i hope you will look at that in a proactive way and help the mannequin companies. >> the chair now recognizes the designee, the ranking minority member of the sub committee, mr. carney is a recognized. >> thank you, mr. chairman. i am down here, mr. secretary. think you for coming today. i am eager to hear your

perspective on the situation in europe and in particular the threat that that situation proposes here for the recovery in the u.s. i have two questions. first, can we be put on a sustainable path. currently it's on sustainable task. >> can we get over it in the short term. that is the question. it is a very difficult decision on whether they should and can oppose more as charity. as a member of the du, greece doesn't have one of the main tools that most countries of the bid would have, which is to allow its currency to sell outside of the country and respond that way. so they seem to be having the

worst of all worlds. they have the austerity imposed on people, yet they don't have the ability to grow out of it with the devalued currency. i would be interested in your thoughts on that. the second concern is the implications of a prolonged crisis on the united states. in particular, the exposure of u.s. banks that they have, we have had other discussions on this committee and in other venues. i am interested in your view on that. i am also interested in knowing your thoughts to the extent that the reforms and how they have improved our ability to understand those risks and to mitigate against them. don frank is proposed to. >> the question is simple, have they given us more information.

do we understand exposure and the stomach risk that exists for the major u.s. financial institutions and markets. a again, i want to thank you and thank you for here and hearing your feedback on these issues. i yield. >> thank you. welcome back to the financial services committee without objection. your written statement will be made as part of the record. and you will be recognized for five minutes to summarize your testimony. the chair wishes to announce to the benefit of all members of the secretary has a hard stop time of 12:30. please observe the rule accordingly. mr. secretary, welcome again. >> thank you congressman. thank you to the members of the committee. they did for giving me the chance to talk about the developments in europe. i would be happy to answer any questions you have about the united states or the economy. europe has enforced a key

strategic economic partner of the united states, and we have a huge state, a huge economic stake and security stake to sustain its crisis. our economy is gradually getting stronger, but we still face a lot of tough challenges ahead as a country. in early 2009, the u.s. economy was facing the clear and present danger of the great depression, and we acted with the federal reserve and congress to pull the u.s. world economy back from the edge of the abyss. we successfully used to stabilize the financial system and restarted economic growth. in the past two and a half years, despite the crisis in europe, despite the rising oil prices last year, despite the disaster in japan, despite the huge damage in the competence of the united states caused by the threat of default on the u.s. government's obligation for the first time in history, despite all of those challenges, our

economy has grown an average annual rate of about two and a half% over the last two and half years. over the past two years, the private sector has added nearly 4 million new jobs, private investment and export has expanded much more rapidly as a whole, and we are seeing strength across the american economy in agriculture and manufacturing and technology. we saw a lot of work to do to repair the damage caused by the crisis. as you all know, the market is still very tough. the uncertain global economic environment in europe will be a long and very difficult crisis, and the risks surrounding iran, which you have pressure, that -- i want to welcome very much the statements made by the authorities over the last couple of days that they will take further action to increase the supply of oil to global markets.

it is a very constructive signal. i would now appreciate significantly in real terms against the dollar. not just over the past five years, but over the past 20 months or so. although they still have some way to go in achieving a more exchange rate that better reflects economic fundamentals, we are seeing very substantial growth in u.s. exports to china. the rest of the world has significantly strengthened the financial institutions over the past three years. i want to express particular appreciation for the support of this committee, the bipartisan support of this committee in those efforts. we are making a lot of progress. i want to talk about it in more detail about the financial systems so that u.s. firms to compete in those markets face a more level playing field even as we put in place tough reforms here in the united states.

a few things on europe. over the past few months, with our encouragement and support and the support of the imf, u.s. leaders have been making some progress and a conference of strategy to deal with their crisis. the crisis strategy has four key elements. the first is to restore fiscal sustainability, to restructure their banking systems, and improve their competitiveness, boosting their longer-term prospects. the second, our institutional reforms, including what they call a fiscal compact, is establishing stronger disciplines on the fiscal policies and budget policies on the deficits and level of debt in the gdp. the third is a coordinated strategy to be capitalized the european financial system along some some guarantees for bank funding. and the fourth is a firewall of funds, financial funds to provide financial support to governments that are undertaking

reform so that they can borrow money at sustainable interest rates. the european economy is caught in the center of this crisis has placed some very tough reforms over these last 18 months or so. these reforms have been aided and assisted by very various substantial financial institutions. those efforts, reform with a firewall and a more accurate ecb have helped calm financial market tensions. but i think it is very important for us all to recognize that europe is still at the initial stages of what will be a very long and difficult path of reform, and that path of reform of crisis resolution presents significant risks to the american economy still. for these economic reforms were, the policymakers in europe have to carefully calibrate the mix of financial support they are providing and the pace of fiscal

consolidation they are embarking on. that is important to recognize because the economic reforms will not work without financial support that allows the government to borrow at affordable interest rates, and if every time economic growth disappoints, if every time it is weaker and then anticipated, they are forced to cut spending and raise taxes immediately to compensate on deficits. that would risk creating a self reinforce negative spiral of growth, killing austerity. the most important unfinished piece of this utter financial strategy is to build a stronger firewall, again it is a backstop of the governments undertaking reform. they are in the process of revealing combined financial of their coupons, so they can make it clear to financial markets that they have the resources available on a scale that is commensurate with the needs they might state where the crisis to

intensify in the future. the imf, as you know, has but played a very important role in europe. a framework for a public monitoring of progress, and financial support for the rims in greece, ireland and portugal, in partnership with the european people, which are assuming the majority of the financial burden. those actions supported by the imf have significantly helped limit the damage from the crisis, and it is very much in the interest of the united states that the imf is continued to provide support here. the imf resources cannot strong for its strong and credible european response, but they can help supplement those resources europe mobilizes on its own. as you know, the imf has played eight nader role in every postwar financial crisis, while consistently returning to the united states and other imf members, any resources they draw within the interest. we have never lost a penny in

our engagement with the imf, and that is because our effort is backed by the very substantial safeguards, including a substantial amount of imf gold. over the past 18 months, as you know, the european crisis has hurt the american recovery, it has been a drag on both the united states and around the world. but europe has pledged to do what is necessary to continue this crisis. they're making some progress on this path. but they are going to need continued support and reinforcement, and this process will take a lot of time. thank you, mr. chairman. i am happy to respond to your questions. >> eq, the chair will yield to itself. secondary, we are certainly hardened by the administration. i remain somewhat confused because two years ago there was an agreement on behalf of the administration to double our

quota to imf, so the first question is, if you do not plan to seek additional funds now, do you have a timetable in which he will? >> excellent question. let me see if i can respond. it is true that in the spring of 2009, we join with countries around the world in that moment of crisis and reach the global agreement to increase what was available to the imf at that time of emergency. subsequent to that, there was a set of instructions that change the government of the imf and two shift the bounds of those resources between what is called the quarter resources of the imf and a supplemental reserve fund. and we have negotiated internationally and will come to the congress at the appropriate moment to request authorization for those reforms to take place. but those proposals do not

increase the resources available to the imf. in the present context, the imf still has about $400 billion of uncommitted global resources available to respond to the challenges of its members. the imf has a long history, if necessary, in short periods of time of him mobilizing resources if they needed to respond to crisis. we don't see the case for asking the eye imf shareholders to agree to more resources to lessen the burden on europe. europe is a very rich continent. they have the capacity to solve this problem. we don't want to see the imf role -- >> as you know, we have limited time. i think you do for that. i'd like to get on to my next question. sometimes when i consider obvious around here is not obvious to others. we have disagreements with the administration. many of us believe that the appointment of richard cordray was both unlawful and unconstitutional.

obviously the ministration had a different viewpoint. we will set that debate aside. it also is obvious to me that if the administration had changed its mind and wished to increase u.s. contributions to the imf, our believe is the would have to come to congress to do that, so my question is, does the administration have a different view? do have legal authority outside of coming to congress to increase the imf contribution? >> under the laws of the land, and i fully support this, i think it's good for this country, we cannot loan money to the imf without coming to congress to authorize that increased contribution. >> the next question, mr. secretary, setting aside the federal reserves liquidity swap arrangements, in your opinion, does the administration have any

other legal authority outside of the imf koror? >> to provide any type of grant, loan, loan guarantee or any other financial assistance to the european countries? >> i do not believe so. >> outside of that, it is like any other matter of spending outside the u.s. constitution. you get to decide and decide control and authority. there is one other exception, congress giving the president the -- what is called the deprivation fund, and the authorities that we have in that context act to help in that context. but it is not relevant in this

context. >> the ministration currently will not be requesting additional funds for the imf. beasley, the imf has announced their intentions to engage in a number of bilateral agreements, of which i understand it, does not require -- would require a 50% load of the eight imf. but with the increase in the imf's bilateral borrowing from other countries to the tune of 500 billion increase taxpayer exposure? >> excellent question. it would depend on how those resources are used. the terms in which they are provided and safeguards attached to them. as you would expect, we would care a lot about making sure that if we were to pursue those agreements that they were done on terms that were not going to disadvantage the u.s. position.

>> thank you, mr. secretary. the turner recognizes the making raking member. >> since the question came up, i would like to say that i do agree that there was a gross violation of the constitution but that was the refusal by the republican senator for the confirmation to take place. they did not have any objection to any individual in nominee. the announcer because they did not like the legislative process. they were going to hijack the confirmation process. the requirement that they treated the nomination of its merit. secondly, i do agree that we have excessive american taxpayer exposure to europe. it's called nato. and in 1949 when it was founded and since then there have been hundreds and hundreds of billions of dollars, it made a lot of sense. it does not make sense today. if we equalized defense expenditures, the situation would be better.

on the imf, i must say that given the danger that exists to our economy is the european situation does not continue to be with somewhat stable, the notion that we should try to discourage the imf from participating is hard for me to understand. but i also want to -- i think there was a misunderstanding about the extent to which we have taxpayer exposure. i'm going to ask you in writing to give us a list of how much our contributions to the imf have cost us, and budget terms, over the years. the last time the u.s. increases are imf, to know what the budgetary costs are in the regulatory budget of his? >> we have 60 books years of experience for a bridge variety of crises. we have never lost a penny of taxpayer's money in that context because it is designed in a way that we make sure this would --

any u.s. taxpayer exposure would be projected. >> that included substantiation 80 in the asian crisis in the 1990s. the crisis of the 80s -- the '90s, and even this crisis of -- >> the imf has not had any impact -- negative impact on the american taxpayer? >> no. and i cannot envision a circumstance in which it would because we are very careful in terms of what. >> -- if we would try to get the imf not to do anything, we would be increasing the risk to our economy and taxpayer. >> would be much worse than that. if the imf were unable to play its role in this context, then we would say there it is much more risk to our broader financial system into the u.s. >> if you would give us to the cbo, we should increase our quota because it makes a great deal of sense. if you would send along the cbo

-- i do want to be honest. the swap between the federal reserve federal reserve and the european central bank that we were virtue, that did have an impact on the american taxpayer. would you explain what that impact was. >> i don't know exactly the return of the swap lines. >> but there was a pop at? >> in a very substantial poppet. >> as a result of the swap, bernanke sent to check? >> that is correct. >> let me ask you now, we have this comparison of the european economies to the americans chairman, in terms of growth over the last couple of years, what is the comparison between the american and european -- what is the general compared it for you. >> as you pointed out, u.s. has averaged roughly two and a

half%, significantly stronger than europe, twice the growth of europe in a hole. >> and of course, significantly stronger than japan. it is fair to say that we are far ahead of europe in dealing with our united states. our economy is looking better on every measure then certainly the. >> next question. there has been a lot of concern about american banks exposure to european financial institutions with credit default swaps. if the financial reform bill that was signed into law in 2010 had been signed two years earlier, would that have had the effect of eliciting the concerns we have today? >> absolutely. i believe that the form was passed in 2010, and placed five years before, our crisis would be much less severe, and we would be in a much better position to manage the effects of the crisis and the damage on the american economy.

but today, because of those reforms and the actions we took to restructure the financial system in the crisis, u.s. bank are in -- they have much more capital and the risks they take on the world. >> the turn of recognizes the gentleman from california, mr. miller spivak thank you, secretary. the courts have asked on the 2010 meeting to double quarter. we have had some responses. it has been asked to transfer funds. yes, we will. we will be asking to do that in that fashion with additional funding. >> in your testimony say that the reforms will take time and won't work without the ability of governments to borrow, and i agree with that. but according to the wall street journal, the internal market and services commission says that the vocal row could impair the ability. how could european companies a

lot of europeans have expressed concerns about the risk. those are some among the many of the comments have received about the initial draft proposed rule. that is in the process of examining those comments. there is a authority over the role in the broader design of the rules, and we are going to take a very close look at how to mitigate those concerns. my view is that we will have the ability to do that. that is a glaring comment from them, and i appreciate your honesty on that but the honesty alone sends it to message that there is a real series problem with that rule it has this type of an impact trying to assist with the imf as far as technical expertise, knowing that we do something like this, that could really set them back. i hope it is going to be a significant effort if there is

problems with the volcker rule, any regulatory task with the volcker rule and potential job losses that will occur in this country, the imf the volcker rule is going to have a huge impact on the monetary system of this country and globally, that is going to cost us jobs or his. >> let me clarify one thing. i do not believe that the concerns expressed by central banks that the rule presents a meaningful risk to liquidity in those countries, but we are careful people. we are going to look at all the concerns expressed by these rules, and i will -- it is my view that we have the capacity to address those concerns. it is very important that we do that. more probably, of course, you are right to point out, that in all these rules we have to find a right balance. we need to create a more stable system in the united states. we also have to make sure we undo unduly damage, the broader health of the american economy. i'm very confident that we are

getting that balance right and we are going to be very careful to make sure that we take comments on draft rules, and that we do that. >> but you used a good word in there, meaningful risk. you are in a tough position, i understand that. you were trying to balance many apples at the same time. when you acknowledge meaningful risk and we go to say that the euro zone is going to be impacted in their cable capability to borrow -- >> i don't think it is a meaningful risk, but again, we are careful people, so we look at concerns both by u.s. financial institutions and businesses as well. as we look at the comments. i don't think there is that risk, but if there is, we will address it. >> have you address the wall street journal's comments, then, when they said the volcker rule could impair the ability for many countries to sell their bonds. >> again, i don't think there is

that risk, but it is something that we have the ability under the law to avoid. the way the law is structured, there is a set of safeguards to protect the taxpayer in the system from taking risks of finance for activities like that. the law is also designed to protect market making and hedging. so the exemptions the law requires us -- exemptions on those activities for good reason, when you design exemptions you have to make sure they don't swallow the rules. >> let's go back to our financial service center. if we are saying that they are going to be under the guidelines requirement to the volcker rule, and get all these other countries are saying we are not going to do that because that would put us at a disadvantage, they are admitting disadvantage, so by the act in and of itself, it would be a disadvantage, so i don't -- >> that would be a meaningful at

risk to financial services sector is. >> let me look at it this way. we have the balancing wrong. that's why we have a crisis, we need to toughen our reforms. if we remove move our reforms appear, we have a problem. generally, we are trying to pull the world up to her standards. it might be a little different in some cases. you're right to say if they say stay but need us, that was shipped. but if we respond to the risk by lowering our standards to theirs, we will get ourselves in a big mess again. but in general, it is not quite right to say that the europeans aren't adapting a similar basic frame. the british are doing a much more radical separation of retail from wholesale financial activity, much more radical. >> i wish we had more time, on this significant issue.

the chair now recognizes the gentle lady from new york. >> thank you, mr. chairman. i appreciate the opportunity, and i am sorry that i apologize for not being here on the opening statements. i did read it. recently, the european act to restrict the services of secure financial messaging to the iranian things. as a result, the society of worldwide inter- banks and telecommute occasions -- you're going to need to explain that because some people don't know what swift is. i do appreciate what you have been doing. on the department to encourage the swift ax in act in this manner. what you believe that the impact of this sanction action would be? would there be an effort to mesh the iranian things with the u.s. >> the combined effect of these

latest sanctions, both to discourage countries from buying iranian oil and cut back significantly and to make it harder for countries to pay for their oil from iran and to pay for other financial activity from iran. the combined impact of those sanctions is very substantial. europe has come a long way in matching -- these are tough reforms we have had in place for some time. supporters are very critical, of course, because we can't do it on our own. we have much support beyond here. you are seeing japan, south korea, china, countries around the world really moving with us to tighten up. now we are going to keep looking at ways we are going to bring more pressure. we are going to look for the effective balance of pressure we can bring. but i think we are making a substantial progress, and our hope is that it will alter iran's calculations about their interest of pursuing nuclear

capabilities. >> thank you. could i have time? europe is the best biggest -- the euro area counts for 15% of u.s. goods and services exports. the national export initiative has set an ambitious goal of doubling exports by the year 2015. which is right around the corner. if economic growth declines in the euro area, how we continue on a path to achieving the export goal with reduced european need? i'd don't think people understand how important it is for us here in the united states for our businesses, for our small businesses, certainly on long island, we do a lot of exporting. how do you see that future coming to a.

>> you are absolutely right. europe does get exports from the united states. the effects come from a variety of different channels. if they grow more slowly, due to recession, then the things that american companies produce is reduced. it hurts us direct way. it does the imac. that means growth outside europe, that hurts the american exporters. as we've seen over the last 18 months, very painfully, we have seen stock prices fall around the world. that is very damaging to the competence of the world. the typical pattern has been when europe has been in crisis, this is a good sign of confidence in the united states, but the dollar has risen over the euro, but you are right to say that the effects are significant, it has been a major factor that has kept growth in the united states slower than we would like, not the only factor, but one of the most important.

if they are stronger in the future, at that will be stronger for us. we will encourage them and work with them to help them get their arms around this problem. >> i think that is what the american people need to understand. when we go back home, everyone says why are we getting all this money overseas? but it is actually for our benefit being that we do take money on both sides volcker rule -- imf export. >> no risk to the taxpayer in that assistance, because again, as said, very careful safeguards have been tested over time. there is an overwhelming compelling economic national security interest that we have in working carefully through the transit imf to manage this crisis. >> think you, my times of. >> the chair now recognizes the chairwoman from illinois. >> thank you, mr. chairman.

welcome secretary diner. in conjunction with state regulators and the u.s. trade representatives, one of their most important missions is to strengthen the international competitiveness of the u.s. insurance and the insurers. that is to represent the united states international forum. and the development of international insurance standards. in your opinion, -- if i don't have the adequate staffing and other resources to successfully. >> i believe so. but if that were not the case, we would fix it. we have listened carefully to the concerns people have. i am personally committed to making sure that that office has its resources that need to.

>> i was required to submit reports in september and january. >> you're right. they are late. they are coming, they are getting closer. we have been busy. but it is not that big of a resource question. >> okay. i would like to go back to mr. miller was talking about the volcker rule. i know that there have been associations like in audible, a letter dated in every 2012. the volcker rule is prohibited in proprietary training presumptions, and it seems like they are saying it is inconsistent with the congressional intent to allow principal activity. to do just that? >> there have been a lot of concerns expressed about the initial proposal rule. when the law was passed, congress will wired the treasury department to put how the rule

should be designed. that guidance we proposed was nicked by a lot of support i all sides of the political spectrum. but when the rule came out, as drafted by those for regulators, as you have seen, there has been a broad set of concerns to tot, to lose, too complex. it is the strength of our system. we are required to put these wools for public comment. we have to learn things from these rules. my view has always been that the stakes -- the stakes in this are very high and we should get to taking the time to make sure that these are right. i'm sure that the fdic are going to carefully evaluating as comments, and i am very confident that they have the ability to address those concerns within the way the law is drafted. >> thank you. one last question.

china stands as one of the few major markets with substantial barriers for financial business including services firms. billy have stated publicly that the u.s. needs to level the playing field with china, they continue to have the most market for financial services to financial services in 2020. the report agrees and calls for significant changes to the chinese domestic financial system as they become more active internationally. as the chinese financial firms expand to the u.s., we pointed you to make sure that the u.s. that u.s. financial forms have access to china? >> figure for pointing that out. that is a very sweeping

constructive set of suggestions for reforming china, including opening the financial sector. i think it is very important that china move further to expand the opportunities for you up firms competing in china. that is a critical part of both the success of the reform process in china and it is orchestrated to be more fair to us. we're going to try to move further, we made recent progress in the last three months in opening the insurance sector in china. we have a ways to go, we are going to keep at it. >> thank you. i yield back the. >> chairman now recognizes the chairwoman from california, this water is. >> in your testimony, you said the european financial crisis has already caused significant image to economic growth of the united states and around the world, and we have a strong interest in the successful resolution of the crisis, and i absolutely agree with you. having said that, let me commend

you and the feds for the work you have done on this extremely important issue in crisis. you have been involved in unprecedented consultation and information shown between political leaders, central banks and international organization, and i think that you have conducted and represented this country very well. two policy initiatives that some of my friends on the opposite side of the aisle will criticize your bow, i disagree with them. they were alluded to when you were speaking with barney frank, and that is swap lines in the agreement to borrow. i think it is important for people to understand, as you have said, that they don't owe any money on the swap lines. but why those two initiatives that are very important, what

are those in terms of providing liquidity to the central banks and why we stand to be served well by these two initiatives? >> thank you for those questions. let me first say on the swaps, europe has a much larger banking system in the united states. much larger economy, and european banks brought a lot of money in dollars before the crisis to lend around the world. when the crisis hit, because of concerns about the stability of europe, they lost the borrowing dollars. of course, the european central bank does not run a dollar -based currency system as we do in the united states. so faced with that lost of ability to fund, european banks had to cut lending sharply around the world, even in the united states. the swap lines by providing

access to funding, significantly reduced the need and the pressure on europe's leading to the united states and around the world where u.s. companies have big stakes -- the swap lines were very effective in helping to soften the impact of the crisis on us and on countries around the world, and it would've been much worse for us without those lines. as i said, the feds are in the positive return on those swap lines. it is equally important. and what the congress said in the middle of 2009 about the imf to have a look much larger emergency capacity was absolutely critical to getting the world restarted, providing refinancing for countries so they could buy american products. we would have been in much worse shape and our economy much weaker without those systems. >> i appreciate that.

as you have indicated, it certainly is in our best interest to have this crisis -- to solve this crisis, and i believe in addition to the cooperation that is in -- that are taking place that this is not a bailout, and for those who turn these initiatives as bailouts, they don't understand how important these two initiatives are. helping to stabilize this national -- international economy. i want to thank you for the work you have done and, again, i want to reiterate that i think what you have explained, literally, helps us to understand, and i would hope helps the other side to understand why this cannot be termed a bailout, but rather cooperation and assistance to make sure that we stabilize the international economy. i yield. >> the chairman recognizes the

gentleman from texas. >> thank you, mr. ticker terry. thank you, mr. secretary. you are on the record as saying u.s. contributions to the imf the u.s. have not experienced a loss from commitments, a loss from the program. i appreciate, mr. secretary, if you go back and look at testimony that has been brought before this committee and the congress over the years, those were some of the same comments that were made about freddie mac and fannie mae, fha, and the list goes on and on. i think these were unprecedented times that we were in, and we would've never thought the u.s. government would have to take the actions it took in 2008. i think to say that additional funding or commitments to the imf is not risk-free. would you agree? >> like i say, a good neighbor made the comments that you made

on fannie mae and freddie mac. you're right. people have said all sorts of things in the past about no risk. but the trend one is really exceptional and how it has been designed. we have decades of experience through terrible crises looking at whether those financial safeguards were tested and how did we do? i am very confident that those financial cigars will protect the interest of the american taxpayer, and i think it would be much riskier for the u.s. economy for us to try to pull the tran-two imf back to help the needs of its members or elsewhere is. >> i noted in 2000 and nine the cbo, when they were analyzing to increase by $108 billion, they did a present value risk adjustment and said the potential cost of american taxpayers would be by billion dollars. what would be your response to that? >> you are right.

from decades of practice in reaching that judgment, and i do not agree with that. i do not share it. but you could think of that as an extreme precautionary balance in that context and it doesn't change my basic view is, the structure of the imf foundation provides very strong protections of the american taxpayer. the question is, would we be better off as a country if the imf could not act in the context? i think we would be much worse off. >> but you painted a very rosy picture about the european situation, and i think a lot of us think that this is just the tip of the iceberg and not the end of the iceberg. beasley, if imf makes additional commitments to that it increases our risk. >> a good way to think about the question -- and i agree that one should be very realistic about the challenges your faces, a lot

of risk is ahead for them and for us. the question we face is what can we do. what can we best do to protect american interests in that context. i think the things we are supporting, very prudent cost its cautious will make us stronger. it would make the european crisis more risky, not just for europe but for american companies. >> i want to follow-up with previous -- you are responsible for [inaudible] you put out some rules considering what significantly financial institutions can cause a financial risk to the system. to your credit, i think you have put forth some transparent rules. when we look at the international community right now, they are going through a process where they are not being

as transparent, and a lot of these entities that are domestic companies that are looking at complying and determining where they stand with you, the international community is not as far along as -- and so is that process out of the plaque, and we need to make sure it that you have heard me talk about romanization between all of these very strolls. where are we in that process? >> particularly in derivatives, we are really a long way ahead of europe in terms of transparency. the fact that they are behind this creates a problem, because we want to be conversed to the basically similar standards. that is one of the reasons why the writers have been slower than the deadlines established by congress. in that context, like many others, they are a little behind because they were make sure that

they maximize the chance for alignment as the european regime takes shape. a very important question, we are concerned about it too, and we want to make sure that we bring him along so we don't put u.s. markets at a disadvantage as the risc chips. >> the time has expired. the chair now recognizes the gentleman -- the gentleman from new york, ms. maloney's. >> naked, mr. secretary for your service. i want to clarify one of the points you were talking about. you said that it never costs taxpayers absolutely once sent -- >> that is true. >> both of them. have they ever made a prophet, and if they do cut? doesn't go into the treasury? doesn't go into the general fund? >> when the imf to draws on the commitments we make, they pay interest on those drawings, yes, in a sense they returns are commitments with interest. >> user to programs that are creating stability in the economy, and obviously creating

exports and jobs and helping us build two and a half% to a higher percentage gdp. so it sounds like a good investment for the american taxpayer. i wanted to ask you about -- of all things, libya. last night i was in libya with a minority lease or leader policy. there was a great sense of unity, a great sense of purpose, expectation for their elections taking place in june, and oil production is up, which is going to help the rule economy, and they were very concerned about qaddafi, the family members and associates, the great wealth was not going into the people or their infrastructure or investing in any way. for 40 years, it is really -- you don't see any investments

for the people of the country so my question is, what happened this money, where isn't? the government said they wanted very much to work with you, and the american government and the international community, to try to regain and recapture those resources to help rebuild the country and to help with this democracy. so i would like to know, are you working in any way, what steps are you taking, what are your plans to help this new emerging democracy? >> excellent question. we work very quickly with countries around the world to freeze the assets of qaddafi and his associates and the institution they controlled. very quickly. we are now working very closely with the libyan authorities and countries around the world on how to recover as much of that wealth they essentially stole as possible. it -- what we do know is there is no meaningful amount -- those

assets in the united states. >> did they have any in the united states? >> i don't think there is any material not in the united states. notts knots rising, because we have top protections, but we believe we have frozen a substantial amount of resources, now we have to figure out a way to help them recover a. >> about how much, isn't hundreds of billions? >> i do not think it is that large. it is great -- substantial -- relative to that need to a backcountry. >> also i've been corresponding with your office and you on the challenges that americans living abroad, i represent many americans that are working abroad, and they are reporting that they are having problems getting assets to bank accounts across -- abroad. i know that they requested a meeting with your office. you granted one in april. i want to publicly thank you for

that, so they can work out why they are being denied these bank accounts. your office is saying that there is no policy in american government that in any way denies american citizens or makes it difficult for them, but the testimonials that are coming into my office tell a very different story, and i certainly support all of your efforts to improve tax compliance and to determine the ownership of u.s. assets of foreign accounts. these average should not compare or hurt law-abiding american citizens. my basic question is really on the facts of the u.s. patriot act and the foreign bank and financial services, and basically, what are you doing to help accommodate american citizens so that legitimate american citizens are able to access bank accounts abroad and with no -- more and more people in the world economy coming and going, a problem across the country's. >> very important question.

you're right. there have been concerns about the impact of this set of laws, particularly will be called shorthand stack up. we are working very closely to try to meet the congressional intent. we're trying to make it -- making it harder for american citizens without undue burdens on their abilities to have a bank account, for example. we are doing a lot of things to provide more time for banks around the world to adjust and to try to make sure that we are designing the rules in a way that created our balance between preventing tax evasion but make it easier for americans living overseas, ended his perfectly legal and possible for them to have bank accounts overseas. we have some work to do on that. we work with your office and colleagues on how to make sure that this is responded to.

>> the time for the gentle lady has expired. the tank the chair now recognizes the gentleman from new jersey. >> mr. secretary. as you know, fannie mae and freddie mac, losses are closed over $200 billion, and their direct loss is associated with 2008 the him out. 2008 belmont bailout. if the gentleman will step aside, if the gentleman will step aside. i believe that number would be harder if it wasn't for the work of mr. demarco and effort gets done. i believe that the american taxpayer owed him a debt of gratitude for not allowing some of the various entities to explode fannie mae and freddie mac. >> you recently announced that

more beam may be underway. a month and a half ago, the president announced a policy that would force doctors to pay brother declares mortgages. mr. demarco talked about how principal productions would be a net loser. there are also great concerns about the moral hazard as well affecting the taxpayers forking peoples mortgages. my question is this, given the terminus john that mr. dimarco has done, but is the minute administrations reaction if he fails to adopt some of your provisions because he believes that it has terminus costs to the taxpayers? >> we have actually been working very closely with mr. demarco. he has been put in a tough job, as he said. he has been overwhelmingly supportive as we are opposed to

repair the damage in the housing market. there are some areas where we disagree, of course, under the conservative mandate congress designed for the fha administration, secretary has no authority over the choices he makes in this area. but where we believe the interest of the taxpayer and router housing market are best served by a additional initiatives, we are going to continue to adopt those as we quite successfully have for the last three years. on the issue of principal reduction, there is a very strong economic case to provide the principal reduction in some circumstances where people are deeply underwater and face a hardship like a loss of job. that is why you are seeing things and investors across the market on a much larger scale in those areas. >> he has extensive reports showing why it would be a net

loss. >> do have a counterpart and how your numbers compared to their numbers? >> that is a good question. we want to make sure that working on the same basis of facts. >> we look with a neutral independent view about where there is a case for reduction. we are working through that with him. >> can you provide this committee with those reports to document just where you stand and where he stands? >> i know you're working through it. >> let me put it this way -- i am happy to respond to that question. i'm happy having to work through where we think it's a good case. >> switching gears completely, on to the $25 settlement agreement, one of the parties that were not at the table, so to speak, were the investors in the marketplace. the first question is, why were they not at the table, should

they have been at the table, and are they a really part of this action, because they are the ones that will be hit by a? >> question. they did spend some time thinking about whether they should try a much more conference of settlement, including those investors at the same time. they did it in stages. they and others were left out of the initial process, and that is still to come. >> what you mean, that is still to come? >> there is a variety things underway about how to resolve a separate claim's. >> that's another issue. already with the claims that are out there, this will or could affect those investors. those investors are not as huge investors, they are the 401k plans, endowments, what have you. they represent our parents and grandparents and their pension funds. they were not at the table, but those investors, those individuals have artie been affected indirectly or otherwise, by this settlement agreement as the banks could be

-- compelled or encouraged to write down those were just. >> are you asking, have the interest that adversely affected either as? >> i'm happy to talk to you about adding to be some reason why. >> the time for the gentleman has expired. the chair now recognizes the gentleman from new york, mr. meeks'. >> thank you, secretary, to see you again. let me just first talk about where ms. maloney had talked about the imf. i think this conversation going on in the senate right now about the reauthorization of the gnome bug i was wondering if you could tell us about hal the banks help american companies and providing financing for u.s. exports in countries that have developed capital market. >> countries around the world

subsidize exports. we do it in a way that is very careful, by forcing them to charge companies for the subsidies they get. that is why overtime, i think there is then no record of loss to taxpayers in this program. if we don't do it, another country will steal business from american companies, and you will see less exports and less jobs, that would be a mistake. that would be a mistake for the u.s. economy. if we stop, they will keep doing it, and it is not just europe, it is china very aggressively. it makes no sense. it is not rational for us to unilaterally disarm, in the hopes by doing this. i don't think it's a case for them.

too big too generous to support that. and almost all the rest of them face a loss of competitiveness relative to germany because they make it very hard to start a business, very hard to use the talent of their country's more carefully, and the half financial systems that, you know, we had a terrible crisis in the united states come to

their financial systems were much larger, much more leverage and risky than even what happened in the united states, so those three changes of the fiscal reform over time, growth enhancing economic reforms so that just a simple way to start a business and financial systems that are brought down to earth have a little more gravity, those are what are necessary, and it is going to be very tough, very long hard coded and it's easy for people to recognize as you did that these reforms which can work against growth in the near term have to be supported not by just some conditional financial systems, but those countries that are in a position to do more to support growth should do that. the would meet the overall crisis easier to resolve and less risky. >> let me try to combine two questions in the little time i have left. one has to deal with the grease again and about the how it relates to the impact on the u.s. economy if greece were to

default and abandon the euro. and the question about greece and also italy given that the deputy governor of the central bank talked about they no longer believed in the need to allow the currency to appreciate if means china is going back to keep it artificially low. so i was wondering what impact would the artificially low have on your note's ability to especially in italy and greece to be competitive internationally with respect to exports. >> good question. greece itself is not large enough to have to cause a lot of damage to the united states. greece matters a lot of because of the crisis hurt confidence across europe and caused much as the rest to fall into recession, and if europe can contain their

spreading the crisis is likely to be less damaging to us in the world and they have the devotee what to do that. on the chinese question is about 14% of the real term against the dollar's since the summer of 2010. 40% of against the last 45 years but they have ways to go. i think by most measures the chinese currency is still undervalued relative to the dollar and the currency of europe and japan and other trading partners and you are right to remind people that by holding their currency too low, they are making it harder for their other trading partners to grow including in europe. estimate the time of the gentleman is expired and recognizes the gentleman from new mexico, mr. pearson. >> thank you, mr. chairman. as i listened to the language, the lingo being used today it sounds familiar to the time in 2008 when we are moving down the road to bailout fannie and freddie i remember them saying that if we ensure 100% we will never have the opportunity of it

and i think you're part of the working group and hearing if we ensure greece it's going to be in our best interest and now europe is in the category of to the to field and the american consumers have to pay the bill defines resonated with the conversation about the imf not ever having failed, and having the head of the imf here in this room she confirmed maybe we did change the maturity dates and the terms of the loans to prevent defaults in the past, and so maybe that idea that we've never suffered a penny loss is a game but we will leave it the way it is. basically i'm just saying that the american taxpayers, ireland already build of the banking systems and now the government owes the banks lost.

back in 2011 he made a comment that fannie and freddie when we give these guarantees the government is going to bail out a bad actions and it makes them take risks that maybe they shouldn't be taking and i'm wondering how if we are going to bail out of europe why they are going to quit taking risk because michael lewis and his book boomerang talks about increase it is a birthright not to your taxes. why would the american consumer be stuck paying the bill for a country where it's a birthright not to pay your taxes? >> excellent question. we are not going to put the american taxpayer or the american consumer in the position that they're taking -- >> with the imf every loan at the imf, if they were under the same rules as loans to the small independent banks in america, would they still be called sovereign over the be put under special watch or would the banks

holding those people on a special category? >> no comparison between those six remember the imf, it's not just backed by the goal its bet by the fact any loan they make mix it senior to any other creditor and the loans come of conditions no bank could impose. estimate but the have had to write down and change the loans that were put in arrears and we change the terms and extend the maturity dates. >> if i were to change the question just a bit camano -- not a penny of loss to the american taxpayers and more than six years of history to all sorts of -- miranda stand but mr. paulson guaranteed if we had 100% of fannie and freddie that we would never have to pay a single line. the was his guarantee coming into the congress in 2008. >> i doubt he said that but the situations are not comparable anyway. >> it's just the american consumer is going to get stuck again. >> it won't happen in this

context. and as we consider people not paying their taxes this documented over 100,000 people working in the federal government that haven't paid their taxes about about a billion dollars. has the administration done anything to start collecting that? would be happy to provide in writing to congress. >> can we get a list people that haven't paid because i would like to put that on my web page. i think the american people would like the information because there's a category of people in this country who believe that they are not paying taxes just like they do in greece and i think it is one of the things people are fed up with. i've noticed your testimony talk about saudi arabia increasing the output. why is the u.s. not increasing its output? and other words, the president is going to my district tomorrow to talk about oil and gas production in the various county areas where the fish and wildlife service overturned a six year collaborative effort to protect the lizard as an endangered species and that lizard has the potential of killing all of the oil and gas

production in the area that drove the surplus we bring the deficit last year in the three county area in the surplus of 150 million. why would the president be shutting down production in this country when he's asking saudi arabia to increase production? >> u.s. production across the country of oil and gas is expanding dramatically and will continue to do so, and that is a good thing for the country. but of course, we have to follow the law of the land and what congress passed to make sure that production exploration. >> i've only got about 11 seconds. the science that was used was disproved. they said this is a slap in the face so we would be happy to continue the conversation on that. >> very brief you raised the concern,,, that when the imf or europeans provide assistance to the nations of europe that it's going to encourage the prophecy

in the future, understandable concern. but i would just draw your attention how incredibly tough the conditions are that are coming with that assistance. if you look at what greece, ireland, portugal have done as a condition for those reforms, and if you think of what italy and spain are doing now, for the similar objectives, they are very, very tough reforms, and i think that helps offset the risk we would have that if you put money on the table it will reduce the incentive for those things. >> the chair now recognizes the gentleman from massachusetts mr. capuano. >> i would yield to the ranking member for a few minutes. >> i feel compelled to come to the defense of the bush administration. there was a previous comment that secretary paulson when congress accompanied his request finally after we came to power to give him the authority to put fannie and freddie in server should guaranteed that there would be no tax payer budget he

never said did such thing. if we pass the legislation it would greatly diminished the likelihood, it wasn't able to undo past mistakes and that is the case since 2008 we haven't lost any money but that is not what mr. paulson said. he of this with steve of the losses but he never gave anything remotely close to such a guarantee. >> reclaiming my time, mr. chairman. after that eloquent defense of the bush administration which i'm not used to coming from the ranking member and i'm from off my game a little it, mr. secretary, i thought today's discussion was supposed to be of the international financial system, so i would like to get to that love it. i've heard from some other members they think that europe is basically handling their problems better than we are handling of problems, and i guess that is one opinion and that's fine. but i would like to ask in the european problems that we've had our inning of the country's significantly reducing their tax

burdens in the last three, four, five years? >> i do not believe so and i think most of them are going rapidly in the of their direction. >> i'm under the same impression but i thought maybe you would know better than mine. and i would like to offer for the record a little table the letter from the organization of economic cooperation development which is a 50-year-old organization that represents 34 countries mostly 24 in the european, and is a simple table that simply compares the tax burden as a percentage of gdp and shows the united states at least for 34 countries actually ranks 32 of the 34 coming and it shows one of the countries that allegedly is somehow more competitive than us, germany, the tax burden is actually 55% higher than the united states tax burden. that's the oecd, not me, and the united kingdom, another country that few weeks ago stealing all

of ours, the heady 42% higher tax burden in the united states. greece had a tax but not 25% higher than the united states. evin turkey's tax burden is high year. the only to countries that have a lower tax burden man-hours as chile and mexico on this particular list. so i would like to submit that for the record. and i asked this because we've heard of the army did a good job dealing with issues and all they're doing is one side of the letter which is the austerity measures which is fine, and i wrong to think that the u.s. has made significant cuts in the last few years to the budgets? >> they reached an agreement to cut more than $1 trillion in spending over the next ten years and if you look at what the cbo said for example but the impact of the president's proposed policies on the budget would reduce the budget dramatically over the next five years to the level of the debt would stop growing in the economies we are making progress on those fronts

but we have to be careful to do it in a way that doesn't hurt growth. it's been a gallon to approach. my goodness, how unique. i guess i would like to ask as a side note the cuts that we've had that they somehow exempt the irs from those, are they exempted from the kutz? >> congress has been reducing police source available for the customer service enforcement, thus hurting by all independent measures the irs capacity to collect taxes. stat while we are cutting the irs we are now demanding that the cut taxes owed to us which i think is a good thing in my former life when i actually felt making money was a good thing i was a tax attorney and was happy because my clients have less concern, and that was fine by me. so while we are saying cut the irs we are saying they should collect more somehow from the tax delinquents i guess at some

point someone needs to educate me how to that works. has anyone suggested that you know of no serious suggestion to increase u.s. taxes for the german model of the 55% increase across the board? >> we would not support that. no one is proposing that we estimate has anyone suggested that that you know of is a thoughtful and a significant person cracks steve mckeithen and the president's proposals on tax reform which as you know would raise the tax burden on the top 2%, the would still be very, very low compared to those that prevail in any country. ischemic my time is running out mr. secretary. thank you and i would like to thank the gentleman on the other side who suggested by implication we should adopt the european model and double our taxes. it's amazing to me he would suggest that even -- >> the time has expired and the chair recognizes the gentleman from georgia mr. westmoreland. >> thank you. mr. secretary, thank you for being here. i can't imagine what it's like

to get three or four days a month and know you have to come up to the health and it curled, so i do admire you for the courage and the stamina that you've got. while we are talking about taxes, you had said previously that being an american is a privilege and that wealthy americans should pay more just for being an american. to you still believe that? >> i believe as does the president there is no plausible for us to address the many economic changes facing the country including our unsustainable fiscal deficits without asking those most fortunate few to pay a modestly higher percent of their taxes. i do believe that and i think it's important. i don't see how we make any progress on things without that. >> so you think that anybody that doesn't want to pay taxes or pay more taxes would be more

of american then somebody that's stepping up to volunteer but doesn't pay? >> i wouldn't say that contract nobody wants to pay more taxes or have to ask them to pay more taxes but the problem we face of course is that if we don't do that and what are we going to do because we can't borrow a trillion dollars for the tax cuts and if we ask someone else to the higher taxes that wouldn't be fair. >> if you look at being governed by guess for living in this country, half the people in the country don't really pay any taxes. estimate that's not really fair because as you know it doesn't capture the taxes they pay for social security and medicare so when people say that share of americans don't pay that's not true because social security and medicare, all americans pay a portion of their income to cover the cost of those programs.

>> but not on a regular taxes. >> their paychecks are deducted as a share of income tax to cover. estimate that at the end of the day they pay no income tax. >> it's true that a small fraction of the poorest americans this congress has decided there has been a bipartisan consensus from a long pergola time. >> so it's not true, you are seeing it is not true that half of the americans -- >> the only way that is true is it to say somehow the tax we charge americans against income for social security and medicare doesn't count as income tax. as ben and i'm not talking but social security or medicare. i'm talking about the federal income tax that you get and file on that 1040. >> i don't think we're disagreeing. it's true americans pay different taxes. they pay an income tax and pay the tax against income for social security and medicare and most americans, the vast

majority tebeau texas. >> so the vast majority. so you disagree with the statistic that says half of americans do not pay any income. >> it doesn't count social security and medicare. >> but if you don't count those texas to the pnac and? >> why would you not count them go because -- it's been a good because i don't want to count them right now pitted i'm just asking a question, let's just have a hypothetical question that you don't count vose, do they pay me? beneteau can count them or not they pay taxes for those things, this federal programs as a share of income every two weeks. >> what's the want something. according to the treasury department, chrysler has paid their bailout. >> we did take a modest loss on

the chrysler programs and we will take a loss on the gm program, too. >> what you consider a modest? >> i don't recall the the actual numbers and chrysler and gm in depends on how things turn out over time that both of the company's art hired a huge amount of people back to work and they're doing very well, people are buying their cars, let's just talk about chrysler what is a modest loss that you think it'll be? i'm anxious to see what you think is modest. >> it's done on the books and the this is a way to think about it. more than fully offset by the more than $20 billion of investment income that we are on the investments and banks would be one way to think about it. ischemic i don't know if i'm not asking the question right or you just don't want to answer it, but what amount is the government going to have as a loss from chrysler? >> i don't want to get the number wrong and will devotee

and right and it's already a matter of public record. islamic is a close to 1.3? >> maybe a little bit higher. >> that's more than modest to me. i don't want to argue that i do appreciate you coming and -- >> the time of the gentleman has expired and the chair now recognizes the gentleman from texas mr. hinojosa for five minutes. >> thank you, mr. chairman. thank you, secretary geithner for sharing your testimony today much of the focus of the media like cnn and bloomberg as well as this congressional body has been on the tremendous debt crisis in europe. however, substantial lack of economic growth and low gdp also looms large over the economic recovery of the year rosellen.

in the fourth quarter of 2011, the year rose known's economy contracted albeit at a slower pace than expected. some of the countries had their ratings downgraded because of those big problems. what is your prediction for the duration and the debt of a recession in 2012 and what sort of drug with the european recession has the have today have on the growth of the united states economy? >> let me start with this if you think about where things were in the fall of last year when most of the world thought we were living with the real risk to suffer the catastrophic failure we are in much better shape today because the have been successful and colman those

financial tensions and people are more confident they will do what is necessary to hold this thing together. but even under the most optimistic scenario on the impact of the reforms this will take a very long time and growth in many of those countries is going to be very weak furlong period of time and that's why it's so important and if it's week it hurts us, it hurts the rest of the world. six months ago that's very important, so even though they have a long way to go we face less risk of damage in the united states and the global economy because of the cumulative impact of the actions they take and you are right to focus on the growth prospects and it's good we can hope now that a bit more breathing room because they've taken off the table the rest of the failure maybe they have more time now to try to focus on things that would improve growth over time. >> i agree a situation six

months ago versus today we are much better off but i would like to hear your thoughts about any measures being considered to address the severe unemployment which we understand they have especially in its young people and countries such as greece and portugal and ireland how concerned are the leaders about the international financial system and the possible long-term effects of severe social unrest that we've year to the to field on tv and athens greece and london and italy and portugal and other european countries, fell's insult in the street where they claim that the middle class has shrunk and the gap between the rich and poor has expanded those are concerns i have. >> we share those concerns and

so do the leaders of this country's and it's important to recognize the biggest threat to those people still in place or at risk of losing their jobs is the financial crisis you're allowed to burn and the necessary essential most important action the have to take to reduce the risk of further damage is to do what they've done to cool the financial tensions because that makes them less likely that the growth that they will go into a deep depression. that's not enough though, and across europe less so in ireland which is a very dynamic economy but certainly in spain and portugal and italy and greece the have to make it easier as an example for businesses to people to start and growing business because of its that is the most likely way they are going to be able to get more opportunity created for those people out of work and they have a long way to do in that context bhatia statistical the financial pressure to make sure they are supporting overall growth and demand alongside the reforms to

make the economy over the long run and it's going to take years and years. >> well, the barack obama administration of less to increase the number of student visas from the european countries to come to the united states and see the way we are handling this crisis which has been very hard for us? i think that education seems to be the solution that works for us as i believe would work for that european countries. >> good question and i would be happy to ask someone to respond to the specific impact of the policies. >> i just want to note, and i appreciate the way that you are running this hearing. what the -- everybody here on this point will be accommodated and i would ask you to please recognize those who have stayed here and i just want to at least

the members that are here i believe we have five more members and the will be it so i would urge you to recognize those five and we will be here until 12:30. >> the chair recognizes the gentleman from missouri. >> thank you mr. chairman and mr. geithner for being here today. just to follow on a couple of questions with regard to the economy of europe, it seems to be that we have in place the plan and using the pressures have been released or lessened from what people thought was going to happen. but actually has debt started to decrease at all? >> good question because as many he pointed out on the growth weakens because of the shock of the crisis that tends to increase the level of debt relative to gdp these countries have dramatically reduced the size of their actual deficits and projected deficits. as the mix with a tennis get their budget under control of the amount of debt hasn't

started to go down because the economies haven't gotten to the point yet they can start paying. is that accurate? >> in some countries it is starting to come down and and others as a debt of gdp it will to live with the deficit's coming down as a necessary path to that. >> least the path to get themselves out. what is the impact of the gas price going to be in europe? because the iranians if i am not mistaken have said and they are not going to solve them any oil, so where do you see that going? >> gas prices in europe when they do what it's not good but it has much less damaging effect than in the united states for different reasons about of a tax gasoline in particular so it's not good but they decided on their own to cut off their imports from iran because they are committed as we are to put as much pressure on that government. >> okay. with regards to the credit swaps

taverna, the banks in the country have the default kurdish stops in germans with regards to some of the european countries and specifically greased. greece basically is a default because the commodores are being asked to take a kirkuk on the 52% or something like that of the bond. what is the impact of that going to be on our banks and financial institutions in this country? >> no material impact. the aftermath dramatically reduced over the last 18 months or so and they did buy protection against the remaining exposure the head but that exposure is very small but any investors around the world that exposure to greece and going into this exchange will be able to take it to the protection they purchased. >> it's interesting from the standpoint this situation has been prevalent for the least a couple of years and it seems

like we're just telling the american public to see what's going on their becoming more aware and and a curious why were we not being worn out front talking about this over the last couple of years say two years ago? i'm sure your office and about this and the concerns after 2008 knowing the intricacies of how complicated and how complex the financial world is and help tied together the as the united states and as the european financial world this together? how are we being impacted here because it looks like we just got talking to other critics of and the volume of funding and the swap lines and the direct other banks and trade partners, we are connected to those guys in every way except being a state of the united states. estimate your right it started more than two years ago, and we have been intensively engaged with the europeans and the imf and the u.s. financial system and countries around the world over those more than two years and encouraging them to move

more aggressively and they've moved slower than we would have liked. the we brought tremendous attention to so that we were protecting the american financial system and trying to encourage them in ways that didn't put them at risk to aggressively, and i wish they had been able to move more quickly earlier because it did do a lot of damage. if you look what happened in 2010 and 2011 the moments to grow faster to weaken the united states it is when you're up was letting it on fire. i wish it would have happened sooner but we have been actively engaged and it feels better now it's. >> very quickly. i know one of the other members of the panel here this morning and ask about the fact. where do you think this is going because i have three quote to this morning from japanese banking association, the

institute of finance or very concerned we're going to be impacting the international investment with the proposed rules and i know we are not there yet but can you be elaborate where you think is going to go and are you willing to consider a lot of these implications and minimize those? >> if you could elaborate quickly. >> twice since fallujah was passed to give people more time to adjust and try to lessen the burden of the compliance for the reasons the state and we're going to continue to work very closely with the finances and the world and their governments to make sure we can meet the law without an undue burden that would damage the interests of the united states and people are not confident we are fully there yet but we are getting closer. >> thank you mr. troup. >> the chair recognizes the gentleman from georgia mr. scott. >> thank you very much mr. chairman. welcome, secretary. let me see from the outset that

while this is about international monetary policy of course we can't leave out what's going on right here at home and the united states and certainly i want to touch upon the progress report from you and share some information about the heart of the problem that caused the whole problem which was housing and mortgages and where we are. as you know, have been on emission myself and thanks to you and your help that treasury with of that regard i do want to say if he would tell your assistant secretary for the financial stability that we appreciate fine cooperation he's given to us along with ms. michel. they helped us less time and i want you to know we're going back and having the second home foreclosure event in atlanta georgia. i mention all of this because we were able to save 3,827 homes

last time. this time our goal is 10,000, and we can do this, mr. secretary. a lot of things that happened since last time that i want to talk about commander certainly want to just ask that whatever you can help us to do to reach that goal and to help make this a successful event it is brenda b. june 1st and june 2nd. now a lot has happened. we know we have some opportunities here to go to the heart of this matter and helped many of our struggling homeowners with a writing down of principles. we've had a settlement as you know, several billion dollars but there is a lot of clout we don't know. there are many struggling homeowners who say how does it help? we want to use this event on june 1st and 2nd to see what we can do to get some of the money out where it helps the most and we can help reach this tindals

and the goal. georgia for example caulkett $813 million of this money. i want to ask you what does this mean, how can we use this money in the billions and of real estate get their share but there is a lot quote of what it can be used for and what it count, however homeowners get a piece of the action. he will be able to see more details of the settlement actually means in the coming weeks and will give you a chance but alongside that as you know we are working very closely with sean donovan that the fha to try to make it easier for people to refinance to to get into of lower interest rates to make it easier for people to stay in their home if they can afford to buy having their payment obligation reduced overtime, helping them if the need to leave their home to transition to more affordable options we're trying to get more support to communities where there is still devastated by the huge number of occupied homes across

communities to get more resources into neighborhoods to help stabilize those communities and we're going to keep doing everything we can in this context and if we work closely the to the next event to make sure we are reaching more people the settlement is part of it but it's not the leading happening. >> exactly. let me make sure we are clear some of this money can be used to help it on principle, is that correct? >> that's correct. they agreed they would have to provide some of the assistance by reducing the balance of principal owed by some of the borrowers. >> very good. now the area that we are emphasizing here is one of the fastest if not the fastest group of homeless people are our returning veterans. we have set aside a part of this and we are coordinating with the va to structure what we have going to help finance state and their homes. it is the height of our young

men and women go and risk their lives and come back and are struggling with homelessness and joblessness. what specifically are we doing in treasury to hold? >> you are right and as a part of the settlement working with 58 and theater housing bodies to make sure the every chance to stay in their home and it's even worse than you described of course because we ask our service members to move a lot and it's very hard to move if your house is under water, so apart from making sure they are protected against people taking their home when they're serving the country overseas, we want to make sure that it's easier for them to meet their obligations as an on a service member and that is still a difficult time in the housing market and we have a lot more to do in that area. >> and then finally, hampshire

-- hamp? >> haslet roughly a million homeowners now, less than we had hoped, still more to come to the standards that we set have helped encourage another two to 3 million loan modifications across the united states said a broad impact of the programs as much larger them that direct programs. one thing important to realize. >> the time of the gentleman has expired if you could submit that answer in writing. the gentleman from north carolina mr. mchenry is now recognized for five minutes. >> thank you mr. chairman and mr. secretary for returning. i know we have a lot of discussion about a were european exposure. but the question of international harmonization. as you have peaks fsoc and your

role. has this been a point of discussion and a concern about the stability of our financial institutions in the united states without regulators' moving much faster than the european regulators when it comes to the full myriad of market regulations? >> it's the central focus of the discussions on the council and i spent a lot of time directly working with the fed and the cftc on that basic question. i'm not worried that in fact moving more slowly is going to do -- is to undermine our efforts to get the reforms in the united states but we want to ensure there is a playing field, so we -- this is true in derivatives in particular we want to make sure that we are living with them, not too far ahead of them because if we go ahead without the knowledge of where the land of things we may end up shifting the risk by the united states and the would be

against the intent suggest we are focusing on it in europe is actually very close to us on the key elements of the oversight but we want to make sure that we are aligned. estimate you mentioned as with of the derivatives on title ix seven with the application. what about the market and make it more volatile and more risky? >> i don't really think so. i think -- think about the world in which we raise our standard set to hear and they stay down here then what would happen is given to be shipped to europe and the world would be more risky even if we felt more comfortable in the near term but i don't see that happening. i think again on the broad strategy of the difference reform the have largely embraced the architecture the congress past and not all of the nine states and even the pierce the were the master adopted and not identical in the areas their clothes and we want to be as close as we can.

>> are you asking the cftc to work more diligently? >> very good point. when the cftc to be as close as they can because it feared different it's hard for the rest of the world to say we want to be like america we try to get the cftc and sec to be aligned with can be severe in a stronger position to encourage the world to adopt our standards. >> we are also encouraging the fed and the fcc to work closely with the europeans and the asians and the british to try to make sure those reforms largely match ours. >> you mention the difference in the regulation in europe and the united states. if there is that difference for the purpose of months, you would see the flow out of our markets to there's, so it isn't important a matchup or is it

important to get close -- i know you've spoken a lot about this and this is the one area where i think what you are saying is matching up with a bipartisan group on capitol hill. iseminger right we have to make sure if we are ahead of them on the implementation that doesn't create a huge competitive that vantage for the european competitors so we're looking on that. before the crisis the gap was like this. i think it's much closer on capital, liquidity, derivatives, all the material things that matter to the economics and the financial business. it's not perfect yet. so yes we will make sure to make sure but not the expense of leaving americans more exposed to risk than the need to be. >> my colleague asked about hamp. many of us have great concerns. i sponsored a bill and passed out of the house trying to

eliminate hamp because of the impact not it has on those of the vets hoping that the over 50% that enter into the program and are left off materially worse off by being kicked out of the program and having to pay fines and the interest and penalties for missing payments. would you categorize it as a success? >> let me say on this point and i would be happy to talk in more detail about this, but the performance of the modifications under our programs as much better for the homeowner and a better success rate than the standard upside of the programs, and i am very confident that it sounds like we should spend some time together on this that you are better off being in the program than not because the debt is better and that is where the performance rates on the modifications is a much higher than in the private market. estimate the time of the gentleman has expired and recognizes the gentleman from texas mr. green for five

minutes. >> thank you, mr. chairman and i think you for appearing today. i want to especially thank you, especially finch you for speaking up for the hard-working americans who pay 1.45% of their income in taxes and for those that are now paying 4.2% for social security. it was 6.2 but we have a holiday that will end and they pay 6.2 at the end of the holiday and they will do this up to $1,110 there about, $110,100 so thank you for speaking up because to them it really is an income tax. we can freeze it and fremont, but it's an income tax and they

paid and we ought to appreciate them for what they pay just as we appreciate a billionaires' for what they pay. anybody that pays taxes ought to be appreciated. somehow we tend to believe that poor people who are taxed on all of their income somehow they are not paying as much as they make in taxes when in fact on a percentage basis they are paying more because the can be the 1.4% of all of their income, others will, too but when it comes to social security if they make some $30,000, they are going to pay that 4.2% on everything that they make whereas a person in the bank's $110,101 will pay only in the first $110,100 to if you make a billion dollars you pay it on the first $110,100.

>> it's even worse than that because as any businessman will tell you, the employer side of the payroll tax comes out of the wages they pay their workers so that tax of the individual to cover social security and medicare isn't after a temporary halt what it is another 6.5% of whatever it is on the employer side which comes out of their wages, so it is true to say that the vast majority of americans pickaxes against their income to help support the progress of americans are supported. >> again, thank you for making these comments clear because poor people merit some appreciation for the taxes they pay, too. continuing on this line because i didn't intend to go this way but now i must continue, a certain billionaire made about $3,000,000,000.1 year and i'm happy for him, i'm proud, it

would take a minimum wage worker to make that $3 billion about 198,000 years. i'm happy for the billionaire that meet his 3 billion, but i do think that it's fair for the millionaire who made the 3 billion to pay a fair amount of taxes, and i somehow cannot grasp of the argument that the billionaire peace to much texas. how did he become a billionaire if he is paving too much taxes? >> nobody likes to pay taxes with a very rich or poor with a stunning thing about the united states today is that effective tax rate you pay as a share of income is very low hysterically low relative to other countries particularly for the most fortunate americans so we have

proposed as you know to raise modestly that tax rate on the most fortunate americans because we can't afford to go out and borrow from a trillion dollars that would take to maintain and we are not prepared to cut medicaid to finance the tax cuts, so i don't come as i said earlier i don't see a way to solve our nation's problems economic and fiscal without raising the effective tax rate if modestly back to where it was for a simple at the periods of history we did very well as a country. >> finally there seems to be a notion of what that you can cut if you cut the corporate tax rate which doesn't necessarily cutting corporate taxes but if you do this you are going to get more money in revenue automatically. does that automatically happen to cut the corporate tax rate because there's the effective tax rate and then the rate we have so cutting will not

automatically bring more revenue? too most economists would say if you designed averitt lowering broughton and tax reform that that might have a small effect on improving economic growth but they're very small and do not come close to paying for the cost of the tax cut. estimate the time is expired and the chair recognizes the gentleman from michigan. >> i appreciate that mr. chairman and mr. secretary, thank you for being here and i wanted to head in a slightly different direction on the debt restructuring but i wanted to address something one of our colleagues -- i wanted to gently correct her when she indicated that europe is our largest trading partner and that is canada as i have checked all the u.s. census bureau website dealing with foreign trade and year-to-date canada accounts for 16.2% of all of our trade both

exports and imports, china is at 14.2% and all of the european nations were in a single digits collectively much more sycophant than that. but i had run out at chollet to meet with a gentleman that is the chair of the standing committee on international trade remember of parliament, rob mary field from canada and we had a little conversation about this and talk about what is happening in canada, and with their budgets they are going to be introducing an austerity budget. they have lowered the tax rates and they believe that they are on firm ground and certainly the prime minister harper who's been here and other places and the world is looking for those partnerships, so we know that when we are talking about america we are talking about an expanded north america on the

influence and canada being tied directly to year up there are also affected by that and i want to talk a little bit about you were starting to things, you're starting to head down the path and i believe we'd run out of time but the bridges to bring the retail forces the institutional spending and use that it's much more radical and i just wanted to give you time to expand on that and then i've got a very specific question as well. kuran not sure i can do justice to the reform but out line, the proposed to do over time is to separate the retail deposit activities in the big banks, require them to be very substantially capitalized and leave the wholesale parts of the banking system separately managed with less regulation and the have to choose what is right for them but i couldn't conceive of why we would want to adopt that in the united states because we went to the crisis in

online where it was caused not by the traditional banking activities also a lot of too much risk but because of what happened in the wholesale markets where kidder was weaker capital requirements and more funding risk and was brought collapse of the banking system in the united states that proposal system that caused so much pressure in the trauma and damage. there's is a much more sweeping separation and i do not think it makes sense for our country. >> i'm not saying that it does either. i think the point you're making earlier and certainly there's a number of solutions being topped up there and whether it is the basil discussions and what inlet is doing and others and we know there's great differences between greece and germany and france and italy and others within the e.u.. very specifically though, it had been brought to my attention

looking at our debt structure and the british debt structure there is a chart how to verify salles that indicated the amount of debt that a great britain has and when it is coming out to be renewed and the of much more effectively in my mind back looted this. their debt window is very different than our tenure that window. we've gotten into the the you have the exact figures but somewhere a high 60% or 70% of your total debt that is going to be needing to get refinanced here in the next 36 months at historic some argue artificially low interest rates, and what is going to happen with those? it seems to me we need to expand this out to revive talk to a former state treasurer in michigan about the six at issue and that is how so many whether the hour states or countries or whatever have gotten themselves in trouble winning to look into

these interest rates. obviously it will have an impact on our day-to-day budget if you could comment on that please. islamic you are right. thank you for raising that and extending the debt is inextensible thing to do in this environment and we're doing it quite aggressively. i think even over the short period of timing of time average maturity of 49 months to attend 67 months and we are going further, and as you said it makes sense to do that because we are in a time of exceptionally low interest rates so we will keep moving into it in a carefully balanced way. >> will this administration be willing to take a short term higher? >> of course it would make sense to do it. >> busheir recognizes the gentleman from minnesota for five and it's a respectable, how are you mr. secretary? thank you for being here. i have question about

remittances and i know that your office has been working less and i want to thank you for it you have been very responsible. but could you just talk a little about what the department of the treasury is doing and might be able to do to help facilitate and come up with a permanent solution in america to be able to limit money back to relatives at home? you are aware of this and i know that but just for the record there's been a number of banks that have refused to facilitate the remittances perhaps you could take it from there. >> you're right and i appreciate you joining attention to this and we will keep working with you closely that you are right to say it's hard and we are not having enough impact yet. the basic problem is the banks are reluctant to do business in parts of the world they cannot satisfy their obligations under the u.s. law to make sure they are not facilitating the terrorists were the people working enhanced the american interest and that creates some challenges and as a tutor in the context site so we are going to keep working with you on it and it's very important to try to do

it. we are not making enough progress, but we will keep at. >> i will continue to work with you on the issue just to make the point for the record, estimates that i found show that about americans and all these spend about $100 million in remittances that basically are a lifelong to their families so at a time that we are worried about foreign aid and staving off, you know, hunger and starvation, these remittances actually help fill the gap, and i think it is in everybody's interest to come up with some solutions. >> i agree. >> can you talk about switching to the housing context can you talk a little bit about what kenya and freddie might do even though the eleanor began a 60% of the mortgages to look at the principal reductions on some of those mortgages in cases where

it's advisable? at this point the agency that is a conservative for those gse is to the capri much said we are not willing to be doing that and my question is could we be doing it, and if we could, when can we? >> we think they can and we are encouraging them to do it. and they are working with us. they have to meet a very tough standard. they have to make sure that they are working to the interest of the taxpayer not just to help the housing market city have to be careful how they do that but we think there's a strong economic case for doing it in some cases, not for all but some and we are trying to make that case as convincing and compelling to them and i hope we will have a better feel for what they are prepared to do in the next couple of weeks. >> i would like you to not talk about the whole crew will pay the past through an the rulemaking process but as people debated in the press and even in congress there seems to be a strong emphasis on of the reasons why it can't work rather

than the essentials portents of recognizing perhaps a bank that wants to buy the mortgage-backed security shouldn't do it with government guaranteed money and then when things go wrong look for the taxpayer to bail them out. can you talk about the central importance of why the rule is a good thing and why maybe we should have an online more on making it work and then figuring it out why it can't? >> we have a crisis caused essentially but some institutions taking too much rest, taking advantage of the safety net where it existed, and there's a cost of the huge amount of damage we are going to be living with a legacy of that damage for a long time to come, still, so it is very -- it makes a lot of sense to try to make sure we're doing things to protect against that and is part of a broad set of reforms the congress past to achieve that

objective but with all eventually says is that banks shouldn't be allowed to run the internal hedge funds that take a huge amount of risk to the capitol because that could put us in a situation where the failures caused much damage to the innocent. the law also protected the market making and for hedging things they need to do to work well, and i am reasonably confident that the writers in the context were going to find the right balance. we want to be careful that the exceptions don't undermine the broad safeguards but we also want to make sure that the safeguards achieve what they are supposed to achieve and don't cause other damage to other interests, so we have to get the dillinger it and we are going to take the time that is necessary to get that right. specs before. i yield back. >> the gentleman from wisconsin is recognized. >> thank you for coming mr. secretary. just quickly, so i am clear on is the role of the secretary to

implement the policies are the priorities of the administration; is that correct? >> yes. >> yes. >> okay. i come from the north and east quarter of wisconsin, it is a larger role district and the skyrocketing oil prices of late have nearly doubled since the president has taken office, and is it your position of the administration has supported policies that will actually lower the energy cost? >> i do, i think so over time to read as the president said many times, there is no quick fix to this. it is double what it is unfair to history because they were really low in 2008 because -- >> i don't have a whole lot of time comes in your position is yes, the administration is supporting the lower gas price policies. i want to run through some quotes that you may recall. in 2008 as the president was a candidate in san francisco in regard to cap-and-trade, quote, so somebody wants to build a coal power plant, they can.

it's just a will bankrupt them because they're going to be charged a huge sum for all the dream house guest is being amended. the was the president when he was a candidate. which would lead me to have some concern about what his role is in regards to energy. in regards to his energy secretary, mr. chu who is implementing the policies of the president in 2000 -- 2008 with an interview in "the wall street journal" he said, "somehow we have to figure out how to boost the price of gasoline to the levels of europe. ..

>> increases the energy for those types of energies that are particularly carbon intensive. doesn't increase the cost of energy -- or it does increase the cost of energy. we have you, mr. geithner, we have the energy secretary, mr. chu, and the president all making comments that would lead the american people to believe that you're not supporting lower energy cost, but policies that increase the cost of energy. >> i think the question you asked at the beginning, and i'll repeat it again is that the policies the president is promoting are helping to facilitate a huge expansion in oil and gas exploration in the united states -- >> let's talk about that quickly -- >> our ability to use other sources of energy over time.

>> let's talk about the change of oil production in the u.s., okay? i don't want to talk about private or state lands, but i want to talk about federal lands. it's fair to say from 2010-20 # 11, that's been 11% increase in oil production on federal lands; is that correct? >> well, as you know, iemg not the secretary of -- i'm not the secretary of energy, but i'm happy to give his views on basic questions. if that's helpful, happy to do that. >> you don't contest production on federal land decreased? >> overall, production is rising quite substantially. >> right. you just said it's rising substantially. i agree it's rising because of private land and state lands opened up to exploration rather than federal land. just quickly. one minute left. >> it wouldn't be happening if the regulatory -- >> in regard to the budget or the president's budget, you indicated he's supporting tax

increases; is that right? only on the top 2% of the americans. i had a chance to review the budget. where's the balance with the tax increases? >> what the president's budget does as the cbo pointed out, over next five years -- >> when does it balance? >> hold on. >> what year does it balance? >> roughly 2016-17. >> what year? >> i said primary balance in 16 or 17. >> okay. >> primary balance. that's making sure that revenues cover expendtures except for interest, and that's important because that's the level where the debt stops growing. >> where's it stop with interest? >> not in the 10-year window. >> shouldn't we have a plan -- >> not in the next 10 years. >> okay. >> no way. no responsible way to achieve balance in ten years. >> i yield back. >> the chair observes there's three more members in the

hearing room without asking questions. it's our intention to clear the individuals to keep the chairman on his schedule. if you don't bother to come, you're too late. >> that's a bipartisan disinvennation. [laughter] >> the chair recognizes the gentleman from california for five minutes. >> as to gas prices, i will comment about six months before bush left office, they were as high as they are today. the collapse of the worldwide economy in late 2008 dramatically reduced gasoline prices. i don't think that's the strategy we'd want to employ as noble as that goal is. in addition, natural gas prices are lower than they've ever been. there is a north american market for gas, so production on the continent cuts prices and has

and if that allows us to displace coal and generate electricity, and energy is traded worldwide, and a slight increase in production in north america doesn't change the worldwide price. a couple of issues about funding a small business if we had member business lending for the credit unions, and if the credit unions had alternative capital, then without washington risking taxpayer money, we'd have capital in the hands of small business. i thank the secretary for nodding, but i hope we have nodding in the committee because it is a matter that congress needs to deal with. now, as to iran, as you know, mr. secretary, i was disappointed early in the administration where we augmented the imf with $105 billion, but did not demand the

suspicion of iran from the imf, and our action, in effect, created $100 billion of special drawing rights as the imf was supplemented. i would hope that before we do anything else to help the imf, we assist iran not be given additional special drawing rights, but perhaps you could comment on that. >> yeah, better yet iran would be suspended because it's the purpose of the imf to help member states when they face a financial crisis, and it is the policy of the united states to create a financial crisis in iran, and so it strikes me as odd we would both setting the fire and funding the fire department. >> good point and well said. i share your view on this, and i point out that the accumulative

impact of the range of things we've done to iran has been overwhelmingly powerful. we have more to do. >> you do, and that brings me to the next question. we've acted to sanction the central bank of iran and certain other designated banks, wouldn't it be far more effective if we designated all iranian banks? if you forced me to change from bank of america to wells fargo or a unknown institution, that would not cause me to change my heart felt policies. shouldn't we be designating all banks and work with swift to remove all iranian banks from the program? >> great question. if it makes sense to do it, we'll do it, but for it to work, we have to have the rest of the world to do it. >> if the journey starts with us

designating them all and then trying to persuade europe or secretary sanctions which is not the first choice of the administration. >> i agree. if it makes sense to do it, we'll do it, but at the moment, i don't think that remaining gap itself is particularly material to the objectives, but if it becomes so, we'll take a look at it. >> i hope you answer for the record how many banks are unsanctioned and by the united states or remain participants in swift, and that is the question i have for the record, how many banks are a part of swift? i want to shift now to housing, and it could be a question for the record. up stead of allowing property to

fall into foreclosure and can you speculate as to or inform us as to why the gses have taken so long, and then the second question for the record make sense to hit them with a 10% dividend rate when we lend them the money to pay us the dividend, and they are not -- i believe in high dividend rates when it's a private institution, getting money from somebody else by taking money from our right pocket to the left pocket, and finally, does it make sense to use the gses as a pay-for for non-related housing programs by increasing the guarantee fee at fannie and freddy? >> time of the gentleman expired, and the secretary can submit answers in writing. we now recognize the gentle lady from new york. >> thank you, mr. chairman. mr. secretary, referring to the conversation, the exchange you had with the honorable member

from texas, mr. green, a few moments ago, discussing taxes, and the fact that it sounds as you're of the opinion a certain amount of raising taxes will actually have a net benefit for the economy for growth. you know, we look across the country at, you know, obviously, we have 50 states that have all their own economic climates 234 a sense, and they have their own state tax structures. can you point to an example among our states in which a heavier tax structure has resulted in greater economic growth? >> excellent. i have a better example. it's not exactly true, but the president proposes to return the

tax rates the richest americans pay to the level that prevailed in the second half of the 1990s. it was a period of enormous growth for the american economy, high rates the private investment growth, productivity growth, a profitable time for american business and individuals. no material evidence from that period of time that those tax rates at the time were damaging growth prospects. another way to think about this, and we had a national debate about this, a good debate to have. >> right. >> what would you do otherwise? we can't borrow the trillion dollars we need to sustain them. it's unfair to ask people to take that out of medicare benefits. hard to imagine we should ask middle class americans to raise their taxes to protect the rich. i don't see the basis for doing it. can't meet the defense needs of the country, really realistically with those tax rates for the richest americans. it's that reluctant conclusion and the evidence from the 1990s that we think it's better than

alternatives. >> well, i would say, mr. secretary, with all do respect, you know, we don't have an example in the states that suggest that higher taxes work. i agree with you, we have a tremendous challenge that faces all of us, but i think the solution that meets with praise from both sides, but i'm one who wants to work with you and all colleagues is growth. and i am against higher taxes, grow revenue by bringing more participants into the tax structure. our corporate tax rate is now the highest in the developed world, and so i hope that the administration's giving careful consideration to the budget proposal that chairman ryan is introducing today that does

reduce substantially those tax rates. i know the administration talk about reducing corporate tax rates, making the tax code fairer and flatter. i thank you for that consideration. on a separate topic, mr. secretary, bassel iii, talked about reforming banks, and this will affect our banks as well in various ways. there is concerned that agency backed securities would be considered level ii capital rather than level i although in the country they are considered equivalent to sovereign debt. can you assure our participants that you're going to be working with the regulators to try to make that playing field even, if you will? >> i was going to say i know they're looking at it. it's the feds' authority; not mine. my sense is from a distance that those concerns about the capital

requirements and that kind of thing, would have a material adverse impact on the price of mortgage, i don't think they are justified at this stage. i know the feds are looking at it, and we'll keep looking at it. >> thank you, mr. secretary, and mr. chairman, i yield back. >> i thank you for yielding back, and i recognize the gentleman for five minutes. >> thank you. i thank you for managing the hearing today otherwise i couldn't ask the questions. secretary, thank you for coming. i'd like to first publicly thank you for the work that one of your assistant secretaries did, mary miller, on the onramp, the ipo onramp bill. i tried to point out as we discussed the bill in this committee and on the house floor that it was really out of an effort by the treasury department that these ideas emerged, and we appreciate her work on that. i also want to thank you for your work on the housing issues. i was part of the letter that was led by ranking member frank to you encouraging treasury to

implement hamp more like harp, and understand that's happening. no need for comment. i'd like to go back to the two questions i raised in my opening statement, and the first is the stainability of the solution for greece. it's hard for me to imagine -- you said in your testimony that this is just the initial phase that severe austerity steps are being taken. economic reforms and budgetary reforms in the countries, and so that seems to me, greece has the worst of all worlds. they can't devalue their currency. they are attached to a currency that is reflective of a german economy than their own. they'll continually, as you pointed out in your testimony, i think, get into this downward spiral that's forced by the solution. could you comment further on that, and -- >> you're right. a member of europe has two disadvantages to the choices many other countries face. they don't have their own

currency, and they can't set their policy independent from the rest of europe, but they also don't have a mechanism for fiscal transfers that makes the united states work for example. they don't have that piece that hamilton put in place in the united states initially to allow transfers to cushion the effects, and those two things are big disadvantages, and you're right to emphasize that, you know, greece is making progress towards stainability, but what do they get does not depend hugely whether they sustain politically support politically. >> i don't know how -- >> i think that, you know, there's no good choices available to them. >> right. so one choice might be exit. what happens in that kind of a situation where nay opt out of the e.u.? >> well, i think -- i know they spent a lot of time looking at that question, and it's true that others have too. they looked at it and concludessed it's worse for

them, more expensive and costly economically, and i think -- well, that's their judgment to make. most of the things they are doing, most countries would have to do in their circumstances. most countries, even if they had their own currency, they dug themselves in that deep of a hole, they'd have to do a lot of these things to bring the government down to earth and fix the financial system and make it easier to start a business and people pay their taxes. that happens no matter what. they are doing thing that are necessary, unavoidable, and makes things better in the long run for them. >> you said the impact of the u.s. banks of the write county of the financing for greek bonds has had no material impact? >> no, no material impact. >> what about on the cbs side? >> no material impact. >> how do you know that? >> because the fed, and it's really directed to them, you know, that they have a really very good feel today and partly

because of all the reforms put in place for the direct and indirect exposures of the u.s. financial institutions to greece, for example, so they can judge how large they are, and they are very, very small, and the cbs protection written was really quite small too. >> finally, went on about the financing of our own debt, and i share the same concern he has, and i was encouraged that you said you're going to try to restructure. when i was secretary of finance in the state of delaware, we were constrained by law in terms of how that could be structured, and that it had to be evenly over time so that, you know, you didn't get into situations where you're kind of, you know, betting on the future. it looks like, you know, from where we sit today, you have basically zero interest rates, and a significant amount of debt, you know, financed short term debt, short term bonds, and they're going to be refinanced at some point, presumably at

higher debt. at some point we're going to be penalized unless we have a 10-year plan. >> we extended the debt significantly just over the last two and a half years and further to go, but we're closer now, i think, to the average of what most other countries do, and that makes sense for us. >> well, happy to hear that. thank you, again, for your service. >> mr. secretary, we thank you for your time and your testimony, and we'll allow you to excuse yourself now. the chair notes that some members may have additional questions for the witness in which to submit to writing. without objection, the hearing record remains open for 30 days for members to submit written questions to the witness and place their responses in the record, this hearing now stands -- >> mr. chairman, before you close, i just want to acknowledge my gratitude to you for -- it's difficult with all these members and limited amount of time, and i thank you for the fairness and the efficiency of which you conducted the

hearing. >> accepted the gratitude. this hearing stands adjourned. [inaudible conversations] [inaudible conversations]

[inaudible conversations] >> up next on c-span2, a conversation on the freedom of information act which allows full or partial disclosure of previously unreleased information. then, a high school education summit. we'll hear from education secretary arnie duncan and then a hearing for the federal communications commission.

>> a house comet issued a -- committee issued a report last week on the federal government's ability to track information about the freedom of information agent requests it receives. next, american university law school holds a forum on government transparency and some of the challenges facing the freedom of information act. >> welcome back, everyone. many of you are still enjoying our lunch up in the foyer area, and we now had a wonderful keynote to start us off, and two panels, and we're now on the home stretch, and that we're

going to have another luncheon keynote, and then two more panels this afternoon, and i have the pleasure of first just telling you one thing by way of administration announcements of sorts. we talked about the website, and there's a series of forms, and that's the collaboration on government of secrecy website. all you have to do is go into google and put in cgs, that's collaboration of government secrets, wcl, washington college of law, and that pops upright there. then if you go to the table of contents section, right up front, there's a amendment of amendments, and under that,

there's a whole subsection. we established that as a subsection back when the law was amended, and now it's advanced to the point there's so much going on, it could be an entire section of the website once we upgrade it finally to the non-beta form. that's administratively to take care of that. i have the pleasure now of introducing the luncheon speaker who we are quite well-known to one another because we used to work so closely together for so many years that i think we once calculated that at least during one long stretch of time, we spent more time with one another than our respected spouses, and debbie and karen observed that from time to time i'm sure. dick huff is going to talk to you on foia over the decades, from ford to obama. we have the dates next to his name, 1976-2005.

well, that's when he was at the department of justice. dick started with foia, way, way back. seven years on active duty with the ormy, and as a consequence of that or follow-up to that, he's now a retired colonel in the army reserve. he came to the department of justice in 1976 while the ford administration was still rolling along, and so the transition into the carter administration the following january, and he was at the justice department all the way to 2005, retiring a year before i did. we were the founding co-director of the office of information privacy. he was there as an acting director of one of the officers prior to that. dick is more intellectual than he looks upon occasion. he's got a ba from stanford.

you got into stanford? apparently so. >> it was easier to get in back then. >> yes. >> if i remember correctly, you said that all of this was set out in your bios there so you didn't have to read any of it to any of the people here, suspect that right? [laughter] >> well, that was for other people, not for you. dick, your special. am i wrong? dick is special. ba from stanford and masters from st. mary's university in texas while he was in the army. jd from hastings law school, which apparently the ranking improved tremendously since you graduated. llm -- >> it's now fully accredited. [laughter] >> yes, it is. from what i understand it was such for awhile? >> provisional. >> llm from georgetown university law center. needless to say, dick and i

have, over the years, put on the dick and dan show from time to time, and this, perhaps promises to be more of the same. i'll just, with that, given the bios are out there, i'll say welcome to dick huff. [applause] >> thank you. [applause] what i would like to do, is i would like to exercise, first of all, i'd like to thank you very much, dan, and hope that you will save your comments as the rest of you also, save your comments and rebuttal until the end. >> i know where that might go. >> exactly. i'm also going to exercise the prerogative that i saw others exercise to begin with, and that is dan has now told you what he thinks i'm going to speak with, and i'm going to modify that only slightly. [laughter] this is not going to be an overview of the foia from the administration from president ford to the administration of

president obama, but rather a worm's eye view of -- from the department of justice from 1976 to 2005. there's many of you here who are much more knowledgeable than i, and certainly more qualified than i to speak as to what has happened inside the federal government since 2005. >> active in the foia since 2005. both teaching and with other memberships and the like. >> well -- >> you just didn't fall off the face of the earth. witnessing the fact you're here. >> as i said, save the rebuttal -- [laughter] >> until -- [inaudible] >> now to flush out my background just a little bit more as dan said, i came to the department in 1976 after a seven

year courtship with the department of army at fort leonardwood, fort sam houston, walter reed, and the pentagon, and i went to the office of privacy -- let's try that again, office of information and privacy appeals where i performed duties exclusively related to the appeals of freedom of information act and privacy act requests -- >> this is a rebuttal, office of privacy and information appeals -- >> oipa, office of information and privacy appeals. >> your memory's better than mine. >> oipa? pretty sure that's what it was. >> okay. >> okay. i'm not sure what i just called it, but that's what i got written down, which is not necessarily the same, i realize that. had congress not overridden

president ford's veto of the 1974foia amendments, i certainly wouldn't have had the fbi -- the fbi wouldn't have had the thousands requests it get per year and the deputy attorney general's office of which oipa was a part of, would not have had the hundreds of administration appeals it had per year, and so i thank the congress in that respect for overriding the veto. now, dan, on the other hand came to the department of justice serving two courtships before he got there as an attorney. he then served a judicial courtship with judge oliver gash, and then he came to the department, i believe, shortly after i got there, somewhere in that general area. >> [inaudible] >> dan worked in the civil division specializing in foia

litigation. now, as he said, in 198 #, -- 1982, the office of information and privacy was formally created bringing together the fire appeals office and the prior policy office, and dan and i served as the two co-directors. he suggested my primary responsibility should be administrative appeals and budget and his would be foia policy and litigation, and i agreed. that same year, dan suggested that we update the freedom of information act short guide, which was then only about 30 pages long, and publish it in the foia case list. i agreed. subsequently, the department's legal education institute established a government-wide 2-day training class on foia, and dan suggested that our staff should be the primary instructors. i agreed. later that year, dan suggested

we include two new features in our quarterly publication, foia update. the first would be foia counselor q&a's consistenting of short responses to the more routine frequently asked foia questions. the second was a foia focus where we would profile someone active in the foia community. i agreed with both of these suggestions of his here. i note that the one problem we had with foia focus is that we did once feature the hud foia officer who four years later pled guilty to forge supply in mortgage documents. >> not under indictment at the time we established it. >> exactly. if he was being investigated, it was not shared with us. all right. in 1984, dan suggested publishing guidance on political

access to agency records under foia and personal records, and i agreed. due to the expansive growth of the short guide to the freedom of information act, the federal trade commission told us that it was false advertising to continue to call it the short guide, so in 1986, dan suggested it be called just the department of justice guide to the foia, and i agreed. in 1986, the legal education institute was no longer able to continue teaching these two days foia classes, so dan suggested oip handle it all by ourselves, and while we're add it, add two new courses, one for advanced foia personnel, and another one of the sort that dan referenced earlier, the dick and dan show, where the two of us, once a year, would go out, and we'd talk about all of the new faces of significance that came out in

the past year. well, this started out with about 200 people, and it grew up to a slightly over 600 folks coming to attend. now, i was never sure exactly why the popularity grew so much, but i had a feeling it might have been for two reasons. one, it was actually a half day class, and we never publicized it as such, but i thought an awful lot of the people took off at, you know, right after we were all gone, and their agency never knew it was a half day program. >> [inaudible] >> the other reason though, and this is one i think dan learned this lesson well, is i think that the people came because we gave away free coffee and donuts, and i noticed donuts, heck, you're giving out danishes up there and lunches. you are really working to bring the people in here, dan, and i think that is a point dan learned quite well. >> i can't take credit for it here.

long before aarrived at the washington college of law, it was well-known the initial wcl stood for we cater lunch. [laughter] >> there's food all over the place. >> all right. that's your side of the story. in 19 -- later that year, foia reform legislation was passed. dan was instrumental in that. i don't remember agreeing to that one way or the other. subsequently, though, he suggested that he draft a memorandum on the 86 amendments which he proudly presented to attorney general for his signature. i don't remember agreeing to this one way or the other either. all right. that's the memorandum. >> did you agree with the change of one word which was misspelled, so it was a good change. >> in 1987, dan recommended we propose an executive order on the proper steps that an agency

should take to give notice to a submitter of business records when the agency receives a foia request for those records. i agreed. dan drafted it. president reagan signed executive order 16200. in 1989, the government prevailed on the reporters committee case in the supreme court. dan suggested that we draft and publish a policy piece explaning all of its nuances. i agreed. in 1991, recognizing a need unfulfilled by the office of management and budget, dan suggested we publish along with the department of justices freedom of information act guide an overview of the privacy act of 1974. i agreed. in 1992, dan suggested that he write, and we establish an article on the automatic disclosure provisions of a1 and a2 of the foia.

mistakenningly believing this would be one of the most exciting topics ever to be addressed in foia update, i agreed. in 1993, dan suggested he draft a new discretionary memo for general renaud, and i agree, but there was a delay because it was shortened when president clinton lifted some of dan's text verbatim placing them into the first ever presidential memo on the foia. three years later following over six years of on and off work by dan, congress enacted the electronic foia amendments. >> you negotiated part of that. you're partly to blame. >> no, i negotiated -- >> i was out of town that summer, remember? >> actually, dan is exactly wrong. the part -- [laughter] the little piece i was to negotiate, i failed miserably

on, and that part was left in. if negotiation includes unsuccessful negotiation, i did it. [laughter] but dan was doing all of the heavy lifting over there. what happened with the electronic amendments was he then immediately suggested that he draft numerous policy articles for foia update explaning the legislation, and i agreed. in 1998, congress decided to hold oversight hearings on this new legislation. dan suggested that i should be the one to testify on behalf of the department at these hearings although he had all of the background knowledge in the area. for the life of me, i don't remember why i agreed to that. [laughter] two years later, the house committee on government reform delivered a subpoena to the department seeking testimony in an upcoming hearing entitled

"felonies and favors: a friend of the attorney general gathers information from the justice department." i suggested to dan that sense i testified the last time, he might want to enjoy the experience this time. [laughter] he explained that sense i was the one who released the information on appeal at issue and that i did such a great job testifying last time and finally because the subpoena was written in my name, i ought to be the one who testifies before chairman dan burton. well, although i had non-refundable air tickets for a summer vacation in idaho for the hearing's scheduled date, dan told me i had to come back. that hearing was no fun. all right. in march 2001, dan suggested we

leap into the 21st century by dropping the paper foia update and post electronically instead. although i was not sure to to work my e-mail account, i agreed. later in 2001, dan suggested that he draft a new discretionary disclosure memo for attorney general ashcroft in the belief that if we did not put such a draft guard, what would result without it would be worse. i agree, but only very small portions of the memo were adopted. >> actually, that's not true. the entirety of it, except for that paragraph that the white house took it. believe it or not. >> oh, no. i agree to these things, but dan doesn't tell me about them. [laughter] or he does tell me about them, but it's 20 years later. >> you knew that at the time. >> all right, all right, all right. well, the way i said it makes a better story.

>> i can't help that now. >> protects your integrity slightly more. >> truth is truth; right? >> perhaps so. in 2003, due to the fact it seems we'd already addressed almost all significant issues, dan could only suggest that we discuss the foia update agencies rely on a wide range of exception three statutes; so i think dan is directly behind the pact -- the fact that you're going to have a panel later on this afternoon discussing those wide range of exception three statutes. >> there is a thread, yes. >> in 2005, dan suggested we publish an article explaning the details of how to respond to a request for unit prices in an agency contract. i agreed. i remember reading the eighth

screen of a ten screen article. it was really dense, and it was really well-written, but right in that eighth screen, i fell down on my desk and had a bloody noses, and what that told me is i knew i 4 to retire. [laughter] i did in 2005. what went well during my time at oip, i adjudicated some 70,000 administrative appeals, taught close to about 300 classes. dan formulated and distributed excellent policy guidance. we produced an outstanding reference volume on both the foia and privacy act, and most significantly, i think we did a very good job hiring and nurturing over 200 employees, many of whom reached the senior executive level, and so, dan, i bet you got more stuff to be presented in further panels this afternoon. >> well, first thing is you probably want to at least mention what you would commonly say when anyone visited your office and said how many people

work here? >> about two-thirds of them. [laughter] is that right? about two-thirds? >> i think -- [inaudible] >> i remember it differently. you said about half. [laughter] >> [inaudible] >> yes, absolutely. well, thank you for that 6789 i'm going to exercise my prerogative of asking the first question because we have time, and i know you're willing. dick, by the way, likes lots of hard questions. [laughter] not the easy ones. if you have an easy one in mind, oh, give someone else a chance, okay? if you have a hard one or two, definitely please line up on the side, but i'm going to ask you first having started way back in the ford administration and being able to see the character, the tone of the foia administration back then, seeing

how it changed in the carter administration, who then ford to reagan one, reagan two, bush 41, clinton one, clinton two, bush two, part one, and bush two, part two. which administration do you think was the most effective and forthcoming and successful with respect to foia administration? >> sure, most respective and forthcoming was head and shoulders the administration all eight years of janet renaud. >> oh, and that's the cheerleader right there. >> head cheerleader. >> that's karl sterns convicted of being the head of public affairs from march of 1993 to july of 1996 under janet and did a heck of a fine job of holding

both our feet to the fire saying, wait a minute, you got to release this, and about the only defense we had, carl, throughout the whole thing was the privacy act doesn't let us. there's criminal sanctions involved. he said, nobody ever gets prosecuted under that. [laughter] i know people in the criminal division, don't worry about that. [laughter] you know. >> that's funny, but it's also true. [laughter] >> yeah, that was just -- yeah, and, in fact, carl was with the attorney general on that because what she would do is come up to karl to start with, you know, thought of this on his own, but the attorney general coming from florida where they had a sunshine statute with some expenses -- exemptions there, and they are exemption six and see if ours is there, and ours is about here, and they practically protected

nothing, and that's what she was used to working in. she'd go there and start giving carl business, and then he'd have to give us the business, and then, you know, that was the way it worked. i'd say it's easily janet renaud. yes, ma'am? >> i have two part question for you actually. the first is do you recommend this area of law as a good area of specialization for graduating law students, and secondly, i know that the next panel is going to be going over legislative activity, but in your opinion, do you think that foia should be amended in connection with the milner decision of last year? >> i'll do the last one first. the answer is yes. i think milner was probably was appropriately decided, although i sure understood what justice breyer said, let sleeping laws

lie. you know, it had been the law for 35 years, and -- 30 years, and, you know, america had worked seemingly pretty well. i understand what the ma jr.ty did, -- moo -- majority did and how that worked, but i think particularly some of the folks with dod and some of the areas i'm familiar with that we have, as dan mentioned, as a -- vulnerability studies and things of that nature and materials high, too, for the military that just really are very difficult or can't be producted right now, and so dealing with that one first. what the second -- with your first question, no. i think you should not go into foia. you should go and be an investment banker. [laughter] that's what i would have done,

and if i would have been able to, you know, do a little bit better. if i would have been somebody on law review, but like metcalfe and somebody who i only knew one person on law review at hastings, and i didn't know him very well. that was sort of thing i certainly would have gone into, investment banking. >> the question was for a law student today, not someone who is deciding which grad school to go to. a law student should go into investment banking? >> become an attorney, learn corporate law and investment banking. isn't that true, tom? there's a lot of big money in private practice. tom is an example of that right there. [laughter] formally, formally. i know you worked for -- you worked for the attorneys right now. >> ngo. >> tom, do you have a question?

>> yeah, tom, formally a lawyer. >> recovering. >> this is for dick, not dan. one of the things from your cronology you didn't mention is in the early 1990s, there was a proposal being developed by the add administrative conference for alternative dispute resolution mechanism that came into ultimate fruition with, you know, 20 years later. the justice department and your office opposed that vigorously among other things saying we do that already. >> uh-huh. >> i had a few occasions throughout the years to get your office too it, and i -- to do it, and i didn't succeed. explain to us, was this really something your actively pursued, and, you know, why is it that so few people knew about it? >> do you remember what i said i did during my 35 years? because that was not one of my 70,000 appeals or 300 classes i taught. i think that sounds more like

policy on dan's side, policy work and i bet we've got an answer for that other than -- >> i can prevent the response, did you hear that? >> communication, not policies, alternative dispute resolution. >> it fell in the cracks. that's the answer to the question. [laughter] >> oh, good one. >> we had about a handful to a dozen of what we called foia-type matters we handled every year. we tried to exercise that puppy. exercised it as much as possible, and it was advertised more than you remember, tom, but as a practical matter, we only took the cases that came in. on the other hand, there's more cases that she could deal with. we tried to deal with that, truly. >> we also had another difficulty, and that's one that

marriam suffers with at her agency. that is, it's not a class a misdemeanor not to follow the add violation of the office of information and privacy when we tell you you have to disclose the information when we talk to somebody outside the department. we can say, and the huge share of the time when we would talk to another agency on an issue like that, the huge share of the time what an agency would do what we told them when we were aware of a problem that way. there were a couple of them, one of which, initials, i shouldn't say the name, but the initials were epa -- [laughter] and that we just once had a terrible problem with saying you can want do that, and we told them on three levels, and they had a political person saying, yeah, we're going to, and as soon as the organization was then sued.

finally, the third entity in the department of justice, they asked us, the criminal division, the criminal division was not clear, and then the ausa told them i ain't going to defend that. that was one where they had to write, you know, attorney's fees inter cost of a complaint, but there was no way we could enforce that in the exceptionally rare case where that happened. >> yeah, wasn't there an attorney general's directive at some point that the justice department wouldn't defend cases they didn't feel were justified, and did that happen often? >> sure -- >> yes to both, but not often enough, perhaps for many. >> yeah. >> that was in the memo from griffin in may of 1977 and may of 1981 to renaud in october of 1993 to ashcroft in october of 2001, and now to holder in 2009. >> yeah. >> it's in every memo.

that's the legal standard set there. >> this is one, it was my understanding when this one came up, it did not even go high up the line. the united states attorney talked to his supervisor and went back and said, hey, agency, we're not going to defend this. >> the beginning of -- >> that's an example. i don't know if there's other stories like that, but that's one of the exceptionally rare cases where they would not take our advice. most of the time they would. >> dick used to love, more than anything else, when we got on the phone, and i told this to someone earlier this afternoon, and tell no less a person than a general or admiral, sorry, you're flying wrong, admiral. >> no, dan did that. >> he loved doing that because he's a kernel and to say to -- colonel and to say that to a general -- >> i was just in the military reserve. >> high draft number.

>> i know, i know. >> 98, yeah. >> i think it's time right now, and, in fact, it is -- >> no, it's not. >> i can't believe you're doing this. >> i'm sorry. >> you're trying to avoid my question like you tried to avoid my appeal, dick. [laughter] >> oh! >> i thought i responded to every one of your appeals. >> there's a lot -- >> denying it. >> there's a lot of blood on the 70,000. >> yeah, yeah. >> no, but i want to thank you for your service on those. we always felt we got a good hearing on our appeals even if we didn't get the right answer over the years. i guess what the question with the both of you here, i guess the question i'd like to put to you is to think and to maybe expound, if you will, a little bit about the role of the justice department as a model and a leadership role for the

entire federal foia process government wide as well as in the world, but specifically government wide, and let me tell you why i'm asking the question which is currently, there's some debate in one of the critics sitting at the panel here about the justice department's number on foia compliance and foia completion and decisions. there's criticism as to whether the justice department is being honest in its reporting to congress about its foia program. , i'm mindful what signal that sends to the broader bureaucracy, and because you are reviewing foia over your tenure, if you could speak to the role of leadership for your office. thank you. >> sure. i think that we did a pretty good job, and i think that we did provide leadership, and i think the policy guidance that dan gave overwhelmingly through

foia update and the case law that the two of us put out through the doj guide and the prief sigh act over-- privacy act overview was extremely good, and we put in cases, for instance, in the doj guide where the department lost, and sometimes where we lost and we didn't think we should. well, there's going to be a parenthetical there saying, judge, apparently on narcotics ruling such and such, but, i mean, we're going to put a straight -- >> aberrational ruling, used that a lot. >> aberrational ruling or ruling without explanation that -- >> inexplainbly aberrational. [laughter] >> yeah. you could tell we wanted to do that, and we were flattered in one respect because we occasionally would see briefs submitted by assistant united states attorneys which clearly

had taken the information right out of the doj guide and cited everything, and we looked down there, and we said, judas priest, you cited two contra cases, two cases against the proposition. these are not in your district, not in your circuit, you are not obligated to do this as a matter of ethics or law, and you have used, you know, inexplicably rulings of such and such, and you used that kind of language in there, and so we wanted to be careful, that, in fact, we definitely put in, you know, the good, bad, and the ugly throughout that guide in order to make it as straightforward and as hoppest as we could, and so i would say that in that area, i think, we did a very good job. i'm not sure if that responds to all of that. >> by contrast, there's no small amount of sadness or basis for sadness as to how things have

gone since then. i'll just point out that not only with respect to the overall backlog reductions, statistics at the justice department has the inescapable fact speaking of leadership and receiverring as a model that in the three -- serving as a model that in the three offices, and this was her primary responsibility for a dozen years, not only do the combined backlog increase by almost 33% last year, but after that happened and there was some focus on it, the combined backlog for those three officers, attorney general, deputy attorney general, and associate general decreased by 2.5 # 7%. dick would say who is counting? they get guidance from justice to reduce the backlog are counting if they see caesar's wife. that's just one of many things that are sad right now.

>> i guess that was kind of the motivation of the question was to speak to any lessons you would draw from being at the crucial policy of the entire government. notwithstanding the products you used to implement policy, but those kinds of lessons of leadership. >> well, it's good to speak straightforwardly and to make sure, not just before you go to an attorney because of the model, to make sure what you say is accurate and that you are telling the truth. >> sir? >> michael, department of the air force. department of defense is facing budget cuts as you know -- >> you always say that. dod always says that. >> it's true this time, i swear. >> oh, okay. [laughter] >> so foia professionals walking around with targets on their back, and i can -- >> yeah.