current. you have to begin to change it and look at the things under ron paul's plan. here is what is working to our advantage as well. while the numbers are bad, why give you some of the numbers earlier, the good news is we are the biggest kid on the block with the largest economy in the world, 14 or $15 trillion down with the recession but to hear about china and india we are bigger than those guys so that helps us while the numbers are not good we are still the united states of america, the biggest play here in the game and that gives some time a but as i said earlier the amount of time we have to fix it is closing so we have to get out to fixing it and again, while the debt ceiling wasn't something i supported it was still a step in the right direction and we've just got to keep turning it.

if we do that the test will be what standard and poor's says in a few more months. the talk about our outlook but we have to make sure the real test will be the market and what we need more than anything else is economic growth. growth solves a lot of problems. you have to grow an economy, creating jobs, 9.4% like we did last quarter but economic growth that's been good things start to happen and you do the right things and get economic growth that that's how you solve it so we have to get back that kind of growth. last three and i will go quicker. >> hillsdale college. i was wondering what you saw as the purpose in both the federal government and you mentioned a few see legislation in favor of the family or with family you want to go for which is wonderful when you are in office, but how do we handle that sort of a valued

legislation when someone doesn't alter from the office. >> the number one priority is defense. that is what the federal government should focus on. we do a lot of other things outside of that. i always ask the question how many of you think there might be leased in the federal budget? anyone? a little bit of redundancy in the federal budget? so, there's just sort of americans get instinctively the fact that some people would even say with exception of the military tell me something the government does really well but there's a few things they do well. there's programs in place a long time we made a promise with the citizens of this country in terms of social security that is a problem we have to keep, so the idea is you have to scale it back and now based on the fiscal picture that we have, everyone understands you have to scale it back so the one thing we're supposed focus on is the national decency week to be careful when the left talks about that's where we want to cut first.

last and then i will get out of your hair. >> from the college in duluth minnesota. i want to get your thoughts on the emergence of the tea party and its powers to drive change tall levels of government. >> huge plus and politics in my judgment. they brought a lot of energy to the political landscape and that is great and frankly they are great patriots to understand just the basics. quote taxing us to death and spending like crazy. just understand the basic things just good common sense. so i've actually been very close to the tea party movement in our state and the country. i think they are a great force of politics and that force will keep republicans acting like republicans. i love that armey had a great line. he said when we act like them

we'd lose and the attitude is to make sure they act like republicans and stand for strong defense and lower taxes and defending traditional value which is what ronald reagan fought that the great party was about to read the tea party has helped emphasize and in some ways reacquaint ourselves as republicans with the principle that he had rested with the party should be about. so great thing for american politics. >> good morning. geren of the university of california los angeles. i know that the converse is finding a lot of times the debt ceiling and the budget but do you feel there are any issues the conservatives should be looking at for 2012 other than the budget or anything that you are passionate about? >> we need economic growth and regulatory reform and tax reform, the right energy policy and fiscal policies so we need to be talking about all of those. frankly also it's important for

people running for president of the united states to be positive in the things i talked about earlier to portray this optimistic view of this country and president obama i think it is in 2008 was viewed as this guy that was a change of optimism. ronald reagan certainly did the guy that can inspire and talk to americans in a direct way about how we can remain this great country i think that's important and i hope whoever our nominee is on the republican side can capture that not just he's got to cut spending and do these things but also talk about this bright future for the country and i think it is. all kind of great conservatives here, young people who want to do the right thing for their country and it's important our nominee do that as well,

communicate that optimism that is just fundamental to we are as a country. >> thank you very much. [applause] >> now we continue our look at the national debt with a conversation from washington journal. this is 45 minutes. >> peter from bloomberg business who is the economics editor joins from our new york studio.f all the economic news in thisn morning's paper is not positive. the words year and dismal are in all the different headlines go k into a recession in your view? guest: i would say there is a good chance -- i do not want to put a percentage on it. president reagan's chief

economic adviser told bloomberg television yesterday that he sees about a 50/50 chance of a recession. most of the economists put the number slightly lower, but if you look at the numbers lately, most of them are pretty bearish. look at the gdp growth over the last two quarters. look at the factory index, dipping almost into confectionery range. consumer confidence being at recession levels. the bloomberg consumer comfort index is at a level that is normally associated with recessions. many arrows are pointing downward. host: we have been talking about this new super committee that

will be making supposedly $1.20 trillion in spending cuts by november-december. what is going to be the effect of that type of spending? is it going to be a good effect or not? guest: in the long term, it is essential to shrink the budget deficit. that is the topic of my cover story. i was talking about that long run projection. if you trace out spending and revenue over the rest of this century and into the next, you see that the numbers of diverge unhealthy way.h an economist from boston university estimates that the

long-term fiscal gap is $211 trillion, just staggering. in the long term, it is essential to shrink the deficit. the problem is that if you aggressively shrink it in the short term, you could actually throttled the economic recovery which would leave us in a japan-like situation in which we cannot get the growth that is needed to shrink the ratio of debt to gdp. what matters is not just a level of debt by the ability of the economy to support that debt. if the economy is shrinking, even if the debt does not go up, it becomes more and more burdensome. it is essential to get growth going again. these latest numbers point in the wrong direction.

it is exactly what nobody wants. so what we want to do is find a way to get growth going, at least staving off another recession. that might require holding off on the immediate deficit reduction, postponing it a year or so until the economy can get back on its feet. host: i want to go through to article in little bit. "it gets worse" is the title. you write --

guest: yeah. so, the fiscal gap is a concept that the congressional budget office uses as a supplement. what that does is look forward, not only what obligations we have already incurred as a nation, but what obligations we are on track to incur if we continue on the path that we are on. for example, current law says the bush tax cuts will expire. if it does an alternative fiscal scenario which is probably more realistic. in the alternative fiscal scenario, you see that the gap between debt and gdp -- between

revenue and spending is a little bit over 8% of gdp in newly. over the next 75 years. that means that are spending will exceed revenues by 8% of gdp. over the next decade, that is in the range of $15 trillion. much bigger than that over a 75- year period. it shows you the magnitude of the problem that we face and of the bargain that was tried to be struck a few weeks ago. host: you write that that is why -- mr. coy, we just got the monthly

unemployment figures. i went to get your reaction to this. of the number of people seeking unemployment benefits dipped last week, a sign that the job market may be improving slowly. the labor department says applications for unemployment benefits edged down 1000 to 400,000, the lowest level in four months. the previous week's figure was revised upward to 401,000. what is your reaction to those numbers? guest: of course, those are the weekly claims numbers. the important number will be the one coming out tomorrow. that is more reliable. we will be watching it more closely. the weekly claims numbers are quite volatile. so you do pay attention to them.

it sounds like good news, but i would not get too jubilant about it until tomorrow. host: one more area from your article before we start taking some calls on the economy, the national debt itself is on one such squishy concept.

host: why not? guest: do you want me to answer the question? i will try to answer it. remember, there are two debt numbers. the one i quoted in that article includes the social security trust fund and other government obligations. the debt held by the public is a $10 trillion number and in some ways is the one with the rubber meets the road because that is money that is legally binding on the government to pay back to creditors whether they are americans, chinese, or saudis. that number does not include our future obligations to social security retirees, medicare, and

so on. the $14 trillion includes the trust fund, so it starts to incorporate a view of what obligations we are incurring toward the long-term future. host: peter coy is our guest, the economics editor of bloomberg "businessweek. the first call comes from punta gorda, fla.. caller: i would like to know why businesses are not hiring and why like this grover norquist can have such a hold on the republican party for not raising taxes on the wealthy and stuff like that. i think that -- why are they not checking out some of this?

i know that schools down here are holding back their money from spending it. i would like to know why businesses are not hiring. guest: well, i have another article in the forthcoming issue of "business week," that will be out tonight. the article i wrote is already available on the web site. host: we have a copy of it right here and we are showing it. guest: there you go. that article talks about -- it tries to answer the woman's question. when the economy slows down to the point it has -- we had only 4% growth in the first quarter and 1.3% annual growth in the second quarter. businesses start to say to themselves i was investing in

some new equipment and hiring people on the expectation that demand was coming back, but maybe i should put a hold on that and we did little bit before i add some staff that i might need to lay off in a few months if things turned down again. that becomes a self-fulfilling prophecy. that person is not hired an cannot spend. some other business does not get the money. you can see how these things feed on themselves. economies are unstable that way. now, my article likens it to a rocket. it can either have enough thrust to escaped eath's gravitational pull, or if it does not have enough thrust, it can slow down,

slow down, and then tumble back to earth. the question now for the economy, which is a concern to every one of us, ordinary americans, is whether we have enough thrust in the economy to escape the gravitational tug or whether we are headed for another recession. host: you write in your new article -- in other words, some economists say if the economy grows too weakly, the slowdown could lead to a recession. maybe investors lose faith in the recovery so stock prices are already down 9%. any such reaction could cause

the very downturn that is feared. north carolina, marsha, you are on the air with peter coy. caller: yes, i would like to ask -- host: we are listening. caller: i would like to ask why is it that businesses here in the united states have not learned from the old adage-you have to spend money to make money. we all grew up in an era that in order to make money, you had to invest. if you do not invest in yourself, you are not going to make a lot of money. i do not understand.

host: mr. coy? guest: put yourself in the position of the business owner. you grow by sacrifice, hard work, investing for the future. on the other hand, maybe not is now the ideal time to take out a loan. what happens if you cannot pay back that loan? you may want to hold your cash a little bit and wait for the storm to blow over. you want to time it. the most important priority for any business is survival. they are going to put that ahead of making extra profit. so i think that is what is going on in a lot of the heads of business people right now. when everybody does that, it creates what john maynard

keynes said it was the paradox of thrift. one person spending is another person's receipt. you cannot save out of that in become so things cannot appeared magically out of nowhere. we are in danger of toppling into that paradox. host: i want to get your reaction on what president obama said yesterday. >> the american people have been continuing to worry about the underlying state of the economy, about jobs, about their wages, reduced hours, about fewer customers. of the economy is still in weekend -- the economy is still weakened, partly because of things that we could not control.

unfortunately, the debt ceiling crisis over the last month i think has had the necessary- impact on the economy here as well. i am meeting with my cabinet to make sure even as they have been thrown out these weeks are redoubling their efforts to focus on what matters to the american people which is how we are going to put people back to work, increased security, how we can make sure they will recover fully from the worst recession we have had since the great depression. guest: yes, i think that democrats and republicans alike can agree that getting people back to work should be the top priority right now. the problem is how to get their. the parties are deeply split over that.

obama did not say it, but the democratic line has been that we need more stimulus, more priming of the pump to get things going again. the republican line, especially from the tea party, is that all kinds of people, households, businesses, creditors are mostly concerned about the fiscal well- being of the country over the long term, and the way to get confidence back it is to show that we can bring deficits under control. you can see how those two alternate series lead us in the alternate directions. obama can not put through and find the political support for any new kind of stimulus. so when people look around -- going back to businesses again, things are not great now, so what is going to change? it is hard to latch onto

anything and say here is the new thing that is going to make us all feel better and get in the mood for spending, investing, and expanding. " larry is a republican in virginia -- host: larry is a republican in virginia. caller: thank you very much. of the cold war ended years ago. instead of investing in other nations, would it is not be a better thing to bring those troops home and reinvest that money back into this nation? i think it would help businesses and housing industry. guest: yeah, there is no question at all that the deployment of troops abroad and a massive spending in the military on iraq and afghanistan and our ongoing military procurement budget is a big drag

on the economy. if we did not have that, we would have more money available for other purchases. the roman empire can tell you all about that. even though there is a consensus between the parties that some of the savings, a big portion, is going to have to come out of the military -- i was amazed that half of the cuts under the $1.20 trillion trigger plan that is being discussed are from defense. the pentagon is coming back and saying these are too draconian for us. the caller is definitely in tune with the latest thinking in washington about what to do with defense. host: you write in your cover

article -- host: do you want to expand on what you wrote? guest: i can imagine that the lightning rod in the whole paragraph is the last phrase about applying in part to current beneficiaries. sold the lights are probably lighting up with retirees -- so, the lights are probably lighting up with retirees who want my head. the reaction i got on that from

pittingple is that i'm the generations against each other. i do not want to do that. when you look at the size of the problem, you have to think that a lot of money going to not just future beneficiaries but to current beneficiaries -- if we hold that generation harmless, that increases the burden on the younger people, the working people, and people who are not even working like children. we have a big problem with youth poverty in this country. in an ideal world, nobody wants to shrink the benefits of medicare and social security, but nobody wants to cut the support for younger people

either. something's got to give. the question is whether retirees should bear at least a bit of the pain. before the calls start coming in, i will throw in one other point. i think it is even more important that the wealthy and share more of the burden with the poor. it is true that the wealthy already pay a lion's share of income taxes in this country, so you can say that they are already doing their part. on the other hand, there is a concentration of wealth in the top tier of the population. the top 1% or something has a third of the wealth. i could have those numbers wrong. the concentration has grown. it is hard for the wealthy to argue that they have been harmed

by the economy. maybe they should share with the rest of the public which would make it easier to help both the older and younger generations. host: peter coy has been with bloomberg since 1989 and is currently the economics editor weekomberg wilmington, delaware, liz is on our democrats lined. caller: good morning. a question is in regard to grover norquist. there are only six people in the house and the seven in the senate that have not taken that pledge. this man has been atrocious for the american people. why they have taken this pledge -- the only pledged they should be taking is a pledge to the american people and this democracy.

i want to see every one of those republicans to tear off that pledge. i like to see mr. john boehner and mr. mitchell mcconnell pick only people who have not taken the pledge. otherwise, this super committee -- this should not be called a super congress. we have a congress. call them a "super committee ." guest: i tend to be against people tying their hands behind their back because it makes them unable to respond to circumstances as they change. host: jim is on our republican line. caller: peter, you mentioned something about sharing the burden. i go home every night and turn on the news and see people of congress getting out of their

limousines. for me, i am still getting a $9 hair cut bank i drive a pretty nice van. i am becoming the one with the draconian policies. i manage a quizno's. these punk kids come in and expect a free bigger chips. host: pittsburgh, pa.. i apologize for that caller. tom, are you with us? caller: ok, yes, i think we have been enjoying a false prosperity for maybe a couple decades. i suggest that we suspend the minimum wage, suspend the prevailing wage, and the mos

regulations that keep business out of making something -- of adding god you to something. we have to reduce our expectations because we have been overcompensated for our work. guest: you know, that is a really interesting point out that the caller makes. let's focus on one aspect. the minimum wage. in a completely unregulated economy, what happens is that businesses are not willing to pay as much for an hour of work because it is not worth it to them. the way that the market should adjust is by people taking lower wages.

we will still be able to have a full employment. that is the theor guest it seems ty. it seems to be more complicated than that. economists have looked at the impact of minimum wages. it is hard to say why, but it does appear that the existence of the minimum wage does not have a huge impact on unemployment overall. it certainly affects the least skilled -- for example, teenagers are more likely to be unemployed in places that have higher minimum wages. but i would not -- i can definitely see the document that there should be a sub-minimum wage for that population. i don't think at lowering the minimum wage overall would have a huge effect on overall unemployment. i think what you want to put this on, rather than the supply

side here, is getting to man the going again. if we all start -- is getting demand going again. if we all start spending and investing for the future, we can grow our way out of this instead of spending less and less money and hoping that will solve the problem. host: back to your cover story in "bloomberg businessweek" -- all the americans have the clout to vote themselves benefits peter coy? guest: the last thing about the benefits can never be repeated -- you know what a ponzi scheme is, right? upon the scheme is where the first people who started get paid -- a ponzi scheme is where the first people who started it paid by the people after that, and the second gets paid by the

people after them. it has to be a pyramid, because the next generation has to be bigger to support the ones before them. mathematically, it has to run out, because the population is five. at some point, you run out of new people to bring -- the population is finite. at some point, you run out of new people to ponzi schemes are illegal. the economy itself is sort of a ponzi scheme in that young people pay taxes that go to benefits for the older people. it works very nicely as long as you have a high birth rate and a high death rate so that you're older generation is shrinking relative -- younger generation. what we have now -- it is a wonderful thing -- people are

living longer. we should be happy about it, but we also have a smaller birthrate. the pyramid is misshapen in a way that makes it very difficult to support those benefits for older people. what you start to think of is that children of today and their children as yet unborn simply on going to be able to get benefits as attractive as the one current beneficiaries are receiving. the only real question is when you start changing the formula of social security and medicare to right that balanced a little bit. host: peter coy, how worried, or do you worry about the u.s. bond rating going from aaa to potentially aa? guest: i would say it is likely to happen at this stage. if you look at the actual quality of u.s. credit, it probably should have happened already. aa is not a bad rating.

it is higher than the vast majority of private countries in -- private companies in this country. there is no reason that should have a huge impact on interest rates, because, after all, the credit rating agencies -- standard and poor's, moody's, and fitch -- would simply be ratified with the investing public already understands, which is that the u.s. is no longer perfect credit. it is more ratification that any piece of news -- than a new piece of news. it might not have much impact in contrast to what would happen if we defaulted this month, which would have been a true disaster. host: a tweet in to you. guest: that's a good question. japan's recovery has barely been

worthy of the name "recovery." they had an economy that sort through the 1950's, 1960's, 1970's and 1980's. the japanese miracle, which peaked around january 1, 1990, the time japanese real estate was the most expensive in the world. the japanese were buying rockefeller center, pebble beach golf course. it seemed like an unstoppable juggernaut. but it turned out that it was partly a real estate bubble. does that sound familiar? now we are seeing the same thing here. the japanese struggle for the past two decades. they called it lost decade. now it is like a lost two decades. country cannot get out of its extended slump for a meaningful period of time. the risk is that the u.s. goes the same way and what we saw in japan is that they would start

to grow and people would say now is the time to cut back, raise interest rates, cut spending. they would do that and cut short the recovery. we run the same risk here. while we should be concerned about fiscal solvency in the long run, if we do it too soon, we could trap ourselves into this malaise that does not ever seem to end. we just got out of recession that began in december 2007 and lasted until june 2009. a lot of americans think we never really got out of the recession. we technically did, and now looks like we might be heading back into one. what is it going to take to get long-term, sustainable, healthy growth? host: john in chicago, you are on the air. caller: good morning. the thing is, i just have an idea about the economy, people

going back to work. ok, now a thing of it is, i believe that every state should be responsible for manufacturing. every state built manufacturing, that they would be the co-owner of manufacturing, people would go back to work and they would have houses, cars, and the economy would start moving again. host: what do you think of buy america programs, mr. coy? guest: well, the caller is asking specifically about states being responsible for manufacturing. that is not a function of state government, it is a function of private industry making those decisions. every state as an economic development agency that would love more factories, and some have been successful.

mississippi, south carolina, alabama -- i could list many more that have done a pretty good job of bringing in manufacturing in recent years, and it is a huge benefit. to some degree, is a zero sum game. if a company decides where to locate, it will go where the most attractive incentives are being offered. on the macro level, national level, we need to create conditions so that the country as a whole becomes attractive for new factories and so is not just everybody grabbing for the few companies that want to locate a factory. i agree with the color bang's point that more manufacturing in this country would be -- the caller's point that more manufacturing in this country would be a good thing. we would be bringing in income from the rest of the world instead of just sharing it with ourselves. host: a twitter follower --

guest: germany did something even before 2008, which is to get its costs in line, to get its economy more competitive. you know, when west and east germany unified, the western portion of the country had to bring up the eastern portion, and that was a struggle. and then when at the euro form, germany had another struggle, because it's torchmark entered the euro -- its deutschemark entered the eurozone in an almost on a competitive level. add to buckle down and get serious and will align -- it had to buckle down and get serious and hold the line. countries like greece were laggards. they did not take seriously the need to be competitive. they were happily accepting the

low interest rates they receive as part of that euro zone and invested unwisely. germy deserves a lot of credit for doing all the right things to make -- germany deserves a lot of credit for doing all the right things to make its economy more competitive. right now it has the thankless job of having to bail out the rest of the euro zone by fiscal transfers from it to the poorer countries. host: peter coy is our guest. we have five minutes left with him. columbus, ohio. matt, you are on the air. caller: i wanted to take the discussion back to the national level and the wars. i am a republican, i have always voted republican, and i chaired the republican party on my school campus. but what people tell me across the board is that people are

tired of these wars. what is the money we spend on these wars each week? if we could take that money and put it back to paying out of visits -- therpaying our deficits -- there has got to be something done about these wars. people are tired of it. host: mr. coy, have you looked of the numbers -- go ahead. guest: i think there are a lot of republicans who agree with this caller. the tea party in particular, as we know, tends to lean towards the isolationist side. people like rand paul, for example, ron paul. that strain is having a big influence on the republican party. you are seeing a historic change in the alignment of the parties. i would say that is a big reason why the budget deal calls for big cuts.

it is because it lost its biggest supporter, which is the unalloyed support of the republican party. both parties are looking at defense spending and saying it may be that is a good target. host: mr. coy, do you think that the super committee, looking ahead, will be able to agree on substantial cuts? guest: it's going to be absolutely fascinating, because on the one hand -- i think you discussed this in your last segment -- there is going to be a lot of pressure on the leadership of the house and senate, both sides, to pick people who are purists g democrats will want people on the liberal side, republicans will want people on the conservative side, making it

a bipolar organization. all it takes is one of defection from either side to tip the balance to the other. if you are a democrat and you are putting in six people here, you don't want to put anybody who seems squishy to you. if that person sites with republicans, you have lost. it is going to be more polarized than congress as a whole. that speaks to the argument that there is not going to be ideal -- a deal. the counter argument is that if they cannot get a deal, the alternative is the mandatory cuts that are pretty attractive to both parties. furthermore, obama for once has the upper hand because he can simply tell the republicans if you don't do a deal with me, i am going to veto all or part of the bush tax cut extension. in this town, it was the

republicans who had the upper hand because they could force the debt ceiling to be invoked and force it to fall on the u.s. -- force a default on the u.s. this time democrats have the upper hand because of the impending expiration of bush tax cuts. host: you are on with peter coy of "bloomberg businessweek." caller: i think the recession right now despis by design. if you look at what the president said when he was elected, he said he wanted to fundamentally transform america. if you fundamentally transform it, you will go to socialism. they said that the way that you destroy capitalism and institute marxist socialism is to overwhelm the system. get more people on government programs, tax people that are

productive, you get more people not paying taxes. thereby, overwhelming the system. you cross capitalism to crash, and that socialism and the institute -- and then a socialism can be instituted. i believe he is a hard-core marxist. peter, maybe you could run a program and educate the people on exactly what these people -- date they are still around. they are teaching at colleges. host: peter clark, anything for the last caller? guest: no, i don't think it is correct. i don't think you can look at what obama has been doing the past two years and conclude he is trying to destroy capitalism. everybody is entitled to their opinion. host: peter coley o -- peter coy of "bloomberg businessweek" has been our guest. the new magazine is out as well, and he previewed the a

next the form on funding the

social security system. a house hearing on the situation in sudan. after that, remarks by ohio congressman jim jordan at the young america's foundation student conference. >> 10, nine, eight, seven, six, five, four, three, two, one. >> these are the stakes. to make a world in which all of god's children can live. are to go into the dark. we must either love each other or we must die. speedboat for president johnson on november 3. this weekend we will look at the history of political campaign ads with lsu professor robert mann.

also former homicide detective james lavelle on the day jack ruby killed a man under his protection. lee harvey oswald and former speechwriters were present nixon reveal those messages were crafted and communicated. american history tv on c-span3. get the complete schedule at c-span.org/history. >> deputy deputy assistant treasury secretary for retirement, j. mark iwry says not enough americans are country leading to retirement accounts and many won't be able to maintain their lifestyle in retirement. for that reason, the obama administration is once again pushing congress to make enrollment automatic. he spoke at a conference hosted by the center for retirement research. this is about 55 minutes. >> i am delighted to have the privilege of introducing mark iwry, who is today's keynote speaker. many of you are acquainted with

mark, who is currently sr. adviser to the secretary of the treasury and deputy assistant secretary of retirement and health policies. i've had the pleasure of knowing mark for a very very long time. marks influence on public policy calls to mind the quote by harry truman. it is amazing what you can accomplish if you do not care who gets the credit. and that is marked. in an understated way mark has been a major force behind improvements and pension and health care policy for decades. chief among his accomplishments is the trend towards 401(k)'s and auto escalation default rates which in my view is the biggest positive development since 401(k)'s were created. he is also an architect of the favors credit, and he co-authored president obama's proposal to the coverage through auto i.r.a.'s vergara really don't have time to list all of

his impressive accomplishments, but i do want to stress that mark is brought up by decision-makers of all political persuasions in both the public and private sector for his expertise. his insights and his skill are excellent making things happen. mark is truly an unsung hero in the retirement policy community for his ability both to develop and implement sensible policies for pressing problems. and if you have an already guess my feelings, mark is simply a terrific human being. we are very lucky to have him here today. please join me in welcoming mark iwry. [applause] >> alicia, thank you for that gracious act of perjury on my behalf. [laughter] i am delighted to be here. this is a fantastic collection

of brains and talent. i would like to thank mike, the commissioner of social security, deputy commercial dave rust, david weaver and everyone who puts this conference together. the consortium is a wonderful effort. it has been productive. it has added great value to the thinking about policy in this area, and the three retirement research centers do a remarkabl. i have the strong sense that being with such a distinguished and thoughtful group, the best use of my time right now

probably would be to close my remarks and go around the room and solicit ideas, collect your best thoughts and suggestions. but i've been asked to talk a bit first, so i will dutifully complied. the theme of the con prince, innovations in retirement security, is highly appropriate and timely. within the private pension system in the retirement savings system, which of course supplements the fundamental bedrock protection that the social security system provides to the american workforce. within the private pension system, our second pillar or second tier of retirement security in this country, the market is innovating in a

variety of important ways. there is a great deal of creative activity having to do with oral one k. plans as alicia mentioned, having to do with defined benefit lands and hybrids, breaking down the traditional barriers between the traditional kind of pension, the defined benefits that promises a particular dollar amount typically per month for life in the traditional format as opposed to the defined contribution plan that, as we know, puts a particular amount of input into the plan, a dollar contribution that then grows with investment and experience to produce an output that is not necessarily determined at the outset. raking the barriers between those two classic formats is

something innovative that the market has done on its own. policymakers have not taken the initiative to do that. the creativity in the market has done that, has gotten beyond the labels and focused on the realities, the specific attributes of these programs and vehicles. what characteristic should they have in order to best help people get retirement security and provide for their retirement security. our private pension system right now is in a state that one might fairly characterized as glass half-full, glass half-empty. the half-full part quite obvious

and salient, 65 or more million american workers are covered by private pension and retirement programs. millions of middle income and lower income families have been receiving benefits for decades now from defined benefit pensions from defined contribution 401(k) and other profit sharing and other plants. the i.r.a.'s have supplemented their retirement saving opportunity on a tax favored basis for folks that don't have an employer plan available to them. and, we have accumulated the largest pool of investment capital perhaps in the world. the latest estimates from first quarter 2011 by the federal reserve suggests that there is

$11 trillion in the combination of defined benefits and defined contribution and i.r.a. programs with something like 2.3 of those trillion in the defined benefit pensions. something like 4 trillion now and they 401(k) and defined contribution, and 4.7 trillion in the i.r.a.'s. as we know, the i.r.a.'s have been taking rollovers, large transfers on a tax-free basis from the other two types of plans so that much of the i.r.a. money is attributable to these employer-sponsored plans that have had the benefits rolled over to the individual retirement account, while other portions of the i.r.a. assets are attributable to continuing contributions by millions of americans.

in particular people who don't have access to an employer plan. .. it folks left out are in some cases contributing to these individual retirement accounts,

but only something like one out of ten of the people with no employer plan and eligible to contribute to a tax favored basis to an ira would actually be contributing in an average year. the take up rate, if you will, the rate at which people use these tax favored savings opportunities is not where it could be. the system is also driven by tax preferences which are designed as we know to encourage the private sector to supplement social security as it has done in such a formidable way. those tax preampses are designed in a way not ideal when it comes how to best address the need of

the majority of american workers. the system of tax preference is deduction based. by that i mean, as most of you know when you contribute a dollar to a 401kingk account for example or when an employer contributes a dollar on your behalf to a retirement program, did doesn't appear on the w-2 or appear on taxable income until years later typically when the dollar has grown and exits your plan as withdrawal when you are ready to take it as benefits. typically, when it goes into the plan, it disappears from your tax base, doesn't appear on w-2, a value to you dependent on how high your income bracket is.

if you're in the 40% or so tax bracket, saving a dollar generates 40 cents of tax savings because that dollar would have been taxed to the tune of 40 cents, so to you, the after-tax cost, the cost of you for putting the dollar in the plan, after taking into account your tax savings is the dollar minus the 40 cents you saved or the 60 cents. if your tax barak et is -- bracket is 10%, you get a dime for the dollar worth of saving you or your employer did on your behalf so the net after-tax cost to you in the 10% bracket of saving the dollar is 90 sents rather than 60 cents. you got a dime's worth of benefit for saving a dollar. many the in economics profession

referred to this as an upside down kind of incentive in the sense that people who need the help the most to encourage them to save are given the least incentive, and as a result, the congress in 2001 passed a savings credit designed to level the playing field on a behalf of the american work force, a moo seniority of our -- majority much our work force is in the lower tax brackets. they work hard and not owing any income tax, rather paying their payroll taxes that are a substantial amount, substantial percentage of their income. for these people, the income tax saving when they contribute is

zero. they may have a tax break when the employer contributes. this situation can be remedied by expanding this tax credit that gives people an additional financial incentive for saving when their tax bracket is not the highest. if you save a dollar in a retirement program, you could get 50 cents back as a tax benefit. the current savers credit, unfortunately, because of revenue constraints give most people who qualify for it 10 cents on dollar back or some 20 cents on the dollar.

very few get 50 cents on the dollar, but it could be expanded in order to give more people a more substantial financial reward for saving that would, as i say, level the playing field in favor of those in the lowest tax brackets. it could also be made refundable, meaning that folks who pay their payroll taxes but don't owe any income tax would actually get a deposit, a refund, in the form of dollars contributed to their plan, 401k, the ira, whatever plan they contributed to voluntarily as an incentive to contribute. another shortcoming of the current system is that even of the people who do have an opportunity to save in the workplace through an employer

plan, many don't. one of the key innovations in the private sector that has addressed that shortcoming to a considerable and increasing extent, and this is something that alisha has written on brilliantly, is the automatic 401k. the notion here has been that one reason people don't participate as much in retirement savings opportunities that they have is that it takes initiative. it takes getting up off the couch, deciding where to contribute if you have an employer plan. it's clear where you contribute, but it may not be clear where to contribute, how much to contribute, how to invest it, and the choices can as behavior

economics have demonstrated can be daunting. they can keep people in a state of inertia where they don't get around to making the decisions and closing the deal and actually saving. we've had traditionally in the 401k space something like a 70%-75% take up rate, somewhere between two-thirds and three quarters of the folks eligible to save take advantage of it, and all the rest don't. the rest, in fact, typically leave money on the table as the expression goes because the employer often matches what the employer could give, perhaps 50 crepts to the dollar, so there's that employer matching contribution that they could get with their own money. it's a powerful vehicle making

saving easy, but not ease sigh enough. take the initiative to sign up for the 401k, make the decision, how much to put in, how to up vest detoured a lot of people. you may take the form home after you are hired and tell hr you'll get it back to them after this weekend when you are going to sit down with your spouse or partner or whoever and think about it and make the decisions and then you'll bring it back next week. if you are like me, by the time the weekend is over, you can't find the form. [laughter] you didn't get to discuss it with your spouse or adviser and time goes by and inertia takes its toll. back in the 90s, one of my staff came to me as a treasury and

said there's a secure legal question we're asked to consider. suppose a 401k plan, put someone in the plan, enrolled them, but let them opt out if you will, of the plan, would that be legal? under the rules, show we spend time taking that question on? my job involved hundreds of legal and policy issues, and my staff and i were swamped with things to do, and i remember saying that we've got all these major policy concerns trying to encourage saving, trying to promote a more secure system, promote retirement security in various ways, and we got so many legal issues on our plate already, we can't deal with it, let's put it off. the lightbulb did not go off

until a little later. it was probably a couple of months, and then all the sud p it became clear that putting someone in a 401k plan, but giving them the choice to step out of it might actually overcome the inertia that keeps a third or a quarter of the eligible folks out of the plan. it was framed as a negative election. that's how the question arose. instead of having people elect to stay in the plan and have a form, could we have a negative election where the election form is only if they want out of the plan. we then realized that when it came to encouraging saving, good policy, retirement security, there was not a legal question, but a very good idea that we ought to focus on immediately, and if it wasn't legal, make it

legal, and promote it. we proceeded to do that. the few plans thinking about this or trying this, we were given reassurance it is consistent with all the rules, all the 401k rules, ect., and in 1998, we issued a ruling defining this practice and naming it approving it and promoting it. negative election didn't seem like a great name. [laughter] this is washington after all, and we wanted people to understand that this is a positive constructive idea consistent with individual choice, but helping people find it easier to save so inertia, perhaps the most powerful force

in human affairs would be on the side of saving rather than on the side of not saving, so we called it, and i'll confess also that my staff and i gathered over lunch one day spending a half hour discussing the name. you know, what should we call it? automatic enrollment just because that is descriptive of what it is. it's automatic in the sense that as an employee you're in the plan automatically even if you do not nothing, but not automatic in the sense you have to stay in. it's the presumptive thing. you can opt out. we want to plant to seed that all methods of automated can be in that sense and be made easier. people with in unless they opt out, what about investment?

why not make investment that way too? give them the choice, decide what they want, but make an automatic option available so if people want to procrastinate decide later after they get more financial literate that then they can do that so automate all phases, enrollment, contributions, investment, and what about payouts from the plan? lots of the funds that are accumulated in our private pension system leak out of the system in the form of consumption that may not be for an emergency, may not be to feed the family while someone is unemployed, may not be for a long term investment of security like purchase of a home or education for one's self-or

one's kid, but it may be to buy the fast boat as the expression goes or take a vacation or what have you. i'm not one who thinks the government should tell people what to do and whether they should use savings for retirement or college to wigs, but we are providing tax preferences for the savings. the taxpayers are paying more in order to direct tax preferences to this particular public policy purpose. we have some stake in at least encouraging people in a certain direction. the purpose for the tax preference being, of course, supplementing social security by promoting more retirement benefits and retirement securities so automatic rollover, that is transferring the money when it comes out of the plan, if you are not ready to retire, in your 20s, 30s,

40s, 50s, whatever, not ready to retire, transferring to your new employer's plan. hopefully you have a new employer if you are leaving an old employer or put it in your own account, to continue to grow on a tax favored basis. that so-called portability, tax free rollover from an employer plan to a new employer plan or to an ira is something that we also could perhaps make more automatic, and indeed the system has moved that that direction. if the employee who leaves a job doesn't ask for their money, the money stays in the plan. if the employee has less than $5,000 in the plan, the employer could cash the person out involuntarily, write them a check, appears in your mailbox, and it tends to be spent. once people get their hands on

the money, especially the smaller the amount, it's harder to visualize if this is making a difference to your ultimate security in old age. it's more likely to be spent. certainly that's true in my family, so what we did, congress, and the executive branch was develop a way to automate these payouts to some degree. we provided that no longer would employers involuntarily cash out small distributions, $5,000 or less if that was thing the balance in the -- if that was the account balance in the plan, but they would instead keep the money in the plan unless the individual asked for it. if the person wants it, affirmatively says give it to me, great, they've got it, but if the person is silent like people are, they are distracted, changed their address, what have you, the money stays in the plan to continue to accumulate on a tax favored basis or is rolled

over to an ira in that person's name even if they didn't sign up for it. automatic rollover to an ira. either way, it stays in the tax favored retirement system, so the phases of savings in the 401k world have been automated increasingly. there's automatic enrollment to a large extent and roughly half have converted in a traditional way to tell people if you want in, sign up, to telling people you're in at a particular contribution rate, could be 3%, 6% of pay, it certainly doesn't have to be a particularly low rate, whatever the plan sponsor decide, and by the way, in the obama administration, we have been pained to emphasize the rate does not have the be the 3% that a loot of plan --

lot of plans use which is the rate we used in our 1998 ruling approving automatic enrollment as an example and toe in the water for this concept of automatic enrollment. plans are increasingly autoenrolling people, not so much the small, but the larger plan, and employees are participating no longer in these auto enrolling plans at two-thirds rate or 85% -- 75% rate, but at 95% of the eligible employees. the take up rate has been dramatically increased, and who has benefited most from it? lower income people, minorities, folks who were not signing up for the plan at their own initiative often enough are now doing so. those who don't want to save are

free to opt out and consistently a significant number of people 5% or 10% of people who are eligible assert that choice. these automaticmatic 401ks represent a first generation of making savings easier. there's a second generation coming on that a lot of creativity in the market is spurring and is fostering. by that i mean, taking that contribution that is 3% of pay that are newly hired and hiking it to 5% of pay. people newly hired are 5% of pay unless they choose otherwise. they can be at zero, 1%, or up to 15%, whatever the maximum is permitted in their plan, but when you use 5% as default, the

evidence sunlights that you don't get a lot more people opting out, maybe a few, but not a lot more. second, the contribution can ratchet up over time automatically. the employer starts it at 5%, but at the second year in the firm, they go up to 6%, and your third year 7%. you can get off any time you'd like, but it is a default. if you do nothing, your saving level goes up in pursuit of greater adequacy of retirement savings. that step-up technique is spreading steadily in the 401k universe. the investments likewise have been automated so there's a default investment, and the labor department has issued a guidance some years ago, two dia's qualified default investment alternatives used to

a great education tent in the private sector, and this success story in the 401k world is one that has helped, i think, millions of people get into saving who were not saving before, but what about the other portion of the population that doesn't have access to a 401k, you can't enroll someone automatically in something they don't have. the idea has taken hold in my colleague's, david john, senior fellow at the heritage foundation who with bill gail, senior fellow at the brookings institution, and peter when he was at brookings. we have ventured some years ago

worked on these approaches and david, john, and i put forward a way to automate enrollment for those who don't have a pension plan. employees are not required to response sore plans as we know, and many employers feel they are not ready to. they, however, have an asset that their employees could use to make saving easier which is their payroll system. one of the great strengths of our private pension system is that it's employer based using that payroll system to make saving easier rather than having to amass a certain amount of liquidity, a few thousand dollars worth of cash in order to cricket to an -- contribute to an ira, for example, although you can contribute smaller amounts subject to the ira trustee rules, but rather than having to

think about where am i going to get a lot of money in order to make a meaningful contribution, the employee with payroll deduction can benefit from the slow gradual allocation of a few percentage points every pay period into tax favored saving, drip, drip, drip, over time, it's pretty painless, but it adds up, and that payroll-based saving mechanism which is the heart of the 401k and how it works can be replicated for the millions of folks who don't have access to a 401k or defined benefit pension or anything else by way of saving plans. at work, we can extend automatic enrollment to them by asking their employers to let the individual salary reduce, that is elect to have part of their salary go into their own, the individual's own tax favored account, individual retirement

account without the employer having to sponsor a plan, without the employer having to contribute from its own funds, matching or otherwise, or having to comply with the labor law rules or the tax code plan qualification rules that apply to 401ks or other plans. as a matter of policy, and i know the administration and most people want employers to sponsor the plan. we encourage the employers to sponsor, define contribution plans, whatever form of plan they are willing to adopt for their employees, but those not ready to do that could at least let the employees use the payroll system as a conduit, as a delivery mechanism to get the money from the employees own paycheck if the employee wants to. if the employee wants to, to is

tax-favoring the like an ira in which the employee could save. that we call the automatic ira like automatic enrollment into a 401k, and we proposed heritage found -- foundation has been very supportive of this, many other organizations, aarp that's here has been tremendously supportive, members of congress own both sides of the aisle, the concept which the retirement security project launched years ago was then adopted by the candidates, then senator obama and senator mccain, both of them indicated support for it, and senator obama put it in his platform, his retirement program as a central come poppet and as

president has continued to propose this in his budget proposals. a tax credit would go to the employers that do this, that let their employees use their payroll system, and no employer that has a plan would be asked to do this. it would be employers that don't sponsor a plan, and that have more than 10 employees and have been around for at least a couple of years. the idea is it should be as easy as possible for the employer, minimum of hassle or burden for the employer and no outlay. the employer is not contributing, there's no out-of-pocket cost. there's another item on its to-do list like income tax withholding or fica or ui withholding it has to for its employees already at the federal or state level. our hope is something along these lines, automatic ira

proposal which members of congress, congressman neil and others in the house, senator bingaman and others and our hope is that this will help address people who are not in the system now and make it easy for them to save. there are many other potential innovations and constructive ideas that would be desirable to pursue and that i'd love to discuss with all of you, but we undertook to save time for q&a and exchange, so alishya, if you've like to begin that --

>> i'd love to. if you have questions, write it on a piece of paper, and there's people who will collect it. andy gave me some. one is -- i think your baby was attackedded by the -- attacked by the "wall street journal". the ppa may have had unintended facts on 401k saving. this is your chance. >> for those who are not familiar with the ac cro anymore or the initials pension protection agent of 2006, it was one of the things that after initial rulings from treasury and irs promoted automatic enrollment, alisha is referring to a point of view that very validly points out if you automatically enroll people into a plan, some may go with inertia instead of not participating otherwise, they would have at a higher level than the default

contribution. maybe i would have contributed 6%, but the plans defated is 5%, so i do nothing, and i'm at 5% rather than 6%. that is a phenomena that some people call anchoring, and at harvard, they have pointed out that that also can happen when you automatically enroll people, but as bridget would enthusiastically agree you can address this readily by escalating the contribution level year to year. you can as dick sailor and others have suggested, every time someone gets a raise, give them an increase in the contribution automatically unless they want to do otherwise so that they don't see their take home pay going down, or as many companies do even without

regard to the timing of a raise, you can adjustment contribution level every year unless the employee opts otherwise. apart from that, it is so significant to have people not contributing at all enter the plan for the first time and become saverrings by reason of automatic enrollment, that that tends to swamp the effect of people who might otherwise contributed a little more, but who by up near sha is -- inertia is drawn down to the default level of contribution. to bring people up to 5% i would argue is more of a social benefit for all of us than to take a 10% cricketer and -- contributor and have them contribute at 5% because they go with up -- inertia. if you increase that 5%

gradually over time, you'll take care of the problem entirely. >> people write really fast here. so there are a couple that are related. one is that you've talked a lot about the accumulation phase of a 401k plan. there -- should there be emphasis on people getting lifetime income out of a 401k plan. you made this point yourself that all the money is moving from 401k's to iras. that's not where the money is these days. >> the contributions are being generated far more in employer-based maps like 401k -- >> right. >> more than iras. the iras have contributions as well. focusing how to get people into 401ks and contribute more as you said --->> yeah.

>> it's well worth it. it's another one of the shortcomings of our system that over time as we've shifted famously from defined benefit plans to -- i wouldn't say defined contribution plans, to 401k's in particular, it's not suture the benefit to define contribution as employer funded, employer initiated, employer directed, employer investment directed to do it yourself plans that people direct on their own. that shift has been associated with the decline in lifetime income, a decline in retirement income payments opposed to single cash payments. more people are taking money out of their plans in a cash payment and up vesting it on -- investing it on their own than might have traditional by been

the case when maps were more prevalent that paid out lifetime income and annuity, a monthly check you got for your entire life and the life of your surviving spouse typically that guaranteed you would not run out of assets during the extent of that monthly check in addition to social security. these traditional pension plans that paid annuities were in a sense similar to or mimicking some aspects of social security, paying a lifetime income. most of them don't have a cola, but in earlier times, some of them did. that lifetime income has been declining. even the defined benefit pensions are paying more lump sums and less lifetime income notwithstanding that the default in the automatic form is a lifetime annuity. people will elect against the

default sometimes. our behavioral strategies need to be more so fist kateed than -- sophisticated than relying on default, and therefore what the market has been doing by way of innovation and what the treasury and labor departments have been doing has been focusing on how we can encourage more restoration of lifetime income to our system for people who want it, more substantial options, options easier for employers to put in their plans, easier for individuals to take seriously as an alternative that they might want to use for their retirement security and that lifetime income protection or retirement income, whether it's guaranteed for life or whether it's a long stream of payments for decades that may or may not be technically an annuity that's guaranteed for life, that is

something that is coming back to our system slowly, and we are labor and treasury een couraging a -- encouraging a national conversation about this. we have many comments at our request including from many of you here, and we are about to come out with -- to start coming out with add min straitive guidance designed to encourage people to consider options for lifetime income in various formats whether commercial annuities, defined benefit plan annuities, individual retirement accounts, ways to help people manage their assets in retirement. accumulating the assets in the first place is critical, and we're far from having reached our goals there, but happily many middle income people are reaching retirement now with some, more accumulation of

assets in addition to whatever guaranteed income they have from social security and from many defined benefit pension, and those people need help simply in deciding how do i make this money last, and how do i assure that i won't run out in old age? that's the issue that is being addressed and we very much invite all of you to council with us on how best to promote that. we used to have something we called a private pension system. we still call it a private pension system, but the term "pension" has denoted lifetime income, a stream of payments that's guaranteed for life the way social security is, the way many defined benefit plans still provide income, and returning to that as a viable option, not necessarily as something that everyone should do, not

necessarily something people should do for all of -- with all of their retirement savings. you need flexible assets people feel for emergencies, expenses, what have you, long term care, medical shocks, but to at least put this option more solidly back on the table. >> you're going to have a truck or wheel barrel when you leave here because there's so many questions. one person asks do you have any thoughts limiting the number of investment options in a 401k. the whole deal is to make it easy and automatic. a lot of options are confusing. is there any thought about limiting the number? >> you're right in a sense that the whole deal has been to make saving easier and much of it to make it more automatic, but part of that whole deal hails -- has also been to realize the

volatile nature of the system. the private sector is in the driver's seat and that's appropriate, and so what we're trying to do is encourage, make it easier rather than require. 401k plans, i think, are finding that they can make the choices easier. in some cases not by reducing the number of options, alisha, but as you know and have wrote elegantly, by having one be the default. if you have one automatic investment option, it's easy for people who otherwise would be paralyzed by the range of choices to go along with that and then think over time about whether to diversify into other choices. >> so this one i have no idea what the answer is. could an investment company like vanguard or a single state have an auto ira if congress doesn't enact it into legislation? >> well, that's a creative

thought. >> these are creative people. [laughter] >> that's why we're here. [laughter] yeah, there is, i think, room for all sorts of innovation along those lines. employers now can voluntarily adopt a payroll deduction ira, that is, if they are not ready to have a plan, and we'd hope, by the way, that automatic iras, if enacted, encourages more employers to adopt 401ks, to adopt plans when they see how effective payroll base saving is and how their employers appreciate it, but employers without a plan can have a payroll depose like they send direct deposits of paychecks to people's financial accounts rather than a paper paycheck and handing to to people on friday afternoons. that direct deposit of paychecks is a model for taking, perhaps,

5% of that paycheck at the employee's behalf and sending it to wherever the employee wants to send it like an ira. >> but not defaulted in? >> you can automatically enroll people and the automatic ira would automatically enroll people into ira's and let employees opt out. you could do something like that in another context, but employers right now haven't taken up the payroll deposit ira. either they've adopted a 401k or a so-called simple ira plan for small businesses, or typically have not had a plan -- obviously employers adopted more elaborate plans like defined benefits, but typically they are not doing this voluntarily, the payroll deposit ira, and that's why the automatic proposal would call for employers who are large enough, but are not willing to response sore a plan --

sponsor a plan to at least make their payroll system available to their employees with a tax credit for the employer that would defray whatever small administrative costs that might be entailed. >> one last one, and then we'll let you go because you're a day from vacation; right? given the emphasis on automatic features, is there still a role for financial education? >> that is something i'm very glad has been raised. financial education i would argue is crucial, and even more so with automatic features. the fact that financial education by itself is not sufficient to generate a breakthrough in savings in the united states does not mean that it isn't necessary or tremendously important. i think that it is. if you're going to automatically

enroll people in saving at a certain level with a certain investment, you want them to assert their choice. the best thing is for the individual to decide exactly what they want. the auto features are just to help people get off the couch and start saving, to help people get into the system. once they are in the system if they have not already asserted their choice, they ought toe have the opportunity -- ought to have the opportunity to learn enough about these choices in order to make the choice that's best for them, and i think that is -- it is critical that we promote the financial capability and financial literacy efforts. i know that you and anna marie, others here have been leaders in the social security -- the social security administration has been a leader in that, the treasury and the obama administration are strongly supportive of it and also have been trying to advance that, and let me add to connect these

themes in closing, lifetime income, the idea that people need help, advice, other types of assistance in figuring out how to make their savings last and how to make sure they neither run out during retirement nor abort their savings means they are not living up to the standard of living they could have because of fear of running out, helping people with those issues is so education intensive a project. it's not only giving them easier mechanisms and methods like lifetime income arrangements, but it's also helping them understand how it all works, how an account balance translates into a stream of income and framing that issue so people will become used to thinking in terms of a retirement or pension paycheck they need to provide for themselveses rather than

just a sum of money whose duration is uncertain, so this has been great. i very much hope that we can continue as we've been doing, the dialogue with all of you here, we very much welcome, i say "we" the administration, treasury department included welcome your suggestions, ideas, input, and collaboration on what needs to be a thoroughly bipartisan non-ideological effort to promote retirement security for all americans. >> mark, thank you so much. [applause] [inaudible conversations] >> john, you should probably come up and take over.

[inaudible conversations] >> two members of the public trustees of social security and medicare will talk about the role of the trustees at the 13th annual conference of the retirement research con cosh yum held in washington, d.c..

>> the student conference, and then a discussion on the national debt, after that, executives of the nfl and nba players unions talk about the -- [inaudible conversations] [inaudible conversations]

[inaudible conversations] >> the subcommittee will come to order. good morning to everyone. we called today's emergency hearing because of the crisis in the sudan state of southern kordofan. it arose this year after the military forces of sudan attacked the yabei region. south sudan was about to be independent and i attacks would have provoked a fight to derail independence. the attack on splm north members in the southern state of kordofan were increasing. because of fighters increasing, no one is estimating how many people even killed in the area. we do know that more than 73,000 people have been displaced. whatever the numbers involved,

we can be sure that the people of southern kordofan, especially the nuba people, has been catastrophic. this latest violence is a tragic resumption of a prior war by the khartoum government. in 1980, islamist forces began a campaign against the nuba pinning arabs against africans in the south. they are not southerners even though they fought with the corpers in the north-south war. neither are they accepted in the north even though many of them are muslims. this left the nuba on their own to suffer the on slowlgt of the government. the ethnic cleansing issued harsh attempts to isolate areas killing combat at that particular times and others -- combatants and hurdling

survivors into so-called refugee camps. when jihad was declared by the government in 1992, even muslims were targeted with the rationale that muslims in splm areas were not true muslims. rape of nuba women is destroying the social fabric of nuba society. almost every woman who has been in one of khartoum's so-called peace camps reportedly was either raped or threatened with rape. according to the united nations office of affairs, between 30,000-40,000 people out of a population of 60,000s in southern kordofan have fled the town. many of the attacks were indiscriminant including bombardments and artillery

fire. bombings have been reported in five villages south of the state capitol south of kudugli and other towns. the u.n. office of the high commissioner for human rights told the u.n. security counsel on july 29th, there's reports as recently as july 27th of bombings forcing civilians to flee from the bombings. one of our witnesses today, bradford phillips of the persecution project earlier this week, on monday, brought to us very, very troubling evidence, eyewitness evidence that he had gleaned being there for almost two weeks. when we hear about the reports, here's a man who actually saw it, and it's the reason, frankly, the genesis of this hearing today. his sense that we need to do something to bring focus and scrutiny and hopefully action to this terrible plight. some today are trying to down play the overall responsibility

of the sudanese government for the devastation taking place in southern kordofan by referring to the refusal of the slm north to lay down arms to negotiate with khartoum, but there is no moral equivalence between the north actions and those of the bashir government. north members are not bombing people indiscriminantly, driving arabs often their lands and homes nor going door-to-door to identify their perceived enemies in order to execute them. the government of the sudan's military forces are and we will soon see photographic evidence of the atrocities. in addition the attacks in southern kordofan disrupted the planting season and will have a long-term negative impact on the ability of its people to feed themselves. in parts of somalia, ethiopia, and kenya, people suffer from draught made worse by conflict. in southern kordofan, the

national government is creating a similar humanitarian crisis. the death and destruction to which sudanese africans have been subjected was thought to have ended with the signing of the comprehensive peace agreement in 2005 to end the north-south civil war. however, the genocide in darfur diverted the international community's attention away from the unresolved issues between north and south. these lingering points of contention threaten to derail independence for south sudan just as the independence process was coming to a conclusion, and now the struggle over abyei threatens to stifle the cries and pleas for help arising from the nuba people as they are dragged into a resumption of the northern war against them. we discuss this war during the subcommittee's june 16th hearing on south sudan. at that time, the fighting in southern kordofan was as horrific as any attacks waged by

the khartoum government. the testimony that will be presented today by witnesses who have seen the carnage firsthand will reveal the horrific extent of this situation. again, i welcome today's testimony to reveal the depths of this tramming di and to -- tragedy and discuss ways to address the suffering of this particular region of sudan. i want to yield to my good friend and colleague, mr. payne, for any opening comments. >> thank you very much, and let me commend you, mr. chairman, for calling this very important hearing and just rushed here from an earlier meeting that we -- that was called on the problem of somalia and the drought that is going on there and so i appreciate the chairman giving the attention to this region which, of course, because of our pressing problems here in the u.s. and we do know that we

have a primary obligation to our nation to make it strong and to correct some of the errors that we've made in the past, we still cannot forget that we have a world that's really being shattered by unsharedded bread, -- unshared bread, and we have a responsibility still as it says in the bible to be a brother's keeper, and so i know that it is difficult to focus on areas outside of our immediate problems, but i do appreciate the chairman of keeping the issues before our nation because we do, i believe, have an obligation. less than a month ago, world witnessed the birth of a new nation, the republic of south sudan. i was among the delegation present at this ceremony, and i witnessed the joy of the people of south sudan that day, many

decades of struggle, struggle before independence, struggle since the independence in 56, struggles with the civil war breaking out in 89, struggles that continued until the cpa was signed in 2005, and struggles until the conclusion of the ref rep deem on -- referendum on july 9th when independence was announced and celebrated, and so it's been a struggle for the people of south sudan, and a struggle continues. the sudanese people accomplished a great deal and their celebration is well deserved and certainly overdue. the peaceful nature in which

98.8% of south sudanese voted for their up dependence was -- independence was commend l, and so serve as a witness to what sudanese people are capable of -- as a matter of fact a voter registration was probably in excess of 90% also, and it's regarded that this turnout even exceeded the turnout of south africa when they had their first election when mr.mandella was candidate for president of a new south africa, so we have to really commend the people of south sudan for their determination and their appreciation for democracy. unfortunately though, violence in south kordofan and other areas also remind us that important work still remains to be done to ensure peace within both countries, north and south

sudan, and a peaceful relationship between the neighboring states. in june, the subcommittee convened to discuss the challenges that the pending nation of south sudan would face. we're now on the other side of the independence celebration and are witnessing some of the challenges that southerners living in the north are facing. in today's hearing, we'll be focusing on the disputed region of south kordofan and the human rights violation that are occurring at the hand of president bashir of the nuba people. the map was drawn in 1956 # or prior to that and when the british gave independence on january the 1st of 1956, the lines were drawn, and had they been drawn today, we would know that south kordofan and abyei and the nuba mountains would indeed be a part of south

sudan. people in those areas fought along with the splm and feel a part of the south, however, the lines have been drawn, and they find themselves in the north; however, there was supposed to be accommodation made so there could be a discussion on what type of arrangements could be made in kordofan, south kordofan. however, the popular consultation has not taken place. the referendum in abyei has not taken place. ..

hundreds of thousands have been displaced. there are disturbing reports of targeted killing of nuba people en masse graves and they are searching homes for supporters and detaining, torturing and killing them. this is evidence of ethnic cleansing. unfortunately the saf are armed to do the job. they are using heavy weapons including artillery, helicopterd russian-made antanov bombers to hunt the new bins like animals as it was said. the violence that is occurring is by no means an isolated or localized incident. bashir has done this many times

before and are for in the eastern sudan and here in south kordofan. our fist visit to 1993 and an sba controlled town of the ugandan border, there was at that time on the frontline. i saw the first-hand suffering of the people in that area. when i returned to introduce the resolution saying the people saw saddam had the right of self-determination and that began the whole notion of a new nation. with deep sadness i remember visiting abyei in may of 2008, just after the town had been attacked and burned to the ground by the bashir forces and pro-government militia. the atrocities displaced more than 40,000 people and upon return i introduced a resolution to highlight this hideous act of violence that continues with the war by al-bashir. in late may a sudanese army

force them dated abyei killing over 100 displacing an estimated 100,000. south sudan's president has shown considerable restraint thus far because he does not want to have a war that would interfere with the peaceful resolution of the crisis. we must remember the human cost of these acts of aggression. people of abyei, southern kordofan have suffered severely. for many, the violence and oppression continues with targeted killings and prolonged displacement. let us also not forget the ongoing crisis in darfur or where many remain in displaced camps and malnutrition in without any way to support their families due to the oppressive government of the bashir people and the military tactics. i along with my fellow sudanese

caucus cochair are circulating a letter to president obama urging him to condemn the violence and seven kordofan. we must use all available diplomatic and political tools to combat these human rights abuses, including possible sanctions and other accountable measures. it is also important the united states properly fund a programs and peacekeeping missions that are helping to save countless lives. the proposed cuts would greatly hinder our ability to provide relief to these affected areas and to help bring stability to the region. that is why during foreign operations operation built markup last month i propose an amendment that would have increased funding for the u.n. peacekeeping budget at the presence requested 1.29 billion add $50 million to be set aside for contingency funds specifically to address these atrocities we are now witnessing in southern kordofan in the

border regions. i am interested in hearing from our panel on how the budget cuts would affect the work that they are doing. i am also encouraged to see that today president obama announced an initiative to strengthen the united states ability to prevent mass atrocities. this new initiative will include the creation of the atrocities prevention board that will have the authority to develop prevention strategies to aid the u.s. and its allies in responding to early warning signs that prevent potential atrocities. the president has also issued a proclamation barring persons who organize or participate in war crimes, crimes against humanity and serious violations of human rights from entering the united states of america. ipod the prison for remaining engaged in combating the mass atrocities that are occurring in sudan and around the world. on july 9 the world celebrated with the people of south sudan

and rightfully so. after all, the united states and people here like mr. wolf and others have played such an important role in what we see today. and so, we have -- we are a critical partner in the sudan peace process as we all know. while efforts have been fruitful, our work to ensure stability and prosperity for all sudanese people is far from complete. it must remain engaged and commit our support to democracy, rule of law, justice and peace for the people of sudan, whichever side of the border they live. thank you very much mr. chairman. >> the ranking member for statement. i recognize andrea buerkle. >> thank you mr. chairman and thank you for joining us extremely important emergency hearing in testimony for today's hearing. this is a sobering reminder that the suffering of the sudanese people remains ongoing. although it is important that we celebrate the new nation of south sudan, we cannot forget

their fellow sudanese across the border. the south korda van area has been said by disease and heartbreak for decades. is frankly unfathomable that these people who were responsible for the darfur genocide are still in positions of authority, still carrying out there her thick war crimes. now with the struggles between the north and the south sudan over abyei the crisis in self kordofan is escalating and destabilizing an already fragile region. and that destabilization means the cost of thousands of lives and presents a serious threat to not only the nuba mountains and contested areas but also to the newly born south sudan. thank you to our witnesses for being here today to share what you have learned first-hand. thank you mr. chairman. i yield back. >> ms.. thank you very much. the chair recognizes chairman will. >> thank you very much mr. chairman. i will be just very very very

brief. one i want to thank the witnesses and two i want to personally thank thank both you and mr. payne for having this hearing so fast. i have never seen so many turnaround. when the two of you got together so i personally want to thank both of you. i think it is incredible you are interested in how the two of you work together and both deserve a lot of credit. i think the church in the west has to do a better job of advocating for the persecuted church. i see one of the witnesses represented, richard morin brenner who i have read his books over the years and visited once in romania. the silence of the church in the west is actually incredible and when i think of what is taking place to believers in that part of the country, that part of the world and yet i hear full complete silence is incredible.

if anything hopefully this hearing can motivate not only the administration but also the church, the leaders of all the nominations to come together to advocate for this. we will see what comes out of this hearing and i thank the witnesses and i want to again thank you and mr. payne or working together and getting this thing done right away. somebody comes up with an idea and 48 hours later we have a hearing for thank you very much and i yield back. >> thank you very much. let me introduce our very distinct panel distant was paneled witnesses today beginning with a bishop in andudu, andudu adam elnail the bishop of kadugli the capital of self kordofan. he tears integrated committee for this conflict torn region. he has been outspoken and courageous. in a recent interview with bishop andudu if anguish --

anguish and bishops had not been receiving medical treatment in early june he might be the -- in a mass grave now. that is how volatile and how dangerous the situation is today and again we are deeply indebted that he is here, flew here and will be providing the subcommittee and hopefully the entire congress and the american people very important insight and will be a rallying cry for action. we will then hear from mr. bradford phillips who serves as president of the persecution project foundation and as a sudan country director for the voice of the martyrs to nonprofit organizations dedicated to serving the persecuted church. i would point out parenthetically that in 1980 i read richard warren brand's look who had suffered horrifically. nicholas judge us go was the dictator of romania and spend years being tortured. he and other believers and that is what got me involved in religious freedom issues after

reading that book. mr. phillips is one of the leaders of the voice of the martyrs, the group that continues that work and he is founder and president of the persecution project. since 1998 mr. phillips has helped document acts of genocide committed by the government of sudan while spending two weeks interviewing victims of war crimes against nuba. as i said my opening, the reason we are meeting here today with his urgent plea on monday that this congress bring light, scrutiny and hopefully an action plan and the president in the state department to try to mitigate this terrible terrible worsening situation in south kordofan. he is also founder of the humanitarian project to provide clean water to darfur refugees. then we will hear from dr. subon luka biong deng the executive

director of kush inc.. he is an expert in african affairs civil wars and conflict resolution and has published numerous articles in international journals addressing these issues. he is also the founding member and chairperson of the board of directors of the abyei community action for development. dr. deng serves as minister of cabinet affairs and minister of presidential affairs for the government of southern sudan in his work for world bank in southern sudan centers for census statistics and evaluation. again thank you offer being here on such extraordinarily short novice. i would like to begin with the bishop if i could and please proceed as he would like. >> thank you chairman smith are recalling this emergency hearing on the human rights and human security in my home region of south korda von.

south kordofan. >> if you could just pull the mic closer. >> i want also to thank the ranking members of the judiciary for the endangered nuba people as well. i'm here to justify all of my people and my members of my church. i want to start with what happened in my diocese and in my town of kadugli where the major atrocities are taking place. my house was shot with guns and my chaplain was able to get through the window and also my offices were burned down as well. the atrocities are taking place not only for the christians but also the muslims.

and one of my -- told me very clearly he has seen the earthmover in the school of dillow and in the evening they brought bodies in the location and the militia and other people putting on uniforms in the prisons in kadugli and also some people working with -- and the people were put in body bags. they were put on the beach so he had seen this personally and i have talked to the many times and i believe really what he is saying.

also, this is consistent with the images that were taken with the satellite and really i appeal for the united states to apply its own satellite to prevent the eyewitness also for the government with a mass grave that was found and also the ongoing investigation to find out exact way what is taking place. in the nuba mountains now, the children are killed and the bombing, the civilians are targeted. it is a war of horror. ethnic cleansing and the nuba mountains. every day i hear from different cities of south kordofan and we are experiencing people running in the mountains and there is no food in the case.

that people just eat greens. they eat grains and there's no food. at the same time, this is a very important part time in an for us in the nuba mountains. if you have not died by the bombs and next october, we will not have any food and then also we will die. that is why we are calling for the u.n., government and other international communities and the african union. this is the people that help us to sign the peace agreement in sudan and we are very grateful for the decision of southern sudan, but at the same time nuba mountains are left struggling. i want the u.s. government really to go further to secure our people in nuba mountains. really, we need the government

and international community to stop this bombing. they are killing people. if these can be stopped to spare the lives of the people, it is not on the military but on the civilians and in places where there is not any -- of the soldiers. at the same time the government is not allowing the humanitarian access. there is no organization to bring food. i am also calling for the international community and the u.s. to make any ways for the humanitarians to get access to give aid and food and also to keep the -- for the injured people in nuba mountain. at the same time the u.n. troops

in south kordofan are -- by the government of bashir. they have been told now they have to move. they were not allowed to go look at the mass graves and really we want the increase and also effective peacekeepers in the nuba mountains. the people of nuba want peace. but they are forced to fight to defend their people. and the nuba people, they don't know what is going to happen. they feel they are forgotten because nothing is done to secure them and give them the freedom. and bashir and sharon are people wanted by the national criminal court.

they are the same people that did the crimes in darfur. we create these in another part of the region like in southern sudan when the cpa was signed in they started a war in darfur. also now there is also were nuba mountains. this is the type of government we have been dealing with for over 20 years. this is a government that is killing its own people and people are engaged and assigning a piece will be broken. we are not alone calling for the international community to help us but all the people in the world. here we have the petition. over a half million of the people around the world are calling for a stop to the brutal

ethnic cleansing in nuba mountain. so we are calling for action in the region of nuba mountains and other marginalized areas. thank you. >> the ship, thank you very much for your testimony and for your urgent appeal to the united states and the world. the community to respond and to do so immediately. mr. phillips. >> chairman smith, ranking member pain and members of the subcommittee, thank you very much for inviting me to testify at this emergency hearing on the current crisis of the nuba mountains of the kordofan stayed in the republic of sudan. by way of introduction my name is brad phillips and i'm on behalf of -- i care of on behalf of two organizations working in sudan. the first is persecution persecution project in the second is the voice of the martyrs and much of our emphasis has been on sudan during the last, more than the last decade.

my very first trip to sudan brought me to the nuba mountains after reading the reports of the genocide that was happening there. alex dewald and julie flint another set written many reports. i had heard about the extermination of more than half of the nuba population and so that was my first introduction to sudan and at that time as was with my most recent visit there were bombings going on every day that were part of an aerial campaign of terror against civilians. mr. chairman i realize that you and your colleagues are only now concluding a very busy time concerning the raising of the debt ceiling so i'm extremely grateful you have taken time in hearing about this issue which is a nonpartisan issue. it is the issue of genocide. genocide currently being perpetrated in nuba mountains in the southern kordofan state of

the republic of sudan. i know you have had the opportunity several times to receive testimony on this issue from my learned friend roger winter who has acted in many different capacities including the former special representative on sudan and during his last testimony on the 16th of june he reported to you on this war of genocide now being waged in the nuba. i'm here simply to say that everything that mr. winter presented in his testimony about the southern kordofan state is true. i've seen it with my own eyes. less than three weeks after mr. winter's testimony, i was in the nuba mountains for 12 days. i fully understand what is happening right now in the nuba mountains requires some context and some background and i appreciate very much the long history that you have had mr. chairman and ranking member payne and congressman wolf in so many others on this committee on this issue. but for the sake of others, 1989

through a coup d'état of the national islamic front came to power in sudan and its leadership consisted of islamic extremists. many of them are were founding members of al qaeda and they were earth by the muslim brotherhood. they were identified by our government as terrorists or supporters of international terrorism and as soon as the national islamic front came to power it again and intensive military campaign to arab eyes and islamize indigenous african populations in southern sudan, the nile and the nuba mountain region of the southern kordofan state and more recently in darfur. during the 1990s up until the peace agreement was signed in 2005, more than 2 million southern sudanese people, most of them were christian or animist were slaughtered but in the nuba mountains in the 80's, and the '90s roughly half the population and estimated more than 500,000 people were slaughtered in a similar

genocide. all of us i think are aware of the genocide that took place and are for beginning in 2003 that claimed an estimated 400,000 lives. the primary resistance of the national islamic front came from the sblm the sudanese people's liberation movement led by the charismatic leader. dr. john was a christian from south sudan but he desired freedom and self-determination for all of the sudanese people and his vision was called the new sudan. after more than 20 years of fighting the sblm fought the national front to a standstill and with the help of international pressure much of the bed by the united states they were forced to negotiate and all of that was consummated in january 2005 with the conference of peace agreement signed in the bosch a kenya. kenya. this agreement provided semi-economy and the referendum vote on self-determination which we all know resulted in the well

coming in of the republic of sudan as the world's newest nation most recently on july 9. but while we do celebrate with south sudan its independence from this murderous regime we must not get the many marginalized groups in the north were not given the same guarantees as the south. specifically the abyei region and southern kordofan state, also the nuba mountains in southern kordofan and the blue nile state received implicit thomases for self-determination and four, as well as some explicit promises in this agreement. the subsequent action to show during the interim period had no intention of granting self-determination to these marginalized areas. under the cpa the nuba were guaranteed a free election, gubernatorial election most recently to take place in may of

this year followed by the popular consultation whereby elected leaders would interview their constituents and determine what the people wanted to do with regard to their political future. this consultation process would hopefully have paved the way for regime change -- regime change or some kind of power sharing arrangement in khartoum that would recognize and respect the rights of all of sudan's diverse communities in the southern kordofan state. as its day the popular consultation that was promised by the cpa has not taken place. moreover, sudan's president omar al-bashir publicly stated in april of this year that if the national congress party could not get its way at the ballot box, but use the ammo box. he went on to say that he would smoke them, the nuba people out of the mountains using tanks and camels. this was really a declaration of war on the 27th of april by bashir and it was a clear violation of the entire peace

agreement. earlier that month, as an intimidation tactic and i believe an attempt to draw the sblm into war before the election, bashir sent militia forces to an area called al fate, which is the home of the nuba commander, the home area of the commander and 27 members of his family were murdered in this attack. he didn't take the bait and he went through with the elections. when the elections finally took place, the evidence of large-scale vote rigging was reported yet even with evidence of vote fraud bashir jumped a few steps and sent down his adviser nofi l. nofi to declare their candidate and indicted war criminal herrera and ruined the winner without any verification

process taking place. the newly-elected governor of herat and ordered all as go ask on forces out of southern kordofan by jim. this was allowed to operate in southern kordofan up to 90 days after the close of the interim period on july 9. this attempt by the ncp to cleanse the north of the sblm before the july 9 independence of the south sudan was also carried out in the disputed obey a region. after amassing troops around obey a ncp forces invaded on the 20th of may forcing most of the indigenous african population out. some estimates of the number of refugees from this area are as high as 100,000. it became obvious to all watching these events unfold what was happening. it is no wonder the sblm refused to disarm or to leave southern kordofan state. when the order was not obeyed by

the june 1 deadline the ncp tried to do it -- to disarm the sblm by force and this was the beginning of the war on june the fifth. on june the sixth, the ncp attacked and sacked the capital of kadugli murdering potentially thousands of civilians in the subsequent days. the ncp pulled out an old card from their deck which is the daily aerial bombardment of civilian targets. using anson on bombers, big fighters and helicopter gunships the ncp launched a campaign of terror from the skies. i've included some pictures of these bomb locations which i think are playing now on this screen. bombing civilians. i personally write a new new bonna fourth of july in one of few private charters that was flying to nuba since all humanitarian flights had ceased. during my visit i have the opportunity to spend time with

an interview more than a dozen individuals who had escaped from kadugli during the first few days after the ethnic cleansing started all of whom share the same basic story and one which the reverend has just shared in which you will hear from others. sudan armed forces went from house to house, searching for any nuba citizen, anyone who was identified with the church or anyone who was associated with the sblm. anybody fitting either of these three descriptions was either killed on the spot were arrested and never seen again. fortunately a few thousand residents at attained shelter but the compound after being filled, and i've heard many stories and accounts of people being killed, at the advocates of this compound as a result of allowing the security forces and intelligence forces of the -- to

enter the compound and take nuba people out of that compound while they stood by and watched. i had the opportunity to spend time with one of the colleagues of reverend andudu who is the chairman of the council of churches and also a priest from the same area. he escaped from kadugli within a few days after it started. what he said to me, and i've submitted the video interview with him to this committee, the ncp is targeting the church in this war. reverend luther received a call from some of his friends after getting out of the first escaping to an area called shinier and make his way outside of kadugli county and they basically told him he was on the list which is what the bishop here is told me well. meaning that if they find him, if they catch them they are going to kill him. his testimony corresponded with so many others that i received from nuba christians and

non-christians alike who are persecuted in the last whereby the same regime. i just mention one story of a man who i met whose fingernails were pulled out and his were crushed. he was dragged behind a tank. he was in and out of prison for eight years and what he pointed out to me was this is a very same regime that did this to him that is now bombing his village. and we saw the planes passing over three or four times a day. reverend luka said the ncp does not distinguish and distinguish between a christian and a member of the political party. they assume if you are associated with the church that in fact you must be sblm and spla and this is the testimony we got from so many passers were interviewed when they capture them. the first thing i did was asked them for a list of all the members of their congregation because if you are part of the church you are the enemy.

consequently even today pastors and church leaders are being specifically targeted as leaders and recruiters of the sblm. another pastor who i interviewed whom i will refer to as comey for security reasons was arrested by the mfn torch and some of the most horrific ways and as mentioned he was forced to do bolts the names of his church members. during his capture, which i've are to mention, they pulled out his fingernails and his toenails and they hung him by the neck and they crushed his. they poured gasoline on his hands than they set them alight and they did many other cruel acts. this pastor was imprisoned for a total of eight years and although he lived several hours drive from the area where reverend luka was from, his testimony was the same.

yet another church leader that i met in a completely different area was stabbed 10 times. his name was moussa. they stabbed him 10 times. he told me that he was killed along with seven other elders and pastors in his church. they destroyed his church. they stabbed him 10 times. he actually -- they believe he was dead but he survived and each one of the people that they killed, they cut off their erisa trophy to go and take back and show what they had done. and, his message to me was again, was that these are the same people that are bombing. these are the same people that are cutting off peoples heads and slaughtering people like animals and kadugli and that they have their way they will exterminate us. so i heard the stories over and over again during the 12 days that i was in the nuba mountains.

the only difference in what i saw in 1998 in what i saw last month is that the sblm fairly taken the initiative and taken the fight as a board to the enemies led by their leader, commander abdul aziz. the people of an nuba mountains are fighting back and have one impressive pictures on the ground. this has occurred without any significant help from the international community. this determined resistance by the sblm in the nuba mountains is a genuine popular uprising and the only thing that has prevented another prevented another of her wand and style genocide from happening but time is running out. the u.n. ended humanitarian relief efforts in early june and most ngos operating under the u.n. umbrella pulled out. all the roads have been closed in the rainy season in south sudan has effectively closed supply routes to the south until the end of the season in november and december. the daily bombings have terrorized local populations and

normal cultivation is not taking place during this crucial planting season. the nuba mountains are isolated, cut off and facing a very severe humanitarian crisis within the next 60 days or less and less relief flights are allowed to recommence. this will not happen while antonin bombers control the skies. the ncp refuses to allow observers into the nuba mountains to document what is happening which does not surprise anyone. is absolutely essential the international community bring pressure to bear on the united nations to immediately declare a humanitarian emergency and impose a no-fly zone to stop the bombing campaign and allow humanitarian access so that relief flights back into the region may resume. i will conclude by stating there is more than enough evidence to justify. >> action on the part of the

united states government and international community to address this very dire situation in the nuba mountains. the president of sudan omar al-bashir is an indicted war criminal. the governor of the nuba mountains is also indicted war criminal because of his role in the darfur genocide. and that he was the one carrying out the genocide in the nuba mountains of the '90s. these men make libya's gadhafi the at the choirboy. there is no justification in my mind for a bombing in libya while we do nothing in a place like the nuba mountains. many seasoned reporters from "the new york times," "time" magazine, al-jazeera english and the independent and others have visited the nuba mountains and some of them were with me during my time there. they brought back testimonies, pictures and video that corps operate and prove that the war crimes were being committed right now against the nuba people by the national congress party regime.

i've included copies of some of these articles with my testimony and i asked the question, how was it then that the u.s. government still claims there is not enough evidence to charge the ncp with war crimes? what is the u.s. government treat, deal with the ncp and the victims of the crimes with a moral equivalency? based on the history of the ncp and what we know about what they are doing today in darfur and abyei and the nuba mountains it amazes me how the u.s. and international community is able to tolerate these killers for so long to get aggressively pursue other villains who have not killed 1/100th of the people as omar bashir are responsible. 3 million lives and counting. when will we say enough? >> mr. phillips, thank you very much for your powerful testimony. dr. deng. >> thank you for inviting me to testify today.

good morning chairman smith and ranking member. >> if you could pull that closer and make sure the microphone is on. >> thank you for inviting me today and good morning chairman smith and ranking member payne and other distinguished members of the committee. is indeed an honor for me to focus on such a difficult issue. i welcome all others on the issues facing sudan, southern sudan and indeed the people of nuba mountain. i am currently serving as a -- of kush and organization trying to promote peace and stability

and the relationship between africa and the u.s. but indeed focusing on abyei and southern sudan. mr. chairman i am one of the people who participated in the organization of the peace agreement but even more importantly i was negotiating the protocol of the two areas. and i want to echo again what happened during the peace agreement. the people of nuba mountains not only participated in fighting for their rights but indeed there was a public invitation given to them. there was a choice and that choice was to have the right of -- but we did not get it. having the consultation is a step for them to pursue the rights. but i want to share with you today also before a -- kulisch i

served as a minister of national government as minister of national affairs. mr. chairman, i rely on the 21st of may this year. after bashir and his government invaded abyei and when he -- i saw thousands of people marching out, crying children. and i saw clearly the pattern, clear pattern of a leadership focusing on select to fully targeting its own people. it started with darfur but coming through to abyei but indeed we are seeing today in southern kordofan. a clear case of ethnic cleansing, a clear case of the african people and that country

being displays and arabs being settled on their land. i sent it my own resignation because of what i saw in saddam. sudan. mr. chairman, nuba mountain is just an example of the pattern happening on the north-south border and that is why i felt we should widen it in order to look at the orders between the north and the south. what is happening is unacceptable and it is going to continue throughout the border region of the north-south. we should remember another reason that will face the same soon and that is the blue nile. i appreciate the opportunity you have provided me today to discuss the current situation in southern kordofan and the

recommendation that this government and the people of america could do in order to help the alarming situation in sudan. it is very important to look at the hopeful picture and that is why would like to look at those issues as well. mr. chairman as echoed and mentioned by congressman payne, i think the people of southern sudan, it appears we should look at the international community in the region of southern sudan. and i think when we talk about the relationship, southern sudan is a reflection of the people of who have suffered. indeed what we are seeing is that going again what happened to the people of southern sudan. we are seeing it in nuba mountains and definitely indoor for. but -- it is most important for you to know i feel it is

critical that the emerging or the remainder of the continued leadership in northern sudan. i am intending to go to the radical elements and the government canada now they have a purified sudan, asic and that only has two elements, muslims and arabs. the great african people in darfur and southern kordofan and -- could see a -- emerging in that country in northern sudan. personally i feel what is happening in southern kordofan is not ethnic cleansing as you have what it. i would say it is indeed a crime

against humanity and it will help us to focus more rather than ethnic cleansing. it is not about nuba. is about the people and about the air traditions and their land. i've personally witnessed in the abyei area and i saw how it is affecting the people. two months ago, 100,000 people were displaced and what i told them again, that in the appalling conditions where children are dying because of the leadership in khartoum. but i feel also in northern sudan -- sudan it is critical for us to look at the opportunities in sudan.

the sudan people in the northern sector headed by people like -- abdul aziz, these are the only critical political parties that they feel i feel are a real ally that would engage in order to inform the system in khartoum. these are the people who for the war believe truly in peace. but what we are saying is that these people in the northern sector because of the things happening in southern kordofan, they may wish for the adoption of a regime change. that will affect eventually the people of this. mr. chairman is important for us to look at what is happening and what is happening now.

i have been negotiating with the national government, the sudan government, under the auspices of an african leader. and it was good to hear what happened in nuba mountain and particularly what happened. i want to remind the members of the committee that the people of nuba mountain for giving these popular consultations. but you know congressman payne, the election and nuba mountain was -- with the hope to dilute the -- of the people of nuba mountain but it is important also that even the blue nile,.

[inaudible] the people of nuba and the blue nile should be discussed at in the next legislation. it happened in the ncp in a laterally is a member of the south in the legislation. you'll be left with an assembly that will not protect the people of nuba mountain. they are supposed to be there up through the ninth of july but they decided are maturely -- it is important to note that also the ncp unilaterally took a decision to disarm these two areas. and a commitment in the arraignment was for us to have this joint integrated unit to

continue to the ninth of july of 2011. but they decided to attempt to disarm them before then. that is what is the conflict we are seeing we are seeing today. dishonoring what we read upon. it is also important to know that during the negotiation and agreement was reached with the sblm and the ncp, the leader of ncp for an arrangement. what happened after the signed agreement, the ncp rejected their agreement and their agreement was talking of a dialogue between the sblm about the forces. and for the sblm, they rejected that one. but in the same pattern i want also to share with you what happened in the abyei.

we agreed of having a referendum for the people of abyei and in that agreement protocol agreed there would be a bombing commission, commission to be formed. that commission was formed and we agreed it should have a final and binding for the founders of abyei. what happened is they rejected that one very early in the peace agreement. the push-ups of level we go to the permanent court of arbitration, we went to the court of arbitration and for the sake of peace, the court found -- of abyei. they rejected and they said now it is still the area that belongs to the arabs. we agreed with the ncp that we should he able to appoint the

candidate of the share of the southern to don commission. and the sblm to nominate abyei from the commission. they refuse. we accepted and they refuse. they invaded. because we failed to contact the -- we had the african union. by the time we were waiting -- in may 22011. these are efforts of leadership dishonoring whatever you agreed with. and i think without one in mind about what they had been doing,

it is important to look at the south also because these people, the hope for them in the nuba mountain, darfur is the new nation being formed now in southern sudan. it is very important to know the it is a collective -- that results in what we are seeing in southern sudan. how people would describe his country i am seeing in that country a passion within the global nation to build a nation and those mentioned by congressman payne, i think they are going to see a lot of difficulty. that is why we are seeing a viable sudan is very important in the middle of -- i think it's important we focus on africa to make it a viable state.

that is the only hope of the people. of nuba mountain and the people of brew my brunei. i want to conclude with some key messages. we working as an organization and how it is very important for refocusing of assistance. definitely, i would like to say there is a leadership problem in sudan. and this leadership in sudan is a liability not only to its own people but the liability to the continent in a liability to the people of southern sudan. and i think it is important for the world to focus attention on what is happening in sudan because if we don't do it now, it is going to be a huge crisis

in the region. in the north and the constant at large. extremism is coming very clearly and the appetite for ethnic toensing and war is becoming a clear case in the loss. what should we do? i think it is very important that the united nations play a real influential role. is very important to take the lead. it is true it is an african problem but it consistently has become very clear how much it has been played in order to bring the commitment for peace and stability and solidarity. sudan is -- if we collectively work together. i think it is very important so that these southern sudan, put

it at the heart of your priorities. it is the only hope that we can be able to show to the sudanese people and to those who have struggled for their own rights that you are an understanding with them. i think it is very important in the united nations. in the abyei area a few have a united nation mission in that region to provide protection to the people and i think that is a very take -- under your role. the whole role of whether you've be united nations can provide protection but not only amended a protection but they also to assist in the -- of the people. mr. chairman also i know during the war it is difficult to get access. we did not expect the sudan government to give access to the people of nuba mountain and

people use a clandestine operation. [inaudible] it was through that process that we managed to take the relief assistance to the people of nuba mountain because we were district did -- restricted. the organization will be able to assist the people of nuba mountain but it is important also be looked for a safe corridor and also for the idp camp in the south so that these people can be served easily from the south. we also as the christian area as in its organization trying to develop we believe in helping the people and making the aid effect of using the indigenous organizations. i would like also to echo our per sheesh in and what the

bishop said about the role of the ngos. it is a program that managed to focus attention and it will provide a lot of information. these are the efforts we need to support. again i will say the role of the chair is critical. is not only about the government but about the people. they can do a lot of with a focus on usaid in sudan. i want to conclude with what i believe we in bush as an organization can do also in the area. immediate efforts are based on the empty goals of -- but we have also visited the domestic

effort. the encourage the united states to seek ways to encourage non-governmental organizations like bush and others waiting in the region and we will provide a foundation for efforts in the south in and the north and to to achieve a lasting peace and a society that is respectable of the human rights and religious beliefs. i would like to thank you indeed for giving me this opportunity. >> thank you very much for your very comprehensive testimony and your work. let me just note for the record that we have invited -- and admittedly it was very short notice. two days ago we asked them. this is an emergency hearing and i wants the state department and the usaid to know that this subcommittee will reconvene at any time come, any time in

august, hopefully very soon, to hear specific a what is being done, contemplated in response to this catastrophic explosive situation that you have wrought our three distinguishes witnesses to this subcommittee we will reconvene at any time and hopefully be part of a solution. bishop andudu you pointed out the grave situation calls for the united states united states and the international community to translate mower -- moral outrage into effective action and talked about how your cathedral has been ransacked and your chaplain has been beaten. you make it very clear that the nuba people fear that they will be forgotten and that the world will stand idly by. these are your quotes, while mass killings continue without redress and you talk about the house to house killings that are occurring as we