homes, markets, schools, volleyball games, churches, mosques, synagogues, temples. from iraq to pakistan and afghanistan, to nigeria and the middle east. religion is used as a club to deny the human rights of girls and women from the gulf to africa to asia and to discriminate even advocating the execution of gays and lesbians. religion is used to enshrine in law intolerance of free expression and peaceful protest. iran is now detaining and executing people under a new crime, waging war against god. that seems to be a rather dramatic identity crisis. so in the obama administration we are working to bridge

religious divides, we're taking on violations of human rights perpetrated in the name of religion, and we invite members of congress and clergy and active citizens like all of you here to join us. ..

>> every time i travel, i raise the plight of girls and women. and make it clear that we expect to see changes, and i recently called president must dominate the lives known through the prayer breakfast and expressed the strongest concerns about a law being considered in the parliament of uganda. we are committed, not only to reaching out and speaking up, about the perversion of religion and in particularly, the use of it to promote and justify terrorism. but also seeking to find common ground. we are working with muslim nations to come up with an appropriate way of demonstrating criticism of religious intolerance without stepping

over into the area of freedom of religion, or non-religion and expression. so there is much to be done, and there is a lot of challenging opportunities for each of us as we leave this prayer breakfast, this 58 prayer breakfast. in 1975, my husband and i thought gotten married in october, and we were both teaching at the university of arkansas law school and beautiful fayetteville, arkansas. we got married on a saturday and we went back to work on a monday. so around christmastime, we decide that we should go somewhere, celebrate, take a honeymoon. and my late father said, well, that's a great idea. will calm, too. [laughter] >> and indeed, bill and i and my entire family --

[laughter] >> went to acapulco. we had a great time. it wasn't exactly a honeymoon. so when we got back, bill was talking to one of his friends who was then working in haiti, and his friend said, why don't you come see me? this is the most interesting country. , and take some time. so indeed, we did. so we were there over the new year's holiday. and i remember visiting the cathedral in port-au-prince. in the midst of at that time so much fear from the regime and so much poverty, there was this cathedral that had stood there and served as a beacon of hope and faith. after the earthquake, i was looking at some of our pictures from the disaster, and i saw the total distraction of the

cathedral. it was just a heart rending moment. and yet, you i also saw men and women helping one another, digging through the rubble, dancing and singing in the makeshift communities that they were building up you. and i thought again, as the scripture reminds us, though the mountains be shaken and the hills be removed, yet my unfailing love for you will not be shaken, nor my covenant of peace be removed. as the memory of this crisis fades, as the news cameras move on to the next very dramatic incident, let us pray that we can sustain the force and the feeling that we find in our hearts and in our faith in the aftermath of such tragedies. let us pray that we will all

continue to be our brothers and sisters keepers. let us pray that i made our differences we can continue to see the power of faith. not only to make us all as individuals, to provide personal salvation, but to make us a greater whole. and a greater force for good on half of all creation. so let us do all the good we can buy all the means we can hear in all the ways we can and all the places we can, to all the people we can, as long as ever we can. god bless you. [applause]

>> thank you, secretary clinton, for your words of inspiration and for the magnificent job you do as the secretary of state for our nation. i now have the high honor and distinct privilege of introducing the president of the united states. that is no easy task. have you ever tried introducing someone who is known to everybody on the planet? it's hard to find something unique and inspirational. everyone knows of the historic impact of barack obama's election to the presidency of the united states. we all marvel at his oratorical skills and his ability to do medicaid and we all know his energy is boundless. we also know that his audacity of hope has given hope to millions of people around the world to aspire to the highest achievement in their life. but it was his state of union that inspired me is what i would

say, because i listen when he asked us to seek those things that we have in common, not those things that divide us. and then i realized it, mr. president, you and i share one unique characteristic in common. we married way over our heads. [laughter] [applause] >> with a magnificent first lady like michelle obama, i felt it only appropriate that i would introduce you today, sir, as the husband of the dynamic first lady of the united states of america, president barack obama. [applause] >> thank you. thank you very much. thank you. thank you very much. please, be seated. thank you so much.

heads of state, cabinet members, my outstanding vice president, members of congress, religious leaders, distinguished guests, admiral mullen, it's good to see all of you. let me begin by acknowledging the cochairs of this breakfast, senators klobuchar who embodies a sense of fellowship at the heart of this gathering, two of my favorite subjects. let me also acknowledge the director of my faith-based office, joshua devoids who is here. where is he? he is here somewhere. he is doing great work. i want to commend secretary hillary clinton on her outstanding remarks, and her

outstanding leadership at the state department. she's doing good every day. [applause] >> i am especially pleased to see my dear friend prime minister, and i want him to relay america's greetings to the people of spain. and johnny, you're right, i am deeply blessed and i thank god everyday for being married to michelle obama. [applause] >> i am privileged to join you once again. as my predecessors have for over half a century. and to like them i come here to speak about the ways my faith in forms ym. as a president, and as a person. but i'm also here for the same reason that all of your.

for we all share a recognition, one as old as time. that a willingness to believe, and openness to grace, a commitment to prayer can bring substance to our lives. there is, of course, a need for prayer even in times of joy and peace and in prosperity. perhaps especially in such times where is needed to guard against pride and to guard against complacency. but rightly or wrongly, most of us are inclined to seek out the divine, not in the moment when the lord makes his face shine upon us, but in moments when god's grace can seem farthest away. last month, god's grace, god's

mercy seemed far away from our neighbors in haiti. and yet i believe that grace was not absent in the midst of tragedy. the hymns and prayers that broke the silence of an earthquakes way, it was witness among parishioners and churches that stood no more, roadside congregation holding bibles in their laps. it was felt in the presence of relief workers and medics, translators, servicemen and women bringing food and water and aid to the injured. one such translator was an american of haitian descent, representative of the extraordinary work that our men and women in uniform do all around the world. navy cordesman christian bechard. lying on a gurney aboard the

u.s., a woman asked christopher, where do you come from? what country? after my operation, she said, i will pray for that country. and in cruel, he responded the united states of america. god's grace, and the compassion and decency of the american people is expressed through the men and women like carmen wishart. it is expressed to the efforts of our armed forces, through the efforts of our entire governme government. through similar efforts of spain and other countries around the world. it's also as secretary clinton said expressed through multiple faith-based efforts. by evangelicals, by the american

jewish world service, by hindu temples and mainland protestant, catholic relief services, african-american churches, the united states. by americans of every faith and no faith, uniting around a common purpose, a higher purpose. it's inspiring. this is what we do as americans in times of trouble. we unite, recognizing that such crises call on all of us to act, recognizing that there but for the grace of god go us. recognizing that life's most sacred responsibility, one of firm as henry said, by all of the worlds great religions, is to sacrifice something of ourselves for a person in need.

sadly though, that spirit is too often absent when tackling the long-term. but no less profound issues facing our country and the world. too often, that spirit is missing without the spectacular tragedy, 9/11, or katrina, or earthquake or some non-these. that can shake us out of complacency. we become numb to the day-to-day crises, the slow-moving tragedies of children without food and men without children and families without health care. we have become absorbed with her abstract arguments, our ideological disputes, our contest for power. and in this power of babel, we lose the sound of god's voice. now for those of us here in

washington, let's acknowledge that democracy has always been messy and let's not be overly nostalgic. the visions are hardly new in this country. arguments about the proper rule of government, the relationship between liberty and equality, our obligations to our fellow citizens, these things have been with us since our founding. and i'm profoundly mindful that our loyal opposition, vigorous back and forth, skepticism of power, all that is what makes our democracy work. and we've seen actually some improvement in some circumstances. we haven't seen any canes on the floor of the senate anytime recently. [laughter] >> so we shouldn't over romanticize the past. but there is a sense that something is different now. that something is broken.

that those of us in washington are not serving the people as well as we should. at times, it seems like we're unable to listen to one another. to have that once a serious and civil debate. and this emotion of civility in the public square so division and mistrust among our citizens that poisons the well of public opinion. it leaves each side little room to negotiate with the other. it makes politics and all or nothing for, where one side is either always right or always wrong when in reality neither side has a monopoly on the truth. and then we lose sight of the children without hope and the men without shelter, and the families without health care.

and powered by faith, consistently, prayerfully, we need to fight our way back to civility. that begins with stepping out of our comfort zones in an effort to bridge divisions. we see that in many conservative pastors who are helping lead the way to fix our broken immigration system. it's not what would be expected from them, and yet they recognize in those immigrant families the face of god. we see that in the evangelical leaders who are rallying their congregations to protect our planet. we see it in increasing recognition among progressives, that government can't solve all of our problems. talking about values like responsible fatherhood and helping marriage, are integral

to any antipoverty agenda. stretching out our dogmas, our prescribed roles along the political spectrum, that can help us regain a sense of civility. civility also requires relearning how to disagree without being disagreeable. understanding, as president said, that civility is not a sign of weakness, now i am the first to confess i am not always right. michelle will testify to that. [laughter] >> but surely, you can question my policies without questioning my faith. or for that matter, my citizenship. [laughter] [applause]

>> challenging each other's ideas can renew our democracy, but when we challenge each other's motives, they become harder to see what we hold in common. we forget that we share at some deep level the same dreams. even when we don't share the same plans on how to fulfill them. we may disagree about the best way to reform our health care system, but surely we can agree that no one ought to go broke when they get sick in the richest nation on earth. we can take different approaches to ending inequality, but surely we can agree on the left our children out of interest, to lift our neighbors out of poverty. we may disagree about gay marriage, but surely we can agree that it is unconscionable to target gays and lesbians for who they are, whether it is here in the united states or, as hillary mentioned, more

extremely in odious laws that are being proposed most recently in uganda. surely, we can agree to find common ground when possible, parting ways when necessary, but in doing so, let us be guided by our faith. and by prayer. for while prayer camp bucca's up while we are down, keep us calm in a storm, prayer can stiffened our spines to surmount an obstacle, and i assure you, i am praying a lot these days. [laughter] >> prayer can also do something else. it can touch our hearts with humility. it can fill us with a spirit of brotherhood. it can remind us that each of us are children of an awesome and loving god.

through faith, but not through faith alone, we can unite people to serve the common good. and that's why my office in faith-based neighborhood partnerships has been working so hard since i announce it here last year. we slash red tape and build effective partnerships in a range of uses a from promoting fatherhood to here at home, to spearheading interfaith cooperation a broad. and through that office, we'll turn the faith-based initiative around to find common ground among people of all beliefs. allowing them to make an impact in a way that a civil and respectful and focus on what matters most. it is the spirit of civility that we are called to take up when we leave here today. that's what i am praying for. i know in difficult times like these, when people are frustrated, went behind and start shouting and politicians start calling each other's

names, they can seem like a return to civility is not possible. like the very idea is a relic of some bygone era. the word itself seems quaint. civility. but to let us remember those who came before us. those who believe in the brotherhood of man, even when such a faith, remember dr. martin luther king, not long after an explosion ripped through his front porch, his wife and infant daughter inside, he rose to the poll but in montgomery and said, love is the only force capable of transforming an enemy into a friend. in the eyes of those who denied his humanity, he saw the face of god. remember abraham lincoln. on the eve of the civil war, with a state seceding and forces gathering with a nation divided, half slave and half free, he

rose to deliver his first a nod to i said, we are not enemies, but friends. no passion may have strained, it must not break our bonds of affection. even in the eyes of confederate soldiers, he saw the faith of god. remember, whose christian faith led him to seek slavery abolition in britain. he was vilified to ride his attacks, but he called for lessening prejudices and conciliating goodwill. and thereby, making way for the less obstructed progress of truth. in the eyes of those who sought to silence and nations conscience, he saw the face of god. yes, there are crimes of conscious that call us to action. yes, there are causes that move our hearts and defenses best year our souls.

the progress doesn't come when we demonize opponents. it's not born in righteous fight. progress comes when we open our hearts, when we extend our hands, when we recognize our common humanity. progress comes when we look into the eyes of another and see the face of god. that we might do so, that we will do so. all the time, not just some of the time. it is my fervent prayer for our nation and the world. thank you. god bless you, and god bless the united states of america. [applause]

[applause] [applause] >> thank you so much, mr. president, for your leadership and your words of faith. we are now in for a magnificent treat. ralph freeman founded the song servant ministries years ago, has sung on condoms around the world and throughout the united states, and has dedicated his adult life -- [applause[inaudible]

>> there we go. thank you. ladies angela, mr. rolf freeman. [applause] ♪ ♪

♪ ♪ ♪ ♪ musi mesic ♪ ♪ ♪

♪ ♪ ♪ ♪ ♪ ♪

♪ ♪ ♪ ♪ ♪

♪ bee ♪ ♪ ♪ ♪ ♪

[applause] [applause] [applause] >> and that's the national prayer breakfast, an annual event established in 1953. it's organized by christian group known as the fellowship foundation. and now we are live at the u.s. capitol for senate gallery waiting to hear from the majority leader, harry b. is expected to talk about the

senate agenda for 2010, including job creation efforts. the democrats meeting yesterday with president obama. it should get underway shortly. that meeting, by the way, lasted an hour and a half or so. you can take a look at that online, as well as the meeting between the president and house republicans last friday. that's online at c-span.org. we are live waiting to hear from the majority leader. [inaudible conversations] [inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations] >> this is the u.s. senate radio television gallery, waiting for majority leader harry reid to come out to talk about the senate's agenda, job creations and their meeting yesterday with president obama, the democrats met yesterday at the new zen. the senate itself o.b. and at noon each and. a couple of other live events

we're covering today. just underway, a hearing on the proposed merger between comcast and nbc universal. that is underway now. you can follow that on c-span3. also online at c-span.org. later here on c-span2, of look at the travel policies of the department of homeland security. travel expenses. that should get underway about 10 a.m. eastern following this news conference. we will have that live for you here on c-span2. just a note about that during this morning on the proposed nbc comcast merger, later today we'll be covering the senate side of the. senate judiciary subcommittee on that. that will be available online only later on today about 230 eastern. that is scheduled to get underway's. so we're covering the house hearing on nbc-comcast c-span3 and later online at c-span.org.

[inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] >> here on c-span2, waiting for the start of a news conference with senate majority leader harry reid. the senate itself comes in at noon eastern today here on c-span2, to resume debate on the

nomination of patricia smith to be the solicitor for the labor department. over in the u.s. house, they come in at 10 this morning, and they will finish up work on cybersecurity bill, a cybersecurity enhancement act, and also are likely to work on raising the federal debt limit the 14th billion dollars. and that is expected later on today. the house is live on c-span, of course. and the senate here on c-span2. [inaudible conversations] [inaudible conversations] >> good morning. big crowd today. must be good weather. and tomorrow, forget it. >> a big moment and you're talking about the weather? >> i will let my friend at the local news channel talk about the weather.

the super bowl is this weekend. guinea pigs? [laughter] >> -- any pics? [inaudible conversations] [inaudible conversations] [inaudible conversations]

[inaudible conversations] >> we are expecting to hear from senate majority leader harry reid momentarily on the senate agenda, including jobs and health care. and they are meeting with president obama. just to let you know about our weekend coverage, we are going to be covering some events at the first national tea party convention. it's taking place in nashville that and our coverage this weekend will include friday night from nine to 10 eastern during the day on saturday, and also coverage of former governor sarah palin speaking to the convention saturday night, now scheduled for 9 p.m. eastern. coverage this weekend is going to be on c-span. if you would like updates on those times, you can check on her website later as the times become more from. c-span.org. [inaudible conversations] [inaudible conversations]

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

[inaudible conversations] [inaudible conversations] [inaudible conversations] >> senate majority leader harry reid coming out shortly to speak at the senate radio tv gallery. as you can see, a lot of reporters gathered. he will be talking about the agenda, and in particular jobs

legislation. going on at this hour, a hearing under way looking at the proposed merger between comcast and nbc universal. the ceos of those two corporations are among those who will be testifying before the committee. the subcommittee on communications and the internet. live now on c-span3. here on c-span2, once this news conference with harry reid is over, we will take you to a hearing looking at the department of homeland security travel policies. that is scheduled to get underway 10 a.m. eastern. we will do this first and join that in progress most likely coming up this morning. [inaudible conversations] [inaudible conversations]

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

>> harry reid coming out shortly to talk about the senate agenda. we will stay here live on c-span2. coming up on c-span3 this afternoon at 1 p.m., secretary gary locke associate press reporting this morning the white house want to double exports in the coming five years. and that secretary locke was outlined today how that's going to happen. the ap writes the president's national export initiative will target three key areas, expanding trade advocacy, and improving access to credit, especially for small and medium-sized businesses, and rigorously enforcing international trade laws. the governmentwide strategy will be coordinate at the cabinet level, and again, secretary locke is set to tell that to the national press club today. watch that live, 1 p.m. eastern on c-span3. [inaudible conversations] [inaudible conversations]

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

>> it's sad but true, too many americans will lie awake tonight because they're worried about losing their jobs. they have lost their job, or maybe their spouse has, their son, their daughter. they are tossing and turning about. can they pay the power bill, the next house payment. someone will repossess the car. people are concerned about having a job to go to. in many instances, any kind of a job to go to.

if we're going to get our economy back on track, the only thing that will make it back on track, will they do something about jobs. people have to go back to work. and that's why we're dedicating this year to a lot of things, but our number one emphasis is going to be creating jobs. it's a plan that will create the right conditions for the private sector, right position for the private sector to hire more people. it's a plan for both our short-term recovery and our long-term prosperity. we believe we will do it in the right places. 96 percent of the jobs created in the last 10 years have been by small businesses. sever going to have to focus on letting more entrepreneurs do their thing and make our homes and buildings more energy-efficient will create jobs, will strengthen our economy, and the environment at the same time. we invest in improving our

roads, bridges and dams. we will create jobs workers can support their families. and the infrastructure to support the programs of that which we speak. when we put more police on the beat, and more teachers into classrooms, we will not only teach our kids but also have them and their families safer. our agenda is not about politics, but partnership. we have the jobs agenda. it's about putting people back to work. our motivation is to help americans sleep a little better. our mission is not to stop delivering american who wants a job can get a job. and our message is this. for democrats, creating jobs is job number one. senator? >> thank you, senator reid. a little over two months ago, majority leader asked senator dorgan and myself to me with a member's of our caucus to talk about their ideas. that might help to spur job

creation across our country. we had several large meetings, and then a lot of staff meetings coming together. and there were a lot a very good ideas that came forward eric we tried to call them down into a group of good ideas, the strongest ideas, and we tried also to make it clear that some of those would be going through the finance committee that chairman baucus chairs. others would go through committee's. and i will allow chairman baucus and senator sherman to share some of that as well. but i will say in general we're trying to do first and foremost, is to move jobs, to spur creation of jobs among small businesses. if you will notice here, the bottom of the first page, we talk about creating opportunities for small businesses. sba lending programs, for example, that have worked, that we know work that will provide credit and opportunities for small businesses, and export promotion that we know will create good paying jobs, credit

opportunities for small business not currently available. there's also a move to make sure that we try to lessen our dependence on foreign oil and improve energy efficiency at home. that's why we have a section in this that relates to ways that we can help homeowners and businesses alike stride toward energy efficiency and create jobs in the process. when it comes to creating basic jobs, we of course have our highly trust fund that is an important part of this conversation. we think that we can do more by investing into transportation, school infrastructure which senator harkin and others have proved poor, regional economic development. and finally, we know that as we strive to create jobs, there's also going to be unfortunately, work that will cost us jobs. many state and local governments are laying off some critical people, teachers, firefighters and policemen.

we're going to try to find ways to make sure that those jobs are not lost, so that the number of kids in the classroom or protected or aren't disadvantaged because of the state of the economy. the bottom line is this. this is a good-faith offering on the democratic say. we are inviting our friends on the republican side to join us. bring your best ideas forward. let's put these on the floor and move on them with a sense of urgency. we need to have a jobs agenda that will pass through the senate that will create jobs across america as quickly as possible. it is the highest priority of the people in this country that it should be the highest priority in the senate. >> senator baucus? >> thanks to the swift and bold actions we took last year, we helpful our economy back from the brink of collapse. but for hard-working americans, still struggling to get by,

unemployment at 10 percent at least, recovery is not coming quickly enough. more than 7 million workers have lost jobs since the start of the recession. and far too many remain unemployed. this is why we must focus on job creation, and do it now. i thank senator reid and senators durbin and harkin and for their hard work finding smart creative ways to address our unemployment crisis. we must use every legislative tool we have available to create good paying jobs for american workers. i look forward to consider the first bill and our job creation agenda to get our economy moving again. i am optimistic this effort will gain lots of work, let us work together to get americans back to work this year. >> i think senator durbin has described well what we have done no for a couple of months, and

that is worked through our caucus to evaluate what other good ideas to put people back to work. it is the case that our economy has been through very perilous time, and we have seen now some stability. but we've got a lot to do to put people back on payrolls. there are several economies in this country at work, and there are 15 million or so people this morning that get up and decide i've got to go look for job because i am jobless. they can pick up the paper and they can read and see that part of our economy is showing record profits and preparing to paid record bonuses. those 50 million people are asking the question, who is on our side? who is standing up for us? who is looking out for us? who is trying to find jobs to put us back to work? and the answer is, we have an agenda that says, here are a series of ideas that we believe can lead to small and medium-sized businesses employ more people. access to capital. we held a hearing in the policy committee. we had three small business come

to that hearing, all of which were profitable, all ready to expand and hire new people. not of which could find capital to do it. we proposed a mechanism by which we provided some capital to small and medium-sized businesses that will allow them to hire new people. 60 percent of small and medium-sized business, small businesses especially, 60 percent of their capital needs, their borrowing is done on credit cards. we can do better than that. creating jobs through energy efficiency, 20% unemployment in the construction trades. we can put people back to work doing something that is important for the country. we have put together an agenda. we asked for bipartisan support and will work to get bipartisan support, and hope that we can get as much of this agenda as possible to put people back on payrolls. >> on monday, i met with about 20 unemployed workers in rochester and buffalo and sat around a table and talk. they were from every background,

every income level. some had only made 3000 a year. so mad made 120,000 a year. but the pain on their faces, most of them have been looking for jobs for a year. trine, families to support, one fellow raise -- went to the top of his industry, tool and i. is business close. he is been looking for anything sends. six kids at home so his wife can't work. worried about the housing loss. these are painful stories, repeated over and over and over again. and i think we can say, to the people of america, we heard the message of massachusetts. the message of massachusetts was in, don't do health care. more than half the people polled said they like health care and we should do a, but they said focus immediately and don't take your focus off jobs. the economy. helping the middle-class. and that's what we're doing here today with this agenda. our leader has widely pulled an agenda. we will move immediately on some issues, and then we will keep

going on different issues as we go through the year. but with a laser like focus on jobs, because that's what the american people want and need. it is priority number one for the american people. it is priority number one for us. and this agenda shows the general directions in which we are headed. >> senator reid? >> any questions? >> i counties for different versions, which one do you think is being put through? >> ifad till conversations with senator schumer, senator casey, and there are others. we are going to look to the finance committee to come up with, what they feel is the best one. >> about sort of the general, your agenda. health care is on the rocks, their increasing divisions in

the caucus, about what to do with terrorists and the like. what about that? and how do you get your agenda back on track? >> first of all, i think you're imagining a lot of things that don't exist. we had our retreat yesterday, and it was a tremendous caucus. it was kicked off by the president, and it was just a really good day. everyone felt very good about it, and if there were people watching that, they would say, this is a pretty good team we have here. so you know, we don't agree on everything. we certainly agree on the fact that we're going to move more on the jobs agenda. that's why we're here today. and the rest of the stuff, once

it is you are imagine, it does exist. >> why does it take so long? >> along? the year just started. >> your people said it would be announced today. >> that's why we're here. and it will be -- will have a vote on jobs bill on monday. >> you have a jobs bill on this bill monday? >> yes. we hope you have a bipartisan proposal that i will lay down. i am hopeful that's the case. if not, we will lay one down ourselves. we do believe emphatically that we're going to be able to have a bipartisan bill on monday. if not, we'll have one that we put up ourselves. [inaudible] >> the reason we have senator baucus here, we spent

significant time with him and his staff. the first package that will be done will be funded without any heartburn. and as i indicated, a number of things that we talked about here today have been talked about in the republican caucus they had yesterday. so i would hope that we can continue to move forward, for a change on a bipartisan basis. we're going to do that if we can. we say about jobs as we've said about health care, we have said about energy, we have set about everything we've worked on the last year. we want to work with the republicans. and it appears to me on a jobs program, they want to work with those. and we certainly are appreciative of that. >> what does the finance committee think of the tax for portion, using state tax in that package to? >> not in the near future. >> can you tell us how big this first jobs bill will be? >> we're not going to in effect

step on our message. we hope sometime today or tomorrow to lay some, be a bipartisan presentation of what we're going to have on our jobs program, but we're going to have a jobs bill. i think that i have votes on that on monday. >> i'm sorry i can't -- >> what you go with how many jobs you'd like to create? >> were going to create as many as we can. and one of the areas we're going to look at initially is what the congressional budget office told us will create jobs now. we have a lot of jobs programs that create jobs in the future. and we want to move initially to those job creating measures that will be ineffective day after tomorrow. as soon as we do this. one last question. . .

[inaudible conversations] [inaudible conversations]

[inaudible conversations] >> and we will take you over to the house side. the cannon house office building. a hearing is about to get under way shortly looking at homeland security travel policies. that hearing scheduled to start right about now. the likely reason for the delay is anticipated house votes p the house is gaveling in now. we'll have a few minutes in the first few sessions and later today on cybersecurity and

raising the federal debt limit. all of that live here on c-span 2. while we wait for the hearing to get under way, we'll bring you a briefing from the state department on human trafficking. [inaudible conversations] >> good afternoon. today secretary clinton will chair the president's interagency task force to monitor and combat trafficking in persons. she'll be joined by fellow cabinet members as well as other task force representatives. this meeting which is required under the trafficking victim protection act is the first under this administration, and we'll discuss steps taken by

inner agency partners in the last year, as well as map out coordinated strategied across the obama administration to confront modern slavery. lewis the director of the office to combat persons is here to provide a preview of that meeting. they serve as the chair of the operating group which oversees the day-to-day implementation and the anti-trafficking policies. sir? >> thank you. mark said i'm lewis, i'm the officer for trafficking. she'll be join the by other members of the task force, including the attorney general, the secretaries of labor, homeland security, and health and human services, the usaid administrator, director of national intelligence, as well

as representatives from the white house, education, agriculture, and equal opportunity commission. this meeting which has mark said is mandated under the trafficking victims protection act is the first held under the obama administration. today we'll look forward to candid discussion that highlights the work that each agency is doing to combat modern slavery. we want to work on anti-trafficking effects against form of explodation including slavery and sexual servitude. january in human trafficking and slavery awareness prevention mark. the crime problem of human trafficking has cross cutting implications across the policy lines. that's quite evident the stakeholders we will see today. just one example of how coordination works in the real

world and how human trafficking affects communities. just in fort worth they convicted two people in a scheme that lasted almost a decade. to bring the perpetrators to justice look the efforts of many different agencies working in concert. just as we worked to rescue one nigeria women in texas, we have to come wine our individual mandates and skillsets that enables a government response equal to the scale of the problem. to confront, we must ask in a manner and specification and tenacity of our adversaries while honoring the bravery and humanity of the victims. with that, i will answer any questions that you have.

why that is part of the trafficking, you can watch that at c-span.org. we'll take you under way live to the homeland security department travel policies just getting under way live here on c-span 2. >> for employees attending the conference. i will be extremely interested in hearing today whether conference spending and attendance at these events office a prudent use of taxpayers dollars. but i'd also like to stress that i as well as all members of the subcommittee understand the importance of government travel, including the jobs that are supported by this travel. as a representative from pennsylvania myself, i know how important travel and tourism are to our economy. but we need to assure that the department can accurately account for it's travel spending. according to the inspector general report entitled dhs conference spending practices and oversight, dhs officials were unable to produce precise

consistent numbers on conference spending. information relating to conference spending was not documented in a way that allows for easy examination. as a result, most responses contained missing data and had discrepancies. most alarming, the i.g. reports that is no reason to track conference expenditures because there are no spending restrictions unquote. the i.g. also found that quote the, components are planning in sponsors conferences without any consistent approval or tracking process. when combined with inconsistent conference cost and attendance numbers, dhs needs to develop better management controls to ensure that conferences are funded and attended for only mission critical purposes and that cost are minimized to the greatest extent possible,

unquote. the department needs clear, inconsistent conference planning and guidance. the department must define terms such as conference, retreat, training, ends outside activities in a uniform manner so that all of the organizal elements are on the same page. limited departmentwide do exist for determining or minimizing the number of employees or for standards justifying attendance. but the only test that appears to be in place for determining the necessity of travel is whether funding is available. this must be fixed. they have one mission to secure the nation from the many threats we face. fulfilling the commission requires the department to participate in offsight activities throughout the country and indeed the world. notwithstanding, the department must exercise oversight, accountability, and transparency

regarding the amount of taxpayer money it spends on conference-related activities. i do want to thank the witnesses for the participation and i certainly look forward to the testimony. the ranking member now recognizes mr. thompson for an opening statement. >> thank you very much, mr. chairman. it's nice to see witnesses, mr. duke, mr. mann, as both of you know we requested the inspector general to look at the practices of the department of homeland security as conferences and similar offsight activities. when the request was made, i was concerned about spending patterns that had been revealed at other government agencies and wanted to see how the department

compared. last month, the office of inspector general released the results of the audit in the form of a report entitled dhs conference spending practices and oversight. the report revealed an extremely troubling picture of not only their amount of money spent, but also a lack of internal controls, minimal oversight, and insufficient reporting throughout the entire department. according to the report, from fy 2005 to fy 2007, the department spend approximately $100 million on conference-related activities. this money was spent on sending employees across the world in 44 ,489 instances.

they sent employees to a conference in st. samone georgia and they sent employees to a three-day event in dallas, texas. further, 320 tsa employees attended a conference in texas at the cost of $643,000. these are just a sampling of the $8,359 conferences attended by the department employees doing the relevant time frame. let me be clear, by no means am i reporting that the department personnel should not attend conferences or outside training. there are responsible and support the homeland security mission. however, doing the i.g. investigation, it was determined that in the vast majority of these instances, the department had not performed cost

comparison to ensure that it was getting the best price available. properly tracked it's spending to make certain that it was on par with other budgetary needs, all required justification for expenditures so that it could be shown that legitimate purposes were fulfilled. none of these things happened. leaveing both congress and the public with the question what did we get for our money? moreover, the death of mismanagement of taxpayers dollars that was discovered by the i.g. was in -- really troubling. according to the data received by the department was unreliable, unverifiable and contained proponents. when i made the request, i informed the i.g. that neither waste nor extravagance by the

department in performance or critical role should be accepted or condoned. i meant that when i said it and i continue to stand by the statement now. at the conclusion of it's investigation, the i.g. made 12 separate recommendations, including increased departmentwide oversight, and the development of internal controls to increase the accountability and transparency of the department conference activities. i fully intend to monitor the department's progress on these important recommendation. i look forward to receiving the witnesses testimony on this important matter. i yield back. >> thank you, mr. chairman. other members of the subcommittee reminded that under committee rules opening statement may be submitted for the record. i welcome both of our witnesses. our first witness is under secretary for management, elaine duke. ms. duke currently serves as the

department of homeland security's undersecretary for management. and this in role she is responsible for the management and administration of the department of homeland security which including management of the departments $47 billion budget, appropriations expend sures of funds, accounting, and finance. ms. buick also administered control over the department $17 billion acquisitions and procurement. she's also responsible for ther personnel programs for department's 223,000 employees. she's administered control of the department's control of architecture through technology and communication systems and is responsible for oversight of the departments facilities, property, equipment, and other materialer resources. prior to to her appointment as the undersecretary for management, ms. duke served as the deputy undersecretary for management. she was the chief procurement officer from january 2006 until

her appointment as deputy undersecretary for management in october of 2007. ms. duke was the department's deputy chief procurement officer from october 2004 to death december -- to december of 2005 when she championed the career program to rebuild the federal acquisition work force for the 21st century, something i personally applaud by the way. ms. duke spent a great deal of her career with the u.s. navy where he held various acquisitions positions of responsibility. she began her career as a contracting officer for the u.s. air force. she holds a bachelor in science degree and business management for new hampshire college and a master degree in business administration from the university in honolulu, hawaii. our second witness is mr. carl mann, he currently serves at inspector general for inspections in the department of homeland security office of

inspector general. he has served in a variety of managerial and staff positions. appointed inspector general for the office of inspections in november of 2006. mr. mann is a charter member of the department of homeland security. he served as the chief inspector in the office of inspections from the departments inception in 2003 to his present appointment. prior to coming to dhs, mr. mann was a senior program analyst with the federal emergency management agency office of inspector general. he is also held staff and managerial positions for the social security administration office of strategic management and office of civil rights and department of security. the department of the office for assistant secretary and has served as a technology consultant for general services and administration, the federal aviation administration, and the department of labor. mr. mann is a graduate of

virginia state university where he earned a bachelor of science degree in business administration. without objection, the witness' full statements will be asserted into the record. i now ask each witness to summarize the statement for $5 beginning with mr. mann. >> chairman carney, chairman thompson, members of the subcommittee. we thank you for the opportunity to be here this morning to discuss recommendation for improving the department spending practices and oversight. i would like to focus my remarks on five areas where improvement are needed. clear and consistent conference planning guidance, reliable and verifiable data, sufficient supporting documentation, compliance with applicable travel regulations, with and sponsored conferences. dhs conducts conferences for a variety of purposes including employee and stakeholder trains,

information sharing, and mission support. we reviewed the department's conference spending practices and evaluated it's policy of oversight and reporting of conference related expenditures. specifically, we accessed a total of conference, retreats, and other offsight activities for 2005, 2006, and 2007. for each dhs component, we further analyzed budgets, funds spent, number, location, and employee attendance at conferences. from that analysis, we selected five components, fema, science and secnology, immigration and custom enforcement, coast guard, and operations in director management. we did 11 conferences associated with those five component to obtain a perspective on individual components conference-related activities. the 11 conferences include the

most expensive within an outside the united states. in addition, we examined an fy 2009 conference in hawaii attended by 19tse personnel. as you mentioned from 2005 to 2007, the department reportedly spent $110 million on conference-related activities. when compared to the annual enacted budget of dhs, the amount spent on conferences was less than 1% of available funds each year. however, conference spending represents millions of dollars where management vulnerabilities can exist and areas where benefits and jut comes are evaluated and measured. prior to october 2008, there was no formal conference-plans policy. it was unclear who was responsible for developing and communicating those policies. although the current document is

intended to represent a departmentwide policy, it still defers to components to continue following their guidance. it is unclear to what extent policies and guyses have been distributed to dhs headquarters or contractor personnel result significant channels confront adherence to and monitors of the department tour guidances and federal regulations. dhs does not have a departmentwide definition of what constituted a conference. the distinction between conference, training, and a routine meeting can effect justification requirements for an event, how it is funded, as well as who can attend. given the importance of conferences to help achieve and further the dhs mission, dhs should adopt and use one departmentwide definition. the same should apply to training and meetings. having consistent terminology, and guidance, would reduce confusion, improve

recordkeeping, reporting, and oversight of departmentwide conference-related expenditures. dhs and it's components maintain information related to conferences they sponsor in many different offices within each component. conference-plans data might reside in program offices, documentation supporting procurement of facilities and other services might be maintained and contracted, financial transaction data might be handled by accounting, staff expenses could be tracked in human resources and travel cost and related documents might be handled within travel systems. there's no central point within dhs or the five components responsible for maintaining all documents or reporting on all cost elements related to conference spending. therefore, central coordination point for policies tracking and reporting of conference expend sures should be established to minimize these differences.

this will provide consistency of policy and guidance, standardize the definition of conference-related activities, consolidate cost and report reconciliation and enable the sharing of common data among components. dhs officials were unable to produce repays and consistent amounts on conference spending. therefore, direct reporting from the program offices and manual review of documentation was necessary in each component. during 2005 to 2007 the chief financial officer issued their calls two components requesting information on all of the conferences sponsored or attended. however, amounts reported by the components to the cfo for the 11 conferences we reviewed were difference from the amounts we obtained directly from the components for the same conferences. discrepancies also existed in the attendance count. the we reviewed the cfo and the information we received directly

from employees that attended. we were unable to validate the accuracy. without using consistent methodology in maintaining attendance records and conference retails welcome dhs cannot effectively provide oversight and monitor policy compliance. we observed the khs components were planning and sponsoring conferences without any consistent approval or track and processes. when combined with inconsistent conference cost and attendance numbers, dhs needs to develop better management that conferences are funded and attended only for mission critical purposes and that cost is minimized to the greatest extent possible. in obsessing tracking and monitoring of conferences, dhs must use tools, methods, and systems to ensure accountability and minimize cost across the

department. dhs had no efficient means of locating documents already information systems that could easily be obtained detailed financial or supporting information about conferences. [inaudible question] >> chairman carney, thompson, members of the committee thank you for having me here. the department encourages employee participation in federal and nonfederal meetings and conditions. they are used to exchange and communicate ideaing and knowledge. there are also the need to make sure it's mission critical, as described in management directives and dhs policy. we appreciate the inspector's general's recommendation in the dhs conference spending, practiced and oversight report and concur with the majority of the findings. however, when we are collecting

the data, the report is based on department facilitating conferences and offsight activity for fiscal years 2005 through 2007. these findings validate the path we are on to ensure that dhs conferences and travel policies reflect the best practices and are uniformly instituted throughout the department. in october 2008, we issued a departmentwide conference planning policy as part of the travel handbook within the office of the chief financial officer. the handbook states policy regarding employee travel expenses and conference planning. the handbook also provides official travel poll you ises and guidance to dhs employees throughout the department. the conference planning policy was based on current regular laces and is consistent with the federal travel regulation. in march of 2009, dhs launched the departmentwide efficiency review to trim cost, streamline operation, and management resources across the department

more effectively. two of these initial initiatives under the efficiency review deal with the subject of this hearing, travel expenses, and conference planning. including the use of government facilities were conferences. the intent to to ensure that the dhs operated in the most economical and efficient manner. every effort should be made to conduct meetings, conferences, and training using the least costly. dhs will ensure all travel is essential and will make every effort to use means such as conference calls, web-based communications to reduce cost. some of the key elements of our new policy include requiring each component to have a senior accountable official to ensure that components adhere to dhs travel policies, including making sure that all travel is mission-critical and having the appropriate documentation. it also includes requiring conferences or training to be

held within the local community area, of the majority of conference and attendees and it requires that conference sites outside of the local community area may not be selective unless it's critical for meeting mission needs and the appropriate cost benefit analysis has been done. for nationwide conferences, components must also perform a cost benefit analysis and get at minimum three proposals. further, inflecting conferences sites, officials must consider government facilities and must document if the use of government facilities is not appropriate. in december -- excuse me november of 2009, dhs accomplished a conference in the event planning services working group that has membership from throughout the department. this group is tasked with making sure we leverage our dhs resources, both in terms of ensuring we have adequate knowledge and use of government

facilities and leverage or -- excuse me spend strategic sources. we've had success stories from this. both in reducing the cost of travel, using web-based conferencing and we look toward to those refining our policy further and making sure that the policies are carried out throughout the department. thank you. >> thank you, ms. duke. as you've heard, we've been called to vote. we have about four minutes left. we will suspend the hearing until after the votes. we will reconvene 10 minutes after the last vote is held. i want to be respectful of your time. both of you. i understand that you have a lot of pressures. but ms. duke, especially, we understand that you have to leave to be some place later on -- if we could -- could you stay for one round of questions before -- >> yes, mr. chairman. >> thanks so much. with that, we stand suspended.

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

>> this hearing is going to take a wreak. once it resumes we'll come back to that. this morning on "washington journal." >> the seen nor director of national affairs making his first visit to c-span. let's start with an overview of small business role and the u.s. economy. how many jobs is it responsible? give us the big picture look? >> guest: it's the backbone of the economy. they've created 60% of the net jobs for the last 20 years. they are responsible for 99% of the u.s. employees. they are really the backbone of the economy. >> host: and what defines small business? >> guest: there's a lot of definitions. the most general is anything under 500 employees which is what we go by, my association.

>> host: last week we heard from the white house we were proposing to redirect some of the t.a.r.p. funds to help small businesses in the way of moving money to things like small banks that could loan to them, to tax incentives in the like, what is your organizations -- how are you getting involved in the debate? >> guest: yeah, the small businessing lending fund, we're generally supportive of the concert. it would transfer $30 million from the t.a.r.p. fund to the new -- the pros are the sigma that would attached to the t.a.r.p. fund would not be there for the new program. other proposals have run up that community banks were eager to be associated with t.a.r.p.. there's, you know, some negative connotations with that. and community banks are really some of the biggest lenders. they have a much smaller percentage of assets. but they make 50% of small

business loans. >> guest: let's listen to the president as he spoke about the $30 billion from t.a.r.p. on tuesday. >> i'm announcing a proposal to take $30 billion of the money that was repaid by wall street banks, now that they are back on their feet the, take that $30 billion and use it to create a new small business lending fund that will provide capital for lending banks on main street. [applause] president obama: if the small local banks that work most closely with small business. they usually provide them their first loan, watch them grow through good times and bad. these smaller banks provide to credit-worthy small businesses the better deal we'll give them on capital from this fund that we've set up. if you combine it with my proposal back in december to

continue waving feed for the sba-backed loan, all of this will help small banks ensure small businesses are once again the engine of job growth in america. >> host: members are telling you the access to capital is a large problem. >> guest: it's a large problem. we did a year-end economic survey. 39% said they are difficulty accessing credit. nearly 80% said they had been impacted by the credit crunch. it is a significant issue. >> host: so members would welcome this? >> guest: i think they would welcome any program that increases their ability -- improves their ability to access credit. >> host: for small businesses in general, are the customers there? >> guest: there's some issue with demand. a lot of banks have sited that as the reason they've been making less loans. there's other issued surrounding the fact that they are doing that. this hopefully will give them,

the program has built incentives to get community banks to make the loans once they have the money. some of the larger banks have received t.a.r.p. funds and haven't increased small business lending. the small banks will be incentivized to increase lending. >> host: we want to show a clip of judd gregg talking about peter orszag about the use of t.a.r.p. funds on the table. >> let me tell you what the law says. let me read it to you again. the law is very clear. the money is recooped from the t.a.r.p. shall be paid into the general fund of the treasury for the reduction of the public debt. it's not for piggy bank because you're concerned about lending to small businesses and you want

to get a political event when you go out and make a speech in nashua, new hampshire. that's not what the money is for. it's to reduce the debt of our children that we're passing on to our children. you ought to have the integrity to be forthright and say that's what you are doing. you're adding to the debt that our kids are going to have to pay back. when you are claiming at the same time that you are being fiscally responsible. >> host: he's talking to peter orszag in the exchange in the senate budget committee. this is not the issue, it goes to the point of whether or not people want to take the money because the sigma attached. can you talk about the attitudes? glv >> guest: there is the concern that the legislative fix that requires congressional action and 39 republican senators signed a letter to the administration earlier this year asking that any remaining t.a.r.p. funds to reduce the national debt.

so there are some political problems to overcome to increase the small business lending. >> host: small business association has put down -- has created an official response. it's available on their web site if you'd like to see more detail. let me move on to tax incentives for hiring new employees. how much would this affect your members? small businesses around the country? >> guest: well, it'll affect them if they are hiring employees. it's unclear if it's enough of a incentive for the tax incentive. $5,000 tax credit is nice. but it's not enough of a break to make you hire a new employees if you weren't already going to be hiring one. >> host: because you have to sustain the salary in the face of $5,000 tax credits. >> guest: there's also benefits with a new employee that are very -- >> host: what is the organization prescription drawing from polling and talking with the members about what

would best help small businesses right now? >> guest: our members are asking for economic certainty. which is obviously a huge issue. more access to capital. they are also asking for affordable health care. 20% of our respondents said they decreased the work force because of the inability -- because of the rising cost of health care. that's 1/5 of small business owners. which is a very dramatic number. and they are also asking for not increased taxes >> host: well, let's get to calls and talk with people. we know there are many of you out there in our audience about what you want, if anything, from washington and the debate to help small businesses. kyle kempf from national small business association. let's begin with ann on the independent line. >> caller: hi. this is ann.

> host: ann, you are on the air. go ahead. >> caller: okay. i would like to make a comment to put the $30 billion into perspective for all availability to small businesses through smaller banks that it's pretty much agreed upon that aig, one business, received $180 billion in one year. so i think this is a really wise measure by the obama administration in conjunction with all of the other supports to small businesses to add, you know, just $30 billion towards creating loans for small businesses. and since there's no political will for a public works program like in the 30s for the government to create big

bureaucracies to create jobs, this is a really good focus on small businesses, including the $30 billion. >> thanks, ann. anything for her? >> guest: that sounds good. >> host: okay. let's move on to maryland, this is chuck on the republican line. go ahead. >> caller: good morning. how are you mr. kempf. >> guest: i'm good. >> caller: i'm a small business owner. >> guest: are a an sba member? >> caller: i am. it doesn't seem like anyone talks to the really small businessman like myself. they say $250,000, if you make over that. a small businessman that is llc or corporation, if your company makes $250,000, number one, you're income has to come out of that, number two, you have to reserves for capital

expenditures, accounts receivable, inventory, if you were able to take personally $80 to $100,000 of that profitability a year, you're still being taxed on $250,000. and this is what the government doesn't realize. and boring money, you have to have the income in order to pay back the loans. you still have to meet the criteria of bank. most small business don't own the building, they rent. they don't have the asset to secure the loans in order to maintain the business through this crisis, as far as capitalizing your business to pay for losses until business turns around. they have to find the way to people are making money that are employeed to spend money. because our sales are down 25 to 30% during the crisis. there is no profitability out there. until the consumer starts spending withing they need tax cut cans for the consumers. i don't care at what level. but people that come in and buy goods and services for small

businesses. that's what needs to be generated, not lending. >> host: chuck, i missed you in introduction. if your business is down to 20 to 30%, have you laid off people? >> caller: yes, i have. i've laid off people, cut hours, and work with skeleton crews. i have the volatility of gasoline prices. gasoline prices in the last three days have gone up 13 cents a gallon. >> host: you said you've been in small business for the long time. how does the past year rate for you as far as your experience? >> caller: this has probably been the worst. what's happening on the state level is we in the state of maryland they just trip on our unemployment taxes for 2010. the administration talks about all of their -- of all of the money that they are putting towards unemployment insurance and extending benefits and stuff like that. they don't realize those

benefits are not all being paid by the federal government. they are being paid by the states. the states go out to the small business say look they are empty, we're going to triple your unemployment taxes for 2010 in order to build up the unemployment reserves. that's excruciating, especially when you are not making money and your expenses keep going up, taxes, fees, licenses on the state level. then you have to look at the federal level what they are doing as far as all of the tax increases they are participating for. >> host: let's get a response from mr. kempf. >> guest: he did. an economic survey showed that 64% of small business owners experienced a decrease in revenue. which is the highest level since we started asking that question in 1993. there's a lot of issues out there with decreased revenue, decreased profitability, which

chuck possibly to. and the issue with tax cuts, expiration of the bush tax cuts for the individuals making $200,000 or families making above $250,000. this is significant for a lot of small business owners. as he mentions, you know, the money that they are making isn't necessary going into their pocket. they are reinvesting it into their own business. only 17% are sea corps, the rest are passed through entities. it is a very significant issue for small business owners. >> host: for kyle kempf. >> caller: good morning. i have a question. you know in mccouldn't's delivery the truck backs up, and it drops off one guy which boxes on their rollers.

and it rolls the boxes right down to the back of mcdonalds or burger king or whatever. you look at these people in haiti, now first, who makes those rulers? and could those people that are in that business provide that to u.s. government and hey, wait a second, we can feed those people in haiti faster than using 30 or 40 men throwing boxes to one another. it may be something to look at in promoting business for that small business who produces those. at the same time, saving the backs of our soldiers. thank you. >> host: thanks. thinking about small business solutions. but just -- his one example right have you explain a larger thing about government contracts and their availability to small businessmen and also we know the administration is talking about increasing trade with policies

this year. will you take both of those please? >> guest: sure. small business plays a significant role in the federal government, although we think it's a sufficient roll. the government has set itself a goal of 20% of federal contracts going to small businesses. they don't reach that goal very often. i think the last few years they've been right around it. we think that 23% is a very reasonable number. it's not much too low given the number of small businesses out there. they add a lot of competition to the procurement process. they are also the leading innovators of the economy. so they really should be playing a larger role, we think, in contracting to the government. that might have been the perfect example. as to exports, very small percentage of small business owners are exports.

so there's a huge amount of area forker growth. we're very supportive of administration efforts on that front. they named the administrator for small business. they are really making some efforts to improve that. and we're very supportive of them. >> so how can the federal government better support u.s. exports by small businesses? is it a question of trade policy or is it a question of trade promotion? >> i think it's probably both. promotion is also huge and financing. it's another big aspect for small businesses that are trying to expert out of it. >> -- export out of it. >> host: does the promotion -- how does that work? >> guest: it's going to adopt a change. they've given a huge increase to the congress department for exports promotion. hopefully we're going to see more coming out of federal government. >> host: the next call as we talk about small business and the economy and proposals that are circulates to stimulate and

support small business hiring. charlie, independent. >> caller: good morning. >> host: good morning. >> caller: trying to figure out if i have a question or not. i'm kind of echoing the comment of the two previous callers about tax breaks don't mean a whole lot to a company that hasn't made much money. >> host: what business? >> caller: furniture. >> host: single store? how much employees? >> caller: yes. all about 25. >> host: are people buying furniture? >> caller: that's one point. at end of december, the end of our corporate year, we were up 30% over the prior year. wait until the january number comes in. january just fell off of the charts. >> host: what are you reading into that? >> caller: i'm reading there's no sustained recovery. that's for sure. i wanted to -- i just wanted to -- the tax breaks won't be important that aren't making

money and haven't the last three years. >> host: is there anything that you could get as a policy? >> caller: it has to be focused around employment. that would probably be my question. what is the administration going to do to create these jobs and preserve the jobs and the people have money they will go out and buy furniture. until that happens, i can't see anything. >> host: you need people getting paychecks who will come and spend. >> caller: there you go. it's economics, but it's not rocket science. >> host: thank for your call. >> guest: well, there's a limited arena at the administration and congress can do when it comes to job creation without spending a lot of new money. and they are a little hand strung in that record. >> host: well, the story related to this is washington thyme thyme, democrat pan payroll tax credit. to creating jobs in the larger

economy. q. do you have any comment on any of that? >> guest: i do think energy efficiency component is interesting. it's potentially a win/win for a lot of small business owners in the sense that most of the people who do energy audits and energy retrofits are small business owners. so they will be getting paid to

do those. studies have shown that small business owners have a lot of room to engage in energy efficiency and growth and haven't been able to afford to take the time to do those in the past. so, you can save 20 to 30% of your energy bill by making some fairly modest energy efficiency upgrades. so realizing that sort of savings is significant for the small business owners who's making them. so, you know, there's a lot of potential there. >> host: this viewer sends us by twitter almost every corporation in every market is subsidized by government already. our city, county, and government needs tax breaks. this is pete on the republican line. >> caller: first thing we have to do. good morning. first thing we have to do is cut government down to bare bone. everybody, like we law off our employees when things get tough. our government has to do the same and come in with a fair

budget. plus, i would suggest to cut the corporation down from 35% down to 12% like they did in ireland. you'll see how fast. it'll take a little time. people w will get more confident. we don't have enough confidence, our policies that the president has set are all over the place. every week there's something new. your stomach turns. people in business don't have confidence. and people that have money that make this country tick, small businessman, they don't have any confidence to do anything. they are worried they are going to get tax. you have to cut the taxes. and cut the capital gains tax too. make the whole world want to invest in our country, come back, bring their money back into our country. that's how you get the economy going. and it'll take a little time. president reagan did it. he cut the taxes down. it took about two years. but he created a lot of jobs. and i have to tell you another thing, there's another great

man, newt gingrich, former house speaker. you put him as president, we'll have our economy back in shape in no time. thank you. >> host: anything to respond? >> guest: president obama and budget blueprint called for temporary elimination on capital gains tax for investments and small businesses. that'll be helpful for a handful of small businesses. i'm being a little less generous. but it's not a huge amount, a huge segment of the industry. but we are supportive. >> host: if the tax cuts pass during the bush administration are allowed to expire next year, how will that affect small business? >> guest: i think it will effect a lot in unintended way. a lot of small business owners are pass-through entities. only 70% at risk or c corps. a lot of those people the money that they show in two forms are not necessarily going to their possibilities but going back into the business.

>> host: next call, mike from independent line out of houston. >> caller: yes, i've been a republican for about 30 years. and i have cut up my card, abandoned my party the, and i'll never give another dime to the republican party. and i've only voted republican because it was the best chance to get a conservative in congress. and i think the biggest problem with our leadership today is that they are beholden to their parties and not to their convictions and constituents. and i think the best solution is for some of these leaders, and i know who they are, who are fiscally conservative, have a high degree of attention to their constituenting and their convictions who are center right that should form coalition with similar and like-minded lawmakers in congress and in the senate.

and i think that could drive their power from a coalition like that, rather than from their parties. >> host: okay. mike. >> caller: that's one point. the second question that i have is who do you think is the absolute, number one reason why small businesses would hire more employees relative to what the government can do? >> host: thank you. >> guest: well, i think the reason they hire new employees is because they need a new employee. their business is growing or they need another hand to help out in the manufacturing of something. you know, it's not clear that the tax credit is going to provide that incentive for most small business owners. >> host: following up on our discussion about export, increasing exports, this viewer aspect, can small business withs really even make a dent in our

trade deficit? >> guest: well, i think there are other, the trade deficit a huge issue. it's not something we really focus on. we are trying to promote small business, you know, the growth. >> host: good for small business. >> guest: it's good for small business. there's a opportunity for growth. >> host: when you ask for the listed health care for the small businesses. health care in what way? what -- with all of the debate going on, what is it that small businesses say they most want in terms of health care package? >> guest: sba has been argues for broad health care reform since 2004. we were the first small business group to do that. we advocate for a broad health care reform that includes cost containment and creates affordable coverage. as i mentioned 20% of the respondent to our survey said they have reduced the work force because the rising cost of health care. that's a significant percentage

of small business owners. so affordable care, and, you know, cost containment are two key issues. >> host: pennsylvania, this is brian on the republican line. we're talking about small business and their role in the economy. >> caller: good morning. i was just wondering if the government were to just get out of your way and perhaps decrease their spending and endostea of continually messing with the taxes if they would just leave it alone and that would give you and your businessman the certainty to be able to move forward? >> guest: to some degree. that would be helpful. but there are also, you know, agencies, federal agencies like the sba that helps facilitate a lot of small business lending. you know whereby we're supportive of agency like that, and their goals. they are trying to help small businesses grow and start. they do a pretty good job with

their relatively limited means. >> host: i want you to respond to this twitter message from john. is that really the way it works if you are a small business ownerrer? >> guest: i'm not sure. >> host: okay. new jersey, maggie on the democrat line. >> caller: yes, good morning. listening to your callers and their ideas, i -- the caller from long island, pete, i think that's indicative of why we find ourself in the situation we're in. the middle class and capitalist economy is a naturally occurring thing, it has to be created. it was created from the new deal that fdr established after the

last great depression. corporate taxes, yes, people rail on -- about -- we have the highest corporate taxes of the world. the truth of the matter is it's 35% that they don't pay because of all of the alignments by the government and tax writeoffs. what happens during reagan, it wasn't only a transfer of wealth, it was also a transfer of power. because corporations had the -- well, what had happened to small business is that they became successful rather than reinvesting in their businesses and hiring more employees. they went through a period of acquisitions and mergers. and the group that had to pay for that was the working class, the laborer. over the course of the last 30 years, wagers weren't only frozen, but decreased. jobs not only were created, but

they disappeared. we are a consumer-based economy. 70% of the gdp does come from consumerism. there was another caller who said he has a small business. there's no one there to buy his product. without jobs and the support of middle class, there won't ever be a consumers. people don't have money to spend. the last 30 years what they've been doing is spending on credit. now the bill has come due. and the reality is we need jobs. and we need a strong middle class. and educated middle class. and creation of jobs. that's what's going to spur our economy and make small businesses capable of being strong again. and there should be an investment in small businesses. :

>> guest: i don't know that our association, a distinct position on that but i think it's clear that small businesses are disadvantaged when it comes to a lot of different policy areas. >> host: she raised a topic and

that's the role of education. and i'm wondering whether or not the education debate is also a great you can right now. the no child left behind bill is being reauthorized, and therefore will be we discussed as policy. from two aspects, one is education, creating different jobs. and secondly, education is providing a workforce for your members. >> guest: they are huge issues. finding an educated and trained, qualified workforce is significant challenge for small business owners. especially because as i mentioned, a lot of them are increasingly unable to offer health benefits to potential employees, which puts them at a disadvantage when it comes to higher. >> host: there's a few on twitter about health care. their position is the single-payer system would make it easier for small businesses to hire. let's go back to calls. springfield, missouri is next. on her and he the pentagon, good

morning. talk about small businesses. >> caller: okay, talk about small businesses. first he mentioned the organizational structure of small businesses. 17% are c corp so the rest are either sole provider ships escorts. the way taxes were, if the c corp state taxes based on corporate rates, the ones that are not c corp, whatever the small business makes flows to the tax return of the individual owner. so there's no double taxation. you've answered the question of her hotdog and knowledge. >> caller: so there's no double taxation. the bush tax cuts, only 2 percent of small businesses have income in excess of $250,000.

only 2%. so the expiration, but obama has said no tax increases for people making less than 200,000. and most of the small businesses are people, that's income. so only small businesses making, that are flow-through to the individual that make less than -- make more than 250,000, will be affected by the expiration of the bush tax cuts. now, a lot of the businesses that -- small businesses that make in excess of 250,000 have more than one owner. and if you have to owners with a small business, and that business makes -- and each own 50% and that business makes 500,000, that will flow through to the two owners, the 250,000.

so that small business will not have a tax increase as a result of expiration of the bush taxes. plus, the increase in taking up the rate is only three percentage points. which means that a small business that is affected by the expiration of the bush tax cuts, their profit which flows through to the individual tax payer, will only be paying an additional $3000 out of federal income taxes, out of every $100,000. >> host: thank you. you've given us a lot announces there. was for you the bottom line of the policy? >> caller: the bottom line is, it doesn't, you know, the expiration of the bush tax cuts does not have an adverse effect, you know, on small businesses. the the business as i see it from the governmengovernment standpoint is that right fail to recognize the current great recession is identical to the

depression of the '30s. the problem is the average person doesn't have any money to spend. small businesses have people because they need employees to provide a service to their customers. if they don't have any customers, they're not going to hire any people. and they're not going to hire people to expand, regardless of tax credits. because they don't need them. >> host: thanthank you very much that it is summer there, he got us right back to where we were when we started. tax credits will only help if you really need to hire people. so i'm going to move onto another call from pompano beach, florida. that is kathleen on the republican line. >> caller: good morning. i have a question this morning. in my neighborhood, the small businesses is all by people that

do not speak like me, do not look like me. what i would like to know is, how did this occur? how did they become business owners in the black community? what did they do when they went to the bank to get these loans? what questions, how did they get approved? because when i went to the bank to get a loan, about five years ago, i had an idea for a computer which is on the market today. i was denied. can you answer that question for me? how did this occur, that every single, small business in the urban community is basically owned by people that do not speak like me, from other countries. can you please answer that? >> guest: well, no, i don't know

if i could answer that. i can say that black on small businesses have been of the largest growing segments of the small business community. as has hispanic owned. they've both been on the rise in the last several years. >> host: are there extra programs for minority owned businesses? >> guest: there are many. >> host: what's an example of one? >> guest: there are special lending programs at the sba for disadvantaged and minority owned businesses, things like, you know, contracting issues were there are more set aside for minority women owned, veteran owned small business is. >> host: and sba when you refer to is the small business administration, which is -- how is it structured here in washington? >> guest: it's one of the federal agencies. it is a new budget blueprint. and has a slightly less than 1 billion-dollar budget. and helps facilitate loans to small business owners all across

the country. and provides a number of other services. >> host: we have time for just a couple more calls are. florida is our next. this is franklin or democrat line. go ahead. >> caller: i used to work for a small business. you said before several calls ago, that most small businesses turn their money back into business. they do not turn your money back into the business. that's a lie. i wish that everybody that represents small businesses would stop telling. i worked for two people, partners, each took $100,000 in salary. they took $60,000 in bonuses every year. they had everything from toilet paper to caviar ship to the house by a food service. for another 40 or so grand a year.

and if they ever needed -- well, every year i was in charge of this, so i know. every year we would have to resupply, because we weren't -- we are called a factory but we weren't manufacturing anything. we were imported from japan and remarking and reselling. >> host: front, where is the story going? how does it help us understand the plight of small businesses? >> caller: i don't think small businesses reinvest their money. what they do is five people like every christmas, we use 256 or eight people so that we could resupply. and then in june, and the best of times we would retire six or eight people. that's the way it was done. they didn't take any money out of their pocket. they can afford to pay more tax. they make $250,000 a year. >> host: thank you. will take one last call here. >> guest: i did say that they reinvest all of their money. i said the way the tax code is

set up it doesn't necessarily demonstrate what investments they make back into their own business. >> host: the last call is also from florida. independent. >> caller: good morning. how is everybody there at c-span? transport very well, thank you. >> guest: thank you. >> caller: the question of the whole notion of the economy, you know, small businesses fine and it's great. but not too long ago may be a decade ago, everybody was counting out wonderful it is to have a surplus economy. how our economy is changing from a manufacturing economy. at least that was a lot of baloney throughout their to get the american people to think that something good was happening. to have a service economy cannot get people buying services. if people are not manufacturing things, that are having regular jobs, to be able to have money

to be able to buy a service. it will slide on his face. that's a we are expecting a. i wish people would do something about restoring. i don't understand why, under the 10th amendment, they can't take control of a manufacturing inside their state like it used to be where they would draw businesses into their state and then keep the people in their state working. federal government, what it does, about 80 percent of what it does isn't even just by the constitution. i think we need to revive the 10th commitment, take power out of the hands of the federal government, return manufacturing. the one thing, the constitution does do is give the federal government the ability to legislate and to control commerce. and that means bring those jobs back to this country right now so the american people can be working. you know, anybody wants to make the case, i can't remember the

word now. it's escaping me about protectionism. there is. >> host: i have to jump in because we are already over and i. thanks. you will be the last word on this overall. i just read because he was talking about service economy. when you look at the overall makeup of your membership, what percentage are actually in manufacturing? >> guest: i'm not what percentage of our membership, but obviously a significant part of the manufacturing economy small business manufactures and they are hurting right now. as the furniture maker, we talked to earlier, there is a decreased demand in manufactured goods right now. so it's not just service industry that is something. it's a lot small business is. >> host: as a closer, what's the message you want to tell our audience about small business and what should be done in you can? >> guest: well, one big issue right now is we think there should be a continuation of the stimulus provisions that increase the sba lender guarantees through 2010.

those have had a real significant impact on small business lending. there have been 36% fewer sba loans made in the last year than the year before. and since the stimulus provisions went into effect, there's been a significant uptick. we think that's important and would like to see some small business credit card reform as well. >> host: thank you for being here this point. >> guest: thank you. >> and we're back live now to the cannon house office building waiting for the reception of a hearing looking at the department of homeland security travel policies and spending. they are in a recess due to a series of votes on the house floor, which should wrap up in the next five, 10 minutes or so. we will have live coverage when they resume. while we wait for that, a discussion from this point "washington journal" looking at the u.s. debt and deficit and the fiscal year 2011 budget. >> we've been talking a lot about the budget deficit and the national debt this morning. brian is our next guest, senior budget and is analyst.

is a guy who digs into the numbers here in washington. i was telling that you gave donald fodder for his column today. with the headline on it, deficit deception. he writes of the new budget from the president, despite all of his claims disingenuous concern about budget deficit and a rising national debt, mr. obama is spending like there is no tomorrow. his budget does not cut back or restrain any of the major proposals in his agenda. it still contains the massive $2.5 trillion health care @ @ @ bbbb@ @ >> host: those are strong words and we have heard the treasury secretary on capitol hill, peter orszag the budget director, and the president himself all suggesting they are serious about the deficit. they have done a freeze on

discretionary programs. >> guest: a small sliver of discretionary programs. >> host: and they are finding billions of dollars worth of deficit, contradict what is the real story? >> guest: the real story is under the president's budget, the deficit would total about $9 trillion over the next 10 years. to put that in context, that would double the national debt. it is not just temporary. we're going to run a one run a $1.1 trillion deficit this year which a lot of people say it's a part of the recession. they're not going to worry about it. even as late as 2020 we would still run deficits. the problem is there are some very small custom they are huge new health care entitlements, huge new cap-and-trade spending, and the net effect. >> host: when the deficits matter. we've heard them for years about look at them as a percentage of

national gdp and to get some context for the. what is your response? >> guest: the best ways to measure as a percent of economy. just as a family would decide how much do they have is acceptable based on how much income they have a richer family can afford more debt. a richer country can't afford more day. the way we typically look at is the debt as a percentage of gdp, the total debt. historically it's been about 40 percent about 40 percent of our national income has been matched by the debt. under the present budget we're going to get to 80 percent of the national income will be the national debt. by 2020. that's virtually unprecedented and it will keep rising beyond that point. the danger is, once you get to 70, 80, 90%, you start to cause real problems that interest rates go up. it becomes hard to get other countries to lend to you. and interest costs along to the taxpayers become huge part of the federal budget. that's why we need to make sure we don't get to that point.

>> host: let's open the phone lines for brian reidl of heritage foundation. you can send us a comment by eno and also by twitter. one of the graphs, charts i want to put on the screen comes from the treasury department, i think by your website. which is a look at who all owns, hold our debt. we hear so much of concern about the chinese and their ability to affect our standing and our policy means, because of their ownership of our debt. but when you look at this, they are 14 percent of 25%. >> guest: approximately correct. the chinese total, i really own about 18 percent of the national debt that it has been increasing over the past couple of years. overall, the percentage of our debt owned by foreigners and foreign governments have doubled since 1995. it is still not a huge percentage. not the majority but it has grown since 1995. the concern is the more that our debt is owned by foreigners, the more unstable it is. because if they stop buying it,

that could raise interest rates. or they could use that to shape our foreign policy. but in the short term it's good that foreign governments are buying much of our debt because it means that we don't have to supply it all ourselves which means interest rates are lower than it otherwise would be. >> host: i started off this one showing the financial times story that movies is issuing a warning that our bonds may be downgraded. what does that mean? >> guest: what that means is right now the united states bond enjoys a gold plated triple-a rating. they are the safest bond you can buy, and that allows us to get away with paying lower interest rates on because people feel like they were safe place to put their money. movies is saying that our debt is getting so big that they are concerned we may not fully be able to repay the debt. at a downgrade our bond and was as our aaa rating, we're going to have to pay part hundred higher interest rates. that will cost taxpayers a lot more money. is going to raise interest rates throughout the economy and affect anybody who wants to get a loan.

>> host: i'm getting a twitter message that says, to asked me to my what a heritage foundation stance politically. >> guest: the heritage foundation is a political think tank founded in 1973. we are nonpartisan. we can hear republicans as hard as we get democrats. mainly we stand for conservative viewpoints. >> host: while we're talking about u.s. bonds, this viewer asked by twitter why would any of the by a u.s. bonds would've pays less than inflation? >> guest: is a safe place to put your money. you're not even making back inflation than. over the long term though, interest rates will go up. once people feel safer to put their money back into the stock market, then we're going to have to induce people with higher interest rates to get people to choose our bond and stay. but right now if you want a safe investment, the u.s. bond is really the only safe game in town. >> host: i have two more questions then we'll get to calls. during the bush administration there was a great deal of criticism that the cost of the

wars were always off budget, off-line. does the obama administration's budget bring them back into the holistic accounting? >> guest: off budget means they were funded on an emergency basis. it doesn't mean that they didn't show up in the final budget totals. the final budget figures that include war spending. they were just funded with the were able to see on it that made it not subject to any caps. president obama does put most of the war spending in his budget, except for $30 billion search for afghanistan would be funded as an emergency. out at the end of the year you can't get away from it. all spending will end up in the final out was. >> host: and such is people understand, when the administration, any administration talks about cuts in discretionary spending, what's discretion and what is not discretionary? >> guest: 40 percent of the federal budget is discretionary. defense, education, a lot of health research. that's the part of the budget that congress goes through every

year and decide how much we're going to spend. about 40%. the other 60 percent of the budget is called mandatory or entitlements that social security, medicare, medicaid, that interest that this is on autopilot. congress doesn't even look at it because the amount dispensed depends on who is eligible. you sign it, you get your benefits. it costs what it cost. the danger is these mandatory programs are growing very fast on autopilot and may eventually squeeze out the discretionary programs. >> host: explained to start. >> guest: what this chart is, is -- that is the long-term unfunded liability in these programs. what that chart is saying is that over the next 75 years, medicare is going to run a deficit of $36 trillion. which means that spending will exceed the amount it takes in in premiums and social insurance taxes by $36 billion. social security will have its benefits exceed the amount we taking in social security payroll taxes by 6.6 trillion.

this is what is driving up the real long-term problem. the fact we have a combined 43 trillion-dollar hole in our future social security and medicare spending means congress has to address that are otherwise we will have to raise taxes through the roof. >> host: let's go to calls. georgia. frank, on our democrat line. >> caller: yes, i would like to know why all of a sudden concerned about the budget right now. and when back in bush's years, they said the budget didn't -- it didn't mean nothing to them. all of a sudden. all of a sudden, you hear it now, the budget mean everything. why is this? >> guest: first off, at the heritage foundation i was criticizing president bush for his deficits. there were some people out there who are raising an alarm. president bush spent a lot of money, and push the deficit up.

but the issue is a comparison. under president bush, the deficits averaged about $250 billion a year. i lot of money. however, right now the deficit is at $1.5 trillion during the recession. and over the next 10 years, the deficit is going to regulate be over $1 trillion. so the issue is degree. 250 billion-dollar deficits during the bush administration were tough. trillion dollar deficits during the obama administration are four times greater. as a matter of fact, we are on course to run up more debt in the next eight years under president obama then we did under all the presidents from george washington to george w. bush, combined. is a little less than that if you go by percentage of gdp. but the fact is, that as a percentage of gdp is going to go very quickly. it's just a matter of degree. the debt is going a lot more now than it was under president bu bush. >> host: this is anna, independent line.

>> caller: thank you so much for taking my call. for some like to say i'm an independent. this is why we want the democrats, kicked out of washington and the republicans who have been paying for the last years for doing nothing, all of them kicked out of washington. you guys come on television and you just be to my constituents here it's so unpatriotic. why don't you tell them, whether country stood on december 31, 2008? you are now coming on, and i don't care much but you are coming, fair is fair. we deserve to know the truth. why don't you compare where we were on december 31, 2008, to where we are now? you would be more credible. okay, you are partisan but you would be more credible if you came on and compared where we were with george bush, handing over to obama and we are now. and i will take your answer off the air.

>> host: and a, compare what? the size of the debt? >> caller: yes. why do we do a before and after, both short-term and long-term? >> guest: at the end of 2008, basically the day president obama took office, the national debt held by the public was about $6 trillion. went doesn't bush took office it was about three chilean. the day he left office it was about 6 trillion since president obama has taken office and has gone up to trillion already. although some of that is the and that was by president bush. so it's about a trillion now, and really we're on a way to hit a debt of about $20 trillion by 2020. and that's what really concerns me. going from 3 trillion to six straight under president bush was tough, but again, when you start looking at a $22 debt by 2020, that makes the earlier debt look like child's play. >> host: blaming obama for this deficit is literally blaming the

janitor for the cost of clip of a mess eight years in the making. >> guest: that's not really the case. a lot of people blame it on the bush tax cuts. but the bush tax cuts did not cause these massive deficits. in 2007, even with the bush tax cuts and even with the war, the deficit was only $162 billion. furthermore, president obama wants to continue most of the bush tax cuts, and he would still run a deficit of $9 trillion over the next 10 years. if it was all bush's fault, then we would've a deficits much bigger under president bush. the real driver of long-term deficits are social security, medicare, medd spending. in theballgame. and the president obama passes a health care -- his health care plan, that could increase the debt. but it's not the tax cuts, not the were. is mostly.

>> host: to do with the social security and medicare debt, we need to collect taxes on every our dollar with no cap so everyone pays the same percentage. >> guest: that is one way to reform it. right now, on social security you pay a payroll tax on your first $100,000. medicare, you keep going. but on social security you pay on the first 100,000. one reform to bring social security in line would be to have you pay the 12.4% payroll tax on all your income going all the way up. the problem i have with that solution is that's a very large tax increase and it does not fully even close the hole in social security. i would rather see reforms on the benefit side. i think raising taxes by that much would cause huge economic problems. but it's a fair point. it would close part of the deficit in social security. >> host: pamela is on our republican line from san bernardino, california. good morning. >> caller: good morning. i would like to find out why they don't perform an audit on

the federal reserve which is a nongovernmental agency, and it was started 19, i believe 1913. madison was afraid that these factions that could be growing in the government would cause problems. and when a family starts to project their income, what they need for the next year, you know what your expenses are going to be. we've had an invasion of 30 million illegal immigrants coming into the country, along with more than 770,000 businesses leaving the united states. we cannot sustain this kind of loss. so my question is, why don't we abolish the federal reserve and return it back to the treasury? >> guest: that's a big -- that's a big question. in terms of auditing the federal reserve, the federal reserve is reasonably public about the way they make decisions on interest

rates and money supply. they do release the minutes of their meetings. mr. bernanke does testify regularly on capitol hill, explaining what he is doing. and why he is affecting monetary policy the way he is. some have suggested such as milton friedman once, that we could replace the federal reserve with a computer that would determine money supply and interest rates by a basic formula. perhaps that would be better than the usual way we have done in the past. i think the federal reserve policy, you know, can be subject to certain criticism. i'm not sure how it would work to eliminate the federal reserve, but i think there is legitimate disagreement on the way that they've had with the recession. and i think that disagreement is there. las. .

650 employees at the spa at the cost of $100,000 for three days for each employee. was a cost comparison done to justify such a cost? how was that chosen at the venue? what happened there? >> in that particular case there

was a cost comparison and there were quotes from several vendors. one the challenges is finding a venue for that many people. it is the high cost. it is the annual training conference for that group of individuals. but since that conference, we have looked at not only the actual cost but the appearance of cost in making sure that dhs isn't representing itself in a way that we're having events at those type of establishments. >> because in your opening comment you mentioned that you need to use the least costly. you couldn't have come down a couple of stars on that in terms of -- >> yes. >> okay. okay. now the number of folks that attended, 650 seems like a very healthy number. was there any kind of criteria as a number of how many people to attend? >> i think there's two types of conferences. conferences in which we're looking at minimizing the number

of attendees. that particular conference is a training event. it's an annual event for dhs employees in the administrative fields to get training on the latest policy, both federal and dhs. and so it's important in that particular face for the employee that is need the training to attend. >> okay. we'll return to this. i want to ask mr. mann a question. mr. mann, who is dhs is in charge of the conference spending? >> it appears as if it's so decentralized that individual agencies run their own conference management shops. we did not identify anyone in dhs who had central responsibility for managing conference. >> who should have the responsibility given the organization chart of the department? >> well, the recommendation in our report for sent to ms.

duke's office. that's where the management oversight should be. >> ms. duke, do you agree? that correct? >> i agree that management should have the oversight. i do believe with our functional integration model that some type of, not as decentralized as it was, but decentralized decision making it appropriate. >> mr. mann, do you think the conferences in the end help further the mission of the agency or did it -- was there a value added? did t we get the kind of bang for the buck that you were after here? >> i think that we did. it was actually hard to determine in some cases simply because we didn't have a good system to measure or the department doesn't have a good system to measure the success or the value that the individuals have gotten for their conference attendance. but given the variety of missions that are within dhs,

the need to exchange information, we don't question necessarily the number of conferences or the purposes of the conferences. we do believe that they do add value to the department. >> mr. mann, when one the dhs officials told the office of inspector general there's no reason to track because there's no spending restrictions, is that true? are there no spending restrictions in place, have there been no guidelines? and if they don't track the spending, how do we know it's even $110 million that was spent. could it have been more? >> you raise an interesting point. that's one of the premise of the report. we certainly believe from inspector general's perspective and just from a responsible method of managing anything, we believe there should be some accountability, tracking systems, there needs to be at least the ability to compare

cost to determine whether or not the department is in fact getting what it is paying for and that information, i'm sorry that the money is being allocated to events that further the department, further the dimension of dhs. >> okay. thank you. i now yield 5 minutes to mr. pascrell. >> thank you, mr. chairman, ms. duke, secretary, for your work at the request of this committee. and i would challenge that when you were examining what happened during this 2005 to 2007 period of time you must have had some real eye openers. and you must have said to yourselves, this can't be. because the same transparency and accountability that we've asked of every agency in homeland security as well as the

department itself doesn't exist in most of the agencies of homeland security. this is a systemic problem within the department. and for their not to be any checks and balances, so what we have here is mr. chairman, i would think, we could conclude, that there is bureaucracy upon bureaucracy. and when there was bureaucracy, there is no accountability. it doesn't matter whether we're talking about december the 25th or we're talking about budget stuff or we're talking about what happened here. the figures that homeland security gave you about the expenditures of traveling during this time and the figures from mr. mann are quite different,

aren't they, mr. mann? >> that's correct. >> how can you have such discrepancy -- we're not talking about a few thousands dollar here, we're talking about a huge gap between what's been recorded and then what you found. specifically, and briefly, why? >> well, it is our impression that the decentralization of what might occur in planning a conference. acquisition of facilities could occur or could be managed by one portion of an entity, the accounting, i mean it could be, it's so separated that it doesn't necessary means the cost are not justified. but they are not consolidated to a point where the final cost of a conference could be assumed with relative assurety. it's not within one place of any

component. >> who's responsibility is it for putting all of the numbers together to having at least the facade of an integrated system? >> that's a good question, sir. i'm not sure. >> i think you are being very frank. because when you go through the maze of the charts, who would you say, ms. duke, is responsible? >> recently within the last year, we have identified what's called a component accountable official. so there's one official in each component. then it is the oversight of my office through the chief financial officer. >> and these officials do know what receipts and vouchers are necessary to prove work product; correct or incorrect? >> yes, that's correct. >> and apparently they didn't know that before or there was no one opinion assigned to each of these entities; is that

correct? >> that's correct. >> who's in charge of booking travel for the department? >> that's decentralized. there's not one central place where travel is booked. >> so in other words, anyone one of those agencies previously could have reached out to whomever through the procurement office in order to try to get quotes on how much it cost. did they have one travel agency? >> for conference planning there is not one travel agency. for individual federal traveler, the employee traveling, there is a mandatory source. >> this reminds me of another scam that we came across four years ago, five years ago. remember shirley limousine? remember that paper? >> yes. >> i remember it very, very well. and the person who controlled

that organization was a felon. i mean that doesn't make him a bad guy, yes. but it was a felon. and we can't figure out how he got the contract. if there's -- if they there are being such a huge discrepancy in the numbers here, mr. mann, am i using a hyperbole that there's something crooked, something criminal? am i too far off? tell me, i'll come back to the trunk. >> well, i'd be hard pressed to say there's criminal. i think the department needs is better documentation. it doesn't necessarily mean that the activities were criminal or -- >> but it's harder to find because the documentation is not there. >> that is correct. >> and if i was a criminal trying to cover up the actions,

no one accountable, it'll be a lot easier, wouldn't it, mr. mann? >> it would be. it would be. >> so i would hope, and thank you for all of the work that you've done, ms. duke, to clean up other people's messes. i'm sorry to hear that you are leaveing. if they had any brains, they'd make you a big offer. i'm going too far. what can i tell you? i hope that people will listen. i know you're gaveling me because i'm telling some things here. >> no, because your time is up. >> i know. my time is always up. >> i thank you for all of your service. thank you, mr. mann, as well. >> thank you, mr. pascrell, certainly. mr. greene, i know you are here first. i'm going to recognize the ranking member for five minutes. >> thank you very much. i appreciate that. can i insert my statement in the

record. >> so heard. >> thank you. secretary duke, the inspector general's report noted the difficulty they had in obtaining conference data because the manual was -- it was a manual process. much of the request for data is several years old. is the department better ago to track and produce data for more recent fiscal years. if not, what plans do you have to enhance your tracking process? would you leverage the capability of task to achieve better visibility into conference spending? >> the accountability is better now because we have one central person. it is still a manual system. we're looking at task to be part of the solution for automated financial controls. additionally, we're moving to a standard classification system to financial. what mr. mann said doesn't happen where things are accounted for in different ways and different components. >> thank you. next question. again for you madame secretary,

portions of the secretaries efficiency review initiative focused on spending related to travel and conferences. you touched on some of the outcomes in your testimony. could you elaborate on the findings of outcomes of the initiative and does the conference data provided to the inspector general's office for requested trips and side visits. >> no, the i.g. report was just on conferences. it would not include the congressionally requested trips. what we're doing in addition to accounting that mr. mann talked about really looking at the mission essential to a number of people we send, what type of facilities we use as the chairman said, so it's really comprehensive. and also travel. how many people we send on travel and the cost of that travel is a huge part of conference spending. >> in your testimony you noted the important of conferences for staff as a learning tool and a

form for the exchange of ideas. as a member from the state that heavily relied on tourism, i know those conferences can also be valuable to the local economy. how does it department in it's components determine where to hold the conferences? >> under the new rule, we look at where most of the attendees will be from and local sites. we require competition where most of the attendees are located so we don't have the travel cost. we require at least three proposals to get a low-cast alternative. >> thanks for that information. is there a mechanism to determine the return on investment to travel for meetings and conferences in terms of increased productivity or improve pressure? >> currently we have satisfaction. but we don't have a way to look at increase the productivity, no. >> okay. mr. mann, what lessons learned or best practices from other

federal agencies and departments would that implement to strengthen it's conference oversight? >> well, one the things that dhs did, for example, the coast guard has an annual commanders conference. and it's based on when coast guard individuals rotate. now for 2009, the commanding officer for this particular district of the coast guard who sponsored the conference recognized that there was no rotation among the coast guard officers. and decided not to hold the annual conference simply because it was scheduled, which potentially saved $113,000 for the department. i think that broader scrutiny with regard to whether an annual, whether a conference is needed, whether there are alternative methods to providing conference information certainly should be looked at. >> i understand your report was completed last november. have you been monitoring the

department's implementation of your recommendation since that time? if so, please tell us about the progress. >> there were 12 recommendations in the report. we were able to close one of them almost immediately. they are due to provide us with the corrective action plan within a few years. >> okay. based on your view, would you recommend any changes to the federal travel recommendations throughout the executive branch? >> no, i think the federal travel regulations are adequate for their purposes. >> okay. thank you very much. no further questions. i yield back. >> thank you, i'll recognize from greene from texas. >> thank you. i thank the witnesses for appears as well. i am always sensitive when you comes to issues of this kind. i'm sensitive for two reasons. one there are hard-working employees who don't merit having

a broad brush touch them. and what i would want to understand is that this is not something that is so pervasive that all of the employees should somehow be viewed in a negative light. and ms. duke, would you kindly comment please so that the record will reflect an opinion about this. >> yes, i think when you look at the conferences listed and the appendix of the aig report, it was clear why they were needed. it was going to sites to meet with small businesses, employment repairs, those types things. what we have to do is be better about documents and make sure when we do those necessary events that they are done in the most cost effective way, including the travel cost, hotel cost, or government facilities. so i think that in looking through the list, the employees

attended, they were mission critical. we just have to handle the few dishy side a little more completely and effectively. >> mr. mann, would you care to comment please? >> certainly. i think that a part of the issue here is a lot of employers are just not, for me, with travel regulations, for example, in cases where yields might be provided as a part of a conference. we did determine that there were some instances that employees were still getting per diem. it was our impression that there's certainly nothing criminal. there's criminal intent in that. just a basic unfamiliarity with the rules and regulations as it pertains to what can be vouchered on their travel expense versus what cannot. we in the aig certainly see the value in having conferences of this nature. i mean we have our own conference within aig. for instance, an opportunity to share information. we're all hearing the same thing at the same time. we certainly support

conferences. but as ms. duke said, the real issue here is documentation that really doesn't make everything add up to indicate that the amount spent for conferences was in fact appropriate. >> we do have a list of conferences, it's about a selected conference activity for review. and if i look at this, i just like for you to just give some indication as to whether or not these are legitimate conferences. there were a case when 150 employees attended a leadership conference cost $28,599 dollars. was that legitimate conference? >> are you asking me, sir? >> yes, sir. do you have the same information that i have? >> i'm not exactly sure what conference. >> this is a conference in st. simmons island.

don't have that? okay. let me do this. if i may having been a trial lawyer, may i approach the witness, mr. chair? >> you may ask your questions. may i have this given to the witness? >> yes, that would be fine. >> okay. thank you. here. let's. okay. would you pass that to the witness please. >> you know, while it's on it's way to me, i may have to interpret because i only have 1:02 left. let me go through these and perhaps the chair will give you the additional time. the first list at the first bullet, 150 employees, was that a legitimate conference? >> to be perfectly honest with you, sir, our scope did not

involve determining the legitimacy of the conference. we took what we were able to get from the department at face value. i know it's a terrible thing to assume that it was a legitimate. but it would be my assumption that it was a legitimate conference. perhaps ms. duke can elaborate. >> ms. duke, can you tell me please. >> i can get back for the record. i think all of the conferences were legitimate. i know later in latter years they did it by technology rather than holding in-person conference on that particular cbp one. >> let me ask, mr. chairman, may i ask one additional question? my time is up. i don't want to abuse the privilege. >> i appreciate you asking. because of that you'll be granted additional time. >> thank you, mr. chair. just quick quickly we have this

list, is there any conference on the list is that not a legitimate conference? >> i don't see any on the list that are not legitimate. we have to be efficient in the number of people, and where we have them. but in terms of the topics, they are all mission-essential conferences as we've described it. >> all right. thank you very much. thank you, mr. chairman. >> thank you, mr. green. ms. duke, the dhs reimburseed employee for gala tickets, where was that too and from? what would make a ticket cost $8,000. >> there are cases of business class or first class travel. that would be an international business class travel ticket would be in that range. and we have tightened up quite a bit. our policies and our actual

activity on business and first-class travel. >> would that include the luggage and lunchbox fees and things like that too? now something that was sort of troubling to me is that people were reimbursed for free meals. what rate were they reimbursed for free meals? how did they submit a claim for a free meal? they knew the meal was free, you know, not to put too fine of a point on what mr. pascrell was saying, was there some mischief here, somebody trying to game the system in this respect? this is for both of you, by the way. >> the issue is the employee gets per diem, and when they have a free meal, say the conference has lunch because of the speaker, they are supposed to deduct that lunch piece. it's a manual, and those were the cases in the aig that was

not done. both the travelers, but also each one of those is approved by an approving official to look for those types of things and make sure they are done properly. >> they were not consistent throughout the department. for both of the travel and the travel voucher. >> okay. but within the various agencies within the department there's not consistency or there hasn't been? >> correct in terms of how much, i guess closely they look at those and didn't, obviously there were some approving officials that weren't looking closely enough. >> please tell me this is being fixed. >> it is. >> okay. thank you. mr. mann. >> i'm not sure what they actually need to deduct. of course, there could be employees who are very knowledgeable about the system and figure out a way to get a few extra dollars. we can't discount that.

but seriously i think it's a training issue more than an issue of individuals trying to capitalize on free meals. >> okay. thanks. ms. duke, the news report indicate that in 2008 dhs was second only to the department of defense. and obviously we all agree that we have need for legitimate travel and the conferences are valuable and that sort of thing. when you get that big of a number, you are closing in on dod numbers, how can we be sure that we're getting the kind of value that we need? there's not folks gaming the system, that we're not being -- sending folks to four star hotels when three star or two star would do. how do we make sure that happens? >> well, i think too the steps we've taken. one is centralizing that under an accountable official in each component. and secondedly, just the

cultural change of really scrutinizing it. i think it was -- under the efficiency reviews there's been a real cultural change to really look at travel, what the necessity and also the cost of it. and we just have to continue that cultural change. >> so the time of dhs before the study was done, the 2005,2007 time frame, there was not the guidance, there was nothing in place that was built into the system of the dhs for travel and conferences? >> there were a few policies out. but they were disjointed. the first time it was aggregated into one policy was in 2008 in the financial manual. that was departmentwide. >> okay. >> mr. mann from your perspective and that of the aig, do you think that dhs is

tracking properly and recalibrated the way they need to do this. >> first of all, i'd like to commend and all of the individuals who we interacted with during the study. we recognize that the time period in 2005 to 2007 was dhs was still just seven years old. it was even younger then. with the number of entities that were pulled together, the mission being what it was. maybe not excusable, but certainly understandable how the travel situation got to be the way that it is. with initiative of the october 2008 guidance, we believe that dhs is on the right track to recovering and preventing future occurrences of the same sorts of things that we identified in our report. >> i'll be interested in a couple of years to see how it's worked out. mr. bill rocas for five

minutes. >> thank you, mr. chair. i understand from september 1 to december, the homeland security spent $3,000 on expenditures. the spending exceeds of all of the other house committees with the exception of the appropriates committee. this past august 14th the committee staffers traveled to australia and thailand. i'm sure there was many benefits to the staff travel, we must ask ourself the same question that is we are asking the department, was this necessary and -- >> we're going to leave the remainder of the hearing with a reminder that you'll be able to hear all of it later. members about to continue work on the nomination of patricia smith to be labor department