one of the significant ones the navy went through is battleship. i wonder if you comment what may happen with the carriers as we look into the future particularly challenged by the range capabilitis. >> yes. >> similar kind of challenge to the battleship, where do you see particularly the super carrier as we move into the future? >> yeah. i think one, it is how do you look at the carrier? how do you look at, at how the carrier's employed and the totality of the systems, defensive systems and offensive systems that it has. i know that there's a great deal of interest in the carrier vis-a-vis the, you know, the df-21. that's the big question. and the how that carrier now becomes vulnerable. the carrier is moveable. the carrier is maskable. and, then there's a whole

set of defensive systems that are able to be employed. i would submit, and you would expect it from somebody wearing this uniform, put me on that as opposed to a fixed land base where i can tell you exactly where the coordinates are and they're not going to change. and so, i think it is interesting that we have the debate about the carrier or questions about the carrier when the, the fixed land sites, which are extraordinarily vulnerable, are not part of that question. so it's not of a question or earth or but -- either or but how you maximize both of them. with regard to the carrier and i will kind of step back and put a little different spin on it, i think of carriers as moveable sovereign airfields. that we don't have to have

permission to move. we don't have to have basing rights. we don't, always have to have overflight rights, particularly if we're coming from the sea and the area that we're interested in is a coastal area. so the question to me becomes, where does the nation want to have the ability to have these flexible airfields that we can put wherever we want them and can move them rather quickly? you can move from the arabian gulf and into the adriatic because i've done it before in seven days. and to be able to move that amount of power, that power projection, that quickly without any negotiations having to take place, i would submit is an aspect of the military that the nation may find helpful.

even in the, as you look into the future and the challenges that may be posed against it. you know, we have been dealing with capabilities and systems that are arrayed against an aircraft carrier really since the beginning of aircraft carrier aviation. they have moved from other ships, other aircraft carriers, submarines, air defense systems, cruise missiles. that is all part of how warfare develops. development occurs. you develop counters to it. so i think we'll be working our way through it. but the fundamental question for me is, do you want to have the ability, as a nation, when sovereignty concerns will become more acute in my opinion in the future? do you want to have those sovereign airfields that you can put where you need them to be? where you can use them to deter or assure, that's how

i view the aircraft carrier. >> we're getting to our closing time. there's two thoughts that i have here. one is that when we talk about the determinants of success, the first, and navigating these types of revolutions in new technologies and challenges the first is the ability to keep our eyes on the horizons. that is to be aware of what is coming at us but also to be able to mine the lessons of the past and i think we've seen evidence of that here today. the second is one of major determinants of success is something that doesn't change and that's good leadership. i'm thinking of the historic parallel of admiral moffitt and the story of naval aviation, that often it is leaders that may not come from that particular background but have a combination of vision and drive to get things done that often determines whether we really do achieve success. and i think with those two things in mind, it's very

lucky for that we have you, serving in our nation's service but also that you joined us here today to discuss these challenging issues with us and so please join me in a round of applause. [applause] [inaudible conversations] [inaudible conversations]

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>> from this event at brookings institution we'll stay live and take you over to the treasury department. the social security and medicare fund trustees will be releasing their annual report today on the fiscal condition of both of those federal programs. we expect to hear from treasury secretary tim geithner, the managing trustee of the fund, as well as other trustees, including health and human services secretary kathleen sebelius. and labor secretary hilda solis. the news conference should get started shortly.

[inaudible conversations] >> we're expecting a news conference shortly on the social security and medicare fund trustees report. and we'll have that live for you when it starts. want to let you know about some of our road to the white house coverage coming up tonight on c-span. newt gingrich is in georgia. he will speak at the republican party convention in make con, georgia. this is his first comments since announcing his run for the presidency on wednesday. we'll have that live tonight at 7:15 on c-span. we'll follow that with your comments. while we wait to hear from the treasury secretary and others on the social security report, we'll bring you comments from c-span viewers this morning on who should run, the qualities of a presidential candidate in

the 2012 race. >> when we got online "wall street journal" we noticed columnist peggy noonan had same idea for the column which will appear inmn the papers tomorrow. it is off to the races what voters are looking for in next year's presidential nominee. we'll share with you what peggy noonan thinks is onwe your mind and we very much like to hear from you. here is what she writes.in i think it is possible this year because of the special s nature of the times, we live through unprecedent. and ongoing crises in the economy and foreign policy. the american people may be less interested in theer personal stories, foibles and family situations of those running for president than in the past. they will still bede interested but these things won't seem as serious or even decisive as theysi sometimes have been.e the current air of crisis may make such things look like a luxury the country can ill-afford. she goes on to say, i think americans right now, but particularly with the current crisis,t will bear

generally inclined to give pretty much everyone a break as long as it's all mischieft confined to the past. they won't accept it in the present. that's what did in john edwards. it wasn't rumors of past girls.rp it was the girl on the plane during the campaign of the americans will come down on you hard for that. that is her thought what you might be looking for in ami presidential candidate in 2012.al throughout this 45 minutes we'll mix in individual very.gi -- video. let's begin with president obama who traveled tope el paso, texas to make a policy speech on immigration. here is a bit of it. >> we have gone on what was requested by very republicans that theyor supported broader reform as long as we got serious about enforcement. all the stuff they asked for, t we've done. but even though we have answered these concerns, i've got to say, i suspect there is still going to bel some who are trying to move

the goalposts on us one more p time. they said we needed to triple the border patrol. s we're now we're going to say we need to quadruple the border patrol or they want a higher fence. they will neat a moat? maybe they will want alligators in the moat? [laughter] they will never be b satisfied. and i understand.i that's politics. >>host: that's president obama in a major whopy addressed characterized by the white house on immigration reform. t we'll mix in the gopwe presidential hopeful as well. let's get to telephone calls with the question. what qualities are you looking for as we get into the 2012 election? our first call from popular bluffs missouri. pam is a democrat there.. >> caller: good morning. what i'm looking for in a

president? somebody that ain't going toho lie to us.o >>host: how will you be able to gauge that? >> caller: igh honestly can't tell you. i'm always a democrat and i don't know if i will pull one in 2012 or not. whoever runs is going to have to really, i don't know. because our country is in big trouble. >> host:. what are the two most important issues for you? >> caller: how to get the cost of living down. the gas prices, get them back down to where people can actually afford to go to work and take their kids places. i think we need somebody in there that has never been a in politics, a politician before. somebody new. >> host: pam, thank you very much. she is concerned about gas prices. we invited richard newel,

the u.s. energy information administration. he is. economist from dukeki university. he has been working with the administration since 2009. his sole job is statistic h that two into energy prices. we invited him to help you and us understand what are the factors that affectgy energy prices particularly oil and gas. that is coming up 7:45 eastern time. what are you looking for in your 2012 presidential candidate? what qualities matter to you. let's go to taylor, a michigan. sherry ians a republican there.i' >> caller: good morning.ea i'm an 83-year-old woman and i have never been so disgusted what is going on. i have been up all night watching these oil people. now, this is just another attempt by this administration to destroy and manipulate this country t into his socialistic ideals. you do not need a shadow government is what we have with all those czars.

this is america. not russia. >> host: i can hear your frustration.xt let's translate that into f your next vote. what will you be looking forer specifically in a candidate?ca >> caller: i want to look for a candidate that on the values this country was founded on. obama does not believe inn them. >> see in our video library. c spann d.o.t. original. we go to the social security and medicare trustees are releasing the condition of federal programs. tim geithner at the podium just getting underway. live here on c-span2. >> i will come at the far end what i'm done. welcome. nice to see you all. the social security and medicare boards of trustees met this morning to complete their annual financial review and to transsubmit their reports to congress. i want to begin by welcoming my fellow trustees and in

particular two new public trustees, charles blahous and robert rishg your. nice to have you with us. want to acknowledge the chief actuaries, richard foster. thank them and their staffs for their excellent work. today's reports make clear while both social security and medicare have sufficient resources to meet their obligations for at least the next decade, it is important that we put in place reforms to strengthen these programs. social security and medicare benefits are secure today but reforms will be needed so that they will be there for current and future retirees. the social security program has dedicated resources that will cover benefits for the next 25 years but in the year 2036, one year earlier than was projected in last year's report, the social security trust fund will exhaust its assets and

income, incoming revenues will be insufficient to maintain payment of full benefits. and due to technical changes in the economic assumptions underlying the projections, medicare's hospital insurance trust fund will exhaust its assets in 2024, which is five years earlier than was projected in last year's report. the medicare report illustrates once again the importance of the reforms in the affordable care act which will significantly strengthen medicare's finances and extend the life of the medicare trust fund. the trustees reports under score the need to act sooner rather than later to make reforms to these entitlement programs. last year of course the president and congress took a timely first step by enacting the most significant entitlement reforms in decades but we have to go beyond the affordable care act and identify additional reforms. americans are living longer

and health care costs are continuing to rise. if we do not do more to contain the rate of growth in health care costs, then our commitments will become unsustainable. so in light of these reality, the president, as you know has proposed a balanced comprehensive framework for deficit reduction. and this framework includes health care reforms that will generate substantial additional savings on top of those that will be generated by the affordable care act. now of course we should not wait for the trust funds to be exhausted to make the reforms necessary to protect our current and future retirees. larger, more difficult adjustments will be necessary if we delay reform and by making reforms soon that are phased in overtime, we will help reduce uncertainty about future benefits. now as the president said, social security and medicare define and reflect the

values of america. they are commitments that make our society more fair and more just. we have kept those commitments for generations but our responsibility is to make the reforms necessary to allow us to maintain those commitments for the future. now on a slightly separate note, on monday, may 16th, just three days from now, the united states will reach the debt limit set by congress and because congress has not yet acted to raise the limit, we have now set in motion a series of extraordinary measures that will give congress some additional time to raise the debt lamt. -- limit. i want to encourage congress to move as quickly as possible so all americans will remain confident that the the united states of america will meet all its obligations, not just our interest payments, but also our commitments to our seniors. i want to return the floor now to my colleague and

fellow trustee, secretary kathleen sebelius. >> thank you, secretary geithner and i think that, we have heard in today's medicare trustee report that there's no question we have strengthened medicare but there is still work to be done as the secretary has already said. from day one the obama administration has made protecting seniors for today and tomorrow a top priority. and that's why we implemented a series of reforms over the last two years including those in the affordable care act signed into law just a little over a year ago which have already produced significant savings for the medicare hospital insurance program. now without these important steps the hospital insurance trust fund would have been exhausted in 2016, just five years from now.

instead, today's report found that the hospital insurance trust fund will remain solvent until 2024. over the next 75 years, medicare costs on average are projected to be 25% lower due to the new law. this is happening even as we're adding important new benefits to help people with medicare stay healthy and to reduce the cost of prescription drugs. this year the projected exhaustion date of the medicare hospital insurance trust fund did move forward from last year's projections. this is due in large part to lower payroll tax revenues as a result of the slower than expected economic recovery. it's important to note this is exactly what we've seen in previous recessions. and that, having the affordable care act in place is the main reason that those projections are not worse. indeed what the trustee's report shows that the

affordable care act has put medicare on a much more sustainable path. because of the law, medicare costs per enrollee are now expected to grow more slowly than gdp per capita, through 2019 after growing much faster than gdp per capita for the last four decades. still the report shows we have work left to do. every day, nearly 48 million people our parents, grandparents, neighbors and friends rely on medicare for the medical treatments and prescription drugs they need to stay healthy. to keep medicare strong for them and for their children and grandchildren we need to continue to look for opportunity to slow medicare costs by improving care and reducing waste and fraud. we recently launched the partnership for patients, an existing effort that has brought together hospitals, doctors, nurses employers, patient advocates and others, to improve the quality and safety of care for all

americans. if reach the goals we have set for just this one program, medicare will save another $10 billion over the next three years and as much as $50 billion over the next 10 years, as well as saving 60,000 lives. and the president's fiscal framework would build on the affordable care act to save medicare another $200 billion over the next 10 years. what we can't do is follow the republican plan to turn medicare into a voucher program and shift the cost to seniors. under that plan a typical 65-year-old who becomes eligible for medicare, would pay an extra $6400 a year out of their own pockets for health care. even worse, the plan does nothing to address the main factor driving up medicare spending and other health care spending, are which is the underlying growth in health care costs. medicare is a promise to all americans that if you work hard, you can retire knowing

that your medical bills won't force you into bankruptcy. while our work is not finished, today's report shows that the steps we've taken in the last two years have put medicare on a more ten sustainable course for the future. i would like to now turn over the podium to our colleague, secretary hilda solis. >> good afternoon and thank you for being here today. today we've heard much about the long-term financial outlook of social security and medicare. undoubtedly challenges remain that threaten both the solvency of these programs and the retirement security of many american workers and beneficiaries who depend on these benefits. program costs are projected to increase significantly through 2035 for mainly two reasons, the rapid increase in reirrelevant toos of the baby boomer generations and lower birthrates of more recent generations that

result in slower growth of the labor force and gdp. furthermore, people are living longer, so while costs of these programs are rising it's critical to recognize contributions of demographic. in addition slowing the growth in projected long range cost of medicare will depend largely on program changes under the affordable care act which will take effect in the coming years. this highlights the importance of making every effort to ensure that the affordable care act is successfully implemented. the affordable care act extend health care coverage for tens of millions of people who would otherwise not have access to health insurance. and to create a more efficient health care system, the legislation will rein in costs even as we expand and promote quality, not just for medicare beneficiaries but for everyone. while trust fund income and earnings are projected to cover costs for a few year the trust fund assets will ultimately be used to pay for benefits, benefits like

the social security disability insurance, the di trust funds, which are projected to be exhausted in 2018. this is especially important as the unemployment rate remains unacceptably high. loss of wage income has and continues to be devastating for working families across this country but it also erodes the payroll tax base, the revenues from which are needed to pay current program benefits. the department of labor is playing a critical role in getting the country back to work and has put in place many policies and programs that are providing opportunities for americans to succeed, keeping our workers safe and making sure that working families keep what they earn. these efforts aren't only critical it revitalizing the middle class, they create more revenue for social security and medicare. for instance, we vrl a program called job corps. it is a free education and training program that helps young people earn a high school diploma or ged to

find or keep a good job. the job corps program provides low income youth with skills they need to succeed in career and in life. there is no question that young workers who join the labor market through job corps and other training initiatives fundamentally strengthen social security and medicare programs. we're also working hard to tackle worker misclassification. when workers are properly classified they receive the pay they earn and deserve and for the work that they do and social security and medicare services receive the appropriate taxes that are paid on their behalf. additionally we're also creating opportunities for our workforce development system to partner with state and community-based organizations, businesses serving associations and economic development agencies to expand employment opportunities for people with disabilities. let me be clear. people with disabilities can and want to work. there's a growing body of evidence that proves that workers with disabilities meet and exceed the job

performance of coworkers without them. yet the talent, those with disabilities bring to the workplace, continues to be undervalued. thus, their labor force participation remains lower and their unemployment rate remains very high. increasing the employment of people with disabilities is not only good for them, it's good for social security and for medicare and it's critical to the economic prosperity of our country. the social security and medicare programs provide an important safety net for millions of retired workers and beneficiaries, many of which are lower income and who depend on these benefits to survive. we must act and we must act swiftly to provide smart, viable solutions that will fill the gap between income and costs of these programs. the well-being of our people in the future and prosperity of our country depend on it. thank you again for being here today. and i'd like to next introduce commissioner

esther. >> like to begin by saying that in my opinion this year's report is a better document because of the collegial work of our new public trustees, dr. rieschour and dr. blah house. we went three years without public trustees and we need perspective that we bring. public debate about social security has focused on retirement benefits. from a technical point of view as president obama has mentioned many times, legislative change is relatively straight forward. if congress has the will to make meaningful changes they can do so with high degree of confidence that the program will perform as predicted decades into the future. this year's report is typical. there are no big swings relating to the oasdi fund. our disability programs are

far more complex though than our retirement programs. there is a long history of well intended reforms cause unintended consequences. and i think the risk of that result is greater than in the past. congress has allowed ssa's demonstration authority to lapse. it has not asked gao to do the type of research that would support serious reforms. disability legislation predicated on anecdotes or sound bites would be a disservice to beneficiaries and taxpayers. one area that desperately needs reform and want to echo secretary solis here whereby partisan support has been very possible in the past is area of work incentives for the disabled. historically congress has been frustrated by low numbers of people who return to work but it has layered new legislation on top of old without revisiting the old and made the problem worse rather than better. the complexity of the

statutes, deters many beneficiaries who are inclined to try work. one and indicator of this problem is a congress in recent years has appropriated up to $23 million annually just for contractors to explain these complexities to our beneficiaries. it is time for congress to review all statutory work incentives from scratch and ask the simple question, is this the best we can do? we need clear, significant incentives if we want those people who can return to work to do so. the president this year in his budget sent to congress our work incentive simplification prorofl or wisp, with which would be a good start for bipartisan progress. i urge the house and senate to review this proposed legislation quickly and schedule hearings on this topic as soon as possible this year. thank you and i will turn now to dr. blahouse.

>> well, i'd like to begin, first of all, by thanking secretary geithner for the outstanding work that his team at treasury did in managing this process. adding my thanks to the terrific actuaries at cms and ssa for the outstanding work that they do. thanking secretary sebelius, secretary solis and commissioner astrue as well for terrific work their staffs did throughout the process. i want to most of all thank, dr. riesch 135is er fellow trustee ideal partner in very pressureable experience for me. we report each year on. two programs, social security and medicare. medicare is by far the most complex, difficult to project of the two programs. social security is a much

easier challenge to grasp intellectually. so i will speak about social security and leave medicare for dr. rieschuor. the story in social security, is pretty straightforward. costs are growing in the program at a pretty rap pace and will do so until 2030s as consequence of baby boomers entering retirement. by our projections cost of paying benefits in 2035 will be 17% of the taxable wages that workers earn and total costs will amount to 6.2% of national gdp. before the baby boomers enter retirement in 2007 report, the last one before the boomers began to hit the rolls, these figures were 11 1/2% of taxable payroll and 4.2% of gdp respectfully. you could see we'll have substantial continuing cost growth in the social security program to the point where mid 2030s,

costs will be roughly 50% larger relative to the size of the economy compared to where they were before the baby boomers enter retirement. that much we have long-anticipated. we knew that was coming and we knew it would place financial strains on social security but unfortunately at the same time as the boomers began to enter the retirement rolls we experienced a economic downturn. and so some of these fiscal pressures have arrived earlier than previously anticipated. in 2010 for the first time since the mid 1980s incoming tax revenue began to fall behind outgoing benefit obligations. in this year's report we project that these deficits in social security which began last year will be a permanent feature of program finances going forward unless and until legislative correct are enacted. now because of interest payments from the general fund to the trust funds, the nominal value of the trust funds continues to rise and we project that will continue to be the case through the early 2020s.

there are some important caveats to be made about that. one is that in terms of financing benefits, the nominal value of a trust funts is probably not quite as importance as duration of benefits the trust funds can finance and presently the costs of paying annual benefits is rising at a more rapid rate than the nominal value of trust funds. so-called trust fund ratio which measures the amount of time full benefits can be paid by the trust funds peaked in 2008. is declining this year and will continue to decline going forward. the other caveat i issue echoes an important point made by secretary solis and commissioner astrue we have more pressing challenges on the disability side of the equation than we have on the retirement side of equation. disability fund is declining in nominal terms and we project exhaustion of the disability fund by 2018. in this year's report we do

not change our view of the long-term fundamentals after affecting social security. none of the long-term assumptions, basic economic or demographic assumptions have been changed relative to last year's report. what we have done we updated data for more recent information about longevity trend, trends in immigration, and economic performance. of these the most important to the long-term projections is a change in longevity experience. we'll find that both in the years 2007 through 2010 and going forward, we expect greater advances in longevity than we're anticipated in the 2010 trustees report. indeed much of this is already in the books and has already occurred. as commissioner astrue indicated we do not have a qualitative change this year in social security's long-term out look. at the same time you will see a significant change in the 75-year acutarial balance for social security. last year this was measured at 1.92% of taxable payroll

over 75 years. this year's report has 2.22% of taxable payroll. that is a 30 basis point change. we don't tend to have wild swings in social security finances as commissioner astrue said but this is actually the largest single year deterioration in the 75-year balance we've seen along with a comparable change in the 2009 report since the 1994 social security report. in the end i would just say to all of you, if, there are any of you who don't feel like struggling through the entirety of the medicare and social security trustees reports i would commend to you the messages written collectively by the six trustees and by the two public trustees. they echo the appointments that have been made earlier here today that the earlier we act to strengthen these programs the better off we will be. time is important in the sense that the longer we wait the more our options narrow. of course in the trustees report we present the illustrative nightmare scenario which shows that at the point of trust fund

exhaustion in social security we would be looking at either a 23% benefit reduction or an increase in the payroll tax rate to the 16.4%. but if we act earlier, we will not have to face consequences of this magnitude and indeed we'll be able to preferentially look after interest of vulnerable low income americans and those already in retirement. i've been heartened to see people on both sides of the aisle their intention to do just that. with that i will yield to my fellow trustee. thank you. >> good afternoon. i'm pleased to be here and participate in this process with my fellow trustees. i want to begin by just making a few comments about the process. as you've been told by several of the other

speakers before dr. blah house and i -- blahouse. assumed our responsibility in september of this year, the two public trustee positions had been vacant for three years. so there was no public trustee input to the 2008, 2009, or 2010 report. as major responsibility of the public trustees is to assure that the american people that the financial and acutarial analyses that are contained in these reports are done in a subjective of a manner as possible using the best available data and estimates and employing the most appropriate methodologis. having been emersed in this process now for a bit over six months, dr. blahouse and i feel that there is no doubt this is the case. one can not be impressed by the dedication and expertise by the actuaries and their

staff. the departmental staffs that support the ex officio trustees and the staffs of the social security administration. we participated in what was an open, robust and vibrant discussion of the numerous issues that have to be resolved each year as these reports are developed as e-mails flown back and forth, sometimes late at night, we've seen all of the participants have been striving to produce the most accurate possible projections of what our inherently uncertain numbers. we've also been encouraged by the collective effort that has been made to make these reports more transparent. and the thrust that was spearheaded by commissioner astrue to improve the aspirational clarity of what tends to be rather dense material. i will turn and make a few

comments that relate in a very broadway to the content of these reports. first, i add my voice to what already is a chorus that is emphasized that under current law these vitally important programs are on, are on unsustainable paths. the sooner policymakers address this problem, the less disruptive and, the unavoidable adjustments will be and the greater the possibility for adjusting in a way that is balanced, equitable and measured. well the bottom line message of the 2011 reports are no different from those of previous reports. one can not but be struck by the uncertainty that surrounds the environment in which both social security and medicare operate. while our economy is improving steadily, we live in a very uncertain world, one in which economic developments in europe, political instability in the middle east, or changed

national priorities in asia can have profound repercussions on our economy, our employment, our growth, and these programs. within our borders we are in the midst of a period of unprecedented innovation in the capacity of medicine and unprecedented amount of experimentation in the way we deliver and pay for health care. these changes are being spurred by many efforts in the private sector and by profound changes in public policy, most notably the affordable care act. because of this turbulent environment, unavoidably there is wide confidence ban around around the estimates for medicare cost for the short and intermediate run, not to mention the much longer time period. given this reality it is important that the central

tendency projections we produce be ones that represent a sustainable future which under the current law is not the case. i want to close by saying that both, on my part and on dr. blahouse's part we look forward to working with the actuary, other trustees and their staffs on future reports and hopefully on policy changes that eventually will put these two programs on a sustainable path. thank you. >> thank you, dr. reischauer. we'll take a couple questions. i ask you leave any technical questions to the background briefing we will do after the secretaries and trustees depart. we'll take a couple. up front? >> this is for secretary sebelius. you mentioned some affects of the affordable care act on medicare. besides the 500 billion that was cut from medicare

advantage, what other specific programs are affecting that long-term cost? if you could just explain some of them? >> first of all there wasn't 500 billion cut from medicare advantage. that is a portion of the reduction in cost increases over time. certainly there are some significant delivery system reforms that are just getting underway, we anticipate significant savings. the accountable care organization structure, the new partnership for patients which i just mentioned which has some cost savings. we have new tools for going after fraud, waste and abuse last year alone produced about $4 billion back into the trust fund. we produced a report yesterday that is available in more detail which, analyzes about $120 billion worth of savings over the next five years, which are

part of the early implementation of the aca and that can give you considerably more detail. >> in the back. >> could you explain the distinction between social security being in deficit and the trust funds being exhausted? is it slightly deceptive to talk about social security running a deficit currently considering it takes in less than it pays out until 2036? >> [inaudible]. can you hear me? good. i'm glad you asked that question. actually in last year's press conference stressed the importance of the media understanding the term exhaustion which means something different to the actuaries than it does to the average person and that what exhaustion in 2036 this

year means that we'll have money to pay a little more than 3/4 of benefits with no other legislative changes. now that's not good. we need to have the congress step up and make changes so that that's not the outcome but that's radically different from, it is totally bankrupt, there's nothing there at all and, is a constant irritation for me picking up the news clips and seeing how often the media reports that exhaustion figure as if there would be no money left in the trust fund. so bless you for asking that question. in terms of the cash flow, i have somewhat similar response. we have moved to, from very slightly positive in several of the coming years to very slightly negative. it is a rounding error in terms of its significance in my opinion and has no significance in terms of the

long-term future of social security. again as i stressed last year, what matters in the long run is the exhaustion date and the percentage of benefits we can pay after exhaustion, whether we are, in terms of points of view of social security, and the stability of the system, there's really, these tiny swings in the grand scheme of things from one year to another, from slightly cash flow positive to slightly cash flow negative, in my opinion, are not significant for the long-term future of the program. >> we'll go right here in the middle. yep. >> the disability trust fund is a much worse shape than the social security trust fund. both you and secretary solis talked about incentives for returning people to the workforce. in a time of chronic unemployment where a lot of people use the disability system as pseudo unemployment insurance system, what are some of those incentives? >> i think the most

important thing is to, to simplify it. if you work through what someone on the rolls who has to, decided to try to go back to work, has to try to master, what the ramifications are, it's extremely complicated and we know from experience that the difficulty of doing it, and the fear that if they make a mistake that they might forfeit, usually not the cash benefits that matter. it is medicare and medicaid benefits that matter. that is a very significant deterrent. simplifying the program and making it clear what happens when you try to go back to work, if you fail what happens and what happens to your medical benefits i think that's a enormously important. and i don't think you could take, certainly i couldn't sit down and explain it to you and get it exactly right in all the technical glory. and it's not reasonable to expect the public to understand that. so i think the most important thing, go back

from scratch. realize that a lot of these well-intentioned statutes from the past are the in conflict with each other and they're detering people from going back to work. so what we've done in the wisp proposal is given congress a cost neutral example of how that might be done so that the significantly more simple and that the ramifications for health benefits in particular are going to be exponentially clearer to people. and i think particularly as the economy improves that will result in a significant amount of return to work. but let me add one qualification to that because i've had this conversation recently with several members of the media. a significant portion of the disability, disabled population is unreasonable to expect them to go back to work. that's why we have the program in the first place. it is significantly less than half. for those who can go back to work, we should do it because, it promotes dignity.

there are small savings to the public, but it will not significantly change the solvency of the disability fund even if we are successful at the high end of your reasonable expectations in and of itself. the work incentive programs are not going to change the solvency picture for the fund. >> thanks very much, everybody. thanks to our trustees.

>> guys, we're going to take about a five minute pause. we'll bring our subject matter experts up here. up next we'll do a background briefing. everything will be attributed to senior administration officials. >> medicare and social security trustees report saying that social security and medicare will run out of money sooner than anticipated. later enyou can read all of that report online on our c-span.org. it is not up there yet but will be later on today. news from the white house this afternoon. president obama will likely announce later on this afternoon that u.s. middle east envoy george mitchell is going to be stepping down, a week ahead of the planned speech by israeli prime minister benjamin netanyahu speaking to congress next week. the president also will make a major middle east foreign policy speech set for next thursday at the state department. back to politics, our road to the white house coverage this evening with newt gingrich who is in georgia for the republican party convention in that state, in macon, georgia.

we'll have his comments life at 7:15 and follow that with your calls and comments. just a reminder too, we have lots of political coverage online including the comments this week from mitt romney, his health care speech from yesterday. you can find that in our video library at c-span.org. ? >> next the house foreign affairs committee hears

about violence against peace corps volunteers. witnesses include the director of the peace corps, aaron phillips. this year marks the 50th anniversary of the peace corps which has over 8,000 volunteers serving worldwide. this is just under three hours. >> the committee will come to order. after recognizing myself and the ranking member, my good friend, mr. berman of california, for seven minutes each, for our opening statement, i will recognize each member of the committee for one minute for their opening remarks. we will then hear from our witnesses and i ask that you summarize your prepared statements in five minutes each. before we move to the question and answers with members under the five-minute rule. without objection the witnesses prepared statements will be made a part of the record and

members may have five days to insert statements and questions for the record subject to the length limitation in the rules. and, we apologize if it looks like it's a sparsely attended hearing. we have the gop caucus going on now, the democratic caucus and about five different committees having, having briefing and hearing as well. so it will slowly build up. and the chair now recognizes herself for seven minutes. march 1st, 2011, marked the 50th anniversariry of the establishment of the peace corps. we initially planned to hold this hearing in march but postponed it to accommodate the many anniversary celebrations. over 200,000 americans have served in the peace corps. today there are over 8,000 peace corps volunteers serving in 77 countries. 300 of these volunteers are from the state of florida and nine are from my own district. according to the peace corps's facts and figures,

60% of the current peace corps volunteers are female and average age of a peace corps volunteer is just 28 years old. for half a century peace corps volunteers have give 10:00 their generous talents and skills to help the poor in developing countries, thereby increasing understanding between diverse cultures. for many the peace corps volunteers serve as only american faces to visit far away places in distant lands and volunteers should be proud of their accomplishments as they are many to celebrate. in spite of these successes it is time to examine how after 50 years the peace corps is faring, in particular we must review how the peace corps as an institution has supported peace corps volunteers. despite critical reports by its own inspector general, the general accountability office, and prior congressional hearings, peace corps safety and security failures have been a recurrent problem with tragic consequences for

thousands of volunteers. some who seek to ignore those problems have asserted that volunteer service itself is inherently risky as an excuse for lax and in effective safety and security measures that attitude is unacceptable. . .

in seventh for the most aggravated assaults. further, in comparison to crime statistics reported by countries around the world, peace corps volunteers experience higher rates of rape and burglary than any of the 86 nations that responded to the crime statistics analysis, and quote. historically the media downplayed teachers assert in the peace corps in underreported in overlooked criticism of the peace corps. recently the immunization has started to subside. in 2002, the dayton daily news produced a seven part series entitled, casualties of peace. former dayton daily news editor, jeffrey pers stated quote, the extent of the safety problem has been disguised for decades, partly because they're thousands of miles away, partly because peace corps has made little effort to publicize them and partly because the agency delivery kept people from finding out while emphasizing

the positive aspect of the peace corps, and quote. earlier this year, i'd shoot a 14th at abc television news program, 2020 expose the peace corps failures regarding the reporting of its assault and rape for many victims to come forward about the mishandling of their cases. according to dozens of disturbing affidavits by her committee, the peace corps is mishandling of rape and associates are for decades. several of the affidavits are from volunteers currently serving in the peace corps. the affidavits received by the committee were obtained by first response action, a support group of volunteers who were the terms of rape or sold. the affidavit established five basic themes: volunteers trained and sexual assault issues, volunteers often placed in dangerous situations, the

peace corps and country response often fails to meet survivors needs, upon returning to the united states survivors often receive hostile rather than supportive treatment. and lastly, institutional obstacles often prevent survivors are receiving long-term medical and mental health care. without objection, i would like to include these affidavits into the official record. at this time would also like to include without objection a statement from returned volunteers, chuck weblog and follow her shop to advocates for reform to address problems with the peace corps, including safety and security. further that objection, i would like to include for the record a statement from the building bridges coalition, a consortium of 300 international volunteer organization regarding peace corps safety and security. finally, i will be handing mr. williams a letter for me to this rant of mine who was serving in the peace corps was recently terminated.

i bask in the peace corps to explain why he did not accommodate medical concerns of the soldier volunteer. you are hearing today, three returned peace corps volunteers have made the difficult decision to testify about their germanic experiences and i commend them for their bravery and continued commitment to affect positive change in the peace corps. we'll also hear from another he peace corps volunteer who did not return home. lois puzey will testify about how the case when she reported the rape and abuse of students for whom she cared so deeply. following the testimony, we will hear from aaron williams, the peace corps inspector general, kathy jeweler. we will find ways to address these so they will not fear for

their safety and we are joined today, thank thank you, senator isakson from georgia. we are joined by senator johnny isakson whose constituent is lois puzey. his attendance is another example for securing justice for lois says dr. k2 was killed during her service as a peace corps volunteer in benin and i understand you will be traveling there next week to get further update on the case. i am pleased to recognize my good friend, ranking member mr. berman for his opening remarks. >> thank you very much, madam chairman. thank you for calling this important hearing and i went to second your commendation of ms. puzey and the other witnesses who are coming forward to talk about some thing which

cannot be that easy to talk about in such a public setting. we much appreciate your courage in doing this. this year, as you noted, march the 50th anniversary of the peace corps. since its founding, nearly 200,000 volunteers have served in 139 countries around the world, providing community-based development, shared american values and enriching their nation by bringing knowledge about other countries and cultures back to the united states. the distinguished list of peace corps alumni includes 15 members of congress, four current members, cabinet members, ambassadors, journalists, scientists, educators and many other leaders in their fields, making an impact around the world country and globe. no agency was such a modest budget has done more than the peace corps to extend america's presence in nearly every part of the world. for that reason, it has enjoyed

the strong support of both republican and democratic administrations. however, all of us were deeply troubled by the recent abc news 2020 segments, which detailed circumstances surrounding the murder of it all in here in the west african nation and the sexual assault of volunteers and a number of different countries. the puzey family was not provided adequate support at the death of their daughter which they were notified to the way her personal by failing to provide ms. smochek with protection she requested to remove it from her sake i peace corps that drove into an attack attack that could have caused her life. by providing inadequate training, peace corps staff and volunteers on how to prevent a response to sexual assault, the

volunteer community has led vulnerable to physical and psychological trauma. we have a profound obligation to our volunteers to do everything possible, not only to improve safety and prevent crimes from occurring, but to respond effectively in emergency situations. there's no excuse for failing to treat survivors with dignity and compassion or for leaving families in the dark. our job today is to identify the gaps and flaws in the current system, lay groundwork for fixing them in the reasonable bipartisan manner. the brave and selfless men and women who chose to spend more than two years of their last office of the most remote places on earth deserve nothing less. indeed, volunteers are and always will be the peace corps' most precious asset. if the agency doing all it can to protect them? is that minimizing risks that volunteers face in the field?

is that providing the training, preparation and support they need for emergency situations? is it using the best protocols to respond to sexual assault and protect survivors? when the worst happens, are they treating families with compassion and respect? to help answer this question, were honored to have with us today the mother of kate puzey and several former volunteers were the terms of soul. we know it takes enormous courage for you to tell your story with public setting as i mentioned. we all share the goal of making the peace corps at the next 50 years even better than the peace corps at the last 50. it is our duty to ensure this agency lives up to the idealism, innovation and generosity embodied in the volunteers. finally, let me just say it takes a certain kind of person to join the peace corps, a certain pioneering spirit to leave behind all the comforts they've known for their entire lives and into the unknown to

serve others. these individuals live with those who are less fortunate than themselves. they see poverty that creeps billions around the world and join them in the struggle to make a small business words, make their crop yields better come again access to clean water, combat deadly and debilitating disease. it is not only the united states, but the world that is peace corps volunteers to get accredited. i hope we can learn today about how to improve the peace corps and work together in a bipartisan manner that is always marked our approach to the agency. we must do this to honor the courage of the people speaking out on these issues and others who have yet to come forward and to respect the legacy of an agency that has done so much good in the world. thank you, madam chairman alec forward to the witness' testimony. >> thank you are much, berman. members are recognized for one minute for opening statements if

they choose to. congressman gallegly of california. >> in the interest of time, so we can get to our witnesses, i would yield. >> thank you. >> thank you, red chair, burbank for holding this. we celebrate the 50th anniversary of over 200 volunteers serving in over 139 countries. i am proud of the contribution you are making in communities where you're serving. because my strong support for the work of the peace corps, i am very concerned about history of safety and security that threatens the peace corps volunteers deliver the world. i'm looking forward to hearing from the audience about the progress made in volunteer safety and i would like to thank former peace corps volunteers who came here to share stories with us.

i also am interested in knowing what processes for new volunteers in danger, how do you remove the volunteer from a dangerous place. i'm very curious how you determine that. i yield back to >> thank you very much. >> peace corps, those american angels abroad are the best we have in this country. they represent everything good and right about this nation and you're sitting right here in the front row and thank you for your service and your courage. when you go abroad, peace corps amtran peace corps volunteer goes abroad, this nation needs to be very proactive in making sure that you are taking care of. too often in the affidavit that i have read, the peace corps volunteer when assaulted becomes the accused. the peace corps has blamed you for the crimes committed against

you. as a former judge, let me just say this. sexual assault is never, ever the fault of the term. our system, our country must totally support the dems abroad, take care of them, bring them back, give them justice because justice is what we do in this country. thank you for being here. he might just where does. thank you, judge. >> i thank you for holding this hearing and thank our ranking member. i want to apologize for not able to stay for the entire hearing padilla to assure you i've read all the written testimony, but i really want to team up for being here to share these stories. i think we all recognize the peace corps has done extraordinary says mr. berman described, but this is a serious issue. i'm proud to be in my district at brown university, which is top in terms of providing volunteers to the peace corps.

we have to make sure every single person who make the sacrifice to serve that we do everything we can come everything humanly possible to ensure safety in the testament you provided your written testimony is very disturbing to me and members of this committee and a thank you repeated repeated to share your story can thank you for your service to our country. >> thank you an affair. ms. schmidt of ohio. >> thank you. kershaw to think these brave women before us. most importantly, ms. puzey for what you have given in order to allow people to go abroad. you know, 60% of the folks in the peace corps are women and you are truly angels and ambassadors. or three-pronged mission of a better understanding of americans to help people understand the folks in america and abroad is commendable.

when you go there, you're supposed to go knowing you're going to be safe and do something has to happen to you you'll be taken care of and i think that is the big blemish in this whole debate. i live close to dayton. i read the article many years ago and couldn't believe it was happening. now that i serve in congress say the ability to do something about it. with your help, we will. >> thank you, gene. ms. wilson of florida. >> thank you, madam chair and ranking member berman for holding this hearing. 50 years ago in 1961, president john f. kennedy, the peace corps has sought to make the legislative mandate of peace and friendship by sending american volunteers to serve at the grassroots level in villages and towns and corners of the globe. living or working with ordinary people, volunteers have contributed in a variety of capacities such as teachers,

environmental specialists, providers and small business providers to improve the lives of those they serve in helping others understand american culture. today nearly 200,000 peace corps volunteers have served in 139 countries. about 8655 volunteers currently serving 77 nations. number 2005, peace corps response volunteers were deployed to assist hurricane katrina relief. the first time in peace corps history that volunteers were used domestically. more recently they are serving in hebe and thank you. while these volunteers serve our nation and our interest today, we'll will hear some terrible stories of sexual assault and abuse of peace corps volunteers. it is important that we learn a note what changes the core has to in the wake of these charges of sexual assault protocol developed by the pool peace

corps is sufficient and what can we do to keep our volunteers save? and look forward to the witness testimony. thank you. >> thank you, ms. wilson. mr. behring of pennsylvania. >> thank you, madam chair appeared as a former state and federal prosecutor, i want to know why these good people were treated like they were and why these kinds were taken to the fullest extent. i yield my time. >> mr. higgins of new york. >> i think the chair and thank the witnesses for being here and the peace corps has done extraordinary work for the past 50 years we have an obligation to ensure safety. it's not what america does. their status or the world. it is that america does in the peace corps for 50 years is the embodiment of the great generous spirit of the american idea. i look forward to the hearing and i yield back my time.

>> thank you commissary. mr. kelley of pennsylvania. >> thank you. to the witnesses come out to thank you for coming forward and having the fortitude to do it. it's got to be difficult as a father and grandfather, after reisinger testimony cannot believe we put you in such danger and treated you so poorly. i tell you i will dedicate my time to following up on this in making sure that at any time this ever happens again, we follow through the way we need to follow through kuyper promised you the way you kept your promise to her country. i yield back the time. >> very good. mr. comley of virginia. >> again, i want to express my love and appreciation and join this panel today. their stories are compelling and need to be addressed. i has to think the ranking member indicated this is the 50th anniversary of the peace corps. as judge poe said, the peace corps makes us proud geared its

presence overseas and marvelous testament about democracy, not in the abstract but in the days faces of the men and women. sadly we can't protect all of those volunteers, but the goal ought to be to do just that, to bring the risk factor 20. we will never quite get to zero, but we need to explore today, what can we do to ensure that this never happens to another volunteer and god for bid when it does, the full front of u.s. resources on behalf of justice and bring to justice perpetrators of the crater at work. so making peace corps even better to be the subject of this hearing and not cloud the 50 partiers of an organization that's done so well for the united states. i think the chairman. >> thank you, mr. chairman. >> one of the frustrating aspects of my job is safe to

hearing that exactly the same time that are both really important. i will be coming back and forth, but i will read your full testimony. i went to thank you for coming forward. it's a sad commentary that women who went overseas to serve our country in serve others found out when their most important time of need have been come and that we weren't there. their government was not there to serve them when they needed it the most. i thank you for coming forward. you will permit us to perhaps correct a bad situation. that's what this is all about and thank you for coming forward with your testimony. >> thank you, mr. chairman. his bass of california. >> thank you, madam chair. i would like to first commend the strength of the women before us for your courage to come forward and advocate on such a delicate and important issue. i appreciate you coming to washington this week to speak with members of congress and

staff from testifying during this hearing. i know you've all endured hardships from these experiences and should be commended for your bravery and perseverance in ensuring that future generations of peace corps volunteers don't have to go through what you did. you inspire all of us with your actions and commitment to the peace corps from a vision of service and world diplomacy. we are grateful to your service during this time in this program thereafter and i look forward to trying to understand what we can do to make sure the situation does not continue. thank you. >> thank you con man. but they pointed in my opening remarks, senator isakson of georgia as the senator who represents the puzey family and we would be honored to give you a minute, senator, to talk about aids case in anything you can help us with. thank you for going back there next week in trying to see justice come.

>> madam chairman. >> push that button. >> thank you very much for holding this hearing. i did not know kate puzey and life, but i attended her funeral and the pride she brought to my state of georgia appeared i made a commitment to do everything i could to see lois puzey and her family find cloture and psychic satisfaction they'd made an effort to see to it would have been in her case would never happen again. i'm very grateful to each and everyone of you for being here. i know the demands always have in our time. this is one of the most important things for america and continued integrity of the peace corps and i'm honored you give me chance to speak. >> thank you very much, senator. are there to welcome witnesses for first panel. our first witness, lewis uzi is

the mother of catherine irene puzey who was murdered in benin on march 12, 2000 i was serving in the peace corps. ms. puzey is here to serve as kate's voice and help prevent other families from experiencing tragedies like hers. mrs. puzey narrator has been in 1976 and had two children, david and keith. ms. puzey retired in 2006 from the department of defense school system after teaching military dependents for 30 years of both osberg high school in germany and catena middle-school in okinawa, japan. i'd like to express on behalf of our committee our sincerest condolences to you and your family, mrs. puzey and thank you for. before us today. next we will hear from carol clark. miss clark served does peace corps volunteer from 1984 until 85. she is currently in elementary school teacher in jones county,

north carolina. she received a masters degree in counseling a bachelors degree in biology. she is super committee is super committee in many ways, including as a child and a child enforcement agency at community college counselor. this clerk, would like to tina mack for your bravery and sharing your experiences and we greatly appreciate your testimony this morning. also appearing before the committee today is jessica smochek, he peace corps volunteer in bangladesh in 2004. she is a board member first response action, a nonprofit organization that seeks change in the peace corps sexual assault policies and provides assistance to former peace corps volunteers who have been picked as of tonight crimes. ms. smochek, thank you for the courage to come before our committee today. next we will hear from karestan chase koenen.

dr. koenen was a doctor from 91 to 93. she is a licensed clinical psychologist and she studies the interplay of genetic and environmental effect is in the production of stress-related mental disorders such as posttraumatic stress disorder, generalized anxiety disorder and depression. dr. koenen, we are honored to have you here today. finally, we welcome ms. jennifer marsh. ms. marsh currently works for the rape, abuse and national network, rainn. rainn manages the sexual assault online hotline and coordinate services and communications with over 1000 affiliate sexual assault service providers for the national sexual assault telephone hotline. thank you for taking time to appear before us today,

ms. marsh. we f keys there is your statements to five minutes. ms. puzey, will begin with you. and if you could put your microphone close to your mouth, that helps. thank you. >> chairman ros-lehtinen, ranking members berman, i am lois puzey here on behalf of my daughter, cate puzey who was murdered in march 12, 2009 fostering that the peace corps in the west african nation of benin and to urge congress to not legislation so other families won't have to endure a similar tragedy. kate was a deeply compassionate, talented and upbeat person with a gift for understanding others. she was twice elected student body president in high school and graduated at the top of her class. after college she joined the peace corps, serving as a teacher in a rural village. kate through time and benin.

she built close ties to her village and was considered a model volunteer. so, how did a confident model volunteer become the victim of murder? from the beginning, kate was warned about the man who is now accused of killing her to a local totting kate scullin also worked part-time for the peace corps. kit was told that mr. bio pressured students were sex. over time, her concern escalated and then in february of 2009, students and fellow teachers told kate he'd actually said in two of her students and big and to. despite potential danger, kate tried to do the right thing. since her village had no internet service and she was 12 hours away from the benin country office, she traveled to the nearest workstation were seeking all the peace corps

country direct dirt, asking for her assistance. kate particularly emphasized the need for confidentiality because she understood that the brother of mr. bio worked in the same country office is peace corps. tragically, the way that kate e-mail was handled ultimately led to her death. the country director fired without talking to kate or taking any kind of precautions or any kind of investigation on her own. she didn't take any precautions to remove cake from her village. and even worse, the inspector general's report indicates that kate confidentiality was broken, apparently resulting in mr. bio's brother seen the e-mail. capers never learned to the danger. within a few days she was murdered. it is believed by mr. bio and

another man, both who were arrested, mr. bio's brother. kate was the heart of our family and our lives have been shattered. the peace corps was very supportive during the funeral and made great efforts to honor her. that being said i'm a were shocked by many of our experiences after kate's death. the peace corps provided us with very little information. he refused to answer questions about the inspector general's investigation and stopped all communication with us after four months, leaving us by ourselves to piece together what happened to her daughter. then six months after she died, her belongings arrived unaccompanied, simply left in her driveway and a fedex delivery. finally, we discovered that before kate's dad, the peace

corps had no whistleblower protections or training procedures in place. these were first drafted two weeks after she died. feeling abandoned, we created our own advocacy group and have since had very improved relationships with the peace corps thanks to the leadership of director williams. however, the peace corps has never acknowledged the critical role they played in kate's dad and we are also very painfully aware that if bbc's 20/20 had not investigated her murder, we would not have heard from them. our family desires and honest and formal apology from the peace corps for any actions to her daughter's death. after our experiences in hearing many other stories, we also believe that whistleblower and victims rights legislation is urgently needed. in the past, the peace corps has

the leaved -- the present administration believes they have solved the problem, but in truth because of transient nature of the leadership, efforts have eroded time after time. .. in the future there will need

another volunteer like mike 8 who will want to do the right thing. honor her so that future volunteers can serve safely. >> thank you very much and we will do so. miss clark? if you could push that middle button and hold it really close. >> thank you, chairman ros-lehtinen, ranking member berman. my name is carol clark. i am a schoolteacher, former peace corps volunteer and rape survivor. i thought i was alone in my experience but when i learned that women today are still living with what i thought had been remedied decade ago i had to come forward.

in august of 1984, three months after a graduated from college i flew to net call to begin my lifelong dream of becoming a peace corps volunteer. the peace corps staff never talked to us about protecting ourselves from sexual-harassment or assault. i never expected that it was the peace corps's own staff members from whom i would need the most protection. shortly after i arrived our supervisor, a peace corps program director, told volunteers he expected sex in exchange for providing us with our living supplement checks. we told our peace corps country director about this but he did nothing. he told us to grow a thicker skin and allow the program director to continue supervising us. three months later the program director raped me.

devastated and humiliated, i reported the rape to the peace corps medical officer. instead of helping me he told me he was disgusted with the volunteers. and anything that happened to us was our own fault. i was not offered counseling, the peace corps allowed my program director to continue supervising volunteers, and before the peace corps would assign me to a supervisor other than my rapist i was forced to confront him in front of the peace corps medical director, who had chided me. being forced to see this man again, to speak to him and convince the peace corps he had raped me was extremely traumatic but i did it. the peace corps took no action against my assailant even after the confrontation. in fact, soon after a return to service he arrived unannounced

at my village. it was clear he told his friends in the village he could violate me without fearing repercussions from the peace corps. he was right. soon after he left, a nepali official with whom i had worked told me my peace corps friend told him i liked to have fun and demanded sex. when i refused he grabbed my neck and choked me. he forced me -- he forced me to put a used:condom on him and began reading me. he raped and beat me. for a long, prayed to live and after that i prayed to die. when i finally escaped i took my bike and road away to kathmandu

where i reported the rape. the medical officer was angry with me for putting myself in a dangerous situation. he did not document the crime. my attacker was not brought to justice. the peace corps flew me back to washington d.c. instructing me to tell others i was leaving because of dysentery. the program director who had initially raped me was given my home address and assigned to mail me my belongings. after i left, many nepal volunteers were sexually assaulted or sexually harassed that they created their own safety survey that showed numerous volunteers had then verbally and physically harassed and three more had been raped. we stopped change from the peace corps. my former peace corps regional

director said our stories made a difference. the peace corps was creating a new training materials and future volunteers would be safer, better prepared and better treated. i believe the peace corps wanted to change than as it does now and some improvements had been made but the women sitting next to me proved those improvements were lacking. in the last 20 years according to peace corps's own data, peace corps volunteers reported 1600 incidents of sexual assault and over 1,000 of which occurred in the last decade. the three most recent years for which peace corps has released statistics has seen the greatest number of assaults. director williams is a good man but the peace corps has had almost 30 years since i was a volunteer to fix things on it so that it has fallen short. the women trusting their lives to the peace corps cannot wait decades for the peace corps to policies to organically mature.

they need the immediate, meaningful change that comes through legislative accountability. for that i look to you. please help us build a better, stronger, secret peace corps so that our daughters can help the peace corps build a better world. >> thank you very much. miss smochek. >> chairman ros-lehtinen. >> hold it closer to you. thank you. >> chairman ros-lehtinen, ranking member berman, committee members. i am a former peace corps volunteer and rape survivor. thank you, congressman poe and all of you who have been working hard to make the peace corps better, stronger and safer for volunteers. in 2004 i was 23 years old.

fresh out of college i joined the peace corps, an organization i admired for its noble ideals and set off for bangladesh. the peace corps said we might experience harassment during the posting but it just took some getting used to. this statement did not prepare as for the reality we would sue and face. shortly after i arrived, for example, group of six local men began following me home. eventually they surrounded me, grabbed me, knocked me to the ground and began touching and kissing me. i was terrified and helpless. eventually they simply left. when i reported this the peace corps staff told me those types of things just happened. over time the harassment only increased. we reported this to the peace corps staff as well but most of our reports went unanswered. a male volunteer offered to teach us self-defense but the

peace corps rejected this offer. we ask for pepper spray or mace but the requests were denied. we beg to be moved to a safer site. again the peace corps refused. the very act of reporting incidents to the peace corps grew dangerous. locals learned of the reports became furious. they turned -- told me they would hurt me if i didn't keep quiet. we reported these threats too. with each report the men grew angrier and the peace corps did nothing. then on december 6th, 2004, shortly after 5:00 p.m. the men dragged me into an abandoned courtyard and the violence began. they started by raping me and forced other objects inside of my body. when they were done violating the with their bodies and their

objects they intensified the physical assault. they yelled insults and threatened to kill me. i began to think it would never end. i begged them for the death they promised. they just laughed. after what seemed a lifetime my ordeal was over. or so i thought. i went to the capital to report the rape but the peace corps medical officer did not examine me, perform a rape kit or collect any evidence. instead she took away my cellphone. is prevented me from warning other volunteers about what happened. in fact, she told me if i did talk to other volunteers are should tell them i was going to washington to have my wisdom teeth taken out. before leaving bangladesh and was forced to go back a loan to my village where my rapists remained, gather my belongings

and spend a night there one last time. then, still reeling from the trauma of was put on a plane alone back to washington d.c.. the peace corps did send me home or give me the option. so i stayed in washington d.c. for the next 45 days. when i arrived in d.c. late at night no one was there to meet me at the airport. i was forced to find my way to this large, unfamiliar city on my own. the peace corps' first send me to a male gynecologist. he was insensitive and it was excruciating. the peace corps required me to meet with a counselor and required me to write down everything i had done wrong for this to occur. as examples she suggested that i had been out after 5:00 p.m. i hadn't screamed and didn't fight

back. rather than feeling safe and supported i felt the little and blamed. after a month and a half in d.c. i was medically separated from the peace corps and shunted onto workers compensation. there are have been repeatedly forced to describe my injury on forms to strangers to get the support i need to recover. it can take months or years to receive reimbursement. this must be changed so that survivors do not have to go from agency to agency begging for help they need to recover. i wish what had happened to me had made a difference for the other volunteers in bangladesh but shortly after i left the country director without my permission told the female volunteers i was raped, that it was my fault and rape was always the woman's fault. years later i learned three

other women in my volunteer groups were sexually assaulted. partly because of what the country director had said that day, did not report it. the peace corps must change. women must be better protected from rape and from the callous treatment that too often follows them. history despite its pain cannot be unlived but if faced with courage may not be lived again. i am hopeful today's hearings will precipitate the needed change in peace corps sexual assault policies and my nightmare might not be lived again. thank you again for the opportunity to testify and bringing me -- these very important issues to life. >> thank you for your testimony. dr. koenin. >> chairman ros-lehtinen,

remember berman, had an associate professor at columbia university. >> put the microphone a little closer to your mouth so we can hear you better. >> i am associate professor at columbia university and adjunct professor at harvard university and teach about the ecological from. my understanding and passion for the topic of the result of my education and my own experience with the peace corps. i joined the peace corps in 1991. it was clear from the beginning my country, nigeria, was dangerous and the peace corps staff inadequacy in dealing with the effect of danger on volunteers. one week during a are in country training period several men broke into our site, insulted me to male volunteers and raped a female volunteer. i recall telling my site director i felt unsafe, but i was told by was making too much of what happened. the peace corps staff instructed us not to tell our families

about the attack. the staff construction was to calm down and keep quiet. the only training we received on how to respond to an assault. despite the fact that serious crimes had occurred on the training compound we did not receive any training and how to minimize the risk of assault or how to report when they occurred. on december 27, 1991, the delight was forced to learn by experience about the dangers of sexual assault. a nigerian man held me down, ripped off my shorts and underwear and raped me. the doctor who worked for the peace corps was kind but neither trained nor equipped to perform a foreign the great example. no one gave me the opportunity to make a formal statement or speak with law-enforcement. the doctor reported the rape to the peace corps director of but he did not visit me or call me. i was soon put on an international flight to

washington d.c. alone. upon arriving at peace corps headquarters i was greeted with a cold reception. i was sent to a male gynecologist. i recall finding the pelvic exam incredibly painful and him telling me to stop being hysterical and just calm down. i was then sent to speak with a peace corps staff investigator who said i am so sick of you girls going over it and drinking and dancing and flirting and if a guy comes on view you say you have been raped. my final straw was when my peace corps country director said to me when i wanted to prosecute it is your word against his. he said you wanted to have sex and we believe him. as an expert in the field of psychological trauma i know how dangerous an inadequate response to a rape victim can be. fear of being disbelieved or blamed as i was by the peace corps is why so many survivors to not support -- report their rate. the peace corps's and data suggests two times more assaults

occur in the peace corps than those that are reported. in addition over a decade of research demonstrated social support a survivor receives in the aftermath of a trauma highly influences the risks the victim will develop post-traumatic stress disorder and negative social response leaves the survivor in a quagmire of self blame for the rest of her life. i have examined the current sexual assault protocol and policies of the peace corps and those they have evolved since my time of service they remain dangerously inadequate. several experts have reviewed the peace corps's 2011 sexual assault guidelines as i did and have written letters to the committee expressing their concern that policies and recommendations for change. i am including these letters for the record as part of my testimony. >> without objection. >> affidavits and other letters make it clear it is time for a systemic, permanent solution that addresses better training for volunteers, training for in

country staff and appropriate accountability for staff in the united states. there are eight things the peace corps could do right away to dramatically increase and improve the care provided to its fallen tears. they are one, discontinue the use of peace corps's current sexual assault training video called surfing safely that shows survivors apologizing for endangering themselves and causing the rape. two, put victims' advocates in every region and the peace corps hired the advocate in d.c.. caring for in country and post service needs where at least 100 sexual assault the year is too great a burden for one person to carry. provide travel companions for credit and sexual assault survivors returning to the u.s.. eliminate the harmful and minimizing distinction used in the peace corps's own material to distinguish major sexual assault from minor sexual

assault. five, set up a task force to determine how to help survivors get adequate and timely benefits without being forced to read experience their trauma. six, list the help of outside experts with a 40 to ensure peace corps policies continually reflect best practices. seven, give survivors a choice of treatment provider. eight, fire the staff of treatment providers who blame victims and harm them. i believe director williams to be well-intentioned but we cannot ignore history. the peace corps promised time and again to fix these problems and has not. we need congress. thank you for the opportunity to speak to you about my experience and my hopes for a better and

stronger peace corps. >> thank you, distinguished members of the committee. thank you for inviting me to speak today. before i begin i would like to take a moment to commend the women who have spoken before me for their courage and eloquence. my name is jennifer wilson marsh and i'm director of the rape and abuse and incest national network or rainn, the nation at large as sexual assault organization. rainn is recognized by the justice department and congress in the field of sexual assault services and provided thousands of hours of training and technical assistance to sexual assault service providers across the country. in addition rainn has been selected to be a member of the justice department's national assistance standards consortium and has assisted more than 1.5 million people affected by sexual violence for the national sexual assault hot line. i will begin by outlining

several best practices to serving victims of sexual violence. the peace corps has a long history of successfully promoting peace around the world and we believe if applied correctly these best practices can strengthen the peace corps organization and their response to victims. i will follow this with a description of how rainn is working with peace corps and conclude with my recommendations. the following best practices are drawn from department of justice standards. accessibility of quality advocacy services following an assault is paramount. the value of the services is lost if victims do not know of their existence. peace corps volunteers need to receive through layered and repeated training information describing the services available to them in the event they are insulted. this training should include a comprehensive overview of issues surrounding sexual violence and risk reduction strategies.

you are familiar with the bystander intervention training of peace corps is developing for volunteers and believe this is an effective model for risk reduction. all staff members who may be first responders should receive a minimum of 40 hours of training and complete any war refresher courses. training should focus on the special needs of sexual violence victims and be reinforced by peace corps administrative policy and procedures. sexual assault response model is the most effective approach to sexual assault victims. start is most typically comprised of a victim advocate, law-enforcement and foreign the medical examiner. this is unstreamlined response thereby minimizing victim 3 dramatization and creates a single point of contact allowing them to focus on recovery. without a guarantee of confidentiality victims may not be willing to seek help for fear

their experience will be scrutinized. control over personal information is not only a matter of privacy, it is also a matter of personal safety. to be made clear during all trading how information disclosed will be maintained and shared for the national sexual assault online hot line we have seen the importance of safe and secure help. with confidential services victims can discuss concerns and are more likely to report the crime or seek long-term support. finally there needs to be a clear procedure of victims who feel they were treated poorly by staff or did not receive an adequate response following their assault. on march 23rd, 2011, rainn and the peace corps signed a memorandum of understanding or mou tiexiera education resources and training schools for risk reduction and responds. since the signing of our mou we

have been asked to review training content and procedures. peace corps is in the process of updating and improving their response to victims of sexual assault we believe they are moving towards implementing some of these best practices. as the committee on foreign affairs is charged with general oversight of the peace corps we believe it should do the following -- enact legislation that will ensure the peace corps establish best practices for victim responds and include a mechanism for formalizing planning to address high staff turnover due to mandated appointment limits. we recommend peace corps expand on the progress being made with the hiring of a victim advocate with the addition of mobile victim advocates. these trained staff would be able to me immediately travel to the location of a volunteer who has been assaulted and provide on the ground help completing of the start model. staffers in this position should be experienced in navigating foreign, legal and cultural

systems and victims will benefit from having an advocate who can negotiate unique challenges of being victimized abroad. in conclusion we believe the peace corps is making positive steps in improving its response to victims of sexual assault. implementing these recommendations will help ensure victims have access to the quality service they need and deserve. >> thank you very much to all of you for your brave testimony. thank you for appearing before the committee today. your testimony is going to make a big difference. this puzey, i wish to offer you my most sincere condolences on the loss of your brave daughter. and your testimony will change the way this business is done in the peace corps. i am sorry you only have five minute to describe what a

dreadful, life changing experience has been for your family and the criminal case is about to begin in your daughter's case. i don't know if that is true but i don't want your testimony to have any negative influence on that. perhaps you could explain to us what you think in detail needs to change in the peace corps that would prevent such a terrible travesty to occur again. >> as i said in my testimony i really feel it is important to have protections in place and training procedures and not just training procedures for volunteers so they know their revenues and where to report but also it is important that staff knows what to do particularly people in positions like the country director so they know how to handle a situation when it comes to them. it is very important.

and of course on the other side, to be sensitive to victims's families. always said the peace corps, when everything is going right, is one of our country's best ideas. but when things go wrong, that component, that response component needs to be improved. >> thank you very much. dr. koenin, i want to ask about the blaming the victim and how that would impact the recovery of victims of assault, sexual assault or any kind of crime committed against them. one of the themes in the testimony that we heard is that the peace corps was not equipped to handle the complaints, did not act on it, accusations were not taken seriously, and more than anything it was the blame

the victim that was at play here. can you tell us how blaming the victim impacts the recovery of the victims of sexual assault? >> thank you, chairman. the reaction that a survivor receives in the acute aftermath of an assault immediately within 24 hours is the key factor in determining whether she or he will have long-term mental health consequences or not. the reason is in that cute period the victim is incredibly vulnerable. she is in a fight or flight mode and she is playing over in her head why did this happen to me, how did this happen to me. when something terrible happens we question ourselves and our behavior and when you meet a provider, who asks how can we keep you safe, what do you need, here are some choices you would

like to do, the blaming the victim just adds to that questioning of your own behavior and you end up in turtle rising that blame. psychologically that can keep you from talking to anyone else about it. it can keep you from seeking help that you need because you are worried other people will respond the same way and long term it can negatively affect your mental health. a big predictor of post-traumatic stress disorder. blaming the victim after an assault increases the risk of posttraumatic stress disorder more than characteristics of the assault with defective is physically injured, more than and there is penetration or not. it is the key factor in whether the victim will recover or not. >> lastly, miss smochek, i want to allow you to comment on the safety and security information

that was included in your hand book and welcome materials. did you find that to be useful? .. >> so, as a survivor, you know, after, you know, you've been raped or sexually assaulted, have to go through your handbook to try to find a number to call

in d.c. is ludicrous. many volunteers don't have cell phones or cell phone, you know, don't have electricity or capability to make that type of phone call. so, i feel that it was very inadequate. >> thank you very much. thank you, ladies. mr. berman. >> thank you, madam chairman. and i just want you to know that i think your testimony today, and the other things you have done, will and power, will work to empower other victims. and also, i think have helped to motivate the peace corps to make sure that people who have, who will suffer from your experience get the assistance that they are entitled to. and ms. puzey, i just want you to know i think the world will miss your daughters hope and sense of community and her

commitment to public service. we all lose when a young person with such energy and promise is taken from us. ms. marsh, just, you touched on this in your testimony, but could you take a moment just to talk about your evaluation of what the peace corps is starting to put in place, once again, and what they need to do? and particularly focus on this issue of whether one person raised in washington with this responsibility is enough, or do we need -- you talked about a notion of roving personnel they can go to to site, and make sure that the country director, the program director, the people involved, the medical officer, are operating correctly.

>> sure. in terms of the work that we have done with peace corps so far, i was invited several weeks ago to participate in their intervention train which is a model used for risk reduction, or prevention of sexual assault. and i found out to be a really positive experience. in terms of the victim advocate, i do feel like having a victim advocate here in d.c. is a step in the right direction. however, as mentioned by the women before me, i feel as though having somebody on the ground in person is crucial. and somebody who doesn't have collateral duties. so cross training, a medical officer can also be a victim's advocate or secure the officer to be a victim advocate, i don't feel is adequate. i believe the victim advocate needs to be solar responsible for the entire -- solely responsible for case management

and victim services. so if having a victim advocate here who oversees the victim advocates in the field, whether they are mobilized when an assault occurs and can travel to a company the victim, or if they're based in the region, i believe those are different options to explore, but i believe that it's imperative to a successful sexual assault response. >> and then i'd like to ask any of the witnesses, if congress, based on what we've heard today, and other information about this, besides to embark on a legislative implementation and mandate for the best practices that ms. marsh talked about to become the enforced policy of the peace corps to institutionalize it as a number of you have mentioned, like us,

directors come and go, and it creates an institutional basis for these best practices, and funds, what needs to be done here. do you think that can significantly reduce the situations that you found yourselves in? or shall we just in this program -- shelby ended this program? >> i would like to speak to this entry the other witnesses would as well. i want to say i love the peace corps and i support the peace corps, and i'll be devastated if my testimony were used to stop peace corps funding, cut funding or eliminate the peace corps. what we want is a stronger, safer peace corps. what we need is legislation to cement the changes that rainy

first response actions that when directors come and go, when times change and when budget priorities change, that victims, that crime is prevented and that victims are retreated adequately so that they can have the best chance at recovery. i can speak in my case, the changes proposed by first response action and once i outlined in my test would come if those were in place they were legislated, when my assault occurred, my recovery would have been faster and much better because every single thing they recommended would have completely changed my expense for peace corps d.c. is the implementation of regional victim's advocate would've transformed all of our experiences, and i know that budget priorities are tied right now, but the cost of doing nothing is far higher. you see the cost in the witnesses here today. thank you. >> anyone else in the 15 seconds i have left?

>> i would like to say that i would be heartbroken for my testimony to be used to destroy an institution that i absolutely love. i still believe in the ideals of the peace corps. we, as an agency of peace corps, our there to show the rest of the world the best part of the united states. peace corps is there to make changes in the world for better, to provide education, to provide ways for people to learn to have a decent living income that will promote communities around the world to become more economically self-sufficient. i do not have the goal of destroying the peace corps. my goal is to make the peace corps better, to help them

provide better responses. we can't -- we can't stop all sexual assaults and violence from occurring. they key is to provide strong, effective, best practices when problems do occur. >> thank you very much. judge bell? >> thank you, madam chair. thank you once again for holding this hearing, and i appreciate all of y'all for being here today. appreciate your courage. but also, ms. clark, appreciate your service in the peace corps. i agree with you totally that the answer is not to get rid of the peace corps. the answer is to make it better and safer for, as i say, for america's angels are brought. that's who you all are. and kate was the same way. ms. puzey, what is the one thing you want to hear from the peace

corps director? >> well, director williams did give us an apology, but the apology we've heard from the peace corps has been if there was anything that we felt was not compassionate, they are very sorry. and i have never doubted the compassion of director williams or the current president staff. but what we would really like to hear is an apology, and then to acknowledge any actions on the part of peace corps that made my daughter's, or was in the response of my daughter's death. >> i hope you get that apology from the peace corps. >> thank you. i do too. >> dr. koenin, let me ask you something about victims of sexual assault. and i think it's awful that, you

know, sexual assaults occur, 122 occurred in the peace corps that they did in 2009, overseas. but this is a unique crime come in my opinion based on my experience on the bench in texas for a long time. because of the way it affects the emotional stability, or the inner spirit of a crime victim, would you agree or not, and elaborate on the fact that victims like peace corps victims that are sexually assaulted, want the peace corps and us to give them validation for what happened to them. in other words, to support their side, so to speak, as opposed to be immediately distancing them from us and making them at fault, making them feel that it is their fault that a crime was committed against them.

is that part of what we need to do as a society in the peace corps, to support the validation of what they say? >> absolutely. victims of sexual assault, all victims of sexual assault, victims of sexual assault in the peace corps need to know from the initial contact with someone after the assault that the peace corps is on their side. that they are not the criminal. i think in all of our cases we felt, we have felt like we were the criminals, and rape is always the responsibility of the perpetrator. so, they need -- the peace corps needs to change the culture so that the victims know that the peace corps is on their side, and that is crucial for come as you know from your work as, crucial for the recovery of victims is essential. and it is a unique crime in that white. >> do you think that the peace corps as we see it now, based on all of your testimony and the

things that you are aware of, that it is a change in mindset, the peace corps needs to have a mindset different about when crime is committed against a peace corps volunteer somewhere in the country, and some are in the world, and rather than say, oh, don't say anything, you might our diplomatic relationship with his third-world country, and all these other excuses you've heard, do we need a mindset in the peace corps do you think? change in mindset. >> the peace corps needs a change in mindset and a change in culture. from victim blaming to supporting victims, and we are all fine of talk about the peace corps family and we need to act like a functional family in which is one of us is heard, the family comes out they come to our support rather than treating us like criminals. >> ms. marsh, a couple of questions. do you think that we can fix this problem, support the peace corps, internally?

in other words, change policy in the peace corps? do we need legislation? >> i.t. believe that we need legislation. again, as mentioned before, because of the appointment turnover, we've heard in our meetings with peace corps about programs or policies that may have been done previously, but it was unclear who is responsible for them or the people that were not responsible for them have since left. so i think that legislation is the best way to guarantee that these best practices of state permanent, in place and institutionalized through all layers of the peace corps. and along with that notion is the training, not only of first responders, country directors, but anybody in the peace corps who may come into contact. and the training should be layered throughout the peace corps experience, not just one singular training on this issue. >> thank you. madam speaker, or chair, without

objection i would like to introduce three other statements from peace corps volunteers that have come to my attention, but they want to keep their names of anonymous and i would like to submit their stories for the record. >> without objection. thank you, judge. without objection. >> ms. wilson of florida. >> thank you, madam chair. my question has, for ms. marsh i guess, who is representing the peace corps, and i have a map in front of me that sort of outlined the places where these rapes have occurred. and rape is a horrible crime. it can amount to death in my opinion. it issues the killing of the spirit, the soul of women. and i am just wondering about the local governments. is there any sort of compact or

contract assigned between local governments and the officials, especially those that are highlighted in red and purple, where most of these rapes have occurred? and some of them are not that far from the united states. i'm looking at the dominican republic, haiti, jamaica. they are in red. so, if these places are this dangerous, what about the local law enforcement and the locally elected officials in those countries? countries, that are responsible for law and order in their respective provinces, our countries. is there ever any communication with these people, pressing charges just as if these people were murdered? >> i would just like to clarify

before i respond, that i'm not representing peace corps. i am representing rainn, so i am going to defer that question to director williams. and also agree with you that rape and sexual assault is a horrible crime. according to the fbi, it ranks only to homicide in terms of drama. >> i would like to defer to director williams to talk about the specific ranges in different countries. but i think about congress to do and what we can make effective changes to legislation here that would change the peace corps' response to ray. and as i mentioned in my testimony, there are three things i said a things that are three things that can be done right now. they can stop the video that they are showing, serving faithfully that blames victims for their assault, they can in his major and minor distinction of sexual assault.

that is against victim blaming and i like your definition from them of minor sexual assault. and they can provide care and travel companions for survivors. those are in the things that can be done right now. while legislation, dealing with local law enforcement is very important, but a long-term more complex process your. >> just a follow-up question. is there ever any contact at all -- you're talking about intervention after it has happened. what i'm trying to ask a question about is prevention. how do we threaten or, you know, these countries to say, you know, we're not sending women to be raped, and if this doesn't stop, i mean, we will pull all of our peace corps volunteers out. is there any thought of threats or anything leveled at these

countries where, and i'm talking about the purple and array of. if you have this map in front of you, it's unconscionable that these many people are being victims and victimized in these countries, and is there any warning that this is a dangerous place to send peace corps volunteers or women? and, that's what i'm asking, prevention. i understand what you mean by intervention and what's happening after these rapes occur, but how do we help prevent some of his? i don't -- i am at a loss. >> in terms of prevention, what we've talked about, what rainn talked about was bystander

intervention, training, with volunteers. again, the video i've talked about polling is part of their prevention training. and i think that the best prevention is that peace corps can start treating victims of sexual assault with respect in his -- and set an example for people in this country of how the u.s. expects its volunteers to be treated. the peace corps is mistreating its own victims, then hack we demand the people in these countries treat us, treat the women any better? >> thank you very much. ms. schmidt of ohio? >> thank you, and first off, the courage of the women up here is astounding, and i hope that the peace corps takes note of it. i have never been so incensed and so enraged at an agency. my rage began before your testimony when i had a

constituent a few years ago that just need to come him two days early for her sister's wedding, her father had died, but the inflexibly of the peace corps disallowed her to come home. and she quit the corps. and that the time i thought to myself, they really have got to get a grip. well, it is a major grip, not he might agree. because my message is, every woman has the right to say no. nomar how the act occurs or at what point the act is agree. and this isn't an american right. this is a human right. and when you go overseas, you're not just presenting american rights and values. you are presenting human rights and values. and it's incumbent upon the peace corps to understand its own mission. and i applaud you for wanting to be continued why you are so violently attacked, and no one came to your a. dr. koenen, i applaud what you are saying, changing this video, it needs to be done today, not

tomorrow but today. that there is no difference between major and minor assault. and assault is an assault. and when it does happen and you have to go back home sometimes 12, 15 hours overseas, you need a companion with you right there. those are easy fixes. and i want to work with you for legislation to put the peace corps on the right track, to protect you. and ms. puzey, before i finish, i just want to ask you, what do you want from us here today? >> protection rights and victim rights. both spent whistleblower rights, protection rights and victim rights. i think we can work on that, and madame chairman, i will yield back my time. >> thank you so much, ms. schmidt. mr. connolly of virginia. >> thank you, madam chairman. and again, thank you to all of

you for your courage and your testimony here today. and ms. puzey, our hearts go out to you and your family. and i hope this hearing gets some small comfort that your daughter's memory is not lost, and that working together we can try in her memory to make the peace corps stronger, more compassionate. it seems to me that -- i've worked with the peace corps for a long time. and i've traveled to have many, many peace corps missions abroad, met with many volunteers. and your stories are, if you will, sort of an underside of the peace corps that obviously troubles all of us. and we can't make everybody 100% safe everywhere. is not the kind of the world. and, frankly, the work of the peace corps puts people in much

riskier situations. i mean, i have a daughter at a university here in america, and sadly, what you described sometimes occurs in the u.s. campuses as well. but there is counseling. there are training and awareness for rent. there are prevention programs. and i guess what troubles me the most about your testimony was that there was, frankly, lacking a standard of compassion. when somebody signs up as a volunteer and their families supports the effort, understanding the risks, and god forbid something goes wrong, it seems to me that we drop everything as a peace corps family, as you said, and we respond. we take care of the family. we do everything in our power to make sure the system of justice

in the host country is working on behalf of that volunteer and his or her family. and that everybody in the chain of command, from the medical director to the country director to the people back here, is clued in, it is a genuinely compassionate and sensitive and working on your behalf. that's the standard we have to reach. we can legislate, and it sounds today like we need to, but at the end of the day inculcating that compassion, that empathy, that understanding that as judge post said, you know, rape is never the victim's fault. we can never accept that. it has to be clear from our minds, and the proper perspective and adopted always. and zero tolerance for any variation from that standard. i know we're going to do later from director williams about

reforms and measures he is put in place. and i've heard the appreciation of ms. puzey for those efforts. and i know that we can't and will have to go further, but i just want you all to know that on a bipartisan basis we continue to support the peace corps, as do each and every one of you. but we're also going to make sure that, god forbid -- first of all, we will do everything we can to make sure that we are cognizant of risks and dangers, and we're going to minimize them, the goal being tried to get to zero risk. we know that's an elusive goal, but that out to be what we are always pushing ourselves towards. and then should something happen, the full force of compassion and resources of the peace corps, and, indeed, of the united states government are behind you and your families. thank you for your tesla today, and i yield back, madam chair,.

>> thank you very much. ms. buerkle. >> thank you, madam chair. and i would like to thank all of our panelists today for coming here and for sharing your testimony. as a woman and a mother of four children, a grandmother of three granddaughters, it's appalling to me, and it breaks my heart to hear what you have gone through. and ms. puzey, my deepest condolences on the loss of your daughter as well. i would like to join with my colleagues here, and it will be a bipartisan effort to get the legislation in place, to do what we need to do to make our volunteers safe. and to change what's happening within the peace corps. i've spent over 14 years with pro bono advocacy and domestic violence, so i have a keen awareness that as my colleague just stated, rape is never the

victim's fault. and it cannot be that mentality and that mindset must never be accepted. so i will work hard with my colleagues to give this legislation passed. i would like to ask dr. koenen, with regards to healing and recovery, is that -- is that possible? and what can we do to help the victims who are suffering? >> healing is absolutely possible, and as is the recovery. i think you can see that from the women, the testimony of the people here that were able to be here and to testify as part of our recovery. in terms of what we can do, putting the things in place to support a victims recovery starts before an assault even occurs. that's why we keep reiterating stop victim blaming, training

materials. change the mentality of the peace corps to one that supports victims to one that blames victims. and the dissension between major and minor sexual assault again, which is victim blaming. set into protocols in place in terms of confidentiality so people know the confidentiality will be respected and that we have control over who our stories are told to. provide support persons to travel back to the country, provide adequate support once the victim is back in the country. the victim's advocate to coordinate services across all these complex systems. so, all those things could aid recovery and the initial response of the peace corps staff is key to the. one of the things i want to usher in what, not just peace corps volunteers, who expressed a sexual assault is that recovery is 100% possible. >> i just want to comment that i understand your commitment to

the peace corps, and i understand your desire not to see the peace corps disrupted, but as my colleague, james schmidt said, this has to stop. and this legislation and our efforts need to start today, now. so that we can make the changes required to prevent any more harm from being done. again, thank you all very much for your courage for being here today. and we will look forward to working with you. i yield my time. thank you, madam chair,. >> thank you. mr. payne. >> let me thank all of you for coming. i am totally with your testimony, although i was not personally to hear. i would like to commend each of you, and as a very strong supporter of peace corps, i have visited many sites. i've been to graduations of the ceremonies when a new class had their graduation, and so much euphoria and pride, in some countries and.

they make outfits that reflect that particular country, and so i have been a tremendous supporter of the peace corps, and the tremendous amount of work you've done, really commend all of you. i think that part of the problem, you know, and i hear talk about we're going to get this legislation going, part of the problem basically has been, in my opinion, the u.s. congress, u.s. senate, the house because this is not the first time that we've had these kind of hearings. ..

it might've been a hidden agenda, because of you know we are having tough times at home so we can't afford to spend a single penny abroad philosophy that i've heard a lot from some newcomers. but, i sort of commend you all for your support of the peace corps. first of all to be in the peace corps you have to be unique in the first place, so i am not surprised at how you feel about it, but i guess my own point is that if we are really going to do something, then the congress has to act. i mean you can just limit on an agency there probably would like to have some of the enforcement of the legislation will do and of course they can do things on their own but if it is backed by the congress i law, signed by

the president then you might see something happen. once again we will bash the peace corps. they haven't done a good job which is true in some instances. so i just hope that there is going to be the will on the part of the people who are saying how indignant they are that this is happening. for the last 11 years i have heard what we ought to do and we haven't had one single piece of legislation. so, i really don't have any questions. i don't know if any of you would like to comment. yes. >> there was whistleblower protections in the 2007 bill. if you had passed it, there is a possibility my daughter would still be alive, so i do urge legislation at this time. >> thank you very much and i hope that we can pass the house and once again get languished and died in the senate and that is the story of our lives. i really appreciate and i will

yield back. >> mr. smith. >> thank you very much madam chair and i especially want to thank you for calling this extraordinarily important hearing and for the bravery of the women who have testified here today. hopefully, this hearing, each of your instances, each of your trauma should have been the game changers and those of others who have suffered like you have. but if this hearing is and i don't know what else could be. the legislation is important and i'm sure our distinguished gentlelady from florida will take the lead on this. we know she will and we will do our parts, but i hope that the peace corps itself will realize that deploying young and very vulnerable young women and men, but mostly women obviously, to places where there is an enhanced risk on like state department personnel who are deployed, deployed to have access to the compound. they are much more likely to be in a protected state.

get hazardous pay if they are in a more vulnerable deployment area. the peace corps volunteers and the charts certainly shows it and i agree with my colleagues, there are areas of the world that are much more dangerous to women when deployed there and that ought to be a serious factor to find some other area and locale where these women could be deployed. let me just say your testimonies are absolutely chilling. i know every member of this committee and those who will follow this transcript perhaps watching on c-span, will be moved. we need a zero tolerance policy and that goes throughout the entire process, training, the assessment of risk. i thought ms. smochek's failure to prepare, failure to protect the issue of the failure to

respond adequately and then the aftermath of course the worst fears are realized. the ig will be testifying shortly and she points out that since fiscal year 2004, the office of inspector general has visited 66 posts, made many recommendations, and some 85% of the posts were visited, and yet dirty 8%, 25 out of 66 were found to be deficient in some aspect of their site development and as she points out an appropriate site development increases the risk that a volunteers can safety net will be compromised if a threat arises. there is conclusion of the oig and i would appreciate your comments on this, while some important oig recommendations remain open the agency has made substantial progress in recent years in developing a comprehensive safety and security program. do you agree with that? finally on the ratio of harassment usually an act or

acts of sexual assault are preceded by either verbal or some other harassing behavior that is clearly the harbinger of what may be headed towards that individual or individuals way. to the peace corps personnel to whom he reported to, those who have been so horrifically victimize, did they take seriously your concerns about the harassment? we know and related issues of sex trafficking and other violence against women, where there is a culture of impunity very often it just works to all women, not just those who are bought and sold and turned into commodities under sex trafficking. but when it comes to women who are standing up and going out as ambassadors, as one member said, angels to the world, it seems to me that we have to work, we have to have zero tolerance in regards to that risk.

so, if you could? >> yes, i can certainly speak to the second part. i know from my experience i was placed at a site with two other female volunteers, and we received extensive verbal and physical harassment and sexual harassment. from the very first day. we kept reporting incidents and to the medical officer, to the safety and security officer and just got the same reply of just toughen up and deal with it. i believe that what happened to me, i believe that, i mean i was targeted by a group, this group of six men and i believe my ultimate gang-raped by them and near death could have absolutely

been prevented. my site was absolutely on face. if anyone had actually come to look at all of the reports that were being filed and taken them seriously, and i mean, we specifically said we are not safe. we do not feel safe. we are going to be harmed. and we were not taken out of this dangerous site. and so, i mean that is just a case and how even, even what is deemed minor, actual harassment or assault, you know, can lead and most of the time can lead to much greater crime. and so, i think that there definitely has to be more accountability and response for all reports that are submitted and they need to definitely be followed through.

every single report needs to be followed through, and to really ensure the safety of the volunteer. >> thank you. thank you mr. smith. mr. rivera. >> thank you madam chair and thank you to the witnesses for testifying here today regarding some horrific circumstances and particularly ms. puzey my condolences to you and your family. thank you for coming today but also thank you for the service you desire to give to your country and to other countries, to mankind. i can't imagine a more altruistic sentiment than the ones with which you entered your service in the peace corps particularly cents as has been mentioned, the peace corps has been an integral part of assistance around the world that we provide to other countries,

but at the same time, i hope the entire world is listening but in particular, those that can make a difference with respect to your circumstances that they are listening as well. it is quite concerning to many of us that you all have mentioned many instances i believe where perhaps the agency has dragged its feet in implementing systematic reforms with respect to safety and that is very troubling to us here and i'm sure to those who are thinking about volunteering with the organization in the future. i think the peace corps should be held to the highest standard of accountability when it comes to the safety and protection of the

by the peace corps in their latest movement forward, is the health care health care services

and health care providers within country but also within the united states, and that is really key because they again are the first responders, and you'd know not only making sure that there are trained people who can work with the survivors but after service, how difficult the issue is to navigate the workers when you are still in trauma mode and once you are separated from the peace corps, that's it. no one is there. there is no liaison and nothing there. you are just left to navigate completely on your own. some people get information and others do not, and it is really, you know, can further harm the survivor. >> thank you very much. ms. clarke.

>> one thing i would like to point out is that even this week we have received new reports of women who have had similar experiences. i think that, as women fill the support of congress, there will be a spike in reports. i would like that not to be used as an indication that the peace corps should be disintegrated, but rather that the peace corps has taken the chance to reform. with that in mind, i would say that apologies without action are useless. i have had an apology from the peace corps. i haven't seen the action. my goal is that we have

long-term, not short-term, but long-term action that can be provided through legislation. >> dr. koenen. >> i would like to conclude this by saying what we all want is a better, stronger, safer peace corps and we have all come forward with their stories at great personal cost to ask congress to cement the changes that we request in legislation so that future generations can serve in the peace corps and be protected. >> thank you very much. ms. marsh? >> i would like to reinforce what the women who spoke before me said and also go back to my testimony and suggest the peace corps follow best practices recommendation and reiterate that i feel as though they are taking steps in that direction and i believe that this hearing will help them to further that

process. >> and ms. puzey, finally. >> as has already been said, i think that legislation needs to happen now at this time. if it is going to be consistent over time and also from the peace corps i would like to see them be sympathetic and compassionate and get support to victims families because things are going to go wrong. so when there is -- the family should also have a support. >> thank you very much. thank you for excellent testimony. thank you for your courage and appearing before us today. and we will work on legislation to move forward. thank you very much, ladies. [inaudible conversations]

we made good use of our time, didn't we? thank you mr. williams. you are recognized and feel free to summarize your statement. thank you very much sir for appearing before us. thank you, sir. >> good morning and thank you madam chairman ranking member berman, members of the committee. thank you or the opportunity to testify about the steps that the peace corps has taken to improve the safety, security and support and care of our volunteers. i am a returned peace corps volunteer, so i am a part of the peace corps family. it is an honor to lead this agency that has meant so much to me throughout my life. the health, safety and support of every member of our peace corps family is my number one priority. the peace corps volunteers represent the best america has to offer and we owe them nothing less in return.

we make a commitment to every volunteer that we will support them during and after their service in the same way that every volunteer makes a 27-month commitment to serve overseas. unfortunately, the peace corps is not always lived up to its commitments. the powerful testimony of the courageous witnesses today shows us that the experience can be acute and lasting. we sincerely regret that we did not fully appreciate this in the past. it is not our intent to victimize our volunteers a second time. we want to do everything we can to help them heal. the brave women who have come forward have shown us that the peace corps has not always been sufficiently responsive. compassionate or sensitive to victims of crime in their families. it is heartbreaking to learn that and i apologize for any additional pain the agency has inflicted on our volunteers. the victims of sexual assault

deserve nothing but compassion and support. each volunteer is a valued and treasured member of the peace corps family. a crime against one is a crime against all of us. since peace corps was founded 50 years ago, more than 200,000 americans have served in 139 countries. we are all enormously proud of their service both to the united states and to the host nations. today we have 8600 volunteers and 77 countries. all in tears and biting compassion and generosity and a dedication to our mission of world peace and friendship. it is these qualities that deepen our pain when there is a loss. we care profoundly about the welfare of our volunteers. every life lost in every attack a violence against the volunteers a tragedy. i have personally met with the parents of katie puzey the outstanding volunteer who was murdered in march of 2009.

i assured mr. and mrs. puzey and her son david peace corps of the united states government has united with them in seeking justice for kate. lois, perry and david have shown incredible strength and i am deeply grateful to them for helping us to improve the way we handled sensitive information and support the families of fallen volunteers. i regret that the peace corps did not do a better job early on in supporting and communicating with them. my staff and i have met with a number of returned volunteers who have share personal experiences of rape and sexual assault. i would like to thank them for their courage in speaking out and for helping us to make needed reforms. they have enlightened us and help us understand the lasting damage suffered by victims of crime. we do not want those experiences repeated. the peace corps of today takes the issue of sexual assault, prevention and response and we

are dedicated to providing compassionate victim centered support. since i became director in august of 2009 the peace corps has put in place new policies and practices to reduce the risk faced by volunteers and to ensure they receive our full support when a tragedy occurs. let me tell you a little about the things we have done. we have issued a peace corps commitment to sexual assault victims as set of corporate swill to ensure we provide timely, effective and compassionate support to victims of sexual assault. we have implemented and trained our staff on new guidelines for responding to rape and sexual assault, the guidelines that are victim centered the specific procedures that all of our staff around the world have to follow to respond properly and provide the best possible support. the agency sexual assault working group is developing a conference of sexual assault prevention and response prague ram. this group by the way, includes returned volunteers, survival of rape and sexual assault as well as our staff which has expertise

in trauma response. since last year we have been developing comprehensive new training for volunteers before and during their service on sexual assault prevention and response. we will begin rolling this out this summer. we have signed a memorandum of understanding with rainn to nation's largest organization on combating sexual violence. that is going to be a very important part of our response. also at the response of the brave women of first response action i hired a nationally recognized leader and victims rights to be our third agency's victims advocate. she is here with me today and she will make sure the victims of crime get the emotional, medical, legal and other support they need. at the suggestion of congressman poe and thank you free suggestion i'd agree the sexual assault panel made up of experts and returned volunteers who were victims of sexual assault to help us design and implement our sexual assault and risk reduction and response strategy.

madam chairman we are committed to reform agenda. we have improved the agency's local safety and security program by working to implement the recommendations by our inspector general in 2010. i believe these reforms will better protect our volunteers around the world. more needs to be done and i look forward to working with you and others to ensure the continued success of our volunteers. their willingness to serve our country is an inspiration. thank you very much and i look forward to any questions you might have. >> thank you very much mr. williams. we thank you for your service. although it is not a perfect comparison, much has changed on college campuses in the past 20 years in the way that administrators, faculty, students and all the staff respond to victims of sexual abuse, and it is improved for the better in the past 20 years. when i went to college, you could not know where to go for help, know how to report it, get

any kind of help. a lot has changed, and mistakes and crimes to occur, but they are treated far more serious vein than before. not a perfect comparison, but as it relates to the peace corps. i was just jotting down what we have heard from the victims and the common denominator is to change the focus from a culture of blaming the victim to not blaming the victim, so i am curious to hear about how you are shifting, not u.s. a person, but the culture of the peace corps and the folks that you have in the country, to shift their focus to blaming the victim and trying to downgrade the crime and it is a crime, to be more supportive and helping the victim to report the crime,

making it easier to report the crime and not blaming the victim. some of the notes that i was taking down. training for in country personnel on how to respond to sexual assault survivors. the doctors that you have in country, that they need training in post-rape exams so that they get the evidence that they need in order to present the case in court. needing advocates and d.c. and throughout different cities, people who understand what the survivors are going through. workers compensation deadlines to eliminate that deadline, peace corps should facilitate interaction among assault victims instead of trying to separate them or downplay the crime that has been perpetrated against them. having whistleblower and training procedures in place. also, many of the survivors share with us either verbally or in their written statement, talk

a lot about the training video that is still being played and whether that is adequate, that really focuses on the problem or whether it is still blaming the victim and trying to make it sound like they might need the ones responsible for the crime. also, reporting and make in that reporting public which has been a very important part of the college campus change in their culture, mandating new legislation that they have to report the crimes that are committed on campus. where are those unsafe laces? is the peace corps reevaluating where volunteers are placed, and also the annual volunteer survey, if that is shared with others so that we know where the sexual assaults are taking place. i would just share those with you and perhaps you could discuss how that blaming the victim more than anything else

is changing in the peace corps and the countries selection, whether we are making sure that we have evacuation procedures in place to get those victims out of harm's way. so, let me ask you the following questions. the peace corps subject to the five-year employment rule which statutorily restricts the tenure of u.s. direct hires, including regional directors, county desk officers etc. and did gao noted quote one factor that may contribute to the peace corps is difficulty in implementing its safety and security policies is turnover among key managers." do you think the five-year rule mix of more it more difficult for the peace corps to protect its volunteers? would you support legislation eliminating this five-year rule? >> thank you madam chairman. regarding the five-year rule, it

was put in place of course by the legendary sergeant shriver when he was director of the peace corps in order to make sure the peace corps had a continual flow of fresh blood. returned volunteers from the field to help design a continue to implement the peace corps programs worldwide. i think that there is always a need for fresh blood in any organization especially i think in terms of the agency that focuses on young people around the world volunteering, but at the same time i am more than willing to entertain and discuss with you and other members of the committee the aspect of the five-year rule that might have a direct bearing on our safety and security. >> thank you so much. in response to the survivors testimony, the agencies frequently asked questions brochure and safety and volunteer support brochure assert that quote volunteers who are victims of sexual assault can expect to receive extensive support as it relates to their safety, medical and psychological care, legal options and continued service with the peace corps." however the testimony presented

to this committee and testimony that i have gotten since we have posted this hearing, indicated as volunteers in general are inadequately trained on sexual assault issues and are often placed in dangerous situations, that the agencies in country response frequently fails to meet the survivors need and upon to the u.s., volunteers often receive hostile rather than supportive treatment and that institutional obstacles prevent survivors from receiving long-term medical and mental health care. how do you explain a the significant discrepancy between what the brochure says, with the video says and what is then resented before the porous? >> madam chairman there is no doubt that what these courageous women have done is opened our eyes to a problem we need to correct and we need to correct it now and i want to work with you to do it. i think i want to mention one thing about the video.

i am going to replace the video image via lee, because i've listened very carefully to the victims and their view of the video. we have been over the past few months designing a new brief and training program which will include preservice training, so we are going to have state-of-the-art. one of the important things we are doing right now is the fact we are going to be listening and working closely with sub10. rainn is known as the preeminent organization. they are going to guide us. i was listening carefully to the rainn testimony this morning and she is provided a roadmap if you will of things we need to follow as we move forward to revamp and reform the peace corps. rest assured this blaming the victim will not continue in the peace corps today. >> i thank you for your attitude that i'm calm for that but those changes will take place. thank you mr. williams. mr. berman. >> thank you very much madam chairwoman and i would like to continue down the line that the

chairman started in terms of some of the specific suggestions. when one reads the e-mail, reads, and of course they didn't but listens to the show and heard ms. puzey talk about the e-mail from her daughter to the country director, i reached the conclusion that unless there is something i don't know, such a high level of recklessness to allow the perpetrators rather to somehow affect access is almost beyond comprehension because that was a sophisticated e-mail that warned of the dangers. it laid out a roadmap of what should not happen and it seems to have been ignored, unless again there are facts that i

don't know. whistleblower protection in that case i think means two things. one is the general principle, no retaliation against the victims who are filing complaints regarding what happened, but secondly, the issue of confidentiality. is that something that practices or legislation you could support? >> thank you congressman berman. without a doubt, we would be open to looking at legislation that could strengthen the peace corps in terms of providing enhanced safety and security for volunteers, no doubt about it. i am prepared to sit down with any member this committee or anywhere else in the congress. we have been engaged regarding whistleblower protection with senator isakson.

>> you are open to a legislative approach to deal with the institutionalization of the reforms that you are embarking upon? >> yes sir, i i am because referring back to the question from madam chairman, the five-year rule is an issue obviously that we need to take a look at and so to the extent we can codify these important best practice policies, there is no doubt something we need to give serious consideration to working in conjunction with congress. >> the second issue, this issue of the role of the peace corps with the victim who is separated from the peace corps in terms of very specifically the workers comp situation. there are issues of ongoing medical attention, counseling, other benefits under the law. going through that is not such an easy process in terms of reforms and the procedures for utilizing the workers comp

system, to get compensation for those costs. i was led to believe from the testimony that the peace corps sort of eliminates its involvement once the volunteer has separated. why does that have to be? >> congressman i think you are absolutely right. when he to take a serious look at that in terms of our ongoing support. just because a volunteer is separated from official service doesn't mean there's not an ongoing need for care and support and i want to work out an arrangement whereby we can do that. one of the things i've been asked my victims advocate in her new position to do is to sit down with me and the department of labor to see how we can coordinate to provide better support to volunteers so they won't have to navigate the bureaucracy on their own. i think they deserve that and i'm prepared to look into how we can do that in a very effective and efficient way. >> sir, another suggestion i heard coming from the testimony

was while what you have done in terms of the advocate in washington is a very important first step. at least until the training has so taken hold that each country team can provide those services on their own, isn't there a logic in having some roof of roving advocates who can go on-site and make sure that the best practices are in fact being implemented? >> i think that is a good management practice across the board in many of our operations and certainly want to certainly entertain that and determine how we can best move for. i think it is an excellent idea. >> thank you very much and i do appreciate your openness to legislation because i do think a pretty compelling case has been made that it is important for us to institutionalize this and obviously we want to get your

reaction as we go along to the workability of what we are talking about. >> thank you very much because we want to cooperate to the extent we can with members of this committee. >> thank you so much. judge poe. >> thank you been in chair. mr. williams good to see you again. thank you for coming by and letting us that this issue in your response and i believe we have six or eight weeks that we are going to meet again on some of the things we met on earlier but i look at this, this issue as a human rights issue. america, we are the human rights country. we go through -- throughout the world promoting human rights in many ways. i think it is important though that we return and focus on the human rights of americans that go abroad in the peace corps and thank you or your service in the peace corps. it is a great organization. i don't want to see it disappear and i think we ought to encourage it and make it better.

i see this issue as kind of several parts. first, when a crime is committed we have a victim, and then we have the peace corps response, which is what we are going to work on, legislatively i hope. but also the peace corps response must i think include two other avenues that haven't been talked about today, and that is the peace corps's interaction with the country that the victim was in and what is their response? how are they going to deal with this crime committed in their country, and then lastly, the perpetrator. there is a criminal involved in these criminal actions and how do we see our interaction with some foreign country going after the outlaw that committed this crime? those are the things we need to work on. we don't have time to verbalize

those now, but i would hope as we proceed with legislation, with your help and rainn on all the victims that are here, that we can figure out a way to mate the country that we are trying to help, these angels that are helping, be responsive to the crime committed in their country as well and i would like to hear some short comments on that issue if you would care to make them. >> kahn -- thank you congressman poe in thank you for the care and concern you have for the support of the peace corps. i've appreciated our conversation i will follow-up as you say a few weeks to continue that. reporting care of the them, this is going to be first and foremost in our response. we are going to make sure that victim centered approach will be compassionate and all of our medical personnel has been trained in how to work with victims of sexual assault. it is not just going to be at the country that posed. it will be a continuum. when they return back to the united united states either to their

home here in washington and it is a team effort. we are all going to make sure all of our staff and senior management is focused on this. we are committed to making this, change in the culture that these courageous people have encountered. we are going to change that. regarding the host country, the host countries around the world as you know so well, want the peace corps to stay there and so we find that working with the country team and the ambassador and regional security officer, each of the embassy said the cooperation we give to local law enforcement has been very good. they are very interested in finding a perpetrator of the criminal who attacks a peace corps volunteer. a matter what the type of attack is and we have seen a lot of good cooperation working with our safety and security coordinator in each of our countries and that will continue to be the case. we will do everything we can to pursue that but again it is also something the ambassador in our country, the u.s. ambassador, also has been -- at about any country can think of where we have had issues they have been

determined and it and a willing ally in this fight. >> i'm going to yield back the remainder of my time. >> thank you, sir. mr. paine. >> thank you very much madam chair for calling this very important hearing and let me welcome you director williams. it is good to see you again. i appreciated the meeting we had early on when you took over the responsibilities as the head of the peace corps. as i've indicated i think it is one of the greatest organizations that the u.s. back in the early 60s created, and i think they really do an outstanding job and i think this year rather better than having this kind of hearing, unfortunately, we should be really celebrating the 50th anniversary of the peace corps and hopefully we can really come up with the corrective work that we can deal with the problems

and once again highlight the great achievements the peace corps has made. i visit many developing countries and one of the first things that is asked if they don't have the peace corps is can you send in the peace corps? the u.s. ambassador's and the heads of countries, many of them as a matter of fact, many of the leaders of countries today had experience with the peace corps and even learned english at a peace corps school. they really want the peace corps there so i know that the problem is not with the host countries, but there has to be better coordination between the host country and the peace corps, as i mentioned before. i've been to the graduation ceremonies after new peace corps members, and, usually a whole group, those who determine and usually 98% go through the training and they have their

celebration and their graduation. i have spoken at a number of those in sub-saharan africa in particular. so i have a very strong feel for the peace corps and what you have done. i wondered this. number one, in certain countries, sexual assault is more prominent than in other countries, as we know. they are all different. is there any special kind of precautions or inculcation with the volunteers to assist them of the fact that culturally and in some places, sexual assault has not been prosecuted by that country. has that come into play and do you do anything special in those areas?

>> thank you congressman payne and thank thank you sir for you- retake every opportunity visit our volunteers and learn what they are doing. i think that we have seen, we have had very good success in host countries in following -- finding the perpetrators of these crimes and prosecuting them. again this is crucial because as you know they want the peace corps to remain in their country and so when there's a crime committed against a volunteer we have had very good cooperation from local authorities. the other thing is that we make sure that when a victim has made a decision to pursue with local authorities, the victim is accompanied and supported by the peace corps every step of the way. we have seen good support from local authorities, sir. >> thank you are gone nowgo now, know you have a 26 million-dollar budget cut coming up in this fiscal budget,

and the programs you are trying to put in, is there anyway you can preserve the work and protecting some of these new initiatives that we are trying in spite of the cuts that you are going to evidently receive? could you ensure that you still work on these issues that have been raised here today? >> i am committed to making sure that whatever resources are provided by the congress, whatever level of budget we have we are not going to compromise on the health, safety and security of our volunteers. we might not be able to go into a new country and we might not have as many volunteers expanding in certain countries but what is first and foremost russ is the health, safety and security for our volunteers. we are going to use every dime to make sure we support them. >> as you know we have talked about the death of our

volunteer, kathy and certainly concerns us all. while we are we are waiting for the final report of her investigation, we have great concern for the safety of peace corps volunteers who report violations of other peace corps workers. can you lay out what protections are in place to ensure that volunteers are protected so that we don't have a similar situation occurred? >> yes, sir. thank you. we want to be sure that we protect the confidentiality of any information in a volunteer provides to our staff. so we have trained overseas staff on how to respond appropriately when volunteers bring allegations of wrongdoing to their attention. this policy requires any staff member who receives or has knowledge of a volunteer delegation to treat the allegation with utmost discretion and confidentiality,

to take appropriate measures to ensure the volunteer safety and to ensure that the allegations are given serious consideration including referral tour inspector general. more than the policy, that is the way we are implementing this and we will provide oversight and i travel -- i've traveled to 10 countries as the peace corps director and by senior staff travel significantly. these are the kinds of questions and concerns we express and looking too deeply when we do that. not only do we have a policy of, we are going to follow-up on follow up on oversight. >> thank you. >> thank you. ms. buerkle. >> thank you and chairman and thank you mr. williams for being here this morning and giving us this opportunity to question and also for your willingness to sit through that very difficult testimonies we heard earlier. i have several questions. i would like to begin by both the bush of administration and the obama administration have

encouraged and talked about doubling the number of peace corps volunteers. do you think that given what has gone on and what doesn't seem to be under control at this point, that would be a prudent objective for the peace corps? >> i think that right now, we are in 77 countries congresswoman, and that is a very effective foot rand worldwide. i believe that we could grow and manage our responsibilities in a very sound way, because we are going to take some reforms and going to to go and views were formed to get the best possible expertise that we could bring to bear to help us manage it as we go forward. i'm confident that we could continue to grow but all this of course will be dependent upon our budget. >> in your testimony talked about training for the volunteers and that has not been implemented yet. when you expect that will be implemented? >> we are in the final stages of

finalizing the new training. we are going to start rolling it out the summer so in a couple of months we will roll it out. also we want to listen carefully to our colleagues at rainn as we move forward because it is important to train first of all our staff but also just as important a volunteer so we have an effective dialogue between staff and volunteers as we move forward. >> if you would, could you please let us know when that begins to get rolled out and keep us informed as to the progress of that? >> i certainly will. i will be happy to do that. thank you or the question. >> we her testimony this morning and specifically in the instance of k.. she was in a remote area but didn't have internet or phones. how will you address that going forward, so that these volunteers have a safety net that they can have some means of communicating any danger that they might feel? >> one of the things we have set said as her goal when we have placed in a volunteer on a site is to make sure they are placed

in a community setting where in fact they're not going to be alone per se. they have counterparts they see every day whether health healthh care workers are teachers. their host families. we work with law enforcement and we take careful attention, pay careful attention to site selection. there is supervision by our staff at headquarters. also we listen very carefully to the volunteers. something we have at the peace corps which we didn't have when i was a volunteer which is a wonderful new arrangement is something called a volunteer advisory committee and they provide a lot of information and oversight in many ways to staff. i listen to them carefully and meet with them when i travel. so we have taken a lot of time thinking about site collection. at the same time if he or she feels this is not a safe setting i want i staff to take immediate action to look for other places for the volunteer to work because we have other sites in all the countries where we were. there's no need for one of our

volunteers to feel unsafe in a situation. we have to listen to the volunteers. >> can you tell us what changes have been made because we heard from a panel this morning that when they express their concerns to their superiors they were ignored. >> i think first of all, we have established a policy of listening to volunteers. i've asked the regional manager for africa asia, latin america to carry out these policies and make sure we provide oversight. the volunteer advisory committees are important source of information because they represent the volunteers and are elected by the volunteers. they are not shy about providing me with e-mails and calls to tell me about things they believe need to be change. we are going to listen to the volunteers and i'm going to make sure if a volunteer feels on safe we have to take action. >> so that makes the whistleblowers provisions and concerns, that makes it more important that time is of the essence so we can protect the whistleblowers and protect those

who are willing to call your attention to some situation and not feel, or fear retaliation. the last piece is we see on the map over here and we have been provided with those maps, there are areas that are even more unsafe than others. will those areas, will there be enhanced safety procedures or will it eat applied uniformly across the board regardless of the location? >> one of the things that is important is we do not intend to put volunteers in an unsafe country. many countries want peace course to into their country but before we do that we have to make sure we have a mess of them are me. we work with the ambassador in those countries and we work with the regional security officers and we conduct a full country assessment before we agreed to agree to move into any country. with the country is deemed to be in safe we will not place volunteers there. >> thank you. i look forward to working with you. this legislation can be more important and i think time is of

the up and -- essence so thank you for being here. >> thank you. >> patent -- thank you madam chair. >> thank you for calling this hearing because then you will get results. sometimes hearings, and go. let me ask you mr. williams ngo said there is good cooperation with local authorities when there is an allegation made. you mentioned that these countries are quote very interested unquote and tracking down the perpetrator. could you define exactly what that means? for example how many arrests have occurred? how many convictions have occurred as a result of rapes of peace corps volunteers? what if anything was required of our peace corps volunteer as a that court case went forward and be very specific. one of the things we have learned with trafficking is that countries will talk a good game and then be very deficient in

doing anything to mitigate sex trafficking and it is often the police, often the judiciary, untrained judges and really a culture of impunity so if you can answer that. secondly, today if a woman does report a concern over her safety, i mean today, right now what absolutely happens in that case? is she redeployed? is there an assessment done as to the bullets baluchi of her concern? a sheehan anyway penalized for coming forward and causing some aggravation on the part of somebody higher up in the chain of command? is there an immediate redeployment and another question, is there an assessment of places where these instances have occurred? for example in bangladesh and one particular locale that may have been five attacks. do we have any idea in terms of tracking whether or not there has been a pattern in any particular area and once an allegation has been made and it seems to me there would need no

credible reason why an allegation would not be given the full faith that woman has concern about something about two or actually happened, is that area then put on a do not send or deploy a peace corps volunteer to that area, so there is zero tolerance when it comes to that particular area? finally in 2010, the agency's inspector general found that between peace corps and state department there was an unclear responsibility that could quote compromise volunteer safety and hinder response to crimes against volunteers quote. the ig recommended the peace corps develop formal documentation of the department of state's bureau of diplomatic security to clarify the roles and responsibilities for overseas safety and security regarding peace corps staff and peace corps volunteers. to date, the peace corps and the state department lack a

memorandum of understanding establishing the agency's respective responsibilities to volunteers. will that happen immediately and why hasn't happened? >> thank you congressman. thank you for your support of the peace corps. i know you have been a strong supporter of the peace corps. let me answer your first question regarding the pursuit of criminals. we have been very successful we believe in working with our partners in host countries to bring perpetrators to justice. in 2009 in 2010 arrests were made in 61% of the rape and attempted rape cases in which the victim elected to file a report with local police. and so we see strong support. the other thing these cases are high-profile case in a small developing country as you will not. our ambassadors are determined to pursue justice for our volunteers and so we believe we have gotten good cooperation and we we continue to pursue this. >> on that point, from the 61

arrests, 61% of the rest could you break down for the record how many that turns out to be, and whether or not they were convicted and whether or not they serve time in prison? >> i don't have those debts with me but i will get them for you and submit them for the record and i will be happy to do that. >> the arrest could be done to placate us and the justice goes undone. >> very fair point. your point about the mou, we are currently in discussion with the department of state about the clarification of responsibilities per the ig recommendation we have to have a resolution of that very soon. it is way overdue and we need to get it done and my colleague at the state department stand ready to do that. >> does your office work with and you have anybody that works with on a regular basis, but the tip office? i know you worked with the interagency council, but is there a regular dialogue for example, because again there were many instances where

countries where especially peace corps women volunteers are being deployed, where they happen to be a tier 3 country and the country on the watchlist that could be tier 3 soon, but if you could just, do you work with the tip office or? >> i don't know to what extent we have frequent conversations with the tip office. this is an excellent idea and i will talk to our safety and security people to make sure we step that up. >> thankthank you is just myth d thank you williams. our committee looks forward to working with you, with rainn, with victims and survivors of sexual assault with peace corps volunteers, former and current who are undergoing difficulties and drafting legislation that will improve their reporting of crime and improve your ability to respond to what is a serious crime and change the culture to a victimless and not a blame the

victim mentality, but blame the perpetrator and the person who is causing the crime and not the victim. so thank you mr. williams. >> thank you adam chairman and thank you members of the kennedy for your support of the peace corps and four looking for ways to help the peace corps grow stronger as we move through another 50 years. >> finally i would like to introduce kathy buller, inspector general inspector general of the peace corps. ms. buller was named by the director to be inspector general of the peace corps on may 25, 2008 with over 20 years experience in inspector general community. as a member of the council for inspectors general on integrity and efficiency, ms. buller is also cochair of the inspections and evaluations committee and a member of the legislation committee. thank you ms. buller for appearing before us today.

your full statement will be made a part of the record and we ask that you summarize it in five minutes. thank you and welcome. >> thank you turkoman and chairman, ranking member berman and distinguished members of the committee, i thank you for inviting me to appear before you and allowing me to summarize my prepared statement. i would also like to acknowledge the courage and the strength that the returned peace corps volunteers and the puzey family. as for the inspector general that these crime charged with oversight of the agency. i began my tenure as ig and 2008 and since then my office has reviewed case safety and security functions at headquarters and our post-audits and our program evaluation. we have issued many recommendations for improvement. by the agency has made strides to improve its safety and security program, several problems continue to surface. we continue to report a lack of management oversight and

inconsistencies in safety and security staff qualifications and training. peace corps is a decentralized agency with headquarters staffed by country directors and their staff to run the programs in the field. this model is only successful when there are clear lines of communication well established policies and procedures and adequate oversight functions at headquarters. the peace corps office of safety and security was created in response to the 2002 gao report to "foster improved medication, coordination, oversight and accountability for all peace corps safety and security efforts." however posts are not accountable to the office of safety and security. instead regional offices provide guidance to country directors and these offices are responsible for monitoring compliance which results in uneven implementation of policies and procedures across posts. peace corps must ensure safety and security managers at

headquarters have the authority to ensure safety and security functions at the post are carried out. the safety and security office must function as the officer was intended to be rather than nearly a consulted office for overseas posts. peace corps's approach to safety and security is built on the model, acceptance model. fundamental tenets of this model include building relationships, sharing information, training, site development, incident reporting and response come emergency communication and planning. our 2010 audit of safety and security indicated that peace corps overseas safety and security staff are not consistently qualified to support volunteers in achieving the goals of its acceptance model. ..

this mlu is a critical step in improving the agency's capacity of security situations. voluntary safety and security is compromised of agencies failure to implement recommendation. since 2004, 44% audited with requirement to provide a background check. after the policy in september 2009 to include short-term contractors and the oig found that 73% of

post-audited were not compliant. we identified a timely and effective remediation of oig recommendations as a management challenge in the agency's 2011 performance accountability report. also the agency that the chief compliance officer position vacant for years and seven months. its a chief compliance officer arrived, more than 300 recommendations have been closed. however, as of today, 205 recommendations remain open, some dating back to early 2008. voluntary safety and security, open recommendations for volunteers and staff emergency preparedness and crime reporting. the peace corps has made progress in addressing the agency safety and security issues since gao issued concerns in 2002. my office will continue to assist the agency in improving the safety and security of volunteers.

we have commenced review the agency's implementation of guidelines of protocol related to volunteer but tons of sexual assault and also plan to follow up on her previous work. we would also like to express gratitude to survivors for cooperation as we conduct our review. i believe is peace corps celebrates the anniversary, the agency has the opportunity to renew its dedication to volunteer safety and security and ensures sustainability of the agency's mission for another 50 years. thank you for this opportunity in a prepared to answer any questions. >> thank you for your testimony. i wanted to ask about the kate puzey murder. as you know, in march 2009 kate, a peace corps volunteer serving as the teacher in benin africa was murdered shortly before the terrible crime, kate sent an e-mail to the country director, identifying her accused killer, a teacher and engaging in

inappropriate relationships with and harassing students. kate requested the e-mail remain anonymous. however, the agency's inspector general later found this e-mail was mishandled. i have some question about that. can you tell us what happened? did the peace corps terminate those responsible? and suppose that the mentally this same scenario repeated itself, a peace corps volunteer repeated peace corps volunteers about an individual who could pose a risk to the volunteer safety and requesting anonymity. how would the peace corps today protect that volunteer? and lastly, are there any legislative measures we can take to strengthen safety and security and support of prosecutions in foreign countries?

>> my office to conduct a review, an administrative review of emission flow that prior to the death of kate puzey. we did find that a competent e-mail -- the e-mail she sent confidentially and additionally another person was compromised, that this information was inappropriately disclosed. >> would have been to the employment of those responsible for the e-mail and the outing of the person who sent that e-mail, kate? >> none of those individuals are with the peace corps anymore. >> are they no longer in the peace corps because of this? or for other reasons? >> they are no longer the peace corps because of this. >> they are no longer the peace corps because of this. suppose that a volunteer would send communications orbit somehow communicate through

peace corps official about a problem to volunteer is incurring and asking for anonymity, how would the peace corps protect that volunteer today? what has changed? >> today there is a protocol and policy in place that mandate any allegation by a volunteer for cheney that is made in confidence be kept in confidence and held them close this discussion may peace corps staff receiving the allegation. the volunteer of the trainees also advise they can come to the ag and actually encouraged to come to the ig with these allegations and we handle allegations all the time and have a statutory mandate to keep our elocution confidential. >> thank you. understanding how difficult it is to get prosecutions, before we enter into agreement to the countries, is the peace corps

being aggressive at the host country and saying that these cases must be handled in a serious manner that they merit? >> i believe the director is in the best position to answer that question. from our day will be prosecuted overseas. it would be helpful if we had the ability to prosecute them here. there could be a legislative change that would allow the u.s. to have jurisdiction over violent crimes for volunteers. for example, if they reconsidered in place at the united gates government for purposes of that prosecution, dear currently allow those similar lines. >> thank you. and as the peace corps implemented, i know you spoke about your audit recommendations regarding safety and security.

if not, which once remain open? what is the most important change the agency can take to improve safety and security? >> i want to just clarify your question, madam chairman if i can. are we talking about the audit for evaluation? either one? >> either one. it was about the audit, but the evaluation is good, too. i would like to address the evaluation because those recommendations are ones currently open since 2000 name. the recommendations remain in the evaluation that are continuing to be open concerning the accuracy of incident reporting -- volunteer incident reporting. we would like the agency to have the director reviewed those reports before they are submitted to headquarters. that is still open. we also would like the office of safety and security to provide the service training to volunteers and how they can

effectively respond to a violent attack given the country that therein. that is not happen. we also would like the regional directors to handle housing criteria that implemented across the board they need to make sure the staff is trained in making certain all of those recommendations are complied with regret the recommendation that may be in a variety of a situation, not just a single situation remains open and that these staffs of america and start development we find that

our program country evaluations that the site leader forms are often not accurate. our evaluators take them to go locate volunteers and it's very difficult to find them. >> thank you are you much. >> thank you. collaborate on this evaluation of peace corps response to sexual assault. what is the scope of your review? and what is the method by which she'll incorporate review of survivors currently serving volunteers? >> the scope of the review we've try to limit to more recent past two years or so with the hopes of being able to identify individuals who are with the peace corps who are still with the peace corps who may have been involved in the response to the sexual assault for the

volunteer appeared >> you're talking about staff? >> yeah, staff. >> this is about staff responsibility? >> yes, sir. we are reaching out to various organizations. we have reached out to first response and asked them to reach out to its members to allow them to come speak with us about their circumstances. we of course don't want to just call sexual assault but was out of the court and start asking them questions and make them relive trauma so we are soliciting input for the those who contact with those individuals. >> so in this case, your evaluation of the just focused on your examination of what the staff told you that responded or basic data of the fence about their views of how the staff

responded. hig mariette up in the records the peace corps has. we didn't have an adequate process to ensure potential volunteers fully informed. was there an issue that was disclosed in your 2010 audit? >> that particular recommendation. we are currently working with the agency to try to address, but as of the time it has not not been addressed. >> that is fully disclosing the security risk of the place where the person is going to be based before they leave washington. >> yes, sir. we recommend that the time when

they bring out the trainees into washington. >> not an country? >> knotting country. >> you have done audits relating to the medical office as well as the safety and security office. how do you think is the dems advocate logically would fit in the structure in terms of dealing with the medical office in the safety and security office? >> i think the position where they placed the position currently in peace corps is probably the place place for you. they placed it directly under the direct or so that person is not -- doesn't report to anybody but the direct to your end will have communications between both the medical staff and the office of safety. >> those offices, medical and safety and security office will have obligations to provide information that the dems

advocate request? >> that is my understanding of how it works, yes, sir. >> so you think they are placed right to get this information? >> i think the person who would seek that information would be required to report directly to the track to have hammer i guess is what you call it to make people respond to them, yes. >> thank you, madam chairman. i yield back my 50 seconds. >> thank you him and mr. berman. mr. smith. >> thank you very much for your reports and wonderful job. let me ask you in response to my question in 2009 there were 61% of those where there was an allegation made resulted in an arrest. do we know what happened before in a way, all seven, 2010? and is your office have any information about what happened after those arrests in terms of

convictions and people actually serving time in prison for that? >> now, my office does not have been information. i can get information for the previous years and supplied up for for the record. >> is that something you could look into? i'm talking the conviction rates in the incarceration and for how many years because obviously the kind and punishment should be commensurate with the crime. >> that is something we could definitely do. >> that would give us a better primer -- i would suggest respectfully as to whether they are seriously will us frederic but it really does lie in whether they go to the present. >> let me ask you that safety trumps everything. mission is important, but there is not an exact mission is important, but there is not an exact mission is important, but there is not an exact word peace corps volunteer. some people in the state department choose deployments. they get hazardous pay without their spouse and family because of it.

are there places that are to be deemed off-limits where there has been a pattern of abuse and not just countries, but subdivisions within those countries through that area ought to be put off-limits clerics >> that's a very good question, congressman. that's really a management decision that should be made by the agency. my office can review those decisions to make assessments as to whether or not you provide criteria they've developed in order to make this place is. that is a management decision. >> is it something you might include recommendations? it seems to me in response to the ig come you provided the blueprint for the peace corps to act so perhaps you can incorporate them into your general recommendations because it seems to me you might say this country is fine, but not that part of the country. let me ask you, to come you testified recommendations are enacted upon.

other instances where they have gone beyond and above have there been correct areas? where we act to >> they are merely reactive. i can't think of a situation, >> i think that's unfortunate. they should be exceeding once he brought the intention back in the early part of this decade, they should have been working night and day to make sure those women are in the safest environment imaginable and to think year in and year out someone might be going back to where two years ago the safe program direct or, like in nepal, were kerry marie clark to police director was telling her and other women but in order to

get their checks they had to sex with her -- with him. and that the volunteer country direct or said they ought to get a thicker skin to deal with that kind of harassment and threat. so the next question would be, what happens to people? is there any record of what happens when an allegation is made against a superior, whether it be indigenous to that country or in americans serving abroad. our charges brought against them? seems to me this program director because he did rape her as she testified. this direct to your found a place where he would have an ongoing group of women, wait for the opportunity if he couldn't coerce them to begin with. in this case she was partying and couldn't stop him. how many times a day do it before and after? i'm sure she was not the only one that he rape.

what happens to someone like that? we have found, not an chair come in the area peacekeeping doubt the hearings on the deployment of peacekeepers in congo and elsewhere who rape 13-year-olds and find themselves on a redeployment somewhere else under the zero-tolerance policy. so if you could speak to that. the >> there are process in place for getting rid of local hire staff, whether they are pfcs were direct hires. i think the better provision would be not to hire people like that. and we have made recommendations concerning the lack of security background checks for host country, staff and contract tears. there has been, as i said in my

testimony, 44% of countries we went in to did not comply with that and it has gone up since the change requirements to an good short-term contractors. so there is a real need for compliance with that recommendation. they did comply with situations like that would be preventive. >> i would hope to peace corps takes this to her, that if there is one instance of an allegation being made, that is enough to trigger a significant investigation so we don't wait until the woman herself is for others in a similarly horrible situation. >> thank you, mr. smith. tina maca ministry and three. or a highly supportive of the great mission and work of the peace corps. we want to make sure you visit polished jewel and we will make the recommendations that we hope the peace corps will implement to secure the safety of all of

the volunteers and change the culture from blaming the victim to supporting the term and holding perpetrators of violence accountable for acts. and with that, our committee is adjourned. thank you. [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations]

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>> republican new gingrich announced this week is running for president. the former speaker of the house will be in macon georgia later today at the georgia republican party convention. watch this road to the white house event by the 7:15 eastern on c-span. >> how does he become transformed? what choices do they make to become terrorists? to kill hundreds of thousands of other people? >> this is the guy that really mattered. understanding him it's about understanding feature the wind tear. this is what we have to fear. these terrorist entrepreneurs like khalid sheikh mohammed.

>> executives from the top five largest oil companies testify on gas prices and energy policy. he appeared before the senate finance committee yesterday. with gas prices over $4 per gallon in many states, senate democrats in the obama administration are proposing to end $21 billion in subsidies before the oil companies is a deficit reduction measure. the executives say the plan won't do much to reduce gas prices and will hurt their exploration efforts. this is about three hours and 25 minutes. [inaudible conversations] [inaudible conversations]

[inaudible conversations] >> in 2005, president george w. bush said quote, with $55 in oil, we don't need incentives to oil and gas companies to exploit.mpan there are plenty of incentives. as president bush, 2005. today, oil costs more than $100 a barrel. so today we will again evaluate those oil and gas incentives. n will consider how they've wi affected profits and industry and prices at the pump. legalize the same question orwe 43rd president answered more than five years ago. is it wise to continue these tax breaks given to the largest oil and gas companies every year?ths

gas prices are nearly $4 a $4lon today and experts anticipate it will remain close pa $4 for the remainder of the season. that means gas prices are up more than 1 dollar a gallon compared to last summer. amt, ft, families will pay an average of about $825 more for gas this year than they did lasn year. tana,e rural areas like mon where people drive further where people drive farther, the increase is more lik increases $50 billion in the first quarter of 2011 alone. physicists should, of course, make a profit. that's the american way. drives our economy. but to -- do these very

profitable companies actually need these terps subsidies? energy incentives should help us build the energy future, not pad oil company proffers. they want us to develop energy sources that won't be defleeted like wind and sun. we can't reduce using fassel fuels overnight. they're here for a long time. we must work with them and get them as clean as possible as we convert to renewables. but vestments in clean energy will move us away from oil. we have to scrutinize every dollar in energy subsidize we spend. the $2.1 billion every year we spend on subsidies on the largest oil and gas companies are not prove moving us closer to our energy goals.

everyone today finds their budgets are tight. families, governments, households. congress is also debating the west -- best way to address our deficits and debt. some are proposing cutting medicare for seniors. others slashing pell grants for students. i think all americans agree as we tighten our belts we all must sacrifice together equally, shared. so we have to fake a hard look at every subsidy and every spending program to be sure we're using our dollars wisely. in 2004, congress created the domestic manufacturer deduction, 199.n referred to as section ..eduction is designed to still -- stimulate manufacturing in america. i remember it back when it was enacted to replace the fisk e.t.i. it was basically not used by e--

the majors so the 199 was essentially a gift given to the majors, according to my recollection because they were not using the so-called fisk e.t.i. so 199 was essentially a gift. each company here today has claimed this deduction but what have taxpayers received in return? these tax breaks prove to be more valuable their medicare or pell grants. these tax breaks have not lowered prices. when these were created, retail gas prices averaged $1. 8 per gallon. by 2008 prices had rison to $3 .20 per gallon and last week they approached $4. these tax breaks have not moved us toward energy independence. if all the subsidies all were eliminated, domestic production

would fall by less than one-half of 1%.elim and that's for the entire industry. today we're only talking about the five largest, reduce only about one-third of domestic oil. today we're only talking about the five largest. they have the most resources and are the -- excuse me. the big five have the most resources and are the least dependent on government subsidies. so the effect on domestic production for these companies would be less. some argue that eliminating tax breaks for these companies will raise prices at the pump or force layoffs. the oil and gas industry has launched argument against this. but a 2007 analysis found that repealing oil and gas breaks would not raise energy prices for consumers.

would not. why? very simple. oil prices are set on a world market. and the u.s. share of production is only about 10%. that makes it difficult, if not impossible, to pass on the costs of losing these subsidies to consumers. given profts of $35 billion in just the first quarter alone, it's hard to find evidence that repealing these subsidies would cut domestic production or cause layoffs. after all, based on first quarter profits, these tax breaks represent less than 2% of what these companies are on pace to make this year and even without these tax breaks, these companies would be clearly highly profitable. the chart behind me to my right lists the financial documents the companies here today have filed with the securities and exchange commission. basically documents first timed with the s.e.c.

according to those documents, the average cost to produce a barrel of oil was about $11 in 2010. and the average price these companies received for a barrel of oil was about $72. i don't say this is exact but it's roughly what the s.e.c. documents show. today oil prices are a lot higher. 40% higher, which would increase these large profit margins much further than shown on this chart. so it is hard to manage that -- imagine that companies faced with these opportunities would cut production. now, some might argue that these subsidies or record profits create much-needed jobs. but those same documents, public documents filed at the scurts and exchange commission, show that nearly 60% of these companies' 2010 profits went to stock buybacks and to dividends,

not to job creation. we can put this money to better use and we should. we should use it to reduce our deficit instead of putting the burden on seniors and our children's future. it's choice, everybody. it's shared choices, america working together and looking at the facts and seeing the degree to which limiting these subsidies would in fact be a fairer way for us to start to reduce our deficit because reducing these subsidies, evidence shows will have virtually no effect on jobs or loss of jobs in this country. for reasons i've indicated. so i urge us to do what's right, what's right for our -- wise for our country. this is one place to examine, look at it, see what the facts are and there are a lot of other areas we can look at. today we can only address one subject at a time and the

subject today is the one at hand. senator hatch? >> well, thank you, mr. chairman. everybody is angry about high gas prices and i can tell you that i'm angry about it. the press keeps telling us that we need america to come together and put aside partisanship. nothing makes for a kumbaya moment like high gas prices. republicans don't like paying high gas prices anymore than democrats do. with one voist america is telling to us do something about it. unfortunately for some, the political philosophy of rahm emanuel is too hard to waste, never let a crisis go to waste. they decide to exploit high gas prices for political gain. this is a double gain for those politicians. on the one hand they are able to score cheap political points.

on the other hand all their fury signifies nothing. it is designed to re-- take away from the simple fact that the democrats have no energy polls -- policy whatsoever. let me take that back. actually, they do. their energy policy is to increase the cost of energy. you heard that right. this is the president's energy secretary steven khiu. "somehow we have to figure out how to boost the price of gasoline to the levels in europe." so the response of democrats is to rail against oil executives to mask the fact that their policy is actually to make the price at the pump more painful. for all of their talk about the shrinking middle class and the income and equality. high gas prices don't hit warren

buffet and warren beate the hardest. they have to hit moms because they have children. when al gore has to pay a little more to gas up the provide jet to fly to france, he doesn't feel any pain. but when my con stitch quenlts -- stitch -- constituents see gas go higher, they have to make real choices. david letterman captured this current situation brilliant live. gas prices, aren't they crazy? it's so expensive. the reds are carpooling in from new jersey. i'd expect my friend from new jersey to change the joke and say that the rats arrived in the opposite direction. we don't have as many rats in my home state of utah, but like states in new jersey and new york, utahans are plenty angry about high gas price, near $4

per gallon. this is very discouraging because we are still recovering from one of the worst recessions our country has ever faced and all the gas prices has done is put the brakes on an already fragile economy. i hear from small businesses that they're trying to make a profit and possibly hire more workers. but no, they have to make room for energy expenses. i hear from those who are still looking -- looking for employment. what the people of utah and this country need is a forward thinking energy policy that will address rising gas prices that is a lead weight around the neck of the complifment i'm not here to defend any particular industry. i'm one of the leading pro opponents of promoting alternative fuels. i might add i passed legislation that does do that. let's not gloss over the plan

that is being offered here. the plan that is being offered here is to raise taxes. americans are rightly upset about the cost of gasoline and the solution being offered here? let's raise some tax. lawyers would call this a non secretary tur. every day, americans would call it beside the point. it's about as relevant as a person walking into the doctor's office complaining of chest pain and having the doctor offer to reup holeser the couch. this demands an energy policy, but all this hearing is about is providing a justification for tax increases. i wish i could say i was surprised no. matter what the question is it seems that for the president and some of my colleagues, the answer is always raise taxes. government spends too much. raise some taxes.

health care too expensive. raise some taxes. gas prices too expensive, i've got it, let's raise some taxes. i would be doing a grave disservice to my constituents if i was to ignore the grave con consequences on these gas prices. at a time when we are still recovering from an historic economic collapse. the proposals that will be discussed today are completely divorced from those pressing needs. the reasoning put forth for repealing these tax provisions, rising gas prices and reporting high first quarter profits would set a bad precedent for future tax increases. are we to raise taxes anytime a company sees an increase in profit due to high demand? what if an increase in coffee

results in starbucks recording record profits? what if the hollywood studios hit a few home runs with new films and record profits result? i'm not going to hold my breath waiting for democrats to call george clooney up here to justify his income. i do not believe we want to go down the dangerous road of deterring u.s. businesses of becoming too profitable. i'm afraid we're going to see you try to score political points today. i have a chart depicting what i believe this hearing will turn into. there you go. that's a really nice picture. >> bhost the horse and who's the dog? >> i think we both know. i know who the horse's ass is, i'll put it that way. i shouldn't have said that.

elaine is going to give me heck when i get home. it's perfectly appropriate to examine the purpose, design, and intent and effectiveness of tax incentives that promote the production of oil and gas. let's have that detective. in 2004 congress passed the american jobs creation act. the centerpiece was the domestic manufacturing deduction. this provision was designed to strengthen the domestic mastering sector. it is a deduction for manufacturing everything from coffee to appliances to the domestic production of oil and gas. the amount of the deduction is tied to wages paid to the american workers. the intent was not to incentive manufacturing and production but to manufacture and produce in the united states rather than overseas. congress passed this provision

with the expectation that it would provide economic growth and job creation here in the united states. this provision is not just tied to oil and gas and to the oil and gas industry but applies to income derived from all manufacturing within the united states. maybe we should have a meaningful conversation about whether this provision is good tax policy, given that it impacts industries far outside of the oil and gas industry, it is a conversation more appropriately suited to a debate over tax reform but i'm not going to hold my breath waiting for this adult discussion of tax policy. i know the distinguished chairman has been trying to do a series of hearings on tax policy and i am personally very appreciative of that and i applaud his leadership. instead i expect some good political theater. the liberal people at nbc

certainly had the talking points yesterday afternoon and are ready to make middle hay. many will point to a comment made by a former c.e.o., that oil and gas companies do not need these tax provisions. that c.e.o. might be right. but let's be clear, they would be less likely to drill in the united states without these tax incentives. we have to ask whether we want to help increase the market share for the u.s. or decrease that market share and put ourselves at the mercy of foreign importers? i'm not going to wait for the nbc lineup to stand on their hats on an oil rig and ask about the potential loss of blue collar american jobs. we have a great number of resources that be be used in the united states. i plawed president obama's

recent pledge to reduce foreign oil imports by a third by 20 20. however, i was taken aback that he told brazil that we want to be their best customers if they increased their oil production. so it's ok for other companies to boost their economy with oil production but wrong for us to do it at home. to be honest, i do not know what the president and his cabinet is for energy security. and i don't expect to get an answer today. the american people are upset at high gas prizes and are demanding solutions. the president has no solutions. his policies would increase the cost of domestic production and harm our economy. so faced with the uncomfortable fact that the buck stops at the oval office and the president's only solution to high energy prices is to double down on

them, liberals hope to distract the american people from their failure to develop a co-heernlt energy strategy. we currently depend on oil for our energy needs because it is abundant and it's dependable. demand is and will remain high for the next decade and certainly beyond that. there's a reason why florida's demand for petroleum based transportation fuels is among the highest in the united states. there's a reason why new jersey and maryland consume more gaspar capita than most states. and we have the resources to make that demand -- >> senator hatch, are you almost through? you've been talking for a long time and we don't have our testimony yet. >> no, i'm not through yet. but i'm almost through. just recently geologists have discovered in the western part of north dakota and parts of

montana a 20,000 square mile sea of oil that could hold the largest accumulation of oil identified in america since 1968. they have dubbed it the kuwait on the prairie. we also have a great deal of oil in the rockies, on public lands and off our coast but the president has done everything in his power to shut down federal leases in these areas. maybe it's just the people working for him, i don't know. we all know politics is thick in the air here. our dog and pony will feel very much at home. many democratic snarpts have admitted that it's good politics to take on oil companies when gas prices are high. we all knowo everyone is angry about high pump prices but if we want to do something about it, three questions come to mind and i'll pursue these with the witnesses. will the policies proposeded by the president and democratic

leadership cause pump prices to drop? second question, if pump prices do not drop then what will the policies proposed by the president and the democratic little do? one possibility might be that these policies will cause the u.s. to become more dependent on imported oil. the third we request -- question, with respect to tax incentives available for all u.s. manufacturers, is it wise, and this is an important question -- is it wise to single out one industry and treat it differently from others? i'll put a finer point on the question. is it wise to conduct business tax reform on a selective and punitive basis? it's a legitimate question and we ought to answer it. let's send the pony back to the stable. that's what we ought to do. let's send the dog back to the kennel. let's get back to reforming the tax code to support economic growth. so far in this congress we've been making progress in making

the tax code more first quarter, simpler and fairer and i know that the chairman is dedicated to that as am i. and i hope the chairman will continue. thank you. >> thanks so much. senator. i'd like to introduce the panel before us. our first witnesses is drmplets john watson, chairman and c.e.o. of chevron. second, mr. marvin odum. u.s. president of shell oil company. third, mr. lamar mckay, chairman and president of b.p. america. fourth, mr. james mulva, the chairman and c.e.o. of conocophillips, and finally, rex tillerson, chairman and c.e.o. of exxon mobil. mr. watson, why don't you begin? you probably know our customary procedure here is have your statements included in the record. if you could summarize, around five minutes. thank you very much. mr. watson? >> mr. chairman, ranking member

hatch and -- half and members of the committee. i am john watson, chairman and chief executive officer of chevron corporation. fortunately, our nation is endowed with adunn ant supplies of energy including oil and national gas. each time we come to capitol hill we advocate for measures that would better helm develop our oil supplies. it's one of the most effective ways to counter rising energy prices and stimulate economic growth. tax increases on the oil and gas industry, which will result if you change long-standing privesings in the tax code, will hinder energy supplies and it will also mean fewer dollars to state and federal treasuries and fewer jobs all at a time when our economic recovery remains

fragile. because my time is limited i'll make three points. first, the oil and gas business pays its fair share of taxes. despite the current debate, few disease be -- businesses pay more in taxing than oil and gas companies. the wordwide effective tax rate for our industry in 2010 was 45%. that's higher than the u.s. masters at 26 .5%. between 2008 and 2009, our industry paid or accrued almost $158 in taxes including $9 in federal income taxes. totals nearly $ 6 million a day. changing a tax prives outside the context of a brooder cooperate tax reform would restrain domesticing develop and reduce tax revenues it -- at a

time when we are needed the most. raising royalty fees will increase the cost of doing business in places like the gulf of mexico and impede development of these resources just when we're getting back to work. second, long-standing provisions in the tax code parallel tax preement treatment of other industries. for all u.s. businesses a basic tax principle is that there are figured off -- after costs. the oil and gas industry's expenses are similar to the research expenses developed by pharmaceutical and technology firms. they allow them to recover the costs of risky designs necessary for their business. some thee long-standing provisions in the tax code. make it ply to other sections of

the u.s. economy, including the manufacturers' deduction. we're concerned about the proposal to curb foreign tax credits for duel taxpayers. without these credits, we would pay tax twice on income generated overseas. this would make us less competitive internationally and cost u.s. jobs that support our overseas operations. my third point is that there should be equitable treatment for all forms of energy and all energy producers, large and small. i am an advocate for developing all forms of energy and using it more wisely but it's wo wrong -- wrong to increase taxes to subsidize other forms of energy. this is also likely to have serious consequences for production, jobs, and revenue. singling out companies because of their jobs is

anti-competitive and discriminatory. after all, our five companies are providing the technical, operating and managerial spers that is allowing the global energy industry to operate. the most sensible path is simple -- don't punish our industry for doing its job well. allow us to develop our nation's vast energy resources and strengthen, don't weaken, our abilities to compete against large national oil companies, who are major players in the u.s. and global energy oil markets. responsible development of our resource sources, will add more high-paying jobs, provide billions of new tax revenues, and reduce our depend ens on foreign energy supplies. if our nation's concern is keeping nevts here at home we ask for here is what we look for

anywhere we nevis. conditions that are not punitive and discriminatory. mr. chairman, i'm proud to lead a 132-year-old american company, i'm proud of the vital role we play in our economy and i'm proud ofous -- us being able to make significant contributions to our community. thank you. >> thank you. you're next. >> thank you. i'm marvin odum. president of shell oil company. shell is a global energy company with more than 90,000 employees in 90 countries. approximately 19,000 of those are here in the u.s. working to discover, produce, market, and deliver through consumers today's energy and tomorrow's energy technology. thank you for the opportunity to speak to you today. i'd like to address right up front the issue that's on many

americans' minds, the rising cost of energy, particularly the cost of gasoline. because fuels are refined from crude oil, the biggest impact is the price of crude oil. everything from weather to politics and the global economy determines the price of oil and the fuels made from it. weak economic conditions in 2008 and ninth -- 2009 lowered demand, which helped push prices down. now with world economic recovery on the way, demand is on the rise, sending prices upwards. in addition, because oil is sold in u.s. dollars throughout much of the world, when the dollar becomes weaker, it takes more dollars to buy the same amount of oil. oil is a global commodity. so while we can't predict or control the price at the pump, we do know that we can increase the stability of our energy future through a combination of efficiency gains and increased supply. and the surest way to address a challenge of a this agony tude

is to focus on what we can control, using what we know to save guard against what we don't. without question, our government is facing significant channels right now, particularly in terms of economy and -- economic and energy security. but when you face a deficit, choices are usually straightforward. get more or use less and often it's a combination of both that achieves the best results and there are choices on how to get more. it can be temperaturing to assume there's something to gain by taking more from a few. however, one must balance the implication of increased industry cost on both supply and the cost of fuel. the opportunity in front of us is to put policies in place that allow the energy industry to become an economic growth i think -- engine for america. developing our own resources, we would see tens of thousands of new well-paying jobs and many

billions of dollars from revenue for local, state, and federal governments. last year, shell reported global earnings of $1.6 billion. we also nevised some $29 billion, mostly in new products to bring energy supply to the consumer. we spent more than $40 billion to run our existing energies worldwide. last year shell deferred some $700 million in capital expenditures. we expect to lose an additional 50,000 barrel ive lenlts a day as a result of that. it represents lost gasoline production just to shell that couch powered on average 6333,000 cars and light trucks every day since january 1. here in the u.s. at the invitation of the federal government, we have invested more than $3.5 billion since

2005 to develop -- develop energy resources in alaska. six years later we've been presented from drilling a single ..'s interference. during that time we have drilled more than 400 exploration wells worldwide. nevts in our industry carry huge amounts of capital and risk. policymakers must consider this when thinking about the competitiveness of the u.s. the president recently acknowledged that reducing certain imports was a national policy imperative. we agree. the u.s. is resource rich in any ways, especially with oil and gas. the bottom line is if we don't develop our own energy sources

we will have to accept the cost, both financial and geopolitical of bringing it into this country from places that can be less secure and stable. in closing, shell is grateful for the widespread recognition in congress of the daunting energy challenge facing this nation. although come -- some of our opinions differ, we stand ready to work with you on developing a more secure, affordable and efficient energy supply for this nation. thank you. >> thank you very much. mr. mckay? >> thank you, mr. chair. ranking member half and committee -- members of the committee, good morning. i'm pleased to address energy incentives today. last marc month marked the one-year anniversary since the b.p. accident and b.p. continues to work very hard to compete our commitment in the gulf.

i'd like to provide a little bit of context on b.p.'s nevts in the u.s. on traditional and renewal industry. we are committed to providing the u.s. with energy it needs to grow in the coming decades. doing so and a spot -- doing so in a responsible manner. largesthe nation's energy investors. over the five years ending in 2009, we have invested more than $37 billion in development of u.s. energy supply. we continue to invest in natural gas production from the rocky mountain west and our existing shale gas regions. we have significant oil production in alaska. we have made significant

investments in our refineries in the u.s., including major capital projects at our key midwestern refineries. we also invest actively in renewable energy. during 2009, we invested nearly a billion dollars in alternative energy. these investments include the operation of wind farms in 10 states, development of the first commercial scale biofuels facility in florida, and work on advanced biofuels molecule with dupont. we have our solar business, which has been in operation over 35 years. bp supports a comprehensive energy policy that includes all forms of energy, including oil, natural gas, coal, nuclear,

biofuels, wind, and solar, and encourages conservation. even with major improvements in energy efficiency, and the rapid growth of biofuels 20 years from now, the united states will still depend on oil, natural gas, and coal to meet more than three-quarters of its energy needs. on the supply side, we support properly scaled transitional incentives for alternative energy, but raising taxes on one form of energy to encourage production of another will reduce industry's ability to keep up the growing u.s. energy demand. the result could be less investment, less production, a tighter energy markets, and over time, at higher prices for consumers. instead, our nation should be encouraging production of all

forms of energy. on the demand side, energy policies should encourage conservation and helped drive energy efficiency. the energy challenges facing the u.s. are enormous. the impact of high energy prices on the overall economy and the american people are very real. we cannot change the international crude oil market, which tries those prices -- drives those prices. but we can work with the congress and the administration to move toward greater energy security and lower carbon energy future. congress establishes the rules regarding energy and tax policy. companies take those rules into account in making their investment decisions. because of the long-term nature of the significant capital investments that are required to develop and produce energy, a stable and competitive tax

framework is critical to the united states, remaining attractive in the global demand for capital investment. the currently contemplated changes to the tax rules would let the resources companies like bp have to invest. not only in conventional energy production, but also a new and emerging technologies. you're serious about building a sustainable, profitable, alternative business capable of delivering clean and a portable power. at my company stands ready to work with you and others. thank you. >> thank you very much. >> good morning. my hope today is to bring clarity to this vital debate on

tax policy regarding major oil companies. there is a great deal of misinformation about our tax liabilities. unfortunately, it has been used to justify further increases. my objective is to convey first the realities of our current tax burden and the negative impacts of new proposals. there would be in? to our company, our industry, american consumers, u.s. job creation, and national energy security. let's take a look at what we already pay. it shows the effect of a worldwide tax rates. there are a lot of familiar names on this chart. the group paid 27% for the years 2006 to 2010.

look at those three in red. >> i cannot read some of those. >> walmart, berkshire hathaway, apple, intel, microsoft. >> and it is done at the bottom? >> general electric, the horizon, coca-cola. >> at the top, conocophillips, followed by the two international american companies. the three major u.s. oil companies already pay the highest tax rate in the top 20. keep in mind that this is after taking the allowable tax deductions and credits. what does this mean in our dollars? for our company, we earned $11.4 billion last year. we paid $8.3 billion in income taxes as well as $3.1 billion

and other taxes. car total worldwide taxes paid to declare income. any fair minded person would likely agree that we pay our full share. companies like ours carry the flag of u.s. competitiveness into the battle of global business. every day we fight for access and opportunities around the world. are rivals are typically nationally owned companies from other countries and they literally dwarfs us in size. some are dozens of times bigger than we are and they enjoy support from their government. despite these compelling numbers and the need to maintain a competitive u.s. oil industry, some would have us pay even more. one proposal would only impact the three major oil companies that already carry the heaviest burdens. further restrict the foreign tax credits that are available to

us, seriously undermine our ability to conduct our business internationally. but we decide how much to bid for foreign energy opportunities, we have to include taxes and the total cost. overseas companies with lower tax obligation outbid us and when the opportunities. unfortunately, this does impact u.s. jobs. we operate worldwide and we have 29,000 employees and 20,000 here at home and go some of them work to support what we do internationally around the world. read this in our foreign tax credits will have a cascading effect on our business. we will this project and opportunities to foreign competitors. our u.s. job creation, investors

would suffer. as profitability declined, it would reduce our ability to invest in domestic energy. a ultimately, we could even see more energy and development conducted by foreign competitors. it would spend -- it would send dollars back to their home countries. we hear a lot about the so- called tax subsidies down coat this calls for another reality check. the major companies do not get subsidies. some deductions and credits available to the industry are not allowed to the three major companies. the ones we are allowed mirror those available to all u.s. companies. even in these cases, the law limits how much we can benefit. that hardly sounds like a special industry subsidies. compress often speak -- congress often speak of enhancing u.s.

competitiveness. but this would be very counterproductive. it would penalize u.s. workers and the american public that invest in our shares, and they would on the well-being of companies that must carry our country into the energy future. that certainly cannot be your intent. i urge you to objectively and passionately considered the facts and reject these unfair and unwarranted tax proposals. thank you. >> thank you. >> i appreciate the opportunity to address the topic of today's hearings. all of us here today recognized the strain of high gasoline prices imposed on many americans. during difficult economic times. we owe it to our customers and to your constituents to address

the topic of energy prices and taxes and an open, honest, and factual way. unfortunately, the tax changes under consideration the target of the five u.s. companies represented here today failed to honor those goals. it is not simply that they are misinformed and discriminatory, there counterproductive. but undermining u.s. competitiveness, they would discourage future investment in energy projects in the united states and therefore undercut job creation and economic growth. because they would hinder investment in new energy supplies, they did nothing to help reduce proxy's. there is a more effective way to take steps. unfortunately, it is a way that congress and the administration has rejected great if we were developed -- has rejected it. it would put downward pressure on energy prices and increased

revenue for government budgets. working together, industry and government can achieve our shared goals. i would like to offer several important facts on the specific tax proposals under currently being advocated by some in washington. it is important to make clear that tax provision such as the section 199 domestic production activity are not special incentives. they are standard deductions applied across all businesses in the united states. section 199 applies to all u.s. domestic producers and manufacturers, from newspaper publishers to corn farmers, to movie producers and even coffee roasters. all can claim this deduction. by any reasonable definition, it is not an oil and gas industry

incentives. we are limited to only a 6% deduction, while other all u.s. manufacturers are allowed in 9% deduction. didn't ignite a select few companies within the oil and gas industry the standard deduction is tantamount to job discrimination. why should an american refinery worker employed by a major u.s. oil and gas company in montana be treated as inferior to an american movie producer in hollywood and an american newspaper worker in new york's wore an employer of the foreign owned refinery in illinois? another tax measure that is misleading can be labeled -- is the foreign tax credit provision. this provision applies to all u.s. companies with overseas in, and as been in place since 1918. it is meant to protect u.s. competitiveness abroad.

again, u.s. oil and gas companies are already treated differently than other businesses under this provision. it includes unique and prescriptive rules on our industry requiring us to prove our foreign tax payments are indeed income taxes and not realties. if these rules were changed, our foreign based competitor is on a full range of foreign government owned oil companies would gain a cigna vacant competitive advantage. -- would gain a significant competitive advantage. they are economy wide, it generally available deductions and credits under the tax code. removing them for a select few is nothing less than discriminatory and a punitive tax hike is jeopardize the jobs of american workers. doing so would do nothing to reduce the prices americans pay

at the pump. gasoline prices are primarily -- bayer said in the marketplace by global supply and demand, not by companies such as ours. furthermore, punishing five u.s. gas and oil companies would generate far less government revenue and if we were allowed to compete and produce our nation's resources. in august 2010, 10 to $17 billion in this country is at risk per year if the section 199 is repealed for our industry. another study found out that opening up federal lands could generate 400,000 new jobs by the year 2025. another analysis shows such actions could generate as much as $1.70 trillion in government revenue.

raising taxes on five u.s. oil and gas companies is simply not the way to reduce prices or raise revenue parade increase in these companies taxes would only discriminate against certain u.s. workers and make our companies less competitive. a much better solution lies in permitting our industry to increase energy supplies, including supplies found here in north america. access, not taxes, will enable us to meet our goals. exxon mobil shares these goals and we look forward to working with you to achieve them. thank you. >> thank you. gentlemen, we appreciate the time -- you taking the time to come here. let me tell you my perspective.

as chairman of the finance --mittee, we've got to find we've got two ways to reduce our annual deficit and debt. it is not an easy task. to do so, we have to find an approach that is balanced across the board. find a fair solution. one shared by americans to be pretty fair and balanced. what you said is true, you do pay high taxes. that is true. it is also true that your foreign taxes are higher than your domestic taxes. your domestic tax rates is quite a bit lower than year worldwide rate. it is also true that the price of gasoline is determined primarily by the world price.

that is the primary determinant. it is also true that when the world price goes up, the after- tax profits of your company's go up very significantly. your cost do not go up as much as the world price has gone up. your profit margins go way up, that is true. it also seems to me that based on the evidence, according to your financial report, if your average cost is roughly $10 a intangible you add ain drilling, it goes up to $20 a barrel, but your after-tax profits would be about $72.

your gross revenue is much higher this year. this is not a matter of singling anybody out. it is not based on your subsidies, is based on the price of crude. maybe a fair way to get at reducing our deficit and debt is to eliminate the tax breaks which to not have much an effect on your decisions to produce. it does not have much effect because your profits are so high. according to reports, exxon mobil after-tax profits go up to $375 billion a year.

your after-tax profits built up a billion dollars. altogether. subsidies we're talking about here, there are $21 billion and break that down to a quarter, that is 5 ended million dollars. -- $500 million. this is rough. if the price of oil were to go down $2 a barrel, that would be more than the elimination of these subsidies. these subsidies do not have much effect on your decisions. your rate of return, different locations, that has a much greater effect on your ability to produce. tell me what is wrong with my analysis. it seems that you're making a

lot of money. it also seems that the subsidies are not really that necessary anymore. many of them were given many years ago. 199 was the aftermath. it was intended to give american companies and export break. congress passed 199 for everybody. it was kind of a get, 199. other companies do use it for export. you do not as much. it seems to me that as we try to get our deficit under control, and oil prices are so high, and

because your subsidies are so low, the increase in crude oil prices, you do not need it near as much as one might initially think. >> to the couple of quick points. if you look at the waist to impact the deficit, the way to impact the deficit and get more money into the federal government is through more production. we pay more bonuses for the access, we pay more royalties on the production, those numbers are much larger than anything we're talking about. that is the way i think to impact the deficit. i did want to comment on your production cost chart. i think in this is a pretty important point. the investments that have to be made to produce oil and gas adds

to the ongoing production costs. the time line from when those investments starts to wind up production starts to happen. the other piece you miss is that it looks at all the existing production exist across the country, i would assume, but the cost of future production is not the same as the cost of the stark production. it is more expensive. >> anybody else? >> i think it is helpful if we talk about the past or the future. a lot of the numbers you are notlaying -- they're entirely accurate. they're really talking about things in the past and what we have already done. we invest in resources that deplete, so we constantly must

replace those if we want to have a sustainable business. we've been around for almost 130 years. that is what we have been doing for more than a century, taking the revenues from the past decisions and finding ways to invest that to replace the barrels are depleting. if we have to go out and find and locate those replacement barrels, they're more and more difficult to find. the real question is not, can be enforced -- can we afford more taxes? that is not what we're doing. we are sustaining the viability of the enterprise for many years to come, so we have to make a very large investment. the real question -- what did these tax changes mean to that next investment decision that we're going to make? that is made on in assets by asset investment by investment basis. if i want to look at a shell oil

police in north dakota, i have to run the cost of acquiring those leases. i have to put the tax burden on them. you give me a different tax burden, my combat it -- i do not get to develop at least. i will take my capital since the u.s. is not attractive and i have to go somewhere else. offshore, you want to raise the incremental cost of development. it is that marginal beryl that you were going to take out of our system. >> i wish i had more time to talk. my time has more than expired. >> thank you, mr. chairman. president obama and numerous congressional democrats have proposed raising taxes on the united states oil and gas production. in an article from tuesday,

mendez and knowledge of the legislation was slated for a vote next week. it will not do anything about gas prices exceeded it in $4 a gallon in some places. with rising taxes, will lower the gas at the pump? >> raising taxes on producers raises the cost of crude oil and the cost of crude oil is the prime ingredient in the price of gasoline. raising taxes will not reduce the price of gasoline. >> ok. do you all agree with that? >> i certainly do agree with that. if the production year and the united states, you do not have access to it or it is

disadvantaged, that move somewhere else. therefore, the jobs move somewhere else. the trade benefits move somewhere else. >> ok. >> i do not believe that raising taxes will lower prices. i do think the important thing is to have a competitive fiscal environment to attract investment, more investment can raise supply and have an effect on prices. >> raising taxes will lead to less investment, less production, and higher cost per gallon. less employment. >> beloved little immediate effect -- it will have them -- it will have little immediate effect of fact -- a fact. it puts more pressure on refineries and they are already losing money most quarters. it will lose more refinery capacity, it means more imported

products rather than refined product here. >> my colleagues in the state of new jersey introduced a bill that would increase taxes on the top five oil companies. he said that these so-called subsidies only benefit big oil and ceo's. i would like to point out to my friend that actually, corporate management only makes up about 1.5% of the shareholders. there is a chart that is showing -- this shows the top 10 holdings of the new jersey public employee pension fund. as you can see, exxon mobil and conocophillips are listed among the top 10 holdings. the top 10 holdings.