small businesses are aware that when the bank can't because of regulatory issues, they are guaranteed -- our guarantee can often, very often make the difference. .. >> so that we have a consistent set of regulations at the bank so that they can open their doors to small businesses and get some of this money out.

>> hope that will happen. i.c. my time has expired. thank you, mr. chairman. thank you. >> ms. mills, i'm the ranking share of the contracting subcommittee, and lastly congress member of mulvaney and i were able to have a hearing in los angeles. and it was about sba and how it does or doesn't show the business of her area. at that hearing the ceo of pan-american bank testified about his small business lending fund. he's doing the job we want. he's providing underserved communities with small business lending fund should and. it's not easy but they are successful. they don't operate a 7a loan program and he said the reason that they don't is because you need a team of experts to ensure that they need all the requirements to ensure that they get the sba guaranteed, it's expensive enough effective for the bank.

and that if sba find that some requirement isn't met and they will withdraw and the bank is liable for the entire tone. why we teams of experts be necessary to operate and sba 7a loan and what do we do to ease the process for smaller banks like pan-american bank? >> first, pan-american bank is now on our list to hopefully come and do some training and some outreach so that we can perhaps get him into the program. the problem, that you described, we have put forward what we call attend hamp program. what happens is when a bank makes a loan, we have developed that can tap system so they put the right paperwork into every single tab, when they come forward at some point to have us honor the guarantee, if there's an issue, we will know that every piece of the paperwork is

in place. so when we come out and we speak to him we will teach them the 10 tab business and hopefully alleviate the need for the extra costs that he is concerned about. and assure him that we will be able to make a proper payment on that guarantee because all of his paperwork will be in place. we do have paperwork. we do have rules. we cannot make payments on guaranteed if those things are not in place. >> is this a program you have in place, a technical assistance program for the smaller banks that need this kind of training? >> yes, it is, and is run to our district offices. that is one of their primary focus is. >> how often do you withdraw the guarantee so that a bank might be held liable? >> we honor the guarantee and 95% of cases. >> okay. on another topic, something else that we learned from our field hearing in los angeles that microloans are incredibly important, in particular at the

prime program seems to really work, especially now that big banks are now likely to deal with millions of dollars. these microentrepreneurs create jobs for themselves and contribute to our economy and they might start with one or two persons, but before you know if they could be a major country. many of these microentrepreneurs only need 50,000 or a couple hundred thousand to get started. but i understand and sba's 2012 budget you say the prime program is duplicative of the small business micro-loan program, but i believe the prime program is different in that the prime program gets entrepreneurs ready for its own what has a microloans technical assistance program trains already existing programs for growth. and just to give you an example of a prime program success story. two sisters, one a recent college graduate invested in the

business, fashion design and manufacture. at 135,000 but they need to bar 35,000 to help cover their working capital. but they came to prime because the regular banks wouldn't help them. and where would businesses like his turn to if prime is a laminated? >> well first, you are correct. there are thousands of stories out there where prime has helped many, many small businesses with technical assistance. the issue we face is that everybody has to tighten their belts in these difficult budget times. so we have looked for programs where we could execute those activities through other programs we had, or through partners. and it turns out that our microloans intermediaries and our community fill the financial institutions provide terrific technical assistance, and that we felt that our value added was to provide them with the ability

to use our 7a program, get access to capital, and that we would use public-private partnerships and public-public partnerships to work together with him to make sure that the technical assistance, through our entire network of small business development center's, micro-lenders, women's business centers, was still robust and growing. >> well thank you. i would like to get that list of partners you think would help get these microentrepreneurs ready. >> yes, we can do that. >> i yield back. >> mr. barletta. >> thank you, mr. chairman. ms. mills, i represent pennsylvania's 11th congressional district in northeastern pennsylvania. my district has one of the highest unemployment rates in the state of pennsylvania. on september 8, after hurricane

irene and tropical storm lee, we have experienced the worst flooding in history of our area. many people, many businesses, as you can see, have lost everything. many people did not have flood insurance as they were told they were not in a floodplain. as i traveled around talking to the residence there, many businesses were saying they're not going to open again. they just don't know what they're going to do. many of the folks there, a lot of them senior citizens, again, asking what will the federal government do to help us. and what i had to tell them was that they could qualify for an sba loan if you're an individual, alone at 247% interest. if you're a business and you can't get credit anywhere else we would give you a loan at 4%. but if you get credit somewhere else, we will give you a loan at 6% interest.

i've got to do i was almost embarrassed to tell the people back home that, especially after, you know, whenever disaster strikes somewhere else in the world, america, being the most generous country that we are, are always the first to know people. in fact, in the last two years we gave pakistan $215 million for flood disaster relief. no interest, no payback. i don't know about you but i think we should help america and americans first. what do you say that i tell the people back home in northeastern pennsylvania why the interest rate would be 6%? >> well, i'm familiar with your district. and it was extraordinarily hard

hit by both irene and tropical storm lee. and for the benefit of those who are new on the committee, we run already deserve 2000 disaster operators who actually, within 24, 36 hours, are on the ground in these areas assessing damage, speaking with people, co-locating with fema. and we have a two-page application. we do homeowners, we do businesses that are damaged, and we do economic injury. so make sure that they know, even if they didn't have physical damage, but because the area was cut off, businesses suffered some damage or because it is still distressed they can get 30 year long 4% economic injury loan. the issue about the credit -- >> but what about credit elsewhere? >> we are responsible for could use of taxpayer money, and the reason about an uptick is that if there is a private sector mechanism, a bank where they can

get credit elsewhere, then the market should provide it here if they can't, then that is our job and that is where we step in and tried to give the most -- >> i guess the problem i'm having is that we give pakistan $250 million for flood disaster relief. so should i tell the people in northeastern pennsylvania they would've been better off if they were in pakistan than if they were right here at home? i don't know. i think at some point we should take care of america and americans first and american businesses. we can't afford to lose any more jobs. i introduced a bill, these changed my life, this flood. i walk with these people, i cried with him and watched them as they put their life's possessions out on a trip to be taken away. i introduced a bill that would change the way america handles disasters by introducing, it would give them a 1% loan for 30 years, enough to cover our administrative costs. if we could help other people i

think we can help americans at a time of disasters. >> think, i yield back. >> i really welcome your position. in fact, after katrina i try to reduce the interest rate and even provide a bridge alone. zero interest rate. and it didn't happen. i didn't have the support from your side, so maybe this time around speed do you want to get on the bill? i think we can change the way we handle disasters. thank you. >> mr. schrader. >> thank you, mr. chairman. i'm pleased it that some people in the majority party are beginning to rethink having, require to pay for fema reimbursements up front when there's a disaster, real people are hurting. and soon mr. barletta was obviously one of those who was not want to hold up the fema bill, so i appreciate his help. >> would you yield? >> no, i have a limited amount

of time. i want to talk about, i think the successes that the small business administrator has had over the last few years. when i came here, actually tranfourteen at the same time and i was a little bit aghast at the status of the small business administration had been hacked at, cut back dramatically by the previous administration, not just the one before but over the years. it was in total disarray. we had a lot of testimony about waste, fraud, and abuse that we've had several subsequent sessions with the administrator and it looks like things have gotten frankly a lot better. there's a new sheriff in town and i appreciate that, madam administrator. and i think there is some misinformation here. i mean, people are talking about, they haven't been here i guess, but there's talk about what the role of the sba is. and i assume that you're not trying to supplant private enterprise to you're trying to work with private enterprise. if for some reason banks, credit unions, mortgage lenders can't

step in that's where you stepping. so there's going to be some default. there's going to be some defaults. but i think i need to be a clarity. you mentioned it, it seems to me that a lot of the subsidy rates that we have endured, paying back the treasury for quote bad loans, unquote, were under the previous administration's watch. and actually our rate of default since you have taken over is down, even though the economy is worse. you think he would have higher default rates. am i incorrect? >> well, thank you. on your point about the current rates, we've turned the corner on our default rates, and they peaked in august 2010, and now have been reducing each month. and our current default rate over all are actually quite low. are lost rates tends to be under 5% to our default rates tends to

be under 5%. are lost rates tend to be much lower. they are about two points higher than the normal federal reserve credit because we are giving credit where you can't get credit elsewhere. >> i appreciate that. that's the bottom line. you hit the nail on head. we got to get small businesses back in, business of hiring and growing the economy and growing america. and so you take a teeny bit of a risk, and i'm amazed that the default rates are where they are. i also remember, in some numbers on this committee are new, that one of our big thanks to when you took over was well, the process is too bureaucratic, trying to get a loan is impossible, the applications we asked again and again and again, can't you streamline this application process? can to make it simpler? so people can actually get in there and get the loans they need. we also were worried about the value of debt, were a lot a small businesses you get a little start up and then you try to get to the next level, and

all of a sudden you can't get that credit. you've developed some pilot programs or some controversy about that. i appreciate that but i assume they are in response to our direct requests, or am i not correct on the? >> that's correct. so if we look at the small business investment company programs, i do want to thank our team and note that not only did they have a record year, they took the process tournament time for licensing new funds down from over 15 months to five and a half months. >> that is a big deal. >> they're bringing in new funds. they are bringing in some of the best funds, and they're putting more money into those funds and those funds are putting more money into small businesses. we do have some gaps, so we have orchestrated to other sets of funds and other the sbic authority. sbic authority was not being fully utilized. it is a zero subsidy program.

it pays for itself, and, therefore, we want to make sure we put as much money through it as the authorization has. so we have a new impact fund, which is designated to go to areas hard hit. the first one was in michigan. and didn't have a new early stage equity fund which will be launched this year. >> i appreciate your efforts. just a last comment and the remaining seconds. don't have a lot to do with you but i can't tell anyone out there have disappointed i am in the treasury department and the way they are not run as efficient as you, and the small business lending fund having cratered horribly when small businesses needed access to capital, critical time and the regulars were beaten up on the banks, having too much of this type of loan, this was a great opportunity to free up capital. my state, not a single bank got a loan. and a ton of them applied and

i'm sure some are probably endeavor shape and let on, not also in favor discipline in a treasure. i would like to have a hearing with the treasury officials at some point in time, if that's not out of order. i yield back. >> mr. walsh. >> thank you, mr. chairman. welcome. and ms. mills, thanks for coming in today. my colleague, mr. schrader, mention that it's the purpose of sba to help small businesses access capital when they can't do that in the private marketplace. what's sba's mission in 20 seconds? >> twenty-four seconds. >> and access to capital area, we also have disaster operations. we run small business, $100 billion of federal contracts go to small business, and that's just a win-win situation. and we have a network of

counselors, mentors, advisors that are as equally as important as the capital. under access to capital, where the market is functioning, where small business can get a loan for the market, from the market, why should taxpayers subsidize that activity because the market is handling it. but there are many, many small business out there that don't have access and opportunity. and that is what we have been able to step into the market, as you just saw in this credit crisis, and provide that access and opportunity. >> i actually chair of the access to capital subcommittee, and we held a hearing a couple months ago and brought in heads of community and small banks, and ask them pretty directly why they were not lending to small businesses. knowing full well this is where the bulk of a small business gets the capital. and their answer was fairly

clear and it will be direct. our hands are tied. government regulations have made it darn near impossible for us to lend to small business. i'm curious, have you heard the same sort of thing? >> as i said earlier, we work very closely with the regulators on guidance to small business. and out in the field we have the same thing you have, which is that the guidance that has come down from washington has been interpreted more tightly at the regional level. and when we've had these conversations, we have gotten very strong assurance that the regulators will work with us to make sure that the guidance that they think is proper is the guidance that is being affected at the community bank level and in the regional level. we want to make sure the pendulum is in the right place and it hasn't swung too far

back. >> take the pendulum. do you feel that it has swung too far? i can tell you that i have probably spoken to the heads of 20 or 30 community banks in my district in the last six months, and to a man and a woman, they all say it has the last couple of years. they've seen a noticeable uptick. are you sensing any of that? >> well, that's a metaphor the regulators, but our role was to bring it to their attention that we were hearing concerns. and to make sure that they took the guidance all the way down. our job is actually to make sure that we also provide the product that can take some of that risk out of the system and allow them the opportunity to make some loans they want to make, but for various reasons can't fulfill the total risk profile on their books right now. >> but you have heard that concern at that level?

>> we have communicated -- i go out every week. i'm somewhere different in this country, and every week, i have a roundtable of bankers and small business owners. and so, i have a pretty good sense of, that in the middle of the summer i think everybody, small business owners, bankers, everybody, had a moment applause. and we did go to the regulators and have conversations to make sure that everybody stays on the same page and access to capital is within the proper constraints available to small businesses as much as possible. >> if you're out there as you say, and i believe that you are, i'm convinced then that you for the same thing most of us have heard wednesday to small and community banks, that they are suffocating right now. their hands are tied. many of them authored specifically to dodd-frank.

>> dodd-frank will not apply to those community banks who's holding, whose assets are less than $10 billion those of the community banks that are in our district. i'm a member of financial services and i work on dodd-frank. >> and i will close with this, and thank you. i guess they are not convinced of that. thank you. thank you, mr. chairman. >> mr. critz. >> thank you, mr. chairman. thank you, administrator mills, for being here. going back to what ranking member velasquez was talking about, this by convincing that you had at the end of the first quarter of fy11. and then as december it, the precipitous drop in the nevada think the figure she used was half of your lending took place in the first three months for the entire fiscal year. some of the information i've been given is that sba used to come to the congress so you

could get appropriations recover, to weigh the up front bar work fees on 70 program, but you didn't do it this time. and that i've been told that your $500 million of jobsite me that you might have been able to use to alleviate some of the images curious as our economy was going the way it was, why you chose not to ask for that appropriation at that point, our why you didn't use the 500 and jobs act mining? >> i ensure you, we use every penny of that party reduction that we possibly had. >> okay. is the reason you didn't ask for a waiver or didn't ask us for an appropriation to wave, so you could wave the up front bar with the? >> we did with all the up front, although borrowing fees through the end of the jobs act period. and we use every single penny and we're very grateful for it, thank you. >> okay.

one quick thing, and this builds on what mr. walsh was just saying, is i notice in your statement that you say that you brought 1200 lenders back to sba lending. and, obviously, some of my banks, community banks must be over the 10 billion in assets because they are asking and talking about how some of the regulations that they are having to meet are hindering them lending money, or some of the capital requirements that they have to keep are hurting in the way they lend money. i was listening to you as you were saying you can team around him and to banks all the time. time. i could be traced to hear what your suggestions are on the way we can be more effective or help you be more effective in getting money out and gained a small businesses energized. >> well, thank you. i want to make sure that you are properly connected, and i think you are, in your location to all of our resources that are on the

ground. so we have district offices, we have small business development center's, and we have small businesses that we match with banks. to the extent that you come in contact with banks and with small business owners who have concerns, who are struggling, who want to make more small business loans, we can help them with our programs. so we are in high outreach mode, and the best thing to do is send them to us. >> i know you're a minister in pittsburgh has called an awful lot, he's a friend of mine, and i can even tell you were on the sbic czar in my district as well so we are pretty well plugged in. you know, my banks are not talking about having troubles with lending money. it's not just sba money. i have a letter in front of me from one of my banks, but it's the treasury program that mr. schrader was mentioning that

one of the rules to get the treasury loan is that the company has to start to certify that they're not child offenders. it was a parliamentary trick played last year to defeat this bill. an accident included so now they are having trouble lending the money because of this provision because small business owners are a little bit insulted that they have to certify, not that they are not murderers, but they're not child offenders. so i appreciate your efforts. i'm not going to belabor the point. my office is always available if we can get any help that i appreciate the work you are doing. >> mr. mulvaney. >> thank you, mr. chairman. administrator mills thank you very much for doing this to at the risk of repeating what may been said, i apologize for being late, but i want to thank the chairman and ranking member for giving me, and congresswoman chu debbie killed during last weekend valley where tran is 12 is the representative, instead

asking questions i'd like to report back briefly to you on what we heard because it was very educational for me. this was an area that is literally driven by small business that takes up an inordinate size of the economy in that part of southern california. there are very few large national fortune 500 companies, but a very, very active small business community, entrepreneurs, large parts, a large part from the immigrant community. and here's what we heard. we had small business lenders there, small banks, and one of the things they told us was they were doing lots of lending to small business, but no small business lending. they were not using any other programs the war of able to them. we ask them why. they said it was too hard, and he said the large banks were doing it. really what the large banks have done is put together teams of professionals who did nothing but small business lending so that wells fargo, bank of america's of the world, they

would have small business units because it was especially and it had especially because it was so complex. they didn't have the human capital or the money available to develop that area of expertise. so they asked us to please do whatever we could to simplify the process. we also heard that one of the things they focused on is micromini. they do a lot of microlending. we heard some great stories about loans under $100,000, how successful they've been used. when i asked them if they knew about the program, one of the things they said they had looked at it but that the paperwork for $50,000 loan was almost the same as the paperwork for a million dollars loan. the time and investment had to make in setting up that loan wasn't worthwhile. to assess to please take a look at anything, if anything, looking at making microlending somehow streamlined. so that they could do more of these things. this was a large majority of the loans they were issued to the businesses in that area were under 100, $150,000.

we also learned about the difficulties of opening a small business development center. that eric had lost its sbtdc and the recent past and there were a couple of organizations that were interested in reopening it, only to find is going to take at least three years to go to the paperwork necessary to open another, a new sbtdc. one of the things that we suggested, suggesting to you a grandfather process. it was an obsession it was an sbdc that close that maybe could be on a fast-track to reopen. sense of oregon for the process at one point in the past. i guess the last thing we heard was that many of them had not heard of many of the programs that you offer. they were not aware of the mentor passionate mentor pro-comp on it wasn't them even had ever been to the sba website picks i don't know which all are doing in terms of outrage to the

small committee banks and maybe they dismiss it because of their impression is too difficult to work with the sba because past history. i'm not link any blame here. that's not the point of the presentation. but that is the opportunity exist to reach out to educate these lenders because again, the basic message i took what was that they are lending to small business and they want to do more. but they're not using any other tools made of able to them through the small business administration. not a question. a comment back from the field, and i appreciate your attention. i yield back. >> mr. peters. >> thank you, mr. chairman. and administrator mills, it's great to have you here with us today and i appreciate all the sba then, particularly instead of michigan. he mentions an innovative program to engage in the state, and i think you. we been particularly hard hit as a result of what's been happening in the economy, and thankfully the auto industry is responding and has been adding jobs in the area but we all know that it's not just the auto industry or large industry in any particular region that support but the small business

that are in the region that need to grow and prosper. even a key player so i want to thank you for that first off. before asking a couple specific questions i also want to get your sense on a statistic you mentioned in your opening comments that job creation is down by over 1000 i believe is the coach ahead. we honestly are all big live in small business and understand small business is the engine of growth for an economy but we also know job creation is heavily skewed towards startup in order to get that kind of job creation. i just want to get your assessment. you have been a very successful businessperson prior to to position. as to what you think accounts for that, just a result of lack of command in the economy, a very weak economy we are in? or are there some structural impediments like financing? how would you wait those and whether things should we be thinking of as members of the small business committee to address the start of issue in

particular? >> thank you, and i've enjoyed working in michigan with all the great small businesses that are there. we focus on both main street small business and the kind of high-growth small businesses that could be part of the next large public company and employer. we are down 100,000 starts, and that is contributing to part of the employment problem. we do know that access to capital for startup businesses and for small growth amounts for those businesses is constrained. as they say the valley of death has widened. we do have some programs, particularly known we're going to launch but there is still a need for continued focus on getting more access to capital, particularly in underserved communities, particularly in distressed areas, particularly

in places which have not traditionally have venture capital because we know there are small innovative businesses and not for knowers waiting to start up in those areas. >> along those lines, you mentioned the success the chat in the recovery act as result of that, you're able to increase lending considerably which at higher guarantee rates as well as a waiver of fees. i know your activity was up dramatically. evident any analysis as to what is more important, waiver of these are the guarantees? if given a choice as we go forward, how should we wait that as perhaps a program going forward because we know the track record of success? >> that's a very good question. we have done some analysis. we have certainly asked -- i asked at every focus group for a long period of time, and usually i get half of them think it's that he's and the other half think it's the guarantee. so i think the jury is out. >> so we still have to find that

out, but certainly speak the combination actually we think clearly worked. >> certainly the combination works, i guess the thing about the jury is out and i don't know who are in your focus groups. probably smaller companies get impacted by fees perhaps more than anything else. i am very concerned about access for underserved communities. i represent a committee that has an unemployment rate of 20%. you talked about the program bringing large banks and i believe this is it's going to target underserved markets in particular, and i like to do just tell us more, what does it mean by in particular, and how do you define underserved and how are we going to really monitor what is going on with these banks as to the success they're having and hopefully focusing completely in underserved areas but i want to know what it means that in particular. what is your hope for the program and how will you associate?

>> well, well, once again this is a voluntary program that private sector banks came in because we asked them to step up. you each bank has a different set of activities and commitments that they're interested in pursuing. many of those banks have said, have demonstrated that part of that commitment will be around underserved markets. we're going to partner with them. making sure community bankers, financial institutions, and making their c.r. a contributions go as much as possible to help proven programs that will get money in the hands of small business. so it would be a wide array of programs. >> thank you very much. thank you for your time. i think my time is up. >> mr. chabot from ohio?

mr. cicilline from ohio. >> thank you, mr. chairman. administrator mills, it's good to have you. i want to begin my comments about the sba with recognizing the great director in rhode island, they're doing excellent work, and i want you to be aware of that. as you know, the sba has $3 billion in authorized leverage angeles to the sbic program, and each year anywhere between one and $2 billion in leverage remains untapped. i understand the impact investment fund our intended to leverage a portion of that existing and yet untapped authority with the hope of really propelling it into the hands of starts and often there is for capital they need to be successful. and i know there's some stories

that indicate the unmet need for early stage capital, equity finance for small businesses somewhere in the neighborhood $16 billion annually. this is an important issue in my state, and having all of us are trying to encourage new startups and those typically are small businesses. and so there's a particular, you know, just use an example. a constituent along -- of mine, develop an anti-niekro view material that will be used on medical devices to combat health care associated with use potential for savings in health care and improve outcomes in health. they been working with sbi programs including sbic. i'm just wondering if you could explain how the innovation fund an impact investment fund would help the company like that access started to really get to as which is described as the valley of death which is the most challenging time to get to

the place where they can create jobs and grow our economy. >> well, thank you. and as you know, i'm a person who spends quite a bit of time in rhode island. my husbands family is all there. so i know that your fabulous entrepreneurs. -- that you have a this occupant of the sbic fund had a record year and it had a record year in a number of ways. neville and come it had a record year in the financing that went out the door to small businesses. and number two, it had a record year, as you see in the charge in the back of my testimony, in sba commitments to the fund. we would like to fully utilize that the ration because as i said earlier, this is a zero subsidy program, and it directly impacts jobs. we have built a great pipeline of credible funds who are

applying, and they can come into the regular program or they can apply to do an impact fund which is really very much similar to the regular program but it is our way of directing potential investors to areas that are distressed and are trying to turn around and have had a difficult impact by this recession. early stage fund will be run slightly differently. it will be one deadline fiscal 2012 activity, and for each of those two programs we have committed a billion dollars, 200 million per programs per year for five years. so those will ramp up. we are doing it as expeditiously as possible. our licensing time has gone down from 15 months to five and a half months. so we are taking our pipeline through faster, but that said,

we need to get capital into the hands of these terrific private partners. they needed into deploy it out to their small companies. they've been doing a remarkably quickly. i think you will hear that in the next testimony, but we are also doing it thoughtfully because we want to maintain this program at its positive levels. >> will that be acting as early stage equity funding for those two funds? >> correct. our current funds are actually mezzanine funds. but within the early stage there'll be a deferral mechanism where they can essentially the an earlier stage equity contribution. >> i thank you. i hope that the sba will really focus on both innovative and creative ways to do this kind of financing because i think we have a lot of financing tools that were designed during a different age of industrial and manufacturing. we really need have this nimble as in government to respond to

the new a, and have financing mechanisms that provide the support our small businesses, our governors and early stage capital is one of those examples. i applaud you for the and look forward to its results. thank you. i yield back the second that i have. >> ms. hahn. >> ms. mills, it's wonderful listen to you today, and i know while we are bringing forward problems and issues that we heard in our districts, it's clear that you and the entire small business administration is working, i think, you know, daily to try to do what your intended to do, which is really to support our small businesses and try to get the capital into the hands of startups, of current businesses.

and i think you're doing a great job. since i've been on the small business committee i've done what many members have done longer than the come and that's actually going and being with small businesses in my district. i think i'm up to 80 just in the last month that i've met with personally. and i've held roundtables. i've walked to the business' unannounced, and i'm beginning to hear sort of a common theme, which i think you have heard today, which he is, you know, the paperwork that is needed to apply for these small business loans is many times daunting. and as we've heard some of them feel like it's not really even worth their time. you know, as of february of this year the sba preferred lenders can approve loans using the new small loan advantage process. and the goal of this broke and

is expand the availability of small dollar donors by allowing existing sba lenders to make loans under 250,000, using a two-page application. sba has shortened the approval time 10 minutes if the application is submitted online. and from five to 10 days for non-delegated lenders. seems to me that this small loan advantage program is exactly the type of solution that i think small businesses are looking for. what do you think we could do to expand this program and make it accessible to everyone? how can we ensure this preferred lenders are using small loan advantage process for all of their small loan to? >> well, thank you, congresswoman. and thank you for your letter. i know that you met with over 50 small businesses speak its up to 80 new. >> and clearly, you just said it better than i could.

we have a product that we have designed. we are reducing our paperwork, increasing our turnaround times, keeping a level of underwriting to make sure we have risk oversight. they are taking those principles of that product and no broadcasting them exactly as you asked. >> one of the other things i heard from my small businesses was under the loan guarantee program, the criteria that sba has to qualify for the loans is sometimes broad and when they actually go to the banks to access the loan. the banks put on more criteria than sba or requires. one of the issues, while if tasha sba, loan guarantee program doesn't require collateral, we'll see as collateral, when they go to the

bank the banks say by the way, we are going to require that you put a real estate as collateral. what can we do in working with the banks that are lenders, you know, do not add criteria or add restrictions to these loans when the sba is clearly not say these criteria forward to small businesses as a means to qualify? >> we work with about 5000 of the 8000 banks. they are our partners. so the first line in the credit process, generally the bank, the bank will make a credit decision. and because they are on the hook for summer between 50 and, you know, 25% of the loan as well. so they have to have an

independent credit decision. we have tried to coordinate, to work paperwork reductions, but we have to make sure that both of us are satisfied in risk oversight because we share risk. >> well again, i would urge you to maybe work with some of our partners out there. because many, again, that clearly stops any of these small businesses, these startup companies from accessing the capital. said you could work within on may be trying to keep their criteria at least the same as yours. and the last thing i would you say, and i wrote to you in my letter, i would like to invite you to sunny southern california and come to my district. i know it would be a great honor to have you and i think they would be a lot of folks out there that would really enjoy listening to you and really giving more about the programs that are available to small businesses.

, during the winter. >> mr. richmond. >> thank you, mr. chairman, and thank you, secretary mills, administrator mills. one thing, and i will ask out of order, but we are talking about making sure that small businesses have the capital and access to capital so that they can flourish and they can fulfill the mission and they can continue to employ people. which is an important aspect of it, but the other aspect of it, demand. how do we increased demand so that those businesses can continue to sell their products, widgets are gadgets, whatever it that they are doing? >> well, what we've seen is in the small business committee american jobs act, we want to

put more cash in the hands of small business right now because while we have seen is that when they have more cash available such as in the payroll tax deduction, reducing the payroll taxes, they have to pay in, they can take that money and they could put it into advertising. they can put it into inventory. and that creates more demand for their products. that creates more jobs, and then they can come for financing expansion. that's one of the first things. >> also, let me thank you for your administration, come down and participate in small business that we had. over 347 small businesses sign up. i had a chance to talk to almost 120 of them on the opening night. and many of them are singing the praises of our local sba office

in terms of outreach and assistance that they give. and that the new push which i think is very important, helping them understand that 95% of the consumers in the world are outside the united states and china help them get to the point where we can sell our goods over there, and a few of them are taking us up on the offer of attempting to do that. and many of them left small business fair with contracts with new vendors. so that was a very good thing. two issues into suggestions they gave to me and i think we submitted them to you, and i would just give them to you. when the president announced expedited pay for contractors working for the government, they wanted to make sure that trickle down to the subcontractor to make sure that when the prime contractor was paid, that they

don't unnecessarily hold of the subcontractor's money. and i think is a program may be 10 years ago where the prime contractor had to indicate that the subs were paid or would be paid in a short period of time. so they expressed that would help, because if they don't have access to capital they don't have the time -- well, they don't have the resources to float the payroll and all those things, waiting on their payment. the other suggestion that was made was that, i'm sure these a lot of members of congress as workload, was if we could put the status of eight a. and other programs, application process online, almost like colleges can do now, where it they can log against a secure accountancy of all of the documents are turned in, see the need anything else, see if they are in the background check face, or whatever. a lot of times because if they know, then they can make better

decisions. and i think that now with technology we can offer that so that they can keep up with that. other than that, i don't have much else to offer. i would just again thank you for what you're doing and giving an opportunity to offer anything that you think you can need are what we need to do to help. and i will say that we are looking forward at least in louisiana to working more and maybe another round of opportunities which we were not successful in the first round. so maybe we can look at second and addition around to see if we can't participate. thank you, mr. chairman. >> mr. coffman, you have one more? >> thank you, mr. chairman. administrator mills, i think you had mentioned the issue about banking regulations and its

impact on small business. and your view was, as it filters down, that at the top, that there's certainly clarity and balance. but as it filters down perhaps there's not balance. and i just want to say that there isn't balance, and i think it has hurt small business lending, particularly the kennedy bank level -- the community bank level where you do have a wide latitude for which the regulators can go, but yet they obviously take the most conservative approach just in case anything ever happens, that the fingerprints are not on a. that you have performing loans out there that are being downgraded, causing these institutions to increase their capital requirement and pull in their ability to land. and i just think that is a huge

issue, impacting small business at the community bank level. one thing, i was visiting businesses last week in my district, and you always wonder did you get the right cross-section. but it seems like there were some signs of life. it seems like although we felt like we are still skipping along the bottom, that the firms that survived this seems to have adapted. some adjusted their business model. they made changes. and adding some employees, i visited a manufacture it in probably three services companies last week. very different picture from 2009 where the economy was in free fall, and the small businesses were getting their credit lines just got off. i mean, everybody was just going down. and so, and so that was tough.

probably a better picture next week when i'm doing job here back in the district, because i know there's a lot of unemployed folks who have been out of work for very long time. and last point, if you just respond, and that is, i've had small businesses that are service related companies come to me and they're very concerned about the impact -- these are kind of relatively low-wage employees. one was a dry cleaners who had a chain of dry clean stores but incorporated under the same entity, had well over 50 employees that the other one was a janitorial firm with well over 50 employees to what is the impact on health care bill going to be on their firm and the ability to keep these employees? and i'll turn it over to you then. >> well, number one, i think you characterized it exactly right. we are seeing some signs of life among small business.

we still have, but we have sent a man now and we had to make sure that they get access and opportunity. in october 2008 i was doing i need a loan to save my business. now i hear i need a loan to buy that next piece of equipment. higher that next worker, make that next expansion. and that is good news, that that also means we have to be there with axes and opportunity. >> let me just say real quick, i was able to visit one of them, in fact that he did mentioned was a restaurant that is being built and, in fact, that's within sba loan. so thank you department for that. go ahead. >> i would also ask a small businesses to come to our website where we can walk them through the affordable care act. we know that small businesses now pay 18% more than large businesses when that exchange is open. that premium will go down or disappear. so there are many good prospects. there's also the health care tax credit. we have a two on the website to

see if they qualify. and those would be opportunities i would suggest. >> thank you, mr. chairman. i yield back. >> ms. mills, are you recognizing the need to increase lenders in your loan programs? last year you had 2727 total lenders. 1349 made three loans are less. and my guess is that some of the lenders who came into the program were attracted by the provisions of the recovery act. so when those provisions expired i just wonder how many of those letters are still active and making those loans? and the second panel we are going to have the credit union testifying, and my question to you is, what will you do to retain the lenders that are participating in sba's own

programs but also what are you doing to increase credit union participation in your loan programs? >> thank you. credit unions are about 10% of the current activity. we love credit unions and we think they can do a very good job with sba. we are bringing them in through training, through education, through participation, active participation with the association. and on the ground, you're exactly right. we have to work very, very hard now. to make sure that we continue to meet one of our a schools which is active lenders. we have about 5000 of the 8000 banks actually hold an sba loan. but we track how many have made alone within that year. and that's that number that is around 3000, the high 2000s. so we need to keep that number

up, and we are going to be working, you know, we hold later education, land around tables. we our program. we walk them through, do everything we can. so if you have landed in your community, particularly those who are on the ground and know those good small businesses, we will bring them in. that's why we are opening our doors to community development financial institution's have good lending track records, and we want to be there with as many doors, points of access as possible. >> the challenge that i see when it comes to either community banks, or credit unions, is that you need to personnel and they don't have that type of capital. and expertise. so, what will you do to help them? it's just that walking through. just because of the pressure coming from regulators to make

sure that they are complying with credit standards, how do you balance? >> well, as you know we are looking, we have a product for a lender that is only going to make one or two or three or four loans that allows them to use much more of their own documentation. and that product, we continue to streamline so that they are able to come into our program without undue burden. >> okay. ..

[background sounds] [inaudible conversations] [inaudible conversations] [inaudible conversations] >> a live picture from the rayburn house office building on capitol hill this morning. the house foreign affairs committee is convening to hear from secretary of state hillary clinton. she is just back from a trip to

pakistan and afghanistan last week, and this morning she'll be talking about her findings during that visit and u.s. relations with those countries. she is also expected to discuss afghan president hamid karzai's recent comment that his country would support pakistan in the event of a u.s. military conflict with pakistan. congressman ileana ros-lehtinen is the chair of the house foreign affairs committee. we expect this to get under way momentarily. this is live coverage from c-span2. [inaudible conversations] [inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] >> the committee will come to

order. after recognizing myself and the ranking member, mr. bear match, for accept minutes each for our opening statements, i will recognize the chairman and the ranking member of the meddle east and south asia subcommittee for three minutes each for their statements. we will then hear from our witness, the distinguished secretary of state, welcome home, and happy belated birthday, who will summarize her prepared statement before we move to the questions and answers with members under the five-minute rule. without objection, the witness' prepared statement will be made a part of the record. members may have five days to insert statements and questions for the record summit to the length limitation in the rules. and we're getting started right away because we will have votes, and we like to be interrupted because of the democratic process. madam secretary, welcome to our committee. we are pleased to have you here to assess u.s. policy and progress in afghanistan and pakistan. in 2009 president obama

initiated a surge in afghanistan resulting in approximately 90,000 u.s. troops there now. the president underscored the fundamental connection between our war effort in afghanistan and the extremist safe havens in pakistan and defined the goal as disrupting, dismantling and defeating al-qaeda and its extremist allies. in the review the next year, 2010, the president noted that ultimately it is the afghans who must secure their country, and it is afghans who must build their nation. it will take time to ultimately defeat al-qaeda, and it remains a ruthless and resilient enemy bent on attacking our country. but make no mistake, we are going to remain relentless in disrupting and dismantling that terrorist organization. however, president obama announced the withdrawal of 10,000 u.s. troops from afghanistan by this year's end with another 23,000 to be withdrawn by the rather curious

date of september 2012. therefore, madam secretary, we must ask what are we -- where are we in achieving this strategic objective outlined by the president. progress in the fight is undeniable, but our gains remain fragile. on the one hand, the u.s. is negotiating with the haqqani network, and yet on the other we're attempting to destroy the haqqani network. there have been some unwelcome developments since the president's announcement four months ago such as the multiple high-profile assassination of major leaders in afghanistan. turnover to the afghan national security forces remains a senate challenge in some of the key contested areas, and on the counternarcotics front, the united nations' office on drugs and crime reported a 7% increase in opium/poppy crop cultivation cites the link between insecurity and opium cultivation. this leads us to the broader

question, what are the priorities for advancing our national security interests in afghanistan and pakistan? i remain troubled by iran's threatening and unhelpful role in afghanistan, so i ask what additional pressure are we bringing to bear to offset the iranian influence in afghanistan? the most important long-term aspect of the american relationship with afghanistan today is the strategic partnership declaration under negotiation with kabul. during the negotiations over the strategic framework agreement and the status of forces agreement with iraq, the previous administration extensively engaged and consulted the congress in a bipartisan manner. we're disappointed that a similar level of outreach, engagement, consultation, transparency on this critical issue has been decidedly absent on the current afghanistan negotiations. so i'm capitalizing on your appearance today, madam secretary, to secure information

on the agreement being negotiated. what are our priority components of this? what are the primary components of this negotiation? do you anticipate a total withdrawal like we are about to do in iraq, or will we remain until we train and, perhaps, have a modest counterterrorism presence? how will it address critical weaknesses within the political system such as too much power concentrated in the presidency and overdependence on foreign aid. what reforms are we requesting to fix these flaws? are we insisting on the right to pursue insurgents who threaten us and our interests? are we preserving our tactical and operational flexibility? the afghan government must be pushed to make the necessary steps to become a reliable partner for the u.s. over the long term, and i know that you know that as well. too much american blood and treasure have been invested in afghanistan for us to walk away or to have a government that threatens american interest.

and turning to pakistan, our relations continue to suffer from a cascading series of crises. first, there was the bitter raymond davis affair involving the u.s. embassy worker who shot and killed two pakistani men he believed were robbing him. davis was correctly released to u.s. custody. the ultimate disgrace was the discovery of osama bin laden living inside of pakistan adjacent to a pakistani military facility, and now we see the armed proxies against the u.s. embassy and other u.s. targets in afghanistan. our two countries are at a crossroads. we cannot sustain a partnership with islamabad if it pursues policies that are hostile to u.s. interests and jeopardize american lives. legislation developed in our committee and carried by the appropriations committee puts tough conditions on u.s. assistance to pakistan funded

through state department accounts. pakistan's security establishment must work more closely with us to eliminate al-qaeda and its affiliates while cooperating more fully with our goal to help stabilize afghanistan. can the relationship be salvaged? can our strategic objectives in afghanistan and pakistan be brought into better alignment? it is hard to be optimistic. all the options on the table appear deeply unappetizing. all run the risk of being an effectual, counterproductive or both. madam secretary, we look to you to help clarify for us the strategic choices that we, pakistan and afghanistan face at this profoundly challenging time for the future of peace and stability in south asia. we're especially interested in the hearing about your very recent trip to the region. i thank you before appearing before our committee today. i look forward to working with you to advance our critical national security interests in

this increasingly pivotal regionment i yield back the balance of my time, and i'm pleased to yield to my friend, mr. berman, the ranking member, for his opening statementment. >> well, thank you very much, madam chairman. and before i start on my opening statement, i would like to just let the committee know that our former colleague, howard wolpe, passed away on tuesday. he served seven terms in congress, most of that time he chaired the africa subcommittee of this committee, and we will remember his dedication to africa. he authored the sanctions legislation against south africa's apartheid government, led the effort to override president reagan's veto of that legislation, he retired from congress in 1992 but as we all know, he stayed deeply engaged in african affairs serving as president clinton's special envoy to africa's great lakes

region and president obama's special adviser for that region as well. we've not only lost a man who made a difference in public policy, but a friend with a profound mind and an engaging and charming wit. so thank you, madam chairman. thank you, also, madam chairman, for calling this important hearing on the administration's strategy for afghanistan and pakistan. i'd like to begin by commending secretary clinton for the leadership that she and the president exhibited on libya. as a result of your efforts, we are able to prevent a humanitarian catastrophe of unimaginable proportions and, ultimately, create the conditions for the libyan people to oust one of the world's most brutal dictators. secretary clinton, you have just returned from a trip to afghanistan and pakistan, so this is a particularly good time to explore what remains one of the most important and complex foreign policy challenges of our

time. in 2009 when the obama administration took office, i was very encouraged by the president's commitment to providing sufficient resources to our military forces, diplomats and aid workers in afghanistan and to renewing our partnership with the civilian leadership of pakistan. however, as i've communicated to you in recent months i am deeply concerned about our rapidly deteriorating relationship with islamabad and how that impacts our efforts in afghanistan. soon after the bin laden raid news reports indicated that pakistani intelligence tipped off militants operating ied factories on pakistani soil. factories that are making bombs to kill u.s. troops. more recently, admiral mullen asserted that the haqqani network, a group believed to be responsible for the september 10th truck bomb that wounded 77 american soldiers and the september 13th attack against

the u.s. embassy in kabul, is a, quote, veritable arm of pakistan's isi. these events raise very serious questions about pakistan's commitment to work with us to defeat the terrorists that threaten pakistan and the u.s. coalition forces, u.s. and coalition forces in afghanistan. this behavior must stop. in 1957 president eisenhower remarked that the united states was, quote, doing practically nothing for pakistan except in the form of military aid. he voiced concern that the american commitment to pakistan's military was perhaps the worst kind of plan and decision we could have made. it was a terrible error, but we now seem hopelessly involved in it. sadly, these words remain true today. given the current climate, i support the administration's decision to pause security

assistance to islamabad until pakistan shows real progress in combating terrorist groups. i believe we should evaluate all military aid to islamabad to insure that it is meeting its intended purpose. but at the same time, i think it would be a terrible mistake to slash our economic assistance to pakistan. it is in our long-term interests to support the continued development of pakistan's civil society and nascent democratic institutions. these are the critical building blocks of a peaceful and prosperous pakistan and, ultimately, a stable afghanistan and south asia. we must continue trying to find ways to partner with the people of pakistan who have become a casualty of misguided policies pursued by pakistan's military and by civilian leaders seemingly unwilling to lead. pakistanis are reminded of these failings every day by constant energy shortages, a never-ending

financial crisis, political turmoil and rising extremism. the united states can't solve all of pakistan's many problems, but we can make a difference. the recently-completed renovation of the dam funded by the united states means that one million more pakistanis will have access to electricity. we should also take steps to strengthen pakistan's private sector by creating an american/pakistan enterprise fund which won't cost the american taxpayers a single dime. madam secretary, i know you have expressed support for this concept. in these difficult economic times, it's critical that any assistance we provide be sustainable and completely transparent both to the pakistanis and to the american people who pay for it. this is true not just in pakistan, but with all our international programs. to those who suggest that foreign assistance is a luxury we can no longer afford, i say america cannot afford a course of isolation and retreat.

rather than making indiscriminate cuts, we need to modernize and reform our assistance to make it more efficient, more effective and better at serving our national interests. let me just touch briefly on transition and reconciliation in afghanistan. i support the president's decision to withdraw all combat troops by 2014, but we must insure that the gains made after ten years of fighting will not be lost. the strategic partnership declaration, which i look forward to learning more about, will serve as an important symbol of our long-term commitment to the government and people of afghanistan, and it is critical to regional security and to a successful transition. while i appreciate the progress being made to cement our relationship with kabul, i continue to have reservations about efforts to reconcile with the taliban and al-qaeda-aquilluated groups such as the haqqani network. as much as we all want the war to end and to bring our troops home, i'm concerned that allowing these extremist groups

to assume leadership positions in the government would threaten the gains we've made on counterterrorism, women's rights and counternarcotics. even if these groups were sincere in their desire to reconcile -- and i'm skeptical that they are -- pakistan remains the spoiler. islamabad may share our general goal of a still and secure -- stable and secure afghanistan, but i think we have a very different definition of stability. ultimately, we will not be successful in afghanistan militarily or politically unless pakistan plays a constructive role in allowing afghans to determine the future afghanistan for themselves. madam secretary, how will we ever succeed in afghanistan as long as pakistan provides sanctuary for afghan insurgents? once again, i thank you for being here today, and i look forward to your testimony. although -- and i do just in closing have to say that because a bill of mine is in a

transportation infrastructure aviation subcommittee round table today, there'll be times where i may have to leave, but i will certainly come back and read your testimony as well. >> i thank the gentleman for his opening statement. mr. cha bot is recognized for three minutes, he is the chair of the subcommittee on the middle east and south asia. >> thank you, madam chair, for calling this hearing. we cel welcome you here, madam secretary. i'd like to say a word on iraq. i'm very concerned about the president's recent announcement of a withdrawal by the end of the year. fulfilling a campaign promise at the expense of american national security interest is at best strategic neglect and at worst downright irresponsible. it seems painfully clear to me and many analysts that the iraqi army is not yet prepared to defend iraq from the threat posed by its nefarious neighbor

to the east. the administration's current policy appears to focus on normalizing our relationship with iraq, but the situation in iraq is not normal. indeed, i fear that our objective is no longer to insure iraq is stable, but merely to withdraw our forces by the end of this year in order to meet a political timeline. saying that iraq is secure, stable and self-reliant is deputy national security adviser dennis mcdonough recently did does not make it so. and to borrow a quote from you, madam secretary, when you were serving in the other body, it requires, quote, the willing suspension of disbelief, unquote, to accept that withdrawing our forces from iraq at a time when iranian agents seek to harm at every turn our country and its allies advances our strategic interests. although i understand that iraq is a sovereign country, i believe that there is much more that this administration could have done to secure a more realistic troop presence beyond the end of this year.

accordingly, i'd like to echo senator lieberman's recent call to reopen negotiations with the iraqis. it would be a failure of colossal proportions to withdraw our forces before iraq is ready to stand on it own. this decisional offers -- also offers a disturbing insight into the administration's definition of, quote, conditions-based withdrawal, unquote, which is, of course, its policy in afghanistan. when asked recently whether not leaving a residual force in iraq endangers hard-fought gains, you responded, and i quote, i think that they should have raised those issues when president bush agreed to the agreement to withdraw troops by the end of this year. unquote. is this what we should with expect of an obama administration in 2014 if conditions in afghanistan do not justify withdrawal? i hope you will address exactly what conditions we would like to see before we withdraw and what

contingency planning the administration is conducting. should, indeed, we get to 2014 and discover the conditions in afghanistan have not progressed as quickly as we had hoped that they would. as one reporter recently observed, it used to be that american withdrawal was conditioned on success. now it seems withdrawal has become the definition of success. if that's the case, success in afghanistan will feel a lot like failure. i yield back. >> thank you very much, mr. chabot. we will now welcome our witness. it's an honor to welcome the secretary to the committee today. the honorable hillary rodham clinton has served as the 67th secretary of state for the united states since january 21, 2009. the latest chapter in her four-decade career of public service. she has served previously, as all of us know, as a united states senator from the state of new new , new york and as the first

lady, attorney and law professor. madam secretary, without objection, your full statement will be made a part of the record. if you could be so kind as to summarize your written remarks, we can then move directly to the question and answer discussion on the five-minute rule in hopes that we can get as many members as possible before you have to depart. madam secretary, welcome back, and the floor is yours. >> thank you very much, madam chairwoman, and to ranking member berman and to the members of the committee, i appreciate this opportunity once again to appear before you. i want to start by recognizing the concerns that many of you have about afghanistan and pakistan policy. you and the american people are right to ask questions, but i think it's also important as the chairwoman alluded to in her opening statement to recognize the significant results that our policy has already produced.

osama bin laden and many of his top lieutenants are dead. the threat remains real and urgent, especially from al-qaeda's affiliates, but the group's senior leadership has been devastated, and its ability to conduct operations greatly diminished. many of our successes against al-qaeda would not have been possible without our presence in afghanistan and close cooperation with pakistan. now, in afghanistan we still face a difficult fight, but coalition and afghan forces have reversed the taliban momentum in key areas. afghan security forces have a long way to go, but they are taking more responsibility every day. and while the country still faces enormous challenges from poverty and corruption, our development efforts have bolstered the economy and improved lives. you know the statistics. ten years ago fewer than a million students enrolled in afghan schools, all of them boys. now more than seven million,

nearly 40% of them girls. afghans are better positioned to chart their own future. i offer these very brief examples as a reminder that as president obama has said, we are meeting our commitments, and we are making progress toward our goals. and we cannot let up. we should build on our momentum, not undercut our progress. now, i will be the first to admit that working with our afghan and pakistani partners is not always easy. but these relationships are advancing america's national security interests, and walking away from them would undermine those interests. with that as context, let me report i have just completed a productive visit to both countries. in kabul and islamabad, i emphasized our three-track strategy of fight, talk and build, pursuing all three tracks at once as they are mutually reinforcing. and the chance of success for

all three are greatly increased by strong cooperation from the afghan and pakistani governments. let me briefly discuss each track. first, the fight. coalition and afghan forces have increased pressure on the taliban, the haqqani network and other insurgents including with a new operation in eastern afghanistan launched in recent days. but our commanders on the ground are increasingly concerned, as they have been for some time, that we have to go after the safe havens across the border in pakistan. now, i will be quick to add that the pakistanis also have reason to be concerned about attacks coming at them there across the border in afghanistan. so in islamabad last week general dempsey, director petraeus and i delivered a single, unified message: pakistan's civilian and military leadership must join us in

squeezing the haqqani network from both sides of the border and in closing safe havens. we underscored to our pakistani counterparts the urgency of the task at hand, and we had detailed and frank conversations about the concrete steps both sides need to take. i explained that trying to distinguish between so-called good terrorists and bad terrorists is ultimately self-defeating and dangerous. no one who targets innocent civilians of any nationality should be tolerated or protected. now, we are not suggesting that pakistan sacrifice its own security. quite the opposite. we respect the sacrifices that pakistan has already made, and it's important for americans to be reminded over the past decade more than 5,000 pakistani soldiers have been lost and tens of thousands of pakistani citizens have been killed or injured. that's why we are pursuing a vision of shared security that benefits us all. the second track is talking, and

here, too, we are taking concrete steps with our partners. so in both kabul and islamabad i reaffirmed america's strong support for an inclusive, afghan-led peace process. and we have been very clear about the necessary outcomes of any negotiation. insur gems must -- ip sur gents must renounce violence, abandon al-qaeda and abide by the laws and constitution of afghanistan including its protections for women and minorities. if insurgents cannot or will not meet those red lines, they will face continued and unrelenting assault. and i want to stress as i did in kabul that the hard-won rights of women and all afghans cannot be rolled back, and the growth of civil society must not be quashed. now, there is no doubt that the murder of former president rah banny was a setback, but the afghans strongly believe reconciliation is still possible, and we support that as

the best hope for peace and stability in the region. pakistan has a critical role to play and a big stake in the outcome, so we look to pakistan to encourage the taliban and other insurgents to participate in an afghan peace process in good faith both through unequivocal public statements and by closing off the safe havens. we are working with the afghan government to help them secure commitments from all of their neighbors, to respect afghan sovereignty and territorial integrity and to support afghan reconciliation. this will be a key focus when i go to istanbul next week to meet with regional foreign ministers. for our part, the united states is working with the afghan government to conclude a new strategic partnership, and let me add in response to the chairwoman's questions, in 2011 we had three washington-led rounds of discussions with the state department leading an interagency team including dod, usaid and the nsc.

these discussions resulted in a text that is about 90% agreed to including strong commitments on democratic institution building, human rights, anti-corruption and other important long-term reforms. among other things, we envision establishing an afghanistan/united states bilateral commission and associated implementation mechanisms to help our focus remain on what needs to be done during the transition process. ambassador crocker and general allen are still working through some of the security cooperation issues with president karzai. the negotiation is ongoing, but i want to assure the congress that although we do not expect this to take the form of a treaty or to require advice and consent of the senate, we will consult with you on where we are in this process, and i will insure that anyone who wishes to get a full briefing will get one, and we will very much welcome your views. and in response to congressman

chabot's point, we anticipate having a transition that does include security components not only from the united states, but also from nato, commitments that were made at the lisbon summit. and, again, we look forward to consulting with you on that. and finally, the third track is building. building what? building capacity and opportunity in afghanistan, pakistan and across the region. now, this is part of a clear-eyed strategy rooted in a lesson we have learned over and over again around the world; lasting stability and security go hand in hand with greater economic opportunity. people need a realistic hope for a better life, for a job, for a chance to provide for their families. so it is critical to our broader effort that civilian assistance continue in both afghanistan and pakistan, and i thank congressman berman for raising that. yet i will also be very clear that we have had to move rapidly

and deeply to strengthen oversight and improve effectiveness, and i'll be happy to answer questions about that. early next week i will be sending you a comprehensive status update on our civilian assistance detailing our plans to shift from short-term stabilization to long-term development. now, as the transition proceeds and coalition combat forces leave afghanistan, there need to be realistic hopes for development. so we are working to achieve greater agricultural productivity, greater exploitation in a way that benefits the afghan people of natural resources, increasing exports and strengthening the financial sector. i really want to underscore the point that congressman berman made which is really that we want to move from aid to trade. we cannot do that if we don't get reconstruction opportunity

zone legislation which will lower tariffs on pakistani and afghan products and the enterprise fund which will not require taxpayer dollars. this is what we did in central and eastern europe, and it was a big help in convincing people that the free market was the way to go. and finally, we are pursuing a broader, long-term vision for regional economic integration that we call the new silk road. it's not just an economic plan, it talks about how we can get these countries that have so many problems with each other to begin cooperating. and to that end i'm very pleased by the progress that both india and pakistan are making on the commercial front and the progress in implementing the transit trade agreement between afghanistan and pakistan. so those are our three tracks; fight, talk and build. and is we're on all of them simultaneously, we believe this is the best place we can be in moving toward, and i look forward to answering your

questions. >> thank you so much, madam secretary. i will yield myself the time for the questions. first, madam secretary, i'm gravely concerned about the safety of the residents in iraq. many members, including the ranking member and i, have sought the administration's commitment to securing their protection given the iraqi government's repeated failure to comply with its international human rights obligations to the camp residence, and in light of president obama's announcements of the final withdrawal of american troops from iraq, we need to be confident that our administration is engaged with the government of iraq, the u.n. high commissioner of refugees and others to insure the welfare of the residentses and to resolve their long-term security goals. and my question, madam secretary, deals with my native homeland of cuba, although in recent weeks i feel the need to carry my papers with me to find out when it is i actually got to the united states. [laughter] but, madam secretary, your

administration has remained in opposition to many be of the world's tyrants, to your credit, yet the u.s. continues to engage the cuban regime. in march you stated that gadhafi should leave power. in june you say that saleh should move out of the way. in july you statedded that assad is not indices pension bl, and we have absolutely nothing invested in him remain anything power. yet in stark contrast this administration comets to engage the cuban regime and provide the castro brothers economic lifelines in the form of allowing increased travel opportunities, support oring their offshore oil drilling aspirations. two weeks ago in front of our committee, undersecretary wendy sherman confirmed that the department had recently met with cuban regime officials to discuss the sad case of alan gross. media reports have statedded that state department officials were willing to offer concessions such as allowing convicted cuban spies to return to cuba or taking cuba off the

state sponsor of terrorism list in order to obtain the release of mr. gross. the united states should not be negotiating with a state sponsor of terrorism, so i ask you, madam secretary, why is there a double standard with the castro regime? thank you. >> well, thank you so much for those two questions. and let me start on cuba, and then i will go back to, um, the camp and our concerns about it. you know, our position has been the same for more than 50 years. we think fidel castro should go. [laughter] i mean, that is the unfortunate commitment that we have put forth over many years. unfortunately, he doesn't seem to be going anywhere. and we do worry greatly about the activities of the cuban government, and we have strongly supported the desire of the

cuban people to freely determine their own future. and it is our view that we should help those who are trying to work toward positive change. so we do support a wide variety of activities on the island. we interact with a broad cross-section of individuals and groups in cuban society, and we provide humanitarian assistance including food, over-the-counter medicines and so much more. we think that that is a necessary kind of double approach. we want democracy for cuba, we've always supported democracy for cuba, we have tried to encourage changes and reform, but at the same time we're going to keep working with individuals. now, have we met with -- >> have we met with officials about alan gross or the convicted spy? >> u.s. officials regularly meet with their cuban counterparts, as i know you're aware because we have a lot of areas of mutual

concern. we have drug trafficking, we have immigration, we have all kinds of issues. and our main objective for the last two years has been to insure alan gross' unconditional release. so at no point has the u.s. government been willing to give unilateral concessions to the castro regime or to ease sanctions as a means to secure mr. gross' release. but i will underscore we think it is a gross violation of his human rights and a humanitarian abuse that he has not been returned to his family. and we would like to see that happen as soon as possible. with respect to the camp which we deeply are concerned about, we know that there is an ongoing and very legitimate expression of concern. we have elicited written a assurances from the government of iraq that it will treat

residents humanely, it will not transfer residents to a country they may have reason to fear, and we are pushing very hard to get the united nations' high commission on refugees to work with the residents of the camp -- >> thank you so much. >> -- to get them into a safe place. >> well, we appreciate that. thank you so much, madam secretary. mr. payne is recognized, ranking member on africa global health and human rights. >> thank you very much, madam chair. let me commend you, madam secretary, for the outstanding job that you're doing. the recent five-country trip, they only talk about two, but i know you touched down in three others, is amazing. your trip to libya where the president had really asked the europeans and nato to lead and that we would come in and help out, i think, was a very successful strategy. certainly commend the administration for living up to the agreement that president bush made when he said that our troops should be out of iraq at

the end of this year, and i congratulate our government for living up to that promise to have our troops back in america by the holidays. and the iraqi people want them out, the american people want them out, and i think they should be out. i certainly support what the administration has done in south sudan, i happened to be in jewish baht the celebration of the new country, but i would hope we would give them all the support to the south sudanese people and that we continue to watch darfur and continue to support the tfg government in somalia. of we need to make that work, and also to urge the kenyans to assist as they are doing now to try to eradicate terrorists who are coming into kenya and destabilizing the area. the, i also commend the president for the 100 troops

that is going to the central africa republic and to uganda to train the ugandans in trying to finally eliminate joseph kony who this house passed legislation saying that we should go out bipartisan support, many of my colleagues on the other side have been just as passionate about the fact that joseph kony needs to be eliminated, needs to be captured or taken out because for 25 years he's wreaked havoc on people, horrendous acts that he has dope is just unconscionable. and time is past that he should be taken off the face of this earth. let me just then quickly get to what you're here about, afghanistan and pakistan. i almost forgot that. the -- [laughter] u.s. strategy in afghanistan has been based on the belief that

developing afghanistan's economy and institutions will win over the population to support the afghan government even after international forces draw down. some analysts are concerned that the afghan economy may somewhere a steep depression -- may enter a steep depression as military involvement in afghanistan winds down over the next three years. what's the u.s. take to insure that this depression does not happen, and i know you did mention a new silk road, the new central asia/south asia trading hub that we're trying to create in afghanistan. will there be job training programs and community development so that that can overtake the military action? >> thank you very much, congressman. and thanks, as always, for highlighting the important issues and security concerns coming out of africa. i thank you for that, and i join with congressman berman in

saluting the life of former congressman howard wulpe who i also had the privilege of working with both in the '09s and as secretary of state. with respect to the sustainability of the afghan economy, you are right to raise the issue that when this enormous amount of international money that has been used inside afghanistan begins to diminish, that raises questions about sustainability. there are three quick answers i would give you. one, we are working to strengthen the capacity of the afghan government itself at both the national and the local level. because we think it's important to try to help them understand fundamentals like planning and budgeting. usaid is currently developing a set of measurements about sustainability and applying them to all of our programs.

and secondly, we are working on necessary reforms right now. i'll give you a quick example. the afghan power company. they have to learn how to effectively collect revenue. they have to learn how to cover the costs of their operations. and we're also working with the ministry of public works on the roads authority because the international community has built roads, but they have to learn how to maintain them, and that means collecting tolls or other tariffs. we're also working to make sure that we are coordinating with other donors. there are many big donation, donations that cover infrastructure and training, and we're going to make sure we're all on the same page. >> thank you so much, madam secretary. thank you, mr. payne. mr. burton, the chairman of the subcommittee of europe and eurasia. >> thank you, madam secretary. let me just start off by making a little statement. there's a lot of congressmen and

congresswomen who are very concerned about unilateral action being taken by the administration in a military fashion. nobody mourns gadhafi's leaving the scene, but we believe that congress should be involved in the decision-making process before we go to war. and that was a long, of long duration. it cost $3 billion of taxpayers' money, and i think the administration ought to be aware that there's a lot of concern among democrats and republicans that unilateral action is being taken without any consultation with congress. now, let me just talk about a couple things and ask a question. in 1979 we supported either tacitly or directly the removal of the shah. and the ayatollah khomeini came back and imposed shah sharia law. he lined up 3,000 political prisoners and shot them and

killed them, and 20,000 people who were sympathetic to the west were lined up against a wall and shot and killed. that's sharia law. now, tunisia has said they're going to have sharia lawment the interim government of libya has indicated they are going to have sharia law. under sharia law one of the things that really bothers a lot of people is if you're an enemy combatant and you're defeated, your wife can be raped, and can it's all right. and i understand there are women who are being raped right now by the people that won the war because the people who supported gadhafi had wives, and they thought that that was proper punishment. sharia law is something that's anathema to most americans. we have in egypt the muslim brotherhood is taking on a larger and larger responsibility, and some believe they're going to end up running that country. the entire northern tier of africa may very well be under

sharia law as well as iran. and i'm concerned, and i hope my colleagues are concerned, that we could be facing another iran not only in iran, but also in libya, in tunisia, in egypt and who knows about syria. and so i'd like to know what the administration plans to do to make sure that we don't have a radical government taking over those places. i know you were just there in libya, i watched on television your remarks, and i understand the position of the administration. but i'll tell ya, it really worries me not only from a security standpoint, we still get almost a third of our energy from that part of the world. and if we don't make sure that we don't have radical islamist governments in that region, we could have a big, big problem like we have with iran. and with that, i'll be happy to hear your comments. >> well, congressman, i think

that you have raised many different aspects of a question that is yet to be answered, and that is what does democracy mean, what does, what's the likely outcome of these changes, and we know from our very long history -- far back beyond 1979 -- that revolutions are unpredictable phenomena. sometimes it works out well as it did for us, many times it goes through really messy transitions as it did for france, for example, and sometimes it ends up in a place that we certainly don't think reflects democracy as we define it. the united states is deeply engaged in and committed to working with these new leaders, many of whom have never been involved in politics before to make it absolutely clear that

there must be a renouncing of violence and military capacity if you are to be part of a democratically-elected government, that there needs to be a respect for human rights, for women eat rights, for the -- women's rights, for the fundamental freedoms of speech and religion and all the rest that we hold so dear. sitting here today, i think a lot of the leaders are saying the right things, and be some are saying things that do give pause to us. but i will assure you we're going to do all that we can within our power to basically try to influence outcomes. but, you know, the historic winds sweeping the middle east ask north africa -- and north africa were not of our making, they were in many instances not even predicted. but they are going to have consequences, first and foremost, for the people of those countries and then for the

rest of the world. >> thank you, madam secretary. thank you, mr. burton. >> thank you, madam chair. i certainly want to personally welcome you, madam secretary, and want to commend you for the outstanding leadership that you've demonstrated not only in your capacity as the president's chief negotiator and just about anything and everything that goes on in the world, but to certainly thank you for the services that you've given to our country. deeply appreciate the opportunities that i've had in dialoguing with you, and some of the issues that are important and the needs of our country. just one question, madam chair -- madam secretary. and maybe i'm being simplistic in trying to unravel or trying to understand a little further about the challenges that are before us as far as pakistan and afghanistan is concerned. there are 12 million pashtuns living in afghanistan, a couple of million use becks, a up to l

of -- a couple of million tezzics. seems to me there's no such thing as an afghan because there are so many tribes that make up the country of afghanistan. and right on the border of pakistan there are 27 million pashtuns, and within that confines we end with some 27,000 taliban we're going after and trying to get them to straighten out their ways, and hopefully by the current process of trying to negotiate with them, we've got 100,000 troops right now in afghanistan, i guess w the purpose of going after the 27,000 talibans. and costing us about $120 billion a year. are we still committed to 2014, madam secretary, for withdrawal from afghanistan given the tremendous amount of resource and problems that we're faced with in dealing with this? >> yes, congressman, that is the commitment, and it's a mutually-agreed-upon commitment

by nato isaf and the afghan government and, of course, the united states. so that is our, that is our commitment, and as you know, we have begun to transition security responsibility to the afghan forces in a number of areas. there will be more announced shortly by the afghan government. and we have a plan that our military leadership is implementing to continue to advise and support as afghan cans take the lead -- as afghans take the lead, but to move away from any ongoing combat responsibility by american or nato airks saf troops. >> thank you, madam secretary. the second question i'd like, i'm deeply concerned about the events that transpired in indonesia whereby the indonesian military and police forces have arrested hundreds of unarmed and

harmless civilians who apparently had a meeting in eye purr rah. the people's congress said that they met, and among those arrested is a dear friend, a traditional leader by the name of -- [inaudible] this gentleman, madam secretary, wouldn't even hurt a fly. he's a traditional leader. out of sheer frustration, 2.2 million west pa poe ans have been waiting for the indonesian government who were supposed to be given the special autonomy status, and the indonesian government hasn't done anything to pursue and to promote this. and i suspect out of frustration the people simply want to declare independence x. for this now the indonesian government is accusing this man of treason. like i said, this traditional leader, i've met the gentleman. he's an elderly person, a traditional leader, wouldn't even hurt a fly.

and i really, really would really appreciate, madam secretary, if the administration would pursue this earnestly with the indonesian government. i realize always the answer's been this is an internal matter within the province of the indonesian government, but it does have a lot of serious international implications in terms of the military forces and how the indonesian government is pursuing this. and i just wanted to ask for your assistance, and if we can work together in making sure that this traditional leader and others who have been arrested are properly given their due process of law. >> congressman, we will certainly follow up on that and consult with you about it. >> thank you, madam chair. thank you. >> thank you. mr. turner is recognized for five minutes. >> thank you, madam chair. thank you, madam secretary. i recently returned from afghanistan and met with

military and state people. there's a contrast between the optimism at least that the military expressed in achieving their goal in the next 30 months. which i think minimally is the thought base of operations. the state department seemed less optimistic in establishing a legal system and a rule of law. and i'd be interested in hearing what you think of this, whether the cultural divide between what we expect from the afghanis and what is really practical can be, that can be closed within at

least a reasonable period of time. certainly, 30 months is going to be very difficult. thank you. >> well, thank you very much, congressman. and thank you for goingment -- going on that trip because i think it is important, and i hope you agree to see these situations firsthand and meet and talk with peopl, and so we appreciate your trip. i think that the civilian presence in afghanistan which has been tripled in the last two years in response to what were clear deficiencies of attention in the prior years, um, has made a lot of progress. but it is a complicated undertaking, and i think that those with whom you spoke were being very candid with you that it is something that is quite

challenging. as i said in the beginning, we've made a lot of progress. we think that progress has made a difference. um, but you've got to remember that afghans had a lot of experience fighting but not a lot of experience in putting together what we would consider a modern government. and certainly, very little experience in what we are hoping to see them move toward which is a sustainable democratic government. so the progress is challenging, but it is continuing. and that is why it's important that we negotiate the strategic partnership document so that we have an ongoing relationship. you know, there's no, there's no sensible way to compare any two nations because they are each unique. but we do have some experience. you know, after the fall of the soviet union, the people living in those totalitarian states had little or no experience unless they were quite elderly in what

a functioning democratic government even looked like, what a trade group onlooked like, what kinds of human rights should be respected. and i think it's quite an accomplishment for the people of those countries over the last 20-plus years to have made the progress that they've made. well, we're starting on a very different level in, um, afghanistan. there's no real experience. they went from a monarchy that was a very loosely governing presence in much of the country to a succession of, first, invasion by the soviet union and the installation of a puppet regime to the warlordism, the rise of the taliban in the part as a reaction against what was not happening, the people in the country thought was in their interest. this is a, this is a country that has been through so much,

and i would add that, yes, even though there are different ethnic groups or different tribal and clan groups, they do consider themselves afghans. they don't have any doubt in their minds about that. but how they work out the modes of cooperation are still to be determined. so, you know, we are entering this with, i think, the right dose of humility. i think maybe in the beginning maybe we department have enough of that -- we department have enough of that, we didn't know how difficult it would to make that transition, but we are staying with it, and on the civilian side we'll be with it after 2014. >> thank you. >> well played, mr. turner. >> we're leaving this house foreign affairs committee meeting this morning hearing from secretary of state hillary clinton who's being debriefed on her trip last week to pakistan and afghanistan and a number of other issues. the senate this morning meeting for a brief proform ma session, senators have been on a weeklong

break this week, and they're holding this session from making president obama -- president obama from making recess appointments. now live to the senate floor. the presiding officer: the senate will come to order. the clerk will read a communication to the senate. the clerk: washington, d.c, october 27, 2011. to the senate: under the provisions of rule 1, paragraph 3, of the standing rules of the senate, i hereby appoint the honorable patrick j. leahy, a senator from the state of vermont, to perform the duties of the chair. signed: daniel k. inouye, president pro tempore. the presiding officer: under the previous order, the senate stands adjourned until 3:00 p.m. on monday, october 31, >> back now to testimony from secretary of state hillary clinton before the house foreign affairs committee this weekend. she is talking about her

recent trips to afghanistan and pakistan. >> we know that they have done it. of those, there seems to be both a weirryness with fighting and a recognition that the path that the taliban had been on was not the right path. this is part of the testing process that we have to be engaged in and i think that the, the hard reality is until we really put it to them in some kind of afghan-led negotiation nobody will be able to gauge that. we have followed some intelligence threads which suggest that there is a debate going on within the about, for example, letting girls go to school which is something that would seem to me to be absolutely a condition. so i think you're asking the right question. i'm just not yet at the

stage of how this is unfolding to be able to tell you, you know, are our chances, you know, 50/50? are they 40/60? we just don't know yet, mr. berman. >> okay. i understand. i want to get into an issue that's concerned me. it's a sensitive issue and i had to miss your testimony because of all politics is local and to this issue in the aviation subcommittee of transportation and infrastructure but last march in accordance with section 203 of the enhanced partnership with pakistan act you certified that pakistan was continuing to cooperate with the united states in efforts to dismantle supplier networks. that it has demonstrated a sustained commitment and is making significant efforts towards combating terrorist groups.

given admiral mullen's recent statement, discovery of bin laden in pakistan, recent reports in the indian press that the mastermind of mumbai attacks remains a key player in the affairs of let despite being in custody for over two years, i'm wondering, do you have any regrets making that certification and is there anything on your recent trip or anything else that's gone on in the last few weeks that makes you feel optimistic that the purposes we were trying to achieve in that certification requirement we can move forward on? >> well, congressman, the certification that i signed with regard to pakistan's role in combating terrorist groups as you know is mandated by legislation from the preceding fiscal year and at the time i made the certification i closely considered the requirements

set forth in the statute and i determined that on balance pakistan met the legal threshold. now one of the challenges is that there are a number of factors here. there was no doubt that pakistan had entered the fight against terrorists and had made sacrifices for that fight. there was certainly a continuing intelligence cooperation particularly focused on the al qaeda operatives that was proving to be helpful and -- >> could i ask unanimous consent could the secretary have additional minute to just finish the answer. >> no, i'm sorry. >> i will be happy to provide you additional written material about that, mr. berman. because i know what a serious question is. i have to do this on an wall basis. i also would point out that in the last six months from

the operation in abadabad we had great success in taking out al qaeda leadership. >> thank you, madam secretary. >> we have to weigh all these factors. >> mr. smith is recognized. he is the subcommittee on africa an global health and human rights chairman. >> thank you for recognizing me. madam secretary, welcome. >> thank you. >> 10 years after the taliban that a single public christian church remains in afghanistan. as you know two christian afghan citizens most certainly would have lost their lives had there not been huge intervention. we were a part of that you were a part of that but my question would be what are we doing to insure that christians and other minority religions are not subjected to an increased repression? the international u.s. commission for international religious freedom said that the situation for christians, quote, worsened in the past year. and in like manner we're seeing the same thing in pakistan. we all know that pakistan's

minister for minority affairs shabaz, badi was assassinated. a terrible, terrible loss. he was opposing blasphemy laws in pakistan. other faiths including hindus. it has been reported by the human rights commission of pakistan that 20 to 25 hindu girls are abducted and converted islam every month. i just chaired a hearing about coptic christian girls. three-hour hearing focused on and distinguished chairwoman was at that hearing. it is riveting we now see in egypt that young teenage girls who happen to be coptic christians are abducted in their teenage years, 12, 13, 14 years old. then they are forced into islam and then they are sold or given in marriage at age 18 to an islamic man. there is even a very pathetic expression that they are islamisizing the

womb. in other words they get a woman and get any children she subsequently bears to be a member of islamic faith. all by coercion and all by kidnapping. of i haven't heard anything frankly by the administration on that. that is egypt. perhaps you want to speak to that. this deteriorating situation on religious freedom, and we all know that is a fundamental tenent of human rights. that it is getting worse. finally piggyback associate my remarks dual standard or double-standard with regards to cuba. fidel castro has really given i think a large pass for his egregious human rights abuses in a way that is similar to what happens with hu jintao. hu jintao got a state dinner. nobody has repressed human rights more than the president of china hu jintao and yet he was feted and treated with great honors where he should have been held to account for his egregious violations. i would ask before yielding to your answer, please pick

up the phone and call the foreign minister of china and ask where is ceng? next wednesday i'm chairing an emergency hearing of the china commission. there have been rumors, reports we don't know if they are true, that he may have been beaten to death. as you recall is blind activist lawyer. you know all about him, who stood up for women who are being coerced into forced abortions and forced sterilizations in lenge province. he took on their case and the full fist, the iron fist of the chinese dictatorship has ever since, years in prison and now under house arrest. now we hear he may have been beaten to death. we don't know. please call the foreign minister on that if you would, madam secretary. >> congressman, i share your, not only your concerns but your outrage over what we are seeing happening. we will follow up on your request to china. and specifically on the question of persecution,

obviously what we're seeing is deeply distressing and it's not only against christians or against hindus, it is also against different sects of muslims. there are islamic sects in pakistan, afghanistan and elsewhere and they are discriminated against and persecuted and adherence, brutally treated. this is one of our biggest problems in the world right now is there needs to be a greater acceptance of religious tolerance and in some places there is no history of religious tolerance. and i am searching for ways to be effective. one of the things that we tried very hard to do is to work with a number of countries including muslim majority countries. the organization of islamic conference, to begin to change the dialogue from something they wanted to

call religious defamation, which would be a legal rationale for persecuting people who spoke out about their own religion or criticize someone else's to a broad acceptance that there needs to be an equation between freedom of speech and freedom of religion. i mean we are trying many different approaches and -- >> thank you, madam secretary. i thank mr. smith. mr. sherman is recognized. >> thank you, ma'am second, -- secretary for coming before us. i hear you have a busy schedule and i missed your opening statement for the same reason as the ranking member. all politics is local and our districts are colocated. my first question or matter relates to the sind province of pakistan. and i, you may have just want to respond for the record because that isn't one of the hot issues but

the sindies have been influenced by the sufi strain of islam. they have moderate values, harmonious with american ideals. and i would hope that we would do all we could for rural sind that is sufficient remembering from this year's -- suffering from this year's floods which are on top of last year's floods and you would speak to the pakistanis. you have so many issues to cover with them but one are the disappearances of sindi activists in southern pakistan. in this committee room we dealt with the authorization bill. it may never become law but it does reflect whatever wisdom there is on this side of the room and we took a look at the voice of america which has a budget of $750

million. and i believe it was man news to direct the voice of america to spend million and a half on that. we're talking about a small amount of money, broadcasting in the sindi language. further research indicates that the best way to reach the people of sind beyond am or mead medium wave broadcasts originating from the u.a.e.. now, we already broadcast in urdu into pakistan but the sindi language is spoken by far more people than the urdu language. while the urdu language may be the language of preference by islamabad, the language spoken in the homes of southern pakistan is sindi i don't know if you have a comment on that or would want to take that under advisement? >> no. i think that's a very useful

suggestion and i will get back to you for the record. >> i appreciate that. i think we, many of us saw this ad about camp ashraf featuring a 14-year-old girl who fears extermination. woe face a tough circumstance in that we are withdrawing from iraq. in the past there have been some would say massacres, at least terrible instances in which tens of people have been killed and there are press reports that the iraqi officials say, well, don't worry about it too much. after all these folks are on the u.s. terrorist list. what are we doing to assure that when we leave iraq we

will not see the massacre of 3400 people at camp ashraf and how is it going on the occurred ordered review whether the mek should be on the terrorist list? >> on those points in particular, congressman, in accordance with the d.c. circuit's 2010 ruling, the state department is reviewing the designation. there will be a decision. it has to be done expeditiously but thoroughly and we hope to have such a decision in the future. i would add that the current designation does not pose a bar to resettlement of ashraf residents in europe and the humanitarian situation at ashraf in our opinion is also not related to the mek's designation. and i think it's also important to recognize that,

you know, we need to do as much as we can to move as many people out of the camp before the end of the year and we are trying to do that. we're working primarily through the united nations and certainly with both the residents of ashraf and the government iraq to try to put in place a very rapid assessment of individuals, and we have urged. eu and other countries to favorably consider the resettling of any ashraf resident granted refugee status because we want to shrink the numbers as best we can. >> thank you, madam secretary. thank you, mr. sherman. mr. rohrabacher is recognized. >> thank you very much. welcome, madam secretary. and let me just note for the record that the chairman is not the, the chairwoman is

not the only person who is deeply concerned about the castro regime and the brutality and the horrible repercussions we have suffered because we have permitted this gangster to ally himself with all of the hostile elements of the world and the hemisphere. so we shouldn't take that lightly and don't think of it just as the chairman's cause but our cause. second of all, you stated that we're going to do as much as we can in terms of camp ashraf. you are not doing as much as you can. it has been 500 days since the court was ordered us to reconsider this terrorist designation and that should be plenty of time to understand what the issues are. and other people around the world now have determined that they don't put them on the terrorist list. so we are not doing as much as we can. i would hope that you take

that up and do as much as you can to insure there's not another massacre of people there that we could have prevented. and let's note that we have officially requested the state department for information about the camp ashraf massacre. do you intend to comply with that request as you we have been told? the state department will or are you backtracking from that commitment? >> congressman, we will provide what information we can to you. >> ow oh. we can sound like the operative words of how to get out of answering a question. you obviously have the records of your own department. are you going to provide it? you have a request from congress. you have agreed to do it and will you comply with that request? >> we certainly will comply with the request. >> okay. thank you. >> but i can not tell you

what will be in the reply. that is the qualification of my answer. >> all right. there are libyan funds that are frozen in the united states right now. how much did we spend to help the libyans defeat their tyrant? and i don't think it is, would be at all inappropriate for us to at this time of economic crisis in the united states, to freeze some of those fund or some of those funds that are frozen to put our request in to be repaid for what we did to help the libyans win their freedom. are we planning anything like that? >> well i think, congressman, the latest figures that i have is about a billion dollars was spent. and, you know, i'm sure the defense department, that is really their money. so i will wait to see what their final figures are. but we, you know we are in discussions with the libyans about a number about issues

that they have requested help from us and it's a little challenging until they get, until they get a government. which as you know they don't officially have. and we're going to look to see how we can best coordinate and organize any kind of reimbursement for certain functions that we have performed but there has been no decisions because there is no government yet to negotiate with. >> let me suggest that it would be, i think a defendable policy if not ad mirable policy in terms of what the people of the united states might think for us to ask for compensation at a time when we are borrowing money, a trillion 1/2 dollars a ir. >>. it is not right for us to borrow money from somebody else in order to help another group of people free themselves and put our people in debt for that. we should if possible, the

libyans have enormous assets. we should require people like this to be able to repay us if we expect the american people to continue to support the cause of freedom throughout the world. and with that said, let me just note and i know there has been a lot of talk about this lately, i do not blame the president at all. i am not here to talk about the job you're doing in terms of trying to pull back from the missions in iraq and afghanistan. the call for extending our deployment in iraq i do not believe reflects the desires of the american people who are war-weary right now. we can not expend resources we don't have and we can't keep sending our troops over and doing the fighting for somebody else when it is up to them at a certain point to defend themselves. thank you very much, madam secretary. >> thank you, sir. >> thank you, madam secretary. thank you, mr. rohrabacher. mr. siclini. >> thank you, madam chairman.

thank you, ma'am secretary. a great pleasure to have you before our committee and the spectacular work you're doing on behalf of our country. i think like many members of congress are very concerned about the capability and the capacity and really the corruption and those two things have been cited as really major obstacles to improving the rule of law in afghanistan and so my question really is, how do we insure that the billions of dollars of u.s. taxpayer funds that are being spent in this country are being used for the intended purpose and used effectively when corruption and a lack of governmental capacity and capability remain two big obstacles? i'm interested on your thoughts how long it will take before these factors are no longer a major obstacle? just to use an example in the state department cbo justification there is a call for $4.35 billion in funding for, which includes a request of 1.1 billion for

economic support funds. you take that investment in economic development in afghanistan and compare it to our own, two largest loan programs administered by the united states small business administration which total about $574 million. which is roughly a third of the amount we're sending to afghanistan for economic support. it is a very hard thing for my constituents to understand in this difficult economy that we're investing those kind of resources to rebuild the economy of afghanistan when we have such urgent needs here. and in the context of this lack of capacity and this pervasive corruption that makes it even more difficult for people to understand. so i would to know how you think we're proceeding on those fronts and when we can expect the afghan people to do the ability to do this work on their own and direct the resources being back here to our own country and urgent needs of constituents in rhode island and my district? >> thank you very much, congressman. i certainly understand and sympathize with the

legitimate questions of your constituents and of americans i think the drawdown of troops in iraq represents a large savings to the american taxpayers. the withdrawal on measured basis in afghanistan similarly provides because our civilian assistance frankly is such a small percentage of the overall money that is spent the vast majority of which comes from our dod security forces. so i think that, we are aware of that. we think we are on the right track. but, specifically with respect to capacity an corruption, corruption remains a fundamental challenge not only in afghanistan but frankly around the world and i find it one of our biggest problems. it is a cancer in some countries whose leaders care

more about enriching themselves and their families and their associates as opposed to making investments that will provide a better future for their own people and so the key is to build institutional capacity, create systems and that's exactly what we are doing in afghanistan. we're taking an integrated civilian military approach because again the largest sums of money that people have worried about feeding corruption have come from the enormous amount of money coming in associated with our military activities. so both state and dod and of course usaid are absolutely committed. we're promoting the enforcement of anti-corruption laws and regulations. we're doing ethics trainings. we're including civil servants and judiciary personnel in that. we support the major crimes task force which is intended to prosecute cases in the afghan justice system. the fbi,

department of justice and others are working with their counterpart agencies. we continue to go after the poppy trade and the corruption that comes from drug trafficking. we have the improved our accountability by increasing vetting for those people who have anything to do with american funding. we have worked with our partners to do the same. so we are very much committed to transparency and accountability, to the rule of law, to monitoring and all of the steps that we are taking toward those ends but we know it remains a problem as it does in so many other parts of the world where we do business. >> thank you. i yield back now. >> thank you very much. judge poe is recognized. >> thank you, madam secretary, thank you, madam chair. i will try to make this to the point. last time you and i talked in this very room we talked about the safety of camp ashraf. that was in march. and then later in april the

iraqi soldiers came in and killed people in camp ashraf. people disagree how that occurred but people did die. right now the 31st united states is leaving. i'm not discussing that but also on the 31st mall la can i has made it the camp would close. in the summer, chairman rohrabacher and others and myself met on this committee met on the issue of camp ashraf. it got very heated. we wanted to go see the camp. he refused to let us see it. we learned later around flying on a black hawk we were invited to leave the country based on that discussion with him. but the number one thing he said about the way that iraq treated camp ashraf was the u.s. designation of the mek. i spent all the time this is

reason they are treat the way they are because you as the united states designated them as a terrorist organization. my concern is the safety of the people in camp ashraf when the 31st comes. they're in fear. 85 of those people, some are americans, and the others in that 85 that are there among the 2000, are permanent residents of the u.s. what are we doing to extend the deadline so people do what is necessary to do in the u.n. to get out of iraq and go somewhere in the world? and second the long-term issue of the mek designation? i'm encouraged by your words last night you made regarding that. so those are my two issues and my two questions to you, madam secretary. >> congressman, i can assure you i am personally very focused on trying to make sure that we protect the safety of the residents of the camp.

i and our department and our administration strongly con depthed the violence that led to the deaths. regardless how it happened, you're right, 36 residents died because of the violence on april the 8th. we are monitoring the situation as closely as we can. we see no evidence suggesting that there is any other attack, imminent attack on ashraf and we continue to urge the government of iraq to show restraint. as i said earlier we do have written assurances from the government of iraq to treat the ashraf residents humanely. to follow their international obligations which they have as long as the residents remain in the country. not to transfer anyone to any country where that person could be persecuted as a result of their political or religious

beliefs. and so we are trying to nail down as much as we can to provide some protective screen for the residents. now, we know that they have approached, that we have also pushed the unh cr to have even more of a presence to do more. move as many of the status determination as they can. so this is an area of deep concern to us and we are moving on many fronts and we're also going to move as expeditiously as possible to a final resolution on the designation. >> and do we have any time frame on the designation? >> i can not be more specific than that, congressman. as expeditiously as possible. >> well i would just want to reurge you and the administration to make sure that when december 31st

comes bad things don't happen to those good folks in camp ashraf. and all the politics, when you set it aside, fulfill our obligation to put their weapons down as the mek, that they get refugee and asylum status somewhere in the world but their safety is paramount. so i would just reurge that, madam secretary. >> i appreciate your urging. i appreciate the concerns and i take them very seriously sir. >> i yield back, madam chair. >> thank you very much. the chair will recognize herself because there is no other member right now. madam secretary, if i could ask you to clarify the comments that you made last week, that the u.s. has met with haqqani network but also urge the government of pakistan to get tough on that very same haqqani network which has directly killed scores of u.s. troops. and one of your senior officials said in an authorized news conference last week, we were asked by

isi to give this a try. so which is it, madam secretary, crackdown or negotiate with the haqqani network or a little bit of both? >> it's both. >> both? if you could elaborate. >> yes, it is both, madam chair. as i said we want to fight, talk and build all at the same time. part of the reason for that is to test whether these organizations have any willingness to negotiate in good faith. there is, there's evidence going both ways to be clear. sometimes we hear that they will. that there are elements within each that wish to pursue that. and then other times that it's off the table. so, i think that, with respect to the haqqani network it illustrates this point. there was a major military operation that was held in afghanistan just in the past

week that rounded up and eliminated more than 100 haqqani network operatives and we're taking action to target the haqqani leadership on both sides of the border. we're increasing our international efforts to squeeze them operationally and financially. we're already working with the pakistanis to target those who are behind a lot of the attacks against afghans and americans. and i made it very clear to the pakistanis at that the attack on our embassy was an outrage and the attack on our forward operating base that injured 77 of our soldiers was a similar outrage. and it was, in both instances, terrible but the fact is we avoided having dozens and dozens of wounded or killed. >> thank you. if i could ask a question related to the statement

that president karzai made just less than 48 hours after you and he held a press conference. president karzai said, god forbid, if there ever is a war between pakistan and america, then we will side with pakistan. i wanted to ask you is this something that he told you in your meetings? have you interpreted his comments in a broader question. are afghanistan and pakistan reliable allies? >> well, first of all, president karzai and i had a very productive meeting when i was in kabul last week. we are making progress on a lot of issues and we are coordinating closely on both fighting the insurgents and trying to test out this afghan-led reconciliation. so frankly when i heard about the comment we immediately asked ambassador crocker to go in and figure out what it meant, what the point of it was and the, and

ambassador crocker, who you know is one of our most distinguished, experienced diplomats, reported back that he really believed that what karzai was talking about the long history of cooperation between afghanistan and pakistan. in particular the refuel that pakistan provided to millions of afghans who were crossing the border seeking safety during the soviet invasion, during the warlordism, during the taliban period and not at all about a war that anybody was predicting. and that it was, you know, both taken out of context and misunderstood. i think ambassador crocker is a pretty good guy to that. >> he sure is. thank you very much, madam secretary. mr. faleomavaega. >> thank you, madam secretary, i get the good luck being here for the second round. madam secretary, going back i wasn't very clear when

mr. berman raised question, joint chief of staff mullen and as well as secretary panetta, pretty scathing in terms of their attacks. i don't know if you want to call it an attack, to say that our partnership with pakistan was something a lot to be said in terms of what had happened here with haqqani. is that, and i realize too that the pakistan government was very irritated by the comments it made. where are we now exactly with the charges made by mr. mullen as well as secretary panetta in that regard? >> well, congressman i think everyone agrees that the haqqani network has safe havens inside pakistan. that those safe havens give them a place to plan and direct operations that kill afghans and americans and we also agree however with what admiral mullen also said is

that there is no solution in the region without pakistan and no stable future in the region without a partnership. so if you look at everything that admiral mullen said in his testimony he raised serious questions which our government has repeatedly raised publicly and privately about the safe havens but he also said that the bilateral relationship was critical and consequential and that we do have a lot of shared interests, particularly in the fight against terrorism. so it's important to recognize that we are all balancing these two realities. i mean it would be great if we could get rid of one, namely the safe havens or the difficulty that is the pakistanis themselves feel they have in taking the fight to the terrorists because they believe that they have already paid a grievous price and worry how they can sustain that. we operate on both those

channels at one time. >> i wanted to raise the question too that i realize that for a good part of over 10 years now it seems that our countries seem to be bogged down. these three countries iraq, pakistan and afghanistan. that seems to be our whole foreign policy seem to be centrallized just in these three countries. i notice with interest that secretary panetta recent visit to asia. does there seem to be a shift in the paradigm in terms of what exactly are some of the priorities and how we look at the situation? why are we so focused or bogged down on this one issue or dealing with these three countries when we have the rest of the world to deal with? am i wrong in looking at in terms of the recent statements that secretary panetta has made about the fact that our interests in asia is just as critical and just as important as we are in other regions of the world? >> no, you're absolutely right. as you recall i have made a number about of trips to asia. my first trip to asia i just

recently wrote an article for foreign policy pointing out we're making a pivot toward asia. we think that it's very important to begin to focus on the challenges and the opportunities that asia presents. i had a wonderful visit as you recall to one of our favorite pacific islands. so this administration certainly is focused on asia. we are looking at how we maintain our vigilance about terrorism because we can not forget that it is from the border regions in afghanistan and pakistan that we were attacked. and that was an immensely costly event in our history in terms of lives lost and dollars spent to recover from. so we did not choose where we had to focus in the last 10 years. but now we are in a position to begin to make that pivot

and there are many who believe, as i do, that much of the future of the 21st century is going to be written in asia. and the united states must be a resident power militarily, politically, and economically if we expect to maintain our global leadership. so this is a very important commitment that i hope is a bipartisan commitment because we feel strongly it's in america's best interest. >> thank you, madam secretary. >> thank you very much. darn it, the gang is back. we no longer have her all to ourselves. mr. royce is recognized for five minutes. >> thank you. welcome, madam secretary. >> thank you. >> i have a question for you on the let, the organization that carried out the attacks on mumbai. and my terrorism subcommittee recently held a hearing on u.s.-india counterterrorism cooperation and a recommendation that came out of that hearing was that we condition our

assistance to pakistan on their inclusion of let in terms of their engagement in terms of theirent attempt to shut down this organization. it's got a campus that continues to recruit. it is an oddity because it morphed, originally an organization focused on kashmir and now it has got global aspirations. we made arrests here in the united states and so forth. so i was going to ask you, would you consider making that a condition in terms of that scorecard that reportedly we keep with pakistan? >> well, congressman, as you referenced in the beginning of your remarks, we have had intensive discussions with our indian counterparts. on my last trip to india,

dni director clapper went with me and had many in depth conversations. so i do not want to commit at this time to taking such a path because i think it's important that there be further consideration of all of the implications. certainly every time we meet with the pakistanis we press them on let about the continuing failure in our view to fulfill all of the requirements necessary for prosecution related to the mumbai attacks and we will continue to do so. >> well, one of the concerns that i have if we don't elevate this issue, madam secretary, if we don't drive this point home now, it seems to me that some in the isi in their assistance to the let in orchestrating

these attraction -- attacks, are setting in motion the types of policies that could lead to conflict between india and pakistan. and i almost wonder, when you look at the mumbai attacks, when you look at the attacks in delhi, and you find the connection to isi or former isi officials who are involved in the operation, when you look at some of the other operations where you find out isi was involved in the training, it leads you to question what's the, what's the intention from an intelligence perspective of sending in a force, allowing them sanctuary, allowing them to base on your home territory, and then carrying out civilian terrorist attacks on a neighboring country? it would seem to me that the potential for conflict created by this type of

tripwire is very, very great and that is why i think this has to be elevated in terms of the discussion with pakistan. i think it has to be conditional. it can't be the case where pakistan says, well, we're helping with any terrorist organization that is targeting the leadership in pakistan but we're going to allow isi agent to assist other terrorist organizations that are targeting neighboring states or as admiral mullen said, targeting u.s. troops, that they get this kind of cooperation. it has to, it has to be broadened to include, in my view, the let. and i just, i would just ask you, do you think there's a potential for this spinning out of control in terms of the types of attacks that have been carried out on the capitol and the major financial centers of india by the let? >> well, of course we worry

about that very, very much. and we discuss it in great depth with our indian counterparts because it is first and foremost a concern of theirs. it is obviously also concerning to us but we have designated them. we are, you know, certainly raising their continuing presence and activities on a regular basis. but i think that our policy has to be carefully coordinated with the indian concerns. as you know india is trying it improve relations with pakistan right now and there are actually some very productive discussions going on. >> but perhaps admiral mike mullen's words will allow us to carry this information conversation on with pakistan rather than india. i yield back. >> the chair will now recognize the ranking member of the subcommittee on western hemisphere, mr. engle of new york. >> thank you, mr. chairman.

madam secretary, since you were my senator for eight years in new york i know a lot of things about you. first of all i want to wish you a happy birthday. >> thank you. >> second of all i should ask you about your comments on this wonderful, wonderful article from "time" magazine. hilly rodham clinton and the rise of smart power? i don't know if you have any comment? >> i'm speechless, congressman. >> i think the country realizes the wonderful job you're doing and i really want to thank you. you know, we're talking about pakistan and and afghanistan and we focus on the middle east and i want to throw in something about something you and i have spoken about a great deal and the conflict between israel and the palestinians because it does impact pact on other countries in the middle east. the race little -- israeli prime minister said he will negotiate with the palestinians, any place,

anytime, anywhere. he is even talking about the potential freezes on expansion of neighborhoods and things like that. meanwhile the palestinians refuse to speak to the israelis and instead still persist in going to the united nations trying to get unilateral declaration of independence instead of negotiating face-to-face. this congress is going to anticipate that we will have legislation cutting off aid to the palestinians if they are not serious about the peace process. i'm wondering if you could comment on that? and then i have an afghanistan question for you. >> well, congressman, as you know we are deeply focused on trying to move the parties to negotiations that would result in resolution of issues and the eventual two-state outcome that is american policy and which i know you and i support.

we have a quartet process that is currently operating. there were meetings held yesterday and now the quartet envoys have met with both israeli and palestinian representatives. there has certainly been an emphasis on trying to get specific proposals made by both sides on territory and security in line with president obama's comments last may and we are pushing very hard for that to occur. now you're right that there remain difficulties getting the parties to sit down with each other so we are pursuing these goals through what are called proximity talks which are not the preference as you know but we think that keeping this moving, keeping it alive as a possibility is very much in the interests of both

because one thing we have learned now over 20, 30 years of these negotiations is that a vacuum is not good for israel, it's not good for the region and so we want to keep some momentum going. with respect to aid for the palestinians, i will certainly underscore publicly again our strong preference that aid not be cut, particularly aid for the security forces, and the maintenance of security in the palestinian territories is very much and in israel's interest. just last week the israeli general in charge of west bank security publicly said, do not cut resources to palestinian security. so i would hope as the congress considers these issues that we will consult

closely and that there be a real recognition that we don't want unintended consequences. and we certainly don't want either a collapse of the palestinian authority and a vacuum that could then be filled by radicals like hamas. and we don't want there to be a collapse of the security cooperation between the palestinians and israel. >> thank you. let me ask you a quick question about afghanistan. i know there has been some criticism from my friends on the other side of the aisle about withdrawing from iraq at end of the year. i think the president got that one right. i think my constituents are concerned we don't remain bogged down in a ground war in afghanistan forever and ever. we have been successful using drones and others to get at terrorists. there seems to be more efficient means than just keeping us in afghanistan forever and ever. i think we should speed up our withdrawal from afghanistan. i would like to hear what your thoughts are. >> congressman, there has been an agreement with our nato allies 2014 is the

year. so that -- >> thank you, mr. secretary. thank you, mr. engle. mr. chabot is recognized. >> thank you, madam chair. madam secretary in a recent interview when asked about negotiations with insurgents you spoke of universal red lines, specifically renouncing violence, renouncing ties to al qaeda and committing to abide by the african constitution. are these red preconditions to talk and if so how is engage gauging with them in negotiations and coherent strategy they reject our red lines in principle? you mentioned during your opening statement and several times during your testimony today the importance of protecting women's rights. and i happen to agree with you on that point but can these rights be reconciled with the potential implementation of sharia-based law which is a stated objective of the insurgents that you're potentially offering a place in the afghan government?

>> well, first, congressman, there are out comes that would have to be satisfied. you don't make peace with your friend and you rarely sit down to negotiate any peace with someone who has already agreed with you. it is through the process of negotiation that you test and determine whether the outcomes that you seek can be satisfied. so that is our, that is our intention. and it is certainly a long, part of a long line of how one negotiates to end conflicts like this. secondly, with respect to the constitution and the laws of afghanistan, which do protect the rights of ethnic minorities and of women, there is an absolute condition that we have said the outcome must be to meet that. i know that there is a lot of discussion about sharia law?

i think there is a lot of information about it, and what it means and how it's applied that, is difficult to assume. there are different countries with different kinds of applications of what they consider to be sharia which is, the law that arises out of the koran in their interpretation. i don't want to prejudge, but i think the rule of law is our guide and the constitution and the laws of afghanistan which due give respect to and in some cases adherence to islamic principles is what we are demanding be respected. so i think that might be useful to, you know, take a look at all the different meanings of that phrase, and how it's applied because,

from time to time i think it's not clear what the implications would be. >> that's one area i would suggest and encourage the administration to take particular care in because the presence of sharia law in any form in, any government, is, it could have potentially devastating effects on the rights of women. i'm sure you're aware of that. madam secretary, recent comments by haqqani network leaders have suggested that we have been attempting bilateral negotiations with them in order to split them off from the quetta taliban. the haqqani network said it will only negotiate with the quetta with participation. are we prepared in effect to negotiate with mullah omar and if so under what circumstances and what would our conditions be? what is your assessment of the haqqani network and

given the administration's intentions negotiating with it, what role might it have in a future afghanistan? >> well congressman, the negotiations that would be part of any afghan-led peace process would have to include the quettasura. would have to include some recognition by the quettashura which based on everything we know is still led by mullah omar that they wish to participate in such a process. that's what i meant when i said you don't make peace with your friends. we are pursuing every thread of any kind of interest expressed. you might have been voting when i said that the isi asked us to meet with a representative of the haqqani network. there was such a meeting. the, there was nothing, it was not a negotiation. there was no follow-up

meeting. this was done in part because i think the pakistanis hope to be able to move the haqqani network towards some kind of peace negotiation and the answer was an attack on our embassy. >> thank you, madam secretary. thank you, mr. chabot. mr. meeks is recognized. >> thank you, madam chair. madam secretary, let me also congratulate you and the obama administration for the supreme work that you've been doing. i think the article talking about is talking about how we're doing things differently. seems to me as we travel now, i feel when i talk to other nations, other countries, that they again feel included. so that's leadership but not leadership where it is my way or the highway basically. leadership where we're bringing world back together, closer together to work to resolve problems in the world, together. we've seen that with the fact that when we have civilian lives at risk. that is what libya was really all about. that is what tunisia is all about. and the president kept his

word and we worked it out and we saved hundreds of thousands of lives and but we did it not just by ourselves, we did it in a multilateral way which is very, very positive thing in my estimation. i think that is what smart power is all about. then talking about afghanistan and pakistan, so my first question is, though turkey seems to be a little bit removed geographically but i know you're going to turkey next week and turkey, i understand, have asserted themselves as keepers of the peace and they will be hosting this conference about building blocks in the afghan reconstruction process next week. so my question to you first, has turkey been otherwise engaged in the region and have they been helpful and not helpful? because that could be another partner we could have in helping us in this crucial area of the world. >> congressman, they have

been both involved and helpful. of course turkish troops serve in nato isaf. i remember my first trip to afghanistan, turkish troops were the responsible for the airport in kabul. i remember meeting the turkish general who was in charge. but turkey also has a great ability to communicate with a lot of the leaders in afghanistan, pakistan, and elsewhere because of course it's a muslim-majority country and it has a, a history of democracy and now a an islamic-based party, the akp, that is leading the country. so turkey has a great deal of credibility with a number about of the countries and therefore its involvement is a very helpful assistance to us. >> likewise, you know, i think that we need to move into a post-cold war

conversation and dialogue with other countries. russia we had a reset agreement. so i was just wondering whether or not russia has been involved in any of the afghanistan, pakistan issues at all in that region? >> well for a long time russia wasn't particularly involved nor was it welcome because of the invasion by the soviet union and the many years of brutal conflict that ensued. in recent years however, and in part because of our reset, russia has been helpful. they have cooperated with us on the northern distribution network which is our alternative route to get troops and equipment into afghanistan when the pakistani route is either unavailable or under pressure. russia is also now participating in many of the discussions about the path forward because remember, afghanistan has been a crossroads for conflict between and among all of its big neighbors. you know, pakistan, iran,

india, china, russia and so russia very much wants to see a stable afghanistan. it worries greatly about the heroin trade that comes out of afghanistan and that is a big domestic problem for russia. so we are appreciative of the role that they are now playing. >> and finally, madam secretary, as we pull out of iraq and we, i know the agreement about 2014 is that afghanistan, i'm wondering, what is the response of nato and isaf and the euro-atlantic partnership council and the initiative and contact countries? do these organizations still remain as a cohesive command and what role will they be playing in the region generally? because i just thought that staying together in that regard is tremendously important. . .