walter reed, and you know there's just a lot of question whether that is really the best place to put this additional responsibility for oversight. .. >> it was our thought aafter 2005 each of the services took off in their own direction @dh6b

examples that are out there. and especially as the general mentioned as far as the comprehensive prevention strategy that we're talking about, someone really needs to take the lead on that. someone needs to -- to be able to liaison and to and partner with the intellect that are out there and the civilian society and capitalize on the great ideas that are part of our american culture. and so we felt that by placing the office at least temporarily under the deputy secretary defense that we expect of course a lot to be done in a short period of time. we felt that added support, and it attention and in fact help them realize their goal. >> if you would stand by that statement? i think what we are wondering if a decision was made that perhaps they don't have the ability now,

the capacity to actually provide the oversight we are seeking where there is some other thoughts about how this might be done. but i think i hear you saying very strongly is that you want to have more authority, more oversight and certainly raised bill loveless whitemarsh with the word as competency. i think it is the capacity to deal better and be seen as an office that means exactly what it says here and we are struggling a little bit to find the better. >> yes, ma'am. i think the intent behind the recommendation is to provide higher oversight, and i think that there are a number of ways to do that. the recommendations gear to the fact that oversight is necessary. and so, that is one recommendation but there are

clearly other ways of doing that. and we indicated in the report one of the areas we found a shortcoming was in the staffing alone of the office and for it to be able to do what is required and i think when you look at some of the issues that drove the recommendation it stemmed from the under resource to nature in terms of staffing of the office that frankly you go back to the inception of the office it was geared more toward response and it needs to expand to prevention training and other areas and in order to do that quickly, higher level oversight at a level whether it is the level recommended in the report or elsewhere we believe it is prudent. >> if i may we see it as critically important that there be uniform members as part of that staff. people in uniform and people that have had the experience of leading and understand. we are also asking for a season j.a.g. officers from the

military service to be part of the staff and have a designated victim advocate on staff with expertise to handle the issues at the strategic level. >> i was going to ask if there is professionals and you mentioned the j.a.g. officer level that you feel would contribute greatly to that kind of stature and authority it would have. is their anything in addition to that? >> principally the leadership of the office and the recommendation we make is that it would be led by a general officer were civilian level equivalent. >> thank you very much. mr. wilson. >> thank you, general, doctor, for being here. i know this behind you have a distinguished j.a.g. officer with you. i am a former j.a.g. myself so i appreciate your service. and however you want to answer and in whatever order. you site there are implementation difficulties with

j.a.g. -- with article 120 of the ucmj and recommend a review by justice as to its effectiveness. are these difficulties related to the fact that the law only went into effect for offenses committed after on october 2007 and lawyers simply not familiar with these new provisions or are there serious issues with article 120 and on what particular issue should the review focused? >> i believe from practitioners what we have heard this article 120 as it is currently outlined is used the word cumbersome. it is complicated and it is confusing. it is confusing for those trying, but it's confusing for those giving the case is in order to listen to the types of

charges that income this far more and i think as a result of that it is very difficult for individuals sitting on a jury in order to be able to come to a conclusion. the concern is because of the broad nature there me be individuals that as a result may be acquitted, and that is why we just asked for a review those who are implementing it, the j.a.g. officers no better than we do and i think the dialogue is important. >> and in line with your concern about acquittals i have the same concern. your report suggests the view of the military is aggressive in prosecuting sexual assault. however, you note the pursuit of prosecution court-martial cases where evidence is not as strong as it might be leads to fewer convictions. this is also an obstacle for obtaining a court martial

convictions. what recommendations would you get to the military prosecutor for increasing court-martial convictions? what role can the nonjudicial measures such as article 15 and administrative actions have in the effort to prevent and punish sexual offenders? >> as a former commander i think this is an area everybody struggles with from the standpoint of wanting to prosecute cases to looking at what is prosecutable and in the and you want to provide justice for the effect on. what we would recommend and we do in fact recommend for the prosecutors as well as investigators is additional training because of sexual assault incidents level spread across all the installations across all the j.a.g. who have to try the cases, their ability to have familiarity with trying sexual assault cases is not as

extensive as one would think so if you establish a capri of individuals well-trained in order to be able to prosecute those cases the army is doing that. where you bring on additional investigators as the air force and others are doing and to provide training to sexual assault we are hoping that leads to increased success in prosecution. to your reference as far as nonjudicial punishment we would argue that certainly when we are looking at cases in the ability to prosecute successfully there are cases the j.a.g. and commander need to have the discussion and need to look at the tools that were there to be able to provide justice for the victim. at the same time, probably merits including the victim in some of the consultative process and we have addressed that as well. >> and another concern i have that your report hits on and it indicates victims often jeopardize their option for restricted reporting because they share information with the assault of a friend, family

member or superior by you know it is natural for a victim to want to tell someone they trust about the assault. you recommend for a victim to have the right to make a restricted report despite disclosing to a third party. however you exclude the direct chain of command or law enforcement from the third parties. why shouldn't the victim have the right to choose restricted or unrestricted reporting regardless who may be aware of the assault? >> the recommendation was essentially one step in the direction of trying to afford the victim's with a little more latitude as to who they can turn to in order to discuss the situation. right now, as you know, they could confide and at year and may not guaranteed and confidentiality. again, kind of harkening back to having been a commander and having the opportunity to speak to the commanders, for the

victim to talk to a commander about being sexually assaulted, it puts the commander in a very difficult position because the commander is going to want to seek justice and having that information not being able to act upon that information i think is problematic since the restricted reporting as we have currently set up we believe works very well but expanding the opportunity for a victim to be able to confide in pierce got friends as research indicates they are more inclined to do as opposed to going to authorities and even offer confidence. chaplains is being one of them. we believe it provides a support network for the victims which in the and one of the objectives is for us to ensure the ultimate victims of sexual assault come forward to receive the care and treatment they need and that is an option that allows that. while at the same time enabling the commanders to have that ball in order for them to be able to

seek prosecution of the offenders. >> again, thank both of you for your efforts. this is such an important issue for the young people serving in the military and the great opportunities they have to serve that they should serve without fear of sexual assault. thank you. i yield the balance of my time dr. steiner. >> general dunbar, would you get 15 seconds summary why the study was such a delay between the time of passage to when dewaal went to work? >> they can't comment to that because i was busy doing my job waiting to be able to convene. i couldn't comment. >> i can't speak to the decision but what i can speak to is the fact when members were asked there was an immediate yes. they saw the opportunity to help men and women in uniform and the

aggressively pursued this task not in a ceremonial fashion but actually getting up a year of their lives to the work of the task force so we can't speak to the question of why but we can speak to the fact when asked everyone responded in a magnificent way. >> general dunbar, when you look at the differences between how you view this, the challenges at a military base domestically forces overseas and a war zone you see those as qualitative different or basically the same approach in all three places? >> [inaudible] >> is your microphone on? >> i believe there are quote to the differences. we are looking at one of the issues that we saw overseas was the need to ensure we were

providing our civilian members the dod civilian personnel with support they require because they are overseas and a different environment. from the military member standpoint probably not much different. in the aor compared to cones, a difference a spirited individuals moving in and out of the letter very quickly. all of the base is very quickly. individuals disbursed over the and that need for accountability, the importance of having individuals know who it is they can go to is paramount given the circumstances of operations in general so there are differences >> one of your recommendations deals with the issue of letting victims of sexual assault know what the results of the military disciplinary action is. that's not a problem just for

sexual assault though, is it? you could have victims of other crimes break in their home, destroyed, vandalize their favorite trophy, who knows what it is, all kind of things can happen, beat up their cade. that's a problem not just with sexual assault; is that correct? >> if i may obviously the investment that it dictum makes and the legal process is a very emotional one, very draining one and also the way things are handled and keeping the rumor under control and so on within a command is extremely important obviously for the will of their of the unit and i guess the point we were getting at were trying to get out is the fact

that too often we interviewed victims were met with focus groups and people were absolutely on aware of what happened, why someone was acquitted, while charges were dropped what better so the information chain is critically important not only for the victim but also the members of the unit in order to have a more transparent look at what is going on. that is why the recommendation was made. >> that is just a problem, we understand it isn't just a problem with sexual assault. the disciplinary process need not -- name off in four qualitative difference but people who go down and filed charges and testify or make complaints may not hear what the results are in other areas; is that accurate? >> yes, would be the case. >> your recommendation that they

need to specifically the dod civilian were dod military, would you find out about why, i don't know, a military spouse who was not dod may not be silly or volunteer, maybe somebody from the community organization, why that breaks down so strongly the you make the strong recommendation. >> it is one of the recommendations that we all felt a very strongly about and the reason why, congressman, is that this access to the commander. a person's ability to be able to access to their commander and we found with contractors is sometimes they are placed under other organizations like family advocacy groups or community services and so on and there might be a two or three tiered chain of command between them and the commander. we feel that for a sarc to be

effective their needs to the immediacy of presence within the commanders not only to keep them informed but have the access when necessary. so the membership as we were talking about ways to make things better we felt that making the sarc and ander of the dod team as far as the employee or the air force has done in some locations making them uniformed members and giving them that sarc responsibility we saw greater improvement in the areas that was happening so that is why we made this recommendation. >> thank you. ms. sanchez? >> thank you madam chair and again for having this hearing. as you know i've been working on this issue for a while and i'm very interested to hear and i read the report with respect in particular to the article 120 comments and i would like to say i think some of those comments there were red herrings and i have a different view but also some of them were to to i think

just the nature of the lawmaking. the initial change to article 125 proposed was different and when i look at the cumbersome pieces of it is those pieces actually came from the secretary's office. so i would love a chance to go back, madame chair, and be able to redo if we have to article 120 because i think it's that important to bring it into today's world. in the military port, you had a case by case synopsis of all sexual assault cases reported and when i looked over the number of cases where an individual would be convicted of rape or eckert faded sexual assault but then they would merely receive an administrative action or be demoted or in many cases no action was taken at all, there were quite a few of

those, and since one of the reasons we made the effort to change arbuckle 120 was so that we could get prosecutions and now we have prosecutions and have convictions so i'm wondering why is it individuals who were clearly convicted of sexual assault are getting away with demotions or administrative action? and i have to tell you that when i read that unless you can clarify that for me pretty much anchored me, so it's my understanding most of the investigations and at adjudication of the allegations of sexual assault fall under the commanders jurisdiction and so, that's why i added language to the fiscal year ten requiring the comptroller general to provide the committees with the report on the capacity each service infrastructure for the investigation and the hat to the kitchen of allocations of sexual assault. so what are the barriers that

exist in this sense that to facilitate a fair and effective organization to add to keep the sexual assault cases to the full extent of the ucmj and why are some individuals committed these crimes, getting convicted and minor sentences or demotions? >> i'm on sure how appropriate it would be that we have great legal minds with us and who have studied this the last 15 months and have poured over a lot of cases and if it would be appropriate to allow colonel brandt who was a member who was also one of our legal experts to maybe address that question for congressman sanchez. >> okay. any of junction? please, go ahead. >> as far as your initial statement i believe you are

referring to the reports at the end of the report. the way they are written is the allegation is assault and one of the problems we note was frequently not a discussion of what the actual conviction [inaudible] that information is really did because it doesn't provide good information at all. that's why a lot of the recommendations for improving the report so you get a bigger picture as to what really happened to each individual case. >> in other words what you're saying is alleged rape and then it went to be prosecuted and we received a conviction we don't know what that person was convicted of under the reports. >> i do not believe [inaudible] >> but we do have that information and if we figure out

a way to get that information we would have better information to tell us what they are being convicted of and white because it and i saw dismissals and changing to other units etc., which if that is the case it is not the intent of what we had in mind. >> absolutely. what happens is they go to the [inaudible] the different conclusions can be reached. there is a gap in the report as to that particular process. maybe there is an on known person [inaudible] she thought she was raped [inaudible] there's any number of reasons -- >> but again the word

convictions so we didn't find the perpetrator. we don't know who he is. >> yes there are convictions in certain cases i agree that some of that information when you are saying that there is i can't remember what the punishment was but it wasn't consistent with -- there are situations where if there are convictions it's possible what they were found guilty of wasn't actually rape or assault. >> it goes back to the issue we need the right information so that we can figure out whether we are getting convictions and whether the culture is still one where the, bought or whoever the command a person is weary of ruining somebody's whatever. we've had so many stories of people sent off to other places etc.. we need to get to the bottom of

what is the conviction and why are there just dismissals going on. >> thank you. i'm going to move on so that we can get a question in before we have to break for this. but i think what the discussion has been having the results of his disciplinary actions, having more transparency around those and trying to figure out what is the best way to get to that place so that even we are able to see that in the context of the discussion today. thank you >> this tsongas. >> thank you, madame chair and for your report. i found it very interesting serious report to address the great challenge of sexual assault on the military. we know there is much more to be done just from anecdotal stories from people who experienced sexual assault who tell us how

they feel they are not particularly taken care of and one of the issues i think we keep coming back to is the role of the commander in making the decision over whether or not a case goes to court martial. the 99 decision in the court of appeals for the armed forces stated, quote, one of the hallmarks of the military justice system is a broad discussion dustin commanders to choose the appropriate disposition of alleged offenses. and we know that the military is a unique place with unique requirements. the department of defense general counsel office analogized the role of a commander to be similar and we had a meeting with the gentleman to walk us through some of the issues there to be similar to that of the prosecuting attorney in the santa fe reported assault. he or she has full discretion over whether or not to take the case to court. the commander me get advice from the judge advocate general of merit of the case that ultimately it is the commander who makes the final decision.

my question is what existing mechanisms does dod have in place for third-party oversight of the review of these decisions, commanders decisions regarding how to proceed on a sexual assault appealable if so were the steps we need to be taken to appeal such a decision and does the lack of such a process to think pose a problem and the other question i have is the oversight around the j.a.g. officer of the commander is dependent very much on the j.a.g. officer recommendations how can we engage in sort of questioning the j.a.g. officers will and advising the commander? >> those are all very good questions. from the j.a.g. officer taking the last first, the j.a.g. officer has reached back to the commands, higher level commands if the individual is feeling as if they do not have all of the

data points, all of the advice, all the support they need to provide the commander with advice considering the circumstances. i believe most commanders when they are talking with j.a.g., they note the jags are providing advice to the commanders make the decision as to what they want to do, where they want to go in terms of traditional and non-traditional measures and if the commander is dissatisfied with the advice the j.a.g. has made and the commander likewise has a higher level command authorities supporting major command in order to be able to elevate the issue in order to seek to get some additional guidance. from an oversight perspective, i will tell you that our task force did not feel the additional oversight was necessary. the review through the investigative files indicated that where information was

available, where you were able to make a determination of having sufficient evidence to prosecute a case that the commanders as well as the j.a.g. sought to prosecute the case. the concern as the congresswoman sanchez raised is it is difficult to ascertain that information just based upon the report and that level of data collection and defender accountability needs to be built into the system accountability so you can see exactly what is taking place. but from the standpoint of oversight, i personally do not see that as being necessary and i would defer to doctor iasiello if he is a difference of opinion. >> not at all. i would add there are great questions, congresswoman. one of the things we see as we went around these locations was we met with courts martial convening authority every place we went and saw a desire to

aggressively pursue and a step forward wherever they thought was possible, and i say that knowing that as we went in and conduct of our interviews with these commanders and courts martial convening authorities at the evin levels they knew why we were there but i really sensed from than the intent was to aggressively pursue wherever and whenever possible any sort of perpetrator of sexual assault and course they know they set the tone, the commanders set the tone and they send messages with in the command as to whether or not the to pursue and aggressively pursue these perpetrators or alleged perpetrators. so i think the intent is there. i think we have added recommendations such as to recognize the special nature of prosecuting the nation's and the need for more training for the j.a.g. and those involved in the

judicial process and i think with that the added training with the specialized prosecutors and the intent of commanders to eradicate crime from the midst nothing its impact on morale and welfare of the troops i think we are stepping in the right direction. islamic i'm about to run out of time but did you see many instances which a commanders' decision not to prosecute as a winep chain of command was overturned? that a higher up in the train to be catching somebody said no in that case we really have to pursue petraeus mick i've been informed we didn't see anything like that. >> thank you. we of the first of five votes and this will be the last for the day so i did your patience and we will return it is probably going to be close to a half-hour.

thank you. [inaudible conversations] [inaudible conversations] >> you can see this hearing in its entirety on line at c-span.org.

[inaudible conversations]

>> it was said every worthwhile accomplishment has its stages and the treasury and triumph. the beginning a struggle and victory. the effort to connect to enact comprehensive health care reform has seen its struggle in the stages of treachery. as we look back at the progress we've made and look ahead and a short distance we have yet to go i remain confident that we will soon move to the stages of trying of and victory. we are on the brink of accomplishing health care reform. we are on the brink of reforming a bill that will have millions of americans afford health care coverage. we are on the brink of reforming the will improve quality and efficiency of health care delivery for all. every day reminds us of the need

for reform. the latest report by the nonpartisan congressional office warrants once again the growth of federal health care spending represents the, quote, single greatest threat to the budget stability in of quote. that is because health care costs continue to rise faster than the growth of the economy and faster than the growth and wages of american families. the last eight years the wages of increased just 20%. the average costs of employers sponsor coverage stumbled more than five times and health insurance premiums have tripled. the high cost of health care means one in four americans lives in a family that spent more than 10% of its income on health care in 2009 and four out of five of these families have health insurance. the high cost of health care also diminishes ability of the american companies to compete and the high cost of health care makes it harder for small businesses to provide health care to hire new workers or stay

afloat. america spends twice with the next highest spending country spends on health care. with u.s. healthcare far too often produces an uneven quality and poor outcomes. more than 46 million americans lack any form of coverage. another 23 million are underinsured. according to the cbo within a decade 54 million americans will be uninsured. and the act where the office thinks that number will be even higher reaching 57 million by the year 2019. we have tried incremental reform. we create rights and protections in 1996. for people who purchase group health coverage. and we cover millions of uninsured children with 1997 enactment of the children's health insurance program. but we have reached a point where it is difficult to fix this system one step at a time. we cannot at 46 million

uninsured people to a broken health system and we cannot meaningfully control the growth of health spending without covering the uninsured. over the past year we learned how hard it is to reform the health care system. just because it's hard doesn't mean the task is any less necessary. just because it is hard does not mean that we should look the other way and just because it's hard does not mean that we have to compromise so much that we fail to address the problems it had. madam secretary, thank you for all of your hard work over the past year and the work of the department helping craft health care reform. thanks to your guidance and leadership, we know that we can start covering the uninsured with pre-existing conditions this year through a high risk pool. we know that we can provide immediate assistance to bridge the medicare drug coverage gap, the so-called donner whole. we know that we can jump-start

quality improvement policies in medicare and medicaid and we can make immediate progress on insurance market reform. i am pleased to see the budget assumes enactment of health reform. the budget accurately reflects health reform as a potential to reduce budget deficit by $150 billion over the next decade. as the president in the state of the union address reform also has the potential to reduce the deficit by $1 trillion over the second ten years. this year the finance committee faces a full agenda and will work on creating jobs, the economy and reducing the deficit. but given the daunting long run fiscal challenges we face we cannot give up on the quest for the health reform that addresses the intercom at the problems of cost, quality and access. i urge my colleagues on both sides of the aisle and both sides of the capitol and both ends of pennsylvania avenue to not give up.

we can't, we must succeed in reforming the system. of course we face another daunting challenges. the medicare physician payment formula reform hhs took an important step moving drugs from the formula and just last week the senate recognized long term solution required a short-term investment by exempting part of the sg are from the statutory paygo rules. this will aid in finding a permanent solution for the sake of the seniors who need to continue access to medical care. beyond health care reform congress must reauthorize the temporary assistance to the needy families otherwise known as tanif and we have more work to do to improve the child welfare program. the president's budget did not assume a five-year authorization, so we must use this year to lay the groundwork for the reauthorization. let me conclude where i began. i agree with president obama we

cannot give up on enacting comprehensive health care reform this year. we have gone well past this effort beginning and have indoor in our share of struggle now but also a long last bring this bill to victory. with your help, madam secretary of certainly the help of the president i feel quite confident we will accomplish that objective. senator grassley. 64 mr. chairman and secretaries sebelius for being with us today. particularly in these very extraordinary times, our nation is beginning to find slow recovery from one of our worst economic downturns. now may be more than any time in history people are focused on our nation's economic challenges and they are worried or maybe words that come out of my town meeting people say to me how i'm scared. they've watched unemployment soar, although industry going to bankruptcy, banks shutting their doors and families struggling to

make ends meet. and as our constituents have tightened their belts and tried to rein in their own household spending they have seen some in washington support spending increase after spending increase. they've watched as a federal debt has increased by $1.5 trillion since president obama to office and on the heels of that, they've just seen a ceiling raised by another 19 tenths trillion dollars to make way for even more deficit spending. so as i travel around iowa my constituents know these facts and figures about, they know the figures affecting our economy as well as debt and they know it more than washington insiders. they also know that this budget only takes minor steps towards a very major problem. they know that under this budget the amount of debt held in 2008 will double to 12.3 trillion by

2013 and then triple to 17.5 trillion by 2019. and the question they keep asking is when will washington come to its senses and realize we can't afford all of this? all of the bailout call of the stimulus, all of the new spending is paid for with our constituents hard earned dollars and they seem to express concern about and they want to know what we are going to do about it. they fail to see the return on investment that some have promised and as a result they've lost faith in government spending. as we consider the 2011 budget with you, we need to be thinking about how we can restore that trust. that trust begins on a believe with transparency and accountability. mauney years serving the united states congress i have made it my mission to ensure transparency and accountability are more than just buzzwords.

they've got to be meaningful. i felt both republicans and democratic administrators, administrations to the same standard. when president obama was running for office he put to make of the government, quote, open and transparent, and of quote. another quote is he promised, quote, to provide a window for all americans into the business of government, and of quote. actions speak louder than words and unfortunately a year into this administration we have seen that this principle is not always put into practice the way that it was talked about in the campaign. transparency and accountability require open and frank dialogue between people's representatives in congress and those in the administration. at this time, i have over ten response is overdue from the department of health and human services on matters ranging from health care for -- fraud and

public safety and their listed there. and the number of days we've been waiting for answers to read departments across the federal government -- i think my oversight efforts are often resistant held up frustrated and impeded by bureaucrats who seem more interested in governing the and opening up. while this lack of transparency and accountability is nothing new in washington the american public was led to believe that more could be expected when they voted for the president that wanted change. promises were made, principles based on transparency and accountability work repeated over and over again and obviously the vast majority of americans believed. well, i want to continue to work on the american people's behalf to hold government accountable for its actions and ensure that the administration's conduct, conducts its business and open and transparent manner that was suggested to read these

accountability and transparency problems persist for i am pleased at least to see addressing fraud, waste and abuse in medicare and medicaid and schip is a prominent role in this year's budget proposal as it should. if we learned anything during the health care reform debate it was fighting health care fraud waste and abuse as a bipartisan priority. we all have seen the staggering estimates of around $60 billion of taxpayer money being lost and this seems to be a conservative estimate. so i look forward to hearing from you, madam secretary today on the proposals to strengthen fraud, waste and abuse, prevention, detection and enforcement. but before the congress to weigh the merits of your legislative proposals as well as requests for increased funding, we need to know what and how you are doing with what you currently have and i mentioned earlier congress has the duty of

government oversight. this includes reviewing annual reports you are required to produce pete one of the annual reports is on payment rates. the latest one was due last november but the congress has yet to see payment rates for specific times of providers. so, obviously this seriously impedes the ability to conduct oversight. and it limits our ability to evaluate how the federal government is addressing a fraud, waste and abuse so i look forward to hearing from you today on the status of that report. mr. chairman, in regard to that i ask unanimous consent that the slides on the payment error rates from cbs be entered into the record. >> thank you. in addition to the fraud we stand abuse proposals the budget also assumes a six month effort at extension two states. while i do agree that the states still need assistance to make ends meet i think it is time for the congress to cut the strings

attached to the aid that we are sending. as the states struggle to balance their budgets, having the federal government provide assistance that prevents them from touching medicaid doesn't make much sense. we should give states control of their budgets so they can be more innovative and efficient with how they provide access to care. and of course you are a former governor so i hope he would agree with that that flexibility is important to being a good government or state legislator. i look forward to discussing this and other issues with you. thank you. >> thank you, center. i would like to welcome our witness from kansas, hhs secretary we are honored to have you here madame secretary. as you know your statement will be included in the record i urge you to summarize it. we have about five met for will but we will give you a few more than five minutes. >> -- committee members i'm glad

to be here today to discuss the president's 2011 budget as it regards the department of health and human services and i think you'll find the budget builds on some teams the president leo in his state of the union strengthening security and opportunity for america's working families, investing to build a foundation for future growth and bringing a new level of accountability and transparency to government and it abides by the president's pledge to try to identify programs that are redundant, obsolete or ineffective. as you know, health and human services provides the health that americans depend on and actually delivers human services to many of the most vulnerable populations and we think it's important to make some of the investments our country has been putting off for years including investments in fighting health care fraud, strengthening public health infrastructure and getting more focused on prevention and wellness so i

would like to give a brief overview of department priorities focusing specifically on areas of medicare, medicaid and schip. and i know that we will have a chance to deal with some questions and look forward to working with all of you as we move this forward. i would start with fraud and abuse as ranking member grassley already noted taking this seriously is something that is long overdue and something that the president feels very strongly about which is why he asked the attorney general and i to work together in a creation of a new anti-fraud focus which is known as the health care fraud prevention and action task force better known as heat.

we have a new data sharing system where we can monitor and observe changing patterns billing practices and a whole host of new rick prevention tools which we anticipate will be enormously effective so the president has included resources for new systems and new personnel to focus on this effort and this is one of the efforts we know returns significantly more than any investment we make. tomorrow will be a year from the date that the children's health insurance program was expanded and we know that in 2009 more than 2.5 million children who were previously uninsured got coverage from medicaid and to chip. one of the efforts the department takes seriously is the outreach effort provided by congressional funding and we in

tend to work with state and federal partners to identify and enroll the estimated four to 5 million children who are eligible right now but still not enrolled. the budget does extend the fmap enhanced match that congress applied in the recovery act, and as a former governor i can tell you this is one universally welcomed relief for states who still have not seen their budgets recover, and since medicaid is one of the most significant expenditures than any state in the country makes in terms of the percentage of the budgets spent on health care having an enhanced federal match is something that is supported i think by republican and democratic governors. we ensure access up-to-date

health care for seniors and people with disability who depend on medicare with new operations in cms but will help change from relatively antiquated claims processing into and actively purchasing quality care system making the next generation in health care technology to help providers raise the quality-of-care for all americans. continue to fund patient center for research projects, which in power providers and patients to get the most up-to-date information about strategies and protocols that work well. this budget also, chairman bachus referenced the physician payment rate, the budget assumes a zero percentage of state for physicians' payments reflecting the last number of years that congress has taken care to make

sure that seniors did not see a dramatic decrease in the provider rates for their doctors. we support the longer term strategy and look forward to working with congress to that and so this doesn't continue to be a yearly debate. there's a continued investment in the neighborhood community health centers following up on the recovery act investment but additional investment that will provide 25 new sites and will eventually provide care for about 20 million people a year, 3 million the and were served in 2008 with high quality low-cost preventive care. there's a continued investment in the health care work force recognizing that health care delivery falls short unless you have the providers who actually deliver that care and the indian

health center continues to be a presidential priority trying to live up to the commitments made generations ago to american indians and alaskan natives trying to reduce the woeful health disparities we continue to find. our budget includes new funding for 21st century food safety system through the food and drug of ministration to be we right now live in a global food marketplace, just for example half of our fruit and nearly two-thirds of our seafood comes from overseas and yet we have a 21st -- 20th century inspection operation, so redesigning a food safety system which gives american consumers the confidence the food they serve to their children is safe is something that we again take very seriously. following the signing last year

of the tobacco legislation, the budget makes a serious investment in the battle against smoking. we saw dramatic decreases in smoking rates for years in america but they now are holding steady at 20% and frankly that is way too high so additional focus on better ways to stop smoking, new research, community-based projects is part of this ongoing effort to try to lower the dramatic costs that are underlying a lot of the chronic health conditions and directly related to smoking. public health security continues to be a focus. we know that we need to be better prepared for our public health emergencies whether it is caused by natural disaster or by attacks by our fellow man. we know that medical countermeasures stand at the front of those readiness

efforts, the vaccines and treatments and respirators that help reduce the spread of infections. this floozies and we have had a bit of a wake-up call responding to the first pandemic in 40 years and having an opportunity to live at where a system worked well and where there were gaps, so we continue to believe that if the funding new strategies, new technologies, new research through nih, work at the fda on scientific breakthroughs but also looking at a host of medical countermeasures is more important now than ever and i have asked my assistant secretary for emergency preparedness to actually use ravee h1n1 experience as a template but get a report back by the first quarter of this year which i look forward to sharing with you, mr. chairman and members of your committee to look at where the gaps in the

responsiveness system are and what kinds of strategies on a multi-year basis we need going ahead. finally mr. chairman i want to mention some of our critical programs that don't deal directly with health care but deal with a human service side of our budget. we know that investment in children particularly at risk children continue to be terribly critical factors in how well and prosperous they may be later in life so this budget again focuses on the early headstart and head start providing enough resources to serve about 66,000 more young children in just two years ago. but what we know is middle class families are not just taking care of their kids these days often they are also dealing with aging parents so there is a new family caregiver program recognizing the fact that about 80% of long-term care services provided by family members.

often that's great news for the elderly family members who gets to be cared for by loved ones that can be financially and physically exhausting for the care givers so this provides the agency additional support for everything from counseling for caregivers, assistance and adult day care centers for a periodic status, respite care, transportation help to assist families who are trying their best to balance these caregiving rules and states and communities are also part of the focus on some additional relief under the tanif program for some of the essential services they are providing. so mr. chairman, that is brief highlights of the health and human services budget focusing on the health and well-being of

americans and delivering essential human services. i think that we continue to work to improve the everyday lives of americans and look forward to working with you to advance the health safety and well-being of the american people and having an opportunity to answer some questions about this budget. >> thank you, madame secretary. i would like you to explain to all of us why health care reform creates jobs and how it saves jobs. here certainly the president went to new hampshire and other states helping encourage more job promotion in the country. we in this committee not in the committee that in the senate will soon pass a jobs bill and clearly to get the economy moving again we have to do all we can to create new jobs. and because health care costs, rising so much higher than

wages. five times since i think it was the last eight years and premiums rising three times it just seems quite clear the tradeoff there is employer was providing health insurance to pay for health insurance and the cost going up so much. that is lost wages. the more we can get health care reform passed to lower the rate of increase in health care costs the more that's going to help the employee get higher wages and if you can just expound on that a little bit, madam secretary to help explain to all of us and the country basically why health care reform is a job creator and helps businesses and employees keep jobs. ..

providers, hal i.t., workers, a whole host of workers in the system are certainly part of our economy, but just focusing on small business owners who are often regarded as the critical engine of their american economy and produce more jobs in the long term, i hear over and over as i travel around the country about the crushing cost of it health care for employees. a small business employers are often in a catch-22 if they don't provide coverage for the >> command a market

eventually there would be not only the opportunity for lower income workers to have coverage again. the top teacher is not only to have more productive companies but the more globally competitive and by reducing overall health care costs and not shift between industry is be able to compete more effectively buy other selling cars or widgets with competitors around the world. the third aspect of the jobs aspect is about having a more productive work force health and will this come a prevention of long-term chronic illness, keeping employees in the work force, reducing sick days

has a direct impact on the work force we have poor health results said many countries around the world but we have employees who live sicker and die younger in many places but have those investments and a more productive work force makes america a more prosperous. >> is health care reform necessary for hhs to implement new ways to reimburse providers to get it more based on quality over quantity with the excessive three admissions from hospitals for example, the dollar-based purchasing that is another example. don't you need less -- legislation to enact the reforms that will clearly begin to reduce the rate of growth and health care costs at the same time improving quality? >> both the house and senate

bills, there is a major direction to begin shifting a payment system to quality of com so prevention and wellness and eliminating copays it encouraging screenings, early detection is, cancer and other chronic illnesses that can be identified early. as you mentioned, we have 100,000 americans each and every year dying not because of what brought them to the hospital but what happens to them in the hospital. and really directing the payment system to provide those that do well but eventually stop paying for care that is partly delivered or makes people sicker. >> my time is expired. thank you very much. >> last week i wrote to

express my frustration with a lack of responsiveness to my request from hhs and the subordinate agencies. i am still waiting for responses to more than a dozen letters i have sent last year to hhs, met fda, ac/dc. in my letter last week i asked you to get back to me buy january 29th but i have not received a response from you. like to have to let me know what i will be getting a complete response to all outstanding requests. >> senator, i share your interest in transparency and openness. i know that we are now on a regular briefing schedule with your staff members say and attempting to respond as

quickly as possible and thoroughly as possible to the information you requested. the information that we have come a given you complete responses two of maturity of the request some that we are still working on as quickly as they get it together we will get it to you i know the staff correspondents is often on going to try to clarify to get you exactly what you want. >> it seems to of the problems is expediting the clearing process within the department and agencies so letters from congress are answered third the in a timely fashion. what are your plans to expedite the process? the letters are written they are sitting on somebody's desk for approval. >> senator, we have a large agency which is not an

excuse for untimely responses. i have met on a regular basis with our executive secretary and now received at my request a weekly report on the status of correspondence and where it is and following through the pipeline scum i am taking this very seriously and very personally. >> you can see how many days it has been. would have been waiting for a response. it seems a list keeps getting longer and longer. if we a answered our letters as senators like that we would not get reelected. let's go on. on another issue as a mentioned in my opening statement i am a strong supporter of accountability as a bomb a mention the other day he is disappointed there has not been more transparency in the health care debate. it assumes health care will

be enacted and in order for that to occur i am assuming negotiations between congress and the white house and stakeholders are continuing to take place that could you commit today that going forward any negotiations month of any senior staff in the effort to pass comprehensive health reform is done in an open and transparent manner? >> i don't know senator what conversations with senior staff you are talking about. our staff is available to you and your members in the with them regularly. i don't control the negotiations that go on our staff provides technical support across the board. >> you say your staff is not there for anything more than technical support or not within in negotiations representing the white house? >> i have conversations on a regular basis with

republicans and democrats but i do not convene the house or the senate or i am not a principal in negotiations nor are my staff. >> arrow in december asking why congress did not receive fiscal year testing report if or search as it is called that was supposed to be out in of today's november it shows a national pay mid to air raids and improper payment rates for each type of provider like hospitals and congress relies on this report to reply await how well or not so well medicare is doing and making payments i also ask you to tell me when i can expect a final report into have not responded to that letter or as i already showed the senator for printing in the record cms of ever presentation to committee

staff fiscal year 2009 medicare improper payment rates with each member has copies. everyone i hope turns 30 page 80 will see november 2000 rate you will see the error rate was 0.7% 2009 that to number jumped up 51 and nine tense that is significant. the on page 10 it goes up even higher 73% is the rate to the asea mascot would use the quote-unquote most stringent criteria for calculating the error rate set so how do you explain sitting on these numbers especially when the country is in the midst of health care reform discussion regarding legislation that would delegate more authority to the department of a broad range of financing and delivery

system changes and new payment models? >> a couple of things come a first of all, i think we took very seriously the previous criticisms by the inspector general of the previous administration under hhs was not being accurate about the payment rates. >> i agree. >> i am pleased to hear that. it changed this year using the criteria we agree was a new system for our would also like i know you are well aware but just to make this clear to other committee members the error rate is not a fraud rates that is a different issue it could be as low as the doctor's signature not being legible but again rethink it should be accurate. we're working diligently under the new system we put out under the global numbers

in november at the time the budget was due we held by the end of this week to have the underlying numbers but the shift has not been one that has been necessarily very quick because it has been a change from a traditional system with every single error rate to recalculate we want to get right and abide by what the inspector general said we should have been doing all along and i promise it will be hand delivered by and told we should have all the underlying numbers ready to go to mike 73% is still a very high rate. >> i understand. >> thank you senator grassley. secretary sebelius i am glad to see you bright couple of point* seven like to make, one with respect to what senator grassley my dear friend who i said very

good things in his election years in the paper. >> it would not be omaha. >> maybe des moines. >> was concerned about something else i did not give you the proper respect. will you please repeat it? >> no. because i got it wrong. [laughter] >> it was said the mine register. [laughter] he and i have a good relationship. but it also occurs to me i think you have 70,000 employees, and the nervous array of things i often find it is good to sometimes simply called either you or some of the staff people because letters can be very inefficient. they take them much longer

time to get back to you then they have to go through a process and sometimes put in general language or sometimes just a phone call an hour as you indicated staff being in touch with a staff is the best way to work the problems out. i am just saying that. for whatever it is worth. isn't it true that health care is the single greatest economic engine in the united states economy in terms of growth of jobs. >> it is inaccurate statement. >> over the past two years, there have been 631,000 new jobs simply in the health care sector. did just in the last

month, a 22,000 new jobs. which is interesting because the economy is not doing very well and people are frustrated by that and we will try to work on how can we create more jobs? if we can just do health care reform or get it done come we will have contributed to the nervously and it is already producing an enormous number of jobs. to me, it is one of the best and that is according to the bls so i am not counting what they say. that the shift. over 100 community health centers that apply for the american recovery act lending. and received in my own state the application is that we had the received a 90% score on the proposals for

facilities are the investment program. but they were left unfunded due to funding limitations. you talk of the important link between economic growth and investment to rethink it is possible that if we come back with a jobs program cover these are very important. it is like the health service corps people if you don't have then you suffer, if you do your people in rural areas which you have a great number of comment that if there are shoveled ready projects, and i am thinking right now of community health centers, if we get more money from that

it would be possible to do monday with that especially people who score 90% or higher? >> as you know, senator, the recovery act provided a major investment in that community health centers and they were wildly oversubscribed terribly beneficial projects that just for not able to be funded based on the amount of money available. but no question having the health center that produces workers in that area and they operate as the committee center and have a huge beneficial effect on neighborhood well-being on workers and on jobs. it is a construction project in the long term service project so we appreciate the continued investment in the 2011 budget it is definitely a jobs program that yields better health results for

the communities in which they are located. 20 million americans have low-cost preventive health care for themselves and their families based on the community health centers and often the strain on hospitals and community hospitals is result-- reduce because people access health providers not going through the emergency room door but actually getting help there a health center. it has a lot of beneficial ramifications. >> my time is up for the moment. >> they q senator grassley come a book on secretary sebelius. obviously we're paying attention today to the fact the budget assumes that comprehensive has been enacted and there would be savings of about

$150 billion over the next decade. the president has said in a central part of comprehensive health reform is expanding consumer choice and competition. i share the president's view. one way the president seeks to promote choice and competition is by creating a working marketplace, in effect a set of exchanges like a farmers market where people can compare various products. how would, in your view creating these health insurance exchanges contribute to the savings that are inefficient in the budget by enacting comprehensive health care reform? >> i think have a a new marketplace with competing private sector plans which is envisioned not only has a

beneficial effect for individual purchases for small-business owners come the self-employed, but others who often struggle with the high cost of care right now would have choices or some options. but also in the long term competition and is a great market strategy. if you have competition versus a monopoly you have an opportunity for the market to work. my experience running a state employee health plan in kansas is that we made sure employees had at least one other choice our least two choices were removed some word created to provide competition but that got us the best prices at the lowest cost.

people wanted that access to the pool of workers and in kansas we have the largest health pool in this state, 90,000 covered people wanted access to that. they ended up being very competitive with those prices that day and offer that would operate in multistate areas and give folks choices that they don't have right now. >> wants to continue to work with you and the president on this but my concern has been that most americans don't have choices today. of course, a member of congress can fire their insurance company and say in 2009 i can go somewhere else in 2010 so i intend to work closely with you and the the president and chairman baucus on this because there is not a marketplace today and we need one levy asking about another area perk

wrote one is the treatment of those who are chronically ill. the evidence shows that summer in the vicinity of 75% of the health care budget goes a relatively small percentage of the population, maybe 10%. there are bipartisan bills hilt a share in the senate there is one here in the house to promote independence at home and they're in effect you would have a coordinated team of practitioners to any effect agreed to take over payments so it does not add to the deficit in order to have better care for people at home. you don't have that in the budget and i would just like to hear your thoughts about what priorities the effort would be for you in the department in the years ahead.

>> i think that concept would be embodied in one of the health reform components. it is one of the strategies that is operational and some areas and in the northeast corner of the country we just added medicare to our provider court may day care strategy in northern massachusetts which it operates very much along that way. it is a huge priority back to the state issued as a former governor the dual eligible population those that are poor enough to qualify for medicaid are old enough to qualify for medicare the fastest 98 days rising cost of any state operation and often are chronically ill or have multiple issues and states are way out ahead of the

federal government in looking at ways to deliver at a better cost is certainly the independent said home have a huge priority for me. >> thank you the last the may statement be included. >> without objection. >> mentor the community health centers receiving an increase of $290 million for the 2010 budget on top of the 2 billion they received in the stimulus package in addition senator biden notice to the health reform is passed that would provide mandatory and unlimited funding for community health centers the president's state of the union address he said families across america are tightening bells to make tough decisions the federal government should do the same house is mandatory and unlimited deficit spending with an increase of

two under diddy million on top of a $2 billion providing in this to this package representitive of those comments? >> senator i think the experience of health providers come a patience and community leaders across america is the investment a community health centers has been a great way to lower health care delivery cost. regardless of where they are in the country the delivery of highly effective care added lower-cost the competing system has been proven in the ability to reach out in this case to americans who either don't have insurance coverage at all or very modest cover rich has been very effective in preventative care delivery.

i think the increased footprint of community health centers working in tandem which they do in many first of the country with the primary delivery system with community hospitals and provider groups has been a wonderful way whether people have insurance are not to deliver health care in a very cost-effective strategy >> i have been a supporter of the committee health centers but it seems to go quite the ways and other entities and clinics have popped up that are supplementing and it seems to be this quite a huge increase. but to move on to a different subject, we have limited time. i think you're chief actuary said the medicare payment cuts in the senate bill could lead 20% of all hospitals, nursing homes and other medicare providers operating at a loss. how many jobs would be lost

if one out of every five health providers is losing money and therefore goes out of business? do think mr. foster's analysis is correct that the medicare cuts may be unsustainable? >> there have been a lot of different analyses with the various strategies regarding medicare. i think the most obvious point* of medicare right now is that to is unsustainable on its current course. it is scheduled with the current situation to be totally out of funds within nine years and those numbers change every year so that it is clear not doing something or doing something is necessary.

what of the things our department took too very seriously was a strategy for the areas of where we are overpaying for various services and goods and subsidizing private insurance companies for various medicare advantage programs not taking fraud reduce seriously. already in the less than one year i have been at the head of hhs, we have had over $4 billion returned to the medicare trust fund based on various settlements and fraudulent activities that we have shut down. we are taking all of that very seriously. clearly, if you had some significance taste six vivica reduction in providers with the medicare

system, there is a job loss but it most importantly a 21% pay cut if congress does not fix the rate. that would be a dramatic job loss for seniors around the country. >> i know medicare needs more funds and in nova of a trillion dollars could go to medicare to fix those and i also have additional questions i would like to ask and i am looking forward to report from the representitive aspect from making $400,000 on the department that did not show up on the list earlier when i requested it. thank you. >> secretary, the me ask you about the improper payments

rates and medicaid. you talk to senator grassley about that. and to the president's budget 26 billion would be spent on the mickey yu program but according to some figures as much as 10% were improper payments which cost taxpayers 3.6 trillion dollars over 10 years. since this is a shared expands program the state and the federal government share and that expense, i have been trying to get from your staff since july, a detailed statement about improper payments to rates and so far we have been refused that information. you may not be aware that so i will bring that to your attention. would do see that the reformation is provided speak to make a more at informed decision of your proposal to spend an

additional $26 billion in the medicaid program? >> yes. said i am not specifically aware of your request to reassure you i will check into it. her department does not pay the medicaid providers directly that really is done at the state level and each state has a different kind of arrangement the providers you are different. one of the difficulties senator may be collecting this data from 50 states around the country and updating and making sure it is accurate is one of the challenges so we don't hold that dated and the department hhs. >> 60% roughly of those are federal tax dollars. >> we pay them back but we do not contract with the providers. >> your department should have an interest whether federal or state dollars are

being squandered. >> that is one of the efforts of the fraud and abuse area. we have a series of new initiatives that will be worked out with the state partners to look at frat stage fraud and abuse and waste in the medicaid program. >> i heard you say that earlier but that is why we made it -- need state-by-state numbers which is what we requested from your agency real like to know if those improper payment rates are provider payment errors or in determining eligibility. we're not reaching any judgment yet we just would like to get the information. i appreciate your commitment to work with us to get the information promptly but i would like to talk about fraud and abuse prefer as a former state attorney general, i can say neither the federal government or the state government has enough resources to chase

the people who are trying to cheat to the taxpayer after the fact. we need to do a better job on the front and after certifying the providers and to stop it on the front and. i would stop and ask you to look at one piece of legislation i have introduced called the seniors and taxpayer protection act which tries to stop it on the front end as opposed to chasing it on the back and. i am not being critical of the improved enforcement efforts but i don't think you'll ever have enough resources to chase all of the fraudsters down that is why we need to start on the front and. >> i absolutely agree. i will definitely take a look at your legislation. we have begun some new certifications and practices and durable medical equipment was one with a huge increase in erratic billing summary instituted

third party verification provider numbers come a but i a agreed every schema at the back and there is a new one at the front end so i look forward to looking at your legislation. >> i appreciate that parker you talk about how medicare will become insolvent and less than a decade. of course, that is the subject of a lot of concern by the american people as they see as spending more on programs with our failure to meet our responsibilities to do with current unfunded liabilities. while we have heard health care reform is entitlement reform we know from dr. -- dr. allman doors in the cbo the reform bills cannot be used to both pay for health reform and addresses solvency of the medicare program.

he said the key point* to the hospital insurance trust fund under health reform would be received by the government only once broke they cannot be set aside to pay for future spending or current spending on other parts of the legislation or other programs. at least a doctor's opinion you cannot double spend that money can you talk about your proposals were the administration's proposals to deal with the $38 trillion of unfunded liabilities for medicare? >> senator, the health reform i think actually does include a number of proposals which would certainly slow the growth rate of the medicare trust fund spending without violating any benefits that

are currently relied upon not only senior specimen of the most disabled citizens and not only look to save money with the overall purchase of prescription drugs but to make sure we are not paying for over pay for services or procedures not cost effective or slow the growth rate by having competitive bidding in areas like durable medical a could make getting the bang for the buck but also an enormous amount in health reform that anticipates prevention and wellness to have a different kind of strategy so you don't root weight until a senior in tears medicare paying for acute services but hopefully with the underlying conditions for the chronic

diseases. >> thank you very much. >> madame secretary, when the first questions is a critical program for my region it to her out the country depending on the severe circumstances of the weather. senator reid and i sent a letter along with 46 others concerning the methodology was used to move the relief of emergency funding for example, 40 million of the 490 release was set aside our state received a 80% less and rhode island received a 50% less. on that he teeing it did refunding thomas states like florida are usually cold receive 3.9 billion in emergency assistance alaska and minnesota and maine it

received nothing because of a calculation of the he team did three days. of the zero main would have had 1300 more than the energy required i am trying to make sense of the methodology used in distribution? i am arguing the point* why there was such a radical difference in the amount of funding severe cold weather stays received of the release of the emergency funding? rhode island lost more than 50% if you use unemployment rhode island is the second highest in the country. we submitted a letter in dae would appreciate if you have a response to understand better why the money was distributed in this fashion? >> surgeon they. we will get the details of

the formula to you. but there were several factors this year there were booked at. one, the cost of heating oil is significantly lower this year than last which affected some of the cost in the northeast states which rely heavily on the -- heating oil that was over $100 last year and down below 80 this year so there was a significant wave as you said some southern states had particularly cold snaps which was not a factor when year ago and need to be calculated. third, the formula not only included the overall look at to the heating issues but also unemployment numbers. those three factors were the four really used. >> i think you would agree that is a dramatic change

given the enormous costs that could be 50 or 70 or $80 per barrel more than $2,000 per season. with the state that has very low wages so a number of the state's you have signed those letters as well i hope there is a discussion in the future. i don't want to say it is a bridge in both -- fight but i want to make sure there is a fair and equitable consideration especially during these difficult times and the fact that home heating korea is an expensive proposition where 80 percent depend on it. on the issue of health care the reverse is true as as well that is what i am hearing with the possible

calculation of what could be rise with health care reform and one of the big issues that was repeated in the cost of doing business for they would hesitate to invest in capital equipment or any jobs repeatedly pataki about medicaid payroll taxes that was included in the legislation of the employer mandate there are a number of issues that could potentially raise the cost of doing business. i have a good deal of concern that will depress the ability of small businesses especially to turnaround the economy. we talk about the tax credits but it requires small businesses to pay up front part of a half of a down some money in order to get the benefit. they might not even we in that position we have to look at the overall calculation.

there are some things we can do short of the legislation that has been introduced with a bipartisan basis that would help to open the doors to small businesses that the very least should have been done long ago. but we have to calculate what is the impact of health care reform as it is already designed on the small businesses and the potential to lose jobs as well? >> think you. madam secretary? >> senator snowe time has expired but i will be courteous to allow you to respond is. >> the jobs calculation for small business owners is a huge. i have heard from some of your constituents directly and i do think the

book, though lends as you know, the small business tax credits in the senate and house bill will kick in 2010. that would be a more affordable market and a fax -- to fix and the system along the way. while it is always important to look at the impact the group being squeezed in the current market place is unemployed and those who have no choices, higher prices and fewer options and often lose employees based on the fact they cannot keep them. >> thank you very much senator lincoln's been wrecker 12 think my colleagues from maine because i do believe the largest percentage of the uninsured do fallen into that category of self-employed independent contractors. it is a great step forward with what we can do with what will be meaningful in

the overall health care debate. i enjoy working with her and she does a great job. a couple of questions. i have about four of them. touching on the technological divide between rural and urban america, the from m.i.t. we're going to find role states those covered under funded or needed to catch up but unfortunately with your finding like the agreements, it appears the finding is on a per person ratio with counties that are more advanced in the implementation. but the problem is we're never started. of like to see assurances that will be available to all america is particularly rules of decisions like those in my state to make sure the digital divide this not make the disparity worse

between rural and urban citizens. i hope that you will focus on that to make sure everybody will have a fair shot at that. the older americans act is a nutrition program provided with 100 million under the recovery act. however the budget summit fy 2011 only totals 8 million. my concern is the recovery funds will be extended and questioning why the programs are not included in the recovery extension. that is important to focus on the elderly are one of our most vulnerable groups. i was pleased to hear senator wyden bring up coordination of care and all of those efforts hoping you can elaborate on the collaboration.

i have been working diligently on those and understand the importance that plays the chicken with the outcomes for growth the part mitt reliefs -- released a draft 216 pages contains 526 objectives and we're glad we're focusing on so many things but i was a little disappointed that the word alzheimer's or dementia were never mentioned. the top 10 causes of death, alzheimer's is one of the only one of the 10 without its own topic area in the draft report. noting it affects 5.3 million americans with the number expected to rise as many as 16 million americans it is a growing public health crisis for i hope you can look at the

possibilities before the publications final report that could include a separate topic area on alzheimer's disease just as the top 10 causes have. it is a very strong message that we are focused on that in this country. but last come in medicare extenders a 12 complement the chairman for working with us and the different issues obviously we feel will fall off the edge of the cliff whether the therapy, physical speech, occupational, a pathologist comment ambulance come role hospital and others come and i understand your position. if the administration does not have the legal authority to extend the policies what do you think you can do too be healthful days who fall

how can we be to those providers? that is a lot but any of that you can jump on would be great too. >> health i t has a variety of strategies looking at different areas. and the health extension office is established throughout the country are very much focused on the underserved areas and assets that need to be broad in. that really is their primary objective to make sure they are not forgotten areas of the country, a smaller provider groups. that footprint is very much aimed at that. there is concern said nutrition aid for older americans is not enhanced along with others. i would say there are a variety of new strategy is for older americans but including the caregiver strategy and others which

have new funding in the budget, but i hear your concerns that this tough time we need to keep the seniors to rely on those programs in our sights. in terms of 2020, i will carry that suggestion to the doctor and have him follow up. i think that is very appropriate. he is much more intimate and the involved with the 500 recommendations and i think that is a great time to provide the input. the medicare extenders as i suggested, a senator, we do not feel we have this minister edith flexibility too merely push them down the line. as a talk about our strategies to hold the bills but that can only be done for a period of time i assume legislatively we could do some retroactive repayment but at this plant

the general counsel has looked at this carefully and feels we are in violation of the law if we ignore the deadline. >> thank you senator. also putting therapy caps in their jobs extender package. >> yes. wonderful. >> thank you, mr. chairman chairman and welcome madam secretary and thank you for your leadership on health care and health insurance reform. first, a key to the chairmen for working hard to helping change the way prepay physicians and i know we will do some things there which is very important part of this payment system does not work for a guy was

pleased to offer the legislation to repeal it i hope it ministration will work with us long term i appreciate your efforts to take the cost of prescription drugs out of that formula but i am hopeful he will look for other ways in which you can fundamentally change that. we change the incentives of health reform and if we can move them forward i think that is one of the of positive things i urge you to continue to work with us. >> and given the efforts in this area, and the uncertainty for providers and patients about the future of their medical care is undermining the confidence in a great health care system and i look forward to a long term fix to make sure we can live up to the trust we have

committed for medicare beneficiaries they will have a provider or services offered. >> one team to ask about the education which reno is so important three need to get more students and physicians into primary care and of course, that is another focus working on health care reform we know there is a broad primary-care crisis i want to know if we have hospitals that want to train more physicians in my state common made, florida, other places. they have been frustrated by the cms regulation on new programs and medicare graduate medical education program. unfortunately the process has changed i assure you are aware, but originally in the

balanced budget act of 1997, there was concern expressed of hospitals moving forward that would expand the residency program. cms initially allow them to qualify for residency under a cap and they created new programs identified those that would receive initial accreditation. it was a straightforward process. the end of august 2008 there was a new regulation that penalized programs that received in the initial accreditation. unfortunately it has resulted in revoking funding for programs that today are ready willing and able to go forward to be able to train primary-care physicians. in fact,, we have physicians

in michigan and who may close as a result of law -- lack of funding i'm asking if you will work with us to address the change that was made over one years ago and be able to allow hospitals to do with they have been authorized to do. >> august 2008 was a bit before my time. i would be glad to go back and revisit that and actually take a look at that with your staff. absolutely. >> i would briefly urge and ask about mental hurt -- health services one of the positive things we have done was to an accommodation include mental

health definitions on chronic care and prevention but yet we're seeing states may keen drastic cuts. what areas of the president's budget would could improve or expand on a critical health care services? >> this new regulations for the wellstone parity actor out and read the foreword to making sure they are in force around the country and as a result is a good effort we have a wonderful it is trader in the substance abuse and mental health area that comes from private-sector and public-sector experience and is already engaged been government efforts working on the defense department with homelessness for veteran's ailments with the department of housing on chronically homeless kids

and substance abuse services being critical intervention there are some exciting new studies about the ability to prevent a mentally ill this and work on preventative care. there are investments in the 2011 budget that adds services to community health clinics as have no mental health services in the past will now have been infusion of investment along with primary-care there are behavioral health services available. we're looking at areas across the government where we can actually make sure mental-health it is not a silo off to the side but a look at health care moving forward and a much more holistic approach. we have a significant dialogue under way with the agency for children and families believe that a lot

of the prevention of substance abuse starts at a very young age. to make sure we have those services available at headstart and early headstart. >> madame secretary, a lot of concern about fraud. medicare and medicaid and other programs administered by hhs. think you'd agree on the intuitive sense that there is a lot of waste and fraud. we just don't stop. this senator came to me with an interesting idea and is concerned about ways in the country generally and the remember a few months ago looking at the home health

care out liar payments in some counties is way above the instance of seniors. but his idea is free to take a page from credit-card companies. as a reno what they have put together is a very sophisticated algorithm. about credit-card holders just like to go. google knows what books you buy it and once you to buy similar books based on purchasing power but just as the credit-card company will notify you as a credit card holder if there is a church that is the outline your say it is in brazil.

>> i was here. >> did you make this charge? they asked if it is authorized turn not authorized but they know they have sophisticated computer systems so maybe we could do this with some other programs. that gets into prompt payment as a provider to be reimbursed but on the surface i think it has appealed. the senator said he called the credit-card company but it might not work here. but often the private sector comes up with pretty efficient ways to doing things. they have to compete. they have to worry about the bottom line. they are not a credit card company.

but anyway i was intrigued. >> i did have a conversation about this notion recently because we've set up our second strike force in florida and it is a hotbed of activities. . . a 10% of the patients getting home health

care live in the state of florida. 95 percent of the patients who have $100,000 or more in bill leyna of home health care live in florida. so we matched those quickly and kind of went after it but that's exactly the kind of when after but that is exactly the kind of -- i hope to learn what the credit cards are doing. >> i encourage you to pursue that. i know i am who being whom corny about this but it's taxpayers, we can stop a lot of this and enhance the credibility of the program. >> getting it in front of it is subsequently -- you bet. pay and chase isn't effective as trying to stop in the first place. >> finding ways to cut and run. basically good to outline, remind some of the bill

deliverable for health care reform. once it is best for several years. can you outline some of the fancy terms, early deliverable. islamic assuming the passage of health reform assumed in the year 2010 is anticipated that we would have states put together high risk pools to provide affordable coverage for the uninsured chronically ill folks often who don't have coverage and all right now. and number of the significant insurance reforms would occur, so that people would not any longer be able to eliminate insurance recovery for children with pre-existing conditions. they would have to be covered. you would have to removed the payment caps that currently interact cancer treatments and chronically ill services for people who have insurance

coverage. the children could stay on their parents policies, the 20 some things. i have to tell you the mother of a 25-year-old that is interesting to me. but until 26 or 27 you could be covered as a dependent under your parents coverage. we would begin to institute medical reason gauche for insurance companies say you know how much they are spending on benefits for patients and how much is going to overhead and ceo profits which right now is unable to be determined so preventive care what cease having copayments right away in 2010. >> so early deliverable. sprick absolutely and the fraud and abuse would start right away to crack down on the system. >> senator carper. >> it's good to be here. i apologize -- >> love to have you here. i had the pleasure of welcoming to delaware monday and number of

high school exchange students from countries all over the world. i was struck we have a q&a session in the senate, state sen at of the legislature and need to ask a lot of questions and one of the questions we got into was health care and they were curious about health care and health care reform and curious as to why we spend so much more money than any other country. there were curious why we don't get better results and there were three students from japan. a couple from okinawa, and they said we spend half as much as you do. about 16% of gdp, they spend about 8%, they said according to the different kind of measurements we have from wellness, polyphemus, life expectancy, infant mortality and so forth, they actually beat us hands down and spend half as much and cover everybody. they don't do it through a

socialist system. i think we have private insurance companies and private providers, but i was struck by that conversation. today i had come down to washington on the train as i do almost every morning during the week. the train goes by in newark delaware almost before you hit the maryland line and there's a chrysler plant, what used to be a chrysler plant. it's closed, and where 4,000 people used to work everyday. today nobody works there, and we are really concerned about trying to make sure people have a manufacturing jobs. can you help us and you may have already done this, connect the dots, why is affordable healthcare, quality health care, how does it connect with the need to create jobs, maintain and create a nurturing environment for creation and

preservation? >> welcome center, i think there is no question we spend almost twice as much and get worse health results than any other developed nation and part of it is we continue to pay more than anybody in the world for health issues that really don't result in people being healthier so we overpay for products and services, we pay for procedures and not for quote the outcome, which encourages i think more testing, more pro call and sometimes people would suggest even more hospitalizations but not necessarily, keeping people well in the first place. we've not invested as many people have in health and wellness and a large part of the health and wellness is a gap who has access to preventive health services, health home follow-up care so when we have 46 million

americans without health insurance at all they enter the health system and more serious shape and chronic conditions and use often emergency rooms as the least effective most expensive way to get health care treatment. some of it clearly has to do with diet. we don't eat nearly as much tuna as the japanese and that would probably make all of us a little healthier. but the jobs i think are directly related because the manufacturing sector has been the first to be absolutely uncompetitive in the global marketplace when chrysler was competing with companies around the world who were not layering on $3,000 in health care costs on every car sold were not trying to compete, as we have to get to a strategy where we have a healthier nation and more equitable share of health expenses paying for outcomes and

quality and finding ways to lower the deficit in the long run which will make us not only of the year and more prosperous but certainly more competitive. >> i think i've shared this before, back in the august september time i held a number of town hall meetings, different than i've ever held before, we did telephone telhami teams in the first week 4,000 people, the second week at 6,000 people on the call and i was struck by the hunger about what was going on, we were really doing. one of the aspects of the legislation that we passed is something designed to help better insure we go after fraud particularly with respect to medicare and medicaid in this provision in the bill supported buy certainly by senator baucus and senator wyden and all my colleagues the said we need to incentivize the states and previously the states had 60 days to identify fraud and collect the money and return half of it over to federal government. as a result dated almost none of

it and rather they couldn't do it in 60 days few of them could they just let it go and what we are doing under the legislation is saying you have a year to identify, go after the money, get it back insulate with federal government, that is on the legislation the senate passed. you have to hundred 50 million-dollar increase in additional resources to fight race in the peace in medicare and vindicate. would you talk about that because we all know it is huge out there and i think we are using private contractors to recover in three states in the last couple of years be fraudulently taken of medicare until $700 million last year alone by think we've taken that to all 50 states. can you talk about that and how these resources will help get back more money? >> welcome center, the president i think takes very seriously we would be good stewards of taxpayer dollars and certainly anyone stealing out of medicare or stealing from the seat partnership with medicaid is stealing taxpayer dollars and a

surprising the trust we have with seniors, so this budget has an 80% increase in resources, new data systems, new sharing with justice department that attorney general and i at the president's request are leading a joint justice hhs effort where we now have strike forces in severin different cities to try and model mix and a strong signal that we take this very seriously but have been enormously effective so far. this will give a much bigger footprint of around the country. we are sharing with chairman bachus data in real time watching billing practices and go after them. we are going to invest in estate partnerships at the mecca of level numbing having the footprints on the ground having u.s. attorneys as well as the state's attorney general who can be very aggressive partners in pursuing fraud is to the good and we know there's a huge

return. it's estimated to be anywhere from $2 back for every dollar we spend to $4 back which is what the attorney general says to every dollar we spend and so this is money that not only makes sure medicare and medicaid will be there long term, but also allows us to prosecute the criminals and prevent fraud in the first place. >> one of the things i was fascinated with my colleagues heard me say this before is how we harness economic forces and market forces to drive good public behavior and a good example of that is the medicaid deal. before that, before now even now under the current law because we haven't passed the senate passed a bill it hasn't been signed into law but even now states are not incentivized to go after the medicaid fraud -- part and? >> i want to give senator wyden the chance to. can i just close? if i may. >> there is i think a provision under the current law that says private citizens, healthcare

providers encouraged to report fraud and deceit in medicare they are encouraged to report, they don't have to but are encouraged to. one thing i would like to think about incentivizing behavior rather than say we encourage the report why don't we say we want you to -- expect you to but also say if you do just like we do with whistleblowers we incentivize whistle-blowers because we allow them to keep some percentage but what is recovered we may want to do that in terms of people that blow the whistle on medicare fraud and insure we incentivize them on just to do the right thing but if they do they will benefit from that financially. >> i think that is a great idea and we will take a look. we have a great sort of senior army that trains volunteers who then go to their friends at the meal sites and neighborhoods and they've become a tremendous sort of strike force. we figure we've got 20 million undercover cops on the ground and if there's anybody that takes stealing from medicare

seriously its those medicare beneficiaries who are very aggressive in their efforts and that has been a huge help to tipping us off to that billing practices to fraudulent activities to people who would steal on a whole host of issues. >> mr. chairman, thank you. senator wyden, think you for your patience with me. thanks. >> senator wyden. >> thank you. it's been a good hearing and we've gotten a lot out of it and i think you for having. >> we are going to do more. >> absolutely. madam secretary i want to ask about one other area, and that is an enormous amount of expense and frustration for the millions of people who use our health care system especially the providers and patients, is the staggering array of different billing systems that we have for american healthcare and as you

know, getting a standardized billing system has almost been the longest running battle since the trojan war. i was actually reading some history on this recently and one of your predecessors lewis solomon made this a top priority. this is a wonderful physician wanted to get done and here we are practically eons later still wrestling with this. i think would be helpful if he would do two things. one, get an update on where we are at this point in getting a standardized billing process and second, i am curious whether you all and your staff are taking a look at some of the efforts around the country that look like they are bearing fruit. the one that i've been interested in is minnesota. minnesota seems to have, with a standardized billing process and then it limits the insurance

companies from coming up with sort of exceptions which invariably jack up their rates and make things more complicated but start if you would buy giving almost a state of where we are in 2010 on getting a standardized billing process so that we end this bureaucratic water torture for the providers and the patience who constantly tell us about all of these forms and different people and the like. where are we today? >> senator, the good news is there is administrative simplification mandates in both the house and the senate health reform bills which i would suggest will greatly accelerate progress in this area absent some kind of a letter. it is a difficult task. it is one donner know personally well because i worked on it in

kansas and i think i am saved saying kansas now like minnesota is about to have a uniform billing system but it is not an easy -- everybody's fine with doing it wants to come to the table to talk about it as long as you use their system and as soon as you begin to deviate a little bit. i am convinced it is a huge cost saver and huge as you say torture saver for providers and patients and one that we have been anticipating, implementing through the health reform strategy because i think that that gives leverage to then have a congressional mandate and follow-ups and make sure we can get the providers. you need the providers and the payers of the table simultaneously to figure out the strategy of timetables that work but it's something that i take very seriously and look forward to working with you to

implement. >> i think the provisions in the legislation both the bills are good. what concerns me is absent the kind of leadership you are talking about will take another eight to ten years just working through those models and somebody else will be in your seat and will ask almost the same question. >> we don't intend to take that long, senator. the states are well ahead. some guy like that part. thank you, mr. chairman. >> thank you, senter. it's true. we hear all the time as do you that all the paper work, all of the forms, it is a mess. i remember three or four nights during the last health care reform era and just happened to go to a montana hospital one floor was filled with people doing paperwork. i went to canada to poke around,

was at the edmondson hospital. there were three people in the whole hospital much larger than the montana hospital doing paperwork, three people that is all there was and we all know about the administrative cost and the american system and in other countries. i urge you -- use of this. once and for all we are not talking about this all the time, and use it states are doing much better, find distinctive in the best job and if clearly we have to pass health care reform to make this happen because one's health care reform is passed it is quite force more simplification because more insurance companies are going to be forced to have quite as many different alternatives and options and co-payments and deductibles and existing conditions and all that stuff frankly. so i urge you to light a fire under people and lower the boom to get this done because we know

how bad it is and we know that american people are fed up with it rightly so is the question senter weidinger status, so i'm urging you in the strongest terms possible to get this done. we want to work with you. as a shared effort to hear. but we need to together and get it done so you need to tell us what you need whether it is legislation or what it is and i strongly urge you to do that. now i think we are getting health reform passed. i'm very confident we are going to pass the health reform this year. but i'm going to ask you this, if you could say on a body annual basis just to give a progress report on the standardized reforms and getting rid of a lot of this paperwork it would make a huge difference in the point is not to put you on the spot, the point is to let

us know what progress is so that together we can solve this. >> and senator, i think you made a big step -- one is paperwork and one is the numerous forms so electronic health records and the standardization as you launched in the recovery act will go a huge way down to eliminating a lot of the paperwork and standardizing operations and driving pravachol but that doesn't get rid of the 15 different if you fill them electronically it still drives the providers, as we have to do both simultaneously. >> but i personally want to quantify it. one of the major drivers and getting results in this quantified benchmark standards, quantifying numbers. how many forms, how many lines? all that kind of thing. >> a lot. a 30 cents out of every dollar we figure.

>> i'm urging you on a biannual basis to get back to us and with the benchmarks you're sitting up for yourself and the progress you are making or not making because it is something we just need to do. >> yes, sir. >> the second is waste fraud and abuse. a lot of countries here have been about waist up front and abuse. i would like you to again on a lot to be cut by in the basis quantify what you think your best guess as to what the waste is and all the programs in your jurisdiction, what the fraud is and i quantify abuse but you have to quantify it, the number of dollars. and then again we work together as we get improvement. i would like you to get a goal, zero is unattainable but if you could give a goal what percentage, by what date as in

benchmarks because that is how we are going to get results around here. it's one thing to talk about things and something else to quantify. with members because you understand numbers, and again we are working together on a six month basis and will be back here again i'm sure some time in the next couple or three years and we will have a chance to talk about this. but again we want to work with you. this is not to put you on the spot is to work together. >> i look forward to it. >> can i have a last point, i just want to come back to that point. we have a lot of federal property that we don't use in our inventory and senator baucus knows we are trying to confirm an administrator for the general service administration that manages thousands of federal properties across the country. but we have a lot of them that are vacant or are underutilized, we pay security, all kind of

other costs that relate to the facilities. when agencies want to -- if they want to sell the money to suppress them or fix them up and then the property is sold the agency doesn't get any money back, any money to pay the costs were fixed up costs. they don't get money back to help underwrite the cost some of the programs so as a result we and carrying on our books not just hundreds but thousands of properties which are trained under treasury. at least one agency has figured out how to use market forces. we incentivize the veterans administration. we allow them to keep 20% of the proceeds, the properties they sell and to use that to pay for the fixed costs and use that to also go into their programs to help supplement the appropriated funds. that is the kind of thing i think we need to be doing more of and i learned all of that stuff and you probably did, too and we need to put more of those

-- there you go. thanks very much. >> i would encourage you to break it out according to major categories in the department so forth so it's not just across the number. the tyranny of averages sometimes prevents the effectiveness. i don't want you to overdo it but figure out some reasonable way to segment each, how much risk departments, fraud, which departments had waste and so forth and just break it down a little bit and and manageable way. thank you. >> sounds reasonable. thank you. >> i appreciate you taking the time to talk to us because -- >> i look forward to working with you. >> we have a lot things we need to do. >> absolutely. >> thank you. the hearing is adjourned. [inaudible conversations]

[inaudible conversations]

special representative to afghanistan and pakistan richard holbrooke today condemned an attack in pakistan that killed three u.s. military employees. eckert he was joined by agriculture secretary tom vilsack foie on agriculture assistance programs in pakistan.

this is half an hour. [inaudible conversations] >> the entry of journalists to get up at 9:45 in the morning in the unheard of power in your profession. good morning and welcome to the department of state. we had promised last month when secretary of agriculture tom vilsack visited with you prior to his trip to afghanistan that we would bring him back to report on what he's seen and progress in developing, redeveloping the agricultural sector of afghanistan as a critical part of the administration's strategy and president karzai strategy for the future of the country. so we have him back with us today along with our special

representative the intrepid indomitable richard holbrooke was going to start and kind of put the agriculture strategy in the largest context first. richard? >> this is the agriculture's chance as we promised to report on this trip and i just want to give you the overarching view but before i do that i want to say a word about the reasons in pakistan this morning as i'm sure you all know three americans were killed, two were wounded, not like threatening, they've been evacuated to islamabad, there were two military said three military. they were on their way to the inauguration of the girls school in the western area of pakistan obviously great tragedy and we are deeply regretful of the loss of life and we are in contact

with the embassy and talk to ambassador this morning castillo's and ollie eda and we just want to let you know about that. spoken the two different military from different parts of the military advisory groups that we had in islamabad and i don't even know the exact designations. american military personnel in pakistan had trained in the frontier of the corsi that's very sad. the ambassador does not think they were directly targeted but that is my only source of

information. >> has there been any kind of responsibility? bulkeley disclosed as we always do. there is nothing secret about the presence there. >> to clarify again there were three killed who were members of

the military. >> and two injured. >> who were members of the military or not? >> i think the two injured were also military. is that right? >> so five members of the military, two were injured? okay. >> this was an lower dir and it is revealing they were on their way to the school. that is what americans do. it was a girl's school. that is what americans try to do. and ever since i joined the surface we have had people who have given their lives in the cause that we believe in. and that is a very good segue into secretary vilsack because one of the most moving moments of his trip which he will describe which you was setting up a memorial to the u.s. the board of agriculture employee who was killed. this trip represents a very big

step forward in the furtherance what is our number one on security priority in afghanistan. and when i say non-security went put in quotes because of course agriculture and security are integrally related in a country which is 80% agricultural. our goal is nothing less than to help afghanistan restore its agricultural sector to the vibrant export economy that it once had and which was progressively destroyed starting in 1978 that this wasn't undertaken earlier a mystery to us that we elevated the agriculture to the top of our priority list. as you all know ended u.s. support for the popular in ratification the secretary will speak about the relationship between those two items in a minute. secretary clinton and i are

enormously grateful. the secretary vilsack took time from a very demanding schedule to make this trip. there will be more efforts. he will outline some of the goals. one of the most important we have for this year is to help the afghans stand-up the agricultural credit bank, an institution which was created in the 1960's and destroyed in the 70's and 80's and 90's but i will leave the rest of it to the secretary and with my appreciation again, tom, thank you for doing this. >> good morning to everyone. i want to thank the ambassador for the opportunity to spend a few days in afghanistan. there is so much written about afghanistan that is focused on sort of the negative aspects of the challenges in afghanistan that hopefully this is a report that reflects on what's happening in a positive way. the purpose of the trip was to spend a good deal of time with

minister rahimi who is the agricultural minister in an effort to determine whether or not progress was being made in afghanistan as the investor indicated this is our number one priority for non-security standpoint and it's clear agriculture is critical afghans either make their living or livelihoods' from agriculture or something connected to agriculture so it is important and their love for this country to spend time and resources to try to help the afghan agricultural opportunity. i want to say that we'd see this in the context of an afghan-led effort. it's important and necessary to know precisely what the afghans expect and want and for us to parallel our efforts and to cooperate with them. so we were very pleased with minister rahimi after he was

confirmed as a initial member of president karzai's cabinet that he paid for with a framework for progress and afghan eckert culture and it is an important framework. most importantly of all of the four in my view is the need to increase productivity among the afghans. i think that he recognizes and appreciates there is tremendous opportunity but it is necessary for the afghan agriculture to take a step forward in terms of productivity and we saw examples of u.s. assistance in that regard. i met with u.s. agricultural representatives working with a great farmers for example in afghanistan who are working on tresstling. steps toward increasing the size of the grapes and the quantity and quality of grapes. this is important because at one point in time afghan grapes were sought after in the asian market and this represents a tremendous export opportunities and

potential. the second aspect that once productivity is increased as the need to reinvigorate the afghan agribusiness, to get supply chain in place to allow the domestic needs to be met and the same time to create export opportunities. probably the most significant step that has been taken recently is the establishment of a juice factory in kabul. this takes apples and, grants on contracts with farmers over 50,000 farmers, contract with this particular juice factory. they take the fruit and they basically create concentrate which is an export all over the world. it employs 300 people for nine months and they have a vision of expanding this facility with the assistance of usaid and usda to replace where the individual juice cartons can be developed toward the afghan market itself which could be on hundred

million dollar market. this was a very interesting opportunity for me to also meet with afghan farmers currently contracting with this juice factory. they like the idea they've got forward contracting opportunities and they like the idea they've already essentially presold their crops for the next several years. it was an interesting opportunity for me to talk to afghan farmers and realize farmers in afghanistan are not a whole lot different than farmers in america and when we had the opportunity to visit with these folks one of the farmers said you're not doing enough, you're not doing enough, you never help us. i turned around and said this factory right here behind me? we just helped build that and that factory is buying your fruit and he says well i guess that is help. [laughter] some things are not different, you know, sometimes you have to point things out to folks but there was i think a recognition and understanding the government was attempting to create opportunities for these afghan farmers and reinvigorating the

agribusiness is an important part of the strategy. the third strategy has to do with commitment to renew their natural resources. for far too long, they have been in a deforestation mode. millions of trees have been cut down in afghanistan. that impact is not just the afghan landscape but it also impacts the capacity to preserve and conserve water which is an extraordinarily important component to the agriculture obviously. i met with usda and representatives they're working with afghan you -- youth to plant thousands of trees in the country, recognizing the importance of restoring those natural resources. and finally, the last piece of the framework is a reflection of the need to bolster the ministry itself. minister rahimi appreciate and understand there are serious challenges within the structure of his ministry. so he has embarked on a change

management effort which we are facilitating. during the course of my visit we made an announcement of an additional $20 million of assistance and help as part of the change management effort. we are also detailing specific experts and specific areas of this framework to work with the minister in the capitol and the ministry so that he is more free or a freer to travel around the country to talk to his farmers. we saw in helmand province a tremendous example of the importance of his getting out and visiting with afghan farmers. this was a very significant is it to a part of the country that a year ago may not have been possible but we spoke with afghan farmers now planting wheat instead of poppy and the reason they're doing that is because with the assistance of the united states government the afghan government is providing

incentives for wheat production and i think it's important to recognize when afghan farmers make the decision to produce poppy they do so because there are certain incentives built into that crop. the incentives involved providing input costs in advance and the delivery of the crop and so the challenge for the afghan and for us is to figure out strategies and structures that will replace those incentives for legitimate crops. so when we provided wheat, seed and fertilizer at reduced cost afghan farmers responded and the poppy production and profit was reduced by one-third in a single year. now we want to work with this and to diversify the crops to focus not just on stable crops but also cash crops which will create export opportunities. there are several challenges that we will need to be addressed. the ambassador focused on one of them which is very significant.

the need to establish a formal list credit process that will take obviously time but it is clear the need some kind of credit bank long-term financing and structure that will guarantee afghan farmers the capacity and resources to put across on the ground. in the meantime we will continue to work with vouchers and other smaller techniques to encourage crop production. we will need to continue to work in a formalized way to help with irrigation issues. the irrigation systems were destroyed during the conflicts of previous conflicts and we are in the process of focusing on farm and regional issues and irrigation issues. we will continue to work hard to create an extension presence. i think one of the challenges we identified and mr. rahimi identified was the fact that there needs to be people on the ground, afghans on the ground providing technical assistance and help, and i think that was

underscored in deficit for the folks basically said we need more people on the ground here helping us making decisions. they are favorably inclined to the model we have in the united states and which we often take for granted. the capacity to get technical assistance to the farmer on farm. i think there's also challenges with reference to trade, the need for continued promotion of trade opportunities in all parts of central asia. i will tell you that i was impressed with the commitment of the people from usda. the ambassador mentioned the memorial service we had four tom stephanie. he was a forester who was killed in afghanistan as a result of an explosive device. his only goal was to try to make a difference. his only goal was to help people understand the importance of trees and forestry.

he was beloved by the people that were there. we had a substantial outpouring of support for the award we have established in his name to reflect there are many different uniforms being war in afghanistan and all the people that service in uniform regardless whether it is the four service uniform or the usda or the military uniform, put themselves on the line to make a difference and they understand and appreciate the importance not just of the people of afghanistan but also the people of the united states to this effort and we are extraordinarily proud of our usda presence which will grow over the course of time. we anticipate by the end of this month to have as many as 64 usda workers, and as the process print sap we would expect and hope we will be able to contribute more. it's important to parallel our increase commitment with an

increase dustin commitment -- increase afghan commitment. of the last thing i will say is i've been. pressed with minister rahimi in his commitment when he was addressing the parliament before his confirmation. he said two things which i think are important. one is he said he would always tell the truth even if a was a hard truth. i saw its sales of that where he acknowledged publicly weaknesses and challenges of his ministry. that isn't often -- you don't often see that. he also said he would root out corruption and he is true to that as well. when he understands there's a limited period in time that this has to work and he is committed to making it happen. with that i would be happy to respond to questions. >> how big a role is this current plan their reintegration plan and seeing agriculture is the key ministry for most afghans and what sort of money are you setting aside from that

and if i might ask is there any movement on the transit agreement with pakistan because that is key in terms of opening up markets with india. >> i will let the ambassador respond to the trade issue because he probably has more information than i do. i think it's fair to say when 80% of the afghan livelihood and income is connected in some form to eckert culture the key strategy to getting stability within the economy is a strong and strengthen agriculture. that involves farmers being encouraged to produce the right kind of crops and diversification of the crops will just focusing on stable crops but also cash crops. we showed a chart which was i think very instructive as you know the value of some of those additional cash crops can be substantially higher than poppy and opium production, since the first step to read this second step in doing that after

recognize the challenge the farce base mother is irrigation or storage facilities and things of that nature which is why we have people on the ground trying to respond to those individual challenges. it's also important is that the supply chain which is why it is reinvigorating agribusiness become so important. there has to be a market and the market has to be visible to and whether it is domestic or foreign and i think it's important and necessary for ministers rahimi in particular to focus on those and then go out into the countryside and show examples where this has worked. this is a big country. pockets of farmers in a variety of different locations. it's not necessarily true the understand or appreciate the juice's factory is being set up and there are markets for thousands of farmers. they may not know about the progress that's been made in the helmand province in terms of cash and stable crops. and so it's important for us to get people in the ministry that will free up the minister to be

about to go out and talk about the progress. >> have in the agriculture job search you think you might be a will to create with the reintegration? >> if you look at the juice's factory that is an example. you've got 300 jobs now and they are just getting started. if they can tap the hundred million dollar market of juice containers for afghans, i mean the sky is the limit. when you talk about storage facilities, processing facilities, where housing facilities the sky is the limit and when you open trade opportunities then there is the whole series of transportation jobs, marketing jobs, regulatory structures. it is virtually unlimited which is why it is important. >> your question is very important the reintegration program as a separate. but in my view, this program is a reintegration program but we are not going to call it that.

this is a rebuilding agriculture program but if it works, we will help the afghans create a very large number of jobs. we had a rough estimate last year that there was a potential to create a million jobs but it is so rough that would be misleading to turn that into a hard hat lying. but if the agricultural export markets open up and it creates all the secondary jobs on the markets and road-building and so on as the secretary said the sky seems to be the limit. at all the programs in the united states supported in afghanistan in the years since this administration took over this has been the most popular and it has the highest and the quickest impact, and it is also the one most enthusiastically supported by general mcchrystal and his people spending

additional money to support agriculture. in fact there was even a creative tension about whether you want the money to immediately get out or whether you want to district through the existing system to beat joe quinn r. dee article for "time" magazine that discussed the issue and back about ten months ago the issue be identified as their pupils the indians have a large program, the e.u. is upgrading. this is a big push and very glad you asked the question because people rarely make the connection that of course there's a connection. it is classic counterinsurgency. it is good in its own right. it is going to help tonight the taliban a pool of alienated youth who go out and get paid to

shoot if there is a family plot, family pressures will be the work on the farms at least during the appropriate seasons so it is enormously important. on the trade transit the negotiations are continuing. there was another round recently, secretary clinton and i talked about this last night. we are down to one or two issues but they are very complicated and involve the equity and politics of both afghanistan and pakistan. i'm not up to speed on the exact standing today so i would rather not get into details but we are continuing to work on this very actively and it was a subject of discussion in london also. >> is there another plan? the last one you are referring to is in dubai.

is there another planned after that? >> yes -- >> can i pick up -- >> on a follow-up to the previous answer is there any push back yet from the taliban of the programs you are doing, have you seen that yet? >> they are preemptively attacking the reintegration program. they started before london. i think they are clearly rattled by this. it proposes a direct threat to them and they know it. and that i think you can see if he read the reports. on agriculture, i don't think they have attacked agriculture directly because that would not be a very popular move but i may be wrong on that. >> i was going to that there is interesting conversation we had with local officials. the difference between the marine presence and taliban presence in that area local leaders suggested when the

taliban had control there was forced labor and the wood extracted youngsters and make them work. when the marines came in the marines were not interested in forcing anything they were in force in and helping and in fact that is precisely what they are doing. in addition to the usda presence in agriculture we also have these enormously important and popular eckert culture development teams within the national guard units that are working extremely hard to provide assistance and help so i think we are putting a different face on this and i think with the response to the challenges and incentives that are inherent in the poppy production i think the afghans are finally seeing there is a strategy that gets them to producing a legitimate crops and crops that can actually be far more profitable for afghans and poppy production. so i think this is where to be very successful first step. >> on the link between that was

mentioned and ambassador holbrooke did as well between the reintegration brand importance of agriculture where do you expect most of the success to come from? to you expected to be drying up of the pool you mentioned or are you hoping hard-core taliban now will be beating their ied? where does it come from? is it the disaffected youth who are not going to join in the first place because they might have a job or is it the existing bad guys? >> our effort is trying to speak to the people in the middle of all of this. his only thought is how we take care of my family, how dwight take care of myself and the taliban as long as there is opium production have a look on

those folks, ability to control their livelihood. given the choice, they don't want that choice. they would prefer another alternative. they would prefer to be to produce wheat or, grant is dee dee de , pomegrantes to read these people are making a rational decision and when we come with a credit system, when we come with a supply chain and reinvigorated agribusiness and incentives to encourage them to plant different crops and we provide assistance to make those more productive, all of a sudden they see the potential to make more money. and they are more inclined to make that choice and reject the taliban savitt taliban have no place to go. >> so you are not hoping that this is going to convert a hard core fighter? >> the goal is not to convert

hard core leadership. >> can you go to the podium? >> i'm sorry. this is such an important issue and i glad you raised it. helping agriculture is good in itself but it's also a core part of a coherent counterinsurgency strategy in afghanistan. and i am sorry, stan, mcchrystal isn't here to join but he believes as deeply as anyone and i know you talked to the command about this. if this program succeeds and is right now our most successful civilian program already ended just started this is going to hurt the taliban. no question about it. but unlike free integration which they can attack it's harder to attack this one because the country is an

agricultural country and how do you attack programs that give people seed and fertilizer and market access the? so this is why we are back at the podium for the second time in a month and why i hope secretary vilsack will be able to continue bringing the public attention to this and this is why we are trying to stand up the credit bank which the secretary can explain better than i as indispensable. is this going to take the leaders of the supreme shore and bring them round? of course not. it's when to isolate them more in the classic problems and will join at this world. >> to put a freeze on it, from my discussions with regular afghans i think they would much rather be farmers than fighters. >> time for one more. >> do you have full confidence

in the national government to deliver the key health and resources and everything that you give them to give the afghan farmers or do you deal with the farmers through the counsel's directly because this is a huge issue for the farmers themselves. >> i don't think it is either or. i think you have to have both, a functioning minister and national government committed to this and i got this sense from my discussions with president karzai, mr. rahimi and others that there is indeed a recognition of importance of the frame work and commitment to the framework and willingness to work within the framework. i think that minister rahimi if he were here would recognize it will work unless you have folks on the ground working with afghan farmers on a daily basis providing technical assistance and help the need to become more productive to establish storage facilities to deal with irrigation challenges and understand the new credit opportunities that we are going to try to create. so it isn't an either or situation. to have to have both which it in the framework the minister has

put forward recognizes that. it is very comprehensive and it is very well thought out. now what he needs is the capacity and the ministry that will allow him to go outside, visit with afghan farmers on the ground and basically say this is what we are doing for you. this is where it has been successful and this is what it can do for you if you having yet implemented this. this is what we are working on. the politics of agriculture are important here. and he just hasn't had the time to commit to the politics and our hope is by the support and assistance we are providing that he will feel more comfortable to do that. >> last one very quick. >> secretary vilsack you have a monetary value how much the u.s. is putting in these incentives and then if i could ask ambassador holbrooke also to just give a little bit more clarity on your comments about the taliban preemptively attacking the reintegration, can you give some specific examples about those attacks? >> i would love to be able to