president, changing three things in the dodd-frank bill. if you do i'm sure we will have a good piece of legislation, at least a better peace. and we'll go from there. but short of that i don't believe that we are moving that nomination. .. >> secretary geithner, the bang of england governor, as you know, mervyn king, as well as some prominent economic economists have said that because el iii -- basel iii

capital standards are insufficient to prevent another crisis. do you agree with them, or do you have second thoughts? >> i do not. >> i've thought myself that basel iii to strengthen the capital standards was positive. >> the framework that we call basel iii is a dramatic increase this basic conservativism of the capital regime in the united states and around the world, a substantial increase in capital relative to what was required before the crisis. combine with the the liquidity provisions in place, too, creates better protections. now, just one quick qualification. we have proposed that the largest institutions fold, and this was required by the legislation too, hold an additional layer of capital, and our judgment is the combination of those two things as long as you phase them in, you want to phase them in carefully over time -- >> but not too much time, is it? not 25 years from now. >> no, you don't want to wait

too long --? >> okay. >> but you don't want people building capital too much, too quickly or having to sell assets in those environments too quickly when the recovery's still trying to -- >> they've got to get on the right road. >> and they are. and u.s. firms are very, very far along to meeting those new standards. >> do you have confidence that the european banks and the regulators there will comply with basel iii, the spirit as well as the letter of it? >> >> well, we're going to do everything they can to make sure they do, of course. and as i say, we have the time to try to make sure we're confident that's going to happen because these rules only start to bite over the next several years. and so we're working very hard to insure we have better protections in place. >> uh-huh. mr. secretary, do you know of any financial institution, and you've been around a while, that has had, that has been adequately, in other words -- and i don't say -- well capitalized and have liquidity that has failed? >> that's like a, that's a very interesting question. um, i think that in a, in a

really systemic financial crisis just to think back to the experience of this country in 2008, for example, it certainly was the case from the great depression and other examples of this stuff, you can have a situation when even very well capitalized financial institutions are subject to acute pressure. in some sense, that's the best way of thinking of your definition of what's a systemic crisis. >> but if they have liquidity, doesn't that help? >> it does help. but, you know, we're -- this is a interesting conversation, but you can't, it's not sensible to try to force the system to hold capital in reserves that would cover any foreseeable, imaginable risk or shock. >> well, that makes no sense then. >> exactly. so in a really systemic financial crisis, even the strong will be affected by the pressures you see more broadly.

>> sure. this week -- >> but that would just, that's no comment on the present. you know, we're in, i think, you know, as i said and if you look at capital liquidity classic measures in a really strong relative position. >> this week, earlier this week bank of america, i guess it's our largest bank, i know it is in deposits, announced that it would charge a monthly fee to consumers, i guess credit cards. when asked about the fee, the president statedded, as i understand it, the banks do not have a right the get a certain amount of profit. how much, mr. secretary, how much profit should the government allow a bank to make? and does the president's comments mean that this administration supports government-mandated price controls on financial products? i mean, this is -- or is he, is that taken out of context, what he said? or is that just political rhetoric? >>? the president does not believe that we get to determine how

profitable individual financial institutions are, other companies across the country. that's not the system we believe in or we -- >> the market should determine a lot of that, shouldn't it? >> >> it should you said of course. but we want to have a system of oversight, consumer protection where consumers have the ability to understand what they're being charged for financial services, what they're being charged to borrow. and part of what we're trying to do is encourage much more transparency and clarity so that consumers are a little less vulnerable to being taken advantage of. >> so the consumer can make the decision and not a bureaucrat, right? >> that's exactly right. >> okay. >> now, there are things that government officials have to do, though, it's our responsibility to do. but the basic strategy we've adopted, the president's supported and the cfpb is designed to establish puts overwhelming burden on better transparency and disclosure as a way to make sure consumers have the better chance to protect themselves. >> but you're basically saying this administration is not in any way coming out for any type

of wage and price controls of any kind? >> no. >> okay. >> or, yes, i'm saying we are not. >> thank you. mr. secretary, the council's annual report that we've been talking about all morning's efforts to coordinate dodd-frank implementation goes across a number of agencies, as you well know. the sec has failed to harmonize some of the substance and the time frame of the dodd-frank rules. what's the council, has the council been involved in this trying to, are they making any success here in improving the coordination of the sec and the cftc? i think that's important. be drinking out of the same cup, so to speak. >> i completely agree with you although congress did leave in place this complicated set of independent agencies with independent statutory requirements. our basic approach has been to

say as you meet those requirements, we'd like you to do so in this a way that is as closely aligned as the law permits. >> uh-huh. >> where the law permits you to be aligned, you should be aligned. because if you're not, all you're going to do is is leave a complicated system with big distortions, opportunities for arbitrage gaps, and that matters for us here, but it also makes it harder for us to get the world to come to a more level playing field. if we're different places, it's hard to get the world to come to a sensible place. >> thank you. thank you, mr. chairman. >> senator bridger. >> thank you, mr. chairman. thank you, mr. secretary. i wanted to focus in my questions on the housing finance agencies and market and the need to bring reform there including a return of the private capital in the private market into that now very, um, government-dominated sector. my concern for a while including

all through the dodd-frank discussion is that that was put on the side with the promise that we'll get to that, we'll get to that next year. well, it's now next year, and i don't particularly see us getting to it. [laughter] now, i do know the fsoc report includes the statement that, um, the member agencies need to strengthen the system, quote, which includes developing a framework for the return of private capital to the system, closed quote. what does that mean exactly, and what's the timetable for concrete action? >> i just want to start with one observation which is that congress did enact a fundamental change to the basic framework of oversight of the gses and the home loan bank system in september of '08. ahead of dodd-frank. but, you're right, that with that foundation which department solve all our -- which didn't solve all our problems,

dodd-frank did not go further and lay out this fundamental problem of fixing the housing sector, and that's still ahead of us. so what are we trying to do? we want to set up a framework where the private system plays the more dominant role in housing finance once again and that we gradually phase down the government's role to a more limited, more targeted, more sensible role. for that to happen, we need to have a clearer set of rules in place across the securitization markets, clarity on the amount of capital we have to hold against a mortgage loan if you're a private institution, and we need to gradually wind down the exceptional measures, exceptional expansion of the fannie and freddie and fha's role that happened in the crisis as private capital withdrewment as we lay out a comprehensive set of options, proposals, objectives last february, we're in the process of designing

legislative proposals to present to congress. we've been consulting very broadly with academic experts, the industry, members of congress on how best to do that. and i don't know what's going to be possible in terms of legislating in this environment in the next 18 months or so, but we'd like to get that process moving. and as we said last february, we're going to take the burden of initiative in laying out to congress a proposal for how to get us to a better place. and you're right to point out that, and i say this all the time, we're at only the very earliest stages in trying to put in place a better housing finance system. >> so that work will include a concrete legislative proposal? >> well, we may -- we haven't quite decided how we'll do it. we might start with a, another -- we've had an option, but we might start with a proposal, get comment on it before we give legislation. we haven't decided yet. but we're going to propose something to you so that you have something you can consider. >> and what's the timetable for all of this broadly? >> >> haven't decided. as you know, we're kind of busy,

but e got a team of -- we've got a team of people who have been working on this all summer, and they're making a lot of progress, and, um, and we're getting closer. >> um, there were elements of dodd-frank which, in many my opinion -- in my opinion, pushed that sector in the wrong direction, further protecting or advantaging the gses. >> such as? >> >> will that be directly addressed? >> i'm not -- >> the exemptions for the gses for certain standards and requirements in dodd-frank? >> i don't think those stand in the way of us probe posing very substantial reforms, but we'll look at them. >> and the risk for exemption, things like that? >> again, that's when i referred generally to the rules on securitization, that was what's i was referring to. those were trying to, starting to define. we've laid them out for comment, there's been a lot of comments, we're taking a look at those rules. but what you need is those set in a sensible place, and then we

need to change the basic economics of the gses' role, do those things together, and over time that'll pull private capital back in. >> there's been some suggestion that i've read that there's been a specific working group on this topic. is that specifically assigned, and who's a part of that? >> >> we have a team of talented people at treasury and the fed. i'm sorry, treasury and hud. we consult with the fed very active hi, we work very closely with the fhfa, the overseer of fannie and freddie, and there's a team of talented people in the nec in the white house that are involved in those discussions. >> and is that formal or informal team include folks from outside the administration? >> well, that team doesn't, that's just people in -- well, it collude some of the independent agencies, they don't meet as a team always like that, but we've been very active in looking to academic experts, people in the real estate market, the housing community, the banking system, the

financial system to make sure we're taking advantage of all the other ideas out there. >> okay. thank you, mr. chairman. >> thank you, again, secretary geithner, for being here today. the financial stability oversight council is important to the overall stability of this country's financial economy. your work and the work of all the members of the council is greatly appreciated. thanks again to my colleagues and their panelists for being here today. this hearing is adjourned. [background sounds] [inaudible conversations] [inaudible conversations]

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[inaudible conversations] [inaudible conversations] [inaudible conversations] >> last monday on "the communicators" lightsquared head sanjiv ahuja spoke about his company's efforts to build a high-speed wireless network. >> for the first time, americans will have access to connectivity

each if there are -- even if there are natural casts and ore things happening through our satellite network. >> tonight, questions on light lightsquared's goals with subcommittee chairman paul broun, jim kirkland and i watch news senior reporter fred schulte at 8 eastern on "the communicators" on c-span2. >> tonight on c-span2, a look at the proposed 1700-mile pipeline that would carry crude oil from alberta, canada, through illinois, oklahoma and on to the gulf coast. >> we all need to stand together for mother earth now because mother earth is crying. our prophesy tells us when mother earth cries, we stand up and fight for her or she will die, and we will die with her. so i ask everyone to remember crying earth, rise up. rise up with mother earth and

say no, no to this pipeline, no to death. no, no, no, no! [cheers and applause] >> this is not a regional impact. it's a national impact. and if approval of this pipeline were to come through, it would help stimulate our economic recovery, it'll put us back on our feet, and many here today focused on -- >> the man is lying through his -- >> -- will have the opportunity to have some of the best paying jobs here in the united states. >> we'll show that entire public hearing, the last in a series hosted by the state department, and a discussion representing differing views of the pipeline tonight starting at 8:30 eastern on c-span2. [inaudible conversations] >> next, the impact of social media on traditional news gathering. participants include howard feinman of the huffington post, paul taylor of e-republic new media, and cbs news white house

correspondent mark noler. this is just over an hour. >> good afternoon. we have a couple stragglers come anything from upstairs. um, we have one more panel of tremendous keynotes, and then we are off to l2 for a couple of cocktails. so if you can bear with us for another 45 minutes or so. like to introduce rob from the heritage foundation who will be interesting our next set of panelists, and rob is both an executive team member as well as a sponsor of amp 2010 and 2011, so we thank him for his support and help today. [applause] >> thank you, jake. and heritage is a proud sponsor of the amp summit as it has been a wonderful day.

thank you all for sticking around to the end. we do have three wonderful speakers this afternoon, and throughout the day i think we've heard some outstanding presentations whether it's been in this room or in the breakout sessions upstairs, so i really want to commend jake, megyn, david and everyone who has helped create this wonderful conference today. it's been outstanding. our next two speakers bring a very unique perspective on how technology is shaping news and government, and we're going to begin with mark noler sitting here to my right. he has been called the unofficial historian of the white house, and officials in the clinton, bush and obama administrations have all acknowledged that he keeps better records about presidential trips, about bill signings and social events than even they do. mark is an award-winning white house correspondent for cbs news, he reports for cbs and radio news as well as the saturday early show. he contributes to the weekend

editions of cbs evening news and up to the minute. and during his career as a reporter he has covered every president since gerald ford. mark came to cbs news in 1988 after 13 years as a correspondent with the associated press radio network. please join me in welcoming mark noler. [applause] >> i have never been in the newseum before. i like it. [laughter] is this part of the newseum or just the conference center? you know, if you live in washington, you never get to go to the museums and the libraries except when you take relatives who come here. and i'm able to talk my relatives into staying away. [laughter] anyway, it was about two-and-a-half years ago in many april of '09 that a cbs interactive executive phoned me at the white house and asked me

if i could start filing some reports on twitter. on what, i remember asking? twitter, he said. i really department know what he was talking about. -- i really didn't know what he was talking about. i thought it was for making dates with people, i really didn't know what twitter was all about. occasionally, i would write stories for cbs news.com, which i enjoyed doing, but that was the extent of my online experience. anyway, the executive explained to me what twitter was. i said i'd think about it which is what i always say when i try and get somebody off my back and not really give them the answer that they are looking for. but the executive called back in a couple of weeks and asked me again if i would start, um, reporting news on twitter. he said, let's open up a twitter account, and i figured it couldn't hurt, and i didn't want to appear uncooperative.

so i agreed, and between the two of us on the phone he helped me open up twitter on my computer and sign on and establish a twitter site for myself. now, i have no recollection of what my first tweets were about, but i remember feeling very professionally satisfied by having an outlet by which to instantly report the news as quickly as i could gather it and write it in 140 characters. on radio you have to wait until the next newscast, either at the top of the hour or the bottom of the hour. and, you know, in that amount of time competitors and rivals and colleagues can beat you at it. but i found the instant professional gratification with twitter to be very satisfying. when i had a development to

report, i did so and practically instantly. and suddenly, it was like having my own personal wire service. now, i'm an old ap guy. i started with the ap, and one of the things at which ap is most proud is the speed at which it conveys news. of course, the saying is get it first, but first get it right. and, of course, we all adhere to that principle of journalism. but, um, with twitter i found i was able to get news, breaking news, out faster than ap and reuters. one of the problems i found that they have which i didn't have on twitter, their copy goes through a copy editor. that slows it down. all i had to do was gather the news, write it and hit tweet.

now, on that score let me give you some very important advice. the temptation is the second you bang it out you think in your head that it makes perfect sense. before you hit the tweet button, reread it again. so often recruiting a reading you -- rereading you say, oh, that's not what i meant, or you've got a wrong name in there. a few of the 40,000 tweets that i've sent out over the last two and a half years, there are a few that i had to file corrections about, and i've tried not to be shy about correcting tweets that contain errors. um, i think it's honest, and it's important that for my own integrity and my own reliability that my followers know, well, if knoller finds that he makes a mistake, he's going to correct it. and that's really very, important. but my number one piece of

advice to you is, to those colleagues who are starting out tweeting, reread your copy before you hit the tweet button, check for spelling, gram around and -- grammar, and above all, accuracy. are you say what you intend? now, if i had a nickel last summer for every tweet that went out about the killing of osama bin laden, but somebody wrote obama instead of osama, i'd have a truckful of nickels. [laughter] when you type something over and over, your fingers get a life and a mind of their own, and you need to check your tweet before you send it out. even at the risk of losing precious seconds to be first on a breaking story. now, what surprised me most about filing news on twitter was the degree to which my instant reports would draw instant comment, and more than i'd like, criticism.

now, politically we all know this is a highly-polarized nation with people having very strong points of view about various things, and they, and they're not shy about letting you know about it if they think you have transgressed in any way. even if you're confident that you've reported accurately and fairly. during 30 years on radio and some eight years doing weekend tv on cbs, i would get an occasional letter or a note from a listener or viewer. but it was really very occasional. you know, we don't get all that much mail in radio and television probably because it takes so much effort for somebody to sit down, write it, find out the address, um, you know, cbs news doesn't advertise where it is, and it takes a good deal of effort to get a letter out. and you get more crank letters than substantive letters.

on twitter each tweet i send can trigger an avalanche of comment. some followers don't get or appreciate my sense of humor. some see bias or personal agenda where there is none. some of the comments were informed and intelligent, some of the comments ask questions that are likewise well put and to which i almost always respond. but most surprising to me is the amount of anger and even rage that resides on twitter and elsewhere on the internet. seemingly innocent reports by me on what president obama says in a speech can bring scores of eye tube rahtive responses. sometimes i find myself accused of being a mindless stenographer of the president's lies, of the times i'm accused of being a lap dog for the president's opponents. some of the criticism even involves crude name calling.

now, some of it doesn't seem to understand that in journalism if a report reflects well or badly on the subject of the news story, it is not necessarily a reflection of bias. that's just the way it is. the more followers i get, it seems the more angry tweets i receive. now, in america everybody's entitled to their point of view, but it takes some getting used to, and it took me some time to get used to it. i find it also have to steel myself to continue to report honestly and straightforwardly without regard to the angry responses that it might foment. i try to read all the tweets i get, but i have made it a point not to respond to those that contain personal attacks. no, i am not an idiot. how do you even answer things like that? [laughter] my objective is to be informative, accurate, honest,

occasionally amusing and thought provoking. i want my twitter site to provide a window into the world, my world as a white house reporter sharing insights and background. i try to give my followers, um, the benefit of 35 years covering washington, a good part of it at the white house. i will occasionally be drawn into a running comment tear on the travails of commercial air travel that is now part of my job since costs have reduced significantly the number of presidential trips on which the networks and other news organizations will pay for a press plane. and a press plane is more expensive than telling them to fly commercial. but twitter gives me a very professionally satisfying outlet; angry tweets in response

and all. i know that white house officials track my tweets as do key aides in congress, and they're not shy about taking issue with my tweets, and that's fine. i've got no problem with that, and i'm ready and willing to answer for what i write and report. but unlike reports on radio and tv, these aides have access to their own twitter sites and web logs where they can report things exactly as they like. ..

partisan reports from a multitude of government and political twitter sites. the white house has many and an official digital strategist at the white house may con phillips, who is also has a twitter site, has for that kind of twitter if that is what you're looking for. irv presidential candidate is on twitter or facebook, many of which have more followers than my cult-like 80,000. but, that is the new need were -- media and i'm part of it even though i very much consider myself as old media. chronologically if nothing else. i still enjoy the challenge of writing tight and writing clever in 140 characters of breaking news, of providing new insight into being a long-time radio reporter, and i noted that being a radio reporter has really helped me in crafting each of the tweets that i write because in radio you have to

write short, 35 seconds. usually the limit these days for a radio report. and so writing tight is an important ability. so i'll continue to tweet and followers can respond. bring it on and i'll do the same. thanks. [applause] >> thank you, mark. as somebody who is leading the new journalism operation at the heritage foundation, i want to thank you for being a role model for some of us young people who aspire to do the kind of work you're doing. so thank you. >> thank you. >> our next speaker is dr. paul taylor. he is the chief content officer of e-republican a editor of large at government magazine. he previously served as the chief strategy officer for

the center for digital government where he headed efforts in i-t policies and practices in state and local government. paul served as deputy state cio in washington state and while working washington was named the original sustained digital state for three consecutive years based on innovation in policy, planning and practice. he is a monk a number about of experts with the information technology and innovation foundation here in washington, d.c. please join me in welcoming dr. paul taylor. [applause] >> robert. thank you. i find myself between knoller and feinman which is some of the west company i have kept probably in my career. i hope i do justice to the panel this afternoon. it is a pleasure to be with you this afternoon. it has been a very good day. i hope to amplify some of the themes that we've heard from others today and maybe add a little bit as well.

what you see here is the cover of the original debut edition of governing which goes back almost a quarter century. it deals with a fiscal crisis in the states and that the federal government, at least for the moment, was out of money. it is funny how themes repeat themselves. governing took a journalistic take on what was going on in state and local government. it covered innovation in government before innovation in government was cool. the coverage was and remains sophisticated and nuanced but it really stems from a very simple premise and that is, a person in a place with a problem and what the community was going to do about it. for our purposes today i'd like to rejig that a little bit to saying a person, a place and a possum because in this particular story the

possum was both the problem and it opened up a truly engaged solution from the community. when all of this began, and you candidate it from the arrival of the commodity internet in the mid-'90s, there was a lot of excitement about e-democracy. most of the people in this room probably fit in that category. but within government where i was serving at the time, there was a lot of excitement about e-government, which is the transactional touch points between citizens and their government. it was new. it was exciting. there weren't many rules, if there were any at all and there was an opportunity to change the way he that government worked. turn government to face the citizen. it was a great promise and, for the last 15 years there have been many in public

service trying to live up to the promise of that. just a word about governing where it fits. one, it grew up, as you know, under the umbrella of cq. it is part of an independent media company called, e-republic out the west coast. it has sister publications also interested in this issue of innovation. government technology is applied innovation where solutions for state and local government are documented. the public cio celebrates the chief technologists within government as they make their move from the data center into more policy, planning and advising rolls. and, all of them are print publications that were incredibly proud of. all of them as you would expect have online presence. governing.com, governortech.com and prove to our particular moment, presence, facebook, linkedin and twitter.

most of the editors and writers have their own twitter accounts. here are three that you might want to start with, including my own if you're in the mood to follow three more. welcome you to do that as well. i mentioned that halcyon days of the commodity internet coming to government. at the time i served as the deputy cio in washington state and we boot strapped the state's first portal called, access washington. and it looked like a lot of things that were being done at the time but there was always the opportunity to do something that had never been done before or do something different in a different way that had been done before. these days online chat or live chat is fairly commonplace. you can't buy a book online without being offered the opportunity to go into a live chat session. well in the late 1990s that was rather exceptional and within a risk-averse

environment it felt risky. so we launched and learned with it and we also monitored the traffic that came off it and what the comments were so every morning there was a policy analyst who would go through the transcripts of these things. one of them pointed to the potential of bringing citizens and government together in unique ways. there was a woman on the east coast who was moving to washington state. it was late in the day. the u-haul was packed. the kids were put to bed and she had some outstanding not only questions but there were a couple of things she wanted done before she began the long drive west and this went back and forth in a live chat environment and off and on it went over about 3 1/2 hours and then finally the operator said, you know, this will have to wait until you get here but we managed to do this, this, and this for you here tonight through live chat.

her response, and it's the end of the thread said, wow, i never knew government could be like that. and for those of who have spent some time, energy, in trying to work through this experiment, it was, it was gratifying and we thought, you know, we might just be onto something with this. so fast forward to today. live chat is being used on october the 8th in new york state to have a wide open, online forum about something as controversial as fracking. being hosted by the government to engage citizens. with the rise of facebook and other social networks they are where the people are so states, and localities are going to where the people are. what you see on the right-hand side is a special site, post-irene, put up by

the state of connecticut, with which is wide open, unedited, nonmoderated forum about issues both good and bad around the response to irene and it is, the state of connecticut, engaging people where they are and listening with both ears and doing so in a very, very public way. at lunch we heard about the chief technology officer in the city of chicago who with many of their peers across the country is removing or shifting really from an orientation of the data center, the big networks and the really large applications to taking a different view of the world. and for people with that kind of orientation it is remarkable that when asked about what the trending issues were for them in the next couple of years they responded with a list that

enclouds the things that you care about, the things that you work in. mobile services to citizens, to businesses. mobile-equipped field staff so services can be delivered when and where they're needed. also data surfacing, web 2.0 standards, all of that on a list that used to be dominated by data center, network. it is much longer list, much more diverse list. i think it is also worth thinking about where the web was when it didn't have a version number and critical mass matters and inat this gators -- instigators matter and catalysts matter and a small company in kansas has been amazingly influential in this state. in fact now they operate the official state portals for 23 states and they have thousands of other apps for thousands of other public agencies across the country but they have got half the state portals, which means

they have got the resources to innovate and within this closed loop there's an opportunity to disseminate that innovation across almost half the country. there has been today about transparency. with transparency comes the rise of the open data movement. and it is a movement. and a couple of things that are remarkable. there's tens of thousands of data sets being posted by local government but when you look at the federal government number, is is rather remarkable. at launch just over two years ago there were 39 data sets available online. as of last week, 390,000. if it is surfaceable it is probably there by now. with that it begins one caution. beware the tendency for malicious compliance. it isn't an arms race to get everything up.

it is proper public stewardship to get it up in a way that is usable, machine readable. there ought to be data dictionary in there. there ought to be complex so people and developers who actually use this data use it, understand it enough to use it properly and in this kind of arms race mentality of getting everything up quickly some of that may have been lost and it's worth keeping a careful eye on. if that kansas city company and the 23 portals was the closed loop, this data activity coupled with the transparency activity is really the wide open loop. in fact you can't see to the edges of this loop. the sunlight foundation among others have been catalytic in this, transparency camps and there has been competitions, code for america has gone hyperlocal in a number of areas. all of that which has provided the follow-on to

really, we used to call or bloggers became known as citizen journalists. now people who cut code are citizen coders, making sense of government-held data but also making government-held data useful. government needs some friends now and this suggests that they need about, there's 103 billion reasons why state and local government needs to look beyond itself for some help in doing things that communities need, and also it isn't likely to get better anytime soon. analysis of medium-sized police department in colorado, they went back and they looked for their calls of service. this is what they found. that 80% of the calls for service didn't require a response from a uniformed office, officer. what would be more appropriate is a response from a neighbor.

there's a there there when you think about citizen engagement of people using these technologies engaging each other and engaging third parties including but not limited to government as we move forward. and in fact, there is an app for that. there are thousands of apps for that. very recently our center for digital government helped co-host at session at the white house for champions of change that were using government data with contemporary technologies and there was a dozen or more of these applications. this one, kind of caught my eye among the 12 and they are mom maps. it comes out of the san francisco bay area where the simple premise was, if your job, in part, is to find playdate locations, it might be useful to know where they are. and yes, your city, your county will publish

locations of these things but wouldn't it be useful if they were mapped out and there were pins dropped, places that you could take the kids? and in fact, that was mom maps genius. they took the publicly available data and made it into, used an interface that was helpful and was as close as the aplaydate coordinator's smartphone. in fact being able to see a pin drop is really a powerful thing. we saw in lunch with kevin. he showed us this interface but instead of a list of itinerary list of the mayor and council members, they dropped a pin at all these places where the mayor and city councils were and immediately you get this visual image where they are and with a click on the pin you see who is there and what they were doing. dropping a pin is also able to focus policy issues. the city of boston has done

it with food trucks. they asked the question, where do you want to eat and they, people dropped pins to show that and that focused, that didn't replace permitting but that focused where the permitting and regulation was being able to be used. through their online app dropping pins as well. here's we're not back at the possum and the creation of what might be a dead possum society because it is both the problem and the answer. this was one, this was one of the pictures that came in through their, their 3-1-1 app. it is gruesome but he is alive, he really is. the deal was this. boston took a 311 online app, they married it with maps and they married it with the opportunity to tweet and the social dimension of it. one night the problem was reported. there's a possum in my trashcan. i don't know whether it's

dead. in normal course of things it would have been a city employee that would have responded the next morning. instead there was a woman who was named susan, she was looking at the app, saw it, realized it was couple blocks away, got bundled up and went. and she solved the problem. was the possum living or dead? alive and a person who owned the trashcan, wanted it out. she tripped the trashcan over and left her with this benediction, good night, sweet possum. i wanted to talk to a woman who write that poeticly about a possum. we spoke just last week and she got it exactly right. when people solve problems themselves and for each other, it makes the city a less faceless town by encouraging people to think that the city doesn't have to solve every problem. and that my friends, is both the wisdom of crowds and the

wisdom of what thomas jefferson called, the highest officeholder and that is of citizen. thanks for your time. appreciate it. [applause] >> thanks again to mark, to paul. turn it back over to jake. >> thank you, guys. >> now for our final keynote this evening. first let me introduce a member of our executive committee and a friend of amp, the vice president, general manager of aol "huffington post" media group. [applause] >> i'm real excited to do this and i, for a lot of reasons. i'm going to choose a colleague of mine, howard feinman who really doesn't need introduction. i have a story i haven't actually told you, howard.

howard and i share something very important. we went to the same undergrad cool. wonderful institution, great institution in our country, colgate university. and when i was a student at colgate it came upon me i wanted to get into media. i wanted to work in desee. i was told by career services which we've all realized how useless going to career services is, that you should write to this guy howard feinman who i grew up watching not playing age card, at all, i grew up watching on television and was an admirer and got address for him at "newsweek" where he was leading with political content and pundit to our national discourse. i wrote a wonderful letter. dear mr. fine man. you don't know me, blah blah. i was so excited. i sent it. i never heard back. so, that was, that was a problem. and i always held that in. and i never mentioned it to him because, unlike me, he has been a huge steward of a lot of different careers

coming out of colgate and more importantly what he is a steward of in our newsroom as the editorial director now for our new aol "huffington post" media group is being a change agent trying to harness all the things we're doing as a news organization. he is more than qualified to do this because of wonderful things he has done in his career. in addition being with us at "huffington post" media group and, cnbc analyst and on all the time and espousing great things. in addition before that at "newsweek" with several roles and winning almost every conceivable award that you might win in our industry, howard has done that. so we're very excited to have howard and he will speak to us for a few minutes and let me turn it over to howard feinman. [applause] >> well, for me this is the beginning of a period of atonement in my religion. so the first thing i need to do is apologize to peter

cherkuri for not answering his letter of all those years ago is this mike on, by the way. peter i'm really sorry. i missed a bet, if you play your cards right you will run the company some day and you can refuse to answer my letter to you. i was supposed to be speaking here at lunchtime. i apologize to all of you that i wasn't here because, when peter asked me if i would do this, i said sure. i didn't look at my calendar. i didn't realize of course that today is the first day of the high holidays in the jewish calendar. this day has only been on the calendar for about 3600 years. 7th day of the 7th month. and, so while peter was frantically calling me at noon asking me where the hell i was, i was at that very moment asking god for forgiveness.

so now i ask peter as well. and i know, i know that, i know that i'm speaking right before you all decamped for happy hour in georgetown. so i will try to be brief and succinct. on 140 characters worth but brief and succinct. by the way the guys that preceded me, all three of them are fantastic and i'm glad you had a chance to hear them. i, in my career i've done everything but sky writing in journalism. i have worked for a local newspaper, when i was i a kid. i delivered the local newspaper when i was a kid. when i was columbia journalism school i spent a month on the desk at upi. which was quite quite a trip, editing a wire, not the b wire. b wire is where all the weird local stories reside. they never let me at a wire. i worked for a newspaper,

louisville currier journal which at the time was one of the best papers in the country. i was a stringer for "the new york times." went to news week. probably one of the first baby boomers, print reporters to be on broadcast television regularly on a show called, washington week in review, that still exists. then i started doing cable television in addition to "newsweek." first at cnn where i had a contract and now for the last 13 years or so at at nbc and msnbc. because of my connection with msnbc i started writing for the internet in 1998 at msnbc.com. so as i say, i've done just about everything but sky writing. and, all the while staying at "newsweek" and kind of making a line extension of myself into other media. a year ago, almost exactly a year ago, i left "newsweek" at the invitation of arianna huffington who i had known for 16 years at the time to

go over to the "huffington post". ironically the "newsweek" washington bureau is at 1750 pennsylvania avenue. the "huffington post" offices are at 1730 pennsylvania avenue. so i didn't even have to change starbucks. [laughter] but i did change my entire outlook on everything. it's one thing to file columns that are put on a web page. it's even one thing to, as file tweets, as prodigiously as mark knoller does and hedown plays himself here when he says he has a small, cult-like following. he has 80,000 twitter followers. that's powerful. even when you're doing that as mark was explaining you're still not essentially changing your whole outlook on things. when i moved from one building next door to

another building i literally went from one world into another. a world that had been developing under my nose but one that i now see from the inside. first of all, i'm having the time of my live at the "huffington post". i'm working with people who generally are at least half my age, if not a third my age. i try very hard not to attempt to be cool because i know that i'm not. i haven't stopped wearing a tie, you know. it is my destiny. but i love them and, i think they have tolerated me so far. now i went to the "huffington post" in, i think october 1st of last year. the at time it was still just the plain old "huffington post". you know it. the at time i think it had maybe 20 to 25 million unique visitors a month. there were nine or 10 people in the bureau.

i think i was the 10th or 11th counting the office manager. everybody was huddled around a couple little tables they had gotten from office depot or something. it all had wuffli -- wonderfully cobbled together field to it changing the way news is distributed on the web. the key to the "huffington post" and is, it is a combination of a news site and a social networking site. i think arianna was first to realize and because who she is and her nature, her networking nature, the way news is going to be delivered in the 21st century digitally is a combination of news and community. so that when you file a piece on the "huffington post", if it is at all interesting or good or buzzing, it might get 10 or 15,000 comments.

unheard of in journalism the way it used to be. so it was a lot of fun trying to begin building up a news organization and a bureau in washington but we were going about it rather slowly. and then, a few months after i joined in october, officially in march of this year, we americanned with aol. one of the founding parents, if you will, of the digital age. shrunken to 100th of its former size, literally. it had a market cap of 200 billion. it has now has a market cap of 2 million. yet it has a lot of energy still in it and a lot of knowledge in it and a lot of good-hearted people in it and what we're trying to do is turn it from a, the combined aol-huffington post media group, turn aol into distribution company into a content company. and i think it's working.

have anyone seen the movie, apollo 13? what is the one they get stuck coming back. apollo 11, apollo 13. there is a scene in "apollo 13" they're stuck up there and they're running out of air and down in houston they're saying we've got a problem. we've got to do something. so, the, the chief of the operations comes in with a big box full of tools, disparate tools and parts and pieces and everything. he dumps it all on the table and says, okay, you have one hour to turn all this stuff into an air filter to save the astronauts. we're trying to do the same thing with ol and the "huffington post". we have a lot of disparate pieces. we're trying to put them together in new, exciting sinner in gist tick ways and i think we're succeeding. aol.com which was a portal site is becoming a news site. we're taking best of huff

post content and putting it on aol dot-com. aol.com traffic is going up. "huffington post" got a lot of aol traffic is booming. last month we had 109 unique visitors for all the sites. this coming month we'll have about 115 million. we're, "huffington post" is the largest web native, independent site in the united states, maybe in the world. in that we're not as big as yahoo! news. we're not as big as google news. we're not as big as msn we're not as big as cnn but for something that didn't exist six years ago that is web native, that is independent, it's, we're past "the new york times." we're blowing past everybody else. it is incredibly exciting. but that doesn't answer the question what is different about this world from what i knew. does everybody here know who walter cronkite was? i'm not, being facetious. he was the, he was the sort

of everybody's favorite mustache, pipe-smoking uncle who was the, anchor of the "cbs evening news." in the '60s and '70s. when walter cronkite came on the air, he was regarded by the american people it in a poll in the late '60s as the most trusted man in america. and he use to do the "cbs evening news." and, end his broadcast by saying, and that's the way it is, october 1st, 1968, this is walter cronkite. and, about 25 million people, or more, would sit there and say, yeah, i guess that's the way it is. uncle walter told us that's the way it is. and the three network news broadcasts in those days had a combined audience of about 75 or 80 million people.

there was at that time, and i'm picking the late '60s as the apogee of this, a kind of hierachical pyramid type structure of journalism and media with the network news broadcasts at the top, with the great national newspapers, meaning "the new york times", "the washington post", "new york times", "washington post", "wall street journal." the news magazines including "newsweek" which i worked for, then the great regional newspapers and wire services. let me put the wire services up there with "new york times" and "washington post." . .

>> that's just the beginning of what's changed. let me go through a few things quickly. this is based on my experience and all media and having lived through a lot of this history. i have identified, and you know i'm old media because i don't have a, you know, a video to show you, but here are the changes as i see them. number one. we now live in a news community that's not one way anymore. it's omi-directional with everybody speaking to everybody else. you put out a tweet, you are innone dated with responses. i can assure you that walter cronkite would be tweeting today, but back in those days, the idea was walter cronkite,

with a huge cbs news machine behind him, with all the collected wisdom of the "new york times" of that day, with all the consensus that there was, would tell you what the news was and was unshakable in his belief, in his duty to have a one-way conversation with america about what the news was. it was one way. obviously, it's no longer one way. it's a news community. as i said, "the huffington post" stands for news community. that's number one. number two, it's no longer a mass disux. it's individualized. the purveyors of the news are not speaking to everybody at the same time. they are speaking to people individually, discreetly, and i mean that in both senses of the word based on what their senses are. at "the huffington post" we have 30 verticals, meaning sections.

often individual sections of the huffington post draws more traffic than the front page does. the huff post politics, one of the most popular if not most popular sections, often draws more traffic than the front page. people don't come in the front door. it's not a mass thing where people see the same front page at the same time. everybody sees what they want to see, what they are interested in, and what they are focused on. that's change number two. change number three is it's constant and not periodic. as mark said, you had to wait for the next radio broadcast, but now you can tweet instantly. that's true now. there's no news cycle anymore. the news cycle -- in the old days -- in the days that i talked about with walter cronkite, there were two news

cycles. the morning newspapers and then there was the evening news and then the next morning's newspapers, and that was the -- there were two news cycles. now we've got so many you can't count them anymore, and really the notion of a news cycle has disappeared. it's constant, absolutely constant. change number four -- the distinction between local and global has disappeared. in the old days, the networks used to send cor spots out to -- correspondents out to cover events throughout the world. it doesn't work that way anymore. tip o'neill, the great speaker of the house used to say all politics are local. that's meaningless now. there's no distinction between local and global now. we were all in tahrir square.

one of my favorite pictures of modern times was on the front page of the "new york times". there was a bunch of people your age or younger sitting around their laptops with bottles of water and soda and pile of cigarettes in the ashtray, you know, on their facebook accounts, you know, sending stuff to youtube, connecting to the world instantly about events in cairo. they were in an apartment in cairo right on tahrir square. that's iconic of the new age. number five is that the old style narratives are gone. people don't do long narratives anymore for the most part. what captures the attention of people now are items that are shorter, blogs are popular. they form a narrative in and of

themselves 23 you want to read through them all, but when we do a live blog of a presidential debate, i'm astonished at how many people follow the live blog, but each individual comment does not a narrative make. it's all the collective narrative that comes about from all the comments of all the different people. it's not one writer sitting there doing a narrative in the manner of a novel or a long non-fiction piece. that's not the no , dominant form today. next big change is video and pictures. nothing moves without video and pictures. if you went back and watched that walter cronkite show i told you about, you would be amazed at how little video there really was. there were lots and lots of readers, lots and lots of time when walter, with his, you know, convincing style and his deep voice, would just read a long piece, and the pieces were

longer, by the way. you know, he'd spend a minute or two just reading something. that doesn't happen anymore in the media. number seven, no -- this is obvious to what i was leading up to -- there's no one authority. there's no pyramid of authority the way there was before. the editors of the "new york times" may think that they still run the show, and as much as i respect them, and i do very, very highly, jill abrhamson is one of the great journalists of our time in my generation, she's executive editor of the "new york times," first woman, by the way, in that job, but she doesn't have the clout that her ancestors in that job had because the pyramid has flattened out if not entirely disappeared. well, in public life on this

earth, there is no such thing as truth with a capital " t," but there was a consensus starting with world war ii and lasted roughly until vietnam, breaking things down, in which we accepted that journalistic authority that walter cronkite sat at the top of once he read the day's "new york times". that is completely gone. that's not necessarily a bad thing, but it's different and more complicated. in my view, it means that everybody has to be his or her own editor today. as a consumer of news, you have to be educated to be your own editor. you have to look for sources that you trust. you have to get outside your comfort zone and look for other things. to be an informed citizen today is a much more interactive thing, really taking us back to

the early days of the republic. number eight that sort of follows number of seven. the media is much more openly ide lodges call -- ideological and given to a platform for crusades. here we're reinventing the wheel. they were not supposed to be olympian sources of authority. objectivity is impossible even though you strive for it, and i've been taught my whole career to strive for it. you have to understand it's impossible to reach that point in the sidewalk. now we're at a time when people were more frankly and openly talking about the biases that they bring to the table, and by the way, this is something that's happened intellectually in academia over the last generation called deconstructionism. you look for the motives behind the alleged truth, the social and political underpinnings of them, and that's healthy. we shouldn't assume that any one source of authority is the only

one to look at, and if you want to use the media to promote your point of view, fine, as long as you say so. transparency is always important. the last thing i'll mention, and then i'll stop, is that this is an all enveloping world we're talking about, this digital world. it's one thing in the old days if you read a newspaper that was a partisan newspaper with a partisan point of view telling you certain things about the reality of the world, but it wasn't all enveloping. it was just a newspaper. you could look up from the newspaper. reading the newspaper took maybe a half hour, then you folded it in your pocket or threw it away and looked at the real world. now people spend so many hours in the digital world that the danger is that if you only look to one source and one point of

view, it will consume and replace the physical reality we live in with the digital one. the fact is that a lot more of our politics are and will be conducted solely on the internet. people are eventually going to be able to vote in lots of places on the internet. they're going to get all their news on the internet, do all lobbying on the internet, do all their political organizing on the internet. president obama's campaign was the first campaign, the first successful campaign of the digital age. the first one of the digital age was really howard deen's campaign, but he was the path breaker that then barack obama followed up on. he has 18 million facebook friends. his challenge will be to expand that enough to win the next election, but he's going to be using the web to try to do it, and we'll be covering minute by minute on "the huffington post.

with that, i'll stop. if you have know questions, i understand because you want to get across town to georgetown, but as long as you got me here, i'd be delighted to answer however late i was in my arrival, i'll be happy to answer any questions that you have. >> thank you. just building on the last point, the echo chamber with consumer networks that are shared with our friends -- >> right. >> apart of the obvious of trying to make yourself go to news outlets you don't always agree with, how are ways that individuals or even outlets that offer varying viewpoints with guard against or provide consumers a way out of the echo chamber and build into the way you consume news so you don't have to think about it every time. >> that's a very good question, and i think just base that pyramid has collapsed and everybody should be frank about their view points and all that

other stuff i was saying doesn't mean each news organization shouldn't try, on its own editorial hook, to try to do some of that educating that you're talking about or opening up to other views. i mean, i think on "the huffington post" we try. look. we are proud of our origins. theygan out in california saying let's start a now progressive news and community site, and the top editor, you know, was howard dean's first blogger. as a matter of fact, niko, i think, was the first campaign blogger ever, and now he's win of our top officials at aol huffington post media group. we should never at huffington post, and i have anything to do with it deny or obscure our progressive roots, and i hope we're always known for that, but, i think we should invite more conservatives in and try to make sure that on our left hand

side, the blogging section our op-ed section if you will, that we try to have more conservative voices because if we succeed in being popular and handy for people to use, then people are going to spend a lot of time on our site, and, you know, we should try to do that on our own. the other thing -- it's silly for me to say i agree with you to say to people go look at other websites, you know, spend an hour on fox, do whatever, you know, people should do that, and people should get the hell off the web, too, but it's against my interest to tell them to do so. anybody else have a question? yes, sir. >> so the obviously how farrington post is great at writing, and that's been a huge part of your rise; right? think about how people search, and then going to that. when you talk to your writers, to your editors, ect., how do

you balance chasing that traffic with chasing the stories that really matter? you just acknowledged that people are moving away from a lot of the long form narrative journalism. there's a community out there, the blog community phenomena that's following that, but those stories take up to $40,000 and a lot of work to obtain. do you commit doing that down the road in the investigative side, and how do you balance that? >> great, great question, deep question. i didn't know anything about seo before i went to "the huffington post," and then somebody took me to a darkroom and it explained it all to me. sure. part of the seo thing is overdone. what that means is you don't write allusive headlines. we like to write literary allusive and elusive headlines

245 hint at the story, but don't really tell you what it is. on the internet, as you know, like a site like the post, you doafnt -- don't put the key words in there, if you don't hit people with a mallet, they won't read the story. i have no problem with that. the question you raise is what kind of commitment is there to investigative journalism, deeper journalism, longer form stuff, people who are not just responding to the herd instant. the answer is we're making a deep commitment to it. we had a washington bureau of ten people when i joined. we went on a hiring binge to get the best of the young generation of reporters, incoming -- including those at investigative reporting. we have two full time investigator reporters in washington now. they both have a chance to be

good with mike who i worked with at "newsweek" forever, and we have a commitment to that, and we niend when we do a good job at reporting and writing those pieces and putting pictures with them, even video with them, and even if we don't put pictures and videos with them, people will read a long piece and they'll read it on our site. we're very much aware of that. we know that there's a counter to the trend we talked about. we tripled the size of the washington bureau, doubled or tripled the size of the reporting staff in new york. you are aware of patch.com, the thing we're doing with microlocal sites, something aol started before we ever merged with them. we now have 850 local reporters in 850 towns and suburbs doing original journalism, and one of the things we're trying to do to answer your question without taking them away from their

local jobs and focusing on the local community in whatever deep dive stuff they can do there, is we are trying to sinner jiz that for international projects. over the last two years, we've hired over more than a thousand journalists. they are not just all there to respond to the instant stuff, so we know we have a responsibility to do that, and i think you'll see us try to do it. as a matter of fact, just today, we're having a big structural meeting about how to edit better, keep track of them, and we really want to do it. i come from that position in "news within -- newsweek. there's people submitting 5,000-word stories and trying to do that. hold us to account because we really want to do. we really want to do it.

anybody else have a question? >> i think we have to grab buses actually. okay. thank you very much. good luck to you. >> for the first time, americans will have access to connectivity even if there are natural disasters and other things happening through the satellite networks. >> tonight, question on lightsquared goals and potential interexperience with paul broun,

and iwatch senior reporter fred schulte on c-span2. >> we all snead to stand together for mother earth now because mother earth is crying. our prophesy tells us when mother earth cryings, we stand up, we fight for her. we will die, and we will die with her. crying earth, rise up with mother earth, rise up and say no, no to the pipeline. no to death. no, no, no, no. >> this is not a reamingal impact. it's a national impact. if approval of the pipeline comes through, it stimulates the economic recovery, puts us back

on our feet, and many here today focus on job creation and recovery, will have the opportunity to have some of the best paying jobs here in the united states. >> we'll show that entire public hearing, the last in the series hosted by the state department, and a discussion representing differing views of the pipeline tonight starting at 8:30 eastern on c-span2. >> climate and energy directer of frebdz with the earth. thank you for being with us. cindy schild is with the american patrol yum institute. good morning. we're here to talk about the proposed pipeline project running through canada down to the gulf of mexico. your organization is very supportive of this project. what's the top reason? >> guest: jobs and benefits to the american economy as well as

consumers right now. >> host: okay, and damon moglen, a lot of opposition, but for a variety of reasons. what's the most difficult thing about this project? is it where it goes to the united states, 1 it the drilling that's taking place? lay a for us the biggest concern. >> guest: a lot of concerns. this is an environmental disaster. the situation in canada itself, the creation of oil is damaging to the environment, it's a major contributor of greenhouse gas emissions. it's a situation in which this canadian company is proposing to build a large pipeline across the united states across fragile areas and over the ogalla area that provides water for people. a huge array of environmental issues involve the. >> host: layout the economic

outline for us. >> guest: unemployment is over 9%. this is the most shovel ready project. president obama talks about job creation and ready to sign off on anything to help americans and workers and their families. there's already 80,000 americans employed to support the development of this resource in canada, and we have the ability to increase that. there's 20,000 jobs that keystone, the company, is committing, and there's labor agreements. it's supported by the unions at large, and they are ready. they are ready for the facility to start work immediately on this project. we'll get into the environmental issues in more detail, but now, damon moglen, what's your reaction to that drive for the economic benefits that cindy schild laid out for us. >> guest: right. this is not about jobs.

it's about profits for transcanada. they want to move oil from canada to the gulf where it refines oil and puts it into the international market. 24 is really about producing oil and getting it into the market for profits. the -- in addition, transcanada's claims are about these inflated jobs figures are refuted not only by government numbers themselves, about a third of those of transcanada, but there's a new cornell study out that suggests the numbers are in many ways radically infreighted and in many ways baseless. what we really see 1 a situation in which we're talking about much smaller numbers. temporary jobs, and they are not local jobs. there's a final point about this. in terms of construction, there's a lot of talk about this giving industry a boost. the fact of the matter is that the steel for this pipeline has actually about 50% of it already been constructed outside of the united states.

that's not about u.s. jobs. it's about transcanada's profits. >> host: looking at the numbers with transcanada, what the jobs impact would be. 250,000 permanent jobs, $100 billion in economic activity, $5.2 billion in property taxes, and $500 million in construction. damon moglen, you don't agree with the numbers? >> guest: it's not just me, the government's numbers are far smaller for jobs. a new cornell study says those numbers are extraordinarily inflated, that the methodology for generating them is very questionable, and, again, what we are talking about is a smaller number of temporary jobs, and also not jobs for local people. finally, this cornell study, which i think is extremely important suggests that, in fact, the pipeline in many ways could be a jobs killer. what we have is a situation in which first of all, a lot of this steel is being constructed outside of the country. second of all, what we have is

the likelihood that oil and gas prices in the midwest are going to increase significantly, driving down the numbers of jobs, potentially in the midwest, and that finally, we've all seen that these extraordinary spills create havoc for the environment, for public health, and in turn, damaging to jobs. in fact, the cornell study suggests that, in fact, this pipeline project could kill more jobs than it would produce ultimately. >> host: american patrol institute, where do you see this most benefiting? >> guest: it has widespread impacts, and when you look at oil dunes generally and what it does for the u.s. economy, there's already 2400 companies 23449 of our -- in 49 of our state that is are impacted, and they are working towards supporting this resource. in regards to the cornell study, i mean, we can debate that for quite a while too as far as some of the basis and claims there

and qualifications of the study. the fact you can say any project that's going to be created, that's going to be built, that's going to be starting from scratch with not requesting government funding, by the way, this is all based on private investment, is going to be a job killer is ridiculous, so, i mean, there's not a single basis for it to take away jobs from americans. if that were the case, i would question why you've seen thousands of laborers coming out, thousands of unions, workers, coming out to support the project. there's official agreements with the labor unions about their jobs and what's going to be created, so they are behind this project. they've said even if it's half the amount of jobs, they would be behind this project. temporary or not, that is what they need right now. they need some emphasis to start the economy. >> host: let's look at the map of the transcanada keystone pipeline. remind you of the numbers you

can call to weigh in. we're talking about the proposed extension of the keystone pipeline running all the way through the united states. the state department is the agencies overseeing this which is interesting and that is because it's international running through both canada and the united states, so they are looking at whether or not to approve this pipeline to decide if it's in the nation's interest, and the decision is expected by the end of the year according to the "new york times". david on the republican line, good morning, david. >> caller: good morning. i'll keep a sealable tongue in my mouth right now. it's kind of hard. the main reason our economics is in such turmoil is because of people like that environmentalist you got there,

that's done everything do destroy our own up dependent sources of energy for own gains for not fraudulent so-called green projects that's been proven to be nothing but fraud from day one. you made the same claims about the alaskan pipeline, and with that, none of this garbage ever happened. you know, because of you people, we cannot build new refineries, cannot modernize refineries, we cannot drill with new technologies. it is more environmentally friendly. we're not supposed to tap into our own coal resources, even though there's clean ways to burn that now even though you lie and say it's nonexistent. >> host: let's talk with damon moglen who is with friends of the earth. >> guest: obviously, the situation in our country is quite dire about jobs. i think what we must not do is

claim there's a separation between jobs and clean energy because there's not. we produced 2.7 million jobs from clean energy here in the united states. 24 is not about jobs or not, and it's not about energy or not. we can have both of those by making the commitment to clean energy and changing our pathway. what we see is the cost of oil pipelines like this or the kalamazoo spill and the peace spill. that's got to be factored into costs. >> host: this is a proposal from the "l.a. time". there's a series of public hearings across the country in areas that will be affected. some might have been surprised that plans to build a 700 mile oil pipeline through the midwest. this would draw a fault line down the conservative heartland, but any skepticism has

disappeared the pipeline was described as a plot by a foreign corporation to exploit america, a potentially polluter of the greatest fresh water resource, the answer to america's energy and security, generator of the last great family, wage jobs, and a dangerous new instigator of global warming. why is there an intense debate over the proposal? >> guest: it's amazing with a project of this nature. we have done three years of the environmental review with dozens of state and environmental agencies. typically, a project of this nature is 18-24 months. we are now looking to see if it's in the national interests, and that's what the recent hearings have been about. i think you're really looking at a debate over the resource itself, and getting additional oil from canada opposed to the project in the pipeline. the pipeline is going to be the first project that will bring

oil from canada down to our largest refining center in the gulf. our texas state, for example, invested in the infrastructure to be able to refine this cleanly. if you're talking about refining canadian oil in the united states. if you have true concerns about the environment, where do you think it's going to be managed better? in the united states, in canada? this resource is being developed, so canada has interest. $15 billion in the past 18 months alone, many other countries following suit. oil by all forecasts will be part of the energy equation for the next several decades. if it's supplying more than 50% of the energy, where are we looking out for our energy future holisticically? >> host: what's your response to the argument better to do it in the u.s. than even canada? >> guest: i want to come back to the controversy because there's a huge controversy

here. the fact is ranchers and farmers feel transcanada used heavy tactics with them, land threats to seize their land, farmers and ranchers who rely on water who feel their water from the aquifer could be endangeredded. they feel their input is not taken seriously. they feel, in fact, what's begun to be clear from the scandal of the state department's handling of the case is this is 5 sham process in which the state department has shown clear bias and complicity with transcanada in actually facilitating the permitting of the pipeline rather than regulating the industry and holding them accountable for the claims they make. >> host: what about the idea of doing it best in the u.s.? >> guest: the fact of the matter is this about trying to get this oil into the export market. it's not about where it's going to be done. this is about moving oil from canada, a landlocked situation to the sea, to a refinery in the

gulf, where they can then put it into the international market. it's not about our energy, but transcanada's profits. >> host: to the phone where kay is an independent from florida. >> caller: thank you, good morning. i did watch the hearing on the keystone pipeline, and i also watched the meeting with the state department, and i can't remember if it was thursday or friday, but i want you to take in reference the name -- [inaudible] i grew up on the gulf of mexico in houston. when you dip your toes into the sand and inch, you read solid tar. it is toxic, poisennous, it ruined the gulf. there's tar balls coming up all the time, and so to the republicans and the tea parties, listen to what the man said. it's an issue here. i also live where the super

conductor supercollider was. my farm was taken by imminent domain. the government built the superconductor supercollider, and then they abandoned the project, but in the meantime, it cut my house off from the road because the land they took was the front part of my property. this is an environmental disaster. the epa study -- or the studies that the young lady said, it was done by the oil lobbyists. please take into consideration there was a bp spill, the transcanada line now in canada had several leaks. we had the oil leak in the keystone river. we can want destroy our communities, the farms, our water for dirty oil. >> host: let's get a response from our guest, cindy schild. >> guest: thanks for your question and your concern, and

you know, there's lots of issues raised and obviously lots of strong feelings, beliefs, and positions on this one, and 245*s the reason -- that's the reason there's been this dialogue. you know, the hearing you were able to see was one of nine, and there are many different positions on this, and, you know, you talk of imminent domain. 90% of the land owners already signed agreements. of course, there's some that are going to have concerned about it, and certainly, there's sympathy to that. the broader picture, when you mention the term tar sands versus oil sands, we're producing oil from this, not tar. there's mechanisms of how you take the mixture of the sand and clay, and you get it out, and you put it in a pipeline. it's no more toxic or corrosive

once in the pipeline. there's nothing down to alter it. we've been doing this in the country for decades. that's something people should know. this is not knew. it's just creating the ability for us to get more oil from our number one source of imports which is already canada. we have the ability to increase what we already get from the friendly neighbor up north. >> host: notes here from friends of the earth about tar sands oil. it emits three times more greenhouse gases from crude and emits lier levels of sulfur, nitrogen, mercury, and arsenic. david>> guest: i think the fact it doesn't have new and worry aspects is not true. this is a kind of oil mixed with

chemicals and heated to move through the pipe. it's raising significant issues about the threat that that poses, and in addition, the nature of the interaction between the pipe and the oil. there's one pipeline, for example, in one year, has had 14 14* leaks. we had a major spill, in fact, the biggest spill in the history of the midwest from a tar sands pipeline, the area of call -- kalamazoo, they they are still forcing the company to come up with a clean up plan because the oil is a kind of oil and environmental damage they are not used to seeing. this poses serious risk to the environment and public health. >> host: there's been oil spills in the last two years, the one that damon mentioned in in call kalamazoo, and one outside of chicago, one in narks, and then 4 # 2,000 gallons in the yellow stone

river of montana. how would this be different? >> guest: according to the state department in con gongs with the department of transportation, transcanada agreed to implement 57 special conditions that would go above and beyond. they've been trying to work also with the local areas and agencies to see what other requirements would be needed. they have special -- i'm not the engineer, but there's a special condition of how you may operate to build in certain areas to be sensitive to the environment. they are going to have more monitoring, additional response mechanisms, so 57 additional, and the state departments and environmental impact statement time and time again believe this would be the state of the art pipeline. >> host: democrat from west virginia, go ahead. >> caller: this is from the

lay toy. you know, they talk about the pipeline going all the way across the united states. they are going to create jobs, do all of this, why not build whole new things up in minnesota or michigan, and then ship the oil wherever they want to go instead of going all the way through the country so they can ship it out to china because china buys our oil, and they will buy theirs too. why not keep it in the united states here where it belongs? that makes all kinds of new jobs. people would have all kinds of jobs. building new refineries up there, and then they truck it all, and there's a big bunch of truck drivers that have job, why not think about that instead of building a pipeline that's going to leak everywhere all the way down through that. after the years it deteriorates and falls apart. >> host: john asks on twitter,

how much does the pipeline cost versus building a refind ri. >> guest: there's a lot to the question. thanks, that's an excellent question and one we've been talking about in the stand point of would it make sense, the oil market is a global market, so when you talk about building a pipeline down to the gulf, it's being done because that's where we have the refining capacity, the ability to process oil. we also have the infrastructure to be able to have flex the in our system in the u.s. to get it to the east coast, 20 get it -- to get it to the midwest by bringing it to the gulf. 234 answer to your question from the caller, you know, if there was incentive, if the main motivation and drive was to export oil, it wouldn't make sense to invest in a pipeline all through the country down to

the gulf just to export it. you would go to the west coast or canada, go to seattle, do something in that nature. it just wouldn't -- it's coast prohibitive, so it just won't make that sort of sense to do it like that. in regard to the refining, we have had refining closures sources fewer refineries in the country over the past three decades, but at the same time, the capacity has been expanding, and a lot of it is about supply and demand, so we are gasoline-based economy, and this will enable us to cleanly and efficiently with some of the most advanced refineries in the world, be able to bring that clean product to consumers, meaning u.s. fuel specifications. >> host: damon moglen? >> guest: i want to talk about moving oil to the west coast. there's so much opposition in canada to move this oil across canada to the west coast and

north, in fact, any efforts to build pipelines that way have been blocked so far. this is exactly what's being looked at. an effort to move it across the united states to get it to the gulf to refine it and move it into the export markets. it's not more than the corporate profits of transcanada. >> host: look at the keystone pipeline already in place. over 2,000 miles dealing with 435,000 barrels a day, cost of $5.2 billion to build. the proposal is to extend it down through the united states. 1600 more miles to do 500,000 barrels a day costing about $7 billion. let's go to the phones and get grand rapids, michigan in the conversation. joe, republican line, good morning. >> caller: good morning. >> host: hi. >> caller: my comment is i wonder how long we'll put up with the democrats and the environmentalists keeping us working poor, even poorer by not

letting us doing things like the pipeline or drilling or building new refineries because this is what the country needs for the jobs, and also the working poor, like myself, who gets $75 a week for gas is a big chunk out of my paycheck. well, that's my comment, thank you. >> guest: well, i appreciate the concerns of the caller. that's what a lot of folks across the country are worried about. one of the things that's been shown about the pipeline, actually, is because of the way it's moving crude oil, there's a very great likelihood it will significantly raise gas prices in the midwest and 15 midwestern sense anywhere from 10-20 cents a gallon. one thing we have to be concerned about in manipulating cost in the international market that, ncht, fuel prices will rise in the midwest, and that's

going to be hard for working people to deal with. >> host: it's not just democrats who are concerned about this. the republican governor of nebraska has concerns. i'm looking at a story from writers, nebraska's governor urged the u.s. president on wednesday to block the plan from pipeline to the gulf coast saying it could hurt the regional water source. >> guest: it's not democrat versus republican issue. as many supporters as you have or as many opponents you have from the policymaker level, you have supporters. you can look at the letters to the state department and where the participation's been, and certainly this has risen above any level we've seen of a project of its nature from a policymaker's stand point, but there's equal support and opponents. >> host: the newspaper talks about the concerns of the water

supply. tell us about that. >> guest: i mean, we've had three rounds of the environmentalists conducting by the state department in conjunction with the epa, local and state agencies, and they have found an alternate route is not a preferred choice, and no rout is not a preferred choice. look at the supply brought into the country, that this can create an -- and talking about the fact that, you know, it's going to be, have an impact on jobs and gas prices. the state department has found that it will not have an increase on gas prices in this country, and their finalist estimate. the council of foreign relations said without having this resource development, particularly this xl pipeline, will actually retard development, that it is going to depress the production in canada

will raise world oil prices. economic logic dictates that if you have an increase in supply, it's going to be good for the marketplace. we are getting it from canada at a time where our imports from traditional nations we've been importing from is declining. canada's already filling that gap. by 20 # 20, we -- 2020, we could have more than double what we get from persian gulf countries. that's amazing. there's so many other benefits we can get into if we have time this hour that we also are not thinking about. it's not just jobs from one particular project. >> host: "new york times" says this is ordinarily a project that a state like nebraska could get its arms around, but the pipeline's proposed route across the sand hills and aquifer that provides water to much of nebraska and seven other states

caused farmers and ranchers to write hate mail to the republican legislators. damon moglen, what about changing the route? could you be satisfied if it was changed so it's not going through the sand hills and aquifer area? >> guest: this is an extremely important question. under the environmental law, in fact, it requires that alternative routes be looked at, and the fact no serious effort was made to go around the aquifer and the sand hills is absolutely incredible. it takes us to the story you quoted from from the "new york times" which is actually pointing out remarkably that the state department at transcanada's urging hiredded a company, a major cline to transcanada, to conduct the study. this is the example of putting the fox in charge of the hen

house. whether there's a failing grade and why we need a new one. >> host: let's get cindy schild's reaction to the story. pipeline review is faced with questions of con infrastructure. the state department assigned a study with ties to the projects' sponsor. the state department assigned an important impact study from the proposed pipeline project with financial ties to the project miening to ensure a partial environmental analysis of major projects. does this give you concern? >> guest: you know, i'm not familiar with which company was hired to conduct the assessment, but from the stand point of the thoroughness, again, there were three rounds. you're talking about certain companies that have field of expertise, so if there's ties, you still have opportunity for ample public comment, not just at the hearings.

there's been three rounds of review. there's been other hearings that's have been conducted, and, in fact, they did not get a failing grade. >> guest: i mean, it's a company with significant oil company ties and listed transcanada as a major client. to hire a company with those ties to conduct this environmental impact assessment drafting is completely unacceptable, and the public realizes this is a conflict of interest, and it shouldn't have never happened. >> host: frank, independent line. >> caller: good morning. >> host: good morning. >> caller: yes, i'd like to say i'm approaching this from a different direction. i worked in an oil refinery for 16 years, and, you know, i worked in maintenance, and this is what we did. i lost a couple good friends when pipe erosion from a light gas ate through 90 degrees, went

through a heater, brought it back, and built them alive on the job. i remember there was a whole street here in long beach alive from eroded pipelines, and these were regular product. now we're talking about running what is basically liquid sand pierp through these pipes all the way from canada to texas, burr ru them under the ground so the seepage will not be seen until it causes a great deal of problems. now, these refineries, and i worked in a number of them. i was in atlantic richfield refinery for 16 years. they don't care about one way or the other about safety of the people or about the safety of the products. atlantic richfield, every night it was foggy, we'd haul stuff away stuff we were supposed to

dispose of properly. that company now belongs to bp, and people who work there say it's gotten worse since bp got it. >> host: your response? >> guest: i apologize for any losses or sympathize for that, and it's, you know, it's a complex operation in managing and running a refinery, but to say the industry does not take safety seriously, it is a top priority. up -- unfortunately, accidents happen, and we take every measure to improve that. by all respects what i have seen in my interactions, 11 years with this substitute, is that there is great strides that are being made, our standards are improved all the time to try to increase safety as well as awareness in any way that can be had, and again, it is something that's taken seriously by the

industry. >> host: cindy schild with the american petroleum study, and damon moglen is with friends of the earth. let's go to a caller from new mexico. >> caller: thank you to both guests for coming on the show. second off, we need to understand this pipeline is only as safe as much as we look at it, and it's not going to be looked at often. just like the last caller who was brilliant in what he said, these corporate people don't care. they don't care about protection, advanced refinery, whatever they say. they care about the money. that's all they care about, and i'm very concerned that we're going to forget that, be motivated by the tea party and all that they do, and then bottom line, we end up losing,

so my question is what happens when all these standards are lost and in 20 or is a -- 20 or 15 years, this thing busts horribly. what happens at that point? they can say or do nothing, thank you. >> host: damon moglen? >> guest: i thank the caller with this. there are huge concerns not only along the pipeline, but, for example, there's many minority communities around the refinery where children have asthma, incidences of cancer, all linked to refinery activity, and the fact of the matter is the choice of trying to refine this oil in the united states poses a significant additional public health burden on people in our country, and i think that that's also an unacceptable asset to this. not only do we have transcanada bringing oil to the united states to get it refined there where it's going to be creating problems for our public, but in

turn, then it's put into the export market simply to make profits for transcanada. >> host: what about the argument it's in compt's best interest to run a tight pipeline? why not ensure their best so the product gets to market and their reputation stays in tact? >> guest: i think the second to last caller makes an important point. the fact of the matter is these are complex and dangerous processes. accidents happen. the fact is that the people who pay for those accidents are the working people nearby. >> host: cindy schild, what's your response? >> guest: regarding the incidents, the state department did not find there would be additional impacts from the emissions at refineries, nor from the construction or operation of the pipeline, so, again, if you look at that assessment, but the same standards apply when you are refining this oil versus any other oil, so the same

environmental standards for emissions are going to apply. the same fuel specifications are going to apply, so regardless of where your oillet -- oil is coming from and where it's going, the same standards apply throughout the process, and the emissions are comparable to other oils we're already refining at the most advanced refineries in the world. >> host: tom, democratic caller in florida. good morning, tom. >> caller: good morning. >> host: welcome to the program. >> caller: thank you. is it true this is a four-phased project and three of the phases are already completed? thank you. >> guest: thanks for your question. no. the construction has not begun. the construction can begin. again, they are ready as soon as the project labor agreements are there. the workers with begging for the work. as soon as the decision is made, and if it's positive for the approval, the work will begin,

but there are different components. you're correct in the stand point of it is not just the braining the canadian oil. there's two high production areas in the united states that would be able to link into this pipeline to bring it down to the gulf as well. you're also talking about u.s. production that would be added to the pipeline. >> guest: i have a comment about this. i think the caller is picking up on another remarkable story that's a new suit came out end of last week in nebraska. transcanada begun ground clearing across nebraska suggesting they are assuming the permit will be granted. that should not be happening. that speaks the scandalous relationship of the state department and transcanada. they have an explicit process and the e-mails released under the freedom of information act, shows that senior officials

coached transcanada, provided insider information, and they had an understanding with transcanada about how to pitch this to the public in a way that gets the permit most quickly. .. >> host: so the process itself has been extensive. it has been a thorough and that's their position. >> host: here's the story

we're talking about. this is from forbes that says -- the report says >> host: scott, republican caller, good morning. >> caller: good morning. appreciate your show this morning. i just have a little input about constitutional matters here. that should be what governs this. the interstate commerce clause was created in the constitution to disallow the federal government and state governments for that matter from impeding free flow of commerce between states and within the country. this is a classic example of commerce that legitimate, commerce and that needs,

government needs to stay out of it as much as possible. and on that regard, the epa is an extremely harmful and unconstitutional institution that has been set up by ironically republican president to impede interstate commerce. i've called upon congress to abolish is harmful legislation and get rid of that agency. if we didn't have the harmful and unconstitutional regulation that we do, from the federal government in this country, we probably wouldn't even be talking much about canadian oil or energy sources from other countries. we would be talking about our own nuclear energy and their own shale coal and whatever else our entrepreneurs are able to freely discover and distribute. >> host: do you agree? transit he is correct and the interstate commerce clause and that has something to do with a pipeline in getting the state department approval. again, i just, i feel like maybe

i haven't spent enough. the different impacts that we have to bring to american people and consumers with this resource. whether you're talking energy security, supply flexibility, you can debate the exact numbers whether they come from the state department are one side or the other, but we mentioned a 2400 companies already employ people. you want to work look at it another way. look at it from the standpoint, from every dollar the u.s. since -- spends on canadian goods, 90 cents is returned to americans. this is coming from a the canadian and american government. you don't have that sort of trade relationship when you're treading from other countries. do we want to be reliant on oil from other foreign countries, or do we want the importing more from canada? it just makes sense because this is being produced. and it will be refined and managed better here where we can bring jobs to americans that if we are sending it to china. >> host: scott says he thinks there's too much regulation, you

agree with that? >> guest: it's one more day that his job isn't being brought in america. from that standpoint, but you longer is no one who could really judge or accept that because they did the time that they felt was necessary. and it has been led by the state department in conjunction with the ep a. you're looking at an industry that is so heavily regulated and has so many standards. and again that would apply regardless of the oil you're putting into the pipeline. >> guest: i would like to pick up on a couple things scott said which is he raises a very interesting point about the responsibilities of local and state authority versus federal authorities. part of this is that actually states to have the right to be making decisions about land a pipeline across their own territory, which is exactly why the governor of nebraska, and many of the state senators, are

now calling for special session in the state to pass a law that would actually stop this pipeline from going across nebraska. democrat, republican alike are saying they're concerned about the environmental damage and public health damage this pipeline could cause. >> host: let's look at details from "the associated press," with extension would entail. a 36-inch still pipeline. will be buried forefeet below the ground, 25 feet below major regions -- rivers. scott, independent light in minneapolis, good morning. >> caller: . good morning. i'm going to side with transcanada. i've worked on the pipeline. i know they employ 300 people, approximately, for each 100 miles with a. they were the most professional oil pipeline that i ever worked with. took great care in making sure the men were safe, the land that

we had worked in lay the pipe in was returned back to its original state, and that was just a real safe process and i just give a pat on the back. i appreciate -- i would be happy to go back to work on the pipeline when it gets started a. that's all i've got. they are a great company and i expect them to make money off the pipeline. that's all. >> host: thank you. that's also another good point. when you talk about a company making money or profits, that shouldn't be a dirty word. look at what's happening in their investments that are made, and when you make money as a company you didn't have to invest to ensure that you can have safe operations. you have to be able to do maintenance. i mean, this is where the money goes and you also can't forget about what goes back to

investors. so, the industry itself is doing its part. we have the ability to employ a lot more people but we need effective policy to be able to do that. if you look at forecasts we would be able to provide 100% of our liquid fuel needs in north america. i mean, that's incredible but we need the policies to do that and we need approval to bring the gas to consumers. >> guest: scott, i appreciate your comments as well. i think i hope that everyone working on this pipeline can be as serious and as committed as you were. i think the fact of the matter is that we see unfortunately is that there have been very significant problems with these pipelines so far. for example, keystone one pipeline in only a year had 14 spills. we now look at the spill outside of kalamazoo, this is the worst still in midwestern history. it is creating an environmental

crisis in the area, and one year out we still don't have an idea about how to clean it up. the epa saying the dynamics of this spill are different from what they're used to. local authorities are saying the same thing. the issue really isn't this poses a significant environmental and public health risk and that's why people are so scared up and down the pipeline. >> host: touching on this where the question on twitter, someone goes by the handle oversight of the gop at coming american people will be affected if oil spills hunter drinking water. >> guest: this is a question about protecting the environment but also -- it's something we do have a look at holistically. but when you look at the report again, that estimate, the findings are that there would not be significant impact. now, from, you can understand concerns. there's already thousands of miles of pipelines running through this region, and again

you're going to have extra conditions in place. you going to have the reasons that these will be instituted and created will be to be able to provide for quick response. no one wants this spill or an incident to happen. if it does you had the ability to respond more efficiently, and you're talking about high plains being the most efficient mode of transportation. so as opposed to additional trucks on the road, et cetera. >> guest: i think these doctrines that have been released under the freedom of information act provide interesting information. one of them, for example, is a fact sheet from transcanada which specifically says that although they said no accident will happen if they didn't say that actually if well, if wells were foul it would simply provide people with alternative water. and i think the people in nebraska and throughout the midwest know that you cannot make up for what would be the damage to the aquifer that

provides millions of people with water. >> host: philip joins us from tucson, arizona. good morning. >> caller: hi. can you hear me? i have a few issues with really concerned that maybe we're going in the wrong direction that could destroy enough of our country. i just think like the corporate greed and the people have been paid off are just kind of running roughshod over us as usual and they will get their way. i think regardless how much we fight they will get what they want. i'm just afraid it's going to be a bad thing, you know? the point you made about kalamazoo still one year out, not even knowing how to clean it up scares me. west virginia, solve a mountaintop removal. that's all i need to see. our country does not look the same as it did 20 years ago.

it's all about money and corporate greed. >> host: philip, if i can ask you a question, what do you think about the need to create jobs? does that wait into your take on this project? >> caller: i don't believe that they will create that many more jobs. we've been hearing, this is the republican argument for the last year, and there's no jobs. and even if, i just don't believe it. they've never done anything except for their own benefit. >> host: let's leave it there and get a response. >> guest: i mean, i'm not sure exactly where the question was. thanks for the concern. and again, you are expressing a lot of, we've heard a lot of use today of what we're hearing throughout this process. and ultimately it's got to be a decision that's going right now they're looking to see if it's in the nation's interest. one of the aspects, we will see

environmental considerations but other things have to be about our energy future. about supply. another thing i certainly hear about all the time, i'm sure everyone else does, whether you're home with her family or out in a discussion is gas prices. this has the ability to add supply to the market, and it's only going to be good to consumers again, the supply flexibility of what we're going to build up in our infrastructure system. so we do have to look at it holistically. we will need all forms of energy for the foreseeable future, and we cannot preclude one that is providing over 50% of our energy needs. >> host: let's go to bill, republican in las vegas, nevada. good morning. >> caller: how are you doing? first of all, this debate -- let it happen. i think the people of showed up to discuss it, but what, i see it as the bps going to be born simply because there's too much

money involved. the real debate or discussion, material debate, i think will, over what penalties there will be once environmental impact occurs. so i'm curious what the guy from friends of the earth seems to have prepared to propose to congress, or whatever, to make sure that the oil companies pay their due share when those things, you know, when those detriments occur. so maybe you can answer that, thanks. >> guest: bill, thank you for the question. i guess i am not sure that i think the baby has been born. i think the fact of the matter is that tar sands oil is controversial all over the world. as you may of heard, for example, last week the european commission actually after a year of studying has decided to give tar sands a very negative kind of greeting, which in all

likelihood means it's not going to be exported into the european market. so i think what we see is actual opposition to this dirty and dangerous oil. and it's growing in the united states as you see. so i guess i'm not convinced that actually this is an industry that is going to a future. i think it's not that i don't think this pipeline is going to be built. i think the scandal that is now surround the state department and transcanada will have a real impact and will have to start this process again. the president will have to intervene. as for the liability issue i think you have a hugely important issue. as we saw after the petroleum spilled we do not have anything like meaningful liability in this country for these kinds of disasters. what we see is that working people throughout the gulf had their livelihoods destroyed, have had their homes destroyed, and have really seen their future kind of that operate under a code of oil. i think you're asking a hugely important question, who's really going to pay? >> host: for what's your

rebuttal to what damon just talked about with how a payment is made, who suffers or deals with the after effects? >> guest: i mean, we do have legal ability in this country, and certainly the exercise of lawsuits, and money is being paid from the dp spill but certainly that is not going to compensate for the incident itself. and the damage that's done, every effort was made to do the best that was unprecedented and certainly something again that the industry has gathered together to improve the standards, to make it better to operate more safely in the gulf, but as far as compensation that is our legal system, and each of those lawsuits are being worked out with a company themselves. >> host: transcanada says the keystone pipeline project is nigh% of total u.s. oil

consumption, equal to the u.s. imports from saudi arabia. let's go to a question from robert on twitter. if pipes or four feet underground how do they detect leaks? how is the monitoring done? how do companies that run pipelines make sure the pipelines are not leaking. tell us about that. >> guest: i wish i had my colleague here who could give you a real good answer to this, but really what your looking at is the type of seal that is used, the type of monitors and the amount of monitors that are used. there's different stops along the way of pumping stations, so that our systems themselves are called weak detections, mechanisms, beyond that would be happy to follow up if he wants more specifics on the engineering design and control measures themselves. >> host: they want to weigh in on the engineering? >> guest: i would.

i think the caller asked an extremely important question. when we saw with the tar sands in kalamazoo, at first the oil company basically said we may have lost a few thousand gallons. in fact, over 800,000 gallons were spilled. one of the reasons it has been so hard to get a grip on it is exactly this problem. that once you dig down and you put the pipe down, it's very hard to know what is being spilled, where the spillage is going. so this is one of the real critical environmental issues. and what a lot of questions have been raised, for example, about the fact that transcanada plans on increasing the pressure in the pipeline after this is build, which has been a huge contingent. that's one of the aspects of the scandal that is now important the state department because apparently the state department knew about that. >> host: let's go to amanda on our independent line, good morning. >> caller: please don't cut me

off because this is very important. i got up especially for this. i could be sleeping but this is important. i take notes on all your shows and i took notes june 11, 2010, on the larry king show. and oliver stone on an jesse ventura who were really fired up about the situation. i wish they had been on the whole hour. i couldn't wait to see this oliver stone documents out of the border. i forgot to write down what it is going to be in the movie theaters or on tv but i hadn't heard mention of it since. i would like to know why president obama couldn't sidestep congress in this horrific situation and start working with hugo chavez? i heard the u.s. was offered help from other countries in obtaining oil and were turned down. now, who is the decider in this? what good is a president if he can preside over congress in an emergency situation like stopping this pipeline? isn't that where the title president comes from, out of the word preside? congress takes too damn long in

deciding. it's time for the president to take action. sidestep and get his work in there. and if not, damon, i think it's time for a president like, i've got a new one in here now, mr. brezinski, doctor brzezins brzezinski. i saw him just by accident on tv. i was surfing and he is a man, he could be a combination of pope john xxiii, fdr, and eisenhower, president eisenhower who warned us against the military-industrial complex. >> host: and related a because we're about out of time. let's throw your question to damon. >> guest: well, i think you raise a very important point. the president actually have to take action now. in this scandal does not include the state department at the highest level, including secretary clinton herself who, while she was supposed to be overseeing a fair and objective

process, instead said she's of the mind to give the go ahead and then it came out that basically one of the lead lobbyist for transcanada is none other than one of her former campaign managers. there has been terrible bias in the state department, complicity with transcanada. state department has in fact coached transcanada. the president now needs to step in. he needs to take this process decision of way from the state department and we need to be doing this in a different way. >> guest: this may be an area we have an agreement on. this is up to the state department and eventually all the way the president and it is time for action. it is time to bring the jobs that can be had and the ability to take a step towards improving our economic situation. and the only answer, and we really hope we see it come if you saw the support that was out there by your american workers of how badly they are looking for this, and not just the

workers for the pipeline, the expanded communities themselves. they are begging for this project to happen. we need a president to say yes to this pipeline. >> host: the state department on friday held its last open meeting. it's held numerous means across the country. finally, to wrap up where do you think it stands now? the state department is supposed to have a decision on this by the end of the year but what are you watching for the next couple of months? >> guest: i think first of all where we are right now is the environmental impact statement has not been completed. there's nobody public comment period, the agencies have to wait in. this scandal has to be addressed that shows the taste department has been completely biased in doing this document. then we have to have a national interest determination to decide whether or not this is truly in the national interest given the public health and environmental dangers. i think we got a long way to go before we have a decision here but i do think the president has to now become directly involved in. >> guest: waiting for a positive outcome at the end of year. we believe that environmental

has been a thorough assessment. appreciate all the concern, and i think the state department has done a good job in attempting to balance all these concerns. again, they've had nine hearings recently. data hearings throughout the process. this has been three years on the economy. they had 90 days to look at the national interest. this project is in our nation's interest whether you talk from jobs, energy security, or supply flexibility and you see that by the support that you have from american workers are out there waiting to have the jobs created for them immediately if there is a signoff of approval on this project. >> host: . >> a look at the proposed 1700-mile pipeline that would carry crude oil from alberta, canada, through illinois, oklahoma and on to the gulf coast. >> we all need to step together for mother earth now because mother earth is crying.

prophecy tells us when mother earth cries we stand up, we fight for. she will die and we will die with her. so i ask everyone to remember, rise up with mother earth. rise up and say no, no to the spy plane. no to death. no, no, no. [applause] >> this is not a regional impasse. it's a national impasse. and it's its approval of this pipeline were to come to it would help stimulate our economic recovery. it will put us back on our feet, and many here today focus on job creation -- >> the man allies. >> will have the opportunity to have some of the best paying jobs here in the united states. >> we will show the entire public hearing the last in a series hosted by the state department and the discussion representing differing views of the pipeline tonight starting at 8:30 p.m. eastern on c-span2. >> last monday on "the

communicators" lightsquared had sanjeev how xuzhou -- sanjiv ahuja. >> for the first time americans have had access to conductivity, even if there are natural disasters and other things happening to our satellite networks spent tonight questions on lightsquared goal and possible gps interference. >> next republican presidential candidate newt gingrich, the former house speaker addressed the family research council values voter summit last friday. this is just over 20 minutes. >> you know, you are here at a

historic moment. i think this is the first time in american history that two georgians running for president have been back-to-back talking to an audience. [laughter] [applause] i was just comparing notes with herman on stage. i don't know if you've watched it but the elite media such of this is not a two-person race. and herman and i have decided it may be right but they had the wrong two people. [laughter] [applause] and it is kind of interesting that the two guys have gotten the most money have lost the most boats, and the two guys with the most ideas have gained the most, so, that might elite media that maybe there is more to politics and fundraising and consultants, and maybe having a heart and the brain actually matters a lot. [applause]

>> now, i think we are in a period of enormous challenge. i think that part of the challenge is barack obama, but by they i think it is much deeper. we have bureaucracies out of control. we have judges who don't understand the constitution. we have teachers who don't believe in american history. we have an academic class that is in many ways alienated from the american people and an elite media which frankly i think has no understanding of the origins of the united states and the nature of american civilization. we have a lot of work to do. recently, i released and you can see at new.org, a contracts wafer center contract with america. and it outlines the scale of change. it outlines both a legislative program and it outlines a first program of very specific executive orders. let me give you an example. imagine about 3:30 a.m. or 3:45 a.m. on inaugural day, we

said goodbye to folks, we take about an hour and a half and we started signing between 50 and 200 specific orders, moving the government away from obama and back towards the american tradition. [applause] now, i don't, you can go to newt.org and you'll see a section, this is open, we will release all executive orders by october 1 next year so it will all be part of the closing, month of the campaign. and if the president says he was for one of them we will pull it out and he can sign it. [laughter] but, but i don't know what i can say with the first one will be. around 3:45 or 4:00 on the afternoon of the inauguration, about the time that president obama kits to andrews air force base to get on air force one to go back to chicago --

[applause] i will sign executive order number one which will abolish as of that moment every white house czar. [applause] >> now, i wanted to come today to talk about a historic crisis that only indirectly relates to the president. you know, abraham lincoln said if you debate somebody who does not agree that two plus two equals four, you probably can't win the argument because facts make no difference. and i want to start with that example. imagine if by a 5-4 about the supreme court decided that two plus two equals five, under the current theory which the warren

court promulgated in 1958, the only effective recourse would be either a, to get a future supreme court to reverse them, or b, to pass a constitutional amendment declaring that two plus two equals four. now, i want you to think about the absurdity of this. do any of you seriously believe it's five appointed lawyers decided to plus two equals five that the rest of us would probably change our school textbooks, change or accounting systems? ..

>> this is an absurdity hoisted on us in 1958 by a historic lie. there is no judicial supremacy. it does not exist in the american constitution. [cheers and applause] let me be clear. judicial supremacy is factually wrong. it is morally wrong, and it is an affront to the american system of self-government. [applause] one of the major reasons that i am running for president of the united states is the 9th circuit court decision in 2002 that one

nation under god in the pledge of allegiance was unconstitutional. that decision to me had the same effect that the dred-scott decision extending slavery to the whole country with abraham lincoln. if a court could be so out of touch with america that it seeks to block children from saying one nation under god in their description of america that we have come to a point when we needed a constitutional crisis to reassert the branches prerogatives to teach the judiciary that they cannot be anti-american and expect us to toller rate them radically changes our society by radical dictate. now -- [applause] what i'm saying to you is in the best tradition of the american revolution. read the declaration of independence.

a very large number of specific charges against great britain involve dictatorial judges. the fact is the founding fathers deeply distrusted judges and thought the lawyer class was danger, and that you could not give them unbridled power otherwise they would undermind and destroy free society. now -- [applause] this is not some marginal position. thomas jefferson asked about judicial supremacy said that is an absurdity. that would be an ole gashing ky. i think we are faced by one of the great cross roads of american life. it's doubly dangerous. you see, if judges think they are unchallenged, they are corrupted in a moral sense, in a sense of arrogance on imposing on the rest of us. whether it's one judge in california deciding he knows

more than about 8 million californians about the definition of marriage -- [applause] whether the judge in san antonio who rules that not only can school children not say a prayer at their graduation, they cannot use the word "benediction" "invocation" "god," or ask the audience to stand, and if they do any of this, he will lock up the superintendent. the idea of an american judge being a dictator of words is so alien to our traditions and such a violation to our constitution as i will explain in a moment that that particular judge should be removed from office supremacy -- summarily. [applause] lord acton warned in the 19th century that power tends to corrupt and absolute power

corrupts absolutely. notice he dropped the word "tense". the courts have proven he's right. with each passing decade, the judges have been more hostile to the american tradition. they talk about using foreign sources of information because therefore the american constitution is so old and so apt kuwaited. -- antiquated. a justice who believes that should not be serving on the american bench. [applause] we have a very lengthy paper, work of years of effort edited by vince haley that we published on newt.org that identifies step by step how ignorantly the current judicial model is taught

in every law school in the country. it's wrong. steve king pointed out one of the major impediments of democracy today is the very behavior of law schools that teach power in a way that's utterly unsustainable. founding fathers designed our constitution based on the concept of the balance of power. we're supposed to have three co-equal branches. there can be no supremacy with no three equal branches by definition. otherwise there's a superior branch and two inferior branches. it's worse than that. read hamilton and the federalist papers. it says the courts can't take on an executive branch because they would lose. what did he mean by that? this is one of the most important things to explore over the next year, and because this is a more complicated topic than a 30 second answer during a game show version of the presidential

debate -- [applause] as the republican nominee, i will in my acceptance speech challenge the president to seven lincoln-douglass style debates with a time keeper and no moderator. [cheers and applause] [applause] one of those debates should be on the declaration of independence, the constitution, the federalist papers, and the nature of the american jew judiciary. [applause] jefferson is the most clear example of taking on the judiciary and the judicial reform act of 1802, they eliminated 18 out of 35 judges.

didn't impeach them, just abolished their offices. told them to go home. i'm not as bold as jefferson. i think the judge in san antonio would be an important initial signal, and i think the 9th circuit court should be served notice that it runs the risk of ceasing to exist. [cheers and applause] [applause] jackson in the bank of the united states said it was an overly centralized form of power. think of it as the earlier bernanke. they said it's unconstitutional. they said, fine, it's their opinion. i have a different opinion. i'm the president. they get their opinion in court. i get my opinion in the white house. lincoln spends a large section of the inaugural address explaning why the dred scott decision is the law of the case, but not the law of the land. lincoln refuses to enforce the decision while he's president,

period. people who come in and say, oh, as nancy pelosi said, if the court speaks, it's as though god has spoken. be fair. having somebody from her branch of the party recognize god is an important step in the right direction. [laughter] [applause] on the issue of god in american public life, a country created because we are endowed by our creator. [applause] the parts have been historically wrong at least from the 1940s and have gotten worse and worse, more and more antireligious, more and more secular, and more and more hostile. the question of national security in the last few years, the courtings, i think have been out of touch with reality. the idea that the courts are now taking on responsibility for defending the united states is a clear and fundmental violation of the constitution and a

fundamental violation of the executive branch's power, and the congress should pass a law repudiating every interference of the courts in national security issues and returning them to the congress and the president where they rightly belong. [applause] on abortion, the courts are waiverring all over the place. they start with a clear and deaf fintively stupid decision here and changed it twice since then. the fact is rob by george could be right and whether we should use the constitution to describe life as a right and insist that's the law of the land. that's something we should look at very, very seriously. [applause] on marriage, it should be quite clear on issues like the defensive marriage act that we should simply say it can't be

appealed. it's very clear in the constitution. the congress can decide what can be appealed. the congress can exclude things from going to the court. in the judicial reform act of 1802, they refused 20 let the supreme court hear about it for 18 months until they finished out wiping out all the judges. [laughter] they said we want to establish a fact on the ground before you get to hear it. this is clearly written in the constitution. now, i mentioned jefferson, but there's other steps you can take without wiping out half the judges. one, you can hold hearings. i think for the congress to bring in judge barry from san antonio and say to him, explain to us your rationale. what right will you dictate speech to the american people? how can you take your court order and the first amendment and tell us 24 is about -- this is about free speech? just -- judges who knew when they were radically wrong would be held in front of congress

would needily have a sobering effect about how much power they have. second -- [applause] presidents can follow the precedent of lincoln. i would instruct the national security officials in the gingrich administration to ignore the recent decisions of supreme court on national security matters and interpose the presidency in saying as the commander in chief, we will not een force this, and by the way, for the liberal friends, the source of that is franklin dolanor roosevelt. [applause] in 1942 a group landed in florida and long island, picked up in two weeks, roosevelt brought in the attorney general said they will be tried in a military court, executed, happening within three weeks, and if there's a writ of habeas

corpus, i will not issue. i'm the commander in chief in wartime. they aren't. [applause] congress has the power to limit. congress can cut budgets. congress can say all right in the future, the 9th circut can meet, but they will have no clerks, we're not paying the electricity bill for two years, and because you reppedder justice in the dark, you don't need the law library either. [laughter] [applause] this is, by the way, paraphrasing hamilton in the federalist papers in which he's defending saying flatly the judiciary is the weakest of the three branches. i mean, this modern model is exactly opposite the american tradition. [applause]

obviously, i'm only jut lining for you item nine of the legislative part of a 21st century contract with america, and yet you can tell just from this, i mean, the struggle we're going to have with the lawyer class over shrinking their power and their dreams of dictating to america how we should behave, just in that one zone, imagine how big this conflict will be. you have other zones. how do we create jobs? how do we get the national labor relations board under control so it's not attacking boeing and other job creators. how do we replace the environmental protection agency with an environmental solutions agency that has common sense, cooperation, takes into account the economy? i mean, step after step of things that matter. how do we control the border by january 1 of 2014. you can do that by passing a law early in 2013 saying we suspend

any regulation or law that prohits us from the national security act to secure our border. no environmental impact statement, no confusion. get it done now. [cheers and applause] each of these steps will be met with some substantial resistance by the reactionary forces who had dreams of creating a radically different america, and each of these steps has to win if we're going to give our children and grandchildren the free safe and prosperous country that our children -- that our grandparents gave us. i came here today because this is going to be a tremendous struggle. i did not come here today asking you to be for me. if you go home and vote you're going to say i hope newt does it. i can't. no one person can do this.

under our constitution, the president can lead the american people in educating the congress in changing things. if we shrink the power of washington by applying the 10 #th amendment, we have to grow citizens back home to fill the vacuum. [applause] i came today to take this opportunity to outline for you one of the great historic decisions we will make over the next few years whether we take back the courts, we relance the constitution, we insist op judges who understand the constitution, and i can promise you in the gingrich administration, only people dedicated to the original document and its original meaning will get any court appointment at any level. [cheers and applause]

[applause] so let me just close and say to all of you i am here to ask you to be with me, to ask you to be with me for eight years, to ask ewe to stand side by side to make sure that we once again reclaim america from the forces of socialism, from the forces of class warfare, from the forces of secularism, from the forces that try to get us to not teach our chirp about the history -- children about the history of this great country. if you will be with me, together we will decisively defeat president obama, defeat the democrats in the senate, and over the next few years, we will decisively reclaim america as the land of the free and the home of the brave. thank you, good luck, and god bless you.

[cheers and applause] [applause] ♪ ♪ >> today, former massachusetts governor holds a town hall meeting in new hampshire. >> next on modernizing air traffic control in the u.s.. the faa is planning to replace the ground base program with a satellite base system known atz next generation air transportation system or next gem. the house transportation committee on aviation reviewed

the faa's work so far at a hearing last week. this is just under two hours and 45 minutes. >> next gen touches every aspect and costs roughly a billion dollars per year. from the beginning, the case cementerred on the ability to deliver operational benefits to air space users to increase efficiency, decrease user costs, decrease environmental impacts, and most importantly improve safety. it is also considered a job administrator allowing for growth in this industry. today's hearing focuses on the benefits the faa delivered over the last year or so, and the specific operational benefits they will deliver two years. we expect them to deliver their long term milestones and targets

for benefits. the key to the realization of next gen benefits is the radar base data to modernize surveillance dependent on technology. it is reliant on industry investments into aveonics. today's hearing is an opportunity for the faa to present a proper accounting of benefits including when such benefits will be realized in the mere, mid, and long terms. it's an opportunity to build confidence in users who need to invest substantial amounts of money to realize the benefittings promsed by this -- promised by the new system. they will oversea and provide federal money. we will hear from the user committee on the benefits 245 are of particular importance to them. under the nextgen this has been

underway for five years, but the roots are in the second term of the reagan administration. the idea of implementing dramatic improvements is not new. efforts to produce the benefits have evolved, it's always reminded -- it has always remained critical to demonstrate real progress year after year and that includes benefits in the year term as well as policy benefits to guide the long term efforts. in 2008, the program was pulled off the gao's high risk list, a compilelation of risky government programs. from today's second panel of witnesses and the degree to which benefits are realized. i believe the testimony of the witnesses will be critical to the next general authorization and funding decisions congress will make in the tight budgetary

times. before we turn to mr. costel lrksz o and others, e ask all members have five days to extend their remarks and have material for the record of the hearing. without objection, so ordered. now i recognize my ease steamed colleague, mr. costello for his opening. >> thank you for your kind remarks. you are correct. i announced over the weekend, actually yesterday officially, that i would not seek reelection in the 2012 election. i said back in 1988 when i ran for my first term that i didn't intend to stay in congress forever, and that i had other interest in other things that i wanted to pursue while i was still healthy and could, in fact, pursue those interests, so i decided to do that. it was not an easy decision

after working here on the hill for over 23 # years with you and other colleagues. it's been a great relationship working with the chairman. i'm going to be around for another 14 months until the end of my term, so we'll work closely together. you were right. there are people back in my district, namely eight grandchildren, who are very happy with my decision, and one of my granddaughters told me on the phone last night that, you know, maybe next year you'll be able to make grandparents day at my school, which i have not been able to do in several years, so i'm looking forward to not retiring, but looking forward to turning the next page and spending time with my grandchildren and also trying to make a contribution in other areas owner elective office. thank you, mr. chairman, and i look forward to continuing working with you over the next

14 months. i thank you for holding the hearing now. investing in next gen now creating a lifetime of savings for the next generation. they provide services more efficiently, and the aviation industry users and the flying public will be the beneficiaries of billions of dollars and cost savings. in the 111th congress, we held four oversight hearings examining the capabilities, discussed required navigation performance procedures, and reviewed the task force report, and analyzed the long term planning and inner agency cooperation needed in order to keep next gen on track. everybody wants them to succeed, and i commend the faa under the leadership of randy babbit, and others for making progress in key areas of nextgen using faa resources to streamline approval

process which yields significant fuel savings. further important next gen infrastructure programs such as adab are moving forward relatively on schedule within the faa's budget requirement so far. however, because many of the next gen programs are consistent on one or more systems, delays with money program means delays in other programs. a hold up with the en route modernization program has an effect on the other systems. including adsb, data communications, and a system wide application known as swim. my concern is what happens when we add severe budget constraints on top of logistical budget delays. if we are committed to the share goal of spending taxpayers' dollars wisely and efficiently, i'm concerned that significantly cutting levels will move

implementation dates back further and increase costs and bit fits for aviation users. when this committee held two hearings on the faa reauthorization bill in february, we had the opportunity to hear from both the aviation stake holders and the faa. our witness panel concluded that cutting the agency's budget to fiscal year 2008 levels as proposed in the long term authorization bill that passed by a partisan vote in april that it would likely trigger cut backs and cancellations of core programs. i want to be clear simply providing more funding is not the entire solution to successful nextgen implementation. in fact, there's many factors to come together nrd to be successful now and in the future, but when we are trying to implement the largest and most important aviation modernization project of our time in a safe and cost

effective manner, at what point is doing more with less just adding to the problem and making it even more difficult for it to succeed on time and on budget? going forward, i believe that it is important for us to have an open dialogue with labor and industry stake holders as well as the faa and other federal agencies such as nasa, the gao, and the department of transportation, ig, to ensure everyone is on the same page. there needs to be realistic time lines, performance metrics, and a candid discussion of cost requirements to make sure next nextgen's systems are not significantly delayed and cost tax taxpayers more in the long run. i appreciate the hearing, and as a strong proponent of next gen, i want this modernization program to continue to make progress and ultimately deliver benefits that we've long discussed for all of our users,

operators, and the economy, and because the aviation industry supports millions of jobs and keeps our economy moving, enactment of comprehensive faa reauthorization bill that includes adequate funding levels for next gen as well as a 2012 appropriations measure that makes investments of next gen a priority creates jobs and i want proves efficiency. it includes a lasting infrastructure investment or our country. again, mr. chairman, i thank you, and i look forward to hearing from the witnesses today. >> thank you. mr. micah? >> thank you for recognizing me, mr. chairman, and let me divert for a second to extend my very best wishes to jerry and to georgia. i was really shocked the other day because i was looking for mr. costello, and usually i can

find him quickly. we have a great repore, incredible working relationship over the entire time i've been in congress, 19 years, and he proceeded me. he served as ranking and chair and back and forth together, and worked to bring the nation's aviation system back to some sense of normalcy after 9/11, and sure the safety and security of the flying public. couldn't ask for a better partner and better friends than both jerry and georgia, so we'll miss him, but i knew there was something wrong when i couldn't get a hold of him the other day and was quite shocked to learn like everybody else he was hanging it up, but we wish you well. i always thought you were at

least as old as me, and i looked it up, and i'll be damned if you are a lot younger. you have a chance for a full additional productive career, and then spend time with your wonderful family, so wish -- i know all of us on this side wish you well, and thank you for a working relationship. it's been great, but we'll miss you, and all of us at some point have to join jerry willingly or unwillingly. we'll be with you. if you're like my brother, he's a big democrat like you, there's lots of money after congress. good luck. he'll hate me for saying that, but he just retired, his third retirement. there's lots of potential out there. you're a young age, but we wish you well. >> i thank you. ..

first of all safe, and secondly that our system is in as efficient as possible. you can only two that do that was using next-generation technology so we have worked together as strong advocates to move forward. we have made some progress. today, i don't particularly want to be critical with faa, but obviously if you read the igs

report or gao report, we will see very specific criticism. the ig really strikes at some and the management failures, some of the rtc recommendations from 2009 still have not been implemented. only a few have been addressed. faa has succeeded somewhat in trying to focus on some of the metroplex is, some of our congested airspace areas, but unfortunately, the very basis of putting nextgen in place as far as programs and technology, he rammed is four to six years behind according to the report. some estimates are it could be as much as a half a billion dollars over budget. we still have problems in

developing our technology of next-generation approach to tracking aircraft. we see problems with software programs and management programs in what faa has taken on to move next-generation forward and this again is not my assessment. this is what the ig has said. and this isn't necessarily a failure of money, and i share mr. costello's and others concerned that we adequately fund our fai operations, but this is not a question of money. this is a question of failure of management and getting a better handle on setting a timeframe, keeping these programs again moving forward and some logical sequence and you have to build

on successes to get to where we want to be. unfortunately, there has been too many failures. the ig also cited failure to use onboard equipment and come up with solutions there. we are behind in that. it looks like also we are sort of forced into a full-blown nepa environmental study. i question the need for that. anyone with any common sense or logic that can determine that this has to be vastly more favorable to the environment, more direct routing, less emissions, more efficient use of airspace, i am not sure where they're coming from. but, again we don't need rocket science or continued extensive full-blown red tape dotting i's

and crossing t.'s with even common sense would tell us the m. bar mental positive impacts of next-generation technology is critical. one other thing that concerns me and i'm a strong advocate of having the private sector involved in this development, and having witnessed back before he became chairman, sitting in this very room, and we would have hearings bringing forth new technology and faa was doing the developmental program. they would go on and on. they would just ask for another billion or 2 billion, and they say, our success is right around the corner. well we are seeing some of adam or gently repeated again and also with concerns me is now, with the failure of making progress and also the milestones that aren't mad or properly

identified, even baselines that are missing at faa has not identified, that the year is now running scared for participation and also not as willing to come forward and provide some of the solutions. so, i am very concerned about our progress with the program. we have got some good proposals in our pending legislation. i hope to move forward with that in the next few weeks, and certainly in the next couple of months to finalize our faa reauthorization. we include provisions to set some standards, some metrics, some baseline, some milestones and timeframes, so hopefully that will encourage the private sector also to become reengaged but we have got to get faa off dead center and get a handle on

this very important project. again, with my compliments to our member who we are going to lose next year and with a concern for the future of nextgen, i yield back. >> thank you. ms. hirono. >> thank you very much mr. chairman and i do add my thanks to our ranking member costello and of course when he chaired this aviation subcommittee and the leadership he provided and all of the issues confronting us, including of course the many hearings we had on nextgen, and i want to thank chair petri for convening this session to bring us up-to-date on what is happening with nextgen. i am also glad that esther costello mentioned the importance of faa working with other partners such as nassau, gao and in my view reticular

lead lee with this labor unions are going to be very much impacted by what we do with nextgen. i will have a few questions for witnesses along those lines. thank you very much mr. chair. thank you. mr. coble. >> thank you mr. chairman. no opening statement per se. i just want to reiterate your generous words directed to the distinguished gentleman from illinois. he will indeed be sorely missed on capitol hill and i look forward to the hearing today as well. thank you mr. chairman and i yield back. >> thank you. mr. boswell? >> thank you. i would like to join with everybody else. i'm just going to say it like it is. my disappointment, because you made a great contribution here and we are going to lean on you

a little bit. but yeah. a lot has been said and more will be set as we go along and you have done a great job. and you will continue to do so whatever you do. you are a patriot, great american and somebody's friendship i value very much. back to the business at hand mr. chairman. i appreciate you having this hearing. i think there has been a little amnesia around here and i said to the other side we have some real challenges across the board. i remember aviation has put a lot of jobs out there for years, growing and i hear this word uncertainty thrown around and i think we ought to stop and say well, who is creating the uncertainty? and to be honest about it. and i would hope that forks amber -- example mr. bolan and some of the rest of you would

tell us what that means, letting us take risk whether it is in wichita or wherever it might be as we think about general aviation and what it contributes to our economy. and keep throwing barriers in front of them for different things and you know, trying to make them disclose where they are going to do business and so one which is wrong, and then wanting to invest in risk and so on and not knowing what is going to happen to nextgen and you made an excellent remark and i certainly agree with those. it seems like we ought to move off center and get going. something for an investment with a known return and i think we are thinking about one of them. we have just thinking about it for a long long time and we ought to get off center. so i appreciate this hearing

today. we have had a number of hearings on the issue, and we ought to be moving forward. there'll alliance and their willingness to do equipment, do avionics. avionics cost so much money. general aviation, avionics cost so much money and those of us that use the system a little bit around here have an appreciation for it that we all ought to appreciate it because we all use the system one way or another whether it is flying back and forth to the district are going wherever we go or those of us that have the privilege to participate in general aviation. it is my hope that we can move forward and pick up the pace a little bit. and realize that this will and hands the economy. that is needed. we need to move forward into next generation. but it is here. it's not over the hill. it's here now when we ought to

be into it and those of us that have gone up to the laboratory and done other things have realized there's lots that can be done to make it safer, expedite, get manufactures and to invest and those users to invest and do a lot of things. so i appreciate it and i hope we do actually move forward with a little expediency and get it down now. thank you very much. i yield back. >> thank you. mr. lobiondo. >> thank you much or chairman. i join in my colleagues and thinking you for this hearing on this most important topic and also when my colleagues on their comments about mr. costello. jerry you are with this play should be about. i have tremendously enjoyed your council, working with you.

almost everybody knows are they should know that you are not a show horse. you are work horse. you are about getting it done and you are about getting results. this place needs more people like you, so we thank you in mr. chairman, on the topic of nextgen, i am a huge, huge proponent of the program. it is no secret that the federal aviation administration technical center, which is in my district, and i believe the premier facility in the nation is not the world in this particular area has done extraordinary work. i want to start by saluting the leadership of secretary lohud and administrator babbitt and michael to you and your whole team for what you are doing. this is incredibly complicated and incredibly difficult, but i also want to make a word of comment. i have been into the tech center on numerous occasions and the

men and women of the tech center have a dedication to excellence and a passion for success that makes it much more than a job for them. they understand their part of history. they are putting their heart and soul into this everyday and i think this is going to yield great benefits as we move forward. we have heard a little bit about the certainty or uncertainty. i think one of the biggest things we can do to provide certainty as to provide a long-term faa bill. the faa itself needed to be able to plan. i can't imagine how you can plan six months at a time and have to spend so much time and resources worrying about shutting down or not shutting down. i was out at the conference, which is ongoing now, on monday. almost every private sector company that i talked to mentioned the certainty and the stability which we don't have right now, which is absolutely critical to our moving forward in this partnership between the

government and the private sector. it requires us to have a known quantity of what we are doing and how we are doing it. we can't do that on these extensions and i hope we can get by at this time. i also believe that one of the things i have heard repeatedly as the contracts, and we have had about 7.3 billion worth of contracts under the structure known as s.b. 2020, that have been a big help in how we are moving forward. but i certainly am concerned that this is not flowing as quickly as it could be. i would like to see more task orders and more funds being allocated on a faster basis than they have been so far. i think it would certainly send a very important message to those who are paying attention. with the big issues here in washington and continuing resolutions, this is so important to the safety of our flying public, to the dollars

that we can benefit from with our economy. it is one of the programs that we know was going to produce results and i'm thrilled we have the opportunity mr. chairman to listen to our panel and to find ways that we can be a force multiplier for the group that is here and they thank you thank you very much. >> representative johnson. >> thank you very much mr. chairman and let me associate myself with remarks that were made in relationship to mr. costello. it is a very disappointing information to learn. but i would like to thank both of you for this hearing today to review the cost benefits, progress and management of faa's nextgen program. i might add that where i have been, talking about transportation, has there not been the emphasis on nextgen and how important is for the future of our aviation industry.

and, coming from a congressional district that is a major air transportation hub, that encompasses a -- airport adjacent to the dallas-fort worth international airport, the safety of our air traffic system is of paramount importance and currently the nation's transportation system supports more than 74,000 flights every day and 730 million passengers every year. with the faa forecasting an increase of 53% to 1.1 billion passengers per year by 2025. so we are very concerned. we are a trade hub. our airport is the economic engine for the area. general aviation is expected to increase to over 85,000 flights every day over the same period

mac, and so clearly the safety programs will be far greater as time moves forward and we must prepare for the future. while the most critical purpose of nextgen is to improve public safety, there are also significant cost savings and efficiencies to be derived from the proper implementation of the program that will benefit airlines, airports and air traveling. the faa estimates that nextgen air traffic management improvements will reduce delays in flights, add on the tarmac by approximately 35% by 2018. as compared to doing nothing. that 35% improvement in efficiency would equate to $23 billion in savings to aircraft operators, air travelers and faa. these cost savings and public safety improvements are far too

important for this congress or this committee to ignore and i look forward to hearing the witnesses testimony witness's testimony regarding the different programs of the nextgen system. the automatic surveillance broadcast, en route modernization of the eram, the systemwide information management, the nas voice nextgen network enabled whether, a collaborative air traffic management technologies and other expert opinions on what must be done to modernize their air traffic transportation system. and i thank you for sharing my passion for safe and efficient national airspace and recognition that the federal government must play a large

role in this ever. i think the future is too important for us to play partisan politics here and for us to talk about how much we have to save and not spend. there are some things that we must spend on to keep the world safe and i think this is one of them. thank you mr. chairman and i yield back. >> thank you. >> thank you mr. chairman and ranking member costello for holding these important meetings and i'm sorry the ranking member is not here right now. unfortunately i haven't been able to -- i've just been able to get to know representative costello somewhat well but ding a freshman congressman, we haven't been able to run in the same circles but what i can tell you is in dealing with representative costello and i became the highest of compliments is that he is a statesman. and that is the highest compliment i think i can give to

another fellow representative so i'm sorry for your departure and your great wisdom to this great panel. said thank you very much, sir. >> nextgen modernization is a critically important in our national airspace system and can meet the transportation capacity for for the 21st century. moreover implementing nextgen technology will lead to improved aviation in a driver for future airline productivity. while i do not support the president's bill entirely, i was glad to see the importance the president placed on nextgen funding. i urge president obama and his administration to think seriously about working together in both houses of congress to enact nextgen related legislation. i think this is a commonsense issue that transcends the usual partisan divisions and the positive effects of implementing nextgen policies will benefit all americans. would like to welcome the witnesses to our panel today and thank you in advance for your testimony. i look forward to hearing from you about ways to ensure the

timely implementation of nextgen as well as eliminating the administrative area is preventing nextgen's progress. quite frankly i'm ready to kick the tires and light the fires on nextgen. as in the first aviation subcommittee hearing this year i will be specifically interested in how the faa's contract management is impacting nextgen modernization. again and thank you for being here today and i look forward to your testimony and i yield back. >> thank you. thank you all and representative norton. >> thank you very much mr. chairman. i have to begin by saying what a stunning disappointment it was where me to learn that we would be losing jerry costello for many, many reasons. first for professional reasons. his unusually deep knowledge of this area will be hard to replicate.

he knows it backwards and forwards and shares it with all of us, is hardly replaceable as we move by seniority in this body here. wonderful friendship and collegiality will be missed by all of us. he is a model for how to serve the people of the united states in this congress. mr. chairman this is an important hearing to half before the end of the fiscal year. wonder where we would need with nextgen if they had not been 22 or is it 23? i have almost stopped counting -- extensions of the faa bill. it is impossible to believe that the failure to pass this bill has had no effect on nextgen. we are not only talking about billions of dollars for those of us who want to see more money in the economy and more savings in

our budget, we are talking about something even more important, and that is the safety of our system. if we do not meet these deadlines, given the increasing pressure on air traffic, i don't think any of us with a straight face could say that the skies are safe. i have no idea what cuts have had on this very critical effort, but i believe we must find out where we are, how far behind we are, and whether there is enough funds for us to continue to move ahead on this very critical long-term effort and i thank you very much again for this hearing mr. chairman.

>> thank you. we turn now to our first panel. the honorable michael huerta deputy administer their of the faa and captain lee moak president of -- and ed bolen president and ceo of national business association and mr. tom captain who is the vice-chairman of principle, u.s. airspace and defense secretary leader and leading a accounting and consulting firm globally. we will begin with the administrator, mr. huerta. >> good morning chairman, congressman costello members of the sub get a thank you for this opportunity discuss the benefits of nextgen and i'm very pleased to appear before you for the first time. nextgen is a comprehensive overhaul of our aviation system to make air travel more efficient and dependable flow

keeping you safe in the skies. is a continuous rollout of new procedures and technologies that will save fuel, reduce noise and cut dilution. nextgen is a better way of doing business for the faa, for the airlines, for airports and for the traveling public. aviation contributes $1.3 trillion to our economy and generates more than 10 million jobs. nextgen is vital to protect these contributions. the current system simply cannot accommodate anticipated growth. president obama recognizes the economic importance of nextgen. the american jobs act includes $1 billion to continue our research and development to advance this transformation. the act also proposes $2 billion for airport improvements for runways, taxiways and terminals. the united states has invested nearly $3 billion in nextgen.

why? because her latest estimates show that nextgen will reduce delays about 35% in the next seven years. it will bring $23 billion cumulative benefits. we will save about 1.4 billion gallons of jet fuel and cut carbon dioxide emissions by 14 million tons. let me highlight some examples were nextgen is already improving safety, helping the environment and adding to the bottom line. helicopters equipped with gps space technology in the gulf of mexico now have improved safety where there was no radar coverage before. they are saving flight time and fuel. in colorado, nextgen is able to control aircraft through mountains the blog radar thereby enhancing safety. airlines are benefiting from nextgen routes and approaches that allow for more direct flights. southwest airlines says it can

save $25 for every mile patch by cat by using a shorter route. i using precise nextgen procedures in juneau, alaska airlines estimates it avoided canceling more than 700 flights last due to bad weather. and ups estimates it it will save as much as 30% on fuel during the arrival phase of flights into its local hub. environmental benefits are clear. burning less fuel produces less carbon dioxide and other harmful missions. to the greener skies over seattle initiative airlines using nextgen procedures will save several millions of dollars per year. aircraft will emit about 22,000 metric tons less carbon dioxide or for years, the equivalent of taking more than 4000 cars off the streets. a true transformation takes planning and it takes time, so that may now describe some of the longer-range benefits. nextgen will make our aviation system safer.

it will increase comptrollers and ability to provide put the -- d. aircraft to receive information about traffic, weather and flight restricted areas. on the ground advances in tracking will make runways safer. we are working in a focused way to relieve congestion and tarmac delays in mater metropolitan areas including right here in washington, houston, atlanta, charlotte, north texas and california. to fully achieve these benefits we must do two things are go first, we need to make sure that the faa is able to properly manage the nextgen transformation. pin second and secondly need to continue working with our partners in the aviation community. we appreciate congressional approval for the reprogramming requests we submitted this summer. a streamlined nextgen office that reports to me in addition to other organizational changes will help the faa meet the needs of our nation's air transportation system.

nextgen will only be successful if we work closely with the aviation community. we established a broad-based panel in nextgen advisory committee to provide guidance and recommendations. we need their help to forge industry consensus on how to equip for nextgen and how to measure our success. there's the chicken and egg nature to the decisions that will influence the extent and timing of nextgen benefits. the future depends upon stakeholders willingness to invest in equipment, staffing and training. nextgen is happening now. if we delay investments long-term cost to our nation, to our passengers and to our environment will far exceed the cost of going forward together at this time. mr. chairman that concludes my prepared remarks and i would be happy to answer any questions that you and the members of the subcommittee may have. >> thank you. captain moak. >> good morning mr. chairman

ranking miller -- member costello. in the present of the airline pilots association representing over 53,000 pilots who fly for 39 airlines and all cargo carriers and the united states in canada. on behalf of our members i want to thank you or the opportunity to provide our perspectives on nextgen. a few weeks ago, i was the captain of an aircraft operating in the reagan national airport and approach that all of you are familiar with. and you probably experienced a rapid altitude decline over the potomac in the last few minutes of a flight when arriving here from the south and dca. the necessary drop, because air traffic comptrollers keep airplanes high, the air traffic high in the reagan and till the last few minutes to avoid andrews to the east and dulles

to the north and west. now we are kept high to avoid the other traffic because as a nation, we are operating our air traffic control system largely with the same outdated and imprecise equipment and i stress procedures that were used during the 1950s. nextgen will bring precision and approach capability to locations in runways for precision approaches that currently exists. like a reagan and from the runways and chicago midway, boston logan and minneapolis. nextgen technology gives pilots and comptrollers are sized aircraft location and altitude information relative to the landing runway improving safety and capacity especially when operating in adverse weather conditions. there is no question, nextgen brings with it and hand safety and also increases airspace capacity and efficiency. now, what is going to cost?

the cost for nextgen as estimated by gao, has been somewhere around 40 billion initially and as high as 160 billion in some scenarios. however, there is debate over the urgent need to modernize the system but industry agrees with a price the price tag is high, we must get nextgen right the first time. with a project of this magnitude and complexity as well as a well coordinated fully integrated plan known to and agreed upon by all stakeholders along with supporting equipment standards is critical. today, we do not have a way forward on nextgen. there is no coordinated plan. now some of you know i am new to d.c. here, and i can give you a couple of great examples of that in just a moment, but i will give you an example of the point that aircraft manufacturers are

delivering aircraft that possess capabilities that cannot be utilized either because of the current infrastructure, the infrastructure not being prepared to use the technology or the operational procedures necessary have not been approved. in addition government has required the installation of nextgen equipment including a tsb that does not meet the end state sand standard necessary to achieve long-term goals. the government must step forward with greater financial commitment and show real aviation leadership. alpha was pleased to see the president's inclusion of a billion dollars for nextgen projects in a jobs package and it is our hope that it becomes lined a 1 billion nextgen investment will serve as a tipping point for others in the industry and government to move forward on the critical initiatives that we are engaged in. but again on the total cost of nextgen what will $1 billion get you? being new, it is like putting a

quarter into a parking meter up here on capitol hill and expect to get two hours and that made her. is not going to happen. a quarter has got me 7.5 minutes and if you don't plan a quite right you are going to get a ticket or worse yet you are going to get towed and that is the penalty for a lack of investment and it industry and consumers are being penalized for not having an investment in nextgen with higher costs that sacrifice safety. you know, when we move forward on nextgen and we try to motivate me industry to invest it is only going to happen if we see a path forward and return to and a return on the investment and the government needs to show that financial leadership and make decisions moving forward on nextgen. in chicago in 1945 -- in 1944 international civil aviation conference was held in chicago at that time and they decided that the u.s. was the leadership in the world and they made the fundamental decision to make

english the language of aviation. right now we need to move forward with nextgen so that we don't lose that leadership role. now i know have gone over my five minutes and i will leave my other comments for the q. q&a period but nextgen is important for members, or pilots who are trained. there's equip another. we need to figure out a way to work together to get this timeline sped up. thank you or. >> thank you. mr. bolen. >> thank you chairman petri. thank you for convening this important hearing and thank you for opening today's hearing. by recognizing mr. costello. i think on behalf of the business aviation community and all of the general aviation community we certainly appreciate the effort that congressman has made to understand our industry and to recognize the benefits and importance of general aviation to our country, and to be a leading advocate on the value of

allowing us to use per gallon charges to fund the system rather than devastating per flight charges so i want to tangle mr. costello for all that he has done over the course of a number of years. this is an important hearing and an exciting one because i think nextgen as you will hear from all of us is something that we fully embrace. what we are trying to do his transition from a ground-based radar-based system to a satellite-based airplane centric system of air traffic control. the benefits are clear. we do believe we can reduce our environmental footprint. we do believe we can enhance the safety. we are convinced we can reduce delays and increased capacity and from a business aviation community it is that increasing capacity that is really exciting to us because what we have seen is over it period of years, airports become congested and general aviation begins to get pushed out.

we initially go to secondary airports. some of you will recall back when midway was a great general aviation airport. manchester, fort lauderdale, san jose, the list goes on and on but is those become more involved with scheduled commercial operations, we can begin to get pushed from secondary airports to tertiary airports. we want to expand the capacity of the system to allow more safe and efficient operations at all of our nations airports and all of our airspace of business aviation and the entire general aviation community has been very supportive of our move to nextgen. i think over the course of the past several years we have seen reason to be excited about some of the things that are going on. we do see that joint planning and development office has put forward a vision. we have seen the community come together at task force five to work out some implementation and currently they are working very closely with the faa and the

nextgen advisory council to try to develop ways that we can move forward in a coherent, coordinated way and make some of the benefits a reality today. i think the important thing about nextgen is that we all understand next gem is not just about technology. there are important technology programs, but nextgen is also about procedures and policies and a culture and i think we can do more. part of the task force five recommendations and early mac comments suggest that we have a lot of onboard technology today that we are not using to the fullest extent possible. we can do more with regard to satellite-based approaches and throughout the united states that united states that can

yield some immediate and if it's. when people want to know, how do we move forward with nextgen faster, we see room for improvement in these areas. that means giving more but -- getting more purchase done and not just overlaying the approaches that we have today. to new approaches that provide real benefits. that does bring some environmental challenges but we think where there is a commitment to work together we can overcome those. so getting more of those approaches out there, making sure that they deliver benefits and streamlining the approval process so the business aviation can participate in that it is a fundamental way that we can all work together to move forward. business aviation and the entire general aviation community is committed to nextgen. we have never wavered in that commitment and we participate on all of the advisory group so that we can have input into a system that doesn't just improve

transportation for business aviation, but for the entire aviation community. we appreciate the leadership that we have seen from this committee and the commitment to work together. we are frustrated by her postals that distract us and force us to spend time and effort on capitol hill, working on funding proposals rather than on the important communication, coordination that is necessary to make nextgen a reality but we are grateful that this committee has understood the need to move forward and has kept our feet to the fire. thank you. >> thank you. mr. captain. >> chairman petri ranking member costello members of the subcommittee thank you for for the invitation today to provide input on the benefits of nextgen. deloitte published an extensive study this past may on the business case based on best commercial practices for the global implementation of air

transportation systems transformation efforts with particular attention to the u.s. action program. my name is tom captain. i'm the lead author. that study was funded and performed independently by deloitte and was intended to provide input to the ongoing industry dialogue regarding the quantification benefits and costs, funding, scope, timing and potential merits of this transformation and modernization initiatives. it also identified the risks and challenges associated with this very complex undertaking as mentioned before. in our business case without conversion to satellite-based positioning navigation, and timing systems enables better pilot situational awareness, point-to-point and closely spaced aircraft operations, continuous descent for procedures and all weather air traffic operations resulting in significant reduction in weather and congestion related delays as well as reduced flight times. we found that the successful implementation of nextgen by 2025 using reasonably

conservative assumptions about future demand for travel, price increases of oil and other factors resulted in an estimated net present value of $281.3 billion a rate of return of 44.8%. by 20206 the first year of full implementation, the study found $29 billion the first year net assets which only would increase each year thereafter as the price of oil and air travel demand increases. this is made up of 830 million gallons of jet fuel savings per year again, 900,000 hours of time saved and 6.8 million metric tons of carbon emissions avoided. it should be noted that these did not include several upside benefits potentially that could make this business case more positive including potential inclusion of nextgen for general aviation and for military aircraft operations, nor did this go contemplate potential

consolidation, again potential, the national airspace operation more efficient air traffic control procedures or reduction of legacy crown radar systems for example. to provide additional insight about the business case, we examined three in nextgen schedule scenarios. number one implementing as planned in 2025 acceleration to 2020 and then delayed by five years to 2030. we found that acceleration resulted in an additional $19.8 billion of net present value and increased that rate of return by another 21.7%. alternatively delayed implementation still has some positive business case of 281 billion but it resulted in net present value reduction of about $47.6 billion reduces that internal rate of return by 13.5%. display the business case found the -- as follows 35% airlines, 59% to passengers by person 5% a

government in airports and 19% to the general economy. the savings are not only fuel costs of time in emissions but less labor cost, insurance, reduction in noise increased airspace capacity and overall economic and if it from a much more efficient air traffic system. as outlined in our study to achieve these benefits there a number of challenges and risks that must be addressed successfully to meet these inflammation timetables. using funding technology and programmers, workforce transformation, regulatory reform, legal air traffic control procedures technical and certification harmonization and so forth. in addition, the program continues to be impacted by program management challenges with cost overruns and schedule delays due to requirements creep and uncertainty as well as verification challenges. to the integrated nature of these elements successful be highly depend on the ability to manage requirements, cost of schedule on a corrugated manner as a program.

the key lag in one of these elements could impact the ability of the entire program to be on schedule as has been mentioned before and they focus on interdependencies would necessarily be required. our study highlights considerations targeted at addressing a number of these concerns which include assessments of potential funding to address the nextgen equipment to close the gap, to close the business case for airlines as well as program management to include oversight and governance programs to better ensure overall program performance and accountability as has been mentioned by the administrator earlier this week. in summary the business case demonstration of return on investment is significant for all scenarios concern. looks like it is an open and shut business case as we said earlier. is all about education. mr. chairman that concludes my statement. be happy to answer questions. >> thank you. i was going to ask you and to build on your concluding statement, your firm does a lot of consulting for the multinationals of this world,

and assume for a minute -- we are not talking about a government that we are talking say exxonmobil which has projects all the time all over the world and if they could our old that the's cost, we are barring a two to 3% now come and get a 65% return on their investment if they moved things up a little bit faster, i think you indicated 44% on the current timetable and if we could cut five years off, we would get 21% more. would you say that is the kind of thing that we would be -- that they are robbing someone because they are making such a huge profit or is this a no-brainer? could you bring it to life a little bit for us what we are talking about? >> mr. chairman think you look at most investment cases for property equipment most companies would say a return on investment of 44% would be outstanding and that is why we say this is an open and shut as

this case. is not about the investment returns. is about how you manage the risks. >> thank you, and mr. huerta, you are kind of in charge of managing and helping to get this thing done. it is a big assignment and it is in a way out of the ordinary for the faa and that's normally the faa is out. the line agency is trying to put out fires everyday and has the responsibility for managing the safe and efficient flow of air traffic among other things in the united states. this is a different type of an operation. does managing a transformative process to reconfigure the way it is doing business. could you discuss that a little bit and the problem and how we can help you to do as effective and efficient a job as possible?

>> thank you mr. chairman and i think you provided an excellent summary of the challenge that the faa faces. the faa is first and foremost an operating agency with a safety focus, and we never want to do anything that is going to get in the way of our ability to maintain a safe system that operates as efficiently as possible. and you are correct in pointing out that our transformation to nextgen represents a very significant difference in the way that we do business. one of the things that administrator babbitt identified early on when he came to the faa was the importance of separating the program management functions associated with nextgen from the the day to day operational functions of the faa, and that was with a very deliberate intent is to ensure that we had the appropriate level of focus and oversight on delivering

nextgen programs as effectively as possible and at the same time not allowing people that are delivering those programs to be distracted by the day-to-day operation that it is always there. we appreciate the support that has been shown by the congress in reorganizing the functions of the faa to create a new program management office and to elevate the profile of the nextgen organization. and, we are very focused on putting the tools in place to ensure that we are able to deliver these programs so that we can maximize the benefit. we also recognize the need to accelerate and make very visible to everyone that benefits from delivering nextgen. you have heard from the other witnesses the importance of advanced navigation procedures and you have also heard that many equipment and in fact most aircraft are equipped to take

advantage of those procedures today. that has become an area, a very significant focus for us and in the year ahead but we really want to do is focus on how can we improve the quality of these procedures, how can we accelerate the deployment and how can we see the very real benefits associated with reduced fuel consumption, reduce time and corresponding environmental benefits as well. but it starts with how we manage and how we oversee the programs and we have put changes in place in the last few months but i think maximize their ability to do that. >> thank you. mr. costello. >> thank you mr. chairman. mr. huerta, let the ask a question but before i do, i think we all recognize that everyone in the room, both on the subcommittee and everyone here today, supports nextgen and wants to see it successfully implemented. we also, all of us as members of

congress and u.s. taxpayers, want to see us do the responsible thing in reining in spending and trying to balance the federal budget and again that is a challenge trying to make investments that in fact pay off in the end while at the same time trying to figure out in the federal budget what can be reduced and what can be cut. what i am trying to do here is to get a handle on how cuts will affect the implementation of nextgen, so my question is, your people at the faa, surely they have done an analysis concerning tiberi -- various proposals in congress. there are proposals in congress that would cut faa anywhere from five to 10% in the capital and operating budgets including accounts for nextgen. so, regardless of where we are and how much should be cut and how much shouldn't because i think we have the responsibility in the agency has a responsibility to tell us how

various proposals will affect the implementation of nextgen. i said in my opening statement that throwing money at this issue or any issue is not the only answer. there are other things that have to be done in order to make sure that nextgen is implemented in an efficient and effective way, but obviously you have to have the funding to move forward. so my question to you is, there are proposals in the congress now to reduce your operating budget, which will in fact affect nextgen. have you done an analysis from a budgetary standpoint as to what a 1%, what a 5%, what a 10% cut would do as far as the progress that the agency is making with the implementation of nextgen? >> thank you mr. costello. president obama is put forward in his budget for fiscal year 12, the of administrations the one what we think are the

resources that are necessary to keep the program on track and to ensure that the benefits that they would like to achieve are there. the question that you are also raising, which is in times of tight budgetary times, what can we do to maximize the investments that we make and how do we ensure that we keep nextgen on track? i think first and foremost, what the president has put forward is what we believe to be the appropriate talents in maintaining the operation and ensuring that we are able to deliver against the goals of nextgen. if we are looking at less than that, first and foremost what we need to be concerned about is maintaining a safe system, and that puts us in the position of needing to consider, are their future investments that we would need to delay? if we delay the investment, we delay the realization of the benefits, and the challenge of that is that the aviation industry continues to grow and a

lot of what we are investing is to enable us to manage the ever-increasing share of traffic. i don't think that it would necessarily -- we have done an analysis and we have been engaging in discussions with the industry and how we should look at it and i think the attention that we have any reduced funding scenario is do we cut everything across the board, what is called the famous peanut butter -- or do we focus on a couple of team programs and try to maximize their benefit? and, we don't have an answer to that because we want to consult with industry in terms of where do they want to see the maximum benefit? you have heard from them that in the near term, the focus needs to be on advanced procedures. i would also like to point out that the investment we have made today, about half of that has been in the deployment of the

ground stations throughout the country, and we need to remain on track to deliver that by 2013 as that is a foundational program that enables us to build on the rest of the nextgen technologies. to keep the program to meet our timetables to industry, that they have asked for, the task force has laid out a series of things that they would like to see us accomplish between now and 2018. to be able to meet that though, the president's budget really provides the template to get us there. >> one more question regarding funding. i asked administrator babbitt when he testified before the subcommittee a similar question i asked him what effect the proposed cuts at the time would have on the implementation of nextgen, and he said i have a transcript of his testimony here. he said, so i don't think that we should be penny-wise and pound-foolish, yes we could save

a penny but in the end, it is going to cost more money over time and today lay a lot of what we are proposing. and what i'm trying to do is get a handle on what that means. so, i hear you say that you know, we would take a couple of programs and prioritize but i think for those of us who are making decisions on the budget and funding levels for the agency, it would be good for us to know that if you roll back to 2008 or 2009 funding levels, but that is going to delay the implementation by a year, two years, three years, four years whatever it may be so that when we are making these decisions to vote on budget levels we know exactly what the effect of that vote will be, that we know we are delaying nextgen by a specific amount of time, and i don't think i have heard that from the agency yet and i think

it would be helpful for everyone to know that. >> there is no question civil aviation is a major economic contributor, and yes, any delay would result in delays and benefits to that industry and would significantly impact the job potential of that industry. in terms of if we cut here, if we reduce by what is it translate to in years, think it is dependent on a number of factors. paramount among them which is how does it affect various funding categories within the faa? there is no question reduced funding result in delays and delays will cost us more in the future in-laws benefit. >> thank you mr. chairman. mr. coble. >> thank you mr. chairman. good to have the panel is with us today. mr. chairman nye to go to another mini-but i want to put a question to mr. huerta if i may.

mr. huerta is very elementary definition, tell us what eram is and more specifically why is the program 500 billion i'm told over budget and three to five years delayed? now is their plan to get it back on track? let me put a two-part question to you. in your testimony delays are are too beautiful to not having enough stockholder inclusion and if you would sir elaborate in more detail, is that to say there were no air traffic comptrollers involved in the development of eram and if you will respond to that i would appreciate a. >> thank you mr. coble. eram represents the new platform for handling high-altitude traffic at air traffic control centers across the country and it is a foundational program to nextgen.

the original contract was awarded to our primary contractor lockheed-martin in july 2003. the challenges we encountered and the deployment of eram related to what you pointed out as stockholder or shareholder involvement and that is the air traffic comptrollers that actually have to use this program to safely separate aircraft every day. and, what we found a couple of years ago as we started to roll the system out into our first test sites, that there were difficulties in the human interface, the comptroller's ability to work with the program as compared with the program they were migrating with an older system. and so we left it at time a couple of years ago to stop where we were and really focus on how good we address the comptrollers concerns and to

ensure that challenges and difficulties were seen in the software could be addressed such that comptrollers would be confident they would be able to develop -- to operate on this program. that has been very successful, and we have now had the program up and running at two of our air traffic control centers, salt lake center and seattle center. on october 19, we will pass the one-year mark where we will be operating on eram in salt lake center and pass the one-year mark in seattle. ..

>> that you pointed out is really the key. the importance of the involvement of the operators of the system early on in the development, and that is something that we've really focused on as we've looked at standing up a program management operation within the faa. how do we adopt those best practices and insure that as we develop further technology programs that we have the right connection between the operators and the users of the system with those that are developing it. >> thank you, sir. i am still, mr. chairman and ranking member, i'm still having difficulty in embracing the delay and the budgetary problem, but i'll try to do better as i plow through it. thank you all for being with us. thank you, mr. chairman. >> thank you.

ms. hirono. >> thank you, mr. chairman. as i noted in my brief opening comments and you mentioned the importance of involving the operators of the system early on, and so you said in your testimony that there would be a new committee to address the various issues that confront faa as we seek to implement the nextgen. so i wanted to know this committee that you referred to, the coordinating committee, who's on it? are they, the air traffic controllers sitting at the table with you? because they are the ones who are going to have to really move and implement and be a part of this whole system. >> the nextgen advisory committee was created by the administrator about a year ago, and it is a broad-based committee of industry representatives, all the users of the system, and the question put before them is really how do we look at the business of

nextgen. how do we advance the benefits and insure that nextgen is responding to the needs of the aviation industry. the members include, yes, labor as well as air carriers. it involves all segments of the industry. in fact, two of my fellow witnesses on this panel are members of the nextgen advisory committee. the committee itself meets quarterly, and there are a series of working groups that deal with very specific taskings and questions that are provided to them by the faa. examples of recent taskings that we provided to the nextgen add add -- advisory committee were to do some work so we could reach industry agreement on what are appropriate metrics for measuring benefits, and then how do we insure that, um, we are able to actually realize those benefits on a timely fashion.

we've asked for input from them on questions such as how do we address equipage of the fleet. the aviation industry has always been founded as a partnership between government and industry, and what we're -- in creating the nextgen advisory committee, it's really to further that partnership for this very important initiative to transform -- >> who are the two other people on the panel? raise your hands. thank you very much. to go on, one of the testifiers talked about how important it is to get the airlines onboard because they are going to need to put forth the funds to make sure that their planes have the proper equipment. and i believe, um, mr. huerta, you said that most -- maybe i heard this wrong -- that most of them are already equipped to be able to use the nextgen procedures? that seemed to be at variance with some of the other testimony that we need to figure out a way

to incentivize and have the aviation, the airlines have the confidence that faa's actually going to be able to move forward with nextgen. would you like to comment? >> yeah, thank you. there are two distinct levels of equipage. um, many aircraft are currently equipped to handle advanced navigation procedures known as area navigation or required navigation performance. and that is a type of approach to airports that enables you to operate with reduced fuel burn and operate, um, shorter distances coming into airports. and so that is one level of equipage. longer term there are, there will be other benefits associated with other equipage. for example, advanced data communications technologies that will minimize, um, opportunities that might exist in the system for error associated with radio

transmissions. instead by providing secure data transmissions, you have a higher level of confidence that there wouldn't be errors in the system. what the industry is telling us is many of them are equipped for rnav and rnp, and they would like to maximize the benefits of those things, and they want to insure that the faa is doing what it needs to do to enable them to maximize those benefits. and they're right. longer term -- and for them that is something, that is an important confidence-building step that is needed in order for them to have the confidence to do future investments in the future. >> so for any of the other testifiers, do you think that things are moving along for the equipment that the airlines already have, that you have the confidence that faa will be able to allow the airlines to use, utilize those equipments currently? is. >> well, i think at this point it's closer to a trust but verify type situation. as the deputy administrator

stated, and i thought it was a very accurate portrayal of where we are, a number of people in the aviation community -- not just the airlines, but also general aviation and even the military -- have put gps equipment onboard their airplane at their own cost. we have also worked to be trained to use this. so investment in nextgen has already been made by the private sector. the frustration is at this point we don't feel we are freely and consistently and ubiquitously operating with those types of approaching. so in my comments that talked about the need to get more approaches, have them be beneficial approaches, and make sure that we are using them, i think, is where we are. we're committed, we're investing in it today. and when we do get to that second level of equipage whether it is, ultimately, purchased by the government or by industry, there will be additional costs to it, not just buying the box,

but the installation cost, the training cost, the keeping everybody current and proficient on that which is significant for industry. but we do bear those costs just as we did with rvsm and gps. >> thank you. my time is up, but i do, i will submit one question to you, mr. huerta, that has to do with faa's plans for the nextgen upgrades in hawaii which has a vast area to cover, our honolulu air traffic control system. thank you, mr. chairman. >> thank you. mr. lobiondo. >> thank you, mr. chairman. mr. huerta, expressed some concerns about the se-2020 pipeline and not flowing as quickly as it could be. i've got a couple parts of the question surrounding se-2020. i've heard, and i'd like you to comment, on whether right now it's not new work that is being assigned, but existing work that is simply being brought under

se-2020 from other contracts, and can you shed some light on when we can expect more dollars and tasks to be flowing through the pipeline? any reasons for the slow start, and what, what you're doing to help address this. >> thank you, mr. lobiondo. yes, as you know, se-2020 is a contract vehicle that enables the faa to contract with the private sector on specific task orders associated with the deployment and delivery of nextgen. over the past years since the award of se-2020, we have processed about 144 task orders, and that total's close to $400 million in investment that has been run through that task vehicle. that is about half of the 2011 enacted capital budget. and as i talked about in my testimony, this partnership with the private sector is very important.

i think that we would all like to maximize the level of private participation in the development of this because it's a force multiplier for us. it behooves us to move things as quickly as we possibly can. i think that there is concern that is expressed on the part of some contractors that we need to be doing more, that there are important things that can be done. i think it's important to balance that, though, against the overall challenge that we have to insure that all of the work is fully integrated as we are developing various parts of an extremely complex system. and what we are doing is insuring that that level of integration is there so as to maximize the benefit and to insure that we don't have disconnects as programs get developed by different contractors: would we like to do

more and would we like to do it more quickly? absolutely. but our overriding challenge is to insure that we do it right. >> okay. you mentioned that the faa just accomplished the realignment which is supposed to help nextgen along. could you elaborate a little bit on how specifically these changes will help the faa deliver nextgen? >> two major things that we did associated with our realignment were, relate to the nextgen program office itself, and then the second relates to a program management function, how we deliver complex technology programs. taking first the nextgen program office. previously it was housed within the air traffic organization which reflects the fact that fundamentally what we're redeveloping is an air traffic system. but concern had been expressed by members in industry and, in fact, by this committee that, um, that organizational relationship did not fully

reflect the transformational nature of nextgen. it's more than developing a computer system. it is also how procedures get certified. it is how we integrate procedures into airports. it involves the full scope of all aspects of the faa, and there are interagency components. you and others have touched on the importance of relationships with the department of defense, with nasa and a host of other external stakeholders. what we have done as part of our restructuring is to, is to elevate the nextgen program office into a new assistant administrator for nextgen that reports directly to me, and i'm pleased to be joined by my colleague, vicki cox, who is the assistant administrator for nextgen, and she has broader agency-wide responsibility that we think will be very effective in leveraging the full resource of the faa against this agency-wide transformation. that's the first thing.

the second thing is program management. um, under our old structure, new programs such as eram were housed within the operating unit they were ultimately going to support. so in the case of eram, it was housed in our enroute organization within air traffic. the enroute organization is fundamentally an operating organization. and it's very difficult to insure consistency across all programs if they're managed by distinct operational units in the faa. and the second thing is operate oing units are -- operating units are consumed with operations. deployment of a new program is a long-term management program that must be kept on track. and we felt it was important to elevate the profile of the programs to give them dedicated oversight and insure that they are appropriately linked to the operation to keep them on track.

and so the two elements were sating the nextgen -- elevating the nextgen program itself, and then creating within the ato a program management office to oversee large technology development programs. >> once again, thank you and your team, for when you're doing. mr. chairman, thank you. >> thank you. mr. boswell. >> thank you, mr. chairman. my time's running out, but i want to compliment all four of you. this has been a great panel. you've said the things we needed to hear. some of it we've heard before, just keep saying it. i especially want to associate myself with mr. bolen. thanks for hanging in there. you're going to be okay on capitol hill. you did a good job, and so thanks for making yourself available to do what you're doing. because we appreciate it very much. it's investment with a known return, mr. chairman. this investment, and i think for our call it fiduciary

responsibility, whatever, if we know this is an investment with known return and also it adds all of the capabilities to safety and so on, let's get on with it. let's get on with it. i have to go, so i'd like to yield the remainder of my time to my good friend and colleague, and i think we're on the same frequency, mr. graves. >> thank you. i appreciate it, leonard, i really do. i actually have a couple of different questions. i don't even know where to start. the first one is, and i'm going to direct it to mr. huerta. we touched just briefly on the budget, and you said the president's bill provides us with the tools to get there. and i think we're all concerned about implementation of nextgen and getting there. but what i worry about is, and the administration has proposed a hundred dollar user fee on commercial and general aviation operations in controlled air space. and i worry about that hampering

us considerably when it comes to implementation of nextgen and, for that matter, even general aviation industry altogether. um, but out of curiosity, are you all worried about that proposal? >> clearly, we are at a time of or significant fiscal challenge in the country, and i think what the president has put forward is a proposal to try to attempt to address that challenge that we have. what establishment of the fee would provide for, it would address what i regarded as current inequities in the cost of operating the air traffic control system. and, um, we recognize the ga community currently pays a fuel tax, but these revenues are far less than the cost of the air traffic control services that are provided to that community of users. it's a relatively small cost in relation to the total operating cost of a flight, and i think that what we heard from the president is that everyone needs to do their part to address the

fiscal challenges that we face as a country. >> does the faa support the $100 fee? >> i support the president. >> do you support the $100 fee? >> yes. >> mr. moak, you want to -- >> i'd like to comment on the $100 fee. it's clearly a tax. the airline pilots' association is against that tax. that is a job killer for our members, for the airlines. you put another tax on the airlines, you couple that with the tripling of the tsa tax, and you're going to have a capacity reduction in the system. it's a fact that airline tickets are market-based. you put those taxes on there, we won't need to have nextgen hearings because you won't need to modernize the system because there won't be enough people flying. enough is enough on these fees that are taxes in disguise. that's how we feel about it.

>> mr. bolen? >> congressman, the $100-per-flight fee is at best a distraction at a time when our industry cannot afford to be distracted, and at worst it is a very destructive force. a couple of comments. first of all, the idea of a per-flight charge is not a new idea. it is an idea that this committee and several other committees on capitol hill have thoroughly studied, analyzed, it has been the summit of numerous hearings -- the subject of numerous hearings and a great deal of input. and after four years of considering this question at the deepest level on both sides of this hill in four different committees, a decision has been made to junk that idea. it has been rejected. it is not in the house reauthorization bill, it is not in the senate reauthor orization bill. reauthorization bill. a per-flight fee is a bad idea.

congress has rejected it, and it needs to reject it again. and i want to point out a couple of other things. deputy administrator huerta talked about cost allocation. as we know from those hearings, the last time the faa did a cost allocation study it was a flawed study. it did not use economic principles. the last time the faa did a cost allocation study that relied on proven and established economic principles, it found that general aviation imposes maybe 7-9% of the cost of the system. our current charges currently contribute 8.6% to the system m we are paying our fair share. that does not mean we have not been willing to work with the committee to find new ways to fund and support next jen. -- nextgen. in fact, we have, but we have been very clear. this type of per-flight fee is not just a tax, it's the most destructive tax possible.

and not only is it creating administrative burdens for the general aviation industry, but it distracts the faa at its core focus. we want the faa to be focused on promoting safety and making nextgen a reality. we don't want the faa to become the skyrs, a collection bureaucracy that is focused on billing agents, collection agents and auditors. it's time to move forward on nextgen. serious proposals are on the table. this is destructive, and it should be rejected. >> mr. chairman, i'd like to claim my time. i think i've got four minutes left. um, and real quick, and i apologize, mr. huerta? if i mispronounced your name. but you said that the $100 fee is going to be used to pay for inequities in the air traffic control system. i thought it was going to be used to pay for the jobs act. um, is -- which is the case? >> right now the current funding profile of the faa is about, um, half and half user fees

associated with fuel taxes and other fees that go into the aviation trust fund and general funds, and i think what the president is proposing is a larger share of that that would be based on fees. [laughter] >> all right. we'll move on. um, when it comes to nextgen, and my question is -- and i'm going to have a hearing on this issue in my own committee, the small business committee coming up here pretty quick -- but being as nextgen is a gps-based system and we've got the lightsquared issue out there, and i'd like to address the question to mr. moak and mr. bolen. please elaborate. give me your concerns. um, because i'm concerned about it, the bleedover, and particularly when we've got this elaborate system going into place and all of a sudden, you know, we've got equipment that -- [laughter] may not even work under the new system. >> so the bottom line on

equipage in an aircraft as we go into nextgen and the money that's been spent since early 2000, it depends on gps. so if gps has, um, any erosion in capability, all this will be for naught. we're against that lightsquared issue. we spoke publicly on it, we've been up on the hill on it. the bottom line is we need to protect gps as a fundamental tenet of the future of the national air space. and so i'd be happy to attend your hearing on that, by the way. >> mr. bolen? >> well, the gps satellite system was, obviously, created by the military but provided to the civilian community and the benefits to our country have been almost immeasurable. whether it's agriculture, marine, banking, it has just been tremendous. and in aviation it is not just the technology that has helped make us safer and made so many

of today's avionics possible, but as captain moak just said, it's the cornerstone of where we want to go. and it is incomprehensible that we are at a point where we are talking about interference with the gps signal. the military is against it, department of transportation is against it, the aviation community's against it. this is about safe navigation, it's about the transportation that is so fundamental to our economy, to our jobs, to our way of life. i'm not sure how we got here, but we need to make sure that going forward the gps signal is clear and reliable. we are all depending on it, and in the general aviation equipment we've invested heavily in it. >> mr. chairman, i'd like to go back and, um, and i appreciate everybody being here today. i think this is a good hearing. but i do want to associate myself with the comments of captain moak and mr. bolen when

it comes to a hundred dollar fee and how i think it's going to effect the implementation of nextgen and particularly what captain moak had to say, i don't know if there'll be any ga left after a $100 fee is imposed. and then i'd like to invite everybody to my hearing on lightsquared. but this user fee is something that concerns me in a big way, and i think it's going to hinder us, hinder us considerably. with that, i'll yield back, and i appreciate mr. boswell yielding me his time. >> thank you. mr. lipinski. >> thank you, mr. chairman. i want to thank you for holding this hearing. very briefly, jerry, i wanted to echo my colleague's comments about how much we will miss you here in the committee and congress. but most importantly, want to congratulate you on making everything that you've done and making this decision. i always think about the fact

that my predecessor, my father who retired from here seven today that he looks younger now than he did seven years ago when he was still here. so you have that to look forward to, certainly. we all know that nextgen's vital for the future of aviation in the our nation, and i want to commend chairman and ranking member's efforts to insure that we see some real near-term benefits from the program. for northeastern illinois realizing these near-term benefits is especially important because our airports lie at the heart of the regional, national and international aviation system. midway and o'hare handle over 40 million passengers every year. that number is expected to jump by almost 20% within the next five years, 15% for each five years after that. so given the large increase that is expected to happen in the near term, it's clear we need to

emphasize results today. i'm happy that we're taking a look at that while at the same time working to invest in more long-term efforts like equipping aircraft with adsb out. in particular, i'm proud to have worked with the chairman and ranking member to include language in the faa draft authorization that aims to boost nextgen equipage with the use of public/private partnerships. so i want to start my questioning, mr. huerta. several federal aviation commissions recommended to the federal government to consider a variety of financial and operational incentives to commercial and ga operators for nextgen equipage. can you with explain what types of incentives, if any, are currently under consideration by the faa, and do you think that operators will be able to meet the 2020 mandate based on where we stand today? >> thank you, mr. lipinski. one of the things we have heard loud and clear in our discussions with industry about

any level of incentive is that there needs to be a clear linkage between equipage a and benefit. and that there need to be mechanisms that would insure that benefits are delivered and that the faa actually signs up for doing its part so that people are able to take advantage, um, associated we quipage. we asked the nextgen advisory committee to provide us a framework to look at future equipage incentives, and they, um, i think mr. bolen led that activity, but i think that i can share with you on a summary level that, um, they looked across the whole scope of the industry and suggested that if you're looking at sniff incentives, it's appropriate to -- while they'd like to see some direct federal support, they feel there is a great deal of promise through credit programs that would enable them

to take advantage of lower cost to borrowing. but those credit programs would need to be linked to specific performance targets that the faa would need to hit. they also go on to say that they think we need to look across the whole scope of the industry, and that is not only air carrier, but also general aviation. because we operate in a mixed environment that everyone uses. getting back to the point of linking together, um, any sort of a credit program with commitments on the part of the faa, i think that's entirely fair. i think it is appropriate that the faa be required to step up for delivery of benefits because it's consistent with the philosophy i talked about before. our whole aviation system is founded on partnership. and if we are depending on the private sector to make certain investments, they need to be assured that the benefits will be there. >> captain moak, briefly. >> if you don't mind, i want to just give you a little bit more

on that view on the why. the why behind this program that we're talking about here is that in the airlines they have invested in equipage that is on the airplane right now. they have trained the crews to use the equipment that they have, and there are not -- they are not currently able to use it because of the process and the procedures of the faa. so that's why this incentive discussion continues and continues, because we have that equipment there, we're not able to use it, and they're not believing that they'll be able to deliver when you don't have a work plan in a timeline-based project management delivered with a deliverable at the end. and that's why they're going with the idea in the airline business that we've already invested in the training of pilots. we've bought equipment that we can't use, and we don't know when the faa will ever be up to speed so we can use it. so they're making the argument on the return on investment, and it's because of the past. so, again, pilots are ready, and

we're trained on rnp, on rnav, on cpdlc which we can't currently use in the continental u.s. we have to use it over the north atlantic when we leave the continental u.s. so that's what the argument's about. >> thank you. if chairman will indulge me for 30 seconds, i wanted to submit for the record some questions based on performance-based navigation that's something i think we need to expedite the implementation of that, and i'm interested in what, what is going on with the faa's current doing on that. but i'll leave that for the question for the record. thank you, mr. chairman. >> thank you. mr. cravaack. >> thank you, mr. chairman. thank you for the distinguished panel for being here today. lots of questions, little time. first question, mr. huerta, reading the most recent ig report, we keep on hearing the term "investment," we've got to keep on investing in this, but how can we invest when a report

says the faa has not reviewed performance baselines for any of nextgen's transform programs nor developed an integrated master schedule for managing and executing nextgen? how can we invest in something, sir, we don't even know what the parameters are? >> i think a couple things on that. first of all, what the faa's adopted as a philosophy in order to minimize plan risk is to break the program into short and longer-term investment decisions. and what we would like to see is that there is a pairing of costs and benefits with shorter-term investments so that we minimize the risk of, for example, investing over many, many years and waiting for some big payoff at the end. we're trying to match costs and benefits over a consistent period of time. the ig had also suggested that there were certain aspects of the program, two in particular where they identified that the faa has not established

baselines for even the first phase. we are expecting that in 2012, the next year, that we will be at a point where we will have the initial stage for one program in terms of baselining and that we will have a contract award for the other. and so we are moving forward to identify program baselines. on your question related to integration, we have over the last couple of years developed two guiding frameworks that i think go a long way toward addressing that question. the first is the nextgen implementation plan which we publish annually, we'll be publishing again next spring in which we make every effort to match up specific investments with things that have come out of industry in terms of specific proposals that they would like to see the faa adopted against specific timetables. within that and on a more detailed level, we've developed the nextgen segment implementation plan that then deals with the first segment of

those and the highly detailed project decision to identify dependencies among the programs and to insure that they are fully synchronized. i think that, um, what we have tried -- it has certainly been my mission since i joined the faa a year and a half ago to focus on much better integration, much better program management, and i think we've made significant progress in that area. >> >> well, i appreciate that comment, sir, but in the end that doesn't really help us trying to put a price tag on this overall and when we're actually going to have it implemented. so i appreciate it, hopefully it'll be more clear in the future. captain moak, i read your testimony, and i found something interesting in your written testimony. is that in regards to unmanned aircraft systems, i found that to be kind of intriguing in many our national air space. in if your written testimony, you actually mentioned that there's been no extensive study to the potential hazards and can the ways to mitigate those hazards must be undertaken

before we can implement this program. we have a lot of dod missions that actually originate here in the u.s. and head on out to oversea missions. how much work do you know has been done thus far about the federal government in studying these potential hazards? >> we've been interacting and identifying the faa, they've been very cooperative on this manner. but currently there is no transparency, and there's no clarity on linkage problems, certification of pilots, and i believe until we have those type of studies where we're working together, it would be tough to integrate them into the national air space, especially in close proximity to passenger or cargo aircraft. >> that's something, definitely, we have to look forward in the future because as uavs become more prevalent, we're going to definitely be having them in the same air space as we have passengers and cargo. mr. bolen, real quickly, i've got 50 seconds, in regards to lightsquared, representative graves brought that up as well, what would be the cost to the ga

community on having to implement any type of equipage that would have to try to make sure that they were able to maintain the proper signal? >> well, first of all, right now we don't know that a filter is possible. tests are, have been run. i think what we are sensing from the manufacturers of gps equipment is they are not comfortable that a filter can be effective. certainly, having gone to the effort of investing in gps, having gone to the effort at making that the cornerstone going forward to try to do a retrofit is going to be enormously costly, and it comes in a backdrop when our industry is struggling. over the last three years, we've seen employment at some of our companies drop by 50%. aircraft operations are down. the inventory of used airplanes are up. the prices for some models have fallen 30, 40, 50%.

so this is a tough time for us. and the idea that we are going to simply go buy new gps equipment or a new filter for gps equipment because somehow we have given away spectrum that was vital to the future of gps is just incomprehensible, and i simply urge this congress to do all it can to preserve the integrity of gps. we've all invested in it, and the benefits are benefiting all americans. >> thank you, sir. indulge us for 30 seconds. mr. chair, i agree with that. a user tax would be absolutely detrimental to our community. as a pilot, i've been laid off before for two years because of the tenuous operations with the dollar value is in the aviation community. i've gone through a bankruptcy with my company as well because of the troubling effects, what's happened in our economy. i think adding this is just, as captain moak said, we're not going to need this because there won't be any need for it because

our skies will be clear. so thank you very much, sir, and i yield back. >> ms. norton. >> thank you, mr. chairman. mr. huerta, captain moak raised the kind of emperor has no clothes on issue, although i want to focus on safety and not funds. um, he in his own way, respectful way, mocked the billion dollars, i guess it is, in the president's budget, um, calling it like a quarter in a meter, and it'll get you, you know, seven minutes. and i think that was fair. i don't know about you, but i think that was fair. and i understand that we're under tremendous pressure, so i'm not asking this question out of criticism. i just think that it was an important point to raise because there's a bill elephant in this room. the elephant is that we're

sitting here as if this is going to happen. you can ask are we on track, let me tell you something, we're on track if we're going, um, at the slowest possible pace, and we're on track if we're trying to meet some deadline. so on track tells us nothing. and whether or not we're on track matters to me for one critical reason, and that is the increase in air traffic. captain moak spoke about grain which is right here where for years they have to use special procedures to get into the airport closest to the nation's capital. these safety concerns are, for me, paramount. now, you're going to have a situation where according to all the figures we have by 2025 you'll have a 53% increase in passengers riding planes.

well, i tell you what, in this country what you're going to do is you're going to keep airplanes going, you know? the airlines are going to keep it happening, and nobody's going to say we're grounding airplanes because we haven't finished our gps. and everybody's going to say it's safe to fly. so let me ask you questions that are very specific. on the surveillance broadcast aspect, that's supposed to be done by 2015 -- '13. on the data communication segment of it, should be done between 2015 and 2018. on the system-wide information that we're all depending upon, segment two has not been baselined, i think segment one was baselined in 2009. um, i've got to ask you, mr. huerta, in times of the safe -- in terms of the safety of the skies, if gps stays on --

i'm sorry, if, yes, if gps stays on the track it's going, are we prepared to limit air travel in the united states because we cannot guarantee its safety? or do you think we'll be able to guarantee the safety going at this pace with a 53% increase this air travel in just a few years, by 2025? >> thank you, mrs. norton. we, the faa will never do anything that will compromise -- >> well, that -- please, don't give me a stock answer. >> no, but to respect your question, you've asked are we on track for the delivery of the benefits -- >> or the systems that i have just named. >> let me talk, first, about surveillance broadcast by 2013. the faa is very confident that we will meet our deadline for delivery of the ground infrastructure for adsb by 2013.

and as i said, we have made significant progress in that deployment, and we hope -- >> okay, go on -- i have limited time. >> data com. we are expecting to receive proposals from bidders in the next few days, and based on what we see from proposals, i will have a better sense of where we will look relative to 2015, 2018. but we have identified those deliveries as required, um, under the procurement, and i'm looking forward to seeing what we get there. system wide information management. yes, you're correct that on the first segment of that, um, i think that that was baselined back in 2009. we have had, there are some benefits that we've seen associated with s.w.i.m.. that program is one that we continue to focus on in order to improve its overall delivery. overall, managing these programs in a very complex and synchronized fashion is our

highest priority, but, um, i think i'm confident that we will be able to meet our timetables. >> one, one further question. >> yes. >> for you, mr. huerta, and for captain moak. assuming experienced personnel and the kinds of regulations that helicopters use all over the country, do you think helicopters should be able to come back and forth into the nation's capital ten years after 9/11? [laughter] >> you start. >> i'll speak to that. i believe they can. i was out at potomac trade con on monday anticipating this hearing, and they have an excellent system set up out there that's probably better talked about privately, but i think they're running a great operation out there. the faa does with their din

network. so i believe it's very safe. >> mr. bolen? >> congresswoman norton, you know, the idea of simply closing down air space or closing down airports is really an inadequate and inappropriate response to our nation's security. and you have been a terrific advocate. the reality is we need to find a way to facilitate mobility in the united states and do it in a secure manner. and that takes attention, it takes commitment, but it has to be done. the idea that we're not going to have any aviation security issues because we're not going to have aviation is self-defeating. we've got to find a way -- >> and, of course, this is the only place we've said not having aviation. in new york, which was the main, the major part of our country hit on 9/11, helicopters were up within a few days.

helicopters are up all over the united states of america. it is a terrible comment on the aviation system in this country even as it now stands that even in the capital of the united states you cannot fly back and forth. mr. huerta, do you really -- do you think that given the, um, requisites i indicated, the tightest kind of regulations, experienced personnel, um, helicopters should be able to fly into the nation's capital the way they fly into cities with skyscrapers like chicago and new york? >> there's two dimensions to that. from an operational standpoint, yes, we can certainly find a way to accommodate helicopter traffic. but the security aspect of that which is, of course, of great interest to other agencies in

the executive branch is also something that we need to coordinate as well, and i can't really speak on their behalf. >> could i ask you to do this, mr. huerta? this was not done in this administration. it was done before and, of course, there were some reasons why it was done before. could i ask you when you, when you return to take it upon yourself to sit down with the other agencies involved to see if some revision of this policy is not in order a decade after everyone in? >> certainly. >> thank you very much. >> thank you. like to thank the full panel for the statements that you submitted and for your testimony. answering the questions. the committee, as you've heard from mr. costello and myself and other members is very interested in supportive of trying to help any way we can to advance the date when we will recognize the benefits of the transformation of our air traffic space.

and as mr. captain testified based on his study, the returns are so enormous of this investment that even if government lags in doing it, we are seeing increasing signs of individuals in general aviation and other aspects of air travel in other countries moving forward more rapidly on this new technology. and so it behooves us to not linger unnecessarily because the world's going to go on, and we're going to be left behind if we don't get our government sector up as efficiently as possible, accommodating growth in the private sector with all the advantages of this new technology. so thank you again, and we will continue to work with you in monitoring this situation and, hopefully, do our part through

reauthorization of giving you more tools and greater focus going forward. thank you. the second panel consists of the honorable calvin scovel, gerald dillingham and the director of safety for the air transport association. we thank all of you for your patience and for being here today, and we'll begin with calvin scovel.

>> chairman, ranking member costello, members of the subcommittee, thank you for inviting me to testify on faa's progress in if implementing nextgen. it requires multibillion dollar investments from both government and air space users to overhaul the national air space system. since the effort began, we have reported on cost and schedule risks as well as challenges faa must resolve to successfully transition to nextgen. faa has taken action to adjust its nextgen plans and budgets in response to our identified concerns as well as rtca's september 2009 recommendations. pressing challenges remain, however. today i will highlight three challenges that senately impact faa's ability to manage nextgen's implementation and realized benefits. the first challenge concerns faa's metroplex initiative. a seven-year effort intended to

reduce delays at congested airports in this 21 major metropolitan areas. initial studies at five of the 21 metroplex locations have been completed, and two more are underway. however, faa has not established key milestones or capitalized on more advanced procedures as rtca recommended, raising concerns among air space users about the pace, execution and viability of the effort. the metroplex initiative fends on the timely -- depends on the timely deployment of more efficient flight procedures. however, as we have previously reported, faa's new procedures are mostly overlays of existing routes which provide few benefits to users. while faa completed a study that identified initiatives for streamlining the process for deploying new flight procedures, it may take as long as five years to implement them. the second challenge involves

e-ram, a $2.1 billion system. testing revealed significant problems with eram's core capabilities for managing aircraft. to compensate for deficiencies, controllers at the key sites have had to rely on cumbersome work arounds. for sites with congested air space such as chicago and los angeles, risks will increase. eram's problems are the direct result of poor program and contract management. for example, faa and its contractor were overly optimistic that eram could be fielded within one year and ignored early warning signs of trouble during initial site deployment. faa did not begin to detect and mitigate significant risks until almost three years after software problems surfaced at salt lake center, a key implementation site. despite eram's software

deficiencies and cost and schedule overruns, faa continues to pay cost incentives to a contractor. given that faa and its contractor continue to add new capabilities while attempting to resolve problems, challenges are likely to remain and will add to costs and delays. a study and our analysis estimate that total cost growth would be as much as $500 million with potential delays stretching to 2016. six years beyond faa's planned date for implementing eram. prolonged problems with eram will affect faa's capital budget and could crowd out other critical programs. for example, delays in fielding eram have required faa to reprogram funds from other projects and retrain controllers and maintenance technicians who must operate and maintain now two different systems. despite the significant program risks and unresolved issues associated with eram, faa has

not conducted an assessment of interdependencies or impact on other programs, costs and schedules. to date, faa plans to allocate nearly $600 million to integrate and align nextgen transformational systems with eram. the third challenge faa must address concerns the costs, schedules and benefits of the transformational systems. faa plans to spend almost $2 billion over the next five years on three transformational systems, but it remains uncertain what the programs will deliver and how much they will cost. for example, faa has already delayed plans to deploy key capabilities of data com, a wireless system for sharing data between controllers and pilots from 2016 to 2018. total program costs are uncertain, but faa estimates that they could be as much as $3 billion. like data com, adsba satellite-based surveillance technology, must integrate with multiple faa automation systems,

but faa has not fully addressed requirements and system risks for adsb. unstable requirements for s.w.i.m., a system expect today provide a secure network for nextgen, have already added $100 million to the first of three segments and delayed completion by at least two years. a lack of clear lines of accountability for overseeing s.w.i.m.'s management and development largely underlies the problems. finally, faa has yet to develop an integrated master schedule to master nextgen. smaller segments of larger programs such as data com, ads, and s. tw. i.m. may reduce some risks in the short term. however, programs are left with no clear end state, and decision makers lack sufficient information to assess progress. moreover, theys with one program can significantly slow -- delays with one program can significantly slow another since the programs have complex

intricacies with each other and with existing communications systems. while faa recognizes the need for a master schedule to manage the implementation of these nextgen capabilities, it has not yet developed one. without a master schedule, faa cannot fully mitigate operational, technical and prommatic risks and prioritize trade-offs among its nextgen programs. much work remains for faa to implement relations and achieve promised near-term benefits. regardless of the funding levels congress provides for nextgen, faa must focus on establishing nextgen budget priorities, detail milestones and performance goals and metrics. it must focus on resolving program management and contract problems with eram. it must focus on developing an integrated master schedule for all nextgen programs. faa needs to take these actions now to advance nextgen and protect taxpayers' interests. mr. chairman, this concludes my prepared statement. i'd be happy to address any questions you or other members of the subcommittee may have.

>> thank you. mr. dillingham. >> thank you, mr. chairman. ranking minority member costello and members of the subcommittee, you've heard a lot about the benefits of nextgen from the previous panel, and we're all aware of those benefits. i'd like to take my time this morning and identify with my colleague and focus on some of the challenges that faa faces going forward. the first and arguably the most important challenge for faa is to establish and maintain credibility with nextgen stakeholders. this is especially true for airlines since several nextgen benefits depend on having a critical mass of properly equipped aircraft flying. program cancellations, cost overruns and schedule breaches in prior atc modernization programs have given stakeholders cause for concern about whether faa can and will deliver desired nextgen capabilities on time and on budget. according to the airline

representatives with whom we spoke, two developments would give them the type of reassurances they are seeking. the first is the opportunity to make greater use of aircraft technology than is currently available in the fleet such as you've heard earlier, rnav and rnp. the second is on-time delivery of nextgen systems with defined benefits and an acceptable return on investment. we're optimistic that the recent reorganization at faa, which is partly intended to provide greater and more focused accountability for nextgen implementation, will also raise the stakeholders' confidence. a second challenge for faa is to deliver nextgen capabilities on time and on budget. delays in implementing key programs can have significant implications given the nature of nextgen. for example, the schedules affect the delivery of several other systems including s.w.i.m. and data com, each of which

requires the use of some eram functions. additionally, program delays could have a negative impact on the plans for harmonization with europe's modernization effort as well as the u.s. avionics industry. thus, the implementation of nextgen both in the near term and long term will depend how long program interdependent says are managed. a thirty challenge for faa is to integrate human factors research into nextgen system development and training for those who will be responsible for operating and operating within the system. faa and its partners will have to identify and develop training for controllers and pilots to carry out their changing role and have this training in place before nextgen can be fully implemented. meeting these training requirements may be particularly difficult during the transition period when some aircraft will be equipped with nextgen systems and others will not. a fourth challenge for faa is to expedite the environmental reviews and develop strategies to address the environmental

impacts of nextgen. with the changes in aircraft flight paths that will accompany nextgen efforts, some communities that were previously unaffected or minimally affected by aircraft noise and emissions could be exposed to increased levels of both. environmental clierns f clearances including community buy-in can sometimes take several years. the last challenge is to manage nextgen implementation and current operations with potentially constrained resources. largely because of government-wide budget constraints and perhaps project implementation delays, faa has reduced its budget by a total of 2.8 billion through 2015. this proposed reduction could affect nextgen and nextgen-related spending. we note that significant reduction in faa's program funding or its operations budget could contribute to delays in establishing nextgen capabilities, increase total cost for implementation and postpone benefits. in the final analysis, faa would

have to balance its priorities to keep nextgen implementation on course while also sustaining the current system's infrastructure, level of safety and operational efficiency. thank you, mr. chairman. >> thank you. mr. hendricks. >> thank you, chairman petri and ranking member costello and other members of the subcommittee. my name is tom hendricks, i'm supervisor of safety for the transport association. we're admitted to evolving the air space system into the next generation transportation system or nextgen. to enable this evolution, we believe that congress and the administration should be guided by a national airline policy that recognizes america's airlines as the global businesses they are and enables them to operate as such. an indispensable element of such a policy is nextgen. we appreciate the opportunity to express our views