when markets fail and banks falter and that is the policy that we have pursued. it is pursued by every other country. it's unfortunate again, i have to repeat. it is not supported by the opposition party. >> mr. speaker, since next week's prebudget report coincides with the start of the climate change talks in copenhagen, has the prime minister instructed the chancellor to reverse the falling green taxes which took place during the 10 years when the prime minister himself was chancellor. and does he not accept that a tax is only a green tax if it's primary purpose is to change behavior and not to raise revenue? >> mr. speaker, i don't think he's proposing a evat on fuel. -- vat on fuel. what we have done is introduced a climate change levy. and we have taken measures that are necessary to deal with the problems of the environment to reduce carbon emissions and we are taking measures that are in line with what is happening in

other countries. if he wants us to put vat on fuel i would oppose him. >> i was pleased to read over the weekend the government is considering moving many of the 130,000 civil service jobs in london in the southeast out to areas where the need is greater. would my right honorable friend consider my constituency as a destination for more civil service jobs bearing in mind that the revenue building and planning has six empty floors. >> that's an excellent location for new work and new jobs. as of december 2008, over 3,000 posts have been reallocated from london in the southeast of wales and nearly 300. we want to help areas by creating jobs not causing unemployment. >> sir peter tapsel. >> the prime minister has just told us that he hopes that in a

couple of years time we'll have 300,000 troops fighting the taliban. as that happens to be the number that i told the government that we would need when they first recklessly went in with hopelessly inadequate troops, grossly underequipped. should he not now as i? >> mr. speaker, mr. speaker can i say president obama will be grateful for his endorsement of our strategy. 300,000 means that there are about 150,000 afghan troops trained and ready to take over responsibility. and that is the task over the next year to train up more afghan forces and i'm very grateful that president obama has made it at the center of what he has proposed. it's what our british forces will do with all our coalition partners and can i think him for his advice. he's not always been -- he's not always been right. he advised me not to make the bank of england independent.

>> thank you, mr. speaker. does my right honorable friend believe that the post office should expend its role in banking particularly in children's banking and a array of financial services to help sustain the financial network? >> the services proposed is a post office account, a children's account, new savings for small businesses and a weekly budgeting account to those on low incomes to take advantage of direct debits and reduce bills. once again we are taking an institution that is well established in the country and giving it a new purpose serving the whole community. and this is what a labour government does. >> order. >> from london, you've been watching prime minister's question time from the british house of commons. aired live every wednesday while parliament is in session at 7:00 am eastern. you can see this again sunday night at 9:00 eastern and pacific on c-span.

for more information go to c-span.org. at the top of the home page, click on c-span series for prime minister's questions, british parliament and legislators around the world. you can watch recent video including programs dealing with other international issues. >> todd zwillich of the take kleaway. how is healthcare going? >> it's going well so far from the perspective of the senators. there hadn't been a whole lot been a lot of substantive amendments yesterday. -- yet. against it or in favor of cutting some funding for medicare or against it but we haven't seen any real substantive amendments yet on

the big issues like abortion, like the public option, on financing this bill or on affordibility. but certainly there's plenty of speeches going on. >> you mentioned abortion. as senator ben nelson is apparently working on an amendment. what's that about? >> well, that when the house version of its bill part stupak in michigan succeeded getting language in the bill tightening up restrictions on how abortion could be funded on the exchange, the national insurance exchange that's envisioned under the bill. many of these plans on the exchange, in fact, most of them would be private. these are not public plans but the stupak amendment as it's called here on the hill -- here on the hill restricts how abortion can be funded if you have insurance on that exchange even with your own money. senator ben nelson is a pro-life democrat. he has said he favors the stupak language and he said today that he will be offering an amendment

in association with some other senators that closely mirrors if not identically mirrors the stupak language. so we're likely to see a similar abortion debate in the senate as we saw in the house. the open question is whether or not nelson can get 60 votes in a senate where there don't appear to be 60, quote-unquote, pro-life senators. >> what's happening behind the scenes, landrieu, carper and schumer are working on something. >> they are trying to work out deals on a range of things. the public option on affordibility. senator carper of delaware is so far one of the lynch pins on trying to find a compromise on the public option. we've been hearing a lot about it and, of course, the democratic caucus agreed to let this bill get on the senate floor but several of those moderate or conservative documents like nelson or landrieu said they won't support the bill coming off the floor if the public option remains. so carper has taken it upon

himself in cooperation with chuck schumer, who's sort of a bridge into the leadership for carper to find a compromised version of something called the public option or something that functions like the public option. we're really -- the function is one of policy that democrats believe that private insurance needs some competition here to hold prices down. but it's also a political one. the democratic base strongly favors the public option but there aren't 60 votes for it. so carper is trying to find a way to preserve the spirit and maybe even the name "public option" in a way that lets democrats deliver for their base but also delivers these four or five democratic votes. or maybe even delivers olympia snowe, a republican. there's a trigger. there's no public option at first but if states don't meet affordibility standards, if insurance isn't affordable in your state, a public option or a co-op or something like that would be triggered. that's what they're talking about now. >> majority leader reid's

timeline, when is he expecting to finish the bill? >> they had said they want to get healthcare done this year and they still say they want to get it done this year which presumably means before new year's or realistically before christmas eve. that's up to reid if he wants to try to cut off debate on this bill before republicans and his moderate democrats think they're ready. he hadn't said that he thinks it will go into next year but a lot of rank-and-file senators certainly think it's going to into next year for the senate to get done. there's really no way the president will have a bill to sign before 2010 at some point. >> todd zwillich is with the takeaway. thank you. >> my pleasure.

>> american icons, three original documentaries from c-span now available on dvd. a unique journey through the iconic homes of the three branches of american government. see the exquisite detail of the supreme court through the eyes of the justices. go beyond the velvet ropes of public tours into those rarely seen spaces of the white house. america's most famous home and explore the history, art and architecture of the capitol one of america's most symbolic structures. american icons, a three disk dvd set. it's $24.95 plus shipping and handling. order online at c-span.org/store. >> now a confirmation hearing for intelligence officials at the homeland security and state departments. dianne feinstein of california chairs this hour-long session of the senate intelligence committee.

>> the meeting will come to order. the committee meets today to consider two nominations to the intelligence community. if positions that require senate confirmation. they are ambassador philip goldberg, nominated to be the assistant secretary of state for the bureau of intelligence and research, which we fondly know as inr. and ms. caryn wagner to be undersecretary of homeland security for intelligence and analysis. or ina. i'd like to welcome both of you. and say congratulations. both individuals were nominated by president obama on october 26th. they have since met with me and other members of the committee and have responded to numerous prehearing questions.

their responses are now posted on the intelligence committee's website for public view. interestingly enough, both nominees come from different backgrounds. and are nominated to lead two very different intelligence organizations. ambassador goldberg is nominated to lead an organization with a very distinguished and respected history. the state department bureau of intelligence and research conducts all source intelligence analysis to advise the secretary of state and other senior department officials and serves as an active participant in intelligence community-wide analytical products. its analysts while far fewer in number than the all-source analysis organization at the cia and dia are highly expert in their fields. and have no qualms about vocal dissenting from judgments they

believe is incorrect or unsubstantiated. and that's very much appreciated. one example of importance to me was inr's view in the 2002 nie on iraq that iraq was not reconstituting nuclear weapons. especially, due to inr's different view on the use of aluminum tubes in centrifuges. that obviously proved to be correct. ambassador goldberg has been long involved in national security issues and has received intelligence throughout his career. but has no past experience inside the intelligence community. we will be very interested in hearing ambassador goldberg's views on his preparations to assume the responsibility. ambassador goldberg is a career foreign service officer. he has distinguished himself over a 20-year period over

community affairs and deputy chief of mission in chile and kosovo and united states ambassador to bolivia. since june, he has served as the coordinator for the implementation of the united nations resolutions on north korea. earlier in his career, he served in bogota columbia and south africa. a particular note is his being declared persona nongrata by bolivia president in september of 2008. the committee has looked at this but members may have a few questions but it's pretty clear to me that ambassador goldberg had no blame in this matter. ms. wagner by contrast is an intelligence professional beginning as a army signet officer and rising to the level of captain. after three years on the house intelligence committee, ms. wagner joined the senior

ranks of the dia before becoming director of intelligence community management staff and subsequently the assistant deputy dni and chief financial officer. she returned to the house intelligence committee as budget director and is now a faculty member of the intelligence and security academy llc. she's being nominated to head the office of intelligence and analysis at the department of homeland security, which unlike inr is a young intelligence organization and one that has struggled to identify a clear mission and bring together an appropriate work force. we have discussed that earlier. the committee's report accompanying the fy2010 intelligence authorization bill noted some of these concerns. they include that as of this summer contract personnel make up a staggering 63% of the work

force of the office of intelligent and analysis. including a large percentage of its intelligence analysts. in my view, this is an inherently governmental function and should be done by the government not by contractors. the office has written analysis that inappropriately analyzed the legitimate activities of u.s. persons based in part on highly questionable and noncredible open source information. in addition, the office has numerous and unclear missions. some of which overlap with work being done by other departments. according to the homeland security institute, the office is unstable and lacks structures for budget and management accountability. i've discussed that this morning with mrs. wagner and i actually believe she's up to it.

so we'll see what comes. i'm told that the office of intelligence and analysis has been drafting a plan to restructure and refine its mission. but the plan won't be finalized until a new undersecretary is confirmed so that will be clearly, ms. wagner, your first big job. i think this committee will be very he interested in your views as a professional on what the office should be doing and how it should be structured or restructured. again, i welcome both witnesses. and i will turn to the vice chairman for any opening comments he might have. no, i did not so you might want to do that. >> i'll go ahead and do that. thank you very much, madam chair, you've laid down a tough gauntlet. we welcome both of the nominees and ask do you have family members that are here or close friends who are supporting you today? ms. wagner?

>> yes, thank you, senator, bond. my husband is here with me and i have numerous friends which i won't name because i will no doubt forget them. >> okay, we will welcome your husband, welcome, sir. ambassador. ? >> i have my colleagues from the state department. the public often hears about other elements of the intelligence committee. the office each of you has nominated to head. inr at state and intelligence and analysis department of homeland security. can and should be making valuable contributions to the community and to our national security. as the chairman said, the chair said i also have had conversations with you and pointed out some things where we think you can enhance and improve the operations of intelligence. now, ambassador goldberg, the chair stole one of my best

lines, but i want to say few people in history can claim the honor of being expelled by the likes of the president of bolive so it's clear you chalked up a major accomplishment and i congratulate you on that. i'm interested to hear how you expect your experiences in bolivia and other diplomatic posts will help you head an analytic shop. ms. wagner, a few months ago at a reception i had a pleasure of sitting next to a former mi5 official and i shared some insights on this war on terror of forging solid and productive relationships among federal, state and local law enforcement agencies. his point to me was that what the brits do and we do not do is use the contacts we have, the continuing contacts we have with state and local officials to task them to bring information up the chain of command.

we send information down but local police department or a local sheriff's office is far more likely to know when or hear when something amiss is going on in their community and report that back up the chain. so we've talked about that. and i think while it's very important -- and i hear complaints and not enough intelligence is being pushed downstream, there may not be enough intelligence coming upstream and i hope you will pursue that. we can make fusion centers work but there's a lot of intelligence, i believe, can be gathered -- best gathered at the local level. on the federal level we need to make a firmer commitment to training these local authorities to identify and collect the in this. -- intelligence. ms. wagner if confirmed i hope

you can make better training a reality. they can be done without additional costs but the benefits will more than compensate for any price they cost. madam chair, i'm sure that both of these nominees are anxiously awaiting our comments and their strategy and so i congratulate them on their nominations and i look forward to hearing from them today. >> thank you very much, senator. ms. wagner, why don't we begin with you, if that's all right. >> thank you very much, senator feinstein and senator bond. i'm honored to appear before you today as the nominee for undersecretary and analysis at the department of homeland security. i believe this position occupies a unique mission space and the national intelligence and law enforcement communities and the state, local, tribal and private sector entities that are the front lines of homeland security. there's nothing more important than forging and fostering those connections. if confirmed, i believe, i have the right skills to continue building on the foundation laid by pat hughes, charlie allen and

the current acting undersecretary bart johnson. i began my career in the united states army serving eight years on active duty in the years since i have spent 7 1/2 years at dia, five years on the staff of the house permanent select committee on intelligence, three years in the private sector and three years with the odni. i've had a mixture of staff and line management jobs including leading a 2,000-person analytic organization within the defense intelligence agency. i've had a great deal of experience in an interagency environment and i'm familiar with all facets of the intelligence community. while my experience with law enforcement has been more limited, i have had significant exposure while working at the dni and at congress to the capabilities and contributions to national enforcement and homeland security agencies. i know i have much to learn about state, local and tribal law enforcement and i'm eager to get started with bart johnson who's a highly respected and

decorated veteran of the new york state police force and who has done an outstanding job as acting undersecretary for the past six months ai've had the opportunity to observe the office of intelligence and analysis from the outside while i've served in the office in the dni and i'm aware of the challenges the organization faces. since my nomination i've learned more about ina's statutory mission, its ongoing activities and the secretary's vision about where she would like to take the department. i formed some preliminary views on what needs to be done to the customers and to the department and to improve its standing within the intelligence community and with its congressional overseers. if confirmed i plan to focus my initial efforts in three main areas. first creating a true homeland security information-sharing enterprise on greater focused on the state and local fusion centers and creating as chief intelligence officer for the department and third putting in place the management processes

to improve the morale and efficiency of the organization. the niche is best defined by its responsibility to share information with state, local and tribal authorities and the private sector on the full range of threats to the homeland. often referred to as all threats all hazards. first responders at the state and local levels are the nation's first line of defense. they are uniquely able to identify anomalous or criminal behavior that could have a terrorist nexus. it's critical to educate them on terrorist indicators as they're identified to capture information that is lawfully obtained while strictly adhering to private rights and civil liberties and sharing it with the wider enterprise. this is a multifacet challenge in adopting ideas and information flow. it also requires an approach that is tailored to the

different threat and operational realities of the individual fusion centers. if confirmed i intend to develop a comprehensive multiyear strategic plan for supporting the state and local fusion centers that can be used to guide resource and analytic planning. the role of the chief intelligence officer for the department was created by secretary chertoff to empower the undersecretary to create a dhs intelligence enterprise that was more than the sum of its parts. dhs components have elements to support their individual missions and they also have data and expertise that can be leveraged by ina in support of departmental priorities or national, state, local and tribal clients while strictly adhering to privacy, civil rights and civil liberties regulations. in addition the components may have intelligence or information requirements that are not adequately being met. ina can help to meet these requirements by leveraging the rest of the intelligence community on their behalf producing tailored products for or with them providing analytic training and mentoring and serving as an advocate.

by leveraging both the components and ina capabilities, we can build on process to create a new intelligence enterprise that enables ina and the department to achieve their full potential and best serve their customers. if confirmed i will view the role of chief intelligence officer for the department as one of the most important of my missions and put in place a staff structure to manage it. finally, in the management arena, ina is still a young organization and several recent studies have suggested it suffers from a lack of institutionalized processes and from poor morale. if confirmed one of my biggest priorities will be developing and formalizing internal processes for planning, programming and budgeting for performance measurement and human capital measurement and most certainly i will be taking a hard look at contractors. i believe that communicating guidance and transparency and hiring and rewarding people and developing a structured and inclusive process for building the budget will go a long way towards improving morale he. if confirmed i also plan to make

training a centerpiece of my agenda. i've already mentioned the importance of training to building information-sharing and intelligence enterprises but it's equally important for professional development and morale within ina. if confirmed i will focus on ensuring that ina analysts receive the tradecraft training that they need. finally, if confirmed, i will work hard to establish and maintain constructive partnerships particularly with the office of the dni, the national counterterrorism center the fbi and the congress. if confirmed i pledge to keep you fully informed of ina's progress and activities. thank you very much. >> thank you very much. mr. goldberg? ambassador, i should say. >> madam chairman and mr. vice chairman, it is a great honor to appear before you today as president obama's nominee to be assistant secretary of state for the bureau of intelligence and research. i am grateful to the president and secretary of state clinton for their confidence in nominating me for this position as well as to the director of

national intelligence dennis blair for his support in my nomination. if confirmed by the senate i pledge to work closely with this committee as it plays a vital role in the oversight in the intelligence community. madam chairman, inr has been a treasured source of information and analysis for policymakers for more than 60 years. inr is also a deeply respected voice within the intelligence community. inr's success has not been based on size or budget. rather, it has been based on the extraordinary experience, judgment, and analytical skill of its personnel. inr is earned reputation for insight and professionalism is based on a mix of civil and foreign service personnel. a combination of those who spend years and often decades on an issue buttressed by those with recent experience in our embassies overseas. if confirmed i will work to enhance the ability of these fine professionals to do their jobs through training, academic

opportunities and service overseas. and i will work to recruit the finest people available. i will also defend the process of independent and unbiased analysis as well as the people who produce it. as you point out, madam chairman, the people of inr have in recent times won praise for the quality of their work as well as a stick into their analytic conclusions as necessary. inr has another role ensuring intelligence activities are consistent with and supportive of our foreign policy and national security objectives. in this area, too, inr is fortunate to have a staff of professionals who have special expertise and years of experience in often very technical areas. if confirmed i look forward to working with these professionals to support the secretary in the department and ensuring policy concerns are essential consideration and the

intelligence decisions and activities. the relative committees of congress as they carry out their essential oversight rules. madam chairman, i believe if confirmed i would bring a set of skills and experience to the job of assistant secretary for intelligence and research that will add to the value of the bureau. while i have not previously served in a position in the intelligence community, i have had extensive and relevant %,!)'''k 'a"úor the independence and intellectual rigor, experience and personal integrity that contribute to good >> having worked on policy

matters in four geographic bureaus and on the seventh floor of the department, i have a strong appreciation for how intelligence can best support diplomacy and its practitioners. this is inr's primary mission. as a two-time chief admission i have ensure that intelligence and law-enforcement activities were carried out in support of foreign policy and national security objectives. most recently i have served as coordinator for implementation of un security counsel resolution on north korea. a job that requires analysis of intelligence information and close coordination with other intelligence community members. my experience leading large and complex missions overseas as well as managerial at times at the state department, have prepared me to lead this large bureau. madam chairman, we live in a time of enormous foreign policy and national security challenges. on issues of war and peace, nonproliferation, climate change

and economic and financial situation around the globe, our leaders need and deserve the very best information and analysis before making difficult decisions. if confirmed by the senate, i look forward to working with you and your colleagues to make sure that happens. thank you. >> thank you. thank you both very, very much. i have a list of four questions that we ask all nominees. if you would just respond yes or no to each of them. the first is, do you agree to appear before the committee here or in other venues when invited? >> yes. >> often wondered what we would do if someone said no. >> i gather, ms. wagner nodded yes. >> she said yes. i heard her. do you agree to send officials from your respective organizations to appear before the committee in designated staff when requested? >> yes. >> yes, sir. >> do you agree to provide documents and any other

materials requested by the committee in order to carry out its oversight and legislative responsibilities? >> to the best of my ability, yes. >> the same, to the best of my ability. >> what does that mean? >> if it ever became, as far as the inr bureau goes, as far as i'm concerned, i will share what ever we can. there are some issues that from time to time might come up about documents, executive privilege and the rest that might be beyond my control. >> let me just say, this is the first time anybody has ever qualified their answer. and that's going to have to be looked into it more deeply. because this committee expects to get documents it requests. we are the oversight committee, and to have intelligence agencies without the ability to conduct oversight is not acceptable to us. >> madam chair, i might add, the

president has the right to declare things for higher security levels, and we would -- before we would accept that, we would need to know from the white house that this was something over which they are exercising their national security. >> that's right. >> we would carry our argument. >> that's right. and executive privilege can't be a drift net to pick up everything people don't want to have oversight about. and that's where we become the guardian angel, so to speak. just do understand that. >> madam chair me, i didn't at all mean to say that we from our point of view and from my point of view, would share all information requested by the committee. that was a qualification. it really isn't a qualification. it is something that would be beyond my control. >> i just want everybody to know

if the committee asks for it, we expect to get it in less there is not a good reason where you have to dangle with us. you don't want to do that. >> no. >> the last question. would ensure that your respective offices provides such materials as the committee when requested? >> yes. >> yes. >> let me ask each one of you one question, and then i will move on. ms. wagner, in testimony before the homeland security and governmental affairs committee on september 30, of this year, dhs secretary napolitano noted that ina is quote, currently undergoing an important realignment to strengthen the delivery of useful, actionable intelligence to state and local law enforcement, based on their particular needs. here's the question. have you been briefed on this realignment? and do you support it? >> yes, madam chairman i have

been briefed. and the realignment is still ongoing. it has not been finalized, but bart johnson did brief me on what he is proposing to do. at the top level, i think it makes -- it makes sense, but i would like to reserve the right, if confirmed, to be able to make adjustments to that. and so i would prefer to come up and brief you after i'm confirmed, if i'm confirmed on where that is. >> if i understand you correctly, you are saying you have some input into the realignment? >> yes, madame. >> and therefore it is not finalized. we will take you at your word, because i think it is fair to say that there are some weaknesses in your area. and we would like to see them corrected so the correction you could bring about could be very important, and we would like to have you discussed that with us, if that is agreeable with you.

>> yes, madam chair. >> thank you very much. let me move to mr. goldberg. we talked this morning about the fact that you have not previously worked in an intelligence agency, or produced intelligence analysis. now, you do have significant experience in a lot of different areas in receiving it in particular. and so in my view at least you are clearly qualified for this work. but can you give the committee some specific examples from your background of when you have provided judgments that run counter to policy preferences? >> i think the kinds of policy

analysis and just plain analytical work that i have done, particularly involved in the 1990s oftentimes within a difficult atmosphere. when we were debating within the united states government about whether to intervene first in boston, later in kosovo, and those kinds of issues were ones that i was fortunate enough to be able to weigh in on and give my unvarnished view on. i think in part as people i work for but also because i felt it was important to do so. >> thank you. i'm not going to ask you what your views were, but i think it's very important, one of the things we want to see are really independent intelligence agencies that give policy makers the unvarnished truth as they see it and they are not swayed by what they perceive in administration or anybody else

for that matter might want. >> absolutely. >> thank you. mr. vice chairman? >> thank you, madam chair. following up, ms. wagner, on a question from the chair. what do you think should be the primary focus of ina? operational support of its components and infusion and says, disseminating intelligence products unclassified information, or some other thing? what would be your priority? >> senator bond, i think the primary mission of ina is spelled out in the legislation, what congress expect of it is to share information with the state local tribal and private sector, and ina as far as i can tell is the only element of intelligence community that has uses people as as its primary customers set. it also as a departmental

intelligence helmet has a responsibility to support the other outlets of the department. and to sort of orchestrate the intelligence symphony, if you will, of the intelligence elements within the various components. so i think those two things are key it also goes back to what you said in your opening comments that the information, sharing flows both ways. we need to make sure there is client, also that they have a wealth of information. and that needs to be analyzed and shared with the larger intelligence community's for national intelligence as well. >> do you think you'd be able able to provide training or the representatives of local law enforcement agencies so they will be able to carry back to their forces, to their teams, what information, what activities may be useful? do you see that being the -- i do.

i think the department and ina can do a lot by providing training. i know the secretary wants to support and elect excellence at the fusion centers big and that is certainly an area where ina can help with training. and the department is already helping with developing training on ensuring that privacy civil rights and civil liberties are protected. there is a great deal that can be done and i think training is a key element. >> thank you, ms. wagner. ambassador, you set on war and peace on proliferation, climate change and economic and financial situation around the globe, our leaders need and deserve the very best information and analysis before making difficult decisions, closed quote. do you really believe that studying climate change is with the best use of our limited and intelligence analysis resources? >> i believe that it is one

area. it is largely scientific issue, and probably not of inr's necessarily competence to judge. but we are involved in negotiation in the climate change area, and policy makers would need information and analysis on the positions of others, and how they would approach these issues. and so it would be more in line with our more traditional diplomatic role. >> i assume, given recent revelations, you might be looking into the process of some of the analysis that came out of certain so-called scientific institutions. but that may be beyond -- beyond your scope. i want to mention to you that inr has a reputation for being a dissenting voice in intelligence community roderick's. and i think some inr analysts

believe this is a positive but i have heard from others that it may be a negative, because continuing to send me make those use a ignored. what's your view about this type of reputation? isn't a problem, and what could you do to change the perception without impacting inr's independence? >> i think, mr. vice chairman, that the reputation of inr is also for a feistiness and independence which is something to be encouraged in the production of intelligence analysis. i actually, i took your statement very much to heart when we had a chance to meet, and i went back and looked at estimates this year and without going into the details of the

estimate, there was less than, i think it was three out of 13 that there were either -- two of them were dissents in part and one was more or less a more general dissent. so i don't know that it is a huge issue, but certainly i want to encourage our analysts to use their best judgment and put their best thoughts forward. that i think my responsibility. >> finally, one of the responses you made to the committee's questions, you set the rules of the assistant secretary is to play key role in ensuring the diplomatic informed policy positions are represented in the formulation of intelligence policy and activity. can you explain what that means? >> it means that, mr. vice chairman, i think that we have a responsibility to assure that that at least is one consideration.

and that the regional assistant secretary, the secretary has a voice in that process. i would view ayin article as very much that of an honest broker, because we have a responsibility certainly to the intelligence community, and we want to make sure that the intelligence flow continues. but that that is one consideration, and that is a role that is designated to the inr and the state department and one that the council is many factors that we would be taking into account. >> so policy positions would affect the intelligence operations and? >> no, sir. maybe i didn't express well. it's more of a risk to reward kind of issue. to point out possible downside, possible damage, the possible

consequences if something happens so that is known up front. before something would occur so that it can be taken into account at the time. >> thank you, mr. ambassador. >> thank you very much, mr. vice chairman. >> thank you, chairman feinstein. could i ask each of you first of all about cybersecurity issues. that does not appear in either of your statements. it is a matter of concern, and i'm interested in knowing, briefly because my time is short, what type of a priorty you think is, and b., whether additional effort on the part of your agency should you think the required. >> thank you, senator. i will take that one. i think it is obviously a critical issue, and it is something that i've already

looked into in the limited time i've had as a nominee. i know there are ongoing analytic efforts as part of the critical infrastructure protection analysis effort at the department. i don't know yet whether those are sufficient. i would expect, if i'm confirmed, one of the first things that i plan to do is to go talk to phil ridinger, who is the deputy undersecretary responsible for cyber and talk to him about how ina can effectively team within to make sure he gets the analytical support that he needs. and i know that as this issue continues to evolve, there's probably room to sort out exactly who is going to do what. but it is an area i expect to focus on. i was a cybersecurity coordinator for the before i retired to their im very for my with those issued. >> good. ambassador goldberg? >> senator, i agree, it is an absolute critical issue. it is one that inr has taken the

lead role in at the state department and organizing us to do with the critical issue. we are still in a bit of a state of flux on some of the cyber issues in terms of organization, because inr have to link with the intelligence community has a very large role. but some of the issues that may be coming up in the years to come will be diplomatic missions as well. that's not a traditional inr role. we are organized to deal with the internal issues for the state department, in terms of our cyber issues. i have already had a discussion, brief one, with general alexander about some of the larger issues involved. it's a very important -- is going to be a very important foreign policy issue as well. so we're on it, and we need to continue following it very

closely. and we will. >> on a second point, i think there is a strong bipartisan consensus on the part of this committee that we are sick to death of leaks out of the executive branch of government. and not only is it a bipartisan concern to the committee but it is a bipartisan issue. it is leaking like a sieve in the bush administration and it doesn't seem to stop with the change of administration, and over and over again what are subjected to the unhelpful spectacle of having our staff cleared out in rooms of some hyper secure briefing and then we read about it a day later in "the new york times." i would like to hear what leaking is politics in washington, it is the way people expand their turf and make their moves.

so a tolerant has developed, that frankly needs to be adjusted. and i would like to hear both of you, put your result on record on the subject of leaks, how seriously you will take their investigations, whether you will engage in them yourselves, and how you consider that problem. again, ms. wagner, if you could go first. >> senator, i share your concern about leaks. and also your perspective on why they happen. i do take them seriously. if i am confirmed, and i have reason to believe that anyone in my organization is leaking, i will deal with that in a matter of management accountability. if it rises to a level that it requires a private report be submitted, i would certainly support doing that. so i share your concern and i will take every action that i can to ensure that the leaks do not come from ina if i'm confirmed. thank you. >> ambassador?

>> i share ms. wagner's statement. i would add that the personnel that inr are not involved in politics, and they shouldn't be involved in politics. they have no business being involved in politics, and we would, if a leak were to be seen to be coming even from our general direction, i would take very serious. and each of you may very well be called upon to be witnesses or to make your staff available as witnesses in investigations of leaks that may take place higher up, but the trail is back to information for your organization. i hear you say that you will provide your full cooperation? >> yes. >> thank you. >> thank you very much. before recognizing senator wyden, i would like to point out that i have appointed a task force on cyber, which is a very serious concern to this committee. senator whitehouse heads that task force.

senator mikulski and senators snowe are members, and they will be probably talking with you any more serious nature at a later time. but it is of major importance to this committee and i just want to have the opportunity to say that. senator wyden? >> thank you, madam chair, and welcome to both the nominees. ms. wagner, it seems to me there are some very serious problems that are now facing the department of homeland security's intelligence unit. and i want to ask you specifically about your response to several of those. let me start by reading you a brief excerpt from a report that the committee approved unanimously earlier this year. and i quote here. the committee has raised a number of concerns with reports issued by the department of homeland security office of intelligence and analysis that

inappropriately analyze the legitimate activities of u.s. persons. these reports raised fundamental questions about the mission of the office of intelligence and analysis, and often used certain questionable open source information as a basis of their conclusions. now the committee is not talking here about one instance. they are talking about a pattern, and this report was approved anatomist lead by the entire committee. so my first question is, if you are approved what specific steps would you take to make sure that the office stops this inappropriate analysis of the legitimate activities of law-abiding american? >> senator wyden, i am aware of some of the troubling products that have been released from ina

in the past. and if i'm confirmed, i intend to attack that several different ways. there are a couple of issues that are reflected in this product. one is basically portrayed craft, lack of analytical rigor of the other is the problem with the failure to take into proper account privacy civil rights, first amendment, protection of speech and the problem with definitions in one particular product was it did not draw a sufficient distinction between the leaks and actions. so i would put in place a very strict tradecraft training program to include mentoring for the analysts. i would also ensure that there is training for everyone on the guidelines that we are to follow, that flow from the oh and have been courting with the justice department to make sure that all of those concerns lead to privacy civil rights and civil liberties are built into

the product early on. and finally, as a sort of insurance measure i will make sure that there is in place a very thorough vetting process for review before those products are actually released. >> do you believe that it is ever appropriate for your office to analyze the legitimate activities of law-abiding american? >> know, senator, i do not. >> now, the homeland security institute and they are federally funded a research center, the evaluation gave the office and overall ranking of one and a half out of five, with regard i gather with all the general functionalities. in particular, it noted, and i quote here, back office processes are inconsistent and ad hoc, and again quoting a stated planning programming and budget processes are ill-defined and lack of vision manager

involvement. you are a former chief financial officer for the agencies budget director for the house intelligence committee. i assume you are up on these general issues. do you agree with the independent evaluation? >> senator wyden, i haven't had an opportunity to be briefed on all these processes in detail, but as far as i know the evaluation is accurate. and i expect to make addressing those management issues and processes one of my top or dirties, if i'm confirmed. >> since i'm running out of time, based on what you know now, what specific steps would you take to address these concerns from the independent analysis? >> it seems to me that what the primary problem is a lack of repeatable and transparent processes that give people trust in the organization and their

leadership. and i think i would take steps to put those processes in place. i have done that before. and as the director at dia leading a large analytical organization and i think that i have the ability to address these issues but it will take a little bit of time, but i'm going to make it a priority. >> thank you, madam chair. >> thank you, senator. senator feingold? >> i want to thank the nominees. i had a chance to cheer last month i will address my questions to ms. wagner today. as undersecretary for intelligence and analysis your will have response but for setting policies relate to the connection announces finding, dissemination and retention of open source information, including on american spirit and as i know you're aware, this is an important homeland security responsibly but it is also privacy and civil liberties implications. for example, dhs and open source

information to the maryland state police about the first amendment protected protest activities of local antiwar groups. something that senators mikulski and cardin and i express concerns about earlier this year. what in your view constitutes open-source information on the americans and what is ina's role in setting policies for how that information can be used? >> senator feingold, i believe there are well-established guidelines and processes already in place that just need to be followed. and the analysts need to be vigorously trained. the language in that there protects u.s. persons has not changed since 1981. there are guidelines that ina is using, should be using that flow from that. and that again, i believe that training oversight and reviewing and release mechanisms are critical to ensure that we are

only using data that is appropriate and lawful for us to use in accordance with all applicable laws and regulations. >> director blair has said it is one thing for private companies have detailed private information that it is another for the u.s. government with all its power and authority to have the same information. when is it appropriate for the government to purchase from private companies data on americans not suspected of any wrongdoing? sure that information be considered open-source? >> i don't believe so, senator. i think for us to have information it needs to be tied to a legitimate intelligence requirement that we can defend. it needs to be consistent with our legal authorities, and it needs to be handled consistent with the privacy guidelines that are laid out in the documents that i mentioned earlier. >> would it be fair to say, because a lot of americans voluntarily put a lot of information on the internet to be read by anyone. would be fair to say that there are limits to how much of that

information can be retained and when it can be subjected to data mining? >> yes, i think there are limits. and again, i think there are some very crucial legal tests that need to be made in dealing with that information. >> the fbi's authority is subject to statutory the attorney general's guidelines and oversight. this and other committees periodically debate whether those accords are too broad or not broad enough and with the checks and houses are adequate. members of congress know where to look to understand the legal framework for what the fbi does. ina is a new institution. it has opry with little specific legal guidance governing activities that have a potential impact on america's. ms. mika, where should this guidance comes from qwest is there a role for the department of justice and had joint invited in unresolved constitutional or statutory question or other gaps in the legal guidance currently available to ina and have you identified those guys how to go about resolving and?

>> i have not yet identified any gaps, but if i'm confirmed, and i do, i intend to rely heavily on the department, office of civil rights and civil liberties in the privacy office. ina is in the process of hiring its own dedicated privacy officer. i would first look in house for guidance on how to deal with appropriate information, or programs. and then i would expect that we would deal with the department of justice, if it required any changes to the guidelines that we can't operate under, which we did negotiate and consult with them on. >> i have long been concerned about the lack of a meaningful standard cover procedure traveling with a laptop by the department home acidity. can determine what the procedure is, for the contents of season laptops? >> senator, as you know, ina doesn't actually sees the

laptops, but under certain circumstances, it is i was in the laptops was provided to ina, we were treated in accordance with all the abaca laws and regulations on analyzing and storing that data. >> would you commit to considering a policy by where dhs must seek to obtain a warrant before he could hold the contents of the season laptop for more than 24 hours? >> senator feingold, i really don't think i'm in a position to answer that question right now. i just don't know enough to answer it. i would be happy to come back and discuss that with you further. >> could you get back in as soon as you can with your spot on that? >> yes, i can't. >> thank you. i think that your. >> thank my. no questions? any additional questions? ambassador goldberg, one question for you. what role in your view, ambassador, do you believe the assistant secretary should play

in ensuring that intelligence sharing relationships court and broader diplomatic relationships, and obviously viceversa? >> senator, i think intelligence relationships among others that take place with foreign governments are very important. very strong contributors to our national security. they have to be done obviously with great care. our particular interest in inr is that the chief of mission in his or her authorities is delegated by the president and the authorities conferred by the president be respected, as the oversight for the executive branch at the embassy. >> we bring you live now to an event with white house budget director peter orszag. he will be talking about the status of health care

legislation on capitol hill. the senate is entering its third day of debate on the bill. live coverage from the national press club on c-span2. >> it never came up in the major news conferences in washington. jerry thought that was a darn shame. also, he found that in a rare moment when health policy determines as a major issue at stake, the sperling breakfast, he couldn't get him because he was just a lousy health reporter. of course, in those days health reporter got no respect. jerry start the practice grew. many people here today were members of that group. but i thought it would be appropriate is more just to take about 20 seconds, which is about as much as jerry would already, just in a moment of silence to remember jerry who did so much for the health policy reporting in this town. and as i say, at that point jerry would say come on, let's

get going with the questions. so jerry, we miss you. and we are honored to be following in your footsteps today. i had the pleasure this morning of introducing our guest, peter orszag, who all of you will note is the director of the office of management and budget in the obama administration. overseeing budget policy, coordinating the implementation of major policy initiatives through the government, and of course, most particularly at the moment, helping to shepherd through health care reform. from january 2000, to 2008 as you also know he served as director of the congressional budget office supervising the agency's work in the analyses of economic and budgetary issues. before that, he was a joke packman senior fellow and deputy tracked of economic studies at the brookings institution. also served as director of the hamilton project, director of the retirement security project and codirector of the tax policy center. during the clinton administration, he was the

special assistant to the president for economic policy. and before that, a staff economist, and then senior adviser and senior economist at the council of economic advisers. he is a summa cum laude graduate in economics from princeton. he owns a phd in economics from the london school of economics, which he attended as a marshall scholar. is an author of numerous books. finally coming is also an avid runner and has completed several marathons. occurred when i think qualifying as one of we push towards health care reforms. so join me this morning and welcoming peter orszag. >> thank you all. is a pleasure to be your. i am particularly pleased because i am an avid reader of health affairs, and thank you all for joining us this morning. let me just a few remarks and then i want to reserve most of the time for your questions. we stand on the verge of a

dramatic account of schmidt. not only meeting the moral imperatives of the worlds leading economic power, dramatically reducing the reigns of its uninsured. not only doing so in a fiscally responsible way, but also putting in place the key tools that will help to lead to health care system of the future embodying continuous improvement and an emphasis on quality rather than quantity. two weeks ago, 23 eminent economists, including the officials who ran medicare under the bush administration, two nobel prize winners and particularly warm to my heart, two distinguished former directors of the congressional budget office, sent a letter to the president outlining the core key pillars of a fiscally responsible health reform and i have that letter within. goes for billers are first, deficit neutrality as gore by

the congressional budget office. so that at the very worst, you are doing no harm, doing no harm to our fiscal outlook. second, the inclusion of an excise tax on high-cost private insurance plans, which according to these economist will, quote, help curtail the growth of private health insurance premiums by creating incentives to limit the cost of plan to a tax-free amount. in addition as employers and health plans redesigned their benefits to reduce health care premiums, cash wages will increase. the third pillar of a fiscally responsible health reform, according to these eminent economist, is the inclusion of a medicare commission which would create a process through which a medicare policy can adopt to changing conditions more quickly than the current system. and as economist know, and i again will vote, creating such a commission will make sure that

reform to health care system does not end with this legislation, but continued in future decades with new efforts to improve quality and contain costs. and then finally, the fourth pillar of a fiscally responsible health reform bill is a series of delivering system reforms. and within that category, i think one should think of several subcomponents. the first is that we need to digitize the health care system. because unlike other sectors, the benefits of i.t. have not spread universally through the health system as in other parts of our economy. as many of you know, the recovery act that was signed earlier this year, provides an historic level of funding to expand health information technology. in the administration will be coming forth with regulations so that in the near future so that that money will start flowing. and we will be moving towards the digitized system of the future.

the second thing in false comparative effectiveness research, that his research into what works and what doesn't. too much of the healthcare services delivered in the united states are not backed by evidence that they work better than an alternative to getting too many cases, your doctor doesn't have the information necessary to evaluate whether this course of treatment or a bad course of treatment would be more beneficial. again, the recovery act included some historic funding in comparative effectiveness research. and i will return in a moment to the back that legislation under consideration ads up on that. and then finally, digitize help system what works and what doesn't and then reorienting the payment system a way from paying for more stuff and towards paying for better stuff. right now we have incentives for volume, and that's what we get. we need incentives for quality so that we can move towards a system that emphasizes making

people better rather than having more things done. there are a whole variety of reforms that have been suggested in this area. bundled payments, policies and readmission rates, accountable care organizations, and what have you. but the point is that within a delivery system reform one of the continuous feedback with digitize records, evaluation of what is working and what is not, and an incentive for providers to follow and emphasis on quality rather than intensity of. let's take a look at the senator bill, the bill that is on the floor of the united state senate, and evaluate it against those four pillars that have been put forward by the team of economists. first, not only does the build achieve deficit neutrality according to the congressional budget office, it is better than that. the congressional budget office suggested that it will reduce the federal deficit by $130 billion over the next

decade. and by a quarter percent of gdp or more than $500 billion over the second decade. so with regard to the first pillar, check that. second, an excise tax. as you all know, the bill on the senate floor includes an excise tax. on high-cost private insurance plans. check that box. medicare commission. it is also there. check that box. finally on delivery system reform, the senate bill includes new provisions in bundling, and a voidable readmissions to hospitals. that is, roughly 20 percent of medicare beneficiaries are readmitted to a hospital within one month of having been discharged from hospital. no one would ever want to have to go back to the hospital if that's a voidable. because it's not a pleasant experience. and the senate bill includes incentives to try to mitigate that tendency. and also includes incentives to

comparative research which i mentioned earlier, including through a new nonprofit institute, to promote quality measurement, to create a system to pay hospitals based on guy you'd rather than just based on intensity, on volume. to encourage doctors and patients to engage in more shared decision-making, and to create accountable care organizations which have been promoted by a variety of health policy analysts. and perhaps just as importantly, it creates a new innovation center that will allow the testing out of a variety of different approaches, and then moving to scale as one learns what works and what doesn't. now i should say, it would have been a lot easier just to do a deficit neutral bill with savings that are, you know, scored by the congressional budget office and a coverage

review. but what that would do is perpetuate a system in which there is inadequate attention to quality and in what you are not dealing with these delivery system reforms. that would have been a lot easier. that was not the course the president chose and it is not the path that is the house or the senator's biggest remarkable that would have been easier just to do a blunt savings and coverage expansion bill. that is not what is happening here. now, there have been critiques that have been put forward and let me just try to address the main critiques. the first is that it is nice that on paper the bill is deficit neutral, but come on, we all know none of that will actually transpire in the future. and therefore, while it looks like it is deficit neutral, or even deficit reducing, that's not the way it's going to be. and the example that is sometimes used is the so-called sustainable growth rate foremen which was put in place in the late 1990s. in which congress has regularly

acted to prevent reductions that were scheduled to occur. let me tell you why i think that that line of argument is not apt to the bills that are currently being discussed. first, unlike the sustainable growth rate -- first, the fact of the matter is that history is not right. if you look at the vast bulk of savings that indent in the past include the balanced budget agreement in the 1990s, the vast bulk of them actually were implemented as opposed to being undone. specifically, with regard to the sustainable growth rate form that there are significant differences between that and the bills under discussion dig up all of the bills did was to reduce, was to have a growth cap on paper and not get as underlying drivers, of health care costs. then press the analogy would have more force. that is not what has occurred. again, as i already said the bills are trying to get at those

underlying drivers of health care costs through delivery of system reform that all the other steps we have been discussing. >> the existence of the medicare system which i've mentioned describes a strong counterweight to any forces to loosen in the future. in other words, medicare commission is on going to be putting forward proposals to improve quality and reduce costs over time. and that provides a very strong counterweight. and finally, don't forget that unlike what has occurred over the past several years, or in the early 2000s, we now have a go provisions that are enforced and that are being obeyed in the house and senate. if you wanted to undo legislation that was enacted this year in the future, under the pay go rules you have to offset the cost of doing that. that was not the case as surpluses emerged in the late 1990s and early 2000s, and

those rules were largely ignored. the second critique is that the delivery system reforms, although they are there, are too timid. that there are a bunch of pilot projects and they're not going to scale the meeting and so ironically on the one hand, some people are saying there's too much been done on the one hand and others are saying the reforms are too timid. i think one needs to remember that because we have not put as much attention on cost containment in the past, or sufficient attention, we don't know exactly how to create the proper financial incentives to reduce reignition on unnecessary hospital readmission, or to bundled payments. exactly which condition should be covered, how should the payment structure worked. or with regard to accountable care organizations. again, exactly the parameters that should apply. you can keep going down the list. the problem is that given the lack of attention to this key

problem, rising health care costs and inadequate attention to quality in the past, we don't know enough to move to scale the media they. so in the income is also worth pointing out the health care market is dynamic even if we knew a lot now, we would want a system in which we are trying things and then you have a mechanism in place to move to scale as you are learning what works and what doesn't. the existence of the innovation center and the medicare commission and the senate bill is use that mechanism, where you can go out and try bundled payments. you can try and send us for quality, and a whole writing of other things, and then as you learn exactly what's working and what is not, you go to scale through a process that is already embedded in the legislation. so what you are greeting is an infrastructure for continuous improvement where, again, you have a digitize health care system, researching into what is working and what is not. and then with regard to

incentive payments for providers toward quality, you are trying lots of things and you have an ability to get them into practice and into policy much more quickly and deftly and under current law. so bottom line, there is always more work that can be done. and although all four of those buckets are checked in the senate bill, and undoubtedly there is even more that can be done as this legislation moves forward, to strengthen the provisions in each of those four pockets. but the bottom line is, the bill that is curly on the senate floor contains more cost-containment and delivery system reforms in its current form than any bill that has ever been considered on the senate floor, period. as the debate moves forward, we need to continue to keep our eye on those four pillars of the fiscally responsible health reform, but i'm confident we will get there and i will be delighted to take your

questions. thank you very much. >> thank you very much, peter. i will take the moderators prerogative of asking the first question and then we will take questions from all of you in the audience here please be prepared to invite herself by name and affiliation so we can make sure your last name is not politely. peter, back to the four pillars for a moment. the deficit reduction one, you said being the first, i number have pointed out that a lot of the deficit reduction comes about initially by a class act provisions in the bill, the community living support and services. which essentially is long-term care benefit collects a lot more money up front rather than paying it out. and really amounts to a new entitlement being seated within the structure, which over time, could be much more expensive than we anticipate. how do you respond to that critique? >> in several ways.

first, if not most, it's about half or so of the first decade surplus from the legislation, about 70 billion out of the 130 billion reduction is coming from the class act in the senate bill, which means that even a part from the class act, there is a surplus contained in the senate bill. second, secondly, even including the classic and the other provisions as you go into the second decade you are still running a significant surplus. and then finally, there are a variety of provisions within the class act that are being a value weighted to try to make sure that even within that program actuarial solvency is assured and that the program is on a sound financial footing. self containment. and so again, bottom line, even apart from the class act the bill is running a surplus, and then there are a variety of

tweaks that are being explored to make sure that the class act is on a firm financial footing on its own to the. >> what tweaks would've caught that? >> i don't want to get into the specific details, but there are already changes that were introduced in the version that was embodied in the house legislation. there are ongoing discussions about other things that can be done. i think there is a tension being paid to make sure this program, the class act, can stand on its own 2 feet am actuarial perspective. >> let's take questions from those of you in the audience. please identify yourself by name. >> two questions. first, former editor in chief of journal of medicine said that single-payer is the single-payer national health insurance, only reform that covers everyone and controls cost that she now leads legislation going through

congress should be defeated and we should start from scratch. the second question is the ap reported earlier this week that lobbyists, health care lobbyists repeatedly over the last year, and you met with the lobbyists from blue cross blue shield association in march, and single-payer advocates have been pretty much barked in the white house that they have not met with decision-makers like a cell. to question. marcia angell's single-payer question, and second, what was discussed with the blue cross blue shield association when you met with him? >> let me deal with those in reverse order. first with regard to not only with regard to myself but the administration officials at large, i meet with a whole variety of folks who know about the health care system, whether it is union leaders or providers, insurers, what have you. i am not aware of meeting

requests from your group or from others, but the key point is that we are hearing from a whole variety of people and institutions that have interest in health care reform. and that is exactly how it should be, which is getting a broad view sort of 360-degree perspective on health care reform. now with regard to i think the bottom line of your question is is this bill better than nothing for coming, that is a judgment upon which i guess i come down very firmly on the other side for the reasons i have already discussed. not only are you reducing the rates of the uninsured by more than 30 million, let's not forget there are 30 million -- more than 30 million americans who will have health insurance in 2015 or 2016 because of this legislation. that would not have health insurance otherwise. and there are millions more who will have higher quality and

better insurance with better protection than under current law. and don't forget, that going without insurance is a key driver of personal bankruptcy and you're doing a lot of risk, financial and other risk when you don't have insurance so that is a major congressman. [inaudible] >> but before, again, you are not only expanded coverage but you're also doing doing so in a way that reduces the deficit, and put in place by our dimension a whole series of tools that will help lead to quality and reduce costs over time. now, there are some who would prefer not having a mixed public-private system as we have in the united states. i think the president was very clear that we have an american system and that we are going to have a mix of public and private provision and insurance, just from -- even from a practical perspective. and i think that's where we are. we're on the verge of a substantial of congressman. i would also point out, there

has been a lot of attention paid to a public option. and that is understandable. i would just note, i think it was a very good op-ed written by paul starr, professor of princeton, but been involved in the effort in the early 1990s and who co-founded the american prospect, pointing out that if anything, the attention paid to a public option has been disproportionate to the impact for example, of how the regulations surrounding the exchange would help to promote competition and reduce costs. so the public discussion has become somewhat lopsided, in his opinion, and i happen to agree with him. there are many other things in the additional things that i mentioned that would help to expand coverage, increased competition, and reduce cost. >> let's take another question here. >> thanks.

i am filled with kaiser health news. one criticism from the health insurance industry on the individual mandate and the relative weaknesses. $95 worst year, 750 after two years. why would somebody spend thousands for health insurance as opposed to just paying a penalty? and will that lead to people just waiting until they get sick and then buying insurance? >> look, first one of the things i have learned is that the economy one approach life for all that matters is the direct financial incentive's or penalties is just wrong. so looking at things just so in terms of the financial penalty, not to say that it doesn't matter, what exclusive focus on rational perfectly optimizing behavior is just not, not what is out. if you look at massachusetts for example with a penalty is only slightly higher than $750, they have had if anything much more

dramatic take-up than anyone predicted. and that's because i think it is more important that they were advertising at fenway park than the penalty was 900 or 1000 or $1100. and the reason is it created a social norm that you were expected to have, that everyone knew about it and you're expected to have insurance. similarly, in other areas, if you look at for example the difference between adherence to seatbelt laws and speeding laws, i don't know what your expense is like, i would point out by the way if anything, the financial penalty for -- the financial penalties are roughly the same. a ticket, do not you can for charged with you for not wearing your seatbelt or speeding, roughly the same. i do know about your experience at my expense is that adheres to seatbelt use is much-and here's to speeding laws. and that's because i think there has been, there is to vote in the united states a social norm that you're supposed to wear your seat but if you're driving a car or if you're in a carpet

if you got in a car and the driver was speeding i doubt, slutty, maybe 30 miles an hour, 5 miles an hour you would probably want to say something to get the driver wasn't wearing a seatbelt, he would probably -- some of you might say something. and that is the important point. a lot of what the impact of the mandate and other provisions, it will depend on how social norms develop and on execution. and i probably should've said that at the beginning there. one cannot expand coverage by 30 million, move toward higher quality, reduce costs just through legislation, stabbed her fingers and you are done. a huge amount will depend on how well this is executed and implemented. and a lot of attention will have to be paid in the next few years to getting this done right. >> question here in the front.