troops home that would be $2,010,000,000,000 a year and could be put back into the social sector the trust fund and also with the president would use the power of tariffs and sanctions and put the tax on all imports may be the jobs would come back and have people working to surprise the fund again. >> host: joseph minarik. >> guest: with respect to the trust fund, even though the federal government has run budget deficits that does not affect the accounting for the trust fund itself what we have to have backing up the trust fund, to back up the trust fund is financial strength in the rest of the budget. the amount of money that you

quoted is not the amount of money that has been deducted from the social security trust fund. in the accounting sense what has been deducted from the social security trust fund is the benefits that have been paid and the social security trust fund has been credited for the payroll taxes that have been paid. the perspective on the other numbers you quoted, although war , the spending is not 2 trillion a year is less than 200 billion a year, actually more like about 100 billion a year or maybe even a little bit less than that. >> host: the 2 trillion figure comes from total cost over the years? >> guest: i would be ten years worth of assuming that we are not going to draw down the current level of activity as has been anticipated to happen but even at current rates i even looked at that number recently, but the budgetary cost of the

war is i believe only about $100 billion the total defense is about 6 billion and malt all of that is devoted to the war that is the standing force all of the tariffs this again is getting into one of the more sensitive parts of u.s. economic policy the way the united states and ended the great depression is through the enactment of the protective tariffs. the sense that at that time was if we could keep imports out for americans to produce. the problem that you have there is we also have americans who are working to export. if you don't import you will not be allowed to export and when that happens in the late 1920's, early 1930's the trade barriers

with the united states was a very early actor and other countries and acted tariffs, trade shut down his so they are not able to produce for export so the export production is based on imported raw materials and other components so it wound up shutting down the economy rather than helping it to strengthen the so-called tariffs one of the hallmarks of mistaken economic policies in u.s. economic history. economists almost all economists will agree that is not a road we want to take right now. >> host: we are talking about the future of social security. this is to get social security. retirees the earliest eligible ages 62, the disabled, spells of

a child of social security, independent parent of a worker who died of a maximum social security benefits about $2,366 retiring as full retirement age in 2011. according to the social security and administration. joseph minarik is director of research at the committee for economic development and active member of a bipartisan policy center debt reduction task force and here is a suite from jim was as population nearly doubled since social security enacted, still growing. should be enough if managed properly to pay the bill. guest of a growing workforce is an important component of a solvent social insurance social retirement program putting that in perspective is you have users like me who don't seem to want

to pass on and as a result of that the relationship between the number of people who work and the number of people who are collecting social security benefits is changing in an adverse direction. right now we have approximately three workers for every retiree as we go out into the future and shift by the time of pretty much the peak of the impact of the baby boom on that relationship we are going to be more like a true workers for every beneficiary so in fact growth in the population seems like a big number for the retired population is even faster. host john democratic collar in arkansas. what is your question or comment. >> caller: hello? >> host: you are on the air.

>> caller: yeah what do you think about taking for social security pierre [inaudible] >> guest: rett mosul shakira eddy has its own problems. ssi is a program that is paid for out of the general fund and as such it has in effect a blank check. it is a quote on quote entitlement, and everybody that is eligible for ssi gets paid. one of the things that has been under discussion and policy recommendations for changes in social security if we try to shore up the program's finances it is to increase the minimum benefit in social security that what this place and actually make better off the ssi benefits to many of the folks who were on that program right now and a lot

of people argue that is a better way to go to make sure as many people as possible who work for low wages might have had interrupted work histories because job loss and child bearing whatever could still get a social security benefits. >> host: what prompted this decision today is the headline in "the washington post" on sunday social security adding billions to u.s. budget the milestone came early. can you explain that? >> guest: when we got into the stage where the reality of the 1983 social security reform began to be and it was clear that at some point we were going to start pulling on to the trust fund, using the trust fund to pay benefits one of the calculations to was made was at what point do we in fact have to

start using the interest on the trust fund to pay benefits? so we have been looking at the calculation of when that date would come for some time and as we mentioned earlier before the onset of the financial crisis that was a giveaway 15 years, the financial crisis hit but clearly affected the numbers but still people were looking at the end of this decade for that crossover point. when the benefits exceed the tax revenues that are coming into the trust fund and now all of a sudden after it happened people did the accounting for 2010 and discovered low and behold we already have reached a point where social security tax revenues are not sufficient to cover benefits. >> host: dean baker the code for the economic policy research he takes issue with it saying

this treacherous milestone in quote is entirely the post invention. it was absolutely -- it has nothing to do with of the law that governs social security benefit payment. under the law as long as there is money in the trust fund social security is able to full benefits. there is literally no other possible interpretation of the law. >> guest: this is a question of whether you are concerned about a law or whether you are concerned about regality if you will. bill walls is the social security is off budget. as a matter of fact, to changes until all have been social security budget so having the social security off budget is the equivalent of the play being off broadway. we've taken it off budget twice. the effect that that house on a reality in the federal government finances is approximately the same as if all of the adults out there when they are starving down their

leftover halloween candy at lunch and dinner today declared that the candy was off by it. it still affects you but sorry, you can't get out of it that way. social security may be off budget but the problem with this cash flow crossover as i mentioned earlier is you are now the point where to be able to pay social security benefits, the treasury must sell securities to the public. >> host: is the treasury able to sell securities to the public, are there people buying them? >> guest: that's the point. under normal circumstances, back in the day when people were talking about saving social security first, the point of the argument was let's make sure that the financial standing of the united states government and

the united states treasury is so strong that there is no risk to the treasury department will not be able to go into the market and sell the securities and raise cash to finance social security. so that is the point that you were in fact making the trust fund sound by making the overall funding sound. because of the financial crisis, because of the near collision that we had with the debt limit whether some point the financial markets are working at the finances of the federal government and say i don't want to own and their paper. there are a lot of circumstances around that. the united states is still viewed by many people as a safe haven and as one economist interpreted that as being equivalent to saying that the united states is the best looking horse in the glue

factory there are those trying to sell paper in the market they look worse than we do. we could get to the point where investors start looking at the treasury paper and saying i don't care if this is the best looking horse in the glue factory. i don't want to take the risk that at some point they are not going to be able to pay interest as in the near miss with the debt limit. >> host: could the situation with social security drive that discussion? >> guest: social security is a relatively minor part of that problem if we want to solve the overall budget problem particularly looking in the long term the biggest problem is the growth of health care costs. however, even in the near term, we have a very large budget deficit the debt is rising much faster than anybody anticipated particularly to go in to the beginning of the financial crisis people felt we were

looking at having a debt equal to 60% of the size of our economy in 2020 to treat it happened last year. so do they affect lowered by 12 years, a tremendous deterioration in the budget. if we got to the point where the treasury department goes with the securities, holds an option and tries to sell them in the open market and we don't have sufficient buyers social security will be unable to pay its benefits just as other federal agencies and other federal programs will not be able to pay their bills. we should never have gotten here. we should have maintained sound overall government finances. but right now we are where we are in we've got to be concerned about the consequences. >> host: pat, independent. dallas, texas >> caller: i have a few comments and questions. first of all its my understanding. i don't know if it is 2035 come 2037 or 2041, but the trust fund

had $3.6 trillion it is solvent until one of those years after that it would be 25% of the benefits. and what has happened over the last 25 for 30 years and as an example during the bush years and every budget took 150 to 250 billion of our payroll taxes and used it for other programs and the bills and they're just like we borrowed from china they are not going to default on what we borrowed from china but they want to default on what we've borrowed from wheat, the people and we will get better. our economy will get better and when our economy gets better, the solvency the year of the trust fund the solvency of the trust fund will go up. >> host: that's a response from joseph minarik.

>> guest: thank you, pat. solvency in a sense is true there is a balance in the trust fund. the estimate is that in the middle 2013 s that balance will be exhaustive right now we are at this stage to take some of the interest that we owed to that trust fund to pay benefits that means that to get that money to get that cash the u.s. treasury must borrow from the public so we are as sound as the ability of the treasury to borrow from the public. the economy will get better. i certainly hope so. i have a great deal of confidence in the united states of america. i'm not going anywhere. we are in a stage where if we want to make sure that that happens we are going to have to get the budget of the united states in order. we are going to have to take

control of our financial situation, and that means stopping the growth of our debt which right now is faster than the size of the economy. that can't go on forever. we have a lot of different kind of obligations. we have an obligation to provide for the national defence. we have an obligation to pay benefits for social security contributors and we have an obligation to make good on our borrowing to people all over the world including in the united states and including the government of china, which owns a lot of our paper. if we do not take care of -- if we do not meet our obligations to people who have lent to us in the past, we had better be prepared that people will not lend to us in the future. if they don't lend to us in the future, then we will not be able to raise the cash necessary to provide for the kind of defense

to keep the national parks open to inspect food with other things. they are all in that basket together so the priority ought to be making sure that the nation's overall finances are sound so that we can meet all of those obligations >> host: social security appears on deficit panel agenda the so-called committee is holding a hearing at one time of 30 in the afternoon. that social security could be part of some sort of plan that they come up with. what are some of the proposals out there to help with the situation with social security how you get them coming in? >> guest: there are right now there are several packages of ideas out there that in fact going back historically we know what the cookbook is. the ingredients are listed and the question is how you put the recipe to gather.

among the ideas one is mentioned early on the call is to increase the amount of income against which the social security payroll tax is levied. >> host: not on hundred $6,800 tax up to that much and no more after that. the benchmark was that we wanted to have about 90% of the total earnings subject to tax every time there's been an attempt at getting that number, the estimates have come have been wronged a large part of that has been that more employees compensation has been coming in fringe benefits which are not taxed rather than in the cash wages. almost everybody, every plan other as you mentioned i was involved in a bipartisan policy center did reduction tosk force was part of our plan, part of the old simpson plan was to

increase over a period of time the amount of wages that is subject to the payroll tax to get back to that 90% threshold. you want to do that gradually because the people who feel that a lot of times you hear people saying well, you know, let's get bill gates, raise the ceiling so that it covers all earnings bill gates would feel that. the people who will know at will be affected most by the people who have earnings that are just above the current threshold so those folks that tax increase will be the most noticeable and the most painful. social security itself is 6.2%, then you also have the medicare tax and it's the medicare tax by the way that is not capped at all. that is another 1.45%. but the social security tax is capped. the usual proposal but folks

make who have spent their lives working on this stuff is to increase the amount is determined by the current formulas about we get up to that 90 per cent level and right now if you did that instantaneously you would be ideally but closer to $200,000 worth of income. who led the bipartisan policy center debt reduction task force? >> guest: but to coachers for former senator pete domenici of mexico and ellis ruslan who is a former director of the founding cbo director omb director vice chairman and a whole bunch of other things. >> host: they will be testifying before the committee one thanks 30 eastern live coverage of this country and on c-span radio. daniel, republican. last phone call here on the future of social security.

>> caller: okay, let's make this quick and let's bust the bubble right here, right now. in 1944, the united states supreme court ruled in helvering versus davis which is on the social security web page that social security is not and has never been a trust fund. it is not and never has been a retirement program. it is called nothing more and nothing less than an income tax which is paid into the u.s. treasury and to be spent by the congress on what ever they desire after it is paid in the treasury shaker had noted on the supreme court page and the social secure web page to the critical outburst and outright lie. >> host: let's get a response. >> guest: i like to too, daniel. the essence i think in one sense

we are singing the same thing. the trust fund was set up so that social security could keep track of the system and the goal was the means of discipline the way that it was set up if you're going to increase benefits you've got to increase revenues and was designed to make sure that you kept track of that and that you made sure that the system pays for itself. and there is that trust fund out there. it is used for that purpose. it can be overstated in terms of its economic importance. the most important thing that we have to recognize right now is that all of our finances really rests on one thing and that is the financial soundness of the united states of america. if the treasury department cannot with a straight face go into the financial markets and borrow the money that it needs for the united states government as a whole to operate, then

everything that the united states government is trying to do is in trouble. so what we have to do as a country is to make sure that our finances are sound. if we do that, we will be protecting social security. we will be protecting the national defense. we will be protecting everything the federal government does come in and we will have a happy ending to the story and i hope that is where we wind up. >> host: josette minarik, thank you very much for talking to the viewers. >> guest: thank you.

>> regulates pollution from power plants. before the house oversight and

government reform committee included a representative of the epa and the virginia attorney general. this is two hours. the oversight committee exists to secure to fundamental principles. first, americans have a right to know the money washington takes from them is well spent and second, americans deserve an efficient, effective government that works for them. our duty on the oversight government reform committee is to protect these rights. our solemn responsibility is to hold the government accountable to taxpayers because taxpayers have a right to know what they get from their government we

will work tigers loosely in partnership with citizen watchdogs to deliver the facts to the american people and bring genuine reform to the federal bureaucracy for the government reform committee. today a debate is on folding in america that comes down to two fundamental questions about how much government do we need in our lives. from this side of capitol hill all the way to pennsylvania avenue, there were hearings everyday and listening sessions every day about the creation of jobs. today we are going to listen about whether or not a tsunami of regulations some will intended, expedited, some perhaps in conflict with each other or creating an environment in which the economic downturn will be prolonged. on the one hand, the obama

administration has been stubborn in its determination to issue costly regulations and pay little regard to the impact of these mandates on the broader economy. on the other hand, the administration has admitted that there are at least 500 regulations that need to be withdrawn. they've talked in terms of duplicative regulations. they've talked in terms of believing regulatory burdens on job creators so much so that the gallup poll of job creators and entrepreneurs consider the number one impediment job creation to be in fact regulatory excess. today we are going to hear about utility matters. the environmental protection agency epa proposed an issue of this will and 11 billion-dollar world but in fact by most of the

people on both sides of the ogle who are looking at the high end of what it could cost the curtain times that or more anything that causes the price of energy and its availability to suddenly change will disrupt markets, will change the balance of cost effectiveness here in america because after all if you increase the price of an essential fuel like electricity, you will by definition increase the cost of doing business and particularly for manufacturing jobs which often depend on a high volume of electricity in order to create efficiencies to offset the advantages to third world countries in the less-expensive labor. whether you are in florida or as the first witness today, virginia. whether you are a donor of the fuel of the greatest choice, that being called for in fact recipient to the power plants you know that in fact the grid

depends of the 51% out of the reliable power it takes from coal. we applaud the epa for continuing the tradition to to find ways to continually clean up all of our energy sources to reduce particulates and particularly set the standard for reducing mercury. we have no objections to the attempt to on an ongoing basis increase the reliability of our power plants to deliver clean energy. at the same time, 24 attorneys general's both democrats and republicans have requested the epa to postpone issuance of its role for one year. today we will hear from one of those attorney general's along with the epa and a think tank individual giving free different views from three different perspectives. this is not the last hearing we

will have on the speed with which we can make their and water cleaner and the cost that will have. and no case do we want anyone to misunderstand. if this rule does not take place, air and water will be as clean tomorrow as it is today. if this world takes place a year from now, and it is different and better, it will only increase the cleanliness and the reliability that comes with good clean energy here in america.

consider the pressing technology related topics in which this committee has not held a hearing. cloud computing coming datacenter consolidation in the day, the implementation of the 25-point plan for preventing the acquisition workforce. we have not not hold hearings on going deep and wholesome acquisition workforce are about how to improve training for acquisition personnel. we thought markups to the legislation to create unfunded mandates and regulations that tabak, but not legislation to streamline or ask the date data consolidation for the card reads data storage. the republican leadership committee is to be the most important issues of federal type

knowledge in management issues which are of vital importance to one of the most important job creating such as our economy, technology. instead of focusing on these important topics, mercury and other pollution spewed dpas updating toxic mercury pollution because the court found that the prior rule on behalf of the polluters violated law. under the obama administration, the epa is trying to do its job and reduce toxic pollution as the congress directed in 1990. sep attempts to administer the clean air act, it's worth recalling the clean air act to step bipartisan support. the sign in to in to lob a republican president 40 years ago and strengthened substantially by republican president in 1890. they any empirical measure the clean air act is a wild success. it saves lives.

major regulations implemented on the clear act have saved far more money than the cost to the implement. since the clean air act was passed commend the u.s. economy is currently 200% but the vibrant new clean energy industry that creates jobs without creating disease is associated fossil fuel production. the regulation the committee majority is attacking today's typical of the clean air act regulations that will save lives and money. according to crs, the utility will save 6800 to 17,000 lives per year with a net savings of at least $48 billion. the republicans claim to be concerned to life-saving public health data were threatened director liability of the supply. once again, we're presented with a false choice. in this case, a false choice between electricity and clean air. those of us would've been outside today breathe cleaner air cleaner air brake your

nation's capital as a direct result of the clean air act. and yes, there are four cars on the road and kilowatts of electricity being produced and when congress passed the clean air act in 1970. primary republican witness today, virginia attorney general cabinet cuccinelli has used his office to focus on narrow ideological issues that in my view squander taxpayer investment. he's subpoenaed a uva professor michael mann in 2010 because he believed the well-regarded climate research might quantifies front and researching a lot. not surprisingly the circuit court disagreed and attorney general cuccinelli is appealing to the virginia supreme court. the witchhunt has strong condemnation from 800 virginia scientists. the conservative if almost every major newspaper in the commonwealth american association of defense science and so many others. it's appalling to taxpayer money would be squander in a vain

attempt to discredit a single climate scientists. in addition to litigating against his own states, premier university founded by thomas jefferson by the lawsuit against the federal government for the epa findings of the greenhouse gas pollution poses a danger to human health and welfare. unfortunately, a character for the monarch republican party and attorney general cuccinelli has fulfilled the predictions come a suggestion it's given this bizarre ideas he would very likely become an embarrassment to the commonwealth. i regret that we are holding this hearing instead of dwelling -- going into other topics i think would be more per.good and would create jobs. without i yield back. >> i thank the gentleman. members will have seven days to submit opening statements extraneous material for the record. we will now recognize their first witness, the distinguished attorney general of the commonwealth of virginia, the

honorable ken cuccinelli. pursuant to the committee rules, all witnesses here will be sworn. would you please rise and take the oath quiet do you solemnly swear or affirm the testimony you're about to give will be the truth, the whole truth and nothing but the truth? let the record indicate the witness answered in the affirmative. i will take a point of privilege very briefly. i appreciate your being here today. i am going to regret that there were some levels of the previous opening statement that may have seemed personal and i apologize to the extent that you were offended. we appreciate your being here. the recognizer one of many attorney general's that is involved in this end i think i'm an overall committee basis, i would say we are very pleased to

have you here as a representative in hope that you'll take the spirit of the full committee without any questions you may have from other opening statements. with that, you are recognized. you have to push the little green button first. and then you may have to get a little closer. thank you. >> chair and i sat ranking member coming from a member of the committee, and ken cuccinelli, chairman of the commonwealth of virginia and i want to thank you for the invitation to speak about the role today. one of my duties as attorney general as is common among the attorneys general is to serve as the attorney for utility customers in my state, advocating for fair rates for customers for electric utilities seek rate increases from the commission that approves them. as you know, public utilities that have reset by state commissions are entitled under the u.s. constitution to recover from customers for necessary expenses they incurred to provide utilities.

that includes the expenses to comply with federal laws and regulations. that means every time new environmental regulations are placed on electric utilities, it is actually the customers i represent to pay the cost. this isn't to say environmental regulations should automatically be rejected because they impose some cost, but it does mean the epa should follow the proper procedures to ensure the alleged benefits of the regulation outweigh the real world costs. unfortunately the epa hasn't been following normal procedures in its regulatory impact analysis for the mact will come and epa conceded it would increase electricity prices and would cost jobs in certain sectors. yet the epa admitted it did not have sufficient information to quantify those losses. in fact, they will having a huge economic impact on this nation. first, it will increase electricity prices over the

course of the next five to 10 years of between 10% and 35% but will vary depending on where you learn what the conditions particularly of her generation and transmission are in your region. that can be a financial death blow for businesses struggling to meet payroll and families on fixed incomes. second, retrofitting power plants to meet the standards will come as you all know be prohibitively expensive, so there's no question certain plants will close in the nation's electricity supply will decrease, living to upper pressure on prices and likely drown out the possibly blackouts and streamed periods of use. the epa even concedes at least 10 gigawatts of electricity will be lost in the nation's power grid for its first initial analysis has over 80. that is a pretty germanic difference between the epa and the people who you would expect to know better. third, while the epa says it cannot quantify the number, it acknowledges the jobs will be

lost. their estimates of 180,000 jobs per year between 20 to team in 2020. for virginia come in the is even weaker than for the rest of the nation, does not mr. connolly is part of virginia, which is worth it. majority of electricity for southside and southwest virginia is generated from coal. since the mact will increase prices for electricity produced from coal, the poorest part of my state will face the largest price increases, including part of appalachia, one of the poorest parts of america. but it gets even worse. the most import industry and southwest virginia is coal mining. these regulations may pull more expensive and less desirable to use, which means the economy and southwest virginia again including up alicia will be devastated by the destruction of the coal industry and the jobs

lost on with it. whatever you think of the benefits of the mact will come a decision about whether it's prudent policy simply can't be made without considering these other impacts and not just for virginia, but the entire country. what is even worse is that the regulation is important, the epa said just 140 days -- 104 days recently extended to 134 to review more than 960,000 public comments on the impact of the rule. if you compare this to other significant goals for the epa favored few. for more than a year with less comments. this abbreviated review period occurred because groups that support the peace positions to the epa and then in a very friendly settlement, and epa agreed to the short review. this kind of gaming of the system is an affront to proper procedure and the rule of law and really should concern people across the fact term. this obvious attempt to brush the rule through so outrageous

that as you noted, mr. chairman, i live with other republican and democratic, governor of iowa and territory of guam filed an amicus brief asking the court not to approve the consent decrees shorten time. given these major economic issues, it's not good enough for the epa to say that it? sufficient information to quantify than negative effects of his regulations. innings to collect information before imposing the will to make sure the benefits in fact outweigh the costs. if the epa needs more time than it should take a common set of gaming the system by entering into a consent decree, this shortens the time for review. thank you again for the opportunity to address these issues. >> thank you. even though i didn't limit you to five minutes, you're perfectly prepared to deliver for five minutes. i now recognize myself for five minutes. the chart up there i think you're probably familiar with,

general. it's a little deceiving, though for anyone watching it here that the large blue line represents the late entry nearly a million comments. the two others -- i will read them because they look like they are not there, but there's life there that represent 214 comments in the case of the middle one, for which there is 344 days of an intervening to evaluate. and then in the case of casper, 3907 in which there were 278, is there any logical reason from your experience both as an attorney and as a representative your estate, that she wouldn't have for nearly a million at least as much time as you did for 214 comments. >> done a logical reason. >> what you think the reason is quite >> it's hard to escape this is being ran forward and i understand there are policy

goals. given the impact and i would venture to guess having not read all 960,000 comments -- >> i'm sure it even combined no team highs, they probably relate primarily not to mercury, even though that's where this all begins. because of the massive impacts across the economy and across the industries that are it. >> i am going to put up another piece on this. could you get that diagram up? this one baffles me a little bit. perhaps he could help explain it. when we look at health-related items in this new standard, if i read correctly that little sliver of red fire is the mercury that's going to be dead. all of the flu area represents particulates. if that's your understanding of what we're dealing with here? >> my understanding is nearly all are not consistent with this

graph that any benefits will come from the non-mercury elements of this rule. >> most of the technology that has to be developed and implemented overnight and the cost will cause from the compared is coming not harmless, but particularly at nonfactor mercury is so many people are legit. >> that's correct. tautology to receive the mercury benefits if left to stand alone is a lot simpler and cheaper to utilize them what's necessary for the whole package. i'm sure that's no surprise. but it also tried to radically though it quantified into the shutdowns of plans. >> let me ask on the question because he looked at the regulatory impact much more than anyone else has. my understanding is that when bp's mandate to regulate particulates comes under that, a

whole different discipline. does that appear here as though they are combining 99-point some% of this bill subside under a section in the review process that isn't appropriate? >> absolutely. none of this is beyond epa's reach through more explicit authority that they have elsewhere in the act. and yet, i know there is always or often in legislation there're sort of catchall phrases and whatever else you think might be unhealthy kind of language. when one gets crammed in there along with mercury is explicitly express our house. italian appropriate to address at this rate. >> a couple quick follow-ups. one of the ranking members from virginia mention one under 60,000 lines of the clean air act case each year the epa

figures. many of the estimates appear that at least 280,000 jobs will be lost as a result of this legislation in its current form. how does that impact your state of virginia quite >> again, i point to virginia will be affected differently in different parts of the commonwealth. if you got a martinsville where they have over 20% unemployment, desalvo lost manufacturing their that we are rather hopeful if we can economic and keep relatively cost-effective energy prices and make the match were difficult for that to happen in the swath of virginia unemployment is particularly high. imagine what happens at west virginia, which is not a rich area either. >> you are never clean coal, but this would still be cold i would be upset.

back to manufacturing, i wanted to focus on this because i'm a former manufacturer myself. nature of american manufacturing is a understand is we take affordable energy and the leverage it to compete against less expensive labor in third world countries. in this essentially would take maybe two-kilowatt hour power and increase it by three or four times. it's a huge increase if your base fuel is: it becomes natural gas. is that correct? >> i can't speak to the decrease of increase, but there is no question that the state we are in is much more marginal for us to become economically competitive and anything close to the changes described take size -- makes us uncompetitive with large loss of the world. >> my time is more than expired. >> is good for you to be better.

i'd like to put on the record that i would like to have the joint statement from the attorney general of the state of maryland, my state, doug hanson and robert adam summers some of the secretary of the department of environment statement inserted and successfully implemented a law that required reduction in emissions from coal burning power plants. rio verde reduce mercury emissions by 80% without effect in my ability in doing so has put jobs in maryland. has to be part of the record. >> without objections to order. >> mr. attorney general, exposure to the toxic pollution from power plants such as hydrolytic acid to mercury causes a wide variety of health conditions. these include asthma, which i suffer from another respiratory ailments and developmental disorders, birth defects, cancer

and to. do you disagree with any of the signings? >> when not in a position to give you medical assessment. i'm just here to talk about the legal side. >> i understand that. you were sworn in in the technical state are you not? >> i think you take into consideration anything that might cause to provide these different things. that's why he asked. >> certainly take those things into consideration i was looking for a balance. >> it has also been reported among industrial united states at coal and oil fired power plants emit the most of all pollutants in 2009. you disagree with? >> i'm not in a position to disagree. i would note that we have some co-located among their utility as oil and coal. and one thing would've led to the same because we see the

voile infrequently, only when we have peaked demand, if those that's one way that would've provided more flexibility for peak demand why still achieving many of the pollution reduction goals we set here. >> it's been >> i've heard that, yes. >> do you have any reason to disagree with that estimate? >> strikes me as quite optimistic, that it's such a large number. but i haven't done any independent research on that, no. >> mr. attorney general, andersen u.s. federal judge as he testified this to delay the final air toxic roles for one year, making many of the same arguments we've made here today. is that in the form of a brief?

>> it was, yes. >> re: wiki or toxic roles have been legally required by the clean air act since 1990, 21 years ago? >> i am aware of that, yes. >> i'd like to enter into the record the judge denied this request. the congressmen would be given under way and i asked that be admitted. >> without objection although it noted went hand-in-hand with the 30 day extension and may not be germane 30 days from now. >> i understand. but is that basically the same argument quite >> the same judge told the epa that if they need more time they can come back and she would grant it. so it is not from our perspective a close question. >> i understand. without i yield back. >> i thank the gentleman. we now go to the gentleman from

the coal producing alternate capital, cleveland, ohio, mr. kucinich. >> revert a time mr. chairman. -- happy birthday, mr. chairman. attorney general, welcome to this committee. as attorney general, isn't part of your responsibility to protect the residents of virginia and not put them at greater risk for illness or even premature death to pollution? >> protecting the people of virginia is an important part of my job, yes. >> is their responsibility to protect the people of virginia from air pollution related illnesses that could cause premature death? >> part of what we do in my office is enforce environmental laws and we are progressives

about doing that, so yes. >> how many prosecutions have you had of environmental polluters since been in office? >> ordinarily the way that is resolved is with the epa. i'd are not many. i know without a regular flow of them -- >> have you recommended prosecution for polluters? how many have you recommended? could you speak quite specific? >> we have resolved all of them with consent decrees. >> we meaning he'll? >> inevitably it is our department of environmental policy negotiating on the epa. >> have you been in the negotiations related to resolve things >> my personal involvement is related to improving of those negotiated by the attorneys in my office and with epa and the

defendant questioned. >> and you know, what the outcome of those have been? had they been consent on behalf of communities that have complaints about pollution? >> yes, that's exactly how they've been resolved. typically finds that requirements going forward in court order for all cared to be taken. >> cirrhosis has been instrumental, you are saying and causing polluters to be signed. do you have any information you could present to this committee right now about specific cases? >> eight did not bring specific cases. >> but you could produce -- will you produce for this committee a list such cases? >> i'd be glad to. >> could you tell members of this committee. i was particularly interested in some of the equations you were

talking about. you said that clean air standards -- they will paraphrase, that they can cost jobs. is that your position? what kind of jobs today cost? can you be specific as to the types of occupations? >> sure, for starters the most obvious is that since we are coal state, south assertion in the coal fact good and i'm like the part of her gender and front, northern virginia has fairly diverse economy, there is not an economic alternative in southwest virginia. so there is a challenge which is the most overt. then comes the industries and businesses reliant on energy as a major component of their cost. and certainly any manufacturing that would take place, which we have been virginia, and primarily not exclusively in the southern part of virginia and that the western part of the state, though again it is

scattered. >> thank you. you are saying that they cost jobs by definition the coal industry? >> sure. >> is it possible that if you don't have clean air standards that it could also create health problems for people? >> sure, that is the trade-off here. that's the trade-off. >> is dirty air good for poor people? because there'll be less poor people of the air air is dirty or? is it good for poor people because there will be less poor people if there's dirty air? >> dirty air isn't good for anybody, jobs are good for everybody. >> can you tell me if you are looking at job calculations about the jobs created by poor air standards. can you think of jobs created by poor air standards? >> the comparison we are looking

not and it is in our own. we are swallowing all the studies were as many being done as compared to where we are now versus what is proposed. we are not suggesting anything not to be undone. although i do think it would be far more appropriate for epa to decouple some of the elements of the world they are now proceeding on. >> thank you, mr. chairman. i just wondered if the gentleman was including its advocacy jobs created for undertakers when people don't survive as a result of poor standards. >> the gentleman may respond if you'd like. >> sarcastically or in general? >> you're the witness. >> no, we are trying to look at this in the aggregate. and you know, as i said to one overt industry they can really be addressed from virginia's standpoint is the whole industry in the spinoffs they are. after that it becomes the energy

cost associated with the gradual rising cost as those incorporated to the utilities because utilities paid none of this. it is the ratepayers to pay for all of this. >> mr. chairman, i appreciate given a chance to respond. we've been talking about commencing 17,000 lives a year on the line with respect to regulations. thank you, mr. chairman. >> i thank you goes. we now recognize mr. connolly for five minutes. >> thank you, mr. chairman. in welcome again, mr. attorney general. the national capital region including northern virginia is classified as a nonattainment reach and in terms of air pollution. do you know what percentage of that air pollution is migrating pollution from coal-fired power plants? >> i do not. >> the surprise you to learn a

third of the air pollution in this region is saturated to those migrating pollution sources from coal-fired power plants in this region? >> i wouldn't expect anything in this region to have started here. so i created that. the specific numbers don't really suggest. >> certainly if the attorney general, representing all of virginia, you can understand anxiety and concern in the northern part of the state with respect to pollution caused by coal-fired power plants? >> i don't think that concern is quarantined to northern virginia. i think it is shared across virginia. additionally shared the desire for balance to be achieved as we gradually keep our air cleaner can improve the standard of living. >> mr. attorney general, the proposition is that showed the speculation going to affect, who would have devastating effects,

both on sources of electricity, and jobs. in 1990, with the clean air act amendments, similar arguments were made. do not have been the price of electricity in the commonwealth of virginia? >> in the intervening 20 years, did it go up or down? >> i can't go back to 1990. >> what a surprise detour in electricity rates in the commonwealth of that time. it actually fallen by 35.6%? >> would not entirely surprise me. >> does that not all into question perhaps then the claims that in this particular case that won't work and in fact electricity rates are going to go up? given the experience of the last 20 years. >> certainly be easier to analyze the argument if there were more than 134 days to look at 960,000 comments, presumably not all of which if you just

compare them to other rules, you all had your own here from this committee. i would look at others that the chemical recovery combustion was 2.5 years commerce appertaining combustion engineer and a half for cement -- departments that manufacturing. >> wrister cuccinelli, we look at for the past month to consider questions for the same dancers. >> mr. cuccinelli, unfortunately time is limited. certainly the clean air act of 1990 were farmers sweeping them up in front of us now. what happened to electricity rates another coal-fired -- states with coal-fired power plants in western west virginia, north carolina, ohio, kentucky and alabama? are their electricity rates intervening 21 years since a sweeping set of amendments quakes are the higher or lower relative to 1980? >> i don't study other states

electricity specifically. i sit i sit at the national compared to virginia, sunday borders virginia and where the rate case where it's relevant. >> would it surprise you to learn they're also cheaper? >> i wouldn't be surprised either way not knowing. >> mr. cuccinelli, i was under the impression that in the health care reform act, the affordable health care act, you were an advocate for nullification. you supported legislation. you supported legislation of the general assembly of virginia that made universal mandates illegal in the commonwealth of virginia. is that not correct? >> nullification is incorrect turned and suggest you don't know history. vilification sinise says we are not going to obey your federal law. that isn't what happened in virginia. the general assembly in a bipartisan basis passed a law. to be exceeded the president signed p. paquette and those two are in conflict. as our constitutional structure provides, we went to court to resolve the disputes of authority related to those two

laws. that is not nullification. >> general cuccinelli, you can answer any question you choose to answer, however you are only bound to answer questions that are within your made this a good subject for which were brought here. you may continue. >> mr. chairman, the purpose of my question was not to focus on health care. i wanted to get the opportunity to the attorney general to explain his position because my question has to do with whether -- you don't like nullification and preemption. does the commonwealth of virginia had a similar preemption right if you don't want to subvert nullification power with respect to this regulation your fewest attorney general of virginia? >> i think the commerce clause. clearly gives congress the mayor for the federal government broad powers to address something what pollution across state lines, whereas if you compare that to the health care example, or during a particular individual

to go buy a product, not regulating western commerce, or ordering them into commerce is a completely different comparison. i have no constitutional complaint with what is going on in terms of the exercise of federal authority here. my concerns are policy concerning chemical process concerns. >> so you see the two is different? >> absolutely. we put the processes in place to protect not only rights, but to achieve the best policy outcomes. i know regardless, everyone here would like to achieve the best possible outcomes for this country. i think that we are more likely to do that if we actually take a legitimate amount of time to consider the material that is now before us that is simply not humanly possible to consider all the comments now before us on the incredibly short time. >> thank you, attorney general

and thank you, mr. chairman. >> i asked him his consent up is another record the details of 1990 clean air act showing a five-year period for rule-making exception. additionally, i'd ask unanimous consent that the statement by the union for jobs and the environment, the public comments come utility communion organizations combining says epa data implies that no coal units in the united states meets all the proposed new sources hepa standards. or the effect goodness of its pollution control devices. that's unions for jobs and environmental public comments. and with that, it would now recognize the former chairman of the committee, mr. towns. >> today get it wrong? >> i apologize. i no recognize the distinguished it from the district of columbia, ms. norton. i'm sorry, i didn't see which

came first. i apologize. >> that's all right, mr. chairman. welcome, mr. attorney general. there appear to be two separate talks to your complaint. one is the process in the time for the process. i'd like to get to the substance because it would appear that some states already implement stringent mercury emission limits that are even more stringent mercury emission as i understand bp is now composing. so i went to a set of states closed by a a way. can indicate, new jersey, new hampshire, massachusetts and new york. i hear is what the massachusetts department of massachusetts department of environmental protection said. experience in massachusetts in

emission limits for mercury and other pollutants clearly shows that epa's proposed limits are achievable and effective. for example, although massachusetts mercury emission limit for existing coal-fired power plants are considerably more stringent than those proposed by epa. massachusetts would fill these and have been able to install control equipment with no impact on reliability of electric power and have demonstrated compliance with the interests. mr. attorney general, i does the same technologies available to the state of virginia, for example? >> presumably there available everywhere. >> have you considered the possibility of using those very same technologies to achieve the results in virginia that has

been achieved even beyond those even beyond those even beyond those even beyond those its? >> congresswoman, i think you are focusing on what amounts to less than 1% of what bp is doing and that is the mercury piece of this. the mercury piece is a lot more achievable with a lot less damage than if you pile everything else on top of it. all of your statements with respect to herstory i just accept them as stated in with suggest that it wouldn't cause nearly -- not on an order not to tear the kind of challenge that the whole world the epa -- >> mr. attorney general, the northeast states of the coordinated air use as epa's opposed rule in here is what they see threw itself is the successful track record demonstrates there are no insurmountable cost -- emphasis

on costs as you appear or timing various to achieving epa's proposed mercury and air toxic standards. now, they are speaking beyond the mercury standards. do you disagree with that statement? >> i am not quite sure what they mean by the air toxics. i'm assuming they mean the toxic gases, which you got the mercury, acid gases. you have that particular matter. >> is a air toxic, so i assume they're talking about all the air toxics. >> if they talk about all, i would not say what that statement. if they were stickley kiki and the mercury piece. >> they are not strictly speaking of that. >> i think the mercury piece is

probably within reach. >> you think virginia could move forward on the mercury piece? >> if you strip the other stuff out. >> these people when i had under him, mr. attorney general because they care about the health of their people in the air beyond what epa is now proposing. so you're going away for epa? >> no, ma'am, they are not. they are beyond the vp is proposing an area mercury. >> said they are beyond what they are proposing in mercury alone? they went ahead before epa proposed. i'm asking you, don't you think virginia might go ahead i mercury allowances you think that is achievable? >> virginia could do that, but obviously it's made a policy decision not to do that. i would note that this all has, as i said before, the balancing consequences. we have a much lower unemployment rate than any state your name. we have a higher economic growth rate than any state you just mean. despite the economic challenges. >> mr. attorney general, i don't know if that case i will not

accept them to look at those figures. was ligature concerned with the process. >> the gentlelady has an additional 30 seconds. >> i thank the gentleman. are you aware that the rule saying alliance apparently to be finalized in december would not have to comply with until 2015 and then extensions could be gotten after that if you demonstrated that an extension was necessary? >> i'm more of the rule goes into effect was approved in mid-december to effect in january and other three-year implementation timeline, i also know what it takes to replace, to permit into all the steps necessary for utilities in my state to replace certain power generation that will have to be withdrawn in that time period. and we cannot match the two. we can get kind of close, but

not match them up. >> in which case, that would be justified. >> thank you, mr. chairman. >> that's always true. however, there is a limit on the epa's authority to just extend than relying on that from a business pleading standpoint is not some thing that i can argue before my state corporation commission when utilities come in and say we have to meet this. they don't have to rely on the extension of the law of virginia is dictated by the u.s. constitution because they are granted to write a return is this race will pass through to all of our citizens, porous, richest and everyone in between. >> i think the gentlelady and i thank you attorney general. but that i recognize the former chairman of the full committee. i'm sorry. chairman, you're just cannot do it one more moment. but that it the gentleman from oklahoma for five minutes, mr. langford. >> thank you, mr. chairman.

i apologize for taking at the former chairman's time. >> we will make up for it. >> thank you for being here. my concern is that i went back or decide years ago, congress was congesting hearings and discussions about pushing power generation not natural gas into into nuclear because we are running out of natural gas peers to no more natural gas out there appeared folks that were used to not need to go into coal. now, plus 35 years, now the federal government says cole might not be a good idea. let's try natural gas and see how that works and it is better or if we can use wind. i think you need to adjust to the provinces the federal government and now use a series of studies to justify how we want companies to move, that is very difficult on power generations. you can't just plan for next year. better plan for next decade what they will construct.

my concern is the cumulative effect of these regulations and if that is then evaluated, is it your opinion of all the thing is coming down i've got three pages worth of different rates coming down right now it is epa on power generation, weatherby 316 v., across tables, whether it may be for cool and a whole litany of issues from the china comes from the ground all the way to fly ash at the point at the end. do you feel that has been adequately studied in this hurry to get through at least a million different comments made, with the cumulative effects also evaluated? >> appear after midwicket was inadequately? absolutely not. this hasn't even gone and they're still setting the finalization date in the middle of december. that's where my self financed process. of course it's november now. so that isn't what happened if they're going to keep to the schedule they've laid out. that is absolutely not been

looked at. you mentioned some of the triggered gods with respect to greenhouse gases and i think of the switching of fuels, you know, the fact that we had epa over their improper process in the greenhouse gas endangerment finding was raised earlier. what is interesting about this is it that is so important, this makes it worse. and that hasn't been looked at either in any serious way or maybe. the 960,000 comments. it seems the timeline has been set up so they won't be reviewed, not so that they will. >> that is my concern is that has not been enough time. the president has been very urgent to say we need to look at cuba to the fax if that is not occur to catechumen of effects with all the rates coming in this the day are coming down to the size of an. one of the statements made by epa was this may have a potential 10.9 alien dollars in

annual cost on the economy. it's just that one regulation alone, $10.9 billion. then you start adding all the different areas of 316 v. and everything else coming down. it's fairly significant was happening. i understand comments made to say we continue to have regulations to the power industry. it presupposes some point that doesn't work anymore. you can't for a thousand regulations that they will continue to drive the cost on to adding a regulations. doesn't work that way. at some point you to common sense. >> i certainly agree with that. i would also note executive order 13563 requires epa and other regulators and i quote to tailor its regulations to impose the least burden on society consistent with obtaining regulatory check is, taking into account the cost of cumulative regulations and the pa has not performed cumulative regulations cost analysis in the utility now. >> what about the effect on

reliability? >> i understand that is widely debated here. it is not much debated in virginia. we are looking for one of our utilities probably $250 million of transmission infrastructure costs. those bylaw passed right through to the ratepayers. on top of that, from a public policy standpoint, i was in the state senate. these are the ones people scream about. this is where power lines will be built across 50, 60 miles of people's backyards that do not now exist and are going to be necessary to provide flexibility in the grid, to meet the reliability requirements that you would expect of a modern electrical grid. so we are also looking at that challenge. bennett talked about that at all. >> i would say again, if we make a major decision will affect future planning, we better make it right.

35 years ago we said let's the most critical because that's more abundant than it is for natural gas, now a now a treasury person that we say of denver studies instead of a knee-jerk reaction, which is the same knee-jerk reaction in the same kind of consequence if we don't do this right. with that, i yield back. >> i thank the gentleman from the nature gas producing state. and i think the former chairman of the full committee whose picture adorns the area just behind us, mr. talents for five minutes. >> that only means i've been here a long time. >> okay we will make it six minutes. >> mr. attorney general, you testified today that one of the impacts of the air toxic rule would be closure of coal, fire power plants, which will in turn cause job loss. is that correct? >> and with the increase electricity cost that comes with it, yes.

>> at evidence from our previous hearings on the subject before the set committee on regulatory affairs, suggest that many of these coal fire power plants are older and would've gone out of business anyway. what is your answer to that? >> i think you are certainly accelerating retirement to part of the cool flea. i do not think in a way to utilities and vision necessarily, but certainly that will be where they try to sacrifice another generation. that is just logic. >> let me ask you this. in a meeting on june the first with investors, the chairman of the american electorate power by the name of michael moore's told investors the following and i quote: as you know, those are high-cost plans. throughout almost all of 2009, those plans probably didn't run

5% of the time because those natural gas prices. when we shut those down, there will use some cost-saving as well. and on balance, we think that that is the appropriate way to go. what is your response to that? do you agree or disagree? >> are second-biggest utility is one of their subsidiaries. apco isn't a peace subsidiary. the 5% comment, we have some plans that fit in the category you described. i use the oil fired as an example. and mind you, there is some value to keeping fuel flexibility. anything if they are dirtier plants, even if they are but schumacher and all the time, have been available for peak time in the winter and summer as

i was suggested great you on both the cost basis and the reliability basis that far outweighs the benefits he might get by shutting them down permanently, which as his comments suggest, what is going to happen. and i think when you -- moving them perhaps from a broad 24/7, 365 positions to using them as peak power would be a great alternative for america. he would achieve, even if you accept all the health claims, everything come without disputing any of that, moving from one position to the other would be a huge boon and with tremendous cost savings from an opportunity cost perspective that are dropped on ratepayers because you moved them over instead of shutting them down. but that is not an option under this rule. it is not an option under this rule. in fact the opposite where you

have to put in all the upgrades for their use some 100% of the time or 5% for a 5% plan. so of course you're going to shut it down. >> let me ask. ee plans to close two plants in virginia and glenn bland, is that true? >> well, i can't think for ap, but i certainly would expect they are on the box, yes. >> ap agreed to retire those plants under 2007 consent decree over violations of environmental law. isn't that right? >> i don't know that shutting them down as part of any consent decree. >> my time is about to expire. mr. attorney general, it seems to me that your testimony before us today is a transparent attempt to blame the government for the fact that many high-cost dirty coal plants could not compete in today's market, even

before the air toxic rule goes into effect. >> and they would be shut down of their own course. >> you know, i know when you answer, that you only represent virginia, but when you -- actually in the position of attorney general company do have to look at what happens in other states as well and then you make an opinion and actually evaluate whether it's good, bad or indifferent. you have to compare it with something. so i want you to know you do have to look at other states. you just can't look at virginia. >> my comic to that effect was only with respect to specific data for those particular states. paper you've got to draw from experience of other parts of the country in other states and i do do that in trying to do what is best for virginia. >> i get back. thank you for coming to testify. >> let me make a quick comment as well. i would take a quick moment and

then yield to mr. connolly and then we'll make a transition as well. there are 25 other states obviously rep senate in this brief. it's not just virginia we talk about at this point. this is not just a single state issue. this is a national issue when all that is happening. currently, what is in place on this is not just stealing with a small group of plants out of date, but there are no coal plants that can abide by this nationwide. no one is at the standard at this point. that is the challenge to figure what do we do with this but no single utility will not be affected by this process? a quick question for the attorney general is well doing with the combined regulations we talked about the killing of effects is. american coalition for clean coal electricity estimated that some of the combinations, an increase electricity between 12% and 23%. i know we are guessing earlier

on some figures. he did support pretty tough, especially. but numbers have you seen? >> and our last round of utility rate cases and i am now awaiting orders on what is the center ground since i've been attorney general, but in the last round we saw -- we analyze rate increases is related to federal, not state, just federal environmental regulation and 35% to 40% of increases or pastor environmental cost. in virginia unlike north carolina come utilities can absorb these costs is to incur an ongoing basis. in north to any utilities can tinker until they flip a switch under the new plan timeline. so it happens a variety of different ways, but it goes.

edelman had a couple townhall meetings as attorney general they were both on utility rates and the poor parts parts of our state because it is hard to describe from people who are not from poor parts of the state what utility rates mean to the people of these households. when you talk about 10 bucks a month or 20 bucks a month more, it is real money in a small house that is pulling me the 1250 kilowatts, which is an apco average. that is big dollars to them. it hurts when they aren't fixed incomes is a large swath of that portion of that you had is relative to the rest of virginia. we see that a lot of the poorest parts of virginia. make no mistake about it. there'll be economic economic consequences. you will make these decisions all the time about where the trade-off should land. make the mistake about this.

do people hurt first and the people her first economically are the poor. they are the poor. patsy will hurt first of will hurt the worst. thank you, mr. chairman. >> with that i yield three minutes to mr. connolly. >> thank you, mr. chairman. i would note that the attorney general's view of history in mind might be slightly different with reese that to utility rates in even the poor part of virginia. many rate increases he is referring to occur subsequently to the reregulation passed the general assembly of virginia has the favorable to industry, not particularly favorable to this numerous. mr. attorney general, let me ask you just one question. he talked about utilities. the largest utility in commonwealth of virginia is dominion resources. as dominion resources requested that you challenge the air toxic

rule legally or that legislation be introduced to prevent it from being implemented? >> now. as i mentioned earlier under mr. mr. rotation of nullification, virginia isn't in the constitutional position to step in on federal environmental regulation of the constitutional objection. even if we have legislation. the supremacy clause of the constitution is federal law trumping state law, the huskers that you asked about earlier in the supremacy clause contains an exception when the federal law is not constitutional. no one i know whereof that's what epa is doing is unconstitutional. an approach. incredibly unique in terms of speed, particularly in light of the volume of the comments and impacts, which even if you asked that the epa's are one of the

dispute. >> the answer is so far the largest utility they seek to overturn the rule. i mean on the federal level. >> have you received -- as the attorney general of virginia can have your seat communication or indication from the largest utility of the commonwealth that like you or others in fact try to seek to overturn this pending war. >> now. my concern is smart ratepayers and it is with utilities. >> thank you. mr. chairman, i would just add my colleague from virginia and i do disagree in terms of interpretation of history. ..

i appreciate you being koln and collaborative in explaining what your goal is what virginia could do more expeditiously and quite frankly, the need to have nearly a million public comments evaluated in the way that is appropriate before we set a regulation that people may asked for extensions on but which may in fact be a different

regulation that if all these comments are properly viewed in a public way. so your attention here and willingness to come on short notice we very much appreciate, and again, i appreciate people willing to come before this committee. it's not always pleasant but it's essential. i yield back. >> we will take a short recess and shift to the next panel. >> thank you. >> [inaudible conversations]

perciasepe >> the hearing will reconvene. we recognize the honorable robert perciasepe deputy administrator of the united states agency [inaudible] -- all witnesses are to be sworn. please stand and take the oath. raise your right hand. thank you. u.s solemnly swear or affirm that the testimony you're about to give will be the truth, the whole truth and nothing but the truth? thank you. with the record reflect the witness answered in the affirmative. pursuant to the normal routine, i know you have five minutes or more to give.

you're entire statement will be placed in the record. you may read off of it or summarize it we would only ask you try to remain fairly close for the time for questions and with that you are recognized for five minutes. >> thank you, mr. chairman and representative connally and members of the committee. i appreciate the opportunity to appear for you to the on the mercury and air toxics standards. >> is your microphone on? >> i will move in a little closer. it is clean air necessary to protect health and the environment from the pollution by the plants especially the oldest in the dirtiest and least efficient of them all. the epa will issue a final arcuri and air toxics standard which is the topic of today's hearing on december 16th, 2011. we are not the first administration to recognize the need to clean up power plants

and issued rules to address that need. in fact, since 1989 when president george h. w. bush proposed what became the clean air act amendments of 1990, power plant cleanup has been a continuous policy of the united states government under to democratic and republican presidents. while past epa rules have made progress in reducing the harmful effects of pollution more remains to be done to insure all americans have a clean environment to which they are entitled. the queen of power plant rules, the mercury in their talks extended and across state air pollution rules finalized earlier this summer will achieve major public health benefits for americans that are significantly greater than the costs. these pollution reducing rules are affordable and technologically achievable. there is tremendous public support for moving forward with these rules. since march we've received hundreds of thousands as has already been mentioned of the comments from the public urging

us to reduce mercury emissions from power plants. the mercury and air toxic would have a significant public health benefit from a sample if we reduce mercury which can cause neurological damage in children exposed before birth. the rule as proposed also is projected to avoid thousands of premature death, thousands of non-fatal heart attacks and hundreds of thousands of asthma attacks. this would provide americans with five to $13 in health benefits for each dollar it costs. our analysis and past experience indicate warning from the consequences of moving forward with these important rules or exaggerated. while not the focus, the mercury and air toxics standard rule has the potential to improve productivity and provide jobs. we estimate the proposed rule would result in 850,000 fewer work days missed due to illness and could support 31,000 jobs years of short-term construction work. the net of $9,000 of long-term

utility jobs. money spent on pollution control and power plants provide high-quality american jobs in manufacturing steel, cement and other materials needed to build the pollution control equipment and installing the equipment and operating and maintaining of the equipment and many of these jobs that are jobs that will not be and cannot be shipped overseas. in fact the united states is a leading exporter of the pollution control equipment. our publicly available analysis shows the epa rules affecting power plants are affordable. the siskel lubber read the weather outside groups and some in the industry who recognize that issuing the rules in the same time can help provide power companies with a certainty they need to make smart and cost-effective decisions. as we did more than two decades ago, we are also hearing claims the rules will lead to potential adverse impacts on electric reliability. epa analysis projects that the agency rules result in only a modest level of retirements that

are not expected to have an adverse impact on electric generation resource adequacy. our rules will not cause the lights to go out. while there are some industry studies suggesting the rules will result in substantial power planned retirements in general they share a number of serious flaws. most notably as the congressional research service emphasized in august, these studies often make assumptions about requirements of the rule the inconsistent with and dramatically more expensive than the epa's actual proposals. in some cases the analysis performed before many of the regulations in question were even proposed. in closing i would like to suggest that the committee should be clear about what is at stake and those who have stalled in cleaning up the pollution calls as those who have stalled the cleaning up the pollution call for further delay. deily encourages companies to avoid upgrading america's infrastructure and putting people to work modernizing the facilities and most importantly deily beans public health

benefits reducing harmful pollution are not realized. thank you and i look forward to answering your questions. >> thank you. i will recognize myself for the first five minutes. and i will kind of take your opening statement in reverse order. if i understand the nature every time one of the political standards i just want to understand you really don't usually do much to the overall facility. it's no romilly additional clinical but isn't that true in this case? >> yes but obviously from the engineering perspective it has to be integrated and to the operation of the facility. >> that begs the bigger question isn't it true that today there is no utility that you can show us that is able to implement this entire standard today. i know there are pieces of it in various places but no utility is currently able to implement isn't that true? >> i don't believe that that is

correct. i believe we'll get the best performing plants are around the country. >> boe we look at that and you look at each plant and put together various plants and say if you do this and this and this like frankenstein you can get one person. but you make the assumption you can put together the best of all these plants. some of these plants have different long combinable operations in the current time; isn't that true? >> i believe that plants can make the standards and some do, but i would like -- >> is there any standard plant today? use it some of them do. could you answer for the record of a single plant that meets this standard today we would be thrilled to hear that because we just had an attorney general, one of 25, 24, and sorry, who have asked for a delay as you know in order to get public comment but most importantly they have asserted else does coming and i will put it in for

the record the unions or jobs in the environment public comments a union, combined trade union organization who believes that today there are no standards isn't a not uncommon the epa believes a standard will be compliant with the standard can be achieved within the time parameter and that it might be and i want to give the benefit of the doubt it might be that you could, they could achieve the 2015 isn't it part of the assumption not that they exist today that if you take all of the analysis they could achieve by 2015. they are proposing for power plants has to be based on available technology that is currently performing at the level that we are the opposing. >> if you have the epa deliver us one power plant of what's

just say make a lot or above that uses coal that currently meets the standard we would appreciate having the for the record and we will hold the record over. if we could put up the pie chart earlier today we had one of those 24 attorneys general who cities and there she is not a scientist skilled in this area that he believed when it came to the area that would be under this normal regulatory process which is the mercury that is incredibly small sliver of paint if this standard will only affecting mercury he would be the shorter comment period with a great likelihood of achievement is possible do you agree with that of mercury is not what is driving most of the objections from what you can tell? >> that chart is correct. the best i can tell,

mr. chairman. spinets from your analysis but we couldn't resist using your own figures because they seem compelling. isn't it disingenuous a term we like to use in washington more often than maybe we should but isn't it disingenuous for the epa to talk endlessly about arcuri and its effects of which were very concerned about when in fact the best record is particulates and if not 920 out of 930,000 comments the vast majority of those comments are of the march report should come a portion which is probably achievable well within the time parameter three estimate the effect on children effect their -- >> my question is very narrow. it's not the effect of mercury. it's the technology exists today or can predictably exist to meet the 2015 s to mercury isn't the

combining of particulate normally covered by another part of your authority it fairly disingenuous use of the benefit because the benefit of reducing the mercury and the technology to reduce the mercury for appears not to be in widespread conflict in fact you get to the mercury only standard you might likely have much greater implementation. >> we can't quantify by neurological impact on children -- >> the result of the benefits as the pollution control achievement for mercury and arsenic amoco and chromium and the gases which are all

regulated which have implementations we think have benefits is a good thing in those benefits also have substantial public health benefits so it is the same -- >> the same equipment that is making those reductions and fine particles >> these are the controls but will reduce the other divisions emissions. >> i recognize the ranking member. >> thank you mr. chairman. >> one follow-up i think the gentleman. for roughly 90 present of the benefits york claiming under this regulation would already occurred under project of that reduction under max isn't that

true in other words your double counting you have some of the regulations would cover 90% of this your accounting 100% of the reduction in particular when in fact 90% of it is going to occur and those of the benefit, so i guess for the record the differential between the two standards the last 10% on a particular its what portion of the co benefit would actually occur in other words it is the last little fraction of reduction. >> by the program which clearly the amount of reduction here in the cost my understanding is that about 90% of the particular reduction under that part of the regulatory authority order basically. >> what i have to answer is this

rule is aimed at reducing the air toxic emissions those air toxic emissions i mentioned in the acid gases or the same control technologies are used. >> yeah understand that but here's the point, much of this standard for the particular is below what you say is safe by your own figures. so when you say you get down to the sluve ball you now have clean air, you've defined clean and safe and yet in this regulation you are regulating on the standard lower than what to say is necessary. in a nutshell is in it true that your regulatory authority in said the point in which air is safe? >> your staff is shaking know behind you. if you can answer that you think you have a regulatory authority it needs a threshold which is saved by your own standard i would like to hear it.

two quick points deregulating air toxic here and it's a technology standard that's looking at the festival technology, the maximum available technology as for the mac stands for for the toxic. it gets those benefits. it gets the benefits of reducing the fine particle pollution which we think is great and there are health benefits even below the standard. >> why is it you have 15 milligrams per cubic meter per billion etc., etc. 15-milligram standard and yet you've got your new you are now sitting -- that is would you consider safe on the one hand, and then you come in below 11.5 milligrams and i can't think in terms of that small but i agree the particulates even in the small amounts are important to look at. but why wouldn't you change your standard, supported with science, change your standard to

in item come to an amount below the 11.5 before regulating and claiming benefits below the 11.5. doesn't it seem like you've declared queen as 15 and regulating below that and taking credit for cleaner -- i'm not a scientist and i will not claim to have any expertise in this. i can just look and say there is an inconsistency like a set of books that don't balance. you may not know where the missing money is that if you don't balance you go looking for it. why not have a standard that is adjusted based on science to match the greater regulatory requests you're making. >> we are making the air toxics. the nickel, the or cemex, the acid gases, the kunkel technologies to read a spread of door claiming the benefits of the particulate. >> they are real. they will accrue to the american public. why not lower the standard to the 11.5 or below so that you are consistent in what you say you want to reduce to respect a

air quality standards set under the science process where we have science advisers that advice on what level is adequate, adequate for the protection of public health. it doesn't mean that there are not public health benefits below that level. and that's what we are looking at here. these are co benefits from controlling the air toxics, that is the objective of this particular rule making. >> thank you for your efforts and i recognize the ranking member. >> i thank the chair. mr. perciasepe, the chairman said after the question of whether any coal-fired power plant in the united states could possibly be completed with the proposed rule i have a list in front of me of existing coal-fired power plants that are

already fully compliant with the proposed rule including four in my native state of virginia despite the testimony of the previous witness that nobody in virginia could become plight. i got four of the power plants, coal-fired power plants suffer fully compliant today. are you aware of them? >> i know there's some that are in compliance with of the rules. >> i would ask without objection. >> there is a new one under construction in your state and virginia city. >> i would ask unanimous consent -- >> we will be providing information. >> is it also not true that nearly 60% of all of the coal-fired power plants that report emissions to the epa are compliant currently with the proposed limit for mercury? >> i don't know the exact number. perhaps my stuff behind the has the exact number. >> he and i would ask that be entered into the record. >> we can't base the standard on

something that hasn't been met by an existing -- >> my point in asking the question is the consumer is some cut off the source of electricity in the united states is a false premise given the fact 60% are already compliant on the mercury standard is and it further to 73% of all of the reporting units are already complied with a proposed limit for hci? >> it's likely. >> 70% i ask that the injured in the record also 70% of all or on the limit for the particular matter. what we are trying to do is make at the margins and improved for those not comply and some of which as we already heard in the previous testimony the old appliances are probably on the chopping block any how it would serve both consumers and debriding public of the sort of use this occasion to perhaps

move on. we also heard from the german concerns about why didn't you just take a lower level. in the previous of ministration try that and wasn't there a court ruling that it was -- and required more rigorous enforcement? >> on a fine particles i think it was an ozone that there might have been a court ruling or court activity. but i don't know about fine particles. the bottom line is there are health benefits. you're talking about this rule. the previous administration -- >> please finish your sentence to be spread there's a 20 year history. >> you're about to say -- >> the previous administration proposed control for mercury in 2004. >> and what did the court of law

-- >> the court of law through those out because they did not comply. >> that is the answer to the german's question. why are you doing this? it is not unique to the obama administration. the previous administration tried to be with the chairman suggested. why not settle for a lower level in a court of law said not good enough and told epa you have to come up with new regulations. they are tougher than that; is that not correct? >> if the court said that the -- yes, that's correct. it would be regulated under a different part of the clean air. >> that's the answer why you are doing what you are doing to become the court told you you had throop and throughout the bush administration to have a lower standard. it isn't because you just, you know, in some law somewhere decided to just be painted of every one side by coming up with the top part to reach regulations and as the data shows they aren't as a majority of the unit's reporting already meet one or more of the

regulations. was this standard on the toxic pollutants envisioned or incorporated in the 1990 clean air act amendments? >> yes. >> why did it take 21 years than to employment fell law passed the 1990, into the law by the republican president? >> it's hard to imagine that it's taken 21 years to get to this particular point, which obviously flies in the face that we are going to fast. has been looked at numerous times by epa. there have been proposed regulations that were not properly completed, and we are in the situation now in this administration of having to be guided by the judicial branch towards the end that we are now aiming at. >> thank you mr. perciasepe and mr. chairman. >> thank the gentleman. social studies was a long time

ago for me. i familiar with the legislative branch. i'm familiar with the executive branch and even the occasional the executive branch over reached. sue and settle was new to me. do they ever encourage groups to sue them? >> knowing that usually we get sued when we are not doing with the congress asks us to do and that is usually what results in knous getting on a schedule that is different than the schedule -- >> then you never invite lawsuits and there would never be anything to indicate that you have suggested that someone would sue a friendly lawsuit shall we say? >> never. >> not that i know of. >> what is about december 2011? 21 years waiting. health benefits denied.

>> we've waited 21 years and we have almost a million comments. wouldn't you think we ought to make maybe 20 to so we can fully digest all 1 million comments? >> it might be good to see something about those comments since they've come up. >> of those million comments, 900 something thousand the vast majority are in favor of the rule of those million comments as you know some people have systems they can reply are unique as opposed to duplicates of comments. >> 22,000 is still a lot, not a million, 22,000 seems like a lot to digest between now and christmas is not between now and christmas. we've been working on this rule for a long time. the comment period. we left it open longer than we normally do so that we would

expect to get a lot of comments. >> have you asked the court for more time? >> part and? >> have you asked the court for more time. this is a judgment. we recently asked the court for another 30 days to finish the work. we have read every one of those comments and we would be replying to every one of those comments in the response to the document that we are currently working on. >> we left the comment period open longer than we normally do and therefore we put the staff to the task that we would need to be able to reveal those comments. >> did you have an opportunity to listen or watch the president's joint address to congress several weeks ago? >> i did. >> he mentioned regulations and he mentioned some that are having a deleterious pernicious effect on industry then he said we should have no more regulation than for the health,

safety and security of the american people and i think that he's identified 500 that at least 500 that can be done away with. it strikes me as curious -- let me ask before i say this -- are you arguing that the position of this regulation is actually going to create jobs? >> we believe the jobs will be a net positive in this sector. >> how many cold jobs to you think will be lost? >> we expect -- >> one of the things you have to realize is we are investing, we, the country, not weak epa, we are investing in this role in the coal-fired power plants. we are going to make a major capital investment. >> how many col d'izoard students we will lose? >> do you think we are going to add some construction jobs how many jobs will be lost because

neither one of us are not even enough to believe there aren't going to be jobs lost. >> i expect the amount of coal that is used will be roughly flat. the plans we will invest in will be many will lock in the fact we are going to be using coal for many, many -- >> what with respect to job loss? >> we have a range that we've identified 900 permanent gains in the middle of the range some go slightly below zero. >> i'm just asking about job loss. what analysis did they do about the job loss? >> that is the net gain is 9,000. >> so epa did factor in the losses to the coal industry and others? >> yes. >> my time is up.

sorry. >> a month to think you on behalf of mr. connally and myself. >> [inaudible conversations] spec on behalf of mr. connolly, chairman lysin and myself, thank you. we will recess of the third panel and we will provide the information suggested to the chairman and follow-up and of course every question we will follow up as quickly as possible. thank you for your time and i appreciate question.

>> we will be in recess for five minutes. [inaudible conversations] the hearing will now reconvene. we now welcome mr. josh bivens. he is an economist at the economic policy institute. mr. bivens, i noticed you were here for the previous panel. so, you recognize pursuant to the rules all witnesses are sworn would you please rise to

take the oath, raise your right hand. you solemnly swear or affirm the testimony you're about to give will be the truth, the whole truth and nothing but the truth? once again let the record reflect the witness answered in the affirmative chance once again, the witness is recognized for five minutes for his opening statement. i think the committee for the invitation to testify today. my name is josh bivens. ayman economist of the economic policy institute in washington, d.c.. by professional peer reviewed research standards the cost of the air toxic are very large but somewhere along the way the debate moved on the ground of job creation which is a little odd because regulatory changes just aren't big drivers of job growth. but in my testimony, and especially my written testimony, i sketched out of a regulatory change in general in the air specifically can affect job creation and unemployment. i conclude that the rules like almost old regulatory changes will have trivial effect on job growth over the long run but over the next couple of years

particularly if the rate remains high the rule will likely create jobs and lower the unemployment precisely as the unemployment rate is high to did will was implemented would have clearly positive impact on job creation so in short the deily to the implementation of the rule based on the deals to the wider economic weakness have the case entirely backward. there is no better time from now from the job creation perspective to move forward with these rules. my research in the written testimony indicates the toxic roel adoption would lead to the net creation of about 28,000 to 158,000 jobs between now and 2015. the primary economic impact will be in significantly boosting health and quality-of-life leading to benefits at least five to ten times larger than the cost and we are here to talk about jobs or at least that's why i've been asked to be here to talk about jobs so let me say a couple words on it. the job impact of regulatory changes dependent am wide econoc impact. when the economy is functioning well the jobs from changes are

going to be small for two main reasons. most important is the well functioning economy the federal reserve can neutralize any boost or drag on overall employment growth that may result from regulatory changes to the conventional monetary policy measures they can raise or lower the interest rates. we may criticize the targets that the fed edolphus, but in a well functioning economy they will be able to hit these targets. moreover the direct first from the impact of the change on the employment growth are going to be modest because they carry offsetting influences so the fed won't have to do that much to counterbalance them. on the one hand employment because of regulatory changes boosted because the investments needed to bring could them into the compliance so the purchasing and installing scrubbers. on the other hand the voice of the price level of energy because the regulatory change may be transmitted to the overall economy by causing a slight rise in overall prices and this may cause a reduction in spending but it's clear the first funding package before the federal reserve tries to neutralize the of the regulatory

changes are indeterminate and it's important to note that even regulations that have large measure compliance costs are no more likely to lead to job losses than those of the smaller cost compliance costs go on both sides of the job creation letcher and represent both the skill of investment needed to bring the firm's into compliance and represent the sort of potential increase in the prices that may result from them. when the unemployment -- when the economy is not functioning well specifically like today when unemployment is high even as the short term policy interest-rate cut told by the fed on the synopsis changes and the most important changes that the fed can a logger neutralize any effect of regulatory changes on employment growth. so instead of the fed counterbalancing these changes are actually have multiplier effects so they would ripple through the economy. the paper in my written testimony based on his positive and the - first effect as well as the effect of the likely multiply it to the economy and it comes to the finding of the dominate and i just want to point out quickly that its estimates are awfully

conservative. basically they are conservative because the only real adjustment to the results i make is the assumption to the fed can't or won't clean against whatever happens to the employment because of the regulatory changes. but actually there's plenty of reason to think that they will be very little scope for the overall price level to actually rise given how much demand is in the economy today and basically the idea that when the past utilization rate of the utility of this at the lowest rate on the record of the regulatory changes will lead to the larger spikes is a very hard thing. in the second, when you have economies with high rates of unemployment, chronic excess of supply the often see the rapid disinflation, and that is what the u.s. economy is seen basically since what we now call the great recession started and this actually leads to the real interest rates rising even one of the federal reserve is trying to keep them down and this provides a brake on economic growth. even in the power generating sector is passed on to the general price level this will actually addressed the upward pressure on the interest rates

and this would be likely not to be positive for the overall demand. i don't include the consideration of affecting my papers so in short i think my estimate is likely job impact of the country by 2015 actually allow the wide scope possible for the negative impact to run free so i think figure every conservative. to be clearly want to conclude this is not a major jobs program it's something that should be done because it will help americans but it will not reduce job growth. >> i thank the gentleman and yield myself five minutes. >> first of all we want to compliment you. i've never seen an economist with so many. i try to listen to your opening statement. it was pretty amazing because it did balance so many but, but, but, but so i will look forward to doing for your conclusions once again after the hearing and see if i can't reconcile them. but let me go through a few

things i think are appropriate to your presence here today. first of all, you are here funded by the bluegreen alliance, is that right? >> no. i employee of the economic policy. >> do you work with the bluegreen alliance? >> yes, i have. >> would you say that it's fair to say a coalition of unions and environmentalists are essentially the people that you work with closely? >> i have worked with closely, yes. >> what a surprise you to know the international brotherhood of the workers of the afl-cio has opposed this implementation of the standard at this time? >> i did know that. >> without objection by the like to enter that into the record. >> without objection, so ordered. >> i'm not an economist, i don't

have a ph.d. so i'm going to make everyone look look set the record of this hearing a little bit simpler and i appreciate the but of your knowledge and capability to balance that so i'm not taking away from it but i just think that most of us have to understand this a little differently. this standard does not create new less expensive energy, is that correct? >> it does not do that. >> it does however when fully implemented in 2015 reduce pollutants in the bus has positive health benefits, is that right? >> that's my understanding. >> okay. and although there are some jobs created as a result of implementing the standard, those jobs are by definition either temporary, 37,000 or so or permanent. the permanent ones or bad for mission greater ongoing cost of producing the same amount of electricity, is that correct?

>> i think that's correct. >> okay. so to put it in terms of my economist economic professor at kent state would have said those are rocks in the knapsack. the benefit is to get clean air and whenever you get from that is fine but your ability to walk long distances are repeated and this is an additional burden of the ongoing cost of producing the same amount of electricity would you say that's correct? >> with one caveat. we're using the same amount of energy but producing cleaner energy than we would have. >> and the benefit of cleaner energy would be the health care benefits clearly and we all agree to that. so on the one hand you have a rock in the knapsack the cost the cost is at least 9,000 permanent greater jobs estimated to be about $11 billion by what we might call the low side the epa estimates. we will forget about the dollars

and gist understand you have 9,000 more jobs to produce the same amount of electricity and those jobs will add forever to the cost of producing that energy. so, with that assumption as we look at the speed they want to implement this three years after the look-see period understanding by about a month, what if 100% of the mercury and 90% of the particular it worked out to be an answer which could be implemented with more available technology today, in other words, what if you could get 99% of the benefit all of the mercury reduction and 99%, and i am using that as a hypothetical figure of the particular at reduction you could get that for a fraction of the cost, let's say 1 billion in additional cost representing only hundreds of additional workers hypothetically?

if that were the case as an economist, wouldn't you want a cost-benefit looked at a vast majority of the savings perhaps in the health benefits 100% because some point you have a drop-off in the improvement. i grew up in cleveland, a place all the walls of black and you could see the error when i was a young man, so i'm very aware of the improvements made since the 60's. my question to you is wouldn't you as an economist wouldn't want to have that reformation at your disposal to make the calculation of cost benefit to the economy on a long-term basis? >> yes. could we achieve the same goals more productively leslie burr need it? in the long run that sounds right. i would say in the short run we have a jobs crisis everyone agrees with that and those compliance costs represent job-creating and investments will be made to the corporate

sector showing no sign of any way showing signs of sitting on a massive amounts of savings without seeing any need to the job-creating investments so that to me is why we are assuming we from the due diligence whether or not the rules should be done if that is the case and it strikes me is the case now is the time to do them because what will help solve the jobs crisis we of the next couple of years. >> i'm not sure if you were there earlier but what we have explained to us is it was five years of rule making implementation after the passage of the clean air act of 1990 and there has been as much a full year for less controversy less-expensive propose rules while this one enjoyed roughly three months now extended by a month, so the question would be not with an economist but the standpoint of wanting to go in million comments evaluating vose and evaluating the cost benefit that comes from those

suggestions if that would give you 90% or 10%, and of course allow additional technology to get the rest, but in that be advisable for your finding the optimum benefit to the economy in a way of affordable energy, cleaner air, and of course job creation on both sides? >> yes it would be useful to know if that was a possible scenario. >> well we hope it is and with that i recognize the ranking member. as amihai thank the chairman. by the way, you asked earlier whether there was -- with her there were any coal-fired power plants that might meet the new standard. i think you were out of the room when i entered into the record the list of the coal-fired power plants that would right now meet the standard including the four in my native of virginia which contradicts the previous testimony. i would have now been corrected there are actually at least six at the station and the city plant both run by the resources

would be fully compliant today. >> hopefully the epa will codify that list as exactly that and i appreciate the gentleman. >> i would also point out that for the record all of at least six coal-fired plants in virginia would be compliant or south, they are not in northern virginia. >> you don't get to represent them? >> i don't put the first witness does. you may recall his concern for the poor communities bearing this brunt. dr. bivens, falling on the chairman's question about trying to follow the testimony you are now our third witness and we have actually three different sets of data in terms of job numbers. our first witness cited the industry funded a study that claimed that perhaps as many as 180,000 jobs could be lost the second witness said that the midpoint and their analysis was 9,000 jobs would be created and

you just indicated if i heard you correctly somewhere between 28,000 of as many as 150,000 net positive charles created between now and 2015 if this rule were to go into effect. to what do you attribute the syrians in these estimates that is awfully hard as a member of congress to sort of make the right decision policy wide with such a wide variety the coterie of the loss or creation estimates. >> i can speak clearly between the defense of my estimates and the epa that the industry funded study is pretty opaque so i can only guess what is driving it but the difference between life and the epa is the restricted to looking only at the likely job impact within the utility itself and one supply industry that's going to supply of i think we're missing a good chunk of the job impact buy not looking at the full range of jobs created by the investments and spurred by the need to make regulatory change so that is what my study

trust to do is look at both in the utility sector and outside and looking at the positive and negative. the industry studies that have -- that i have seen that have topped up big losses regarding this rule i think make two big problems generally to read each one is a little different. first there seems to be a big discordance deutsch and compliance costs and the cost implications. so basically, they have compliance costs that look, you know, relatively big say two times as big but in the of the price four times as large and given the compliance cost the dollar value was the skill of investment that support jobs those should actually move in tandem with the price increase. the only reason you have to raise the price is if you have to hire new people in order to do this if you have to do to comply with the regulatory new regulatory regime, and so i think that the consistently had price increases that are well out of line with the rest of their study actually. and the other thing they don't do i think is properly account

for the very different macroeconomic environment we're in right now so we simply assume it is what is the investments deutsch dropping to the u.s. economy at a normal plant in time we are not have a normal pleaded time we've had 9% unemployment even while the interest resource to get zero and the jargon of the liquidity is a really important context for how the economy is operating right now. >> my time is limited so that we ask this question now. we've heard assertions made it this kind of regulation is a job killer and it's going to pass on significant cost to consumers get when one looks of the date of the record for implementation of the clean air act since 1970 and the amendment since 1990 the data suggests the opposite really wonder as an economist would you comment? >> i agree and i would urge people to look at it the brimley institute they looked exactly at that sort of forecast for what

regulatory changes were going to do to jobs, price increases, things like that, and consistently in the and the cost of the regulation this almost always smaller than -- >> the price of electricity? >> i'm not sure if they look to the price of electricity. the best estimate for what's going to happen in the electricity is the epa and i see a lot of studies out there that look out of line. >> i repeat in my native state the commonwealth of virginia, since 1990 the aggregate -- the net cost of electricity has gone down by 36.5%. with that, i yield back mr. chairman. >> if i can ask the gentleman a question about your state. in virginia for those to go down i'm presuming that sense it is a rate based on their cost that's a matter of efficiency to reduce costs over the same period of

time they produce more electricity at lower cost, where they are getting a free turn on their capital, regulated return on their capital. so in this case, where the epa by its estimates has a cost of implementation, those costs would be passed on so it would be temporary spike in what otherwise is a cost benefit reduction that they've been achieving that period of time. >> the chair takes an important role that could happen. i would only point out that contrary to the first witness testimony of the reason for this week's especially in the rural parts of virginia have to do with every regulation of the industry the was written by the industry and the general assembly of virginia and had nothing to do with federal regulation. >> i appreciate the explanation and i will tell you that as somebody that has seen our state go through deregulation, a dramatic reduction in cost we have partial reregulation

although not completed as one of the challenges to we give the regulated utilities when they are given the cost plus situation the often do not complain about the cost drivers because the can pass it on in the cost of benefits to their stockholders. the same time they will say they want a free market system but maldon can't they give greater profit margin. he has a good point in your state as i do in line. at this point i should adjourn. dr. bivens you were very helpful. you're entire statement will be there. additionally because you had not as many witnesses that you have questions related to some economic hypothetical set me be beyond what is in your comments you provided to read any additional for the next cuts say

seven days and if you need along derleth us know. we will keep the record so anything you believe are missing and also see if there on the upside or downside we would appreciate having -- additionally, if you could do me a personal favor of the committee a personal favor. to the extent to could issue us the cost of a delay was they just had 30 years in the implementation and the benefit that is potentially there from slight adjustments in the final standard how you think of best pal letters of a slight change in the worst case because he has a cost to clean air. benefit may lower the cost of ultimately greater affordability. i didn't see that in your earlier stuff. it's kind of esoteric debt for all of us who want to weigh

dewey deily to get the right to this the cost of the delay something since we are talking about the 90's until today i feel we have to run that perspective and a yield to the ranking member. >> i support your question because i think that to try to understand the economic success this i wonder of the tram would also ask him to provide a little more knowledge to his questions about the job number the creation. pretend like you're in to help us understand the different methodologies -- >> to the extent that is the ranking member said it might be more artfully than i did because we do see where one side is looking at the cost of jobs, higher utility costs and so on, and the other side self-serving lee and rightfully so is looking at the jobs created and

obviously we want to look at the balance particularly in the relative states to think the doctor's comments were right on in the free-market regulatory state much of this could be a compression of province of the utilities. in those states that our cost plus or regulated it's going to be passed on the and i think that's one of the things the ranking member made a good point that to read and with the affirmative yes, we stand adjourned. [inaudible conversations]

[inaudible conversations]

which was kind of cool so you go to a meeting and they would be like we love your stuff. what about this?

[laughter] no a hearing on international organized crime, money laundering and terrorist financing. but mrs. and quote assistant attorney general who again apologized for a bureau of all cahal, tobacco and firearms program that allowed guns to cross the u.s. border into mexico. this is a little less than an hour and a half.

>> good morning. the hearing will come to order. i appreciate the witnesses. having taken the time to join us i'm not sure if any of our republican members will be joining us, but i've been given the nod by the minority staff to go ahead and proceed, so i will begin with my opening statement if anybody else does are rife we can proceed to their opening statements if they care to make one to read every day as we know overseas criminal networks target's americans, weakening our economic prosperity and compromising our safety. today's hearing provides an opportunity to evaluate our

current statutory authorities, law enforcement tools and resources for protecting the american people from the series and ever growing threat of international organized crime. .. a innovative american businesses, stealing their valuable intellectual property in order to produce cheap competitors are counterfeit.

large-scale criminal enterprises are openly engaged in the online sale of massive amounts of stolen american movies, music and software. in an entire criminal industry has grown up around stealing credit card numbers, inc. account passwords and personal identification information of american consumers. criminal groups involved in human trafficking for smuggling narcotics and weapons are dangerous to our communities, often engaging kidnap income extortion related accidents along the way. some overseas crime network scaling to terrorist organizations. these foreign criminals overseas base of operation, flexible network structures and use of the internet and other modern tools create significant challenges for u.s.

law-enforcement. investigators tracking international crime crudeness regularly worked work and then went several different countries to build a single case. the laws and practical circumstances in each country pose obstacles to uncovering evidence, to interviewing witnesses, to locating criminal suspects. the high-tech tools used by foreign criminals require our law enforcement experts to use complex and often costly forensics to identify those responsible for a crime. even once investigators had pieced together a case against a dangerous group and founder suspects, additional hurdles may stand in the way of bringing foreign criminals to justice. criminal statutes, for example, may not apply to criminal groups based overseas and some of our most powerful criminal as for organized crime may not capture the types of fraud and theft that international criminals engaging today.

our rico statute, for instance, does not apply to computer crimes send us does not hope combat overseas hacking rings. oversees criminal groups demand heighten attention and resources from any element of our government, investigative and law enforcement agencies must work together to detect and disrupt oversees criminal plot. davis also collaborate with their economic, diplomatic and intelligence communities to share threat information, kind of criminal networks access defines a simple mac criminal prosecutions with other approaches to keeping the american people safe. it is good the administration has announced an aggressive strategy to combat international organized crime and prepare specific legislative recommendation on which congress can act. today which i may representatives from the department of justice, treasury department and icp who are

well-positioned to this as the threats we face from foreign criminals. i also look forward to hearing more from them about what actions the administration has taken and what we in congress can do to provide law enforcement with the tools it needs to confront this challenge. protecting american citizens and business from foreign criminals is no partisan issue. members of congress in both parties agree that we must strengthen our ability as a nation to take down these overseas criminals. our ranking member, senator kaya was unfortunate not able to join us today because of his important commitments on the committee. but i've greatly enjoyed collaborating with him this year on legislation to enhance cybersecurity in another hearing for a forward to working with him and other members of the committee on this important issue. since there's no one immediately present to make further opening statement, we can get right to

meet at the hearing, which is always a good thing. i would just go right across the panel here, beginning with lanny breuer, assistant attorney general for the criminal division at the department of justice. before joining the justice department to listen llp in washington or he served as cochair of the white-collar defense investigations practice group. previously in his career he served as assistant district attorney in manhattan and a special counsel to president clinton. he received his va from columbia college and jd from columbia law school and were pleased to have him here today. mr. breuer, please proceed with your testimony. >> is a real pleasure to be here. thank you for the opportunity to hear before you make the partners of homeland security to discuss the justice department's efforts to address the threat posed by transnational organized crime. trans national organized crime

pose a grave and growing threat to our economic and national security and the safety of our citizens. these groups commit a staggering array of crimes all the way from credit card fraud and cybercrime to that crime and drug trafficking. they penetrate and undermine government institutions. they threatened the world financial system and they prefer legitimate market. for these reasons from the task of combating trends national organized crime has never been more earned. the fight against transnational organized crime is among the highest priorities of this administration and the justice department will play a leading role in that effort. the department has made great strides in attacking transnational organized crime groups as the cases highlighted in my written testimony illustrate, our work often

depends upon our close relationships with foreign law enforced and. it is often impossible to identify, arrest and prosecute offenders repeating critical evidence without the assistance of their allies. to give just one example, our prosecutors and agents work with romanian law enforcement to target organized criminal groups operated in that country that threatened american citizen and institutions. just last month, i traveled to romania and saw firsthand how closely are two nations are working together. and that work is paying off. for instance, earlier this year joint investigations resulted in the arrest of over 100 organized cybercriminals in our two countries. but the challenges to pursuing these groups remain significant.

for example, law-enforcement in some countries is unable or unwilling to cooperate with our investigative efforts. in addition, combining assets as sophisticated criminal organizations often involves unraveling web, a sophisticated web of shell corporations use to disguise them under profits. and even if we are able to build a case securing a build a case, securing extradition of the defendant often poses a significant obstacle. attorney general holder and i have taken important steps to better position the justice department to confront 21st century organized crime. in 2000 name the attorney general announced the creation of the international organized crime intelligence and operations center or ioc to, which coordinates the efforts of nine federal law enforcement agents to use against

transnational organized crime networks. late last year the attorney general excepted my recommendation to merge the organized crime and gain sections within the criminal division to make more efficient and effective use of our resources to go after organized crime groups, both here and abroad with the support of congress, that mergers took effect earlier this year. but combining the threats posed by transnational organized crime requires more than a foot of law enforcement. to that end, in july the administration announced a cutting-edge strategy that for the first time brings all of their resources and tools that the federal government today are in a coordinated way against transnational criminal groups. one of the centerpieces of our new strategy is a package of the essential legislative days, and

designed to ensure that we have the tools we need to confront these evolving threats. this package includes changes to our money laundry and forfeiture laws. to improve our ability to break the financial back bone of criminal organizations. we also seek to modernize our racketeering laws. and we propose that the amendment aimed at addressing the increasing global reach of these organizations. we believe that these legislative proposals will enhance our ability to attract transnational criminal groups wherever they are and protect the american old from this global threat. thank you for the opportunity to discuss this important issue with you in mind of course pleased to answer your questions. >> thank you, mr. brewer. next we have danielle glaser at

the department of office and financial intelligence. he served as treasury deputy assistant secretary for finance team and currents. in addition to prior roles he has served as an attorney for the united states secret service and headed the u.s. delegation to the financial task force, intergovernmental agency charged with formulating policies to combat international money laundering and terrorism finance team. he's the columbia university school of law to welcome them here. mr. glaser. >> truman white house come as distinguished members of the committee committee met for the opportunity to appear today to discuss the department's contribution to the upon the administration strategy to combat transnational organized crime. my testimony today will focus on the treasury department's efforts to implement the strategy with the use of unique authorities including executive order 13581 as well as their

ongoing work to promote financial transparency both domestically and abroad. in early 2010, the united states completed the assessment of transnational organized crime which concluded these networks have expanded in scope and sophistication engaged and arranged of illicit activity and are exploiting the international financial system. to combat the growing threat to u.s. interests, the obama administration announced a national strategy to combat transnational organized crime to utilize this new and innovative capabilities and tools to combat this threat. the most significant tool is executive order 135 you want, designed to specifically block property of major transnational criminal organizations. in executive order the person identifies and imposes sanctions on for significant organizations. the circle in russia, the camorra in italy, the coups in japan and los zetas in mexico.

piece of economic activity threatens u.s. economic interests at home and abroad through subversion, exploitation and distortion of legitimate market and economic activity. the result of convergence of complex volatile and destabilizing threats to the national security. the treasury department is implementing a strategy to effectively implement .3581. first, we attempt to map the financial networks of these organizations so we could target with derivative designations by undermining the ability to operate effectively within the international financial system. efforts will complement u.s. law enforcement in these organizations, but none are already close cooperation with u.s. department of justice. we also work with like-minded foreign partners in the international financial community to build an international coalition to combat transnational crime or bradley. in fact i will travel to moscow to to discuss this issue and build on our ongoing cooperation with russian counterparts. of course the treasury department will not limit a

first of these groups or so these executives offer. we will target an employer for small tools including section 311 of the u.s. featured at. success of our efforts to combat organized crime through targeted action relies on our ongoing work to provide a transparent global financial system. transnational criminals seek to exploit complexity and a pc at the international financial system. we therefore must enhance financial transparency and diminished ability to commit them profit from crime. then order to improve transparency, treasury department has worked internationally to create a global anti-money laundering and counterterrorism financing framework as a foundation for taking action against criminal groups. burke has been advanced to such organizations of the task force, imf, world bank and g20. these efforts however undermined by the ability of criminal organizations to launder proceeds to the abuse of legal entities. accordingly, treasuries develop

strategy to adjust vulnerability in u.s. and international financial systems. first, we are working with interagency partners in congress including senator levin to develop new legislation that will enhance the ability of beneficial ownership to law enforcement about legal entities created in the u.s. i can't, we plan to clarify and strengthen customer due diligence for financial institutions with respect to beneficial ownership of the calamity. finally we work with international partners in the fa ts to clarify and facilitate global implementation of international standards of beneficial ownership. the price repco point mutation that can evade strengthen u.s. requirements and access u.s. financial assistance through other means. transnational organized crime presents a persistent unique threat to our financial system. the first combat that will persist and will continue to find innovative ways to disrupt and dismantle that works and ensure the international

financial community build strong systems to counter penetration by crime groups. thank you for the opportunity to testify today i look forward to answering any questions. >> thank you, mr. glaser. next is kumar kibble, deputy director for u.s. immigration and customs enforcement at department of homeland security. he's included as leadership roles including deputy assistant director for the national security investigations division and as deputy director enact and director of investigations. mr. kibble began in 1990 estimate the tree officer and the 82nd airborne division and is a graduate of the u.s. military academy at west point where pleased to hear you. mr. kettle. >> decembrist members of the subcommittee on behalf of secretary napolitano, thank you for the opportunity to discuss eyesore and transnational organized crime. but the 20,000 employees include 7000 homeland security investigations or hsi special

agents assigned to more than 200 cities throughout the united states and 74 offices around the world. this global team focuses exclusively on investigating transnational threats. hsi investigators are uniquely equipped with cross-border authorities expertise and information enabling to disrupt and dismantle transnational criminal networks operating among the entire list of travel and trade pathways and destination transmit in source countries. just yesterday we announced a plan express, a 17 month multiagency investigation responsible for dismantling a massive narcotics trafficking organization affiliated with the civil law cartel appeared conservative estimates estimator to fight here. the organization smuggled within 3.3 million pounds of marijuana, 20,000 pounds of and 10,000 pounds a pair when she united states generating almost $2 billion in illicit proceeds. hsi agents with no county

sheriff's office, attorney general's office in more than 20 federal state and local partners arrested 76 subjects and seized when the 60,000 pounds of narcotics than 100 weapons. the organization smuggling methods including use of backers, vehicles and sophisticated operations hear the case demonstrates how hsi targets transnational criminal organizations along the entire canadian transnational crime beyond borders in coordination with foreign partners with customs and border protection and within our borders and cities throughout the united states in partnership with federal, state, local and tribal agencies. with the last two decades crime has expanded tonight in size, scope and impact and response this year the administration launched its new strategy to combat transnational crime. to support the administration strategy, we've developed the illicit pathways attack strategy or i pass using a a race-based

approach to prioritize efforts to attack convergence points and vulnerabilities in the networks and infrastructure used by high-risk transnational criminal networks. our first plan facilitates engagement with host country part is increased joint human smuggling investigations, enhance exchange the information and support foreign and domestic prosecutions. what a strategy of attacking him of smuggling networks on the illicit travel continuing reduces pressure on borders and assist peregrinations and disrupting something within their territories. in addition to the sparkling come hsi works for international partners to disrupt and dismantle criminal networks and haitian schemes that include intellectual property theft, architect ouchi proliferation, child exploitation, human trafficking and transnational gang activity. to truly dismantle teams, partnerships and information sharing with domestic and more importantly foreign counterparts are absolutely essential and with the several agency centers

to afford a comprehensive response to threats or the national ip or center brings an 18 federal and international partners to address intellectual property theft. really an effort to educate the public and ideas about ip theft in connection with organized crime. working with crime center or c-3, the apr center has led innovative cyberoperations resulting in the seizure of 200 domain names used to facilitate counterfeiting and infringement. the expert coordination center created by executive order last year and led by each essay will coordinate proliferation investigations and industry average among cdp the department of homeland security, state, commerce, treasury, defense, justice, energy and intelligence. our human smuggling and trafficking center is this information clearinghouse will coordinate interagency affairs involving human smuggling and trafficking. sadly significant number of these victims are children and we take the cases seriously.

cash not investigations are coordinated through ball cash smuggling center through which we provide real-time operational and tactical support to federal, state and local officers involved in smuggling seizures. 20 for us today, seven days a week. recorded at the el paso intelligence center to respond to these inquiries from state and local agencies. thank you again for the opportunity to appear today and for continued support of law enforcement mission and i'd be pleased to answer any questions you may have. >> let me thank the witness list for being here and for their work. i don't need to tell you as people who are on the front lines of this battle that we have never been more vulnerable to international organized crime and they certainly don't need to lecture you about the urgency of our response. you are living it.

but i think you can tell us what tools we can provide you to make your job easier and more did in dealing with this large, growing and increasingly pernicious threat. let me first ask a question about the scale of the enterprise is that you are facing. and compare for me the revenues, for instance, that you believe some of the largest criminal cartels and organizations have access to with the revenues as let's say small sovereign countries, just to give us a sense that the scale for starter. mr. brewer. >> train to mr. chairman, you're absolutely right. the challenges they face internationally and nationally

dining and international organized crime is extraordinary. some of these groups of course have swayed that crosses borders easily and have become almost institutions, almost extraterritorial a few of states in and of themselves. you talk about some of the groups in the former soviet union. if you talk about groups and latin american cartels, tape amassed enormous resources. they are extraordinarily diversified. >> when you see enormous resources, or two -- of a resource is larger than the revenues of countries that we recognize quite >> certainly certain countries, senator. and compared to some countries, they absolutely are at least equivalent so we believe. there of course nicely diversified, so it poses an enormous threat in -underscore is your point a to combat this,

not only do we need advanced tools, but we need to have our international partners join us in this very important preeminent battle. >> mr. glazer, anything to add i'm not quite >> just to give you numbers, mr. senator, the narcotics industry in the united states is reported to generate between 19 and $39 billion in profit per year. the camorra, one of the groups were targeted with the new executive order, their annual budget has been estimated at up to $25 billion. the world bank has estimated that there's a trillion dollars per year spent and bravery around the world. so bonnie is absolutely right. we talk about big numbers and numbers with the ability to skew and governments around the world to combat it. >> do you agree, mr. kibble?

>> yes, sir. the investigation and asked yesterday, over a five-year period generated $2 million in revenue. i can think of a smuggling investigation that resulted in the dismantling of the columbian super cartel. we are talking about amounts arranging in the billions. >> the other question when i think back to my u.s. attorney tenure and i consider the cases we did that were the most intensive bombing outfits, one was a public corruption case that involved a lot of doj oversight because doj does a lot of oversight and public corruption cases as you know, mr. breuer, and above the rico act, racketeering prosecution which has a number of complexities and oversight issues that doj. it involved undercover investigators who had to be backstopped and put in position. and involved working with

confidential and permits, which is complex. you put the whole thing together and it was very time intensive and management intensive. it took a lot of work. we had an environmental case with a lot of forensic work that has to be done to rebuild but it happened to a burned talk and barger rate in order to show the culpability of the country. in a wonderful fbi agents spent an enormous amount of time effect to delete virtually rebuilding i guess he would say that from its record so we could show the necessary criminal standard had been that. you look at cases that are intensive at that. and then you add to it the foreign element. and i'm going to be out of time, so i will come back around to this and more in a second round. just quickly scale for me in

terms of, you know, gathering evidence. you couldn't really suspect very readily in the united states if you're an fbi agent. he is the witnesses. that's the very simplest part of a simple investigation. the site to a foreign country and it all becomes complex. could you, i'm not quite >> of course, mr. chairman. an exceedingly proud of what were doing, but when you have these transnational organized crime groups, we have to collect data internationally. we do that too long for partnerships, all of which take a long time because we have to build relationships. if were going to bring admissible evidence to court we have to do it through mutual legal assistance treaties. some countries are more progressive and quicker about those than others. we have to do with byzantine financial records all over the world in different institutions they sometimes are more helpful and not hopeful. we have to do that with our

resources. so these are very difficult, but some countries have better relations. with others we have less. some are more sophisticated, others less. the transnational crime so powerful, wealthy and entrenched , identifying and exploiting our knowledge and prosecuting is an overwhelming responsibility of ours. i think it's one we are doing well, but clearly it is a challenge that becomes harder each day. >> my time is expired. before he turned to senator grassley, let me ask you for a one-word area. given the power on the wealth in the reach of the sorkin is asian, isn't always clear in dealing with a foreign country that the foreign country is not on their side? >> now. >> thank you. >> senator grassley and then our side the order of arrival is senator feinstein, senator

kearns and senator klobuchar. >> train to mr. breuer coming yesterday he made a statement saying dcf and u.s. attorney's office officials quote, unquote repeatedly assured officials in the criminal division and the leadership of the department of justice the allegations about walking guns and fast and furious or not true. please be more specific. who exactly dts had begun walking allegations were through? not exactly at the u.s. attorneys office said the allegations were untrue? >> senator grassley, as i said yesterday, of course it was my office that ultimately prosecuted the wide receiver case i want to be very clear to you, senator, that when i burned a mess of april 2010 and i learned about it and we decided to prosecute this case from 2006