the fragmentary notion of the actual oversight itself. now, you have the two homeland security committees, and they do a good job. we have good relationship with both of them, but beyond that, then you've got committee that all it's looking at is this issue or that issue or this issue and what you miss is that kind of overall strategic oversight and guidance that one would want out of the congress, and so i keep hearing, well, you can't take up that reorganization. congress is -- only congress can reorganize itself, and i say that's a given, but at a certain point in time, i hope there's the opportunity for some self-reflection in the congress..

up to an underpass, they? >> it is 108. >> well, in this line of inquiry, seeing that i am retired and make pension is a shared, i would propose it's time to end random acts of after site. thank you all for those comments. i appreciate it. they think were going to a lightning round. we'll see who wants to take this one on.

we've all talked about cooperation of the state and local level. secretary napolitano from her home state, there've been some local legislative initiatives that posher local law enforcement officers in the role of quads i enforcement of integration policy that seemed to be a federal responsibility. any insight into this vertically integrated dhs enterprise? with the best we can afford and have a discussion about integration reinforcement? >> yes, i give a speech at american university online and it really talks about immigration enforcement now and what makes for smart and affect the enforcement with the statutory scheme that is more and more out of kilter with the actual needs of the country. but it is a combination of enforcement strategy and they

really allow us to prioritize those that we seek to remove from the country. and then, encouraging and making it as smooth as possible the business practices for the go immigration. >> next in the lightning round for secretary chertoff. i remember having some really wonderful discussion about this topic. in light of the decreasing budget, do you have any thoughts about the homeland security grant program and how best to move forward on not get the biggest return of the money for think tanks and so forth. i remember standing behind you or with you in taking the spears coming and we try to adjust the grant program. >> everybody without any grant program that didn't give them all the money you gave it to someone else was a really program. and the funny thing was there was some communities that would go out and in the run-up to the

grant announcement, that they were really dangerous, it's really unsafe here. the chamber of commerce would go what are you doing? the other tourist business here. so there was always a little bit of a schizophrenic attitude to it. look, this is an area where three term and i don't know if it's not a budget, the president would submit it and we would give you more money for grants. i don't ever remember during these budgets i was involved with the congress said we have to or we're going to cut the budget. and it is a very popular part of what dhs does for congress. that being said, the purpose of the grant program was to invest -- make essentially capital investments. investing capabilities that would allow building up a foundation at the state and local governments up and operate. it was not meant to be a payroll

subsidy for state and local governments. and i think that's really the right approach. there are frankly some communities, where literally hundreds of millions of dollars if not billions have been spent and there is a point at which you say, you know, you've got a lot of money. you know how to do the engagement of maintaining those. now, the one qualification i would give is this in some communities, the vulnerability and the threat is enhanced because of the fact that what is being served by that community is not just a community, it's all the surrounding areas. so again, it is his externalities problem. so it is fair and certain big cities, particularly in ports and airports, where there is an economic foundation for an entire region, it is fair perhaps to the federal government chicken something to recognize the fact that the

benefit of this is expanding, not just of the city itself, but to the whole region. that being said, i think in line with this disciplined approach, it is time to look at what has been obtained for the expenditures and talk about how you win some of these communities off what they have begun to treat as entitlement. >> secretary ridge, with a questionnaire regarding -- or get back to managing risk you talked about earlier. a lot of focus on terrorism, but as they said in a press above, would all agree that all has to thought is not clearly diplomatic or law enforcement for dod or doj it's going to come into the homeland security enterprise. can you just comment on the role of the perceived threat of terrorism as it relates to managing the entire portfolio? >> well, i think obviously the profile of the terrorist is

sanctuary of its areas, tactics of the terrorists, the number of terrorists is all changed in the past 10 years. but the threat of a terrorist attack has not. one of the things they think as they looked over the past 10 years as we've proven ourselves be undeniably a resilient country. we are a very resilient country. and we will always prepare, hopefully, for that big event, the strategic attack like 9/11. but now the secretary napolitano could probably comment, but given in the past 18 to 24 months, we see more interdiction and the rest to the citizen come naturally citizen, people may be here. so the scenario really hasn't changed. i think we've demonstrated we are resilient. the professionals are still at it every day. we are no longer breathless and

anxious as we were about it and we've got it in the right perspective. even though bin laden is dead, al-zawahiri's number two. how you going and deliver the message to al-zawahiri's number two. the bad news is you're in the crosshairs of our special forces, so good luck. you will do whatever they are going to do over there, that al qaeda and the arabian peninsula in yemen and the horn of africa and the fact that you are going to have -- we are at the war system and ideology is and interpretation of an historic and profoundly devout religion. and so, we will always be a war -- terrorism is tactics. war against those who engage in that type date to take their interpretation and kill innocents to advance whatever their cause is. i think we finally got it and i think we ought to just keep it in perspective and remind ourselves, 300 million people, the borders to matter what we do, north, south, east and west,

there's a chance someone will come in and an even better chance they can be converted here. let's accept that as the new norm, just as we accepted the new norm of potential nuclear engagement with the soviet union. what did we do? manpower at our professionals. we manage that risk but i let the rest of america going about and building a diversified economy and the civil rights movement and the digital revolution. it is the new norm. homeland security gets it and we will continue to manage that risk is that we even under the most dustier budget conditions. >> to continue the discussion of enterprise approach to these problems that i above all, we got a question regarding the current relationship with them an apartment in the u.s. of mexico. with the recent paramilitary killings of veracruz and issues from time to time. despite goes away. as we know it's a ubiquitous problem in the border. do you want to give us an update on your current inking?

>> i think we have been engaged in various efforts with the calderon administration to do with particularly the cartel in mexico. and that the homeland security issue in part because those cartels all have fingers that reach into virtually every state of the united states. and it's also important because you don't want the rule of law lost and particularly the northern states of mexico. there have been some danger that over the past couple of years. progress is being made. some of the leaders have now been captured or killed, but i think that our relationships with mexico heading into their own presidential election cycle, this is my homeland security is such a complex field because you have got to do with managing

that relationship, keeping a southern borders secured. and at the same time, making sure that the ports are open and commerce is flowing freely between mexico and the united states. why? because they're literally hundreds of thousands of jobs that depend on it. striking a balance, getting it right and working with the government of mexico all has to be done simultaneously. >> well, maybe thank you for participation. let me close with one question because were talking about the role of the private or in how we saw this large complex problems going forward. we did pretty in depth and robust discussion and cybersecurity issues and i think it's pretty clear there's a consensus on this panel about the preferred way forward on that. maybe just go through each one of you and talk about another problem related to cybersecurity where there may be a budding technology or solution out there that's not necessarily going to reside in government in terms of bases for broader security in another problem that's going to require the private sector to

help. >> well, i think one area is the whole area of diagnostics. and the ability to be able to monitor and diagnose if, for example, there is a biologic agent introduced into the atmosphere very quickly with appropriate medication processes and things available for that. so i think the whole area of diagnostics is very right one. >> it's a little bit cliché now, but the issue of big data and analytics. we collect data, video, staff now on facebook and open source networking. there is information we collect at the borders, all kinds. the ability to unify and bring it together, manage it and do so in real time i think is a huge

challenge now and it is one in which i think the private sector has a lot of interesting capabilities to bring together. >> technology is a detection that covers both predictive analytics based on what you know in the data you have, also technology exists for these spores, pathogens we worry about, or the contagious? nuclear material radiological detection. so the technology detection covers come in many areas and i think is that the private sector, whether it is the analytical piece based on the data information in that kind of algorithms and how you write those up to the technology detection that secretary napolitano said at a great place for the private sector. >> you can find this conversation online at the c-span video library. we take you live to las vegas, nevada were president obama is speaking about homeownership. >> it is wonderful to be with all of you and i want to thank josé and the side and their

wonderful children for letting us set up right in front of their house. we just had a wonderful visit. without a doubt, the most urgent challenge that we face right now is getting our economy to grow faster and to create more jobs. i know it, the people of nevada know it. i think most americans also understand that the problems we face didn't happen overnight, and so we're not going to solve them all overnight either. what people don't understand though is why some elect did officials in washington don't seem to share the same sense of urgency that people all around the country are. last week, for the second time this month, republicans in the senate blocked a jobs bill from moving forward. a bill that would have meant nearly 400,000 teachers, firefighters and first responders being back on the

job. it was the kind of proposal but in the past at least republicans and democrats have supported. it was paid for and it was supported by an overwhelming majority of the american people. but they still said no. your senator, majority leader harry reid has been fighting nonstop to help get the economy going. but he's not getting some help from some of the members of the nevada delegation. so we need them to get their act together because the truth is the only way we can truly attack our economic challenges, the only way we can put hundreds of thousands of people back to work right now is with. that is why i'm going to keep forcing senators to vote on common sense, paid for jobs proposals. the last month when i addressed joint session of congress about

her job crisis, i also said that i intend to do everything in my power to act on behalf of the american people with or without congress. so i'm here to say to all of you and to the people of nevada, people of las vegas, we can't wait for an increasingly dysfunctional congress to do it job. were they won't act, i will. in recent weeks, we decided to stop waiting for congress to fix no child left behind and decided to give states the flexibility they need to help our children meet higher standards. we took steps on her own to reduce the time it takes for small businesses to get paid when they have a contract with the federal government. and without any help from congress, we eliminated outdated regulations that will save hospitals and patients billions of dollars.

but the steps are a substitute for the bold action that we need to create jobs and grow the economy, but they will make a difference. so we are not going to wait for congress. i've told my administration to keep looking every single day for actions we can take without congress, steps that can save consumers money, make government more efficient and responsive to help heal the economy. and we're going to be announced in his executive actions on a regular basis. now today, what i want to focus on his housing, which is something obviously on the minds of a lot of folks here in nevada. probably the single greatest cost of the financial crisis and this brutal recession has been the housing bubble that burst four years ago. since then, average home prices have fallen by nearly 17%. nationwide, more than 10 million homeowners are underwater. that means that they owe more on

their homes in those houses are worth. and here in las vegas, the city that's been hit hardest of all, almost the entire housing market is under severe stress. now, this is a painful burden for middle class families and it's also a drag on their economy. when a home loses its value, the family loses a big chunk of their wealth. paying off mortgage debt means that consumers are spending less and businesses are making life and jobs are harder to come by. and as long as this goes on, our recovery can't take off as quickly as they would after a normal recession. so the question is not whether or not whether we do something about it. we have to do something about it. the question is what do we do and how fast we move? one idea i proposed is contained in the jobs act that is before congress right now and it is called project rebuild. a lot of homeowners in

neighborhoods like this one have watched the values of their home decline, not just because the housing bubble bursts, but also because the foreclosure sign next door or the vacant home across the street. right now there are hundreds of thousands of vacant homes like these and more than a million unemployed construction workers. that doesn't make any sense when there is work to be done and there are workers ready to do it. so project rebuild connects the two by hoping the dirt put construction workers to work, rehabilitating think and or abandoned homes and businesses all across the country. that will help stabilize home prices in communities like this one and will help families like the bonita to buy a home and build a nest egg. this is some thing that will the congress can pass right now because it's in a jobs bill. we will put construction workers back to work and we will rebuild

homes all across nevada and all across the country. when congress passes a jobs bill, we can get project rebuild going right away. if congress acts, people in nevada and across the country can get significant relief. but remember what i said, we can't just wait for congress. until they act, until they do what they need to do, we will act on or around because we can't wait for congress to help our families and our economy. over the past years, we've already taken steps to help families refinance their mortgages. nearly 1 million americans with little equity in their homes have gotten the system so far. he made it easier for a complete homeowners to keep homes while looking for a job. we are working to turn vacant properties into rebel housing, which will reduce the supply of unsold homes and stabilize houses here in las vegas and all across the country, we can do more. there is still millions of americans who have worked hard

and acted responsibly, pain mortgage payments on time. now that the homes are worth less than it on their mortgage, they are having trouble getting refinancing, even though mortgage rates are at record lows. that is going going to soon change. last month i directed my economic team to work with the financing agency or shs may and their partners than the housing industry to identify barriers to knock those barriers down and explore every option available to help many american homeowners to refinance. and today i am pleased to announce that the agency that is involved is going to be taking a series of mortgage rates. let me just name the steps. number one, the barrier will be lifted that prohibits responsible homeowners to refinance being if their home

values have fallen so low that what they own their mortgages 25% higher than the current value of their home. this is critically important for a place like las vegas, where home values have fallen by more than 50% over the past five years. so let me give you an example. if you were $250,000 mortgage at 6% interest rate, but the value has fallen below $200,000, right now you can't refinance. you are ineligible. that is going to change. if you requirements, you will have the chance to refinance at lower rates, which can save you hundreds of dollars a month and thousands of dollars a year on mortgage payments. second, there are going to be lower closing costs and certainly financing fees will be eliminated, fees that can sometimes can't look the benefits of refinancing altogether, so people don't buy their refinance because they have all these they have to pay. we are going to try to knock away some of those fees.

third, there'll be more competition so consumers can shop around for the best rates. right now, some underwater homeowners have no choice but to refinance with their original lender and some lenders frankly refuse to refinance. for these changes are going to encourage other lenders to compete for that business by offering better terms and rates and eligible homeowners will deal to shop around for the best rates on the best terms. so, you take these things together, this is going to help a lot more homeowners refinance at lower rates, which means consumers save money, families save money and it gives those families spending again and also makes it easier to make their mortgage payments so they don't lose their home and bring down home values in the neighborhood. and i avoid to keep on doing everything in my power to help to stabilize the housing market, grew the economy, accelerate job growth and restore some of the

security that middle-class families have felt slipping away for more than a decade. now let me just say this in closing. the steps that have highlighted today aren't going to solve other problems in in the housing market here in nevada or across the country. given the magnitude of the housing bubble and the huge inventory of unsold homes in places like nevada, it is going to take time to solve these challenges. we still need congress to pass a jobs bill. we still need them to move forward on project rebuild so we cannot homes like this and wonderful family is having an opportunity to live out the american dream. but even if we do all those things, the housing market is not going to be fully healed until the unemployment rate comes down in the inventory of homes on the market also comes down. but that's no excuse for inaction. it is no excuse for just say no to americans who need help right now. it is no excuse for other games

in gridlock we have been seeing in washington. people out here don't have a lot of time or patience for some of that nonsense that's been going on in washington. if any member of congress thinks there are no unemployed workers or note down on their luck neighborhoods in their district would benefit from the proposals in a jobs bill, then they better think again. they should come and talk to the families out here in nevada. these members of congress who are doing the right thing right now still have a chance to take meaningful action to put people back to work and to help middle-class families and homeowners like the bonita is. but we can't wait for that action. i'm not going to wait for it. and when you keep taking the message across the country we don't have to wait for congress. we are going to act on her own and keep on putting pressure on congress to do the right thing for families across the country and i am confident that the american people want to see action. we know what to do.

the question is whether we have the political will to do it. all right. thank you so much everybody. god bless you. god bless the united states of america. [applause] >> thank you for welcoming me to your neighborhood. [applause] >> thank you. [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations]

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[inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] >> that is president obama meet meet homeowners in las vegas. pushing for changes to the home affordable refinancing program or hard copy to make it easier for property owners to refinance home loans as long as they are current on their mortgage payment. find us again i might if you want to watch it at the c-span video library.

>> our review which we issued last week in a report identified that weaknesses exist i.t. security controls at each of the tony for major federal agencies and departments.

the mac more now on the economy and focusing on job creation efforts. mark pinsky, ceo of the opportunity finance network types that its collaboration with starbucks to launch create jobs for u.s.a. this is from this morning "washington journal" and it's about 40 minutes. the mac on your screen as mark e., ceo of the opportunity finance network, joining us from philadelphia to talk about something called the create jobs for u.s.a. initiative. mr. penn gave him a thank you joining us. explain this to initiative. what's it all about? >> guest: we have partnered with starbucks to try to raise capital that will help finance

job creation and job retention across the united states. very simply, the way it works as anyone who wants to make a donation to $5 or more and they can do it on the web that create jobs for u.s.a..org or can go into a starbucks store. those who do will receive a red white and blue wristband, but the real purpose of the money it took him to opportunity finance network, which will quickly turn around and put that money back out into communities through network of things called community development financial institutions or cpsi and those are in the business of financing community businesses and that includes retail and manufacturing and nonprofit businesses, commercial real estate developers, that sort of thing. the money will go out in the form of loans primarily to support business is a growth phase for job retention phasers started phase. post our guests will be with us for 40 minutes.

mark penske, ceo of the opportunity finance network, create jobs for u.s.a. as their initiative with starbucks says he just laid out. we'll put phone numbers on the bottom of the screen as we talk about the best way to raise jobs in this country. republicans, democrats and independents had their separate lines here. we'll get to your calls in a couple minutes for mark penske. how did you come into being? >> guest: it is a network of these things called community development financial institutions, which are financial institutions, private financial and additions that led to create and if it's for low income, low wealth communities. that's what we've been doing for 30 years and that's what we'll continue to do. opportunity finance network is a financial intermediary and refinancing of the subcontinent provide training into work around policy.

so we are all about cdfi. >> host: our guest has been ceo since 1995. tell us how the partnership with starbucks came into being. >> guest: it is actually a financing story and a quick story. our opportunity finance network has been in urban places in rural places a native market and what we keep hearing from folks as they want to be able to do some thing? they want to help and we recognize people that need help. similarly, when reconnected with starbucks we heard from howard schultz, chairman and ceo of starbucks that he was going into stores in hearing the same thing, that people thought they could do something they would do something. and so, starbucks approached us. we had conversations over the years and they approached us and said, can we do something together? is there a way we can raise money little at a time to put it together and have a significant impact on job creation and

retention in this country? of course that is what are cdfi they're doing. the last of the recession and have continued lending successfully for community businesses. they're getting repaid cannery pain investors. and so, it was an easy connection to make. it all started in august, late august in fact. it happened fairly quickly when we started some conversation and it was really clear to both of us from the beginning that it made a lot of sense. starbucks wanted to use it kill for good and that meant he was able to connect with a lot of people, both through stores, but also through this ability to communicate outward and we have that ability to put that money to work with a quickly. the idea here was that we could find a way for anyone who is $5 to share, to help someone who did fight hellish despair, it is worth doing. so, we launch on november 1, a week from tomorrow. we will go live on the website,

create jobs for u.s.a..org and the starbucks stores and people will be able to make donations to move quickly turn the money around through the cdfi silicates deployed into communities. fiat before we get to cost them a quote written by mr. howard schultz, head of starbucks. i found myself growing more and more frustrated at the lack of cooperation and irresponsibility among the officials as they put partisan agendas before the people's agenda. this is not the leadership we have come to expect or deserve. what is your assessment of the situation the country, mr. penske quiet >> you know, i think what we are focused on is less about the talk and more about what we can do. that's what this partnership is about and i think it came out as -- from howard said he came under cowher's frustration with the issue described. there's no question that we have -- we are stuck in some of our policy and politics. we are stuck in our lending and we need to move forward.

what we're trying to do is they can't pretend to be the whole solution, but it perhaps can help jumpstart the solution. so what we're trying to do is worry less than a sense about what's not happening in trying focus on what could have been. what we know from our work over 30 years at sub 10 is that 95, 98, 99% of the american people want a chance, an opportunity to move forward, an opportunity to get a job and do something. we are trying to respond to that. first call comes from los angeles. it is amanda, democrat, good morning. >> caller: yes, hi. i have two statements to make. one is for the host and oneness with the cast. for the host, i thought the host was supposed to stay neutral. when ted crawford was on, you made a statement about obama being desperate.

i thought the host was supposed to stay neutral. >> we are, caller. we are referring to an earlier color who have said that. if that wasn't clear, that's my fault, but that was the moment there. >> caller: well, it makes you sound like you are a key backer and that really annoys me. for your guests, i want to tell you i appreciate everything you guys are doing and i will go there even if you were promoting mass. so trust me. me and my growth friends will go put in our $5. we'll do that. thank you greenwich. >> host: mark penske can explain a $5 donation at starbucks will turn into something significant. explain how this all works. >> guest: sure, i'm happy to do that. and thank you, amanda for that.

i'm glad you like starbucks, but for people who choose to can go online. they don't have to go starbucks donate money. because it comes in as the donation, it passes through americanization, opportunity finance network, 100% of the money donated goes into the community. there's no money taken off overhead or anything on iran. it goes into the cdfi is a capital grant. but that means is the cdfi can take the money and borrow money against it and when the total money. so on average from the $5 that comes in will support about $35 of lending. so $5 donation, whether it's starbucks, online, amanda and friends or anyone else come in each will support about $85 of new lending bubble have been as a of that. that $35, coupled with other $35, altogether will support financing of all types and will support my current prices, small

businesses, but also support larger manufacturing companies. we do that based on what's happening in the markets where we are and aren't cdfi they're in every state of the country and work in all different kinds of situations and they know best for money will create retain jobs. >> host: what the initial fundraising goals are and how do you exist to grow? what are the broad goals? >> guest: we were very fortunate in starting the starbucks foundation launched this with the donation into the fund in the create jobs for u.s.a. fund. debris from the beginning we had $5 million to start with. it's hard to know exactly what's going to happen. if my experience and how his experience talking to folks is right, we think will raise tens of millions of dollars per share and that money -- every $10 million will support coming in now, about $70 million of financing. you know, our hope is you can produce hundreds of millions of dollars in new financing to create and retain jobs.

>> host: lake placid, florida. jason, independent color, hi there. >> caller: okay, i have a question about the independent finance network. what is the concept number about securing funding for these projects? >> guest: is a great question. thank you for asking, jason. you can call us by phone, but the easiest way to do is go online to opportunity finance.net. www.opportunity finance that make. there's something called the cd if a locator. click on that. tell them you're in florida and it will pop up all the market in florida right now. you can then reach out to them. if you want to try to collect, you can call us at (215)320-4310 and we'll try to make a connection for you but the cdfi. of course you have to work with the individual cdfi in your community to arrange the

financing. but that's over in the the business of doing and we hope we can help you. >> host: are just at the finance network, mark pinsky has served on the advisory council of the federal reserve board of governors. this is from 23,292, including the chair in 2005 back in 2002, president george w. bush appointed ester penske to the cdfi advisory board and that the department of treasury, where he served until 2006. las vegas, our next call roy, republican, good morning. >> caller: , good morning. i hate to sound like a devil's advocate, but i'm wondering if it's such a surprise the organization financial statements are open for viewing and let the average salary of people that are administering this office, what they make. thank you. >> thank you, roy. it's not double that the kid.

we your question. financial statements are available and we are audits of publicly available irs form 990, which is their tax form is publicly available. and i actually couldn't tell you -- it's a great question that average salary is something i look at. i couldn't tell you off the top of my head with the average salary of folks are, but our books are a fan in anybody's welcome to look at them. again, if you contact us, or you e-mail us, i'll give you my number and e-mail directly. e-mail me at and pinsky@opportunity finance.net. we will get the information for you. >> host: you mention this program will start in about a week at november 1st. besides programs like this, how are you getting the word out? >> guest: there's a whole range of activities going on. we announced we were going to do this on october 3rd and we did that largely through the media and let the media folks know about it.

we received widespread attention that is coming. but about november 1st, there will be a concerted effort to spread the word through advertising on tv and in print online that we are using social media, facebook, twitter and others to spread the word about this. there's been significant media interest as well. so we think there will be a pretty broad awareness of overtrained to do with create jobs for u.s.a. and we hope that results not only in donations to the create jobs for u.s.a. fund, but also in businesses that are looking for financing. our experience has been through this a 10, our experience has been that there are a lot of businesses out there that are deserving of finance and having a tough time getting it. we want to hear from businesses and we want to match them up and provide financing of the deal works. >> host: is going to ask you what you thought about the current climate for business lending. do you want to speak more

broadly about conditions in the country? >> guest: sure, there's no question there's been a credit crunch that has gone on for several years now. that's a product of a lot of things. and there's no question the small business finance is tougher to come by now than it was a few years ago. there were indications from big banks are least that they are trying to step up their small business lending and we encourage that. we want them in the game and were pleased to see that we hope this rate. there's been a significant backlog of demand unfortunate what happened over the last two years as we have less businesses one of the things that has happened to cdfi over the country as we started hearing from businesses that were previously banks, but no longer able to give credit from banks. they ran into problems. cdfi tried to set up or we could. wasn't always possible, but we know there's still significant demand out there. we do a quarterly survey of

market conditions and the space and we see strong and steady and high-level demand far exceeding our ability to supply today. we hope that create jobs for u.s.a. will help ameliorate that respond to more businesses. there's no question the business demand is there. even as banks, small banks, credit unions, anybody else is trying to land, it's going to take several years at least to get the small business credit back to where it needs to be in this country. >> host: do you have a position where do you want to speak about the president jobs coso? the whole debate here and in washington but he puts that seems to have stalled in congress. any thoughts? >> guest: well, without going into individual components of what the president has proposed, we see it as a situation, that we need the government to be sort of moving aggressively to try and support job creation and

retention. we need the private sector -- corporate sector to be doing all that account. it's one of the accounts howard raised his corporations should be using resources to create retain jobs to the extent they can and we need things like this. we create jobs for u.s.a. that have a fellow topic that, that really are intended to contribute to this effort. so you know, i am probably not the person who can tell you whether certain tax incentives are the right way to do it or whether direct expenditures are the right thing to do it in all cases. it's a complicated problem. but i know would not going to be able do it alone a government can't do it alone and the corporate sector can't do it alone. so we want everybody putting their oars in the water on this. >> host: we have mike from roseburg, oregon. thanks for waiting. you are on with mike pinsky. >> caller: good morning, gentlemen. i need to ask you, okay -- i'll

stop at the joke. my concern with starbucks is in terms of whatever job creation were talking about is they don't end up. hopefully the focus with the returning troops and doing something with creating jobs for these guys and men and women. quite honestly is returning vets serving coffee, this sort of thing would, and be more creative. there is the old lewis black joke that starbucks in houston was the end of the universe. why? because you go to starbucks and you turn around there's another starbucks. we have a few too many starbucks running around. mind you, i love the coffee. but you know --

>> host: let's go back to mr. pinsky in philadelphia. to the caller's main point about jobs for veterans, that's actually a comment we've heard several times on the program this morning. what are your thoughts? >> guest: well, i couldn't agree more. i hope we are creating jobs for veterans who served our country and i hope there's jobs appropriate to them. there's no doubt veterans will come back from service and i hope we can find a way to put it to work. and you know, i don't think -- i certainly don't think the folks at starbucks think that everyone should be working serving coffee. and that is not our goal here. in fact the financing in the program is not aimed at financing starbucks. the goal of this financing is to create jobs in places where they're appropriate to the local market conditions and whether they create jobs and return jobs

in those places and will affect veterans and service members wherever they are and whenever they come home. there are cdfi said at a greater focus on returning veterans and veterans from prior service. and so, it is something we care about. we care that about quality of jobs. we want good jobs that will help people support families, help them save for education, health and start a business if that's what they want to do. so i take the point. i think it's a valid point to an absolute part of what we care about. >> host: there is a tweet here that i want to get a response to. one viewer says your plane is just a business welfare plan. you should give money to be people, consumers who will create demand by sending it. what do you think? >> guest: well, we support business is that are generally owned or started by low income, low while folks in an effort to give them the opportunity to build their own wealth. that's a lot of what we're doing

in a different way. it's what we are expert at. you know, were not in the business of giving money to individuals for themselves. we are the business of supporting community businesses. i would think what they tweet is suggesting is something that is probably more what government can do or should do perhaps, but that is not what we do. others said earlier, we are not the whole solution. there is no question demand is that this is about. our hope is by creating retain jobs to get more people ability and confidence to spend money and support their family, whether it's on housing, food, anything like that and then in turn will be what drives the economy. no question about that. >> host: it's david on republican line. good morning, david. >> caller: good morning. >> host: yes, sir, go right ahead. >> caller: i am a small-business owner. i've struggled for quite a few years without the help of any banks or financial is the two

shins, which by the way you are right. they are not there to help us at this point. my problem is the word job creation. it is used very loosely all through washington. you don't create a job. if you have a new product, the demand for the new product and somebody to make it, that is creating a new job. increasing starbucks for kentucky fried is not creating jobs. >> host: collar, let me ask what kind of business you are in. >> caller: polyurethane molding. >> host: how many folks do you employ? >> caller: two. poster you said business is not so great? >> caller: i had to move from upper middle class down to lower middle-class borderland. that should tell you the whole

story. >> host: what do you think your future prospects are? >> guest: for myself, just to tread water. pasco was the downfall of the u.s. and you know, everybody talks about how president clinton had a balanced budget surplus. he is the one assigned us away. when he jumped the gun inside the free trade agreement with china, even though they have no child labor laws, no slave labor laws, no osha -- they just have no regulations at all. and then make it a 25% tariff. so it is totally unfair trade. >> host: mr. pinsky, what do you say to david in ohio, says he is basically charging a lot without the help of any government and soon he needs for

two. what do you say to him? just go well, i think david, your story is a story we hear a lot from businesses that are struggling. demand is low and it makes a hard. and i would disagree with you. i agree with you that it is demand for products, having good product and demand for it that create jobs. what we can do is provide the financing so that businesses can be designed to take advantage, whether that's a labor force question or supply chain question, or whether it's a market question. there may be demand out there that businesses need help finding. so you're absolutely right about that. i want to touch on that. and i think this is a tough business environment in general. i don't buy your industry well enough to know the challenges that were created by kafka or competition with china. there is no question that there are imbalances in how we manage

business here and what the government does and what happens in other countries that contribute and may create jobs for small businesses. having said that, what eric aarons is that most small business owners, you know, they may have frustrations. they may have things that have caused them problems in the past. what they really want to do is be successful at what they do. they want to produce the best products or services they possibly can and i'm sure you do when they want to find a market for them. and you know, we try to be as pragmatic as the candidate all of the -- all of the challenges and joys of their that the challenges are distractions for his own business owners. i don't know specifics of your business. if you want to get in touch that said would love to get more information. he said he hadn't had me up from financial institutions in the past and maybe that's by choice

and certainly should do that if that's your preference. but if it's something that cdfi could help with, would be interested in talking to you. >> host: we have 10 or 15 minutes left with her cat. mark pinsky is ceo of the opportunity finance network. if you're talking us about partnership with starbucks beginning next week to launch the create jobs for u.s.a. program. here's a look at the opportunity finance website. this organization we are indivisible. you can see the tattoo that says let's create jobs for u.s.a. another place to go. we have jackson, tennessee and the line now. pat, independent, good morning. >> caller: good morning. good morning, gentlemen. mr. pinsky, i have often wondered. i hear often the politicians saying that the small businesses

are the ones who create the jobs. now, i have heard on c-span, callers stating that they hired two people, three p. will and then there was one job and then a couple months ago said he didn't hire anybody, just runs his business themselves. ..

>> guest: you can have business hires a few people, but when small businesses as they iewfn do, get it right, and hit on a product or idea where as the last caller said, producing something there's demand for, they can grow significantly. the pace of growth can be great, and that's where you get job creation as you go tabaret, but we also have to lock broadly in the economy about where jobs come from. in create jobs usa, we support non-profit businesses because they are surprisingly large percentage of jobs in the country, about 8% of the jobs in the country are nonprofit. it could be a social services provider, charter school, an arts facility, and so we took a broad view of what it means to do that. now, having said that to your first question, i think, was that there's no requirement for what our financing -- there's no number on the number of jobs that need to exist in this

business or create the business, but having said that, we do prioritize in the way we're going to fund the cdfi's and the way they are going to finance businesses. we do prioritize those that have greater job creation or job retention potential, so that's -- we are going to look at that closely in order to get funding from the create jobs for usa fund, they have to demonstrate the demand for the financing, and we look at the demand to see if it creates more or less jobs. if it's your $5, you have to right to know it's productive as possible, and we make sure the money will retain the most jobs. >> host: another tweet here, wanted your take. the second part i want your take on. first of all, they ask will create jobs be low paying jobs or living wage jobs? we sort of touch on this, but are there regulations in place?

what can you say about that? >> guest: the -- i'll answer the first question first which is we aspire to create within wage jobs, and generally we do, that's in the mission of what cdfi's do, create good opportunities, not opportunities that get people stuck, so that is what we are trying to do with that, and there are a range of provisions in place that are some cdfi's there's some regulations 234 terms of lending, and some there's other. others are determined by the market place in a sense we have investors of a range of types. we have investors ranging from, you know, from banks or other financial institutions that lend to us putting requirements on what the lending can and can't be, and they enforce them. different cdfi's work in different places. the lending is there's no secret

to it. a caller asked about our financials, and our financials are publicly available. there's a cdfi in the treasury providing some support to cdfi's to ensure that what cdfi's do or what those who participate in the program do gets public scrutiny, but it varies. >> host: anne from north carolina, democrat, good morning. >> caller: yes, good morning. how many jobs do you foresee to be created? maybe a million or two million? a figure if you have had in mind, and have you received push back from republican party regarding this. you know, their prejudices is not create jobs because it might help the economy which in turn helps the president. have you got push back from them about creating jobs? >> host: thanks. >> guest: great questions, anne.

the first one is, you know, the number of jobs created or retained depends very much on the amount of money that's donated, and we can't know at this point how much money that will be. a couple thirngs we know. one is we know that it takes about $21,000 on average across this whole program to create a retain job. do the math on that, but, you know, for example, the $5 million contribution that starbucks made to kick this off ought to create about just under 1700 jobs on average as we go through this. it will take time to do that whether that's the case or not, but we don't know how many dollars are coming in. a couple things about that. on the website, createjobsusa.com, there's a jobs counter tracted on a periodic basis and we look at how much was donated from people like you, and then we'll multiply that by using our

formula to give an estimate of how many jobs we expect to create. we don't stop there. if you donate $5, you have the right to know what's going on. we ask cdfi's to track job creation and retention so they have data to compare against the jobs counter, but that's not enough. we're going to do after 15 months -- 12 months after a job is created, we'll do a jobs audit, and we have an up dependent third party agency looking at how the money was used, what jobs were created, and we'll have an honest count because we want to be transparent and want people to know what happened with this. it's the short answer. the second question, anne. we have not received push back much from anybody. we have a lot of support across the board. i think there's a lot of excitement and enthusiasm about the idea that americans can help

americans. that's what america's about, and we think there's broad support and expect it to be bipartisan support. historically cdfi's receive bipartisan support because the things we do are not built out of or hue to one political party or another. they are just pragmatic solutions to real problems asking real people every day. >> host: another tweet about how you came up with the $5 opposed to something smaller like a dollar. why the $5 figure? >> guest: you know, there was not a lot of magic. it's a good question. there was not a lot of magic to the $5 figure. we thought it was a reasonable minimal amount for people to donate, and once people don't have $5 to sthair, and those are the folks who we want to help with this program, and so there was not great science about it.

we thought it was a modest amount for most people, and we know it's not for some people, and for those people, we hope to reach out to them to help them. >> host: one other tweet. perhaps you covered this, but they want to know if starbucks puts up matching funds as part of the program? >> guest: they are putting up seed funds so the $5 million from the starbucks foundation was intended to seed this effort and get things rolling so that we can start as soon as possible, the program launches on november 1st, and people can start making donations, but we want to create jobs before we have the chance to take in and account for all of that money and put it book out, so that money helps us get a faster start for it. the starbucks foundation is providing support in the form of, you know, i said earlier 100% of the donation of every $5 we get, 100% goes through the communities, through the cdfi, then multiplied to support $35

of financing. one of the wayings to do that is the foundation is covering the incremental costs to make sure the program gets done right, so their support is beyond the $5 million in order to do this, but the goal here is to create, again, to respond to something i said earlier. the goal is to respond what we hear in communities, what howard told me he's heard as he went to stores and talk to the folks working there and the customers in the store, and it's what i hear in communities whether it's in, you know, rural south dakota or whether it's urban los angeles or anywhere else, and what i hear is that those people who feel they are in a position to help are looking to help, a means to do something, and that's what we are trying to do here. >> host: illinois, you are up, independent, good morning, don. >> caller: one of the things that strikes me is the way that

government has treated the factory worker in this country. we have lost half of our manufacturing jobs in the last 10-12 years. they pass the nafta and bill clinton signed the bill so there's both democratic and republican responsibility for this. i want to see the government start protecting our manufacturing base rather than allowing it to be sent overseas. the chinese protect their own economies through their manipulation of their currency and by duties that they charge for people trying to ship into china. this -- one of these days when the working middle class realizes that they are not middle class anymore because those manufacturing jobs that made them middle class are no

longer available to them. we're going to see a lot of unrest, and it's not going to happen soon, but ultimately, i think, you're going to be faced with that, so i would hope that the federal government gets off their square one and start protecting the american factory worker. >> host: statement there, not a question, but any response? >> guest: there's no question that there's a lot of disstress and lot of upset and turmoil in the workplace in the jobs market, but i acknowledge that, and so, you know, think that we need to -- we need to, you know, do something as a nation. again, what we're focused on, i can't be the answer for what government and should do. we're trying to support the folks out there today trying to figure out how to whether it's manufacturing, retail, a nonprofit or construction, we're trying to figure out how to

support those folks that are trying to create and retain jobs that way. >> host: last call, james on the line for democrats. welcome. >> caller: good morning. i have a question and comment. my question is inform america how many people does it take to consider to be small business? 1 to 500 is considered to be a small business; am i correct? >> guest: lot of people dwin it different ways, but that's fine. >> caller: okay. the next comment is the prop obama's having is all the racist republican senators from the south make it their mission not to help him with the economy or anything else. they want him to fail. >> host: last call there, but final comment from the guest in philadelphia about this program which you hope will lead to lots

of lending. what are your best hopes here? wrap it up for us if you can. >> guest: our hope is that what we're doing with create jobs usa helps to motivate and spur individuals to action, motivates businesses, help motivate corporations, and even motivate the government to sort of look forward and figure out what to do about it. we're committed to this, and starbucks is committed to this for an extended period of time as long as we need to. we are happy to be out of -- put ourselves out of business when the economy comes back. we hope that happens sooner rather than later, but what we're trying to do is just tap into what we think is the fundamental spire -- spirit of americans helping americans, and we hear people who want to do it and we think people will do it, and it gives people a reason to look up and forward and together hopefully we can create jobs together for the usa. >> host: thanks for the look

ahead at this new program. appreciate your time. >> guest: my pleasure, thank you. >> issued last week in the report, i identified that weaknesses existed in key security controls at each of the 24 major federal agencies and departments. >> sensitive, personal, and classified data stored by the

federal government is at high risk of cyber attack. find out more with the gao's head of information security issues tonight on the communicators 8 eastern on c-span2. >> the senate subcommittee on primary health and aging looked at the impact of the recession on older americans including social security payments, rising health care costs, and difficulty finding a job. witnesses include an official from the government

accountability office, a syracuse university professor, and a single mother who tells her personal story. this is 90 minutes. [inaudible conversations] [inaudible conversations] >> good morning, and i'm senator bernie sanders from vermont, and i think we'll be joined by my colleagues in a bit, but i do want to thank all of you for being here and especially our panelists. this country is, i think, we all know, is in the midst of the worst economic downturn since the great depression, 16% of our people are unemployed or under employed. median family income declined by over $300,000 in the last decade and all the new income has gone to the top 1%. in the midst of this, it is

enormously important that we ask a question that has not been asked enough in my opinion, and that is what does this recession mean for older americans? how are they fairing in the midst of this terrible recession? what is the employment situation for people in their 60s? are most americans most working americans expect to be working throughout their entire lives? how many workers in their 60s have lost their jobs, have seen a decline in their incomes, and very importantly, how many older american workers who have lost their jobs are never, ever going to get another job? what does that mean to the economy? what does it mean to of living to that workers both economically and psychologically? if you anticipated working until

the retirement age of 65 and now you're 61, you're never going to get another job in your life, and that's one of the issues we are going to be talking about today. another very important question that i don't think has been asked enough that needs some answers today is how do you survive economically in these tough times if say you get $12,000 in social security, and that's all 6 your income or virtually all of your income, and you don't receive a color for the last two years. what does that mean to you? furthermore, and this is a huge issue that needs a lot of discussion, does the current formulation for social security colas adequately reflect the purchasing habits of senior citizens? i can tell you that in vermont, i hear over and over again from senior citizens who tell me, bernie, i don't quite understand how they think there's been no

inflation when my prescription drug costs are soaring, my health care costs soar, and we don't get a cola. is the current formulation regarding this adequate, and that's important because i think tomorrow or in the near future, we're going to be hearing about what colas, if any, seniors, will be receiving. is the current formulation adequate or do we need a new formulation that better reflects the purchasing needs to seniors? according to information we'll be receiving today, and this is really rather stunning, the bottom 20% of senior citizens in our country live on incomes of less than $12,000 a year. i'll repeat that. bottom 20% of seniors in this country, millions of people live on income less than $12,080 a

year. the average income is $7,500. i hope our distinguished panelists will explain to me and the american people how any person in this country, let alone a senior with specific needs often regarding health care, can survive in the year 2011 on $7,500 a year. now, importantly, and let's be very frank about this, as many americans know, there's a major effort on the part of some in congress, especially in the republican led house of representatives to make major cuts in social security, medicare, medicaid, the peeding assistance program, community health centers, affordable housing, nutrition programs. now, if these cuts were to take place, what impact would they have on seniors? now, my office learned yesterday

that senator paul, the ranking member, would not be here this morning, and i'm disappointed by that, and i hope that perhaps he or some other republicans will, in fact, come to this hearing this morning to talk about these important issues because i'll tell you, it is very important to announce how you're cutting social security, cutting medicare, cutting heating assistance, but it's harder to learn what the impact of the cuts mean on real human beings, and what kind of suffering takes place, but how many people will die as a result of those cuts? this is an important hearing. i hope we can -- i look very much forward to hearing the testimony from the gao and from our other distinguished panelists, and with that, let me introduce senator franken for introducing remarks. thank you, senator franken.

>> thank you, mr. chairman, for holding this important hearing. i have no opening remarks other than to say as we get to the reauthorization of the older americans act, i instructed my staff in minnesota to do a number of round table discussions, and i, myself, have participated in that dean a field hearing when i was with the special committee on aging and just a whole bunch of events at senior centers, and have had this discussion, and i think everything that the senator sanders spoke to is very, very important, and i did have an opening statement, what do you know? i just with love for the ear of the testimony today, i do think that cutting social security,

the social security had nothing to do with our deficit. if anything, we've been taking from the social security surplus and using it not lock boxing it. i look forward to the testimony today and to the discussion of what we can do to the recession or in this economic slow down to make sure that seniors live a dignifyied life and have a dig any fied retirement and also seniors or those approaching seniorhood like i am in an economy where as -- we'll hear from some of the testimony where folks are out of work for -- who lost jobs, can't get jobs for just a record amount of time

now, and what recourse they have, so i want to thank these two witnesses and the witnesses in the second panel. thank you, mr. chairman. >> thank you. thank you, senator, and thank you for what you've done for seniors. we'll begin with barbara -- and she's the mapping director for education work force in income security issues at the u.s. government accountability office, previously, she was the director for retirement security and in that capacity studies social security and pension policy and management. before joining gao, she led the city wide analysis unit of the district of columbia's budget office, and we thank you very much for being with us this morning. >> thank you, mr. chairman. senator franken. thank you so much for inviting us here today to discuss the effects of the recent recession on older adults.

while the recession officially ended in june 2009, the economy has experienced a weak recovery with unemployment above 9%. older adults, particularly those close to or in retirement, may not have the same opportunities as younger adults to recoffer from the recession's effects and still ensure they have sufficient savings for retirement. my testimony today will present the results of our work tar this subcommittee on older americans' well being. a report, which is being released today, presents data from various, mostly federal sources concerning the financial status of older adults. i'm accompanied by michael collins, our assistant director for this project. things were not especially great for older adults in 2007, before the recession. we previously reported that older americans were heavily relint on social security benefits with about a fifth of beneficiaries over 65 receiving more than 80% of their income

from this source. this reflects relatively small amounts of savings from many older people. almost half of american workers have no defined benefits or contribution pension to supplement social security, and those with a pension will not have enough to live comfortably in retirement. in 2007, before the great recession began, the median level of financial assets for householdings approaching or entering retirement was just around $72,000. this sounds like a lot of money, but it has to last for decades. using basic rules of thumb for withdrawals, 24 amount provided for about a 5% replacement rate for those at median incomes. even with social security, this is not enough to support a middle class standard of living. older americans were not especially flush prior to the recession, and things have not got betterment since 2007, annual unemployment rates doubled from 3% to 7% for

workers 55 and older. these rates are not as high for other age groups because there's seniority and likely to lose their jobs than younger colleagues. still, once an older worker loses their job, they are less likely of a younger worker of similar skill to find another. the median duration for older workers rose sharply between 2007 and 2010 tripling workers 65 and older and increasing from 11 weeks to 31 weeks for workers aged 55 to 64. those employed, the portion of older part time workers who indicated they wanted full time work nearly doubled. the recession also left older adults with difficult choices regarding retirement savings. nerd stocks nor real estate recovered from the low points after the recession, and savings provide little, if any, interest income after inflation. in these circumstances, those

approaching retirement find they may not be able to retire at all until such time that markets recover. those already in retirement and managing their own assets face reduced circumstances without time to adjust to saving more. in an aarp survey, 50% of older people reporting having difficulty making ends meet delayed getting medical or dental care or ceased taking medication entirely. those with benefit plans are protected, but increasingly older adults manage their own savings by a 401(k) plans and are less volatile to market availability. some adults were protected from this period thanks to social security. household income fell for adults, those 65 and older experienced an increase in household income and while poverty rates increased for

those from age 55-64, they decreased for the 65 and older, although this changes when medical costs are factored in. it seems social security is an important protection like it's intended to be for those eligible for the benefits. in conclusion, the great recession had a profound impact on older adults. many lost employment and wealth and have limit time relative to their younger counter parts to make up the difference before they retire. some will not retire voluntarily but may lose their job from layoff or physical disability. fortunately, social security has largely protected retirees from poverty, but it is intended to be a foundational benefit and not the sole source of income. americans increased vulnerability to the complexities of the financial markets for their retirement security means they are increasingly unprotected from a retime and reduced circumstances. helping protect a rapidly growing population of growing

old people offers a special challenge as we seek economic recovery for all americans, and that concludes my statement. i hope the written statement will be submitted for the record, and i await your questions. >> thank you very much. we'll now hear from senator casey. >> i wanted to thank you for convening this hearing on this important topic, and i won't be here for all of the testimony, but i'm especially grateful. i represent a state that has, depending on what the latest nirm is, probably the third highest number of individuals over the age of 65, so we have i know at least over 1.9 million over the age of 65, and, of course, big numbers just below 65, and i think what this hearing does 1 remind -- is remind us not only of the gravity of the impact of the recession, but it also reminds us how urgent the work is we're

doing right now to put in place job creation strategies. we're finally at a point where we're debating and voting on a series of job creation ideas, and this report that the gao has done and the other testimony from our witnesses should give added or urgency to the work that we're doing because we've got to do everything we can to prevent even further damage to people's lives and their communities, so it's been horrific time for a lot of families, and probably ever many so older workers and their families, so we're grateful for the scholarship and the work that goes into this report and grateful for the testimony of our witnesses. thank you very much. >> thank you, senator casey. let me begin with just a few questions. you mentioned in your report

that workers 65 years of age and older saw their lengths of unemployment triple, and you mentioned a report that workers 65 sought length of unemployment almost triple, and you also mentioned that one-third of the workers 65 or older are in low wage jobs. in human terms, what does it mean if somebody is 65 or 66 today and loses their job or 62 and lose their jobs. in your judgment, and i know there's obviously exceptions, but are many of those workers never again going to be working, and what happens to their lifestyle if they are not -- if that income is not coming in to their family? >> we've previously reported on the situation for older workers that they are less likely to lose their jobs than younger

workers, but when they do it's hard to get another. they may have skill issues with shifting to another job, health issue, and they also frankly have employer issues. employers will not always look to hire older workers, so it is very difficult for older people once unemployed to go back and get it job, but if they are lucky enough to be at least age 62, they can claim social security benefits, and up fortunately, if you claim benefits at age 62, you're going to get 25% less on a monthly basis than if you wait for the full retirement age of what is now 66, but it still is available to you, and we have seen increased claiming at a consequence of the recession. >> so very specifically what you are saying is that many more seniors are now taking social

security at 62, at 25% fewer benefits, less benefits than waiting until 66? >> that's correct. >> all right. could you elaborate on the gao's finding about the important role that social security and medicare in older american act programs have on protecting the american seniors and talking about poverty rate not declining when people reach social security, and what happens if social security was cut, what happens if the eligibility age for medicare goes from 65 to 67? what would be your guess be about the implications of that? >> let me talk first about social security because social security is there to assure a baseline income for older people, and it's done its job.

it reduced poverty rates for older people fairly steadily since its inception. clearly, if people don't have social security to go to you, you would see a different pattern in poverty levels at age 65 and older, but something you have to worry about in social security and you eluded to this earlier with cost of living increase z 1 that older women in social security have higher poverty rates than the average that we reported for everyone over 65, and so a concern in anything that might happen with the cola is what would happen with those older women who in their 80s may find themselves in povertiment now, i can't comment on the increase in the age forever medicare. that is completely outside my area of expertise, but i can say that the things that you hear from older people and the information we have on medical costs suggest that those make

quite a difference to what what they perceive they are able to spend on other things to their disposable income. >> okay. okay. senator franken? >> thank you, again, mr. chairman, for calling this hearing. as i mentioned in my opening statement the older american's act is coming up for reauthorization, and it really provides a number of services that allow seniors to remain independent in a way that actually saves federal government money because these folks can stay in their homes rather than getting much more extensive nursing home care, and some of the services provided are, you know, home delivered

meals or job training which we'll hear from in the next panel or transportation, respite care for care givers, ect.. based on the findings of the gao study, would you say the need for these programs will increase or decrease in the camming years as our aging population reaches an all-time high? well, the need increases because of the demographics if nothing else. the baby boomers are entering their retirement years, and as they get older, there will be an increased demand for these services. we did work for the senate special committee on aging on this topic, on the older americans act, and discovered that the states in the community providing these services are just overrealmed, and it will only get worse. the concern that we had is there

really isn't much sharing of, you know, ways to address services. there's not a lot of targeting of services, so while many people receive services, people who need it the most are not always getting those services, and we think there's a federal role there to help these communities, but just based on the demographics there's a great increase in command. >> and, you know, given the what we're talking about, the effect on the recession of older americans and given we're seeing higher unemployment across all factors, and especially with seniors once jobs are lost, the expansion of the time it takes to get another job, and so with

longer unemployment and lower wages as we're seeing and decreased savings and there's an increase in the reliance on social security, is there not? and i think it's important, really especially important at this time to maintain social security benefits, not only at their level, but to use the cola to increase them. would you agree with that? >> senator, for at least ten years, gao has been very, very concerned about social security because of the future, the instability of the program, but the importance of it to the american people, and it is clearly something that is a decision for congress, and we cannot make any recommendations, but it is something that needs to be thought through very, very carefully, precisely because of

your point that people are so reliant and becoming more so on social security. >> the title of today's hearing is where do we go from here. given your research, what's your advice to older americans who are been particularly hard hit by the recession in what's the strategies they can employ now to rebuild their retirement savings? >> i wish i knew. if you're already retired and you're relint on a 401(k) or ira, relying on the financial markets, you're probably really reducing spending on other things and probably making a significant change to the standard of living. >> and there's choices made sometimes that are not good choices between heat and between medicine and between food. i mean, that's something that we should just recognize that is happening; right?

people are making choices, and that aarp survey suggested the first thing to go is medical care and medicine even though those over 65 are eligibility for medicare. >> a number of senior immediatings that i've held, there's -- it's very, very common for people to only income to be social security for one reason or another, their savings have been depleted, and they require certain medicines and they have to make choices, and one of the things, i'll get into it in the next panel is that the affordable care act is doing -- is closing the donut hole which i think is a very important thing that we continue to do, and i think a repeal of the affordable care act just in that

alone would be disastrous. thank you for your good work. >> thank you, senator. >> before we bring up the second panel, the average income of a senior living in the bottom 20% is $7500. how does somebody in your judgment survive in the year 2011 with health care needs, prescription drug needs, how do you survive on $7500, do you think? >> i think they are probably tremendously reliant on the programs in the older american's act. twex, for meals, for transportation, they are relint on medicare. they are probably getting food assistance through this program. they would be tremendously

reliant on supports like this. >> would it be fair to say if those programs were cut, it would be devastating for people who are just right now living on the edge? >> it would be very difficult for them to adjustment i think that is really our point in our work as we looked at, you know, things happening with younger adults, but with older dulls, they have no -- adults, they have really limited ability to adjust. >> okay. thank you very much, and we'll hear from our second panel now. >> thank you. [inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations] [inaudible conversations] >> we have a great panel here. we have some of the leading experts in the country on senior issues, and we're going to be delving into what's happening financially for seniors, and i'm very, very pleased, and i want to thank you for being with us this morning. we're going to begin with dr. eric kingston, professor of social work and senior research, associate in the maxwell schools center for policy at syracuse university, and also a

co-director of social security works, and a founding broad member of the national academy of social insurance, so we're pleased that dr. kingson is with us today. doctor? >> senator, thank you. thank you very much, senator, franken, as well, and other members of the committee for holding this hearing and for focusing on human beings in particular because ultimately policy, these policies are about the lives of americans, and we lose that too often, so thank you very much. as you mentioned, i'm eric kingson, a professor at syracuse university. i also serve the staff to two presidential commissions on social security including the greenspan commission in 1982 and most of my work is on the politics and economics of the aging and now co-direct social security works and co-chair of the strength in social security campaign, which both members present today on issues in the

programs have been extraordinary supportive of, thank you. just to summarize main points, and i enter the testimony, the written testimony into the record if i may. there's nothing, absolutely nothing, that provides the assuredty of protection, and nothing's going to replace it in the next 50 to 60 years. it is, as the chart shows, and i can talk about that in q&a, the single most important source of income for the vast majority of older people. for older persons with less than $31,000, i believe, roughly, it provides 75% of the aggregate income going into their households. critical, it's not going to be replaced. former presidents, former congresses were wise to establish the cost of living

adjustment, and it's my hope to maintain the cost of living adjustment, and terrorist my hope that in the future, members of congress will also be doing the same and try to maintain the standard of the cost of living adjusted accurately reflects the cost of living changes for older people, people with disability, and others. the weight of evidence as has been mentioned, the wait of evidence concerning the current cost of living adjustment mechanism is that it understates the impact of inflation on older americans. it falls short of the assuring that older americans maintain their purchasing power no matter how long they live because it does not give primarily sufficient weight to the impact of health and health care cost increases on these populations. the alternative cpi or the chain cpi or called the sue perlative

cpi, called by some members of the super committee and has been discussed in the deficit reduction discussions, that alternative simply does not pass the smell test. it would only make a situation we have today worse. we are not adequately in my opinion or the opinion of others adjusting for inflation. today, the chain cpi, if implements, will further reduce benefit, and a woman who retires at age 65 retiring at 75 gets a benefit of $7500 less in real dollars, and at age 80 $it's 950, and at age 95, it's roughly $1400 less than it would have been 23 the chain cpi is put into effect.

the consumer price index for the elderly which the older american's act asked to be developed by the bureau of labor statistics, americans over age 62 is a far superior measure of inflation, but, it, too, is less than perfect, but it's better than what's in play today. the -- in terms of the impact of inflation of older households, the public would be welt served if the cpie were put into effect and if congress requested further development and testing of price index sighs. we have an interest in an accurate cpi, democrats, republicans, all have an interest in that. the problem is i think today we do not have an accurate cpi. i think if we get a more accurate cpi, it would, in fact, increase -- not increase, but adjust benefits. we don't want a national policy that says the longer you live,

the less purchasing power your social security has. that's what we will have if we implement the cpi, the chain cpi, and it is also arguably what we still have today because the current cpi does not fully adjust for it. the implications, by the way, with the chain cpi and the ssi program are more interesting because it both cuts benefits in the beginning before people get benefit, and it also cuts their benefits after that. whether implemented in 2011 or 2021, it has changes the president made that there would be no changes to social security benefits affecting people 55 and over. it's bad policy. it's also terrible public relations. this is a social security -- social security is a promise. it's a promise americans expect their government to keep, and this is true across all political spectrums, across

political spectrum, it's true for tea party households and union households. americans are not easily deceived, and if congress chooses to implement the cpie, umghtly, they're understand in terms of social security over ten years will take $121 billion directly out of the pockets of social security beneficiaries. who will understand that their government has left them down? it's very important that your casting light today on this issue, and it's very appreciated that you have put this panel together, and we're delighted to assist in any way possible. thank you. >> thank you very much, dr. kingson. our second witness is gail. she's a vermont resident who lives in a very rural part of northeastern vermont, and what she's talking about are some of the struggles that she's had over the years which i think

reflect the struggles that millions of people her age had, and she's also going to talk about the benefits that a older americans act program called ccep has had in turning her life around. ms. ruggles, thank you for being with us. >> good morning, and thank you for inviting me to testify. it's an important issue to me too. i'm gail ruggles, 61 years old, the administrative assistant for a growing research and development firm in northeast vermont. for the first time in many, many years, i'm beginning to people economically self-sufficient. three years ago, it was a different story. i was gainfully employed since 16 years old in lower level jobs. when i turned 50, i was divorce the, raising a 5th and 7th grader on my own, and i wanted to be a better role model for

them. i met with a financial aid rep at the college, went back to school, took me awhile, but i graduated with a bachelor degree in liberal studies. i was 56 years old, ready to get back into the working world full time, but something weird happened in five years. people started looking at me and seeing this thing called "at your age." it has a dirty feel like i was used up, a has been. i was still me. i was worried going back to school was not a good idea. i was deeper in debt because even though i participated in work study, i maxed out my student loans to pay my monthly bills. i searched the papers for jobs, but when i saw something i considered answering, i thought, yeah, but who wants me at my age? i lost sweep. i turned the thermostat down and we were cold, ate cheaper and cheaper food. i told the kids sometimes i was

hungry. i gained wait from poor eating. i looked bad, i felt bad. i felt like i was a failure. within six months of graduating, i was working five part time jobs. i did substitute teaching when i was called. i picked up books from the town dump and sold them. i sold parts for a friend and e bay, did freelance writing, and tax work in tax season. the economy hurt me like so many others. the car was on its last legs, getting behind in my mortgage, and other than an understanding banker, i was afraid of foreclosure. in three months, it was springtime, big deal, then the electric company could shut me off. i went to a food pantry, and a lady was checking off names, and i was so mortified i took my groceries, got in my car and cried and never went back.

i was 59 years old, and i reread my social security statement like wasst it was the holy grail. i wanted to make it to 62, pick up a chunk of social security and combine it with all of my five other jobs and make end meet maybe. i was afraid of what would happen to me if i -- what would happen to my kids if i couldn't support them. i just wanted them to get through school, and i didn't care what happened. i knew i needed help, but didn't know where to get it. the turning point for me was in january of 2009. i went to a thrift store to get a coat, and i said i was looking for work. i made a joke about being someone at my age. she said, how old are you? she handed me a brochure and the program sounded too good to be true, but i called anyway. i got to tell you, i don't like public aid offices or defending my life's failures for a handout. the people of vermont associates

were different. they really cared # and really want the me to make a better life for myself. they took the time to explain to me the duality of the senior community service employment program, and they placed senior workers in paid training positions in c3 organizations. i thought it was brilliant. community people helping each other. i was assigned to train at the office of the hawks little native american nonprofit group. this was a 20-year-old organization run by volunteers. i set up their files, put their finances in order, started to catalog their library and the chief started calling me the clan secretary. i said, hey, i am good at this. i told my soup visier i want to write grants to fund the library. it was weird, but we worked together to make it happen, and i took a grant rating workshop

in bos p. it was a key addition to my resumé. as part of the program, vermont associates holds monthly training and employment meetings where specialists teach us to rewrite our resumé for today's employers, a really new skill. they taught us interviewing skills, how to create a portfolio. at one meeting, we had a make a list of skills we had, and i can do a lot of things from suing to cleaning septic tanks. i have skills to be used in the real job situation. in early november, i was helping a friend dealing with a tax issue, and i met him where he worked. his boss let us use his office. i saw stacks of mail, folders, and papers everywhere. i thought this guy could use me. i was confident that i knew how to take care of an office. after all, i was doing it for eight months, so i gathered my courage and asked for an interview with the owner.

he didn't know he needed help, but he was not convinced to hire a new staff employee, but i had oje, an employer incentive program, and it stands for on the job experience. as it turned out. the combination of skills i 4 during the training and the insenttive together landed my job. it was up to me it keep it, but that was december 2009. it's october to 20* 11. i got a raise in january, i have insurance benefits, vacation time, and i invest in a 401(k). this gave my things welfare never could. i have training opportunities and gave me confidence in my abilities. ultimately, the steppingstones to be self-sufficient. i don't think about collecting social security at 62 because i don't have to. i'm building a stronger retirement. they helped me turn my life around. it's a program that works. thank you.

>> thank you very much. our third witness is dr. heidi hartman, president of the washington's institute of women's research founded in 1987. she's research professor at the george washington university, and thank you for being with us today. >> good morning, mr. chairman. it's a pleasure to be here -- >> talk close closer to the mike please. >> i have to turn it on. thank you. it's a pleasure to be here, and i thank you for the opportunity to testify. in addition, as you said to being president for the policy research, i'm a labor economist with a ph.d. from yale university. i wanted to share recent research and acknowledge the support of the ford foundation, the rockefeller foundation, and the andy casey foundation in supporting our work. briefly, our studies show seniors were hit hard by the recession. their income from assets and pensions fell, and they are

making up for that by working more. fortunately, social security is there for them making up a larger share of their income. at the same time that other sources declined. among all the age groups, only the elderly did not see an increase in poverty during the recession, and it's aftermath -- its aftermath, and this instability is the result of the important, and important with the lifetime guarantee and cost of living adjustment. as a result of the recession, more americans are worrieded about having funds for retirement, and few feel they are saving enough, and many borrow from their retirement funds to deal with the slow recovery from the recession. ..

as we have heard from the poignant testimony the assistance with job training and finding employment is also critically important as his continued long term unemployment insurance benefits. i would like to illustrate the major points of research. first, older americans are relying more on social security. first in the full testimony with all the figures, 2.5 show that women's and come from all sources is lower than men's income and women therefore rely on social security more than men. this is figure six in the testimony shows for all women 65

and older the share of reliance on social security for 80% or more of their income has grown, four percentage points since 1999 to 15%, so in other words half of all women 65 and over are getting 80% or more from social security. the increase has been greater in the recession and recovery period since 1999 the share of men 65 and older greenly on social security for 80% or more of their income has grown by six percentage points from 29% to 35%, so that's one third, more than one-third of all men who are now relying on social security for more than 80% of their income. the period from 1999 to 2000 - course included two recessions that 2001 recession and the gao testified mentioned at the start of the second recession older people were not in a term of

their assets because most americans never really recovered from the 2001 recession before this much bigger recession hit in 2007. so we have another graf in the fall testimony that shows the older rely on more social purity than the older and minority rely for larger shares of their income than do whites. second, i would like to point out in the next graph something of the gao also mentioned that social security has been remarkably successful in this recession and preventing the poverty rates for older americans from going up. as we can see those are americans 65 and older the rate fell between 2007 to 2010. but you can also see that the age group characterized for them the poverty went up for those 60 to 64 that's the blue line their poverty increased during the recession, and especially for

those 55 to 59. the red line still increased during the four years of the recession and the recovery and this reflects the fact they are still largely in the labour force and the labour force is simply not providing the jobs. again, the rising poverty rate reflect the difficulties older workers are having on the market and it shows how important it is to create jobs and provide job training for this age group. a third time want to share some findings we did from 2700 americans in the next chart and looking at how people believe they will or will not have adequate savings to maintain their standard of living in retirement. we ask them to compare their view to what they held before the recession and the drops in the confidence that their savings will be enough to maintain their standard of living are at amazing. for women ages 45 to 59 on the

blue line showing a severe drop, 52% before the recession felt their savings would be adequate now only 25% to and once again women have less confidence than men and a greater drop in confidence as a result of the recession. once again, this age group is an age group that is a risk and therefore i think i would just conclude with the notion that these programs such as described to take advantage of are extremely important to continue. if we are going to prevent poverty from increasing the as this generation retires we have to do something to strengthen their employment opportunities and their ability to save and build for their retirement. thank you very much. >> thank you very much, dr. hardman. our final witness is dr. sandra

najaf and senior vice president for economic security of the ed national economics on where she oversees programs to the economic well-being of 5 million vulnerable older adults by 2020. prior to joining, she served as president and ceo of the richmond childrens foundation. thanks very much for being with us. >> thanks, chairman sanders. my fellow witnesses and guests on behalf of the national council on aging i appreciate the opportunity to testify today. ncoa is a nonprofit advocacy service organization headquartered here in washington, d.c.. ncoa's mission is to improve the health and economic security of millions of older adults, especially those who are vulnerable and disadvantaged. ncoa is a national voice for older americans and the command organizations that serve them, and working with nonprofit

businesses and government ncoa develops creative solutions to help seniors find jobs and benefits, improve their health, live independently and remain active in their communities. senator, throughout my career i've examined the issues that we are discussing today from a public, private and non-profit perspective but my expertise is not the focus of my remarks to read today i am an ambassador on behalf of the millions of older adults who struggle every day to pay for food, medicine, utilities and a place to live. my eighth remarks will give a voice to the over 13 million older adults in the country who are living on the edge, just one health incident, one car repair,

one nist brandt payment or roof leak or lay off from poverty. people like frank from st. john's vermont food shares william one paycheck away from foreclosure and bankruptcy. struggling to make ends meet i went back to college at the age of 59. i graduated at the age of 61 and continue training in my career field wearing a new valuable skills but can't seem to get ahead simply because i'm so strapped with debt. from warsaw kentucky says i'm a 72-year-old female getting by on $650 a month in social security. i'm living in a senior citizen subsidized apartment complex in rural kentucky. i need my medical benefits and food stamps so that i can make ends meet every month.

i am someone's mother and grandmother. struggling to make ends meet, many low and moderate income adults are either rethinking retirement plans and extending work or her returning to the work force, only their -- often their only option. as markets as eugene and oregon put it, my 83 year old mother is so pressed economically that she has had to go back to work in a part-time job. with little cash many older adults in the country today are balancing their budgets on credits, for going necessary medical care, and letting her of the bill now. the past year ncoa launched a national video advocacy campaign called one of the way which gives voice to older adults who are struggling financially. working with over 14 states and

local organizations including many strong partners in states like vermont, kentucky, iowa, maryland, north carolina and pennsylvania, one of the captors stories of seniors to raise awareness and advocate for policy change. the one away campaign shines a spotlight on the fact of the golden years are not so golden for many adults. despite the struggles, they regularly suffer in silence. and the courageous few who do reach out for help often find a system that is ill-equipped to respond to their needs. of course family caregivers and friends play in a central role in helping older adults, but the needs of older adults are facing today are often too complex for family and friends to have the expertise to assist them. with their retirement of over 78 million baby boomers i have

of us, ncoa believes the pending reauthorization of the older americans act provides a key opportunity to initiate important changes. we have three specific recommendations for the older americans act this morning and i will highlight them very briefly. first the older americans reauthorization must improve the coordination of existing resources and in power older adults to access and navigate the range of public and private support that are critical to increasing their economic security. with the growth of the older population and other economic struggles, the network organizations across the country are experiencing escalated demand for the services such as job training, help with applying for benefits and subsidized meals but feel strongly the authorization should remove

barriers and strengthen opportunities for the network to better coordinate existing federal, state, local and private resources through a comprehensive approach to elder economic security. second, the older americans act reauthorization should define economic security and it explicitly stated as an objective of the older americans act. it should evaluate and replicate comprehensive approaches to economic casework and assistance in. although the economic security has long been an applied goal of the older americans act the recent economic downturn and its negative impact on the housing employment and financial markets have made it an even more pressing matter for older adults. the agent network must define a

goal as a benchmark. the term economic security should mean access to assets, income and community-based support necessary to provide for basic needs. at a minimum of the measure must be geographically based, taken into account life circumstances and ensure that an individual can afford housing, health, nutrition, transportation, basic household needs and, financial resources and long-term care. these are based on the altar economic security standard index or older index created by the opportunities for women and the gerontology institute to read the third recommendation is the older americans act must modernize and protect training and employment assistance for

the mature workers including the senior kennedy surface employment program it at the previous witness talked about the importance of that program and we feel very strongly that it should be expanded to meet the needs of an aging work force. finally, we cannot forget to strengthen the foundational will cut social security, medicare and medicaid play in ensuring economic security. we have specific recommendations, center, that we have included in the papers and i would be happy to elaborate on of those. but very quickly i would like to close with a story about mrs. perry in baltimore who worked hard, wanted to retire at the age of 70 and found herself in a position where she wasn't able to do so. she went to the cash campaign in baltimore which is an economic

security center and as a result of the services and support we were able to provide her was able to get her life back on a path of economic security. so thank you so much for the opportunity to testify today. i would be happy to answer any questions you might have. >> thank you very much. >> him a want to divide my questioning. the good news is we have you in front of us and senator frank and and i can ask you a number of questions and get into some debt on these issues. one area i want to focus on is in fact the social security, and i want to start with dr. kingston on that. doctor, when i'm back in vermont many seniors come up to me or to look for my office and say we don't understand how the government concludes that there has been no inflation in the

last two years that we are not getting a any colder in the last two years when we are paying more, health care costs we are paying more for prescription drugs, more money is coming out of our pockets. are those seniors in vermont around the country wrong or are their perceptions corrected? if you are a senior in america today you are paying more of pocket than you used to. >> those perceptions are correct. it wasn't given as you know, senator, in the last two years as a matter of law and often a decision by the president or congress. it was a function of a spike in the cost of living around 2008 when the prices spiked it resulted in a very large call and come up 5.8% and since then prices went down, colo wasn't given and for many seniors that's very problematic and the

reality of people on the ground is yes, prices are increasing. they know their health care costs are going up, the no out-of-pocket costs are increasing and fuel costs have gone up. so correct, yes. >> as you mentioned in your testimony, there are some folks here in congress who are saying that in fact the current formulation is too generous. so generous it overstates what seniors should be getting and we have to move in a new direction to trained cpi which as you indicated in your testimony would mean significantly lower in the years to come. can you comment on that? >> some members of congress and of the press seem to believe that giving seniors two years

was giving them too much. so they see the need for reducing the cost-of-living adjustments to this technical change. i can go into the technical aspects of it the bottom line is the econometric measure that they would put in which would change the way we measure the consumer price index. nobody can say i believe with a straight face that it is being done to really improve the accuracy for seniors and people with disabilities. it's being done because -- it's being done to cut social security, pure and simple. $121 billion would come out of the pockets of seniors and veterans because veterans benefits are attached and another 9 billion out of others it would also increase payroll general revenue slightly but

would place the burden mostly on middle-income and lower-income people buy the changes the would take place in the tax. >> let me just go right down the line from ms. ruggles to dr. hartmann and dr. nathan. what do you think a reduction security benefits would mean for seniors in this country? ms. ruggles? >> the seniors of a deal with and that i talk to at the vermont training is to see its were terrified plain and simple to expect to live on the dollars and cents that was in their earnings statement which unfortunately we no longer get. but their standard of living is the has been working adults and all of the minds of these meetings with, they were working adults. and they were not waiting for a

handout. they knew they couldn't survive. >> dr. hartmann? >> in the survey that we asked retirees the challenges and they would face, one would be not having enough savings, going to a nursing home not being able to pay for health care but the single thing they were the most afraid of is the possibility that social security benefits would be cut. it's in our full report i can send you. as you can see from the poverty data on how many people rely on it for such a large part of their income is simply their anchor and cutting that anchor i think would be devastating. >> dr. nathan? >> i concur with the other panelists. 77% of older adults rely on social security. and so, cuts to the social

security benefits would just be devastating. you know, the out-of-pocket medical costs are increasing and as it is now seniors are just in bye year straits. so the impact would be just tremendously devastating. >> senator franken? >> thank you. this question is for pretty much anyone on the panel. because of the affordable care act, seniors who purchased brand name drugs in the doughnut hole now this year are receiving a 50% discount on those drugs as the fall received minnesota seniors over $3.5 million in drug costs this year. since medicine in such a huge expense for seniors, it seems to me this provision in the affordable care act is critical to seniors economic security and then disappear to be implemented

by 2020 virtually would be eliminated. would you think the effect on seniors with the of the reform were repealed in seniors had to go back to paying the full cost of their prescriptions drugs? in the doughnut hole? >> very problematic because it would be an increase. it's interesting even the 23 per cent was mentioned for seniors who are in reasonable situations many of them as they age in the doughnut hole what in fact pull money out of their pockets in the future the enclosing. i can't resist this, senator

frank and you have a marvelous chapter in your book on social security that everyone should read and i just thought i had to add to that and it is assigned to the students and its insightful and very correct. >> do you assign them to buy the book? [laughter] i'm sorry i haven't helped -- i copied and hand it out. >> we will talk leader. [laughter] >> i would like to follow-up on this in terms of mr. kingston. we saw on the chart may be in the testimonies and i apologize i had to leave for the committee going on at the same time. as you get older you get more and more reliant on social security. is that because your savings runout?

if you hadn't come because you are working year-over-year and you're in parliament that goes away as you get older, your medical costs tend to go up? so this change would sort of exacerbate that problem. am i correct it seems to me that colin becomes more and more significant as you get older and rely more and more upon social security? >> that's correct, sir. and getting it right becomes more important, too for those reasons as people age, those who were able to work oftentimes leave work to have hired a health care costs. often as you said, and we see transitions by the loss of

spouses of those who are married and we see that the assets of people are not protected in the interest rates. the one mechanism -- the one thing we have that's largely protected against the loss against inflation is social security. it's so critical to keep that, and it was so correct for the congress back in 1972 to implement it and say that national policy should be that no matter how long someone lives, the social security benefit maintains its purchasing power. >> in a way of the harder things get in the sense of more medical costs and loss of income, the drawdown of your assets many people who are now living well into their nineties or into the

hundreds probably didn't expect to live that long. ms. ruggles, think you for being here today and for your story. in the testimony it says when you went to your appointment at the vermont associates the staff made you feel comfortable. assuming they were amazing. they really were. it was a small office. it was furnished. one of the things that amazed me is when i went and i was the only one with that appointment and usually in the office were told to be there at 11:00 and there's 20 other people there at 11:00. five or six hours later you might get in and you might not put my appointment was for me only. they were very efficient in what they did. they placed me with -- to give the skills to match what i both like to do and do was really good. >> and they explained at scs

that it wasn't a handout, it was a hand up, and you were aware of that is part of a law called the older americans act and its full of similar programs that give seniors a so-called hand up. so i just can't underscore the importance of the reauthorization of the older americans act, and is their anything that anyone here would like to say about the older americans act in terms of what we need to do in the reauthorization? >> i have a simple comment, and that is in my observation an ounce of prevention is worth a pound of cure. if you can make a senior citizen

self-sufficient, they are not going to be on the dole. i was a poster child for her one away program. i really was. i run away from everything. from having my lights shut off, one away from losing my mortgage, losing my house. the fact is if all those things have happened, if i had dropped off that one away cliff i would have been totally dependent on a system for food stamps, shelter, what ever. my kids would have been with me on my coat tails i would have been raising another generation of welfare kids but instead i'm showing what you can do and i am proud to say one of them is now graduated college and the other is on his way to beat >> mr. chairman, thank you. >> thank you. >> let me start with dr. nathan and head west. we talked a little bit about

cola and some of you have touched upon this issue of economic security and what that means. when i read that on average people in the bottom 20% quintile are living on $7,500 a year, that is almost beyond comprehension. i just don't know how people do that. so say a word about that. how does somebody survive on that kind of a minimal income. and second, more broad comment, and i know it very is depending on the location of the country that you are living in, in vermont and minnesota it's cold and people spend a lot of money on heat in other parts of the country that may not be so. food prices vary. but dr. nei fin, talk a little about the issue of economic security and what is happening to people living on seven or $8,000 a year?

>> senator sanders, chairman sanders, anyone living on $7,000 or less each year, as i stated previously, is living in a state of economic deprivation. no one can provide for their basic needs and achieve a certain level of economic security on that income. part of the problem as i stated earlier is the way that we have such an outmoded measure for poverty. the federal poverty level in 2011 for a single person was a little over $10,000 a year, and that is extremely low. so we are talking about income that's $3,000 less than that. from the standpoint of economic security, it would be impossible for someone to achieve that on

that income, and when you look at the geographical differences, $7,000 a year in san francisco it is even worse. so, -- >> people are living on minimal income, so these are multiple people in our country who have health care needs can't get around how do they survive, what do we talk about talking about economic security? >> i think that for very low-income people i would hope they have found subsidized housing. but many older people do with low income is live with other family members. they cannot afford to live in their own household. public housing is extremely important at such low incomes. so any programs that can increase housing assistance for elders are very important. about 8% of seniors are on food stamps so they are receiving

health through food stamps. as you know they may also be rep through ssi. we do have programs to assist people and not all of these assistance programs are shown in the incoming data. the poverty data is not noted for many reasons but among the poor elders are those who live alone and are the longest lived which of course many women but at older ages most men are actually still married but older ages most women are not married. they are not able to remarry. there are fewer men and around and they are living alone and those are among the most deprived our older women. >> what you're saying is many of the lowest income seniors are dependent on the federal program with its affordable housing or food stamps. let me ask a simple question what happens if those programs are cut?

>> a complete disaster. people can try to go to food pantries or rely on charity from friends and neighbors and churches conference at neighbors are going to try to do as much as they can, but most of those groups are actually relying on the federal program to give assistance. if you drive meals on wheels you are volunteering your time with the meal is coming from a federal program. so i think as much as we would call upon our volunteers to help if the federal programs disappeared would be very, very difficult. >> ms. ruggles you live in the northeast kingdom which is a very rural low-income community in the state of vermont read what is your observation about the seniors and their struggles economically? >> i have seen seniors gives away or put down their pet because they can't afford to feed them. i have seen seniors close off all but their living room and use the oven to heat the house

and turn off one utility in favor of the other. they don't use whites. they go to bed when it's dark and get up when it's light. if it's a gray outside, too bad. they don't have the money for electricity. i've known a lot of seniors in my area that have gotten together one will give up their house and go live with another to read you just start getting things up. cupule things we've gotten used to all of your life. you don't shop for new clothes, you don't get your glasses fixed. you're supposed to take a medication seven days a week so you take it for four days so you can stretch it out. you decide which is the most important medicine and you don't get the others refilled. i of seen her go to the hospital twice in the last three years and it gets worse. >> the point of this hearing is

to raise awareness on those issues because the story is large a different degree being pushed under the rug. we have a lot of seniors in urban areas and rural areas and they are desperately trying to maintain their dignity and hang on and i don't think we know that as a nation we haven't heard about and i think until we know that it just becomes too easy to stand up we are going to cut social security and raising the eligibility a few years what is the problem with that. cut back on medicaid and the meals on wheels program we can tighten that a little bit of a i don't think they know the cost of that. thank you for a much for your general testimony. dr. kingston? >> you are so right, senator. we don't see people. there is an amnesia so

problematic today. we don't remember things, we don't remember the poorhouse or with the world was like before we had social security medicare and dairy concern about the bottom 20% but i'm also concerned that we have a crisis coming down the road among baby boom coleworts and people who follow in many ways that is what we are fighting for to make sure we have a retirement system that works for them and we have people that have lost housing, lost equity, lost pension protection, lost jobs, have not seen their wages increase moving into retirement and they don't have a lot of time to make up and part of what is happening i think is being middle class it implies a sense of security the sense that you can deal with the difficult times that might happen but still basically be okay. we are squeezing the middle class and shrinking the middle class pulling that security away not only from the very poor who

never had but from the hard working people and even the upper middle class it is a world we have to deal with and it's for that reason i'm just pleased to be here, proud to be here because i know you are asking the right questions. >> thank you. cementer franken. >> i'm glad, ms. hartmann, you brought up the fact that very often as these churches who are doing the work on meals for wheels or something like that people don't realize that that is part of the older americans act. that is the funding that is coming through so it enables the churches to do that job and to do a wonderful job as they do and as many volunteers so it is really leveraging the older americans act and many ways it

is a good use of funds because it enables seniors to stay in their homes and not have to go to a nursing home, which is much more expensive to everybody concerned, and not what they want to do, what seniors want to do. so i think you for bringing that up and i know that ms. najaf in the national council on aging has just launched an older americans act survive defeat to support drive for members of congress to commit to strengthening the older americans act during this year's reauthorization. how many members of congress have joined this dr.? >> so far, senator, chairman sanders, the aging committee have provided statements of support. we are delighted to do that. >> i am committed to those that

have been a big part of what i'm doing in minnesota in terms of listening sessions and i am committed to strengthening the older americans act and this legislation called the home care consumer bill of rights that would put in place additional protection for seniors that receive home and community-based services. my bill would expand the long term care ombudsman program to serve seniors in their homes as well as guarantee that every senior receives home and community-based services if protected by the home care bill of rights as they are in minnesota. does that sound good to you? >> that sounds wonderful. we are aware of the work that you've done with your constituents and recommendations to strengthen and improve the older americans act, and we deeply appreciate your commitment and support.

thank you. mr. kingston, one of the parts that has been touched on a couple of times this far, the change in the collapse of the real-estate market has had an affect on seniors because traditionally seniors have had this sort of nest egg in a sense in their home and push comes to shove they could sell their home, and the housing market today is such that that nest egg has disappeared in many ways and some seniors or even under water in their mortgage so that option is gone. so we are really talking about the most vulnerable americans now at a very vulnerable age as they get older and older, and as

we talk about this changed cpi, how much do you say that would take a year from someone with 65 to 20 years later how much? >> in the testimony we used an example of a hypothetical woman who turned 65 today and she's worked her life, legal secretary, move forward in that time ten years out say she is a benefit of around $15,000.10 years out she loses about nine -- $600 that year. 20 years out, she loses about a thousand dollars that year, 900 or a thousand dollars and further out, she loses about 1400. that is in real dollars adjusted for inflation. social security benefits are modest to the average retiree

receives as you know about $14,000 a year in social security. >> and as you sit as you get older your assets disappear and you don't -- you are less likely to be earning and more likely to be using health care services that have some out of pocket. so, we are really asking if we do this for the most vulnerable americans to be sort of the ones that are observing the hits toward this creating reducing our deficits and creating -- >> we would be asking many people and putting middle class people in yes and we would be doing that -- we propose a

birthday bond perhaps increasing the benefit by 1% like the simpson proposal included a one got to cut three, 45 at age 80, its 85 or so. it doesn't do the job. the accumulative impact on the one i put forward a typical beneficiary if they live to 95 they are losing about $24,000 of real income. >> and at a time when there just is the refusal to ask people who in our economy are doing extraordinarily well, better than people have ever done sort of in the history of the world. and there is an absolute refusal on the part of some to ask those people themselves to make any kind of contribution towards those, toward the sustainability

of our debt, even while we are really setting up a construct where the most vulnerable people in our country will be asked to give. they will be asked to contribute to our fiscal stability and not those who are wildly successful and wildly successful because they have lived in this country and provide their opportunity and provide the infrastructure for them and provide the legal apparatus and all this stuff that those of us who have done well in our society have benefited from. >> we seem to forget that we have moved forward on the shoulders of others and other generations and that part of those shoulders had involved having a good education, having a good social security system and health care, and pulling apart of that is almost mindless in the sense that we have more

and more insecurity in this society the last thing we want to do is undermine the systems and particularly ask the most vulnerable to pay for it. >> i thank the panel for all of your testimony and thank the chairman for calling this important hearing. thank you curious mix before, senator frank and for the work you're doing for seniors and your contribution to date. let me conclude the picking up on a point that senator franken made. a number of wonderful people have pointed out how you, judge a society is how you respond to the needs of the most vulnerable and the population that we are talking about today, they are vulnerable. and it seems to me that at a time the wealthiest people in this country are doing very, very well at a time when our deficit was caused by unpaid war

and tax breaks for folks who didn't need the money, the wall street bailout and so forth, i think that we've got to take a very hard look at the morality and the economics of balancing the budget on elderly people and some of the most vulnerable people in our society. it is the point that many of you have made this morning and i think you very much for your testimony. what we are trying to do is raise consciousness on the issue and in this recession many seniors are hurting and we cannot simply balance the budget on their backs. thank you very much for your contribution. >> thank you. >> the subcommittee meeting is adjourned [inaudible conversations]

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issued last week in the report identified that weakness has existed and key security controls at each of the 24 major federal agencies and

departments. earlier this month defense secretary leon panetta said leaders likely have to consider changes to the military retirement system in the coming years but he fouled one of those proposals would upset the benefits proposed to those already serving. tuesday the house armed services committee holds a hearing on those proposals. to concede that lie of starting at 1 p.m. eastern here on c-span2.

as three-time governor and influence in national politics in the election of dwight eisenhower and richard nixon. the contenders life from the roosevelt hotel in new york city try 5 p.m. on c-span. today the house armed services committee defense business panel held a hearing looking at the challenges facing the the defense industry base. the panel was created last month to identify issues preventing the companies from moving forward with new defense

technology. you can see the hearing in its entirety tonight at 11:20 p.m. here on c-span. in the meantime, here is a portion. >> thank you very much. could you talk a little bit more about the technology of the emerging companies and the technology keeping it out of the dod? we heard in one of our hearings of the regulations that it's very difficult once you have a technology that is now in the open market with our folks providing the the d.o.t. can't sell commercial constraints. you are suggesting people are saying i'm not even going to start selling to the united states government because they are going to capture this and i'm going to be on the end? >> this is one of the thorniest topics on the landscape in terms of the reform. i know this committee and the

congress and the administration have been looking at this topic. we have the beginnings of a lot of strange unintended consequences because of the way the policies have been put into place. they've been put into place to prevent the core american technology from leaking out to adversaries. it's having the unintended consequences to be implemented where companies are afraid to put the technology into the u.s. and are keeping it out site. you are seeing this mostly in the very cutting edge telecommunications technologies. i am aware of at least two instances where the global companies decided to sell off their u.s. related businesses in order to be able to compete globally because it was too difficult. you are beginning to hear other countries about developing products that are, quote on quote, free. when you talk to those companies in the -- csis did a study on these that said we would have gladly bought american had we been allowed to since we were

not to build our own set of technologies. so we have to figure out a way to reconcile a way while mitigating the unintended consequences i would argue those unintended consequences are rising at such a level that it's getting to the crisis levels where addressing this issue is absolutely critical. >> then you talk about cutting off the composition. where is that occurring? >> it's not a corrine yet but as a given to the tighter budget and firemen it's easy to sit there and look at that list and say i'm running ten uav programs. maybe i should just go to one. all i say is 10-8 is probably okay but 10-1 would be disastrous because we are still trying to figure out that technology. where the answer is becoming more evident like it did with the aircraft industry where we settled on a common solution of the single and others it is okay

to narrow down. >> thank you. the department of defense just came out with a report talking about the long term investment, short-term strategic. the report is almost schizophrenic and it talks about those things being important it is going to allow the market to continue to drive our needs or provide for our needs and you see that you report we need some kind of a strategic plan moving forward to keep some of our legacy and some of our core competencies. is that -- did you see the report at all? >> i have. >> and your assessment is? >> it seems to continue to assume that this industry operates like a consumer electronics or the automobile industry and if that is not the case trying to develop a strategy based on an incorrect

assumption, an incorrect understanding of the nature of what they are trying to manage and develop a strategy for is probably not going to succeed. given all the way back, because of the acceptance of that assumption, that incorrect assumption that it's a normal free-market and competition will work the same as it does in the consumer electronics or flat screen tvs, the policies based on the assumption have generally done more harm than good. so, now in fairness to that report they did talk about the service aspects of the defense acquisition as opposed to major weapons systems, and the use of competition may be more useful in the services end of the procurement commesso there is a point to be made there in terms of the way they structured the

report, but still, the assumption about the nature of the industry as far as i can tell has been wrong. >> you concur that in your testimony? >> i do entirely. i think competition certainly ought to be used for those sectors of the industry where it may be effective. electronics is a key area there's not going to be much competition for a nuclear submarine or long-range bomber. there just aren't enough companies in the market. they -- so you can't have the classic competition in the core capabilities and i think the challenge for the pentagon is to understand the difference and construct a strategy that is adequate to deal with the differences. >> at some point we will have the folks in the dod and ask why

when it's clear most people who look at look at it as a common sense as the regulator and one u.s. department defense. why do you think in their mind, just kicking the can down the road because they've got fiscal financial restraints? >> i'm just puzzled buy why that has persisted as long as it has. it seems to be a myth at best. perhaps it's just we will get the normal market commercial parts of our industry we think the competition and innovation are very important that we just sort of assume that it's pretty much the same in the defense industry. on the one hand. on the other hand, if you look at the down select from the rfp to move into the development of a program, most of the

competition in this at that point and not withstanding the essentially the direction of paul from the 2,009 reform act which suggested with the secretary defense to try to maintain competition throughout the life of the program it just hasn't been happening and the best exit was for the joint strike fighter. if you go back and review the reasons for secretary gates for not going ahead with that it was basically the trade-off between the real up front to .7 billion or so real cost to develop the engine and the more theoretical of the long-term actually being able to compete to the engines over the life span of that airplane, which they judged as more theoretical and ephemeral and just didn't think it was worth the 2.7 billion.

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