procedures for short-term small dollar loans. testimony last year before this committee professor elizabeth warren stated the principle role in consumer protection regulations credit markets is to make easy for consumers to see what they're getting in mckeesport consumers to compare one product with another some markets can't function effectively. ..

bill we are leading these products from tight ends. but when you try to define the market for small consumer loans companies actually a variety of potential products bear. payday loan, car title loans, brokers, other sort of runtime type qaeda. they're also come as you know, overdraft protection as an alternative that can give you access to short-term money for considerable fee is typically geared and there's issues around at the other regulators have already recognized and we see as well. it is typically the case that when you are talking about overdraft protection, you are talking about a deposit institution and a bank account. a payday loan is a nonbank product typically not necessarily. there are some new products. some of the banks are starting to offer that they call some diversion of product advance. this is a somewhat different product and it is not a deposit

type product. so i think we are trying to focus our exam guide or on a particular type of product in the nonbank sector. but i think you're absolutely right to know that there are comparability is between that and overdraft protection and the effects on consumers. there's also comparability between those on the deposit advance products but a handful of banks and perhaps others to come are starting to offer. and credit unions have a short-term product is low. >> well, i have macri g demagogue this this morning by this afternoon, but there's a lot of conversation about wall street versus main street. it's about two blocks long. i don't think there are any businesses on it. it is at the courthouse. main street is much bigger, watch biker, many more businesses. there are some business than in the state of south carolina and i suspect another state to have that legitimately why their

businesses being treated differently from others. so i heard your explanation. i would sq to be sensitive to the fact that many people use overdraft protection as a form of a loan. and if the numbers are right, 20 million people choose to go another route. there was a lot of fear that your refuted predecessor wanted to ban payday lending. i would ask you, do you want to be in a? >> congressman, i don't look at these issues in terms of banning products. without permission of the the code talks about his addressing unfair to set up an abusive attacks or face. one of the things you may did we saw last week we went to birmingham alabama and held a field hearing on payday lending. it was important for us to do that because in particular we need to know more about all the perspectives on this product.

there are some issues that we have seen in terms of potential unauthorized withdraws to bank accounts that would be illegal. i think that collection tactics being used to be illegal. in terms of the structure and core essence of the product so, we thought we need to knew more about it and we are pleased that we at appearing pretty extensively from both sides of the issue. it gave us allowed to come back and digest. i think we need to analyze this. we need to think carefully about it and hear from people and then make judgments. but you try to make judgments off the top of our head is not the right approach. >> you made reference to combat that is currently illegal. the last time professor warren was here i counted and my colleagues made use of the word illegal or unlawful 19 different times, which is a former prosecutor strikes me that if it is currently illegal and unlawful, why are people being prosecuted for a?

have you had in a conversation for the department of justice about the status of their lawsuit that may have arisen from the 2008 collapse? >> we have discussions with the department of justice about their work in our work. we actually sign a memorandum of understanding with them also before the end of last week, which we require to do by law so we could court me. i will tell you we have also reached out to the u.s. attorneys who have a great interest and told us frankly that had they known more about mortgage fraud in the early part of the last decade, there were cases they could've dealt with that they did not see the significance of and they regretted some of them that they did not. while we were in birmingham, we chordata closely with the u.s. attorney for that district of alabama, who was interested in how payday lending issues affect your constituents and we're going to take insight and guidance from others on the

fence you think about the right approach. we are at the beginning of that. >> mr. chairman, can i ask a question i would have a one-word >> essar chairman, i ask for one additional minute. >> i thank the chairman and the vice chairman. you mentioned the department of justice has a statute of limitations expired in many cases they wished they had no more about? >> i'm sure that they have because some of the mortgage fraud cases, in fact, when i was a local treasure only saw irregularities in a local real estate market, which turned out to be scams which was 2004, 2005, you know better than i would depend on exactly what the nature of the criminal activity was they would be charged to what the period would be. some of those very likely have expired. others probably have not. >> thank you, mr. chairman. i think the committee's

indulgence. ms. beers from california is recognized for five minutes. >> thank you, mr. chairman. mr. cordray, welcome. we have awaited your appointment for a long time and as one member delighted that you are now on the job doing the people's business, i'd also like to point out to my colleagues at recess appointments are not unusual. in fact, president clinton made 139. president george w. bush made 171 and president obama just made a little over 30. i think that your appointment is very key to us being able to move forward to protect consumers in america. i may ask a couple questions. we got off on payday lending just a moment ago and as you are certainly aware, there are more payday lenders in this country than there are in donald franchises. my question to you would be, if

it abusive for a wonder to charge a 400% interest rate? >> that's an interesting and difficult question. there are states, including my home state of ohio that have made a determination in the legislature to cap the interest rate on payday loans in ohio the cap was set at 28%. as i mentioned earlier, we do not have authority. the statute is very clear to cap any interest rates on any financial products. there is clearly a demand for small consumer loans that shows up in the demand for this product, even though it's a tough product to sustain over time. it is something that as i said, we disconnected the field hearing on the issue because her very interested in maybe to know more. we were happy to hear from all sides of the industry and customers or vendors and also

those who were opposed to its effects in their community and it's something we'll continue to sidestep. >> all right. let's move on. why don't you tell us how many complaints you have received from consumers in this country since it's been established. >> we have received thousands and the volumes of complaints we receive is growing. i assume if their visibility grows and also because we are facing in periodically the handling of different kinds of complaints as we've built from scratch started with credit complaints. i'm sure you all know because you get constituents telling you stories and asking for help is immensely more complicated. we've been getting a more haiku volume of those. we will add other products as we go over the course of this year and take complaints on those as well. we are hearing a lot from

people. >> what are you hearing about complaints relative to credit cards? >> we hear all kinds of things you can imagine. we hear all the things you hear. we hear complaints about charges and fees that people don't understand why they are there. we get complaints about changes in interest rates that they don't understand why that happened had we get complaints about -- >> excuse me for interrupt team. let me ask you this. financial privacy is a huge concern to most consumers. when you fill out your application for credit card and mortgage company returned for that specific purpose, not to have it then sold to third parties to be used in whatever way they deem appropriate. some states have passed laws to protect financial privacy and give consumers the ability to opt-in or opt-out. do you have any interest in pursuing that within your euro? >> we inherited a mess we mentioned earlier overdraft

protection. often opt-out but was adopted with respect to that product. i think there other areas where that can be an appropriate approach would also inherited authority over graham leach bliley and consumer privacy is for consumers that are of great concern. when i was attorney general, perhaps in a stretcher of ohio we had a credit freeze and i legislature that i testified in support of, which had to do with your ability to protect your financial information against identity theft, which is the fastest growing crime in the united states in a very easy crime for people to perpetrate anonymously through the internet. so it is an area of rilke's turn them into something i know congress has been concerned about and has legislated on it. we will look at those issues with respect to consumers we hear from and there is something of a difficult balance there, but some of these issues don't seem quite hard. >> in the nine seconds i have

left on student loans, a huge problem musetta mintier times article earlier this month, that it could be a redo of the sub prime market. do you believe that private loans should be extinguished at death are not? private student loans. >> i don't have a position on that issue. it is not something i thought carefully about, so i went on to opine off the top of my head. the student loan -- total student loan burden is still much smaller than the mortgage debt in this country, but it is growing fast and in fact it is probably growing faster than any other kind of consumer debt. so the whole area is on is concerned, but i don't have a position for you today where that should be extinguished. it seems like a matter for congress. >> to juggle it is time time is expired. >> the ranking member seeks recognition. for what purpose? >> i apologize, mr. chairman.

the ranking member of the full committee, mr. cummings was going to ask unanimous consent to have a letter he wrote due june the 23rd, 2011 to chairman isaiah on this matter in the record. >> reserving the right to reject, what is the nature of the letter? >> has just handed the letter. doing the chairman of favor. >> i certainly understand. i appreciate the ranking member and without objection, this'll be entered into the record. we'll recognize mr. ross from florida for five minutes. >> thank you, mr. chairman. mr. cordray, i think you'll have your hands full with regard to legitimize not only your appointment, but the agency with which you really. not a chance review not only are up in testimony, but also listen to it. he makes several references about consumer poor will benefit on its businesses.

oz businesses want to compete in a market where buyers understand the terms and in conclusion you say to make financial markets work better for consumers and honest businesses that serve them. what constitutes an honest business? >> to me, and honest businesses a business that abides by the law and competes in a fair way in american base. let me give you a couple examples of what i saw as dishonest among years. in a local treasure i was responsible for collecting delinquent property taxes and we saw certain businesses that would put a low priority on paying property taxes because it gave them a cost advantage of knowing when after enforce the law against them. i made it a point to do that to level the playing field on behalf of all the law-abiding taxpaying businesses. i could give you other examples. >> would it be safe to say it's what you've been charged with an act or practice? does that constitute?

there is little if any standards by which your regulatory control should be exercised. i guess my concern is you have been given broad powers and now we are saying -- i think business is business insane and honest business means that all the businesses out there aren't honest. i guess what i'm asking you is in your rulemaking, is their standards? is there something that says this is the level with which we are going to hold businesses accountable? more importantly, i will point to hold them? again come you are a whole new agency and you look at a business community that says at what point do they get involved? do they get involved if they do not make this loan? today get involved after the loan is made if they should've made this love will find you. >> i think i understand your

question better than i did when i answered it before. so we don't have authority as a bureau to tax judgment about a dishonest business. dishonesty in itself doesn't violate the law. i do think it's a term most people can understand. i saw and i took on dishonest business informatics at the attorney general. i saw businesses fraudulent. they were making money. >> i understand you need to utilize private law firms to prosecute some of these suits against business as that were in violation. in furtherance of your enforcement, but fantasia said she was so in your capacity, to utilize private offerings to do that? >> no, it is not. >> with regard to the first ferments he received over 5000 credit card complaints which are investigated are only four came back to the consumers saying they will resolve to their satisfaction of approximately 80% of those.

did you collect data as to whether those 5000 were sold to activity or just customer dissatisfaction? >> we have been -- we weren't sure what we would find when we started out in what we are finding is there is a considerable willingness on the part of the institution to consumers once we get them to work together to see if they can figure out and resolve those issues. we are going to continue to analyze this as we go. we have a little bit of data so far. we will have more as we go. a lot of it is disagreement and misunderstandings and different points of view. >> the data you are collecting. is this something you want to expand further into the mortgage lending industry? >> we got a complaint for mortgage issues, yes. >> do you intend to share the data you collected? is something you want to keep for internal purposes?

what he ought to do with that data? >> the first thing we do with complaints of makeovers to get complaints resolved. we refer them to the institution. they've been very cooperative with us and they understand this is good business for them. i think often they prefer the cost was go to them directly rather than coming to us, but it is the same difference in the end. we also are collecting data about what consumers are telling us. >> to maintain confidentiality? >> that is a hard question we are working through right now. we have another 50 are from people how we should handle that data. we are subject to the freedom of information, ask if some of it has to be public as long as we started out as identifiable information. some of these issues are quite lawyers look at them carefully. we want to also not beyond fear. see my times expired in may of that. >> mr. connolly of virginia for five minutes.

>> thank you, mr. chairman. mr. cordray, welcome to the committee. in the thank you for your willingness to serve your country in a difficult role and i appreciate your being here. let me say however and this may surprise colleagues on the republican side of the aisle frankly scare the misgivings about recess appointments. from my reading of the constitution and the united states, recess appointments were intended to give the president the power to run the government when they were of congress not been in session. frankly in my view, recess appointments have been abused by republicans and democratic. if my republican friends in this committee and in this body actually want to correct back, not by using usb example, but by moving forward to correct that on a bipartisan basis, they were more than willing to cooperate because i think it is another example of frankly ticketed

encouragement and legislation. that is a different issue. having said all of that, what our hands be entirely cleaner in the congress? you can't have it both ways. the chairman indicated it was unprecedented. i don't know if that is true. but i do know that to a 44 members of the other body actually write a letter saying the matter what and virtues, we are going to block any appointment to this body duly constituted and mom because was reading of the constitution says the weblog becomes a lot that goes to the president and is signed into law. you win or lose. i bought some. i've had amendments that weren't affected or were defeated and amendments passed. once it becomes a lot, we implemented. that is the duty of the president. it is unprecedented to have all

but two members of the other party and the other body say no, we don't care for life. we are going to port it anyhow. that is not how the constitution intended legislation to work. it is not at all an example of checks and balances and the government entities in my view a and abuse of the power and you unfortunately are the victim of that power struggle, which i think is extraconstitutional and strange coming from so many hero/comp to touche and the public facing first i believe in constitution. but that is just me. mr. cordray, could you explain to us what you think created the pure bureau? what was that the congress had in mind from your point of view that somehow we came up with this idea?

>> congress had several things in mind. they had in front of them did very unhappy at the start of experience of the financial crisis. the credit crunch, the meltdown. as the state treasurer in ohio in 2007 in 2008 to mislaid to work to safeguard public funds in the wake of markets that really work functioning properly. and people were trying to understand the causes of that. one of the causes i'm firmly convinced and i think congress embodied this in creating the bureau is that you had consumer finance issues that have largely been ignored at the federal level, that when allowed to fester and grow, such as the marketer regularities could actually come its reverence for christ grow so large they threaten the safety and soundness of the financial system. >> i'm sorry, mr. cordray, the building of your experience, would it be fair to say that all of these examples given foreclosures, the meltdown on wall street, the tanks teetering on the edge, that this was in

fact the worst situation on this categories affect consumers as well as the public at large since the great depression? >> no question. >> said the need this imperative? >> it seems to me that there is a strong case for the bureau. that is a congress enacted into law. no one had real authority over these issues at the federal level. it was parceled among many hands and was a low priority for all those involved. >> i'm going to run out of time and fortunately. real quickly, holly patrice's office of servicemember affairs, isn't in fact a part of the month some foreclose on active-duty members while serving overseas? >> it has been documented that there were violations of the servicemembers civil relief act many foreclosures went forward when they should not have done so for people on the duty. i personally doubt any of that was intended by the institutions

involved, but they need to pay closer attention to making sure they complied with the lot and many of them have gotten that message. >> i thank the chair. without we will not recognize ms. burkle from new york for five minutes. >> thank you, mr. chairman. i want to commend my colleague, mr. connolly with regards to his comments about appointments. i have a couple questions, mr. cordray and thank you for being here and answering my questions. my first question and it's the line of question that i spoke i been asked elizabeth warren about. you've heard from so many of my colleagues on the other side of the with regards to this horrendous meltdown in the foreclosures than all of the issues, fannie and freddie are not in looted or covered by dodd-frank, are they? >> i believe they are not. there's nothing in our bureau that touches on that.

>> a big part of the problem that this economy faces and the american people face wasn't even addressed in sub 10, which concerns me greatly that i've been a vocal critic of dodd-frank because of the overreaching, because of the uncertainty that it causes for so many businesses and financial institutions i've met with the district of community banks and credit unions. so that is of concern. the fact that the indian freddie weren't addressed, that is not going to get any better. i just have a question with regard -- one professor warren was here, she said that the fpb is completely walled off from the durbin amendment and i'd like to hear your review of the authority with respect to interchange. >> my understanding of our statute is that the interchange

among men in the cap that was put on not wise specifically not something that was corny jurisdiction granted to the consumer bureau to address it. so that i believe would be the reason why she would have made that statement. we do not enforce any of that, nor do we have the authority to amend or modify by adapting roles any of that. >> so you agree it is walled off quite >> i believe that so, yes. my last line of questioning and i also took us up with ms. warren when she said here before it matters with regards to your budget and a factory not subject to annual congressional appropriations and the whole pay scale for the employees that will be employed by consumer protection board. now you mention to our chairman about 757 folks have been higher

today. >> at the end of last year several weeks ago. >> how many do you anticipate you a higher and so you get the entire board in place? >> is hard to say for certain. part of it depends on how efficiently find that we do our work as we go. but i think our long-term estimates have ranged in upward of 1000 by the end of this year and probably will need more than that would be nice and. >> any idea beyond a thousand? been magnified because the estimate somewhere between 12 and 1500, which is smaller than the other banking agencies, but we think we can utilize the technology in enterprise ships to try to have an impact, even with smaller numbers. >> now, on your website and before you get into this and i have to keep watching my time, you are not going to follow the federal guidelines for salaries

that the federal employees with regards to dickens tumor boards and members? >> in every other area it is our intention to closely follow the law that we are operating under. what congress said in authorized as we are to be higher in, paying the federal banking agency pays a lot more to be comparable in particular to the federal reserve. we did check in preparation for is this year year and saw best buy or 1% under for the federal reserve and we are following the carefully they are in train to do what congress told us to do. >> on your website there is a listening for open staff position as a training administrator. what is a training administrator? >> i'm not familiar with the exact posting you may be asking about, but it was certainly

found that there is someone who is overseeing the training programs we need to bring on board either examiners or perhaps attorneys, trainmen and the laws that we are overseeing. train them as examiners in procedures that are voluminous, but we are adapting from other agencies in all aspects of what is needed to make sure they were perfect to delete and efficiently. >> attendance at, but would it surprise you to know that the training at in a straighter come to starting salaries anywhere between $5,350,102,900? >> i would say that i know that on our scandal, which is mimicking the federal reserve, it is very often or intention to fill this kind of positions at the lower end of the pay. anything we been caricatured at times it people will pick up the high-end and assume that if the people are going to be paid.

it is not a valid assumption. >> thank you. i yield back my time. i just asked mr. cordray if he could provide the job titles and some description of what you intended staff members do that you will be hiring 12 of 1500 possibly the pay scale with each one of those job titles. >> i'd be happy to do that you >> about that, we'll recognize ms. holmes norton of the district of columbia. >> thank you, mr. chairman. mr. cordray, i want to congratulate you and thank you for your patience and for reading out of the process. they attempted to nullify the process of re-appointments which are pre-constitutional. our president has shown great forbearance on recess appointments until it became clear that his appointments were

being perfectly qualified candidate, were being filibustered and held a. you've got a step forward when you find that kind of stonewalling of a process as intended if the framers. my good friends on the other side of pose dodd-frank. they lost and became sore losers. he became a hostage in the president to needed the only thing that he could do if he meant to enforce the law that was in fact passed. let me ask you. i am curious, something we should tell everybody what kind of new consumer movement we have in the country. i don't know whether it would comment to your jurisdiction. that was a big bank of america

revolution, where people rose up against these monthly debit card fees where you had to pay to get your own money out of the $5 fee and then enforce bank of america to withdraw it. i didn't take any regulation, but it does tell us where consumers are today. would that have come under your jurisdiction? >> we do not have the ability as they said under arla to set the price of any fee or the interest rate on any product. however, what i would say about that set of circumstances was it is interesting to see in every marketplace transaction, consumer transaction, there is both a provider in every marketplace transaction, consumer transaction, there is both a provider and both sides

of the table has is important that provider needs to serve their customers if they are going to succeed in the long run in provide the provider with the information about what they're looking for they can always vote with their feet by going i wish that were the case all the time. what we did have found a new way to organize in consumer protection. i think it is a real morning to the congress a i do not agree that people have the same be a very dangerous is to consumers

are not left don't think that is necessarily a harbinger of what you see in the tell you what willing to help to make sure the there's one group of people and that is the people who i think have been crisis and that is the people who have been abused by see the -- the the art with no clear remedy are hard to take. for example, illegal foreclosures against under the

new law, we have considerable authority and different tools to try to address problems mortgage servicing. we have rulemaking authority. we have the ability and which largely did not occur had the ability to enforce the law, which is very important to making sure people in in the senate continue as the most forward to figure very i hope mr. cordray will give some priority to the servicemembers list of people and can't the same time people services.

>> i appreciate my colleague with additional questions we will begin at the vice-chairman mr. cantona of cordray, i want to talk about two items. listen --, what we i think both agree is and it struck me as interesting. i went to the the very biased towards field hearing was.

you the way to take a position loans as your me it appears that there is some sort of area. i want to get some. let me the day after our very clearly addresses this issue can occur congress has essentially told us to prioritize. the. what we did is we launched our program. we brought out, which very closely adheres to how we approach banks as well.

were is identified by the congress. so he brought out a manual brought out a manual on mortgage servicing products and lending in he did that all since yes. although our come out was able the turn of the year. , the mortgage originators came out of the course of the last several weeks. the only one of those in our statute, which is sort of the privacy of lending i expect we'll address that in due course as you have any particular i am

not sure what you mean i think the answer is no, but i'm not entirely >> going back to i guess i'm trying to figure out up a point the subject matters. the only reason i'm asking if it. i've been here a year, so i'm not quite certain how it's going to vision and trying to get. >> you and me both. we've been here of think what would happen over time as we are going to be examining, which means people will have the ability and authority under the law ask questions and how they're being marketed, whether there's any kind of acts or it

is an ability to really get under the skin see we will be utilizing that authority and it is important for us, we'll just have to see whether there are violations of the law that can be remedied if so, will have to proceed nonetheless. a possibility that gets closer to is whether at some point we might engage in a rulemaking to some if we of who a rulemaking seems like it could be in order, then what in that is something that could occur don't have a

mechanism set >> now coming for sunday the process we could address up there are being remedied in any other way. >> okay, so as they were going to it will depend on, you don't want to wait on a the law already as that is and you will pass it or it the rules we inherit can't wait on other processes to to is i think that

the project for in pages of information relative think that is three to $600 budget, whatever you spend in whatever you commit to expanding coming in now, that it's time for i think we are providing more we are putting information up on our our or something as we go that we better understanding of and want to financial sight will

say we are a new agency. we are just underway, but we did have which you'll provided by law we would be subject to it was a clean audit opinion about how we the kind of information had talked about them access to if you are dissatisfied and would like more information, i'm happy to have my staff work with your sad to see that we are trying to transparency purposes. i think the public should have access to that information if they so choose to read it. you are going employees. i understand your new agency not subject to the considering conditions of our economy, would you were to

>> i wouldn't have very specific jobs know, i don't know what the consideration may be and i think was making a larger point about

the cheese so many holes

we are required to do that. the other things you're talking about we are not required to do battle help us do our job better. i have no aversion to hearing from the nonbank firms that we are going to be regulating. it is important to hear from them. their unofficial race for us to do that. we will consider that. >> having no aversion is different from saying that she will do it. so at the risk of repeating the same question again, will you commit to have an advisory panel not given one of your nickel

slots to remember the industry, but advisory panel so you can hear from people. i'm sure is a former prosecutor you can understand frustration of people to complying with with state law. and there is a fear and apprehension about what comes tomorrow, which leads to the second question. i would like whether or not you will commit to at least have a non-dining advisory panel, where you can get the day from people currently complying with the respective state laws. >> again, that may be the first time you asked the question. sounded like it was limited to payday lending and nonbank firms. i will consider doing that and i'll come back and let you know what we are doing i'm not over the next month or two. >> what about the states that already bank embarked on regulatory teams without giving it a long discussion about

preemption, what will be the fate of those regulatory teams with the new cfpb? >> and i appreciate that you sent us a letter on this subject and i believe we are responding today to the letter. for example, when we were in birmingham for the field hearings, one of the people in attendance who spent time talking to us is john harrison, the alabama state superintendent of banks and a sister in that state and i know from ohio and probably a number of states, superintendent of banks doesn't only to banks. they deal with nonbank financial firms including alabama payday lenders. so there are some states that have significant and robust every site. there is some states that have none. some state i'm sure you know how to effectively ban payday lending by post a cat makes untenable. so there is kind of a patchwork quilt as there often is with state law. it is our intention to work and

coordinate close with the state regulators so that we understand their different point of view and informs our work. we have no intention at this point to preempt state law in this area, but again, the reason we had a field hearing as we are kind of at the beginning of the road and trying to understand and appreciate what the right approach to that product and number of other products are generally well gather more information as they go. >> i understand you have a good memory, but even i will not expect you to remember every word i've said 10. there is a phrase in dodd-frank that to taking unreasonable advantage of consumers that strikes me if every word has meaning and its possible to take reasonable advantage of consumers or else they wouldn't have used the word unreasonable. i asked professor warren, you may find this to be an inappropriate question report of a reason i never could get her

to answer it. i think it's a fair question. what do you believe the duties of the consumer are with respect to educating themselves? >> i think consumers have not only a duty to do that because you really can't be properly function citizen and economic democracy if you don't educate yourself and being in a position to make responsible decisions for herself that she can live with overtime. i also think that one of the tasks we have been given us to work on financial literacy issues. that is near to my heart. when i was a local treasure in ohio we worked with the ohio legislature cannot legislate it on both sides of the aisle to get it passed, and i would be a requirement for a high school student before they could graduate. reman shooter that. it is one of few states that has that requirement. i think we would all be better

off if young people had some consisting pagans in this area because they often don't get it at home. often a home people are embarrassed to talk about finances and they know they don't understand or have trouble with finances. so i think that would be helpful and will try to work with state to consider that. but people have to be responsible for their decisions. i think the can do that is important is to make sure decisions they are faced with are as clear and transparent as possible, that they know prices and risk and therefore make a deal that they can live it down the road. if they make a bad deal, they have to live with it. no one is going to wave a magic wand and give personal responsibility. and all of us feel that and see that 13-year-old twins before long we'll go out into the world and not be able to expect fend for themselves. i'll give them what they can to do that, but we need to remember

that we need to shore up young people so when they go out and do that they will make racks of their lives in her society as well. >> thank you. may the record reflect that mr. cordray answered the question. >> at the gentleman from south carolina appreciates that based on how exasperated the committee was admitted for an answer to that same very question. and thank you, mr. cordray. i recognize myself. so we are going into -- my colleague had delved into taking unreasonable advantage of the legislative touch. there is also -- we now and i asked us russian before when ms. boren was before committee, representing the cfpb in july of last year. and now, we have a caselaw that is already outlined unfair and

deceptive. and it appears to me that in the agreement you have with the ftc, you have accepted, in a sense, that's a lineage of litigation, legal memoranda and things of that sort that really codify what that means and give some awareness to industry, that their actions are permissible. so is that correct? >> i think frankly for us to go off and define some new and bizarre babe in the course had been with it for several decades, known only at the federal level, but state level would not be productive. >> okay. the additional thing that the law you are operating under includes this abusive.

do you have the intention -- is it your intention to define abusive as a matter of regulatory action? >> said the term abusive in the statute is for the reasons you say a little bit of a puzzle because it is a new term. there's a brief flirtation with it in some of the d.c. law in the 1990s and they had some difficulty defining it. so the term abusive in the statute is defined by congress. there are specific problems in the statute as the congressman mentioned a moment ago, he promised to take unreasonable advantage of people in different circumstances. one of which is they are not in that market do not have an opportunity to choose providers said they can't leave and there are markets marked by that. for us, since it is apparently

different, unfair and deceptive, the first question is what is something that would be abusive, boudin also be unfair and a set of? if it is one of the others, it is straightforward to deal not turn. in terms of what it you said specifically at, we have been looking at it trying to understand it and we determine that is circumstances issue. it is not something more likely to be able to define the abstract. probably not useful to define a term like that in the abstract. we have to see what kind of institutions they arrived to fit the bill. >> can you give us an example? >> let me have a market. let's say you have a market where you don't get a chance to provide your provider which is the case for mortgage servicing these days. >> that actually could be the

case are bringing on the lights in your house as well. >> that's true. >> i understand you don't have the jurisdiction, but go on. there's only one provider in your region. or in this case you don't have control over who the provider is. you could alone and then it is sold and resold and you are and ask permission or have any veto over that. by the time you have a problem, you don't know who is your loan and you've never met them in ever had anything to do with them, right? if the party which take unreasonable advantage of the fact that you are sorted that their mercy in this way, i guess unreasonable advantage is a something of a vague term that needs definition. i suppose that could be a realm where you have abusive practices. it's something that i want to stress we are trying to think through. it's obviously going to depend

on judging facts and circumstances as we have marked by mr. provide will be transparent and providing guidance. we don't have all the answers on that one at this point. >> so it is your intention to define abusive based on enforcement action rather than definition? >> there is the definition in the statute and is fairly specific in terms of prongs, not so easy to determine exactly how you provide that as facts and circumstances. i imagine a situation where we think practices are courageous enough to be abusive and it might be the basis of action. i do not want to give u.s. the speaker back and forth. i can also imagine there might reappoint by which we would you go making now. i think we want to see facts and circumstances and let our view of that the view of others who are giving us lots of guidance,

frankly you understand both sides of the question mature and in a bit that we have more confidence on that issue gave >> as you use the term imagine a now be thinking about the end we are considering this. there are trillions of dollars of financial assets that are reading on your thinking or imagining are going through this process. and that adds to one's certainty in these contracts. your point of reference on reselling mortgages and very interesting one because this has been the legal case and their contract law for decades on the reselling of that mortgage and as far as the disclosure process. so to say that his abusive is a puzzler. >> that isn't what i thought everything or what i intended to

say. the reselling of mortgages is perfectly legal. there's nothing abusive or illegal about that. when you're in a situation as this statute defines, where you do not have control or the ability to choose your provider, if then unreasonable advantage was taken of you in that situation, that seems to be what the statute is getting to contemplate. but again, i'm just trying to give you some context here. for example, if outrageous practices were engaged in at that point, i think there may be an issue of that sort. but i don't think there's a lot of uncertainty here for businesses. in terms of abusive. >> i think what is very clear the statute, even a lot of detail and definition is as you say left cares for something to be an abuse of the earth, it would have to be pretty outrageous to us.

.. >> is it your intention that that be the case? again, it takes two to tango. >> we'll continue to reach out to the banking agencies and law enforcement asians the same way we've been working very well

with the ftc and try to arrive at the same kind of productive relationship. that's the intense. i hope they respond accordingly. >> okay. additionally, you know, asking about the definition of "abusive" to give permission to certain actors in the marketplace, but to outline that, i think, would give some level of certainty to the market place, but beyond that, there's some action that i've become away of regarding credit card disclosures, and some of what you already outlined or you're going through the process now at the cfpb, in essence mandates some defined terms that the cfpb would like included in that credit card disclosure. am i characterizing that

appropriately? >> yeah, i think if i understand your question is the know before you owe project which the center piece of that is the form that is something we're happily following through on what you noticed five or six years ago that there was a need for that. other areas where we work on know before you owe has to do with private student loans where we have worked up a sample shopping sheet with the department of education which is out there for people to consider and use, and we've got a repayment calculator on the site to use because that's a confusing difficult thing for them. in the credit card area, what we developed is a simple agreement. it's not binding or imposed on anyone by rule, that would attempt to pull out and identify and highlight the specific important terms in a credit card agreement so rather than the

consumer being confronted with dense fine print and will not read it and can't tell what it and is not important that there's an effort made to make it clearer and more transparent to them. that is in line with what a lot of the issuers have done on their own in the wake of the card act. i mean, i have seen in cards i applied for in the last couple years, shorter, clearer, simpler forms. we're working with financial institutions cooperatively to see if they'll adopt these forms. there seems to be a lot of interest in that. we'll see how the market place evolves on that. it's not intended as a binding heavy-handed regulation. this can be done, here's an example of how. will you consider working with us and seeing if you can adopt that or something similar, and i think we're getting a lot of buy in and interest from them because i think they recognize

what we all see when they apply for their own credit cards, they probably have trouble getting through the fine print themselves, and they want to have better services. >> my time is long past, but i'll finish with that. >> that's fine. >> the greatest concern, going through the markup, had the concern that came about, you know, out of the senate of having a single individual given this enormous power and a half a billion dollar budget who has a set term and in order to unseat that person, it would take very extraordinary action, and your actions are only overruled by the financial stability board. if it causes larger concern, i

mean, they can't just simply overrule you. they have to have a concern about the financial market place of the country, the largest market in the world, and so that power is a concern. the second concern is by essence by having the cfpb, we'd have plain vanilla consumer options, so the financial marketplace has fewer option, have government terms, only a narrow safe harbor for financial firms to operate in, so that's why i ask this question about, you know, defining the terms, and if you mandate terms for their disclosures, certainly to start the process is to lay out the frame work by which you're going to judge them, not simply agent as many attorney's general have that enforcement action, but you're given this authority to

outline the regulations. >> yep. >> i think those regulations, those bright lines, and the clear frame work so we can have a variety of consumer options and we don't end up with plain vanilla options, fewer choices, higher cost, which is not, i don't think, what anybody wants in this country. >> yep. >> so, may i in response to that? >> absolutely. >> the good news is i think that's how we're approaching the issue. one of the things the statute tells us, it's not easy to figure out how to do it, but how to encourage innovation in financial products, and certainly the opposite of that is to stifle innovation and say everything has to be done in a single way. again, as we put out the proposed sample credit card agreement, there's nothing mandatory about it. it's attempt to lead thinking in

a different direction, but the market is moving in this direction already it seems, and it is not intended to constrain everybody into one jacket of doing things a particular way. one of the great features of financial products in this country has been lots of innovation over the years, lots of technology developments, lots of different approach, and then consumers are in the position to pick the ones they think most suit their needs and those tend to do well. credit cards, themselves, were once an unusual product, and they have become pretty much universal or widespread. debit cards and prepaid cards are a new product. there's a lot of 0 in the district, and -- there's a lot of innovation, and no regulator knows the right or wrong answer in regime. we should focus on

accountability and then where we can encourage innovation, but any common sense approach would recognize that as well. >> thank you. with that, mr. walsh from illinois is recognized. >> thank you. i appreciate you sticking around. i will be brief, and i apologize if i'm redundant. i missed a chunk of the hearing, but, again, thank you for spending time. >> if you're redun adapt, i'll have answered it before, and i should have an answer, good. >> small business in the country is dying. they are not growing. they are not hiring no matter what the president says tonight, that's not going to change. what i hear over and over back home is they are scared to death with all the uncertainty coming out of washington and to a wan and a woman, they feel overregulated like you wouldn't believe, big and small. as importantly, what we hear from small businesses every day

is they can't access credit. i chair a subcommittee access to growth, and we held a meeting bringing in the heads of three or four community banks and asked them why aren't you lending? they all said they can't. their hands are tied. they eluded to dodd-frank and all these regulations. it seems like whatever we do up here, the big banks, big business is able to adjust to small businesses and community banks get hit hard. dodd-frank requires you to consider the impact on small business with any rule that you will implement these review panels are to be convened before any proposed rules that impacts

small business, and correct me where i'm wrong, but it seems cfpb decialed here initially that a number of rules won't impact small business and they opted to not convene the panels? i understand a panel has not been convened since july, since -- am i right on that? >> i don't think so. in the following respect -- thus far, we have not had a rule making of our own to begin and to propose a rule. what we've had are rules that were begun by others, notably, the federal reserve in several cases, that then came to us to finish. there was a remittance rule that we finned that the federal reserve began. we're supposed to convene the brief of panels before we propose a rule, and therefore, we've not been in that position yet. we have one upcoming that i

talked with the chairman of combining mortgage forms to simp fie them. we committed, and we are going to do panels that will get underway very shortly, i would say within the next month of two, and that will be a model for how we do this, and we'll learn from that as we go, but it is our intention to convene panels on our new rules we proceed wherever the law tells us to do it and also we recognize it helps us do our rules better. when i was the treasurer in ohio, i inherited a small business loan interest buy down on small business loan programs, and it was almost out of business when i took over because small businesses didn't want to deal with it, and by the time i left two years later, we put out more than $300 million

by making the forms simple and promising them and getting a response within 72 hours. i'm mindful of the needs of small businesses, it's critical to the country. we all know they create two out of three new jobs. that's what we are missing as we came out of the recession, but another thing which is the credit crunch they are suffering under was caused by the financial melt down. it has been the most difficult credit conditions that any of the small businesses ever lived under, and some of the things the consumer bureau are designed to do is prevent a recurrence of that worst economic catastrophe of our lifetime. if we can be successful and do our job reasonably well, we'll ward off conditions hurting small businesses and banks more than anything now. >> you'd worry about the pendulum swinging too far, as far as too much regulation as well? >> yes, i would. >> tell me if i'm wrong, it's my

understanding that many of the actions the bureau are poised to take may well lead to a further reduction in credit opportunities for small businesses. can you comment on that? >> i don't think that that's our intention, congressman, and if you're hearing from small businesses, community banks and others in your district, pass those comments on to us. we may well be hearing from them as well, but that's not our intention. our intention is to be mindful of the difference between larger institutions and smaller institutions. smaller institutions typically don't have a big compliance department to shrug off burdens imposed on them. on the remittance rule we issued, there's a further proposed rule to consider setting a threshold that the rule doesn't apply to those below the threshold because they don't need to take on the burdens as not doing it in the

normal course of business, and that's what i pledged that we'll consider regulatory work in that way. >> thank you. i'll close with this. i would just implore you to commit to looking out for small businesses and community banks. i'm not exaggerating when i say that they are suffocating right now under regulations, and there's great, great, great trepidation that this bureau on everything else we're doing up here as of late is only going to add to that so please look out for them as you embark. >> i appreciate that, sir. >> again, thank you for your time. >> yep. >> certainly appreciate that. >> thank you, mr. chairman. i just ask that the document, ten reasons why we need the cfpb now issued by americans for financial reform be entered into the record with unanimous

consent? >> without objection. >> thank you. just a couple more questions. >> sure. >> there was an interview with the "associated press," and i'm sure you're prepared to answer this. your quote was, "frankly there's a lot of fraud committed in the market place that's not on its face necessarily technically illegal." can you clarify that statement? >> yes, and i appreciate the opportunity to clarify the statement. i thought it was garb led as i read it and i didn't like it. i'm sure you had that experience. >> oh, never, never, never. [laughter] >> there's issues where they are specific and some ways technical in what is compliance. for example, some of the regulations under the truth in lending act and there's the law under our statute of what is an

unfair decenter abuse of practice. i don't mean to say in any respect that something can be not against the law, but somehow acted on by us. it would have to violate the law in one or another of these respects, and either i got twisted around in saying it or it was twisted in the quoting, but the point is not that we can just deal with things that we don't like even though they don't violate the law. that's not my view of what we do. >> it's a violation of the law as you interpret it. that would be how you would take action. the concern here is your interpretation of existing law. so much of what we have in comn law history is built on precedence and if you accept the precedence of the agencies that you're taking powers from, that you're assuming powers from, and you accept their legal basis for

those precedence, then i think there's greater deal of certainty. >> uh-huh. >> but having not -- the marketplace not knowing that that is fully the case adds uncertainty. >> yes, i see that. that is not our intention, but i do see why the concern is there. >> so walk me through that. i do want to give you the opportunity to walk through -- >> sure. >> what that looks like and how that functions, and not as a got-you, but just as a clarity. >> sure. law we inherit from other agencies and frankly, law we have because congress imposed it, is law that we need to follow and follow closely. if there's a body of law interpreting rulings for example, regulation z that we inherited from the federal reserve, that's relevant to us, too, and constrains us, and we should not go on a new wild

unexpected direction. the thing is that the -- what i would say what's now about the bureau is there's authority now in areas where there was not any application of law before. for example, in the notary public-bank sphere, federal law did not apply to the various parties we talked about here today. they were not subject to necessarily unfair deceptive abuses. the terms we've talked about, and so, look, it is not our point to try to revolutionize any kind of existing law. our job is to follow it and apply it, and it's not our intention to start going off acting like we're a minicongress doing anything we think is good and right and writing it into the bookings. i think we need to follow

procedures carefully, follow the law carefully, and if we do that, we'll build credibility in our work. >> okay. so to that line -- >> okay -- >> that line of thought that brings me back to my first question. >> okay. >> at the beginning of each year, the fcc outlines intention for regulatory actions for the coming year. >> uh-huh. >> it's not saying they'll get to every action there, but it is their intention to get to the actions. that is a broader agenda than the two paragraphs that are found on the cfpb website that outline the principles, which looks like an agenda of sorts, but it's very broad. >> yep. >> that adds to uncertainty, and uncertainty in the financial marketplace means things cost more or are less available. actually, those two things go hand in hand, so it would be a

proper thing for you to outline your regulatory actions that you foresee for the coming year and make that a matter of due course for this bureau that is new. you are the first head. you're taking powers that have never existed with one person in washington, d.c.. there's a great deal of trepidation based on that enormous power. it's not about you. you certainly exhibited, you know, the reason why you're elected in ohio as attorney general. i mean, in answering your questions and answering questions that are forth right about it. many of us just may see things differently about the powers you're vested with, and some of those actions you may take, but if you could be forthright at the beginning of each year, i think that would add tremendously to this, and explain clearly what your

intention is for enforcement actions even on a quarterly basis would be helpful. >> yep. i'll come back to you on that saying i think we can satisfy you on that. it's a reasonable request. as we sit here an talk about different pieces of the bureau and preparing for this testimony, i think it is pretty clear what we intend to do in the rule making sphere this year. i would just say one thing i'd want to say because we're a new agency and this is now to us, i want to say there could be something coming up over the course of the year we did not foresee that we need to do, but i think we can give you and the public more detailed guidance on that, and i happen to think as we had this exchange, that would be a good thing. >> well, thank you. the concern again is that asterisk that leads to uncertainty. i said that quite a bit today. >> would you like any closing

comments? >> thanks for being here. good luck. >> thank you for the forthright answers. there's been a lot of concerns expressed here today. you've given a great deal of explanation. we appreciate that. we certainly appreciate the exchange of ideas. again, the question of the cost to the market place, the question of access to credit is really key to all of the questions and concerns. you know, and, you know, you will not be able to relay the fears that we have about the enormous budget given to one individual and enormous powers individuals have. in essence, change contract law and a number of other items, but you can allay a number of fears and take away a great deal of up certainty with your early actions. thank you for being here today, and thank you for submitting

yourself to congressional oversight. >> absolutely. >> with that, the committee stands adjourned. >> thank you.

>> a house senate conference committee meets in hoping of breaking the deadlock on a payroll tax cut extension. they passed an extension in december. democrats proposed taxes over a million dollars and the republicans asked the costs to be offset through spending cuts. this is an hour and 20 # minutes. >> [inaudible]

>> i'll do this again. senate chair, the previous house senate conference, it is my privilege to nominate david camp, chairman of the house of ways and means to chair this conference. is there an objection? without objection, so ordered. >> well, thank you, mr. chairman. as chairman of the conference, i'd like to nominate the chairman of the senate finance committee to be vice chairman. without objection, so ordered. first, i want to thank everyone for attending. before we get underway, i want to make a quick comment on location today. preparations of the state of the union prevented us from holding this in the capitol to accommodate both the house and the senate members. i intend to do that in the future meetings whenever

possible. that said, i hope you're welcomed into the ways and means committee room. we'll begin with opening statements from members. each member has five minutes, and we'll alternate between house and senate members. there's five days to submit written testimonies for the record. i'll discuss in greater detail the next public meeting and in order to accommodate the house democratic retreat that begins tomorrow. i expect the meeting will take place next week on wednesday. this may be our first public meeting, but the work of this conference committee has been ongoing since the b end of last year. members spoke often and studied the issues. i also note and thank the staff for their due diligence leading up to the meeting as a result of their efforts, every member before them has a side by side comparison of the house bill and the senate bill. from those two documents, one prepared by the joint tax committee and the other prepared by the national research

service, we can see the positions of each chamber and differences to work together to resolve. as i review the tables, the biggest issue i see is only the house put forward a plan to extend for one year the payroll tax holiday, insurance benefits, and payments to doctors treating our seniors, and those enrolled in medicare. this leaves us until february leaving americans wondering what the taxes are next year after the tax rates expire, but also what the payroll taxes will be in less than 40 days. doctors treating medicare patients wonder what the reimbursements will be, and the seniors who rely on doctors for critical medical care are wondering who, if anyone, will treat them in march, and the unemployed wonder if there's benefits for them and hard working taxpayers wonder if washington is serious about helps people get the training and education they need to get back to work rather than handing

out unemployment checks. extensions of the unemployment program added $200 billion to the debt. continuing unemployment benefits for the end of 2013 as the house bill did cost another $30 billion. all told, the policies before us will cost refly $160 billion. that's the second biggest issue we have before us. paying for these programs. i would be remiss if i did not point out unless we find a way to pay for these programs, we'll be forced to borrow more money from places like china creating a larger debt, dragging our economy down. non-past san experts testified because our debt is large, it's weakened our economy and hurting job creation with the result of 1 million fewer jobs for american families. the third and final issue to point out today relates back to the first. the house legislation includes a number of critical reforms, job creating provisions and bipartisan measures to offset the spending the the senate

bills contains one additional job provision of keystone that the president rejected. we are focused on getting people training and education they need to get back to work, not just handing out checks. .. these are the three big issues that are part of this conference committee. one, senate bill extend programs for two months when the american people need and expect at least

one year. the senate bill unlike the house bill, provides an indication of the senators would paper longer term extensions and the senate bill contains the straight extension of these programs about any of the aforementioned reforms and has no additional measures to help get americans back to work. the differences in the positions between a house the house a house in the senate are for the competition by the fact that the senate version is currently the law as a result of passage of h.r. 3765. under house procedures the scope of conference as effectively as the house bill. as you can see we have our work cut out for us and i'm confident if every member of his conference committees committed to finding a solution we can and will do it. with that i will now turn to my good good friend from montana senator bachus for the purpose of his opening statement. >> thank you mr. chairman. dr. king once said, we may have all come on different ships but we are in the same boat now. we have all come from different places. we have fought for different

priorities that we are now all in the same boat. families in montana and across the country are watching to see if we can deliver. they are watching to see if congress can work. i believe we can. but this isn't about the washington debate. it's about the consequences to our economy if we don't deliver. those consequences are real and they affect each and every family we represent. those families like the second family of butte montana are the reason we are here. we don't extend the payroll tax cut jeff beckett and lucretia will pay $800 more in taxes this year. that is $800 the beckett's can't spend on groceries. that is money just can't use to take his daughters piper and page to the pizza parlor on friday nights. that is $800 not pumping into the local economy.

that is just one worker along. if the payroll tax cut expires 160 billion americans will have less money in their pockets march 1. that would hurt families. it would harm our economic recovery. the congressional budget office a nonpartisan scorekeeper says allowing the payroll tax cuts to expire will reduce job creation i-9 hundred thousand jobs. other estimates show a failure to extend the payroll tax cut unemployment insurance would cause gdp growth to decline by as much as two percentage points. it's our job to work together here, to make sure this tax cut does not expire. we need to show that we can provide politics for the good of a country. congress passed a two-month extension of unemployment insurance health extension and provisions to make sure seniors have access to doctors. and we have an opportunity to extend other professions that expire in the end of 2011

commonly known as tax extenders. many of these provisions as possible in the remainder of 2012. seniors, families, businesses depend on them to pay their bills. they will provide needed services and continue boosting our economic recovery. would help deliver jobs to the economic growth we need. so let us realize that we have an opportunity. everything is an opportunity. this is an opportunity. it's a major opportunity. we should seize it. let's put aside our differences for the greater good and find a balanced solution. let us fulfill our responsibility to the american people who sent us here to extend the payroll tax holiday and unemployment thrift benefits. let us make sure seniors have access to doctors. blood is use this congress to show we can work together for

families across the country like the packets of butte montana and like other families all across our country. thank you prayer thank you. senator kyl you are recognized. >> thank you mr. chairman and colleagues. i know that one month seems like a long time to get our work done that it is going to go by a lot faster than we think. so i think we are going to have to devote a lot of time and effort but to me anyway it is just job that we can accomplish. the first reason is to accomplish it is i don't think we are going to get more short-term extensions from our colleagues. they expect us to get our worked and secondly if you have ever had anything to do with payroll of administration we are going to drive those people crazy for can get these results so we have got to get it done. we can get it done. one bit of good news is despite the failure of the joint select committee to come to a conclusion we did a lot of work and identifying literally hundreds of billions of dollars of potential offsets and while i

can't contend that we all agreed on all of them, there was a lot of common ground created in that work, so we have a great work ruddock i think from which we can build. understanding of course that is the chairman said we are going to have to deal with the reality of the scope created by the passage of essentially just the house bill here. a third on unemployment insurance, this is a matter that ought to also be doable. i think there is to recognition on both sides that we need to shorten the time and we need some reforms. obviously there'll be discussion about which of those reforms will do the most to help get people back to work but we have to agree to that prospect. and talking about getting people back to work, we ought to be doing something here to actually create jobs not just with a band-aid over the problem people have because they are uninsured by providing an extension of the unemployment benefits. in the first bill that was

passed we tried to do that with the keystone pipeline. and it is very lamentable i think the president did not see fit to approve that pipeline in view of the number of jobs that could have been created and the other benefits from that. obviously this will have to be discussed again as well other provisions in the house bill which i would think we would find some common ground on like the 100% extension, the boiler rules that have an application around many of our states, most of our states a think and perhaps we can find some other ways to actually promote job creation rather than just dealing with the effects of unemployment as unemployment insurance doesn't finally, we have an opportunity as senator bachus said and also i think an obligation to ensure that the people that we asked to take care of our senior citizens and medicare are properly

compensated for their services not just for their benefit but for the benefit of the seniors who rely upon their care and who are finding fewer and fewer physicians willing to take new medicare patients. we need to find a way to provide robber compensation for them and if we are able to do so even perhaps solve some longer-term problems with that compensation process. so mr. chairman i think the goodwill of this group is evident and the resources are there for us to solve a problem. we have the time to do it but not any time to waste. >> thank you. congressman levin is recognized for five minutes. >> thank you. while we just got started i think it is our ready clear by those who have spoken. i would sum it up this way, the time is short and the issues are challenging. and i think we all agree we need to somehow rise up to the challenge. i think that is especially true because we convene at a critical juncture for our economy and for

millions of american families. millions. what is at stake is the continuation of our economic recovery. in december we saw the strongest job growth in months. more than 200,000 private sector jobs were created and 3.2 million private-sector jobs have been created over the last 22 months. despite this progress, over 13 million americans are still looking for work and i wish we could talk to all of them. we need to ensure that 160 million workers continue to benefit from the payroll tax cut, and that nearly 5 million unemployed workers don't lose their unemployment insurance benefits while they look for work, both of which support economic growth. and we must ensure that more

than 46 million seniors continue to have access to their choice of doctors. in addition, american families and businesses cannot afford the kind of last-minute uncertainty they were forced to confront last month. i would hope we could agree on that. we need to arrive at a bipartisan outcome in a timely fashion and without crisis. in other words, this conference committee must choose positive results over continued brinksmanship. too much is at stake. we arrived at this juncture following a year that saw far too much brinksmanship. the federal unemployment insurance benefits for nearly 5 million workers are at stake. i emphasize this. long-term unemployment remains close to its highest level on record. in large part because we still have roughly 6 million fewer

jobs today than when the recession started in 2007. every day is an emergency, and emergency for those without a job. and it is still too difficult to find one. when i was reading "the wall street journal" a few days ago, last week the chairman of president george w. bush's council of economic advisers said this and i quote, it has the number of unemployed is high and the number of hires is low, the statistical likelihood that an unemployed worker will find a job, will find a job, is just over one third as high as it was in 2007. congress has historically provided unemployment benefits on an emergency basis. if you look at the record over the last 20 years, congress is not required an offset to maintain a federal you why

program with the exception of the current stopgap bill we are now operating under. the payroll tax cut for 160 million workers is at stake. if we don't pass a full extension as has been said earlier a family struggling through an economic recovery making 60,000 bucks -- will see its taxes go up by $1000 beginning march 1. allowing that to happen when not only hurt those families, it would hurt growth. as economists have estimated failure to continue the payroll tax cut for 2012 in federal unemployment insurance would reduce economic growth by a full percentage point this year and destroy 1 million jobs. the payroll tax cut essentially assist low and middle income workers whose wages have stalled over the last decade. the story for the very highest

earners has been a very different. the top 1% of earners gained 58%, 58% of income growth from 1976 to 2007 while a whole third of income group -- growth went to the top one tenth of 1% of earners. one tenth of 1%. those of us who have done the best in the last years and decades to contribute to a little more to fiscal responsibility, fair way to do that is through a surtax on income over $1 million. finally, 46 million seniors access to care is at stake. we all have a great interest in preventing the pending cuts to medicare physician payments. and acting a permanent fix would put this issue behind us and help ensure continued access to care for seniors and individuals with disabilities long into the

future. we can and should fix this problem without penalizing the very patients received to help so mr. chairman and colleagues i look forward to working with each and everyone of you towards a timely and effective resolution on all of these issues to economic recovery and the livelihood of millions of americans are at stake. >> thank you. i would normally call on representative kevin brady but he has been called away because of a family emergency so i know we are thinking about him and his family at this time so i will now go to senator reid for five minutes. >> thank you very much mr. chairman. let me echo what my colleague said which is this is critical work to do in a relatively short time. 160 million americans will face a tax increase in more than 3 million people unemployment benefits. continuing the payroll tax cut

and unemployment insurance comes down to the bakelite -- asa question. the middle class has felt the brunt of this downturn while many corporations and the wealthiest americans have been able to take advantage of loopholes. americans believe and forcefully many cases the deck is stacked against them. >> ish or microphone on? you might push it. is there green light? >> the green light is on. >> there you go. >> is that better? thank you mr. chairman. many middle-class americans believe that the stack is unfortunately stacked against them and this conference has a chance not only to pass legislation to make sure the americans know congress is working for them, not for the privileged few and one of the best ways i believe that the middle class can be supported in this crisis and continuing unemployment insurance. that's why we should continue same policy we had in 2011 through 2012. there is no reason to qa for

someone in rhode island or michigan or montana that they should be treated differently than someone in 2011 when they lost their job and at the very least states with high employment shouldn't lose jobless benefitsand less it will have an outside impact on unemployment in that state in their local economy. ui is the best bang for the buck we have. when it comes down to helping our economy and providing relief to millions of americans, ui helps millions of americans and their families in one of the toughest job market since the great depression. with only one opening for every for unemployed workers. more were providing ui improves the economy's recipients are able to pay their rent by food and other necessities. some would choose to unravel this system by limiting and changing the fundamental nature the program. i do believe by reducing and placing a onerous burdens and

barriers to the program. slashing at the u.s. system doesn't make it easier for americans to find jobs. blame it is a really harder. if there is concern that americans are taking advantage of ui, congress can and should make important reforms strengthening re-employment and reassessment services that help the unemployed with their work search and ensure that they are meeting their obligations. we should also give more flexibility to states to prevent layoffs in the first place by offering robust work sharing programs. uis one of the best counter-cyclical programs we have. federal support has been a direct lifeline to 18 million americans since 2008 and if you include households that number climbs to 50 million americans. these households represent a broad swath of americans because job losses have happened at every level and segment of our economy. continuation of ui benefits have in the past been as my colleague mr. levin pointed out -- some in congress have not

semantically -- ui. if congress decides ultimately to offset ui as the payroll tax credit should read them by asking the wealthiest in our nation to contribute their fair share either through a millionaire surtax or by giving up lucrative tax loopholes and at least paying the same rate as the middle-class. this make sense in terms of policy and plain fairness. millions of americans are relying upon us to get to work and provide relief to them and to their families. i hope congress can and will reach these goals. thank you mr. chairman. >> thank you and now dr. prices recognized for five minutes. >> thank you mr. chairman and good afternoon to my committee members. it is refreshing that we are here today give lasting a conference committee as is done under regular order. to work out differences between

house and senate legislation and there's absolutely no denying that we have differences on how does to fill our responsibility however there should be no disagreement on the need to restore a modicum of certainty for job creators families.her yours and seniors. the current pervasive lack of certainty crosses countries having a remarkably negative impact on our economy and on the general trust of the american people have on us here in washington. so with our actions in this committee and in the weeks ahead we can help restore some of that certainty and regain some of that trust. a lot of focus rightfully so has been on the temporary payroll tax holiday extension and unemployment benefits. we need to find a resolution to our differences on these issues and ensure that they do not add to our debt or further endanger the solvency of social security. we do current seniors and future generations no service by increasing the likelihood of a fiscal nightmare in social security. that being said our focus should not diminish the importance of

finding a common sense responsible agreement on how to move forward with a sustainable growth rate, the sgr which determines how much doctors are paid to treat medicare patients and by extension all patients. this is about hearing for our nation's seniors, ensuring their access to quality affordable health care. that that is not an issue that should take a backseat or be compromised. in the house legislation, we call for a two-year fixed to the mgr to stave off a 30% cut in the payment rate. 30% cut -- cut would do severe damage to the ability of doctors to treat medicare patients and for medicare patients to access care. this comes at a time when nearly one out of every three primary care doctors are limiting the number of medicare patients that they see. furthermore the president's health plan passed into law unless changed would take more than $500 billion out of the medicare program currently and put in place at eight border bureaucrats who will decide what

care they will pay doctors to provide for seniors. this is just plain wrong and will compromise the care nations receive. a two-year temporary fix is not by no means a solution to the payment formula issue. after and after and as many my colleagues that are meant fighting for a longer-term solution with complete repeal of the sgr formula but a two-year fixed as provide a breeding room. the house legislation presents a stronger level of certainty for seniors and their doctors. that should be the overriding purpose of these negotiations, certainty for families, certainty for small business owners come certainty, certainty for job creators and business -- physicians and seniors. we are able to agree on a temporary fix to the medicare payment formula as well as a way forward on the other pressing issues we will run up against the reality of how to ensure that we are not adding to our dead with a future insolvency of the social security program. one idea from her democratic colleagues propose in the past has been a tax increase on hard-working taxpayers and job creators. such an idea is clearly not

sound economic policy. we should not be taking more money out of our economy and decreasing the private capital available. enterprises and create jobs. addition to the damages would do for an economic standpoint it's an idea that has already been rejected by the senate and said they cannot pass in the house. one item that ought to be revisited is which was part of both the house and senate bill is the keystone xl pipeline project. this bipartisan was the decision not to move forward this project. would create tens of thousands of jobs and help enhance our energy security. there ought to be a way to get this done for the american people sooner rather than later. there's simply no reason to have our allies canada, negotiating with china for distribution and transport of these resources. this is a bipartisan issue. it out to be considered as part of a bipartisan compromise. american families and small businesses need greater certainty. seniors need to know that medicare will provide them

access to quality care and their doctors will be able to see them. we can get this done on behalf of the american people and do so in an orderly fashion through regular order and i look forward to working with my colleagues in getting an agreement that will promote certainty and promote jobs. >> representative becerra is recognized for five minutes. >> thank you mr. chairman. i almost feel like i've seen this movie before but i know that the plot and the characters are little a little different and i hope that given that we have a hard fast deadline before us we are able to focus a bit more this time around but i know that all of us understand the test that we have before us and i believe it's very straightforward. we need to strengthen our economy and we have to take care of that to do anything to do to rail that economic recovery that is underway. as mr. levin pointed out we have seen some job creation, 3.2 million jobs over the last

22 months. last december, 212,000 jobs created. in the last year, 2011, we have seen more jobs created since 2005, 1.9 million jobs, new jobs were created in the private sector and so if you were to ask americans across the country, to many probably would say that we still have a lot of climbing to do. and i don't blame them. when you see more people looking for every job that is available you know that there is something still wrong in america. when you see that while we have recovered from 3 million plus jobs since the depths of the recession, it doesn't help that there are 6 million americans who are still looking for jobs that they lost during the height of the recession. and so i think this committee knows what it has to do and i

would like to just focus a bit on something that i have received from a person in california. her name is stay and she writes i have been unemployed since october 2010. i have sent out over 3000 job applications and have had 33 responses, for interviews and was told by each one that i'm over qualified or undereducated. i am a bookkeeper and i have an aa in mathematics and keeping certification. i'm grateful for the benefits that i receive through unemployment but in order to survive i have moved myself and teenage son into a sharing apartment in san francisco. we shared a bedroom separated by a screen. we shared a flat with four other roommates. this is fine. not ideal, but we are not homeless. we barely have enough food that we cannot qualify for food stamps or if learned to eat less and try to make each dollar go

far. >> there are no extras in our lives, no internet, no tv, no going out. i am okay but it is painful at times. i point this out because as grateful as i am for the benefits, we are not homeless or starving. they are not fun and i'm looking for work day in and day out. i go to the one-stop center daily or the library for the computer. i go to jobs workshops weekly. i apply at restaurants grocery stores and i'm told since i have no experience that i'm not qualify. i moved to san francisco because there are more jobs here than where i was and i needed to sell my car to get by so i needed to be somewhere that had public transportation. i pray to god each night and each morning. sometimes it is hard. if i did not share my room with my son i would cry myself to sleep. i want a job so badly. i will be destitute of benefits

are not extended. my son and i will be homeless by february 1 to 2012 if these benefits are not extended. i've no one to ask for help, no family on which to rely. i'm very scared right now. i will gladly accept any training or school requirements. things are bad and need to change. if there is anything that focuses a mind is when americans americans are talking to us and they are talking loud and clear. i believe that they can get this done and i think each and every one of us understands we have a hard and fast deadline. we have got about a month. we know what we need to do. our reports are simple and the three most important things we can tackle comics than the payroll tax were american workers, take care of those benefits for people who have lost their jobs through no fault of their own and give seniors and their doctors the certainty they need to know that medicare will be there when they needed.

needed. if we get that done we can talk about a lot of other things but first and foremost let's focus on the task at hand. let's focus and with that mr. chairman i yield back. >> thank you very much. senator crapo is recognized for five minutes. >> thank you very much mr. chairman at the outset i want to extend my thanks to the chairman of the vice chairman for having an open conference. i do believe will be able to get our work done effectively and take this opportunity that we have been given to deliver to the american people on some very critical issues at this point in time. i believe that this committee understand the importance of that task that we have been given and that they can find their way to resolve these issues. we have some very big differences of opinion about how we should deal with the issues facing our country right now. but although our task is challenging and tough, it's also critical that we get past the

partisanship and the gridlock and find a result that will help us to move forward and i agree with those who have party spoken about what we ought to be focusing on here. we need to strengthen the economy or do we need to make sure we create a strong increase in jobs in our country and we need to to do so anyway in a way that is fiscally responsible. i agree that the tax relief which will help keep money in people's wallets from their own paychecks is a critical step that we need to extend. i agree that the unemployment provisions that the house bill contains are important reforms and help in moving forward in dealing with a critical unemployment issues that have forwarded been discussed by others in this meeting and i strongly agree that we need to get the most powerful reform of the sgr program for medicare that we can. i personally would like to see us have a permanent fix for the

sgr rather than continuing to limp along for a year or two years, continuing to leave that program languishing and not performing the system in any way that would make it permanently workable and continuing to add to the fiscal pressure it has caused -- that is caused by her inability to deal with some of our entitlement systems. and i also believe that those who have mentioned jobs are right on. there is a need for us to focus on provisions such as the keystone pipeline provision or those boiler matt provision or other provisions we can focus on to try to strengthen and improve the climate in which job creators can provide those jobs that are critical for people who are looking for them in our country. i want to emphasize that all of this, the opportunities we have in this committee take place in the context of america facing

what i consider to be the greatest fiscal threat it has ever faced. one of the greatest threats our country has ever faced in our national debt. i have served with javier on the president's fiscal commission. others in the room served on the joint select committee. others have been involved in one way or another in a very concerted effort to try to deal with the threat we are faced with by our national debt. our national debt as everybody in the stables today does has gone up 43% in the last three plus years and we are now at over $15 trillion. that is a $4.6 trillion increase in our national debt in just the last few years. and so the reason i bring that up is that in the context of making sure that we can help people with their paychecks, to have a little more money and in the context of fixing the sgr and in the context of reforming

and dealing with unemployment insurance which as i have said we need to do. we also have to do it in a way that is fiscally responsible and does not drive up our national debt yet once again. and i believe that can be done as well. as i said there are very big differences among us on a number of these issues about how we should deal with them but there can't be disagreement among us about the fact that we must make sure that we can handle our international debt and that we achieve the objectives of this conference in a way that does not fiscally change our posture further. i will just conclude with this. i see the work of this conference as helping to deal with parts of the much broader solution that we are ultimately going to need. the president's fiscal commission colluded we needed to change our fiscal posture by at

least $4 trillion. i think i was actually low. i think we should probably have to do it at $4 trillion a couple of times in order to truly get a handle on our fiscal circumstances. and although this commission, this committee, does not have the task of putting together a broader deal it does have the responsibility to help put together pieces of that will help us to move toward a toilet or were to working with you mr. chairman. >> thank you very much. representative waxman is recognized for five minutes. >> mr. chairman we have a very important job to do. we need to do it don't play and without holding the american people hostage to a partisan agenda. we can't put the country through the briggs winship we did last december. here is what i believe we must do. we should enact a full year's extension of the payroll tax reduction. we should enact a full year's

extension of unemployment insurance benefits and we should protect seniors by solving the problem of inadequate payments to physicians under medicare. the first two items on our agenda extending the payroll tax reduction and unemployment insurance, are temporary measures made necessary by the lingering economic effects of the wall street collapse. but the third item, insuring adequate compensation of doctors providing care to seniors is a recurring problems. the answer should be a permanent solution, not another short-term fix that only makes the long term problem worse. these articles i hope everyone on this conference shares. our challenge will not be these priorities. it will be whether and how we pay for them. unemployment benefits have traditionally been covered on an emergency basis without

offsetting savings. that should be our guide here. there's also a case to be made for extending the payroll tax reduction on an emergency basis. we shouldn't weaken its stimulus in effect by pulling money out of the economy somewhere else. i recognized but not everyone it on this conference shares this review with every physician. if we need pay-fors for some of these provisions we should look first to raising -- for millionaires to who pay less in taxes are the secretaries who work for them for the waiters and waitresses who served them meals. there are plenty of corporate loopholes we should close that will raise billions. with oil prices at $100 a barrel, special tax breaks for oil companies deserve to be at the top of our list. and we should also take seriously the suggestion by the american medical association,

hospitals and others that use the savings to help find a permanent solution to medicare's physician payment formula. obama kept his promise and a costly war in iraq and is in the process of ending the war in afghanistan. we have savings as a result. they should be on the table. i would also support raising revenues through specter mock shins if we can get the policy right. carvajal spectrum provisions are objectionable in their current form. appear to be designed to benefit at&t and verizon and expensive market competitions. they stymie innovation by limiting the authority of the fcc to allocate spectrum broadcast -- broadcast spectrum for super wifi and other unlicensed users and they are opposed by police and firefighters across the nation

because the glaring deficiencies in their public safety provisions. i am prepared to negotiate in good faith with republican conferees to clean up this bill. if we can do that we can raise $15 billion or more by buying underutilized spectrum from tv broadcasters and reselling it at a higher price to wireless carriers facing growing spectrum shortages. we have the chance in this congress to strengthen our economy and protect vulnerable seniors and the unemployed. let us not squander this opportunity. the bill passed by the house republicans in december is full of provisions that would harm medicare, cut medicaid, under blind the affordable care act and raise premiums for millions of seniors and families jeopardizing the promise of medicare and affordable private health insurance coverage for a

american families. we must categorically reject these positions. we need to get this done. we should learn the lessons of last year and move forward on a businesslike basis to complete the work on issues over which we are fundamental agreement and leave the political games behind us. we have a whole election year to play those games. we only have one month to do the job that this congress has been assigned. thank you mr. chairman and i yield back the balance of my time. >> representative tom reid is recognized for five minutes. >> thank you mr. chairman. thank you to my colleagues. one thing you will notice in me as i rarely use a scripted speech and that is because i came to washington not to stand before cameras, not to stand before public events or could i came to washington, left my businesses and my family, to do the people's work.

and i'm going to talk about the elephant in the room in the sense that i wish this meeting happened over a month ago and i'm glad my colleagues in the other chamber as a freshman member of the house. i've heard a lot of stories about you. [laughter] and the reality is, you are just men and women who believe in the country and just have a different philosophy on how to go forward but through open conversation, honest debate, i am confident based on the sentiment that i heard here today that our two chambers, our two bodies, our two parties will come together to find long-term solutions for the american people. that is what the american people want. that is what they need. that is what we all need. and we have to look at the reality of the situation. the solutions that are being put out there to come to long-term resolution to these issues are going to cost money. money we don't have. that is the reality of the situation. the american people know that.

they are not stupid. $15 trillion worth of national debt? they get it and i get it. i come into this looking to put everything in the past, looking forward and working with you in good faith to come up with solutions for the american people. and i know that we can. i will never give up. there was no one in america that will ever give up. that is what has allowed us to persevere for generations. so we are going to get this work done. we are going to the money because we can't threaten social security. we have to make sure it is protected as we go through this payroll tax rate discussion. we have got to make sure that medicare is taking care of but we need to come up with a long-term fix on how are doctors get paid. no doubt about it. i am all for a permanent solution. let's just get it done and with that, mr. mr. sir chairman thanu for allowing us to be a part of

this process. i yield back. >> welcome back to senator cardin. you have five minutes. >> thank you chairman and congressmen reed let me assure you is a former member of the house the people of the senate really are good people. we share the same vision that the members of the house to get the job done and on a personal note i have had the honor of serving for so many years and i hope the best tradition on the ways & means committee is developing the best legislation in the national interest for the guiding principle for us to get our job then we follow that. i'm confident we can succeed in finishing our work. i think there is general agreement on the provisions that we need to extend. we need to extend the payroll tax issues for many reasons. there is 3.1 million -- the benefit from that will see over $1000 this year is here is we extend the program. that is more money in the pockets of marylanders and

around the nation. consumers spending more money and creating jobs. that is what this is about. we need more jobs in america. unemployment insurance needs to be extended through the rest of this year and that is the right thing to do. 65,000 marylanders will benefit from that. i heard chairman camp mention the outlook on the unemployment and i think that doesn't quite tell the full story. unemployment is an insurance program. its counters the killer. it's meant to put money in the economy during a tough economic period. so it helps our economy. is intended that way and that is why traditionally the fund should not be offset. the medicare physician issue needs to be fixed. i agree with my colleagues. it will hurt our seniors if we

did not get that done because it will restrict access to health h care in this country. it is interesting, but a decade, little over a decade ago when i was on this committee i was with congressman clay shah who introduced legislation to fix permanently the broken reimbursement structure. for 10 years equals with the cost estimates are for two years. i want to agree with my colleagues who say it's time for us to fix it and i hope we can do as much as we can to permanently correct this and they tank go congressman waxman for his comments in that regard. the other tax provisions we should extend, it's important that we deal with renewable energy. we need to extend -- and other programs. i expect that most of our discussions are going to be on the offset.

how do we act responsibly with the budget but i think all of us want to do. i think it's important to point out as i said earlier that some of the scots traditionally are not offset because of contour secular unemployment legislation. it to look at what we are doing, and i note that the rules in the house of representatives use different rules for taxes than they do for other issues. i just wish we have consistency on budget discipline. but we will work with you to find ways to be responsible and a senator reed said and i want to concur with his comments, those who benefit the most through the recession should be ousted help contribute to the costs that we are having today. we need to take a look at loopholes in our tax code so i hope we will take a fair and balanced approach. let me just say one word about a house bill is a release of the federal work.

our dedicated federal workers worked very hard every day to protect our borders. they are doing great things that nih and they are protecting our food supply at fda. they are advancing technologies and i can go on and on about the work they are doing. they have already made a commitment to our deficit. a two-year pay freeze of $60 billion. the president's budget includes a 25% increase and another $18 billion or federal workforce has contribute to. there are better ways to balance this package. the american people are looking at what we are doing here and they want us to succeed. i am feeling better knowing we are having an open conference and i hope we will continue to do that. i hope when we complete our work fairly by understanding we will have to have compromises and we need a balance and fair

approach. without mr. chairman and look forward to working with you and i yield back the balance of my time. >> thank you in out recognize the commerce committee chairman representative upton for five minutes. >> thank you mr. chairman. this conference committee was so simple to finish her work with the middle tax -- middle-class tax relief. there were two parts of bill and i want to talk about both. are able chair and vice chair of talked about the tax relief piece of the puzzle and certainly that is very important. this week economy working families can use the extra 1000 bucks per year that comes from a temporary payroll tax. likewise far too many americans who cannot find jobs in this economy are forced to turn to unemployment benefits instead of a regular paycheck. this conference will address both of those issues. but we can't talk about the relief portion without also addressing jobs. the house passed middle class

tax relief act provided job creating policies. many of them originating in the commerce committee and i would like to talk about those provisions. the first jobs provision included in the house passed bill is properly called the jobs that. that is jumpstarting opportunity with broadband spectrum act, bill drafted by comfrey greg walter to spur and drive the creation of hundreds of thousands of jobs. also included in the house passed bill was legislation called the epa regulatory relief act which addresses the boiler -- oiler macros. president obama's jobs council recently suggested we need to enhance american competitiveness to a smart regulatory reform and this bill does exactly that. the house approved a bill last october 13 with a strong bipartisan support and there is

a companion bill also bipartisan in the senate. the purpose of that bill is to give just a little bit of regulatory relief to facilities all across the country making costly new rules for industrial and commercial boilers and incinerators. we are talking about everything from manufacturing facilities to colleges and universities all of which will be affected by epa's new rule. epa concedes major flaws in the rules. they are reconsidering aspects of them and have tried to delay the rules that but the federal courts recently struck down the agency self-imposed delay earlier this month. as a result of this cost and then workability of the rule currently written and the litigation they are continuing in an extensive uncertainty. our proposal is simple. we are talking about friction in extra time for epa to develop rules that are achievable in the real world and extra compliance time so facilities can install the new technology to make

upgrades to their equipment to comply with the new rules. talking about 200,000 jobs and $14 billion in savings. find me want to talk about one of the best-known job creating our checks out there, keystone xl. we have before us a shovel-ready project, one that won't cost the taxpayers a dime but it represents nearly $7 billion in infrastructure investment. is projected to create 20,000 direct construction and manufacturing jobs not to mention more than 100,000 of their jobs. this a pipeline that will add nearly a billion barrels of safe and secure energy supplies supply to u.s. markets every day. last week president obama said no. he said that 60 days wasn't long enough to say yes but only took 26 days to say no. to the present i say this, we cannot wait any longer. we can't say yes to the jobs

bill like this. eye of the congress will. i do believe it falls within scope of the conference and we will talk about it is as part of this package and a lot of other places as well. a hearing before the energy and commerce subcommittee tomorrow first thing in the morning. this overall build middle-class tax relief and job creation, and i think we can do both and pay for it and i yield back. >> thank you very much. representative van hollen's recognize. >> thank you mr. chairman. like my colleagues on a bipartisan basis i think the charge of this committee is try and nurture a very fragile economy and not do anything that would disrupt the economy, but let's face it, we'll have very different views in many areas as to how we can help spur economic growth in the economy. after all the president in delivering -- was before joint session in september. we have not acted on that bill

in the house and in the house you have various ideas on how you can help the economy so i would suggest we focus on the three areas where at least by majority vote the house in the senate we have already demonstrated we think we need to do something to move the economy forward and that is to focus on the payroll tax cut extension for 160 million americans that we extend unemployment insurance as we have done in every other economic downturn so people who are out of work have more money to pay their bills and that means small businesses are able to sell more goods and services and we deal with the -- there are lots of things that everyone of us would like to put into this package but i would hope we are not going to allow extraneous provisions to blog this down. we all know that look there are many members of the house and the majority who are on record opposed to payroll tax legislation and i hope that these other extraneous provisions will not be used to slow down the work of the

committee. i agree with my colleague mr. price said we want some certainty and one thing we should do is tell the mac and people we are going to focus on the three items that we have expiring at the end of this month and extending them. mr. camp mention the total price of the bill might be 160 billion i don't know the exact figure. the payroll tax cut the is about $100 billion i think it is pointing out is a contradiction in that regard which is that when he came to permanent tax cuts, permanent tax cuts have disproportionately benefited the wealthy, republicans colleagues have never demanded an kind of offset. in fact he change the rules of the house on the first day to make sure that a trillion dollars over 10 years tax cuts at the top of the put on the credit card. they didn't have to be upset at all so there is a different standard being applied with respect to providing a one year and in fact a 10 month extension of the payroll tax cut for

160 million americans. so if as we go forward you are going to insist on that different standard for a payroll tax cut for 160 million as compared to know offsets for a trillion dollars in tax breaks for the high income individuals i hope you will work with us to make sure those offsets do close some of these corporate tax loopholes. i think the oil and gas loopholes, we have seen hedge fund managers and private equity owners have all sorts of unfair preferences in the tax code, so again if we are going to apply different standard and i don't think we should dodd if we are going to insist on applying these different standards i hope you will work with us in that area and i would just quote from ronald reagan who back in 1985 said in a quote we are going to close the them productive tax

loopholes that allow some of the truly wealthy to avoid paying their fair share and i think if you look at carried interest, private equity as well as some of the others my colleagues have mentioned those are items that fit that category so it's not going to be easy for those of us who have been a part of other groups. it's not going to be easy finding these offsets so i hope we will work cooperatively in doing that and look at not just cuts on one part of the budget but also look attacks expenditures and some of the pork barrel that is in the tax code as we go forward with that effort. and that i agree with my colleague chairman -- again i think there are frameworks for how you can do that in a balanced way and i hope this week we approach this particularly much smaller issue, we also do it in a balanced way. >> thank you.

senator barrasso. >> thank you very much mr. chairman. the time is short in the issues are challenging. the issues of job creation, taxes and spending americans are going to be watching what we do. the goal is to get a positive result for americans and small businesses. americans were looking for work and for all american taxpayers. my colleagues might note the different standard. we are talking about social security money and making sure that money is there. this is a sacred trust so we need to make sure that funding is there and there is a pay-for. we need to work together as a conference to extend the payroll tax holiday for the rest of this year, set the stage for permanent pro-growth tax reforms so i would like to make some comments following what representative upton has said regarding job creation. if we are going to be serious in this country about creating jobs it is critical to also provide meaningful relief from government red tape. the president has said repeatedly that he is committed

to cutting red tape but his rhetoric has not matched his actions. his executive order for regulatory relief has gone unfulfilled. here we are a year later. we want to turn our economy around we have to reduce and the repeal cosby revelations that are strangling the economy. they are burdensome, they are expensive and they are time-consuming. in addition to tax reform and regulatory reform we need energy security and the jobs to go with it. the white house announced the president will talk about energy development tonight in his state of the union speech. it is going to be hard to take his word seriously after his irresponsible decision regarding big keystone axel pipeline. the president should have embraced the american jobs and energy that comes with the pipeline. we need to put politics aside and build the keystone axel pipeline now. if the president really believes that we can't wait as he says for american job creation, he

should immediately reverse his keystone xl decision. and we must work to provide the certainty to our nation's medicare patients and a position to care them. one of the reasons that we have this problem today is because the president's health care law was full of fudge it gimmicks and accounting tricks, not permanent solutions. fixing medicare's broken payment system should have been a cornerstone piece of the health reform. so mr. chairman i'm ready to work in a bipartisan way to seize these opportunities that are ahead of us. >> thank you very much. representative schwartz is recognized. >> thank you mr. chairman and i look forward to working with you and other house and senate colleagues on the conference committee. i do hope we find common ground because we need to put forth an agreement that will benefit american families and american citizens, promote stability and

promote economic growth. this conference committee is charged with resolving differences between the house and the senate bill so we can extend middle-class tax cuts, or been a drastic reduction in medicare payment rates and extend the unemployment benefits for americans who have lost their jobs and are working hard to find employment. i appreciate that we begin the work on this conference committee with a shared commitment to meeting these goals. and i'm committed to working together to ensure this plan is paid for in a responsible and fair manner. in order to strengthen our economy we must have confidence in our capacity to reach our agreement. it to strengthen middle-class and create an environment which private-sector jobs and grow. by extending the payroll tax that we can accomplish all of these goals. without action to 160 million american taxpayers will see their taxes increase. these are middle-class families. too many of whom are struggling to pay their mortgages, their food though, health care or college tuition let alone save

for retirement. this tax cut will be better enabling them to meet their obligations and grow our economy. many in congress predicted a failure to pass the payroll tax extension would cost the u.s. economy and economic growth of 1.5%. america's economic -- is our economy rebounds we cannot afford to herder economic growth by raising taxes on millions of middle-class families. it's my expectation that they will find a way to extend the tax cuts and enable the taxpayers to keep more of their hard-earned dollars. while there have been encouraging measures of economic growth, our economy and our recovery is fragile. this past december marked 22 months consecutively of private-sector job growth yet there are still millions of americans out of work and struggling to make ends meet. losing a job should not be an economic disaster for families who have worked hard and played by the rules. while the employment rate is declining, there is significant

need to extend the unemployment insurance. if we fail 4.5 million americans will lose their extended benefits, including 140 -- 848,000 pennsylvanians. we should not allow this to happen. additionally an order to provide and protect her promise to american seniors we must fix the broken medicare payment, position payment system. it creates uncertainty and instability for patients health care providers and federal budget. failure to repeal the fdr and replace it with meaningful payment mechanisms for physicians prohibits the drive towards innovative delivery reforms, serves as a disincentive to physicians participating in medicare and inhibits access to doctors for millions of seniors. medicare payment policies have a direct impact on the care that beneficiaries received and the medicare program as a whole.

due to uncertainty surrounding the ft are some doctors are telling their patients they will no longer accept medicare. which of recognized once and for all that fdr cuts will not be implemented and will not continue the rising costs in health care spending. we must work to replace it with a payment system that awards quality and value, saves lives and assure seniors access to the care they need. wheel it to the american seniors to end this perennial threat to medicare once and for all. now is the time to take action to move beyond the decade-old policy that is fail taxpayers, medicare beneficiaries and those on the frontlines of patient care. the right step is full repeal of the ft are. ..

>> in five years, short term fixes and accumulating debt reaches prox $600 million. offer the unique and limited time opportunity to resolve the budgetary problem that grows more costly with each passing month. this approach gained support from members in both chambers and on both sides of the aisle. i urge colleagues here today to fulfill speedometer to -- responsibility to the american

seniors and repeal the spr. the american people count on us to extend tax cuts for 160 million americans, protect seniors, payment rate, and extend unemployment benefits for those who lost jobs and are working hard to find a new one. i look forward to achieving these goals in a fair and timely manner. thank you. >> thank you. >> thank you very much, mr. chairman. delighted to be here in the same room. i would suggest we lock the doors and not leave until we get this resolved. the american people are expecting us to work this out. they really are. everything i heard on both sides of the aisle and capitol is we want a one year extension on unemployment insurance and a two year doc fix so the yen your st'ses have access to physicians, the medical community gets the care they need and deserve.

now, the house passed such a bill. we passed a one year extension on unemployment benefits, and we funded it. we passed a two year extension to make sure that our medical providers were properly exon sated to continue to see our senior citizens on medicare, and we sent that all over the senate, and we got back a two month extension bringing us here today. that's the history. that's the fact. that's the reality. that's where we are at. what i hope to work towards is a solution that's long term. we were small business owners back in 1986. senator kyl, when you talk about the problems in changing up the payroll every month to accommodate some government change, i can -- boy, you can see, i pulled my hair out. we went through that. it's very, very frustrating. our small businesses, especially, and these are our job creators, folks. they are the job creators. i bet we all have becks in our

district. people who are struggling wonder what in the hell is beginning on in washington not to solve the problems for the long term, but to fix things not only for two years, but use that time to fix them permanently. i have not heard anyone here at the table say they don't agree with that notion that we have to do better as a congress regardless of the label after our name or preface before the name. the problems are the same for america. now, i think in terms of this bill, there's several things, and i disagree with my friend with whom i share a birthday but celebrated it more often -- [laughter] there's thing -- there's three things to be addressed. we had hours of discussions trying to find commonground on spectrum, but let's just understand that that spectrum piece of the legislation alone in the next five years could produce as much as $73 billion

to $151 billion for gdp growth in the economy and the chairman of the federal communication program said it could produce 171,000 new american jobs. talk about keystone, also a provision we need to continue to discussion and move forward on it's 22,000 direct jobs. getting us up on the fourth generation wireless network system is billions, 151 billion into the economy and 177,000 jobs. we have to figure that out and take care of the first responders who are expecting us to fill the 9/11 requirements to have a network we can forge and sustain. this boiler mac issue -- this matters. i toured a plywood plant in my district facing a couple million

dollars per boiler, and they are not sure even with the technology that it will work when they go to produce plywood because the way they run their systems and all. this could be 2600 lost in oregon, 31 boilers in oregon with 152 million in compliance costs. when you make plywood, you sell into a housing market. do you think there's really an aggressive robust housing market right now? run that back through the food chain, if you will, the supply chape, they don't have this kind of resource right now to go out and comply with all the new regulations. let's give them breathing room to survive and hopefully we can find a more commonground in terms of those. so flood insurance. i just close with that because whether your in oregon, flood insurance how it's enforced now is not working right. i met with a person in the

district who is three feet higher upstream from someone three feet lower and downstream. he has the buy flood insurance when the guy downstream does not because the maps are wrong. i conclude by saying there's enormous opportunity around the table to resolve the issues with men and women who have brains and ability to get it done. let's do it. with that, mr. chairman, i yield back the final two seconds of my time. >> thank you. >> thank you for your leadership and vice chairman baucus and just thinking of kevin brady today and his family. kevin and i worked together on the joint economic committee as chair and vice chair. remembering him today. we have very important work to do in the next number of days and weeks to strengthen the united states' economy. by reaching an agreement to cut payroll taxes for the remainder of this year and to continue

unemployment insurance for workers who have been job less for more than six months -- just imagine that -- if we do that, we can help americans get back to work, and we can also bolster the recovery itself. many of us just spent a number of weeks back home listening to constituents and the folks i ran into in pennsylvania said two things. number one, what are you going to do about jobs? number two, how are you going to find ways to work together, democrats and republicans? over and over again, i was asked about jobs. we've got work to do and the work of the conference committee can be and must be a big part of that answer. cutting payroll taxes, for example, will benefit as we've heard and can't say it enough, 160 million american. now, the very nature of a conference committee is that no one will get everything he or she wants. we know that. that's what a compromise and what this conference committee

must be about. how do we pay for the -- how we pay for the payroll tax cut and the up employment insurance benefits will be the summit of a lot of debate and discussion. we know that. we know that while the economy's made progress adding more than 100,000 jobs in each of the last six months, we still have a long way to go to dig out from not only the great recession, but the weak job growth that preceded that recession in the previous decade. there's broad consensus among economists that failing to extend the payroll tax cut and unemployment benefits beyond the two month extension we are authorized would, indeed, slow economic growth this year and cost the economy jobs. my staff at the joint economic committee prepared a report that we're releasing today which would highlight -- which does

highlight how continuing the payroll tax cut and unemployment insurance benefits boosts consumer demand and strengthens the economy. the report includes a state-by-state breakdown of the initial take home pay households receive if the payroll tax cut is extended throughout the rest of 2012. i have copies of that report here with me. additionally, there's an analysis of the economic impact of failing to continue unemployment insurance in the payroll tax cut for the reminder of 2012. the joint economic committee staff, my staff, estimates that failing to reauthorize federal unemployment insurance benefits and the payroll tax cut for the remaining ten months of 20 # 12 would reduce gross domestic product growth in 2012. saying this in the context of

what the blue chip forecasters tell us for that same measurement, gross domestic product growth in the first quarter of 2012. at an annual rate of just 2 percentage points edging up to 2.1% in the second quarter. the forecast for growth is not that great. thank god it's at two or better, but it's not that great. that's why we need both of these issues passed. we don't have the luxury of jeopardizing the modest economic growth that's currently forecast, and as we look at both revenues in spending to identify the pay-fors, we have to be careful not to make cuts that offset the stimlative effect of unemployment insurance policy -- unemployment insurance benefits and port at risk the whole recovery itself. as we begin our work today as a

committee, we should keep our focus on at least two numbers. 13.1 million americans who are unemployed and struggling to make ends meet. second, 160 million workers who will benefit from a payroll tax cut through the end of 2012. i look forward to the work from both chambers and parties. the task before us is clear and the challenge is urgent. i'm confident we can work together and come together to strengthen the united states' economy. thank you, mr. chairman. >> thank you. >> thank you, mr. chairman. i'm privileged to be a freshmen on this committee, and i note that tom reed and i all came to the congress in the context of the most dramatic, transformative election in the house of representatives in decades, and certainly in my own hudson valley of new york when i

had the privilege of running for office and prevailing in that particular election, i pledged to the people, whom i'm now privileged to serve, that i would bring the federal government to the right size, to make it more efficient and more effective. there was an overwhelming sentiments in our districts and across the country that the federal government takes too much from the american people. we are here together, talented and dedicated men and women all with great hearts and great mind for this task, and we're at the an nexus of philosophy and practice. we're certainly entitled to our own opinions, hold them strongly and passionately. we cannot have our own version of this passed, so i look forward to considering with you all the reasoned arguments for

or against ways 234 which we can approach this challenge and fundment tally what we have is a great nation, a magnificent nation, the most remarkable in history for the opportunity in the promise that it has offered humanity. my own mother among them, my mother grew up in england, immigrated here, i'm a first generation american. we have over the course of decade taken on obligations that have become for reasons of demographics, scientific advancement, and a variety of other circumstances, have become enormously costly, and we have a responsibility to carry those out as a physician, and i practice for 16 years, 20 years in the academic setting and in private practice, i'm acutely aware of how important, particularly with parents of senior citizens, how important it is for our patients and

doctors to have a medicare system that works for them, and it does have repercussions, no question, for the rest of our health care. certainly, i was elected with the strong thought in mind that we need a loping term approach to our health care that makes sense, but we need to provide that reassurance today to all of those who provide care to our seniors and so our seniors, of course, themselves, that we can assure them they'll have access to the doctors whom they prefer and on whom they rely. that is a costly proposition. there's no question. i certainly am cognizant of the fact that every dollar we spend, that the federal government spends, comes from the pockets of america's workers and very hard working, hard pressed taxpayers. 40%, 40 cents of every dollar

the government spends is barrow. those are obligations that are going to accrue to generations who don't have a direct voice at this table, and these are the thoughts we bring to mind as we approach the issue of the sustainable growth rate and in the house of representative, we passed a two year bill that was compassionate and sensible and was also paid for which is a crucial issue. unemployment insurance, no question, is something that millions of americans sadly rely upon, but points out the fact we need an economy that grows, and we cannot have that growth unless we allow americans to utilize resources they create, to save and spend and invest in their own communities, so we need to represent here that respect for our citizens and our

taxpayers that, and the payroll tax holiday is important to citizens, but those savings for the taxpayers have to come responsibly from other parts of the budget because they are not like other general revenues. they are already committed in the social security trust fund. it's a privilege and honor to work together with all of you thoughtfully and carefully and responsibly on lasting solutions to all of these problems that will serve our citizens about whom we care so much in the best possible way. thank you. >> thank you very much. representative elmers is recognized for five minutes. >> thank you, mr. chairman, and i would like to extend my thanks to the speakers and colleagues for the opportunity and privilege to be sitting here on this committee today. i'm very encouraged by what i hear here today. we agree on more than we

disagree on, and it's evident as we listen to everyone's opening remarks where those situations are. we all agree we need a year tax holiday, payroll tax holiday for our working americans. we agree on that. interestingly enough, we passed provisions in the house bill and on to the senate. we believe in these things as the american people do that not only do we have to make the efforts, but we have to be paying for them. we cannot continue on a path of unstainability. my colleagues across the aisle explain the provisions as extraneous. to the american people, to the hard working tax paying american people, those are job creators and certainty, and we have got to do everything we can to comet

that. we have got to move forward. i can go on and on about all of the different positions. absolutely, the medicare cuts, we cannot allow physicians to have a 27% cut. we all agree on that. a two-year extension would be wonderful because then we can come to the solutions that we need to. i have a constituent back home, donna, who just told me that because of family decisions, she had to move her mother, who is on medicare, from about a 50 mile radius, she can want find a primary -- cannot find a primary care physician who is taking new medicare patients. that is already the situation in the country, and we have to fix the problem. we cannot continue on this path, and the american people know it. it is our job as we passed our legislation in the house, now doing the work into 2012 that should have been finished in

2011, and i'm ready to go to work with all of you. we have got to fix these problems. we have got to fix them for the american people because we just simply cannot continue on this path. thank you, mr. chairman, i yield back. >> thank you, thank you very much. i thank everyone for attending today. i appreciate the tone and sincerity of everyone's remarks. as i noted earlier, the house democrats leave tomorrow morning for a retreat, and so i expect the next public meeting, intention is to hold the next meeting next week on wednesday, february 1, and i'll announce the exact time later or if the date should change, but at that meeting, i would expect us to be prepared to explore in greater depth policies raised by the speakers such as do we extend the payroll tax holiday for another year? two, do we want to extend unemployment benefits through january 2012 13* as the house --

2013 as the house bill does? three, what forms of the unemployment program should be adopted to help americans get back to work and also reform the program so it does more than just write checks to people? as part of that, i'll ask specifically about provisions in the house bill such as those who are receiving benefits actually look for work, requirements that unemployment recipients without a high school diploma work towards a ged to improve short term and long term employment prospects, and three, allow states, if they choose, to implement drug screening programs. it's my hope that we can make progress on these areas, and then once we do that, move on to others, and i'll look at the calendar. obviously, as mentioned today, our time is short. our task is large. we have a big job to do. it's one of that the american people expect us to get done so

they have certainty for their future. with that, i yield to senator baucus for comments he may wish to make. >> thank you, mr. chairman. i think this has been a good initial meeting. i join in with mr. reed and the big benefit of the open conference is to get to know each other a little bit. i've heard a lot about you, al, but i like you. [laughter] it's good we're meeting here like this, and same with other new members of the congress. that's great. i hope we can continue open conferences. i think it's something we should pursue. second, i'm very impressed with the general unanimity here. everyone agrees we should extend the payroll tax cut for a year. i've heard nobody disagree with that. i think there's general agreement, too, more than general, no one -- could be

difference of opinion, but everyone wants to continue ui. we all want to give continued access for our seniors to medical care. we all agree to that. you know, there's not a lot here that we disagree on. now, contours might change a little bit. there's a question of extraneous, that's a little in the eyes of the beholder, but i urge all of us when we meet again as the chairman has suggested and to be prepared and that means not just on positions, but also means being prepared to think of possible compromises. different ways to skin a cat, second and third level of being prepared because we don't have a lot of time. the more we think in advance of what some modifications might be, the more likely it is we're going to achieve our result more quickly which is a good thing.

am my cable it will be successful. i'm pleased with this session, and let's see what we can do. thank you, chairman. >> well, thank you, and obviously that would not preclude any private discussions occurring now and before the next public meeting. with that, this public meeting is adjourned. [inaudible conversations]

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