best one. >> thank you. we are social affairs. we have a very small crew. if i could introduce wendy harman was director of social media does a fantastic job. for wendy and her team are getting into our own operations center right there at headquarters to make sure that the people who are actually sending out volunteers, setting up shelters and all that are getting this information are integrating it. we now have twitter feeds going on in our disaster operations center. it's almost to pay attention to this. this is important. as i mentioned with one have been to an alabama, there is beginning to being able to take this data. i've got to tell you, it doesn't come in a neat easy to read format. it comes than a lot of places with different hash tags and symbols and it's hard to read.

.. it's more i think getting it clear to them how to use it. >> it must be interested to lack the language. >> somebody said when we first took him the crisis in alabama to the emergency abortions under the city looks like a space ship.

>> i know my own kids i used to have to call them and see what did you say? that being said, where is the potential for more information, sorghum and, more innovation and what are some examples if any of some of the more exciting innovations in this area that have taken place so far? either one. anybody. it's really for either or. [laughter] >> okay. well, there are a lot of places to go but first and foremost remember disasters are local. disasters don't miss a we have and that the federal or the state level. we are in the first responders. it's the people on the ground that our local emergency management offices and things like that and so i think we're the new technology needs to come in is where we need the government to work with a social companies to create something the first responders can utilize on the ground zero level. oftentimes they rely on the

volunteers that come in and help during the time. but we need something to where they don't necessarily have to have the person to sit there 24 slash maximum monitoring the social status of what's going on on these different areas. we need to work with the companies because like we talked before it wasn't created for disasters and now that we see that it is being able to be used effectively in the emergency response systems we need to work with the companies to see how to utilize and narrow it down so we can incorporate it at that local level first and drove it from there. >> ms. brown, if i could ask the question, everything google is doing, the impact disaster response and the dedicated crisis response team that you have is this a full-time group and google? >> [inaudible] >> no? prez it again. >> very microphone 101 obviously.

yes, we have a dedicated team that is based in a combination of mountain view, new york, however it's important to know that when a crisis occurs, it actually brings together in addition to that team a lot of those who otherwise have jobs. so in other words, in japan we are fortunate to have an office there so it isn't difficult to have a lot of people drop their current activities and literally live in the office a day and night certainly for the first four or five days. so we supplemented that has needed with resources around the world but it is determined to become permanent team in the united states. estimate is their philosophy or a recent four google to support the dedicated team that use all the need that he wanted to go in and zero in and be a leader in that area, and with that, do you see in expanding capacity and dedication of additional resources in this area in the

future? >> in terms of the area quite simply it was an area consistent with the philosophy of an opportunity for us to take some of our technology and put up for social good. we didn't spend the croesus response but it looks like something we're quite frankly information are critical just of course as food and water are after a disaster. and we seem very well positioned to help around the communications information. in terms of increasing resources, it has grown over the last couple of years. really over the last year since he we realized the power of it and at the moment the team is continuing to respond to natural disasters and continuing to focus on making the tools more applicable and scalable. ferc simple, when there isn't a disaster happening, which has

been an opportunity, but dittman there isn't one we are working on what sorts of data might we aggregated have times so we can respond faster. >> thank you peery is there any area where he may need, chris's halgand legislation to streamline consolidation and make it more efficient, anything like that? you or anyone else can -- >> if i could respond quickly to the last question about innovation, one of the things we are learning, none of the tools were available back during katrina, twitter, facebook, so here we are five years we think what is the next five years so i would say whatever solutions we are working towards we need to be careful not to tie the one particular application or technology because it's changing so rapidly. i think in terms of the help we need i think just holding this hearing is really great because

it raises the prominence of these issues so people began to think about them and begin to work around them. we are having great success working in collaboration with fema and others administrator fugate has been terrific in that regard. we are working with all these groups here and i think there's kind of a crowd of mentality that comes together with this medium. so i'm not sure that i think the government should jump into the middle of it or try to interfere with what is happening. but i think that there are places where probably government is needed to provide the resources, and we mentioned the emergency 911 as one of those six samples, and bringing together wireless companies and to do that. we obviously at the red cross need to continue to invest in new technology. we want to get this where it's not just a manual thing. we have to have people monitoring every second but it

becomes to be a stream that is automatic that goes to the right places in the operation centers and we have to invest -- >> not to interrupt but is there a point where it is too much information? it seems like it's overload you have a crisis everyone wants to do the right social thing to help and be helpful. at what point is it like okay, we get it. how do you draw that line? >> yes, senator it can be overwhelming and that is what we are trying to find are what are the common standards and weighs at which we can feed this information so it just doesn't all come in at once in different ways. i think if there is working on that and i don't know if you want to address that aspect. >> sure. i think when we talk about information overload we are really talking about as a lack of filter is that you really need to be able to look at the body of information. it's kind of like a river if you will and the river is swelling. and during a disaster as the

river is overflowing. and once you really need is filters. and a lot of times the filters are based on data standards. and the data standard is something that's really important in this area. and the question is in an operations center who is sitting in the seat that's creating the filters? for the information. and so, and being able to kind of have that on for the kind of information that needs to come into the but augment the operational pitcher to better make decisions for the people that from the incident manager all the way to craig fugate, and i think that there is a common misperception that there's a term called the common operating picture, and in a way where you really want is a user defined operating picture because when the incident manager needs to see on the front lines it's different than what craig fugate needs to see but the need to be able to have access to the same pool of data so open data is important.

it's the backbone of what we are talking about. and social media is information that becomes the points of data. so if you have a tweet at tweet -- you turned your location on your phone that tweet can be mapped now. but a lot of times when people tweet they don't have the location on their phone so we can't say like okay, here's the damaged building. and i must begin to context to say it. but if they didn't give you any context and they have their location on we can automatically pulled into a matt, and that gives emergency managers better information. >> thank you mr. chairman role in this hearing. i appreciate the opportunity to participate. >> thank you for being here today. >> well, thank you all for all your testimony. let me die even with a few questions. actually i have about ten pages of questions i'm not going to worry about. [laughter] but i do have several questions and for the tiny submit some for the record, but i don't really

know where to start, so mr. francis, let me just start with of the red cross. something you sit in your testimony, everything you will sit caught on the year, but something use in your testimony that caught my ear is in haiti the red cross sent out 4 million tax to people, which i think is a great tool and a great resource. i'm curious about how you got all those phone numbers to 16 by a curious about do you have that capability in the u.s. with various privacy concerns etc? >> thank you for that question. in haiti the cell phone use is incredible. i think it's like 90% of people in haiti have so phones. and as they were going into these camps and tents, tend areas we were registering them in, we actually piloted a program to see if we could actually give money to families through texts, through their cell phones that they would go

to a particular place, dispersed and please come and get money right into their hands so they could provide the needs of their families. so there we had people going into the tent communities where they were registering. and that's how we were getting those cellphone numbers and able then to push out the right information. to be perfectly honest with you, senator, i don't know that we had that capability right now here in the united states. it's something we are certainly looking at and there's certainly an inch tv to emergency management agency's are looking at that. but, you know, when a crisis strikes the first thing you've got is yourself or your car keys, and so to be able to have the ability to push the information out, it would be terrific and maybe that is an arena that we can work together on. like i say, i know the government is working on some of these things, but we at the red cross don't have all the phone numbers by any stretch. >> did you have any success with your pilot project about taxing people some sort of i don't know

what to become a voucher or a code they could get money. did it work? >> worked in the pilot phase by a number of reasons that the haitian government decided that the end of the day that wasn't the best thing to do. but we certainly think that that will work in future operations because most people are familiar with where to go to a bank or something. you'll get aco with for yourself alone, the able to take it to the bank and immediately the bank can verify that and give that to you so it is a very fast we to do it and there's kind of a synergy to between people who are now taxing to give money to help people and people using their cellphone now to be able to take that and get immediate help. >> and you mentioned in your testimony also the alabama experience where you guys have had a lot of success using social media and its it seems to be working well and seems to be

fairly well integrated. what steps do you have to do to set that up or does it just happen spontaneously? >> heather is probably more the expert on this but it happens pretty spontaneously. what happened was that a personality in birmingham set up kind on website send me all of your needs, and so spam, was it? people began to text of their needs and they are everything from i need baby food, diapers, things like that, someone needs tree removal at their home, the other is a shelter, the church's official to the need volunteers, the need, you know, diapers, these kind of things and all of these are kind of pouring in and so with the emergency operations center said was can you begin to put those into a more orderly catalogs a weekend digested and then get the help couple to but they grow up organically in and people are looking at the site

to say maybe i can run some diapers over to the site. ayaan nearby and it's great we want to encourage that. its neighbors helping neighbors. >> did you want to comment on that? >> part of it is the justice of it. the red cross had come to us and also humidity road is a nonprofit that utilizes the technology to also be a will to take information and be able to help people. so there were two projects. one, again, with the operations center and theater is tuscaloosa news. tuscaloosa news launched a crowd map which is basically an open platform where you can actually take pieces of public information like to order and it's believed to it can go on a map suite for the project and this project and we need to reimburse the project. we have about 50 volunteers

associated with another organization called standby task force and people are basically, in the internet right now as we speak to find means that people are saying in alabama. so they're taking the information and cataloguing it and putting it on the crowd map the tuscaloosa news have generated. and we know there's a crowd map that is a product in an open mapping platform and that is the platform you saw that was deployed during haiti and also deployed during of the japan crisis that we saw earlier this year. we see a crowd that is deployed but the crowd map may not be exactly the right tool because the platform because you're dealing with a lot of low-income a lot of information come a lot of customization that needs to happen behind the scenes. so we recommended to the

tuscaloosa news and red cross let's get together and see if we can kind of put this in a platform that will be able to work long term. so we have volunteers working basically around the clock and we are working, reaching out to the local universities to see if we can host the platform longer-term to make sure we have local grassroots engagement on that. so with the platform seeks to do is pull these people are talking about in the local eeoc is going to look the needs that people are planning and the plan any fiction and they will be about say we are planning these folks over here, we have feeding stations in this town but we are seeing on twitter that people need food. we want to make sure we're closing the dividing and the gap and so in the way they are using it to double check their planning and operations which was really fascinating. as we are happy to support the red cross and also happy to support tuscaloosa news and we

are going to the will to help them over the next coming days. >> is it fair to say that in what you're doing too large of the disaster and the need because with of the disaster there's more devastation and more of the local system and more interactive tv coke impact is that fair to say? >> i will give you something really great to see and that is in the way the bigger disaster the more people really want to help. there's disasters people don't know about so what's really been amazing is that we have seen this rise what we call the crisis crowd is a lot of times people talk about the wisdom of the crowd and people being able to use crowd sourcing. what we have seen and really what he demonstrated is the map ability for people all around the world to connect to each other using the global platform of the internet. and being able to work on common

projects. like missing persons, that is a really great example. missing persons, that became -- after katrina, the community volunteers got together and created actually their own technical standards so there was no technical standard doubles available. and so, they actually felt no one is creating it we are going to create it so that is what created this standard and we would be happy to a segment more information about that. that evolves into basically a lot of technology volunteers that have experienced during katrina came together and said there is a data standard that's already available and was able to take that the the standard and create the missing persons database based on that so now what we are talking about is the crisis providence what we are able to do is later this month we are actually holding a missing person status simmons-harris to be able to kind of work further on privacy

issues, being able to figure out how people can be able to better utilize this information. so there's lots of different pieces that the crisis crowd of giving every crisis really wants to respond. we really want to kind of look to see like how can we make the response smarter? how can we make getting information into the map for local needs quicker? how can we have, you know for example, during alabama you're talking about categories. what if we had predetermined categories? we don't need to even think about it. we just go. so that information, the river of information to flow into a map and be able to really automatically provide information that's critical to the emergency management. >> center, can i have a local front when you talk about major disasters as you probably know at the red cross most of the disasters we respond to our house fires and they don't get a whole lot of people, you know, but what we are discovering and

through our chapters who are also now tweeting and using facebook as we are able to bring the local community -- make them aware that this has happened down the street and that these are neighbors of theirs who need help. and so i think it just doesn't have relevance for the big ones that get media attention but it has relevance for the everyday emergency people who go through. >> right. so, can let me ask you if there is a -- i want to talk about the missing persons program you offer application that you offer, but ms. blanchard, let me ask you, how does someone in tuscaloosa find out about the availability of missing persons or someone in utah for that matter wanting to find someone to make sure they are okay in tuscaloosa how do they know that that's out there? how do they know that exists? >> there is actually coming from

being at the dhs for seven years, i really kind of a familiar with the emergency management protocols, and during the disasters in the united states the red cross is the lead for missing persons, and we seek to support that. but there are other efforts such as the google missing persons finder because that convinces the amount of missing persons databases that currently are created. so when this a crisis people create well-meaning technology tools like missing persons database is could be and what google did is collapse that down into basically won the was able to be propagated all over the internet which was really helpful. but -- if you have a family member that is missing, the american red cross is the place as well as fema asks people to go towards so we want to support

the local response efforts. >> ms. brown, tell us about the need for universal data formatting. i think i understand that sort of in layman's terms what that means. >> is that working? good with databases, that at microphones. so, psif which is the standard heather was referring to is as she described created out of the genesis of the hagee experience and is the standard that we are continuing to it trade on today. the concept is essentially that if you receive data rather than as souci was describing it as a space ship or all different order to be in an order with a field name you would understand so everybody would call something first name as opposed to family name or something so that would mean that when the data was coming in and could be

interpreted and you could have actually different databases easily talking to each other. that's the premise. and so if everybody made data more compatible with psif, than the speed with which everyone could talk to each other during the crisis and therefore has an end result the speed with which someone could be looking for something and be able to look into a whole bunch of different datasets within one silo here and there would be dramatically increased so that is the basic idea of the data standard. >> are they all over the board? , increasingly they are. islamic the peace of standard with basically david interoperability, making sure different databases can talk to each other, and that is definitely able to happen.

>> for flem during a disaster we do registration deily covered to serve people and take them in and make sure they post there but we are able with of these technologies kind of like craig fugate said let's not try to fit people into our system, let's try to work with the other systems. that's why we became compatible and now with facebook and twitter we are working with google on people finder because whatever is the easiest way for the person that's the way we want to go. it's not a proprietary red cross, it's not proprietary but can we work together so we get the data together and get help? >> a question about who's using it. for example in japan, we did find that many organizations used the standard particular the police so when we talked a lot missing people but you need more, all these organizations that identify people to be using the same standard for it to work

perfectly and we have a way to go. >> everything here is actually we have monthly calls on the missing persons the the so we need to create some kind of continuous improvement process on that. so we are sharing information and looking at the standard and we hope to contribute something meaningful to it. >> let me ask a question about arkansas and the specific experience you've had in the last few weeks with all of our storms, do you feel like our citizenry and the various government entities are using the social media effectively? do you feel we are following this trend other folks have talked about? >> it's a very diversified across the state. in the urbanized areas to central arkansas there is a large group of people that actually the utilize this.

in north arkansas there's some and northeast and then in everywhere else around the world portsmouth it's kind of scattered. people may use it and people may not. but a team that also has to do with of the fact that it's followed around now and it's the areas that have a large media center. you've got the television stations in things localized so we have people they can follow. and that's why i stated earlier we talked of getting groups of people together to talk about how we can actually use this for emergency management in mind to help the local areas because when you've got smaller counties but don't much less of a budget or actual county government website, social media provide them the opportunity not just to do things during the response and the recovery because before you can do that they have to know where you can go to get that kind of information. it is where the preparedness stetson. you've got your local emergency

managers utilizing this stuff in advance of a particular disaster. in that disaster people know where to go ahead of time and that's why it's so important we go ahead and work on that the obviously ahead of time to make sure we can get it together and set in place have in you would see a lot more involvement once the individual emergency management at the county level that don't obviously have a budget much less, you know, full-time status are able to do this without any web training or experience or know how to do any type of html encoding and they can enter into specific sites be able all that is already laid out for them or a facebook account that already laid out where they can put in the information and they don't have to bring out the information actually gets to where it is going. >> right. you are at adem, and the department of emergency management, do de talf it is

updated person for social media? is that you? [laughter] >> that's a very loosely defined. yes, i'm the one that does it but it's not my sole responsibility. it falls under the public affairs staff of the side of things where it belongs and there's two of us on stuff and i'm the one that handles the social media think. actually tamar earlier training additional staff to be able to make sure that it is timely and congruent in this we aren't just involved in social media when i am away to follow the time frame and we are getting some of that training tomorrow. we do have someone that takes care of that stuff but it isn't important to be done on all aspects and all levels and the emergency operations center will monitor things they come and then go out and directly talk to the people that are positioned in the eoc the deal with the counties on the first name basis

and then getting reports that the roads are flooded and they're concerned about an evacuation i will go to that even the manager in the eoc that's going to be discussing this with the perry county emergency manager to make sure is this true, is this going to happen? like we said before the emergency managers are so consumed with their life savings responsibilities which is where the need to be the they don't have time to come back to the state and say this is going on now and this is going on now so be able to have that additional side we see what the citizens are saying or the citizens are receiving we can say they are getting the message effectively. okay this area doesn't seem to be getting the message the county wants to this place so we need to figure out how best we can get this information to the local community. >> we saw that a lot and alabama where people say i am in this particular area. i think it was shackelford and we don't have any food or water. well, we did, they just didn't know where it was, so the social media allowed us to put out to

them know, you go to the corner of x and y and that is where you'll find it. >> it seems to be something we haven't talked about today is the local media especially the local tv stations in our state and probably the newspapers and radio as well, the local tv because we have had such bad storms they pretty much what just discontinue their normal programming and just do the weather all the time as these terrible storms are rolling through. but it seemed like they were getting a lot of social media information as they were covering this. >> absolutely. >> that helps bring awareness. >> we use it as we said before the italy to get information on to our public, the citizens of arkansas but also to get information out to the media standpoint. on the public affairs side of things especially the disaster by the time you put out the initial press release is already old information. it's already delayed and you've got the new information that came while two were going through the sector to get the original one approved.

the way that the media puts out the expectations of all responsibilities and getting information out the social media allows us to put out a simple statement within roughly 15 minutes of something happening. even if that is simply stating, and you know, the arkansas department of emergency management and state of arkansas activated the emergency operations center. we are monitoring what is going on as we get the information we will give it to you. it lets citizens know and taxpayers know how okay the state isn't doing nothing. they are doing something, and we know that now. whereas before they had to wait an hour or two hours to get that potential information. even though the message isn't really changed, it justifies and i think it validates the fact that they know that people are doing something about what is going on. >> we actually have all observed that if something is on a twitter or trending on a trip of 24 to 48 hours the next giunta will make is to cnn. so it is definitely happening both mediums.

>> right. let me ask a federal state local government questioned and that is on budget. does it cost money? is this just adding to your overhead? >> not at this time but in me saying that we are limited in what we actually do at the moment. it could justifiably cost money when you talk about the opportunities that there are now there and the bad thing is excellent when we were recently talking about the potential earthquake. at that level, that intensity that could happen, being able to map things like that for the social media would provide instant information and a source of information to the purges, gas lines, fires, things of that nature we are discussing still how we're going to get into these areas.

obviously they will cost analyzing what's coming and using analytics to determine which of your messages are being effective and which are not being effective and how you need to work the ones that are are not got out to the audience that you need it can cost money. this time we are not really a dime on it but we have places to go to begin to improve where we currently stand but without spending a think that we very effectively used what we have been able to take care of. >> mr. francis, let me put slight number three, which is a pie chart and it's about your survey, and i'd like to know a little bit more about the survey. as i understand to ask a thousand people around the country, and how did this work? >> as i told you during haiti this was the first time we were stunned by the fact we were getting tweets truck under

collapsed buildings and no way to answer so we wanted to make sure that we could convene a summit on all of this which we did last august. but in advance of the summit we wanted to be informed, urges the public really using the social media? and so that was the genesis of the survey. we surveyed about 1,058 when the users so these are people who are already pretty well on the web, but i think like you said, we are seeing a huge -- we would love to do the survey again and see where this is going because we expect its rolling and more and more people are turning to eight. we are also seeking demographically obviously we are seeing number of people using it more but as they get older than it will become more the way that people operate. so it was very useful in giving us a base line if you will for house social media is becoming such an important year in disaster space. >> that is helpful.

i actually did have a lot more questions, but in the interest of time i think what i will do is submit those for the record but i would like to finish with one general question, which kind of goes back to the mission of this committee, and that this i would like to get your thoughts on what, if anything, the federal government can do to help make the use of social media more effective, or available, more accurate, you know, just a better tool for all of us to use before during and after these events. so your answer could be the government needs to just stay out of the way and let this just happened and if that is the answer is a fine answer but i am curious about your thoughts on what, if anything, the government can do or should do better. ms. blanchard, do you to start? >> i think the government can do a lot. and i don't think the private

sector definitely has a huge role to play but i think the government always takes a great leadership position. the government has different types of mechanisms such as advisory council it would be great to see a technology committee on that and to inventory the resources brought to bear, and to support local authorities and for example being able to provide imagery karelian satellite imagery during disasters in the disaster assessments and you can harness technology volunteers to do that. the other thing is the limit does the done really well some nasa and noah, the weather service, there are great agencies that work all day long, and in a way like being able to

share their lessons learned as it's applied to emergency management i think would be really helpful and the data standards is always something i know that speed is working on. and by deciding to also be helpful, and then of course, you know, looking at the grants, because we definitely want to build capacity so you don't have kind of de -- it's great to have one superstar person, but you really need in a way it's not the technology tools but it's the data behind it, and it's the people that are behind being able to, you know, being able to coordinate the information across only the public affairs but also in the operational sense. >> mr. brown? >> if the federal government were to encourage all of its agencies and bodies to gistel

sadr symbol in the standard and open the would really be helpful in all the ways that it can do that. for example, noah as well as the usgs has been using in their alerting mechanisms, and alert pravachol, c.a.p. and if everyone used the same protocol as the earlier discussion, then our ability to be helpful to the government on aggregating for the alert purposes would enhance so that's one example there are many is simply encouraging the behavior and always it can would be most useful. thanks. >> thank you mr. chairman. you know, we struggle with social media at the red cross when we broached it because we didn't know how we could control, and in a way it is a medium you cannot easily kunkel as we discussed today it's very organic, it is citizens input

coming in so i'm not sure the we would see the government stepping in to set standards or come up with cash tags or things like that and they're seems to be much more fluid type of medium. i do think that by drawing attention to the issues herel bs particularly with a local and state governments who are trying to staff emergency operation centers and have the technology and have people trained there may be people who can afford that and certainly we've already discussed it with a new next generation 911 there are issues because even if the fcc were to say here are the rules, you still have to resource local, state governments that have their own 911 systems. so there may be a role for grants as well in this area. i think we've done today by convening the various organizations and groups and drawing attention to this

problem and this opportunity is really important. >> i said several times already come and it's about the importance and i can't strive eighteen's that we like the federal government to work with these private companies on a whole social media platforms can be treated to allow the saunders to utilize it in an operation standpoint. and then from that, you know, have tool kits that those local emergency managers would be able to use fairly easily. and then the guidelines, because it always gets back to guidelines set regulations, allow those to be flexible enough to allow the new technology to work instead of having to continuously go back and edit legislation and guidelines as the new technology becomes available, just allow it to be flexible enough in the beginning it can go ahead and integrate into the system. >> i want to thank all of you for being here and like i said we are going to have more questions for the record. we have a couple of members that

couldn't make it today, but we do want to thank you all for being here and we are going to leave the record open for two weeks. and again, thanks for changing your schedules and making time to be here. if you have ideas azzaoui -- as you will continue to do what you do, please, don't hesitate to let us know because it helps us understand what's going on out there and maybe we can prod the federal government to do better in some areas and to allocate more time and attention and resources. so again, thank you for your time and appreciate all that you do not just today but all that you do around the country to save lives and put this country back together after a disaster. thank you.

today vice president joe biden and congressional leaders met to begin negotiations on federal spending and the

national debt. meanwhile, house budget committee chairman paul ryan spoke about those negotiations and raising the debt ceiling at an event hosted by the american council for capital formation, a business oriented think tank in washington. this is 45 minutes. >> my name is mark bloomfield, and chairman ryan just arrived. he's going to get some coffee. weigel he's doing that, let me welcome you to our special forum with chairman ryan to read on behalf of margo thorning my colleague and chief economist we're so pleased you could join us. would you like to -- you got some coffee or -- okay. let me get the preliminary is out of the way because obviously we are here to hear paul ryan. as i said, it's a real pleasure to welcome chairman ryan, and i welcome chairman ryan with a little bit of [inaudible]

pure [laughter] and i'm not talking about my tax expenditures to which i say that because i refer to them as chairman ryan because as many of you know i was taught to have respect for the office. and the problem is i have respect for the office, but theo people who hold the office havei pulled over you, and one of thet remarkable things about chairmat ryan come he doesn't want to eall the chairman, he doesn't want to be called congressman, congre he doesn't want to be calledss anything but ryan. so i welcome you welcome paul ryan. i just want to say paul, it isn't the critic who counts. another is the man who is actually in the arena who if he fails at least he feels will daring greatly so the police will never be with those holes and timid souls who knew neither victory or defeat, and i can think of no better description of paul ryan.

welcome, and we are grateful. [applause] >> i would put alongside the quote that i already have on my wall. [laughter] i've had that on my wall for years. i can always use another one. thank you very much. i appreciate you would like me to talk for a little bit and then just answer questions, does that some like a good use of a peace time? all right, let's start off with where we are right now. we have a soft economy. typically in this country when we have a deep recession we come out of it with a big recovery. usually the deeper the drop the bigger the balance. that is not the case today. so why is that not the case today? why is our economy fledgling? why did we just have a gdp quarter with a one on the front of it?

i would argue it's because of our policy, our government policy. there is a growing body of evidence that the government activism and our economy is what is holding the economy back. so not only do we have differences of opinion with the president on his domestic policy with respect to health care and things like that, we have a big differences with the president on economic policy, what it's going to get jobs created in this country and i would say there's basically four foundations for economic growth that are not only being ignored before being turned upside down. and the four foundations, and i am simplifying, are what are the necessary basic building block condition ingredients to get the economy growing again to beat number one, and this is a bigger threat is our debt, our spending is out of control. there were spending has been growing at an unsustainable rates. our spending is about to take

off based upon the current law and there's no sign this is getting under control. so, when you take a look at the facts but today's big deficit means nothing more than tomorrow's big tax increase or interest rate increase and inflation problem, that injects a lot of uncertainty in the economy. the threat of a debt crisis and of a bond problem is holding back investment. number two, the regulatory state is just pittard to reality. so much more regulation, with its financial service regulation with thousands of pages of new regulatory agency dictates we don't even know what you're going to do is also putting a chilling effect on investments, on capitol. the environmental protection agency didn't get the law they wanted the last two years so they will try to do it through the regulatory body. these are putting a chilling effect on investments. and so we have regulatory agencies the are out there

really not looking at a cost benefit analysis. going don't have political corporate welfare capitalism picking winners and losers in the marketplace making everybody guess who's going to be the winner and loser, we need a regulatory system that is transparent, fair to everybody that doesn't take winners and losers and that is predictable and reasonable and we don't have that. for reduced taxes. yes, this is an area we have enormous uncertainty. remember the word on certainty. enormous government activism and uncertainty. the president has given a budget and he did get a budget in february. the criticism he didn't do anything is he did give a budgeted just didn't tackle the problems we had, was spending problems come it didn't address our unsustainable entitlements. but it did something on taxes. the president on taxes said he wants the top individual tax rates to go up to 44.8%.

then he gave a speech a couple of few weeks ago that said he wants to do more tax increases on top of that. and so we are getting from the administration, the signal sent to investors to job creators, families is you're going to pay more in. as i would say if you take a look at our tax issues, the idea we can tax a few other people that we don't know they're disconnected from us and that will take care of all of our problems is this a false concept is not an accurate idea. we can confiscate commit tax all the problems of the fortune 500 run the government suffers something like 40 days so we have to look at the fact even if the president's tax rates ochre and go up in his budget, the ten year revenue we would get from that would help us get 50% of this year's deficit down.

the point is spending is on a tear. a growing at an unsustainable path if we tax our way of the problem we will shut down our economy. so what we have is a signal sent to the marketplace is that there's going to be tax increase after tax increase and here's the problem. this is in the 20th century anymore. america is not just the undisputed economic superpower of the world. we have to compete and be competitive. i did my 18 town hall meetings and i was at a small town in southern wisconsin and western kenosha county. only myself, and michael barone know where this is. [laughter] and ensure you know where the leak is, michael. excuse me, i did john might know where it is as well. that's right. so this gentleman was talking to me. he has a small business, he has a small business. he just paid his taxes and paid

35%. but his competitors are in canada. what is canada doing crew? his competitive fer pays about 16% on their taxes. and they are lowering their taxes. the vindicated this approach with the last election. we can't compete when we tax our producers, our job creators a whole lot more than our foreign competitor tax payers so it's not just the large companies in the global competition. every eddy is and global competition. so we have to be mindful of the tuck fact when we tax more than the tax there's we can't do anything about that. so we are talking about it's not necessarily cutting taxes we're talking about reforming the tax system, not dropping tax revenue would reforming the code to raise the revenue coming into the government more efficiently, more effectively, fairly and with an eye towards economic growth. if we are going to get ourselves might have to prosperity it is

because we get spending under control and grow the economy. we create prosperity. the way we create prosperity is we don't pick of the phone and call somebody at a bureaucrat downtown and say regulate more jobs. we create prosperity by unleashing the entrepreneur by getting american businesses more competitive so that they can go out and create jobs. and when we tax the capitol more, we get less capital. when we tax capital more we extinguish the see corn that creates a, japan or abandonment. we want more production, more achievement and when we penalize those with our tax policies, however we do it, whether it is through the class warfare or just some innocuous revenue raising exercise we get less job creation. so fundamental tax reform is critical. that's why in the budget we say let's clean up the tax system and lower the tax rate across the board to make ourselves more internationally competitive to

get jobs created. a lot of people tell me that is a tax cut for the rich when you clean up the tax code and look at the fact people in the highest income brackets, the largest corporations enjoy the tax deductions. they are the ones that itemize deductions and in the tax shelters. for every dollar in a tax shelter that is at zero. if we clean up the tax code and will work in everybody's tax rate more of that income is subject to taxation but it's subject to taxation that is more internationally competitive. so it isn't washington sitting in the ways and means committee at the irs and the treasury department picking who wins and loses and gets extra benefit and who doesn't. it's the entrepreneur deciding that, the economy deciding that. so we need to make the economy more competitive and our tax code is one of the ways right now we have a system that is basically designed to penalize all the qualities that make us a great. saving, investing, thrift, investment, those are the things

that make us grow and i would simply say that preying on people's emotions of fear, envy, anxiety, that might make for good polis six but it's partly inspirational. it's hard the whole and it makes for really bad economics. so the fourth foundation i think it is essential to growing a stable economy is sound money. we want our money to maintain a reliable store of value. it is nothing more in city is the government can do to its people and to decrease its currency. i said in the 19 taha meetings i carry this around because i had some constituents come up to me one leedy in burlington, one over in twin lakes and devine sure michael barone knows where this is. i've received these over the years and it is astounding to me. this is a -- i asked because we can't accept gifts and a lady tried to give me this note and i said i can't accept anything of value.

she said this is a from the volume of the republic. it has no value. so i accepted it. [laughter] when you keep printing money whether it's a 50 billion-dollar note, $100 million zimbabwe not given by constituents or 100 trillion-dollar zimbabwe note or something from the republic that came from somebody's wheel barrow back in the day talks we have to be mindful. we are a world reserve currency and we should act like we're the keeper of the world reserve and we are not acting like we are the keeper of the world reserve policy. what do i mean by that? yes, we had a shock and federal reserve needed to intervene to stop the panic. the need to intervene in credit facilities to make things work, the paper market work, money markets work. those happen, those things needed to happen. but i think we've gone down the path of excessively losing money

which i fear will end up being a big problem and that means we ought to have our one institution of government in charge of making the money to focus on sound money so focusing on stable prices. maintaining the value of the currency and not often all these other tensions. i think the federal reserve has a schizophrenic agenda or schizophrenic charter. on the one hand they have an employment mandate and the other hand a price stability mandate. we should focus on price stability alone. they should govern themselves by a transparent rule that takes all the guessing game out so that we know that the focus on the federal reserve is transparency. it is price stability, sound money. we can't mess this up. deval said being the keeper of the world reserve currency is an exorbitant privilege. it is. it gives tremendous of dandridge. let's make sure we can keep that. and let's make sure that as we conduct ourselves, our money,

that we don't play with people's retirement funds. the person that takes it worse is the person that needs help the most people retire and live on fixed incomes, people living on the social safety net who was off their dollars we don't want to wipe out their purchasing power and i fear the way the fed measures these things using this output model they will see inflation after it set itself in stone and the over compensation correct and will be even more severe. in the credit crunch since the late on the banks on the money velocity and interest rates on what it will shut us down and will be all for naught because we were not focusing on the price and the foundations of economic growth are to get spending under control so you can do your borrowing under control and live within our means and stop spending money we don't have. have a regulatory state that is fair, transparent, stop trying to pick winners and losers from

this reasonable and predictable. having tax systems that raises the proper amount of revenue for the federal government as efficiently as possible so we can maximize economic growth and job creation and prosperity. and have a monitoring system that honors our place as the world's reserve currency, doesn't the base the value, doesn't try to create a new big fine neighbor standard by which we all lose at the end of the day but keeps and manages the currency as a reliable store of value so that we can take all the guessing out of the investment so that we can be sure and sound with our investment. there's a growing body of evidence of this economic or government activism is hurting sidey economy. greenspan put out interesting paper with a vigorous regression analysis. others have done the same. government activism is injecting so much uncertainty we are getting with what people call meal investment. we don't grow the economy

organically by reflecting a new bubble. we grow the economy by helping the entrepreneur is become entrepreneurs and we have a society characterized by equal opportunity, upward mobility and prosperity and those characteristics are here because we have been true to the country's principles, founding principles and they will be just as true tomorrow. i'm quite optimistic because i do believe from having just done all of these town hall meetings and talking to the constituents i did a telephone town hall at the kenosha county yesterday. people get this. the country knows we are in trouble. and they know our government is not being strict. they know that politicians from the republican party and democratic party have been making legions and decades of unfunded promises to them and things are changing for the better and they're going to stop

rewarding the politician he keeps making the promise to the o tellladget reelected and stop .. this country and what it's going to take to get us back on track in fix our problems. i'm a huge fan of winston churchill. he said two things i saw were pretty interesting. number one was democracy the worst possible form of government except for all other forms of government? its sloppy. we have lots of head lines that go this way or that we at the end of the day it works pretty well. the second thing he said was the americans can be counted upon to do the right thing only after they've exhausted all other possibilities. [laughter] i think we're kind of getting to that point right now. there is nothing that can stop us from growing this economy from getting getting property back and leading world to the goal of limited government and economic freedom to be the role of government is to promote equal opportunity and upward mobility not to equalize the result our allies.

and so an agenda that is hopeful, inspirational, that helps people get back on their feet instead of being on a path to dependency is the american past, the american idea that can be restored. and i have every reason to believe we will do that and that is exactly what we are trying to do in the house of representatives. thank you very much. i would be happy to take your questions. [applause] [inaudible] [laughter] >> there was a little confusion over night about where things stand with negotiations over reducing spending and where the entitlements are in the equation. and if you would come a related question you made certain assumptions about how in the future we would hold down cost so that under your plan for medicare things wouldn't get of control and people wouldn't dare

to much of a burden. what has been discussed this is the assumption the president made about how to hold down the cost would you compare the assumptions hold down the cost? >> i'd be glad to. stan garate kantor and i spoke about this last night. our starting point of the house budget the house passed a budget and actual budget and the budget certified by the congressional budget office now only get our deficit under control but it's our deficit on the path of balance and we paid on the debt and to get economic growth restored. sweep it out a plan to fix the problem, and the only way to fix the problem is to address and time of reform, particularly health care and health reforms. the president put out a budget in february that didn't do this. he gave a speech a couple of weeks ago that gave us one additional not a new idea which is to double the cutting targets and i will get into that in the second but it doesn't come close

to fixing the problem or getting the deficit ever paid off. we have yet to see anything from the senate, so our starting point is the house budget. knowing that we are very far apart between the president, the senate and where we are, we are not under any delusion we are going to get a grand slam of agreement. for instance we don't like the president's health care law. big difference of opinion there. so, our goal and our hope as we go through this summer because the debt limit is something that is going to move through the house and senate in the white house is we may not get the grand slam the agreement but let's get a single or double, let's get down payment on spending and actually cutting spending in discretionary or what we call mandatory spending and let's get some really good tough fiscal discipline and stuff like that to lock spending control to get the debt under control. and we are under no illusion we are going to get everything we've always wanted in this one bill but let's get a good down

payment and let's get this spending situation headed in the right direction. that's all that is happening right now. to the second point is medicare. medicare is in the biggest program today but it is tomorrow. and medicare is growing at enormous rates for a few reasons. beavers when it was created, they are now retiring so we go from 40 million down to 77 million. the are living longer than was ever measure were anticipated. it is a good thing. [laughter] health inflation is growing so much faster than the economy or the regular inflation. so under anybody's plan to address medicare and the president does have one thing that addresses medicare is slow the rate of growth because the current is currently unsustainable and has trillions of dollars of unfunded liability going bankrupt. so we say don't change the benefit for the current seniors or people ten years away from retiring 55 and above, but to keep the promise made of people who already retired and organize

their lives are not of the promises you have to reform the next generation. those of us under 54 and we want more a personal best medicare system that does work like the plan we have in congress or federal land we used it would work like the prescription drug benefit to the senior would look like medicare and and khator like your supplemental insurance, so it's not -- we aren't used to have increases in medicare but we want a choice system where the power goes to seniors and they choose among competing providers for their benefit choice and competition is our half towards getting price competition and lowering prices. the president disagrees with that. he wants to do my seniors choices, and for the current generation of seniors, he has selected a different path in its path many countries have taken. it's to create a board of 15 people he will appoint next year. the board is called the independent payment advisory board. it's in the law, part of the health care law and he gives arbitrary targets to cut

spending in medicare. they've already got target's over half a trillion from the presidents wall in the speech he basically had another half a trillion. i think 480 billion. and he is board of people, go cut medicare prices, cut medicare reimbursement. price control medicare which leads to rationing. and this board makes the decisions and it doesn't go through congress to read it just goes in the action, goes into the wall. if congress doesn't like it they have to replace them somewhere else and medicare to meet this week basically given this unelected board of bureaucrats no matter how smart they are, the power to basically decide how medicare spending will be lowered and this starts now with the current senior population and it is my opinion backed up from the analysis of the medicare chief actuary that this would lead to more and more providers dropping medicare. this will lead to medicare reimbursement providers lower than a decade. and we're on a come from, more and more doctors won't even take

medicare because for every person that walks in the door the just lose money and what its ends up doing is it actually tools health inflation because providers that get under reimbursed by medicare and medicaid on the one hand have to go overcharge everybody else with private insurance under 65 on the other hand and that tools health inflation so not only do one thing this is going to fail to reduce the inflation i think a will exacerbate and dramatically lower the quality of medicare for the current seniors and i don't think it's necessary to do that to create some kind of price control board. i think the choice and competition wherever it's been applied has worked very well and there are many areas we can improve the bill deals with this issue for the under 65 population. i think that's the way to go. we believe don't break the promise of the current seniors, fix it for the next generation and don't have a board of an elected bureaucrats make these decisions. and that is the big difference

in our approach and philosophy. the point we are making here is also we are not a debt crisis stage yet, we are and where europe is where the bond market turned and we have to do surgery right away we are cutting across the board and raising taxes. shared sacrifice is what you do after the debt crisis has hit and it's nothing more than shared scarcity in my opinion. well we are trying to do is preempt that so by going now fixing the problems today, you can keep that promise to those who already retired and organized their lives and prevent that kind of thing from happening. but if we keep kicking the can down the road will be able to keep that promise. we won't be able to have the debt consolidation plan done on our own terms and now for a long way and there will be the ugly across-the-board disruptive thing. the point of the budget is the government has to reorient its policies so the citizens don't have to dramatically reorganize their lives. and if we have a debt crisis because we don't do anything to

fix the problem now, they have to reorganize their lives and will be short, swift and sudden and people will not have time to repair. i promise i won't give as long an answer on of these. how about the dalia the classes. tell us who you are if you don't mind. islamic and eisel and with reuters news. this is an idea that is circulating around the capitol hill. that you might not be able to agree on the specifics of how to overall but that of congress commits to certain deficit targets and we don't reach the targets in the coming years ago that the, automatic trigger is what can and stop spending or raise tax revenue. would this be enough republicans as -- >> i don't think so, no. as i mentioned before, our -- what we are working off of is our budget and what our budget is cut $6.2 trillion of the president's budget or 5.8 baseline so we have lots to choose from because we think actual spending cuts right up

front or important but we do three kinds of what i call budget process reforms or budget caps. we propose what we call statutory caps in law and discretionary spending, we propose corker mccaskill in the senate, the cap on the overall government spending as a share of gdp than a week of the debt cap which is we kept the debt as a percentage of the economy which is the course we put in the budget and reinforced with triggers so it sequesters what we use in the past so we put out three kinds of spending caps in the budget so we see the budget as a option for which to select from to try to advance the dialogue in an agreement but in and of themselves alone i don't think the conference would accept >> you talked about the budget

caps. some of the press accounts talked about triggers that would trigger tax increases. >> spending is our problem, michael. look, even keeping the bush tax cut permanent, our revenue still go back to where the stokely have been. we go back to where the historical revenue linus spending goes from 20% of the economy of to 40% of the economy and then it goes up from there. spending is a problem and we want to keep focused on spending. the other thing is if we say we're going to keep raising tax rates you're going to slow down the economy and don't get more revenue to slide on the economy. i'm not saying every tax cut as before. that's not the case. i am saying tax increases slow down economic growth and it is essential and critical to getting revenue. so i don't want to get into the my menus of what we are for and

aren't for because i don't think it is constructive to negotiate to the media, no offense -- [laughter] , but at the same time we don't think, just to give clarity i don't think the tax increase triggers work and i think the offering called out for politicians to not cut spending because they get an automatic tax increase. and that, i think, was like a leader among the four foundations of growth which is predictable that the uncertainty tax rates are going to be low and stable so you can make your investment. .. i don't think that's a constructive way forward >> somebody over here? [inaudible] >> -- aren't about dangers of uncertainty and talking about overall tax reform. that's a big job. i am just curious what kind of timeframe do you expect something like that to take?

>> i think a lot of these issues we should get as much done as we can in this session of congress. but the president himself has come out against the basic contours of his own fiscalor commission, which i served on. we put a dozen or so ideas inisl our budget and the fiscalmajorif commission, which has a majority of democrats said the same thing we are saying. broaden the tax priests you can lower tax rates to get economict growth and international competitiveness. the president isn't saying that. he is seen in the tax rates,e he which i think will hurt economir growth. so ereven though we have democrs who agree with those on the general nature of tax reform the president does that tax reform agreement. we're still pushing forward nonetheless. i'm not sure what he exactly means and he's being extremely vague. the problem we have is we're

negotiating with ourselves right now. the president put out a budget in february that didn't do anything to fix the problem and gave us $13 trillion in more debt. we put out a budget to fix the problem and literally pay off the date, and then he gave a speech, and you can't score speeches, we tried. cbo can't do it. [laughter] we don't have an offer. there's no other plan p on the table. people in the media say the president has a plan, but he doesn't. the numbers he gave aren't close to what we proposed, so there's a fiscal commission plan that achieves fiscal metrics similar to ours. we exceed the metrics, but we have seen nothing that meets the moment from the white house or from the senate. maybe we will see something from the senate, and that can be done any day now. now, we're out there alone with a plan to fix the problem, so it's tough to see where this is

all going to go on the other issues outside the debt limit like tax reformment i think at the end of the day hopefully what we'll do, and i use baseball analogies because we're in the season, wait until the fall, and i'll use football terms relating to the green bay packers. [laughter] let's get a single or a double, let's get a down payment and spending controls as a part of that. at the end of the day, 2012 makes the decision. if we do our job right, which i think so far we have, we will give the country a choice of two futures, and, you know, the way we see it is do we want to reignite the american idea and have the prosperous society with a safety net designed to get people on their feet, or go down the path of debt laiden manage decline, of having more and more people dependent upon the government for their livelihoods, cradle the grave

welfare state, shared scarcity, and that is how i see the fork in the road we're at right now. that's the trajectory we're on right now, and if we do our job right, we owe our fellow countrymen at least a choice. how we do with it going into it will completely determine what kind of country we are coming out of it for the 21st century. instead of having a back room deal cut by six people, this has to be a choice that is involved, transparent, that every citizen in this country gets to choose, and i think ultimately that choice is made in 2012. >> chairman ryan, i want to ask you a specific question with the debt limit. do you see the debt limit being raised, and if so, when and under what process? >> just give you michael's answer. we -- i don't think the votes are there. i wouldn't support a vote for a

limit increase. the president 79 -- ments nothing but a increase. that would hurt the markets. that shows there's no will in washington to do anything about the cows of the debt limit hit in the first place. secretary geithner's numbers are probably accurate. we have the tax receipt data in now. there's certain cash management things, and let's assume it's august 2 -- august 2, so i think that's probably pretty accurate. these numbers move a little bit every day, so i think that our point is we need something serious to address the debt in the future. the reason the debt limit is hit is because of spending in the past. we don't want to rubber stamp an increase, but get a down payment on fiscal control in the future. i think that's what ends up

happening. that gentleman, sorry. try to get to you earlier. >> mr. chairman, do you have any information on the progress that the senate gang of six is making? >> i don't, and i shouldn't even speculate. i talked to conrad at dinner about it. i don't know. i think they slowed down a little bit more. i don't know the answer to that. yeah. >> michael warn from the weekly standards. i want to ask about public support for the medicare part of the budget. i know there's been a bunch of polls all representing the medical part differently showing varying results. >> that's the key, how to phrase the questions. >> sure, sure. there was a poll that i think pretty welfarely represents the medicare part asking if you want to keep the status quo, a or b, or make the changes you talk about the seniors joining in

2022. it's a pretty fair representation of your plan, and 60% say they want to keep the status quo. what i want to know is, you know, is there a need for a national campaign to talk about this? >> i think that underscores it is the status quo, it's gone. first of all, the president changed the status quo already with his health care law. you take $682 billion to spend on another entitlement, we don't do that. it goes towards medicare solvency. he puts this in charge of cutting the quo and reducing prices. a lot of people think the status quo can keep going. it can't. medicare, medicaid, and social security consume all, all federal revenues by the time my kids are my age. gosh, have interest on that, by 2025, they consume every federal revenue. there's a required federal

education campaign as to how dire our fiscal situation is as to how unsustainable the programs are and how they are going bankrupt, and i mean, look, the fiscal gap, this gao calculation, in 2009 it was 62.9 trillion, and in 2010, it was $76.4 trillion. today, it's $99.4 trillion. what's the fiscal gap? this is the amount of unfunded promises the government is making to today's americans. promises that are made to seniors, workers, and their children that the government has no means of paying and goes up over $10 trillion a year. what this tells us is the sooner we act, the better off we are because every year we delay, we go that much deeper into the hole. there is a sense of urgency here. we call up bill gross and bond traders and economists and have them come into the committee and ask how much time we have.

they all say 2-5 years. that's the answer i get from every one of the people who seem to be the ones monitoring the credit market. there is a sense of urgency. it's not extremely immediate, but it's in the near future, and i think people just have to understand -- that's why i've done over 500 town hall meetings in southern wisconsin on this topic over my -- >> do you need to be doing more around the country? >> i've done 19 in southern wisconsin, so i think i did a pretty good job there. across the country -- we need to be doing more across the country. we just deployed 243 house republicans over the last two weeks who went out and did the town hall meetings. for our side of it, house republicans, and i talked to dozens of members yesterday who were excited about their town hall meetings, delivered the message to their constituents, came back energized like i did. the people are ahead of the

political class, and i really believe that people, when think -- they see the circumstances and the numbers, they're ready to embrace the reforms we talk about because the alternative is really quite ugly. jerry? >> vice president biden is convening today a small group to talk about -- >> the commission. >> exactly. what place does it have on the road to resolving the debt ceiling question, and mori browedly, -- more broadly, how do you explain the tenor of your dialogue with the administration through all of this right now in >> i'll take the easier question first. so the president as a condition of the debt ceiling in the last session created the fiscal commission, the fiscal commission by a majority of the

democrats and then there was a budget that didn't do anything to fix the problem, and then he gave a speech that said more ipab and have the new commission figure this out. what i make is leader can't keep delegates the decisions to other people. you know, leaders have to get in and fix the proke, and we if we keep delegating to others, nothing gets done. what is the biden commission? what are our hopes of the biden commission? i guess i would say the place in which discussions occur with respect to the debt limit. a budget agreement occurs between members of congress, between budget committees and leadership, in conferences after budget resolutions are passed. i don't know if we're going down that path or if senate can and will pass a budget resolution. i think the biden commission as i suppose the place in which the talks reinvolving around the debt limit occur. with respect to the administration, the one i talk to the most is secretary

geithner. he's the one i talk to more often than anybody else. i like jack lou. i want a lot of respect for jack. we talk not very often, but we have mutual respect for one another, but i pretty much talk to the fiscal people and that's it, and i suppose tim is probably the one i talk to the most. yeah? >> hi, from the financial times. >> oh, yeah. >> could you explain, perhaps remind us why house republicans also felt to support the comitionz proposals and why that -- commission proposes and why that is not a possible compromise or solution as to a way out? >> i don't think we failed to support it, but we just didn't support it. [laughter] i was on the simpson -- there was a lot of the parts of the plan i like, and the reason people like me didn't support it

is because it didn't address the problem, and the problem is health care. i worry that we're giving the country is false sense of security if we put out a fiscal plan that addresses everything but the primary issue which is the primary driver of our debt, and the primary driver of the debt are the health care programs. you cannot structurally address the debt crisis if you don't address health care entitlements, and so not only did it ignore medicare and medicaid, the -- i don't think it was the intention, duh it was the consequence to be accelerating obamacare, so what that commission does with respect to health care is more harm than good. it accelerates the imposition of obamacare. if you take away the tax exclusion for individuals, we believe that more and more employers dump their people into the health exchange and have subsidies go up far more than we

estimated today. if you take away the tax exclusion, that exacerbates that effect. we believe that the sumpson makes it worse because it accelerates obamacare, increase exchange subsidies, driving up the deficit. i got a letter from the cbo two months ago saying they under more realistic assumptions they believe that the president's health care law will exacerbate the debt and deficit, actually add to it under more realistic assumptions they believe are more likely to occur, and it didn't do anything to address medicare or medicaid. it added a third to the eligibility standards, and it didn't really do anything fundamentally to fix medicare, and i don't see it as the fix to medicare. i think that's more shared scarcity, price controlling. price controlling doesn't work. it was a good bipartisan agreement, but it was a price agreement. what happened? congress in two successive

agreements pulled back those savings, restored those savings except for the sdr, and then we pass that every single year, and so i don't think those things hold, and so what was aless -- less son taken from that is take it out of the hands of congress and have a board do it to stand political scrutiny and just do it. that, to me, is not the path to take, and that's why people like me didn't support it. >> does that mean in your view no compromise is going to work that does not dismantle health care reform? >> this is why i think 2012 is the ultimate decider of these things. there are other things that can be done to make improve. -- improvements. it's on other areas of government spending in both the discretionary and mandatory side, there's a lot of things we can do to save money and put

controls on debt and spending to commit us to spending down, but i don't think you can fundamentally fix the problem unless you fundamentally fix health care, and that is where we have a gulf that separates us, and that gulf, i think, will be largely determined, the outcome of which will be determined in 2012 in my opinion. it is what it is. >> final point. >> okay, sure. this is your watch? >> this is my watch. i'm high-tech. as you know, one of our big missions is tax reform, and what's interesting about your proposal, it not only lowers the rate, but it doesn't pay for it by increasing taxes on savings investments. >> that's right. >> that's unique about the ryan program, and i want to commend you for that. >> the house republican program. >> yes, with some bipartisan support, and we commend you for that. secondly, i'll continue to give you the man in the arena as long as you are the man in the

arena. thank you for joining us, paul ryan. >> thank you very much. appreciate it. [applause] [inaudible conversations] [inaudible conversations] [inaudible conversations] >> senate minority leader mitch mcconnell tacked to the federal spending and the deficit on the senate floor today.g of this is five minutes. and i >> normally end up in the majority leader crispers. he and i have never viewed this is a contentious n process.head

since he is not here yet i wille go ahead.r i >> republican leaderss recognize >> when it comes to the state of our economy, the american people have seen enough choreographed rallies on factory floors and speeches that sound could lead to nothing. after two years of chronic resul joblessness, they want results n and that's why we growing consensus in washington over the pastso few weeks that something serious must be done about our nation that.aging even democrats now admit to failing to bring down the debt g would be far more damaging to our nation's economy and the ru. than failing to raise the debt ceiling. the situation has been described as the most predict the book tisis in american o history. people on both sides of the aisle now realize the warning bells are too loud to it morecil and less than president obama himself many crucial admission in a sign that he too is starting to worry about prospects of inaction. ser

the president says failing to dd produce a serious plan for tackling the deficit and debt could be a bigger drag on the t economy than anything else. see so more and more people see thea problem. now the challenge is achieving a result. basic principles yesterday that i believe could guide us to success. ahead this morning i want to reiterate those o principles at the blairr house by setting out clear principles that drive power far more likely to actually get and somewhere and prevent the crisie before it strikes. o fri first is time for friends on the other side to stop pitting one group of americans against ano another, solving this crisis will require all of us working together. so why don't we start to make af quick second, the level of spending democrats want tohout g maintain just isn't possible without raising taxes on the cls middle class, which we know is t that going to happen. -gs u we're only going to solve this crisis by admitting up front we have a spending problem.he

third, entitlements need to be a part of the discussion. so let's drop the scare tactics worked together on reform.fourtg anyone's medicare. fourth, raising taxes is the t a last thing we should be doing he and delivery section. what's more is the senate oppose raising taxes. let's set the idea inside andro if we recognize these things, we can avert the crisis. if we don't, we won't and i assure you will answer for it. e very few people saw the last this crisis coming.clear as this one on the other hand is gd clear as day. failing to work together in good eryone a faith would be completely the indispensable. everyone agrees this is ali crisis. more people, including the president agree failing to the address it would be disastrous for jobs in the economy never knows the upcoming death of the vote is the best opportunity will have to do somethingso abot it. so what are we waiting for?

doing something meaningful about the debt is the centerpiece of any serious job agenda innt mada washington. other things will help on that front and the president made a o small but important step in then right direction yesterday by announcing he was ready to begin ngalli talks on a free-trade agreement with colombia, something we've been calling for him to do for t years.nd ratify this agreement with other agreement will open up markets to u.s. goods and create e ousands of jobs with just onev of the ideas including arele comprehensive job seeker in to , this week, that focuses on expanding opportunity, lowering costs and clearing bureaucratic cleaiers. at the top our list of things we bed to do to create jobs is bring down the debt. get the if we can't get spending under control, we'll never get the to economy moving.defits and if the economy doesn't grow, we. will be a will to reduce don't deficits and our debt and if we

don't reduce our massive federaa debt, we face a crisis that makes the financial panic of 2008 look like a slow day on nee wallrm street.erm fis so this debate can be more important to our near-term and long-term fiscal health. everyone has a stake in the debate. we face up to it'l like adults lll not only prevent this most predictable crisis, will help preserve our way of life in thea best part is no one side will bl able to claim the credit. this is the moment we cannot let cannot mr mr. president, yield the floor.c >> majority leader is second recognized.fficer: e [inaudible] >> clerk will report. >> h.r. 1213, naturally pill mandatory funding provided to states and the patient protection and affordable care act to establish american health in us and exchanges. fur further proceedings in this matter. >> objection is

heard. owll >> it will be placed on the calendar. >> mr. president, reappear in morning business until 5:00 p.me today with republicans controlling the first 30 minutes and the majority controlling the second amendment. next roll call vote will be monday, may 9 at 5:30 p.m. it will notify senators the subjece matter with the nomination.reicn >> mr. president, in regard to the republican leader, as they listen h to him, i picked up abt three or four points i think ard fairlyon obvious. rich. one is don't touch the tax cutsr for the rich. number two, don't touch tax cuts for the rich and number three is that they want to go after entitlements. >> vice president biden will host a series of deficit reduction talks with

congressional leaders. he held the first of those talks today at blair house in washington before and after the meeting the vice president of two reporters. no audio. [no audio] [no audio]

[no audio] >> -- we know we have to the main concerns. one is that our debt limits and the fact that the matter they are connected. we've got to make sure we also have a much larger issue of long-term debt. and we've got to some real progress. were all in agreement that we have to deal with both these issues and we have to make progress. this is an opening meeting where today we had the chance to talk a little bit with each of my colleagues. we're going to lay down tonight and try negotiating and make sure each of us understand where the other guy is coming from, where we think the plan we put forward mix them up sons and them are going to get to work. and so, i'm optimistic, but then again the congress for 36 years.

so thank you are very much for coming in and we'll be talking to you later. [inaudible conversations] [inaudible conversations] >> good meeting. we're going to meet on tuesday and everyone has agreed there was a joint press release were putting out, acknowledging we made progress. we're meeting again tuesday to get the process underway. thank you. >> vice president biden will next meet with congressional leaders on tuesday, may 10.

>> housing and urban development secretary shaun donovan testified that back his budget request for 2012. the mr. schlosser $40 billion, 1% less than in 2010. it includes funding for foreclosure programs, rental housing assistance and homeless assistance programs but reduces funding for community development grants by 300 million. the senate banking committee hearing is an hour. >> -- to discuss administration budget agenda. secretary donovan come you come to sa challenging time.

our panelists in our state and local government run partners continue to struggle during this economic downtime. administers programs aim to provide access to quality and safe housing for homeowners ando renters. these programs often provide a needed lifetime to our mostomy,e vulnerable citizens in today's economy there are more important than ever. far too many american families and communities still face the threat of foreclosure and millions more are seeing thei ra property values fall in a fragile housing market. and although it may seem has counterintuitive, housing has come become less credible for lower income families, even as housing has plummeted. recent studies by your department has shown dramatic increases in worst-case housing

needs among variants of income and homelessness among families. as you know, as the senator in n the visit to south dakota last year, many communities continuef to struggle with the shortage of economic opportunities and a lack of housing choices. as the need for credible housini prices, local providers face difficulties due toaging the aging buildings and contracts. meanwhile, states and localrn governments by squashing services and job investments. as the country faces the daunting challenges, the federai government and preserve important programs that help those most in need, and

that at the same time, we must also be mindful fft budget constraint -- of the budget constraints and be certain we get the most value for our dollar. .. cutting funding for several problems that you otherwise support in order to meet these fiscal goals. i am concerned, as you may be, that the number of these cuts would house our progress in addressing the needs of businesses. but in but your budget also contains a number of proposals intended to increase cost effectiveness,

including those to improve house and administration and programs come to strengthen the and financial standing of the fha insurance programs as theythey e provide countercyclical funding oo the housing market andrec communities provide new tools te help createl and preserve publid and assisted housing andsist streamline our public housing te and programs to meet the more effect is for guarantees and families. vital resources for millions of americans who struggle to meet t one of our most asic needs, ae t safe place to live. as we continue to debate the tae budget intact when the deficit, we cannot afford to leave smericans in the cold.to thedi

i look forward to a discussionas of the proposal during today's hearing. i will now turn to senator shelby for any opening remarks you may have. senator shelby.weome to the >> thank you, mr. chairman.a to. we all know that. our nation's debt as $27.6 trillion. ironically, the office of management budget declares on its webpage that the budget pato

quote puts the nation on a path to live within our means.true. i wish that were true. unfortunately, while the president talks of living withis our means, his budget produces a different result. the hud budget is a good illustration. prepared secretary donovan stays in his prepared testimony that the administration's budget quote e reflects the need to ensure that ou are taking responsibility for our country's deficits. yet hud's own summary states the department's gross spending wily increase 900 million for 2012.0. ludson at level of spending will apparently fall by 1.1 billion. very int it appears that hud provides att this figure by offsetting the total spending numbers with 6 million in fees that are to be collected by fha.standing al

it was nice understanding these fees were supposed to be used to ensure safety and soundness ofbe these entities. it appears they are being used to offset the cost of programs elsewhere in the hud budget. bu i hope i'm wrong.is a while this is a new concept in government accounting, this is h not a new concept in government accounting. we're going to have to be honesu with the american people and ourselves about what we areactuy actually spending it for serioug here in the congress about getting your debt under controla i think we must find a way towe curtail spending if we can ever hope to restore the nation's long-term health. i look forward to hearing from secretary donovan on how hud can tighten your belt while contributing to essential e services they need in theices wd housing area. thank you, mr. chairman. >> secretary donovan, please proceed.proceed.

>> tha >> thank you, chairman johnson a american member shall be forityo your partnership, wrhich i wasws reminded of the guinness thatidt you as they join other memberscn of president about his cabinet cabinet to tour the devastation out by the recent tornadoes. as i prepare to return next week, i want to assure you,e senator shelby and the fourfecte members of the committee from affected states that will do everything in myas the secretars administration makes the lives of displ familiesho powery i come before the committee to discuss the investment of this fiscal year 2012 budget proposal calls for to help america with the future by of educating, innovating and outbuilding our competitors. i will also highlight the steps the proposal seeks to improve how we operate the programs and the tough choices it makes to ensure we take responsibility for the deficits. obviously our fiscal year 2012 proposal was developed before the continuing resolution for the fiscal year passed by congress signed into law by

president obama. although the cuts in the agreement were necessary to ensure we live within our means and keep the government running the president noted that the sea are contained real cuts that would have an impact on services and people who rely on them. indeed i believe the president's 2012 budget strikes an appropriate balance between the need to reduce spending and preserve critical services for americans. mr. chairman and sold in the 2012 proposal, we follow the three principles to help us strike this balance. the first is to continue support for the housing market while bringing private capital back. two years ago with the housing market collapsing and private capital in retreat the administration had no trace but to take action. the critical support provided is to help over 2 million families buy homes since that time and nearly 1.5 million homeowners refinance into stable, affordable products with average monthly savings exceeding 100 billion. and while fha continue supporting the housing recovery in the year ahead, we also must help private capital return to

the market. this is a process hud began many months ago and i want to thank congress for passing legislation the last session to reform the mortgage insurance premium structure. with this authority, feg increase premiums to 25 basis points last month. because of these reforms and others, fha has projected to generate $9.8 billion proceeds for the tax payer in a fiscal year 2011. indeed the reforms generating the receipts today set the stage for more private capital to return in the years to come weigel insuring fha remains a vital source of financing for underserved borrowers and communities. one of the fiscal year 2012 request is $4,738,000,000,000 in the riss budget authority because of the fha and ginnie mae received a cost of the taxpayer for the budget is only 41.7 billion. this is consistent with the president's proposal to bring non-security discretionary spending to the lowest share of the economy since president eisenhower.

the second principle we use to develop the budget is to protect current residents and improve the crow programs that serve them. will the median income of american households today is over $50,000 for households who live in the assisted housing its $10,200 per year. and more than half our elderly or disabled. at the same time, having seen from 2007 to 2009 the largest increase in the history of the hud's worst case housing survey it's clear the recession hit these families hard. that's why the 80% of the proposed budget keeps the residents in their homes and provides basic opportunities to public housing while also continuing to serve the most vulnerable populations through the homeless programs. because the cost of serving the same families grows each year, protecting the existing families and programs require us to make tough choices with the remaining 20% of the budget and putting the decision to reduce funding from 2010 levels for the canada development block grant, home investment partnerships and new

construction for the hud supported housing programs for the elderly and disabled. eyes of our myself as a local housing officials the difference these funds can make supporting senior housing, boys and girls clubs, ymca and other providers of critical community services. these cuts are significant but with american families tightening their belts, we need to do the same. i would note this budget provides $80 million for the housing counseling program which was eliminated in the continuing resolution. there was particularly painful to the responsible homeowners and neighborhoods around the country struggling to keep their homes and restoring it reflect the president's call to make tough cuts to reduce the deficit without sacrificing the core investments we need to grow the economy. at the same time this budget makes a strong commitment to do more of what works and stop doing what doesn't. by including provisions of the section 8 felker reform act and the budget we will simplify and streamline the voucher program and save $1 billion for the

taxpayer over the next five years while supporting the ability of the housing authority in small towns and rural areas to better serve the working poor. indeed thinks the senator reid and the committee leadership passing the act is a new housing stability program reflects the unique and growing need in those communities. the budget also calls partners accountable for the funding they received from hud to fund the public-housing operating fund we require public housing authorities with excess reserves to contribute $1 billion. these resources were set aside so our ph a could continue operating during a rainy day and i think we would all agree that rainy day is here. these efforts point to the commitment expressed through the transformation initiative to improving the programs. the funds are replacing the the systems of the largest programs housing choice vouchers that date from the early 1990's so we can hold the to the could accountable for managing the budgets just like families and businesses are doing across the country. the flexibility tian provides allows us for the first time to

offer technical assistance across all of our community planning development programs and watch a new initiative to improve the financial management accountability of troubled housing authorities. bye supporting research evaluation and program demonstrations cotillon in paris the hud accountability by identifying what we do well and we need to do better. these needed reforms allow us to propose increased investment in programs we know work like the hud program for homeless veterans. this is built on a solid body of evidence that determine a supportive housing was going to end homelessness and save money for the taxpayer by putting an end to the revolving door of emergency rooms, shelters and jails. as such, the budget would increase funding for homeless programs by more than 25% over 2011 to keep the president's commitment to opening doors. the first federal strategic plan to end homelessness which the administration unveiled last june to end chronic veteran

homelessness by 2015 and homelessness among families and children by 2020. our firm and final principal for developing the budget is to develop initiatives that have been part of a wedge of the last 20 years but in this fiscal climate proposed no new initiatives. the president made clear when the rooster and educating our children but that's not possible if we live in a whole generation of people behind in the poorest neighborhoods. that's why i'd like to thank senator menendez working with us on the terrace neighborhood initiative which was founded in the sea are and we again propose funding in fiscal year 2012. tweeze neighborhoods allow the communities to use the mixed use financed was pioneered by secretary jack kemp and henry cisneros with the program to transform all federally assisted housing neighborhoods. similarly ensuring america out builds our competitors, requires for the future right now we're losing 10,000 units from the public housing stock every year.

the sinking is billions of dollars of private capital sitting on the sidelines that could put tens of thousands of construction workers to work rebuilding this housing. that's up to 255,000 public housing units using long-term project priest rental assistance opening new funding to affordable housing but also a new sense of discipline that extends from the way the properties are financed to the way they are managed. lastly, jimmy johnson, american business large and small cannot out in avaya their competitors wonder workers spend 52 cents of every dollar they you're on housing and transportation combined and of a project some roads cost five times as much we stand fuel and time as it did 25 years ago. that's why we request another

$150 million for the sustainable community initiatives building and funding provided in 2010 and in 2011. instead of federal one-size-fits-all rules that tell the community is what to do, this initiative is helping regions and communities to build comprehensive housing and transportation plans to create jobs and economic growth. with help from its record 7 million-dollar grant from hud, austin texas estimates it will create more than 7,000 permanent jobs generating an additional $1.1 billion of economic growth over the next five years and saving the taxpayer one in a quarter billion dollars. the potential of these innovations explain why the extraordinary demand for the grant program wasn't just coming from the largest metro areas. indeed over half of the regional grants were awarded to the rural regions and small towns and so mr. chairman come stifel's fiscal 2012 proposal to the proposal isn't just spending was it's also about investing smarter and more effectively. it's about an hour to the crowd

of educating and out in a feeding our competitors and making hard choices to reduce the deficit and put in place much needed reforms to hold ourselves to a high standard of performance. but most of what about the results we deliver for the people and places to depend on us the most. for mortgage-backed securities in the future starts at home and with the budget i respectfully submit targeted investments and tough choices we aim to prove it. thank you. >> thank you, mr. secretary. would the clerk please five minutes on clockworks and as mentioned earlier, you visited south dakota with me and saw firsthand the dillinger and facing the country toeally appreciate the v .. needs. i would like to ask about the speed of the hudna distribution. mortgage-backed securities issued in fy 11 on january 27,

2011 compound and at present many have not received their full fy 11 funding. some have held housing development and others have started to eliminate the staff. what is the department dillinger to speed the provision process to ensure the tribes will receive their full allocation of fy 11 ai hbp funding program that the very earliest possible moment? >> senator, obviously the delay in approving the 2011 budget about half the way into the fiscal year has had a significant impact not only on the tribes, but on recipients of the funding across all of our programs. we have moved now that the budget is in place to accelerate the we that we are awarding that

funding, in fact one of the things we have learned with the new process we put in place under the recovery act where we are five months ahead of the targets we set for distributing the money as you know tribes across the country used quite effectively and quickly a witness to grants in the past. we've taken the team that developed of the implementation around the recovery act and assigned them to accelerate our regular funding process he's so we expect to be able to distribute much more quickly this year the american block grants and we'd be happy to sit down with you and your staff to give you details of exactly when we expect that to happen based on the last few weeks of work we've done since the budget was resolved. >> good.

mr. secretary, your request includes $88 million for hud's counseling program. as you know, this program was not funded and fy e. 11th. is hud's program still an important use of federal dollars? >> absolutely. and i mentioned this specifically in my testimony. what we have seen is housing counseling has always had a benefit to homeowners, but particularly through this crisis we have seen the importance of housing counseling has increased substantially. urban institute recently did a study that showed homeowners that are in difficult times with their mortgages are 70% less likely to be foreclosed on if they receive counseling. we've also seen from other studies homeowners to purchase

homes with counseling are more likely to be successful in being able to stay in those homes if caught so given the impact the housing crisis had on the economy more broadly, given the number of families still struggling to make the payment of unemployment, we think this is an absolutely the wrong time to eliminate funding for the counseling. i would also note some have said there is a program for the neighbor works in the budget as well that continue to get funding in 2011. i think the key point here is that only meets a portion of the needs of their. for example, beyond just the families struggling to pay their mortgages, seniors who are interested in using our reverse mortgage program are required to have counseling. that counseling was paid for through hud's appropriation. there's no other source of funding and now that will fall

on the seniors. so we expect as of october 1st with a fist cut there are many agencies around the country no longer able to provide funding there are approximately 70,000 homeowners who we will not be able to reach without the funding and even we were hoping for. and so it is absolutely critical that in 2012 we restart this funding. >> has it been a justifiable focus on the fhe single-family volume is often overlooked that the multifamily loan volume is in the recent years. can you describe some of the actions taken to ensure the ongoing integrity of the multi family programs also would is the growth in the volume say

about the multifamily housing access to capital? >> i appreciate you asking this question because it is often overlooked given the crisis we had in a single-family how important the fha programs have been to the continuation of the multifamily market and you're exactly right in terms of the increases we've seen in our multi family program to the we have applied many of the same tools in the multifamily programs we have on the single-family program. the fact we appointed our fha first-ever chief riss officer created a whole set tools to track and monitor the default in the fha portfolio, the delinquencies and half as a result of that made a number of changes in the underwriting

criteria for these programs and changing many components of the underwriting terms such as the loan-to-value ratio and range of other things that have improved the performance of the programs. what i would note, however, is unlike the single family side, multi family programs have performed relatively well through the crisis at the gse the multi family programs did not contribute to their collapse. and we continue to see even through our most recent numbers the multi family programs that hud deemed profitable. while they are much smaller and don't contribute nearly as much as a single-family side to the mowing .8 billion in receipts that we expect this year the have continued to be profitable and they are a critical source as we have seen iran to rise, vacancy decline in the rental

stock is an absolutely critical we continue to have a source of financing available as we work our way through this crisis. >> senator shall be? >> thank you mr. chairman. >> secretary donovan, we have had these conversations before getting the private access and private capital because there's a lot more out there. anytime we can access capital including prime in the pump, putting some money to say access and two-thirds more on something like that i think we are making good progress and i think you do, too. would you expand a little bit on what you're talking about the program did into the private capital tell you were doing this? i guess in many ways. estimate absolutely. public housing is the single most important example of this. public housing is the only form of affordable housing in the entire country today that has

these very difficult barriers to access and private capital. is really only indy 500 hope six program and very limited other examples to the choice neighborhoods where public housing is able to access low-income tax credits for other private capital and other public capital as well. the result of that is set in my testimony isn't just that we are losing 10,000 units of public housing a year, but what we also see is that too often public housing is cut off from the neighborhoods that surround it and cut off from opportunity. to give you an example from my prior life, we try to bring grocery stores and public housing. we try to bring new development on to public housing land, mixed income housing, senior housing that would help those raise their kids in public housing and now need more support in smaller

units and it was like banging our heads against the wall too often, senator, to try to bring those tools to public housing. so it's time the federal government got out of the way and allowed many of the entrepreneurs and the communities that have despite some of these pressure actions done creative things to look into that. that's why we have a proposal, demonstration of allow over to under 50,000 units through some fairly simple legislative changes to change the way that that land is zoned to allow the deeds of trust to change and change the way we fund public housing. right now we supply capital funding and operating funding and we are really the only source of funding that can support those units by changing it to in operating subsidies similar to the way section 8 works with all of the other owners. we would allow public housing authorities to be able to access all of these sources.

we estimate is $25 billion of private capital sitting on the sidelines that can create hundreds of thousands of jobs in construction. starting today, if we could unlock that capital. >> do you need a statutory change? >> we have a very limited authority to do this, and we are expanding ways of the we can do this with existing authority -- >> this committee? >> absolutely but we are proposing a demonstration which will be legislative the would increase buy roughly ten times the number of units we could reach >> would you crystallize that and get it to the committee to have already indicated at least to me and the chairman? >> i'd be happy to do that. estimate of one to get into something else if i could come cost savings trying to do more. >> according to the cato institute the amount of money we currently spent on subsidizing affordable housing is enough to

pay 100% of the rent by every family in the country earning less than $22,000 a year. some changes could be made to ensure we are holding the greatest number of families in the most efficient cost savings manner possible. what steps has hud taken to reduce the cost while increasing the efficiency of the housing programs? >> that is a tough job to term. >> very important. but look, this is as a former customer of hud if i could put it that way, i would say we have too many programs with conflicting rules. there's too many places where we require housing authorities or owners to comply with or u.s systems or other things that frankly are not efficient and so i would point to the two things that were critical.

one is we have proposed and worked with this committee on the bill would call the section 8 vouchers reform act. and just to give you one specific it simple, we have as a sudden my testimony, over half of our residents are elderly or people with disabilities. they tend to be on fixed incomes. 80% of them have exactly the same income year after year, and yet we have required recertification of 100% of the residents each year. it will allow was on a risk basis to say these are residents much more likely to have an income change. we would target them for the annual certification but others come seniors for example, we learn that it's less likely. if we do every two years we've done the analysis. the impact of that is a savings of a couple hundred million dollars alone in one year.

>> that makes sense. >> so svra come if we could get it passed as either part of cogent process -- budget process or support a bill i'm hoping that we could get is a billion dollars in savings over five years. simply by making it easier for folks to run the programs and it would also in the rural areas helpless surf more families working. >> who would be against that? do you know? >> we became very close to getting it done at the end of last year and they're seem to be very broad support. there's an argument but very minor provisions but i would be hopeful we could get that done. it sickened example we hoped for and got flexibility from the appropriations committee to invest more in what we call transformation initiatives. it is investing in the systems and control systems, fraud detection systems, public

housing that will also allow us to save significant dollars in think as well. >> that's good. one more question. one of the criticisms of the current housing finance system is that it increases borrowing and accumulation of debt rather than the building of equity. i know that's what we need is equity. some scholars have proposed a better way to encourage the responsible homeownership is for the federal government to stop subsidizing mortgage rates and instead held potential homeowners build their finances for a downpayment. i don't know how that would work. what is your view of shifting subsidies away from encouraging borrowing in the programs that help them build equity in their homes? i have to see the mechanics myself of that concept. >> i think it is clear from the crisis that we have been through and we need this very clear in our white paper that we did with the treasury on the finance

reform that we have spent too much money subsidizing what often didn't get to the borrowers because what we did is to have an indirect implicit threat of an explicit guarantee and didn't have a system with feeney and friday that made sure the benefits made it to the taxpayer. and we support limiting the risk to the taxpayers in the future system. we do think there is a role for the fha for a targeted guarantee. we have a number of proposals and the reason given he might be used to ensure that in a crisis we have adequate financing and the rates remain stable and affordable but i do think is more we can do to shift funding towards building equity.

one proposal we have come and i know senator reed has been a champion of this is that rather than having the next incentive of goals which did not accomplish what they were intended to do under fannie and freddie in too many cases we have an explicit funding source that would support downpayment assistance and rental housing through a dedicated stream of financing the the national housing trust fund is one way to do that under the prior system we think their needs to be much more explicit targeted source of support the doesn't mix incentives the way the goals did in the prior system >> senator reid. >> thank you mr. secretary for your great leadership. let me ask about the family self-sufficiency program. that's something i know that you have included in your budget.

it's something that my local housing advocates is a very strong and you have one of the greatest vintages in the job of having been as you describe both the consumer of the higher the services now provider and many perspectives we are working on a proposal together with your colleagues to help improve this program and your views of where we should go. of the family self-sufficiency and the reason is it is a smart approach. too often we focus on the short term and don't think about how our programs can help support self-sufficiency and reach the ultimate goal of families who can work getting jobs, becoming independent and graduating from

the program, if you will, and making space for those that are on the waiting list elsewhere. it makes sense for everyone to do more of that. the problems as you fight and fight for that right now it works in our housing program, our felker program to those programs are completely separate and we think it makes perfect sense and this goes to senator shelby's point to combine the programs, reduce the cost of them and be able to expand the number of the families it reaches. we also think it's a terrific idea to have this reach hour multifamily program as well. right now the residents of the project based section 8 are not eligible to participate in fss to we think it makes perfect sense to this. we also think that this is one of the things the transformation initiative is funding as well that we have a very good anecdotal evidence, and some limited studies of the success

of fss. beah torian new york city invested substantially raised a lot of profit foundation money to expand but also to study it more closely and that we are doing the transportation initiative to look at this in detail the impacts with greater studies we could demonstrate this program pays for itself and we ought to be doing much more of expanding it substantially so the proposal was absolutely going in the right direction. >> i think also to your emphasis on analyzing and ensuring that this is funds knorr the cost and if it makes sense that we are investing but also getting much more return that is the key part of what we want to do. let me turn my attention and commend you for your increase in the proposed budget for the homeless assistance programs. we have some success in the

country throughout getting people off the streets and into some type of structure. but would you take a moment from your perspective of how, why it's important to invest in these programs? >> well, to go back to the point that you just made, we demonstrated that it is more expensive for somebody to live on the street particularly chronically homeless person than it is housing. it's simply that. and this recognition i think is growing broadly. your leadership and the bipartisan passage of the act showed that there is a growing recognition that investing in our homeless program is not only saving lives, it saves money. and the fact that and as difficult a budget environment

we have that there is an increase in our homeless programs and the 2011 cr and we are proposing difficult cuts to many programs the significant increase in the homeland program in 2012 demonstrates that we have shown that these programs work. now the issue i would point to there's a small increase. it will not allow us to implement the harth act fully. we will implement one portion of it but to give you an example, there was a very important new role homelessness programs created in the act. there is not adequate funding to find that in 2011. and so making sure that after all of the work that was done over the decade as you know very directly to create the act it's critical that we find ways to ensure that we can find the pieces of it because it makes sense it, consolidates and will

lower administrative costs for hud but tens of thousands of families, and i would just last lease a as you know what the veterans in the country 50% more likely to be homeless than average americans, the commitment president made in the veterans homelessness by 2015 we think is absolutely critical and the vouchers are an important part of that as well. >> one of the examples that help work on this effort is the testimony senator byrd and i took in the hearing in north carolina housing why the two or three veterans were living basically behind a bicycle rack in durham and one of the communities, one of the rural communities, that is where the university is also, but it's not a big mitropoulos and it should

be effective. we can't lose sight of the role homelessness. let me turn to another topic and that is we all work on legislation that ultimately produced one aspect of what was in national housing trust fund. we originally thought we would fund the proceeds. that is not an option at this moment. so, we are working to try to tap into some of the profits that have been generated through the war and could again working together on this committee we insisted be part of the legislation which supported the banks over the last several years, and we've actually recouped about $9 billion in pure profit. in addition to the preferred dividends were paid when we sold the war and we picked up $9 billion just as i think they would have done if they were lending the money to us. that's one source.

but to the larger issue of why it's important to get this trust fund off the ground from your perspective. >> i think many people missed this has been have seen the housing crisis to fill in many communities we have excess vacant units overbuilding in some areas. at the same time, throughout the entire crisis, for the low and moderate-income renters the burden increased. rent went above the low end of the scale. between 2007 to 2009 we saw a 20% increase in just two years in worst case housing needs. the biggest increase the we recorded in the history of the survey. and so there is no question that while the trust fund was critical before the housing crisis it is absolutely essentials now given what we

have seen. in a very difficult budget the president proposed a billion dollars to initially capitalized the trust fund and in the long term we believe as i said earlier that one critical part of housing finance reform is that we find a long-term source. we set up a trust fund locally thousands of communities have done the serve the country in the the key is by having a dedicated stream of funding that's not dependent on appropriations as the original would have been it assures a consistent source of that funding that can really be generated year after year. >> thank you. again, let me just had our experience from rhode island is that in these low to moderate rentals the price of the last has gone up 45%. as one of the terrible ironies of the last few years is in the

worst housing collapse where residential homes were falling rental property prices because people need someplace to stay and this housing trust fund would provide affordable rental housing and do it in a consistent way as you pointed out. this goes to the issue that has been plaguing all the fuss for two plus years now and there is the foreclosure. to take effective comprehensive action, and i am encouraged servicing guidelines have been released, updated and the services have invested more resources but what is still absolutely difficult to explain and for the average person

deliberately provocative and disruptive of their whole lives is the dual tracking of the foreclosure modification. and i would point out that the south carolina supreme court justice ruled two days ago suspended all foreclosure in south carolina in the reason of the dual track and that is the and also by new york and connecticut. so this is not a localized problem and it's not one of the classic problems of well it's a blue problem, read problem, etc.. when you have the eminent justices of south carolina court saying this is so offensive to the basic legal rights of our citizens we are going to tell order banks not to foreclose until they clean this up we have to do something nationally. and i must say i was frustrated by the settlement agreed to by a federal banking. i know you were participating in

those discussions. in the whole topic of the foreclosure individual track modification i would like your comments and opinions of what we can do. >> let me start by saying broadly we've taken a broad set of steps that have made a difference. the fact is that the number of people entering the foreclosure today is down about 40% from where it was a year ago. we think there probably would have been twice as many foreclosures over the last two years if we hadn't acted in the way the we did. but i will also be honest we have been frustrated, too in terms of the steps not going as far as we had expected or would have liked and part of the reason for that has been the difficulties in the servicers actually implementing and being

able to help folks that by all means in the programs could have been helped. just specifically on the settlement that you described, we have been and continue to coordinate with the regulators. to be clear, their decision requires plans from the individual institution within 60 days. there is nothing in those requirements that conflicts with the ongoing discussions we are having with the banks especially on the issue of dual track and other surfacing standards, we are very much agreed that there needs to be stronger consistent standards including on the dual track and if i may do will track that we are pursuing on that in the short term for the

institutions that would be participating there to make sure that the fix those prophecies. but in the long term as we sit in our housing finance reform proposal having clear consistent servicing standards that cover everyone whose servicing is absolutely critical and that is something that we've begun to work on longer-term establishing principles around that and then beginning to work out the details. i would just say it is in everyone's interest to do this. there are homeowners in communities that have suffered, financial institutions that have suffered because they haven't taken common sense steps where it makes sense and it's in everyone's financial support to modify loans. that hasn't happened because of all of the conflicting and

confusing morass of issues a writ of the way that the securitized loans have been serviced so standards about pulling the service agreements and all the other steps here will benefit everyone if we can get their. thank you mr. chairman. >> cementer merkley. >> thank you mr. chair and mr. secretary for your testimony today. and i certainly echo the thoughts of my colleague from ruda island that it has been extremely disappointing to see how incredibly slow the action has been to even address the fundamental issues of process, the single point of contact with the dual track and the recent settlement was along the lines of continuing to cheerleader and say this is the right thing to do, please, please do it as opposed to anything that actually takes us down the path. we have been cheerleading for a

year-and-a-half and see virtually no results on the ground. people coming in the door today are not telling you different story than they had a year ago in terms of the complete insanity of reaching a different person the may contract still having their files lost repeatedly so on and so forth. for a long time we've been hearing results around the corner. we haven't seen them. >> to turn to the qualified residential mortgage process and the proposed 20% down payment requirement, there's a lot of concern in the house and the world but this will create a two-tiered system. i would suspect you could survey my entire community of working class families where i live or any similar communities around

the country into would be hard pressed to find a single family that bought their first house with a 20% down payment unless they have inherited money or win the lottery or something and the would be one of 100 at best. the you have any sense right now what the point spread is on the difference between other things equal between somebody putting down 5% and putting down 20%? >> i'm sorry. the point spread you mean -- >> in terms of the 30 year advertising mortgage. >> given that the fha continues to operate and provide low-cost financing for the low down payment, we continue to be yet to have a relative affordable low down payment option available, but i think outside of the fha, that spread has been

pretty substantial. i haven't looked at it the last day or two but it's white and dramatically as we have come through the crisis and would be in excess of the point my expectation would be. >> i have had a lot of conversations with people on the ground who's worked with families and i'm adding to that my own experience working for habitat humanity and developing affordable housing and the collective impression is that a small down payment of really drove the risk of foreclosure, and for a couple reasons one is simply that -- and talking about pretty 2003 mortgage market before the failure to regulate the teaser rate mortgages,

believe interest rates mortgages, before that set the foundation for this entire meltdown there was a steady appreciation in housing prices, and folks who renting if they could come up with a down payment in a few years they had some significant equity and found themselves far better off in terms of stability in the financial foundation than those who continue to rent and the huge incentives to hold onto their house as a point of great pride and stability for their family and the primary wealth building aspect of their life. things become quite different when you introduce the predatory mortgages and the balloon in the housing value the was driven by the teaser rate mortgages.

but take that away because we aren't going back on the path. we have thankfully outlawed the undocumented loans and the prepayment penalties and the steering payments that drove the originators to steer people into the sub primes. all of that so we are trying to reclaim the standard amortizing mortgages as a wealth building instrument that it has been since it was invented all been the great depression. the 20% down payment requirement driving a two-tiered market to the disadvantage in no provision to buy 20% down payment. i would try to get your thoughts on that. >> it's a very important question, and i think in my mind it's important to state up front

there is no question that down payment is one piece of what helps predict the performance of loans and the risk and we certainly saw through the crisis has i think that you acknowledged we went too far. could we have seen in the portfolio there is down payments or other loans that were effectively 100 per cent ltv that the performance was significantly worse even controlling other factors but i think the issue here is both the one you raised which is important which is access. we have to balance thinking about the importance of making sure a range of middle class families, low-income families continue if they can afford to be homeowners and prepare to be homeowners of the continue to have access because down payment is the single most important

barrier. we need to balance that against safety and soundness. but i think the other point i would make is that we shouldn't lose sight of the fact that down payment is only one element of the felipe risk and what really got us into trouble is the leader in the press between down payment and a whole range of other factors. so when we put out the proposal and i would emphasize its proposed we've made no final decisions we are very interested in comments. we did put in the preamble alternative to the 20% that was at 10% that is really inviting comment of exactly the time that you're making of what should that balance be coming and what other factors should we take into account should mortgages aren't or other types of risk

retention be able to compensate for that, how exactly do we make these pieces work because it isn't as simple as saying we should look at the loan-to-value and ignore the other components of leering of risk. >> everything i've seen shows a very small discrepancy before we allow the predatory mortgages in 2003 and within the fully amortizing certainly amounting to less than the basis point, and i just want to reemphasize this point taking the wrong lesson out of the crisis the lesson was you don't allow kickbacks to the loan originators or undocumented loans, you don't allow teaser rates with deutsch prepayment penalties to lock people into them because in that setting you will drive people in need of that balloon bricks and will matter how much a downpayment to have severe needs to be scanned in the game but putting a large premium would be a misreading of

the experience that we have had the last 20 years in the mortgages. so i would just want to emphasize that fought. there was a study that cannot because the new census of northeast portland which was a poor area and used to work in it were a message out migration of impoverished families, and the main finding was that it was a failure of the city to work and i say this city because it was kind of related to the city policy but it does reverberate in the broad housing world the failure to tackle the down payment problem. while i was working there we created an organization called project downpayment specifically to try to tackle this fifth by raising the money to assist was very slow and difficult and a few families work civilized. those who were stabilized their housing went, their homes went from joost to 60,000.

so they participated in the american dream and the way we can never get through to minting. >> i would love to call a one-shot program, the so-called opportunity program. it's been moved into the budget online and it's not clear what that means for its future and i think it's been a substantial factor in encouraging the type of fundamental -- fundamentally fair strategies that have in power a tremendous number of families who never otherwise would have been homeowners. >> thank you, cementer merkley. thank you, mr. secretary, for your testimony. i look forward to working with you and the committee to ensure hud programs can effectively meet the needs of our families and communities.

this hearing is adjourned. >> thank you, centers.

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administrator craig fugate testified today about the use of social media like twitter and facebook to coordinate disaster response. he spoke of the senate homeland security subcommittee on disaster recovery. other witnesses included shaunna brown googled.org senior vice president as well as communications officers from the american red cross and the arkansas department of emergency management. arkansas senator mark pryor chairs the committee. this is an hour and 45 minutes. >> i want to welcome everyone to the subcommittee. i want to thank you all for being here and all our witnesses for being here and also want to thank senator brown for being here today and put forward to his service. it may be temporary but we

certainly appreciate you and all that you're doing. it's been a pleasure working with you and your staff on this hearing. let me start by just saying that we have two panels to become qualified witnesses and i want to thank director fugate for being here as busy as he is around the country his time is very precious and he's been generous with his time and always helpful to this committee and subcommittee and this senate so thank you for being here and all the other witnesses as well, all the ones involved in various disasters around the country. we really appreciate all that you all have done and appreciate you being here today. last week a series of severe storms whipped across the southern united states causing immense damage and historic loss of life. the storm system spurred powerful thunderstorms, tornadoes and flooding, and it was the second deadliest day of

tornado activity in u.s. history and killing 341 people in seven states including an unimaginable 249 in alabama. those are the latest figures i have. 14 people lost their lives as a result of storms and the state of arkansas i want to offer my most sincere condolences to the families of those impact or killed during those storms. i hope that your families are comforted through this very difficult time. today the subcommittee has been joined by a very insightful guests to talk about the increasingly important role that social media networks play during disaster response and recovery efforts. from search and rescue to family reunification to the safety of dates to the communicating vital shelter information to other critical or lifesaving information and to all around situational awareness, social media is becoming a tool that

people are coming to rely on and to use heavily during emergencies. in july of 2010, the american red cross conducted a survey, and they are here today and will probably talk about this in more detail, but they conducted a survey of over 1,000 people about the use of social media sites in emergency situations. the results of the survey were striking. 82% of the participants used some form of social media at least once a day and nearly half of those use it every day or nearly every day. the survey found that if they needed help and couldn't reach 911, one and five would try to contact responders through the digital means such as e-mail, web sites or social media. if with users new or someone else knew of someone else who needed help, 44% would ask other people in the social networks or contact authorities, three out of four respondents would expect

help to arrive in an hour if call for help was delivered over the internet. 35% would pose to request for help directly on a response agency facebook page and 28% would send a direct twitter message to responders. more than half the respondents said they would use social media to let loved ones know that they were safe. the survey also said that respondents with children in households were more likely to use social media. 81% versus 67% with those who do not have a child in the house. as the word continues to improve the efforts to respond to and recover from disasters it's important that we find new and creative ways to communicate to those facing the often chaotic circumstances that surround emergencies and disasters. i want to thank all the witnesses for appearing today and contributing to an important conversation that uncertain will

lead to more effective tools that will save lives and the delivery of assistance more efficient in the future. >> my thoughts and prayers to those in the south east dealing with the loss of their loved ones and this past weekend and there's no better time than to discuss. the tools and technology better system response to the recovery is and unfortunately future disasters would be forthcoming and other types of social media companies to understand what they do and how they do it and we met here on capitol hill with facebook folks and others and having kids understand how they have adjusted and adapted and

learned a lot quicker than other members of my family in using social media and related technology, and i eustis quite a bit myself in the last couple years. so i think it's important to understand what is being used and with the opportunities for the future use are and how we can use this when we have natural disasters and other types of situations we need to get out reliable important sometimes life-saving information. i.t. it's another tool in the toolbox so to speak. i'm looking forward to the testimony and i appreciate. >> our first witness is the honorable w. craig fugate administrator of the federal administration agency known as fema. he was appointed on may 13th, 2009. to serve as administrator based on the carrier in emergency

management. he will discuss fema's short-term and long-term goals for the enhanced use of social media tools, and i know the director has come off the road and has been down many places but we do have a timing system that within five meds on the opening pretend testimony put in the record. mr. fugate? >> thank you mr. senator and senator brown. we need to understand it is another jewel in our toolbox. it is by no means the only way which we need to communicate with the public both in morning, alerting situations and also communicating with them. previously we've had the ability to communicate at the public with aretas radio, tv, web pages

and even billboards going across where the tornadoes struck in search of the bills and other things, but our ability to communicate with the public and have to we conversations. we oftentimes have taken the approach in government of creating systems people have to adapt to meet and communicate. as we've seen of people use these tools differently many of which we call social media was never designed with disasters in mind. but they became increasingly tools of people were communicating day-to-day and sharing information with families and loved ones that began providing a role in a disaster in ways that for us in government we didn't innovate this. we didn't create or direct it

but we began observing at. and i think for us that the federal emergency management agency as well as my peers of the state and local level and volunteer agencies and other groups active in disaster response, we began to see a whole new group of volunteers emerge with skill sets of the able to apply this technology in real time situations without necessarily a direction from a central location but more of a term that is oftentimes use the crowd sourcing. many people working on similar problems, sharing information, often times getting the better in solutions. mr. chairman it has caused me to realize that in some ways social media, and particularly volunteers and groups in the industry that's involved in this, i can put it this way we need to innovate faster than the speed of government and they are doing it. instead of trying to make the systems fit us, make the public fit how we communicate we are

trying to meet that need to giving out how to apply this. it is when someone says what is the performance major and measurement of success our you doing this? we try to understand how the tools can be applied. here's what i want to communicate in the short time i have. in most disasters when you are displaced from your home you no longer have access to your computer, you may not have wi-fi access the in many disasters including being on the ground in haiti where we had folks within a day of the earthquake i was down there a week later. the one thing that was working or mobile devices. and it is this that i think we in the federal government need to understand that we are moving more and more away from a web

based capacity to a mobile environment. so one of the things we did was to start moving our information into the mobile format. we have a mobile web page, m.fema.gov because you don't need pretty pictures or charts, you need information the will be low bandwidth that you can get to a phone and get things you need. we've designed our registration so that you could access it by your smart phone. but we are also learning that the public has tremendous information in disaster areas that oftentimes we've taken the approach that was not officials or wasn't usable because it didn't come from the traditional forms of communication. mr. chairman, i would suggest we look at these as the the points, as sensors. the individually it cannot provide us the best information, but collectively, oftentimes are the earliest and best reports of

the severity of an impact and our telling stories faster than any assessment team or any ability to get into an area. we've seen this in haiti, in japan, church and even in the tornadoes across the south. pictures, stories, petites, giving us information. i think we need to take the approach in the federal government of the public is the resource and not a liability and learn how to listen but we also need to recognize we are in a mobile environment and the federal government needs to focus more upon developing the data to support our citizens in a way that they can use in a disaster rather than making them sick and our traditional models. thank you, mr. chairman. >> i think those are points very well made, and well taken. you know, because arkansas has had so many tornadoes, store and events, floods in the last couple of weeks, and again, you guys have been great been down there and being on the spot, being on site and helping

people. i've been getting out that website that you're talking about, the disaster assistance website and your toll-free number, and pretty much everything i've done this week when i talked to arkansas - encouraging them to do that because i think that it's just people just communicate that way today, and you guys can provide such a great tool for people to access immediately come and just is a game changer. so i appreciate you all being on top of that. at spc -- fema do you have people in office during your social media focus here, or is this just part of your overall effort? do you have to have folks that focus on this? >> we do have a dedicated staff that are working on our what is called digital engagement. initially when i got to fema, the web page, using things like youtube to post up to eight videos, and beginning to do partnerships with facebook where we would do joint facebook pages

per disaster with the state to share information with the public. when i got there, one of the things i asked early on was to begin tweeting which started doing in florida and do at craig@fema. i don't have staff to tweet and i done tweet about me, but things i think are interesting. people like communicate with our my peers and practitioners. it's actually interesting not only is it useful when disasters but it's helping build a community and emergency management that traditionally had to go to courses or conferences to see and hear across the nation ideas. there's things that are coming you know, when you get into the nomenclature of all of these terms, the concept of what a cash tender is in twitter. what is is something that you build into a message that you can link that can take everybody that uses that tag can link