he had one of my favorite lines in the 2008 campaign when he said i like fred thompson, he plays me on tv. [laughter] i know how dedicated this group is to the voter integrity. [laughter] i know how important you are in showing voter integrity and that our elections are fair. all of you are familiar with the election laws in wisconsin because they are the test case of how that elections can be run. but with our new governor, scott walker, i think we are ready to change that. we've always done -- [applause] i can tell you as chairman of the party, you've always done a great job of sending us the best and brightest in to our state, assisting efforts in wisconsin, making sure that we can do everything we possibly can do to help run n-word elections fairly

and as accurately as possible. ronald reagan obviously as your honor you today for your meeting charmed us with his humor and blessed us with his leadership. my task as the chairman of this party is to help elect a republican president who shares ronald reagan's vision of an america that removes the government's interests of obstacles to opportunity, in america built on principle and purpose, america that is strong, safe and free. that is the america that ronald reagan created. and i fear that is the america we are losing with each passing day under our president, barack obama. and that's what -- [applause] and that's what i want to talk to you a little bit about today. there is no doubt about it, the president is a gifted politician

but good politics we do not inherently good policy. good speeches do not create good jobs. and winning debates does not in place of plebeian that you are winning the future. the president says that he wants america to live within its means. the president says we need to reduce the deficit and address the debt ceiling. the president says we need to reduce wasteful washington spending. i agree. we all agree. and this debate in washington, the president has said a lot of things. but here is the problem. the results don't match their rhetoric. the president says, and he says, and he says, but this is what we have seen. every day washington barrault's

roughly $4.5 billion just to pay its bills. 43 cents on every dollar spent in america is borrowed. when my children are my age, when my son who is six is my age we live spent 43 cents on every dollar made in america to run the federal government. the past two years non-defense discretionary spending has increased almost 25%. how many families in america have had their own personal budgets increased 25%? total federal spending as a percentage to gdp will rise from roughly 25% of where it is today to 40% 30 years from now in 2014. and if we do nothing, we just stay on the current trajectory,

give speeches, ignore reality, in 2014, our national debt will equal twice the size of our entire economy, and that is the economic definition of bankruptcy. on top of it all, medicare itself will be bankrupt in nine years. this is america. this is the greatest nation the world has ever known. and it is a nation that is going broke. as a matter of principle, a government that loses its sovereignty to its bondholders cannot possibly guarantee prosperity or freedom. a government that buries the next generation under an avalanche of debt cannot claim any vestige of the moral high ground. a government that stifles economic growth with excessive

taxation, litigation and regulation to the cannot create a competitive climate for economic expansion. and at the end of the day, a government that is controlled by china cannot possibly compete with china. [applause] the facts are as staggering as they are unsustainable. and they constitute more than just a political case against president obama. they constitute an economic case against barack obama. make no mistake, the battle that we are in is more than just financial. the battle that we are in is a fundamental bowel about freedom -- battle about freedom, determination. ask yourself, do you think that we are winning the future? for the first time in many

years, more americans believe that the next generation coming your kids and my kids, will be worse off than this generation. on the day after the government heads this scare the we are going to shut down the government, the president made a special trip, do you remember, to the lincoln memorial, and he stood in front of the hollowed monument to announce with inexplicable pride of the lincoln memorial ladies and gentlemen will stay open. this debate is not about keeping the lincoln memorial opened. this debate is not about keeping the washington monument open, this debate is that keeping america open. it's about creating an economic climate that will facilitate demonstrable growth and encourage american business owners to keep doing business in

america, not overseas. this is a debate about making an america that creates opportunities, not an american that facilitates dependencies. a few weeks ago, the president took a second shot proposing a budget. remember it was a speech. even if the speech was a budget it would do little to address the perilous economic climate that we are facing. and it turns out that this deutsch over budget was little more than just that, a political speech. and clearly, our president, barack obama, is willing to sacrifice the future for short-term political gain. sure. we all know the president can talk about hope all he wants. but here's the problem. pope isn't hiring in america.

and more alarming than anything, we learned recently that the president's economic advisers privately urged standard and poor's not to lower its outlook on the united states from stable to negative status. their argument, obama's adviser said that the s&p was underestimating. the ability of politicians in washington to fashion a compromise to curb deficits. that a change in ratings wasn't needed at this time because the debt was manageable and the administration had a viable plan in the works. s&p ignored them. i'm no economist, i'm not an expert in the s&p but i do know the importance of having had a good credit. we'll do. and america's credit just went from stable to negative. americans have of only seen, but

they have felt the consequences of barack obama's america. and as ronald reagan said, don't be afraid to see what you see. i believe, like i'm sure a lot of you, that we are in a battle for freedom in america. the same battle of freedom that founded our country. the same bottom of freedom that james madison reaffirmed in the bill of rights. it's the same battle of freedom that founded the party in 1854 in wisconsin course. but we are in a battle for freedom. we are in the battle for the opportunity, and the battle for america and for our children and their children. do we want to have a country that leads or that follows? we want to have a country of makers or a country of takers?

do we want more people writing the wagon or more people driving the wagon? the stakes are high and the consequences are very real. and that brings me to the on here and see. i can promise you on my life that like all of you here i didn't run for chairman because i have some great worry about future of the republican party, the indoor not here because you're just gravely concerned about the future of the rnc or the local party or the state party. i ran for chairman of this party because i'm concerned about the future of this country. i know that we have a battle to fight. i know that we have to save america. and that is why i ran for the chairman of this party. we are the only organization in america that can coordinate our ground operation, our election day operation, our phone calls, door to door absentee ballot, we

are the only entity in america that can take our operation and coordinate it with the presidential candidate. i believe that all of us in this room have been blessed in different ways, every one of us. but in order for all of us, because you're with me, right? we have a battle for freedom to fight. but in order to do that, in order for us to win eight make barack obama a one-term president and save the country, we need to work together, and that's why i'm here, number one to say thank you, but i'm also here to engage you and invite you into the rnc family to say come to work with us, we will come and work with you but let's work together, see our country and in the process we will save our party. thank you. and god bless you. [applause]

[applause] thank you, mr. chairman. we accept your invitation to join you in the fight. what ever you need, we will be there. mr. mayor, thank you again for accepting our award. it is one that is important to us, and we could have no finer recipient. ladies and gentlemen, the bar is open. [laughter] [applause] [inaudible conversations]

we had now to capitol hill in the 2012 budget request for the department of housing and urban development. hud 63 shaun donovan testified on the 40 billion-dollar budget request which includes foreclosure programs, rental assistance and housing for the homeless. it reduces community development block grants by $300 million this is an hour. >> i am pleased to once again welcome hud secretaries shaun donovan to the committee to discuss the administration budget request and hud's legislative agenda. secretary donovan, you come to

us at a challenging time. for the state and local government partners continue to struggle during this economic downturn. hud it administers programs that aim to provide access to quality and safe housing for homeowners these and renters. these programs often provided a lifeline to the most vulnerable citizens, and in today's economy they are more important than ever. for too m many american families and communities still face thend threat of foreclosure and vues billions more see their propertl values fall market, and although it may seem kind of intuitive, housing has become less affordable for lower income families even as housing prices plummeted.

recent cities by your department have shown dramatic increases in worst case housing needs among very low income representers and even homelessness among families. as you know, as you saw in south dakota last year, many tribal communities continue to circle with a shortage of economic opportunities and a lack of housing choices. as our need for affordable housing rises, local providers keep increasing difficulties in preserving the resources we have. due to aging buildings and other contracts. meanwhile, states and local governments are slashing services and job creating investments. as the country faces these daunting challenges, the federal government must ensure that we make wise investments 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. .. and what you have made a number of hard choices in your fy 12 budget. cutting funding for several in order to meet with the siskel goals. but the budget also contains a . number of proposals intended to

increase the hud's effectiveness in order to improve hud'snistran administration programs,e strengthening the management and financial spending of the theyrams as they provide countercyclical countercyclical tnaing .. record and provide new tools to help create and preserve public and assisted housing and streamline the public housing programs to make them more effective for guarantees. for the millions of americans whose goal to meet the most basic needs a safe place to live. as we continue to debate the

budget and tackle the deficit we cannot afford to leave americans out in the cold. i look forward to the discussion of the proposals during today's hearing. i will now turn to senator shelby for in the opening remarks we have. senator shelby. >> thank you. welcome to the committee again mr. donovan. you have a tough job. we all know that. our nation's debt as >> you have a tough job. we know that. the nation's debt is on the unsustainable path. we all know this. at the end of the 2008, our nation's debt stood at $10 trillion. today not even three years later, that debt is $14.3 trillion. even worse, cbo estimates that our total national debt will be nearly $27.6 trillion by 2021. think of that. $27.6 trillion. ironically, the offense of

management and budget declares on the web page that the president's budget, quote, pushed the nation on the path to live within our means. i wish that were true. unfortunately while the president talks of living within our means, his budget produces a different result. the hud budget is a good illustration. secretary donovan states in the prepared testimony that the administration's budget, quote, reflects the need to ensure that we're taking responsibility for our country's deficits. yet, hud's own summary of the budget states that the departments gross spending will increase by $900 million for 2012. hud's net level that's called of spending, will apparently fall by $1.1 billion. very interesting. it appears that hud arrives at this figure by off setting the total spending numbers with $6

billion in fees that are to be collected by fha in may. it was my understanding that these fees were supposed to be used to ensure the safety and soundless of the two entities. it appears they are being used to offset the programs elsewhere in the hud budget. i hope i'm wrong. while this is not a new concept in government accounting, we're going to have to be honest with the american people and ourselves about what with e are actually spending if we are serious here in the congress about getting our dead under control. i think we must find a way to curtail the spending if we hope to restore the nation's long term health. i look forward to hearing from secretary donovan today on how hud can fighten the belt while contributing to essential services that we need in the housing area. thank you, mr. chairman.

>> secretary donovan, please proceed. >> thank you, chairman johnson, ranking member shelby and members of the committee for the opportunity and partnership. which i was reminded of again this past weekend as i joined other members to tour the devastate wrought by the recent tornadoes. as i prepare to return next week, i want to assure the members from the affected states to ensure the administration makes the lives of displaced families whole again. today i discuss the budget america calls for to out educate, out innovate, and out build our competitors. i will also highlight the steps our proposal takes to improve how we operate the programs and hud's choices that we take to make sure we take responsibility for our deficits. obviously, our fiscal year 2012 proposal was developed before the continuing resolution for

the fiscal year was passed by congress and signed into law by president obama. although the cuts were necessary to ensure we live within our means and keep the government running, president noted the cr contained real cut that is will have real impact on services and people who rely on them. indeed, i believe the president's 2012 budget strikes the balance between the need to reduce spending and preserve critical services for americans. mr. chairman, in developing the 2012 proposal, we followed three principals to help us strike the balance. the first is to continue the support for the housing market, while bringing private capital back. two years ago with the housing collapsing, the administration had no choice but to take action. the critical support fha provided helped over two million families buy homes and two and a half million home oners refinance. with average monty savings exceeding $100. while they continue to support

the housing recovery in the year ahead, we must help private capital return to the market. this is a process that hud began many months ago. i want to thank congress for passing the legislation in the last session to inform the insurance premium structure. with this authority, hud increased by 25 points last month. fha is projected to generate $9 billion in receipts for the taxpayers. while ensuring that fha remains a vital source of financing for underserves borrowers and communities. and while the fiscal year 2012 request is $47.8 billion in gross budget, because of fha, the cost to the taxpayer for the budget is only $41.7. this is consistent with the president's proposal to bring nonsecurity spending to the

lowest share of the economy since president eisenhower. the second principal that we used to develop our budget was to project current residents and improve the programs that serve them. while the median income of american households today is over $50,000. for households that live, it's $10,200 per year. at the same time, having seen from 2007 to 2009 the largest increase in the history of hud's worse case housing needs survey, it's clear that the recession hit these families hard. that's why 80% of the proposed budget keeps the residents in the homes and provides basic upkeep to public housing, while continuing to serve through the homeless. because of the cost of serving the same families grows each year, protecting existing families required us to make tough choices with the remaining 20%. including the decision to reduce

funding from 2010 levels from the community development block grant, home, investment partnership, and new construction for hud supportive housing programs. i saw for myself as a local housing official 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 the budget provides $88 million for the housing counseling program, which was eliminated in the continuing resolution. this cut was painful to responsible homeowners struggling to keep their homes and restoring it reflects the president's call to make tough cuts to reduce our deficit without sacrificing the core investments that we need to grow our country. at the same time, this budget makes a strong commitment to doing more of what works and stop doing what doesn't. by including provisions in 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 small towns and rural areas to better serve the working poor. thanks to senator reed, the budget fund in new rural housing stability program that reflects the unique and growing needs in the community. the budget also holds or partners accountable from the budget received from hud. we require housing with excess reserves to contribute $1 billion. these resources were set aside so that our phas could continue operating in the rainy day. the rainy day is here. we express to improve hud programs, in the largest program, housing choice vouchers, to hold pha accountable for managing their budgets, just like family and

businesses are doing across the country. the flexibility ti provides has also allowed us for the first time to offer technical assistance across all of the community planning and development and launch a new initiative to improve the financial management and accountability of troubled housing authorities. by supporting research evaluation and program demonstrations, ti improving hud's own accountability by identifying what we do well and what we need to do better. these needed performs allow us to propose increased investment in programs that we know work. like the program for homeless veterans. it's built on the solid body of evidence ends homelessness and saves money for the taxpayer but putting an end with shelters and jails. this would increase hundred dollaring for homeless programs by 35% in 2011, to keep the president's commitment to opening door, the first federal strategic plan to end

homelessness, to end chronic and homelessness by 2015, and homelessness among families and children by 2020. we have critical initiative that is have been part of the budget, but in this fiscal climate to propose no new initiatives. the president has made clear that winning the future depend on america wins the race to educate our children. that's not possible if we are leaving a whole generation of children behind in our poorest neighbors. that's why i'd like to thank senatormy then doze for working with us on the choice neighborhood it will allowed them to used the mixed tools pioneered by jack kemp with the hope 6 program to transform all federal assisted housing into neighbor. it requires us to protect and

preserve the housing for the future. we're losing 10,000 every year. at the same time, there's billions of private capital sitting on the sidelines that could be put to work, that could put tens of thousands of construction workers put to work rebuilding the housing. that's why we proposed the $200 million to preserve up to 255 public housing units using long term contracts. as we've seen in the section eight and low income house credit, opening up the properties to private capital not only brings new funding to affordable housing, but also a new sense of discipline that extends from the way these properties are financed to the way they are managed. lastly, chairman johnson, american businesses large and small cannot out innovate the competitors when the workers spend 52 cents of on dollar on housing transportation, and moving products cost five times

as much wasted fuel and time as it does 20 years ago. that's why we request another $150 million for the initiative, building on the funding provided in 2010 and 2011. instead of federal one size fits all rules that tell communities, this is helping regions and communities develop comprehensive housing and transportation that create jobs. with the $3.7 million from hud, austin, texas hopes to create 7,000 permanent jobs, generating $1.7 billion growth, and saving the taxpayer $1.25 billion. the potential of innovations explain why the extraordinary demand for the grant program wasn't just coming from the largest metro areas. indeed over half of the edge nap grants were awarded to rural regions and small towns. mr. chairman, hud's fiscal year 2012 budget proposal isn't just about spending less, it's also about investing smarter and more

effectively. it's about out educating, our building, and out innovating our competitors, reducing the deficit, and put in place much-needed reforms. most of all, it's about the results that we deliver who depend on us most. winning the future starts at home. with the budget, i submit with the tough choices that we aim to prove it. thank you. >> thank you, mr. secretary. would the clerk put five minutes on the clock? as you mentioned earlier, you visited south dakota with me and saw first hand the housing challenges facing indian country. i appreciate your visit and the focus on these needs. i would like to ask you about the speed of hud's indian housing block grant distribution. hud issued in fy '11 funding

notice to tribes on january 27, 2011, at present many of our tribes have not received their full fy '11 funding. some tribes are halted housing development and others have started to eliminate staff. what is the department doing to speed up the distribution process so ensure tribes will receive their full allocation of fy '11 ihbg program funding at the very earliest possible moment? >> senator, obviously the delay in approving a 2011 budget about half of the way into the fiscal year has had significant impacts not only on tribes, but on recipients of hud funding across all of the programs. we have moved now that the 11

budget is in place to accelerate the way we are awarding that funding. in fact, one the things that we've learned with new processes that we put in place under the recovery act where we're five months ahead of targets that we set for distributing the money as you know, tribes across the country have used that money effectively and quite quickly. relative to grants in the past. we have taken the team that developed all of the implementation and assigned them to accelerate. we expect to be able to distribute much more quickly this year than native 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 that we've done since the budget was resolved.

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

we've also seen from other studies that homeowners that purchase homes with counseling are likely to be successful in being able to stay. this is an investment, given the impact that the housing crisis had on the economy more broadly, given the number of families still struggling to make their payments with unemployment, we think this is absolutely the wrong time to eliminate funding for housing counseling. i would also note, some have said there is a program for neighbor works in the budget as well that continues to get funding in 2011. i think the key point here is that that only meets a portion of the needs out there. for example, beyond just the families who are 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. now it will fall on seniors. we expect that as of october 1 with the cut that there are many agencies around the country that will not be able to provide funding. there are approximately 70,000 homeowners who we will not be able to reach without this -- the funding in the '11 that we were hoping for. so it is absolutely critical in that 2012 we restart the funding. >> well, there has been a justifiable focus in the growth of fhas single family loan volume. it is often over looked that fhas multifamily loan volume has tripled in recent years. mr. secretary, can you describe some of the action that is you are taking to ensure the

integrity in the multifamily programs and also what does the growth in fha's volume say to you about the multifamily housing access to capital? >> i appreciate your asking this question. because it is often over looked. given the crisis that we had in single family, how important the fha programs has been to the continuation of the multifamily market. you are exactly right in terms of the increases that we've seen in our fha multifamily programs. we have applies many of the same tools in the multifamily program that is we have on the single family program. the fact that we appointed our fhas first ever chief risk officer created a whole track and monitor the defaults in fha, the fha portfolio, the

delinquencies, and have, as a result of that, made a number of changes in the underwriting criteria for these programs, changing many, many components of the underwriting terms, such as the evaluation and a range of other things that have improved performance of the programs. unlike in the single family side, multifamily programs have preferred relatively well. at the gse, the multifamily programs did not contribute to their collapse. and we continue to see even through our most recent numbers, the multifamily programs at hud being profitable. while they are much smaller and don't contribute nearly as much as a single family side to the $9.8 billion in receipts that we expect, net receipts that we expect this year, they have continued to be profitable. and they are a critical source as we've seen rents rise,

vacancy rates decline, in the rental stock it's absolutely critical we continue to have a source of financing able as we work our way through the crisis. >> senator shelby, thank you, mr. chairman. secretary donovan, i like -- and we've had these conversations, some of it before, getting the private access and private capital, because it's a lot more out there. >> yup. >> and any time that we can access capital by putting prime in the pump, by putting some money in and say access 2/3 more on something like that. i think we're making big process. i think you do too. would you expand just a the bit on what you were talking about the program of getting in the private capital and how you are doing this. i guess many ways. but absolutely. >> i think 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 accessing private capital. it's really only in the hope 6 program and very limited other examples, choice neighborhoods, where public housing is able to access low income, other private capital, and other public capital as well. and the result of that as i said in the 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. just to give you an example from my prior life, we tried to bring grocery stores into public housing. we tried to bring new development on to public housing land mixed income housing, senior housing that would help those who had raised their kids in public housing and now needed

more support in smaller units. and it was like banging our heads around the wall, too often, frankly, senator, to try to bring the tools to public housing. so it's time that the federal government got out of the way and allowed many of the entrepreneurs in local communities who have despite some of the restrictions done some very creative things to let them do that. that's why we have a proposal, demonstration in the budget that would allow over 20,000 units through some fairly simple legislative changes to change the way that that land is owned, to allow the deeds of trust to change, and to change the way we fund public housing. right now we supply capital funding and operating funding. we are really the only source of funding that can support the units by changing it to an operating subsidy very similar to the way section 8 works with all other owners. we would allow public housing

authorities to be able to access all of the other sources of capital. we estimate that there's $25 billion of private capital sitting on the sidelines that could create hundreds of thousands of jobs in construction, starting today if we could unlock the capital. >> do you need the statutory changes there? >> we have very limited authority to do this. and we are expanding ways to do this with existing authority. >> would you tell that to this committee? >> absolutely. we are looking to increase roughly ten times the number of units that we can reach. >> we have to get at least to me and the chairman. >> absolutely. >> i'd be happy to do that. >> i want to get in something else if i could. cost savings is what we're talking about. trying to do more. according to cato institute, the amount of money we currently

spend on subsidizing affordable housing is enough to pay 100% of the rent for every family in the country earning less than $22,000. clearly some changes could be read to ensure that we are helping the greatest, i think that's your goal, greatest number of needy families in the most efficient cost saving manner possibly. what steps has hud taken in the area to reduce the cost while increasing the efficiency of its housing programs? that's a tough job to turn. >> very important. but look this is as a former customer of hud, if i could put it that way, i've seen that we have too many programs with conflicts rules, too many places that require the housing authority, and owners to comply or use symptoms or other thing that is frankly aren't efficient.

i would really point to two thing that is are critical. one is we have proposed and have worked with this committee on a bill we called severed. just to give you one specific example, we have as i said in my testimony, over half of our residents are elderly people with disabilities. they tend to be on fixed incoming. 88% of them have exactly the same income year after year and yet we require recertification of 100% of our residents each year. they would allow us on a risk basis to say these are residents that are much more likely to have an income change. we should target them. others, seniors, for example, we know it's likely. if we go to every two years, we've done the analysis. the impact of that is a savings

of a couple hundred million alone in one year. >> that makes sense. >> so if we could get it passed, as either as part of the budget process, or separately in a separate bill and i'm hopeful that we could, that's $1 billion in savings over five years. simply by making it easier for folks to run the programs. and it could also in rural areas help us serve more families working poor. >> who would be against that improvement? do you know? >> well, we came very close to getting it done at the end of last year. and there seem to be very broad support for the provision. there was some argument about, i think, very minor provisions in it. but i would be hopeful. a second example, we asked for and got flexibility from the appropriations committee to invest more in what we call the transformation initiative. it is investing in the

anti-fraud system, fraud detection, in public housing that will also allow us to save significant dollars as well. >> that's good. one more question. and one the criticisms of our current housing finance system is that it encourages borrowing an 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 responsible home ownership is for the federal government to stop subsidizing and instead help potential homeowners build the finances for a down payment. i don't know how it would work if it did. what's your view shifting subsidies away from encouraging programs that help them build equity in the homes. i'd have to see the mechanics myself and the concept. >> i think it's clear from the crisis that we've been through and we made this very clear in

our white paper that we did with treasury that we have spent too much money subsidizeing what often didn't get to borrowers even because what we did was to have a indirect -- a implicit, rather than explicit guarantee. and did not have a system with fannie and freddie that made sure the benefits made it to the taxpayer. and we support limiting the risk to taxpayers in the future system. we do think there is a roll through fha for a targeted guarantee. we have a number of proposals of other ways a guarantee might be used to ensure in a crisis that we have adequate financing and that rates remain stable and affordable.

i do think there's more we can do to shift funding towards building equity. one proposal that we have, i know senator reed has been a champion of this, rather than having the mixed incentives of goals which did not accomplish what they were intended to do, we have an explicit funding source that would supply down payment assistance, and support rental housing through a dedicated stream of financing that trust fund, the national housing trust fund was one way to do that. we think there needs to be much more explicit targeted source of support that doesn't mix incentives the way that the goals did in the prior system. >> thank you, mr. chairman. >> senator reed. >> thank you, very much, mr. chairman, and thank you, mr. secretary for your great leadership. >> thank you. >> let me ask you about the

family self-sufficiency program. it's something that you have included in your budget, it's something that my local housing advocates think is a very, very strong. i know you have one the great advances in this job of having been as you describe it both, a consumer of hud services is now a provider of hud services. you can comment on many services. we're working on a proposal together with your colleagues to help improve the program. if you might comment on the proposal and your views of where we should go. >> senator, i want to congratulation you. i'm a big fan of the self-sufficiency. and the reason is it's just 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 just makes sense for everyone to do more of that. the problems as you've identified with fss are right now it works in our public housing program, it works in our voucher program, but 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, and be able to expand the number of family that is it reaches. we also think it's a terrific idea to have this reach our multifamily program as well. right now residents of project based section 8 are not eligible to participate in fss. we think it makes perfect sense to do this. we also think, it is one the things that our transformation initiative is funding as well, that we have very good anecdotal

evidence and some limited studies of the success of fss. we actually in new york city invested substantially and raised a lot of private foundation money to expand, and also to study it more closely. we think if we did more work which we are proposing to do through our transformation initiative to look at the in detail the impacts with greater studies, we could demonstrate the program pays for itself and ought to be doing much more expanding it substantially. i think the proposal is doing in the right direction. >> thank you, mr. secretary. i think also your emphasis on analyzing and ensuring that this is funds that are, you know, in the cost benefit makes sense that we are investing. we're also getting much, much more return. i think that's the key part. let me turn the attention and recommend in the increase for

budget homeless assistance programs. we've had some success throughout the country in terms of trans -- getting people off of the streets and into some type of structure, some time of facility. but -- would you take a moment and just from your perspective, how and why is it still important to invest in the homeless programs? >> well, to go back to the point that you just made, we've demonstrateed that it is more expensive for somebody to live on the street, particularly chronically homeless person, than it is to house them. it's as simple as that. and this recognition, i think, is growing broadly. your leadership in the partnership passage of the harth act shows that there's a growing recognition that investing in the homeless programs not only saves lives, it saves money. and the fact that in as

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

it consolidates the programs, streamlines them, lower administrative cost for hud, and also help tens of thousands of families. and i would just lastly say as you know with veterans in the country 50% more likely to be homeless than average americans within the commitment the president made to end homelessness by 2015 is absolutely critical. and the vouchers are an important part of that as well. >> i think you are right. one the examples that helped me to work on effort was the testimony that senator burr and i took at the hearing of the north carolina housing advocate, you know, describing how two or three veterans were living basically behind a bicycle rack in durham or one the communities, rural communities, again, that's where the university is also. but it's not a big metropolis,

it's a place where this program could be effective and should be effective. we can't lose sight of the rural homelessness. let me turn to another topic. that is chairman johnson, senator shelby and i worked on legislation that produced one aspect of it was the national housing trust fund. we originally thought we were going to fund it with 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 for the warrants that again working to get on this committee we insisted be part of the legislation which supported the banks over the last several years. and we have actually recooped about $9 billion in, you know, pure profit in addition to the preferred dividends that they were paying when we sold the warrants that we picked up $9 billion. just as i think they would have

been if they were lending the money to us. that's one source. to the larger issue of why it's important to get the national housing trust fund off of the ground from your perspective? >> at a time, i think many people miss this as we've seen the housing crisis develop in many communities, we have excess units, vacant units, over building in some areas. at the same time, throughout the entire crisis, for low and moderate income renters, their burden increased. rents went up at the low end of the scale, between 2007 and 2009, we saw a 20% increase in just two years in worse case housing needs. the biggest increase that we'd recorded in the history of the survey. and so there is no question while the trust fund was critical before the housing crisis hit, it is absolutely

essential now given what we've seen. and so that's why again in a very difficult budget, president proposed $1 billion to initially capitalize 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 the long term source. like we set up a trust fund. locally, thousands of communities have done this around the country. and the key there is that by having a dedicated stream of funding that's not dependent on appropriations, as the original trust fund would have been, it ensures the consistent source of that funding. that can really be generated year after year. >> well, thank you, mr. secretary. again, let me just say, our experience in rhode island is that in the low to moderate rentals, the price has gone up

45%. so one of the terrible ironies of the last few years in the worst housing collapse where residential home prices were falling, rental property prices because people need some place to stay. and the housing trust fund would provide affordable rental housing and do it in a consistent way. i think it's absolutely important just as a final question. it goes to the issue which has been plaguing all of us for two plus years now. the failure to take effective comprehensive action. and i, you know, i'm encouraged that, you know, service guidelines has been released, updated, that some steps has been taken that the services have invest the more resources into doing this. but what is still absolutely difficult to explain and for the

average person not just frustrated, but almost on the verge of being deliberately provocative and disruptive for the whole lives, it's a dual tracking of foreclosures modifiation. i would point out the south carolina just ruled a few days ago, suspended all foreclosures in south carolina for the reason of the dual tracking. that has been done by also new york and connecticut. this is not a localized problem. it's not one the classic problems of well, it's, you know, it's a blue problem, red problem, et cetera. :arolina 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.

u.s. state department officials testified thursday about the political unrest and violence in the middle east. they also talked about egypt, syria and the recent agreement between hamas and fatah to form a unified palestinian government. ohio congressman steve sheik who recently returned from a congressional delegation to israel and egypt chaired the hearing. this is an hour and ten minutes. >> first of all, welcome to everybody. we are going to be starting here pretty close to on time. i want to apologize to think some of my democratic colleagues

>>und out we were getting outr. early today and i find they hav. all hit the airports.t so i hope to finish a weapon and they've ale a few more of my republican colleagues be here. the purpose of today's hearing is to provide subcommitteeues be the purpose of today's hearing is to provide subcommittee members with a broad overview of security issues in europe and eurasia. terrorism remains the biggest threat to the transatlantic community. as a result, the goal of this hearing is to assess the cooperation between the united states and within others in jurisdiction with this subcommittee in regards to terrorism. last sunday night, america learned an elite american unit has killed osama bin laden. i'd like to personally congratulate the bush

situations, as well as our intelligence kmooet, law enforcement, most importantly i'd like to thank all of our fighting men and women in uniform, especially those in the unit six that did such a great job under great stress. great risk and relentless resolve on their part produced this great victory. the events of last sunday inevitably remind us of the tragedy of september 11th 2001. those we lost that day remain in our hearts and our minds. however, we must also recognize that due to the vigilance of the american troops, law enforcement officers and ordinary citizens, the mass murderer behind the attacks on 9/11 was unable to strike the united states before we got him. we may never know ul the details about the operation which led to the death of bin laden. we do know that civilian and military elements of the united states government worked with international partners for years to track him down. we're here to learn more about

and to encourage such counterterrorism cooperation. specifically, we seeking to strengthen ongoing efforts with our european and you're asian allies, including the sharing of information, resources and successful practices. counterterrorism is working in afghanistan. our european allies have made and continue to make significant contributions to the international security and assistance force. our eurasian and our asian partners also assist. i was pleased to reed this week that kazakhstan ratified an agreement that formalizes the arrangements under which thousands of flights have crossed kazakhstan air space since 2001. such contributions are essential and must continue. our mission in afghanistan is not yet complete.

counterterrorism cooperation with our european and air asi e allies must be global in scope. i'm interested in listening to the allies working together to address the threat being made. excuse me. i think the president is calling me. i'm sorry. i'm in a committee hearing. i'm going to turn my phone off, and i'll call you later. okay? i bet that's never happened to you before, has it? i apologize for not shutting that off earlier. now, when you're in with the president and you do that, he glares at you. the united states can learn from the approaches taken by our european allies. i am particularly interested in

how our allies approach counterterrorism and share successful practices. for instance, the united kingdom and the netherlands have implement eed programs that wor with communities that counter radicalization. it would be helpful to understand how officials from the department of homeland security posted in our embassy throughout capitals in europe and eurasia can bring such innovative practices here to washingtonment i hope you'll address that when we hear your testimony. terrorism threatens not only our lives but our way of life. i hope that our witnesses will describe the administration's efforts and the efrlts of our european and eurasian partners to balance security concerns with the need of robust transatlantic trade and tourism. trade with europe and eurasia is vital to american economy, supports hundreds of thousands of american jobs across all 50 states. this trade must continue. this i look forward to hering about initiatives such as the

visa waiver program that seek to provide access and american markets and for common sense precautions. i'm in favor of expanding this program to include additional qualifying european partners as well as historical lies such as taiwan. i was just in taipei recently, and they made the case that we ought to recognize them for this program. to foster trade, the united states assigned our hopes to -- we have signed our hopes to sign several different elements with our european and air asian partners. for example, negotiations continue with the european union on a renewed passenger name record agreement. it's my hope the agreement will deepen mutual trust and bolster confidence in the atlantic. our common security and prosperity depend on us working together. finally, we must look at terrorism in the context of the events taking place in the middle east, north africa, which some have called the arab spring. al qaeda's role in these uprisings has been nominal so

far. instead, the american ideals of freedom, democracy and opportunity have inspired many. however, i am concerned that these uprisings could create an opening and i hope you'll address this, for radical groups such as hamas and the muslim brotherhood to increase influence or even acquire a base in the region, a country from which they could threaten united states and israel and our european allies. it's important to understand that these radical groups do not have to convert people to their twisted version of islam in order to gain support. instead, hamass and the muslim brotherhood have a history of provide goods and services, food aid and medical care to those who would otherwise not have access to such necessities. the united states and our european allies must take action against such a tragedy. we have a tendency to think of this arab spring as one event.

however, the event is are interesting. i'm interested in the wojts' assessment of what we're doing to support democratic forces in each country. i'm also interested in how these uprisings each individually impact the united states counterterrorism strategy and cooperation with european and eurasian allies. the death of osama bin laden marked a major victory, but let us be clear. the fight is far from over. the united states and her allies must stay committed to the counterterrorism mission in afghanistan and around the world. this subexcrete can do what it request to help. we'll continue to focus on terrorism and examine it from you'll angles. we'll be traveling extensively throughout europe to find out what our allies feel about all of these issues. i want to thank our witnesses and members for participating in this hearing and i look forward to a productive discussion.

my minority member is not here so i'll recognize mr. poe of texas for his remarks. >> thank you, mr. chairman. like many americans, i'm worried that pakistan is not as good a friend as we think they are are. at least as much as they claim that they are a friend of the united states. capturing osama bin laden was a great moment in not only our history but world history, but it revealed also how unstable our relationship is with pakistan. i, too, want to commend those who were involved in this operation, the president for making the decision to go and take out osama bin laden and his compound, all of the intelligence agencies and especially the navy s.e.a.l.s, osama bin laden has met his maker and i appreciate the navy s.e.a.l.s in arranging the meeting. but let's look at the facts. bin laden was hiding in a city just 35 miles from the capital city of pakistan. his house was a massesive

million-dollar compound, eight times the size of surrounding houses, had 15-foot-high walls, had barbed wire. once in, with he can see the compound had been built especially for osama bin laden and his hideaway or hideout, and perhaps the worst thing of all, the compound was just a stone's throw away from the west point of pakistan. it would be like john dillon jer living across the street from the fbi building down the street and the fbi not knowing about it. it's very perplexing that pakistan claims they were unaware. even administration officials share those suspicions. the cia director leon panetta asertded that pakistan had not done enough to bring osama bin laden to justice. now saying that, quote, there's total mistrust between the united states and pakistan. those are strong words from the person who is the cia director. john brennan, the deputy

national security adviser for homeland security and counterterrorism says it's inconceivable osama bin laden had no support system to help him inside pakistan. a year ago, hillary clinton following a trip to pakistan, said in an interview with fox news that elements within the pakistani state know the whereabouts of the al qaeda chee chief. so it seems to me that pakistan was totally incompetent in their security issues or they knew of the location of osama bin laden and hid him out. if pakistan was helping bin laden hide from us, i sefrnl don't think we should be giving them $3 billion of american aid. it doesn't seem to make us any safer to give american money to a country that may be playing both sides of the field. i've introduced the pakistan foreign aid accountability

account, which freezes ny foreign aid to pakistan until it's proven pakistan didn't know about osama bin laden's wheres abouts. they have opportunity to make their case before we give them any more money. america just wants some answers. where do we stand? where does pakistan stand with the united states? president bush stated in his joint session to congress after 9/11, to our allies, that you are either with us or you're with the terrorists. and i would like to know where pakistan is in that group. there is no middle found. i'd like to also find out what's going on with the mekdgo designation. veat thel district court ruled .. mek due process when it decided to keep the mek on the fto list. the law states that reviews are to take place within 180 days

should the group appeal its designation. it's been past 120 days. it's now 230 days. during this time, the mek has been attacked by the iraqi military. yunami has confirmed that the soldiers killed 34 residents at camp asha raul, 34 residents that have yesterday to be buried because the iraqis refuse to allow them to be buried. high ranking public officials in the iraqi regime repeatedly cite the u.s. terrorist designation as their justification for treating the residents of camp >> iraqi troops won't them bury the dead. u.s. representatives have not given an investigation, and, of course, iraq has not. of course, we wouldn't expect the people responsible for the

action to the investigation. all this seems to be compounded and made more difficult because the state department just won't take a position on the mek. it's like we say in texas. keep them on the list or take them off the list, just make a decision. the evidence points to the fact they should be off the list, but this delay, delay, delay not able to make a decision for whatever reason is, i think, a problem state department can resolve and within their power to resolve that matter. those are some questions and concerns that i have, and i would hope that these can be answered. i enter deuced h res 60 to take them off the list, and there's colleagues agreeing with that and signed on that. i hope we can make a decision

before this bill is before this committee in the house floor. thank you, mr. chairman. i like your cell phone tone, it's very patriotic. i yield back the rest of my time. [laughter] >> well, that was bethoven. i know you're here to talk about europe and euroasia and the issues raised by my colleague are under the purview, but i hope you address those issues because i share those concerns and i agree with all of them. as much as humanly possible, i hope you'll include those in your thoughts and remarks when we get to the question. with that, i'll yield to mr. griffin, my old buddy from arkansas. >> your old staffer.

>> he was a good one too. >> thank you, mr. foreman. first of all, thank you for holding this hearing and thank you todd witnesses for -- to the witnesses for coming. i think this topic is as relevant or more relevant than ever in the wake of the killing of osama bin laden. what i'm particularly interested in, and maybe i can get follow-ups on questions, but i want to throw this out there so the witnesses can address this in the context of the other questions is the impact that the leaderless al-qaeda has on the desperate terror cells spread throughout the european continent and what, if any, changes we might see in terms of an increased threat or decreased threat. i could make -- excuse me -- i could make the case in the absence of one leader that there could be an increased threat, and an increased independence of

the desperate groups on the european continent, so i just ask you to keep that in mind, and if you could address that, i would appreciate it. thank you, look forward to hearing your testimony. thank you, mr. chairman. >> thank you, mr. griffin, and now we'll hear from my colleague from ohio, mr. smith. >> [inaudible] >> she yields back her time. let me grue deuce the witnesses today. i thank you for being here and thank you for your patience. daniel benjamin was sworn in at the department of state with the rank of ambassador at large on may 28, 2009. from 1994 to 1999, mr. benjamin served on the national security counsel staff, and in 1994 he was the foreign policy speech writer. before entering the government, mr. benjamin was a foreign

correspondent for "time" and the "wall street journal" -- that must have been an interesting switch from "time" to the "wall street journal," and someday i'd like to talk to you about that. mark is at the department of homeland security and responsible for coordinating the department's international programs for policy to achieve the international strategic objectives. he's served as director for european and multilat roll affairs in the department of homeland security office of international affairs from june 2007 to august 2008. prior to joining dhs in june 2007, mr. koumans served in the foreign service. welcome to you both, and we'll recognize you mr. ambassador benjamin. if your statement is long, we'll

accept it for the record, but we'll give you as much time as we think is reasonable. >> thank you very much, chairman burrton and distinguished members of the committee. i submitted testimony for the record that talks about the cooperation, and i thank you for the opportunity to appear before you today, and it's a great pleasure to testify during the week when the united states achieved a historic success against al-qaeda. bin laden's death is a victory for the united states and all human beings who seek to live in peace, security, and dignity. sir, you mentioned my service on the national security counsel for the last two years of that time, and i was there in bin laden issued his well calls for the death of americans everywhere, and when our embassies were blown up, so this for me has great personal significance. i should underscore though this is by no means the end of our

effort against al-qaeda. we felt the blow of the leadership, much evolved to the affiliates, and much remains to be done. we sthowld recognize one of the unsung success stories of the period has been the ration of an extraordinary global alliance against terror operating out of the headlines but effectively works to protect our citizens around the world. in the critical areas of intelligence and law enforcement, governments prevented attacks including those against planes in the atlantic and public transportation systems worldwide. our european allies responded extremely positively and the european union paid tribute to our efforts. various statements by european governments also noted that

al-qaeda remains a serious threat. europe very much remains a focus of terrorist's plots. we saw several attempted attacks in denmark, a first ever suicide bombing in scanned scandinavia and separatist group bombings on the metro and north caucuses. our work with europe spans the globe. we work with our nato partners on stability operations. we've been working with our european allies and others in the friends. of yemen process and including partnerships with france and others to constrain the relationship of al-qaeda in which they operate by strengthen governments in other regional partners. such work helps us deny safe havens to terrorists which is absolutely vital. to deal with the terrorist threat and identify individuals preparing to commit violence,

information sharing is essential of the the united states and e.u. are committed to sharing information and cooperation in the investigation and prosecution of terrorist related offenses. we work on the issues through the united states treasury finance tracking program. the department of homeland program passenger name program, and presidential directive six. there have been some concerns raised in europe about these programs, but we know our approach is to protecting privacy have more similarities than differences, and we share a strong commitment in protecting civil liberties. i'm confident with a common sense of resolve, we can achieve the goals we seek. another crucial aspect of the cooperation is the bilateral work with key partners to build capacity of other nations around the world. our european allies from russia in the east and italy in the south to netherlands and denmark

in the north share our views with counterterrorism policies focusing on building the capacity of foreign partners and countering violence i extremism. while it's the highest priority in the engagement, hamas and hezbollah are a major focus. we will continue to work true bilateral channels to press our allies to take more aggressive action to crack down on fund raising at both the e.u. and member state levels. i made this a personal priority. in conclusion, the magnitude and breath of the challenge makes clear no country or organization can defeat it alone, and the united states will, indeed, we must continue to work closely with our partners around the world especially our capable and willing european allies to identify areas where further work remains to be done and how we can further collaborate ever more effectively only through such corporation can we succeed.

thank you, and i look forward to your questions. >> thank you, ambassador benjamin, and now we'll hear from mr. secretary coumans. >> thank you for the opportunity to testify on the department of homeland security with europe. first, like you, i want to acknowledge the achievement of this past week. as secretary said, the death of bin laden is an important success not only for the united states, but the entire world. i recognize the statements of support from europe including president barosso. we all agree as we said this morning, this afternoon that bin laden's death is not the end of our security efforts. al-qaeda and other organizations continue to plan attacks here and abroad. security is a shared responsibility more than ever before. it's a mission that forms other

key missions of secures borders, enforcing i want gracious laws, safeguarding cyberspace, and showing resilience to disasters. in order to succeed, the department must work with their international partners. the attempted terrorist attacks in 2009 and the printer bomb in 2010 underscore the interdependence of our homeland security with international security. terrorists and criminals look for vulnerabilities in networks to carry out attacks. i'd like to highlight three points. the first is working with our european allies to prevent terrorist attacks. second, dhs and european partners cooperate in particular to prevent terrorist travel. third, the visa waiver program provides incentives to provide high security standards and deeping cooperation with the united states. my first point concerns the partners to secure the flow of travel and trade. to that end, dhs has 400 employees in europe working daily with governments, the traveling public, the aviation

industry, cargo shippers, and others. it is dhs's goal to expedite legitimate travel and trade, both critical to the u.s. economy while promoting the flow of goods and people and prevents illegal activity. much of the cooperation takes place at the operational level investigating transnational crimes, combating human and drug trafficking, screening containers, conducting maritime assessments, conducting passenger screening and forcing u.s. customs and immigration regulations and investigating cybercrimes. on my second point, terrorist travel remits one of the greatest threats u.s. security, and therefore detection and disruption are key goals. every week there's more than 2500 flights between europe and the united states. we analyze travel and passenger data and shares information with our european partners to

identify both known and unknown potential terrorists. dhs has a number of programs to address the threat. under the immigration program, dhs post officers at foreign airports to work with airlines and foreign officials to identify high risk and improperly documented travelers before boarding aircraft for the u.s.. another example is dhs collection and analysis of passenger name record. in recent years, pnr data is pivotal in cracking cases of mumbai plotter, new york city bomb plotter, and time square bomber fizal shahzad. we just passed the one year anniversary with bin laden's demise. there's ties to terrorism were officially identified through the analysis of pnr. presently, we're negotiating a new agreement with the e.u. to

avoid the potential conflict with the european privacy law. dhs is not negotiating for the collection of pnr required by u.s. law, but to ensure a stable and legal environment under which it is transferred. our goal is to improve security while reassuring our allies of the commitment to protect individual privacy. we have held six negotiating sessions and hope to conclude the talks in the comes weeks or months. i will turn to the third topic of the visa waiver program. since 1986, this program allows citizens to travel to the u.s. for tour ism. the first countries are among our closest partners. 30 countries are in europe. by statute, these countries develop a security partnership with the u.s. and dhs conducts regular detailed reviews of each country. these reviews focus on u.s. law enforcement, national security, and immigration interests and insent vise the countries to

share information vital to our security. i look forward to working with you as we continue to explore opportunities to advance our cooperation with european partners. i submitted a longer testimony officially for the record. i look forward to answering your questions. >> thank you very much. before i get to my questions, i'd like to just once again stress, i just got back from taipei, and they have been a great ally for a long time, and they should be a top candidate i hope for the visa waiver program, and i hope you and the department look seriously at that. the first question i have is after bin laden's death, there may be some changes in attitudes around the world, and with our continued commitment to freedom in the middle east, afghanistan, and elsewhere and stopping al-qaeda and the taliban, do you think the attitudes of our

allies that have been working with us in those areas and endeavors change? will they remain committed as they have been or have we seen any change? >> thank you for that question, mr. chairman. i think that our expectation is our allies will retain the same urgency and same mission that characterized the cooperation we've had for many years now. it you look at the statement from any number of european leaders, they were quite clear that this is a milestone achievement, but by no means the end of the threat. they experienced the heightened threat environment in the fall. germany arrested three terrorists in the midst of the a conspiracy just a few days ago. i think there's a widely shared understanding among the governments of europe that this threat is by no means over. >> you anticipate the commitment

in afghanistan will be strong as ever? >> well, as you know, there's a number of different statements about troop levels and things like that in afghanistan in particular, but overall, we note that our european allies have supplied a large number of troops, a large number of teams for training police and other parts of the afghan government, and we certainly hope they will continue to do so. i don't think that this event is going to, in itself, trigger any kind of seen change. >> thank you. one of the concerns i have involves the middle east. i was senior republican in the middle east the previous two years, and as my colleague from texas was alluding to a few minutes ago, we're concerns about what's going on in the middle east, and what i'd like to ask both of you is our allies in europe, europe and euroasia, what is their attitude, and what

are they going to be doing from your perspective to help us make sure the entire northern tier of africa and the entire persian gulf doesn't go up in smoke? i'm concerned and i want to know your perspective, but i'm very concerned about who's going to take over in egypt? who's going to take over in libya? should gadhafi be gone? what's going to happen in syria? all these issues that will affect the entire world are in the middle east, and they are supplying energy in large part for many of the countries in europe and euroasia. i know this is a pretty broad question, but i want to know what both of your assessments is about what's going to happen in those countries and what you project in the future. i mean, if egypt goes to the radical elements like the muslim

brotherhood, if syria goes from assad to a radical element monitoring the question, if gadhafi leaves, and others were able to take over the country, what does that mean, and what are we doing to stop it, and what are our allies doing to help us in that endeavor? >> well, as you said, mr. chairman, it's a broad question, but let me take a quick stab at it. our allies are every bit as concerned as we are about the fate of the region. we are all, of course, stunned by the rapidity of change come to the region. there's a shared desire to see egypt, tunisia, and other countries hanging in the valance involved in a democratic way meeting the aspirations of their people. we have very close cooperation with the europeans on what is

going on in libya. we've coordinated closely in terms of our assistance and our messaging to tunisia and egypt, and we've also coordinated closely, for example, on outrage at the intoller rabble crack down in syria. this is a sampling of the coordination. it's by no means meant to be exhaustive. we are working together to ensure that we do see the kind of middle east emerge that we would like to see. we are, of course, all concerned that terrorists will try to exploit this moment because although the arab spring as you mentioned has been a -- in its own way a strategic blow to al-qaeda and its adherence because it shows they were not part of the revolutionary movement, not part of the story there, and, in fact, the events themselves demonstrated the falseness of one of their core

beliefs which is that only violence would change these countries. we view these as being very, very positive developments. with that said, terrorists will try to insert themselves wherever they see an opportunity, and as there are some distracted security services in the region and border security may not be what it once was, they may see that as a moment of opportunity. as you can imagine, we're working closely through diplomatic intelligence, law enforcement, and military channels to do what we can to ensure that the region maintains its security and to ensure that terrorists do not have an opportunity to exploit this moment. it's still very early days, but i think we are still optimistic about the trajectory of the region. >> well, i'm about to yield to my colleague from texas because i used a lot of time already. i would like to urge homeland security and the state

department to do everything along with our allies as humanly possible to make sure we don't have radicals take over in egypt, syria, or the other countries. i understand, and i think we all acknowledge, that we've had some repressive administrations over there. mum and others trout throughout the entire tier of northern africa and even in the persian gulf. one thing i don't think the world can live with or tolerate are several more irans popping up in the northern tier of africa and persian gulf because, boy, we might not have enough energy because we're not drilling here in america, we mite -- might not get enough energy to turn the lights on. i urge you to make this a top priority. with that i yield to my colleague from texas. >> thank you, mr. chairman. i'll follow-up on my opening

comments. now that bin laden is dead, who is the most -- who would you rank as the number one terrorist group in the world as opposed to the united states? >> well, sir, undoubtedly al-qaeda remains the foremost terrorist threat we face operating either from the al-qaeda core base in the pakistan afghanistan region or through affiliates why yemen, in north eastern africa and north western africa, so as the president has said and as many others have said, this is a historic achievement, but not the ends of the story. i think it demonstrates our determination to continue to remove al-qaeda threats that we face. >> i agree that the death of bin laden shows other terrorists

that the united states is resilient and will do whatever we can for as long as it takes to make sure we're safe. cia director pa panetta makes the comment there's a mutual distrust between the united states and pakistan now that we have found him harbored in the country for so long. do you share that opinion, mr. ambassador? >> well, the ambassador richard holbrooke once said aeroothers said there's a trust deficit between our countries we are trying to overcome. we are going to try to overcome what systems there were to support bin laden in the city and to make it possible for him to live there for such a long

time. i do think though that it's important to emphasize as the secretary said this morning that our relationship with pakistan while occasionally has its challenges is a productive one that more terrorists have been apprehended or killed in kick -- pakistan than anywhere else and this collaboration between our countries has been absolutely vital to degrading the al-qaeda threat over a number of years. it is a complicated picture, but it is a vital relationship, and we have to keep working at it. >> i understand it's complicated, but my question is do you believe that the pakistani government knew that bin laden was in their country? that's just a simple yes or no. >> i believe that they thought there was a good chance he was somewhere in pakistan. i can't imagine given all the

focus on fighting extremism particularly in the federally administered tribal areas that they didn't think -- that they were certain he was not in their country. whether or not they knew he was in the city, i think that probably came as a much greater surprise to them. >> of course; united states didn't notify pakistan they were taking him out, and they now objected saying that strained our relationship. in my opinion is they knew or totally incompetent in their intelligence field. let me switch gears a minute and ask you a couple questions about the mek. every time we get together, i ask you about this, and i hope we get an answer someday, but is the state department going to take them off the list? if they are, when? if they're not, when? when are y'all going to make a decision? >> sir, the answer is the same as a couple weeks ago.

we are working as expeditiously as possible to complete the review that the u.s. court of appeals ordered. as recently as april 6, we received new material from an mek counsel, and we are reviewing it, and just as fast as we can, we are going to get a recommendation package to the secretary and have a decision made. >> six months, a year? do you have any idea? >> i can't give you a certain date, but i can tell you less than six months, countribly less i hope. >> as a follow up, i have attended as many members have all of the classified briefings that i'm aware of on this issue. has any new information come to surface in the last two months that would help members of congress on this issue classified or not? >> as i mentioned, sir, we have received new information as

recently as last month from the mek itself, and so we're reviewing that information and seeing if it helps in our deliberations. >> i'll yield back the remainder of my time. thank you, mr. chairman. >> i apologize, i missed part of your questions, mr. poe, did you ask about what our state department is doing to urge those people who have not been buried would be dealt with? are you aware of what he asked earlier on? i mean, if those people were killed some time ago and for whatever reason they are not being taken care of properly, it seems since we're a strong supporter of iraq and the iraqi government, we have to do everything we can to make sure that's taken care of immediately. >> i fully agree, and as soon as i get back to the department, i will check with my colleagues. >> would you let me