worked very well. but i don't think we should rely on. i think that was lucky and i think the amount of attention and time that people, regulators, the industry, legislators are focused on making sure that the instrumentality and the pipes of clearing derivatives are in place is highly justified, not withstanding a derivatives crisis. >> and do you think that the failure or near-failure of aig was related to credit swaps, that is credit default swaps? and do you think that having clearing would have in any way reduced the risks inherent in

aig's position? >> i believe that it may have helped a bit. i don't think that was a key thing. aig was bent on taking a lot of credit risk. they took that credit risk in the derivatives market. they took that in writing insurance against credit events. they took it by holding securities. it was a failure of risk management of colossal proportions. there were derivatives and there, but it was really, those were merely mechanisms of taking credit exposure to get paid for that exposure that they took through multiple kinds of vehicles and could have substituted other vehicles for them. >> do you think, how would having a clearing house and having exchange trading of standardized derivatives reduce systemic risk?

>> i think that, to the extent that you have -- starting with a clearing house, to the extent that you have a clearing house the issue we had with an aig visa ve margin or fighting over settlements or market to market should be for the smooth transfer of margin we would have avoided. we got market. it was hard to get out of them. it was slow. in a clearing house context that would be easier to do. so anything that is liquid enough and could be priced easily to go through a clearing house should. if further it is standardized so it can trade liquidly on an exchange then it should. i would not banish solutions that could not trade on an exchange because they serve a useful purpose. if somebody wants to hedge their grade of oil, let them hedge their grade of oil. but what could be on an exchange

should be on exchange. those that can't produce through a clearing house and those that still can't have bilateral contracts between companies, but should be surveiled and subject to extra capitol. >> thank you. mr. mack, i think in your testimony you indicated that you thought that clearing would be a valuable reform effort at this point. would you comment on that [speaking in native >> okay. as mr. blankfein said, it really would be alleviate some of the issues of saddling up with your counterparties. not to be redundant. it would be very helpful. you would shrink, i think, some of the notional amounts. so i think it would go a long way in helping us, especially in times of crisis. away from that it makes sense to

do. if you go back not too many years ago when we were able to put the swaps business into the clearing house that has helped us. >> could you tell me how much, i understand that only standardized contracts could be exchange traded and cleared easily and that the spoke customized contract because they would not be part of a fumble group are not as an amenable to clearing. could you tell me what percentage of the over-the-counter derivatives that your business is involved and are standardized as opposed to this bocor customized. >> i can't give you an exact percentage. i will give you that information. predominantly they are standardized. we will give you exact numbers.

>> kid you tell me me what percentage of your business and over-the-counter derivatives are standardized? >> no, i can't. i would have to look. i would guess that our business mix is would be different from each other. different places in the market. >> i would appreciate it if each of the witnesses could provide the commission with information on the percentage of standardized contracts your over-the-counter derivatives for the last four years place. >> yield my time on that point. >> if, in fact, we created -- no, it's my time. your's is being saved. if we created the standardized

versus what the ratio was over the last four years, don't you think it would change over the next four years in terms of a whole lot more spoke and fewer standardized? >> said dawn mello. >> it always works that way. >> i don't know. >> we'll see. >> a lot of derivatives are already on exchange clearing houses. i am talking about, we estimate 70 or 80%. one of the big fears as regulators is that this opening for over-the-counter, we can put a lot of stuff in there. regulators should limit and charge capital in a way that everyone is comfortable. >> thank you. i would like, just so you know what our motivations are, i would like more things to go through a clearing house. the biggest problem we had was

counterparty risk. and so it would release u.s. to have everything not just standardized, that could be standardized and makes sense to go along as clearing house arrangements. in fact, the industry has been driving this. >> back on your time. >> thank you. have any of your institutions changed your operations in terms of over-the-counter derivatives dealing in light of what was learned through the financial crisis? >> at think everybody did a lot of work. the regulators have looked at it very carefully. that was the risk that build up in a way that i don't think we've anticipated. that is respectful lot of our

time. not only the core economics, but the underlying credit risk. >> mr. dimon. >> other than being more vigilant i think not a lot, but i will make one exception. a little more time now looking at our exposure to another large financial companies so that we are more prepared in case there are problems since we have a lot in contrast to the company's. >> thank you. >> do you need another minute or so? >> i would like another minute just to ask one follow-up question to the questioning that commissioner morrison made. i would very much appreciate it if each of you could submit to the commission information on your proprietary trading over the last four years, that is the kinds of trading that you were

engaged in, whether it was speculative, the degree to which you were engaged, the revenues and profits for each of the last four years. thank you. >> thank you, commissioner warren. mr. vice chairman. >> thank you, mr. chairman. first of all, i want to thank all of you. we have a very difficult job. when you rely on secondary and tertiary sources it makes it very, very difficult. your willingness, one, to come in front of us and begin to answer the questions that we are asking. i might just tell you, mr. chairman, based upon my request we have already over the web, and i have some directed specifically to some of you. i won't ask the now, but we both get it back and writing and communicate. we have got california, tennessee, connecticut, missouri, and more coming in.

this is going to be very useful to us. you want to assure you, as we have the administration, that any information provided to us will be handled in the appropriate legal and protected ways, especially sensitive with the private sector on trade secrets and other information. it is just that without your help in follow-up questions that we will ask to get some detailed understanding that we can provide not just the broad picture of what happened, but a more nuanced understood in-depth picture of what happened b ecause, frankly, an argument that i made a lot and quit making when i was in congress is that it is basically you just don't understand what we are doing in the context we're doing it. and i'm sure that you have heard a lot of that. our job, hopefully, is to provide as mild and easy a form of education as possible to just how complicated this world yesterday and what makes it akeo

around. your help in that regard, as i said, is invaluable. we will ask you questions. we would hope we get a timely response. as we get nearer our time to exist it will be a bit pushy ier in terms of getting your response, but once again, ms. chairman, i want to thank the panel now, one, for their willingness to come, two, their openness in response and, three, the answers you will be giving us over the course of eight months. >> thank you, mr. vice chairman there is little remaining time. i would like to just ask a few follow-up questions. mr. blankfein, you are going to suffer. i do want to revisit some of the issues. so that me preface this by saying if i die 51 % right and

49% wrong will be a happy man. i do believe that one of the issues we must explore is was this purely a pervert storm or was it a man-made perfect form in which the clouds receded. that is why i am driving forward questions and answers. i will put aside my view that i am troubled by your inability to accept the probability or certainty that your firm would not have made it through the storm but for the vast array of federal assistance. i really want to turn to this issue of mortgages, which you securitized, as did other firms. bofa stopped. 60-25% default. maybe it is like the murder on the orient express, everyone did it. having said that, mr. blankfein, i read your testimony. there is public policy driving this mortgage business.

you were subject to the community reinvestment act. there were the standards of the time, but i would hope that we try to elevate standards. of what i am bothered by is thi. you were not just a market maker. you were securetize and underwriting packages for mortgages. when it was clear the market was going bad you kept moving this product in the market. i guess what i would ask you is what is your responsibility when you put your name on a security to investors to underwrite that the early? there were fbi warnings, warning available. did you fail in that respect in that you did not underwrite the loans that you then securitized and moved into the market? >> what we did in that business was underwrite to the most sophisticated investors who sought that exposure. i know it has become part of the

narrative to some extent that people knew what was going to happen every minute. we did not know at any minute what would happen next, even though there was a lot of writing. the fbi may have written a report. i will tell you that there were people in the market who thought that it was going down and there were others who thought, gee, these prices have gone down so much they are going to bounce up again. i remember being teased because at my shareholders' meeting early in the seventh somebody asked me what inning or we in. i said the seventh inning of the crisis. of course it turned out not to be. it turned out to be the second inning. so we were doing, we were creating, if you ask me if i wish we had done it, yes. >> i am asking you a more direct question. was your due diligence adequate

>> well. >> did you scower hour-long tapes? did you dig deep into looking at what you're moving the actual product? in the 1920's everything is different. wall street banks were selling bad latin-american debt. at what point do you have a responsibility? >> we have responsibility to be open and to tell people what they are having, but in our part of the market. >> not to ensure the product unto itself. >> good products that creates the exposure that these professional investors are seeking, right now you could buy. we would underwrite distressed product as long as we disclose it, help somebody move that distressed product off their balance sheet, and give it to somebody, a sophisticated investor, knowing what the

product is. >> but you were giving more than that. you were facilitating the market in which products were being offered in the consumer marketplace that are clearly unsustainable. >> yes, for sure. it had that effect by allowing that to turn over and buy as giving the dollars back to the originators in exchange for loans that allowed them to go out and originate more loans. so to that extent we were, played a part in making that market, all of us as syndicators. doing what the capital markets to which is give people access to capital. so that was a role. >> mr. mack's rather compelling statement about regulation recently, we cannot control ourselves. you have to step in and control the street. is this an argument for very tough regulation of products offered at the ground level because of the inability of the chain of securitization and the chain of private players to control the quality?

>> looking at what happened in the most horrible thing of this crisis, what has happened to consumers, to individuals and the mortgage market and of the things, taking on debt as a consequence of behavior and a consequence of behavior in the recession. i would say no one would argue that there should not be more protection and safeguards and regulation of that interaction between finance and the consumer. >> all right. one minute left. the only final question is to you, mr. diamond. how do you correct the asymmetry in compensation? let me just say it's simply. i was in the private sector have my life. i was in a business where you put real equity at risk and if you lost you lost. you bet big. you could also loss big. there is an asymmetry. it seems that you are at a

blackjack table in which you never really get wiped out. on the other hand if you bet big you can win big. it seems to always tilt toward making the biggest possible. >> there is a consequence. you loss your job and reputation. i do think you raise an issue. to reduce the do the right thie right reason for the client? it is a little one-sided. the more senior the more stock than on, so they are responsible for the well-being of the whole company, and they will pay a price if our company pays a price. in d.d you see that. people did pay a price. >> even though the harvard study said that even in those

instances people took out hundreds of millions of current compensation. so the downside compared to what most americans feel is not nearly the same. >> should we do some of those numbers with the study? they were not all right. >> we will debate that after the session. gentlemen who came before us, thank you very, very minds. thank you for adding to our work. appreciate that we will be posing request as to each and every one of you. thank you. photographer, hold on a minute. [inaudible conversations] >> folks, photographers, clear out of there. hang on. we are still trying to do a meeting. >> please leave the well. >> move aside. >> the hearing is not leaving. >> we appreciate your fervor to inform the public, but we will take a 25-minute break and commencing at 12:45 we will be moving to the second session of this hearing. thank you all very much.

[inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations] >> branch centers and offering centers, investment bankers. as an individual and shareholder. [inaudible conversations] >> i think that companies do badly. [inaudible conversations]

>> two different things. first of all, i have been completely clear throughout that i don't blame the regulators at all, never, not even once. the people to be blamed are the people in the management of companies that failed. having said that we should, the regulators should look. what can they have done better to avoid a problem like that? you have the right to raise issues with your government. that is what democracy is about. most lobbyists are very vocal. the facts and information. j.p. morgan chase has always tried to help them do the right thing. i don't think that is inappropriate at all. [inaudible conversations] >> what do you make of that proposal? >> all right. i haven't really seen a proposal. it has kind of leaked out.

i think using tax policy to punish people is a bad idea. a step away from that, when we talk about enhanced resolution authority, the industry should pay for the cost of that. unrelated taxes. i also think it is very hard for the auto companies. at one point you have to be a little fair. >> would those taxes be passed on ordinary americans? >> i don't know how it is designed. all businesses tend to pass their costs on to the customer. it is not unnormal. >> win the fight over this debate. you make the argument that size can be an important factor. you're going to win that. banks like yours should be barred from doing investment banking. they should be smaller. >> did glass stiegel coming down

cause problems? mortgage brokers and thrifts. they were not a combination. and size, look, a lot of companies are big because they are required. the size of scale, the size of investments, the size of data centers. j.p. morgan does business in 100 different countries. we follow fortune 500 companies around the world and help them do what they do. you can't do that if you'rexd small. you have a debate why you need to be that big. >> the public backlash. >> does wall street get it? [inaudible conversations] [inaudible conversations]

[inaudible conversations] >> investment bankers are the next witnesses in this financial crisis inquiry commission hearing. we will bring you live coverage when the hearing resumes after this break here on c-span2. and tomorrow is day two of the hearing with testimony from federal, state, and local officials on current investigations. attorney general eric holder, fdic chairman sheila baird, and sec chief mary schapiro. we will bring you live coverage tomorrow as well at 9:00 a.m. stduring this break a conversatn on proposals for creating new jobs from today's washington journal. it's about 40 minutes.

>> host: our guest now is the washington bureau chief on market watch. he is here to talk to us about creating jobs here in america. we found this blurb in "usa today" about jobs. it says that for every job there are more than six workers waiting for that job. those are the latest figures for november. what do the numbers like that mean in the broader economy? >> guest: well, i think it shows how tough this environment really is for a lot of people out there. the usual numbers around two openings, two unemployed people for every opening. of course a lot of people are qualified for those openings at all, but usually a lot more turnover in the labour market. now we have more than 15 million people unemployed. millions more have been forced to work part-time. they would like to work full time. millions more have just become so discouraged about finding a

job that they have just dropped out of the labour force and are not even try anymore. so it is really tough right now to get a job. layoffs are falling, but hiring has not picked up yet. that is really the key element that we need to see. >> host: what are the best projections you're hearing about? >> guest: the best. well, i heard one economist say he thought that the unemployment rate would fall to 8% by the end of next year. it's 10% now. most economists i'm talking to don't think there will be much progress at all over the next year. there is a survey called the blue chip. their expectation for the end of next year is 9.9% unemployment. very, very little progress. millions of people will really struggle this coming year, even though the economy is growing. >> host: creating jobs, the

topic of this segment. eaur chief for market watch. democrats, republicans, independents, we welcome your calls. we will get to them. we found this in the wall street journal. it says that job data fuel fight over stimulus. this stimulus package was responsible for keeping between 1.5 million and 2 million jobs in the economy through the end of 2009. give us more of your perspective. >> guest: well, a year ago but democrats pushed through the stimulus plan. nearly $800 billion. at the time they said that they thought it would create or save about three, three-and-a-half million jobs. a lot of that stimulus has come into the economy now. they have reports out last night saying that their best guess was nearly 2 million jobs saved or created. the republicans all along have

just scoffed at this whole idea that stimulus could ever have an impact on the economy. they have been fighting this. very few republicans voted for the stimulus. just one in the senate. so it has been a big battle between the two parties over what to do about this great recession that we are in. the democrats are more activist. they want the government to take a wall. republicans have been very reluctant, even things that they supported in previous recessions they are really very reluctant to support this time. >> host: we will talk more about congress and the white house. before we get to these calls, i wanted to show you a chart. it is a little tough to see. the camera can move in, it is a "washington post" start. ey basically make the point over the decade that thereñi was zero net job creation. basically the same amount of jobs now as ten years ago. that is a pretty significant statistic. what does that mean for the

broader economy? >> guest: well, i think it means that first of all, we have had too bad recessions. we have had, you know, a lot of months of job losses. at the more fundamentally it means that the structure of our economy is changing. it is going to be in very violent and very uncomfortable for a long time for that to happen. the last time we really have this kind of structural change was in the 30's when we actually lost jobs in that ticket. i think it means that we need to try to shift some of our focus. we got very good at building houses. we got very good at packaging mortgages and selling the financial securities. we weren't that good at doing the things that maybe we need is a country. that is why i think the administration has focused on infrastructure and green jobs, trying to sort of turned the ship a little bit. one of the things we probably need is more manufacturing jobs.

we have, you know, a large trade deficit. we buy more than we can really pay for. ultimately we can really do that. we need to shift the balance is. that goes beyond just what is happening in this recession. i'd think it means that a lot of people will never go back to the same kind of job they had before. we need to think about what kind of jobs we can create for the future. how does this country fit in with the rest of the w orld? >> host: add some more briefly about what the house passed in december. what is it? >> guest: it is really hard to tell. but are locked up, i'd think, and a lot of this partisanship. the house as a little bit easier time because democrats have a bigger majority. the house bill is a little bit of a grab bag. it has got some stuff.

they have people who are unemployed. it has got some infrastructure stuff. it has cut some taxes. this, i think, the interesting part, tax credits to try to get businesses to create new jobs. it's always tough to make sure that you don't let the system gain. at think well-designed tax credits might work. at least it is something that they are going to try to do. but i just have no idea. >> host: to the funds now. william, independent. you are on. good morning. >> caller: good morning. >> host: good morning. >> caller: i just wanted to make a statement about this job creation. i always felt we are sending too many jobs overseas. why not bring some of those jobs back to the united states to back those jobs are going overseas so that certain interest groups can fill their

coffers with more profits. there are no manufacturing jobs left in this country. this country has become a service country. that is the reason why we are in the shape that we are in right now. thank you for your time, and that's all i have. >> guest: we have heard these sentiments from many, many callers, especially the last couple of years. bring those jobs on. >> guest: well, it is understandable that people would have that idea, have that approach. it is not that easy to bring those jobs back. but i think there are things that can be done to reduce the incentives to move jobs offshore. i think it is a little bit of a misnomer to say that we don't have any manufacturing jobs left in this country. i think a lot of the things that people buy at the store, the clothing and electronics and things like that that they buy

often and have labels on them, it often says made in china. but the reality of the u.s. is the biggest manufacturing economy and the world did we make a lot of very expensive things that foreigners in our own companies by. airplanes and computers and semiconductors. so it is not really true that we have no manufacturing jobs. there has been such a surge in productivity, in other words, we are able to produce, you know, almost 40 percent more manufacturing goods now than they were teen years ago with fewer employees. so this is the productivity revolution that should be a good thing. if workers share in the benefits of productivity. so far there really haven't. their wages have been fairly flat and they have lost jobs. i think the profits are really going to the companies rather than being spread to the rest of the economy. >> host: to that point "wall street journal" also has this story, u.s. trade deficit grows

as imports climb. rising imports to the u.s. outskirts exports. with unemployment here at 10% it could rekindle american workers angered over jobs lost overseas intensifying. so they are making the connection between jobs here and a broader trade issues. >> guest: absolutely. over the last year trade has really rebounded. a year ago trade had collapsed bobbly because of this recession. the biggest decline in global trade since the depression. and even, i'd become a greater than the early years of the depression. but that is rekindled now. there is more trade flowing back and forth. and exports from the united states has increased quite a bit. this year and one month we had sort of a setback. that is common because the numbers are released you a lot by borrowing. they shipped and plans one month and won the next, and that can make a big difference in the

trade figures for that one month. it is a general trend, exports are rising pretty strongly. that is pretty good news for the american worker because it means maybe we are becoming more competitive and maybe we can sell more things. >> host: to job creation. carol, republican. good morning. >> caller: yes. i have a question in regards to the health care affects on new job creation and what it will do to the job economy. one of the questions i have, their is a lot of corruption in the city of chicago, and a lot of the newspapers. husband has been in jail for a couple years. while he was in jail for embezzlement and corruption he wrote the book that is the foundation of health care. is that the same?

thank you. >> guest: to that health care. make the broader connection. it is really rough. a lot of businesses, we are hearing from a lot of smaller businesses that there is uncertainty about what is going to happen to health care, to energy, taxes in general. i think that they believe that this uncertainty is really hurting them. they don't want to make plans to expand right now with this uncertainty over head. that said, i think the health care bill, at least if it is well implemented and designed ought to reduce some of the uncertainty for employers about what their health care costs can be. small businesses in particular,

i think, are very hurt by the health care system we have today. imagine somebody who is working for ibm who has a great idea and wants to go out and start their own company. it is unlikely that they would if their child had leukemia or if they have some pre-existing condition. so that, i think, restrains the entrepreneurialship. small business sector in europe is bigger than it is in the united states. they don't have this kind of issue for people starting businesses. you know, but we can be patient about this. i hope i am hoping that of paris will be helped by the health care bill because of the certainty and the ability to get health care other than through your job. >> host: angela is on the line for democrats from indianapolis. welcome to the program. >> caller: hello. >> host: can you turn your sound down pleased. >> caller: yes. >> host: we will hear you much better. >> caller: just a moment. >> host: indianapolis on the line. >> caller: yes. hello. >> host: color, we need you to turn the sound down please. it is very hard to hear. >> caller: okay.

how about now? >> host: great. go ahead. >> caller: my question is on the economy. i want to say -- i am sorry. could you repeat that. >> host: you are on the air. we are just listening. >> caller: my question is, with the, what is going on as far as the economy with the american people? i am sorry. i cannot hear you. >> host: caller, why don't you, we will put you on hold. we will see if we can bring you back. i am not exactly sure what the issue is. in the meantime we will go on to bangor, maine. bangor, maine, go ahead. >> caller: hi, there. thank you for c-span. well, i wanted to make some points. one was the health insurance for jobs. i am kind of an entrepreneur. why don't have, really,

insurance. my point was as a business owner i really don't feel with all the stuff that i have to do that i should have to worry about someone's health care. i think this should be all totally removed. >> host: mr. nutting. >> guest: there are a lot of people that feel that way. the bill does not get to that point. there are a lot of progressives and liberals he said the single payer plan which would really divorce health care from employment, is the way to go. this bill doesn't do that by any means. it does provide some methods for businesses not to have to worry for quite so much about the health care. there in police and not be at a disadvantage with the

competitors. . >> host: the democrats named this bill that passed jobs for main street act. what could that mean in the scope of the debate here on the economy and jobs, no republican support. why was that the case and what were they looking. >> reporter: >> guest: well, it is hard to tell what the republicans want to do right now. they have lost a little credibility, i think, by suggesting that you can't save a job or that government spending can't spur the economy. i think these other matters that have always been used throughout the years to try to judge what the impact of policy is going to be. they're pretty much decided that they are not going to pay attention to that. why did that they really would like to stop obama and the democrats from doing much of any bank. that think they hope that will be a successful strategy for november. i do think the republicans are being pretty political about

this right now, especially with some of the votes on some of the bills. in the past at least a few members would probably want to go for it and try to negotiate with the democrats to get some things that they would like. it has not happened. >> host: belleville, illinois. mike. >> caller: yes, sir. good morning. thank you for taking my call. >> host: you're welcome. >> caller: i would like to speak to this to some and briefly on the job issue. basically i have been self-employed most my life. as a contractor i lost my business recently. i lost all the 40ks. all of that. the gentleman said that there is manufacturing jobs in the country. now, i am 54. when i with 20 years old i could start a job on monday morning, and if i did like that job i could walk down the street and start another one. you see, you know, this a job

creation. i have been in construction for years. let's build a new city. a whole new city. he knew what i mean? there is job creation. >> host: rex nutting. >> guest: construction, of course, have been one of the industries that has been hardest hit by this recession. not only do we have this huge bubble in housing, which created a huge collapse in number of new homes being built. we are at a record low level of new homes being built. even back in the 40's we build more homes than we did during 2009. so those jobs basically disappeared for a while until we could get this back into balance. the same thing has happened on the commercial side. we built to many malls. the delta many offices. now there has been a collapse in the commercial real-estate business and construction jobs are falling in that area as well. so i think that, you know,

construction is not a great place to be right now. that's for sure. really the only place that is drawing is the government spending on highways and schools and bridges and things like that. it's a tough environment. >> host: we also hear a lot about something called a green jobs. to what extent of the part of this job creation picture and what kind of jobs on the end of this sustainable? >> guest: yet, there has been made to lot of debate. there was a lot of emphasis put on them. obama put a lot of emphasis on that early in the administration. of course the reality is that there are just not that many green jobs available. it will take time to develop manufacturing industries, wind turbines and solar panels and all the other kinds of alternative energy. i think there is some start being made in that. a lot of these greens jobs are essentially the same old kind of jobs we did before, but they have more of a benign impact on the environment. we are talking about people who

put in insulation and houses, but in new windows. you know, some of them are fairly good jobs. you know, skilled labor, paid pretty well. some of them, of course, are just going to be low-paying jobs. i am not sure that it can fill the gap. 10 million jobs below where we need to be. there are not 10 million green jobs available. >> host: harbor springs, m ichigan. hello. >> caller: hello. i just had a question. he mentioned earlier that a lot of people lost motivation and dropped out trying to find a job. i was wondering what we can do in order to get them consented to join the work force again or maybe like a porsche instead of just letting ing taxpayers pay their wage even though it is a low wage. that is really self-destructive

to the economy. >> host: caller, you mentioned give them a push. be descriptive, what type of push? >> caller: a lot of people i know, you have to put a resume online in order to get unemployment. a lot of people fudge that or make things about. i think that maybe if we spent some time going over and actually trying to find the people who are unemployed and took them up with jobs, that could be a big benefactor to the unemployment. i no there are jobs out there. i have two of them. there are jobs out there if people want to work. >> host: let's get a response. >> guest: i think a lot of it really depends on the individual motivation of the person. i think a lot of times somebody, especially somebody with a lot of skills and a lot of drive probably can find a job. let's go back to that graphic

you said at the very beginning. there are six unemployed people for every job opening in america right now. that means that no matter how hard we push them there is not really a job for them out there. businesses have to create these jobs. businesses right now don't see a lot of sales. they don't see a lot of future for that employee. the employee has got to pay his own way. that is the way the system works. he don't hire anybody unless you think they will earn more revenue than you have to pay them. there are probably lots of things we can do in terms of job training, coaching, trying to get people into that job and off unemployment benefits. right now people can be on unemployment benefits for up to 99 weeks. that is unheard of in this country. it probably does zap the motivation of a lot of people who say i am not trying to starve. i can get food stamps. i'm going to be okay. i'm going to live.

until there are actual jobs out there for people to get, it is hard to see what else we can do. you know, we need to the the current businesses to create the jobs. >> host: we should point out that president obama will go out to maryland outside washington, d.c. for a tour of a joint labor-management apprenticeship and training facility. he would get briefs on clean energy jobs for the rest of 2010. give us a sense of the scope of the president's effort on this job creation area. >> guest: well, i think, you know, they know politically that this is one of the biggest issues that have. maybe terrorism might be a bigger issue. but for most workers and most voters a job is really the thing that matters. the administration knows that in november there is going to be a lot of angry people out there. their putting a lot of effort into into this. you know, they are trying to pass another stimulus bill to

try to encourage more jobs be created. they're trying to work with small businesses to try to ease credit conditions, so that small businesses who are viable can expand. you know, there are dozens of ideas out there, and they're probably trying ten of the 12 i deas they've heard. grand i'm very skeptical about how much can be accomplished in one year. the issues we have had are extremely deep. >> host: george is on the line for democrats. good morning. >> caller: yes. appreciate you taking my call. i would just like to ask them, ain't the capital gain, the cadillac tax keeping businesses from being here in the united states? >> host: can you speak to t hose two taxes? >> guest: the cadillac tax would be a tax that is in the senate health bill. it would tax very high health insurance or very expensive health insurance programs.

a lot of union workers have some of these plans. i am not sure exactly how that prevents american companies from hiring. generally, you know, businesses always point to high taxes as being one of the obstacles to their expansion. one of the reasons they moved jobs overseas is to get lower-cost, whatever it is the cost is overseas, lower wages, easier environmental issues, maybe lower taxes. so all of these things are big problems for the u.s. because we don't want a race to the bottom. we don't want to get our environment regulations. we don't want to lower wages. we still want to be competitive. that is a balance that is hard to achieve, especially for a country that is used to relatively high standard of living. we don't want to be india.

>> host: to alaska now, fairbanks. mike on the republican line. good morning. >> caller: good morning. i am glad you mentioned green jobs. the president is really pushing this green jobs. there is a company called evergreen solar that had a manufacturing. i am not sure where they're manufacturing solar panels and such, but with the government regulation and all the stuff that the government puts on companies nowadays, they have to have all of these regulations. the company couldn't make any money at what they're doing. they moved the jobs overseas. in that kind of environment with all the regulations the companies are just going to say, well, we can't make money in the united states. we are going somewhere else. >> host: any thoughts, mr. nutting? >> guest: well, i guess it is hard to know. i don't know the particulars of this company. the leader in solar technology

right now is germany, and it is a company i don't think anybody would say has no regulation at all. some regulations are probably valuable for a business climate. certainly they can be onerous. one of the things i think helps with the u.s. competitor is that our work force is relatively well-educated and well-trained. so even though we pay your orders more they actually produce more. so the productivity of the american worker is pretty high, and that is one of the things that can keep jobs on shore. one of the issues we really have not talked about is the value of the currency, the value of the dollar. there are a lot of people who believe the dollar is overvalued and that if it were weaker u.s. made goods would be cheaper for buyers both here and abroad and that might be one reason why manufacturing is suffering, because of this overvalued

dollar. a lot of it has to do with what the chinese are doing with their currency. >> host: explain that a little bit more. >> guest: well, the chinese officially manipulate the art of their currency. they keep it very weak which makes their products very cheap. they can out to be just about anybody because this subsidy that their government gives to everybody who does business in china. there is a lot of, you know, manufacturing and labor interests in the united states who have been talking about this for a dozen years with very little effect. the chinese have promised to do better. they have loosened up their currency a little bit, but not really to the extent that people have helped and not to the extent that would really make a big difference for u.s. jobs. so i think currency issues are, you know, one big reason why, you know, the united states has such a big trade deficit.

it is something that the administration is reluctant to talk too much about because of the relations we have with the chinese. they own a lot of our debt. they are one of our biggest customers. they are a huge military power. you know, you can't just push the chinese around. >> washington journal live every day at 7:00 a.m. eastern. we are leaving this recorded segment and taking you back live to the meeting of the commission appointed by last year to examine the events of last year's near collapse of the financial-services industry. phil angelides, former los angeles treasurer sharing the ng the commission. they're just getting under way. afternoon session live here on c-span2. >> thank you very much. members of the commission, we are now going to move to panel member two. i am looking for my agenda to make sure i do this in the right order.

we will be hearing from mr. mayo, mr. bass, and mr. solomon. even though you are not seated in that order, i think what i'm going to do is take you alphabetically and ask you -- actually, let me do this. i apologize. they gave me them order. mr. mayo, we are going to start with you today. i would ask you to take up to ten minutes for your testimony. mr. mayo. >> thank you. chairman angelides, vice chairman, members of the commission, thank you for inviting me to testify today. i am here to represent my own views. i have submitted almost 200 pages of supporting material. i hope you received that. two decades ago i worked down the street at the federal reserve. at the time we were helping banks recover from crisis. we took great meaning from our

work. i hope the commission's efforts lead to a banking system that we don't have to revisit every two decades to save. this is important. i have been covering an industry on steroids. performance is artificially enhanced, and we are now paying the price with the biggest bailout of u.s. banks in history. it is also resulting in the biggest wealth transfer from future generations to the current generation. my children, nine, seven, and four, and their generation will have to pay the price. i am shockedw'é and amazed more changes have not taken place. there seems an unwritten promise that wall street exactly how it exists today is necessary for the economy to work. that's not true. the economy worked fine before wall street got this large and this complex. wall street has done an incredible job at pulling double over the eyes of yes of the amen

people. this may relate to the clouds of the banks. the four banks that testified this morning have annual revenues of 300 billion. that is equal to the gdp of argentina. my perspective, i have analyzed banks since the late 1980's. i value the independent reputation of cosa, and i have been negative on banks since 1999 and have published over 10,000 pages of research to back up my view. i have identified ten causes for the crisis. if you can turn to slide three i will go through cause. cause one, excessive loan growth. we cannot accept reality that we are in a slower-growing economy, a more mature market. loans grew twice as fast as they should have grown, twice as fast as gdp. cause two, higher-yielding

assets. the u.s. banking industry acted like a leveraged bond fund. more borrowing with the proceeds invested into more risky assets. look at treasury security. they went down some 32% down to 2%. that is the least risky assets. instead banks did more risky securities and risky loans whether it be home equity or construction loans. look at construction loans. the percentage of construction loans to total is double the level where it was even in the early '90's. cause three, too many eggs in one basket. look at data from loan in last decade. mortgages, commercial real-estate, multifamily real-estate, one element in common, real-estate. cause four, high balance sheet leverage. shortly before the crisis the u.s. banking industry had the

highest leverage in 25 years. then take a look at the security industry. right before the crisis almost 40 times levered. cause five, more exotic products. some of these were so exotic that i don't think the directors, ceos, and in some cases even the auditors fully understood the risk. i think of this like a cheap sangria. a lot of cheap ingredients. a lot of cheap ingredients repackaged. it might taste good for a while, but you get headaches later. you have no idea what is really inside. cause six, consumers went along. there is some personal responsibility here. consumer debt to gdp is at the highest level in history. japan didn't have that. we didn't have that during the great depression. there is a false allusion of

prosperity through this additional borrowing. it is no secret that everybody from kids to pets to dead people get loan solicitations. cause seven, accountants, the sec in 1998 made rules or decisions that interest banks to take less reserves to the problem assets to reflect what happened next. declined from 1.8 percent down to 1.2% drop before the crisis. that was a wrong move and should change now. the bank regulators should be back in control and helping to set reserves. that was not a close call to many of us in the industry. cause eight, i know dimon said regulators -- that is not true. regulators share some blame here too. ..

>> i think if there's one word after you spent all these months going through this, one word is going to come up as being a key

cause, and that one word is incentive. people do what they are incentive to do. and if you look at the banking industry compensation, what the industry pays out is pretty constant as percentage of revenues. but guess what? that doesn't reflect for the risk of those revenues. if you own a lot of treasury security, or if you make construction loan or if you own ceos, makes a big difference in terms of the degree of risk you are taking. so in summary, i consider this an industry on steroids. performance was enhanced by excessive loan growth, successive security risk, security yield, bank leverage, accesses were conducted. yes, they were conducted by bankers but they were also conducted by icons, regulars, government and consumers. side effects were adored and with little financial incentive to do anything about so we ignored the long-term risk. and i say we, collectively. the solution i say partly a

function of abc. a is for a county. let's have greater transparency and more consistency. that b. is for bankruptcy. we should allow firms to fail. the prudent should not have to subsidize the imprudent. and a terrible precedent to the decade was saving long-term capital in 1998. and thus he is for both capital and capitalist. during the crisis, we all realize that banks are as vile as our most precious utility, and imagine walking to the kitchen morning, turning on the faucet and not getting water. we were close to that in the banking industry. that can never happen again. so we need to have enough capital for the banks. the other part of the c is about having good information, it's about allowing firms to fail. it's about having markets over government, allocate capital with prudent oversight and

regulation. to me, the crisis is not caused by capitalism. it was caused by a lack of capitalism. one more point on capitalism. capitalism is about money, but it's also about meaning. and for this i look no further than my cousin and he was a captain in the army. and he is going from army in iraq to business go in the fall. and here is what he wrote to me. he said that he hopes that we, as the world leader in capital markets, can make sound investments to help less fortunate people, provide for the family. to him, he will continue his pursuit of peace and prosperity as he goes into business. and 4000 andy, cap-and-trade 11 as i would like to call him, he gave a reminder of and that is to improve peoples lives by helping to allocate scarce resources to where they can best be used to comment like godlike in their ceos, remind people of the purpose more often and i

appreciate the commission's efforts to find out there because of this crisis to bring greater awareness to this mission and to facilitate its execution. i look for two questions. >> thank you very much for that very good and timely presentation. thank you very much, mr. mayo. mr. bass, your next. and you know what i realize, is even though the commissioners have seen all your bios you might just identify yourself with your firm and your responsibility currently. >> thank you. chairman angelides, vice chairman, members of the commission. i would like to thank you and the members of the committee to share my views with you today. as you consider the cost of the recent crisis as well certain changes that must take place to avoid or minimize future crises. i believe i have somewhat of a unique perspective with regard to this crisis as my firm and i were fortunate enough to see parts of it coming. hayman is a global asset management firm that made several billions dollars of subprime and alt-a positions and

we remain an active participant in the marketplace today. i realize the primary objective of the hearing today is to provide basic information on current state of the current financial crisis, in my opinion no single bank or group of large institutions single-handedly caused the crisis. while i will address each participant structure and problem independently later in my testimony, the problems with the participant and regular structure needs to be considered more holistically and order to prevent future systemic breakdowns and taxpayer are. while there are many factors that led to the crisis, i will address what i believe to be the key factors that contributed to the enormity of the crisis. the first of which is the otc derivatives market place. it was brought up in a prior hearing, but with nearly infinite leverage that it afforded and continue to afford the dealer community it must be changed. aig, bear stearns and women

would not have been able to take on as much leverage as they did have they been required to post a national collateral on day one for the risk positions they were selling. asset management firms including hayman have always been required to post initial collateral and maine as collateral for virtually every derivatives trade we engage in. however, in aig's case, not only did they have to post a initial collateral, didn't have to post initial collateral for these positions when the positions moved against them, the dealer community forgave margin. the dealer committee as was other supposedly rated counterparties were and some still are able to transact with one another without sending collateral for the risk they are taking. this so-called initial margin was and still is only charged two counterparts that are deemed to be of lesser credit quality. and imagine if you are a 20 year old superstar at aig financial proctored and you are compensated at the end of each are based upon the profitability of your trading book. which was ultimately based upon the risk you are able to take

without posting any money and you should. how much risk would you take with the unfortunate answer turned out to be many multiples of the underlying equity of many of the firms in question. in aig's case the risk taken in the company stripped his book were more than 20 times the firm shareholder every. for a conference look at those leverage ratios we can move the tables in my presentation later. the u.s. taxpayer is still paying huge bonuses to the members of aig financial products group. because they convinced the overseers that they possess a unique skill necessary to unwind these complex positions. there are hundreds of out of work derivatives traders that would happily take that job for $100,000 a year instead of the many millions being paid to the supposed experts. to solve this otc derivatives problem, i heard a few of the potential solutions this morning but i will go over the three i think are absolutely mandatory to fix this problem. one, is the key issue is homogenous minimum collateral requirements. all participants in the derivatives market place do not

bar the dealers from this. should be required to post initial capital based upon some formulaic determination of the wrist by the appropriate regular by. two, centralized clinic and mandatory price reporting of all standardized cds, and interest-rate derivatives. we believe close to 90 percent of the derivatives are standardized. centralized data repository for all cleared and non-cleared of derivatives trade. as of today that still doesn't exist that it's hard for me to believe that where we are today that that doesn't exist. the second thing i'd like to talk about is the bank leverage, and this is just the fundamental tenets of the u.s. banking system. under current regulatory guidelines banks are deemed to be well-capitalized with a 6 percent to one capital, an adequate account lies with 4% tier one capital, based upon risk weighted as his. as an aside the concept of risk weighting and asset should also be reviewed. this in turns means that a

well-capitalized bank is leverage 16 times to its capital. much more to its tangible common equity. a minimum capitalized bank is 25 times levered to its tier one capital. i don't have a prudent individuals or institutions can possibly manage a portfolio of assets that is 25 times levered when we had a crisis, but i surely can't. unfortunately the answer so far has been not many of the other banks have been able to manage these risks either. of the 170 banks that have failed during a crisis today, the average loss to the fdic and the taxpayer is well over 25 percent of assets. when you think about that, that means they have lost more than six times their equity of the banks that have gone down so far. depository institutions like citibank were able to parlay their deposits in the large levered beds in the derivatives market place. and are, at fiscal year end 2007, citigroup was 68 times levered to its tangible common

equity, including off-balance sheet exposures. the composition of these assets is important as well. but i've simply tried to illustrate how levered these copies were at the start of the financial crisis. while aig's book was only 20 times, 64 billion of these derivatives were related to subprime and subprime credit securities, the majority of worth were worth zero. i put a table, labeled exhibited in my presentation. what we've done is look back at the cumulative net income that was lost and financial institutions is the third quarter of 2007. fannie mae lost 20.5 years of its profits in the last 18 months. aig lost 17.5 years of its profits in the last 18 months. freddie mac lost in them and .5 of profit. a little bit more than a year. the point of trying to make is

the ridiculousness of what's going on in the leverage that was in the system, the key problem of the system is the leverage. we must regulate that leverage. my third point that i will talk about briefly here is an entry. with five and half trillion of outstanding debt and mortgage-backed securities, the quasipublic are now in conservatorship fannie and freddie have obligations that approached the total amount of government issued bonds the u.s. currently has outstanding. there are so many things that went wrong or are wrong at the so-called gse's that i don't know where to start. first, why are there two for profit companies with more shareholders charitable foundations, and lobbying arms ever given the implicit backing of the u.s. government? the chinese won't buy them anymore because our government won't give him the explicit backing. the u.s. government cannot get in the explicit backing because the resulting federal debt burden will crash through the congressionally mandated debt ceiling which was already recently raised to accommodate more deficit spending. these organizations have been the single largest political

contributors in the world over the past decade with over $200 million being given a 350 lawmakers in the last 10 years or so. yes, the united states needs of low-cost mortgages but why should organizations created by carter's have to lobby congress? fannie and freddie use the most leverage any institution that issued mortgages or held mortgage-backed bonds in the crisis. at one point in 2007, fanny was over 95 times leverage to its statutory minimum capital. with just 18 basis points set aside for loss. that's right, 18th 100th of 1% set aside for potential loss with 95 times leverage. they must not be able to put humpty dumpty back together again. if they're going to exist going forward, fannie and freddie should be 100% government owned and the government should simply issued mortgages to the population of the united states directly since this is a sense of what is happening today. with the added burden of supporting a privately funded argument and saw the capital

structure. i will conclude my testimony there, and leave it for questions. >> thank you very much, mr. bass. mr. sulliva solomon to. >> thank you chairman. vice chairman angeles and vice chairman thomas and members of the commission. thank you for asking me to appear before the commission. before i begin i want to commend the leadership of the house and senate for creating this bipartisan commission. to examine the causes of the current financial and economic crisis of the united states. when i entered wall street in the early 1960s, security firms and commercial banks have not changed much since the 1930s. stock ownership was not widespread. pension funds and endowments did not best broadly. the average white on the new york stock exchange was about the same as four years earlier. there wasn't a large public bond market. the business of commercial banks

was lending. the securities firms were usually private partnerships. investment funds were separate from banks and security firms. i've been afforded the opportunity over 50 years to observe the dramatic changes in the financial world from a number of perspectives. my career at lehman brothers and 29 years. i rose to vice chairman of the firm in the 1980s, and i was cochairman of the investment banking division and chairman of the merchant banking division. i have held financial positions in the public sector, as deputy mayor of the city of new york during the financial crisis of the 1970s. and as counsel to the secretary of the treasury in the carter administration. i haven't acted on corporate boards, not-for-profit foundation board, where i've been involved in an investment decisions. so the past one years i've been chairman of the peter j. solomon

company, a private independent investment bank and member of general. our firm is a throwback of the air of the early 1960s when investment banks function as agents and fiduciaries advising their corporate clients on strategic and financial matters such as mergers and raising of debt and equity capital. i like today's diversified banks, we do not act as principles of a nor do we take proprietary positions. we do not trade and we do not lend. for a moment let me set the scene of the 1960s and investment bank. the important partners of lehman brothers sat in one large room on the third floor of number one william street, the firm's headquarters. that congregate there not because they were eager to socialize, to overhear, interact

and monitor the activities and particularly, the commitments of their partners. each partner -- [inaudible] >> ub may be interested to know that lee was cat at the time of incorporation in 1970 was $10 million. the wealth, and thus the liability of the partners like robert lehman, exceeded the firms stated capital by multiples. since they were personally liable, as partners, they took risk very seriously. the financial community changed dramatically in the 1980s, incorporation, public ownership by public security firms, and enabled them to compete with commercial banks. innovations like junk bonds for example about security firms to live and to not investment-grade companies. all the firms accelerate the

push in the global market, far-flung operations, mathematical modeling, proprietary dealing from debt and equity, and the growing use of leverage and derivatives through hedge risk. as the commission investigates the causes of 2007, 2009 crisis, it is important to remember that market crises occur periodically. to name a few in the last 20 years, the markets asian, russian crisis, the collapse of 87, the collapse of long-term capital, the 2009.com collapse and of course in ron's bankruptcy. the question before the commission is what events are actions occurred within the capital markets or the environment which allowed this crisis to become a debacle?

first, every legislator and regulatory move in the last 20 years has been towards a glittering the distinctions between providing financial services and bring the capital markets. the shining example of course is the wily act of 1999 which removed the last vestiges of glass-steagall. second, financial institutions use the more lenient regulatory environment to build scale and extends go. citigroup, bank of america, j.p. morgan for answers required and expand their operations into new fields. concentration created institutions to big to fail. government regulation in terms of oversight and coherence did not keep pace with innovation, leverage and the expanded scope of the banks.

three, access to new capital permitted the banks and security firms to shift the nature of the business away from agency transactions and towards more proprietary trading, that took positions in marketable and less liquid securities and assets such as commercial real estate. combine with greater leverage, earnings volatility increased. forth, scale, scope and innovation created an interdependency most noticeable and credit default swaps, disproportionate to the equity capital of all banks. management misjudged their capabilities and the capabilities of their elaborate risk management systems like the aor, to keep their institutions solvent. even for insiders and those institutions, transparency diminished so much that firms

were not prepared for the extraordinary, the so-called black swan event. paul volcker has suggested that financial firms might be categorized between activities with ongoing relationships such as lending and transactional interactions such as trading. he has proposed these functions to be separated. a corollary question is whether it would be preferable from a public policy point perspective, and adequate from a capital market points of view, to require proprietary investing to be in private partnerships. until it went public, for example, goldman sachs remained a private partnership and was able to attract sufficient capital and whether a series of large losses. in closing, my hope is that the commission will determine that a 21st century model is consistent with the need for

stable banks and capital markets sufficient to finance the world economy. the commission has an opportunity to approach this challenge and a bipartisanship manner. these conclusions can hamper profound effect on legislation as to the recommendation of the 9/11 commission. in doing so, the commission will make a major contribution to the stability of financial markets and will have a chance to mitigate future crises. thank you very much. >> thank you very much, mr. solomon. we will now begin our questioning. in this round, members i'm going to actually not start off. mr. vice chairman, do you want to ask him questions to start? >> thank you, mr. chairman. just a couple of questions. mr. solomon, i appreciate and admire your belief that we're going to be able to do what you just described. we certainly hope we can. as i requested during the first

panel, i really do want people to submit questions that we need to ask to particular institutions, agencies, or private sector, structures, but you folks are an example to me of the kind of people who probably, in your areas of expertise, no more of the questions that you should be asked then we can think about putting together in the timeframe we have to produce a product. so one of the things i hope you will get to us, and i always prefer them in a hierarchical order, are some questions that you want answered from which particular agency or structure, and then what i would especially want from you is a parenthetical, or a separate sheet explaining what you believe the answer should be.

because sometimes in comparing what someone says versus someone who has looked at it for some time thinks it should be, helps us in our education as well. for example, mr. solomon, i was here in this institution would be gramm-leach-bliley act was passed. we certainly did not have oath of us the experience with the early reaction and becoming comfortable with the glass-steagall act. and so what in terms of gramm-leach-bliley act really contributed to this financial crisis, as you said that it was the vestige of glass-steagall, but was it the last joint of detail that got cut off? or did you have the animal and it took to heart out? >> that's a very good question. there's a great debate about the

effect of the gramm-leach-bliley act. but 1999 was a very interesting year. 98, 99 as i look back on. and i would not have said that at the same time, contemporaneously. at the end of 98, you're the collapse of long-term capital. and 99 you had the merger of citigroup and travelers. that actually, merger, was delayed until gramm leach was passed, as i believe. 99 great lakes was passed that 99 olden sachs goes public. there was a confluence of events at which we all need to in retrospect. you could see that 99 was a critical moment. i think what really has happened, and my fellow panelists have said it, is that the combination of legislative and neighboring regulatory

babbling, sort of dawdling, and administrations successful administrations encouraging coalesced into really fundamentally irresponsible behavior. you know, everybody knew that the end was coming. they didn't know how it was going to come. but you could see all these things beginning to occur and building up to a store. you asked a question earlier, chairman, of whether it was a perfect storm from outside, a perfect storm from inside that it was a perfect storm from inside. everybody could see this coming. we didn't know how it would end. so gramm-leach, the point i'm making, there's no silver bullet here. as i've said about this, there is sufficient number of villains, if you listed all the villains in this tale, you wouldn't get to the plot. and that's -- and that's --

that's what is. it wasn't a single thing, gramm-leach-bliley. >> thank you, mr. bass. we have a lot of people interested in risk management, and appeared on the first panel they arm now more interested in risk management and they were a few years ago. in terms of just how important it really is. can you provide for me briefly, and if necessary, additionally in writing, how banks risk models and monitoring activities take off-balance-sheet activities into account? i think they probably are far broader and more sensitive than they used to be, and what isn't and what needs to happen? >> sure. i can give you a few examples of how they do it, just to help you understand it better. when the commercial paper crisis

happened shortly after lehmann failed, what you have is on balance sheet our loans are repaid. a few things are off-balance-sheet upcourt derivatives to a certain extent but more important credit lines. if they extend the credit line to someone or extend it a backup credit line to a corporation, the amount of assets they have pledged against that credit line is literally razor thin. because they believe in a non-correlated marketplace, if one corporation has to tap its backup lines, all of them will not. so what the real lies whenever he had to tap their backup credit lines, no one had the money. so the data at t.a.r.p. was announced, that was the day ge went to tap its backup credit lines and they ran to congress and said we're getting capped, we don't have the money. so congress had to come up with targets of the off-balance-sheet exposures have no capital assigned to the. if you retain in freddie's

statutory capital guidelines, they're on balance sheet capital requires two and a half% capital set aside for the loans on balance sheet. there are more mbs guarantees under off-balance-sheet exposures require 45 basis points. so on balance sheet they can lever call it 40 to one. and off-balance-sheet taken lever 201. so what do you think they did? right. they went 201, wherever they could. so they got to about 95 to one on a blend. so when you talk about off-balance-sheet, that's where you go. the risk weighting of assets is another thing that maybe michael is better off than i am. but when you are statutory minimal capital levels, that doesn't apply to all assets. for instance, fannie or freddie bond as i spoke with teeth earlier on, has a zero risk weighting. so you can buy as many of those as you want. u.s. treasury has a zero risk weighting to a aaa rating has a very, very low risk weighting. so you can buy a lot more of those and stay within leverage

and capital guidelines. that's where the ratings agencies come into play here. the risk weighting should be reviewed because the ratings agencies argue that they're just a -- i guess they are asserting their right of free speech. however, they set the gold standard for which what pension funds and endowments can invest and was investment-grade. the fact that they set the investment grade guidelines make them a de facto regulator. it's what everybody bases their capital positions on. there are so may things we can talk about here, things that go rent, but off-balance-sheet at risk weighting are very important that i don't know, michael, if you want to add to that. >> thank you. and i'm going to ask mr. mayo a question as well, but that's why i do want to, once again, extend to you a willingness, if you are willing, to have the record run until we are done in terms of

our work so we can get back to you as we again get more sophisticated and understand the questions we should have asked. and work with them, and appreciate your willingness to do that. mr. mayo, i like your sheets on the 10 points. my question to you, given the complexity of the bank's financial statements, the derivative off-balance-sheet positions that we talked about, how are you able, i mean, they all claim that they have adequate capital. how difficult is it for you to get a clear picture of what is actually there? our current sec disclosure sufficient if you're good enough and have a bright enough light? or is that an area that we could talk about looking at as well, or perhaps was one of the problems no one could get a clear picture of what the situation actually was until of course after the fact.

>> i think about your question a lot, and accountants try to re-create reality and numbers. and we as financial analysts take those numbers and try to re-create reality. so if the numbers that accountants give us are not good, then the conclusions of the analyst will be good either. so definitely more disclosure is good, and would be helpful. i say innovation always outpaces regulation, but in this case it was just much further ahead. and you certainly need more capital for new activities, more risky activities, or activities without a long enough track record. we saw that. and as mr. solomon said, we've had a lot of once-in-a-lifetime events. whether it's enron and worldcom, or russia and asia and mexico, or the tech bubble or real

estate bubble. seems as though these once-in-a-lifetime events happens every couple of years. so the idea more capital over all makes a lot of sense for these once-in-a-lifetime event, or these new activities. and as far as additional disclosure, no question. it would have been very helpful during the crisis and would still be helpful now. especially with regard to problems at u.s. bank. i would make one point. we can't be too procyclical. if you try to correct all at once, then you're going to kill the economy. so you have to do this in a balanced way. >> question to all of you, and it's just from my previous job on ways and means on the tax code. would it make a big difference, not much difference, if we had in a time of all of these once-in-a-lifetime events, a better understanding between equity and debt in the way in which major american corporations and even international corporations can

utilize the debt versus equity? and had recognized it in the tax code, that to a certain extent the old cash on the barrel head is perhaps a good way to see what's going on, notwithstanding the complexity of the world today? >> i'll take a crack at that. i don't know how to quite into that same take a crack at a. i think the taxing of the equities is fairly appropriate that and i think credit is what makes the world go around. and credit is what makes the economy go around. and what we're trying to do here and what i hope you will reach conclusions on, is what is the balance between the capitalist markets and liquidity in the capitalist markets and the need to regulate them. and give there are changes that should be made in the tax code over a long period of time to cause that to be in balance, and do not favor one greatly over

another, then i would hope you would reach those type of conclusions. but i don't see that as the number one issue. i see the extension of risky as both my colleagues here have noted, it's the extension of bad loans. it's simply bad loans. there was a testimony today about the role of leveraged loans. i think mr. blankfein said it, but mr. dimon and all the people here who have testified this morning are extending loans, covenant light loans in leveraged buyouts. well, who would think that was a good idea? was that equity or was that data? that's the question. if you don't have to repay it, if you violate a covenant, is it actually debt even if you have to repay it at the end? maybe it isn't. >> i like to make two observations. two quick observations on the. the first one is i agree with mr. solomon about the tax

structure. i think it's very appropriate the way it stands today. i think that when you look at the banking business there were securities that were considered to be hybrid securities. they were not equity, were not get. banks could raise hybrid securities it in forms designate as trust preferred. they got to raise that money and yet it didn't impact their total indebtedness. so it was -- wasn't equity, was a desiccated that i think what you're asking, should we draw lines that i think we should all lies between, preferred stocks, senior debt, there should be bright lines in the cap structure of u.s. companies and not all the crazy hybrid securities where no one knows where to put into the cap structure. i guess since i'm being brave, i wanted to add one more point that i'd didn't get to make in my testimony with regard to the cap structure and the debt and equity of these companies that when the taxpayer money comes in, and this is a separate debate, when tax money comes

into a company, i realize the treasure was realizing with pages as a raton and this was a very much a la carte model of dealing with the financial crisis because we didn't prepare for a. but going forward, i think what has to be done from the commission's perspective is to determine a methodology for which taxpayer money is to possibly be infused into companies. it needs to be last and first at. it needs to be senior to the bank did pick that back whereby equity with taxpayer money is an abomination to the taxpayer. so that's a little bit different spin on debt and equity but that's where those loans need to go. >> thank you very much. thank you, mr. chairman. reserve the balance of my time. >> thank you, mr. vice chairman. i was going to hold all my questions to the end but i want to ask one now so i don't forget to. and that is, one thing you seem to be saying is, in a world of rapid innovation, rapid change, expansion of new industries,

there's an argument at least for the core financial sector to have perhaps even greater stability. as opposed to, for example, all the entities out there who can take greater risk without consequence to the taxpayers, but you seem to be saying that the price of greater innovation, greater volatility in the larger economic world may be having a stronger core. am i hearing you correctly? >> yes. >> if it's all yes, and lets you want to -- >> i would say not completely. so, and the source of a lot of the losses were detailed by mr. bass and mr. solomon took a lot of the companies they named were outside the core banking industry. >> the activities were spirit and activities. destroys not only yet for the u.s. banks, but the big losses you have seen were outside the core part of the u.s. banking industry. so i would make that point to

start off. the second point i would make is to some degree, its management over model. so you can go down the whole laundry list of the types of financial firms. you have big conglomerates, some did well, some deported or job brokerage firms, some did well some deported. i don't want to overstate the point that you're making here. >> management matters. and so one of the things we realize is, and you saw today is that people are better managers did better in times. but what we have to also acknowledged, as many of these firms have very large hedge fund proprietary trading operations. and they have shifted from becoming agents to dealers, to proprietary dealers and this has changed the nature of their view that this is certainly affecting compensation, as you get to that issue. it's affecting risk that it has to be affecting risk. and it's probably affecting

judgment. and you heard the folks this morning talk about that and say that yeah, we didn't use a judgment we could have. but acknowledged today that what is the difference between some of these folks will talk today and what we called hedge funds? you have a total different view of those, but if you look at the income statements of proprietary trading, you will find that they had increased materially. and they have two different phones of regulation and of recognition. i would argue that hedge fund should be privately -- should be private and should be not in the same structure as, for example, the lending business. >> i think i would respectfully disagree with mr. mayo with mr. mayo on the. i think we need to determine, if an institution is systemically important to the united states and to our system, we need to determine what appropriate levels of leverage our and we need to force those companies to live within those leveraged

buyouts. today as i mentioned, somewhere between 16 and 25. i will just assert to you that that is -- that's too high. so what we need to determine is, to mr. solomon's point, if you're going to be a proprietary trading firm and it is the u.s. way and it is capitalism, go do it. but there will be no safety net for you if you set. don't become systemically important. so you can make that happen. you can separate those two and goes back to the glass-steagall argument. but i think of the institutions, we have four banks in the united states that own 45 percent of the assets. that we have 8300 others that on the ballot that our whole system is very top heavy here. the reason that they're systemically important as they are that big. so i think more holistically we need to figure out what the structure needs to look like and we need to set with the rations are. that's my opinion. >> were going to go to question.

i'm going to keep the same order we did last time and reverse it. self ms. murren, why don't you start off and we'll do the same order for this panel and the next. thank you. >> thank you, mr. chairman. and thank you gentlemen for appearing today. i wanted to follow-up on this last topic since we didn't have a chance to cover it too much in the first panel, but could you talk about financial institutions that lie outside of what would be considered the core banking system, and talk perhaps a little bit about whether you think it changes in regulation or standard should be made there? and then a second question relates actually to shortselling, i want to talk a little bit about your position on whether or not shortselling should be a disposable item in the same manner that a long position would be. >> okay. with regard to institutions outside of the system, to reiterate a point i just made. first of all, we have to determine who is systemically important and who isn't. if they are systemically

important they need to have a high risk premium charged to the. we need to regulate them heavily. if they are not, they should be able to engage in these non-bank activities, or even lending activities and lever however many times they would like to be levered. if they fail they need to be able to feel. and my testimony i say capitalism without bankruptcy is like christianity without he'll. there have to be consequences of excessive risk-taking. as far as shortselling is concerned, i believe that shortselling is a vital part of a marketplace. it's interesting that when mr. mack was advocating a shortselling on a crisis, once the shortselling ban was put into place, the financial equities actually dropped more than they did prior to the ban being put on. i think the proof was in the pudding factor in the crisis that quote, supports it short-sellers did not create this crisis. it was sent to a lack of confidence in the people that

owned these equities. i think it's actually a very good thing. >> would've, i'm not an expert on this but i will note that the fcc change in the shortselling in the navy uptick rule was to buy an awful lot of my friends who are in the trading business as a bizarre event. they couldn't understand why the sec and sort of the middle of the summer or whatever it was eliminated the uptick rule. and i'm not talking about the period you're talking about. which is the ban on shortselling of financial institutions. that was really very, very late. one of the more curious things that occurred in a regulatory environment was this change in the uptick rule. and you really should look into how that happened and who influenced it, and one of the things that the folks have covered, one really has to look in the influence of the financial institutions in terms of campaign contributions on the

regulatory and legislative process in this country. >> i think we're talking about systemically important. i think there are four different factors we can think about as we talk about this topic. number one would be if you're outside the banking industry, there is clear lack of oversight. and so we need to get the shadow banking industry back under the umbrella of oversight. i think we are in agreement on that point. i second what would be the actual activities that are allowed to be conducted by the banks. and we may agree to disagree on that point, that i would say i was shocked and amazed because of all the activities conducted, a lot of them are still being conducted. the ones that are not being conducted is just because the business isn't there right now. as i think that is certainly a point for debate and discussion, which activities should be allowed. i think of her pony would be there are other risk factors. so let's not make this a one item issue. i brought up management as

another risk factor and the fourth point would be sized. and on the size point, i do agree with mr. bass here, that there are certain terms are so large that they might be systemically important. i mean, where you draw that line is a big question. but i disagree with mr. dimon. there is in no uncertain terms j.p. morgan is too big to fail. 2 trillion-dollar balance sheet, they are not think that i heard mr. blake lenk, i heard mr. dimon present order, and they say, and you ask the question, could you fail today? well, they said the system is a little too fragile right now. but once it is not fragile. to let me ask you, or if you want to ask them again, under what circumstances would j.p. morgan be a risk of failure when the system isn't fragile. it's not a close call in my world world, educable ever what else you talk to. maybe there are other people

until. could j.p. morgan fill? >> the corner is this. when there is a government induced autolock lake, what is the government's role vis-à-vis the autolock lee and can you afford to have one member of that fail? so of course i agreed with mr. mayo. >> this discussion is going well. i will yield three, four minutes. utility which you need to i got flexibility this type of. >> that should be perfect. you mentioned that you disagreed with mr. dimon on that particular point. i'm curious, maybe if you could just teach briefly what you most agree with what they said, the previous panelists. i'm assuming you had an opportunity to hear the testimony. and then perhaps maybe one or two things that you disagreed with. >> you know, as i listen to mr. blankfein, he brought up a one word, that hit me that i think if i'm still doing this job, 20 years from now is going to stick with the. and that's what he said

rationalized. we rationalize what we were doing based on the circumstances at the time. and i think one of the conclusions of your hearings throughout this year, that's a warning to the future. look at how much we rationalize the activities that were taking place in the industry. so i very much agreed with that. and with regard to morgan stanley, mr. mack mentioned there is just too much leverage at the firms. that's an easy call. and you can certainly track that. and let me yield. >> i certainly agree on leverage. they all said there was too much leverage. and i also agree all their managements failed. so i can agree on both of those. what i really disagree on is that standards change, and that's what i gave you a little history of the 1960s. standards do not change. what changes is the competitive environment. and what has change is limited liability.

incentive compensation, and public ownership. and that's what's changed that one of the reasons these folks made those decisions is they have analysts judging how well they are doing that and when one of them provides a leverage loan, with a seven times to some company, the other one competes and says i can do it at eight times. and one tries to buy real estate and sees that goldman sachs or somebody buys, then dick goes out and decides he has to go out and buy the west coast and some else has bought the east coast. it's the competitive nature of public ownership and limited liability, that is at the essence of the problem, in my view. but i don't agree with standards change. >> thank you. >> i think i might surprise you with this. with regard to something i disagree with, or let's say i agreed with mr. blankfein on

that the press is jumping all over, and i heard this morning. with regard to securities they were creating, and then taking other side of those, i think if you think that all the way through and yo to understand wht was happening, these firms, i agree with mr. blankfein that these firms, they take reverse inquiry. date their clients come to them and say i want to buy xyz. if it is a synthetic instrument, they have to create out its thin layer or make it themselves. is the same as if they want to buy an equity option. the soffa listed marketplace and goldman create the. i don't think they would have to disclose to the other party that we are creating this for you, it might go to zero. i think the point he made about institutional investors taking risks was actually a good one. i think the press is barking up the wrong tree. with that argument. i don't think you will get anywhere with that argument, you know, from my perspective. the thing that i disagree with when i heard this morning that morgan stanley had changed their compensation plans to allow

their risk managers to make as much as they're traitors, i think that's a horrible idea. alt-a. if you have a risk manager out there, that is supposed to be rainy and risk, the only way you make money at these firms is to take risk. if he's incentivize to get paid as much as the traitor, he's going to be more incentive i still let things go. i think that income any quality between a risk manager and a traitor creates some avarice and the firm that needs to exist. they just missed it the first time. i think if you force the other way it's going to be a big, big mistake. you'll have bigger problems, not smaller problems. so those are two key points that i heard this morning that i want to reiterate. >> may i raise one more? it involves clearing house that they all seem to be in favor of the clearinghouse. this is really a revelation to me. as it must be to you. yes, this should have been a clearing house three years ago.

it was clear. it was evident that many of us wrote about it. the reason you don't have clearinghouse is that the price will go down. it will be like mayday 1975 where the commissions went from $0.25. we all thought they would go to $0.16. they went to $0.08. it took about three days. so the spread will go down. they can be -- you said they were 90% customized. >> standardized. >> standardized that they could be on a clean house and the response i think your question, so. >> i would like to add one more point to that, mr. solomon. >> you know what we're going to do? we're going to move on just to get more questions and more issues on the table. i'm going to take a minute of my time having said that, but i'm going to charge my minute. i just want to make one comment that here's what i think is a significant issue with the fitting two sides, for large institutions. i think responsibility of what

you move in the marketplace is relevant to the stability of the economy. you can make the argued there is a demand for florida swampland. there is responsibility of sellers of florida swampland. the fact is what's coming through the pipeline him and there are big questions about what was coming through that pipeline and what was the actual quality of what was being sold. just an observation. all right. senator graham? [inaudible] [laughter] >> mr. mayo, i was interested at the conclusion of your comments, you are talking about what is the fundamental purpose financial institutions, and my definition, their fundamental purpose is to be an intermediary between the general public and economic opportunities, and to make judgments as to where allocation resources should be

allocated. is that consistent with your definition? >> yes, it is. >> now, the questions i was asking the first panel, were any factors that are relevant to that definition included in their performance of evaluation, of their employees? do they utilize any metrics that relate to how well that financial institution has, in fact, allocated resources? and then reward or sanction persons within the organization as the result of application of those metrics? is that a naïve expectation of institution to look outside its own financial interest to the broader interest of the economy in evaluating the performance of its employees? >> well, we don't want our ceos practicing morality with other people's money. so i don't think we want to be in that situation.

having said that, making money is not mutually exclusive from creating value to society. so the reason i put my point and about, you know, my cousin andy is a captain in the army going from iraq to this is cool because maybe it's about time to have the ethics committee at these firms take a little bit tougher look inside the firms. if you ask are these firms producing for society, well, to some degree they must be because they are making money. and unless they're cheating they are making money, unit, but maybe it means leaving the last 10 percent on the table. maybe some of these transactions that really take place in a gray area. you say maybe we shouldn't do that. maybe the ethics part of the surgeon have a a little bit of a stronger hand so you might make a little less money now but the ability to make money will be more sustainable. the reason i feel this is so important is i believe financial services as one of our greatest export in a country.

the number of people living under free market of caplet has gone from one thing in 1,995,000,000,000 today. and out of ability to export our financial services system wouldn't have worked if we had all of these abuses we had over the last seven years. so i do think ethics is important that it shouldn't be the overriding principle but it should be more of a factor than it has been. >> not to denigrate ethics, i don't quite see this as an ethical issue. as an example, i'm soc with a couple of health care organizations. one of the things that we're talking about is in establishing the performance standards that will be used for the officers of those firms. to include in the measurement of their performance how well they function as a health care organization, are the people who are there charges, those who look to them for services. being better treated, are they healthier, are they detecting diseases early in to take

effective intervention, those kinds of metrics. if those are appropriate standards for a health care institution, why aren't general effects on the economy and appropriate standard for the evaluation performance of people in a financial institution? >> at a minimum, it would be nice to hear the ceos, these major firms, remind the employees about the all but the ultimate purpose. when i come across that great at it, that transaction that may be should be done, maybe they step back. so i think some step in that direction, maybe not too far though. there some point to go i think where you're headed. >> mr. bass, i understand that if one point you were sufficiently concerned about the impact of the subprime mortgages that you talk maybe it was a bear stearns, and also to the federal reserve. could you summarize what messages you delivered to those two audiences?

and what response you got. >> i wheeled a couple minutes more. >> sure. first of all, in the interest of full disclosure, i was a senior managing director of bear stearns for five and half years, from 1996 to 2001. so a lot of the people at the firm are very good friends of mine, and a lot of the people that ran from our very good friends of mine. in september of 2006, i went to bear stearns to meet with a guy named bobby steinberg, who at the time was their chief risk manager at the firm. he congregated in meeting in a conference room at their headquarters for me. with the head of mortgage trading, the head of fixed income trade, the head of mortgage risk, fixed income risk and my so. i went through my entire presentation as to what i saw in the building and housing market, where i thought mortgage credit was going to go. a couple points i will make.

someone in this morning's hearing said did you ever contemplate housing prices ever dropping. they didn't even have to drop for losses to show up. okay, if housing prices just went flat, they would have lost nine or 10 percent on these securitizations which would have wiped out everything up too close to the double a's. so to put any perspective, i went to a presentation with their risk and maybe, instead do you realize that if i'm right, and by the way, i am one data point for now so i realized they could discount what i have to say. but the presentations fairly compelling. if i might do you realize what's going to happen to this firm? knowing how the firm's position and he said, he said you would about your risk management, we will worry about ours. that was the last time i spoke with him. again, it's one day -- data point. with the federal reserve i met one of president bush's staffers and went through it with him.

and he suggested i go talk with the federal reserve here in d.c., and i met with one of the federal reserve board members eric and went through my presentation, ian, just a data point from dallas beating at the federal reserve here in d.c. it's not a large data point. however, their answer at the time was, and this was also the thought that was homogenous throughout wall street analyst, was home prices always track income growth and jobs growth. and they should be income growth on one chart and jobs growth on another. and said we don't see what you're talking about. because incomes are still growing and jobs are still going. i said, though, you obviously don't realize where the dog is and where the tail is and what's moving what. but again, it was my opinion, which they intended -- or they disregarded the. . .

the full spread sheet of these numbers, and these numbers were aggregated from 10k's and their off-balance sheet reporting so it is all publicly available data and i am happy to supply that for you.

i don't have it here in front of me but i have a full dataset for you. >> okay, this is 2007. we have leverage it 68-1 in what we heard from the panel this morning again and again in their written testimony or remarks, or everyone became to lever, we were going the other way now. but, what they did not hear even in the discussion of the risk-management practices is how the leverage got determined, how internal calculations are done about appropriate levels of leverage and how they affected their risk management regimes and expect that, how that was done in the industry if there had been significant changes in it, and the extent to which this can only be imposed internally. >> i think that the way that this leverage was built, when you think back to the timeframe

in question, pre-crisis a look the securities they were levering and gannett mosadek to the rating agencies the fact of gold standard on investment-grade and more important aaa which has statistically the lowest probability of impairment of any security. if you were to leverage an enormous amount of treasurys you could have your interest-rate risk and you can put on a fairly sizable position and not have an inordinate amount of risk on their balance sheet and the same thought can iterate itself to the next layers of aaa. so the next layers were fannie, freddie and the next layers were tripoli mortgage securities that had never defaulted said they took on enormous leverage, and the only thing they were hedging in these levered books was interest-rate risk. they weren't hedging capital risk, and you heard some of the participants this morning say yeah we kind of relate on the rating agencies to provide their ratings and that is how we ran our leverage books so when you

look of the institutions that failed if you look at my exit but one when you look it grows leverage at lehman it was 52 times and there was 38 times. let citigroup it was 68 times. when you look to these leveraged numbers and if you are 60 times levered and you lose 3% you have lost two times your money. and the losses are going to come in much higher than 3% so i think it just boiled down to people getting lazy and people just levering they are wrong securities, and not being able to hedge those risks. >> mr. mayo, in your list of ten cause one was government to the gse's. what exactly where the mechanics of that and what should we have seen at the time? >> the capitol and the housing market was partly facilitated by the gse's. i personally never covered fannie and freddie and those

enterprises. those were a separate set of families that cover those companies but i think what we should've seen is the massive amount of capital that was allocated to the housing sector, government incurred for the government guarantee, and that encouraged a whole industry of these government sponsored entities, and that was a mistake, easy to say in hindsight. many of us in the industry sought for a while, and that goes back to the loan growth. some of the fastest growing areas as i showed the my loansharked, every slice of real estate, first mortgages, second mortgages, these activities, but do you know what, wall street also met the demand so it was kind of together, the government with wall street with the banks that facilitated it, and i made the general comment, i would prefer markets over allocating capital with very strong oversight and regulation.

>> mr. chairman i would yield the gentleman to additional minutes. >> i wanted to get mr. solomon's reaction to the observation. i think it was mr. moynihan whose testimony walk through the monoline institutions that failed during the crisis and made the argument that it was in fact a large and diversified institutions that survived better, which seems to stand in contrast to a lot of the thrust of your argument about post gramm-leach-bliley activities. >> i think that is not a bad point. it is clear that the more diversified firms did survive. and, that is why i don't pin the blame on gramm-leach-bliley. that is why i said it was just one, that was my response, so i think-- i don't-- i am not sure anything is clear incidently. >> we need to figure this out, right? >> that is why do you were

there. to take you out with the clarity is because all the things things happen and they all happen simultaneously but the point the chairman made, i believe the vice chairman is the board cost from outside. they were calls from inside the institutions and that is the point to have got to continue to probe glahn. and i think we all agree on that. so i think brian is right on that point. it is just management. it is how you set the standards, how you set the risk and how you manage the risk in your own hubris at matching the rest so a lot of this is just pure management failure. even the best of institutions, you have heard mr. dimon and even mr. blankfein and mr. mack say we failed. they are right. >> thank you. >> thank you mr. holtz-eakin, mr. georgiou. >> thank you gentlemen.

you know mr. mayhew said innovation always outpaces regulation. and mr. solomon, you have almost 30 years at lehman brothers and sort of harkened back to the days when all the partners that in the room and listened to each other and make commitments on behalf of the firm and on the path of each other's capital in a way and you thought those days, the market and that the partners were unconditionally liable for the commitments of the term maid was essentially the safety belts that prevented people from over committing themselves and putting the whole financial system at risk. given that today we don't really have many of those firms that are in the upper levels of the financial marketplace, what can we do and what ought we be thinking about doing to create

market mechanisms that would replicate, if that is possible, the discipline of the capital that was unconditionally and unlimited liability in the private marketplace? >> unless you get to the place i would like to get to, which i agree is unlikely, which is to hide of some of these activities and make them be private in make them be partnerships, and i understand how difficult that will be, but a lot of things we thought were difficult at one point later became true. for whatever reason. i think you just have to have a regulatory environment that is coherent, not patchwork, and enforceable. the regulatory environment failed here and the proposals, if i may say, for regulators, it seems to be a nightmare.

look what happened in homeland security. those regulators, those folks get together. and now we are going to get together. that is foolhardy. it will just fall through the cracks again. pifer one emmit varies strong regulator-- >> as you can tell we are having some signal problems from this testimony today in front of the financial crisis in great commission. were walking-- working on the problem and are taking the entire event and will show it to you later in our schedule so again working on the schedule. in the meantime to president obama who today promise with the action to deliver humanitarian relief to haiti, the side of the large earthquake yesterday. the president spoke for about five minutes today. >> good morning everybody. this morning i want to extend to

the people of haiti the deep condolences and unwavering support of the american people following yesterday's terrible earthquake. we are just now beginning to learn the extent of the devastation, but the reports and images that we have seen, the collapsed hospitals, crumbled homes and men and women carrying their injured neighbors to the streets are jolie heartwrenching. indeed for a country in the people who are no strangers to hardship and suffering, this tragedy seems especially cruel and incomprehensible. our thoughts and prayers are also with the many haitian americans around the country who do not yet know the fate of their families and loved ones back home. i have directed my administration to respond with a swift, coordinated and aggressive effort to save lives. the people of haiti will have the full support of the united states in the urgent effort to

rescue those trapped beneath the rubble and to deliver the humanitarian relief, the food, water and medicine that haitians will need in the coming days. in that effort our government, especially usaid and the departments of state and defense are working closely together with their partners in haiti, the region and around the world. write our efforts are focused on several urgent priorities. first, we are working quickly to account for u.s. embassy personnel and their families in port-au-prince as well as the many american citizens who live and work in haiti. americans trying to locate family members in haiti are encouraged to contact the state department at (888)407-4747. (888)407-4747. second we have mobilized resources to help rescue efforts. military overflights of assess the damage in by early afternoon

our civilian disaster assistance team are beginning to arrive. search and rescue teams from florida, virginia and california will of rife throughout today and tomorrow and more rescue and medical equipment and emergency personnel are being prepared. because in disaster such as this the first hours and days are absolutely critical, to saving lives in avoiding even greater tragedy i have directed my teams to be as forward leaning as possible and getting the help on the ground and coordinating with our international partners as well. third, given the many different resources that are needed we are taking steps to ensure that our government acts in a unified way. my national security team has led an interagency effort overnight to make sure we coordinate our effort going forward. i designated the minister of the u.s. agency for international development, dr. raj shah to be

our government unified disaster corp. knitter. this rescue and recovery effort will be complex and challenging. as we move resources into haiti will be working with partners on the ground including the many ngo's from haiti and across haiti, the united nations stabilization mission which appears to have suffered its own losses and are partners in the region and around the world. this must surely be an international effort. finally let me just say this is the time we are reminded of the common humanity we all share. with just a few hundred miles of ocean between us and the long history that binds us together. haitians are neighbors in the americas in here at home. so we have to be there for them in their hour of need. despite the fact that we are experiencing tough times here at home, i would encourage those americans who want to support the urgent humanitarian efforts to go to white house.gov, where you can learn how to contribute.

we must be prepared for difficult hours and days ahead as we learn about the scope of the tragedy. we will keep the victims and their families and our prayers. we will be resolute in our response and i pledge to the people of haiti that he will have a friend and partner in the united states of america today and going forward. may god bless the people of haiti and those working on their behalf. thank you very

>> u.s. house back in session today. the intelligence committee getting a briefing from administration officials on the flight to 53 attempted bombing on christmas day. the ranking republican on the intelligence committee, pete hoekstra joined is on this morning's washington journal. it runs about a half-hour. >> host: we talked with representative pete hoekstra, who is ranking member on the intelligence committee and house. congressman getting a briefing today about the administration

on mekras misstate bombing attempt. what do you want to know? >> there is really a couple things i want to know. number one this is kind personal for me. i come from the state of michigan and this was an attack on our latest city, said that we have any indication that all that detroit was picked for a specific reason than that this is an indication that may be the target sometime again in the future, or was detroit just a choice of convenience? a credit bin atlanta, evette in minneapolis, could have been a your or any other city. the guy was heading to detroit. the second thing is, i really want to find out why, after ft. hood, which had very much the same footprint, the american-born erratical cleric in yemen, it had al qaeda of the arabian peninsula and an attack on america. what steps did the administration take immediately after ft. hood and in the intervening time between ft. hood and the christmas day attack?

did we put enough emphasis on going to the arabian peninsula, who knows what could it happen if we would have focused there. i think the refusal to recognize ft. hood as a terrorist attack meant there were certain things that we didn't do in the intervening window. >> host: the president said regarding detroit, they have the intelligence. they fail to connect the dots. he did say it was unacceptable. there working on it in what you make of that response? >> guest: i'm glad the president recognizes number one it was a terrorist attack in the second thing he recognizes their continued weaknesses in the intelligence community, and you know, they collect a lot of data in what we now need to do is develop a system-- i worked on the 9/11 report. i worked on intelligence reform. i don't think of formation in intelligence is the key issue. now we have all this data coming into all of these different organizations. we need a system that pushes information now that says hey,

we are listening in getting this chatter out of yemen that is talking about nigeria. we are getting this father coming into the embassy in nigeria saying hey maysan is moving over to the radicalized side, and start connecting some of this and pushing out in saying this is some information data that information data that comes together. we now need a live person to analyze this stuff. >>host:the phone number for a guest on the bottom of this screen, separate lines for democrats and republicans in independents. we are talking about u.s. policies on terrorism. our guest is representative pete hoekstra who is ranking member on the intelligence committee in the house. in addition to the briefing and making members on several committees sent the letter to the white house. you have touched on it a little bit so far but speak more about the letter you sent in the major points. >> guest: the frustrations we have had as we had no briefings

on ft. hood. you know, the present commission report to be done on november 30. that was delivered to the white house. congress still hasn't seen it. again, i thought ft. hood was a terrorist attack. and, what really caught my interest again was a radical islamic cleric who is the american-born. what is his influence? wendell qaeda agents someone who is in america as part of their operation or inspirational network, that is a coup for them. and so, what was going on and what did we learn and what do we know about a lucky and what did we do is a result? they continue to refuse to brief us on that. i was in yemen on new year's day and expressly the white house had called the ambassador, and the cia had called the station

chief. this it never happened to me before, and said the congressman may ask a particular question about a range of issues that the committee does have jurisdiction over but if he goes into that area, you have got to tell on that information will be forthcoming to him from washington. you can't talk about stuff you are doing here and the answer you have to give me a sorry congressman, go back to washington and get that answer. i already know, they won't give me that information so there is a high level of frustration. >> host: before we get to calls, you mention yemen. what did you learn there? >> guest: we learned a lot of things in yemen. we have a fire hose from 12 hours from the people telling everything they want you to know about yemen. the american-born problem, gitmo detainees return to the american-- the form kind of the court of the al qaeda of the arabian peninsula.

these folks that have a special interest in attacking the united states, because they are so tied to the united states so the franchise on the arabian peninsula, the al qaeda franchise is different than the senior leadership in pakistan and afghanistan of the al qaeda in what their goals and objectives are. afghanistan and pakistan, senior leadership is focused on the battle and afghanistan and disruption in pakistan. al qaeda on the arabian peninsula, they are interested in what is going on in the arabian peninsula but they have a special focus that they want to attack the united states and they are willing to do smaller attacks. they will take satisfaction out of the attack on ft. hood, 14 americans killed. they will take satisfaction if that plane but it's gone down in detroit, we would have lost roughly 300 people on the plane. it would not have been on the

scale of 9/11. we are voice thought singer leadership hovel qaeda wanted to do something as big if not bigger than 9/11 as their next saban. al qaeda on the arabian peninsula is going to accept smaller victories. >> host: the first call for a guest, a camp in new jersey, louis republican you are on with pete hoekstra. >> caller: good morning guys. when we catch somebody on a vis the and they are planning to attack how come they are not charged with spying or espionage? another question, if they are a citizen and we catch them planning doing an attack how come they are not charged with treason? one final quick note, with the administration byfield the-- [inaudible] thanks guys. >> guest: thank you. i would like to save those are easy questions and their easy answers but in this area there are no easy answers, to some of

the question that you love best of the the points you have raised points that i would typically agree with. we have vast the president as a result of ft. hood and as a result of christmas day attack to move exactly in the direction you are talking about. number one is we need to recognize people coming to the united states and traveling to the united states from overseas, this is a privilege not right so if we get information that people may pose a threat to the united states we put them on a no-fly list aires letter list and if they want to come here they have got to go further more for an in-depth interview. if the come here and they commit a crime, absolutely a terrorism act, charge them to the full extent, but put them through a military tribunal, take them out of the civilian courts. they do not deserve the rights and privileges are civilian court system provides. the third thing, and this is i think an important point that you make, is for americans who

become traders, the molotky, the spokesperson for bin laden who is an american, the dc 52 left the u.s. sometime i think in november and went to pakistan to practice jihad, these individuals need to be treated as they traders that they are, and we have to accelerate and remove the barriers to dealing with these individuals, and then the fourth point the recommendation made to the president is we have gitmo detainees who were from yemen or from saudi arabia the president sent six of them back to yemen late december, stop it. leave them in guantanamo, don't send them back to these countries with major i mcgovern terriers. they go back and they go back and form, enjoying to many of them are joining the al qaeda again. >> host: to the line for democrats, ed in wilmington,

delaware for the congress. good morning. >> caller: it seems like we are talking about swatting flies. now we have a lot of enemies, like what is the real root cause of this war against islam, this crusade that bush announced? we have to go back to the document that was produced for israel by these american thinkers, and they ask for a new apparro-- pearl harbor in the next thing we know we are having 9/11. [inaudible] crossing the rubicon is a good book. at says, here we have israel a country with 600 nukes, hundreds of icbm's, a satellite system that they blackmail from us. you can read about it and see

what it says. we have to assume israel's enemies even though they do terrorist actions against their neighbors, and you know, basically are having a holocaust against the palestinian people. why are the people reacting to that, our enemies? >> guest: i think you are exactly right. you need to look to the root causes of this radical jihadists movement against the united states, and you about lend a couple. in one form, that sure our support of the state of israel is a cause that motivates these individuals. they are not big fans of democracy. they don't believe in the quality of women's rights. they don't believe in freedom of religion. at their core, they despise our way of life and the values that we as spells, so there is a

fundamental difference between a radical jihadist and their view of the earl then did you what the united states and i think yes you are absolutely right. we need to understand those root causes and understand that it is not going to be easy to address these problems and why it is so difficult for those, you know, it gives you an understanding as to why this a difficult to say we are going to negotiate with these folks. i am sorry, i am not sure there is a negotiated path to reconciliation between the jihadists movement and the values that we have here in the united states. >> host: on the hill itself, congressman of course health care out there, economy and jobs that the story of terrorism, especially detroit and intelligence matters, we are expecting a lot of activity. kenny give us a sense of the scope of hearings that are coming? >> guest: on the until committee today we will get a briefing on the christmas day attack.

the full house will get a briefing from the president's national security adviser, again on the christmas day attack. i assume this will be followed up by a number of hearings in a series of committees, homeland security, again there will be more hearings on the intelligence side and i'm sure there will be hearings on the armed services side as to exactly what is their level of involvement going to be in yemen, what is their level of involvement going to continue to be in pakistan and afghanistan but those are not the only in government areas. samole yet, people say that is surprising this guy from nigeria but i have been to nigeria the few times and there is a fault line in nigeria. the northern part of the nigeria is of law and right along the fault line there has been a lot of violence and that is where this individual apparently came from, so there is going to be a lot of looking at the specific incident but what we need to do is we need to recognize and continue to take a look at the

bigger threat. it is almost a global threat. you have got the hot spots within you of guthie activity that is taking place in europe and obviously in the united states. let's go the lead story in "usa today," american support air travel profiling. americans are divided over whether the president's response for the attempted bombing went far enough. by 3-1 those polled favored the idea of subjecting airline passengers to more intensive security checks if they fit a profile of terrorist based on age, ethnicity and gender. good idea? >> guest: i think so. again, i spent a lot of time going to airports and going to yemen. i will take a much more intensive, something that goes closer to the israeli model where they are interviewing people and you are going for all the right reasons but they still make you break out into a cold sweat and say i wonder if i'm going to be able to get on that

plane versus what i experience in yemen. it is human judgment. and it is-- rather than having a bureaucratic model that says we are going to have, we are going to have the bodies gannon all of these things people find ways around the system. somewhere around the line you have to recognize the bureaucratic system is not going to work. you have to put in and allow for some gray matter analysis that somebody is looking at this crowd and saying you know that person over there for whatever reason, they are behaving suspiciously. when they come to we are going to pull them aside and ask them a couple of questions and we may put them through more intensive screening. people that are trained in this, they will be able to spot the kind of behavior that got to pull people aside. >> host: shirin is on the line from norcross, georgia. thanks for waiting. you are on the independent line for the congressman. >> caller: good morning.

i voted for george bush twice. i voted for president obama the last time around, and what i see and what the republicans have been doing for an entire gear, maybe a little bit over eight years since the election of barack obama, is everything and anything that is built with america is wrong. they know the right way, how to do it. they know the right way which should have been done. they know the right way, where it should be. there is never, ever and the american way. coming from the republicans. if it is not by the republican, then it is the wrong way. do you think it is fair that for people like me, who are independent, and to vote for people, that they believe, you know, are on both sides, not one

side, you do it my way or else but both sides, looking at everything from an american view. >> guest: absolutely. i think you are exactly right. that is the impairment many of us hope come to washington a year ago. that is exactly what the president promised in the campaign, that there would be an american and he was going to lead the american way and precht on the partisanship, and we began the year with a stimulus bill that was $787 billion that was passed with democratic votes that the president, from my standpoint, rather than looking at building a coalition, where there would be republicans and democrats that it supported stimulus plan are the could supported cap-and-trade plan or that could support health care plan, that would enable us to move forward recognizing that neither democrats nor republicans were the repository of having the correct in the right or the american answer. but the president, and i think in some ways driven by the

leadership and congress, theory ribas 60 those in the senate and nancy pelosi with 257 votes in the u.s. house, they made the decision and convince the president that to get and passes legislative priorities, getting 218 democrats to vote for a piece of legislation was an easier way to move forward than trying to get 160 democrats and maybe 60 republicans to move legislation forward, and so they moved the president into a position that said we are going to take in recommend you take a more partisan approach and will not go along the bipartisan approach on three major pieces of legislation. that is exactly what happened. i am disappointed by that. i was more than willing to give this president the benefit of the doubt and to come in a year ago and to work with this president on each of these issues and the leadership in the house and the senate decided that, on these major pieces of

legislation, they would go it alone. and, you are seeing it now, the final steps as we move to health care, the negotiations are going to be held in secret and help with the only democrats in the room. at one time, you know a year-and-a-half, two years ago during the campaign we were expecting weaver going to see all this on c-span. we were hoping we for going to be seeing it on c-span the that is not the direction we-- the in the house and senate will be moving or the president will be doing. we will end up with a partisan approach. i'm disappointed by that perhaps as much if not more than you are. >> host: bud, republican. you are on the air. >> caller: it morning. representative hoekstra i have a question as to why we continue to be on the defensive in screening people to get on airplanes. i think we need to go on the offensive. >> host: what do you mean by that caller?

>> caller: i have a specific idea. all the people who are training to be suicide bombers are sent to mecca and medina during the hajj and that ask a high-ranking intelligence officer one time, i bet there are a lot of bad actors at the hodge every year. i think that is where we need to attack. i think we ought to bomb mecca and medina. >> host: mr. hoekstra? >> guest: i think bombing mecca and medina you up to recognize the vast majority and i'm not sure how many are there for the hodge but i believe it is probably in the millions and indiscriminate bombing would be something that i would be opposed to and i think would be a relatively if not a very bad idea. right now within the muslim community, the number of individuals that have radicalized, you know is very,

very small and an indiscriminate bombing on their holy sites would be definitely a step that would not encourage. you can go there. >> host:re is one twitter message this is uebelacher we are xcor with a ideology, islam in parentheses as opposed to simple for fanatics. >> guest: absolutely we are at war with the ideology. as a part of islam, and we have to recognize it is an ideology and more importantly, muslims need to recognize that there is a core, that there are some within that are trying to hijack their religion, and they are going to be the most effective in the most forceful in dealing with this issue in this problem within their religion. it is an ideology and if you take a look at it people talk about, this comes out of the poor and the lack of development. if we just had the economic

development. this young man from nigeria came from one of the better families in nigeria. a well-to-do family, his father was a high ranking official. it wasn't the poverty, it was the ideology that brought him in that the that he embraced and put him on that plane. >> host: milwaukee, robert you are on the line for democrats. thanks for waiting. >> caller: let me give you little recent history here. i am a uniter, not a divider. secondly, richard reid, the shoe bomber, and also you were the chairman of the intelligence committee, and i assume that you were capable and agreed person to correct some of the problems that previously happen, and now you were complaining because what you recommended is not even functional. so i really don't know where you are coming from, and you had

eight years, you republicans. i remember the energy bill which was secret, if you recall, that was not anything obama had to do with the now you were saying the democrats are keeping things in secret. you guys kept a lot in secret and thank you for your time. >> guest: i think, i was on one of the sunday morning talk shows a couple of weeks ago. we were on with jane harman, joe lieberman and susan collins, a democrat, and independent and two republicans. the forbes worked tirelessly to do the intelligence reform bill. we were uniters and we did intelligence reform. i haven't criticized the system that we put in place other than saying we now need to take it to the next up, where we address the problem of the information sharing. we now need to address the problem of information analysis. and the more than willing to work with democrats and this

president to make that happen. national security should be a bipartisan issue. you'll also find on the record if you go back, i challenge president bush pretty repeatedly on his unwillingness to share certain intelligence information or information i thought we were entitled to on the intelligence committee and we went out and got it so just as i am challenging this president and sharing information on ft. hood i challenged the previous president because i think there's a separation of powers here. it is congress's responsibility to hold the executive branch accountable and to do oversight whether it is a republican, a democrat or one of your members are someone else. you are exactly right, richard re. people are saying this is why we should try the guy and detroit. in civilian court because that is what we did with richard reed. just because we were wrong with richard reid does that mean we ought to be wrong now with the guy and detroit. let's set a consistent pattern and move forward as we arrestees

votes. >> host: conason hoekstra's bill, we need to be smart inconsistent about the threat posed by terrorists. lot of the points we touched on in this half-hour but the want to let you know it is there an printed do you want to take a look. the next call from michigan, dan on the independent line for congressman hoekstra. >> caller: yeah, here is my presidential voting record, to make sure that everyone-- i voted for reagan, bush, perot and clinton second term and obama. i was just wondering, what do you think about dick cheney coming out and calling the obama week, like the same day as the, the day after the christmas attack or almost attacked or whatever, and then as far as the information sharing bills, you

hear about that thing, like the 9/11 commission the danger. there was like-- able danger was blocked by military, military lawyers to share information. it was like on purpose so i was wondering what your comments were about that. >> guest: thank you. i understand some of the frustrations that the former vice president may have. repeatedly over the last 12 months, everything that has been wrong with america has been blamed on the previous administration, and you know, while i might prefer at this point in time to say you know, mr. vice president, mr. cheney, just kind of back off. i understand why the vice president is speaking, because i think he is proud of the track record. it is an imperfect track record on some of the national security but it was a clearly focused

effort and i think he is saying, wait a minute, here is the things we got accomplished. may not been perfect but i want to set the record straight as to what we got them and how we are different from this administration. the second thing on information sharing, you are absolutely right that i don't remember the specifics on able danger but prior to 9/11, we had boxes of information, and that information couldn't cross the line from the intelligence world over to the fbi, homeland security and these places. we have broken down those walls brick and the thing i'm starting to get concerned about is now that we are treating much of this again as law enforcement we are going to start building those walls again and that information is not going to be shared. i can't tell you the number of times over the last two or three months rai fest for information and the answer i get back is congressman we can share that information with you because we

are now involved in a legal process, and you know we are going through a legal review. he kind of said this information is really important to understand the larger context of the threat that we face. and so i am now worried about that, at the box is an affirmation that says this is an ongoing investigation. we can share with other people. this is what happened after ft. hood. did we have information after ft. hood that was part of the investigative process that should've been given over to the sunland security to try to keep it safe. >> host: [laughter] , lawton oklahoma, a joke. you are on the air. >> caller: if we had all the information we the public would be able to combat this terrorism. i was wondering if you are familiar with the book, final jihad?

>> guest: i am not familiar with that specific book. why don't you give me the particulars. >> caller: the final jihad rick might be the last jihad,. [inaudible] he is a former cia fbi former governor of oklahoma. he was the first pick for vice president and he elected not to do it. i was planning on him being the governor of the first domestic terrorist-- in this country and anyways, his books, the final jihad that had the timothy mcveigh blowing up of the federal building and this book was made two years before the oklahoma city bombing. the intelligence committee ought to know this kind of stuff. >> host: caller, any specific question for guest? >> caller: i was wondering

what you all were doing up there, listening to you contradict yourself, speaking about obama not leading the charge on terrorism when you just said, the house of representatives and the heads of those committees are leading the health care bill, which is directing obama. who is leading who right there? >> host: congressman final thoughts on the intelligence system, the process, what happened on christmas and moving forward? >> guest: we have all of this information. we have all of this data. howie push the data out and say these are the things that we really need to look at? and, the hope and expectation and in reference to this caller, i hope that we start declassifying more information and make more information to the american people. the recidivism rate, how many people have left gitmo? that is import information as we think about moving this president to the united states.

and as we think about releasing more. i think there's a lot more information that would enable the american people to better understand this threat and be part of the debate, indeed more constructive p debate. [applause] representative pete hoekstra ranking member on the intelligence committee, we appreciate your time this morning. >> guest: thank you.

>> live coverage of today's financial crisis inquiry commission hearing is continuing right now on a web site,

c-span.org. and tomorrow is day two of the hearing with testimony from federal, state and local officials on current investigations with attorney general eric holder fdic chairman sheila bair and sec chief mary schapiro. we will have live coverage starting at 9:00 a.m. eastern right here on c-span2. now on c-span two it is a conversation on health care legislation from today's washington journal. it is about half an hour. us gore guest, representative jan schakowsky democrat from illinois in night district, talking primarily about health care and we woke up to this story in the roll call, hosted last night. charlie rangel head of ways and means is health care talks are stalled in facing serious problems not likely to have a final bill until february. in your view what are the serious problems that there are any? >> guest: well, of course we are at an historic moment right now where we do stand on the precipice of being able to offer to americans finally affordable,

quality health care, and getting there has not been easy. there is a lot of interest involved, that one too stolid as well as those who want to pass it so here we are at this moment, where we have some really difficult questions about how do we pay for the bill? about affordability, are people really going to when they see the legislation, when they go to those inevitable on line calculators and put in their income and their health status of etc, going to find that they can afford to have health care? are we going to be able to cover millions of new people with their health care plan, and so we are at a point right now where some of these serious serious questions are still unresolved. let's go there was a big democratic caucus meeting on the hill last night. what was it like? >> guest: i think there were just a lot of people who feel

particularly that the house bill that we passed is preferable to the senate bill in many, many features. and i think that was what you heard from the members at large, that unhappy with various revisions. there's a lot of people, who talked about as a way to pay for it, taxing benefits of workers was not feud as a good way to go. this is a plan that is in the senate bill. the white house is certainly supporting a version of that, and we are trying to come to a place where middle-class people don't find themselves, once they take a look at this bill and find, wait a minute, s&l i am going to have additional taxes on my benefits.

and there's some dispute about just what is a cadillac benefit, that really what it means is a high-cost benefit. let me give you an example of that. i know you will want to go to your viewers and listeners, but the house in-- house and senate are all part of the federal health benefit plan. and large group, average age 47, and the cost of our plan would fall below that threshold of the so-called cadillac plan. if the senate of the jana, average age 63, a smaller group, with some health issues, if they were getting their own plan by themselves, that very same benefit package would suddenly be a cadillac plan, because it would cost more. so really, when you talk about a catlett plan, you have to talk about, is it the benefits that

are cadillac or is it really because of the aged, the health status, even the gender, more women in a group, more money. we are discriminated against and have been in health care costs. >> host: the phone numbers on the bottom of the screen for guess. she is congresswoman jan schakowsky, a democrat from illinois. separate lines for democrats, republicans and independents. pelosi, hoyer, panel chairman will represent the house on health reform. they talk about 11 lawmakers meeting privately with president obama at the white house today. theegottors and house majority whip clyburn as well as senators reed baucus dodd durbin harkin. it is likely the senators will represent the chamber on the health reform compromise and one other headline before we go to calls. support grows for u.s. help the exchange. it is a "wall street journal" story. the right the white house wants

to include a national health insurance exchange in the house bill which would give house democrats one of their top demands. would you care to speak more to that? >> guest: i sure would. the house bill creates a whole national pool, so that there are lots of people that are going to be able to choose, people who are uninsured right now, the self-employed, small businesses that can go into this national exchange, that will have national guidelines, and they will be able to choose from a variety of private plans within that exchange, and the house bill we also have a public option that you could choose from. but, we believe that by creating these national rules and a national pool that it will be much more successful than the senate idea of having state-by-state by state. these could end up being very small, with not a lot of

negotiating power to bring down costs and to provide the benefits people me. >> host: the first call for our guests, louisiana, jane on the democrats line. hi there. >> caller: good morning. can i ask my question now? >> host: you are on the air with the congresswoman. >> caller: the retiring ceo of united health care last year was to receive a package of $1.2 billion for his retirement. then they cut that down to 800 million because of a discrepancy in paperwork, so how you justify, isn't that the real problem with hospital care and medical care because of the high insurance rates and i will take my answer of the air. >> guest: well, the idea that some of these insurance executives are making these huge bonuses, that they are getting these golden parachutes when they retire, that a lot of the

health care dollar goes to pay these costs is something that we are going to get under control. what we are going to say is that a certain percentage of the premium dollar must go to health care now. the house bill says 85%, the senate bill i believe is 80% but they are not going to be able to just dig into your pocket and take all that money into profits, which has been a problem for so many years, and these high salaries and bonuses. and so, we are going to actually require the insurance companies to open up their books, to provide more disclosure so that we can do better oversight and control over the way these health care dollars that come from hard-working people are actually distribute it. >> host: jacksonville, florida, sally on the republican line. you are on the air now. >> caller: good morning. i have a question.

i have health care. i don't want to lose the health care i have. and, i don't want to pay for anybody else's health care either. so, how am i as a taxpayer not going to be penalized so that money comes out of my pocket to pass your foolish bill? >> guest: well actually, of course i disagree with the foolish bill, but if you have excellent health care, and i assume that is probably through your employer, in my right about that? >> host: i think the caller is gone. >> guest: she is off the line. you will continue to have your health care, and the way the bill was organized, you won't be paying additional costs for anyone else, but i want to say this. that every other industrialized country in the world has made a

decision, just as we have four fire, putting out fires, the fire departments are for public education, that it will be a rights of all the people in their countries to have access to health care, and they have decided that it is a community, a country function, something that we are all in together. the united states stands alone in saying that we don't share together in making sure that all americans have health care. i think it really is a moral issue, and we all want to be involved in making sure that we have access to quality, affordable health care i think. >> host: back to that meeting. specific this site for a second, what was the general mood of the caucus as it now returns to town in ameet finality on the bill? >> guest: i think the mood of the caucus was at the end of the day house members want to see a bill that more resembles the

house bill. we think that it provides much greater affordability for people. we think that we have handled the issue of control over the insurance industry much better. we think that you know, just one after another of the provisions. the closing of the donut hole. that is how much people on medicare have to pay out-of-pocket for their medication. we want to close that gap, so people don't have to pay that much. we do it in the house of representatives. so that was the think a lot of the conversation, so it is not sip yet. was do we covered a town hall meeting with congress to packin michigan. you talk a lot about his amendment on abortion, part of the house legislation. did that come up plus side and what is the fate of that abortion language? >> guest: it did. the pro-choice caucus, which i

am part of, which has well over 100 members in the house of representatives, and wide support certainly throughout the country for reproductive health care being part of any package. it came up last night in the context of those of us who are pro-choice, believe that we ought to stick with the status quo, which says and i want to say it very clearly, not any federal dollars to pay for abortions. we don't necessarily like that but we agree with that. that is the hyde amendment. and the stupack amendment, and the nelson amendment in the senate go well beyond that. we think as women, that all of our reproductive health needs to be covered. that was discussed even by a pro-life democrat, that he

agreed, that let's not make this an abortion bill. let's keep this a health care bill. keep the status quo, no federal dollars going for abortions and move on and not make an issue of how we are going to expand core actually take away rights that women right now have. will be put on me. i run a very small business. i have a couple of employees. what they are going to force me to do is going to put me out of business. one of the democrats said that the republican health care was to die quickly. i would rather die quickly and free than under the yoke of oppression. host: what do you and your employees do for health care right now?

caller: we do not have any and i will not get any. there is plenty of health care available out there. this thing is turning the nation into a bunch of bums and beggars. where is our american pride? guest: actually, this is good news for you, if you >> guest: actually it's really good news for you if you look carefully at this bill. there will be an opportunity for your employees. if you're a small business, to go into health care exchange. what they can get the health care that they need. this will be an opportunity for you to save your employees, it will be away for you to get the health care, and it's not going to be charged to you if you are a very small business. additionally, right away there are going to be small business tax credits that will make employee coverage more affordable.

there will be tax credits of up to 50 percent of premiums that will be available to firms that choose to offer coverage. that choose to offer coverage. so actually, this bill has been very careful to particularly target small businesses, most of whom want to provide their employees with health care coverage. i don't know if that's your situation. with the kind of assistance that you'll be able to do it, either yourself with tax credits, or by having a health care exchange that your employees can go to. >> host: our guest, elected back in 1998, we're talking health care for now with jan schakowsky. the representative. steve, you are on the democrats line. hi. >> caller: hi. in my book, i would love to pay more taxes to get good health

care, because i think we should have a single-payer system in stead of paying these lousy insurance companies to make their big ceos and stuff all these problems and stuff. i'd rather be paying a little bit more taxes, and i think i probably get a whole lot better health care than what i've got right now. >> host: anything you want to respond to their? >> guest: idea that a single-payer system is a very efficient system. what single-payer means is that the government would be the insurance company, but people would still be able to pick their doctor, pick there, do, go to their hospital, what have you. the same kind of distribution system we have for health care, but every single person would be covered. the way that it could be covered is by a special tax for health

care, but as you correctly said, it is for most people, it would actually be less expensive, and yet everyone would be covered. remember, the united states of america, per person, spends nearly twice as much as every other nation in the world. and yet, we have almost 40 million people that don't get health care. but then there's millions and millions of more. i hear them every single day, that are underinsured. they think they are insured until they get sick. >> host: cal is joining us now from tennessee. republican, what would you like to ask this when? >> caller: good morning and thank you for taking my call. i have about three points. please don't cut me off until i get finished. i want to ask you about national insurance exchange. okay. the second, can somebody use private enterprise like myself establish his own exchange? >> host: let me stop you there. let's get an answer.

>> guest: insurance companies would qualify to come into the exchange, and so it would be a place where there would be an established benefit package. there will be some people who are subsidized within the exchange and order to pay that premium. they would have to abide by certain rules in order to be in the exchange, but it would be for private companies. as i said, in a house bill that would also be one publicly run option. but all the rest would be private insurance companies that meet the criteria in order to come into the plan. >> host: keep going. >> caller: the second point i want to make is i haven't a know, about a month or two ago, from the insurance -- one of the big major insurance companies. the point is that people keep up beating the back of the ancient copies, but the truth is, $0.99 out of every 1 dollar goes for

doctors, hospitals, medical supplies and so forth that that's part to. and the second point i want to make of the last point i will make real, real quick is that governments could in some areas but this is not the time. we have over 60 million people by the way that are involved with health insurance but if you want to break and you're going to put them on the unemployment ropes. thank you. >> guest: first of all, the insurance companies actually would still exist under both the house and the senate plans. and we would be adding so many people now to the ranks of the insured that we know that the health care industry itself would absolutely build. in fact, one of the challenges that we have is making sure that we have enough health care providers in order to meet the demand. in both bills, the house bill and the senate bill make investments in a workforce development to make sure that we

have all the primary doctors that we need, to have the nurses that we need, and all of the other -- the whole range of health care professionals, nurses, and assistance that we're going to need, in order to take care of the people that are now going to have access to the system. so there's going to be a lot of jobs in health care that are available. and we're not taking away the insurance company jobs. >> host: from all called a write-in shoulds are growing between the two chambers, several house lawmakers have voiced frustration with senators lieberman and nelson over concessions and special deals they cannot. did that come up last night and what's your view on what's been reported about those deals? >> guest: well, you know, one of the things that senator nelson got was 100% government reimbursement for health care for nebraska. just for nebraska. and i think even within that state there some people who think, wait a minute, you know,

because you've got that 60th vote, now you're going to make special deals that only apply to nebraskans. you know, this is not too good. so yes, there's enormous frustrations. the fact that one united states senator can hold really not only the whole congress, but the whole country hostage and away, i think really does raise questions about the rules. we know that we've got 50, you know, in the high '50s of senators who are ready to compromise to work on a bill with a house members, and we've probably got about 55 u.s. senators that would support a public option, for example. which the public supports. and yet, we got one senator -- well, and senator lieberman also, who by the way, just days before he said he wouldn't support letting people buy into medicare, actually did support that. so we've seen some change of

heart. i think probably due to the insurance industry. >> host: we're going to cover an event at the press club today with the attorney general of south carolina on health care topic. it will be constitutionality of the bill. somehow talked about these cool special deals, others have talked about mandates on people to buy injures. what do you make of the constitutional arguments on health care? >> guest: i'm not a lawyer, but certainly, again, every other industrialized nation has figured out constitutionally how to provide health care to all of our citizens -- their citizens. i think we can certainly, as the richest of all and pretty smart nation, figure it out. >> host: back to the phones. howard, independent caller for representative schakowsky. >> caller: yes, i have a couple of questions i got as. i'm a little nervous now. >> host: take your time, sir. >> caller: i hope i can get my point across but you know it makes it sound like the waste, fraud and abuse that's going to

pay for half of those health care bill. they make it sound like the only payment they're going to go after it is after the health bill is passed. i don't understand it. and secondly, i'd like to know what's going to happen when we had that next big wall, when people are living healthier and longer, what's going to happen with our social security? >> guest: let me talk a little bit about, you mention waste, fraud and abuse are one of the ways that we want to get this under control is to hold the insurance industry accountable. and one of the most important ways to do that is right now, insurance industry is exempt from antitrust laws. by law, right now, they can actually collude with each other, get together, set prices, set territories. without any interference at all.

only major league baseball and the insurance industry is exempt from antitrust laws. one of the things that i know the white house wants to do, and certainly it's in the house bill, is to remove that exemption so that they actually have to compete. >> host: we should point out, our guest also sits on the intelligence committee. we do want to talk, now that you're back and out, there will be a lot of activity on this attempted attack on christmas day. the plane coming in to detroit. what is the right approach intelligence wise, and she could twice? >> guest: , well as the president said, we had the intelligence. it was about connecting the dots that were going to have a briefing, a full briefing this morning on the intelligence committee, about exactly what happened. and what we need to look for is where are those holes. you know, we created director of

national intelligence in order to make sure that we coordinate and not stovepipe the communications, so that the cia talks to homeland security, talks to the military, you know, so we pull it all together. where -- well, we know. i think the one that sticks in my craw is when the father of this young pakistani terrorist was turned in by his own father, when he came. how, somehow that didn't get translated. let's not let this guy on the plane with no baggage and a one way ticket, and a visa that he could use over and over again. how did we miss that? but i think there are a number of other places where it fell through the cracks. we're going to find out. we're going to try and glucose together so that doesn't happen again. >> host: so what is the biggest challenge in pulling all that intelligence together to make the right decisions? >> guest: well, we want to hear

that it's not just a good idea for people to talk to each other, but that there some accountability here. that employees from top to bottom must transmit certain pieces of information. and we also do want to look at the internal structurets somehow is preventing that. with hardware? you know, google and put in a wrong spelling, will say do you mean? how come, if this guy's name was put in with one letter wrong, as we've heard, then it just disappeared? and another, these are all transliterations from another language. and so of course there's going to be different spellings that occur. we can't let that make us unsafe on airplanes or anywhere else. >> host: woodstock connecticut, steve, like the democrats. haida.abou the

cadillac tax that is on the middle class depending on what media source you see. they say it will be 40 percent on union members. about 40% is going to topple us over pretty much everywhere in the family. >> guest: you know, i think the argument somehow, if the plans are taxed at such a high rate, that instead of doing these generous health care plans, that the money in -- but the employers will turn that money into salary is just a mistake, especially in this economy. i'm agreeing with you. i think it's a real problem to say that we're going to tax these benefits, particularly if you're in a group of older workers or more female workers wear the same, rather modest benefit package, becomes very,

very expensive because of who you are. or you're any sort industry that's more dangerous. so actually, i think the notion of taxing these benefits is not a good idea. we're working very hard right now to reshape the proposal so that it doesn't hit middle class workers, whether they are parts of unions or not. >> host: one lasko here. saint pete, florida. david, republican. good morning. >> caller: i miss, who is our guest today? >> guest: on congresswoman jan schakowsky from the chicago area. >> caller: very good. i may doctor. i'm also a member of the board of the florida association. i have followed this issue for many years. and it just strikes me that you are making so many apologies and pushing forward so many myths. you know, on the one hand you say the insurance companies are bad. they need to be controlled. and then you support a mandate that forces everyone to buy overpriced health insurance that

would tax them -- they will even be subjected jail time if they don't buy it. on the one hand you complain about price-fixing, because of the mccart ferguson act of 1945 in the antitrust exemption. and yet you allow medicare price-fixing. on one hand you complain that the system is broken and cost too much. and yet medicare is bankrupt. and of course there still to. let's not debate the jail time if. congresswoman, i would like to ask do you really think the people who elected you are the stupid? why are you playing politics above people's lives ex- >> guest: well, the american medical association actually supports the legislation. so you're not representing the view of organized medicine here, who does, as you may know, in the house bill, we do make an important fix in terms of doctors, and come under

medicare. and outcome in the house bill, because we increased the number of people, it agrees with the number of people in medicaid, we understand that we need to raise the rate, that doctors are paid their and so, it is not about politics. this is about -- and i would agree with you. i think we need to do more to regulate the insurance industry, make sure we don't have, and our bill does that, exclusions from preexisting conditions. i imagine, people get sick, then they can't get their health care. this is why the medical association is supporting the legislation, so that you can really be a healer and make sure that all people who need the health care will be able to get it. >> host: our guest has been representative jan schakowsky, democrat from illinois. ninth district. that's the north side of also evanston, skokie, wilmette.

thank you for your kind is going. >> guest: thank you. >> american icons, three original documenters from c-span. now available on dvd. a unique journey through the iconic columns of the three

branches of american government. cd exquisite detail of the supreme court. go beyond the velvet ropes of public tours of the white house, america's most famous old. and explore the history, art and architecture of the capital. american icons, a three disc dvd set, and. one of the many items available at c-span.org/store. now joint chiefs of staff chairman mike mullen and his wife deborah on suicide prevention for soldiers and veterans. >> hosted by the defense centers of excellence for psychological health and the veterans affairs department. this is just under 35 minutes. >> it's my privilege and is a great privilege to introduce to you today the 17th chairman of the joint chiefs of staff and mrs. mullen. sir. [applause]

>> well, good morning. before i get started, before we get started on the topic, obviously that's so important to all of us, i do want to express our thoughts and condolences for all the citizens of haiti, and those who have been struck by this very significant tragedy. and also, certainly from my perspective, the united states is going to do all we can to help. and we will have worked throughout the night to figure out how we can do that and do it as rapidly as possible. and awful lot of people work in that direction right now. i know there are also significant international efforts, and although it will be greatly appreciated. so we should just keep the haitian people in our thoughts and in our hearts today, as they

start to recover from this very, very tragic incident. it really is a great pleasure for deborah and i to be here with you today, and i will make a few comments. the devil also make a few comments and they will try to take a couple of questions that we only have about a half in our. i know this is a third day of this conference. i also, it's the department of defense and the a conference and i think that alone says an awful lot about where we used to be and where we are right now. very much in this together. i know this subject, the subject of suicide is one of tremendous difficulty and challenge and understanding. and there have been a lot of people who have worked on this diligently for many, many years, and certainly in the services with the rise and the number, and all the services, since these wars started, to really

look at the causes and get to a point where we can prevent this and understand it. and i know at this point in time, there does not appear to be any scientific correlation between the number of deployments and those that are at risk, but i am just hard-pressed to believe that's not the case. and i know we are and hope we continue to look at their first to peel back the cause is, if you will, to get to the root of this so that as these deployments continue, and are 12 times particularly in the army over the next couple of years is not going to go down significantly. as a come out of iraq and sent additional troops into afghanistan. card will time in the marine corps, which is another service that has been very hard pressed by deployments, will increase over the course of the next year or so to get to appoint of about

twice as long as hot as you are deployed. and we think that's a significant mark buchanan and sustain that over time we think that will relieve a lot of the pressure and the stress. and at the same time, we know we've got to continue in these missions, and we've got to focus on our members and their families to address this issue and other issues that are -- that are so important and so relevant to the force that we have today. so what you're doing this week is really, really important. and i hope, and i was talking to general sutton just walking in, i know that, i think there are twice as many people here this year as last. the problems that are identified in suicide are being widely discussed, and i go back to where i started between the d.o.d. and the va, i think

sharing those practices, sharing those protocols, sharing that understanding. and i'm sure reaching much further than that across the country, and indeed, around the world to centers of excellence in the suicide world will help. i'm struck, one of the things that struck me in recent months is the army kicked off this $50 million suicide study, several months ago, in the fall. and it was a five year study. one of the things i worried about was we can't wait five years. and these things have to -- we have to be putting programs, intervention, building resilience, attacking the issues that we know affect our people right now. and i was encouraged in talking with the leaders of that study that they were going to peel off results as they go. so it's not going to be a five year wait. and i'm very hopeful that they will do that, start doing that in the very new future. as i talked with uniformed

leadership about this, that uniformed leaders are attacking this from the leadership perspective. the ncos in the case of the marine corps, really focusing on the ncos. and when i was in camp lejeune not too long ago, i was struck by the commander's comment that the ncos had really started to not just get into it, but have an impact. and numbers of events, numbers of suicides, that were taking place in camp lejeune were reduced over the previous few months. that that had occurred. and i don't know how else to get at this except leadership. and figure out who is at risk, understand it, train to it, back to the study i was also struck, and these were five of the leading individuals in our country on suicide from east coast to west coast, who were leading this. and i was also struck at how,

from their perspective, how little national attention is paid to this issue. in the tens of thousands of suicides every year, it doesn't generate that kind of interest and effort to get at the causes across the board in america. and so, this study is really part of what i would call really a landmark study, upon which we are greatly dependent. and these experts explained that they really haven't been able to do anything like this in the past. so i'm encouraged by that as well. like so many things, we are trying to solve these very difficult problems while we are in two conflicts. we are trying to release the pressure, build resilience, understand how we identify at risk people, and then extend the web.

deb will make a comment, will comment here very shortly there we also find it extending into families and into children's. so how do you extend the web? how do we know as an instituti institution? we don't track the suicides longer than 120 days after somebody etf's but how do we know what really happens to those who have served so well? who aren't necessary connected to the va? so our tracking methodism need to improve. we need to understand a very early for the at risk individuals are. and it's oftentimes squad leaders and family members who know that. best friends who know that, who see the symptoms, the earliest. who can look them in the idaho or who can reach out and do a life ring of help towards someone who can help intervene. in this very difficult area. so i know there's an awful lot

of leadership attention given focus to this, and we focus a great deal on the army, but general chandler is here who is the number two officer in the united states air force. and as i look at the numbers for each service, the numbers have gone up. the rate has gone up per capita at about the same rate over the last four or five years for every service. so this isn't just a ground force problem. and it's a growing problem that we, as leaders, have to commit to. and then you and your fields of expertise have to figure out how to get it to us so that we can actually do something with it. , institution standpoint. so we understand what causes it the best we can, and then make those kinds of changes. i just want to reemphasize my commitment, that was commitment, and the leadership in the senior family leadership commitment to

getting at this problem. >> good morning. . . i had a recent meeting with several of the leadership individuals from the marines and

the army. and i asked about whether they track family member suicide. in the army did say that they did, that they had nine family members last year who had committed suicide. i did not get a response out of the marines. i don't think -- my understanding is that they don't generally track suicides because it tends to be last to the investigators. and often people don't want to talk about the fact that someone has committed suicide, so we really may not have our arms around that figure. i asked about the number of suicide attempts by family members. and i was stunned when i was told that there're too many many to track. so if you have a family and let's say it's a spouse who has

attempted suicide and her husband or with the wife is serving overseas and were not tracking this, are their children in the home that we are not aware if we may need to be doing interventions with. i know that if that number is that large, just in -- this was the army. we really don't have an idea of the scope of the problem with the times by sabo says in any of the other services. we don't know how many children out there are at increased risk. also, just the fact, the family that has someone serving downrange. if the mother or father has attempted suicide here in the states this is a crisis, a family in crisis. and it's our responsibility. these are our family members. we've got to find a way to track them.

i don't know if they're attempting this because this is the only way they feel they can get mental health, emotional health care. we don't really have any answers and i think we need to understand the answers. we know there's a stigma. spouses tell me all the time that they would like to get mental health assistance, but they really do believe as incorrect as this is that they really do believe that if they seek help that it will have a negative impact on their spouses military career. we have got to, you know, this stigma is just not with a service they servicemember getting help. recently there was a spouse who i think it's been finalized that she did not suicide when i was reading about this they believed it was suicide in germany. and one of the things that are spouses talked about was there is no training for suicide prevention for spouses.

it's focused -- there is suicide training but it's focused specifically in the military on the servicemember. i think we need to start to recognize that we have families that are under such great stress. it distresses only going to continue as we send these 30,000 troops in. we need to be a litigious tools to family members who are left behind to recognize not only in themselves, but in another spouse or a friend. not just the usual i'm feeling depressed or down. we know that they feel this way, but how do we maybe go a little step further by providing training for the spouses to really and what they should be looking for in another spouse or in another family member. the other issue i just wanted to talk about is when you have a

spouse living with something -- a service member who has had ptsd from a combat experience. the spouses suffer from anxiety, depression, and suicidal ideation. and one of the big top loans and psychologists and psychiatrists say these folks need to see someone. but this barrier to care, whether it's an inside barrier to care that they're afraid to go or they think the stigma is there or they think it will have a negative impact. or the barrier to care because they can't get help i think is something that we really need to address. and i know i talk to bonnie carol about if we had a family member that felt someone in the family come either the servicemember or a child or even themselves with contemplating or they thought was looking -- looked like maybe there was a suicidal situation that my have

been. bonnie's organization has such a connected web across our country with first responders that if we can use that resource, someone can call paths and tops can actually talk to them and have a first responder present very quickly. and those kind of resources we need to get to our families. it's not just about families of the fallen, which is what tapped does so beautifully. but it's all so they have the resources to help people that are really struggling with the fact that there may be someone in their family that they are suspect to give suicidal. so i appreciate the opportunity to just talk a little bit about the families and hope that that is something that you will look at as you work through these really challenging problems. we do have family members that we need to be aware of.

we need to get our arms around the problem that we're facing through this number of suicide attempts and actual suicides and the impact on the families. so thank you very much. [applause] >> let me just close with a couple of thoughts. first of all, debra mentions the pts issue, the tbi, this stigma issue. those are things that have been out there. we know how difficult they are. we're not breaking through them quickly enough. now i don't know what the right answer is. i have actually particularly on the stigma issue and how do i reach for help? but i have a real sense that we've got to create a much broader network of anonymous help that his effect is. so that individuals have a way to seek help, get help and not

be consumed by the thought that it's either my career or my spouse's career that i'm putting in jeopardy. until we break through it. i'm not saying that's the answer but that we will have seen some success with that we need to broaden not as rapidly as possible. there is part of a sea of goodwill in this country. there are individuals out there who want to help those who are in the military and their families. until that well is dry we should be figuring out ways to tap it. innovative ways to tap it. and then last, lastly in terms of suicide, specifically. when i lost one of my crewmembers in command when i was a navy captain, what i didn't really understand and there was at a time of real tension in our deployment cycle,

and our readiness cycle, et cetera. but i really didn't understand what sort of the pebble in the quiet water that he suicide was and how far those circles radiate, how far they reach. and i is a wind leader wanted to solve this as rapidly as i could. but i couldn't do it alone and i didn't really know that -- i'm not necessarily geared to thinking there are problems i can't solve when i'm in command come up but i couldn't and it wasn't until in the maybe there's something called a super team that is available in the major hospitals. and it's a 20 24/7 team that's available with bags packed to respond to a crisis. and it's a group of psychiatrists, psychologists, mental health professionals and they are on their immediately. and it wasn't until i got them

on the ship and i had a crew of about 400 troops that they understood the pebble and the quiet water peace. and they reached the places in the families that i wouldn't even have thought that were fact that by this suicide. and these were friends, liberty buddies, families of families, family friend of family friends kind of thing. and i would hope that again until we see relief here that we are focused on this as the crisis but it is and have the kind of response that was very supportive of me many years ago and allowed me quite frankly as a commander to work my way through these issues much more rapidly because of that assistance and then get on with the mission. and the last thing i'll say, even though i said that a couple

times -- [laughter] the last thing i'll say that it is really the evolution of who we are and it ties back to families. but it's the readiness piece, literally from the day you join any of the services. and if you join with a family, it's how ready is that family for this experience? and we have a tendency to cycle that, to get you ready before you deploy. and i would argue that with where we are right now that we have to have a continue one of readiness that starts to educate families from day one. and i wouldn't even just a spouses. i'm talking about moms and dads as well, about the challenges that lie ahead. the information that is available, the networks that are out there in these challenging times so that we hopefully can avoid crisis, but then when we

get in them as we are right now in this suicide area we know who to reach for and we know how to get help. and these young family members, these young soldiers, sailors, airmen, coast guards have a long lifeline and leadership that is supportive of throwing a lifeline out before it is a complete crisis and everybody's looking back and saying, what happened? so again, thank you for all your work on this ethanol discomforts is there a lot of people here. it went to spend a week. i expect great outcomes, output to impact on these challenges and i appreciate all the work that you all are doing. both debra and i do. thank you. hot mac

[applause] [applause] we've got a few minutes for a couple questions if there are those that want to ask. or not. [laughter] >> good morning my name is theresa rankin, the originator of the brain line project which is funded by the defense and veterans brain injury center. good morning admiral and mrs. mullin. have you had an opportunity to have any kind of feedback from the american red cross. i'm working very specifically and the needs of the national guard and reserve it who are returning to rural america. and i'm quite struck by the extensive networking and extraordinary capacity

competencies of the red chapter. >> i have not but i will take your recommendation and get that. i actually heard a great deal about what you do this week because death i now spend sometime with you. as senior sponsors -- the issues that surround the guard and reserve are particularly important and difficult because members and are guarded throughout our country. and it is a great strength of our country and there have been some guard units that have been incredibly innovative and how they attack these very difficult challenges. but i will play last year, 2009, i was struck as we really tried -- as we really dove into this suicide issue. and the heavy focus was on the army and we were tracking month

to month on the army. it wasn't until almost two thirds of the way through the year that i asked the question, do these numbers include the guard? and in fact, the ones that we were tracking do not. another guard was tracking it, but we were tracking it back row and we are now, very specifically. and the efforts amongst the services, across, again, the senior leadership is working hard to integrate -- understand what is working best, share those practices and then spits them out as rapidly as possible. but i'm not aware. i haven't seen anything from the red cross per se and i'll be happy to look into that and certainly from just the tone that your question itself obviously they're doing some great things in weed to make sure we're taking advantage of that. >> can i just say something? did you all have a leaf on brain

line.org because it is a actually the only comprehensive resource out there for dramatic rain injury. i visited their location or w. eta who has a history of some very successful websites. and this is not just a normal website. one of the things that brain line one studio is create sort of an online university so as our veterans leave the dod, the va, and then go out to rural communities, the doctors who may not have god training and dramatic brain injury or maybe have only seen one or two over a period of a year. and all of a sudden there may be a veteran in their area that has this but the first five minutes. and also, teachers who may have a child whose parent is suffering from the spirit that can go on brain line and literally go three curricula so

that they -- so that there is some training and understanding because, you know, a child to may not be doing the work it is not because they don't want to. it's because they have a parent at home with suffering through dramatic rain injury. same thing for a people and their job. people don't understand and so this brain line.org i think if they get the funding is going to be able to get this up online, which i think will be a wonderful resource for our country, but mostly for those more rural areas that don't have a level one trauma hospital in the area. so, it's well worth visiting. >> let me just comment on the dod, va aspect of what you're doing here. and i've come to believe over the last couple of years that we are two very seriously look at evaluating people's readiness to be discharged. and too often and any military

member knows this when an individual gets within six months after bts or ea os is just how many days left. and they focus specifically on that number and that day, whether they are ready to go or not. and so for those who have been through these wars and been through so much, leaders need to ask the question, you know, is sergeant jones ready to go? and if not, because in the long run it's going to be much better to ensure that he and his family by himself are actually ready to transition out into civilian society from this very structured environment, whether they loved it or hated it into an entire meant that they left years ago, that is unstructured and in which they may have no support whatsoever. and i believe we need -- the outfit that does this pretty

well ours peschel forces because the deal is you can't leave until we're ready to let you leave. if you want to be a special forces soldier. and i think we need to think a lot more about that. and that's a pretty steep hill because he sign a contract four years later your ea os comes out and you're supposed to leave and you get focused on a contract over etc. but in the long run, i believe we can get that right the individual be better off than civil society and will be able to transition much more smoothly those individuals into the va system. and one of the things i haven't asked if the va zero of who we are sending and while we could have done better in preparing the for this transition. >> good morning.

i'm a reservist and my question is, because i've been on three deployment and usually you come back and you might stay one day and then you're out to your dash, the base. maybe there needs to be some kind of program where -- i'm a deputy sheriff so maybe the police force in the areas fire department and also the hospital has some kind of deal the training regarding suicide prevention for what we deal with in the military. and then they can have a step-by-step concept of what to do for these people, especially the people they work with because you go back to your regular job and there's no one there to really understand what you've been through. maybe some because we have some more than i thought were also in the military. but i think there needs to be some kind of program like that

around. >> that's a great suggestion. i understand exactly what you're saying and you speak to an issue that's been a challenge throughout these wars as you deploy you come back, you are back at work in a week or two or however long it is and you have very few individuals, maybe none that have your experience. and so that support mechanism isn't there and they don't understand what you've been through. it goes to the red cross idea, the guard and reserve idea and i'll actually take that back with me and just ask the question to see where we are on that. >> you know, michael and i had met with a marine infantry platoon that was getting ready to deploy and michael last and i found out you asked the wrong question. >> thank you. at last mac >> you're welcome. he asked if anybody had emotional problems. and apparently you're supposed to ask, you know, how are your sleeping? but anyway, he asked that there

was dead silence. and michael always just stands and waits and finally someone said, actually they had actually called to get them help. and they took the person to sessions just to explain, you know, what they were doing. what their job was. and finally he realized that he wasn't owing to be able to help at all. and so he basically turned to the guy next to end up with sitting on the deck and said that this is who i go to for help now. but i think that happens to a lot of our military folks. they go out and if someone doesn't understand what they've gone through, they spend a lot of time just trying to explain the military and what it's like in theater or what goes on with their families when they get back. and i'm not saying that outside

their up it can't handle that, but not all of them can because they don't have the training home of the don't have the experience. and so there's a lot of frustration in finding someone, you know, that you don't have to spend two, three sessions just trying to explain and then maybe get to the problem at some point. so -- >> okay, thank you. [applause]

>> president obama today promised swift action to deliver humanitarian relief to haiti, the site of a large earthquake yesterday. measuring 7.0 on the richter scale it was the largest earthquake ever recorded in the region. the president broke replete with reporters from the white house. >> good morning, everybody. this morning i went to expand to the people of pd the deep condolences and unwavering support of the american people following yesterday's terrible earthquake. we are just now beginning to learn the extent of the devastation, but the reports and images that we've seen have collapsed hospitals, crumbled homes and men and women carrying their injured neighbors through the streets are truly heart wrenching. indeed for a country where

people are no strangers to hardship and suffering, this tragedy seems especially cruel and incomprehensible. our thoughts and prayers are also with the many haitian americans who do not yet know the fate of their families and loved ones back home. i have directed my administration to respond with a swift coordinated and aggressive effort to save lives. the people of haiti will have the full support of the united states and the urgent effort to rescue those underneath the rubble and deliver the humanitarian relief, the food, water, and medicine that haitians will need in the coming days. and not efforts, our government on a especially usaid the department of state and defense are working closely together and with our partners in haiti, the region, and around the world. right now our efforts are focused on several urgent priorities. first, we are working quickly to

account for u.s. embassy personnel and their families in port-au-prince as well as the many american cities than to live and work and haiti. americans trying to locate family members and haiti are encouraged to contact the state department at (888)407-4747. i'm going to repeat that. 888 for a 7447. second, we've mobilize resources to help rescue efforts. military overflights have assessed the damage and by early afternoon our civilians last disaster team are going to be arrived. urchin rescue teams from florida, virginia, and california will arrive throughout today and tomorrow, and more rescue and medical equipment and emergency personnel are being prepared. because in disasters such as this the first hours and days are absolutely critical to saving lives and avoiding even greater tragedy, i have directed my teams to be as leaning as

possible in getting the help on the ground and courtney dean with our international partners as well. third, given the many different resources that are needed we are taking steps to ensure that our government acts in a unified way. the national security team has led interagency effort overnight and to ensure the record made our efforts going forward at designated the administrator of the u.s. agency for international development dr. dr. rajiv shah to be our government unified disaster court nader. and this rescue and recovery effort will be complex and challenging. as we move resources into haiti we will be working closely with partners on the ground, including the many ngos from haiti and across haiti. united nations stabilization mission which appears to separate its own losses and our partners in the region and around the world to this must truly be an international effort. finally, let me just say that this is a time when we are

reminded of the common humanity that we all share. with just a few hundred miles of ocean between mass and a long history that binds us together, haitians are neighbors to the americas and here at home. so we have to be there for them in their hour of need. despite the fact that we are experiencing tough times here at home, i would encourage those americans who want to support the urgent humanitarian efforts to go to whitehouse.gov or you can learn how to contribute. we must be prepared for difficult hours and days that as we learn about scope of the tragic. we will keep the big dump and their families and our prayers. we will be resolute in our response and i pledge to the people of haiti that she will have a friend in a partner in the united states of america today and going for it. may god bless the people of haiti and those working on their behalf. thank you very much.

>> more now on u.s. relief efforts for haiti. the state department told a briefing this morning. we'll hear from the head of the u.s. agency for international development as well as the head of the military southern command. this is about half an hour. >> good morning and welcome to the department of state. as the president said earlier, we are committed to helping the people of haiti as well is looking after the welfare of the roughly 40,000 americans who live and work in haiti, including those were part of our u.s. embassy family in port-au-prince. this is a hold of government effort as you'll see by the speakers who will be -- what did you kind of a status report on the way forward it represents in the department of state of defense and from agency for international developing also

other agencies such as the permanent homeland security as we go forward and that's what you're responding as rapidly and as effectively as we can. we'll begin this morning briefing with sharon mills counselor to the secretary of state and the driving force behind haiti policy formulation here at the state department followed by brasov the administrator of usaid. we're thrilled to have doug fraser, the commander of u.s. southern command will be coordinating the consider military response to this disaster. but will begin with cheryl mills. >> good morning. let me first start off by saying that our thoughts and prayers are with the haitian people and the vast internets community that is present in haiti as we are going to what has been a very challenging and difficult time. and we are looking forward to being able to provide all the

support that we can bring to bear to try and ameliorate the impact of this terrible situation. as you well know, shortly before 5:00 yesterday an earthquake stuck outside of port-au-prince and outside the island of haiti and the multiple aftershocks that had an impact on the island as well. according to our initial overflights that i've gone on this morning most of the damage has been within port-au-prince and at the outer lying areas have sustained less damage are very limited damage. the situation on the ground is very fluid eras we have imitated telecommunications and certainly within the haitian community there is limited telecommunications. we have been fortunate our u.s. ambassador has been able to reach president to ball with safe and gray ford to the allport assistance he is been receiving from the international community. and they have had a couple of occasions to have conversation. as many people of arty scene, there are numerous structures that have been sustained substantial damage and we also know that there had been not

insignificant numbers of casualties. we don't have any estimates yet nor for the numbers of individuals who have been injured. the situation is very severe. in addition to the numerous facilities that have sustained damage we also note that the u.n. peacekeeping had quarters sustained damage it will be lending our systems see how we can provide support to be able to provide search and rescue support in that area. i'm going to speak a little bit about our american citizens were there and and watch will be speaking about faster assistant administrator and we would then have general fraser who also be speaking about our military spots. so in that vein there approximately 45,000 u.s. citizens who are in haiti. the embassy port-au-prince has activated its early warning system to connect with those citizens and establish one with how they are doing and to what is untracked support they might

need. we've received a number reports that we are working to those to appeal to make sure we are giving everybody the assistance that they need to there've been a number of call to commit our counselor affairs here at the apartment seeking love ones. for those people seeking information that president gave up his number. and that is (888)407-4747. and that is a member you can call into if you're seeking information or seeking to make a request with respect to someone that you are trying to connect with but is in haiti. in terms of embassy personnel on the ground there, where about 172 personnel who are they are under chief of mission authority as of 8:00 a.m. we have accounted for just about all of them. there were eight personnel who were wounded, four would've been seriously wounded. we've arty at u.s. coast guard on the ground be able to medevac them to get appropriate care. are also beginning to see that happen as well. we have ordered the departure of

approximately 80 embassy spouses, children, not central personnel, those will begin happening later today so that we can ensure that the infrastructure and resources are there to be properly concentrated on those who are in need. the post about planes actually arriving at the latest afternoon and general fraser will be able to assist in that evacuation process. the embassy structure has remained in become a point of support and it has been providing medical support and other support for haitians and americans and others who have been able to reach the embassy. we have reached out to the government of haiti to be able to access with their needs are and to be able to understand what their priorities are. they have launched a multiagency effort to provide disaster assistance, which is being led by ambassador shaw through the disaster assistance. but that is a background will turn it over to ambassador shaw to speak to those efforts.

>> thank you, cheryl. our first, and of course is that our thoughts and prayers are with the people of haiti who are suffering a tremendous tragedy with this earthquake that started last night, just before sundown. we are working aggressively and in a highly coordinated way across the federal government to bring all of the assets and capacities we have to bear to quickly and effectively provide as much assistance as possible. the goal of the relief effort in the first 72 hours will be very focused on saving lives. that is the president's top priority and went what the president directed us to do. we will do that by first putting in place significant disaster assistance relief team. at the end of that today will have 15 members of that team doing surveillance, collecting data, identifying priority sites and guiding the efforts of the

larger search in response units that will be following their entry into the country. we have to urban search and rescue units on their way, both our units with 72 individuals, people who have significant training and significant equipment on a technical capacity to conduct search and rescue in urban settings to drill through and clear as much as possible rubble in order to try and identify individuals that can be saved and continue with the mission of saving lives. we are working across the various agencies of federal government including fema and the department of homeland security department of homeland security to identify additional units that will be able to deploy as rapidly as possible. and we're working hand-in-hand with the department of defense and general fraser to make sure we have the transport and majestic to get these assets into the country into a efficiently operating as quickly as possible.

the other comments i wanted to make is that as part of this we are also of course thinking about critical needs in the area of health and food, water, transportation and infrastructure and other advanced planning that needs to take place now so that we can -- because we know we will have quite a lot of work to do in the days and weeks ahead. we are committed to a significant effort and we're committed to doing everything we can in all of those sectors. indoor team which includes members from every agency in the federal government that has the capacity to help is working to develop plans and put resources in place of that we can effectively respond to some of the requests that have come from the haitian leadership and from our teams on the ground. finally, i'll point out that we do already have of course teens underground, including our ambassador, our usaid mission and mission there and other brave men and women who work for the u.s. government in that capacity. and they've been providing

guidance and support and data and information and are very much a part of the effort, despite having themselves gone through a very significant and challenging experience. so we want to thank them for that effort. so we will be pushing for what they were progressive and targeted effort focused on saving meister aggressive search and rescue in the urban environment for the next 72 hours. will be the primary focus of our engagement. i'll hand it to general fraser for the logistics that we need and will continue to get from our armed forces in order to make sure that we are is in every capacity we have in the government to the effect is. thank you thank you bash our condolences go out to the citizens of haiti also appeared in court nation with usaid and with the entire u.s. government we have a significant undergoing to support this on the time we found out about the earthquake we started into motion.

there are still concerns about the airport in the access to the airport in port-au-prince. the word we are getting is that the airport is functional, but the tower and the capability to operate their are limited. and so we are pushing capability there now to be able to operate and secure that airport. we're also pushing command control capability and communications. as you well know, to negations has been very difficult and turned on and so we're pushing that to not only support u.s. forces who are there but because a lot of the communications from the new stuff is in their headquarters. that has been lost and so we're looking to support them in this effort as we go forward also. we also have various ships within the region, u.s. coast guard ships as well as some department of defense shifts that are moving in that direction. they have limited humanitarian assistance supplies on them, but they have some vertical lift

capability, some helicopters with them. in addition, were moving the aircraft carrier carl dissent from north slope to the vicinity. it will take on a complement of helicopters as they perceive them are hoping to have that in the vicinity of haiti tomorrow afternoon. so we continue to robustly move capability and support into the area to provide that life-saving assistance as well as do assessments of what the needs will be. and we're already looking beyond the immediate needs to understand, as we get those assessments and, to provide the capability as quickly as we can to haiti. so a significant effort across the board. thank you very much. >> i'm not leave with "the associated press." i'm wondering, considering the situation there right now with the fact that the u.n. appears

to be not completely functional functional -- the 100 people trapped in their command and commit occasions out. and the fact that this humanitarian response has got to to not really function unless there is law and order there. i'm wondering if there's been any thought given to sending troops to complement the u.n. forces who may or may not be able to secure the area. >> we're looking at that capacity. and as you heard from my standpoint the distraction is very focused, at least appears right now in port-au-prince. matanuska has forces all around the island of haiti. and we're working with them to give his vestments as a matter of circumstance, my deputy commander happened to be in haiti during an earthquake so he's working with the new set to chordate those efforts. so we're working with menus and

then and then doing the assessment. >> so it is possible that american troops might decide to have at least temporarily help the u.n. and secure -- >> were seriously looking at that were looking at sending a large deck of amphibious ship will have a marine expeditionary unit embarked on that. and i will be in support of minusta and the embassy and usaid as we continue to suffer. >> at which is also stressed that the commander of minusta happen to be out of haiti at the times of the coast guard is providing them with transportation so they will also be able to establish command and control. we have a gratuity of advanced untracked events. >> i have a couple and maybe a few we can just take each one. multipart. we are famous for them. cheryl, in terms of the americans, we understand that you've only heard from a couple dozen of 40 to 45,000 americans.

you think that is a factor of a lack of commit occasions to get around or you praising your selves for serious american casualties and what's being done about that? then, if you could talk a little bit about the communications with the government to this point it seems that the government itself, because you have your own kennedyesque medications that are working well, but the rest of the government doesn't necessarily have communication. so how are you working with them not just on kind of talking, but given the state of haiti even before the earthquake they have a lack of capacity, a lack of infrastructure. you know, the government while stable certainly needed a lot of help to begin with. i mean, how are you dealing with this delicate balance of dealing with the haitian government that was needing help to begin with and now not trying to be seen as

taking over but seriously know that you can provide a lot of capability right now. >> let me try to address both of your questions. in terms of u.s. casualties we've activated our warden system which is in communication with our folks that are on the ground there and american citizens there. we have not yet had reports of major u.s. casualties. we're honestly going to continue to monitor the situation. we have relatively good communication terms of being able to start doing some assessments of where folks are and so that's what we're going to continue to do and continue to be hopeful that it works out for everybody on the ground spare haitian or american. with respect to government medications, ambassador joseph from haiti has indicated a request for communication support and that is something we will be providing. usaid and dod are providing support that will actually arrive there today and be able to provide that kind of support because i do believe that one of the challenges of being able to communicate among themselves as

the government into their people. we are going to do the best we can to provide that support to them so they can do so. >> can you pick up on the point of even before the earthquake the lack of development and infrastructure in the country puts haiti -- this seems to be a country that can afford it the least right now. so how do you, you know, not be seen as taking over but know that certainly the government doesn't have the resources to provide? >> well, it's without question that haiti has had less capacity than we have here, of course, to administer these kind of efforts and run these kind of emergency operations. we are working in close ordination with the haitian government. we are the principle of our assistance, whether humanitarian or developing in its orientation is around the partnership with those whom we work with and serve. and so, we are being responsive to their stated request for health and medical services for example by deploying specific

assets to meet the needs they have there and exploring a range of other things we can do by standing up emergency medical services and emergency medical facilities in port-au-prince. we'll continue to stay connected and communicate with them. as we were spending on transcending the commit occasions package to allow the leadership there to have regular access to effective communications and we made that a priority and put that on the first plane down. so we will continue to work with them to send this out. it's going to be a challenge in operation for everyone involved. but we have the resources in the capacities to be effective and so we're going to work that way. >> thank you. >> shall? >> you talk about saving lives is a priority, but they wonder if you have any sense of where these teams or rescue teams are going to have first. do they go to the u.n. headquarters or are there hospitals? .a. little bit about the priorities. >> sure and i may ask my colleagues to help address that.

that's why we send a disaster assistance response team and to do the assessment. we're also getting information of course from our partner countries around the world, from the u.n. system and of course some of the challenging situation they are facing right now. and from our various partners in haiti. but we will have a team on the ground that can actually serve firsthand. we have overflight data rate now that it's getting better by the moment, that's allowing us to get a sense of where the destruction is and what the priorities ought to be and our goals will be to save as many lives as possible in the first 72 hours because that is the window in which that is a possible outcome. so we will stay very focused on that while meeting the obvious priorities of supporting our american personnel there and the personnel of our partners. >> i just want to add one thing. the u.n. is adding a disaster team that is helping to multiple countries coming.

we'll be in close partnership as they go about making those assessments and providing whatever support we can. >> charlie with cbs. first of all, general fraser can you tell us how many marines are of that ship? >> on the first of going down that there are no marines. on the aircraft carrier going and it's really going to be to provide the support list. that should happen to be out of port. it was training and it has a limited capacity on board. and so, that's why as it goes south we are going to put a complement of helicopters on it. so we're providing in provisioning the carrier as it steamed south. so there is not a complement of marines on there right now. the ship that i was talking about where there may be is a large deck amphibious ship. that's another day or two away and so it will have a standard marine expeditionary unit. don't tie me to this precise numbers, roughly 2000 marines

potentially on-air. but we are still determining that right now. >> margaret warner, the pbs news hour. general fraser, under what circumstances would you feel it is necessary to deploy the marines they are? in other words, is a question of keeping civil order or is it just facilitating the disbursement of supplies? and what is the situation on the ground in terms of the duke reporter or disorder? >> from what i've been told by general keane who is the deputy commander who was on the ground if the situation is calm right now. and so, we are anticipating going in, being able to provide that humanitarian assistance to set life-saving efforts and that's going to be the focus, primarily getting out there. so to be our assessment that will determine and injunction with the other international partners who are there how best to deal with any security situations that come out. >> so are you saying the marines are being sent there as -- for a

security situation or simply that they may be actually needed to help facilitate the delivery? >> what i'm saying is we don't know precisely what the situation is on the ground. so we're planning for it to provide as much capability as quickly as we can to respond to what ever the need is when we get there. >> can i also address that? this is about having options in the president has asked us to make sure we look across the entire government, all of her capabilities and make sure we generate as many options as possible. were doing that on the health side, dealing with two or three different types of strategies. and as we get real information on the ground about what is the best way to pursue the president's goal of saving lives in this critical time frame will be able to narrow those options and make strategic decisions. but we are in the process of trying to generate as many potential options and put as many assets as we have into where they could potentially be used quickly and efficiently to get to that goal.

>> this is for general glacier. lee martinez with abc news. you mention the marines but the army also is global response force. have you given any consideration to them as they seem in this effort? >> we have given consideration to that's a wee bit very for he says around the armed forces on alert so that is to get the assessment then, we are postured to move those forces in the expeditious manner. we've put a brigade on alert just in the circumstances you do so will determine not as we get the assessment. >> and the flow of air resources whining coming to anticipate tomorrow to 17th coming in tomorrow? >> go be an international effort. we're working with usaid. we're trying to understand what the other partners are doing better. i think it's also important to understand that there's really one airfield, one runway limited ram space, the terminal is not functional right now and were

not certain what the status of it is. so it's a difficult environment that we are going into. so are trying to understand that. we think that we're going to work our team in there to make sure that we can operate that airfield as efficiently as we can to keep the flights moving in and out of it. were also taken assessment of the port because the likelihood, the port of port-au-prince will be more important in being able to move a volume of goods through. we don't know what the status of that is, so we are looking at all the options to try and make sure that we have as much flexibility as possible. >> mike emanuel from fox news. i know it's early on in the disaster but i'd been wondering if there is a well as a disaster that this seems to compare two from experience. so the american public can maybe get their minds around exactly what is going on there. >> well, rather than comparing this to a previous disaster or just say that this does present unique challenges because so many of our partners and many of

our own people are in a position where we are still accounting for their safety and their security and certainly that is the case as mentioned with the u.n. team out there. so of course, these are people who have gone through a lot in the last day and now are also called upon to help protect and serve others and it will be challenging. they will need all of our support and that is why when the president asked us to be swift and aggressive and coordinated in doing this, we are bringing together the entire federal government to make sure we have as many options as we possibly can to provide that support as quickly as possible. >> kim delaney, u.s.a. today. administrator shah is that you are looking for more urban search and rescue teams. does the federal government have that capability or other countries pledging to move out and? were you looking for those teams? >> oath. in particular its relationship

with fema we can't expand our capacities and make sure that in addition to the teams the office of foreign disaster assistance house ready to go. we can explore using other teams and getting them ready and getting them and plays quickly so that's what we're doing to try to expand the search and rescue immediately. >> so why was it just the two initially? is that although we're ready to deploy a sort of at a moments notice? >> two teams of 72 people each with significant equipment training with all of their visa and international training and status ready to go is a significant usability. in addition to that and really in parallel, this was not something where we waited before we deploy. we built -- we have a partnership with fema and are deploying a third team. and we will look to get other teams onboard as well. part of the challenge will be getting information from the ground which we will do in a matter of hours. understanding the priorities and letting back at the capabilities we have so that we can work this

in a really coordinated way. the third team is currently based in miami. [inaudible] >> january 26 in new york state state -- thousands of people died and millions are homeless. what can we learn from not an what do you have for the people of haiti this time? >> well, that is a broader question. we're going to stay very focused on the short term on the search and rescue it and the first 72 hours. the question does touch on when the rebuilding commences and it will commence, thinking in a smart and strategic way about building the right types of structures and building the right types of institutions can be more resilient in the future and of course our agencies and many of the year of their agencies that we are working

with around the federal government have had a wealth of experience working in disaster environments. and there are ways to be prepared, but right now or focuses entirely on the search and rescue effort in the effort to save lives for 72 hours. >> i mean what sort of international help are you seeking from other countries including india because it may be in this case doctors and medical help and all that. >> well, there are a wide range of countries that have offered support and those are coming and by the moment. so we are working through that trying to have a cord knitting approach on the ground to make sure we execute that in a way that's most effective. for example, i believe the dominican republic is offering helicopter transport support and a few other capacities. those are important. those are important partnerships that we have to have with a range of international partners. >> are you specifically coordinating this or is this done through the haitians? >> well, we work in with the haitian government.

working with the u.s. government in a broadway the department of state and others. right now we have an embassy that is standing in with and communication that we will do everything we possibly can with the capabilities we have two make sure that we're serving the haitian people and that we're serving american citizens in that environment and trying to save lives. and if that means being more active and aggressive and fast about trying to secure commitments and support from other countries and trying to coordinate that effort, we are prepared to do that. >> one or two more. very good. thank you very much. >> thank you. >> the defense department already hosted general fraser and briefed reporters on the situation in haiti.

we'll show those remarks to you right now. it's about half an hour. >> good afternoon and thank you for joining us. it's my privilege to have the opportunity to introduce to you general douglas fraser who is the commander of u.s. southern command. and by circumstance happened to be in washington d.c. when the earthquake hit haiti. as most of you in this room know, as the commander of u.s. southern command he will be the person in charge of the dod effort as we provide support and assistance to haiti. nds to get back to this command

to oversee that effort. but before he left, he offered to give us about 30 minutes to answer some of your questions. so with that, general, thank you for taking the time. i know you're very busy and we appreciate it. >> a new very very much. i want to reiterate from that department of defense support that our condolences go out to the citizens of haiti into all the other partners who are there. it is a horrific events that they have suffered through and we are working every effort that we can and pushing and leaning as far forward as we can to support the life-saving measures initially do an assessment mm look beyond that into the humanitarian disaster relief support that we can give as we work in a very integrated faction with usaid and the entire government. we have a very robust effort headed in that direction.

the initial requirements because there was very difficult communication last night. and so, we really only had a couple of landline capability. there wasn't a lot of ability to get around port-au-prince so it was very difficult to understand what the situation was on the ground. ..

>> , >> >> inustah, the headquarters partially collapsed. lost a lot of their communication. we are looking to robust that the indication. also we are sending an assessment teams in conjunction with usaid, supporting their efforts as well as putting in some of our own to support their efforts. we are moving various ships that we have in the region, they are small steps, coast guard cutters, destroyers in that direction to provide whatever immediate assistance that we can. we also have a u.s. navy aircraft carrier, the u.s.s. carl vincent moving in that direction. at sea off of norfolk. so it is going to take a couple of days for it to get there. we need also to resupply it and give it the provisions it needs to support the effort as we look at haiti. and then we are looking across the international agencies to

figure out how we support their efforts as well as our efforts. we also are looking at a large-deck amphibious ship with an embarked marine expeditionary unit on it that will be a couple of days behind the u.s.s. vincent. that gives us a broader range of capability to move supplies around, to have lift capability to help support the effort there also. so bottom line is, we don't have a clear assessment right now what the situation on the ground is, what the needs within port-au-prince are, how extensive the situation is. we also finally have a team that is headed into the airport. from my understanding because my deputy commander just happens to be in haiti when the situation happened on a previously scheduled visit, he has been to the airport. he says that the runway is functional, but the tower does not have communications

capability. the passenger terminal has structural damage. don't know what the status of it is. we have a group going in to make sure that we can gain and secure the airfield and operate from it because that is one of those locations we think we are going to have a lot of immediate effort from an international basis going into. and then we are out conducting all the other assessments that you would consider appropriate as we go forward in this effort. we are also coordinating on the ground with minustah for the folks who are there. the commander for minustah happens to be in miami when the situation happened. he is right now traveling back through and should be arriving in port-au-prince any time. that will help us coordinate our efforts there also because again obviously the united nations suffered a significant loss there with the collapse, at least partial collapse of their headquarters. those are the initial efforts,

.as we get the assessments of what is coming next then we will adjust as required. secretary of defense, the president have all stipulated that this is a significant effort and we are crawling all of all of the resources within the department of defense to support this effort. >> how concern are you that the security situation there might be deteriorated and your troops might be needed to provide some sort of peacekeeping force in light of the looting? we heard a prison might have collapsed. also, are you considering guantanamo bay as a possible place to house refugees or jail inmates from a prison that may have collapsed? >> right now, again, the assessment is very fluid. from the general keane on the ground there he says the situation is calm within port-au-prince. and so that is what we are expecting. i think it is also important to

understand that the united nations mission was there primarily on a security role. they have forces throughout the country. they have done a significant job in sustaining and maintaining stability and security within the country. that, i don't think, has changed to a significant amount. i don't know the answer. we will work with minustah and get assessments and figure out what the security situation is and then decide what to do from there. i am still trying to understand what the situation is on the ground, but i am really going to rely on the support of minustah because they are familiar with the situation that they have been dealing with regard awhile. >> the possibility. are there resources available to you? >> there are resources. so we are looking across the region to adjust to understand what the possibilities are there. >> general, you talked about a large deck amphibians ship. can we assume that will be a

marine expeditionary? >> it will be from the east coast. probably out of north carolina. i don't know the specifics of that right now. we are still working the details. >> the hospital ship, do we expect that to get underway? >> it is a consideration. as we look at our efforts to do humanitarian assistance throughout the region we have traditionally run a hospital ship down there for about a four month time frame. on the alternate years we use a large deck amphibious ship because it has a very similar capacity to what the comfort has periods of the fact that we are sending that large deck m did down there we will give us a us a very significant medical credibility on the ground. we will have to look in the future as we get assessments. >> you said the runway seems to be intact. the tower, of course, has lost communications. any sense when you will rolling

c-130s? >> c-130s are what we are rolling right now. that is what the assessment is going to be. that is in coordination with usaid, all of the national and international organizations to figure that out. i don't have good answers for you right now. >> the state's department has been put on alert. can you tell us to that is and what the condition would be that you see there? >> well, there has been one. it is a brigade in fort bragg. the specifics of what we are going to need and how we are going to need it and the evolving situation, i don't have a specific on that right now because we don't understand what the situation is on the ground. we don't understand where the capacity of the haitian government is. we are just putting and giving ourselves options for the future. so that will evolve.

>> yes, sir. >> the haitian government said on cnn a short time ago that the death toll may be in the hundreds of thousands. the you have an initial sense if that appears to be in the ballpark of what you think that all will be? >> i have no good sense to be able to tell you. you have heard reports of collapsed buildings, but there has been very limited communications. there has not really been an assessment teams that have been out there. a lot of the organizations are just focused on recovery their own people. so we don't have a good sense of what that equates to right now. i think it will be significant loss of life. i can tell you that for certain. >> in the immediate aftermath of the earthquake had a bunch of other countries start rolling out their plans to begin relief flights and what they're the impact has been deleted has taken the u.s. logger to assess. what accounts for a difference

between other countries doing it sooner and doing it slower? >> from practice we have found that the assessments are critical to making sure that we get the right equipment in there and make the recovery efforts and the life supporting efforts as efficient as possible. the worst thing that we can do is put a lot of equipment for word that we don't know whether or not we'll need. and so that is why we are doing right now, focus on getting our assessment teams in there. we are moving assets to prepare for moving additional assets in there. that is where the focus of our effort is right now. yes, sir. >> two questions. the formalities of the request from 80 come up to the state department and down to your command yet? and secondly, can you go into more details about what capabilities the carl vincent brings to 80? when it gets there what will it

be used for and will there be additional sets that are normally ally part of its bell p with it when it arrives or s ors it going along? >> from the carl vinson standpoints but -- ," from the state department i have not seen a formal request. i ask you to ask the state department. we understand did is a dire situation. we are leaning toward. i know that the president u nofficially, the president of haiti has asked for assistance. official documentation i have not seen yet. and so from the uss carl vincent it happened to be a ship that was available. had a very small complement of aircraft on it when it was the sea. as it passes through or by port we are going to provision it with as much stability as recant, primarily looking at helicopter capacity because we need to be able to get around

the country. we don't understand what the needs of that are yet. and then it will have whatever we can provision as we get better understanding of what the capabilities and capacities are. then we can use that as a staging base, if you will, to move equipment, move resources in and around haiti. we are trying to get, again, ourselves options. the army air field within port-au-prince is a single runway. it will have limited capacity. we are trying to give ourselves options to get as much capacity down there. >> we will other ships and the bell group b with the? >> there could be another one. we are looking at what to do to replenish it to make sure we get it there with whatever assets. it is still a fluid situation right now. >> can you tell me with more specificity what some of these things are arriving? >> teams are going in this afternoon. there will be arriving this

afternoon. our ability to manage the air filled, our command and control capability, our headquarters complement, our common here, that is not coming in this afternoon, and then we are looking based on assessments on what else is needed to go in there and working that in conjunction with the usaid. this is a multiple efforts. it is not just the dod. >> the mission is going to be been an international level. have you had so far any contacts with military leaders, foreign military leaders to coordinate the effort of the mission? >> i have not personally had those conversations. there is an organization within my command who has a lot of liaison officers who also are represented in the u.n. mission in haiti. they are coordinating all of those efforts right now. so that is one of those things

as i get back to my headquarters i am looking to do. >> general, what have you heard about how many americans may need to be evacuated? >> you heard from the state department's that there are around 45,000 u.s. citizens in haiti. i don't have an answer for you bon what the immediate needs are. the embassy has ordered an evacuation of their families. so that is an issue that we are working right now to make sure. >> is that something? >> it is a government issue. we are looking to try and figure out the right assets to do that. right now we are coordinating with the u.s. coast guard c-130. they look like they will have the most immediate capacity. >> what is the assessment about what trouble they will have

getting into the air. >> reporter: have any landed there? >> none have landed yet. add-on have a good assessment. roads are passable. depends on rear you are and what is going on. i really don't have a good assessment of where roads are passable and where they're not. >> can you may be clarified a little bit about what the coast guard mission is down there? he said the ships are kind of small. what can they offer? >> part of it is vertical left. they have helicopters on a lot of their coast guard cutters. so that is the capacity we are looking for. they also have some small stocks of humanitarian assistance relief in. we are looking for whenever we can do. the coast guard mission that has been down the traditionally for rest is focused on a counter drug mission. monitoring and detection of traffic through the caribbean.

so that is where they are. and then just providing that normal assistance. we are orchestrating that, changing that, and giving them toward haiti to support that effort. >> can you just give me a sense of the number of people involved? some sense of how they do their work? give us some sense of the number, the scope of the teams and also what they will do? >> there are going to be various teams. from a department of defense standpoint we are moving a small headquarters element down there. it is going to be about 25 people plus 10-15 additional experts from around the staff. engineers, medical professionals. and so they are going to assist the usaid efforts in coordination as we get down there. their is a usaid representative on the ground. they are going to have the lead for this effort in conjunction

with the mission down there. so we are going to support the embassy's effort to go wherever they need us to go to do those assessments of where damages said that they can report out and understand what we need to. >> they bring their own transportation. >> no, this is very light. this is an immediate capability to get people and equipment in their communications equipment primarily initially will line of the assets there on the ground for movement. >> it has not been made. >> we are looking at it as an option. again, we have some likability as we put a large deck amphibian ship it down there. >> if the numbers are right possibly hundreds of thousands killed, are you also looking at helping out with more facilities, the disease that is going to come within days? are you looking at or supplying

a think? >> we are looking across the board. working that in conjunction with usaid to figure out the right capabilities to put in there. so all of the resources of the department of defense. we are looking at to understand what the best ability to plan there. and so are we looking at it? yes. do i know if it is a need yet? no. >> the capabilities for something that large? >> i can't answer your specific question. i'd have to go back and asked to get the answer to that specific question. >> it is going to take them some time to get there. would it make sense to deploy the now and then turn them back if they don't need it said that it would be right there if it turns that you need them? >> we are pursuing moving large deck amphibian now.

that effort is ongoing as we go down there. then we just have to understand hands what is on the ground, what pampa debility they have. then we will make the decision on how and to to move beyond that. >> they have not received any deployment orders. would it make sense to get them moving now? >> we are working to push on the capabilities and capacities we have to go down there. we are working the capabilities and capacities we need to get down there, and we will continue to evolve that as we get better understanding of the situation on the ground. >> along those lines it seems that time is of the essence. you talk about trying to assess the situation, but we have been told that fairfax, virginia, is sending and rescue teams. do you have the capability and are you sending this type of assets ? >> we are supporting this

effort. >> no specific capabilities. >> civilian rescue teams are heading that way. jo two teams are heading that one from fairfax and one from california. seventy-two person teams with equipment, and then there is another famous capacity down in miami that we are looking to push. i don't know the answer to that. you will have to ask usaid. >> if reports are correct and hundreds of thousands of dead clearly tens if not hundreds of thousands are wounded were trapped. do you expect to send more rescue teams heading down there in the next 24 hours? >> we will support whatever the requirements are to move in there. again, it is a fluid situation and i just don't have a good specific answer for yet. we are massing of our forces to

provide as much support as we can as quickly as we can get. >> we expect them to get on the ground today? >> yes, one today and one early tomorrow. >> military aircraft. >> a combination. u.s. military aircraft involved also commercial. so, again, though of government effort to support haiti. it is not just the department of defense. we look at this and the ongoing effort, dod has a portion of it, but there is a much larger governmental effort that is being undertaken. >> fairfax and california. you know of other? >> again, it is not as who is calling them. usaid is in charge and leading this effort. they are the ones that are pursuing that. >> he said there are about 60 members of the u.s. military.

>> is that a plausable assessment that there are hundreds of thousands? >> i really can't speculate. i really don't know what the answer to that is. all i know is, and i have the same information that you have. there has been just an initial assessment from an aircraft flying over. the damage appears to be mostly centralized around port-au-prince. i don't know that for certain. i don't know how much that aircraft went out and surveiled other parts of the country. i am hesitant to say exactly

what the situation is on the ground and what we're going to find as we go forward. that is why we are looking for all the options recant. >> one or two more. >> the haitian government, current haitian government. steve believe it is stable? do you believe that when this is all over and with the same government will still be in power? are you worried this could lead -- >> i am not going to speculate. we have got a very precise focus right now, and that is the disaster that he de has suffered. we are focused on the life-saving measures, the assessment, the emergency response and then looking at the humanitarian disaster relief requirements and providing international support to 80 to help them through the significant disaster. >> thank you very much.

[inaudible conversations] >> join us later tonight for coverage of the court case regarding broadcast of an expert test. the second circuit court of appeals in. we will have that for you starting at 9:00 p.m. eastern here on c-span2. and tomorrow more from the financial crisis inquiry commission. planned starting at 9:00 a.m. eastern, and we hope to have that for you live here on c-span2. now available, c-span, abraham lincoln, great american historians on our 16th president. it is a unique contemporary perspective on lincoln from $56, journalists, and writers. abraham oln nowauo to listen toe available where digital audio downloads are sold.

learn more at c-span.org / lincoln book. >> did you know that the number one free news application is c-span radio. c-span radio. there is also a tabwith links to all of our podcasts. it is all free and available from the app store. now a defence department briefing on operations in northern iraq. we will hear from major general anthony. topics include tensions in northern iraq and the upcoming elections in march. this is just over half an hour. >> the operating base in iraq. a few comments and then he will be happy to take your questions. thank you for joining us.

over to you, sir. >> thanks, marine. good morning, everybody, back in washington d.c. i wish i could see you. i am sure i would recognize a couple of faces. i am fortunate enough to command 21,000 of the finest americans in iraq right now. i have got brigades from fort bliss, tex., fort riley, kan., fort lewis, washington the lead to brigades from hawaii hinterlands and of course one one brigade from my the homestead and florida. hint psst that makes up to 21,000 soldiers. it is an example of the modular army at work. no question about that. what we are doing right now in northern iraq centrally partnered full spectrum operations. that means all types of operations from combat when

necessary to stability operations, the full spectrum partnered. we don't do anything unilateral. it is all with our ranking partners in probably the most demographically complex battle space in iraq. we have got a little bit of everything here, and obviously what we have here that does that exist in other parts of iraq is the kurd-arab fault line, if you will. that is what i mean by the demographically complex area. it is about the size of the state of georgia. about 250,000 square miles. our current operations could be characterized as supporting the provincial reconstruction teams, moving to police primacy in the cities as best we can, and then outside the cities establishing a capacity in our partnered iraqi armored forces that will allow them to assume our battle

space completely as we continually drawdown throughout this year. howard focus of f operations rit now has been with our partners tamping down the violent extremist networks. they still exist. they have been knocked back pretty hard lately, but still because they are secular in nature still can pack a punch with a high-profile attack. keeping as good a lead as as wen on kurd-arab tensions and then also prepping for the elections. so that is a characterization of what we're doing here. i would be happy to open it up to any questions. back to you. >> i would like to ask you two questions, sir. first, if you could address or if you could give us an update

about the arab-kurd relations and how they are facing now the problems over the disputed areas. second, if you would also give us an update about the relationship between the government of baghdad and the pashmirga in the north. >> sure. those are great questions. they are occupying a good bit of our time. first the status of kurd-arab relations. everything right now is colored, if you will, by the upcoming elections. so there is a natural tension that requires confidence-building measures in the areas where kurds and arabs exist together or where forces exist across the line from the