen. we will be at a disadvantage and but for future conflict we might face. so madame president, i urge our colleagues to think about long-term impact of this decision. i oppose the amendment and look forward to further debate. thank you madam president.

i yield the floor. >> madame president, how much time remains on our website? >> the proponents of 35 and a half minutes. the opponents have 18 and a half minutes. >> i would yield to the senate of arizona so much time as he requires. >> the senator from arizona. >> thank you. i again want to thank my friend, the distinguished german for proposing this amendment -- inaudible >> thank you, chairman, for being the sponsor of this amendment and it is a privilege to work with him on this as well as many other issues. this amendment is probably the most impact full amendment that i have seen in this body on

almost any issue you much less the issue of defense. and it really boils down to whether we are going to continue the business as usual of once a weapon system gets into full production it never dies or whether we are going to take the necessary steps to really reform the acquisition process in this country. the f-22 in itself is $1.75 billion. that is an impressive number anyplace outside the beltway. but more importantly than that, it is a signal that we are all going to continue to build weapons systems plaid with cost overruns that outlive their requirements for defending of this nation and very frankly starts to gain control of the

acquisition process which is completely out of control. there is the government accountability office recently proposed concluded that there were over $295 billion in cost overruns and the last several years, $295 billion in cost overruns. now, recently a close friend of mine and a great leader and former secretary of the navy wrote an article in "the wall street journal" and he stated, quote, when john mccain was shot down over hanoi 1967, he was flying ace guy hoc that jet cost $860,000. by the way, i didn't know that

cost to the taxpayers i had caused, but the jet cost $860,000, inflation has risen by 700% since then so mr. mccain's 84 cost $1.6 million in 2008. hawaii and a generous factor of the fee for technological improvements the price for a 2008 navy f-18 fighter should be $18 million instead we are paying about $90 million for each fighter. as a result the navy cannot buy sufficient numbers. this is disarmament. the situation is worse he goes on to write, the situation is worse in the air force. then secretary of the navy says in 1983i was in the pentagon meeting that launched the f-22 tractor. the plan was to buy 648 jets

beginning in 1996 for $60 million each. that was $1,983. now they cost 350, and the obama budget caps the program at 187 jets. then he ads at least they are safe from cyberattack since no one in china knows how to program the 83 ibm software that runs them and then goes on to say other problems including navy shipbuilding fiascoes etc., etc., the army future combat system, which was meant to read with the entire army and has had a 400% cost overrun and the new air force weather satellite with a similar cost overrun. so, eight days out of control i say to my colleagues i will match my commitment to equipping them and and women in the military with anyone in this

body but it's got to stop and this vote, this vote on them 22 will determine whether its business as usual with earmarking pork-barrel business of dollars which has bred corruption. we have former members of the united states converse residing in federal prison, or whether we are going to finally get it under control and who better frankly to be a spokesperson in my view than our secretary of defense. i know of no secretary defense. i've known and admired several and i know of no 1i admire more than secretary gates. he gave a very important speech yesterday on july 16th at the economic club of chicago. a remarkable speech. i would hope all of my colleagues would have the chance to read it. and in part of it he says about the problems we are having in defense spending first there is

the congress which is understandably concerned especially in these tough economic times about protecting jobs and certain states and congressional districts. there's the defense and aerospace industry which has an obvious financial stake in the survival and growth of these programs and there is the institutional military itself within the pentagon and expressed through influential network of retired generals and admirals some of whom are paid consultants to the defense industry and some who often are quoted as experts in the news media. as the result, secretary gates goes on to say, many past attempts by my predecessor to and feeling or unnecessary programs went by the wayside. nonetheless, i determined and a triumph of hope over experience and the president agreed and i want to emphasize my strong support and appreciation for the president's stand on this issue, the president agreed given the

urgency and the war we are in the daunting will security environment we will inhabit for decades to come and the country's economic problems we simply cannot afford to move ahead with business as usual. and then later on he talks about the f-22. air superiority missile defense, to areas where the budget has attracted the most criticism provide case studies. let me start with controversy over the f-22 fighter jet. we had to consider preparing for potential conventional state on state conflict what is the right mix of the most advanced fighter aircraft and other weapons to deal with the known projected threats to the u.s. air supremacy for example we now have on an aerial vehicles that can simultaneously perform intelligence reconnaissance etc. and the president's budget would buy 48 of the most advanced uav speed we also took into consideration the capability of

the newest and combat aircraft program the stealth of 35 joined strike fighter, f35 is ten to 15 years knew were than the f-22 and he goes on to say about how important the f35 days and then says the f-22 is clearly a capability we need. and it silver bullet solution for one or two potential scenarios. specifically the defeat of a highly advanced enemy fighter fleet. the f-22 to be blunt doesn't make much sense anyplace else in the spectrum of conflict. maybe, i ask my colleagues, would you ask yourselves why the f-22 has never flown over iraq or afghanistan it's been in production for nearly five years. it's never flown over iraq or afghanistan and i want to emphasize i think it is an important fighter. we are building 187 of them. the question before this body is whether we continue to build

more. whether we continue to build more, or the f35, joint strike fighter which goes to the marine corps, navy and air force is a weapons system we need to balance our entire capability of manned aircraft. and i would ask my colleagues since the f-22 was on the drawing boards and moved into production will get the advancement and unmanned aerial vehicles unmanned aerial vehicles have been performing in magnificent jobs both in iraq and afghanistan have been a critical element sometimes on the battlefields. so, and this president's budget understands that and kids extreme priority to that. in light of these factors,

sector ann gates goes on to say, and with support of air force leadership and i concluded 183 program of records since 2005 plus four more at supplemental was a sufficient number of f-22 as and recommended as such to the president. reaction from parts of washington has been predictable substantive criticism is completing the f-22 program means we are risking the future of u.s. air supremacy to assess this risk is worth looking at real world potential threat and assessing the capabilities of other countries and the fact is that in the view of the president of the of the air force and most any objective observer of the military seem to believe the f-22 is important.

we need to have what we have but it is now time to move on to the compelling needs we have to have in order to win the war in afghanistan, continue our success in iraq and put our funds into that kind of equipment and weapon systems? or are we going to continue -- and i want to say i'm in good sympathy with the senator from georgia and other senator whose have come to the floor. i understand the sincerity of their views and respect them. i also point out, though, to argue that we should build weapon systems in the name of jobs is not -- not -- what we should be about. we should be about procuring and building the best weapon systems

building the best weapon systems procuring and building the best weapon systems to ensure our national security and make ms equip the men and women who are in harm's way all around the world today so i understand the economic impact particularly in the sun-times. my sympathy goes out to the committees that are dependent on the contracts with this f-22 aircraft. all i can say to them is that we will do everything we can to help you and your families and make the adjustments and may continue to increase spending on defense and we hope that we will be able to provide you with the necessary jobs in manufacturing there would be devoted to what we have ascertained as a national the offense weapons systems pick chairman priorities. so i say with sympathy to my house use during deeply concerned about the economic times, but this is not the way

to provide jobs. our obligation is to amend this nation. some madam president, i think that this amendment is overdue and i think it will be a significant one amendment as i said before whether we will get our priorities straight and this into our esteemed secretary of defense and president and our chairman of the joint chiefs of staff and other military evaders in whose hands we just make tough decisions. i and a standard file decision is. congress, but i also don't think we should dismiss the arguments that have been named the i think one of the finest men to ever serve this country and that the secretary of defense case. madam president, i yield the floor.

>> the center of new tom. >> and during his july 16th -- >> coup yields time to the center? the senator from georgia. >> how much time do you need cranks'. >> probably seven minutes. >> would be happy to yield seven minutes. >> the senator from utah. >> madam president, i think a great deal of secretary mike aids myself. during his july 16th address the secateurs evidence robert gates of the military needed maximum versatility to bring to bear a wide range of armed conflicts of last january he argued that a military is preparing for a simple expansion included the insurgents taepo con rep. facing in iraq and afghanistan as well as large scale threats from north korea and iran. i cannot agree more with secretary grades however design

nation the second of the hard-earned lessons of how to find and insurgency and as a province seems poised to make similar errors by limiting our capability to the fate there a threat of today and tomorrow. integrated air defense system. this advance system is composed and extended range russian service to air such as the s300 events fighters such as the as you 30 rich have been so large numbers to china and india. together this sissons may penetrating airspace extremely difficult if not deadly aircraft like in the f-22 stealth technology for sustain supersonic been appearing in is in these capabilities enable the rapid to have the capability to conduct stealth operations at a time they are night the secretary gets argues for reducing production of the f-22 auction of 100 and seven built because we will not is of the pentagon refers to as a mere appear adversary for the

foreseeable future. and as a coronation i hope he is right however ... davis is a critical point. and vance integrated air defense systems where comparably inexpensive and readily available by nations such as the wrong with his insistence on developing a bare weapons rebel history provides ample examples of that type of use of integrated air defense systems and nations that i the resources to be considered a near. at a certain and the u.s.. has retired lieutenant-general michael dunne recently noticed with vietnam vet and its territory during the vietnam war with what at the time was an immense air defense system. this comprised of service to air missiles and was able to shoot down 2,440 american aircraft in 1970 war between israel and asia his and other examples. bunning from their integrated air defense umbrella and beverages forces ribbons to

initially make civic and territorial gain while the israeli air force base serious losses. only when the egyptians advanced beyond the range of their service to air missiles umbrella was the israeli air force able to find more info it is significant blow. him more contemporary example is hola 1797 when 17i talk to the serbians who are not equipped with the latest evidence system. despite such examples some argue additional aptitudes are not necessary since unmanned aerial vehicles which are still in development will play an increasingly vital role in destroying critical ground targets. this is true for threats on the ground but i am unaware of any plans to deploy an existing next generation of chinese jet fighters which will be hunting these. from the forces could be confronted with the next-generation russian and

chinese fighters sooner and there have been numerous amid reports the russian government is developing in itself a aircraft presumably to counter the f-22. it this aircraft is being developed jointly with the indian government an additional media sources cite china's development of a similar twin engine still aircraft and some argue that the f-35 de can tackle those threats and if a new generation of advanced aircraft. while it is a very capable stealth aircraft that was designed to complement and not replace. in the night is the f-35 is neither as cable a fighter, is delving as the f-22 and is not have one can be upgraded to use the super presentence increasingly needed in today's sell operations. remember the f-22 is a nascar race of this era dominance team.

thereafter will punch a hole in an enemy's defenses quickly dispatching into honduran air the striking of the most important ground targets. the joint strike fighter is a ragged s.u.v. impressible not as renewable are capable of sustained speed the etheridge rival exploit the hole of my attacking additional targets and directly support our ground forces. this is not to say it is not a highly capable stealthy aircraft but its role is to supplement the f-22 the substitute for into. lowy by utilizing this rings of both aircraft and reassure era dominance of the next four years and for the more as the f-22 is such a boondoggle when you're allies such as japan and australia want to spend billions to purchase the aircraft? why this australia for instance plan to purchase up to 100 f-35 in large numbers of a u.s. navy and yet remain interested in the f-22 pranks perhaps it is

because australia understands the russians and chinese are developing in more sophisticated versus to air missile self -- threads uniquely designed and equipped to destroy. madam president, i understand how this been done has not been deployed in iraq and afghanistan. this is true. however, their recent plans to deploy the f-22 to the persian gulf. but according to the july 9th 2000 edition of the web their respective defense and is the pentagon overruled those plans and concerns about strategic dislocation. this means the f-22 is hardly in dinosaur his a weapon that can change the balance of power in the region and to turn our adversaries. in conclusion by reminded of a point author made in his book about the battle of britain. he observed that even those of two prime ministers before winston churchill pursued a policy of appeasement and also

committed their government to develop and parker the three pieces of equipment is that a firefighter, hurricane fighter and radar which to ensure that nation's survival in the battle of britain. i hope the senate will profit from this is reason and vote against that mccain of love and commitment and i compliment for writing in this matter. with that i yield back the balance of my time. >> to yield time? senator from michigan chemical. >> how much time and? >> attendance would be plenty to amend the senator from oregon and kim and madam president, i rise this month to support the 11 mccain eminence. is assuming that by a more f-22

at this point would meet the very definition of government waste. which you have is a situation where the pentagon of which and i said today has an exactly been shy over the years in terms of calling for additional weapons on record as saying it is unnecessary. over there and have been out talking with members of the guards at home and trying to get their perspective of what is needed in dangerous times and they have never once mentioned in something like this. they talked for example about body armor and boots, they don't talk about more f-22 in suffice it to same when the congress is now having a debate about time to find additional money for health care of for example to go out and spend close to

$2 billion to buy seven more and f-22 fighters for the air force says it does not want, i think just defies common sense. and my home state for example with love to be able to hire back the other essential workers that have been laid off. the senate building seven planes we could be restoring infrastructure and developing renewable and nj. again in my home state we have had a budget shortfalls and we've seen it reductions in essential services law-enforcement just been one and the debate in my view is in the amount necessary steps and sharing the sean national events, the question is about whether the united states congress wants to spend close to $2 billion to pay for more fighter jets that the air force doesn't want. and i think it is also important

to remember the f-22 is not been purchased for were is the u.s. currently is fighting. certainly the taliban and iraqi insurgents do not have an airport. the f-22 is being purchased to find possible future conflicts with other countries that may have an air force. while i strongly believe the pentagon ought to be able to prepare for such possibilities, it is in the pentagon who is telling yes that we don't need these additional path 22. i think it is also important to note the pentagon has purchased 187 f-22 so there is not a debate about whether the u.s. ought to have the fighters in our arsenal. the debate is really whether or not the air force needs 194 of them in 7187. we have a very good secretary of defense robert case and it reads as said that 187i sent into

combat current imputed rent. he is the one who says it wants or not needed and is the one is said and i quote the must break the old habit of layering layer upon layer of cost delayed systems that are so expensive and elaborate that only a small number can be built and then i then usable only in a narrow range of low probability scenarios. madam president, i think secretary gates has sent the nail just about as prickly on the hand is you can. he and our country want the strongest evidence possible, but there are ways to make better use of that $1.75 billion and on seven march f-22 is. in madam president, let me close by thing that i serve on the senate select committee on intelligence, i know that there are threats to our forces every single day.

there is no question as a my friend from georgia serves on the intelligence committee and he feels very strongly about this witness well. we need to make sure that we are protecting our troops in harm's way. but we have a variety of choices, a variety of choices and learn to secure the protection of our troops in the nav and i intend to work with chairman 11, secretary gates, the singer senator from arizona and the president to ensure that we replace current f-15 with mark kibble and save for five years. last month there visited with some of the 3,000 members of the of 41st brigade in comment teams as they train whether current deployment iraq. not one of the soldiers told me that their big concerns or whether there were some have 100

and four at 22 instead of 187. they talk to me and said about the best vehicles and the best medical care if they're injured and talked about the best body armor and not one of them mentioned the f-22. madam president, but i am not voting against the f-22. i am voting for the soldier and voting for the taxpayer. they both deserve our government's greatest protection in this critical time in our history and i urge my colleagues to support the mccain-levin amendment and that i yield the floor madam president. >> who yields time? >> how much time is remaining on both sides? >> the senator from georgia has 11 minutes and the senator from georgia has 15 minutes.

>> and not sure how many other senators. >> the senator from michigan. >> madam president, i don't know how many want to speak, with eminent of the opponents have speakers on their sides left. kim and the senator from georgia and gimmicks senator inhofe indicated a desire to speak in his hat in the committee and may be able to get here. we, of course, would like to finish so we rely to be at the end of the line here. >> i'll be happy to make, -- comments. when senator inhofe comes then he can give a few, as if that

would be ok. >> madam president, would you notify me when i have used six minutes please? >> the chair will notify new. >> five minutes, i am sorry. our lead to as unanimous consent of the army and travel privileges in the consideration of this bill. >> without objection. madam president, a one to make a couple of quick comments relative to some things that have been said in an, first of all, were with regard to senator widens with comments concerning the national guard of us want to make sure that we equip our guard and reserve and i've been doing a forest of albany's they have and i was simply signed him to the letter which is ahead of the army guard and air force

colonel. and he says that this f-22 is uniquely qualified to fill the needs that baggara has for its national security missions so even slightly indicate that the guard has issues with this program is simply not correct because baggara is on record as being a strong supporter of this program. madam president, i have a letter from retire at general david dacko, ratan and the u.s. army. he now is the executive and director of the reserve officer association. let me quote part of this. it is predicated upon technical as the master -- 94 victory, military experts believe the current cap of 187 and 22 it is an inadequate number of aircraft to assure no future threats to impeded the u.s. their dominance

and the menem number required to ensure a strong defense is 250. but ask unanimous consent that the letter was a retired general will be inserted in the record. >> without objection. >> madam president, one i also have quoted earlier the comments pine and to do a general, the guy i figure -- not because he falls in the category of where in the uniform of the u.s. but he is standing up to the personnel and the pentagon and is saying the u.s. are wrong with and for a general i could do need to do that want to take significant courage and this is the guy walked in the foxhole with maine. that is general corley was commander of air combat command who very clearly says in a letter that we have previously entered into the record that a fleet of 187 the f-22 the

execution of our national military strategy that high-risk in the near to midterm and the amount the minimum number of the 22 that we need in his opinion is 381. i want to also madam president talk for imminent and out senator mccain's comments on the cost and this is an expensive weapon system but is also the most sophisticated weapons system ever designed by mankind. and most importantly it is doing its job. it is doing its job in a professional way. instead of costing the three nevada $2 million the senator mccain said in his earlier statements because of a multi-year procurement contract we entered into between the pentagon and the air force approved by this body and as senator mccain objected that understand that, but by a vote of 7228 that multi-year contract was approved by this body has

was by the house and as a result of that misstep in the three her $50 million we are today and did that multi-year contract a $140 million a copy with and that is in comparison to the $200 million in a copy that is fine to be paid for every single at 35 we are buying in this budget. because of the figure for 200 the subpoena in this budget exceeds $6 billion. madam president, there are a number of people were watching this debate out there today, those at the pentagon are anxiously awaiting the results with, the white house is anxiously awaiting the results of the load. the chinese built into some of winning this old and let me tell you why. there has been now and i quote from an article july 19 in from a gentleman named robert fisher jr. who is a senior fellow with

international assessment and strategy center. he says in here that the of the chinese government says next to nothing and says little, what is known about china's fifth generation fighter program is disturbing. both of china's either manufacturers aircraft corporations are competing to build a heavy fifth generation fighter and there are a series of indicators china may be working on a medium weight with generation fighter similar to the x 35. they can be expected trade regeneration fighter on his future aircraft carriers and expected more than 187. madam president, i would ask that article be read in the record a document without objection. >> madam president, let me close by say there is another group watching anxiously out there and it is a group of men and women who wear the uniform of the u.s.

air force, and lieutenants, and captains and majors. and they are watching this anxiously because they're saying to themselves i signed up to be a part of a u.s. air force that believes in putting men and women in cockpits, men and women who are going to carry the eye to the enemy. and what am i hearing remembers of congress from at the leadership at the pentagon. that we're going to move away from the most advanced fighter in the room today and move to a smaller fighter and going to move away from fighters may be even altogether by going is this the air force i signed up for. well, i can tell you why they are in just awaiting the outcome of this because they talk to made. time and again the amount of that they are concerned about their future in the u.s. air force. the worst thing we can do is to discourage the brave men and women who want to make a career

of the air force and wearing the two, three and four stars but i assure you that those lieutenants and those captains and those managers are watching with this body does from a policy standpoint day. in northern leadership of the pentagon is coming from and they don't like what they're hearing. they're now looking to congress to fill the role that john the director of csis spent time and time again and that is two objectively refuse the budget that the pentagon and sends to the hill and we're in the process of doing that in exercising the type of oversight we should exercise and without which i would urge my colleagues to vote against this amendment and i would yield to senator in, two minutes given of the center of oklahoma.

>> , it was at that time talking russ 750 and a member started coming down. and then as it approached i guess to have 43 new the air force officials have repeatedly stated that no fewer than that would be sufficient with a moderate level of risk and my concern and it has been the same concern that i have been talking about ground capability. we see countries like china and russia passing us up in areas when we bring up cannon right now but there many places where our prospective enemies have better than we are. we do know that china has very

t.a.r.p. monday 12 in russia believe a calling there's the two fifties and we do know that the service generation fighters and it is disturbing to mean that we would consider stopping at this point when this is not going to be adequate to give us added the mavis category. so i certainly support the effort to maintain and quite frankly and when senator chambliss introduced by seven us thinking we should be shooting for more and i think he agreed with that however appear like the experts out there want and with the addition of the seven put in the committee that would be enough to keep the mine open and so i strongly support the effort to keep those numbers when they are. and i yield the floor. >> to yields the time?

40 minutes and 14 seconds. >> how much to the opponents have? >> 45 seconds. >> well, at the center of arizona would go to amend the senator from georgia. >> how much time? >> 35 seconds. >> i would be glad to yield a couple mormonism thing to the senator from convicted. >> the senator from arizona. >> i will be fairly brief. this argument has been made it and it pretty well covered most of the issue. i would remind my colleagues

that all the things we do r and matter of choice is because we don't have unlimited amounts of funds. obviously and to spend money on one project and obviously it you may have to spend less on the other and that is the case of the f-35 if we don't eliminate this 1.75 billion but most important and 12-point out again this amendment is more than just about a weapons system. this amendment is about whether we will stop doing business as usual and that is continuing to fund and weapons systems that are no longer in needed and unnecessary. we are not saying this f-22 isn't a good aircraft. we are saying is time to into the production of the f-22. the president of the u.s. has threatened a veto in this entire bill, that is not good for the

men and women in the military to have to go through this process over again. the chairman of the joint chiefs of staff of the air force and bear in parlay the secretary of defense who served under two presidents and has gained the respect and appreciation of all of us free service and ask unanimous consent then secretary of defense in a speech last july 16th to the economic club of chicago included in the record. >> without objection. >> madam president, i am a student of history and there is one of the titular president with that have grown along with historians to appreciate more and more for his two terms as president of the united states and that is tied david eisenhower. we were at peace with during president eisenhower's term and they believe that perhaps the war in vietnam and have been avoided if we had heeded his was

canceled. and many things the president eisenhower did lose to contribute to this nation both in war and peace and on several occasions i have reread his farewell speech january 17th 1961. in his speech the president eisenhower sent in in the councils of government we must guard against the acquisition of unwarranted influence whether sought or unsought by the military industrial complex. potential for the disastrous rise and misplaced power exists and will persist. we must never let the wake of this combination in danger our liberties with democratic processes. we should take nothing for granted. only an alert and knowledgeable citizenry can compel the proper

smashing of the huge industrial and military struggle with the liberty of state. ming military struggle with liberty at stake only thus we shall remain despite every provocation. was also the security and member team and prosper together. when triply that last sentence. committed successfully there is called for nonesuch emotional and transitory sacrifices of crisis with those which and it was to carry or the steadily surely without complaint the burdens of a prolonged war and complex struggle with liberty and stake. i would only ask to president eisenhower's farewell and just to the nation which is compelling in many ways that should be changed from a military industrial to military-industrial congressional complex. what we are seeing here despite

the advice and counsel of our president the secretary of defense and human military with rare exception which is a recommendation to that we stop with this aircraft and build another. not that we stop building a better aircraft are inventory, not that we stopped event in this nation of the weapons systems remain. we're even in a weapons systems continued possession and that has never fallen into wars we are engaged in. so i urge my colleagues to understand the impact of this amendment. if we're able to succeed him is going to send a signal that we are stumping business as usual and we must move forward with providing the men and women with the necessary means to win this troubles we're in for of the world and especially to wars. so i urge my colleagues to understand that sacrifices will be made and jobs will be lost. it will cause disruption in some

communities. but our first obligation is the defense of this nation and they use of scarce thus dollars in the most selective fashion. i urge my colleagues to vote in flavor of this amendment madam president, i yield the floor pierre cote command the center of a mission. >> i have at 91 consents committees to major in the session with the approval of the minority leaders and ask consent these requests be agreed to and printed in the record. >> without objection. >> madam president, i have two minutes? can i correct, senator and a mechanic it meant living began when i did a few moments and that is my great respect for parliament and john mccain and the me begin with a point, there's nothing wrong for the national security emanation in the retirement which brings those of us to the size of the table in support of this program

and opposition to this amendment. this program is a critical and important program to maintain superiority, not pyridine and has always been our goal of protecting our national security interest. it was a very pentagon himself which advocated that we move toward with the program, only 36 months ago. obviously we can change their minds but over the months when preparing the news emanations it was the commission of the future of aerospace authorized by this conference which concluded the following and they said and i quoted that the nation had a decline in promoting the growth of science and technological training u.s. aerospace workforce adding that to break down american intellectual and industrial capacity is a threat to national security and our capability to continue as a world leader and it was the pentagon will in 36 months ago and the quote tenyo review that's an appalling. and they said in this report that the f-22 production should

be extended to fiscal year 2010 with a multi-year contract to ensure that apartment and does not have a cap and regeneration capabilities and airports the f-35 delayed in additional 11 months and the increasing gap of five years talking about. the danger of losing not just any job anywhere from 25,000 to 90,000 aerospace workers is not insignificant. ford is ago we were warned with 15% decline. industrial capacity and this will and is even further. the ability to have a workforce capable of building these aircraft is at risk. will know that is why the issue not only of the capability aircraft but the workforce to produce is a state with this amendment and i say that respectfully about how this camp in production by the pentagon of

the industry itself by the pentagon by the very of rescission to determine where capacities or in the industrial capacity in aerospace and where to find both reports and both recommendations by cancelling this program and this implies a at risk the future generation of superior aircraft that we need in the 20% three. so again madam president i urge my colleagues is buckley to reject this amendment. there is a compromise available to end above the number parlous projected numbers but to cancel the program ritually freeze and a gap in a production capability and is a great danger for a nation not to mention these jobs pinnacle imprinter and nation's future and i urge the rejection of the amendment with. >> five minutes 25 seconds. >> i yield two minutes to the center of delaware.

>> i want to thank them for their herculean efforts to try to stave off the closure then tried to pull myself and the issues of others when take a position and i say when i saying it comes from the heart won't in support of your constituents. the madam president, we have today via come at every years when we have seen our national debt double and incurred as much new debt our country over the last eight years as in the previous 208 years. but are looking this year to bring a one-year dozen higher than the history of our country well over $1 trillion. neagle back 22001 and look at cost overruns major weapons

systems is a 25 billion in last year almost $300 billion. we tell women in the pentagon which weapons systems union and those who don't and the secretary gates said clearly want as well as his deputy the last president has said we don't need it more than 22, we have f-16's and at 18 and to many years will have 2500 and 35. my hope is we will be scoring off and is not continue production. my hope is that will be a smart enough to have an abortion role in building the f-35 of concealing help build at 35 and out hope that would be the case. lessing and ask mr. cuban 91 as still think about how much it costs of flying in aircraft and our and the word from $223,000 for the f-22.

it is too much money. things are much. >> in terms of the alleged gap there is no cap and they said we should be building fighters, at 22 production at an fyi 101, as a matter of fact, what we're now doing is exceeding their production with f-35. we have 31 at 35 in this and i10 budget. there is no gap in by their production and whether the speed and is a capable fighter let me read it from what secretary gates said. the subpoena is 10 to 15 years with your then the f-22. carries a much larger suite of weapons and is superior in a number of areas most of corley air to ground missions such as destroying sophisticated enemy air dunces. it is ever so aircraft less than half of the total cost of the f-22. now the f-22 is costing an awful

lot more than represented here because asking now that this amendment is defeated that we would be spending $1.75 billion worth 47 f-22 which is approximately $250 million a copy for the ones that the opponents of this amendment want to build this year. madam president, the president of the united states, the last president, the previous one comment to secretaries of defense will come into chairman huang of the joint chiefs of staff and a secretary at an air force, two of staff of air force said it is time to end production of the f-22. to move into greater production of the f-35 which will serve a free service is not just one. if not now, when? when will we end production of a weapon system if not now when you have it both president obama

and president bush tried to end it, secretary of events trying to end it, chairman of the joint chiefs tried to end production of the f-22. he must not do the sensible thing which is requested by secretary gains. not because he is learning that man and chief as has been suggested, he is not just saluting the commander-in-chief, he feels were deep in his got one that we must change the way we do business. we must finally bring some of these systems to an end and that is why secretary gave so passionately believes that we must bring this production of the f-22 to an end and move into greater production of f-35. more f-35 produced in this budget would then would be produced if this amendment is defeated. madam president, i don't know if there's any time left but i yield the balance of my time.

>> after the senate voted 58 to 40 to cut funding for the f-22 we talked to a reporter covering the debate one. >> john donnelly "congressional quarterly" joins us, so what is the outcome means for this vote and the underlying the events of the rescission bill? >> okay, the vote was on essentially whether or not to keep the f-22 fighter jet production line going one not. and the senate voted 58 to 40 not to continue to produce that which is what president obama had wanted and president obama had threatened to veto any bill that provided funds to continue producing f-22 five jets. >> he won the vote but wires supporters of the f-22 so determined to continue production of that fighter jet? canaccord various reasons. in some cases won't have jobs in their districts and other states

that a dependent on the production of the aircraft and of the lawmakers received campaign contributions in a vault with and to some degree members may believe in their hearts that this really is unnecessary head to an uncertain world. >> they wanted to strip the bill of the f-22 of rising language. what to do hear them say about the outcome of the vote? >> obviously they were encouraged about it. they said that it was more decisive than they had expected and i think most people were surprised by the margin of victory. expected to be a closer vote than it was in a two-minute with a lopsided victory to the fact that the president and secretary of defense had waited so clearly in favor of stopping program. >> what does this vote on this issue mean for action on the debt and spending bill or on the

house science the f-22 issue there and appropriations for authorization bill when it comes to the house? >> quote on the house science and we authorize there's one, the house of us authorization bill passed and it has some money in their to buy parts for a future f-22 to keep things going and it will level. that is the health house of risers and the defense the pervicacious subcommittee has marked a bill that provides funding to do the officers wanted with the full house appropriations committee and the full house of not acted on the spending bill. the senate it looks like one -- the defense authorization bill will not have any money for f-22. the senate appropriators have not i can't. the senator in away said after the vote then he would not advocate -- advocate putting money into the defense spending bill i should point out quickly

that he is the chairman of the defense appropriations subcommittee so he will have but the members of the defense appropriations subcommittee are split down the middle on the f-22 issue and if the house spending bill to us some money in there it will definitely be in a live issue in the conference of this is not over yet, but i think that the senate vote today one quote i know how many nails that in the coffin of the f-22 a lot of the naylor in. >> what is ahead on the issue of the joint strike fighter, the engine? >> on the one that the senate armed services committee bill and the house armed services committee bill and the defense appropriations measure of that matter when would like to continue developing a backup engine for that plane. that is something that the obama

administration opposes the think it's a waste of money, but the momentum in congress is for continuing to build the second engine and it is quite possible. >> john donnelly of "congressional quarterly", thank you for being here. >> my pleasure.

michael o'hanlon of the brookings institution and join us for a half-hour of "washington journal". a smack our guest is michael o'hanlon, the senior fellow. thank you for being with us. tell us what you think the main success in afghanistan. >> guest: in terms of time and will take a while. both probably take a year to see the strategy is working and probably frankly three to nine years of sustained effort it for

the afghans and many in the main way to describe the difference in afghanistan of violence against civilians never been nearly as severe as in iraq and obviously has been quite tragic for troops. 55 for nato over all and there have been a lot of attacks on u.n. troops and afghan forces but the finding is more of the taliban and against the uniformed military police and a lot of what we have to do is two any afghans of banking carry on that fight. the route we have to bring down the level of ourselves immediately as a country was at risk of being torn apart in afghanistan is different about building a stake or none has existed as a different towns and in some ways easier despite what is commonly said because again the violence is not nearly as widespread and, on the other hand, it cut to creed something out of nothing. that is going to take a while. >> have a recent piece in the daily beast where you do look at afghanistan and iraq and compare and contrast the two.

to talk about how it is seen as a quagmire, unsolvable solution because of the history. how does that play into where we're at now? >> and i say this with modest to because of not an expert, but having fallen as much as i can about this country's history is roughly as old as the u.s. in terms of the modern nation state of afghanistan and has had extended periods of peace and other way tends to do reasonably well one of the loan by others with a lot of for the 19th century because the russians were coming from different territories and the soviets invaded in the 1980's. the taliban fun it out of pakistan largely the lesson of 20 years in giving them the tools they need to win their own work to build their own state. i thank you look at it in those terms when you see is the last 30 years have been unusual because the rest of the world has been ripping afghanistan apart and if we can give them some toasted fix things on their

own they do have a certain sense of nationhood and all want to be stuck in the seven reporting century. they want to look for the most of the population is very on the return of war and had the taliban and don't much like one presence is there for this buzz of them have that gives us some hope this mad when to pull from secretary gates' comments, the focus has been iraq but what did you take away for afghanistan? >> guest: which you are saying is the secretary is committed and there is a little bit of internal dissent, they're very good at message control and have had a lot of big maystadt and a lot of pick dissent for the senate is a campus says we probably built up enough in afghanistan and vice president brian appearances this when in afghanistan two weeks ago and then there are others who basically said let's keep an open mind and do we need to do to win. i think aids is in the latter camp, not say we need more forces necessarily but certainly is open-minded and that is part of why he has announced this

increase in a hurry because he expects the operation will continue with at least 16,000 u.s. forces us credit plan and maybe even a bit more. >> host: our guest is michael o'hanlon talking about u.s. foreign-policy in afghanistan come and join the conversation a. what how do you think philosophically americans are appealing the war in afghanistan resist the were in iraq? two have a different impression and willing to commit to? >> guest: that is a good question but my overall view is americans are tired of all this up, it's been a long time and depending on how you measure afghanistan will become a long as one history sometime in the press of this year out to a union on the courses been a much lower level of violence and much less catastrophic for our country but that doesn't change

that i them with an 700 americans have died there and several thousand americans have been severely wounded and made taken away from the families and many i think to have a non unease and probably have even more on the mine in the form of worries about the economy following the healthcare debate. and i iran's nuclear program etc. so afghanistan was a lot of other issues and reports on how the world is going in the casualty's we have some written to be on page editor 10 and those checking in the various articles. we now have had the bloodiest month for u.s. forces ever in this war and those stories typically are very back in the newspaper that reflects the public's critique and that is the simplest way to summon up. >> host: in usa today on page 4a, talks about the death of u.s. troops exceeding 5,000 in both wars talking about iraq and that afghanistan and they reached tucson milestones, july

has become the deadliest month and the combined death toll surpassed 5,000. out is the obama administration, have these numbers of things like that affect the direction? can gays consider this and think about how this plays in american public or is he focusing on the mission a little thing to succeed over there? >> the two issues are seen as interlinked in the sense that the obama administration is worried about the congress and how long they will sustain this. in my judgment that are too worried because president obama has declared this to be his top priority, the afghanistan theater and i personally cannot see the democratic speaker of the house majority leader and democratic committee chairman point out the rug of this president is forced year were what has taken seven and a half years to us because we have initial setbacks. so i think there is an open of hypersensitive any one on the

other hand, it is good two have a sense of desperation because we have american troops fighting in this kind of a war and you want to turn it the route as fast as you can and you want to recognize that can change course or even get out so i am glad for this emergency even though i believe politically they probably have a couple of years to make this work. >> host: our first call is julia from california. >> caller: and morning. thank you. i feel that iraq and afghanistan and just another vietnam. i protested the war in viet nam and finally we got down and realized that it was not winnable of wood and people in leadership did regret it. no and i think that the same is happening here. and i am nine years old, i have been protesting war of my life

and i think that war is not the answer. we have to help the people, we have to legalize all drugs and then there won't be the drug wars and we will save the monies from morris to help people not so that they will not want to be terrorists. the terrace come from usually means the satisfaction. even obama will understands and promised that we would get out and i am sorry that he has increased the number of troops instead of an working things out so we can get out. >> and is a powerful message to them that use an upper limit china couple of computing power of messages. one is the world and we have a trade afghanistan for 30 years. we helped them drive the soviets out of their own country and helped us win the cold war left

them of their own mercy to fight each other to dominate with as a result afghanistan has had a whole lost generation totally caught up in warfare, as some people in foreign elements and voice and by and watch because once we accomplish our goal try this of is out begin care and that was pretty much the attitude we had in the late 1980's and 90's. after we over to the taliban and 2001 secretary rumsfeld didn't much care about what happened so we have a small footprint and you see what has happened so if you care about the afghan people with this idea of hands of dozen working there. if the buildup is bound to fail obviously you don't want to reinforce that so we do have to listen to your message because if this doesn't work they agree we have to abandon the average and stop reinforcing failure by edge with a thicker strategy is to allow us to be more careful

and use of force because we have enough people walk in the state's bodoni to use these big air bombing campaigns as much as we sometimes have in the past the last few years and those have led to the casualty disputes with the afghan people that have put us in a bind. the afghan people despise the alternatives the most likely result of the left and the popularity of the taliban and improbably come to power if we pulled out this summer between 2%, i%, depending and they have seen that world, the dollar up back. so i think our mission is giving them the tools to fight this war on their own and build on country but i think it is the marlee best choice we have here you talk about ways to help afghanistan that would be parallel to the military effort.