being more trusting. but it's hard because there's some people that seem very resistant to this. i was just reading "the washington post" yesterday, and i think john kelly said this best. he's talking about a green dodge scam. and he starts out -- he does the usual if it sounds too good to be true, it is. i've been doing it for 40 years. it doesn't always work. when a stranger calls to say you've won something, you haven't. tamp down that little flutter of excitement, listen to the voice that says why would somebody call you out of the blue you've won a sweepstakes you don't even remember entering. sadly enough people listen to the other voice, the one that says, why shouldn't dumb luck smile upon me once in a while. do i not deserve the universe's love and the scammers make a decent living. so we have a real issue in terms of trying to prevent it other

than through the great work of law enforcement. >> and that raises the question -- why would -- i'll give this to you, naomi, why would it be older folks may say, why doesn't dumb luck shine on me? something about them perhaps that you've looked into that you talked about some of the research that you've done. why would older folks think perhaps more so than others? >> thanks. it's a pleasure to be here. the question about why older people are targeted and why are they particularly vulnerable and zero in a little bit more on what betsy mentioned about diminished capacity and the research that we've done. so the research really shows there are quite a number of reasons that older people are targets of fraud and financial exploitation. they include -- i mean, this is pretty basic. they're the people who hold the largest portion of our wealth in our country. even though individually many of

them are poor, that's where the money is and that's where the scammers go. it may be that they're more trusting and that they are more unsophisticated about financial matters. there's often a presumption that they are more vulnerable and, thus, they're targeted because they're perceived as being more vulnerable. and they may, in fact, be more vulnerable due to cognitive impairments that i'll go into in a second. also, many older people are more isolated and, thus, they are more dependent on helpers of a whole variety and those helpers have great access to their money and to their documents. so, you know, these are crimes of opportunity. so just to zero in for a minute on diminished capacity because i think with the age boom and with people living longer, more and more people are having cognitive impairments and diminished ability to make decisions

including financial decisions, and we have family members. the financial services industry, all kinds of industries and professions saying, oh, my god, we have this coming. we don't really understand it. and what are we going to do about it? so capacity -- decision-making capacity is not really an alor nothing thing. it's made of a types of capacity. we have capacity to make personal decisions about your everyday life, capacity to make health care decisions. and then capacity to make decisions about financial transactions. and what we've learned as betsy said is that financial capacity -- it's been called the canary in the coal mine of capacity. it's really the first to go. and it's made up of a number of skills. it includes your basic monetary abilities. identifying and counting money, understanding debt and loans, conducting cash transactions, paying bills and then i want to underline this last one because this neuropsychologists have

done research and identified this one component of financial capacity is, maintaining judgment to act pursued dentally and avoid financial exploitation. so you can see when financial capacity starts to go, people become more vulnerable. and the population numbers, not to throw a lot of numbers at you, but they're pretty astounding. declining financial skills start to happen when people have mild cognitive impairment, not even full blown alzheimer's disease. 22% of americans aged 71 or older have mild cognitive impairment. so that's a lot of people. 1 out of 8 people, 65 and older, has full blown alzheimer's disease. so we can see where this is going. so let's just bring it closer to home, with an example. dad seems fine. he's still handling his bank account, his brokerage accounts, and then the bank teller sees

him perhaps making sudden and uncharacteristic large withdrawals or having multiple overdrafts or the broker is getting calls to cash in his conservative investments and to buy shares in a risky startup that he just heard about from his new best friend. so we all know and many of us have had personal experience that it's really hard to take away the car keys when dad's reflexes are getting slow or his vision declines. but one day we fear dad's car will hit a child crossing the street and so we do something about it. similarly, we don't want to take away mom's financial driver's license. and then we see mom being taken by a lottery scheme, buying an inappropriate annuity after attending a free lunch seminar or getting ripped off by her home care aide. so you can see that we have a

huge challenge. i'll just talk really quickly about the research at arp public policy institute that betsy talked about. it was in the investor's sphere but we surveyed front line financial advisors, broker dealers and also their compliance officers about, do they understand diminished capacity? do they see it as a problem? do they have protocols in their firms to deal with it? are they worried about financial exploitation? what do they need? and the message was loud and clear, yes, they see it as a problem, almost all of them recognized it. some of them had protocols but their protocols were all over the map. they overwhelmingly say, we need training on diminished capacity. it should be mandatory but our firms don't require it. so i think it's interesting there's a recognition but yet we don't have the tools yet and we're going to all have to start

working together to create them. >> one of the points -- one of the scams you mentioned, was the lottery scams. jeff steger who's actually in my office has done work on scams. can you talk on the lottery scam and how the scammers use some of the vulnerabilities that both betsy and naomi talked about, older folks, how they use that to their advantage to steal money? >> sure, as a prosecutor with the consumer protection branch, we're currently participating in a number of investigations involving lottery scams that are emanating from jamaica and preying on citizens in the u.s., mainly elderly people. essentially, the scammers will call potential victims in the u.s., including many elderly people and form the potential victims that they have won cash and prizes, sometimes cash, and a mercedes, typically, a car.

but mostly money. we're talking about millions of dollars that these people are told they won. and indicate that the winnings will only be delivered once the individuals pay upfront fees, taxes or insurance. victims end up sending the money through wire transfer, through entities that david had mentioned earlier, through western union, through money gram, through stored valued cards, the green dot card that betsy mentioned. and that money ultimately will be sent down to jamaica. our office is currently in the middle, as i mentioned, involved in a number of investigations and i just want to give a profile -- profiles of five recent victims that we have talked to, meaning within the last couple of weeks. and i'm going to be very generic

because these are obviously ongoing criminal investigations. one is a female, early 70s. she was working at the time. she was living alone. received a call that she had won a sweepstakes prize of 3 to $5 million. during the conversation, the initial conversation, the fraudster was most interested in knowing from her what it felt like to win the lottery and that was essentially to gain her trust. over time, they had many conversations, many emails. he was able to get her trust, and she ended up sending tens of thousands of dollars and wiring tens of thousands of dollars which ultimately we believe ended up in jamaica. a female in her late 80s living at home alone. she acknowledged she entered sweepstakes at times. she was called at least 12 times in a 2.5-week period and she

ended up wiring money to them. a third victim, a male in his late 70s, early 80s he was a widower. lived alone in a small town. he was an owner of a small business during his career and, you know, he was a victim of this type of lottery scam. a fourth victim, a female, in her 70s lives in a small town. lived alone, acknowledged she entered sweepstakes such as publisher's clearinghouse and she was victimized by multiple groups over a period of several months and she wired money to them. she got suspicious after she didn't get her winnings but they offered her an excuse saying that because her fees were not coming in as quickly as they had anticipated, that her winnings were being delayed and that's how she continued to get caught up in this scam. and finally, a fifth victim, a

female in her early 70s, again, lived in a small town. they sent her a check to purportedly pay the fees, that this was going to be an advance. she deposited the check and she immediately or shortly thereafter withdrew the money from the check and sent it out. the check bounced and so she was out that money. to put a little bit more meat on this profile, these people that we've been talking to, most recently, they are elderly but they're not in their 90s. they're not in nursing homes. they're typically people who are living alone. they're independent. they have some disposable income but not a huge amount. so after a couple of weeks, when their disposable income is gone, it's not unusual that they would take out a loan on their house

or more typically -- or typically they would take a cash advance on credit cards. to talk about their profile a little bit more, these -- the scammers who, at least in these investigations are from jamaica, they will -- they will call these individuals more than perhaps their family members will call them. >> jeff, let me stop there because i think that goes right to something we're going to ask jonathan about. what's common about all these individuals is that they were living alone and that perhaps part of what the draw is with these folks, they have somebody to talk to and that goes to something imposter frauds that i know you may have heard different flavors of it so to speak. jonathan can you talk about imposter frauds and also talk a little bit about your work internationally. all this money is being wired internationally and it sounds like for perhaps there are frauds around the world that are

similar to ours that can inform. >> thanks, mike, let me talk, first of all, on imposter frauds and some of the broader ramifications of the fraud of mike's office, jeff's office and our office and the federal investigative offices. they can fall into several categories. one of them that has gotten creation is known as the grandparent scam. we first heard about this several years ago in japan, where -- and the m.o. for this is fundamentally the same as we now hear about today in the united states. people get lists of others typically senior citizens although they may be call these people cold and when the phone rings and that person picks up at the other end of the phone

the person says, it's me. and depending whether they know they are calling an older person won't work in every single instance but oftentimes the person will say -- let's say it happens to somebody in the united states, johnny, is that you? and that's all they need. they'll say, yes, grandma, it's me. i'm so glad i got you. i've been arrested. i'm here in, fill in the country. i'm here in france. i'm here in the netherlands. i need bail money. can you possibly wire me some bail money. or i've been in an accident. i need money. i have to pay the hospital, you know, can you just send me some money right away? now, naomi and betsy both touched on the issue of different kinds of vulnerabilities that may stem more from neurobiology. these are the types of scams that you could understand would readily play on the heart

strings of anybody who simply makes a mistake and never anticipates the possibility that somebody would be calling them up with a specific purpose of lying from the very first words of the conversation to get money from them. so they respond in the way they think they need to help out their loved one, grandson, whoever. and only later on do they find out the 1,000 or $1500 they just wired somewhere didn't go in the pockets of their grandson but in the pockets of fraudsters. as far as the other types of imposter scams, the grandparent scam is what we've seen increasingly not in the united states but from other venues around the world. about 10 days ago, the royal canadian mounted police made arrests in the montreal area of several individuals who are engaged full-time in the

grandparent scam specifically targeting older americans. now, why is it that they would be doing this? well, first of all, for a long time, u.s. law enforcement has recognized that there's been -- say often a aa trade you might say in fraud between the u.s. and canada. going back as far as 1998, a series of regional task forces were set up across canada with u.s. and canadian participation to work, telemarketing fraud and other types of mass marketing fraud on a collective basis. and all of our major partners and consumer fraud ranging from the federal trade commission to the fbi, the postal inspection service, the secret service have all participated in different ways in these types of task forces. well, the frame of reference has changed. now, when jeff talks about lottery fraud, no, he didn't say as we might have a number of years back south florida or southern california. now it's costa rica, jamaica,

the dominican republic and farther afield, spain and other parts of the world. now, in part because we have seen and assistant attorney general breuer's marks highlight as well as we've seen the globalization of fraud including the globalization of techniques. when we first started to compare notes with our law enforcement colleagues going back probably four or five years ago in australia, canada, the united kingdom and even nigeria, we started to find that we were talking about the same kinds of scams with the same kinds of techniques targeted against the same kinds of -- in many instances of senior populations often as well by the same groups of people. so part of what we've sought to do, and i think it's fair to say, mike's office, fraud section and the multiple u.s.

attorneys have focused on this particularly. what we're trying to do is take our ability to respond at these types of frauds directed at older americans at the next level to share information from who from our respective investigations are the main players behind these scams, where are they launching these schemes from? where are they getting their lead lists from? how are they recruiting? how do they organize? where are they moving their money? more and more what we focus on within the justice department and the rest of the federal law enforcement community has to do with sharing information better, faster, coordinating more effectively as i think the department and the ftc, for example, have done very successfully over a number of years, but recognizing that fraud has become globalized and particularly when you're talking about targeting of seniors with so many different types of scams, whether it's lottery scams, inheritance scams, grandparent scams. ultimately, we have to move

faster, share information faster and collaborate faster. the arrest i mentioned is one example of what we can do but it takes that kind of active and sustained cooperation between law enforcement here and in other countries. >> and that's -- that's coordination among law enforcement. there's also the international component of these will affect the kind of messages we will send to consumers. and that's something i think david would like to talk about, about how the ftc is recognizing the international component of much of their work and how it affects the messaging -- or the messaging they give out to the consumers -- well, to consumers? >> i think this has been a terrific summary. the kinds of scams that are plaguing older people in the united states but they pose a real -- a real problem, a real challenge both for law enforcement and for consumer education. so let me just sort of run through some of the reasons why that is so.

these are retail rather than wholesale scams. one of the keys to the scam typically is getting someone on the phone and having a conversation with them. they may be initiated through the internet. they may be initiated through the receipt of a fake check. but generally there is one-on-one interaction between the scammer and the victim. second, as jonathan has pointed out, a lot of these boiler rooms are not in the united states. they're in canada. they're in jamaica, they're in ghana. you know, we get these complaints, you know, now even peru and spain show up on our lists in terms of where these kinds of calls original from. so these are not the boiler rooms in tampa that we can shut down easily. third, there are multiplicity of scams. if you want to just educate people about grandparent scams, that's one thing. but these scams take multiple forms. grandparent scams, there's lottery scams, there's sweepstakes scams, there's fake

check scams, there's mystery shopper scams. as you multiply the form the scam takes, you geometrically increase the difficulty of doing consumer ads. so we really have a three pronged approach to going after these scams at the ftc. first and foremost, of course, we want to stop these scams. we're going to close down the boiler rooms. we work very closely with the canadian authorities, the jamaican authorities and others to try to find these guys and to stop them. we also are trying to go after what we think is the pivot points here. at some point, the elderly person needs to send money to the scam artist. and that is a point where we can go after them wholesale, not retail. so we have money gram which is the second largest money transfer company under order we have western union abiding by the terms we have in our money

gram order. one of the things we have done and is starting to really yield results is we've insisted on really clear consumer ad. so if you walk into many wal-marts today, hopefully, within a year -- if you walk into any wal-mart, money gram's principal outlets are in wal-mart stores. they are under our order -- you will see facing you as a consumer a miranda warning. if you think you've won a lottery, guess again. if you're sending money to a relative, call them and make sure. if you think that check that you've just cashed is a real check, wait a month 'cause it probably isn't. if you've been hired as a mystery shopper, again, sorry, you're out of luck. and they're training the personnel who actually man the desks there to talk an elderly person who's about to wire money

to jamaica or montreal or beg began -- ghana, why are you sending this money. and this is what was talked about before, sometimes they have to fight with the person, you know, you didn't win. oh, but it says right here i've won a million dollars. and there are tragic stories in which ultimately they leave the money gram outlet which won't let them wire the money and go somewhere else and send it, which sort of underscores the difficulty of succeeding on the consumer ed front. >> well, just to echo what david was saying. commonly in these types of scams -- and i believe david will know this, in order to assure the victim they may have won, they very well receive documents on ftc letterhead, on doj letterhead, on irs

letterhead, on federal reserve letterhead saying that they've won the lottery or saying that this amount and one of the tactics that the government can use is that there are laws against impersonating a federal employee or using this type of stuff. >> yeah. let me just finish -- so one of the things we're doing is not only going after the wire transfer companies, but, for example, green dot has agreed not to allow basically refunds, getting money in jamaica. we're working now with the store value card companies in order to try to combat this fraud because as important as stopping them, you know, going after the scammers, as important as consumer ed is, the way i think we'll ultimately get real traction here is going after the money and stopping and interdicting the flow of the money. >> and before we -- and that's an important sort of conceptual

law enforcement tactic that a lot of us are using which is some have been calling a choke point where can we attack a legitimate business to stop the flow of money. and what seemed to be sophisticated frauds, overseas, using phones and wires but the tried and true door to door fraud still exists. i mean, king men are still around even though they are not selling aluminum siding anymore and if you could talk about the door to door fraud that still happens. >> yeah, unfortunately, it's still very common. we at the indiana attorney general's office have seen all of these scams within -- among the consumers that we are representing. one of the -- one of the scams that's very common in our area, partly because every year we face a lot of storms, which you've all been reading about in southern indiana and tennessee and illinois -- we always get tornadoes. we always get very severe storms with hail, et cetera.

there are a group of scammers that will go from door to door and from state to state, following the storms. we typically call them storm chasers. sometimes we have a different group of scammers that we call travelers that just come seasonally depending on the situation. in case of the storm chasers, what will happen is they will follow a disaster and they will go door to door and say things like, i just repaired your neighbor's roof and i have some materials left over. i'll be happy to give you a discount on your repair for your house 'cause i've got, you know, one more day that i'm going to be here. if you decide right now. so there's the high pressure sales the person, you know, you're only going to make a deal only right now. we did it for your neighbor. so they're trying to, you know, give a number of areas of comfort with respect to -- i've already been in your neighborhood, et cetera. and, of course, we've even seen people get up on the roofs and

make damage so that they can, you know, ostensibly repair it. a lot of times the insurance company get involved where they talk the person into signing over their ability to take the money, et cetera. so it's a very pervasive thing. we see it every single year and seasonally as well and it's a really big problem. we also see many of the things that you all have been talking about in terms of person's helpers coming into persons homes and taking advantage of elderly persons. >> i think that's -- if you could expand on that. we've been talking a lot about strangers calling up. >> yeah. >> it sounds like you're talking about folks who know -- >> yeah. this is the opposite of strangers. it can be a family member as we've been discussing but it can also be somebody who takes advantage of the situation, of being in the home of the individual. we've also seen persons who are committing identity theft. and this is something we warn people about all the time, where

you've got a repair individual who's come into the home to fix the toilet or fix, you know, something in the home. and especially elderly people but really any of us don't think about what kinds of personal information might be lying around in the house while that individual is wandering around effecting the repair. so it's very important one of the things we educate people about is before you have some stranger into your home, you know, be sure to walk around your home especially where they might be and cover up everything. make sure anything that is -- that has your personal identification information is taken and put away someplace safe. we have had that -- and i really appreciated all the research that aarp has done because we find education one-on-one to be much more effective with elderly than anything else. so what we do is we go all around the state and i would encourage ftc and all the federal partners to use the state a.g.'s offices.

a lot of us do have very extensive outreach departments where we go around the state and specifically educate groups of elderly and other vulnerable populations. they listen to us because they think of us as being -- you know, we have a certain amount of authority for them because we're the a.g.'s office and they're state and they see us as good guys so we have a bit of trust there and, frankly, it's just harder to reach people with paper. and this is a group of population where, you know, you all have awesome materials on the internet but they don't use the internet and they don't look on the internet for information. they don't even know they need the information until you tell them that this is what's going on. and annually if not more often. >> in the interest of time we have to -- >> oh, sorry. >> no, okay. we can wrap up and just leave with one question which is the natural outgrowth of what you're saying and i'll direct it at david, which is some folks don't know to ask or don't know what's out there. and one of the things i get a comment on very briefly is how

you -- how do law enforcement learn about frauds? how can folks be more willing to report them and then how can we turn around and tell people about things that are happening? >> well, you know, we depend, like every other law enforcement agency, encouraging people to step forward. and so one of the things that we've been doing is we've been doing common ground conferences. we've been going all over the country meeting with consumer groups, legal services, local law enforcement to try to encourage people to reach out. and that -- that effort has yielded enormous dividends because we are getting people who are in the nursing homes or do reach out to provide services to the elderly. >> i think -- we'll stop on that 'cause i think -- that's a really fascinating point as opposed to waiting for people to come to us. and the people in the room, i suppose, can take that as a -- as a last message. you can reach out to where folks

are. >> get out of dc. [laughter] >> well, thank you, folks. thanks for the information. [applause] >> good work. [applause] >> tax day is approaching and the panelists are to my immediate left, sally cooper, the director of operations from the internal revenue service criminal investigation and to her left is carol, the civil criminal coordinator in the tax division of the department of justice and they're going to talk about again common tax scams that consumers and individuals should watch out for as they're preparing to file their tax returns. so, sally, carol? thank you very much. >> hi, good afternoon. thank you for having me on the panel this afternoon. as mike said i'm sally cooper. i'm the acting director of operations policy and support

for irs criminal investigation. and one thing we were talking about as we were listening to all the panels is that there is a permutation of commonality of scams of every panel that seems to be presenting today. as far as criminal investigation's mission, c.i. is the investigative arm of the internal revenue service. we support the overall mission of -- northern to achieve voluntary compliance with the internal revenue code. once the investigation is complete, we forward a recommendation for prosecution to our partners at the department of justice specifically we start with the tax division who reviews our work and hopefully authorizes for us to go forward with the prosecution and they then in

turn refer it over to the respective u.s. attorney's office and carol was going to give a little bit about her mission. >> the tax division at the justice department does review all criminal referrals from the internal revenue service criminal investigative division. our attorneys do a lot of the prosecutions but we really rely on the local united states attorneys to carry the bulk of that water in the criminal prosecution. we also have a civil arm actually more our civil attorneys because as you know there's a lot of affirmative tax litigation which actually may be seen as kind of anticonsumer. i've been doing foreclosures for over 23 years so there are a number of people who probably don't like a big part of our mission. but we also combat on the civil side a lot of the kind of scams that we'll be talking about today that sallie will be talking about today.

for example, getting injunctions against bad tax return preparers and abusive tax shelter promoters, things like that. so we're working with the attorney's recent memorandum really pushing parallel proceedings where we civilly shut down a scam, collect as much delinquent tax and penalties as possible. ..

in your home, you have to be careful of what you have laying around. the irs is taking a very proactive look at identity theft. we're sending notices to taxpayer which is sometimes their first notice that their identity has been compromised when we see more than one return being filed, and or, we see that a w-2 has been filed in that person's name, that it has unknown employer. in january the irs announced where we did a coordinated sweeps week trying to attack this identity theft issue. now anyone that believes that their identity has been

compromised there is an irs identity protection specialized unit and that information can be accessed on irs.gov and look for identity theft. mr. berotte out of the u.s. attorney's office in los angeles, he mentioned identity theft and phishing as well. i phishing is where someone uses e-mail or electronic media to try to solicit someone to respond, either giving personal identification, either giving account information. for irs it can appear it is coming from either a legitimate irs inquiry or some related entity. irs will generally not send an initial solicitation or request for personal information to a taxpayer. so that should be a warning sign right away.

if you get an e-mail from someone that it appears that it is irs or appears that it is related to irs, be concerned and don't respond. either call irs. go to the irs.gov and look for steps to take but that's one way, that once they get your information, again, they can use that for all types of scam. they can use it to file false tax returns. they can use it to obtain mortgage loans. they can use it for all types of things and it's very hard to correct once that happens. >> let me just add, with the phishing, the attempts to get personal information from consumers and then what happens is, generally these scammers turn around and file some sort of false refund claim. and often, as sally mentioned, the first notification a victim will have someone else stolen

their identity, gotten their personal information and gotten a refund claim when they go to file their own tax return and it gets bounced because the irs already received what appears to be a legitimate tax return under that individual's social security number. these scammers file tax returns very, very early in the tax season. in fact, most of them are on vacation by now. and if you're like me, you're just thinking about, oh, yeah, pretty soon i think i need to file my tax returns. so the legitimate folks tend to get really surprised by this late date. we prosecute, at justice, irs has been refering a lot of these, refund crimes that are facilitated through identity theft, to the justice department and we participated in the january push that sallie mentioned. we have since, even since november, when our deputy

assistant attorney general testified before a house committee, since november we've had a ton of very, very strong sentences that, for refund crimes, that include, aggravated identity theft count. a lot of these were able to get, as part of sentencing, a restitution component. it is restitution hopefully to victims. sometimes they are not, not everybody that is involved in a refund crime is necessarily a victim but there's restitution for innocent victims as well as to the u.s. treasury. collecting that, that's another story but the courts have been pretty receptive to, to giving restitution to both categories of victims, both the individuals and the united states. >> thanks, carol. and you made a good point that all taxpayers who are subject to a scam may or may not be victims. in the first two, the phishing and the i.d. theft,

probably there are more victims than part of the scheme but when you're talking about questionable return preparers and you go to a return preparer and you give them your information, you're ultimately still responsible for what is on that return. and so in 2012 every return preparer needs to have a preparer tax identification number. when they sign that return, they need to enter that return or that number on the return. and let me just say, we're focused here today on consumer fraud but most of the return preparers out there are honest and decent. we're focusing though on the ones that are taking advantage of individuals. and some of the things that you need to watch out for, or consumers need to watch out for, when they are choosing a return preparer, is one, does the return preparer sign the return and enter their preparer tax identification number. to they -- do they give you

a copy of the return? because you should always see what has been filed with irs before it is filed. and you should get a copy to sign. are they promising you a larger refund than you thought you would get? goes back to the old addage, somebody mentioned it earlier, if it sound too good to be true it probably is. do they base your refund, their fee own percentage of your refund? that is probably a clue. that probably means they're inflating your refund to increase their fee. do they require you to split the refund with them? and do not ever sign a blank return, and then let them fill it in and mail it in. again, remember if you're going to a return preparer to have your return prepared, you're ultimately responsible for what is on that return. and this too comes in, carol mentioned, some injunction earlier and that's one of

the mechanisms that are used against fraudulent return preparers. >> right. one of the things we all have to keep in mind that something like 60% of u.s. taxpayers use a paid return preparer and as sally mentioned, most of them are good. they have gone through continuing education programs. they have their preparer tax i.d. number and they do a decent job but it is the ones that are perpetuating fraud and taking advantage of consumers that are the real problem. and, we can deal with that, in the federal government two ways. number one, is prosecuting them, because it is a crime to file a false return. it's a crime to assist people in filing a false statement. with the united states. but the other thing we do and can often do much more quickly is get a civil injunction against a bad return preparer to stop them

from preparing bad returns. that can also be frequently done more quickly than a criminal prosecution. typically what we'll do is get a referral from the internal revenue service on a bad return preparer. we will talk to several clients. maybe people that have worked with the return preparer. get a preliminary injunction. issue a press release right away. and then the community knows we have a bad return preparer or at least at potentially bad return preparer in the community. and then seek a permanent injunction. a number of these bad return preparers very quickly say, you know, we give up. we will stop preparing returns and we get a lot of these injunctions by consent. in fact the u.s. attorney's office in los angeles is doing a fabulous job getting consent injunctions from bad tax return preparers. often as part of a plea

agreement in a criminal prosecution. so they're sort of killing two birds with one stone. what you do with that is you have a incredible deterrent effect. you clean your area out of bad return preparers. and and that really is the power of both the criminal and the civil injunctions. one of the typical provisions in a civil injunction against a tax return preparer is that the return preparer notify all their clients that they have been prohibited from preparing returns. and that, perhaps, tax returns they did prepare were false or fraudulent. and also provide the internal revenue service with a list of all the clients for whom they prepared bad returns. now, what that means frequently is the internal revenue service will go out and find the clients and try to make up the tax loss from the individual clients. a lot of them are very upset by that remember, the goal

is so collect the right amount of tax from everyone and a lot of these, a lot of these people are either victims of a bad return preparer, or, as sallie mentioned, a lot of them actually participate in the filing of a bogus return through a bad return preparer. so it is kind of a delicate balance there but, we do try to collect the right amount of tax through the civil and the criminal proceedings. >> the last one i will touch on today is, what we term as free money where people put up flyers and they advertise that, hey, come in to us and you can get free money from irs. this typically targets some of the lower income individuals and the elderly as we just heard about. they charge people for filing their returns and sometimes the returns don't go through but they already have their fees and they're gone with that money. and we have a number of tools in criminal

investigation that we use to go out and, a, identify these taxpayers. b, to do investigations and our goal is to enforce those laws and ultimately put people in jail that are committing this fraud against the taxpayers and the government to deter that pro happening in the future. just like we're meeting here today and people have been working all today day, one of the best preventative measurements is awareness. so we do outreach and we go and talk to people so they are a aware that these comes are going on and hopefully when someone approaches them with something that does appear to be too good to be true they think twice about it before they commit or turn over money or turn over their identifying information even when you're going out to do your own personal health care or other items. a lot of times a form will ask you for your social security number and

other identifying things and i found that because, generally my husband is the primary and i never have it, they never come back and ask me for it. they're always able to process it without that information. as much as we can get out, as little information as you put out in a public venue the better because any personal information that gets out is vulnerable for someone of a bad purpose to get it and use it for misdeeds, whether it is filing a tax return or some of the other scams that you've heard about ultimately they're all to make money for somebody who's getting it that it doesn't belong to. as far as irs, if you have any questions or any doubts of any information that you received, especially that is unsolicited, please go to the www.irs.gov website. they have all the official information that has been put out and that would be used by irs for official

business. >> and also, just a little reminder, on the table outside, sallie has put down the press release of this year's dirty dozen. if you want a little light reading you can read about all the other scams you we deal with if you can't get access to the internet this afternoon. >> thank you very much. [applause] >> our next panel is on business opportunity fraud schemes. its's moderator is charles harwood. deputy director of the bureau of consumer protection with the federal trade commission. panelists, lowe's grismanftc. aunled draw birrotte, united states attorney from central district of california. richard goldberg, director of the civil branch much

civil division of the department of justice. ed mirs ask. y program director with the public interest research group, also known as iprg. dep by shanks, officer office of the maryland attorney general. and that i turn it over to mike. >> thank you. >> fellow panelists take the seats here and i begin with an on vision. who among us hasn't at one time or another, thought, gee, wouldn't it be great if i start my own job. maybe it was only a fleeting thought but i suspect if we took a poll of consumers we would find many of them think they have within them someplace the ability to make it on their own, to start their own business, to maybe, won't start the next spanx. but maybe go out and do something that will make them a little extra money. in many instance it is stops right there. consumers think it would be nice if i had my own

business but they pretty much stop at that point. in times of financial anxiety, when people are feeling anxious, feeling uncertain, i suspect times for example, when people are thinking that their job is at stake. they think they need a little extra income because they aren't getting as many hours they used to be getting. they're facing extra education costs because they have got kids in college. they're worried about medical bills they may be facing. they're realizing, for example, their retirement just doesn't go quite as far as they thought it would. whatever reason they're feeling financial anxiety. that is the frankly the kind of situation many consumers find themselves in right now. when they find themselves in the situation, i think it makes them more likely to decide to take the next step. to actually try to make money on their own. to sign up for a business opportunity or to try to find a work at home seem. -- scheme. when they go out in the marketplace and look around, guess what? there are many, many companies and individuals who are happy to help them

start the business opportunity program or start that business opportunity or start that work at home program. that is exactly what we're going to talk about here today. business opportunities and work at homes. the problem we'll see in just a minute while there are many legitimate opportunities out there but there also many, many instances where consumers end up being scammed and find themselves worse off than they were before. we have some eminent panelists with us. i will start with lowe's with the federal strayed commission. we'll start with business opportunity fraud schemes? >> sure, thank you, chuck. it is a real problem and problem not going away as chuck highlighted as others highlighted with the economic downturn, people are unemployed and underemployed, for various reasons they need to supplyment their income. i want to take a moment, what is a business opportunity, or we do shorthand, bizop? it is comercial arrangement. you will pay me to help you set up and i will provide

you something that may or may not be real. perhaps assistance securing an outlet, setting up a place, location assistance or maybe i will be willing to buy back your merchandise which often is the touchstone of a work-at-home scheme where you sit at home, stuffing envelopes or building various pieces of crafts and i will buy them back and find a market for you. consistently a top complaint-geter in the complaints the ftc receives over the course of a year. last year ftc received 1.8 million. >> you can find the rest of this conversation on the c-span video library as we take you live now for a briefing with spokesman jay carney at the white house. >> as you can see, i have guests with me. i'm proud and happy to have with me on my left, secretary of the interior, ken salazar and on my right, heather zikel. assistant to the president and top advisor on energy policy to the president.

they're here to talk about a blueprint for a secure energy future, the one-year progress report provided to the president today. what i'd like to do, as you know, when i have visitors like this have them speak to you for a few moments at top for you to address the questions you have on their issues at the top. then we can allow them to exit. and i will take questions on other subjects. and with that i think i will turn it over to heather and we'll get started. >> thank you. as jay said the president today received a new progress report showcasing the administration's historic achievements in securing our energy future. the accomplishments in the report which represent the efforts of six federal agencies underscore the administration's commitment over the past three years promoting an all hands on deck, all of the above approach to american energy and building a more secure energy future. i want to discuss a couple of the highlights. a year ago the president set a bold but achievable goal of reducing oil imports by a

third in little over a decade. thanks to booming u.s. oil and gas production, more efficient cars and trucks and a world class refining sector, we have already cut net imports by 10%, or one million barrels a day in the last year alone. and with the new fuel economy standards the president announced last year, we're on pace to meet our goal by the end of the decade. speaking of those fuel economy standards, we, the obama administration has put in place the first-ever efficiency standards for heavy-duty trucks and, as many of you know we proposed a toughest fuel economy standards for passenger vehicles in the u.s. history. requiring an average performance of 55 miles per gallon by 2025. over time these new standards will save consumers more than $8,000 over the life of the program. we've also doubled renewable energy generation, developed advanced alternative fuels and supporting cutting-edge research and development in

clean energy technologies. to speak a little more about our role in expanding domestic oil and gas production is secretary salazar. >> thank you, very much, heather. i think it is important for all of us to note that the domestic oil production is at an eight-year high in the united states of america. domestic gas production is at the highest level we've seen in recent memory. and as, heather just said we are importing the lowest amount of oil we have in 16 years to the united states of america. for me, for my time as a u.s. senator and watching this debate over the last three years, remembering back in 2008 when we were importing 57% of our oil from foreign countries to today, in 2011 we're importing only 45% is a dramatic achievement and one we are very proud of. on the level of activity that we have underway in the united states, we have, we had a 55% increase in the snum per of rigs operating

offshore for oil and gas as well as significant number operating in the outer continental shelf and gulf of mexico where the gulf of mexico is back to work again and oil and gas production is taking place there. on federal land and water we have moved forward in the last three years with a 13% increase in oil and gas production just from the federal land themselves. gas production in 2011 was one of the best years we've had in the past decade. and acreage being allowed to be developed by industry now includes about 72 million acres both on the land and in the sea where they currently are not developing. that is 72 million acres that have been leased to oil and gas companies where they currently have not developing. we moved forward to continue the robust, all of the above energy strategy which the president directed us to do so by con sinning to lease in the outer continental shelf as onshore n 2010 we leased 34 million acres we offered to lease 34 million

acres of area in the outer continental shelf. oil and gas companies only leased 2.4 million acres of those offered acres. in 2011 at a lease sale i conducted in new orleans we offered to lease 21 million sales. it was a highly productive lease sale in terms of amount of money that came in to the american taxpayer. at end of the day a million acres were leased by oil and gas companies. in 2012, this summer we will plan on moving forward with additional lease sale of over 30 million acres. onshore to make a quick comment about our continued to efforts to lease out million acres of public estate for oil and gas production, oil and gas companies today are sitting on 7,000 permits that have been issued to oil and gas companies where they could move forward immediately and start producing those leases. just a quick word on the renewable energy program which heather spoke about for just a minute. this president has really led a renewable energy

revolution which we are very proud of. the amount of renewable energy that has been produced here in the united states has now doubled in the last three years. we're proud that it -- over three million homes by end of the year. with that i will turn it over to jay. >> what i will do, i will call on folks. if you have questions for secretary salazar and heather, let's do that now and i will stick around for other subjects. alistair. >> secretary salazar you said all auctions are on the table in tackling high gasoline prices. would you discuss conditions under which would consider a release from the strategic petroleum reserve. >> i would say when you look at history of the sbr used

by president george h.w. bush in gulf one and used by president george w. bush during katrina, and so i think when you look at these issues and jay can speak more to this all options are on the table because the president obviously feels the pain that the american people are facing with respect to gas prices but i would say again this is probably the most important point, alistair. when you look back from the formation of opec and even before then we've had price shocks that have occurred in this country now over a dozen times. and every time you have oil and gas price shocks occurring you have all the political rhetoric and in the country rising to the highest volume it could be raised. what this president has done from day one is move forward with the kind of energy policy and strategy that includes all of the above energy program that we're i am bring -- imly meanting because that is the only way we'll get to a point where

we stop having the kinds of price shocks and disruptions that we've been seeing since the formation of opec and in fact even before the formation of opec. >> rising price meet the strategic threshold for release from the spro? >> i will have jay answer the question because he has been working more specifically on this issue. you want to take it? . . on american families and they may struggle to make ends meet. it's a reminder of why it was so

important to extend the payroll tax cut, which by putting an average of $1000 extra in the paychecks of the average american family is helping those families, 160 million americans helping them deal with higher-end oil -- oil and gas prices. he's micciche the department of justice is reconstituted the working group that will make sure there is no fraud speculation, price-gouging that is taking place in the country as a result of these higher oil prices and he will continue to review other options. he has also said because it is a simple fact that any politician, who pledges to the american people that he or she has a three-point plan to cut the price of gasoline to $2, $2.50 is not on the level. you guys know it. such a plan does not exist. not such a plausible plan. the global price of oil is affected by it for radio factors some of which are well beyond the control of any

administration and they include growth in emerging countries like china and india, brazil as well as on rest in the middle east and other areas of the world. that's why the president is focused on things we can control, think secretary salazar were talking about in terms of an all of the above energy approach. >> mr. secretary you said oil production is excluded from federal lands. the republicans introduced private lands but not on public lands. are you putting that stuff together to get production up or do you have staff that they don't have? the republicans keep saying that production is not up on federal land and it's up on private land and more broadly had the answer they said repeatedly that these are bush ministers and policies. recently jay has previously acknowledged that case but also this president has increased drilling as well. how do you sort all of that out?

>> i would say that those attacks are simply wrong. the fact of the matter is we are but boosting more public lands both oil and gas both offshore as well as onshore that -- than anytime in recent memory and when you look back at the year of 2009, 2010 and 2011 we continue to make millions and millions of acres available both on the land and on this even after having dealt with the national crisis of the deepwater horizon. the president and his administration stood up a robust brogue ram to continue to explore and develop the sweet spot of america, the gulf of mexico for about one third of our oil and gas comes from every year and today when we go out to the gulf you will find that there are more rigs working there than in the any recent time in memory and the fact of the matter is in the last 12 months we have issued over 61 permits to drill in the deep

water and about 100 drilled in the shallow water so we have more of that coming. when you think about alaska, there is a national petroleum reserve that is essentially been off-limits because of iraq received that happened during the republican and democratic at administrations of the past. this administration has essentially solve the problem but we are going to be seeing it for the first time in history. for those who say that this president's administration have turned back the clock on allowing our public lands to be used for oil and natural gas production, they simply are wrong. >> i think i just might to add to that by stating the numbers speak for themselves in terms of oil and gas production going up every year since the president has been in office but as the president has also acknowledge we are not at a point where we can drill our way out of the problem. that is why the report and all of the policies in this administration have been working on since day one from energy

efficiency to alternative fuels have been a top priority administration wide. >> the president also says there is no silver bullet in bringing gas prices down in the short-term but he has called on congress. do you guys have some kind of estimates of how, it is their subsidies regarding prices at the pump versus fairness issues? >> i think from our perspective it's a fairness issue. at the point in time when we are making difficult decisions about the budget and where to make investments and where to cut, the fact that oil and gas companies are bringing in record profits and the same time getting $4 billion in subsidies annually, the subsidy should be repealed and the president has called for that and i believe the senate will be acting sin to vote on the issue as well. >> there would be some kind of a connection between that and the president? >> right.

>> any more? >> why is gas at $5 or $6 a gallon? >> here is the reality and i think all of you in this room are smart, so i think when you look back at history, back, all the way back to 57 going into the the post world war ii era you see the price shocks for both oil and gas have occurred in this country with the different responses that are made and those responses have been going on since the formation of opec and a whole host of other things that have happened. but the reality is, is that the oil prices and the gas prices that we pay here in the united states are sitting on the global market. we don't control them. this president in this congress cannot control those prices on the global market. but that has failed for the last

four years is that no one intel president obama has really embarked on in all of the above energy strategy. that is ultimately what will be the ups and downs of these price shocks. so when we talk about all of the above strategy, what we are talking about is yes we will produce more domestically as we have shown we have done in the last few years but yes we will use less than the way we have done with the president's action in creating a much more fuel-efficient fleet system here in the united states of america and yes we will move forward with alternative energies and alternative fuel like oil refineries or the powering of much of our electrical means in the united states like we are doing is solar, geothermal and other forms of renewable energy. it's the commitment to sustained over time the all of the above energy strategy that ultimately will help us deal with this issue which otherwise is outside of the control of the united states.

>> the president has been talking about a longer-term approach, all of the above strategy for a while now but they pull out from abc news shows that two-thirds of the public of disapproves of the president's handling of the gas line issue and that only 26% approve of the way he has handled this. does this say that people want more immediate action? >> david, i think the fact of the matter is the president and the administration is not focused on polling data. we are obviously aware that americans are paying a very high price when they fill up their gas tanks. and the president is focused on that and concerned about it and understands the kind of impact that has on hard-working american families who are trying to make ends meet. that is why he is focused on a broadly capped economic policy that includes payroll tax cuts to 160 million americans that gives them extra money in their

pockets to help ends meet -- to help make ends meet and a job policy that increases employment and increases economic growth and he is looking at specific alternatives and approaches to deal with both our short-term and our long-term energy situation. but it is a fact and this goes to the question that steve had about why the price of oil is up. if drilling where the answer, if increasing drilling were the answer in the united states, to lowering prices at the pump, we would need seeing lower prices at the pump because under president obama we have increased significantly domestic oil and gas production. that is a fact. what it also affects obviously is the international price of oil, is economic growth in china, india, brazil and other emerging countries, economic growth around the world. the fact is, the united states

is growing. other parts of the world are growing and that increases the demand for oil around the world and that has an effect on the price globally. of course, also unrest and uncertainty in the middle east whether it's tehran or syria or libya last year has an effect and these are all factors that we have to take into account as we make policy and only reinforces the imperative that we do everything we can to reduce our reliance on foreign sources of energy which is why the resident is focused on all of the above approach. we will take two more here. alexis. >> they were successful in solving some of the problems of oil production in alaska and my question is do you feel confident defenestration could resolve similar problems so that keystone could take place under this administration's watch? >> let be just say something about alaska first.

i think the npra has basically been off-limits for a long time because they have been able to move forward to start in the not-too-distant future in terms of developing the npra and also in the months ahead i think we are in the midst of redoing what will happen up in the arctic and the final decision there. those have been debated for a very long time but i think they are indicators that the administration has tried to look for oil and gas production for a lot of different specifics related to the country and its energy needs but also the trans-alaska pipeline. the keystone pipeline, i would just say this. you know the president never reached a judgment on the merits. the state department never reached a judgment on the merits. we had a republican governor who i know was very opposed to the initial configuration of the pipeline and we are still waiting to receive the application on the new pipeline.

so i think if people would put politics aside and say canada should come forward, let us propose the pipeline on the table and then have the process engaged so we can formally evaluated and a decision can be made. >> and i would just add to that, you know one of the things we were and cursed by the fact that the oklahoma, port arthur section of the pipeline will be going forward and from our perspective that is certainly an opportunity to create jobs but also to address an energy problem. in cushing we have a glut of oil we will be able to move that oil more effectively and a portion of the pipeline that is not controversial that we can get started when the president, where the federal government has a role to expedite the work that we have to do and we are committed to doing that. but again, you know, that is one pipeline and this administration has actually approved a number of oil and gas pipelines,

including one from canada. so, you know whether it's oil and gas are what we have done in the renewable sector or with our infrastructure, this administration has a record of success. >> yes, sir. the distinguished gentleman in the back. >> i was wondering what the administration's -- in the middle east to the price of a barrel of oil today. the api says it's 15%. >> i don't think i can tell you specifically what that number is, but as jay has mentioned what we are seeing today and certainly the president recognizes what families are seeing in -- at the pump and struggling to make ends meet that outside force is including what we are seeing in terms of growth of demand rum emerging economies with millions of new

drivers on the road as well as the increased business in the middle east. we know that is having an impact on american consumers and that is why the president has directed his cabinet to take all actions available to help address this. >> thank you, all. >> thank you very much, sir. >> okay, with that we can move on to other subjects or are we can stay the subject. do you have a question? >> in afghanistan, the civilians killed by the american soldier. first of all, is this sense of not one that the president fears puts americans in jeopardy? >> well, the president is always

concerned about the well-being and welfare of americans stationed overseas, especially in a place like afghanistan both men and women in uniform as well as our civilian personnel and that is certainly the case in afghanistan. for specifics about what action may be being taken by the military or by the civilian presence there i would refer you to the state department. specifically with regards to the aftermath of this incident but you can be sure the president remains very concerned about that, and we will continue to be so. >> is the president thinking at all about the -- [inaudible] >> it's important to remember that the president's policy in afghanistan which was announced after a very careful and thorough review of a war there that had under the previous administration begun to drift,

that lacked a coherent set of priorities and goals, has been to focus on our number one priority which is to disrupt dismantle and defeat al qaeda and in service of that objective, to help stabilize afghanistan to the point where afghan security forces can begin to take over responsibility for safety and security of that country. because after all there is one reason why u.s. forces were sent to afghanistan and that is because the united states was attacked on september 11 -- september 11, 2001. that remains unchanged. and it is important to remember that is part of that strategy, the president has been and isaf forces have been drawing down already after the insurgent

forces, the forces have been drawing down as announced previously on that will continue only as will be discussed in chicago when nato ministers meet and heads of state me. meet. that process will continue so that in accordance with nato policy said in lisbon, the afghans will take over control of the security of their country by the end of 2014. the pace of that withdrawal will depend on a variety of factors that will certainly be discussed in chicago at the nato meeting and will be discussed running up to chicago and in the aftermath of chicago and it will be determined by a friday of factors related to the situation on the ground. but it's important in the aftermath of this terrible and tragic incident to remember why we are there and what our objectives are in terms of the united states national security. >> drawing us back to that broader objective which i understand in the meantime we have the koran burning incident

and americans killed by the afghans serving and the tragedy of an american killing children in their sleep. when you say there are many factors that could affect when we pull out, can you tell us with something like this what can happen? >> we have been in afghanistan for more than a decade. thanks to the president's focus of our policy and strategy on eliminating al qaeda, we are in the process of withdrawing our forces as we turn over responsibility for security of the afghan security forces. we have seen difficult challenges in afghanistan before during the course of the 10 10 years and as recently as, in the wake of the inadvertent burning of the koran, not long ago. the fact is that even in the aftermath of that, in our negotiations and consultations with the afghan government to resume our work on the strategic

partnership, and resolve difficult long negotiated detention issues to sign an extremely important memo of understanding last friday with regards to the transfer of control of retention facilities. i bring that up only to point out that we will continue to have very direct and important in negotiations with the afghan government as we pursue a strategy that is designed to bring our troops home as we achieve our object does. and to turn over an increasingly over to the afghans. >> jay, thanks. just to be clear will there be any review of u.s. policy? >> there is an investigation underway already into the events that happened, and the tragic killings of afghan civilians and i would refer you to isaf for

more details about that. as tragic as these events are, the strategy is focused on disrupting, dismantling and defeating al qaeda, stabilizing afghanistan so that afghan security forces can take responsibility for the security of their own country which would allow us to continue to draw down our forces and that is the strategy and a policy the president is implementing. i'm sure there will be discussions on going between u.s. military leaders as well as civilian leaders in afghanistan and the afghan government in the wake of this incident that our strategic objectives have not changed and they will not change, and we will continue to discuss with our afghan counterparts they need to implement our strategy and develop that strategic partnership that will allow us

ultimately to turn over responsibility to the afghans. >> could he harm his son standing with the american people relative to afghanistan? >> the president is focused on the national security interests of this country and when he was campaigning for this office he made clear that if elected president he would refocus attention on our efforts in afghanistan, attention which was flagged because of the attention on iraq in the previous administration because he felt our number one objective in the wake of 9/11 should be to eliminate al qaeda. the development and implementation of his afghanistan strategy was meant to do just that, refocus our priorities and make sure what we are in afghanistan to do and

make clear that we are not there to do more than that. he has focused very clearly on the implementation of that strategy and he has by any standard met with some success in regards to diminishing al qaeda. but that fight continues, and this president is committed to fulfilling his responsibility as commander in chief to ensure that al qaeda does not pose a threat to the united states or the citizens. >> a couple of weeks ago i asked if you had any idea how many al qaeda members there were in afghanistan? it had been under 100 a couple of years and director panetta. could you give an updated report? >> if i did have that i may not be able to share it with you,

but what i think was true then remains true now which was that the region between afghanistan and pakistan has been a focal point of our efforts and that the goal of the afghanistan strategy has been to both go after and removed from the battlefield leaders of al qaeda, but also to create a situation in afghanistan that makes it inhospitable to the hosting of al qaeda in the future. man that effort continues. >> the larger question, even as tens of thousands of u.s. troops who are there are brave and heroic and doing what they are asked to do, do you think that the presence of u.s. troops in afghanistan right now is actually making it more stable and less hospitable for al

qaeda, or is it doing the exact opposite? >> i don't think there's any doubt that we haven't had success. with the implementation of the strategy in making life a lot harder for all qaeda. and that has been a direct result of the president's approach in afghanistan and pakistan. i really don't think anybody could doubt that. there is no question that this is hard, that the situation in afghanistan has been and remains difficult and the challenges that our men and women face are significant. but it is important to remember that it is all done in the name of and with a focus on the number one priority which is to enhance american national security interests by disrupting, dismantling and ultimately defeating al qaeda and the stabilization of

afghanistan, this government of the building up of its security forces is done in service of that goal and that is why this initiative so important. it is not the case, and this was debated at the time, that our policy is or should be about trying to create a jeffersonian ideal in afghanistan. that is not going to happen and i know that is not what you are saying that i'm making this point in the context of why the focus of the mission is so important. >> we have reached our -- . >> we have been there a long time and the president has made clear that his policy would allow us to draw u.s. forces down, as we converse our goals there and it is a very specific plan. it has a timetable attached to it which some take issue with although you have to wonder why, because he understands the impact that more than a decade

of war has had on our armed forces and on the families of those who have sent men and women to iraq and afghanistan, on our economy, and that is why it was so important to him when he was developing it that we get it right and we have the right priorities and the right focus, and a place to which to achieve our goals and draw down forces and that is the president's plan. >> one concern in the white house that we in the presence of u.s. troops even though almost all of them are doing what they are asked to do, is not doing more harm than good right now? >> i'm confident we believe our presence there is having a desired effect in the implementation and achievement of our objectives, the implementation of the plan in achievement of the objectives. there had obviously difficult challenges we face in

afghanistan and incidents like this do not make it any easier, no question. i think i said alexis. >> the president wants the afghanistan and the government of afghanistan, the people play in investigations and the meeting out of justice? >> for the investigation of the specifics of that i would refer you to the defense department and isaf. the president is confident and i believe it's important that there be accountability for what happened, and the defense department is clearly investigating this matter and i refer you to them for details. >> is there a role he wants afghanistan to be able to play? >> i think the united states military is investigating this matter and we have confidence in the defense department's

handling. >> just to clarify, -- [inaudible] >> no, it will not dan because the strategy is focused on the objectives that i have laid out a couple of times today and certainly previous to today, and those objectives have not changed. we will continue to work with the afghan government, with afghan forces in the implementation of our strategy. we will investigate this tragic incident, and make sure that there is accountability, and we will continue to first do our strategic objective in afghanistan, which are about u.s. national security interests and the protection of the united states, our personnel and our

allies. >> you said in the past, the trust between the u.s. forces there and the afghan forces. is there concern at all that this could further impact the skepticism between the u.s. and afghanistan? >> well, i would probably suggest that the best people to answer that question are the defense department or in afghanistan both military and civilians. this is a challenging time, there is no question. the focus of our policy is designed to hand over greater authority to and responsibility to afghan security forces and the afghan government. i think that demonstrates that our interest is in -- is not in staying any longer than we have to. it is a strategy that fully respects the sovereignty of the

avenue can nation and the afghan people. and, we will continue to focus on the implementation of that strategy, to continue to focus on taking the fight to al qaeda. there is a reconciliation process, afghan-led, that is an important element as we move forward, and all of these aspects will continue. >> five counties in southern illinois i am told were denied disaster aid from fema. >> from illinois? >> because of tornadoes and other storm damage there. they have requested disaster aid and have been denied. >> dam, as you know the process by which fema evaluates requests for disaster situations is the same no matter which state made the request and the criteria

that allow for the approval of a declaration for kentucky for example are the same criteria that may result in a did not know, at least for now, to another state because they haven't been met and it's judged based on the objective criteria that the state has the wherewithal to handle storm recovery on its own. but, fema has a lot of regional offices, a lot of presence on the ground in these affected states and the evaluation process continues and our efforts at the federal level to assist those states that have been affected by the storms will be ongoing. >> is the president still planning on going to the -- [inaudible] >> his schedule has not change. speeches to follow up on the afghan question, i just want to get this clear. you said no one not have an

impact on the timetable for earlier you said the withdrawal will be determined by a variety of factors. one of the factors that the nato ministers will -- >> a couple of points. i think you are finding a distinction that does nexus. the focus of our overall strategy is not in reaction to a single event. and anymore than any more than it was two months ago. the evaluations of the pace of the drawdown will continue based on a friday of assessments made by u.s. military leaders as well as leaders of our isaf partners, and my point to dan was this incident did not change the strategic imperative that is embodied in the president's strategy. >> but if you change the timetable -- >> let me be clear. i do not believe this incident will change the timetable of a stretch of the -- strategy that

was designed and is being implemented in a way to allow for the withdrawal of u.s. forces, to allow for the transfer of lead security authority over to the afghans, and which will be completed no later than the end of 2014. the discussions about the pace of that drawdown have been ongoing, as i think secretary panetta suggested not long ago and he was having discussions with fellow defense ministers and will certainly be a subject of discussion among heads of state in chicago at the nato meeting there in may. kristin and then i want to move around a little bit. >> turning to syria, the president said repeatedly that -- according to recent reports intelligence officials have said said -- do you continue to argue and if

so how? >> recent reports citing anonymous sources are saying, whatever they are saying. there is no question that assad continues his brutal assault on his own people. there is no doubt about that. we continue to believe that it is not a matter of if, but when assad will be removed or remove himself from power. his legitimacy is certainly long since been lost, and we are working with a broad coalition of partners around the globe, who believe as the u.n. security council resolution made clear, that there needs to be a transition in syria. there needs to be, first a

cessation of the brutal assault on the syrian people and a transition that allows for the greater fulfillment of the aspirations of the syrian people. that continues to be our policy. we are not going to put a time by which that will happen. we will simply continue to work with their international partners to pressure assad, to isolate him, to make the cost of his assaults increasingly higher, and work in any way that we can to assist the syrian people who are suffering greatly under his brutality. >> a "washington post" report, there have been possible military interventions by the opposition forces there. can you confirm those reports? >> i think these were reports specific to the fact that as is

almost always the case in a situation like this when their international crises or events, the pentagon develops contingency plans. that is not the same as a policy decision. our policy remains the same which is which is are believe that contributing to the further militarization of syria is not a wise course of action right now. it would cause, it could potentially lead down a dangerous road and we are focused instead on what i just described to you which is working with international partners to to a a, help provide whatever humanitarian assistance we can to the syrian people as well as continuing the pressure on assad. i don't know if terry is here. do you have a question? >> last week there were congressional hearings about alternatives and one gentleman in the crowd talked about how alternatives were -- but

difficult to get americans to buy them. >> the president's approach in has all of the above energy policy is to invest in clean energy technology so that they become industries that create jobs in this country, not just overseas, and in ways that help reduce the price of alternative energy. a good example is our increasing share of the international market in battery technology. as greater breakthroughs are made in advanced battery technology, the cost of those batteries declines, which results in a reduced price for the vehicles that use those batteries and obviously that savings is passed on to the consumer. it is simply a fact in the world that we live in that someone

will dominate the alternative energy market. the alternative energy industries. light wind, solar, biofuels, advanced batteries. the president believes that those are quality industries that create well-paying jobs and he believes they should be here in the united states, that we should not change our reliance on foreign sources of oil to a reliance on foreign sources of alternative energy. and moreover, we create those jobs here, and we reduce our dependence on on foreign source is so it's a win-win. that is why you have to have this long-term strategy because as he and others have said we have 2% of the worlds oil reserves. we consume 20% of the world's oil. there is no way with those two facts in front of you that you can drill your way out of the

problem. you have to do more than just drill. you have to drill, you have to increase drilling and increase production and the president is committed to that but you have to do everything else as well and that includes not just batteries, biofuel wind and soil and granting the first permit to build a nuclear power plant which the administration has done. >> that is why gas prices will not push to lower gas prices. >> that is categorically false. this president is absolutely committed to reducing, to doing everything we can to negate the effect of higher gas prices on american families and to lower gas prices. what he is not willing to do is to look the american people in the eye and claim there is a strategy by which you can guarantee the price of gas will be $2.50 at the pump. any politician who does that is lying because that strategy does

not exist. it is a simple fact that there is no such plan that can guarantee the price of oil or the price at the pump. you have to have in all of the above approach and that all of the above approach can limit the effects are reduce the effects of high gas prices on americans and can also important to reduce our dependence on foreign oil so when there are fluctuations in the price of oil internationally, we are more insulated from the effect of them. yes, roger? >> pat roberts -- pat roberts has introduced a package, an amendment that basically revisits the package last week. the president was making calls and i was wondering if you think -- [inaudible] >> i don't have any additional calls to report. i would say, as i said then when

i reported that the president had conversations with members of congress with some frequency, and we don't have them all. i want to give others a chance. >> the president's meeting with mayor bloomberg? >> they speak from time to time. the president appreciates the mayor's insights into matters of policy. he appreciates the mayor's leadership on issues such as the economy and other issues and he enjoyed the lunch that they had here. >> they were focused on policy matters. >> the president is taking prime minister cameron to a basketball game. >> i think it's an opportunity for the president of prime minister to spend time together outside of the official trappings of washington and the white house. and of opportunity for the president to show the prime

minister a slice of american life. march madness is just getting started. some of us enjoy it quite a bit and any americans do around the country and he certainly looks forward to sharing that with prime minister cameron and i will be happy to attend that event with them to made sure everything goes according to plan to -- plans. >> question on afghanistan. i wonder if you you have any response to the chairman who said president bush gave over 40 speeches about iraq trying to educate the country to understand what we were engaged in. president obama is given three speeches about afghanistan and hasn't done anything to educate people. >> the president has spoken a great deal about afghanistan and his policy in afghanistan. i will leave the irony to compare it to others. it simply say the president is focused on a strategy that is effective and in the national

security interest of the united states and it ensures that every bit of effort extends -- extended by american men and women in uniform and our civilian personnel over there is aimed at our strategic objective which is to disrupt, dismantle and ultimately defeat al qaeda. it's because of al qaeda, because of the assaults on the united states on 9/11 that we sent u.s. forces to afghanistan more than 10 years ago to begin with and it is thanks to president obama we have refocused our strategy and the reason why we were there to begin with and it's because of that we are in the process of drawing down forces in afghanistan and in the process of transferring responsibility for security to afghan security forces and in the process of supporting an afghan-led process of reconciliation, which has the hope or creates a hope of a political resolution in afghanistan which is absolutely required for the long-term stability in that country. >> a more substantive question,

when the president had the conversation with karzai, is that when the -- >> i don't know the specifics of this but it often can be the case that setting up a call with a foreign leader specially when there is a great time differencs through you want to make sure you get the call and you have to call and it works for both leaders. that is why he sometimes has those conversations on air force one and sometimes when he is in the car. is greg here? no? okay. last one. go ahead. >> the killings in afghanistan happened a few days after a helicopter killed several civilians and karzai is holding out on fee and a night raid

earp. particularly in light of this recent killing and karzai saying it's unforgivable, are you willing to move on the night raid? >> i would refer that question to the defense department isaf, perhaps the state department. we are focused on implementing our strategy and doing so in a way that ensures the success of that strategy, and the safety and security of american personnel both in afghanistan and around the world. the specifics of the negotiations with the afghans i will leave to the defense department and the state department. >> more on afghanistan, where on the priorities list is -- >> we are in afghanistan for a

reason and i think i made clear what that reason is. if you are suggesting as i think you might eat, that the actions that happened yesterday were harmful, certainly they were. that is why we made clear that it was a terrible and tragic incident which will be fully investigated and there will be accountability, but as the president made clear in his statement that does not reflect the actions that, the actions to not reflect the mission and do not reflect the values or the professionalism of the american military men and women who are in afghanistan, and they are tragic and unfortunate. >> more on basketball of al but later. another president is going with 15. it's not the best game in the ncaa.

[inaudible] >> but seriously, why isn't he instead catching up a little bit of -- skipping out early on that dinner? that would be much more fun for everybody, wouldn't? >> we will look at that option. look, prime minister cameron is here tomorrow and wednesday. this is the opportunity that presented itself. march madness is a wonderful tradition in american sports and american culture and the president very much looks forward to having the prime minister join him for this game. >> the president would rather watch this game? >> we will have to provide details for you.

i'm sure will be the traditional interaction with the press with the prime minister and the state dinner of course and bilateral meetings. thanks. >> thank you. >> thank you very much. [inaudible conversations] [inaudible conversations] >> if you missed any of the white house briefing you will fail to find it on line shortly at c-span.org.

>> at some point the federal government has to be able to say to the private business that owns critical and the structure that we all depend on, that an enemy might attack, we have got to be able to say to them, you have got to meet this standard of defending herself in defending our country. >> in the year 2010, the estimate is that they are worth three cyberattacks on private and government computer systems, 3 billion. so this is the threat that is growing exponentially and that we simply must address. >> senators joseph lieberman and susan collins the chair and

ranking member of the homeland security committee detail how their cybersecurity bill differs from others senate bill to be considered the spring. "the communicators" tonight at 8:00 eastern on c-span2. >> mr. norm act was a local man here, and he started accumulating books when he was a teenager and continued. over his lifetime he accumulated over 200,000 volumes, and we have a gym of a collection. it is probably going to be this one. it's one of the books we we are most proud of. it's in the original binding from 1699 and it was once owned by a very famous scientist. you can see his name, i newton

and we are not pulling it out so much anymore because it is starting to flake away in the title page. >> pioneer medicine is a long stretch from what it is today. if you consider that the basis that we take for granted today when we go to the doctor, things like being as germ-free as possible as if the doctor has washed his hands before he decides to work on us and we use the term loosely for doctors. a lot of these doctors in our region were self-taught or they had worked under somebody else who had been self-taught and they were getting ready to retire, so they would just learn as they went.

>> now i conversation about the impact of the unemployment rate in gas prices on the stability of the u.s. economy from today's "washington journal." >> host: joining us from westchester pennsylvania this morning, hifr there.ent, >> guest: good morning. talk to us abouts unemployment. a couple of days ago, what do you make of it guest: good news, unemployment rate is still very high, 8.3%, so that's very high by historical standards, but it's good news that we're moving in the right direction. the peak unemployment rate back a couple of years ago was 10%. so we're making a lot of progress. and more importantly, our most importantly, we're create ago lot of jobs now. in the last three months, we've created, on average, close to 250,000 jobs per month. so that's pretty good job growth if we can sustain it.

then we'll get unemployment even lower. host: you told politico that what we're seeing is a reduction in the number of layoffs, but we're still not seeing strong hiring yet. guest: yeah, that's a good point. most of the improvement in the job market -- just to give context. the job market has been improving for two years. job growth resumed back in february of 2010, so wee seen steady job growth for two years. but for most of that time, it's been related to fewer layoffs. businesses have reduced the number of layoffs. we haven't really seen a significant pickup in hiring. that's really been the missing ingredient in this economic recovery. but the good news is, seeming the -- seemingly in the last three, six months, businesses are now starting to hire at a higher rate, still very low by historical standards, but it's picking up and that's very encouraging. it suggests businesses are starting to gain the confidence necessary to go out and expand

their operations, and that's what's needed for a healthy economy. we're not quite there yet. we've got a lot of work to do, but we're moving in the right direction. host: mark zandi, a question that comes up all the time, what are we really seeing? are we seeing fewer layoffs or people who aren't filing for unemployment? guest: well, in the case of jobs, it's a question asked to businesses, businesses respond to surveys from the bureau of labor statistics, and they it will the bureau of labor statistics how many people are working for them. so that's an actual count. that's a measure of employment. there is a little bit more difficulty in measuring unemployment, because to be counted as unemployed by the b.l.s., you have to be looking for work. you have to be in the labor force. sometimes it gets difficult to determine exactly whether people are looking, not looking, looking hard enough, that kind of thing, so there's

more debate about how much unemployment there is. but i think, broadly speaking, 8.3% unemployment is a good measure of how the economy is doing. it's still very high, so the job market is still very difficult, but it's down from where it was, and it's moving lower. and i think that's actually happening as well. host: join the conversation with mark zandi. democrats, 202-737-0001. republicans, 202-737-0002. independent callers, 202-628-0205. let's look at the february employment breakdown, where jobs are coming from. professional and business services, 82,000 jobs, a bump up, healthcare and social assistance, a bumpup of 16,000. leisure and hospitality, 44%. we're also seeing jobs in manufacturing, mining. what we lost jobs in was specialty trade contractors. these numbers are from the bureau of labor statistics. mark zandi, what do you read from where job growth is

occurring? guest: well, first and foremost, the job growth is increasingly broad based across lots of different industries and regions of the country. if you go back when the job recovery began a year or two ago, the job gains were more narrowly based. so it is encouraging that an increasely -- increasing number of industries are adding to payrolls. also rejob -- regionally, we're starting to see job growth in many parts of the country. most encouragingly, in the hardest hit parts of the country, places like florida, arizona, nevada, california, these were states that got screamed by the bust in the housing market, but they're now showing some signs of life. so that's good. there still are some parts of the economy that aren't creating jobs and losing them, so local government is the biggest drag on the job market. that's a lot of k-12. local governments are under extreme financial pressure, and so they have to cut.

construction is still weak. the housing bust is winding down, but it's not quite over. but i would anticipate the construction employment improving in the months ahead, but at this point it's still soft. broadly speaking, the job gains now are across lots of different industries. and again, that's quite encouraging. host: could rising gas prices throw a wrench in economic recovery? guest: yeah, sure, there are many things to be nervous about. the economy is still fragile. people are still very nervous about what we went through and what they're still going through. and the thing that makes me most worried is the runup in gasoline prices. just to give you a statistic, every penny increase in the cost of the gallon of gasoline costs the american consumer about $1.25 billion over the subsequent year. so, you go back to december, the cost of a gallon of gasoline, regular unleaded, was

$3.25. we're now up to $3.80. it's starting to add up to significant dollars. i think if we go over $4 for a gallon of regular unleaded, that will be a problem, because that's a psychological barrier. not only will it hurt because it's taking money out of the pockets of american consumers, but it's going to start weighing on confidence and consumers will start pulling back. so, this is a thing that makes me the most nervous, at least in the very near term. host: mark zandi is joining from us westchester, pennsylvania. he's the author of the book, "financial shock: a 360 look at the subprime mortgage implosion and how to avoid the next financial crisis." let's hear from curtis, democratic calmer in richmond, virginia. good morning. caller: good morning to you both. i'd like to ask the gentleman about the gas prices and is gas our number one export? guest: no.

thank you for the question. no, it's not an export. we do export some refined petroleum products, but we import a lot more energy than we export, so we're still very large importers of crude oil. that's obviously a key ingredient to gasoline. so when oil prices rise, that's a problem for our economy. because we produce some of it, but we import a lot more of it. and the way i kind of think about the effect of gasoline prices on our economy and energy more broadly is that it's almost like a tax increase. you know, if we have to spend more to fill our gasoline tank, then we have less to spend on everything else. in fact, it's kind of a pernicious tax increase, because it really hurts lower and middle-income households who spend a lot more of their budget on gasoline. a lot goes to overseas energy producers in the middle east

and other parts of the world. that really doesn't do us a whole lot of good. so, it's a very difficult thing they will begin with general speeches as members return to washington. legislative work gets underway at 4:00 eastern with more debate on the transportation programs and projects bill. no votes are scheduled for today although maturity leader harry reid has warned lawmakers to expect those tomorrows leadership tries to wrap up work on a measure this week. now live to the senate floor here on c-span2. the presiding officer: the senate will come to order. the chat lynn will lead the senate in prayer. the chaplain: let us pray.

lord of mercy, we trust your power and will not be afraid. in these challenging days, give our lawmakers peace that comes from confidence in your providential powers. when they feel pessimistic, remind them that you are able to keep them from stumbling and that deliverance comes from you. you are a gracious and merciful god, slow to anger and abounding in steadfast love. help our senators today to strive to do as much good as they can in as many

circumstances and to as many people as they can. we pray in your sacred name. amen. the presiding officer: please join me in reciting the pledge of allegiance to the flag. i pledge allegiance to the flag of the united states of america and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all. the presiding officer: the clerk will read a communication to the senate. the clerk: washington, d.c, march 12, 2012. to the senate: under the provisions of rule 1, paragraph 3, of the standing rules of the senate, i hereby appoint the honorable christopher a. coons, a senator from the state of delaware, to perform the duties of the chair.

signed: daniel k. inouye, president pro tempore. mr. reid: mr. president? the presiding officer: the majority leader. mr. reid: we rarely acknowledge the chaplain here in the senate and we should more often. we're so fortunate as a body to have this good man leading us in prayer virtually every day. the prayers he gives tremendous thought to what he should say. they're always very challenging and encompass the issues that we're dealing with. for those of you watching who don't know anything about this man, he is a role model of what america's all about. raised by a single mother. she would give him a few pennies each day that he would memorize verses of scripture. he -- i've seen the man and his ability to speak volumes, pulling up things that he has in

his brain, remind me of senator byrd who for many years sat right here behind where i am, and he had a remarkable ability to remember things that he had read or studied. admiral black is the same. so i am -- i'm, mr. president, i'm very -- and i speak for the whole senate, not democrats or republicans, but for this body in expressing our appreciation to the good work he does, not only in offering his prayers here but the counseling that he does on a daily basis here in the senate. mr. president, each day the senate begins its workday with a ritual, a solemn ritual -- we just did that -- we pledge allegiance to our flag. each day we rededicate our loyalty to this flag and to the fundamental pillar for which it stands, right to do justice for all. unfortunately for tens of millions of americans, that

right to equal justice under law is at risk and i'm sorry to say it's at risk because of republican ideology. more than half the nation's population -- 160 million americans -- live in parts of this country that's been declared a judicial emergency. what does that mean? it means that more than half the people in our country who suggests of the courts and judges, the courts we find are strained at the breaking point under a backlog so intense an emergency has been declared. mr. president, the presiding officer is an expert on bankruptcy and knows how important filling those bankruptcy slots are. one reason we are slow in filling those bankruptcy spots is, of course, we need more bankruptcy judges, but the bankruptcy judges are chosen by our federal judiciary, trial

court judges. they've got other things to do. they are so overwhelmed with things to do. people who have businesses that they have problems dealing with because of federal laws need to go to court, have those issues redressed. there could be injuries suffered that only the federal system can relieve them of their responsibilities. discrimination because of age, gender, antitrust cases, business rearranging. mr. president, you've heard that expression, "what are you trying to do, make a federal case out of it?" the reason people say that is the federal court system is the place you go to be treated fairly. when i practiced law, i had great respect for the state court system, but it was in the minor leagues compared to when i had to go across the street to the federal court. much different setting.

mr. president, one out of every ten federal judgeships is now standing vacant in our country. americans can no longer rely on fair and speedy trials. the courts where social security cases are heard, appeals are heard, discrimination suits are tried -- i went through the whole list -- they simply don't have enough judges to handle the cases brought before the federal court. in these courts, our federal judges are being forced to limit their time on the cases they have and we don't want these federal courts to be like traffic court judges. they're different responsibilities. we want people to say, what are you trying to do, make a federal case out of this? we want that to be -- to mean something. and families and businesses typically wait for years before their civil cases are heard. now there's some problems that congress can't solve but this isn't one of those problems. i repeat, this is not one of those problems.

the senate could act tomorrow to put highly-qualified judges on the federal bench, judges who are supported by both democrats and republicans. the senate could act tomorrow to ease the backlog of cases, lighten the load of overworked judges and shorten the time it takes to see justice done in our great country. the senate could act tomorrow to confirm 22 judges currently ready to serve but awaiting senate action. these are 22 qualified consensus nominees, the overwhelming majority of them received unanimous support from the judiciary committee. they have the support of republican senators from their home states. 11 of these nominees would fill vacancies designated as judicial emergencies. we're filing, mr. president, i will soon announce, cloture on all these to bring to stop the filibuster being conducted on these good men and women who want to serve. we're going to file on 17. 11 of these people that we're --

we're trying to get confirmed, mr. president, are nominees from judicial emergency states, yet republicans have refused to allow us to even vote -- won't even allow us to vote -- on these qualified judicial nominees. republicans have prevented the senator from doing its constitutional duty and that's what it is. the house doesn't have to deal with this because our constitution says that that's our obligation, to confirm or reject the nominations the president sends to us. we should have up-or-down votes on these. the kind of qualified consensus nominees that in years past would have been confirmed in days or weeks now languish for months and months with no acti action. there are judges on this list go back to november of last year.

not because we couldn't have done it. these could be confirmed in a matter of minutes. the votes should be routine. they shouldn't be a fight that delays action on important jobs measures. creating jobs is the senate's number-one priority. republican obstructionism is the only thing standing in the way of moving forward with additional work to get our economy back on track. unfortunately, republicans have forced our hand. what else can we do? the endless obstructionism has created a judicial emergency in this country time and time aga again. at the end of last year, senate republicans refused to allow votes on even one of the 14 judicial nominees awaiting confirmation last year, breaking with the senate's long-standing tradition of clearing the calendar of consensus nominees at the end of a session. each of these nominees was well qualified and had bipartisan support. president obama's judicial nominations have waited an average of five times longer to

be confirmed than those of president bush. look at this, mr. president. president clinton. these are days. these are days. president clinton's were confirmed in a matter of about five or six days. president bush's, 21 or 22 days. obama's are still skyrocketing. it's really, mr. president, unfair. it is really unfair. it's not only unfair to the system, which i've described, but it's unfair to these nominees. they're all well qualified. they've received near unanimous support. they're all lawyers having to hold their practice back waiting to see what's going to happen here. these are lifetime appointments. that's what the founding fathers

established. long waits have nothing to do with the qualifications of these nominations. as i've indicated, after waiting months for the senate to act on these judges, they're often confirmed unanimously, almost unanimously. what does that say? it says that the wait is dilatory. it's delay for delay's sake. as we know here, my friend, the republican leader, said his number-one goal in this congress is to defeat president obama. this is part of it. president thomas jefferson said -- and i quote -- "when one undertakes to administer justice, it must be with an even hand and by rule, what is done for one must be done for everyone in equal degree." well, when we have judicial emergencies all over this country affecting 160 million people, what president jefferson

said doesn't work. president jefferson's principle is true in america's court system as it is any place in america and it should be true in the senate. one qualified consensus judicial nominee ought to be treated like another, regardless of political party and regardless of who's president, quite frankly. for the courts already in crisis, the republicans couldn't have chosen a worse time to play politics with the confirmation process. so today i regret that i have to file cloture on a package of 17 district court judges. i hope that we can move through these. i hope people aren't going to be doing more dilatory tactics. if cloture is invoked, people have a right under our rules to hold up the next judge in line for 30 hours. that will show what this is all about. it will show it's an effort to embarrass the president and not take into consideration

160 million people who don't have the ability to have their cases tried in an orderly manner. the petition to end the filibuster only applies to district court judges, trial judges. so i hope that republicans won't continue to filibuster appellate judges, our circuit court judges. that would be wrong. we would have no alternative but to take action with that. there's a lesser number of those but they're very important positions. this -- we have so much work to do, mr. president, here in this body. we must complete action on the extremely important transportation bill, which will either save or create 2.8 million jobs. i'll work with the republican leader to finalize a path forward on a bipartisan small business jobs bill that the house passed by a very large margin last week. we must consider postal reform legislation, cyber security legislation. we have gas prices we have to deal with.

and the reauthorization of the violence against women act, and other things, mr. president, that are important to our country. it's unfortunate that we've had to move forward on something that is so glaringly wrong. look at this. look at this, mr. president. and this -- these are static. they're not going to change. these are not going to change. clinton's not going to change. whatever happened, happened. this is not going to change. whatever happened, happened. here, this number keeps going up. you go back to a couple of those judges, november, december, january, february, march. we're up to five months with some of these judges. i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

the presiding officer: the majority leader. mr. reid: i would ask the call of the quorum be terminated.

the presiding officer: without objection. mr. reid: would the chair announce the business. the presiding officer: under the previous order the leadership time is reserved. there will be a period of morning business until 4:00 p.m. the senator from north carolina. a senator: mr. president, i ask unanimous consent to speak in morning business for up to 40 minutes. the presiding officer: without objection. mr. burr: i thank the president. i thank the majority leader for his leadership on an amendment on the transportation bill, the menendez-reid-burr amendment. for a short-title purposes it is called the nat gas bill. this is not a new bill. it is not a difficult bill to understand. it is a game changer as it relates to our energy policy in this country, and more importantly, the economic security of our country. i want to take these 40 minutes to sort of walk through the bill, but it is essential before

i do that that i say to my colleagues and to their staff and to the american people, if for some reason you believe that in the next 18 months in america we're going to have massive tax reform, lower rates, no deductions, no credits, no subsidies, then i want to you do me a favor: turn off your tv. leave the gallery because i'll never convince you that this is the right move. in fact, if i believed we were going to do comprehensive tax reform, i would not be on this floor. i would not be offering this amendment. but the truth is there's nobody in america that believes that's going to happen. mr. president, let me say this to all my colleagues, their staff and to the american people. if you believe some myrrh calculus thing -- some miraculous thing is going to

happen and there is going to be peace in the middle east -- no civil wars, no nuclear advancements, no threats -- then turn off your tv. leave the gallery. i'll never convince you, nor would i be here today if i thought that was going to happen. but the truth is that as policy-makers we're charged with doing things based upon the landscape and the framework we have in front of us. and today in the absence of this body, the congress of the united states acting, the american people will get exactly what they've gotten. escalation of energy costs. that's to fill their car. it's to fill their truck. it's to heat their house. and you know what? it's felt by the increased cost of the businesses they work for. this is about personal security. this is about the livelihood of every american. let me just say now if you're still with me, if you haven't turned off the tube or left the

gallery, the single-most important reason that we should do this is our national security. our national security is vital to this country. now let me just stop and pose a question to you. who controls today our access and our cost of energy? it's not us. in many cases it's people around the world that don't even like us that control whether we're going to have access to oil or what the cost is going to be. today 70% of our oil is imported. so we've got 30% that we've got some ability to control and to access. but 70% of it, we're at the whims of other people. we're at the whims of the market. you know what? they don't like us and they don't care with a we pay.

and i might say, mr. president, many of those countries use the dollars we send them to fund terrorists to, fund the very people that we run into on the battlefield in afghanistan, iraq, and around the world. they aren't concerned with our economy. they aren't concerned with the future of our country or the future of our children. not a very comforting situation to rely on for our energy, especially with 70% reliance on what they have. let me suggest that this requires u.s. dollars to be spent and u.s. lives to be put on the line to make sure that day in and day out this country has access to that 70% reliance on black gold. look at the gulf today.

ships, sailors, marines, aircraft, all in the gulf to make sure that somebody doesn't shut down the straits of hormuz, to make sure that we've got access to that oil. it certainly doesn't cap what we pay at the pump or in the taxes that we pay to assure that when we need it, it's going to be there. some claim that speculators are the whole problem with the oil industry, and i'll admit i think around the edges a couple cents a gallon, that speculation, futures traders probably do have a little bit of impact. but, mr. president, it's not significant. and speculators don't control our access to it, our reliance on foreign oil is what judges whether we have access to it or

not. we must admit that our access today is a national security threat. two, economic security. mr. president, you and i know a word up here is called liheap. it's the low-income heating program for seniors across this country, for individuals who can't afford home heating oil. we're going to spend $5.1 billion this year to subsidize home heating fuel. this entire bill, the nat gas bill, which is a game changer relative to the cost of not just home heating fuel, but diesel and gasoline, costs a little over $3 billion and the taxpayers aren't on the hook for one penny of it. i'll get to that a little bit later. the u.s. economy is starting to

recover. we've seen signs not in every community and not in every sector of our economy, but we see signs that it's moving in the right direction. but there's one common thread that all economists agree on. if energy costs goes up, you stand the chance of cutting off that recovery. you stand the chance of freezing or increasing unemployment at the rates that it's at today. now how quickly we recover, how quickly americans are hired, how quickly unemployment goes down, how this affects our balance of trade, we haven't even talked about the individual family budget. think of what a typical family is faced with today, the cost on a weekly basis to fill that vehicle up. many families today have accepted jobs not close to where

they live. where jobs were available. they drive from one community to another. some drive from one state to another because that's where the job was. we've had no increase in wages. we all know that. but we've seen food prices and we have seen gas prices and energy prices go up. here is an opportunity for us to have a real impact on the family budget in america without charging the american people one penny to have us do it. in my opinion, mr. president, we should have started new exploration decades ago. had we skhroerd for -- explored for oil and natural gas onshore, offshore and built pipelines, we might not have this problem right now. for those that say we shouldn't do it now because it's ten years down the road before we feel the

effects, we had this same debate 10 years ago and had it 18 years ago when i got to the house of representatives. today we're still talking about the same thing. the only thing that's changed is the price of energy in america. i believe we ought to focus on america, north america, and we ought to tap those resources in a safe and environmentally friendly way, which is in fact we're technology allows us to go today. my third goal to this bill is energy security th-fplt year we voted against pipelines. they would have provided some security. we've reduced some form of demand, not much. today we're reducing exploration. we're not increasing exploration here at home. and who pays the bill? the american people.

it's real simple. it's just pass through and pretty soon we get used to $3.76, which is the national average. in some places in the country it's over $4. but -- three years ago $1.86. i was ratinged as the seven -- i was rated as the seventh most conservative member of the united states senate. this year i bought a hybrid. i bought a hybrid because i was tired of paying people money that hate us. i was tired of paying an exorbitant amount for gasoline. i personally would do anything that i could to make sure i reduce my consumption and my costs. but the only way i can affect every american family is to come on this floor and to change the policies that we have in this country in a way that nobody is slighted, nobody is cheated.

nobody loses. you know, somebody said this bill picks winners and losers. well, i've got to admit it does. the winners are the american people and the losers are everybody internationally that produces oil. i think that's a pretty good pick. well, let me suggest to you, mr. president, this must stop. it must stop. my suggestion is that it should stop tomorrow when we vote on this amendment. we need an energy plan. we should explore. we should build pipelines. if we did, down the road, we'd benefit. you might think well all of this is an accurate depictions of where we are.

what would a natural gas bill do to change our situation? let me suggest to you it's about our most abundant clean, flexible fuel. you know what? it's american. it's found right here at home. why wouldn't we use as much as possible? oh, by the way, did i say it's cheap? if you look at natural gas as an ekweuf thraopbt a gallon -- equivalent to a gallon of gasoline. natural gas is somewhere between $1.60 and $2.10 at today's rates. imagine where diesel is. imagine where home heating oil is. why? because technology has allowed us to reach reserves that we

could never reach before. it's allowed us to do it environmentally friendly. it's allowed us to do it at a pretty attractive production cost. as a matter of fact, the word in the world is the united states is the saudi arabia of natural gas. but nobody looks at us and says you're controlling our access because we can't even figure out what our policy is going to be. now, let me just suggest to you that i think the president -- mr. president knows this. if we produce more than we consume, then we will aggressively build an infrastructure to ship it all around the world. but if we consume what we produce, there will be an effort to produce more and to produce more and to produce more, and when that happens, typically the

price goes down. so i guess the question in front of this body is are we going to use it for the benefit of the american people or are we going to ship it to the rest of the world? now, some in congress will tell you that shifting natural gas usage through federal legislation shouldn't be done. let me be clear. i agree 100%. the federal government is not the one that should be legislating how markets go. but when i consider the federal government, we're speaking for the american taxpayer, because usually they are the ones that are the backup funder of everything that we pass. this bill doesn't do it. this bill is a five-year bill and it sunsets. it goes away.

and it funds the roughly $3.4 billion with a user fee on the exact people that are benefited by it. those natural gas users. you see, the american taxpayer has no skin in this game. they all say that the federal government, the american taxpayers, shouldn't fund any new tax credits or subsidies. i agree. these are the two criticisms that this bill has received. i agree with them totally. read the bill. that's not what we do. we fund it from the people that benefit from the credits and from the subsidies. now, you might ask where do we disagree? policy can and i think it should accelerate the usage of natural

gas. some have said that there is no need to do this. it's happening all by itself. i agree. another point of agreement. it is happening every day in communities across this country. and ten years from now, we might look back on it and we might have made a little progress. we have got an opportunity right now without taxpayer funding to accelerate this move in 18-wheel vehicles, in fleet vehicles, in municipal trucks and automobiles. so i think that we can and i think that we should accelerate it. again, natural gas is the only flexible mobile fuel we have. it's not like there are other options out there that we can accomplish this with. i believe that if credits or

subsidies are paid for by the users, those that benefit, that this is a good thing and it is good policy. think about it for a moment. if you took all of your 18-wheel vehicles in america and you put them on natural gas, you would redues cummings of foreign oil by one-third. do you want to know how to bring down the price of gasoline and diesel? there it is. take one-third of the demand and shift it over to natural gas. fleet vehicles today, companies, fedex, u.p.s., i can sort of name all of them, the in and out every day. they go out in the morning, they come back in the afternoon, they have one fueling station and they are running to go to natural gas. they don't need the incentive, but look how fast they could take their entire fleet if it was there. again, without one penny of taxpayer money. municipalities. there is not a municipality in america today that's not challenged from the standpoint

of their annual budget. they have cut parks and recreation. they are trying to figure out how to do education. every community is faced with the same thing, decreasing property values. therefore, the flow of revenues in is less than they were last year and the year before. where is the game changer for municipalities in a maryland gas bill? -- in a maryland gas bill? it's very simple. there are 500,000 buses in america and there are 26 million kids every day that get on a bus. if you can reduce by one-third or more the cost by switching to natural gas, we should be doing everything we can to get every school system in america to have a natural gas engine in their school bus so that the other two-thirds that they have saved goes back into the classroom to educate our children, that nobody is faced with trying to decide whether they are going to buy textbooks or have a teacher's aide. but every classroom is designed not based upon how much money we

have got available but what the educational requirements are for that next generation. for those that suggest this bill doesn't do anything, i would tell you that one point alone is enough to get up and vote yes when it comes up. it's a game changer. it's a game changer to local budgets, and more importantly municipalities get to devote the money to the right places. now, why is the credit needed? it's very simple. it costs money to switch an engine. a typical natural gas engine is going to be somewhere between 25,000 and 40,000 more than the typical diesel engine in an 18-wheel vehicle today. but you know, as more and more and more get built, what we're going to find is the diesel engine is higher and the natural gas engine is cheaper. wouldn't we accelerate this as

fast as we could so that we can get the benefits of that production shift? everything's geared to do it today. as a matter of fact, it's so compelling a reason that chrysler, ford, general motors have all announced in their light-duty pickups, they are going to come from the factory with natural gas. but you know, for a consumer to fuel natural gas, they're going to have a little compressor at home for compressed natural gas hooked up right to their natural gas line. for an 18-wheel vehicle going from north carolina to california, it's not that easy. it means you have got to have an infrastructure across the country that enables that to be a feasible business decision for a company. what's part of the nat gas bill, it creates a credit, a subsidy so that that infrastructure that's needed is out there. and oh, by the way, we have still got the credit in place for individual consumers that want to have fueling stations.

mr. president, we're not re-creating the solar or wind subsidies or credits. we're not re-creating an ethanol subsidy for gasoline that americans have just had a huge distaste for. we're taking not a technology of the future and investing in it, we're taking a technology that's here today and saying let's create the incentive for this to explode, for this to be a game changer in the global balance of trade. now, why don't some want this? some don't want this because they use natural gas today and they don't want the price to go up. we're sitting on a 100-year supply of natural gas right now if we didn't drill another well.

we have got companies that are in the business today because of where the price point is and because of where the demand is are thinking about plugging, shutting in natural gas wells because they can't move it out of the country and they can't sell it here, yet we're on the cusp of being able to create an incentive that's paid for by the users that not only keeps those wells open but gives the reason for those companies to actually produce more. america's always proven if we buy it, they will build it. look at the automobile industry. we would buy them and today we're going everywhere in the world to find the gasoline that it takes to put in them. well, my belief is, mr. president, that if you accelerate the use of natural gas in trucks, fleets,

municipalities, what you're going to have is you're going to have another explosion of natural gas finds. you're going to increase supply. if anything, you may see prices drop even further, but without the demand, i can assure you the future is very predictable. we have this fuel at home. it's on land. there is some offshore, but the majority of the finds are on land. and more importantly, mr. president, this has happened exactly where we need it. pennsylvania, ohio, north dakota, oklahoma. and yes, probably north carolina and virginia. the fact is none of us know today because some areas geologically have never been explored for. what are the realities?

well, if we can outproduce what we consume, one of two things will happen. one, we'll build an infrastructure to sell it all around the world, or two, we'll slow the exploration. in both cases, the price will go up. isn't that why people are against this bill? because they are scared the price is going to go up? in fact, this bill is the only thing that will keep natural gas prices at historically low costs. anything less than this would cause devastation throughout the marketplace. many say let the markets drive what happens. that's what i'm doing. that's exactly what i'm doing. this legislation says produce as much as possible. shift as much from petroleum as technology will allow us.

you know, it's sort of like saying let's give the federal government a five-hour energy drink. let's put this policy on steroids of shifting as much as we technologically can from gasoline and diesel and home heating oil over to natural gas. what's the impact on the american people if we don't do this? it's higher gas and diesel prices. it's higher costs for all goods we buy. you know, sometimes we don't think about the fact that when that trucker pays $4.20 a gallon for diesel and they have seen their price double in the last few months, it's not too long before we feel it in the cost of groceries or in consumer goods or in everything that we purchase in the united states.

and if the warehouse that that product is stored in, energy costs go up, we get it there. and if the cost to produce it goes up because the manufacturing process costs a little bit more, it goes up there. this is how inflation happens. here is a great opportunity for us to really get our teeth into inflation and cut the primary driver of inflation and the byproduct of it would be, i think, that we would have almost a magnet in america of a capital attraction to fuel job creation and to put americans back to work. see, there is a lot more to an energy policy bill than whether they are winners and losers. what else would the american people be impacted by if we don't do this? higher property taxes.

there is no way around it. there is absolutely no way around it if, in fact, we want the next generation to be educated. and we have got an opportunity to take two-thirds of that transportation cost of a municipality today and to pump it back in to the budget. well, let me suggest that there is another loser in this. i think the president of the senate knows this. if we fail to use this as a flexible mobile fuel, most of it is going to be used to generate electricity. they are going to take the easy way out, $50 million to build a nuclear -- i mean a natural gas generation facility. it's cleaner burning. that makes it very attractive to them. the only problem is we're going to get 30 years down the road, most of us here are going to be

old enough that we're looking back, if we're still here, at our children, saying i can't believe we made this mistake. i can't believe we locked you into one fuel for the generation of all of america's electricity. one of the beauties of america is that we have a mix and we're constantly changing that mix between coal and natural gas and nuclear. well, we would make a huge mistake if we just left it to today's economics to say let's do it all in natural gas. if we did that, we wouldn't have a bridge fuel, the flexible fuel that natural gas provides us. we would be locked into betting that solar allows us to run it in future and i'm not sure i can bet that for my children and my grandchildren. i'm not sure that we're there. i'm not sure that we're smart enough.

mr. president, i'm going to pose a question to the senate. what if i'm wrong? i've been wrong before. what if i'm wrong? what if it doesn't happen? what if there's not an explosion of transition from gas and diesel over to natural gas? it's real simple. the user fee goes away. but we tried something. there's no downside. it's not like we're locked into something that costs the american people money. if we don't need as much, then we don't knead the user fee. -- need the user fee. had hadn't impacted up or down

fuel costs if in fact we haven't pushed things over. we're where we are today. no daniels, no downside. --, daniels, no downside. the presiding officer: what if i'm right? what if i'm right and this is a game changer? well, we continue to grow our production of gas. that creates tens of thousands of jobs all across the country. we reduce our need for foreign petroleum. game changer in the security of this country. we stabilize or reduce the current price of gas, diesel, home heating fuel, the more natural gas we leverage, the more dollars we have in our pockets. as americans.

the environmental impact is significantly better than diesel or gasoline. our economy grows because fuel cost is predictable and more investments are made, hiring more americans. communities and companies can budget, they can budget better, because we have control of our future cost, not somebody that hates us. prices come down because fuel cost is less, do not go up. less of the family budget goes to fuel, less community budgets

go to buses, more goes to our children. i realize this is bold. and, boy, has america become risk-averse. this is not something that i stumbled on yesterday. i've been promoting this for three years. this is the first chance to come to the senate floor and have a vote. and you know what? it probably is not going to pass. that's the disappointing thing of it. it will probably fail tomorrow unless my colleagues or their staff that stayed after my first two comments and listened to this understand that there's not a downside to doing this. why in the world would we not

take this bill and implement it in hopes that for the first time we've got a piece of energy policy in america? i said at the beginning that if this was done by pulling the money from taxpayers in america, by never be up here offering this bill. but this is the time. it's now. look at the global landscape, look at the cost of energy. there has never been a more important time for a piece of legislation that drastically changes the future of this country. you know, mr. president, i, too, have been disgusted with governments investing our dollars and picking winners and

losers. mostly in losers in technology that haven't proven to be effective. this isn't that. this is using dollars that we collect from user fees to accelerate technology that is there today. it's just accelerating its use. it's making sure that the future is radically different. using existing technology to be a game changer. it affects the lives and the livelihood of every american, the communities we live in, and more importantly, our children. i mean, maybe this is too simple.

maybe -- maybe members of congress only gets he get difficult things now. this is easy. it's easy to understand, it's easy to see the picture of what it affects. it's easy to understand the impact on the american people. and it's all positive. if you implement it, it has no downside. why wouldn't we try it? and see what happens. mr. president, if passing this amendment might accomplish what i've described, why wouldn't we do it? we represent the american people, and it may be that their voice needs to be heard before tomorrow when votes happen.

this requires vision, and i've got to admit, it's something that congress has shown very little of, of late. this legislation benefits only one thing, only one thing. the future of this country, the united states of america. the opportunities of our children, the prosperity of the greatest country in the world. if those things are important to you, then you ought to support this bill. they're important to me. and that's why i'm here on a day when the senate has no

business, has no votes, because it was the one time i could come here uninterrupted without the distractions of all the visitors and all the claims to set the record straight about this legislation. it's simple, it's easy to understand, it impacts everybody in america, it does pick winners and losers, it says america is going to win, and the people that aren't our friends are going to lose. i'm not sure that you can say it any clearer than that. doesn't cost taxpayers a dime. the beneficiaries are the ones that pay the tab. if it doesn't work, there's no downside. if it does work, it is a game changer from the standpoint of our energy policy and more importantly, our future.

the bill sunsets after five years. we've got a hundred-year supply of natural gas today if we didn't drill another well. we import 70% of our petroleum, and that costs $25 billion a month that we send there. imagine what that $25 billion could create in jobs here if in fact we made this simple policy change. mr. president, i thank you for your attention, for your patience, and the patience of my colleagues, since i ran over a little bit. but i'll conclude with this: a bill that roughly costs $3.4 billion to $3.8 billion and

is funded by user fees is not a big bill in washington. but the potential impact of this legislation will not only be big in america, it will change the landscape of the world. it will put us back in control of our national security, of our economic security, and more importantly, of our energy security. this will be a day that congress will either be proud or disgusted at the outcome of a policy like this. i thank the president. i yield the floor. i note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

quorum call:

mr. sessions: mr. president? the presiding officer: the senator from alabama. mr. sessions: i would ask unanimous consent that the quoacial calquorum call be disp. the presiding officer: without objection. mr. sessions: and, mr. president, i would ask unanimous consent that senator -- the senator from wisconsin and i be able to conduct a colloquy. the presiding officer: without objection. mr. sessions: mr. president, it's not been that long since the president's health care proposal has been passed. if we recall, it was passed on christmas eve, after a long battle. we were told, well, don't worry what's in it. we'll have to pass it t first to find out what's in it. i remember that senator brown was running in the state of massachusetts, a liberal state, and he said, if you elect me --

and he was running in the special election -- i'll vote against it and provide the vote that kills it. and the matter was delayed. his appointment and confirmation, after he'd won his election, was put off and the interim senator cast the vote for the bill, and it passed by a single vote, passed 60-40, to move forward. i think it was a dangerous, dangerous step for america. i'm ranking republican on the budget committee, and the senator is ranking -- is member of that committee. and so we have serious concerns about what's i in this bill. now that we're beginning to read it, now that we're beginning to apply it and see what might happen. senator johnson is a successful businessman, ran for the united

states senate and joined us just a little over a year ago, and he came here to do something. i have been exceedingly expressed with his approach to business. he's successfully challenged the secretary of health and human services, secretary sebelius, on some numbers. the situation was quite troubling. senator johnson, maybe you could tell us about your concern, what you raised last week, the economic impact of what's happening, jobs and on the american economy and debt of our country, and maybe we can begin our discussion springing off from where you're coming off and what you observed from your exchange last week. mr. johnson: well, sure. well, first of all, senator sessions, thank you for those kind comments. you mentioned that speaker pelosi famously stated that we need to pass this bill in order

to figure out what's in it. you know, what i know you and i are dedicated to, to make sure that the obama administration doesn't make sure that this law is fully implemented before we understand the true cost of the bill. we simply can't afford not to have the american people, not to have members of congress understand the true cost of the health care law. and i would just remind everybody that back in 1965 when they passed the medicare bill, first of all, the entire bill was less than 300 pages. i mean, that was kind of interesting. the provision that applied to medicare alone was about 124 pages. that compares of course to the 2,600 or 2,700-page bill, the patient protection and affor affordable care bill was. now there's been over 10,000 pages regulation just trying to

implement this thing. when they passed medicare, they statemented out 25 years. in 1990, medicare would cost $12 obama. -- would cost $12 billion. in fact, it cost $110 billion, more than nine times of original cost estimate. senator sectio sessions, i'm nee but i have a been watching this tong pretty closely. i don't believe washington has gotten any better in projecting and estimating figures, if particularly not on new entitlements that people want around here. they always tend to underestimate in order to be able to pass these things, particularly a bill like the health care law that was done in such a partisan fashion without any really support or any kind of input from our side. so the point of my questions to secretary sebelius last week was to just lay out the broken programs that have already occurred before we really even

begin or have only begun to implement this law enforcement the first broken promise i asked her about was the very famous guarantee of president obama that said if you pass this health care law, every single family will see their insurance premium, their annual insurance premium, go down by $2,500 by the end of his term by the way. the kaiser family foundation has found out that health care premiums have gone up about $2,200 per year. that's a $4,700 difference in just the first three years of this administration, really only two years after it was originally passed. mr. sessions: senator johnson, you have been in the real world, having to make a payroll and manage a company. if you as a c.e.o. made a representation that this was going to reduce the cost of insurance for your employees by

$200 an,000 and increase it $2,, that would be a stunning event, would it not? does it bother you as person from the real world, first time -- firsttime you have been in ed office, to have numbers promising to reduce health care costs and actually driving up health care costs? mr. johnson: had i made that guarantee to my management, to my shareholders, that's what the president did, he made that guarantee to the shareholders of america, i wouldn't want to have to face the budget committee or the budgethe budget meeting wheo explain away that broken promise. they's what secretary sebelius was in a very unenviable position of trying to explain how the president garchtsed a $2,500 reduction when we've seen a $2,200 increase in the insurance premiums. mr. sessions: i was mr. sessions: well, you are right. there was a promise made to achieve the passage of the bill.

and a lot of americans didn't believe these promises, thought they were inflated to begin wi with. and this promise, a fundamental promise, has already proven to be wildly inaccurate. and thank you for raising it. a senator: and of course that's only the first promise. i have a couple more. the administration also famously said that this thing -- this health care law would not add one dime to the deficit. in fact, the original projections were that it would save $143 billion in the first ten years. well, thankfully, the administration has recognized that the class act was, as, you know, budget committee chairman kent conrad said, is a ponzi scheme. it simply was not financeable workable so they're not implementing it. well, because they're not implementing it, they're not going to get $86 billion worth of rev so that's going to eat away at that $143 billion of deficit reduction. and then of course last -- a couple weeks ago when president obama presented his fiscal year

2013 budget, included in that budget was -- was $111 billion request -- or i guess cost estimate -- on the mandatory spending of the health care exchanges. if you add the $111 billion to the $86 billion, that gives you $197 billion of reduced deficit reduction, if that makes sense. so bottom line here is i think that's broken promise number two. i do not believe in the first ten years that this thing's actually going to reduce the deficit. and senator sessions, it's far worse than that. these are the small numbers. this is just the tip of the iceberg in terms of the revisions that are going to be occurring when we actually start finding out what the true cost of the health care law is. mr. sessions: well, the promise was that -- and it was repeated here, and the president went on national tv, i believe he said it at the state of the union, this bill will not add one dime to the deficit.

if you drop out the $80 billion or so. and he estimated that his plan, if passed, would actually create $143 billion in surplus, in extra revenue for the treasury. it wouldn't cost anything, it would create more money. and so you lose $80 billion or so because the class act is proven to be the ponzi scheme senator con rasd sai conrad saie and we just saw a request in the president's budget for $111 billion more for the exchanges. well, that already wipes out entirely, does it not, the promise that it wouldn't add to the deficit before the bill's even implemented, really? the projections are that it would -- it would cost money rather than make money for the treasury? is that your analysis so far? a senator: exactly.

that's broken promise number two. and, of course, broken promise number three is also famously, this president said, "if you like your health care plan, you will be able to keep your health care plan, period. no one will take it away no matter what." now, there's a couple pieces of evidence that prove that that also is a broken promise. first of all, the c.b.o., in its initial cost estimate of the health care law, estimated that a million people would lose their employer-sponsored care and be put in the exchanges. so right away -- by the way, that's a gross underestimate and we'll talk about that a little bit later. but also, just the fact that the department of h.h.s. has granted 1,200 to 1,700 waivers from basically some of the requirements of the health care law also indicate that were it not for those waivers, basically employers are saying, listen, we -- we need some relief here. were it not for those waivers, you know, my concern would be, and i think this is probably pretty true, is that those

employers would probably be forced to drop coverage. and those waivers cover about 4 million americans. but let me -- let me describe a little bit why i believe th the million-person estimate is so yunders stated. underestimated. there have been surveys of employers conducted now in the last year that prove or that indicate that employers, when they take a look at the whole cost equation of the health care law, 30% to on 50% i 50% in sune survey conducted by the mckenzie company, that 30% planned on dropping their health care coverage shortly after implementation. well, senator sessions, if that were to happen, 130 million americans get their care through an employer-sponsored plan. if 50% drop their plan, that could mean 90 million americans -- not a million -- 90 million americans could lose their employer-sponsored care and then get put in the exchanges. and we're trying to work with

the c.b.o. to find out exactly what that would cost. but in their initial estimate, they thought -- they estimated it would be $7,000 average subsidy per person in the exchange. now, if you deduct for the $2,000 penalty and the deduct act of the healtdeductibility, d be $14,000 to the federal government. instead of $95 billion a year, senator sessions, the health care law could cost us half a trillion if 50% of the employers drop their coverage. and that's scary. you've been a real leader in terms of our deaf an debt and d. like senator mullen said, the greatest threat to our national security is our debt and deficit. we can't afford to increase our debt and deficit on an annual basis close to a trillion dollars. if everybody were to lose their coverage which is, by the way, exactly what i think this plan was designed to do, lead to a single-payer system which is what president obama i believe

really wanted, that would cost us close to a trillion dollars a year. i mean, that represents a deficit risk that will just absolutely ensure the final bankruptcy of this nation. mr. sessions: well, senator johnson, you have been talking about this issue for some time and it looks like reports are coming along to validate it -- validate your concerns, but the administration estimate only 1 million would go into the exchanges. and these are the areas where if you don't have employer-based health care, the government will subsidize your health care program for you and it costs the treasury money. this is how we get in financial trouble, when we make bad estimates. you think that the numbers that go into the exchanges could dwarf $1 million. how many could it be, based on the reports that you've seen? mr. johnson: well, i worked with former c.b.o. director douglas holtz-aiken trying to look at the numbers that are presented. we don't have enough, we don't

have enough information which is why i'm very grateful to the fact that director elmendorf recognized the fact that there's some credible evidence to cause the c.b.o. to reassess that estimate of a million people. so they're -- they're working through those numbers right now. hopefully they'll give us a very full accounting of that in the next couple weeks. but the work i did with douglas holtz-aiken showed if 50%, if 90 million people get put in those exchanges, it could cost over $400 billion a year. mr. sessions: that's stunning. mr. johnson: it is astounding. mr. sessions: for example, $400 billion a year over a ten-year window would be $4 trillion. and the budget control act that we worked on so hard last summer that the president's already undermining, but if it were to take place would only reduce spending over ten years $2 trillion. and this would be an unexpected $5 trillion -- $4 trillion added on top of that, would it not? mr. johnson johnson: exactly.

mr. sessions: it's not baked into the numbers now. we're not assuming it's going to be $4 trillion or $5 trillion more health care cost under obama-care. we're assuming only $1 trillion, i guess. mr. johnson: and, unfortunately, we're not -- we're not even owning up to the current deficit projections and we're not seriously addressing that. so nobody really wants to take a look at the danger inherent in this. and, of course, the administration doesn't to want talk about it or admit to it because they want to go full speed ahead and make sure that the health care law gets fully implemented so we will not be able to reverse t. an it. and that's the main point here. it's time to put the brakes on the implementation of 9 health care law beforimplementation ofs this nation. we simply can't afford to implement it to find out what the true cost is. it would be disastrous for our debdebt and deficit. mr. sessions: senator johnson, is it too late? is it a fait accompli, this low-income law that was passed? or can we not reverse it, or is it practical at this point for us to pull back from this path?

mr. johnson: it's essential that we pull back. it's essential that we put the brakes o. and i guess we all can keep our fingers crossed and hope the supreme court rules the individual mandate unconstitutional and that there is no severability clause so the entire law is repealed so that then we can actually fix the problems in the health care system with patient-centered, free market-based reforms. that's the way to really address this. mr. sessions: well, you raised these issues with secretary sebelius last week in the committee and the thing is -- the exchange has been on tv and on the web and it's become a bit of a sensation, really. people have been looking at it and it's been very troubling. would you tell us what troubled you about secretary sebelius' answers or her lack of them and what you think we should do next.

mr. johnson: well, again, if you addition i'you -- i'm not accou. i've been in hundreds of budget meetings. when you're presented your budget to the budget committee, you're armed with the information, you're ready to answer questions. and i was -- i was surprised that the secretary was unable to answer the questions and really particularly when i mentioned the waivers. she seemed to have no idea what i was talking about. now, it's her agency, it's her department that is actually granting those waivers. so that troubles me. so, you know, i appreciate the fact that you've offered and we've sent a letter to budget chairman conrad requesting -- and to be fair to secretary sebelius, to give her a chance to be fully prepared to come before us and explain, what is this $111 billion in additional requested funds for the exchanges and, really, i'd like to really dig down and -- and really talk about this million-person estimate and what is going to be the effect. if the administration's wrong, if c.b.o. has been wrong in the previous estimate and the

mckenzie study is right and half the people, very quickly after your implementation, get dropped from their employer coverage and get put in the exchanges, what is the effect of that going to be on our -- on our budget? you know, i'd love to give -- i think it's appropriate to give secretary sebelius the opportunity to come before our -- our budget committee and have a fair exchange in terms of explaining those -- those parts of her budget. mr. sessions: well, $111 billion error is a big deal. if you think about it, we brought in $2rbgs 20 $2,200 bils is $100 billion, about 5% of the entire estimated revenue that we had in the government last year. to miss that on one part of one bill is very troubling to me. we're fighting every day, wrestling with a highway bill. we came up $2 billion short over two years. and the whole bill is held up

and votes on it, points of order raised about it. and here blithe into the president's budget comes another $111 billion. i'm sure that there can be some explanation for it, but i really do think the american people, don't you, are owed a prepared secretary before the budget committee that could lay out explanation for what this is so we'll know how much overcos ovee already are on this plan. mr. johnson: a hundred billion here, a hundred billion there, it starts adding up to real money, doesn't it? one thing i'd like to point out too so that people don't think this 90 million people getting dropped from their employer coverage is a fantasy, it's not. it's very realistic. let me explain that. i bought health care for the last 31 years. and the decision employers are going to make is going to be actually quite easy. it's not going to be a complex financial decision. employers are going to be faced, because of the health care law,

they can say, okay, i can pay $15,000 for family coverage or i can pay the $2,000 penalty and because of the health care law subsidies, you're not exposing your employees to financial risk, you're making them eligible for huge subsidies. if a household earned $64,000, they'll be eligible for a $10,000 subsidy through those exchanges. now, i know that probably sounds pretty good, but the problem is, when we've already -- when we're already running $1.3 trillion-a-year deficits, we can't afford to add another half a trillion dollars per year to those deficits if that were to happen. we simply can't afford it. mr. sessions: so you're an employer, you've got employees and you've been helping them -- you've been providing health coverage and you realize, i can cancel my employer contributio contributions, let the employee go to the exchanges and they'll

be subsidized by the american taxpayer? where is the money coming from that will provide the extra money they'll need to get full coverage? mr. johnson: and if you don't drop coverage, you're denying the people that work with you the chance at taking advantage of a $10,000 subsidy. i mean, we have created an incentive in this health care law for employers to drop coverage and for the people that work with them to get their coverage through the exchanges at high levels of subsidy. we've created that incentive. and when government creates incentive, when government dangles a huge subsidy in front of people, the history -- we know what happens. we know the history of that. people take advantage of those subsidies and that's my concern. mr. sessions: what about a new business, some small business that starts up, and they're thinking about whether or not they're going to provide health care for their employees, and they have the option of the exchanges. do you think a new business

would be even more likely to not provide coverage and let the employee go to the subsidized exchange? mr. johnson: sure, because they know their cost is going to be $2,000 per employee. you were telling me a story earlier about some employers in alabama that simply, because it's a low-margin business, they simply can't afford to offer health care. the result of the health care law -- why don't you tell the story? mr. sessions: i had a number of people in a meeting i was at to explain the realities of it, and they told us that the whole fear of regulation and the health care bill and the revenue that's going to be extracted from them to pay for it would result in lesser employees and making it impossible for them to provide the coverage. so one told me that they could

lose as many as 70 employees. i remember that figure. mr. johnson: again, this law will cost jobs. it's going to blow a hole in our deficit. and we haven't even talked about the quality aspect, how it's going to harm our health care system, how it will lead to rationing, how the type of medical innovation -- you've heard the story about my daughter, these marvelous surgeons that when my daughter was first-born with a serious congenital heart defect, one of these wonderful human beings came in and saved her life and eight months later when her heart was the size of a plum they reconstructed her heart, so now her heart operates backwards. those types of innovations that saved my daughter's life, we're going to limit that innovation. we're not going to have that type of advancement in medicine if the government takes over control of our health care system. the effect on our budget, the

uncertainty in terms of how it's going to destroy, explode our deficits versus the harm it's going to cause the quality of care, lead to rationing, lower innovation, when it's all put together, i think the greatest thing, the priority we have to have moving forward here is we have to make sure this health care law, the brakes are put on it, it is repealed. again, replaced with patient-centered free-market-based reforms. mr. sessions: it's not fully implemented yet. there's a lot of opportunities for us to get off this train before a disaster occurs. i truly believe it. it's not too late for us to alter the course. i think the american people have never been happy with it. they have been told that they wouldn't have to give up their health care. they were told it was going to bring down the kofpt curve and -- bring down the cost curve and reduce the cost and they were told it would pay for

itself. it would be more money coming in than the bill would cost. would you say all three of those promises have already been proven false? mr. johnson: absolutely. look at the name of it: the patient protection affordable care act. it's not going to protect patients. if we're going to lower the quality of care, if it's going to result in rationing, if it limits innovation, how does that protect patients? affordable care act, you ticked off the three reasons it's not going to be affordable. it's going to drive up costs. it's a fiction. the health care law is a fiction. i'm so appreciative of your efforts at, again, making sure that before this thing is fully implemented, we both are dedicated to make sure the american people fully understand the full true cost of this health care law both on quality and the effect on our budget. mr. sessions: i just have one more thought to the cost. i've looked at this very carefully. december 23, the night before the bill passed, i got a letter

back from the director of the congressional budget office who also had stated it would create a surplus in the bill of $143 billion based on conventional accounting procedures. and i asked him were they not double counting the money about $400 billion? were they not double counting it, counting as income to medicare and counting it as money available to fund the patients bill here, the -- obama care? weren't they using the money twice? think about that. here we are on the eve of a vote, december 23, the vote is tomorrow morning, december 24, and we've not agreed on whether the money is being double counted. and he wrote back and said it's being double counted. quote -- "although the conventions of accounting might

suggest otherwise." close quote. the way they scored this bill was carefully done by experts to get the score that they got, that it would make a surplus of $140 billion. but the money was medicare money. they raised tax s from medicare. they cut costs from medicare. they created some money on medicare. but the money was borrowed by the u.s. treasury and spent on this new program. the money's owed to the medicare trustees who are trustees by law. they are holding debt instruments from the united states. but because it's an internal debt, it doesn't score. that may be complicated, but it's not. trust me. they borrowed this money. and sooner or later when medicare is going into deep financial distress, is going to

call their bonds from the treasury and the trerb have i going to have to pay -- the treasury is going to have to pay it. they're going to borrow the money on the open market so they can pay the medicare trustees the money they borrowed from them. this is not a good way to do business. that's just one of the additional problems we've got with this. but senator johnson, thank you. thank you for focusing on all of these issues, but particularly for raising the cost of the exchanges. because by any estimate, wouldn't you agree, that is a dangerous number? it could surge above the number we're at. don't i think most any person, even if they thought it would be $1 million -- a million people would have to admit it could be 5 million, 10 million or 20 million people? nobody knows for sure. mr. johnson: that's why i'm so thankful that c.b.o. director elmendorf understands there is pretty credible evidence to have

the c.b.o. revisit that estimate. i spoke with him last week. it looks like they're working hard to provide us that information. i'm looking forward to seeing that and see what their estimate, the revised estimate is for the number of people losing their coverage. but even more importantly, to figure out what that per-person cost is. maybe we won't agree. he might do a very economic analysis, and certainly somebody like myself who actually bought health care understands the mind-set, the decision of an employer. even if we disagree on the number of people, if we have that total dollar amount, cost per person in that exchange, we'll be able to show that to the american people. if he comes up with x and i say it's really x plus 30 million, 40 million, 50 million people, then at least the american people have that information and they can judge for themselves what they think the realistic estimate is for people losing their coverage, getting their insurance through the subsidized exchanges. that's information -- information is what the american

people deserve. that's why i'm so appreciative of your efforts. i know you're going to be just with me, making sure that, again, we know what the true cost of this health care law is before we implement it. mr. sessions: we've got to know that. we have a responsibility as representatives of the people to understand are we talking about another $100 billion in costs over just one year's time that we weren't expecting? i believe that the budget committee is a good forum to have that. i know you and i serve on that committee and i hope that senator conrad can agree and would agree to give secretary sebelius an opportunity to state her view of the situation. i just have to say i'm more and more convinced that we cannot afford this health care bill. we cannot afford it. we just don't have the money. we just don't have the money. i think it will damage health

care. we've had a lot of debate, experts tell us reduce the quality of care in america. what i'm saying is we can't afford it, and it threatens the financial viability of our future. we need to save medicare and social security, the programs we've got. it would be a terrible tragedy if we start off on another program, like you talked about medicare 30 years ago, 40 years ago, it surged way beyond any estimate they would ever expect in terms of cost. if we start on another program, i don't see how this country can sustain it. the entitlements that we have today are now taking up about 60% of the entire budget of america: social security, medicare, medicaid. over 50%, almost 60% of entire spending goes for those three

programs. to start another massive new program when those are all unsound financially and in crisis and need to be fixed is the height of foolishness, in my opinion. i hope we can have a good hearing. thank you for your leadership and great addition to the budget committee. and really thank you for spending hours digging in to these numbers, bringing your business and accounting skills to bear that us lawyer bunch benefit from somebody who can actually add and subtract, i've got to tell you. mr. johnson: thank you for your leadership. mr. sessions: mr. president, i yield the floor and note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

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a senator: mr. president. the presiding officer: the senator from arizona. mr. kyl: mr. president, i ask that further proceedings under the quorum call be dispensed with. the presiding officer: without objection. mr. kyl: thank you, mr. president. i come to the floor today to respond to some arguments made in a recent opinion article by the chairman and ranking member of the senate and house budget committees respectively. it's entitled "g.o.p. budget attacks misguided." the crux of the piece is that president obama has made great progress in improving the economic outlook and it would improve even more if only republicans would embrace his

policies. the first set of claims i want to respond to relate to the strength of the economic recovery. the authors write -- "we have come a long way since the peak of the recession, thanks to actions taken by the obama administration, and we have had 23 consecutive months of private sector job growth." end of quote. well, to start, i don't think that the 12.8 million unemployed americans would agree that we have come a long way. indeed, it's been two and a half years since the recession technically ended and we're still experiencing the weakest recovery since the great depression. growth is anemic and there are 700,000 fewer employed americans today than when president obama took office. although it's been three years since passage of the stimulus bill, unemployment has been above 8% for the last 35 months. remember, this legislation was sold as a way to keep

unemployment below 8%. there are -- these are some of the signs that actions taken by the administration are not working. you get americans back to work or improve the economy. now, regarding the claim that america has had 23 consecutive months of private sector job growth, the president has been citing this number on the campaign trail in saying that 3.7 million jobs were created during that time. but the claim doesn't stand up to scrutiny. those who cite it don't account for the role that new work force entrants play in employment streaks. economists generally agree that for unemployment -- excuse me -- for employment to hold even, about 150,000 jobs must be created each month to employ new entrants into the work force. these people include those who have recently concludeed military service or family

obligations and recent graduates. if you multiply 150,000 by 23 months, you get about 3.45 million jobs. that means that even by the administration's own figures, only about 250,000 new jobs have been created in roughly two years. moreover, according to the bureau of labor statistics, the net positive increase in payrolls was above 150,000 during just nine of the 23 months to which the president referred. so yes, it would have been nice to have 23 consecutive months of private sector job growth, but that's not really what happened. again, you need 150,000 just to stay even with the new people entering the work force, and in only nine of these 23 years did the economy produce that many jobs. the second set of claims i want to discuss relate to supposed blame on republicans for the

debt and the hampering of a stronger recovery. the authors of this op-ed claim, and i quote, that while the deficit has remained high over the past three years, that is largely the result of policies of the previous republican administration, end of quote. now, let's look at the actual deficit numbers. labeling the last three deficits as high is quite an understatement. according to president obama's own budget numbers, in 2009, the deficit was $1.4 trillion. in 2010, the deficit was $1.3 trillion. and in 2011, it was again $1.3 trillion. the deficit this year is expected to top $1.3 trillion. at the end of the budget window, in 2022, the deficit is projected to be $704 billion. the highest deficit under president bush -- $458 billion in 2008.

every deficit under president obama has been almost three times that figure, more than double, but president obama shouldn't be accountable for the debt problem? how does that work? the president and his supporters like to point out that the budget contains $4 trillion in deficit reduction over the next ten years, but most of this reduction is based on new taxes and gimmicks such as alleged savings from actions that congress has already taken or from ending operations in iraq and afghanistan. as a "usa today" editorial noted, and i quote -- "the budget relies on gimmicks and avoids some of the problems instead of tackling them. most blaringly, obama takes credit for about $850 billion in savings from winding down the wars in iraq and afghanistan which were paid for with borrowed money in the first place." end of quote. so these were not actual

savings. the committee for a responsible budget put it this way -- "when you finish college, you don't suddenly have thousands of dollars a year to spend elsewhere. in fact, you have to find a way to pay back your loans." now, regarding the supposed problem of republican resistance to demand-based policies, there is a major misconception that consumption fueled by government spending actually creates jobs. this is the stimulus myth. it doesn't. it just inefficiently moves money around from one pocket to another or one taxpayer to another, and that helps explain why the stimulus failed. if americans can't spend enough money to stimulate more demand, how can the government accomplish that for us? it's our money that is being spent. simply put, demand policies don't work. there have been ample opportunities to prove otherwise in recent years. let's remember, the president got everything he wanted from congress during his first two years in office.

he has been in office a little over three years. the first two years, there was a democrat house and a democrat senate. the 111th congress passed all of the demand-based policies he asked for -- spending, temporary tax credits, tax holidays, the stimulus, and yet here we are. a better idea is to encourage nick activity and greater opportunity through the supply-side of the economy. that means reducing government consumption of taxpayer dollars and not raising taxes on anyone, especially job creators. and that brings me to the third set involving the notion of balance. the authors claim that the budget calls for a balanced approach with everyone sharing responsibility for deficit reduction. they also note that balance is missing from the g.o.p. approach. well, balance in the obama budget, of course, means higher taxes, so i ask how is it balanced? to tax job-creating small

businesses even more than they are being taxed today? according to the joint committee on taxation, nearly 750,000 flow-through businesses -- these are the small businesses, the businesses that pay their taxes as individuals -- nearly 750,000 would be suggest to the president's proposed tax rate hikes that would take effect on january 1 of next year. a quarter of our nation's work force depends on these employers for a paycheck. according to the national federation of independent businesses, up to 25% of the work force is employed by businesses that will be affected by the president's proposed tax hikes. now, perhaps job growth is so slow because these job creators are skittish because they don't have certainty and they certainly haven't for a long time. in fact, the only thing they can see is the president's attempts to impose more taxes on them. the specter of tax hikes has

loomed for years and has inhabitatted job growth, and if the tax increases actually occur, you can be sure that the -- that any economic growth that we might be perceiving will be killed. finally, the authors claim that the president has demonstrated that he was willing to go the extra mile to reach a bipartisan deficit reduction agreement, end of quote. well, i will note that the debt talks fell apart last summer because the president dug in his heels and he insisted on harmful tax increases that republicans, of course, opposed for the reasons that i just noted. when we had another opportunity to do something about the debt this small, the president was not particularly helpful or encouraging, often missing in action. he never participated in the process. the plan put forward by the republican senator from pennsylvania at the time was the only balanced approach that put significant revenue on the table in the context of pro-growth tax

reform. the majority whip called it a breakthrough, but it was never enough for the other side. so here we are still debating this subject. so much for the president going the extra mile. in conclusion, mr. president, i'd like to say that the president's budget is more of the same -- spending, taxes and debt that we have seen for the last three years. last year, the budget was so unpopular with the american people that the senate voted it down 97-0. not a single member of the president's party voted for his budget. the massive amounts of spending, taxing and borrowing in his budget will hinder an economic recovery. in times like these, we have to focus on growing our economy, not our government and debt. mr. president, i notice the absence of a quorum. the presiding officer: the clerk

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