here is the good news. you may know for every dollar spent on medicaid the federal government gives us $2. the same token, every dollar received in medicaid saves the federal government to dollars. i was in washington the day before yesterday at the white house with the president health policy adviser and deputy chief of staff and also the head of cms, the agency that oversees medicare and medicaid and we took documentation that we ran through the omb and shows oregon say the federal government's $15 billion over the last 20 years and we can save them $20 billion in the next 10 years with her new health care reform. we asked them for several hundred million dollars a year each year for the next five years to help us make this transition and the response was extraordinarily positive. [applause]

so what that means this will most likely have the resources necessary to make this transition for those dollars will not come to oregon to pop up the current delivery model. he will pull through the care organizations that will produce savings over the next 10 years. selecting early in february to authorize the full bill of the health insurance exchange and not brace expansion of the coordinated care organization gives the only chance we've got to create a health care system that's actually financially sustainable. we have an opportunity to help inform the national debate and also put us in a position to weather the economic storm that is surely coming our way when congress seeks to raise the debt ceiling again a year from now. the choice is ours. a lot to do in the next month, but a whole lot to gain. we are well down the road to transformational change in health care and public education

and importantly luck changes and a mock trajectory in february so they can turn our attention to other pressing matters facing the state. developing a revenue system that can adequately fund education and shelter us from the boom bust economic cycles that affect us for decades. adopting a tenure energy plan that gives us a pathway to me rps and reduction goals and maximize energy resources. improving public safety to protect and reduce the cost to the state. on federal lands and what we seek over the next 10 years. moving forward will require courage to challenge the status quo. but it's also going to require us to actually believe in our ability to shape our future. i'm not suggesting that isn't a risk involved with the path they've undertaken here.

but there's a lot more risk in the status quo. the riskiest thing we can do i will continue to do what we're doing because we know that will take a senate on a very good place. anytime his decision the best thing you can do is the right thing. [laughter] the worst thing you can do is nothing. i think you now and i now and oregonians know that delay is not some benign and prudent place order. it is a choice. it is a choice to embrace the status quo. it is a choice to abandon dozens of oregon's schoolchildren situates to spend more and more in health education. in short, and it is a if they choose to bear the responsibility we have for the next generation in a choice to fill the future and we are better than that. not here, not now, not in oregon. we are not going to fail the future we will not abandon the

responsibility that we have for the next generation. i want to close with the words of the epic form ulysses, which i think in a very special way captures the struggle of the working people over the last four years, but also captures the resiliency and spirit and commitment to the future. come my friends. it is not too late to see this newer world. so much is taken, much advise them that we are not now the strength which in old days move was in heaven that which we are, one equal temper of heroic art made with a time and date for strong and well to strive, to seek, to find and not to yield. thank you. [applause]

>> thank you. [applause] >> thank you so much, governor for challenging us to do better and inspiring us. and now if you have written a question on an index card at your table, now is the time to raise it up and given how crowded we are, i advise you raise it up high so the staff can see it and collected and bring it out to me. the first question for a speaker by tradition comes from our friday forum post, who today is city governor, jeanne a crouch. genius crouch pitching instructor is sustainable growth the charter construction, where she focuses on business development, community outreach and sustainability.

jeannie has been a member since 2006 and has served with me on the friday forum committee. [applause] >> thank you, melody and governor for being with us today. we really appreciate it. i reached out to a dozen or more people i know in business and education and in government and ask them what he would want to ask you today. and interestingly, the answers coalesced around one topic and that his tax. we can have a prosperous economy and community you alluded to. so the question as, what do they need to do? is it doable? how do we do it and what specifically will you do to make that happen? [laughter]

>> easy ones first. >> i think two things very briefly. first of all i think just about everyone recognizes we have a dysfunctional tax system in a state of oregon and we disagree on what we need to do about it. the moment of opportunity here having been a veteran of two widely unsuccessful efforts to change the tax system is the debates we've had in the 80s and 90s were just about the attacks. there wasn't a larger context. i think more and more people are beginning to understand there is a direct relationship between the depth of the recessions we have a cyclical basis, the capital from our state and our tax structure. so there are three steps. the first is we have to get the people on opposite sides of the table during the 66, 67 campaign in the same room and recognize we cannot follow the tax problem

without all of the employment hurts. that has begun. we had a meeting several months ago with the leadership of major labor and business organization followed up on a couple other meanings. the dialogue is taking place. planning to do joint point to look at various options. and i think we have to decide on the best approach and obviously a number of fat nurse. one has to do with stability come a key element. one is adequacy of bonus equity, largely in the mind of the beholder and the more difficult one to address, but we have to make sure that the relationship between a long-term economic objective in our tax code is not random, but is intentional. and then we have to have a campaign to educate oregonians about the need to do this. we are moving in that direction and i'm optimistic we'll be a little pull it off. [applause]

>> will not take questions from the floor. as always, members are invited to the microphone address their questions. asking questions at the microphone is a privilege of membership, so please identify yourself as a sitting member and ask your question in under 30 seconds or you will see the infamous city club? also, i'll be sure to read at least one index card from the floor. >> good afternoon, city club member coming thank you for your focus on education, which those of us in business now is key to ensuring the regional economy continues to flourish. i'd like to ask you in two parts, what are chances for getting a waiver and no child left behind and how dependent is that waiver on the legislation that you described with? second, if we get the waiver, how long before you see us moving forward on an organ specific approach? connect the chance of the waiver are very high. i talked to secretary duncan when he was here in the key is

we need to demonstrate that if we are going to get rid as a punitive provision of that law, we have to actually have our own real accountability system and we are perfectly capable of doing that and that obviously will be part of the legislation that goes forward in february. the idea is to have the achievement compact to set up in the next school year, 2012, 2013 sclera to collect baseline data so they cannot have a benchmark for which to measure progress. it is a very important. is about taking a child from where they are and making movement forward been using testing not as a blunt instrument, but it did diagnostic tools you can turn around and help each other next week, nasa and the ghetto report card card in august telling how your kid did. >> afternoon, jamal sorensen, city club member. i'm one of those many people concerned about health care you mentioned earlier.

many of us who deal with seniors and people with disabilities are concerned about the severity of cuts to programs, especially home health care which would drastically affect seniors and people with disabilities. aarp and far less damaging cuts save oregon's seniors.org. i wonder if you'd consider those changes before making further cut to seniors and those who care for them? >> well, i can't argue with anything you said. i mean, having taken care of both of my parents and the last few months of their lives, bathing them, feeding them, i understand the important role that home health workers play in our system. i also believe that home health workers and community health workers will be the back room of a new delivery model that keeps people with chronic illnesses in their home and not the hospital. the reality is we have a difficult budget and chronic

unemployment at 9%. we have $310 million less money now than we did in the end of the budget. we will have to make difficult choices. i'm yesterday with legislative leaders with co-speakers in the senate president to begin a process to see how we can do this. there will be some cuts and that's not session. i'm not going to defend the budget will do the best we can to set priorities. but i also think we need to keep our eye on the long haul to make sure the choices we make and this biennium look at the impacts we have in 2013 and 15 to continue to seek waivers to allow us to use the dollars to more efficiently get hundreds of millions of dollars for federal resources into this state, hopefully in this biennium to mitigate some cuts. i cannot tell you though that some of those cuts are going to take place. >> good afternoon, governor. i want to thank you on the

behalf of minority voters. initially ten-month ago we accuse you of not doing anything around equity. 10 months after that, you're doing a great job. >> my work is done here. [laughter] >> this is not mission accomplished, governor. >> the 40% african-american kids you eloquently said in your speech is man-made. when the resource is or again is in an insert minority contract juries cannot ask that, what we have is poverty and communities of color. what are you doing at least now to mitigate and to create answers to opportunity among communities of color? >> said yesterday afternoon i met with representatives of minority contract is around the

state in our conference room, your comments and actually to talk just about that. there are significant -- extra two weeks ago we had a meeting abalone with ceos around the state to talk about a variety of issues about minority contracting and minority businesses in emerging businesses and women-owned businesses it is a couple of robust opportunities coming up. one is this year's the, which will move forward. there will be a lot of contracts with the crc at one of the things we want to do is get some major contractors we know will be involved in around with some minority contractors and see if we can do some mentoring and figure out opportunities embedded in that project to really make progress on the road for creating opportunities, not just for contracting, but growth is some minority business enterprises. another is a school program is that begins to ramp up.

it's on the radar screen. met just yesterday with a group of people focused on the assembly will continue to lean into this. >> anthony peschel, thank you, governor for your innovation and candidness in the state right now. my question is around communication and i prefaced it with given the tense political climate we have right now and origin's unique ballot ballot initiative within our constitution that could undermine some of the things you're planning on doing, what do you plan on communicating to the general public and how do you how do you plan on communicating a lot of your changes, which as you mentioned change be difficult. >> well, you know who ken masiello's, my communications are. we have obviously a very act of social media operation out of the office, but we're trying to use the networks of various partners we are working with to bring about these changes.

but obviously the education association american federation of teachers a tremendous and robust network as does the european school boards association. university system. i happen to have first-hand experience with the effectiveness of the university of oregon outreach network. [laughter] the business association. essentially we try to engage the major stakeholders have been a party to designing to use their networks to reach out and communicate. i was a sign that we are having a series of community meetings around the state this month around the work of the oregon education investment board, including the early learning council. so we are attempting to have a very aggressive community outreach aspect as well. [inaudible] >> one question from the floor, from the table. teach for america and other

programs like at a place in the future of transforming k-12 education the state? >> any program that helps the professional development of art teaching staff and gives them opportunities to teach in different venues that they not us. i think we are obviously looking for partners and ideas and concepts proven around the country that we can use here in oregon to bolster and accelerate efforts. >> bill dickey, city club member. i first of all want to thank you for your talk with the members to ask their questions. it's a time-honored tradition and i think the members of the club really respect the speakers who monitor the time it and give us a chance to ask questions. i'm also a business owner who has been suffering. i own a printing company. with a double whammy of the recession in an additional

revolution that is sort of hurt the printing industry in general. we have been suffering through a really difficult times trying to figure out how financer company. and so my question -- i've written it down so i don't get it out. >> actually bill brad very -- you touched on this briefly in your talk. one of the things i like about brad. 2010 was his state bank idea. in any event, here's my question for you. what you're doing to support work in businesses who want to examine and debate that don't have the capital to do it? >> the effort we're undertaking with the treasure just is the idea to the average the resources we have to increase or a best buy and try to free up a lot of private credit sitting in capital, whether that is to

return to the program or other marketing sense, to gauge as to essentially try to leverage public resources. we should have a draft of the legislation -- we actually probably have one and i have been to know you so make sure you get a copy of the bill drafting you can look at it, i urge you to come down to salem in the legislature is considering this. the other thing i want to mention that i was fortunate enough to participate in a white house conference on wednesday on and sourcing on basically how then can we bring manufacturing back in that state of oregon and into the united states? it's interesting how many people are thinking about that. folks that make the otis elevators throughout the manufacturing mexico and brought it back because it separated manufacturing from r&d and manufacturer transportation costs and other ratios is no

longer penciling out quite as well. there's a real opportunity and access to capital, but also to be attentional and aggressive to bring the manufacturers offshore back here to the united states and particularly the state of oregon. >> but after now, governor. [inaudible] a lot of people that i listened to were concerned about the elliott state forest decision. do you have a biting questions about the way we tied the funding for river schools to oregon forest? i understand some people have 90% of our forests are gone. that law came into effect when we have more trees and fewer people in this situation is radically reversed over the last century or so that we've lived with this.

what would you do to address the problem of funding rural schools, but not at the expense of the last few trees and also one quick comment. men and forests of the tree. >> will not agree entirely with your last statement. i do think there're vast reaches of federal forests, particularly in the northeast part of the state that will burn down an essay for us that is that bernstein is neither a tree farm very forest. it is charcoal. reduces carbon in the atmosphere, does real damage anything to sensitive habitats. so i think we'd find a place where we can have a conversation about this. i don't think anyone wants to go when i log over a forest, but we interested the national cycle,

particularly in the northeast of our forests to suppress fires. we have hydrated some big fire resistant trees end-of-life stark raving. this is not a natural habitat and fund management to make them healthier can also produce fiber that can be used for a biomass industry and putting people back to work. that's on the east side inside their origin. we have a very strange set of laws enacted piece over time. have to do is default in a man. have to deal with patchwork of forests. we have a very perverse financing mechanism for cutting trees. i think that's an artificial connection and i don't think we have to continue that. we're working very, very hard. what if counties facing very serious financial issues .. regardless of what happens with the forest on it. a short-term challenge of trying to figure it out to maintain a

financial integrity of our counties, particularly in southwest oregon may longer-term challenge should tolerate to measure in a way that makes sense. i personally feel of the lands were bundled and there are parts that are plantations have been operative plantations. if we use is going forward as an opportunity to provide a responsible production capacity and not part of state, they said their lands if we can bundled them up around ecosystems, watersheds or we can create a big conservation can as well. and for that to happen, we have to basically find a table of space to sit down and have a conversation about that. i'll close this by saying were essentially creating a spot in my office to have a person working full time on forestry issues and at the top of the list is trying to address this growing crisis down in southwest oregon.

>> hi, mary boca line. it is a killer at lunches. and i wanted to ask about an issue that seems to have almost disappeared from the mainstream media these days, unless you listen to democracy now, you heard almost nothing about the durban conference on climate change, for example. so what about climate change? what is the state doing to show leadership in the absence of the federal government's role ms? 's >> well, a couple of things. and my remarks to the oregon business summit, i talked a little about beginning to add and integrate into european business elements of what i call a sustainable economy. an economy that seeks economy and jobs by replenishing our national environment. i think what we are talking about in terms of the management

of some of these is an element of a conservation economy and there is a restoration economy out there as well. i've done a lot of work developing a very real market for ecosystem services. the three biggest elements that contribute to greenhouse gases are power generation, transportation and environment. our cool schools initiative is trying to prove the roi investing and large scale which are bits of our environment from a debt-financed mechanism. i think that we are developing a ten-year energy plan to try to guess a pathway forward on both renewables, head of a rps and reduction goals. the big nut to crack long-term as our transportation set their. we are making some steps towards washington and california is

putting an ev recharge stations around the state. we are taking steps and if we can develop a common set of policies on the west coast, we can move the national debate forward. i think the debate at the national level is stalled out as is the responsible debate about health care and other things. there thinks he can on the west coast were definitely doing some in the state of oregon. >> susan stoltenberg number. also direct drive impact northwest, which is a social service that has thousands of folks that are positively affect it by good vision with regard to health care, education and early learning. my question is three fold and you partially answered one of them. most of the families we serve need housing. second thing, a lot of folks we served as most of the children we serve have. to need jobs. they are underemployed and

unemployed. and it so we can them, all the early childhood, the best education in the world are not going to be looked to be received by those children. and the third part of that is mental health. so let me give you jobs, not to my satisfaction, but if you could extrapolate, but what about the immediate need or basic needs for housing and mental health? >> i didn't talk about jobs potentially. i want to talk about issues we have to move forward with the 2012 february session. i did talk about jobs last month at the oregon business summit. your point is very well taken that there are service is absolutely essential for children and families in houston is one of them, hunger is

another one. but we attempt to do the early learning council. if you like on the website and look at the delivery mechanism as we envision it is organized around elementary school areas, where family resource manager would work to connect those families with whatever those services happened to be, whether that be housing challenge or mental health issues. there's no question that a whole lot of investments and mental health independent services. you've got to treat the entire family. their services in an event overpeer the problem is they are not connected, not integrated in many of these contracts at the state state to provide services are not performance-based contracts. adults around how many people they serve, not whether people benefit from the service. that is where a lot of the resistance is. everyone will argue that needs to be changed as long as the revenue stream doesn't go to

someone else for iraq to change what i'm doing. we do have to change the entire system. the other thing i want to make reference to is the first lady is fleeting a very aggressive initiative to focus on poverty and to actually develop a poverty policy. a lot of programs that address poverty. poverty is an underlying contributing pratt dared to all the other else's bad part of it is a social services issue, parties the jobs issue. as the economy begins to recover, we've got to be intentional about workforce community workforce agreement and creating opportunities and pathway opportunities for people who are living in poverty to get back into the work force. [applause] ..

>> maryland governor, martin o'mal, delivered his annual state of the state address before lawmakers and ambassadors from mexico, ireland, japan, and korea. he talking about the economy,

education, and the support for legalizing same-sex marriage. this is half an hour. [applause] thank>> thank you very much. [applause] >> thank you. thank you. [inaudible conversations] >> thank you, all, very, very much. let me begin by thanking god for the goodness of maryland, for her natural beauty, for the goodness of her people, for the hope that we see in the eyes of each of our children. let me also begin by thanking the men and women of maryland who serve in our country's armed forces. [applause]

[applause] and i also at the outset here want to thank the parents and the loved ones of our fallen heros for the sacrifice that they have made and they continue to endure. thank you, governor glenn denning and governor hughes for your continued service on behalf of the people of maryland. thank you, president miller, and speaker bush for so ably and effectively leading your respective chambers through these very difficult and challenges years of recession. [applause] through the challenges years of recession and now jobs recovery, and thank you, attorney general,

treasury cobb, comptroller, and for your work in protecting the dignity of every individual and in advancing the common good. thank you, my colleagues and county, and municipal government battling nobly on the front lines of the job recovery and the defense of our quality of life in these extremely challenging times. thank you to the men and women of law enforcement, probation, juvenile service agents, committed u.s. attorneys and state's attorneys throughout the state whose hard work drove violent crime down to the lowest levels in 30 years. [applause] thank you major stephanie rollings blake for the leadership in saving lives and driving violent crime down to record lows. [applause] thank you, and welcome to

ambassador of mexico, to ambassador michael collins of ireland, to ambassador fugisaki to japan, and ambassador of korea, and thank you, katie o'malley and the cabinet for your high competence, your effectiveness, for delivering results, and for caring about every citizen that we serve, and thank you to the men and women of the maryland general assembly. for putting the best interests of the families of maryland first and making the right decisions however tough or however unpopular for the sake of the better future that our children deserve. my fellow marylanders, we are here because we care about people, all people, every person, every family, and we know in order to tackle the

challenges at hand and to get all citizens back to work, we must act as a people. five years ago in our first state of the state together, i declared before you the goals of this administration, to strengthen and grow middle class and family on -- owned businesses and family farms. this is the indicator of progress for our state and the better future we seek for our children. there is nothing more important for a family's security and future than a job. we are all in this together, and in this important work, the state of our state is strong. [applause] with tough, but fiscally responsible choices, we are moving our state forward out of an era of recession, foreclosure, and job loss, and into a new era of job creation and greater opportunity for all.

we had not yet recovered all the jobs we lost during the bush recession, but we are moving forward steadily. as president obama stated last week, we must create an economy that is built to last, and in this work, maryland is once again leading the charge for the country's better future. by improving education and harnessing innovation, modernizing the port, opening the intercounty connector, expanding broadband, building new schools, modern classrooms and other critical infrastructure, by making college and skills training more affordable for more families, we together have strengthened connections and improved conditions that allowed businesses to create jobs. expanding opportunity to strengthen and grow our middle class is a choice, and because of your choices, more marylanders are working this year than last. marylanders like kevin reid of

prince georges county work again because you chose to make modern investments in plairs' innovation economy. after taking the initiative of taking a solar skilled training program sponsored by ibew local 26, cell phone landed a -- kevin landed a green job installing solar panels at the field that is home to our washington red skins. [applause] more marylanders are working again because of small business owners like susan aplin who recently moved her ecofriend lee home furnishing company to baltimore with support of the maryland venture fund. [applause] and get this, last year susan hired nine new employees, and this year, she plans to hire ten more of our citizens, and

susan's with us today. susan, raise your hand. [applause] marylanders like those who saved their homes because you have taken action to drive down home foreclosures. she operates a day care business from her home, and when the recession hit with fewer and fewer moms and dadses not able to afford sending their kids today care, she fell behind on the mortgage. at risk of losing her home and business, she tried to no avail to work with her mortgage servicing company, but through the hot line, she was connected with a non-profit development company, and she negotiated a loan modification that reduced her monthly payments by more than a thousand dollars a month allowing her to save both her

business and her home. [applause] by investing in our one-stop centers, you are helping marylanders like dave bryant move from unemployment to re-prelim. he visited the one-stop center in carroll county, and while training through pathways of cybersecurities at the college, he participated in weekly study groups at the one-stop center, and with hard work, he landed a cyber security job. linda gillis was also able to find a new job with the help of our state's one-stop center. i want to share with you some of her own words. she writes, "i lost my job in the middle of june. being able to use the computers was a real lifesaver for me as i do not have the internet at home. the staffs behind the desk at

the center were always helpful. they read over my cover letters, thank you notes, and applications always giving good suggestions. what i feel helped me most show was susan willie's coaching on interview technique. susan, a state employee, knowing when my interview was called me the day before asking if it would be a help to me to practice some questions. i got the job. i'm grateful to have had such invaluable resources and assistance, and it's part of the reason that i now have the position that i now call my dream job." get this, that job pays more than the job she lost and she and coach susan from the one-stop center are both with us today. would this dynamic duo please stand. [applause]

so more marylanders are working this year than last. still too many continue to search for work, and you know that. better is not good enough for the mom or dad who continues to search for a job. this is why the most important job we create is the next one. this is why everyone is needed. this is why i am asking everyone to do more. over the last six year, i asked you to make the right decisions, and admittedly, often times the very tough decisions to create jobs and move maryland forward into better times. in a period of our nation's history when short sided choices have severely under capitalized the job creating potential of america, you have made better and stronger choices for maryland. because of your wise and balanced decisions about where to cut and your smart decisions about where to invest, maryland's businesses are

creating jobs again. last year, in fact, maryland businesses created more new jobs than we have in any year since the recession hit and at twice the rate of our good neighbors in the commonwealth of virginia. [applause] and together, together we have driven down unemployment to a three year low. by restoring fiscal responsibility, with a 3w4r5*7bsed -- balanced approach, you secured maryland's place that earns a aaa bond rating from all three bond rating agencies. [applause] because of your decisions and a leaner government that works to deliver results, college is more affordable, health care is more available, and more moms and dads in maryland are working this year than last, and because

you have had the courage to make the right investments, maryland schools have been number one in america for an unprecedented four years and in a row. [applause] our high school students are now achieving the best ap test scores in the nation. our high schools are graduating a record percentage of our students, and our colleges are graduating 21% more students in science, technology, engineering, and math. [applause] this has never happened before. it did not happen by accident. hard working teachers, hard working students, caring parents have all been supported by your strong choices.

with the balanced approach of cuts and revenues, you have chosen to invest in education even as you made record cuts in almost everything else. likewise, our states innovation economy is not merely the product of geography. it's also the product of the important choices and the important investments we have made together in initiatives like invest maryland, the biotechnology tax credit, the research and development tax credit, and the healing power of stem cell research, the cyber maryland initiative, and rural broadband. none of these things happened by themselves. progress is a choice. strengthening and growing our middle class is a choice. we can be the victims of circumstance, or we can build a better future. as we discussed last year, there are costs and there are values. we cannot kid ourselves into thinking that by failing to invest in our future, we are somehow saving resources.

we are somehow being clever and saving money. for everything has a cost. failing to make decisions that are consistent with the best interests of the next generation, this, too, has a cost. without any sugar coating, let me plainly lay out the tough choices, the costs, and the tradeoffs before us. this year's budget is a jobs budget. after cutting the growth rate to 1.9%, it does more for job creation than any budget in recent history. the capital budget alone is projected to support 52,000 jobs building modern schools, modern roads, modern transit, modern clean worts infrastructure. to create jobs, a modern economy requires modern investments, investments by all of us, for all of us. now, that's not a democratic or republican idea. that's an economic and a

historic truth. it was true for our parents, it was true for our grandparents, and it is a truth that is built our state and built our country. to expand opportunity and strengthen and grow maryland's middle class this budget invests to create and save jobs. 78,000 teaching jobs at public schools across maryland, 11,650 jobs tearing down the temporary learning shacks and replaces them with modern classrooms. 25,000 crime fighting jobs as police officers and others make our neighborhoods safer. 19,000 jobs through record procurement at businesses led by women and minority owners in maryland. several thousand jobs, thanks to the venture capital dollars that your vote supported, for invest maryland, that will infuse maryland's innovation economy greater private venture fund dollars. 400 jobs building facilities like the new math and

engineering building at cecil community college, the new nursing and allied health building, the new health sciences building at howard community college. 2750 jobs building facilities like the new center for communications and information technology at frostberg state and the new business complex building at morgan university. 2500 jobs improving local drinking water systems and upgrading waste water treatment plants at facilities in frederick, lexington park, back river, and baltimore city, and 1100 jobs building affordable renting housing units which are in high demand, and 294,000 jobs in the health sector that we all support in the work to drive down costs, improve quality, expand access, and reduce health disperties for a healthier and

even more productive work force, and beyond this budget, together, we'll create 1500 jobs installing smart meters in homes all over maryland, in the bge and service areas that will help families save on their electric bills, and when lieutenant governor anthony brown, with his leadership and your vote, we can also create thousands more jobs on top of the very successful public-private partnership at the port of baltimore that created 57,000 jobs, and we -- 5700 jobs, and we can leverage more through public-private partnerships. we balance the investments with cuts, with revenues, and with regulatory reform. with 800 million in spending cuts and reductions, this budget brings total cuts and reductions over the life of this administration to $7.5 billion. in fact, to achieve balance over the last three years, we have

relied almost entirely on cuts, but with 84 cents of every dollar that we invest, allocated to public education, public safety, and public health, and with one of the smallest state government work forces in the nation, every passing year leaves fewer and fewer responsible choices for cutting. this budget, therefore, calls for some new revenues in support of two important investments. one, the cost of education and retaining quality teachers in our classrooms, the second is clean water infrastructure. now, educating our children is a shared responsibility between the state and the counties. last year, after rebalancing and saving our defined benefit pension system, we are now asking you, in this session, to bring maryland into closer alignment with how most states share teacher retirement system

costs. our proposal balances this responsibility 50/50 between the state and the counties, and it also provides 244.5 million to the counties to cover additional costs in year one, no prior proposal on this issue ever offered this much help to the counties. we will partially fund this education cost along with other priorities by capping income tax deductions and favoring out some exemptions for the 20% of us who earn more than others. asking our fellow citizens to do more will not be popular, but without anger, without fear, without any meanness and the course of this discussion, let's ask one another how much less education do you think would be good for our children's future? how much less education do we want? how much less public safety?

how many fewer jobs? there are costs, and there are values. along these lines, my republican predecessor called the flush tax one of his most important accomplishments while in officer. by allowing us to make green upgrades to waste water treatment plants, together, we greatly reduced the pollution flowing into our bay, but the fee, however, was never sufficient to cover the work that has to be done. while others suggested tripling the flush tax, i believe the fairest way forward is doubling the yield by switching households to based on a fee structure based on consumption. in other words, the less you use, the less you pay. this doubles the amount 6 work we are able to do for the bay. in the next few day, i'll submit a separate bill for your consideration on transportation funding. you do not have to be a traffic engineer to know that maryland has some of the worst traffic in

america. we pay a heavy price in terms of the time that we spend idling in bumper to bumper traffic when we could be at home with our families. with the growing population and aging infrastructure, we might soon pay an even steeper price because bridges are not like trees. they do not grow stronger or broader with age. today, the gasoline at $3.50 a gallon, our primary source of revenue for transportation is the same flat 23 cents that it was during governor schaffer's second term when the price of a gallon of gasoline was $1.08. meanwhile, it now actually costs more to paint the bay bridge than it did to build the first span. as the "baltimore sun" wrote about yesterday, if we continue to embrace a 1992 tax rate, we'll have to settle for crumbling 1992 era infrastructure. through the years, as you know,

there have been many recommendations on funding options, but no one has wanted to ask people to do more. the best remaining option, in my view, is to repeal the current sales tax exemption on a gallon of gasoline, phasing it out by 2% a year with the breaking mechanism to protect consumers in the event that the price of gas spikes. we should also enhance protections in the law to better safeguard new investments in the trust fund. an enhanced investment on this scale would allow us not only to start getting our way out of traffic congestion and all the time we waste in traffic, but it allows us to create 7500 new jobs building needed roads, bridges, and public transit throughout the state. now, look, i know that every family is still feeling the effects of this recession. the people i serve are the

people that you serve. i know this is a very, very difficult ask, but nobody else is going to do this for us except for us. beyond these issues are work to eradicate childhood hunger continues, our work to reduce infant mortality continues, our work to expand drug treatment continues, and there's other things we can do and should do to create jobs and expand opportunity this session. with your vote, we can forge a historic partnership between johns hop kin, morgan state university, and the university of maryland campuses and your state government with the goal of transferring 40 new technologies, new ideas out of the labs and into the economy to create jobs within a year. now, maryland is already number one, number one in research among the 50 states; therefore, it is absolutely unacceptable

that we should rank 37th when it comes to technology transfer, commercialization, taking those new ideas and getting them into the economic vains of our state where they can create jobs and employee our people. we should be number one in technology transfer and commercialization of new ideas and designs. [applause] because too much paperwork means less time putting marylanders back to work, through maryland made easy and fast track, we're reducing the administrative burdens on business and have begun streamlining permit after cations in this session. we'll submit 750 pages of regulations for you to reform, reduce, and remove from the books. i welcome your ideas and support in finding even more pages to cut. in our pursuit of a cleaner and reliable energy future for maryland, this administration

has entered into a settlement with exlon energy and positive results for maryland families. not only will rate payers and those in need of energy assistance receive immediate benefits, but they agreed to build a new gas fired power plant in maryland, the first to be built in maryland in over a decade. they also agreed to create 6,000 new maryland jobs with investments -- [applause] 6,000 new maryland jobs with investments in solar, on shore wind, and in the first stages of atlantic offshore wind. over the interim, chairman davis and chairman middleton and their respected committees have done a lot of really good work developing a consensus approach for maryland offshore wind. i greatly appreciate their hard

work. i know it's not simple. i look forward to being able to sign legislation that their committees put forward this session. i also appreciate the tremendous amount of time and consideration that so many of you have given over the interim to curbing the growing problem of septic pollution from large scale housing developments. large scale housing developments that threaten the bay and also threaten the very future of maryland agriculture. septic causes six to ten times the amount of pollution in the bay than the public suer. in fact, of the four largest causes of nitrogen pollution into the bay, none is growing faster than septic pollution. the moderate, reasonable, and tiered approach that the task force crafted is patterned on what several rural counties are already doing to protect farmland and protect the waters of the bay. along with president miller's

proposal to exempt working farms from the estate tax, this measure will much better protect the agricultural lands upon which family farming depends and better protect the waters of the bay, and it will save all of us a huge amount of money in remediation costs down the road. [applause] i'd like to talk with you now about a quality of civil marriage rights for all marylanders. the very reason our state was founded was for religious freedom, and at the heart of religious freedom is respect for the freedom of individual conscious. the way forward, the way to sustain and enhance our common life together is equal respect for the freedom of all.

we all want the same thing for our children. we want our children to live in a loving, caring, committed, and stable home protected equally under the law, and it is not right, and it is not just that the children of gay couples should have lesser protections than the children of other families in our state. [applause] [applause] nor would it be right to force religious institutions to conduct marriages that conflict with their own religious beliefs and teachings. in maryland, we already recognize civil marriages performed in other states, and just over the border in the district of columbia. it is time to join with clergy, faith-based organizations, civil

rights organizations, community leaders, and individuals across our state to pass a civil marriage law that protects religious freedom and civil marriage rights equally under the law. [applause] .. i leave you with these final thoughts. each of you here has responded to a noble calling in your hearts to serve others, and history has determined that you should serve your neighbors, the people of our state, and a decision making role, a decision making role for all in the time of difficult tradeoffs and difficult choices for all.

you are each an integral and indispensable part of our people's progress and consciousness, our people's progress in caring, of our people's progress in freedom, of our people's progress in our shared sense of what is right and what is just under the law for all. where there are no easy solutions or simple answers, the greatest counsel that we have is the truth in our own arts. for at a personal level, far deeper than any party, there is something that stirs deeply in each of us. when we talk with a mom or dad who because of our choices has found a job at long last to provide for their family's future, there is something that stirs deep in our beings when we

speak with a mom or dad who managed to save their home from this terrible wave of home foreclosures in part because of the choices and the actions that we have taken together here in this place of decision. it is the same feeling that so many of us experienced just a few short days ago, that the hope we saw in the eyes of little girls and boys gathered in this historic building with their parents and with their grandparents. when maryland recognized the native people of this place, our place, for the first time in 380 years. [applause] i am sure that there are many

who at the hindsight of history will say why did it take them so long? if there is a common thread running through our efforts together, it is the thread of human dignity, the dignity of work, the dignity of a child's home, the dignity of every individual. a great man once wrote, "there is an absolute direction of growth. life advances in that direction. life is never mistaken either about its road or about its destination. it tells us what part of the horizon we must fear if we are to see the dawn light grow more intense." may the choices we make on behalf of the people of maryland, the choices for job creation, the choices for human dignity, the choice for a better

future, be the right choices for the generations counting on ours. thank you very, very much. hou the governor called in the state legislature to a quick lead budget puzzle for department of health and human services. this is just under an hour. [cheers and applause] >> thank you. thank you. thank you.

thank you so much. thank you. president cullerton, speaker o madigan, leaders radogno and cross, attorney general madigan, secretary white, comptrollerdke topinka, treasurer rutherford, members of the general assembly, distinguished guests and fellow citizens of illinois, i'm here today to report to you on the state of our state. but before i begin, i know i speak for all of illinois inrise to wishing our senator mark kirk a [cheers an would you please stand.

[cheers and applause] give to my family, thank you for all the support that you have given me in standing by my side every day for the last three years. the military herald this evening, thank you for your alsl courageous service to our great state and our great country.ajor i would also like to recognize . and thank major mark stevens. major stevens, please stand.

[applause] to wait next month, major stevens will be leaving on translating his soldiersm to kuwait abortive operation enduring freedom for the third time. in the middle east supporting our great country. not only is major mark stevens the commander of the net, but he is also the marketing manager on a company. major stevens is a true citizen

soldier. major combat thank you. thank you for your service. thank you fire leadership. we wish you and your union card speed. [applause]being i would also like to thank maing public broadcasting for beingmoe here tonight. i will not promise you a free tote bag or more fattening after my speech. yeahave [laughter] ri i am pleased to report that

analyzed seer, we have taken ou right turn on the road to economic recovery.ut and a bipartisan affair, we i passed the largest tax cut in state history.only do [applause] not only do they cut the topmaie rate for individuals, we are supporting working model in theo main people by ensuring that 70,000 means denying will no longer pay income tax until they earn higher wages. [applause] self-suffi that is a helping hand to put them on the road to self

sufficient see.e our tax cut for the rich. in name, the top income tax rate kicks in at an end come of under $20,000 per person. let me tell you this. no matter what anybody says to you or to me, $20,000 is not rich. [applause] rief two thirds of the main hard-working will receive tax relief next year. maine families will have more money for heating oil, gross or this he is and gas in every vehicles.

this was not an easy task. i think the entire legislature for their efforts in focusing on making numerous date and morein, prosperous home for all mainerst and for helping us put main people ahead of our politics. [applause] admistrati just one year ago, my administration based of $4.1 billion short of in the el pensionim system.ion of together, we eliminated the $1.7 billion of pension debt on the books. 45% of the existing shortfall. love protecting retirees for my future pensions sensible reformo

we cannot assist a pay pension some highway use. [applause] th and other areas, names that government has a new attitude,he with the leadership of senator. mason, maine became the 41st taking into account charter schools. [applause] budget in addition to charter legislation, my first biannual budget increase general-purpose aid to k-12 education by

$63 million. placeduse] as promised, throughout my iums campaign, a five-year cap was placed on welfare benefit. workers compensation insurance premiums are down by 7%. [applause] unemployment is down and considerably below the nationalc rates.saved re than the maine department of $100 transportation under the superb leadership of commissioner david earnhardt saved more than $100 million without sacrificing any infrastructure improvementsl red tape was reduced.we are we are not here to tell main jod ou creators with ytou can't do.

we are here to help them find out what they can do.providing [applause] of providing superior customerhe service to all mainers is the first job of the government. we are changing the culture estate agent fees from notes he can do. [applause] together, these things add up to one reality. maine is open for business. [applause]

during 2011, we heard from dozens of business is to pledged investment domain, totaling $100 million with plans to create over a thousand jobs, good paying jobs. we in the last year, we have not only reopen businesses, but we m brought back american jobs from overseas. the restarting of great northern people shows how persistent and working hard to reduce red tape and regulation can pay off. what was recently a shuttered business is now a blossominged employer again.

[applause] another will as carbonite in the den. carbonite recently relocated it customer-service operation for india to name. according to carbonite ceo, david flamm, we are set to inaie explode tate regulatory process in maine with the primary reason to they were able to bring 150 new jobs to maine.[applause] [applause] even as we mark the fewontinue successes, we continue to facecr

ongoing fiscal challenges. when i took office january 5, 2011, i found two distinctearly fiscal issues, clearly threatening the future of main financial stability. first at the pension fund liabilities, which we addressed. that can was unsustainable welfare spending.ate my administration did not create this problem and did not invent it. many in this room did not create this problem, nor did they invented. that this problem exists and we are here and the like to to fix that. [applause]

[applause] the commissioner for her leadership in grace during the difficult challenges. [applause] [applause] th the commissioners say two friend of main people.today, we today we must confront the

221 million-dollar budget shortfall within the department of health and human services. that is the old right generous welfare programs that the state can no longer afford. over the decade, maine's welfare program has grown by a billion dollars. while our population has a relatively table. we have encouraged people to rely on the tax payers, rather than rely on themselves. year after year, our state has used one-time federal fund name, accounting gimmicks, and misuse of funds, not pain hospitals anl worst of all we have to pay bact money to the federal governmento to feed this monster is beast.

we are forced to make tough bute necessary decisions. pr many theists have choices wereop proposed last break. are here we are again. if we keep it can this time, i guarantee we will be back next year in the program will be eve. worse. it is growing exponentially. this is not political rhetoric. we must stop promising people a free lunch. those in maine are earning the law, the national average. et is unfair to promise people g they can get things free when bg the resulting bills are not being paid. [applause]

we have select officials mustth decide how to protect the most vulnerable among us.inistratiohs my administration has made that commitment to save name safety net. [applause] that saving faith do not means we must restructure our welfare program and reduce our overall spending. we also met begin to reestabliso

priorities for a welfareams program. if we don't, the system will fill everyone. my plan stabilizes the safety ma net for maine's most vulnerable and preserves benefit for over 285,000 mainers. as they state, we must move closer to the national average and turned our welfare program. my plan protects benefits for m over 285,000 mainers. a number that will still have% name 15% pension. [applause] as as they move forward, and if we look to our neighbors in newthee

hampshire, you will find that the annual median household income in new hampshire is $60,734. in the, it is $64,057. here in maine, our annual median household income is $45,708. 18% below the national average. it is god. really, really sad. this is one of the singlegreatee greatest issues that affects familiess in maine and we shoul be ashamed that our state is in this position. so i ask all of you, where is he outou rage?

why should mainers live in poverty while our neighbors whoe live on the other side of the a map or in a far better income and lead much more prosperous fs lives. my friends in the legislature, e it is time to be outraged. this time to create a climateaie remaining were joban creators can succeed where made people can prosper. [applause]

the high cost of doing business in maine is a common theme in fiber to belfast, therefore my legislative will focus on concerns i have heard from me job creators. we need more jobs. we need more careers, to pull our state a poverty. we need good paying careers thad allow for benefit, security and good job satisfaction. [applause]

to do tonhis, we will focus on lowering the cost of energy, create an educational system thatom can help scp globally and ngthen boost efforts to strike the local economy in each and every maine community. i am convinced that reforms in these areas will wring more jobs th ines maine in perfect career pah missing today for main people.i energy. energy in this state of maine is one of the largest inhibitors, if not the biggest obstacle to creating jobs. maine's high energy costs must be addressed immediately.

we must address the issue of high-priced select tri-city and energy in total. we if we want economic prosperity.t last thursday, we went to kim grams. 500, not workers, another 16 management workers, this is what they told us. comte 10 grants commit to grow they compete for capital against three other u.s. companies. it's a u.s. plant within the prop during campbell's system. energy costs in east three othee plants range from 4.2 to 5.6 cents livered. per kilowatt hour. in the main plant, 8 cents per kilowatt hour.

kilowatt hour. the former barber foods facility in portland compete in oklahoma. oklahoma planned 7.5 cents hour kilowatt hour.plant, main plant, 12.5 cents kilowatt hour. cos folks, 67% higher energy costs h in maine in oklahoma. unacceptable. [applause]highest elect or cd prices in maine are the 12th highest in the country. we pay 42% above the national average. as the results come in maine pays the products that they $400 million per year more thann

the national average. think about it.pockets. $400 million out of the main people's pockets. make when i asked you to be outragedr that should take you out. our rage. may no longer completes just in new england. you just heard oklahoma,theslare pennsylvania, other states wherp these corporations have plans. we must compete now nationally and globally. however, there are some that name government should mandate types of energy regardless of how good it is. i do not support aghast at being

in the business of increasingeai cost on the hard-working maine s families to tab the pockets of special interest groups. [applause] i believe it is morally and ethically wrong to take more money from those who can least afford it to line the pockets of those that are politically good year in the gas data. i've spoken with companies ranging from natural gas or

fighters, although dealers, via mass. to gather input regarding what can we do it immediately to lower maine's overall energy costs. my energy policy will focus on all forms of energy and give mainers the freedom to choose c whether or not they buy from bu renewable sources. for example, hydropower is the korean energy. eergy let's remove the 100-megawatt restriction on renewable efficient hydropower. [applause]

i support let the free market decide what energy source is our sustainable farming people. energy conservation is an important goal.wever, however, we must make sure our government -- our government programs that use tax payer dollars for energy-efficient t. are responsible and to. [applause]let's let's make sure that when peopln give us all these energy 8onservation saving, that we 1 have the nerve to us questionion

and challenge their formulas. folks, we are being sold a bill of goods. [applause] with back 15 years ago.. did every household have a laptop, a cell phone, an ipod, , and i've been [laughter] we have to recognize that with technologies comes the reality that we will couldn't do more and more of a tri-city as theymt go into theri future. we need to empower main peepin hole to take control of theirth [applaergy state. [apusplause]

businesses have repeatedly told us over the past year that therr are jobs available. but lack of qualified workforcem and this is not unique to me ati all.e i have met with students, teachers, principals, educationn expert. y averseleared too man to drop out of high school and to many that complete high school are not ready for college worker.r. we must reform education. [applause] we cannot afford to fall further

behind. this summer, this past summer,ir commissioner stephen go on and t studied education systems from around the world. for much of the 20th century, the united state of the worldtu, and quality education and in driving economic prosperity. dly, sadly, our country no longer need. in fact, we struggled to follow. most international assessment os student performance placed the united states at best as average average is not leadership. average will not create prosperity. average to me means we are asw close toe the bottom as we are t

the top. mame can and must lead the mus nation in education. [applause] emproving education in maineimp starts with one's host a comment putting our student first.st. that is not a slogan. it's not a cliché.. we all must ask ourselv we all must ask ourselves, what is best for our student? not special interests, not union

bosses, not superintended, not school board.bo students must be first. [applause] teacher effectiveness is critical to student learning. we will soon introduce a series of reforms related to name's teacher effect goodnessmain policies. name must have the best teachers educating our children. [applause]

further, children's educational needs should be determined by families, not by the street address. last year, this legislator did a great thing by passing child school legislation. p that is a start. as we put students first, we must recognize that students learn best -- some students learn best working with your hands. my hobby is making furniture, working with furniture requires a strong working knowledge of

geometry.ick a some will not pick of geometry from a textbook. we will in the context of the trade such as woodworking, welding, machining. and the job environment, they wl will learn these skills. ki we must ensure that every tudent has access to a widess o array of educational opportunities. therefore, i want to increase is access to an improved maine'supn career and technical education system. [applause]

in thing to do foundation, which got to step up on it yesterday theh a wonderful grant to the community college and the high school of natural science to go an drill hinckley. i think we need to continue that and we need to focus on not. as we consider education reform i ask you to simply keep onee question in mind. what is best . what is best for thes student? [applause] ny four year career has been ini

business, much in manufacturing, some in retail, but about ail, b third of it i spent doingt i business turnaround in the dirt. i have said it many times.man as governor, i cannot create good jobs. however, as governor and withwie the help of the legislature, wee can develop policies that will encour encourage businesses to ask bana and create opportunities here in maine. [applause]

if we truly one to claim that wm are open for business, we must hrk further to reduce the highe cost of doing business. last week, "wall street journal" reported that in 2009 come in maine had the ninth highest tax burden in the country. new hampshire, our neighbor was the sixth lowest in the country. even taxachusetts was lower tha. maine. last year we passed the largest tax cut in the state's history. [cheers and applause]

that's the good news. the bad news is that was not enough. i will return. i i will return with further proposals to reduce our tax burden.rdens. [applause]retire her we keep our retirees here at home. investing in our straight, mentoring and children and grandchildren, we must break the

cycle of a retired mainers, living in florida next month and a day to avoid our taxes is one to go south for some beach weatherh in january february. f it is an entirely differentffert thing if you are doing it to escape the taxpaying. [applause] as your as your governor, i amtate go determined to make state governmentve accountable. we need to work with our jobwor creators, not against them. red tape or procrastination or just for tracking is no longero acceptable in the state of maine. [cheers and applause]

however, encouraging businesses to ask and takes a partnership with local communities and states. therefore, my administration is developing a certified business friendly community. this is a way for the state ands community to partner to reduce the red tape and promote job creation throughout the state. with job creators of her job

creating attitude to go the extr ghtra mile and create jobs andwi wealth right here in maine. state l be designated and recognize that the state s. communities that are open for business. i believe man is the mostieve beautiful state in the nation. [applause] born and raised unearned by living here in name and race myh family here iner maine.n it is important that we do nota lose sight of our readers. and we work to improve our home and our economy.

the choice between our environment and our business climate is not either/or. it should always be both. [applause] too much of mature histories, fishing, farming and forestry ee have been maine economic engines. main can be prosperous and still be a greate vacation land. i am committed to reviving these industries, to get to a point where maine people can enjoy ine maine as this vacation land.

i call ton the legislature to ort ou support our plan to create the department of agriculture conservation and forestry. [applause] with renewed strength and collaboration, this departmentpt would not only be a good steward, but have to protect our l resources-based economy can grow up for generations to come.t issue the last issue i want to address tonight is one that is very, very personal to me.e. i am sad to say that my childhood memories are ravaged with domestic violence. those memories are not pleasant,

but i will share my past to find domestic abuse today and going forward. [cheers and applause] every year, nearly half of maine's homicide are related to domestic violence. in 2011, 23 people were

murdered. 11 involving domestic violence. these are real lives. mothers, fathers, sisters, brothers, uncles, and. and yes, children. we all feel very horrific effects of domestic violence. this tragic loss of life is an accept the ball. i have zero tolerance for domestic abuse and a nature help. [applause]

[applause] more than 80% of domestic assaults are committed by men. it is time that man stand at, speak up stambaugh domestic violence. [applause] as men, we need to stand together as one and say no to domestic violence. tonight, i am very proud for knowledge and domestic awareness advocate who has a personal

connection to the effects of this brutal abuse. after the murder of his two grandsons, arthur jette -- arthur please stand. are they became involved in the maine chapter of parents of murdered children. cards and i believe that it is time we ship domestic violence from being a woman's issue to a men's issue. [applause]

it will take a much tougher justice is done to stop the silence. i end up with chief justice attorney general schneider, commissioner morris, district attorney vic duns and the maine coalition to end domestic violence. in an effort to strengthen maine's domestic violence related laws. our system must focus on protect the women and children. there is more to justice than winning or losing a court case. we must close loopholes in our current rail system. it is important that the last assure the most dangerous offenders are put in front of a judge before they receive bill.

ending domestic violence is not a partisan issue. i'd like to thank house minority leader, emily kane has expressed an interest in sponsoring this bill. now emily, this might tell my? [laughter] ladies and gentlemen, make no mistake, maine is at a crossroads in the road to economic recovery and prosperity is the challenge. in order to succeed, we messed

up politics and gridlock aside. [applause] it is time to roll up our sleeves, get to work and fight the maine people. thank you, all for the opportunity to share my thoughts and vision for maine. god bless maine, god bless america and let's get to work. thank you. [cheers and applause]

[cheers and applause] [alause] [applause]

[cheers and applause]

members of congress questioned homeland security department about a memo detailing problems at the agency in charge of security. dhs undersecretary brand told the house energy subcommittee that issues raised in the report are being addressed in the risk of an attack on a chemical

facility has been reduced over the last several years. this is an hour and 45 minutes. >> the subcommittee will now come to order. we'd like to welcome our panel and i'd like to begin with an opening statement. in my time serving in congress, i've learned is oftentimes is the case that the initial problem is in as big a deal to people as they pour explanation of a problem can be. further coverups are the best hope of people who know they are in the wrong and the worst move for those who get found out. people try to hide problems or face the specter, more ferocious response from congress and the public than they had if they had simply come clean. it's a great surprise and disappointment i read the internal memorandum about the operation of the division

implementing chemical facility standards that in this program at department of homeland security. i for one have historically been a strong supporter of this program. of the statute is found in regulation reasonable. in fact, the andersen memo calls for only one legislative change, long-term extension of the program. the program is not meant to be that the epa said a program designed find people or bureaucratic backdoor to overregulate chemicals. it is meant to be a collaborative effort to secure high-risk facilities with this the appropriate measure is based upon risk presented. congressional intent was that cooperation would get facilities into compliance. we did not intend to increase federal revenues or enforcement actions. i hope dhs is not looking to abandon our original intent. last march i acknowledge as a work in progress, but i told security with been enhanced in a

mythic in public and private investments for me to implement the program. i still believe security at the facilities of chemicals is much better today than before congress the dhs's first-ever regulatory authority. unfortunate confidence in dhs and substantial amount congress has given to it is not nearly as strong. someone compares the faster an unmanned police car positioned at the side of the highway. the words of speakers, but not much else. we need to be sure dhs's program has saved cnn intends to focus solely on correcting its internal problems, implementing the program is drafted in law and not suggesting the program should take on any other additional responsibilities. they better first do the responsibility design vendor lock-in to take on additional ones, such as drinking water for ist issues.

see fast is an appropriate combine of the subcommittee jurisdiction in the days of oversight of this program are over. i urge all members of this committee to join me in that effort. i have tremendous respect for undersecretary service to this country. that said, he and i have been taught there were only three acceptable responses when questioned by an officer. guess there, no sir, notes hughes, there. bursary don't understand. i expect no less than not today. i want to welcome undersecretary. and every feature her who along with penny andersen showed recruits with the frankness of the internal memo. both of you should know that the committee takes very seriously any evidence of undue pressure, insulin, retaliation was the weather because of your testimony today.

while they continue to investigate important issues. in other words, they really do appreciate this internal memo. and very hopeful and we want to ensure those who came forward are not penalized for that. please let my committee staff know right away if you have any kind time, retaliation is illegal and will not be tolerated. i trust you ensure you are in agreement with me that no retaliation should be tolerated and we will hold you in any other white house officials accountable to god. without a eula to distinguish ranking member, mr. green for five minutes of the purpose of offering is a statement. >> thank you, mr. chairman. undersecretary bearse requested the status of the program and recommendations for improvement in the summer of 2011. his memo was delivered in november 2011 to the media and detailed in this door into

summer 23rd, 2011. nsa when i read the internal member of surprised by the level of dysfunction and the lack of progress in the program. i'm also amazed during this time is that committee discussed her in her work in a churning away, the phone dictation of the chemical facility come antiterrorism act simply unaware of the severity of the situation within dhs in the program. the portion of the internal memos related to these priorities. i won't go in details, but seems to be the root root of the problem is i'm qualified for their positions and prohibited from hiring individuals that had no training program to help out some qualified. this an appropriate headers lack of proper training of employees with dhs instead of reassigning is on contractors to do workers should be done by the agency. the internal memo outlined about

priorities, including the process for the review of the sites and security plans. unfortunate the time of the memo, dhs was the 4200 face security plan and not a single plan was approved. i know that dhs is working to clear up all the tier one facilities, but it has been six years since the program was enacted in the habit clear the low-level facilities. to conduct compliance inspections today, dhs has conducted not a single complaint expection. not that any of my and trees that represent are looking for an inspector to come knocking on the door, but they have been working to make substantial private investment in some cases we actually were able to receive grants for homeland security at our plant protection. i must say this proposal reinforces problems identified as the internal memo for a fall

fact that dhs is complicated and not relying on it is consistent such as is consistent such as here but i transmitted a personal hearing that the card someone working my concern is additional personal security one thing the committee needs to look at. blessed the personal surety program and i received a positive response and if the proposal does.

quite frankly now is not the team inventing the will and implementing a personal surety program for 35 items. i look forward but i believe several action items have receives lack of morale in the program, which seems to stem from the fact program public health, particular in the channel which is a petrochemical complex that stretches from the gold coast and produces also the largest petrochemical complex in the can't stress how my constituents or employ some

security standards possible to prevent the act of get that the legislative fixes and i'm when the committee can work together and find a compromise on hearing their suggestions program is too be this much and stress. mr. the time to my colleague on the right if anyone the ranking member, mr. calling on me and more importantly for holding this the chemical facility

antiterrorism program the letter has is to address the threat of terrorism to the nation would going to hear the program was established in now almost challenges and limitations on a detailed last year. this takes the form dhs also provided it the program has been

plagued by personnel issues challenges described serious department of homeland security has a plan to address the identified problems in upland deserts is a crucially important we must get it right this program was created by a rider on an that implementation. it did not have enforceable deadlines or disapproving site

we learned of of understanding determining it's starting to realize this has jurisdiction we didn't know how the program needs to be revisited in look forward to learning more about get the department, but it can

only do so much. they cannot address shortcomings in task falls jurisdiction on the committee that should crafting the is the responsibility hope today's hearing will be part of an ongoing effort, when i was chairman of the committee, we were working brought in on it was a major undertaking. we labor, everybody else that had a because was not a

furtherance that examination of the will continue hope it will our best wishes with a long period of authorization without doing a fair examination to figure out how we works the way security of i yield back my time. >> a thank you for your i'd like to yield with permission mr. barton for on the opening statement i think mr. waxman

part i would also say we did have a hearing prior to the where the department of homeland security said. and obviously that is not the case either. so with that, mr. burton. >> thank you, mr. chairman. i'm not sure happy anyone you wish it to be appreciate you for holding this hearing come to you and mr. green on the chemical facility in tasting your of last year and the satisfaction of program had not program was set up to serve and protect companies the general public against the i was chairman of this committee back in the 11 of

the authors of the chemical facility antiterrorism act of the as for of terrorism in these understand the program have challenges. but i don't seem how the undersecretary could be so unaware many of please been hired in managerial positions he don't have the skill set why has it taken three years to start staff training has invested billions of this you have

totally mismanaged this program spent $90 million a year and we have no well-developed direction and my understanding received over 4200th a have our differences on this bill was no one regardless says if you receive security plans come you don't even get i read that a couple days ago, i was on national protection

qualification it conducts the compliance inspection. you go out hiring tiring of inappropriate your own infrastructure compliance division the administration of the program must be fixed immediately to provide stability to the program and of whom are members of the. they've invested heavily in security measures over the past i have to in providing the internal memoranda for. having said that, everything else is in the negative is time

to get this thing done. if you can't do it, resigned. seems to be fixed, tell us and we'll try, as mr. shimkus which it hear it what you claim to the chairman emeritus to see the remainder i want to welcome our panelists today i want to commend you for having this hearing. i want to note it is being conducted in something which in its high priorities around this place. having said that, results of the hearing today. i number of these and not long

back, it causes lots of excitement and casualties enormous hardships from the communities in which the your labors and their leadership, mr. chairman look forward to the hearing going which it in the hope that we will be able get these programs widely differing character point where they working together to accomplish the great purpose for his safety and security for the thank you and mr. with that committee chair of international program director at the department of homeland security, mr. david m. wolf, deputy director of

infrastructure office of infrastructure protection, national protection programs director at the you know, the testimony that you are about to section 1001 at when holding an investigative hearing, and this committee has the practice of taking testimony you have any objection to testifying then advises you under the rules of the house and the roof you are entitled to be advised by counsel. do you desire to be advised by counsel during your that case, if you please rise and raise your right hand, i that the testimony you're about to give us the truth, the whole truth and nothing and it's my

understanding that the only opening statement will be given by you, mr. secretary and mr. wolf is here to answer the internal. they're both going to give it. okay. change in, mr. beers, you are recognized for five minutes to and distinguished members of pleased to be here discuss the department of homeland security's efforts to regulate the antiterrorism standards act. as you are aware about as mentioned the fiscal year 200 it

recently to october for a 2012. the programs and i welcome the opportunity to continue to work with congress and on levels of government to further improve this vital the inception, we've issued redefine chemicals of interest two surveys with industry to define that cause them to be determined to submissions from more than 40,000 facilities that might potentially to about covered facilities. in the process of doing that, more than 1600 facilities which

would've fallen 1600 facilities are totally removed they are so we can say of the successes that have happened with respect adoption of we can say there's been a reduction in risk that the nation as correspondent we been made over the past two years to establish implement this as the report has a number of challenges to address. in david wolf, i ask both of them to provide for my consideration the views on the successes and challenges these

kinds of assessments are need in order to evaluate improvements, course corrections ongoing decisions will need late november of detailed report was hand delivered to me. it is important to note in addition to path that will address those challenges. specifically action plan with detailed recommendations for addressing with my receipt of this report from each of the

nearly 100 items of the program senior leadership team and i these issues. for members of the team have been asked to provide milestones on a schedule for completion of each task program's acting chief of staff addition, leadership now means suzanne spaulding was to me assure you there will be no retaliation to the people who wrote this report, would've served me frankly telling us where we nor will i tolerate you have my pleasure i'm seriously

and we are going and strategically to address the challenges, we believe it's making the nation safer and are make the necessary course corrections to holding. i'd like to recognize mr. will out also extends to members of the committee for the opportunity to testify before you today. in july of last year, penny andersen and respectively of the infrastructure the in response

to the undersecretary's request that we provide a fresh perspective penny and i produced an internal assessment of what we see to be the essential priorities, challenges and to success penny and i feel strongly while challenges we've identified they also are not insurmountable. i welcome the opportunity have on the background and context behind the challenges we cited, but i also like to. re: make tangible progress in addressing some challenges issue identified they security plan reviews than a consistent help overcome past difficulties in meeting this challenge, is the best apartment approach over the

icd has been able to more than quadrupled the number of throughout and through that or 28, 2011 we can dish it plans. and the subsequent two months leading up to january 20 we conditionally authorized an additional security plans. we respect to complete a within the

the. >> with that of a flight to recognize myself for five minutes but we're in a

fiscally constrained environment the undersecretary and the challenges that will occur to the military 45 through 90,000,000,003 year that could be cut we will look every where we can go to adjust dollars to meet the needs of the operation. let me start the memo states on page 15 that ised lacks tracking of consumable supplies it creates the environment for fraud ways to be used our concern this is not good gao saying that led to the program managers describing their own program.

how can a member of congress used to fund a program that is so self-described? >> let me begin the answer to that question. the report notes the deficiencies in the program and we asked for the management review of the program december of last year. that program review was completed while this particular report was being prepared and incorporated into the report and the comments that you see a part of the effort of management at the most senior level, the common making sure this program was working properly. know i will turn to mr. wulf for what we will do about these findings. >> i would add we did not

find actual indication of fraud and waste or abuse with regard to the purchase and tracking. we found a system was not in place a and something we have already moved forward to address. >> i will reclaim my time. we know there is action items but that obviously is of major concern that we will have to deal with not just the committee ourselves or our colleagues. we will file this. i do appreciate the fact that in july brought mr. wulf on board. but the question would be cents you have been on board since 2009, what took you so long to have the overview of the program?

>> the initial indications of concerned surfaced the following year. prior to that, i had definitely had the sense that the program was devolving and changes were being made. but they were being made in due course of the pri diligence by the program managers. july of 2010 i discovered the discrepancy in a way that people were being paid within the program and moved at that point* to correct it. in the fall 2010 we posted an announcement. >> not to be disrespectful but to move to another question because the time line is important because you testified march

31st, 2011, statements were made again my comments back to mr. waxman was we were given a pretty good signal that things were going well. small problems when nothing major. one of the questions i have asked about the highway -- hiring process and dropping and it was said at that time i was not aware of any problem. were you? >> nola was knocked. >> if not when did you learn about the problem? >> the beginning of june of this last year. >> was impervious time to your knowledge that personnel discovered were there others within the department that in new the

mis-tiered problem was messed up? >> there was an indication may 2010 that there might be a problem with respect to the mis-tiering the individuals looked at the problem and felt they had resolved the problem and informed people of the chain of command. did not know there was a problem at that point* of time. of the program with ford from their. 2011 with a new acting director of the office asked for a review but rediscovered the discrepancy issue and asked for a much deeper dive into that. that is what resulted in a problem being identified to the assistant secretary and immediate need to me june 2011. >> my time is expired. we will continue obviously

to have oversight over the process. i help if there is any relevant activities that balks under your office that have not been doing their job, that through the legal process of removal that some people could be held accountable because if there was not waste fraud and abuse maybe theft that would be helpful to understand the government could correct that now cahal will recognize mr. green for five minute. >> thank you for being here. as i said my opening statements over the last six years in the ability to hire qualified individuals and lack of morale coming from year-to-year reauthorization. and mr. wulf said in i apologize that of us have a copy of your statement but

what has been done since the memo was released on the 23rd, there is action that has been done that we have not heard about. mr. beers you know, mr. wulf statement about the things that were done in the last month? >> yes i do. i want to start this response but i also one mr. wulf as well we look at the training issues identified in the report and we have remove the impediments for hiring training officers within a program so that can go forward. we have begun to look up the training requirements in order to take the people who were hired you may not have adequate training for that position that they are in.

but the other thing we need to focus on is to define what it is we expect from our inspectors when they do the final site of authorization inspections and compliance inspections. >> i would add we're very excited about the progress we have made in the past couple of months with the site security plan. the statistics i mentioned is in the red tint testimony as well. we have an aggressive plan to move forward with a review of the site security plan and to outreach. >> okay. i know you gave hard numbers

they only have five minutes. could you reiterate that? >> we started two months ago with 10 tier i hour authorize now we're at 53. >> that is the only hard number? we don't have your testimony it is hard to go for something we authorized 43 additional tier i site security plans to make those routes taken from my testimony. >> is that based on site visits or what was provided? >> that is what is provided by the companies in some instances falling compliance conducted by the chemical

securities. >> into the other issue mention in the personal security program that was submitted june 14 of last year to the omb. this is the third priority of the dhs memo. i'm aware brain need to screen individuals against the tiered database that would require facilities to submit background against personnel within 60 or 90 days upon implementation for existing personnel. any individuals not classified as personnel if they have of quick kearns their information submitted to dhs within 48 hours. in the real world we went with the rollout of the card and it was not as smooth as we would like and there were 260,000 and quit cards issued in the port of houston so if you overlay

with personal security requirement what did that card not cover that you think now? i am concerned about reinventing the wheel even though it did not run to well earlier but it is now. >> let me clear up some perhaps misunderstanding of the way we intend to use the card. we will accept the card as proof of a background check. those who have the cards to determine that it is valid. that will be an acceptable standard applebee's to do so

in this lavinia their background check. >> i have some concern about that. sometimes that does not get to the final stage was that submitted that is the ideal blend submitted to all of the? >> >> that is part of the information collected. >> i would be comfortable seeing in writing what you said because we literally have thousands or hundreds of thousands around the country we don't want to have a breakdown to read do something. i know working with the industry and the bargaining units that should be important for i know i am over time i would like to submit if we don't have

time. >> without objection. now recognize mr. murphy the vice chairman of that committee. >> mr. beers the member states the memo states cfats the ability to uncritically look at long-range plan planning so for your candid response why was this not done until now? >> why was this not done in terms of evaluating its self? anything that stood in the way to delay the self evaluation? >> no sir. nothing as i indicated earlier we have had several reviews. this is the most extensive that we ask for but we have had several reviews since i

became the undersecretary. >> whiff a clarification who sets but cfats goals for each year? and the objectives who was responsible for doing that? >> the program director provides the goals they go up fed chain of command to the secretary and i responsible. >> is that annual? >> i don't know if that is public information. >> have you measure is that internal documentation how you review those? >> sir, let me ask mr. wulf to answer that. >> there are performance metrics that we prepare and send up the appropriate chain performance is measured with respect to numbers of inspections as

compared to the totality. >> clearly from the evaluation that you talk about, we appreciate getting your candor. but in addition are these factors are evaluations factored into employee compensation such as raises or bonuses? >> sir come as a general matter as the performance of the entire issue of bonuses or promotions, do you want to add anything specific? >> i would echo the under secretary second -- sentiments meeting the performance goals is a significant measure to

assess bonuses deny to any cfats employs receive bonuses? or supervisors or superiors received bonuses since 2009? >> i don't have that information. >> it would be helpful if you could follow up with disinformation. also the memo said employees belts and comfortable delivering bad news to superiors. what is the failure with this working environment who chilled that environment? was that you were who had that the fact secretary beers? >> i have said the management principle based on my 40 years in government that i appreciate hearing bad news and i don't want to hear bad news from anybody else. this particular issue has

been used as a teaching moment by me for the entirety of my work force. no one. no one should feel that they cannot tell me bad news because that is usually something we can do something about. if we do not hear it we cannot do anything about it. i cannot speak to the culture within the office or the words in the report but i want you to understand to all the people who work for me, i say that time and again. i am perfectly prepared to hear bad news are really don't want to hear it from somebody outside the organization. >> as nav officer as he got up the food got better and the news got better but you don't get that bad news coming of sore you confident now you are getting full and accurate information full

disclosure on cfats? >> i have complete confidences to make sure that information comes to me and they know that i want to hear it and to fix the problems that i have the power to fix it. >> can i ask mr. wulf answer the same question? i know that i am over time. >> i can confirm that director anderson and i received the message that he wants the bad news within the first week or two of our arrival on the job. that is very much the spirit in which this report was written for him. within the organization, i cannot necessarily speak to how the culture evolves, but i can tell you that penny and i have gone to great lengths to create a culture

of transparency in which our employees are not afraid to raise issues that they view as problems. we have an open-door policy and have meetings on a regular basis. we have made it clear we don't tolerate repression of concerns. >> i yield back. >> before you to the chairman emeritus, i will ask unanimous consent for members to submit statements to the opening record. know i would like to recognize mr. dingell. >> thank you for your courtesy. secretary beers why did you commission the study of this program? >> sir, when it became

evident to me that we had a mis-tiering issue that was brought to my issue in june and we had had an issue of locality pay and the slowness in terms of the approval of site security plans, that i needed to make sure the new management that we have brought in to take over the program to make sure it was running solidly brought their full attention to giving me as accurate picture as possible with this program. we had already commissioned a management study which was completed during the time the report was prepared. of the final request of penny anderson and mr. wulf

is a result of increasing concern on my part that the program was not running well. >> thank you. is department of homeland security working to engage the industry to get the program successfully implemented? yes or no. >> absolutely. yes. >> i know there has been some controversy regarding ms. classified facilities. can you assure me in the members you have properly addressed this issue and you have correctly identified high-risk facilities? yes or no? >> yes. >> mr. wolf, as your internal memo points out there has been a number of challenges to implement the program to believe it is fixable? yes or no? >> yes. you do agree? >> what is the top two or three things that need to we

addressed to bring this about in your opinion? >> i would say the site security plan review process which we have already begun to move forward considerably over the last two months and preparing the rest of our team to move forward to conduct authorization and combined inspection. >> what progress had you in the department made to address these issues? >> we have quadrupled the number of tier i security plans we have conditionally authorized over the last two months. we have commissioned a

working group as well to develop the standard operating procedures to determine what tools our inspectors will need as we move forward to conduct authorization inspections to get into the regular cycle of compliance moving forward >> i return with 27 seconds. >> i would like to recognize fennecs gentlemen. >> i am not as familiar of this program and its history and i don't have a lot of facilities in my area but i am however very concerned about this memo. we have oversight responsibility and to some extent we are as vulnerable

to criticism of for failure to perform adequate oversight and be vigilant about the use or abuse of taxpayer funds. that is why this memo is bipartisan and because we know we have responsibility to make sure government is run well. i am also a businessman. i have hired and fired people. i don't like to fire people. but it happens. secretary beers if you are in my position looking at this report would you consider yourself to have done a good job in your role today? >> sir, i hold myself responsible for these sets of problems and i am committed to fixing them. >> if you were your own boss would you keep yourself on the job? >> i cannot answer that

question. >> have you considered the possibility this may not be the right role for you? >> it may be time for you two step aside? it was referred to in the opening statement. >> i consider that every day work with the federal government. eyesore and office on three educations to protect and defend the constitution and i believe in that. if i cannot do the job than i will walk away as i have done before. >> is an unusual to have an action memo that you are not disputing, as 70 different recommendations a lot of which are noted in progress. you also noted you could dress the issues to the extent that i have the power to fix it. do of the power to fix all of these problems? >> with the issues in this particular action plan, yes.

but mr. green's comment of the card, no. i cannot make that the broader than the current authorization of the card that means you have to be a transportation worker. >> okay. this is a disturbing memo. we appreciate the fact it has come to our attention. and i certainly hope that you understand that most of us have not seen anything like this. it is an unusually poorly run agency. if at any time you believe you're not the right person to turn this troubled agency around them may be there ought to be a different managing structure. having made that point*, i hope the committee will

carefully watch the progress of this action plan because the american tax payers will not stand for this kind of alleged or perceived to incompetence for this very important agency to our nation's security. >> will the gentleman yield? >> as a follow-up, but we really have to get a handle on the card issue. we would like you to provide us your legal opinion of why you cannot deal with the card. we think you can. the energy and commerce committee have been discussions with homeland security four months trying to resolve this in rethink it is within your jurisdiction and if it is not we would like to see the legal reasoning why it is not so we can change the law.

we think it is within your power now. i think mr. green would be very pleased