morning to remind you that it exists they are already stepped out the door, there is this enormous mound reminding you of how much the national day he would have to pay off at some point and had a kind of tactile quality about it. we had a greater sense of urgency about it among the masses. >> what is your sense of optimism or pessimism as to whether this much-needed solutions can come down the pipe? >> i am a product of america, said the glass is always half-full. with the greatest education institutions in the world, even though stressed at the moment. the genius of the nation is everyone is coming here, wanted to work harder and fulfill the american dream and have ambition. we have just been witness in the last couple of weeks to the enormous outpouring of tributes to steve jobs. steve jobs and bill gates and sergey brin, larry page at google and all the others

invented this technology in america. they changed the world. if you go to silicon valley, you find all these bright young americans that we at once a long time ago dismissed as computer geeks out there in silicon valley at the moment they don't have a recession. the economy is pumping. so it is that kind of american inventiveness that if you give them rented room they can get the job done. but i do think that there are some fundamental structural problems of the country at the moment that we have to address. because we are competing against countries that now have an open playing field in which they are preparing for their future by inventing their own new institutions and changing their laws to adapt to the reality. we are living as i said earlier in an analog way, but as a digital world. >> question to the audience.

you sound very down on public education. surely you cannot mean that every public school is failing its students? >> now, i'm not done a public education. in fact the book i pay tribute. the public education like every other institution has to look at how it can renew itself. i pay tribute to a woman in north carolina, public school superintendent, who got very concerned about the gap between hispanic and african-american students and white students. when she looked and i was mostly the absenteeism. they had no apparent home and left for school and when they got to come acidic at country escape school. she persuaded her teachers and that local money to have the sixth day of class on saturdays, gave out her telephone number is the other teachers did in nature and the school around. i work with a school in the south bronx in new york, an elementary school.

a principal in a public school called me up and said i need some help. like you to see her school. i went to a school built in 1955, structurally very sound, second floor large room, completely empty. i said but is this? you said it should be a library. but with nothing to fill it up with. i hope to raise money. everyone is now filled with computers and electronic books and other kinds of books and she keeps it open until 7:00 at night as a community center for single parents who can come home from work, go there with their children and learn together. a lot of teachers are volunteering to stay afterwards. it is that kind of enterprise that will be the saving grace of public education in the country. i've got a lot of other examples of the book as well, but i encourage you to buy and read them that way. [laughter] >> from the head table we have a question. what to think about the impact of the citizens united decisions

on elections and what will that do about the level of arguments in politics and campaign? >> well, i've been a big critic for a long time but take money in politics and that took it to a whole different level. having said that, i am not enough of a legal expert to say that the supreme court was wrong because i do think that institutions and corporations have a right to play their part in the american political system. before we had citizens united, with lots of other money pouring into the system. what i discovered -- i've been covering this particular part of american politics since i began. i remember in california i went to the secretary of state's office after a very expensive senate race to look at the records about who is giving money and they could file by submitting all the names but with no space between the names and one mine bumped up against the others so is almost

impossible to read pages and pages of documents. money is the mother's milk of politics. so many people in this country are not directly involved in a culture have come to accept that. it's very hard to get the public aroused about the impact of money. they are generally inclined to say it's always been that way, it's probably always going to be that way. but now we are talking about numbers that are unimaginable. we are going to spend a couple billion dollars on the presidential election next year at a time when that money could be used in so many other ways in this country to move the country forward. >> is the impact pushed people away from their government? >> it is. i went across the country in 09 on highway 50 and i came back with two conclusions. one was about half of the country was ticked off and the half position and they just didn't believe anything they were hearing anymore and i really believe that was the root of the tea party movement.

the other half of the country was really just worrying about holding their families and their communities and businesses together and it kind of given up on washington. a lot voted for the president. they were independent consumer moderate republicans and they felt a sense of betrayal that he wasn't as aware of what they are going through in the heartland. i think most of all people just feel connected to the congressman or senator in the way they once did because they lead such different lives now than they did. you've got an entire industry. you know how much money is spread around. look at the amount of money being used now to attack the new regulations on wall street and every bank and financial institution had a high-powered lawyer in her. we haven't finished the debate on health care either promoting or taking it apart and that will be driven so much not from the

patient population as it will be by the special interests. >> you are almost recognized in current times more than not there. there's a reason you are here as a broadcast journalist. talk about the craft of writing for a book is supposed to preparing for on-air. how do they compare differ? >> well, broadcast journalist in the short form and books are long for. so that was a transition for me. i have a number of friends who are literary novelists. tom mcqueen is fine, jim harrison is another. we talked about the craft of writing. carl hays is one of my favorite friends in wittiest guys brought in today. i set my problem is always writing, keeping track of everything we can send us of short narratives come either an op-ed piece or magazine piece of some kind. but a book is a really long journey. and they said there are no pills you can take. [laughter] you just have to find your way through it.

i find it very gratifying. but what i like about it is the permanence of it. walter isakson and i had a conversation the other day about trampy electronic books. and he said something very perceptive. he said i'm trying to hang onto first edition copies of books in print that i like because i think 20 years from now i know where they will be. i am storing them on my ipod or computer. i think that is a fairly astute observation. i find that my grandchildren still all read books with books in their hands. they love the idea of books and they go straight through them. they will pick up and read, but they are not reading electronically as much as they are a book with the binding on it and with a printed page. >> let's talk about the point of which he rated nbc nightly news

anchor. your rivals at cbs, dan rather. peter jennings he talked about. >> is that right? [laughter] >> we have young people in the audience who might not be as aware that. >> is only six years ago. [laughter] >> some of thought that sort of stature of the network anchor can never be recaptured again. do you think that's true? >> here's something i like to remind people of. though rarely gets a lot of attention as he is the most popular commentator and cable news. and he likes to talk about that and that's fine. [laughter] as the number one cable news program. he has half the offense of frank pelley who is that evening news broadcast. i nightly basis to deliver viewers. it still has a lot of tonnage

attack to appear gratefully brian has done a great job in his number one. diana's number two, but it is more competitive. the thing we worry most about is there is a decline from year-to-year, but, but most of all we are about at the demographics that the audiences tend to be older. we don't get as many young people because they can get it from so many other places. so we have all of their nightly news that comes on after bryant signed up online on the website seeking additional information. i think it is that makes that will probably prevail for a good long time. you don't want to overstate, let dan and peter and i although we were granted just like i did with rush, but we were perfect either. what changed for us, which was so exciting as we all grew up as correspondents, as reporters. and when we got today's chairs come the satellite technology arrived simultaneously so we could be anchors and reporters. we could get on the plane and go

to the philippines and tian an men square or russia or czechoslovakia when everything was changing. we could be in south africa for the night the berlin wall came down and report live from those sites and added a whole another dimension to it. >> do you think the nightly newscasts will survey of 20 years from now? >> my guess is that it will. it constantly has to adapt to what's going on and will probably take on some new forms by then. and what i think it will probably have many parts to it. they will be in on the air part and on my part and they will be complementary going on at the same time. you'll probably be able to see it on your ipod in whatever form that is. you'll be able to diet lit up, even on an airplane. i mean, with all cotton used to the idea of getting on jetblue and watching satellite television across the country. why could we have been at a news available to us on a pda of some

kind? i think there's a possibility and complementary information off to the side with statistical analysis of what we just reported on. >> are very talked about the media doing its due diligence with herman cain six months ago. it's the media as a whole newspapers, radio, television, missing a lot of stories because of the downsizing of the operations and attention to trying to keep up with real-time news? >> i don't think it has to do with downsizing. it only took bob woodward and carl bernstein two guys to bring down richard nixon. two reporters were not there and went through card files and not condors and that is how you do real reporting. and actually pro-public, which is paul sackers has won two blisters and six years, seven years with a staff of 34. r. bloomberg representative was telling us how many people in the office? [inaudible] over 200 people in the bloomberg

bureau. bloomberg didn't exist when i was a reporter in washington. so there's a lot of fire power out there. it is just how we use it that's the real issue. we ought not to become an echo chamber. when we say one other thing about that. i was on jon stewart promoting my book on "the daily show." before i got on, the first half of the show, john's sound was so good and did the best job i'd seen all week of the hurricane story putting in perspective and getting archival information and tracking the different things he said along the way and then putting it in context as well some of the defenses of him. there is a debate going on. and coulter saying our blacks are better than their plaques that is the reason there is such a dispute about this. jon stewart and his own inevitable way that right after that. and at one point, someone was suggesting that this was just an allegation against herman cain

and do is reset. john said it had been in 1890. wasn't an allegation. that is the kind of reporting we ought to be seen frankly i'm other cable outlets and all the news -- traditional news outlets because there wasn't anything floated about all that. he was just doing a factual recitation of what happened. >> time, we are almost out of time. if you allow me, i have a couple of last-minute housekeeping items to take care of. either determined or audience about the upcoming luncheon speakers. a member of your nbc universal family, jim kent torrey, d. i'm camera meteorologist will talk about extrema during a job to cover that appeared between then and now, the postmaster general patrick donahue will be able to address their audience about the crisis that is really affect you and the u.s. postal service. >> ask if he can keep the post office opening big timber, montana. [laughter] 's >> here is a card.

not because you do so much traveling, tom, and they've been at this podium before, but we have a new thank you asked as small as it is the new npc travel mug. it's a token of our appreciation. so the final question is a mention at the beginning and we'll be celebrating their 50th wedding anniversary next year. so what is the secret to such a long, happy marriage? >> when my daughter first got married, the eldest, met my wife went inside always make sure you have your own space. one of our anniversaries, jennifer got up and said those great guys i realized my mother has 5000 acres in montana and i realize that's much more space i'm never going to happen in marriage. i think space, however you define it isn't working. we complement each other since so many ways did i say in the the book i am infinity business.

i'm kind of a cowboy in terms of my impulsiveness. my wife is a master at the fine craft. she's a great musician, wonderful were summoned competitively, not just writing across the prairie. she's an expert bridge player and it's all the stuff for her grandchildren. i am at the other end of that spectrum. i am out there raising is a journalist in doing the kinds of things i like. and we fit together in the way. she still laughs at my jokes, which is an important part of it. and i still count on her to have the long view and most about what has been so important to our marriage is that i am in awe of how she has been a role model for our daughters by just being there for them and allowing them to develop as individual women without an oozing around cells on them. so it is worked out very well. the fact is we met we were 15 and that is the equivalent of a

moonshot, that you can make a marriage last four feet ears when you met when you were 15 years old in south dakota. i daresay i met a lot of other people in the world and there's no one else that occurred to me i could ever be married to. i would like to think she feels the same way. >> the name of the book, "the time of our lives." thank you, tom. [applause] 's >> here's a quick look at her upcoming road to the white house coverage:

[applause] 's >> energy secretary stephen chu discuss alternative to the results that research yesterday to "washington post," et cetera noble power sources. he called global energy conservation fierce and must implement if your policy to be a leader in the field. his remarks are about 45 minutes. >> today on a day when we've gathered many of the most influential speakers are country has on energy, all in this room, the conversation is quite different and the focus. today the focus is on the economy, lifting it, creating jobs and using technological advances in the energy field to help do that. the watchwords are clean energy, smarter uses of energy and

energy efficiency. individual consumers and business owners want their bills for their homes and for their offices and that therese reduced and they want to do the right thing for the planet. so today we are asking those in the know to talk about the biggest picture. national security issues, energy security, shifting geopolitical map of where the new demand and supply is coming from and were going to ask a specialist to come into this honest and detailed to help us with the saturday morning decision of the hardware store about which lightbulb to die and to tell us what cars are going to look like in terms of mileage and she'd been injured and even a couple of years. but let's start our foreign right away on foreign energy. but the man in charge of our nation's energy department, steven chu is the united states secretary of energy. his job description implements

president to bomb his to invest in clean energy, reduce our dependence on foreign oil, address global climate crisis and create new jobs. how is that for a job description? steven chu came to washington as a distinguished scientist. he saw known as the winner of the nobel prize for physics, something few members of the cabinet if any have had. he's also served as director of the department of energy's lawrence berkeley national lab, where he led the pursuit of alternative and renewable energy technology. please welcome, steven chu. [applause] >> all right. thank you, mary, for the nice introduction. the focus of this conference is on the future of energy, but i

want to start with some lessons of america's past. i take you back. two kenny hot, december 7, 1903 with a lodge brothers launched the world's first airplane that achieved him in flight and with a whole new industry. the next several years, those brothers left the world in aviation. what is less appreciated is the last intact on sheet you need a few short years later and by the beginning of world war i, we are hopelessly behind. although the military, u.s. military was the first major customer of the wright brothers and their competitor, glenn curtiss, between 1808 and 1913, the state ranked 12th in government aviation. the lack of purpose showed and when we entered the war in 1817, we're so far behind in aviation technology he had now as

convinced as to produce european designed aircraft and we did. after the war, they say we can't compete with europe. we saw leadership in this industry is a national security imperative and economic opportunity. we launched an agency to support research and development come to pass legislation to allow aviation companies to carry mail. demand from the military postal service kept the industry alive during its early years and laid the foundation for domestic commercial aviation industry. the second lesson i want to give his a history of the army deal. in 1885, the modern engine was invented in germany a godly feminine current events. and the automobile. he invented the assembly line, which great increased worker productivity. americans became the dominant force in the world by becoming the low cost high quality mass

producer. as the price of christ endowed the markets exploded or more factories built for more workers hired an america dominated the audio industry. my final lessons about information to knowledge he. american ingenuity created technology upon which modern electrons were born, the federal support helped usher in telecommunications area. the u.s. saw this emerging industry and took steps to foster its growth. the transistors in computers and defense department backed research to help lead the development of the technology in the purchasing power of the air force, nasa and other agencies guaranteed a market that drove down costs of the 17 connector technology. this song made them affordable, widely available and then disseminated around the world. the lessons from these examples are clear. the u.s. government recognizes economic opportunity, made a choice to compete it took the necessary actions for this

industry. and now this brings me to today. once again there's a huge opportunity before us. a global clean energy market already worth an estimated $240 billion in europe and is growing rapidly. in fact, a very reasonable accident is that the photovoltaic systems alone represented global market today of more than $80 billion a year. $80 billion for a lot of money. it's about as much as we sped here every year. however, this is a faster growing market. the united states felt an early lead. solar cells, wind turbines the batteries were all invented here but were no longer leading manufacturing these technologies. in keeping with comparison with in 2009, we spent seven dollars on potato chips. that is $2 billion more than our federal investment on energy research. history is repeating itself. just as we took the lead in

germany and other countries have studied the u.s. book and take the lead from us. while some people in washington debate whether the clean energy economy is real or whether we should eat, other countries seize the opportunity. nowhere is this more evident than in china. luster in shanghai, and currently the leading photovoltaic manufacturer in the world. import their silicon away from material in the united states because electricity required to refine silicon cost less in the u.s. they at all the high-technology processing steps in china and a highly automated factory. sontag is not only low cost leader at the time of my visit, they hope the record for the highest efficiency polysilicon solar cells in the world. sontag is trying to do to us at henry ford did to daimler and benz. another secret of the success is

the triumph of many countries have formed from the united states government can support critical emerging industries. last year, china offered roughly $30 billion in finances to solar companies including 7 billion to sontag. at least 10 countries have a dog did electricity standards can wear them 50 countries around the world offer public financing for clean energy products. for example, germany and canada operate government-backed lending programs and in the last several months the u.k., australia and india have now announced plans to the same. since his first day in office, president obama has working to strengthen u.s. competitiveness on clean energy. energy department has has stimulated the chain using grants to support cutting-edge r&d projects and advanced battery factories, tax incentives like the 60 to three program, which is supported nearly 20,000 renewable energy

projects and law programs to find out innovative manufacturing and deployment of renewable energy. while we make progress come in the united states is at a crossroads. many of the clean energy tax incentives are expiring. one program posted september 30 and is obligated virtually all of our recovery act money. american takes this is a choice today. are we going to recognize the opportunity and the clean energy rates or will we waved the white flag and watch all the jobs go to china, korea, germany and other countries image or europe? to global competition is fierce and support for innovative technology comes with inherent risk. not every company, not every project will succeed, but there's no reason to sit on the sidelines these leadership in clean energy. some of washington are ready to throw in the title towel. they don't think america can compete for they don't think it's worth trying. others think the best thing we

can do is for government to get out of the way about the free market work. we have vista beta 2002 dozen and about the u.s. auto industry. a lot of people in this town say we are ready to give up on u.s. auto manufacturing. president about i refuse to let the auto industry collapse. today, ford, gm, chrysler are creating jobs from quality projects. after seven straight years of decline, america's automobile manufacturers of senator up to a 35% this year or the president took action because automobile manufacturing is the lifeblood of our economy. the research found that nearly 8 million jobs are impacted by the u.s. automobile manufacturers, suppliers and dealers which includes shots directly connected to manufacturing and other jobs that benefit woodworkers than the paycheck. the critics are wrong about the auto industry. i believe they are just as wrong today when they say we shouldn't other testing inefficient

vehicles are clean energy. i recently read a paper from a friend of mine, michael spence who was one of the 2001 noble laureates in economics. he wrote about job trends in the united states on the date data between 1990 and 2008. he divided into two sectors. one factor he called the tradable job. these are jobs where he made stuff like airplanes, cars, chickens that can be shipped and sold around the world. the second factor is called nontradable jobs. these are jobs that cannot be traded, like real estate sector, hotel and restaurant workers, health care professionals in government jobs on the u.s. secretary of energy, not tradable. the good news is that we had a 27 million jobs in the united states in this period of 1990 to 2008. the bad news is the job growth is virtually all of the nontradable set there.

.. critical to their future prosperity. other countries whose economies are largely fueled by industry as oil, gas and minerals don't say, our future is secure because we're blessed with these natural resources. the leaders of those countries know that their supplies will eventually run out. they have a finite window of time to develop a knowledge-based economy.

to those in washington who say we can't or shouldn't compete, i say that is not who we are. in america when we fall behind we don't give up. we dig in and we come back. why should we concede one of the biggest growing markets in the world that is our sweet spot, technological and manufacturing innovation? america has the opportunity to lead in the clean energy technologies of the world, provide a foundation for our prosperity. we remain the most innovative country in the world but invented in america is not good enough. we need to insure that these technologies are invented in america, made in america, and sold around the world. and that is how we'll prosper in the 21st century. thank you. [applause] >> thank you so much. so, i have to ask you, is it harder to cool and trap

atoms with lasers, the work that you did that won the nobel, or to work in washington as a member of the cabinet? >> is that a softball question? >> that's a softball question. tell me. i am interested. >> it's not harder. they are different but they require many of the same talents. you have to keep your wits about you. you have to dispassionately analyze what the best path to go forward. you go there. as you, have a few bumps along the way. break throughs will happen. set backs will happen. use the break-throughs, work around the setbacks and go forward. in that respect dealing research in science is very similar to what i see in washington. >> that's surprising. it is unusual to have both the president and a member of the cabinet to both have nobel prizes.

so what is the nobel banter between the two of you? >> oh, we can't do that. that is a secret handshake. [laughter] >> have you had any interesting conversations about that? >> a little but again, it's, we're very much, i serve the president. i do my best to, as you say, to, enact the agenda that is so important to the country. >> well, so, i think you've heard this word solyndra and i guess my solyndra question is, if you were given a pile of stimulus money today, what would you do differently? >> well there's, i think the loan program was an important part of both the recovery and its an important part of stimulating job growth and an important part as you heard me talk about, stimulating what we need to do in the future to secure not only jobs today but our

future economic prosperity. that's why the other countries have similar finance programs. i think one could do differently, you start with the idea that we, congress and the administration can design a better loan program, a loan program that shares in the upside. there is a recognition in congress when they wrote the statute that not all the loans would succeed but we think we can design a program that it could actually be self-pay and still stimulate the most innovative industries. as we look at what happened in solyndra i think without, hindsight is often said is to be 20, 20. in this case i think some of the hindsight was 20/10 or even better, clairvoyant. there were things that were the market took an unexpected turn.

the cost of solar modules dropped tremendously in a very short period of time. and in the time we gave the loan, totally unexpected. we were watching all those market conditions but going forward i think, knowing what we knew at the time doing these things i think one has to take risks in order to promote innovative manufacturing. i think, as i said in my remarks it's a very important part of the history of the united states. other countries are doing this. we just have to go forward. we can perhaps learn but always go forward just as i said about research. >> so you still, your department still has quite a few billion dollars to spend, right, on new programs that might stimulate job growth. what, can you tell us what you're going to do? >> no, the 1705 loan program is now closed down. there is a 1703 loan program

which is essentially self-pay. there is only a little bit of current subsidy left and, i think it's a very important discussion that the administration should be having with congress and the american people on how does one go forward and promote those industries? we know will be rapidly growing industries in the world. there is a huge growing market for all the things that i talked about and it is in our technological sweet spot. if we, we can compete with high technology manufacturing. we can compete in those areas. germany is competing in those areas. other countries are. there is nothing, nothing that says we can't and quite frankly i go around the world and i look at the truly invent tiff discoveries and innovations coming out of american universities, national laboratoriryies, startup companies and major companies and these are all

great things. >> so what is it that we're not doing that we need to do? you're saying we need this conversation with congress and the american people. what needs to happen? >> i think it is very important that we create a demand for these clean energies just as other countries they are doing. so there is market. i talk about the market for airplanes. the market for semiconductors. and i think there are are ways to, to try to level the playing field. other country, again, copying from the united states are using the united states playbook and we should not toss that playbook away. it worked. i believe it still will work and certainly other countries do and so we should continue to guide with a deft hand and private sector investments. in the end there will be private sector investments that will make a difference. >> we're going to open this to the floor very soon for some questions. we have two mics. one over here and one over here. you were talking about the

interesting technologies that are coming out of the labs. you used to work in the lab. tell us some the exciting things you see that are coming out. >> let me give you a couple of examples. there's been a remarkable development of battery technology. as i mentioned an american invented the modern lithium ion battery -- probably didn't want to know about that. >> i think it is very interesting. >> but, there have been improvement. s, actually that came out of fundamental discoveries in one of our national labs that you put in a little magnesium and the batteries all of a sudden become higher energy density, 50 to 100% higher energy den sis on the photo cathode side. they are inherently safer and less expensive to manufacture. the ip for those batteries are is already in the first

generation volt. we see a lot of other ideas now in the laboratory going towards manufacturing. another example is, for example, in biofuels. we think that there is tremendous capacity for biofuels. biofuels based on plants designed to raise energy, not food crops. biofuels where you can take this woody material that has a lot of agricultural waste and turn it not only into ethanol but already there are developments that have come out of national laboratories have gone into companies where companies are now piloting plants, feed them sugar and out comes drop-in replacement fuel for diesel jet fuel and gasoline. it's not yet economical but we see a path where it could be -- it is not economical in the united states. actually the sugar, it's economical in brazil now because sugar grows

abundantly in brazil and a cheaper feedstock than let's say the starches we have in the united states but we want to go to ultimately embryonic stem cell feedstocks. -- cellulosic feedstocks. and a drop-in fuels. there is possibility that some of the most rapidly developing areas in science are in biotechnology. >> you mentioned china and a lot of people are worried about falling behind in energy especially to china. you talked a bit about it is there something china is doing? i know it is a different political system, but that we should be copying? >> well, they are making financing available. they're, in the united states there is competition between states to attract industries. there is a competition in klein among their states and provinces and cities but

china sees the opportunity for all things in the energy sector. they consider it not on opportunity. they consider it so critical that it is very clear, anything from the highest voltage transmission lines to solar, solar industries. they're now the world's leader. they're also the world's largest market internally for renewable energy in the world. so it is not just for export. that's a myth that some people think. they're the largest market. they, so you look at solar, you looked a wind. they're trying to get into the wind industry. they're trying to catch up from other countries abroad. they're trying to get into electric vehicles. they're building about two dozen nuclear reactors. they need very much and want very much to diversify from coal as their major source of electricity production because it is polluting. they recognize that climate risks but -- >> is there something that they're doing you wish we could just do this year?

if we could just do that? >> yes. they have a national energy policy and they're walking behind that. they remain focused, and again, i think the, they recognize the economic opportunity. we're still debating this in this country. >> and, there's a lot of debate on capitol hill and some people say it is a bit paralyzing. what are your thoughts about congress and how helpful or not they are in energy policy? >> well my job is to do my best to educate anyone, congress, especially, about what the opportunities are. my other job is whatever resources that they do give me, with the administration backing, to do what we can to promote anything in the innovation chain, basic scientific research, that the deployment, to the

deployment of these new energy technologies. again this is vital to economic prosperity in the united states. this is a major part of what we do in the department of energy. >> and your thoughts on congress? >> well, i hope, you know, i try to remain optimistic and hope that one can see the wisdom -- this is essentially a nonpartisan issue. i know many people, republicans and democrats, actually know that we have to remain competitive in high technology manufacturing. that the opportunity of high technology manufacturing in the clean energy sector and energy efficiency is there and we shouldn't walk away from it. we should seize that opportunity. >> when you left your lab and one of the reasons that you came to washington you were pretty passionate about climate change and wanted to do something about it. now you've been here for a while. are you at all disheartened about the lack of movement on climate change?

>> well it could be, it could be faster. i think we are moving, it is true we don't have a comprehensive energy policy but if you consider the thinks that have happened, you consider, especially during the recovery act all the things that are advanced in terms of developing new technologies, driving down those costs it is only a matter of time when solar energy will achieve parity and become less than the generation of energies of fossil fuel. the debate whether it is going to be in this decade or a decade and a half from now in the united states. and so, again when that happens, it is, the demand is going to explode worldwide. so we have done a lot in the department in sponsoring a lot of the research in solar technology and biofuels, automobile efficiency. we've done a lot in

developing more of the fundamental research. and there is the other part of this. nuclear security, and nonproliferation. and i think we've strengthened those capabilities as well. >> and there has been a lot of talk and things written lately about the changing, the shift away from dependence on middle east oil with greater technology and digging deeper into the world, digging into the ground that we have more supplies in our hemisphere. what are your thoughts about the keystone pipeline? >> well, actually before i answer that let me, let me say, i forgot one very important thing. the mileage standards in the united states have been markedly increased. this i think is going to be one of the single most important steps in decreasing our dependency on oil and our dependency on foreign oil. so that's another great thing. >> the standards for cars? >> the standards for automobiles and light

trucks. to go to 55 miles an hour. it isd55 miles per gallon. it is standards that will make our cars competitive. worldwide because we're getting to reaching around the world what people want to buy. they see the long-term prospects of what's happening. i'm going to, regarding the keystone pipeline i think this is a very complicated decision. it is before the state department. let me beg off on that. >> come on. you're the head of the energy department. it is a massive pipeline going from canada down to texas. surely they want your brain on this. what do you think? >> let's just say, well, it, do i expect to be consulted on this? yes. [laughter] >> and what would you say if you were consulted on this? >> the, these are, these are, it is very important decisions and let me just

say that, this is a very important decision and i'm going to not commit one way or another. >> oh, boy. okay. we're going to take some questions from the audience. now and you can go to the mic. just go to the mic and identify yourself please. >> dr. chu, i'm dr. sam hancock of emerald planet here in washington, d.c. and we keep talking about the things we can't do or not happening with congress based in your estimation what are some of the things we can be doing like research in the national labs and working with these various state and international universities that we have here in the united states? so focus on the positives and what do you think we can do to really move forward over the next five to 10 years? >> well, i think i was, in my remarks first of all saying that there are challenges and we should

step up to those challenges and many of the things we are doing. as i said the research enter prize in the united states, a lot of it is supported by the department of energy. what people don't realize is that we support more the fiscal sciences an engineering than any other agency in the u.s. we support the work of more nobel laureates than any other agency in the world. and these, this research has been a cornerstone for all the innovation that has come out of certainly in the last 2/3 of a century. so that will continue. we in the department are beginning to, for example, created rbe, a new funding agency in the department. we were able to recruit an extraordinary number of individuals. members of the national academy of engineering who

have many could, people from schools like berkeley or mit or, who are, but, members of the national academy who were elected in their 40s but who are still in their 40s, to come. and people of that extraordinary high caliber are really what makes this program so special, to be able to identify very, very innovative ideas, knowing these, there are high-risks but we're looking for the home runs that can actually change the landscape. that is a very successful program and that's really transforming. it has got rave reviews from industry, from the vc world and from universities and national labs. that's something we started. there is other things, energy innovation hubs, which bring together teams of people across disciplines, bringing together an industry at the very beginning to say how can we solve a problem?

just as we did this during world war ii to develop the radar and things of that -- so these things, we have the first of those programs. so there are things like that that are starting. we are winding across energy and across other sciences in rbe along the lines of business, solar, batteries, and biofuels and seeing where can the department of energy spend whatever precious fund we get in the most effective way to help ultimately american industry keep the leadership positions in these critical areas. those things we think are going in the right direction, going very strongly in the right direction and i'm very encouraged by that. that largely less visible in washington but people are out there in the business community and the research community see these things. >> take another question here. we'll have to take another question. >> thank you for your solar decath that lon. that is really a excellent program.

that is quite visible. >> thank you. another question over here? >> yes, mr. secretary. i'm bob grilberg. i retired after 40 years of federal service, the last 30 working on energy and i worked with the doe labs and 10 years promoting use of combined heat and power in multifamily housing and now it is coming on in smaller buildings including single family. i don't see anything on the agenda that addresses the potential for combined heat and power which is already producing about 12% of the electricity in the u.s. and i'm hoping you can say a few words in support of the eight regional clean energy centers and the efforts that the department has been making to support it. >> yeah. well, as you know we've been huge advocates of energy efficiency or more efficient

generation. combined heat and power i put in the basket of more efficient ways of using energy. combined heat and power is a known technology that is going out in the world. we certainly promote it. it's, it's something, there's, it is a known technology. it is very effective. there are other things we're adding to it. for example, sometimes you want the heat but not the power. sometimes you want the power but not the heat. and so we have a very active look at how to be storing thermal energy in a way that's very, very efficient and cost effective. so you can, you can really have these power plants work at their true optimum of over 80% of total efficiency over time. there are things like that we do. we are promoting ways to get the technology we know works today out in the field, into the commercial sector, both in residential homes but also commercial buildings. and beyond that into systems

of buildings and parts of cities where we think there's huge opportunity. that's one of our energy innovation hubs is on building efficiency and part of that is looking at those systems. >> i'm glad to hear your reference to the district energy systems in the '80s hud worked with doe to promote that and the brooklyn navy yard cogeneration system is an example. i'm florida to hear you're taking another look. >> we're moving on to some different topics but you spent a lot of time this year looking at the oil spill. can that happen again? i mean and is there something that you've learned from that is some kind of a safeguard? >> we, like everything else that happens when things happen, you go first, the government plays an important role in helping stop the leak but beyond that there are always things you can learn from incidents like this.

there are things we'll look are learning from fukushima. there are things we learn from any incident. and one goes forward. and when you say, can it ever happen again? no one can guarantee that something is going to be accident-proof but you can certainly do things, very cost effective things to make the probability less, sixth less. and so that's one of the things that will undoubtedly is coming out of what we're learning there. again the important part is, when things happen, we didn't say, okay, no more offshore drilling. well some people said, but i think as a country, we didn't say more -- no more use of oil. we said, let's learn, pick ourselves up, move forward and make it safer. with any incident whether it is an airplane accident or a gas explosion or an oil, sorry about that, or an oil accident or any other incident. >> you think drilling is

much safer now? >> drilling has become safer over the years. it will continue to become safer. offshore drilling especially in deep offshore drilling will be made safer. >> okay. another question here. >> good morning, secretary. my name is john from every blue training institute. my brother and i started a training company four years ago an we now have trained tens of thousands of workforce employees from companies and we partner with universities so we teach all over the u.s. and we see a demand for workforce education but if you read the news one of the criticisms and one of your bullets are mentioned earlier was the mission to create jobs and generate essentially employment in this field. i was wondering how you would define success? if you read the news that there is criticism you can not define a green job. there are no jobs created. i don't necessarily agree with that but what are your thoughts and how you would define success on jobs front? >> you define success on the

jobs front if the unemployment number goes significantly down. this is intolerable. this is causing great hardship. and so, that is how, that's easy. that is how you define success. i, the, charges that we haven't saved or we haven't created new jobs, simply doesn't, make any sense to me. we, you know, u.s. oil industry was, had a near death, or some say a death experience. it could have been catastrophic if you think of all the jobs associated with assembly of cars, supply line chains all the services go into that dealerships and all the secondary jobs. now we're bouncing back. and that's, very clearly something where jobs were saved. new jobs are being created. as i said, the production is increasing for the first time in seven or eight years

by 35%. this is tremendous. so, so i think we see already very clear examples of job creation. the other thing that's very important is to realize just as the henry ford example, he made a highly productive assembly line. so if you think you will make x number of cars and go to high productivity, you're not creating that many jobs, that is the first criticism. no, he drove the price down so it became a mass marketed item he will. he wanted to build a car, he said quote, for the multitudes. that mass market item became accessible to a much wider population which ultimately created much more job growth. so what we need to do is look for those areas where there's going to be a new thing that can be affordable for a lot of people that adds value and comfort to their lives and to make those things in america. so it is new markets, you know, the ipad and iphone were invented in the united states. it is being as sell belled

in china. the many of the chips are being made in korea. we would like to make the chips and have the assembly plants over here. there's a lot of engineers over there in china, and again, to say it is okay to invent here but not to the engineer? one of my best friend, we went to graduate school together, we lived in the same house for four years, worked for hp labs for most of his career. that part of hewlett-packard got sold off to a private equity firm and, the last part of his career he wants to build, bring a product to market, just the -- the product he is bringing to market is optical mouse for apple. he is an optical engineer. and, so i was visiting on vacation last summer and he comes home late at night, 9:00 p.m., every night. why? he has to stay up to talk to the engineers in china about the design of the optical

mouse. >> john is an iraq war veteran. started his company and created some new jobs. how many jobs has the stimulus money at energy created, energy department? >> it is something in the neighborhood of what we would call direct jobs, i believe something in the neighborhood of 60,000 plus jobs. but these are very direct jobs. and in the world, very conservative roles, if we give let's say a loan to a company or a grant to a company and they subcontract out, we're not allowed to include those jobs. we're not allowed to include supply chain jobs. >> right. >> so it is a very, very conservative number and -- >> overall of the billions that were given in stimulus money do you feel it was well worth, it was well-spent? >> yes. yes. >> and on november 17th, i guess you have to go up to the hill and talk about

solyndra. what, can you tell us what you're going to say up there? then i will let you go. then i will let you go. >> we'll see what happens but i certainly my message to congress is more or along the same lines what i said today. this is a key time in american history. there's key opportunity to seize the opportunity. . .

i think with all my heart and soul that this is true, but i am not allowed. i said there are many dozens of other countries out there. >> can we expect to see you in a sec and obama administration? i know other members have been made lately even if obama wins they are not going to stay. how about you? >> this is between a committed president in and our secret handshake. [laughter] let me just say i came to washington because i deeply believe in the importance of the mission of the department of energy. there is nothing that has happened that has that ever has led me to think that note, maybe it wasn't the right belief. i believe this even more strongly today. >> and the last question is coming to gc that john stuart

skit about the wonder of? >> i saw part of it. >> what did you think? >> jon stewart is very funny. >> i appreciate you coming. you're a busy man with a massive portfolio. thank you for allowing us to jump around from oil spills to renewable energy and i very much appreciate you coming. >> thank you. >> thank you. [applause] >> part of our brother to the white house coverage, we have let this afternoon at the washington convention center for a march on republican presidential candidate, mitt romney and herman cain today here at the americans for prosperity foundation annual summit. former new york city mayor rudy giuliani also expected to speak. live coverage on c-span too expected to start in just a moment. ♪ ♪

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♪ >> welcome again. ladies and gentlemen, please find your seats. ♪ >> again come at the washington convention center in the nation's capital for marks from presidential candidate, mitt romney and herman cain. they are the americans for prosperity foundation annual summit. we are also expecting comments from new york mayor, rudy giuliani. a quick reminder of more life to the untrue white house. five candidates will be in des moines, iowa for the ronald reagan dinner. speakers include rick perry, former house speaker newt gingrich, representative michele bachmann and ron paul and former senator, rick santorum. live coverage getting started tonight at eight eastern here on

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♪ ♪ ♪ a ♪ a ♪ ♪ ♪ ♪ >> once again, ladies and shabbat, please find your seats. the show will begin in just a moment. please take your seats. thank you. ♪ thank you.

♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ >> awaiting a republican presidential candidate mitt romney and herman cain this afternoon. if the americans for prosperity annual summit. also expecting her marks are new york city mayor, rudy giuliani. this is less coverage and wrote to the white house coverage will continue to run it with herman cain and duke gingrich squaring

off in a lincoln style debate on social and economic conditions in the u.s. live coverage of saint houston texas tomorrow night at 8:00 eastern on c-span, c-span radio and online at c-span.org. [inaudible ♪ ♪ ♪ ♪ ♪ >> 2012 presidential campaign takes place tonight in new hampshire. >> tonight pre >> tonight presidential summit on job creation hosted by the new hampshire chapter of the americans for prosperity foundation a limited government

advocacy group will get five potential white house hopefuls a chance to off reservation for economic recovery. >> presidential candidates use a stage in new hampshire to get message across to voters. a national grass-roots political group made a stop to talk to residents about the nation's regulatory energy policies. the americans for prosperity foundation running at alcohol at the center. >> you are starting a national media campaign as he called running on at yum, which you placed the blame clearly on president to bomb his shoulders. >> regulatory policies of this administration are a key reason, not the only but a key reason. we don't think you ought to use government to pick your projects. when it comes down to prices for americans going up. that's who we're fighting with us to a running. >> iraq obama will be a long-term president. >> with that in mind and several

others come boston fired up a crowd of conservative bloggers. [inaudible ♪ ♪ ♪ ♪ >> ladies and gentlemen, please welcome the president of americans for prosperity foundation, ladies and gentlemen, 10 phillips. ♪ ♪ ♪ >> how is everybody? ♪ >> good afternoon. good afternoon.

[cheers and applause] welcome to the sixth annual americans for prosperity foundation defending the american dream summit. [cheers and applause] over 2008 grassroots that this from all across this great country converging on washington d.c. and we've got a pretty simple message for this government, don't we? lets cut spending and get within your means and tighten your belt like every business in every family that this country is set to do. is that right? that is the message we are delivering. many of you have traveled long distances to be with us today. i want to thank you on behalf of the foundation for that. i saw dallas woodhouse, afp north carolina state direct during the buses from north carolina are here. is that right? [cheers and applause] and this morning i heard a commotion at the hotel and i ran into a whole bunch of okies from

oklahoma. where are you guys? and then, i talked to folks who literally just finished an eight to 10 hour bus ride from the great state of michigan. [cheers and applause] thank you for being here. all of you have stories to tell and we are the organization that helps you tell them. you know, days like today bring to reality the vision our board had many years ago in sounding our predecessor organization, citizens for a sound economy and then americans for prosperity foundation. they envisioned a genuine grassroots movement promised a base, but national in scope. with literally millions of american citizens from all walks of life, standing up and fighting for the economic freedoms, the very freedoms that it made our country the most prosperous in the history of the world. from day one, our americans for

prosperity foundation team has been blessed for the chairman of integrity unit deep blogger freedom of. david coke on behalf of our foundation and american comic thank you for all you do. and we are proud to have you as their chairman. [cheers and applause] now in just a few moments, you are going to year from two leading contenders for president, herman cain and mitt romney. [cheers and applause] then, you're going to hear from america's mayor, rudy giuliani. [cheers and applause] tonight at our reagan dinner -- by the way, as the years pass, does then-president ronald reagan let veteran better? his accomplishments in dreams and hopes. i tonight at the reagan dinner, you will hear from the judge -- judge napolitano from fox news.

[cheers and applause] and dinesh to souza, one of my favorite authors about breaking. and tomorrow, you've got to come back for a cut spending effort now in raleigh. you are going to hear from andrew breitbart, john fund and the great one himself, mark was then. [cheers and applause] now, there is one disappointment this weekend. and it is troubling, perplexing. we invited president obama to join us. no, we did. certified letter, absolutely. white house 1600 pennsylvania avenue. we wanted to give the president the opportunity to explain the billions of our tax dollars he is wasting on green energy boondoggles in pursuit of his global warming ideology. we want him to explain that. we wanted him to explain how this tax dollars were boondoggles -- i know this is just a mistake, a tama county

thing. they would seem to end up in the hands of favorite friends and donors. we want him the opportunity to explain that. we want to give him the opportunity to explain the reason why he wants to raise taxes and a whistle status program, why is epa continues to wipe out literally tens of thousands of jobs in the private sector with these regulations and red tape. but alas, we won't be hearing from the president because he turned us down. very disappointing. but mr. president, we do have a message for you. we may not hear from you today, but trust us, you're going to hear from us. [cheers and applause] you are going to hear from everyone of us. [cheers and applause] you are going to hear from us this weekend. you are going to hear from us next weekend and you are certainly going to hear from everyone of us across america in 2012. [cheers and applause] now in recent weeks, we have

seen the last working to rejuvenate itself at the grassroots, using that occupy wall street movement. and i mean this sincerely. i welcome this development. i do and i am not being facetious. here is why. the occupy wall street movement offers our nation a crystal-clear choice between what the radical left's vision is this nation and what afp foundation in our tea party allies of what our vision is for this nation, right? when it comes to the economy. [applause] they possess a vehement hate trade of free enterprise and capitalism. it drips from every word in every statement. they ultimately call for socialism and they disparage job creation. at americans for prosperity foundation, we know the truth. free enterprise has lifted more people out of the muck and mire of poverty and despair in any other system known to man.

[cheers and applause] in fact, we know free enterprise has given wall street folks the means to hold the process in america today. often the occupy wall street movement has even called for and resulted environments. they break the law. they disrespect the rights of property owners and fellow americans. i can tell you this at americans for prosperity foundation and with our tea party allies, we want to genuinely bring change to this country. we want to reform government and we do so with their respective rule and law and this great land of ours. [cheers and applause] there is one last crucial difference. the occupy wall street movement and the far left is based on anger and envy. they want to use the government

to tear down fellow americans to suit their radical ideological agenda. their calling card we have seen. it's class warfare and unrestrained and the. americans for prosperity foundation, we know something they don't know. americans are not an envious people. americans aren't aspirational people. [cheers and applause] they aspire to a better life and are willing to work for and fight for it without tearing down fellow citizens. now, there are those who tell us today we cannot change the direction of our nation. are those pundits on the media sometimes you say that it governments and big spending and high unemployment and job killing regulations and other spiraling deficits and debt are here to stay. that is a national failure and default we are are watching increases are saved.

those who say such things do not know you in this room and your commitment to freedom. they don't know the millions of americans just like all of us come at americans i've met from shelton washington to jacksonville florida were willing to work and sacrifice their time and treasure to bring economic freedom and prosperity back to our nation. those who forecast our inevitable decline do not know the spirit of america and the site you are willing to undertake. this past july 4, i left an event date in the afternoon in eastern pennsylvania and i drove to my home in leesburg, virginia. as i was driving through southeastern pennsylvania, i entered a small town that many of you may have heard of called gettysburg. and i thought how appropriate on independence day to be driving through town was so much sacrifice and valor. as i was driving through, i noticed in a large field in july for celebration taking place. he'd seen us in a probably participated.

contiguously greenwood, god bless the u.s.a. great son. i will sing it for you, don't worry. and i had to start. i pulled over and i watched the fireworks display, this iconic american vision. i got back in my car and it was after dark now in the center of the last 45 minutes or so to leesburg, i could see on the horizon in all directions little pops from the fireworks taking place in small towns across southern maryland by band in western maryland and western virginia were holding their own july 4th celebrations. and i thought back to the most inspiring dinner of my life. it occurred about three years ago in manhattan. it was a dinner honoring the living recipients of the congressional medal of honor. over two dozen of these men. [cheers and applause] and my table that night was a short stocky veteran who had been honored for his gallantry at iwo jima.

remember the movie we were soldiers or the book we were soldiers? did you ever read battersea that movie? a helicopter pilot was just a few tables over. he had been awarded the congressional medal of honor. how we flew a helicopter i will never know. that night is humbling to look around the room and hear stories of these and, to see humility of individuals. that is what shines through the brightest. after the dinner, most of the crowd had left and i looked over and there was one last congressional medal of honor honoree and the room that i can see. he had the metal pulled tightly around his neck as he usually is worn. i walked over to him. he was a big strapping gentleman, a shock of silver hair and blue eyes that were still vibrant, much like the eyes of the 25-year-old. he had been honored with the congressional medal of honor. he landed with the second wave, but he was awarded the medal of honor for his actions on the second day after today.

i walked over and sets are coming thank you for your service and i'll never forget what he said to me. he looked me in the eye inside sun, they gave me that battle for some united on monday. but what i am most proud of is that every day for almost a year, me and my buddies thought hard across france and then we fought hard into germany. when i look back, that's what i'm most proud of. we didn't take days off. we fought hard everyday. i want doubt. [cheers and applause] i walked out into the crisp spring air of a manhattan evening with those words ringing in my ears. we were cards and thought hard everyday. and look, i would never compare what we do in the policy arena to that. they are sacrifice beyond anything. but the principle is the same. i don't know if we've got 10 days, 10 hours, 10 years, 20 years or the truth is none of us

know. but i want to let that one way and that assuredness, look into the eyes of my children and grandchildren and stake out is, i did everything i could. i thought hard everyday to make our nation the freest and most cost or is in the country. i know that the commitment you shared in thank you for being part of this foundation. thank you. [cheers and applause] [applause] our first speaker today is one of the leading contenders for president for republican nomination. he's a successful businessman. he is also the former governor of massachusetts. please welcome to our foundation event, mitt romney. [cheers and applause] ♪ ♪ >> thank you.

thank you for that very warm welcome in thank you for the work you're doing across the country. this is the year. this is the year we are going to be held to select a nominee and make sure we can take back this country, so i appreciate the work you're doing. i'm sure you have noticed the president has been traveling across the country trying to get the people of america to support his new half a trillion dollars stimulus bill. he keeps telling people, we can't wait, to which i say, yes we can. [laughter] [applause] you know, upon taking office, this administration's motto was, you never want to let a serious crisis go to waste. since then, it is unclear if they don't know how to end one. the unemployment rate has been over 8% for 33 months.

our country has been running a deficit for 36 months. and just last week, nearly 400,000 americans filed for new jobless claims. we know that is not the best america can do. it is just the best this administration can do. we are going to do a lot better. [cheers and applause] over the last 33 months from a president obama has suffered a number of plans for getting the economy going. the problem is most of his proposals are based on one idea. more spending and borrowing. today government or is 36 cents of every dollar it spends. if we stay on that course, we will face tomorrow what greece and italy and spain are facing today. there is no nation big enough to bail us out. it took 43 presidents over 200 years to accumulate $6.3 trillion in debt. president obama is on track to do that in just one term.

his fundamental error is that he believes government creates jobs. he has run. he puts his faith in government. i put my faith in people. [cheers and applause] this is why i am committed to making government simpler, smaller and smarter. it's not only good for the economy. it is a moral imperative. we cannot with moral conscience by a trillion dollars that can only be repaid by her children. we cannot so weaken our economic foundation that would jeopardize our ability to preserve freedom. some argue that fiscal responsibility is heartless and immoral. now, what is heartless is to impair our children. what is immoral is to imperil

the strength that the nation founded under god and preserved by his hand. [cheers and applause] this is a pivotal moment in the history of the country. it will either be led by a man in women who care only for the present, who promise more and more for less, or who ignore the tightening noose of data. or will be led by those who believe that deficits matter and we have the courage to act with fiscal responsibility. now when i became governor of massachusetts, 2003, our state budget was out of control. my legislature was 85% democrat. some thought we could solve our problem by just raising taxes or borrowing more money. i said no. even what about the most democratic legislature in the nation, we didn't just slow down the growth of spending. we actually cut spending.

we turned a $3 billion budget shortfall into a $2 billion rainy day fund. and learned how to balance budgets and the business that her. you see, and the air, you have no choice about balancing budgets. do they balance their budget or you go broke. and you spend every dollar like it is your own. because it is. as someone should've told that to sulindac. [laughter] the federal government gave them a $535 million startup loan to build a fact jury in fremont california. the footprints of their facility covered five baseball fields. they had robots that was sold disney songs. i am not kidding. they had what was described as ball like showers with liquid crystal displays that told you what the water temperature wise. the company headquarters was called the taj mahal of office

buildings. that is how government starts a business. lma compares to wonder with staples, a company that i helped get started in a small way. our headquarters is located in the back of an empty food warehouse. we got used office furniture, old not to highchairs. you actually have to be kind of inaptly to get out of them once he's adamant. every penny we had one into selling and attract customers. that is the difference between the current government. fiscal responsibility. now when i type the business experience and i brought it to the olympics. i came there at a time when the games were in crisis. we had about a $370 million budget doesn't fit in some people said the games are going to fail. the first thing we did this to change the culture of the organization. it started with some small but symbolic gestures. we stopped renting a big empty

conference room for board meetings and we decided to charge our board members rather for their meals. one dollar for a can of coke, $1 for a slice of pizza. ..

>> to set on this goals and present a credible plan to achieve those goals. this is not going to be easy. it's going to require tough choices. many believe it can't be done. i believe it has to be done. i believe in the american people. and when this nation calls americans deliver. over the last 33 months president obama has grown federal spending to 24% of our total economy. 24% of the gdp. as president, i pledge to reduce spending to 20% of the gdp by the end of my first term.

[applause] and then i will cap it at that level, and further output is on the path to a balanced budget and a constitutional a minute that requires government to spend only what it turns. [applause] to reach that 20% goal, we are going to need to find, by 2016, about $500 billion a year in annual savings. upon taking office i'm going to cut discretionary spending and submit a budget that returned spending levels to the pre-obama level. [applause] >> let me know by the way as i said at the citadel a few weeks ago i would reverse president obama's massive defense cuts. any savings -- [applause]

any savings that we define in the core defense budget we will redirect to rebuild our navy, our air force, to add soldiers and sailors. [applause] and to provide decatur that our veterans so richly deserve. [applause] the world has not become a less dangerous place. we must preserve our commitment to a military that is so strong no nation would ever think of testing it. [applause] now, my roadmap to a smaller, simpler government combines three separate approaches. first, eliminate and cut programs. and that will start -- [applause]

that will start with the easiest cut of all. i will repeal obamnicare. [cheers and applause] [applause] >> i should have started with that line. [laughter] look, obamacare is bad law, that policy. and when i am president that bad news will be over. now, they are -- [applause] by the way, there are a lot of other federal programs that we should either dramatically scale back or cut out entirely. for each -- [applause] for each program that we have in

the government, i've been looking at them one by one. i'm going to ask this question. is this program so critical, so we central that we should borrow money from china to pay for it? [applause] now for example, i like amtrak, but i'm not willing to borrow $1.6 billion a year from china to pay for it. [applause] look, i really like the national endowment for the arts, the national, the national endowment for the humanities, the corporation for public broadcasting, but i will not borrow almost a billion dollars a year from china to pay for them. [applause] and then there's foreign aid. did you know that we give $27 million a year, just to which country? to china. 27 million a year to china. i will stop sending me to any

country that can take care of itself. and no foreign aid will go to countries that oppose american interests. [applause] and you know well that we spend $300 million a year on groups like planned parenthood, to provide abortions or abortion related services. its longtime pass for that to be over. and so -- [applause] and so first, the first approach, we're going to eliminate or cut programs that are not absolutely essential, even when we like them. second, we are going to return numerous federal programs to the states. that's -- [applause] and that's because innovation and cost management and reduction of fraud and abuse can far exceed at the state level what happens in washington is in

charge. medicaid is a prime example. we need to turn medicaid back to the states to allow them at the state level to craft health care solutions that suit their own citizens best. and by limiting the growth of medicaid funding, the cpi or inflation plus 1%, we will save $100 billion a year by 2016. [applause] today, there are nine separate federal agencies that run 47 different federal workforce training programs. at a cost of $18 billion a year. just imagine how much of that is being spent on overhead. i'm going to send those workforce training dollars back to the states, empower the states to retrain workers in ways that fit the needs of their respective economies, and in the process we will save billions of dollars. now finally, in addition to

cutting programs and eliminating programs and sending programs back to the states where they belong, there's a third approach to reining in federal spending. and it's to impose far greater standards of productivity and efficiency on government itself. just like it's done in business every other day. [applause] let me give you an example. this was amazing to me. just how out of control government can become when it doesn't have competition or people who understand how to exact efficiency and productivity. i was speaking with former secretary of the navy, john lehman, he told me that during the second world war we commissioned about 1000 ships a year, and the navy purchasing department that year which they called at the time the bureau of ships, had 1000 employees. by the time john was secretary of the navy under ronald reagan, he said we commissioned about 17 ships a year, and navy purchasing had grown to 4000

people. today, we will commission nine ships a year, and purchasing? it's grown to 24,000 people. a business like that would be out of business. we've got to cut the size of the federal workforce. [applause] on president obama's watch with added 140,000 workers to the federal workforce. the american people are increasingly working to support the government. it out to be the other way round. i'll reduce the federal payroll by at least 10%, saving three and half a billion dollars a year. [applause] and, of course, we can save additional billions by cutting out extraneous federal contractors. but it's not just the size of the federal workforce and

contractors, it's their cause. since president obama took office the number of federal workers that make over $150,000 a year has more than doubled. i insist that we limit the salaries and benefits of public workers to those which exist in the private sector. [applause] public servants shouldn't get a better deal than the taxpayers they work for. and by linking -- [applause] i linking government paid with private sector pay, we will save as much as $47 billion a year. [applause] now, they're still other ways to make the government more efficient and effective. we've got to attack the rampant fraud that exist in numerous government programs, one of the ways i would do that is in

acting far stiffer penalties for those who steal from taxpayers. cutting improper payments just in half could save as much as $60 billion a year. we can save nearly 11 billion a year by repeating a political giveaway that protects unions from competition and drives up the cost of every government contractor and project. it's time to repeal davis-bacon. [applause] one of the things as an old business guy, i'm looking forward to come is finding savings by combining certain government agencies and departments. for example, it makes very little sense, the trade policies and programs are administered by so many offices in so many departments. today, trade matters our house in the office of the u.s. trade

representatives, the department of commerce, the international trade commission, the international trade administration, the department of homeland security, and the department of treasury. and by the way, guess who gathers all our trade data? none of the above. it's the census bureau. look, too many chefs not only spoil the broth, they make it in edible and prohibitively expensive. we've got to combined federal agencies. [applause] let me just reiterate. i'm going to make the federal government simpler, smaller, and smarter by eliminating programs, by sending programs back to states and by making the federal government itself more productive. and at the same time provide for the national defense, enforce our laws, preserve our safety net, and honor all our promises to our elderly. this is the right course for a

moral nation. deficits do in fact matter. they matter if we want to convince entrepreneurs to start businesses. they matter if we want employers to start hiring. they matter if america is going to avoid the shoals of economic calamity. they matter if america is going to remain the shining city on a hill. into those who say that deficits don't matter, to those who spend and borrow, to win the praise of the shortsighted, we assert that you're in the wrong and we are in the right. my dad used to say that the pursuit of the difficult makes men strong. our next president is going to face difficult challenges. among these will be the future of social security and medicare. in their current form these programs will go bankrupt at some point. i know that. you know that. and even our friends in the opposition party know that. the difference is that i'll be

honest about strengthening and preserving them. and they won't. president obama has failed to articulate a single serious idea to save social security. i believe we can save social security with a few commonsense reforms. first let's underscore this. there will be no change in social security for retirees or those near retirement, no change. second, for the next generation of retirees we should slowly raise the retirement age. and, finally, for the next generation of retirees we should slow the growth of benefits for those of higher incomes. now, while president obama has been silent on social security, his agenda for medicare has been a disaster. he is the only president in modern history who has cut medicare for seniors. don't forget, it was president obama who cut $500 billion from

medicare. not to preserve it, not to sustain it, but to pay for his all on 10 -- pay for his obamacare. those bureaucrats by the way, they have the power to change medicare, to put in place for the cuts to it without congressional approval. even if those cuts overturned a law previously passed by congress. president obama's so-called medicare reforms could lead to rationing of care or denial of care for seniors on medicare. we must not let the public learn or forget who it was that that medicare. it was president obama, not republicans. [applause] him anour next president will pt medicare, improve the program, and keep it sustainable for generations to calm. now there's several principles that will guide my efforts in that regard.

our first, just like social security, medicare should not change for anyone who is in the program or is about to be in a. we should honor the commitments we made to our seniors. and second, as with social security, tax hikes are not the solution. we couldn't tax our way out of our unfunded liabilities that are so large even if we wanted to. third, tomorrow's seniors should have the freedom to choose what their health coverage looks like. younger americans today, when they turn 65, should have a choice between traditional medicare and other private health care plans that provide at least the same level of benefits. competition will lower costs and increase the quality of health care. that's the answer for medicare. the federal government, by the way, will help seniors pay for the option they choose with the level of support that ensures that all can obtain coverage they need. those with lower incomes will receive more general assistance.

beneficiaries can choose to keep the savings and less expensive options or they can choose to pay more for a costlier plan. and, finally, as with social security, the eligibility age should slowly increase to keep pace with increases in longevity. those ideas will give tomorrow's seniors the same kind of choice is that most americans have in health care today. the future of medicare should be marked by competition, by choice and by innovation rather than by bureaucracy, stagnation and bankruptcy. [applause] our path for the future of social security and medicare is honesty and security. there's a demagoguery and deception, and that's one more reason they will lose. [applause]

let's start over. the plan i proposed to make government simpler, smaller, and smarter represents the biggest fundamental change to the federal government in modern history. it to change where going to have to make if the words full faith and credit of the united states are getting anything at all. we are not the first people to come to this realization. and we will be the first people to be criticized for believing the responsibility is a virtue. president reagan shared our conviction in his first inaugural address, he said this, it's not my intention to do away with government. it's rather to make it work with us. not over us. stand by our side, not ride on our back. government can and must provide opportunity, not smother it. foster productivity, not stifle it. the task before us, it's to reaffirm our conviction in the

beliefs and values that unite us. and the challenges and opportunities that face us. and in the victory that surely awaits us. thank you for all you do. god bless you, and god bless the united states of america. thank you all. [applause] ♪ i was born free ♪ i was born free ♪ born free ♪ ladies and gentlemen, please welcome "national review" and fox news contributor jonah goldberg ♪ ♪ ♪

>> thanks to all of you. thanks for having me here. i'm happier than hippie on free hash brownie day. [laughter] i usually say i'm happier than helen thomas at a hamas rally but i thought, you know. [laughter] one of the constant themes of the obama presidency is how we need to compete with china. we use it constantly. causally on the stump saying we need to build highways and bridges like they are in china. build airports like they are in china. he says if you go to beijing they have the best airports in the world, which always remind me when richard nixon said that it was obvious the world is overpopulated because everywhere he went he saw huge crowds. right? if you fly into beijing, they'll have a really nice airport.

but what you're not going to see is maybe a 20-40 million chinese people who live in caves, literally live in caves. you will not see the hundreds of minutes of chinese people who live on a dollar or two a day. and yet what we causally hear from barack obama and from democrats like nancy pelosi and harry reid is that we need to be like china and make these investments and spend all this money, because we don't have the infrastructure that they do. they had these wonderful windmills and this miraculous new sort of shovel-ready technology that converts unicorn poop into clean renewable energy and all this kind of thing. and what they leave out is the reason why china is building a lot of these things is because they don't have them. we have 10 times the number of airports that china does. we have hundreds, we have hundreds of thousands of miles more railways than they do. used to joe biden out there talking like that weird guy in the cafeteria on lime jell-o day talking about how we need to

have more trains out there. but you can understand the frustration. barack obama came into office be leaving, as he once put it in an interview, he said i actually lived, this is a family from the audience, he said i actually leave my own bs. and he does. at the time come in 2008 he came into office and he believed that we are on the cusp, not just a liberal ronald reagan or a new new deal, but at the dawn of this brand-new progressive era. that's what everyone said. that's what everyone expected. he campaigned in berlin in which i'm still trying to figure out. and he had this whole routine, people of earth stop your bickering, i'm barack obama. i am here to help. he was going to ride the crest of a new progressive era, which

involves spending money like you wouldn't be. i used to say under george w. bush that he spent money like a pimp with a week to live. i'm out of adjectives for how these guys are spending money. but president obama wasn't alone, right? everybody says this was the dawn of new progressive era. three years ago i used to give talks to free market groups like you guys, tea party groups, americans for prosperity type groups. when i would talk about limited government and free enterprise, it felt like us talking to civil war reenactors, our attendees of a klingon wedding. we were so out of the time come out of the spirit of the age where everyone knew that this was a new new deal was on the rise. off a political scientist have been saying for 50 years that during a time of economic crisis the american people rally around statism, rally around big government, rally around more

spending, more handouts and all the rest. everyone expected that to come. all those poor people, all the brilliant guys at harvard and all the rest. the one thing they didn't count on was people like you. [applause] the tea parties and groups like americans for prosperity and other like-minded people, they came out of nowhere. none of the models predicted that you would have this mass populist movement demanding less from government. not more from government. it fundamentally transform the debates in washington. it transformed the debates in congress. the tea parties were, i like to say they're sort of like stem cell therapy for the public in part. they helped the party we grow a spine. [laughter] [applause]

today's progressive that constantly say barack obama says this all the time, that constantly say that they love america, they care about america, they want what's best for america, they just want to fundamentally transform it. so the gentleman in the room i suggest you try this out at home. go to your wife and say, hey, honey, i love you dearly, i lived with all my heart. i just want to transform we dashed it fundamentally transform your. my sense is that she won't have a great reaction to it. so the salt of the spirit of the occupy wall street out. their whole idea is a notice now all of a sudden this is the highest form of patriotism again? under bush dissent was the highest form of patriotism. then and obama it became the lowest form of racism. and now with occupy wall street so you're allowed to dissent again.

it seems like the only permissible dissent is always from the left for some reason. it's kind of surprising. but the occupy wall street crowd has the same sort of mindset. they say we want what's best for america, we want what's great for america and there's really nothing wrong with america that is making us more like greece won't solve. it's that mindset down there, you go down there and you look at these people and you talk to them and all the rest and you don't want to interrupt him while their recycling their own urine or whatever the hell they're doing, right? but they have this mindset about what america should be, and it's a really interesting mindset. you sometimes get the same feeling you get from them when you talk to like it year about how awesome it would be if superman could fight, you know, the world they're describing is interesting. it's just not a world that is grounded in earth logic or anything like that. that's not, you know, that's putting aside the times where they're selling drugs or breaking people and all that

kind of thing. it's funny, i have spoken to a lot of tea party events around the country, and i brought my seven and eight year-old daughter at the time. to these things. i remember in racing wisconsin my daughter work the concession stands at the tea party valley. i wouldn't let my daughter within 10 miles of the park. i think -- [applause] i think there's a lot, this incredible sort of clicking on ruby red slippers, he'll together got a bunch of times, this is the left wing tea party, this is the left wing tea party. and we is desperate to turn this into something it's not. at the end of the day the american people are going to recognize what this thing is. you can't say you're for an eight episode and then close to one of the largest ports in the world where working class blue caller people make a living. right? [applause]

but they come from a mindset that possibly thinks the reason you have poverty is because you're not spent enough money on poor people. that is the entire mindset become from. they ask why is it poverty in the world. this is one of the dumbest questions you can as. you have to be too stupid to based on shared at an m&m factory to think this is a good question. [laughter] w.? the only relevant and important question isn't why is there poverty. it is why is their wealth? there is only one system in human history that reliably created wealth. the single greatest anti-poverty program in the history of humanity is this lockean gunsmithing, american anglo-american revolution that says we are sovereign individuals that property rights matter, the trade and commerce is a noble thing.

and -- [applause] there's a lot of pessimistic talk up there. people are bummed out about a lot of different things but i'm far more optimistic today because people like you, the progress we've made that that it was in 2008. i think our best days are ahead of us. [applause] the challenge going forward it seems to me is to keep them honest. what do i mean by then? i mean everybody. i mean republicans. i mean democrats. [applause] i mean congress. whoever controls it. what you want is for people like john boehner who i think is an honorable and decent man to have to go into negotiations in halo, i would love to cut a deal with you guys, but these guys are crazy. [applause] right?

and if they're going to call you terrorists for it, well, shame on them but where it like a badge of honor. [applause] anyway, they only gave me 10 minutes today and they told me i was supposed be entertaining, uplifting and insightful. i hope i checked off at least one of those boxes. [cheers and applause] but keep up the good work and keep hope alive. thank you all very much. [applause] ♪ >> once again, ladies and gentlemen, the president of americans for prosperity foundation, tim phillips. ♪ ♪ all right. we are honored to have a second

leading presidential contender with us today. he's a successful business leader, and he hails from the great state of georgia. please welcome herman cain. [cheers and applause] ♪ ♪ ♪ >> thank you. thank you. thank you very much. delighted to be here.

[cheers and applause] love you all. love you. thank you very much. before, before i get started, i want to know who's teleprompters are these? because i don't need them. [cheers and applause] maybe they are for somebody else. let it be borne in mind that the tragedy of life does not lie in not reaching your goals. but tragedy lies in having no goals to reach for. [applause] is not a calamity to die with the dreams unfulfilled, but it

is a calamity to have no dreams. the american dream has been hijacked, but the good news is we can take it back. [cheers and applause] you see, the founding fathers, they got it right. the founding fathers got it right when they talked about in doubt by their creator. not somebody else's, not by the president, not by congress. endowed by their creator with certain unalienable rights among these are life, liberty and the pursuit of happiness. and when the founders talked about in endowed by with certain on a label rights, among these suggest that there was some others. and i happen to believe that

there was another when they had in mind, another unalienable right, and that is the right to protect yourself, to protect your family, and to protect your property. we call it the second amendment to the constitution. [cheers and applause] and on any level right -- the founding fathers got it right so we have to be the founding fathers and take our nation back, to take the possibility to dream big in this nation and to be able to achieve to take it back. because unfortunately we have become a nation of crises. we have an economic crisis. we have an entitlement spending crisis. we've got an energy crisis. we've got and illegal immigration crisis. we've got a foggy foreign policy

crisis. we've got a moral crisis. and the biggest crisis we have is a severe deficiency of leadership crisis in the white house. [cheers and applause] hihere's how we get this nation back on track. and this is one fundamental difference between a businessman and politician. i've never held high elected office before. [cheers and applause] i'm a businessman. because you see, the politicians, they want to propose stuff that will get us chance, have a chance of being passed. businessmen will propose solutions that will fix the problems. we need to fix problems in this country.

[applause] and the way i approach solving problems is just like all dash the idea for over 42 years. make sure you're working on the right problem. you make sure you sign the right prayers, surround yourself with good people, put together the right plans and then you execute the plans in order to be able to solve the problems. let's take a look at the top three gold critical priorities that i believe that the next president of the united states needs to tackle immediately. there isn't that no one party, we've got three top critical priorities. first, this foggy foreign policy. i happened to have a foreign policy, philosophy that is an extension of the reagan philosophy. reagan philosophy was peace through strength. [applause] the cain philosophy, the

transfer philosophy is peace through strength and clarity. we must clarify who our friends are, clarify who our enemies are, and stop giving money to our enemies. [applause] and the reason we need to clarify who our friends are is such that we can tell the rest of the world who our friends are, and who we will stand with, starting with the nation of israel. [cheers and applause] our friends. foggy foreign policy. we must make it clear. what the united states is saying. secondly, this economy is on life-support. we don't need a solution that is going to try to trick last year prosperity. we cannot trickle this economy

to prosperity. it starts with understanding a very fundamental economic guiding principle which is quite simply, the engine of economic growth in this great economy of ours is the business sector. so we've got to put some fuel in the engine. and the way we do that, in the way we put fuel in the engine is a bold plan that we have developed. some people say it's too bold. i don't think it's too bold because america can't wait for another solution or proposal that is not going to solve the problem. this bold plan starts with you throw out the current tax code. throw it out. [applause] throw out the current tax code. and then pass a very simple

9-9-9 plan. 9% business flat tax, 9% personal income flat tax, and a 9% national sales tax. it will replace five sources of revenue. it will replace the corporate income tax. the personal income tax, the capital gains tax, the death tax, and the biggest tax of all that some people today, the payroll tax. all are collected with 9-9-9. [applause] one of the biggest criticisms about 9-9-9 is because we introduce a national sales tax. but you're going to give congress another way to tax is? well, let's throw out the 10,000 ways in the current code and i will give them one that we can understand. and the other thing is with that national sales tax, it's not a

replacement tax. it replaces the hidden taxes that are in everything we buy. take a loaf of bread. the farmer pays taxes on his property, and he pays the payroll tax for all of his employees. the miller who makes the flower pays taxes on his property. and the payroll tax for all of his employees. the baker pays taxes on his property, as well as the payroll tax for all of his employees. the trucking company that delivers the bread taste taxes on its property. and the payroll tax for all of its employees. the grocery store, if they make a profit, has to pay tax on that profit as well as the payroll tax of all of its employees. who do you think pays those tax is? we do. 9-9-9 takes out the invisible

taxes and replaces it with one that you can see called 9%. that's how 9-9-9 works. cost of goods not going to go up, they're going to go down. so we have got to clarify our foreign policy. we've got to boost this economy, and thirdly, we need an energy independence strategy. [applause] we have the resources to do it. we've got plenty of coal, oil, natural gas, shale oil, in order to become energy independent. we just -- and some of that, too. [laughter] we just need the leadership and the will. whenever i share this message with some people inside the beltway, they are ready to criticize it and save well, but you can't do that. i saved what you mean i can't do

that? i'm going to be president. we can do that. [applause] what do you mean? then they say well, all of these things that you're going to do, you're going to maximize all of these resources? yes. well, the epa is not going to let you do it. i said well, let me tell you what i cain presidency will be about. you see, the epa needs an attitude adjustment. they work for us. we don't work for them. [cheers and applause] attitude adjustment time at the epa. [applause] they work for us. that's we're going to develop the energy independence strategy. we can do it responsibly. but we do not have to stop all of the things that we can do.

my approach to all of these crises is the same, folks. and it is all based upon some guiding principles that i've used throughout my career in order to fix stuff, in order to turn stuff around, in order to build businesses, in order to lead organizations, big and small. some guiding principles. number one, do what's right. start with what's right. not what is politically right. number two -- [applause] if you want to solve a problem, go to the source closest to the problem. and the source closest to the problem is not in washington, d.c. it is in the states. let's go to the states to help solve many of these problems. 30 guiding principle, another guiding principle, is that one of the reasons we have all of these crises is because we have become an entitlement society. there will be no new entitlement

programs, only and power mac programs. empower the states, empower the workers, and empower businesses. [cheers and applause] list of those guiding principles. i've been in washington all week and i've attracted a little bit of attention. [cheers and applause] and there was an article in "the new york times" today that has attempted to attract some more attention. that's kind of what happens when you start to show up at the top of the polls. it just happened that way. but the article in "the new york times" is very kind of interesting and kind of those traits some the things we have to deal with in order to turn this country around. the article tries to make a case of how close the cult brothers and i are.

i'm proud to know the koch brothers. i'm very proud to know the koch brothers. [applause] they make it sound like that we have had time to go fishing together, hunting together, scheme together, golfing together. it just so i can clear that the clarify this committee, this may be a new announcement for the media, i am the koch brothers brother from another mother. [cheers and applause] yes. i am their brother from another mother. and proud of it. [cheers and applause] you see, the reason that i am running for president, folks, is because i want to unite the united states of america, not divide the united states of america. [cheers and applause]

and here's how we are, here's what we need to do. we've got to stay informed, stay informed. sadly, stay involved. the reason you are here at this conference is because you want to defend the american dream. the founding fathers, they did their job. we have got to do our job into thinking it. so stay informed, stay involved, and thirdly, stay inspired. they want you to believe that we can't do this, but i know in my heart that we can do this. stay inspired. many things have inspired me to get on this journey. one of the things that have inspired me to get on this journey, started 12 years ago when my first grandchild was born. i now have three grandkids, and it's for the grandkids and all the other little faces that you are here to defend the american dream. we're going to be all right. and it's not about us. it is about them, which is why

we are doing what we do, and why i am on this journey. and i am reminded of one of our greatest presidents and how he inspired this nation, ronald reagan, when he used to describe the united states of america as that shining city on a hill. but in the last three years, that shining city on a hill has slid down to the site of the hilltop. other nations to look up to us, but we on the side of the hill. this is why we need a renewal in america. we need a new type of leadership in america. my pledge to you as your president is that i will lead this nation with your help back to the top of the hill where it belongs. and i will never apologize for the greatness of the united states of america. [cheers and applause]

♪ ♪ ♪ >> european settlers seeking a better life build this country, making it one of the 10th wealthiest economies. but as prosperity grew, so did politicians hungry for power. >> pitting citizens against each other to impose policies robbing all of economic freedom. huge government pensions and benefits bankrupted the country. the transportation networks were nationalized.

sound familiar? this isn't america. it's argentina. government control of the argentinian economy with skyrocketing unemployment. today, argentina is one of the least economically free countries in the world and america's on the same course. plummeting every year. deficits soar. growth vanishes. history repeats itself. it's time to embrace economic freedom. >> ladies and gentlemen, please welcome the chairman of americans for prosperity, art pope. ♪ ♪ >> thank you very much. i do literally meaning thank each and every one of, for you all americans for prosperity. it's my pleasure to bring to you today a gentleman we have for our first meeting i've years

ago. it's rudy giuliani, who we all know as a successful attorney, who was a prosecutor for the u.s. attorney's office for president ronald reagan wrought him to be the number three person at the department of justice. he then returned to the u.s. -- the u.s. attorney for southern district of new york, prosecuting the worst of the worst criminals. rudy giuliani camera to men and made a great contribution as a prosecutor and a public servant. we went on the run for mayor of new york in 1989, was successful in 1993 and reelected in 1997. and as a former prosecutor, and mayor of new york you may say he would clean up crime in new york but it was not expected. it was thought the big city crime was a problem our society could not deal with. starting one window at a time, one street at a time throughout the whole city, mayor giuliani

turned in new york around and made the safest large city in america. and knowing the education is the key for both preventing crime at an early young life and billy our citizens, if that first job, he focus on education reform including charter schools and vouchers. while president clinton and his washington, d.c. was vetoed welfare reform, mayor giuliani was implement welfare reform in new york cutting the welfare rolls by two-thirds, not just make it hard to get welfare but moving people off welfare and to jobs. he did this all while balancing the budget of new york city and cutting taxes at the same time, revitalizing the economy of new york. in short, what rudy giuliani did was show that government could be run to meet the needs of the people, to serve the people, and at the same time allow the people to keep more of their hard earned dollars to provide

for themselves and their families. and, of course, we were all thankful for leadership that rudy giuliani shows -- showed it 9/11. so please welcome the man who still america's mayor, rudy giuliani. [applause] ♪ >> thank you very much. thank you very much. it's very nice to be here with you, and to see more republicans in this room than in all of new york city. [cheers and applause] man, i'll tell you, in new york city, republicans should have a law passed making them endangered species. [laughter] but it's great to see it and it's nice to be here. iran a city that was five to one

democratic. my city council had 45 democrats and six republicans. so for me to be with republica republicans, you might even agree with me. i was the first republican elected mayor in 25 years, and the first one to remain a republican in 50. [applause] so, this is a very, very comfortable audience for me, and i first want to thank you for all the great work you did in the elections of 2010. because if you hadn't done that work, just think of how much money we would be spending right now. we meet at a time in which the united states is more divided as a country and as a people that i think any time since the vietnam war. we haven't had this kind of class division, this kind of

turmoil, kind of thing we're seeing in my city of new york, with occupy wall street are what we just saw yesterday in oakland, california, where several of the occupied whatever they are occupying in oakland, were using molotov cocktails. i mean, this is a very, very dangerous movement. and indicate the tremendous division in our country. and it's ironic that this division is happening under a president who promised to unify us. well, the president who has unified us has divided us more than we have ever been divided. it's been relentless. [applause] he's practice the politics of pitting americans against american, of class warfare, and

he promises to do a lot more because it's his only chance of reelection. or at least he believes it's his only chance of reelection. occupying wall street is a direct result of barack obama's relentless class warfare that he has been practicing from the time that he was a candidate. it is not an accident, it is not just some kind of byproduct of the economy of our time. it is a direct result of his social philosophy which he has been announcing now for three or four years. remember when he answered joe the plumber? way back during the campaign. well, he revealed the seeds of this class warfare in that answer. he said when asked, do you think it is appropriate to raise

taxes, even if it won't raise more revenue is? like if you raise the capital gains tax, you would probably get less revenues that happen in the way by the 1980s when they raise the capital gains tax, this is income principle to "the new york times" editorial board. but, of course, the new york times doesn't really run a business. [laughter] so they wouldn't understand this. but when they raise the capital gains tax in 1980s, the federal government lost hundreds of millions of dollars. so joe the plumber said, would you raise taxes even if it did not raise more revenues? barack obama said yes, that would be the fair thing to do. well, what would be fair about it? what would be fair about it is he would be practicing what i think is a principal tenet of his economic and political

philosophy. he would be redistributing wealth. he would be deciding who should have money, who shouldn't have money. whose pocket asia, out of, whose pocket it should go into. and that is at the core of the economic philosophy of this administration. and as a result of that, i believe that barack obama owns the occupy wall street movement. [applause] it would not have happened, it would not have happened but for his class warfare. and remember, as it gets worse and worse because it's going to get worse and worse, where it came from. barack obama. he praised it. he supported it. he agrees with it. he sympathizes with it. and as it gets worse and worse, i believe this will be the

millstone around barack obama's neck that will take his presidency down. [cheers and applause] as the american people look at occupy wall street, what i believe most of the american people say about occupy wall street, and all of its versions all over the country is, how about trying something different to help our economy, instead of occupy wall street and occupying boston and occupied oakland? how about you occupied a job? [cheers and applause] how about working? working. i know that stuff. woodstock is more fun. right? woodstock is a lot more fun than

working eight hours a day. how about proceeding with your education and getting a better education? no, they would rather do a woodstock in manhattan, which is what it has turned into. so, i believe that this will become a major factor in analyzing what this president has done for us. there is no doubt he has ruined our economy. the american economy wants to recover. it is trying to recover. it's been trying to recover for a year or a year and a half. just follow wall street and as and downs wall street. look at the money that is sitting on the sidelines in america and all over the world. money that wants to be invested. money that wants to go to work. to put more people to work. why is that money being held back? the money is being held back because we have an

administration that is doing everything to discourage the growth of the private sector. it has one concern anyone concerned only. grow governments. more government union jobs. that is the only answer they have to dealing with this economy. that is going to require higher taxes. it's required more regulations. it's required and energy program that makes no sense at all. if you need any indication of how the ideology of this administration is choking our recovery, i will give you one, just one example. we all know that america as a matter of national security should be striving for energy independence. [applause] there was a report done in april of this year by a very distinguished professor named

daniel juergen. and what he said in the report was that based on studies by this institute, is a barack obama would just allow the same level of drilling in the gulf of mexico that was going on before the bp oil spill, if you just did that alone, he would create 150,000-200,000 more jobs. ..

he is willing to either ignore the best interest of his campaign because his ideology, his anti-energy policy ideology is so great that it overcomes even common sense. that is the problem with our president. that's why we have obamacare because his ideology overcame common sense. that is why we have this ridiculous stimulus program because ideology overcame common sense. this is why we have a jobs program now that wouldn't create a job for anyone because ideology overwhelms common sense. well, it is real simple. we have to get rid of him. [cheers and applause] we have to get rid of them -- [applause] we have to get rid of him and go to the american people with a very, very clear program.

imc network. it worked for me in new york city. i didn't invent it. i've heard it from governors in wisconsin and michigan. a project for ronald reagan. here is what it is and it's real simple. number one, we have to reduce government spending, discretionary and nondiscretionary. [cheers and applause] we have to reduce all government spending. and we have to do it relentlessly because the federal government is spending us into crushing debt and debt must be controlled. and we must remove the idea of nondiscretionary spending. [applause] there is no such thing as nondiscretionary spending. all spending is discretionary. it has to be voted out of house of representatives, by the senate and signed by the

president. that applies to medicare, medicaid, even social security. it applies to all forms of spending. this category of nondiscretionary spending was put there so that it would preserve constant increases in spending that nobody would touch it. it has to be challenged, has to be taken on. our candidates have to take on medicare, medicaid, social security, not to ruin it, but to say that because they are all going to go bankrupt and they are not going to be there 10, 15, 20 years from now. [applause] second, we have to not only have two reduce taxes, we have to reform and simplify the tax code. [applause] and here, herman cain and rick perry has made two very big contributions. they have offered to excellent

plans for how we can simplify our taxes. whether it is the 999 program of herman cain or it is a flat tax program of rick perry. both of those would be an advanced improvement over the complex completely unexplainable tax code we have today. [applause] and we have to reduce taxes, simplify taxes to stimulate the dear. when i talk about this, i see the democratic party believes in the government. the democratic party wants to raise taxes, more money for the government. what we believe in is leaving more money in your hand come in your pocket because we believe he will do more creative, much

better things and engage in a lot more job creation with your money in washington will. take a look at the stimulus program, take a look at so under a pure look at the tremendous amount of waste they are doing with money and not producing any jobs. best thing is cheap keep taxes low so that you can spend it and drive this economy right through the roof. [cheers and applause] and finally, there's another reason we have to reduce taxes. it is a reason i learned from my boss, ronald reagan. ronald reagan used to have a theory about reducing taxes. and he used to call it starve the beast. ronald reagan wanted to see taxes reduced because he wanted to get the congress less money to waste. the more money you give them cover the more money they raise.

the more money you hold back, the more they have to make efficient decisions about the use of money. the more they have to look at, is a program worth it? if we help that money, we would not now have the slender scandal in which half a billion dollars was given to a company to do -- what a daylight? windmills on top of hats? they have pets at the windmills. the company was going under in order to create energy. energy for us. they have to much money, so another reducing taxes. on the poor, rich, businesses and everyone is get the government less money. [cheers and applause] and finally, the whole purpose of it is not to reduce

government or the sake of reducing government. or reduce taxes for the sake of reducing taxes. it is because we understand that this is the genius of america. this is what makes america the greatest country in the history of the world. we're one of the few countries on the one who has done it the best has decided that we can trust people more than we can trust government. it goes back to our very beginnings, goes back to her soul. the other party trust government to solve every game. we trust like madison and jefferson and so many of our founding fathers, we trust you the people to make the right decisions. we understand individual liberty, individual decision-making. we understand you'll do better things to secure government than

with bureaucrats. we understand you'll make a better choice about the education of your children and government bureaucrats who don't even know your children. [cheers and applause] so whereabouts not just these economic issues, we are about restoring the greatness of america. restoring our dignity and pride, restoring respect for america, an america that will be military strong and not afraid to lead. this administration says that it leads by following. i wrote a book about leadership and which i pointed out the very best lessons of leadership. i am going to write a new book about leadership and point out exactly what not to do that will be based on barack obama. [cheers and applause]

we love this country. there's no reason to apologize for it ever. we certainly have our faults. we have certainly done things wrong and we have done things that we can be ashamed of in our history. however, can hear two representation that exists or has existed with the greatest nation in the history of the world, we should not forget that. we should build on our strengths, not magnify weaknesses and we should never apologize for yourselves. we should be humble about it. we are the luckiest people in the whole world in the history of the world. let's preserve what is great about it. the private care, private individual, decision-making to decide on your future that is as it was created a limited government that stays out of most of your life and life you lead it.

god bless you and god bless america. [cheers and applause] ♪ >> please welcome editor at "american spectator," john fund. ♪ >> thank you. well, like jonah goldberg, i visited the occupied wall street folks. as you know, they've been showered with gifts from all of their supporters. in fact, they had to start getting out all of the free food because the homeless had moved in and taken it over. they've gotten so used to being on the welfare wagon at the

other day i was down there and sure enough in front of a burger king i saw a very distraught protester. he just came out of burger king and was shaking it had. i said was wrong. he said is the first time it's happened. and he said what? i said just now i defend some of my own money. [laughter] well, you all know from fox and is that the real power behind organizing the occupied wall street folks has been something called the new york communities of change. this group is the old acorn. they operate out of the same office. they have the same stationery, same employees. they are acorn. remember, acorn was an umbrella group of 196 entities. at organization chart so confusing that the inside joke was that i left hand doesn't know what her extreme left hand is doing.

[laughter] bareback organizing occupied wall street. if they are back doing that, let me tell you what else they're probably back doing. what was acorn most famous for when they were not helping people set of child prostitution rings? there were famous for voter registration fraud. well, they may be back with that. and i think that is one of the things we have to watch for as we add in the 2012 election. you know, ever since the florida recount of 2000, we have seen an enormous amount change in how elections are not conduct did. he used to be you had to have a margin of victory. now you have set a margin of victory beyond litigation, beyond with the other side will sue over. walter dean burnham, dean of american political science says yugoslavia's election system of any country. you can't tell where competent fen/phen fraud begins. we have not done enough to restore election integrity. if you don't believe me, look at the washington state governor's race in 2004. based on new balance in king

county 17 times. look at the al franken senate race in 2008. there were more felons who shouldn't have voted in that election than the margin of difference. and if you don't think that election mattered, remember, obamacare only passed because they have 60 votes in the senate for a few months before scott brown state tree. al franken was that 60th vote. so, they say voter fraud exist. down in mississippi a few weeks ago, the head of his liberal organization was sentenced to prison. she had voted 10 times in one election, seven and the names of lives, three in the names of dead people. she didn't discriminate. [laughter] just last week on ahead of elections in madison county, florida was indicted. absentee ballot fraud. they say voter fraud doesn't exist. well, they not only say that,

they state that was to prevent it, having photo i.d. at the polls, taking absentee ballot restrictions, all of these they say are the return to jim crow. this is what bill clinton said the other day. there's never been in my lifetime since we got rid of the jim crow burdens on voting at the determined effort to limit the franchise received today. debbie wasserman schultz in july said this is the functional equivalent of bringing back the poll tax and jim crow. well, there is a problem with those contentions. they are true and they came in a very inconvenient time. three days after bill clinton made that statement, the state of rhode island passed a photo i.d. love. rhode island is a liberal state. [applause] rhode island is a liberal state. its legislature is five to one democratic. it has an independent governor. the sponsor in the state house was the morton fox, first

african-american speaker. sponsor in the state senate was the only african-american state senator, both democrats. this is what mr. met said as to why and the world he was supporting photo i.d. it has come to my attention, he said, that many people in my community has had state stolen. my own representative and daughter saw their votes stolen. this is too often ignored. we ignore this at our peril. those who do not believe that there is voter fraud all so will do nothing to make elections more transparent. now, this procedure in rhode island passed a democratic legislature signed by the independent governor and herald that, i have been criticized and called a knuckle time. i've been criticized and called a traitor. i am all for party loyalty, but god gave me a brain and i use it.

[cheers and applause] now, harold matz was attacked. and now we have another witness coming forward. archer davis was a democratic congressman from selma, alabama, the cockpit of the civil rights struggle many to 60s to serve in congress until 2010 when he ran for governor. the teachers union took them out of the primary because u.s. for school choice and various other constitutional reforms they didn't like. artur davis is a distinguished democrat. he was the first democratic congressmen outside of chicago to diverse barack obama into destiny. he was a democratic congressman who second barack obama's nomination at the denver convention. but now that he's out of office, he has the best party, calling people want voter integrity names coming yelling racism in a crowd of political theater. and this is what archer davis

wrote in montgomery advertiser and i've interviewed him since then. i changed my mind on voter i.d. when i was a congressman at the path of least resistance to any evidence allowed into the rhetoric requiring photo identification to vote as a suppression tactic aimed at supporting black voters. the truth is he said, the most aggressive contemporary voter suppression of the african-american community today is the wholesale manufacture of dallas. voting the names of the doubt, the nonexistence committed to mentally impaired to function cancels out the vote of citizens are exercising their rights. that is suppression by anyway. i have heard the peddlers of these ballots brag about it. i've been asked to provide defense for voter fraud in my campaigns. i am confident it is change the results of several close elections. there is no question of voter i.d. law must be passed. artur davis was attacked for that. [applause] he was attacked for that.

he also deplored, he said. the intimidation visited upon senator matz and the other peep hole to set up for voter i.d. he said anyone who stands up for this loss is going to be attacked, but it is the right thing because in the end, some of the most tragic fate and for voter fraud in this country are in the minority communities to try to fight the machine in their communities and reformers in those communities have those stolen, whether it's in detroit or st. louis or in alabama or rhode island. they have those stolen by political machines that want to continue to oppress them. voter fraud affects all of us. now, what can be done about this? we have to push back. yesterday, and the democratic leadership in the house of representatives sent a letter to all 50 secretaries of state and they asked them not to enforce any of these new photo i.d. laws, not to enforce any law is designed to voter integrity.

and last week the obama white house opened a counteroffensive against these changes of election laws to improve voter integrity. the effort is being led by white house counsel robert bauer. this is right out of the obama white house. says one campaign official to "the wall street journal," we will look at what the states have done in ways to counter through litigation, administrative interpretation. beyond that, you have a program that is clearly offensive and must be stopped. we must stop them. all of you -- [applause] all of you have an obligation to go out and not just campaign for the people you support, not just contribute money and time to the people you support, but to make sure the elections are monitored. there is an organization based out of houston texas. you can look it up. they are starting a nation by partisan because voter fraud can occur in both parties. bipartisan organization is designed to have people trained

and ready to protect voter fraud can whether it's absentee voter fraud or fraud at the polls and make sure it stopped. just like disease, prevention can cure a lot. a little voter fraud prevention, just knowing someone is watching can tell people coming in now, maybe i shouldn't commit that product is the slightest slightest chance they might he caught were exposed. now, we used to have democrats who cared about this. we now have people like congressman davis, senator matz, the least of national democrats. senator kristof of connecticut health has the vote in 2002. what he said is this country must have a system in which it is easy to though. they want everyone to go, but hard to cheat. he said we can do this. i agree with him. unfortunately, rhetoric and the campaign has become very much polarized. but we, citizens of goodwill from whatever party, whatever part of the country must join

forces with people like senator matz and congressman davis, join forces and make sure that voter fraud and voter incompetence no longer govern any of our elections. ultimately -- ultimately the choice must be a people's choice. and must not be left to people who try to put it, and the skills of an election or try to throw to court and have the judges decide the election. i am pleased to be the chronicler of these efforts. i am rewriting my book. my current edition of my book, stealing elections i will be signing copies in the south foyer. i'll be happy to hear from you. every time a today's figure stories of election irregularities. i'm happy to collect them from you and i will just leave you with this. the 2012 election you know is one of the most minutes of our lives. we do not want it to end like florida in 2000. we are for 47 days this country

was torn apart because some people wanted to recount some counties and not others. someone had to finagle some ballots and not others. we cannot afford that again. the worst possible result is an election that becomes close because of fraud or incompetence. it gets thrown in the courts and no one is satisfied with the result. let's have a clean election. let's win this fair and square. [applause] ♪ >> ladies and gentlemen, please welcome the producer of not evil, just wrong, ann mcelhinney ♪ >> hello. it's good to be here. my name is ann mcelhinney, a recovery in european. because of my journalistic efforts to hunt down and expose environmental -- environmental

terrorists, environmental extremists, i have been called the poster child for the decline of the american morality. some of you might notice i have a bit of an irish accent and that as far as i'm concerned, just one of those jobs that immigrants are doing that americans aren't willing to do themselves. [cheers and applause] i love this country. one of the amazing things i often think about and it's not my original line is that gates rule, that if there were gates around every country in the world then he lifted them, this is the only country that people would all want to come to. the only country in the world and that is very, very unique. it is a very unique thing that people in cuba are willing to swim with sharks to get to this

place. and what strikes me in these days is that those people who swim with the sharks are not occupying wall street. [cheers and applause] those people who are occupying wall street are the most pampered generation and people in this room know very well what happens when you pampered children. can anyone really work out what it is that they want? but it is that these occupy wall street want? i have no idea. i don't think they know themselves. outside you but i do know, though. i know what the people in this room one. the people who have come here to defend the american dream and you know what that means. [applause] and i just want to do a shout out for a number of the things that that means. a number of the freedoms that that means. to run a business that is

successful and not of the president, give your competitor money so you cannot be successful. the freedom to work hard and keep the money that you weren't and not have it redistributed to people who don't want to work. [cheers and applause] the freedom to use the natural resources of this extraordinary country for the benefit of the people who live here, to make things safe and beautiful and gorgeous and to keep the lights on in america. to use the resources we have here in this country and not leave them buried in the ground. [cheers and applause] the freedom to farm the land of this country and not have the government tell you to stop or not have your governor turn off the water because he cares about now more than he cares about you. [cheers and applause]

the freedom to control your own thermostat. will you ever believe that? i lived in eastern europe. i lived among people who understood communists and nus mayors and local authorities who would turn off the heat and they talk about that here in america now, that the local authority will turn off the heat and turn on the heat any other president in the white house who said he won't be able to keep your house cooler to 72 degrees. well, he has something coming in terms of what people think about us. [cheers and applause] the freedom to choose the light pole for god save. this is america. this is america a mac [cheers and applause] the freedom to choose the kind of car you drive, a car very

similar to the president of the united states, but he was doing it creates. if you get into a car like his, he's going to punish you for it. do you want to live in a country like that? that's not the american dream. you watch her nice big task of flair and so do i. and good luck to you. [cheers and applause] the freedom to leave whatever you'd like him even if it's cut trans-fat, even if it's got sugar, even if it's got out. because guess what quakes you are a grown up. [cheers and applause] the freedom to smoke a cigarette because you are a grown-up than to smoke it where you like. and the freedom to shop in small stores and in big stores, however the mood is just striking me that day. and the freedom, most importantly to have your children educated in a school where they cared about literacy

and numeracy, not ecological literacy, green literacy. in the freedom to have those same children not terrorized by teachers who aren't really teachers. they are environmental terrorists, environmental police to tell those children that their parents are evil because they work for an oil company. the same teachers that tell them that their mother is irresponsible because she has eight children. the very same teachers who told children the classrooms of america last week that we have something to mourn. in the first of the 7 billionth baby, who i think is a miracle and a joy to her parents. [cheers and applause] the freedom to understand that

the miracle of natural gas, 100 years of natural gas discovered here in america, and north dakota and pennsylvania, texas and arkansas is a joy, is a miracle, is incredible. how gifted a country can get. [cheers and applause] and the discovery that your neighbor, your friendly neighbor, canada, who don't believe in stoning women have got saudi arabia out there. they are saudi arabia and albert said. [cheers and applause] and his future is bright because look at where we have come. 235 years unless we have come. just contrast that to the thousands of years of development in greece. [laughter] where they are the bean university of 40 and they are retiring at 50 on a government

pension. i've mixed up my pages. you just know that it's going to happen. but one of the things i am here -- i'm here to upset you a little bit. and i think you need to be upset. i was 38 years old before i discovered how great capitalism was. i was 38 years old. i watch an awful lot of bad television. i've been to university and no one ever told me that. i discovered it myself and i resent the fact that you didn't tell me. [laughter] and i think it's very serious. i think as we come here to celebrate the american dream and to realize that we need to defend that american dream, we need to understand that the children in this country are not going to learn the joys of the amazing things about this country from watching television they are certainly not going to get it from the university of utopia that they are now attending where they are majoring in anti-american

studies. and so what is going to have to happen here is that she would have to stop being so quiet about what you know, about how extraordinary this country is. and you're going to have to do the things you don't want to do because he knows something is lovely chatting to friends in this lovely being here among friends, but you're going to have to take that obnoxious nephew you had to that era kidneys do to have, to your own child who don't recognize. you are going to have to talk to them about the american dream, about what this country means because no one else will do it if you don't do it. [cheers and applause] and i am going to find my last days because someone is this an awful lot better than me and i want to quote from that person if i could ever find the pages. you should really number your

pages. [laughter] we are lucky because we have a petri dish for a lot of stuff here rather putrid dish for what it looks later they control federalized economy. with a patcher -- for that. we've seen cuba, the soviet union. we have seen and by the way they look inaccurate. what a great success story that is. with a petri dish and we are not like that dish. not yet. so you need to get busy and you need to do something that you're not doing because preaching to the choir is gorgeous. it's one of my favorite things, but you've got to get on the front of this thing and talk to those children that are being bred across this country. they're particularly breeding them in california, where in god help us, beautiful extraordinary place. can you believe it. how extraordinary is that. they are pumping oil in beverly hills. isn't that great?

but you have to get out and the reason you have to do this is in the words of somebody who spoke to so much better than i ever could in someone that you and mr. levin at virus matches i love i love and admire him, ronald reagan, who said, freedom is never more than one generation away from extinction. we didn't pass it onto our children in their bloodstream. it must be 54, protected and handed on for them to do the same or one day we will spend our sunset years telling our children and our children's children what it was once like in the united states for men who are free. thank you very much.

[cheers and applause] ♪ ♪ ♪ >> once again, ladies and gentlemen, the president of americans for prosperity foundation, tim phillips. ♪ >> wow, ann, such a quiet retiree and lady. and thank you for those words. for quick amount spent on the summit will be wrapped up. breakout sessions begin one floor down. at 3:15, they're a wide number of sessions in your program. send you with issues training. we have spent a major gene,

amazing trainers in this breakout sessions and make you in a more effective at this for freedom. they will be a book signing directly outside on this level with john fund for his new book. and then tonight, for asp zone fill curb imports and credible new book, democracy tonight, which i think you want to look at. and also dinesh d'souza one of the greatest authors on president reagan will be happening tonight for those two. visit our sponsors. they are on the floor as you out. they are wonderful friends and allies in a move that for freedom. they have good stuff at their booths. i hope you take some time and thank them for sponsoring this defending the american dream summit and look at what they have to offer in the materials they had. you keep your name badges on for security purposes and the breakout sessions.

the receptionist at 6:00 p.m. back here. dinner starts at 7:00 p.m. as with dinesh to susanna and the judge himself, judge napolitano. and guys, thanks for what you're doing. see you this afternoon at the breakout sessions in 10 minutes. ♪ ♪ ♪ [inaudible conversations] ♪ [inaudible conversations] ♪ [inaudible conversations] ♪ [inaudible conversations] ♪

[inaudible conversations] ♪ [inaudible conversations] ♪ [inaudible conversations] ♪ >> we have more wrote the white house coverage coming up this evening. by republican presidential candidates will be in des moines, i offer the ronald reagan dinner

>> would you continue your statement please? >> i am preferred to wait for my answer until freezes over. >> u.n. ambassador for president kennedy during the cuban missile crisis. a former governor of illinois and twice ran as the democratic nominee for president and lost. adlai stevens on the c-span series the contenders turn the stevenson family home in libertyville, illinois. live tonight at 8:00 eastern.ppp for ap preview in court emersed speeches, good or a special website for the series, c-span.org/the contenders. >> the senate banking house in an urban affairs committee held

up rearing yesterday looking at military families in the financial hardships they face while serving, and putting predatory lending practices in the polls within current laws meant to protect military families. among the witnesses, holly petraeus, wife of cia director david petraeus. this is just under two hours. >> good morning. good morning. i'd like to have this hearing to order. earlier this week, it was reported at executive at fannie mae and freddie mac were scheduled to receive bonuses to more than $12 million. given the current economic times and continued challenges in the housing market, i want to assure my colleagues that calling the

fha director ed dimarco before the committee as soon as possible. the details are still being worked out by my staff to be in touch with your staff. as a conservative at fannie mae and freddie mac, fhs a hundred mr. dimarco's leadership was responsible for approving the conversation and maintaining adequate internal controls to oversee the day-to-day operations at fannie mae and freddie mac. this committee that congress and taxpayers need to be confident that those controlled in place and the conservator has responsibilities. as a reproach to be prepared to welcome home the last american troops from iraq this year, it is important for us to understand the unique consumer

and financial challenges members of the military, veterans and their families face. i take special interest in this matter. not only as a father of a soldier, but also as a senator from a state that has over 72,000 veterans. in more than 3500 military personnel at ellsworth air force base. at today's hearing, we will examine how god enlisted personnel officers, veterans and military families manage financial needs, whether through mainstream financial products or products marketed to the military community. we will also learn about the important role financial readiness place in mission readiness. and we will look at some of the tools and protections available

to help military consumers navigate the complex consumer financial marketplace. it is important to remember how a military consumers differ from the average consumer. this population is predominantly young and the military lives out financial education. the military lifestyle requires frequent relocations, which requires to find a playmate and selling homes that they are choosing to live off base. their mobile lifestyle also means they need banking services that are accessible throughout the country in the world. one service member deploys, he or she must be certain they have appropriate access to handle bills and financial needs and their absence. it was with those needs and mine

that congress created the office of this service member first at the consumer financial protection bureau. i am pleased to welcome the first head, the assistant here, holly petraeus. as the military daughter, wife and mother, mrs. petraeus is very qualified to lead this office, which will educate empowered members of the military and their families to make the best financial decisions for themselves. as importantly, once the cf bp has a direct or in place the agency be able to monitor non-bank financial institutions which are often at the heart of the military communities financial hardships. i would also like to welcome bonnie's been from my home state of south carolina.

one he runs a rushmore consumer credit resource center. bonnie will explain some of the work she does and assistance to airmen and their families and to members of the national guard. admiral steve abbot, thank you very much for your service to our country and for being part of today's hearing. we look forward to your testimony and importance of financial readiness and the work of the navy marine corps release today. we are also trying by journal kevin bergner of u.s.a. e. and mr. frank pot from the panic in credit union. general gertner, thank you for your service to our country.

both the u.s.a. and the pad federal credit union of military consumers and they do an outstanding job in meeting committees needs. banks to both of you for being here and being part of today's hearing. in closing, i would like to recognize our veterans and the military -- the thousands of military personnel who continues to serve in harm's way in defense of our country. and grateful for their service, but it has been my hardest priority to his sister servicemembers and veterans. as chairman of the senate military construction in the appropriations subcommittee and the senate banking committee, i continue to work to ensure servicemembers and veterans have the resources they need and protections they deserve. i look forward to today's

testimony. i now turn to ranking member shall be for his statement. >> mr. chairman, thank you for calling this hearing. first i want to respond to your statement that you are going to call a ahead of the federal housing finance agency. i think that's a good idea of regarding high salaries and so forth. the salaries of fannie and freddie, but i would also ask that you bring up the treasury because the federal housing finance -- that's a mouthful. they have to consult the treasury on this. we need them both here to have a proper and thorough hearing. so i would hope you would do that at the same time. and if you do that, that i think we'll have a good and scared -- [inaudible] sure, i don't know you how you can have a good hearing without doing both. anyway, i've got an opening statement here, mr. chairman i pay to give.

the issue of consumer protection for military service members has long been a priority for this committee. during the 109th congress why was chairman of the committee, the committee examined reports of predatory lending practices aimed at them yours for the armed forces and their families. this examination identified the series of problematic tactics used to sell financial products to military personnel. it also identified regulatory gaps in the lack of court nation among financial regulators in handling military consumer protection issues. based on the investigation by the committee, the committee ultimately passed the military personnel financial service protection act of 2006. this flap protects members of the armed forces from cert unscrupulous sales practices regarding the sale of insurance, financial and investment profits. it also improves the ability of our regulators to enforce our

consumer protection laws with respect to the military. servicemembers and their families have unique needs that will respect the needs of financial services viewed as circumstances caused by the military service. for example, military personnel move regularly, which can make purchasing home a very risky endeavor. in addition, military personnel are often very john and away from home for the first time. they often have to make important financial decisions without being able to consult with family or with trusted advisors. congress and the states have sought to address these problems through a variety of legislative and regulatory initiatives. as a result, at least nine federal regulators and state regulators in office these days currently have varying levels of regulatory supervisory and enforcement powers. at the federal level, this

includes the department of defense, the ftc, federal reserve board, sec, occ, fdic, department of education, department of justice and most recently the bureau for consumer financial protection. accordingly, i don't believe there's any shortage of regulators. the real challenge is making sure that regulation keeps up a change in technology he had changes in the marketplace. in particular, i would like to hear today whether new forms of lending to our military such as online 19% and any difficulties enforcing consumer protections for military personnel. i would also like to know whether more can be done to ensure that our military personnel and their families receive the information they need to exercise all of their rates available to them under federal laws, such as the servicemembers civil relief act, or scra.

they currently foreclose on members of the military while they were on that duty. in my view, that is a sort of problem no military members should have to worry about while they are fighting overseas. mr. chairman, often there appears to be little upon which i respect and size can agree, there is complete agreement on our joint commitment to supporting our men and women in uniform. i look forward to hearing from you today. i believe this could be a constructive hearing. >> thank you, senator shelby. are there any other members who wish to make a brief opening statement? senator chester. >> delegate to my opening statement when i get to the questions. i want to thank you for being here, especially you, holly. but thank you, mr. chairman for the hearing you announced on the f. hsa. ultimately in the adventure the

people here today so we can get to the bottom of five businesses were given out and get some accountability. i appreciate you and your staff scheduling of that hearing. i think it's critically important. >> anybody else? >> mr. chairman, let's also put in a request. a synchronized dynamic explosion with exposure to the european banking system. they think you should probably call for an update on that because i am concerned that we may see a fairly bleak prospect of the current european stabilization facility meeting its goals. i am concerned about reports that u.s. bank exposure now is considerably more than it was an activity and transparency that way this committee i think would help u.s. markets. >> senator akaka. >> thank you, mr. chairman. i want to add my welcome to our witnesses today. i look forward to their testimony on a matter that many of us in the senate are deeply concerned about.

making sure that our servicemembers and veterans are economically empowered to make the best financial decisions possible. for years, my colleagues here in the banking committee have heard me talk about financial literacy and economic empowerment. and my colleagues on the armed services and veterans affairs committee is now that am concerned about the unique challenges confronting military families and our veterans. prolonged deployments in more frequent relocations create unique banking of budgeting challenges. veterans come home from war only to face the highest unemployment rates in the nation. and meanwhile, our guard and reserve forces are feeling the financial impacts of sustained

at the service. it is clear our men and women in uniform now more than ever need to be educated in financial matters, both before and after they complete their service to our country. chairman john said, thank you very much for convening this hearing was such an important topic here for many other military families, financial education and protection is tied to their readiness. service members, veterans and their families have sacrificed for us now, it is our turn to do while we can. to help them return. thank you very much. >> senator brown. >> thank you. i appreciate all the panel being here. thank you for the work you are doing and will be doing.

i sit with chairman akaka and senator tester in the veterans committee in the stories we hear about financial predators, especially around bases by patterson air force base in dayton, the scans that appeal to a veterans patriotism, the scam websites as though they are bound by the government and look like they come from the department of defense for the va. they often come from a.com operation for the personal information or boat. it should be automated automated for a target service. it's back to legal fees and you will know that. it is so important for people who are serving their country or have served their country and i appreciate your on that. >> senator hagan. >> thank you, mr. chairman. i too wanted to tell you how much a appreciate you holding this hearing especially as we are so close to veterans day. in north carolina, we applied

ourselves i'd be one of the most military friendly state in the nation and having such a huge number of active duty and veterans living in our state. i'm also very concerned about the high rate of unemployment that returning veterans from iraq and afghanistan have. it's about 11.7%. we also know that many of our military families are targets for predatory lenders and other schemes. so i think even these disturbing trance, we need to be sure that these returning kivas are not subject to predatory practices in that they also possess the tools and skills that they need to make responsible financial decisions. so i think the witnesses for being here today and i look forward to your testimony. mrs. petraeus joined me at fort bragg recently to really talk about these issues than i think it was -- she can bring such an important light to this topic

for so many of the young people in our military today. so i thank you for doing that. thank you, mr. chairman. >> thank you, all. i want to remind my colleagues that the record will be open for the next seven days for opening statements in any other materials you'd like to submit. mrs. petraeus, you may proceed with your testimony. >> chairman johnson, ranking member shall be an members of the committee, thank you for the opportunity to speak with you today about the opposite servicemember affairs at the consumer financial protection bureau, or as we collect, see fpb. but the lasting military family member, i've seen firsthand the devastating abstracts dreaded tory lending can have on military families. i also spent six years as head of the better business bureau military line program that is an education for me about consumer issues and scans an impact to

military. unfortunate there are still too many gun troops learning financial lessons through hard experience and years of paying off expensive debt. in january, 2011 i was asked to join the cfpb it had at the opposite servicemember affairs. the author's job is to educate and empower servicemembers to make better informed decisions regarding consumer financial products and services, to monitor complaints about service financial products and services and responses to those complaints and to coordinate the efforts of federal and state agency to improve consumer protection measures for military families. ..

i have also met with the national guard and oklahoma ohio illinois and indiana. what are the issues that have come up? first the housing meltdown has had military families hard when they receive orders to move. also they can sell their home for enough to pay off the mortgage. they can't rent it out for enough to cover their mortgage payment. they are told they can't get a loan modification or short sale because they are not yet delinquent and they can't refinance for a good rate because it will no longer be considered their principle residence once they leave. we have heard of a number of cases where the servicemember has opted to go along to the new duty station and that's pretty tough when you consider that he or she may have just had an

overseas deployment and the families now facing another separation, this time for financial reasons. we are starting to see some positive movement on this issue. the department of the treasury has issued new military related guidance for its home affordable foreclosure alternatives program and fannie mae and freddie mac are tweaking their own guidance as well. another big issue we have been hearing about concerns military education benefits and for-profit colleges. there have been cases of very aggressive marketing by for-profit colleges to military personnel and their families. both educational programs and extensive private student loans. another issue is car loans. servicemembers are awful -- off and sold clunkers with high finance charges and when the original clunker breaks down the urge to roll the existing debt into another loan for yet another clunker. there is also yo-yo financing were servicemembers drive away thinking they have qualified for financing only to be told later that the financing fell through and they will have to pay more. although the cfpb will only have

supervisory authority over the auto dealers her her right there on loans, the federal trade commission and the federal reserve are required to coordinate with my office on military auto issues and we have started to do that. finally a continuing issue for the military is the general issue of indebtedness. many servicemembers don't make much money at it it is a guaranteed paycheck subject to garnishment outside the normal court process. this is lead to a lot of businesses looking to lend the money. it can be the kiosk at the mall selling high-priced electronics at higher financing, the rent-to-own furniture store for the latest installment loan just outside the military lending act definition of payday loans. when servicemembers get behind in their payments their debt is turned over to debt collectors. we are concerned about potential violations of the fair debt collection practices act. we ever heard reports of debt collectors calling units 20 times a day for addressing them at the uniform court of military justice and telling them they will get security clearance

revoked if they don't pay up. they also may call the parents and spouses of deployed servicemembers in an attempt to get them to pay their debt. we have heard of a debt collector telling a widow she had used the money from her husband combat death gratuity to pay the debt immediately. a big part of my job is to educate servicemembers about their rights under existing consumer financial laws and give them the information they need to make wise financial decisions and i will continue to work with you and other federal and state agencies to help identify effective consumer protection measures that will work on their behalf. thank you for the opportunity to testify before the committee. >> thank you mrs. petraeus. ms. spain you may proceed. >> chairman johnson, ranking chairman shelby, committee members thank you for the opportunity to be here today to speak to you about what we see happening with the military in our area.

organization is in serving western south dakota for 37 years providing housing counseling credit counseling and financial education programs. we also create national financial education programs to be used by 1.4 million consumers across the nation. our agency serves military personnel at ellsworth air force base. the airmen and family readiness center provides financial education programs. they also refer individuals to us that are struggling with housing issues or if they have more financial issues for our debt management program. and on the rare occasion for someone to come in for prefiling counseling. yes the military do have housing issues that civilians don't. when they get orders they have to move. a civilian has choices. they can choose not to move and choose when they move and the military cannot. if they take their family with them and they leave the home and it doesn't sell it creates financial stress that they leave the home and it creates financial stress.

it's a difficult time. agencies such as ours that provide housing counseling can help military members and their families as they work through these difficult times will they serve our country. we helped one, 21-year-old being discharged for medical disability. he was told to short sell his house. he couldn't find a realtor that the list is house. the realtors told him their lenders are not accepting short sales. you have to get the lender first. they came in and talk to our consumer credit counselor who is able to get the lender to agree to the short sale in the realtors are now listing the house. another military family was retiring from the military. he was having typical the selling his home. so he came in and contacted our consumer credit counselor, and she helps work with the lender to get the short sale through. unfortunately the lender refuse to forgive the second mortgage and the military member had promised to sign a second note to repay $10,500.

even though they struggle through these issues there is support for them. military personnel are always under pressure to keep their finances and credit good because collections are bankruptcies can cost them their career. this isn't vulnerable to lenders who charge high rates of interest and predatory lenders continue to target the military. one young man that came to the airmen and families center had five payday loans all charging over 36% interest, forward over this on line in one locally. he went to the legal base and they sent him a letter. the predatory lender said that's all right, these are open-ended transactions. they are not payday loans and we are not changing our interest-rate. at that point the member has a choice of hiring an attorney which they can't afford to do. payday lenders know that. payday lenders also know people don't ask enough questions and on line you can find different sites that don't tell you where they're located, not under

disclosures, not in their privacy policies. they don't tell you what their rates of interest are but the very first question they ask the military member is what is your social security number? we had one client that had gotten a payday of payday loan.didn't realize the funds came from croatia. they finally had to close her bank account in order to stop this company from pulling money out. another one, another issue that we see our military struggling with this debt settlement. debt settlement can often do more harm than good because people don't understand how it works. one young woman paid $1500 to buy nothing being done with her creditors but to go further delinquent. another one, another family paid $6000 in fees to have $600 set aside to settle their debts. our demographics are seeing people across the board of all ages struggling with their finances and with multiple

issues. we had one young man that came to us after he left the military that was filing for bankruptcy. he said he had made every possible mistake he could. he got payday loans while he was in the military and went through a divorce causing additional problems and then he trusted when he went overseas a nice little old lady he said to pay his bills and she didn't pay his bills. when he finally got out of the service and moved home he rented a car. he fell asleep and got in an accident and it -- sued him. i can tell you unequivocally after 25 years and working in the credit counseling industry financial education is key to helping people not to be taken advantage of. it's important information be relevant to their personal situation. we also develop drug ram specific for ellsworth and rapid city. we took our united way funding and provided direct assistance to homeowners who are behind that needed a forbearance or loan modification and often had to come up with money.

with $68,000 we helped 32 family stay in their homes. are financial education pro-dems are used by bases across the united states including ellsworth langley mountain home fairchild shepherd shah randolph and liberty air national guard and florida's national guard in virginia national guard. are programs of also reached overseas. we had a marine use our programs in afghanistan this year. in 2007 we received a request from the army programs over to northern iraq. in wrapping up i would like to recommend the following actions. close the loopholes payday lenders are using to charge military members over 36% interest, require on line businesses to post their locations and their raising interest rates, strengthen regulation for the debt settlement companies that target individuals that are abusive, apply the same standards that

nonprofits have to adhere to, continue to support financial education for a military and allow the basis to use the funds to purchase material they know are good for their agencies and their military. require homebuyer education for first-time homebuyers to help people see colmes to help revitalize the troubled economy. and support housing counseling and homebuyer education. military families need the assistance and individuals who can tell them what to watch for in their areas when they're buying a home. and conclusion on behalf of first consumer credit resource center and more importantly the servicemen and women that we see thank you for the opportunity to testify today. >> thank you ms. spain. admiral abbot. >> senators, it appreciate the opportunity to be with you today to discuss what our servicemembers are encountering in the financial marketplace.

in 2010, the navy marine corps society we saw 73,000 individual sailors and marines in our offices around the world and some of them more than once. that is 100,000 cases or what amounts to one fifth, one out of every five sailors and marines, 20% of the force, in a single year. so, it is still a tough financial environment out there especially for the junior troops. the financial assistance that we provided in 2010 was the greatest that we have provided since the end of the cold war when the military services, including the navy and marine corps, were substantially larger than they are today. i would like to say upfront that there is very good news, senator shelby, referring to it and it

is the effect of the military lending act which became effective in october of 2007. it is dramatically curtailed payday loans and we are grateful for the farsightedness and the effectiveness of that legislation. to prove that point, i can say that our annual assistance to those who have become stuck in the payday loan trap has decreased from $1.4 million in 2006 to just $168,000 this year. and virtually all of that smaller amount went to retirees who were not covered by the military lending act. we credit both the military lending act and improve financial management education and training are this welcome development. but the military lending act was implemented on a limited scope. financial institutions have

found loopholes in the regulations, and new predatory lending practices have a prison which continue to victimize our clients. before my visit this morning i contacted all 51 of our offices around the world to ask what practices they are seeing that send their clients into the downward spiral of debt, and so here are a few illustrations of the problems that are facing young servicemembers. in fort worth texas we assisted a retired navy e-5 with rent, food and utilities because he had used his retirement check to repay a payday loan he had are owed $950 at an annual percentage rate of 277%, and a finance charge was over $216. in the interest of time i will skip over a couple of others of

these and ask that they be included in the record but i would like to focus on those that deal with the use of overdraft charges. at camp lejeune in north carolina we recently helped a marine lance corporal with food and utility since his paycheck had been entirely consumed, entirely consumed i overdraft charges and associated fees. and in quantico virginia nabe to who we saw one month after his 21st birthday, with a wife and a child, had overdraft protection payments due at every payday and when seen by our office the member had six credit cards, one loan consolidation debt and one personal loan. the society helps with the no interest loans for food, gas and diapers and provided him some on the spot financial counseling and sent him to other sources for in-depth counseling.

a similar story in corpus christi texas where we saw an active-duty e-5 with a wife and two small children. they were in a cycle of payments for overdrafts exacerbated i high-interest internet loan, and the family had gone into the overdraft condition when a child they had required medical care at a -- at a facility in another town but the distance was not far enough for tricare to cover the travel expenses. by the time the couple sought assistance they had suffered more back-to-back pay days when $500 was taken by the bank 20 overdraft funds and fees. so here are the trends that my directors reports. banks and credit unions on and near military bases continue to charge exorbitant and multiple

fees associated with overdraft protection. with an overdraft protection plan, the bank agrees to cover a transaction despite a lack of funds in the account, charges a fixed fee and takes payment out of the next deposit to the servicemembers account before other banking transactions can take place. , and overdraft fees range from 25 to $35 per transaction. i mentioned earlier that i told our 51 of our offices all but four of them listed this overdraft protection penalty as the top of their list. it has already been mentioned about on line lending. it is hard to monitor. it is predatory. they evade state regulations by being offshore and they hide behind anonymous domain registrations.

the financial industry is adjusting its practices by structuring loans for a longer payback period and making them open-ended instead of closed ended and for a larger amount. banks and other lending institutions offer installment loans that avoid a 36% annual percentage cap that was instituted with the military lending act and can legally charge as much as 500%. a few recommendations. first, we need to continue to improve financial education and consumer awareness for these technically savvy, but not necessarily financially savvy men and women in uniform. two, legislators and administrators should plug the loopholes in the laws and

regulations governing predatory lending practices. three, the need for credit won't go away even with better education and better laws. so we should stimulate additional responsible low-cost alternatives to predatory loan practices. forth, we should encourage direct dialogue between senior military leaders in banking and credit union executives, including at the local level. fifth, the protection of the military lending act should be extended to retirees, reservists, guard, and to veterans. and sixth, banks and credit unions located on military installations should be held to a higher standard of service offering military families including military retirees lower fees and better protection

from predatory lending practices. they should also offer financial education to inexperienced consumers before they commit the loan contracts and agreements. adopting better business practices would go a long way toward ameliorating if not fixing the problems of the servicemembers are experiencing. some institutions are moving in that direction and i applaud those steps. i sincerely appreciate the opportunity to appear before the committee today. >> thank you admiral abbot. gen bergner you may proceed. >> chairman johnson ranking member shall be members of the committee thank you very much for your leadership and your commitment to protecting our servicemembers and their families. i want to thank you for the opportunity to appear before this hearing to represent usa. i grew up in military family and my father served in korea and vietnam and my brother served for 30 years as did i and i'm a proud father of a son who is

currently a captain and recently returned from iraq in the united states army. the issues before the committee are ones that are important to me both personally and professionally. i appreciate the chance to represent this discussion. i had the privilege to serve as the deputy chief of staff for general petraeus in 2,072,008 and i got to know him well in 2005 when i served in iraq as well. during that time we were very honored to live right down the street from holly petraeus who we first came to see as a wonderful advocate or our soldiers and their families and a wonderful friend to my wife carla throughout my deployment. i wanted to take a moment to say how much i have personally appreciated her service, her willingness to continue to serve and be an advocate for our servicemembers. irish nation is so well served with her. i'm also humbled to represent a 22,000 employees of usaa today. we were founded in 1922 by 25

army officers who found themselves in a situation where the risk they were exposed to and the mobility that is associating them with their careers or colluded them from binding insurance and security so they banded together and formed an association that has now grown to 8 million members today. but the founding values and their sense of service and their commitment to one another into her and are still at the center of usaa as a member-based organization. our purpose today continues to be a very simple one, help military families facilitate their financial security. as usa employees today are probably recognized for their commitment to customer service and it manifests itself in how our members feel about their association. about 90% of our members will stay with this association and 94% of them say they will stay for life and we have about a 97%

member satisfaction rate among those 8 million members of the association. our employee commitment to those members is driven by one simple fact. we have the very best customers in the world. our members and that is how we refer refer to them, as our members. and they deserve the very best service and protection that any financial services company could provide. in fact we see their financial security as our national security responsibility to this nation. i wanted to share one example of how that commitment comes to life on a daily basis. this is an example that took place a few months ago and it was an army captain serving in iraq, who called usaa because she was about to lose her home in the states due to foreclosure. her mortgage was not with usaa but she was a member of usaa. she spoke to a member service

representative whose name is norma, and norma understood how important was for that captain to be able to get to the duties associated with her deployment and the special circumstances surrounding that and realize the special circumstances to take care of her. norma agreed and arrange for a short-term loan that would get captain current with the other lender and got her started on applications to refinance your mortgage at a lower rate and kept her in her home. it is not with usaa but usaa help. norma represents the commitment of our association and the other 22,000 employees she served with to understand the military and understand the special circumstances and support them in those. about one in five of our employees is actually serving in the military, have served or is a military spouse. so that is how we understand what it means to serve and how

we go the extra mile for our members. some of the things that they do specifically unique to their circumstances we have a deployment kit specifically for those that are deployed to help them finance and organize. our insurance policies do not have the wartime exclusion. are our checking accounts are truly free and we refund the atm fees that other banks charge our members when they use it. also in 2010 we adjusted the payment terms on about a billion dollars in credit and loans, loan balances enabling members to continue to meet their obligations on 72,000 accounts and keep them financially secure. we appreciate and share the committee's commitment to supporting and empowering our servicemembers in the financial services sector and we very much look forward to the discussion today and thank you for the opportunity to be here. >> thank you gen bergner. mr. pollack you may proceed.

>> good morning mr. chairman and distinguished members of the committee. on behalf of the florida directors of federal credit union i want to thank you for the opportunity to testify today on these important issues that affect those who are sacrificing so much to protect our nation. when we think about financial issues within the military community we believe that more can be done to provide financial education and tools necessary for servicemembers to better manage their money. too many servicemembers are ill prepared to protect themselves from those who would take advantage of their lack of financial sophistication. we would never send our troops into battle that way but we have not similarly focused on their financial preparedness. i would be remiss if i failed to recognize the laudatory efforts of credit unions in general and the defense credit unions in specific. because they are member owned not-for-profit cooperatives we can create unique or grams to meet the financial needs of the military servicemembers and i would like to share some of the

programs the pentagon federal credit union has improvised to its members. recognizing the need to address the lack of financial education in conjunction with the foundation we have established relationships with partners like -- to develop financial education materials that will assist in teaching military personnel how to properly manage their money. we provide these services free of charge to members between the ages of 17 and 25. all of our materials and legal documents are already in plain english. we believe the lack of clear and easy use disclosures prevent members from preparing and thus selecting the best financial options available to them. as a result in collaboration with pew trust we have introduced a checking account disclosure that is much more transparent and enables members to easily understand the fees and costs associated with their account. we hope to roll out similarly easy to use disclosures for all of our savings and loan products by the end of the first quarter of 2012. we believe the disclosure format

created by pew trust represents the better way forward for all financial situations and we are proud to be a leader in rolling this out. the fact is when a servicemembers fighting in afghanistan or iraq they should not have to worry about these charges on their accounts even when they do make a mistake. in 2009 we introduced a program for active-duty servicemembers called for years advantage which way checking a count fees associated with insufficient funds for up to two occurrences in any rolling three-month period. we have also waved atm surcharge fees at all of our atms on installations and we provide services to our members as well. in a recent survey of fees by the military times newspaper we have the lowest average fees of any financial institution serving our military bases in the united states. importantly, we intend to continue driving our fees lower as we look to the future. our efforts extensive borrowers as well as -- as we do not price

based on risk every qualified member who receive the same price for a loan. our present rate for a used car loan which is a staple in the military community is 2.49% apr. we provide a credit card offering that has no annual fees, no late charges, no foreign transaction fees and annual percentage rate is a market-leading 7.49%. in short we are trying to do everything we can to ensure that the military member has low-cost credit available to them for any need the mite have. we do know that military members can and do get into trouble with debt. when they do some turn to payday lenders for assistance. for the past eight years we have provided an alternative to our members in such circumstances. through our are cleanly provide up to 500-dollar emergency loans for a flat fee of $5. if the rollover is requested members are required to go to consumer credit counseling free of charge to develop a plan to get them out of trouble. we provide up to five rollovers free of charge for any

additional roll ups that might be necessary. through our foundation we cover the losses were 12 other defense credit union to participate in our arc loan program. our friend nation provides matching grants of up to $5000 wrecked it duty servicemembers who seek to purchase their first home. because we had never done so our delinquency and losses have remained low. as a result their collection efforts are focused on helping members in trouble rather than -- get out of trouble rather than arresting them. one of many defense credit unions is a labor of love for those who defend our country. the men and women who have given so freely of themselves so we may be free at home deserve nothing less. we appreciate that opportunity to testify here today and we thank all of you for taking your precious time on an issue real importance to the long-term security of our nation. thank you. >> thank you mr. pollack. thank you very much for your

testimony. as we begin questions, i will ask the floor to -- each member. mrs. petraeus, many of the abuses that have been raised in testimony today are committed by non-bank financial institutions. do you think that the cfpb would need better able to protect servicemembers and their families from abusive debt collectors and unscrupulous lenders if they had a director in place? >> yes, chairman nye do. we have an array of things that we can do to help servicemembers. one certainly education, which we are already working on and another would be enforcement of the third leg if you if you will is supervision. without a director we cannot do the supervision of the non-bank

entities such as payday lenders that -- debt collectors, private student lenders and the ones that you mentioned. >> ms. spain, would you please describe before the committee some of the regular financial literacy training you and your partners conduct for ellsworth and the national guard? >> we provide a program called money in motion and it is a two-hour basic financial education program. what it teaches, people understand they know they should budget. they don't know why. they know she they should care about their credit score and they don't know why so what are programs do is explain the why. you need a budget so you can cover your bills. you want to know what your credit score is and what interest rate he was -- will pay did term and how much money you will have left for other things. edition we require a six-hour credit education program called

credit when credit is due and the fair program we provide at ellsworth is called make your guide to homeownership a six hour homebuyer education probe ambitious than the current forms as well as the information they need to know in any community and what they need to ask. those are the programs we are currently providing and we also provide programs upon request from ellsworth airmen at the center. >> admiral abbot, general bergner and mr. pollack, as we have heard, the military is different and creates unique financial intelligence for its servicemembers and their families especially during deployment. what tools are available to the military consumers to make these transactions -- transitions smoother? admiral? >> the military lifestyle is a

peripatetic one that misses petraeus has described in recent years that is involved so many rotations into theater and back. that creates the difficulties for the families that are staying back at the installation and the dilemma that is posed for them, whether they are going to in fact remain at the installation or in fact move to some of the locations where they might have other more family oriented support particularly difficult for the junior members. and so, be for instance at the navy marine corps relief society will see clients, individuals who have come into us and asked for assistance in dealing with some of those circumstances where the military member is deployed over a substantial period of time.

the spouse is back a loan at the installation and in fact may choose to move to a location where she has or he has more family. >> general bergner? >> mr. chairman one of the biggest challenges are servicemembers face today is the mobility challenged and we send them hither and beyond all over the world. their ability to maintain their credit and at the same time have access to the financial services that they so deserve is one of the biggest challenges they face. so one of the tools that we have recently deployed is something called out of circle. you can access it on your mobile device and we have arranged discounts with car manufacturers to provide those two are servicemembers and on average they can save about $4500 on the purchase of an automobile by using that. most importantly it puts it in their hands on them matter where

they are, wherever the service to take them they have the facts available to them to make the decision that is the right decision for them that isn't going to be a car lender or car dealer outside. we do the same thing with home purchases in home mortgages allowing them to access them on line. it allows the application on line and they can pursue that mortgage on line. being relative to their motive -- mobility is one of the key things. >> credit unions do and not -- do a lot similar to the usaa. we have a deployment kits. many credit unions serving overseas bases and very few of those locations make any money. and the issues are as the general has pointed out that when you are moving that frequently, your spouse and family may be at home and you may be somewhere a long way away so we too provide on line services 24 hours a day, seven days a week. a member who is stationed

overseas can call us on tsn and we reimburse the government for that so they think could reach reach his 24 hours a day, seven days a week of there is an issue. in our case we are live real time on our computer computer system 24 hours a day, seven days a week around the globe so that if the military person deposits money in okinawa and their spouse needs the money in washington d.c. the money is available at the same time it is deposited. those kinds of services enable a military person to be far away from their family and able to take care of their family at the same time. >> thank you. senator shelby. >> thank you mr. chairman. mrs. petraeus in your testimony you discuss that you joined the bureau in bureau in january of this year to start an entirely new office, the office of servicemember affairs. how many people if you hire to work in your office x. how many total staff members do you hope to higher and what is your budget and lastly are you

getting the resources that you need here? >> thank you for the question. thank you member shelby. we now have six employees working for me and so we are a small but mighty office i hope and i expect to have a get much larger than that. of course everybody has a wish list and there is nobody if you asked if they could use more employees that they would say no and i have a wish list to extend our reach. but you know there are other divisions within the cft be that we are able to tap for their expertise as well. so we don't have to do everything ourselves. as for a budget, that is still being hammered out and thankfully for me my deputy is doing the numbers, so i'm a little bit removed from that so i can't give you accurate information on that right now.

>> do you think you can get the resources overall that you need thus far wax and know you are just getting started. >> yes. although, the resources are there but again i think it is a frustration right now to have, to not be able to do everything that people expected us to do. when i first began i got letter saying we are so excited there is an agency now that you and mr. petraeus will be able to do something about these people that prey on the military so i'm eager for the day when our non-bank supervision team, if i can give an analogy, get permission to land and start their work. >> mrs. petraeus as you well know in 2006 congress passed the military lending act and this gave the department of defense the authority to promulgate regulations to unscrupulous lending practices involving the military and after dodd-frank

legislation passed the department of defense still continues to have the sole authority to write regulations implementing that particular act. what is your view of the effectiveness of the act in stopping unscrupulous lending? >> i think we heard from admiral abbot that there has been success on the classic definition of a payday loan. i think the problem is there are a lot of predatory products out there that have now managed to rank themselves in a definition that puts them outside of the implantation. i went on line yesterday and i searched the term military loans and i got 9,980,000 tips, and the top two search terms they came up for military loans, bad credit which was almost 2 million military loans no credit check also 2 million so there's obviously a ton of people out there who are managing to exist outside the protections of the military lending act and it is a problem.

>> mrs. spain, should there be a requirement for first-time homebuyers homebuyers to receive financial education of some sort before they can obtain a va insured loan, in other words serious counseling as to the implications and obligations of the loan? >> my opinion would he yes and this is the reason i say that. buying a home is a complicated process and unless you are a realtor or a mortgage lender you can possibly know everything you need to know. speak it is a big lie for most people. >> it is the most important purchase they will ever make. >> admiral abbot, in your testimony among other things you stated that the military lending act has dramatically curtailed payday loans to active duty servicemembers and we are glad to hear that. you also point out however that some financial institutions have found loopholes in the regulation that the department of defense promulgated in 2006.

have you contacted the department of defense regarding these issues and if so, what has been their response to close some of those loopholes? >> yes, senator. we did in fact in the year immediately after the act was passed and then implemented have a period where we examined its effect and we reported the results that we had seen to the department of defense, and we had -- it had guarded the gun to be clear it was having a positive effect on all the same phenomenon you describe as workarounds were coming. the narrowness with which we saw the act implemented gave us concern in the beginning and now in light of four years of

experience, it continues to cause us concern and that is the direction that the financial industry has gone in using the particular limited application of closed-end loans in certain circumstances to in fact offer new products that were essentially new payday loans. regarding on line lending, are there additional steps that the dod can take to ensure it adequately covers on line lending because people will be resourceful to get around anything. >> you know senator, believe that education may be the single most important weapon in that particular fight. >> so you agree with ms. spain? >> yes. >> general bergner, u.s. aa, i know your organization is

unique. what are some of the ways briefly that u.s. aa is uniquely qualified to serve in the military? i know that is your focus, and their families. >> senator i think it starts with customers and we recognize that and it is then followed at the best employees in the world to do that. the combination of those two things generate a level of commitment that really is at the center of how we truly put their needs first. a couple of ways that it manifests itself. we look at every person out there from a member needs perspective and so that is where we start and finish. last year, we saved those members about $165 million through way -- refinancing mortgages and savings on auto purchases specifically. that is a tremendous amount of

savings for servicemembers who are exposed to the kinds of threats that mrs. petraeus is talking about so it is a members, a member focused effort. it fcra is another example. cab 6% and usaa we cap exposure at 4% so it is going that extra mile for servicemembers. >> mr. pollock briefly, it is my understanding bear are at least nine federal regulators and regulators in all 50 states, all of our stays with the authority to regulate, supervise and possibly enforce service, lending to servicemembers by banks and non-bank lenders. in your few have any of these regulators failed to properly oversee lending to military personnel and if so which one's? >> we need to point this out because the regulators need to do their jobs. >> i am not sure i can actually

answer your question, but i do believe the definition of education. if we properly educated our young people in america they wouldn't make some of the mistakes they make. >> do you all agree the worst thing a lender can do is overload anyone, but especially a young servicemember, 19, 20, 21 years of age with the debt they can't carry? it makes no sense financially and it is exploiting a servicemember, is it not? >> yesterday as in i've been doing this for 33 years and for 33 years we have had that exact problem. a person enters the servers in the first thing they do is buy a car they can afford in the second thing they do is take on more insurance than they can afford them before they even get going they are in trouble. >> senator reid. >> thank you very much mr. chairman and thank you for your wonderful testimony. first let me make three points. i want to commend mr. pollack

for adopting disclosure measures for financial decisions throughout the country so thank you. second, i think one of the most satisfying aspects of the dodd-frank dodd-frank act for me was the office of servicemembers affairs and particularly -- so thank you for what you are doing. third, in the mid 70s mid-70s i commended the paratrooper company and executive officer of the company which meant every day i got letters from creditors and young paratroopers telling me how they bought a $25,000 truck on a 70,000-dollar year income. what i've heard today is more outrageous than i recollect in terms of what is being done to military personnel particularly now in a time of war. so whatever we have done is not enough and we have to do more.

let me focus in on a particular issue you alluded to in mr. abbot's testimony and thank you it away for your selfless service to the mutual aid association and to your colleagues in the army and air force. we have facilities that operate on bases and expectation i think is that they are on a military base for individual servicemembers. they have got the stamp of approval. they operate under operating agreements and so the question i want to address to mrs. petraeus and ms. spain and the admiral is are those operating -- sufficient and are they being enforced and there is some indication that some of these facilities are charging far in excess of fees for failure to pay on time etc. and that is

normal. so mrs. petraeus? >> i will say as you mentioned, they do have a contract to operate on those installations and they are expected to do certain things. part of the contract is to provide financial education. certainly they should also be transparent in the fees they are charging and when that contract comes up for review that is an opportunity for the servicemembers to decide if they are treating their customers right. i will say that we are taking a look at the issue of what are the special products that financial institutions are providing for servicemembers? we put a federal register notice and about a month and a half ago asking for input from across the field saying let us know what you are doing and we are going to have a one-day forum next month where we discuss both the issues and then some of the things that are being done better on the positive side. hopefully that will serve to put the word out about what is being

done that is commendable and what are the issues that need to be addressed and we look forward to some cross-pollination if you will. i hope you look at them and go back and say why can't our institution do this so i'm pleased about that. >> ms. spain, your comments? >> there is a credit union that operates on ellsworth air force base and they support financial education to grants that allow us to go to the base to provide education. the military members in the family readiness center haven't had any complaints regarding that particular credit union. >> admiral abbot. >> senator i know that our servicemembers and their clients are grateful for the services that they do get from a finance and industry on days. that is a great convenience and we are grateful for it. i do agree that the renegotiation of it. a contract is a spot at which there ought to be a frank discussion about

the practices and the local leadership should be empowered to discuss those issues with the banking credit union leadership. we heard today about some commendable best practices. i personally believe there is an opportunity for a discourse consolidation of those in a way that would benefit all of the military installations that have those facilities. >> thank you. my time is about to expire. general bergner, i don't want to upset your premise because i have been a customer for 40 years so forgive me. back in 1971 i ensured a dashing triumph with usaa, triumph sports car. the years have passed and now i'm ensuring in 1991 ford escort.

that is what happens is you grow older. so thank you for your service. thank you all. >> senator akaka. >> thank you very much mr. chairman. mrs. petraeus, our guard and reserve forces have been called up to fight alongside their active duty in a higher office to ensure our nation's safety. what do you see as the differences in the consumer protection needs for families of our reserve component when they are on active duty versus when they are in reserve status? >> i have had the opportunity as i mentioned to talk with a number of national guard

officers and enlisted and their families on my trips out to the states and in fact i try to do that when i go out because their issues are a bit different. for a great amount of their time, the families especially consider themselves really to be civilian families and some of the challenges preparing for the change in circumstances when suddenly the baby, military family and they have their guardsman or reservist deployed. they don't have the installations that the active-duty force has with all the wonderful offices that they can walk into and get information. a great deal that has to be delivered virtually through the web. there are -- they have come a long way and there are great initiatives now. the yellow ribbon program that provides information before they deploy and also circle back around after they come back, but delivery of information certainly is a challenge for them and again just make him the families really aware of what is there for them in in a way of

benefits. i will add the economy supports the challenge for that as well. deployment is an issue when they are not in active duty and also for their family members. >> thank you. ms. spain, on average military members arrive at their initial training assignment with $10,000 in debt. this means that they may already be behind before they even consider how to manage their finances. in your experience, does this initial debt influence their reliance on high interest loans to meet their short-term needs? >> when they come in and have dead it does affect them because they become targets. they know they have to make those changes and if they have anything go wrong, the car

breaks down or whatever happens they become more vulnerable and that is why they fall prey to lenders that are charging exorbitant fees. so it does make a difference. at ellsworth we are allowed to come in and talk to the first termers which makes a huge difference, and provide them the education so that they know that they have options and to ask questions very carefully to know there are other programs. >> thank you. mrs. petraeus, i want to congratulate you and wish you the best as you focus on the important topic of financial education and consumer protection for military families. if there was one thing congress could do to help the cfpb better protect servicemembers and their families, what do you think that would be?

>> confirm a director for us. we can use the full array of education. we need to be able to also exercise supervision to go in and take a look at the practices of some of the non-bank lenders that are out there. i actually heard from the ceo of a federal credit union in ohio. they have a branch of ours your pawnshop in a payday lender and the only one that is regulated is on us. so you know we need it fair playing field and to do that we have to go in and supervise and look at these folks and then as needed exercise the enforcement capabilities as well. >> thank you mrs. petraeus. as operations come to a close in iraq, we will begin to see end strength numbers decrease and veterans numbers increase.

what are you doing now to partner with agencies such as the va to identify the financial needs are vulnerabilities of those transitioning through veteran status? how are the needs of these wounded in action different? in your statement you did mention you are working closely with the va. >> we are and we talked to them as i said about distressed homeowners that may come to us that they might be able to help. we have also talked to them on the issue of education benefits because we will have a lot of veterans getting out and looking to use their g.i. bill which is a wonderful benefit. we want to be sure they use it for college programs that provide them with the best bang for their buck if you will. unfortunately there is very -- very heavy marketing right now because the military education benefits don't count in the 90%

for-profit colleges. they can only get 90% from title for education funds. they have to get 10% of their funding elsewhere and the military benefits are part of that elsewhere, that 10% so we are heavily marketed. we have been talking to them again, hopefully to make it more transparent. what is its track record? what is the default rate on loans for its graduates? what is its accreditation and our office of students has put out a note on a financial worksheet that i think is a good first step. we all want to see our veterans, out and find gainful employment and become productive members of society. we have also worked with the department of defense offices to transition on that as well. >> thank you very much. >> senator tester. >> thank you mr. chairman. i have a question i wanted to

dovetail on the ranking member's question. i think senator akaka may have gotten the answer to it but i want to be very clear. the reason a non-bank supervision team is circling to use your words and does not receive permission to land in other words the reason we cannot regulate the non-bank financial folks that i think just about everybody on this panel referred to as being somewhat of a problem in regards to our military folks is because we do not have a director of the cfpb. is that correct? >> that is correct. >> thank you. i want to go back on what you just finished up with and that is for-profit schools. you brought to the attention to us some of the unethical recruitment and marketing practices of the bad actors in this industry and they are not all bad actors. some of them are. what are you doing about it? is that an education situation? how are we reaching out to the military personnel and are we being successful in that?

>> i think it is a work in progress right now. i think a lot of it really depends on the education for servicemembers know they have to write questions. there to competing priorities. won a servicemember is on active duty and has tuition assistance benefits they may be looking for college credits for a promotion so they want something they can get quickly, easily if you will, possibly on line and 70% of those courses are delivered on line. that may not need the best college credits for them when they get out and they want to apply that college to a job. right now it is mostly education. our jurisdiction is limited to the private student lenders side of the market, but i have a broad mandate to work on consumer protection measures for federal and state agencies and i will continue to do that especially on this issue. >> i appreciate that work.

i want to talk about foreclosures for a second. and this is a question for you to major general. right now the servicemembers are protected under the civil relief act when it comes to foreclosures. and correct me if i'm wrong on that. can you tell me what is the mechanism for mortgage servicers to determine if there is a deployment status of a servicemember, and how is that, how is that handled? what i'm trying to get at is it is my understanding there are some services that are starting foreclosure before, while the servicemember is deployed and i do not believe that is legal under the law. correct me if i'm wrong and what is being done about that? i will start with you, holly. ..

>> senator, i and i go back to a reference they made in my opening statement about murmured to react, probably the best example i could give you up our commitment in the way it plays out on a daily basis. doorman that sharia benefited from the training necessary for

a member service representative to understand what the scra requirements are. remember in my recollection, she was -- this is not a love we had even made. >> i guess the question of god as we've heard a lot about mortgage servicers. it hasn't necessarily been good in a lot of cases. do we have to ramp up the penalty? i am not big into state, but by the same token, you know this better than anybody and tell me if i'm wrong but you've got a service member in theater in very stressful conditions. the last thing you want to head as a kid with her head back at home in kenya that houses foreclosed. so what do we do about this? >> senator, you think it starts with a sense of ownership and not purgation to the service members. that is what is at the center of our commitment. even when the load isn't with their financial institution,

we'll work with the servicemembers to protect them from foreclosure and do everything humanly possible to keep them in their home. not to mention the law requires us to do so. >> i appreciate you and i appreciate your company. unfortunately there's a lot of folks out there that don't share the same commitment and i don't appreciate the nearest such as itu. i want to thank you all for your testimony. appreciate the work you do a good but. >> senator menendez. >> thank you, mr. chairman. thank you are your testimony. but pick a person under tester left off as the housing subcommittee chair, we have taken a particular interest in stopping foreclosures on military families. at one of the hearings i chaired, we invited carpooling and to testify, an attorney who represents military families who were illegally foreclosed upon by some of the largest banks in

violation of the servicemembers relief act. it seemed to me from this test damone and other sources that the act is either not well understood on the benign side, will say that, or simply not followed it means better enforced plant. for example, bank of america, morgan stanley and jpmorgan chase collectively agreed to pay $80 million to hundreds of military feelings, whom they illegally foreclosed on. so mrs. petraeus, my question is, what can the cfp b2 to help the problem of servicemembers and families be in retton with foreclosure and the high interest rate imac to duty. >> i certainly had the opportunity to talk about this issue and i did hear testified with the captain that had been impacted by being foreclosed on

or the threat said that while he was deployed. i should first point out that it's a lot the servicemembers and is not a law that the segment will enforce. it is partly because as you said, it's a very complicated law. there's a lot of pieces to it. but we didn't want to take staff, so forgot complaints came to us, first of all consumer response would be able to identify something as a potential scra complaint. so we had done some training and our insistence that people recognize that. and we also met with all the chad from the justice department in the same room and we and the jacks of all the services signed a joint statement of principles. really one of the main drivers of that was to make sure that scra complaint did not fall through the cracks and we have it procedure for what we do if

we got him to see tcv would be addressed. >> i appreciate that because the justice department of course is sometimes a matter after the fact when you've gone to the nightmare of foreclosure while you are stationed abroad. and while you may get relief at the end of the day financial relief by inaction taken by someone like mr. harper lee and on behalf of those families, it doesn't mean you solve the problem of keeping your home. i hope what you may not have joint resection can appreciate the effort. we would love to work with you all to try to have a more vigorous approach that has those who give mortgage products that understand and we can prevent that action and deal with the aftermath of for closure. >> much better to be a thinly act it. frankly it all boils down to the person on the other end of the phone.

if they are unaware of what they should be, the protections they should be extending cameo have a problem with the service member. >> is the justice department considering bringing in the largest mortgage entities and giving them a little bit of a primer on what they're supposed to? >> i have not heard that particularly from them, but a lot of what they do come if they announce publicly. i did have the opportunity and i wrote a letter to the ceos of the 25 largest banks suffer months ago, saying this has been an issue when i hope you will look at your own practices and make sure you're not doing this to servicemembers who have accounts with you. >> i appreciate that. let me ask you collectively. i know some of my colleagues before have talked about the military lending act. i just want to get a bottom-line answer here. it seems to me that the act which cat daniel interest rates for credit to military bars at

336% including fees and charges have narrowly defined and payday lender loans and vehicle title loans and tax refunds to participation months. but they don't include high-cost credit cards. they do not include overdraft loans, military installment loans to many forms of open credit, auto loans. if the public policy in one universe is to protect servicemembers at the end of the day from such high interest fees and charges, is very public policy reason not to extend not to the broader universe for servicemembers? >> i am all about consumer advocacy, so i would like to see broader protections. i know the devil is in the details trying to write a rule that does it in a way that

doesn't have an unintended consequence. the broader protections. >> anybody with public policy why that's not good? >> i was going to climb on the side of saying that i think there is a public policy reason to extend it for the same reason that the original legislation was put in place because that the effect that he was having on servicemen and women on their lots of security clearances on their lots of readiness to deploy and the more measures that have been taken to deal -- to go around those measures that are in existence have effectively produce the same circumstances, just with slightly different products. >> thank you, mr. chairman. >> senator hagan. >> thank you, mr. chairman. i once again just want to say

how thankful i am for you holding this hearing today. i think we've gotten that information and i also think what we have discussed speaks volumes about the need for financial literacy education in our public school systems. i don't think we do enough of that. i keep saying it is not rocket science. we just teach it and i think so many of our young people in the military could benefit greatly if it had a financial literacy regulation while in high school. is something i'm advocating for and i hope at some point in time we can accomplish that at the state level and at the federal level. but i did want to, general bergner can ask you a question. i know many years ago when military bases for remote locations, that there was a one-based, one bankroll that came into play. i have heard that this limits the number of financial

institutions on military bases. so can you describe this to me and discuss the benefit to servicemembers pro and con? and then anybody else. >> senator, thank you very much. we do not operate as a single being, but we do have an educational foundation that will produce about 4.1 million pieces of material on everything from cybersecurity to financial management to car seat safety, things that truly do matter to servicemembers and their families. without regard to a product endorsement or even a mention of the company that is sponsoring the educational foundation. one of the challenges that exist his access to military service members to support requirements underneath. for example, we have been asked by army community service and family readiness groups to provide such educational

material and support them. because of the one bankroll, that is sometimes limits our ability to provide those, even though they don't have any reference to a bank or other financial activity. i think to the degree we can level that can make those kinds of resources available, there's the opportunity for not-for-profit educational foundation to help fill that gap in financial literacy. we will give about 900 presentations this year from the educational foundation on financial management. many of those who servicemembers and families come in many to national guard or reserve components located far away from the footprint of our community services. there is an opportunity for us to be able to enable nonprofit educational foundation flicker educational foundation to serve some of those purposes. >> anybody else care to comment on that question? >> senator, i think we need to

be careful of the overseas environment because the credit unions are not making money overseas. to the extent we put more financial institutions on base overseas, i think would actually be good. stateside is a different issue, but overseas who need to be careful. >> thank you. admiral abbott, you mentioned overdraft practices in your testimony. what can be done on this front and are hijacked overstaffed b's comment on on-base financial institutions? >> senator, yes. i would have to assess it as probably the top problem that i have been serving right now in young servicemen and women who are getting into a condition that they can't cope and therefore can't uci's.

and it is the magnitude of the fees that they pay. i read a statistic that in 2011 the national cost of overdraft fees will be $30 billion. and of course the military members are only a small fraction of that. but at $25 to $35 a time and in some cases up to as many as seven per day. so for somebody who is overdraft protection at $500 worth of the, seven times 25 does not work out very well. and there needs to be and there are a number of proposals that have not only been made, but implemented tight credit institutions, which improved by

circumstance. we don't advocate one specific list of them, but are encouraged that they are being discussed and we think that is going in the right direction. >> well, certainly seems like something that once again education would really help up front on this issue. >> i would like to come in and out, strongly with that and also add that it is not a one-time inoculation, that you have to repeat financial management education throughout the career of an individual because the problems will rear their head again. >> chairman johnson, i have one more question. >> go ahead. >> mrs. petraeus, and your testimony, you state that the cfpb will concentrate on

understanding the students know the dynamic sister loves. so many servicemembers in particular come in many cases are first-time -- first-generation college students. they are being offered opportunities for a lot of different areas. can you describe a little more about what you are looking not in that regard as far as advising them and in giving advice? >> well, there are some real concerns. again, there is such aggressive marketing right now to military and it's not military members, but it's their spouses and children as well because the g.i. bill can be transferred to them. i talked to an army wife at fort campbell kentucky and she's started her comment on my roundtable by saying i'm attending a military affiliated college. i tottenham, so i asked her the name. of course it wasn't. it was a for-profit.

but it had been marketed her situate day she thought they had official military affiliation. she thought when they filled out a card of inquiry, they called her 10 or 15 times a day until she enrolled. once the first day of class have been, she was having trouble logging on because there was an online class and she could not find anybody to take her calls because again, they had her money at that point and she ended up not passing the course because she couldn't get done enough times to do so. but the money was definitely committed. so again, i have a real interest in folks being able to make more informed decisions than just a standard military friendly, call me 15 times a day. i think we need to get some tools out there to make it easy for people to compare and see what is the track record. if it is a for-profit and it

costs more, is it worth the extra money i may have just been beyond my military benefits which will not cover the holocaust. >> in that particular instance, did she get her money back? >> no. >> thank you, mr. chairman. >> to the panel, thank you all for your testimony and for being here with us today. i am grateful to those brief men and women who have served our country and choose those who continue to serve. i will continue to work to make sure that servicemembers and their families have all of the tools and protections they need and deserve. this hearing is adjourned. [inaudible conversations]

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>> anything obviously reading the right books is usually helpful. but reading a wrong book can be an education as well. it's good to see what can be done wrong so you can avoid the false yourself. >> i think every young writer should remember publishers out there desperate for a good new book to publish and for an exciting new author to publish. there shouldn't be enormous hope for what is yet to be done. >> next, a hearing on legislation that would establish a new mortgage market and replace fannie mae and freddie mac. we will hear from the acting director of the federal housing

finance and administration on freddie mac's request for $6 billion in additional aid. this comes up after the company posted a larger loss in the third quarter, helped by house financial services that committee, the panel runs an hour and 50 minutes. [inaudible conversations] >> and good morning, everyone. i called to order the subcommittee of capital markets and gics, on the private mortgage market investment act is called to order. and we welcome everyone to this hearing today. and to begin, we will begin with opening statements and i would yield myself three minutes to do so. as they say, today's committee is holding a hearing on the private mortgage market investment act, the legislative text is a product of many discussions we've had both formally with the subcommittee's hearing in new york city and informally about the steps they

need to be taken to bring about private capital markets back to our factory nations secondary mortgage markets. currently the federal government is guaranteeing or ensuring over 91st night of the u.s. mortgage market and every one of the size of the aisle and all market participants claimed that they genuinely support the efforts to bring additional private capital back to the secondary mortgage market. two things must be done through private capital begin to reenter the space. one time we must begin to roll back government's involvement in the housing market. the subcommittee astarte password can go so far this year with the intent of reducing the government's footprint than setting the course for the abolishment oceanian freddie. this is a key and vital part of getting private capital coin again because as long as the cheaper government option is available, that will be the route chosen. secondly, we must take actions to facilitate increased investor in the market by facilitating continued standardization and uniformity within the market

increasing transparency and disclosure in providing legal certainty three please rule of law. if we do that, there'll be robust investor participation in the housing market without exposing the american taxpayer $2 trillion of risk. the legislation discussing today says a new qualified securitization market, the fha is tasked with establishing a number of categories or mortgages using traditional underwriting standards at different levels of credit risk associated with each category. also, the fhfa is standing securitizations for this place. the securitization agreements will do well? they will standardize arrangements of the loans and process the loan to a modified in representative investors ability to put that quality loans. they contain the agreements are no securities will be available for exemption from sec

registration. it will allow for a futures market as well in these qualified securities. with credit risk appetites will then be able to buy securities next, legislation removes one of the biggest impediments to private capital reemerging. it does so by striking risk retention provisions from the.frank at. i agree with retention has benefits and i talked about that. the way this is implemented, we will create multitude of negative unintended consequences in the marketplace. i must ensure what good the risk retention world we have well to if we exempt fannie and freddie and loves it down payments of 5% or more. that sounds like just about everything that's made up there. it has risk retention and

recovery that. a better format is an improved representative warrant system includes a structure that ensures investors claims will be honored at the end of the day. the legislation provides a much-needed fix to the? outcome of a qualified mortgage definition created by godfrey. we insure loans that meet the test layout of a dispatcher able to qualify for a true safe harbor instead of unnecessary burdensome liability. and to bring private investment during mortgage market is essential the world was clear, specific and upheld. best of their rights and contracts must be honored. by facilitating between investigators and issuers by clarifying the rules around the first lien holders rights and by preventing government for some modifications that would negatively impact investors. investors will have certainty they need to get back into the market. finally, in regards to

transparency and disclosure, investors should be empowered if you will enable us to do their own analysis of the assets underlining security. so by disclosing more detailed low-level data was the same time protecting privacy of the borrowers and by allowing more time for the investors to study the additional information, investors will be able to conduct more due diligence and lessen reliance on reading agent is. so that is a capsule, if you will come of what we're doing with legislation with regards the director's testimony we are about to year in the ongoing work over at the fhfa. let me say directly i think you are doing a very good job under very, very difficult circumstances. i know you have been called upon by some more extreme elements come asking that you allow for americans basically to pay for other american mortgages and i

appreciate the physicians who have taken because as you sit here and i skin in your position, you are basically the last while, if you will, protecting the taxpayers from literally billions and billions and billions of additional losses over these entities. i thank you for the work you have done. and with that, i yield back and i yield two minutes to mr. miller. >> thank you, mr. chairman. there is a lot to like in mr. garrett's bill. it is similar to legislation i have introduced in this congress and in the previous congress as well. h.r. 1783, foreclosure fraud and homeowner abuse prevention act. and the differences for whatever reason we have not yet worked policy out on this legislation, but i certainly welcome the chance. it appears differences we have are not deep, philosophical differences. there is no partisan divide.

we are trying to do the same thing in a somewhat different way, but it seems to be the practical difference, not a philosophical difference. i certainly support the idea of standardizing contracts with pooling and servicing agreements making -- making clear transparent the underlying loan files and making sure the servicing standard are uniform. those are all things in the bill that i have introduced. i certainly welcome the idea of amending existing laws to make the mortgage securities market function like other asset security markets. that appears to be -- we appear to be trying to accomplish the same thing in this respect, but the bill under discussion today would really just create an entirely mortgage market from scratch. when there appears to be a clear model for doing that and write