but there's definitely a cadre of retired agents, and outsiders who say hey, there's a problem here. he is arguing something is going to happen, some tragic event, we'll look back and say they were underresourced, there was lack of discipline. he talks about agents or out of

shape and can't open the presents limiting. >> host: as far as discipline concerned, do you see that within the ranks itself? >> guest: it's hard for me to judge. i talk to me, 20 plus year veteran to insist it's not a big deal. i've talked to others of say yeah, there is a problem. >> host: this happened after the president left, would this be a story? >> guest: the prostitution thing would make it a star but i think it would be viewed a little carefully. they wouldn't have evacuated, these agents were forced to leave in the middle of their job. and that decision, special agent in charge of miami, a woman who apparently ordered this action. that when that happened if the president had already left or wouldn't have been a significant ideal. i think it would have been beautifully. >> host: huntsville, alabama, hello. >> caller: good morning. the question i have is not what a question, more of a common.

when are we ever, ever going to get rid of this insane phobia of sex? who was harmed? who was endangered? i don't see, i haven't heard, the president was never in danger. it seems to me that these people have done their job the way they're supposed to. the whole thing, if it had been, if it had been something, the questionnaire i did know that was made it wasn't even illegal. but we make such a to do out of anything that has something to do with sex, it is utterly ridiculous. the media frenzy over something like this, hey, guys, the world is coming down around our head, and this is what we have to talk about? that stupid. that's the end of my comment. >> guest: i think it's a valid

perspective. and i would say the frenzy over the story has to do with huge public interest. we now can see all our news papers can see what stores draw huge internet readership. there's huge readership in these stores to people are faster. i don't know if they're condemning it but they are fascinated by it. i've heard that perspective from retired agents, including a female veteran i talk to. she said look, agents or people, and what if they had met these women at a bar and they weren't prostitutes and brought them back to the hotel, without a been an issue? where do we draw the line? prostitution is legal in this part of the city. i mean, that perspective is out the. i think though most people can agree at this point it's been bad for the agency and bad for the country, an embarrassment this whole thing is caused. that would be better if it hadn't happened. so that's the reason. >> host: ken dilanian joining

us. this is in the pendants, oregon, hello. >> caller: hello. i am a retired postal worker, and they have a clause in the contract i signed when i joined the post office that says i don't even have to do anything wrong, all i have to do is have the appearance of doing something wrong. i was wondering if it was the same on their contracts? thank you very much. >> guest: i just don't know about that. i'm not familiar with ricotta conduct their but i would imagine, they don't have a union but there is some kind of due process that agents would get before being fired. i would imagine, you know, it would seem common sense they would have to be more substantive than the appearance of wrongdoing. >> host: almost like a moral clause. >> guest: right. there may be a moral cause. i've heard called code of conduct, but i haven't actually read it. >> host: here's paducah, kentucky, joe, democrat line. >> caller: i was agreeing with

it earlier caller that is an abuse of power. if you were to work and use your position to have a sexual relationship with anybody, that maybe you worked with or outside of work, whatever, whether people come in for your services, you could get fired for that. and i believe that, you know, these people have done dash it had done something wrong. they make the hold united states look bad. >> guest: you know, we are sort of -- there have been allegations in the history of infidelities, i think in the service and in other workplaces, and that's an issue. i don't know that that applies here in terms of abuse of power. one thing we have to talk about is that prostitution is legal in parts of colombia. as with any place, there's a huge trafficking issue.

you can go on the web and see people talking about some of these people are not their of their own volition. so that's an issue. the woman that was interviewed in the new york times said she was doing it voluntarily for the money, and that's fine. but to the extent that there are underage women are trafficked women in these situations, you know, that's another thing that reflects poorly on this conduct. >> host: attention being paid to the secret service agents are the same page of the military side? >> guest: it's not. it's an interesting question about why not. one issue though is the military hasn't said any these guys are suspected of patronizing prostitutes. they haven't said. they said they are investigating. and the something about, i just feel like there's, the secret service, no one would be shocked of military members are patronizing prostitutes, right? i mean, but there's something about the secret service down on it protectee detail that i think is captured imagination.

>> host: to most people think of those closest to the president, everyone in the secret service? >> guest: even these guys are not the presence detail. and i think that the perception of being straightlaced guys in suits with a pisses, you know, you are sort of monks. this is the line the image i think. >> host: new york, hi. how you doing? comic just a comment. it's really not really the taxpayers money. everybody is paying taxes. these guys are working, you know, if there at the hotel, probably had a couple of beers or whatever and they got the girl in a hotel and they did whatever they did. i mean, -- [inaudible] that on businesses go out and do this type of thing. people are saying oh, it's the taxpayers money. they are doing these bad things. i mean, come on.

they had some girl in the room, big deal. >> host: it doesn't bother you? transit it doesn't bother me at all. i have never done anything like that, but i'm just saying them we are all human. you know? big deal. they got a couple, four, five guys. that's like saying hey, let's go out and have a couple beers together in our hotel room. and everybody turns around and says they had beer in their hotel room, you know. the people they worked with, they want to sue everyone. >> guest: again, a lot of people share that view. i think i'm interested in one or two people accused of doing this it would be much smaller store. what made this a big deal was 21 women allegedly brought to the hotel, and the allegations that these guys went to these sex clubs before and and the woman, i mean, in advance of a

presidential visit, it distracted from the presidential visit. and the whole reason this came to light allegedly is because one guy tried to offer a woman $30 she wanted, now we read not $800, but 250, $300. so, you know, the guy tried to stiff the woman. and she ended up going to the police and that brought the whole thing down. >> host: their stories today time of people went to go underlie detection and things along that line. what's the point? >> guest: it's been reported that all these guys have all asked to take polygraph tests. i think it's been reported one has agreed to do so. yeah, security agencies use the polygraph as part of investigations, clearly. >> host: greensboro north carolina, republican line. >> caller: yes, good morning. now listen, i cannot believe the comments i am hearing. first of all, this man, sullivan, needs to go. the director needs to go.

he is harder than the six-year. is a 30 year veteran. he needs to go. he's been there too long. i can't -- these people, i don't really think should be out partying and drinking before the president gets there, because they need to be out there posting any of these guys are collins, the safety -- [inaudible] i don't know if you them are sharpshooters. how busy are they? talk about paying for the prosecutor and the like that, of course they're supposed to be their own money, pay for the prostitutes. but this is, this is a party time for men in our government. i just can't believe i am hearing all this. thank you, president clinton. it's their own personal life. guess what. if you're in a position of authority and actual, something that means something to this country, people need to wake up. >> host: lisa, before you go, tell me, lay everything like mark sullivan has to go, in your

opinion. >> caller: because this happened under his watch. a few things have happened in the six years he has been the director. he has been there too long. i think the people that -- the top position in government, i look at the, through the ranks, we need better representation for our country than this man seems to be able to keep under control. i'm sorry. have a good day. >> host: that is lisa from greensboro north governed. she put a lot out their. >> guest: that's what i've heard from retired agents. the contrary view which is sullivan has done everything he could, and respond quickly to this end has been transparent. peaking, chairman of the house homeland security to me has backed sullivan. so we will see. he may not survive this, you know? but so far he seemed to be hanging in their. >> host: public reception? >> guest: you hearing a split. i think it is. i would love to see polling on

this but i think this is a very divisive issue and a lot of perspective on. >> host: good morning, texas. democrat line. >> caller: yes, good morning. glad to be able to talk on c-span. our government and morality has just lost in this country. from the congress, fbi, tsa, you name it. it's all morality. voted party lines, i joined no leadership, whatsoever. then what do you expect out of fellow citizens in american when you're not showing leadership your self? >> guest: it's hard -- hard to apply that. whose leadership are you talk about, the president? what's on display here is human

frailty, active and point out to me that this has happen, will happen in every agency of the government. i think, not to the scale but, and you know, there's a series of events you that made this a huge story for obvious reasons, but, you know, it's hard to say this is reflective of leadership. >> host: what kind of activity goes on with the president arrived, when it comes to the secret service? >> guest: from i understand there's a couple hundred people in advance this, member of another, state department, communications department and secret service, jump team which includes someone earlier talk about snipers. they were apparently members of the secret service counter assault are among these 11. these are the tactical weapons guys. someone explain to me that they are type a personality of the secret service, former military, former swat. so no, they are down there, and some of these guys would've been

involved in security sweeps. again, not the protective detail but working with local law enforcement and creating perimeters, doing the kind things you need to do to secure the president's visit. >> host: the secret service is an organization decide whether to stay as far as hotels a concern or is that done by the agents themselves? >> guest: i don't know the answer to the question but i would believe it has to do with security, and there are people whose job is to pick secure locations. >> host: only because reportedly this type of activity takes place frequently. >> guest: right, i don't know much about carter ham, whether that was come but i did read this morning that the hilton where the president stayed, now is the subject of further in greater they're looking at india who was brought, whether anyone was brought to that location and anything basically everybody. >> host: frank is from falls church, virginia. hello. >> caller: thank you. the real issue is, you, the guy

didn't want to pay the girl, okay? simple. number two, clearly showed this guy with the secret service have no street savvy whatsoever. y. 1525 guys out whatever it is, well have group leaders to give these guys important to you, the situation to will do this, do that. there is no coordination anything. i travel overseas. i clearly, these are the do's and don'ts right here. [inaudible] heads have to roll. the leadership is totally out. there is no scandal here whatsoever. widget is one guy who messed up and you need to hang him by his

toes. thank you. >> guest: the implication was not paying for prosecuting a. that's one view. i think a lot of women will be shocked by this discussion. honeycutt and clearly this wouldn't have happened -- or something to that. there is an incredible naïveté coming in, that these guys would do this and then let it explode into this public scandal over a few hundred bucks. i'm sure that deeply regretting that at the moment. >> host: champaign, illinois. this is tea, democrat line. >> caller: first of all, you know, all this talk is going on about, you know, secret service. and so far the whole conversation this morning i haven't heard anything about why the president was actress of those be going down the. if this is an important conference, you at south american, a good many other countries down in south america,

they criminalize and drugs were legalized marijuana. you know, i think they ought to a look at india this is all really starting to set up, because i think it's basically just a cover-up, you know, just to distract from the president's actual visit down there. i mean, we have service members that go from colonels, captains. i was in the service, you know, on down to where, you know, prostitution is not that big of a deal. in states like cartagena where they're at, it's illegal. and i think, i think it's pretty much kind of a setup. you know, given conspiracy theory or whatever, you know, that just basically to draw away from what the president was

really even going down there for. and so far the news, i can list a half hour of what happened with the secret service, and five minutes of why the president was even down there. that's my view of the thing. >> guest: certainly true that it distracted from the visit. there was sort of an important development in that the u.s. allowed latin american countries to air on the issues of decriminalizing drugs that we wrote about another people wrote about. they're completely obliterated by this thing. and that was one of the reasons that mark didn't see was so apologetic. he actually said we let the boss down because all people are talking about is the scandal, and that's the last thing we want to have. >> host: have been any indications by the secret service that the media policy changes are forthcoming because of this? >> guest: no. policy changes i have not heard. >> host: philadelphia, pennsylvania. hi. >> caller: good morning.

i have three questions. went on a day on and off duty? was this a drunken orgy with many people in one realm where they could have been autographed and blackmailed? and give it to reveal secrets about the first family, mike boyce down to whatever or the first lady's alliances with somebody? this is very much more important than just a few people having individual indiscretions. thank you very much. >> guest: those are good questions which i think we don't know the answers to. that's part of what the investigation is trying to get out because there have been reports that some of them went to a club. you know, there were initial reports that the whole dispute with the woman took place at the club, which doesn't appear to be the case. so what we know is that, what we believe we know is a number of women, as many as 21, were brought back to the hotel. we don't know whether this was all one could that happen, or

whether it was individual agents and military members meeting the individual women. apparently you can meet women on the street there. so all that is included in fact this morning again we're hearing people of paris in a dissent i didn't even know these women were prostitutes. there were a lot of drinking going on. the question of when and where they're off duty is a good one. i think it seems from judging by the conduct that their work was done, they were off the clock, they were able to relax. the president wasn't there yet. the security grammar had been created. >> host: and individual file and equipment they use, does it get put away somewhere while they're off duty? comic so we are told. we were told there were no weapons, raiders, sensitive equipment in the hotel rooms. >> host: yankton, south dakota, this is jeff on the republican line for ken dilanian of the "los angeles times." >> caller: hey, listen, i was down there with george bush during his term.

but it was hmx one and air force one, what hmx one takes care of marine one, and air force one, they have their personnel, and you're going to work throughout the day to whatever the president is going to go. if he's going to go there during his visit, you can bet somebody's going to go there and check it out. but at nighttime, they are done. and if they want to go to a bar and drink, that's what they do. however, if anyone of those military members gets to a point where they do something to lose their clearance, that's the point where they are no longer with the presidential details. and marines and air force both know that. the secret service personnel, they're kind of on the clock, the same as the military, but again, all of us on those details, if you lose your clearance, you are done period.

>> guest: just at, that secret service agent, they protect the president, the vice president and their immediate fans. they protect former presidents and spouses, the children of former presidents up to the age of 16. major presidential and vice presidential candidates within 100 days of the general election, distinguished foreign visitors anyone designated by the president as well as national special security events. we also have this from jack up and would. i think it's your to expect higher standards of the secret service when on the job because and he is adding to their on-call. >> guest: and the question is were the on call. it seems like their perception was the one on the job in a sense it was in the middle of the visit. they were staffing in advance of the visit. there were no protectees there. and so that's -- you hear from the collars, people are getting it wrong. some people think maybe the president was there when this happen. that's not the case.

>> host: illinois, good morning to bill. democrats lined. >> caller: good morning, c-span. personal, i'm appalled this guy did an in depth story and he doesn't know what the moral clause is, you know? that's ridiculous. number two is, for one agent to make comments that he was checking out sarah palin, yeah, should be up on. and number three is if any these guys america you don't think that these women could have blackmailed him a? come on. what is your problem? this is a morals issue, and this is what's wrong with the government today. there's not enough people taking responsibility for this type of action. thank you. >> host: there's a picture on the face but posting, david chaney. he was covering sarah palin. trek to the gentleman's point about we are only as good, i've been asking for days but the

pacifica rule was regarding prostitution and we're not getting a clear answer from the secret service. the freedom of information act takes a while. we're doing our best on that one. unit, i think what we're seeing here this morning with the collar is the divide between, and a few of them morality of prostitution and distributed. some people think it's abhorrent and other people think it's perfectly fine and. >> host: columbus, ohio, good morning to john, republican's line. >> caller: i'm just calling. i may, to me it doesn't matter whether you're republican, democrat, independent, whatever. these men and women that work for the secret service are supposed to be professionals. i mean, they take an oath. i can't see how in any way that anybody could find this acceptable. i mean, they are protecting our president, senators, congressmen, congresswoman. i mean, in what way can we eat

and say -- can we even say that this is okay? how is it acceptable at all, you know? it's just, i don't understand. these people are professionals. they were hired on to do something. whether they were on or off duty, when you're working and that's high of a position, you have to take everything serious. i mean, i don't understand. it is not acceptable in any way, shape, or form. >> guest: on this issue of black know, it's interesting. i spoke to one former agent he was married and just look, if they came to that, he was are suggesting to me he didn't have a problem with prostitution when it was legal. he said that he came to i which is, why because i'm not going to compromise a national security of the united states. i will tell my wife. but i'm just making that point because, but there is an issue. foreign intelligence services have use these kind of tactics

to target people for decades. you know, the people with top secret security requirements -- that's one of the issues you. to what extent is that actually offered? i've been trying to get some clarity on the. they get five your security clearance reviews with a polygraph and the rs, significant contact. what i've been told is that basically you reported if you are being targeted, if people are asking you about your job. if you meet someone job and they don't know you're a secret service agent, they were probably not reported. >> host: what has been the stance when you ask these questions? >> guest: they have been, you, fairly forthcoming, fairly transparent. i haven't dealt with them before so in a, i wasn't sure what is going to get. >> host: savannah, georgia, good morning. >> caller: yes, sir. the last guy kind of stole my thunder. i've been really appalled by

some of the comments i've heard of this money. except for the one lady from north carolina, and another lady that is called them. you know, i think the president of the united states, i can't think of any more important individual when it comes to protecting protective services. and for an advanced team to have drink and sex on their mind when they should be making sure that the president is safe, we're in the midst of a very hotly contested elections, and there have been presidential assassinations in this country. the secret service individuals saying that i will tell my wife if i feel black know, that is nonsense. when you're thinking, leave with half of your property in divorce? that's, you know, you can't be blackmailed by foreign agent to reveal some secrets that is supposed to protect the president of the united states

in that circumstance. so for these individuals to have sex and drink on the vines when they should be concentrating on there, you know, on their work they're supposed the other doing, it's ridiculous. >> guest: i agree with everything he is saying, except potential is clear there. that's what members of congress are concerned about. secret service people. i think what they also say that is the reality is it's a pretty remote possibility and for what? and he would do it? colombia. so there's this issue of the potential and you never want to allow that to be a possibility versus was the really a security breach. >> host: we heard initial reaction from the white house about this. has there been any for the reaction from the white house? >> guest: yes, and they're staying away from this question of is there a cultural problem with the secret service, and they're basically saying let's let the investigations player.

they have express continued confidence in mark sullivan. >> host: one more call. this is claude, independent line transfer i will make it short and sweet. i'm compelled to say something for "washington journal" factoid is that nobody said there was a superiority complex in government in all agencies, and i just feel like that is true. bill clinton said i did what he did because i could pick anybody like larry craig and all those guys did. they did it because the good and there was no one to stop hundred and finally, i would say $30 bucks these guys are making huge salaries and quibbling over $30. i find that, that's my point. >> host: tell us what is next in this story as far as -- guess that i don't think they make huge salaries first of all. but we are told that more resignations are expected among these 11. there's a question about the military people, a question about whether others were involved. i'm sure, you have reporters calling around cartagena so

you'll see more women come forward. >> host: ken dilanian's with the "los angeles times" to he serves as a national security reporter. thanks. >> coming up in just a few minutes, live coverage of today's white house briefing. spokesman jay carney will be joined today by education secretary arne duncan. it's scheduled to get underway at 12:30. while we wait a discussion from "washington journal" about the sportsman's heritage act which recently passed the house. >> host: joining us right now, bill horn. the federal affairs director. hello. >> guest: tell us what the alliance does. >> guest: it is hunters, fishers, privatizations founded in the mid '70s. basically to combat the anti-have become anti-phishing animal-rights movement. ..

>> host: what would threaten those rights? >> guest: basically a group of organizations radical human rights groups and hunting groups, misnamed. humane society of the united states. committed to run anglers and hunters off private land to boot. that intersection to federal being public land we care

about in this legislation was the desired or designed to address. >> host: so this is the sportsmans heritage act of 2012. >> guest: correct. >> host: what's the purpose? >> guest: well the purpose really fourfold. it is amalgam of four different bills to fix different problems. title one which started out as a separate bill called h hr-2834. it has a senate counterpart, s. 2666. blm and public land and forest service lands are presumptively open to hunting and fishing. that doesn't exist in present law. most of the laws were written years ago. there was no radical animal rights movement. teddy roosevelt and company saw no need to put in express provisions for angling and hunting. the concept somebody would be opposed to those traditional activities is off the radar screen. this essentially establishes those lands, hunting and fishing are legitimate activities and those lands are presumptively open until

the agencies can exercise their retained discretion to make closures as are necessary if those closures and restrictions are based on facts and evidence. >> host: some of the democrats behind other opposing this bill saying there are already laws that mandate as far as when it comes to federal land whether they're not open or close already? >> guest: they don't. that is part of problem. the law does not expressly provide for access for angling and hunting. we fish and hunted and lands as matter of tradition. not so much as matter of express provisions in law. that is what this is designed to correct in part. the second part of the bill codifies recent epa decisions and determinations that the toxic substances act of 1976 does not authorize epa to either ban lead fishing sinkers and lures like buck tails or lead in ammunition. not with standing the fact a variety of activists have

been petitioning epa to take that step when epa said no. they have filed suit in federal court. the, these provisions in the bill codify the recent epa determinations that they do not have that authority under the 1976 act. >> host: will allow lead products to used in these? >> guest: that's correct. >> host: doesn't lead hurt animals? >> guest: lead is regulated in variety of circumstances. in some cases it has been determined it does. for example, when i was assistant secretary of interior we took steps to prohibit the use of lead shot shells for hunting migratory waterfowl, ducks and geese. it has been replaced in that context with other types of nontoxic material. but in other circumstances there's no good science demonstrating that the use after fishing sinker is causing any appreciable problems or that the use of traditional lead ammunition is causing any major problems. so, there is that policy

issue but the other side is just a legal one which is, did the 1976 toxic substances act give epa that authority. this ep . a, this administration a epa said no. this provision in the bill would codify that decision and confirm it. two other parts, there's a section involving recreational shooting on certain blm land. this is provision determined to be necessary because the bureau of land management in recent years has taken a series of steps very hostile to traditional recreational shooting out there in particularly the west. >> host: these are lands that have some structure in place that al lo lous you to hunt and fish? >> this is not structure this recreational shooting go out someplace, obviously far out of town. put tin cans on a rock and do plinking and shooting and target shooting of that type. the provisions in the bill are designed to overcome recent decisions by blm very

hostile to this activity. even though the agency basically backed off on a lot of that the conclusion we need to codify that fix. we need to make the fix in statute. the fourth feature is a real, very specific fix, canada, for many years has allowed hunting of polar bears because, not with standing the fact that they're deemed threatened under the endangered species act, president polar bear populations are record highs. canada allows hunting. various americans went up there before the bears were put on the endangered species list. took the bears. and then, when the listing occurred they had not imported 41 of these trophies. this bill essentially allows those 41 bears taken prelisting but before they could be brought into the country post-listing to come into the country and get them out of the legal limbo and red tape they're presently caught in. >> host: talking about legislation that passed that bill, sportsmans issues.

if you want to ask questions of bill horn, the u.s. support men's alliance. he is their federal affairs director. numbers on the screen. 202-707-ooo 1 for democrats. journalists c-span.org is the e-mail. send us a tweet at c-span wj. what reasoning would you give about the need to make sure these land remain open for hunting an fishing purposes? >> i think there is a couple reasons. long-time traditional activity people engaged in and no reason not to continue this. secondly, we adopted in this country, under the leadership of teddy roosevelt and folks of his era what we all refer to as the north american wildlife model. most people don't appreciate that the vast bulk of funding for wildlife conservation comes from anglers and hunters. it is in the for of license fees, duck stamps, other types of stamps and very specific federal excise

taxes levied on hunting equipment and fishing gear. you go buy a fishing rod there is excise tax on there that goes into a special fund that is then later dispersed for sports fish restoration projects. this mix of anglers and hunters, fees and taxes exceeds a billion dollars a year. that's what drives wildlife funding. it doesn't come in large measure from general tax revenue. and if you obviously cut off and begin to restrict access and opportunities for angling and hunting the license sales drop, duck stamp sales drop, the excise revenues drop and the money that goes into conservation begins to dry up. and we're fearful that we live in an ever-increasing urbanizing society. most urbannites will not want to basically pay extra taxes or have their general tax fund directed to wildlife conservation, as i said for 100 years basically paid for by the angling and

hunting community. >> host: this is north bend, oregon. don on our independent line for bill horn. go ahead. >> caller: how are you doing this morning? >> guest: fine, thank you. >> caller: okay. hey, i live in the state of oregon which is owned basically about 60% by the federal government and they are constantly, constantly shutting those down, blocking roads, digging ditches. putting gates up. restricting our access to public land, for hunting and fishing. and you know, what can a person do to --. >> host: what reasons do they give, sir? >> caller: what reason do they give? because they want to protect the wildlife. or the trees, or the drainage or, some river

system or what, you know whatever, but it's like, just, you have some chief bureaucrat in some areas that just decides, hey, i want to block this area off and, i don't know what they want to do. make a park to where you can look but not touch? i mean --. >> host: let our guest answer. >> guest: well, that's one of the reasons, and, part of what's driven this bill, which is that there has been levels of increased hostility from the federal land agencies to a lot of traditional access and hunting and angling. a lot of frustration has boiled up. i think the caller is an example of that and the decision was rather sit and wait for these problems to continue to build, let's take some type of preventative action right now and begin to codify in law that hunting and fishing are a very important traditional activities on these lands.

agencies you're supposed to provide for these activities. you can make the closures and restrictions where necessary and where appropriate but the presumption is they're open first, closed second. and we hope that having congress pass law to that effect it sends a very clear signal to the land management agencies to take steps to facilitate traditional access to these land. >> are the access only guaranteed to recreational hunters? >> guest: in this particular case yes. this is a bill about fishing and hunting. some of the critics have raised in my mind red herrings there are secret provisions to open lands to oil and gas and mining and off-road vehicles and that is categorically untrue. the bill was very carefully put together by committee folks. very carefully put together in cooperation with the hunting and ainge little -- angling community. this is hunting and fishing bill. this is not oil and gas or grazing or commodity development bill. >> host: carl on the

republican line. carl is next. go ahead. >> caller: bonjur. >> host: you're on, sir. go ahead. >> caller: i have a few questions, yes or no responses to the list, to the guest. have you ever shot a polar bear? >> guest: i have personally not. >> caller: have you ever shot a wolf? >> guest: i have not. >> caller: have you shot a snow white mountain goat? >> guest: no, but i have friend who have. >> host: so let's stop the questions and tell us why you is them. >> caller: have you --. >> host: sir, why are you asking the questions? just give us reasoning? >> caller: i'm trying to establish the credibility of your guest as a hunter. >> guest: well i can tell you that i've been a hunter for probably 40 plus years. i'm primarily a up land bird hunter and duck hunter. i hut rough grouse, woodcock, bobwhite quail. mostly out here in the western mountains of virginia, west virgina.

duck hunting quite a bit. i don't do much big game hunting but very avid bird hunter and lifelong fly fisherman and angler to get. >> host: caller, one more follow-up. what is it? >> caller: do you own a bumper sticker that says save a buck, shoot --. >> host: we'll leave it there. most of activity you do, is it on public or private land? >> guest: mostly on public land. like in virginia, west virginia. i hunt on the george washington national forest and the moneghalia national forest. >> we're leaving this recorded program now to take you to the white house briefing. >> good afternoon, ladies and gentlemen. it is great to have you here today. as you can tell you have with me the secretary of education, arne duncan. this week, as i know, you know president obama is launching a concerted effort to get congress to stop the interest rate on student loans from doubling in july.

secretary duncan is here to talk about that issue with you, to take questions on that issue from you. he can also take questions on other issues of related to education. you know it's worth noting that secretary duncan oversees the implementation of the president's education agenda, his vision for investment in education and education reform and that latter piece, the education reform, is something that in a way that is often unnoticed or unmentioned by folks in washington. has enjoyed broad bipartisan support. this is another issue that should enjoy broad bipartisan support because you really have to have a brick in your head not to understand that education is the corner stone of our economic future. without it, we can not compete and win in the 21st century. with that i give you

secretary duncan. >> thank you, jay and good afternoon. next week president obama is traveling to three states to talk about the fact that interest rates for new subsidized student loans are set to increase on july 1st unless congress acts to change that law. the rates were set by congress in 2007. and the current interest rate is 3.4%. and it will double without congress's action to 6.8%. based on the average loan amount, this will add more than $1,000 in costs over the life of that loan. for students who borrow heavily to go to college it would obviously cost them even more. we have to make the interest rate increase will affect more than seven million families expected to take out new loans this fall. at a time when going to college never has been more important it is also unfortunately never been more expensive. families and students are struggling to meet these costs and there is no reason why we should add to their burden. i have to tell you i travel throughout the country and iowa wisconsin past few days

with secretary vilsack but disadvantaged communities but more and more families are not thinking college might be for them but for rich folks. we know going to college is path to the middle class. we will outline the administration's proposal to work with congress to keep interest rates down and spare working americans this added cost, this added burden. all of us share the responsibility for cost of college, from federal and state governments to educational institution, students and their families. and because this issue is so important to our economy and to our future our administration is doing more than ever before to address it and we have a number about of proposals in our 2013 budget. with support of congress we have doubled, doubled pell grant funding for low-income students and nearly tripled tax credits for middle class families. we've lowered the cap on student loan payments to 15% of income. and we're going to lower it even further to 10% starting in 2014. the president, vice president, biden and myself

and so many others have held town halls all across the country, to talk about the costs of college. we met with university presidents, governors, state legislators, and members of congress. and next week, the president will meet with students at the university of north caroline at chapel hill, the university of colorado at boulder and university of iowa in iowa city. these three universities are among the nation's educational jewels. we should do everything possible to insure that they remain a affordable. you may also know that to 12 marks the 150th anniversary of the more relact which signed into law by president abraham lincoln and contained the first public universities. we have a amazing opportunity to honor lincoln's vision and secure our economic future to work together to assure college remains affordable for all americans. i will stop right there. happy to take any questions. yes, sir? >> mr. secretary, white house would be tweeting a viewing of movie, "bully".

-- bulllying student nondiscrimination act prevent has haven't. is the administration prepared to endorse that legislation at this time? >> we have to do everything we can to make sure there is zero tolerance for this. i met with one of the young women in the movie this morning with her father. this is very personal for me and president and we all have children in school now. whenever children are going to school scared, when they concentrate on biology and algebra. as a country we hope we see unprecedented level of support from our administration. first ever anti-bullying summit in the white house. president talked about his own experiences there. seen many states toughen laws to protect students from bullying. until our children are safe and secure at recess, in the morning, after school and not just physical bullying, cyberbullying as you know. some of my toughest meetings from parents who lost children or committed suicide due to the impact. we all have to continue to work together. this movie is very tough and very hard-hitting and tells the truth and great greater

awareness around country. can not be normal rite of passage. can't accept it. >> will the president call next week for one-year or temporary freeze in the interest rate or is he going to ask congress to pass permanent. >> we need to fix it now. we have immediate crisis. fix it now. think about the long term as well this always enjoyed bipartisan support. we have to educate our way to better economy. jobs of the future will go to folks with higher education. to not do this together doesn't make sense to me. >> would you support a short-term, freeze? >> i think we need to get the immediate issue dealt with now. let's all work together to work on long-term issue as well. yes, sir? >> what do you say republicans call it created controversy. this deadline comes on democratic legislation. this is coming up right before the election that the president is taking it out on the campaign trail? how do you respond to those criticisms. >> the facts are very, very simple. this passed in 2007 with broad bipartisan support. signed by republican president. we all understand if we want

to keep jobs in this country we're not come the pooing in our little district our states. we're competing against india, china, singapore and south korea if we want to keep the good jobs here we have to have an educated workforce. i have lots of data. you guys all know this, but over the past year if you have less than a high school did diploma there is decrease of 200,000 jobs in this country. if you have some college or associate's degree, increase of about 750,000 jobs. if you have a bachelor's degree or more, 1.4 million new jobs created. we know the trend are going to continue. we all have to, this isn't republican or democrat, i could care less about politics or idea log. we -- ideology. we need educate workforce. we have two million, high-wage, high-skilled jobs unfilled because we're not producing employees with skills employers are looking for the i can't tell you how many ceos i met with or president met with we're not trying to export jobs but you're not producing

workers. we don't have a jobs issue. we have skills crisis. we have skills gap. we have to close the skill gap. only way to have lot more poem graduating from high school and going to college. >> you're saying republicans are wrong to suggest this is brought up as wedge issue? >> that was passed five years ago in bipartisan way, no reason it shouldn't pass again bipartisan way. signed by republican governor. we have to educate our way to better economy. that is not republican or democrat or any issue. that's reality. yes, sir? >> you said that would increase the average loan by $1,000 over its life. what is life of an average loan? >> average is 12 years. varies. for each year this doesn't happen, would be additional $1,000. doesn't happen this year, $1,000 another year. $2000. we know, debt from college exceeds credit card debt in this country. something is wrong with that picture. we don't need to increase the debt. we need to keep it where it is at minimum. we've done so much to make college more affordable.

talk about pell grants. perkins loans increase. we're asking for ability to double work study opportunities. college has to be affordable for the middle class and folks aspiring to go to the middle class. unfortunately, many, many american sfams list, all types of neighborhoods and background are starting to think college isn't for them. that's a real problem yes? >> secretary duncan, a lot of depth at podium about issue. this is term familiar with you. will you put skin on the game, going on the hill you and president talking about this? >> i will do whatever it takes. i've been out traveling country every single we can talking a long time. done a number about town halls with the vice president. president is going to three different universities next week. this is one where, i know you guys love politics and love all that stuff. that is zero my interest. i'm not any good at it. don't care about it. we need a lot more young people to go to college and graduate. that is all this is about. when families start to think they can't afford college, that is not good for those families, those communities or for our country. >> will you go on the hill?

>> of course. sorry, absolutely. absolutely. whatever it takes. yes, ma'am?. >> secretary duncan i want to ask you a question about school safety. today is 1th anniversary of columbine. fifth anniversary of virginia tech passed this week. obviously a lost lessons learned but from your perspective what more needs to be done? >> a great question i don't have easy answers. we have a nation have learned tremendous amount about warning signs and acting quickly when there is an issue. i take you back to the bullying issue. when we have children or young adults or high school students who don't feel safe, who aren't secure, you can't begin to be as effective as you need to and concentrate academically. so creating a climate free of violence, free of fear where young people can concentrate what is going on in class is definitely important. so i think there's been a lot of progress. you've seen a reduction in violence which is very encouraging. but one incident is obviously one incident way too many. i come at this more as a parent than anything else.

i have a 10-year-old daughter and 8-year-old son. i don't want them or anyone else's children worrying about this when they go to school today. >> besides there is mental health aspect. those shootings may have played a bigger role than bullying or atmosphere of violence identifying. >> yes, i think that's correct. and universities, peers, fellow students, when we're seeing something that doesn't feel right or doesn't look right, raising those alarms early and letting folks know this is student or young person or young adult with some issues that are worrying, we have to have those conversations and so often, and in these situations not always, but so often there are signs or indication this is person isn't stable and i think we have to take those. unfortunately we have to take those very, very seriously. not something we can sort of blow through. yes, sir? >> mr. secretary, congressman wine's office issued a statement as you were coming to the podium, basically saying that no one's offered a serious

proposal, meaningful proposal to pay for this $6 billion stopgap. what do you see as a way to pay for this so we're not just borrowing more money, adding to the deficit? >> i think president's budget contained a number of proposals to pay for it. something we want to work very closely with congress to do. we're committed to paying for it. lots of ideas out there. president will talk more about it next week. i want to work with congress. i have tremendous respect for congressman klein. we have a good relationship. this is right thing to do for this country and his family in minnesota. yes, sir? >> how would you go about balancing the reality cost of college with the concerns up there that allowing more access to more credit would create possibly a student loan bubble down the road and actually increase college? >> so, again i think the most important thing we can do is have young people go to college and graduate. and that is the best investment we can make. when that debt is manageable, obviously, you know if you

have no debt that is best situation. this is not bad debt to have. it is very good debt to have. we have all kinds of data not just around jobs but how much your earning potential throughout our lifetime goes up from high school graduate to two years degree and four-year degree. this is best long-term investment we can make but we are worried about debt going higher and higher. when we have the opportunity to work together in a bipartisan way to prevent the escalation of debt. this is the best thing to do and i expect folks to step up and do that. >> do you think there is correlation more access of student loans and rise in tuition. >> we looked at it very carefully. when you increase pell grants tuition go up. if you look over 30 years, over those 30 years, 196 those years pell grants went up. ten of those years pell grants went down. one year stable and all 30 of those years tuition went up so i don't think there is correlation there. we are challenging this is about shared responsibility. we're challenging states to continue to invest. we're trying to lead by

example. huge increases in pell grants, biggest since the g.i. bill, perkins loans, double work studies make the altc permanent. states have to invest. we can't do this by ourselves and universities have to keep down their tuition and build cultures around completion. we're doing a lot to provide transparency and scorecards and parents make a good choices which universities provide great education and reasonable cost. that transparency and parent responsibility is very important. yes, sir? >> president obama has initiated his concerns from education delegation from india is in town and talking about opening up 100 or more community colleges in india. >> yes. >> so high level delegation coming to the conference in washington, d.c. where do we stand on this initiative? >> i met repeatedly with my counterpart, the education minister from india. he is remarkable man.

we think we have challenges here. trying to go to scale at amazingly rap rapid rate. we want to be helpful. martha cantor, former community college president, first time any one of that stature in our administration, any administration had that community college background. whatever we can do to partner with leaders from india we want to do that. very, very ambitious goals but we want to see them achieve that. >> just to follow, once india was a house of knowledge at universities and today, india is has hundreds of thousands of universities and schools and so forth. how can the u.s. help indians to learn and india can ten americans? >> we're all in this together. i believe a rising tide lifts all boats. more we have educated workforce in america. more we have educated workforce in india, and next generation of both employees an consumers that's great for the world. we want to partner together. we have, i think still the best system of higher education in the world. we have amazing, amazing

community colleges. i was at three over the past two days in india, not in india, in wisconsin and iowa. and whatever best practicings we can share and whatever we can do to have india go on this very ambitious growth pattern and trajectory we want to do that. >> what is special about the three universities that the president will visit besides states they're in? do they have higher rates of students using loans? >> this is the not just private four years, but public four years people have having concerns about paying for. >> a lot of universities of the why these three? >> these are big major flagship universities with large student populations. these are kinds of families, middle class families are having a hard time paying for this. what we want is more and more young people going on to these type of universities, not feeling that college is not for them. yesterday in iowa talked to high school senior happens to be a twin. talked to her. her brother wasn't there she

said her family is thinking which one of them should go to college next year. really deep conversation. and no family should have to choose this child or that child. . . and paying for it but you guys have a preferred option when you go to the hill what are you going to bring? >> the president proposed in his budget and we will work hand-in-hand with congress that we are not set in one idea. we want to pay for it but the cost of inaction is i think

unacceptably high. this is one we have to get our act together. congress is struggling these days. there's no question about that and if there's one issue folks leave behind i can't think of a better one than around education, it can norway to a better economy, so it's the past bitterness of finding where it might be why not come together and do the right thing for a country it's a great opportunity for folks on both sides to do that. >> before this announcement today going to the hill. >> we are talking many lawmakers. i testified to retreat times the past couple weeks and next week this has been the heart what we've been talking about and people see both the opportunity to do the right thing and the huge cost of inaction. yes, sir. >> the family is paying what you do to rein in the dramatic commission? >> a couple thoughts there. we propose in the president's budget a billion dollar race to the top for higher education that we've put money behind again, not just in those states that continue to invest, and in

those institutions, the colleges would do two things come keep their costs down and also create a culture that can't just be around access it has to be around completion. the other big piece that has been the lack of transparency i think young families are making these complicated decisions are hard to figure out what this university package and this so we are trying to create much greater transparency. they want value for their money as well. so putting strong incentives out there and move some resources potentially more towards the university's doing things right and away from those that aren't. we have 6,000 options, the two years and four year, big, small, leverett might be we want people to make the right choices for them. >> thank you, psychiatry duncan for the questions.

i, separate from the presentation secretary duncan just gave i do not have anything to begin with so i will write to questions from juliet the associated press. >> i just want to follow on secretary clinton's remarks yesterday during the briefing. she essentially called for the u.s. council action but also acknowledged anything put forth would be vetoed. so i'm wondering if there is a concern in the administration that continuing to focus on the security council action which is likely to be vetoed seems to be moving. >> a couple things. we remain horrified by the reports of the significant violations of the cease-fire and the regime. yet again, this regime has failed to keep its word and failed to thus far live up to the obligations it made to honor

the plan. second, we are in consultation with security council members about the next steps. it is absolutely true and we bemoan the fact that the time of an earlier resolution was vetoed by the russians and the chinese, and we made clear our displeasure over that anp our feeling that is shared around the world that it was a historic mistake to side with the regime that was at the time and to this day brutally killing its own people. i think in the interim the assad regime has become all the more clear. i don't want to get ahead of anything the security council

might do and still deliberations will take place but it is worth noting that we did have unified support around the annan plan on the security council and i think there is greater acknowledgement of around the globe as well as within the united nations and the security council of the appalling behavior by the regime. >> do you think that that increases the likelihood? >> travis speculate about what the next steps might look like we obviously remain supportive of the plan and the steps they're being taken with monitors, but we are also clearly a failure of the regime to live up to its obligations so far. and we'll of course engage in the security council and broadly with members of the friends of syria on the next steps as necessary. >> is there any condition to

build that is inevitable or are you considering actions in power? >> we still believe that assad tenure as you well will come to an end. it is obviously difficult to put a time frame on that and an end date on that, but he has utterly lost the credibility with his own people, credibility with the nations and people of the region, credibility with defamation of the world, credibility within a organizations, regional organizations. fahey his capacity to unflinchingly a leash brutality against his own people in order to sustain his own rule has certainly prolong his stay in

power but it will not last forever. >> is any consideration being given to the outside counsel with the secret service scandal or is that? >> that is the first i have heard that phrase. i have heard no consideration of that nature. >> a en agent has come to light can use it as the president personally know either of these? >> i'm not aware that he does. i don't know that he doesn't. i'm not even familiar with the names of a lawyer understand some names have been published. the president has spoken about this when he was asked in colombia on sunday. he once the investigation the secret service is leading to come to completion.

once that completion is reached if the result is that the allegations have been broadly reported turnout to be true, she will be angry about it as he made clear in colombia. the reason for that is that as he said then, every member of the united states government who travels to the country on a presidential trip or a trip by cabinet member, the vice president, representing his or her country, and every american in this country, and therefore should conduct themselves appropriately tall times. so, but as i said yesterday and i said previously, the president does not want to and certainly do not want to get ahead of the conclusions of the investigation and make what judgments while

the investigation is still underway. estimate the director of the secret service and meeting with congressional investigators voice concern that the prosecutor or in a room that had confidential secure information to it and wondering have steps been taken to make sure that if they work, travel plans may have been on the computers where they were no longer relevant? >> two things, one i'm not privy to the conversations. the director of the secret service may have had with members of congress or the conversations those members might have had with you about the director. the investigation is ongoing. specifics like that are not things and in the position to answer questions on at this time, and matters of security in general, presidential security are handled by the secret service center generally not

being discussed for reasons of security, but by understand the question and i understand at least hypothetically what a concern like that would be and why it might assist, but i would ask you to patiently wait for the conclusion of the investigation and the secret service or the white house addresses those kinds of questions. >> as i'm sure you know it's been reported to begin with that one of these is a question or one of the officials in the secret service had on his public facebook page it picture of him with governor sarah palin with an inappropriate remark about checking her out. this was before the incident of the picture had been posted to read those that cause the president or anybody in the white house the question on directors olden's oversight of what is sufficient? it would seem that that would not be professional either

coming and it might cause somebody the question whether sullivan was engaging in the enough oversight. >> i did see the report that you mentioned this represents the entirety of my knowledge and have not any conversations about the president or others hear about that specifically for that i assume haven't even prior to president obama taking office. stepping back, the broader question of behavior, culture is something that i'm not prepared to address at this time while the investigation into this specific matter and this specific person is on going. once the investigation is concluded i assure the secret service will have more to say

about as well. >> will that cause the president in any way to question whether his confidence in director sullivan is taking place? >> again, i haven't had a conversation with the president about this specific facebook entry or even his agent that you referenced. the two things i would say is the secret service stated quite clearly and the president believes that his security and the overall security of the true was never compromised into columbia. he has great faith broadly speaking the secret service men and women who protect him and his family and the vice president and members of the traveling staff protect the grounds here.

right now we want to refer the conclusion of the investigation into this specific incident before we look more broadly at if that is necessary and some of the issues of cultural security but the president does, as i said before, have faith in the secret service and high regard for the agency and the job that they do protecting him from his family, protecting his predecessors. it is an enormously difficult job as you can imagine and it involves putting your life on the line regularly, being willing to sacrifice yourself for the sake of not just an individual but for the trauma of any kind of harm that might come to a president or a nation that's a huge responsibility, and this incident, while it is obviously under investigation, and the allegations that are now there are very concerning but it's important not to forget what the job the men and women of the secret service to on the

basis for the president of both parties. >> yesterday when asked whether the white house was confidence that nobody who is employed by the white house is engaged in any activities he said something on a lines of you were not aware of any evidence. does anybody in the white house looked into anyone at all had anything to do with any of this? >> when i got that question yesterday was the first time i heard anything like that. i have no reason to believe -- i do not know otherwise that this did not involve anything but the agents and the military personnel. we are in regular conversation with senior members of the white house staff on a conversation with the secret service getting briefed on the progress of their investigation. i really don't have anything more for you on that. >> i'm wondering if anybody in the white house has just made sure that none of this was done. >> not that i'm aware of.

i do not -- my answer is the same as it was yesterday. >> some republicans including senator sessions and governor palin have begun to suggest coming to the deals they reported by the gse party in las vegas and the breakdown of the man in afghanistan where the soldiers are displaying severed limbs. it does that suggest senator sessions and governor palin among others. >> that was senator sessions and governor palin. >> the white house oversight there's been a war in afghanistan for tenure zipf pfft we were in iraq for nearly 9i believe for. they've been in great concern that happens in those war zones

and on the numerous occasions the incident that you refer to is terrible. it does not represent the standards of the u.s. military or the conduct with which the overwhelming majority of the men and women in afghanistan and before that in iraq conduct themselves. any assertion by those politicians you mentioned should be of the nature that you mentioned should be valued at the cost that you pay for it. it is preposterous to politicize the secret service, to politicize the the heater on the terrible conduct of some soldiers in afghanistan in a war that's been going on for ten years. >> to president's leadership. >> what they're doing is trying

to turn these incidents that are under investigation into the political the advantage and obviously you recognize that and everyone here recognizes that. i think on the face of it is a ridiculous assertion that trivializes the serious nature of the endeavor that our military is engaged in in afghanistan and the very serious nature of the work the secret service does, a political nature of the institution, and the seriousness of the investigation with regard to the secret service and the military and the incident in colombia. >> to follow quickly on the question is there no process --

>> the questions about the random rumors. >> has there been some sort of that ranch >> from the moment that this was made public and an investigation was launched we have been in touch with the secret service and obviously with the pentagon about this incident. and i'm sure the discussion and the briefing covers a variety of subjects and both facts and rumors. but i'm not going to do as i said yesterday is give a play-by-play or speculate about every rumor that you may have heard from either anonymous sources or just the internet. so why don't have anything more from you on the investigation itself. >> on the investigation if you don't know it. >> i have no reason as i said

yesterday to believe there's a need for that i'm not going to call speculatively about where this investigation is going. >> any member of congress briefing year the white house news a senior officials can you elaborate? >> conversations with of the chief of staff, deputy chief of staff and media others in the communications with let me finish this part, there may be communications that other individuals and other members of the secret service. it's a regular conversation so the white house can be kept abreast of the investigation and the steps being taken. the president hasn't had a conversation with director sullivan. i wouldn't rule out that you will. i'm sure that he will be brief at some point with the director about the investigation and

where it stands and what we know about what happened >> can you explain the criteria why the university. >> i would just point to two with the secretary said, and i guess we can go back to the conversation. how many of you would no quicker than anybody else in the room was the margin and ytoy in 2008. substantial, right? saddam any state, not the one that i saw that any state by which we won by that margin which would not be troubled there? >> of the university of texas. a great parts of the country. also as you know, let me finish, there's a lot of things that go into the decision about trouble is easier to travel only half the country than the length of the country. i would point out as i did yesterday that the president has

recently delivered remarks in oklahoma and while hope springs eternal i'm not prepared at this moment to call that a battleground state. he gave a major speech late last year. i misspoke and i said nebraska yesterday was kansas as you know. again, in either case, nebraska, there was the omaha bifurcation is in 2008 generally not viewed as the up for grabs, generally not perceived to be up for grabs the kansas, are you giving up kansas? >> all that travel next week, you know, it feeds the cynicism that this is all sort of one entity. jay carney the journalist would be asking this. >> the issue is this concerns the president's trip next week,

that occasion of secretary duncan who has made clear doesn't give a rough about politics, doesn't believe that education should be a political or partisan issue, and largely by major outlets represented in this room have not by and large been a partisan issue in this administration. and the unbelievable the important reality that on july july 1st race for student loans are going to double if we do not take action. that is a policy issue that will amount greatly to the students of the very large universities the president will be visiting. it again, you know, it is simply not something we accept that the president shouldn't be able to travel all around the country come shouldn't be able to travel to talk about his agenda with the american people that he represents, and if you took

seriously all the maps that show states that are battleground states today and have been inappropriate for the president to visit in the free election year it would be his ability to take great parts of the country. >> it's a fact when the story first cannot ka "the wall street journal" ran this graphic about how president obama traveled to more battleground states than the stage in their reelection cycle and predecessor. >> they didn't consider in 2004 virginia to be a battleground state. it's solid republican but did consider for president obama because he wanted against all expectations. every president goes to virginia because it's an easy way to get out of washington and get beyond

the beltway and get in the country. >> i don't have the full schedule but these are official events where he's going to talk about the student loan issues. [inaudible] are you confident on the stability of the working relationship with whoever ends up winning? >> certainly monitoring it in the sense that we follow the news and france is a great, great ally of the united states and we will continue to do so. >> certainly. >> what is the president hope will be achieved -- the relationship between the u.s. and france?

[laughter] we have not, 90 million subscribers worldwide that interested in what goes on in this white house. and one of the questions i have is what does the president hope will be achieved in solving the crisis as they come to an end here in washington this week. >> they are obviously looking at the year autozone -- eurozone crisis as the obviously extend beyond the imf. they have an important role to play as we've always said. it is an adjunct role. it's not a principal role in the governments and banks taking the lead and not. u.s. contribution to the imf will not be raised and will remain where they are. but the imf does have an important role to play and they've taken some very

important steps in terms of building a fire wall, actions the ecd have taken and reforms undertaken in greece and italy. but there's more to be done, and we are always available, and extremely engaged with our european allies on this issue. secretary geithner in particular and others, very engaged with our gif european allies and providing whatever counsel we can to help them deal with this significant challenge. >> what is the gsa spending say the vice president's effort to crack down waste in government spending? >> i appreciate question to the first, with regards to conference spending in particular which is the matter

of concern with the gsa that outraged the president and led to the actions taking place, first of all in september, 2011 the office of management erectile agency heads to conduct a thorough review of how we're spending taxpayers' dollars on conferences. pending the review the conference related activity not permit it to go forward without sign off by the deputy secretary or an equivalent chief operating officer for each agency. each agency has established tough controls and they are now in place. federal agencies have identified and are currently executing on the plans to achieve travel and conference cost savings that total nearly $1.2 billion as a result of the president's executive order. to date to have achieved over $280 million of reduced cost in the first quarter of fiscal year 2012 compared to the scene period of time in fiscal year 2010. broglie the administration efforts to streamline federal

spending on the conferences as a part of the president's broad campaign to cut waste initiatives which has led as you've noted by the vice president and which is already reduced cost by tens of billions of dollars, by eliminating inefficient or unnecessary spending. we were to cut realistic cost by $1.5 billion. realized over $1.4 billion in cost reductions by slashing spending and in administrative areas such as travel and printing and avoided $4 billion on the cost by turning around downsizing or eliminating the i.t. project that were over budget are behind schedule. millions in production caused by minting the dollar coins that are not needed and i'm sorry if you are a collector. presented a $20 billion of improper payments and put an end to the sky rocketing contracting costs exceeding the president's goals of the reduced spending by $40 billion. i'm so glad you asked, because the record is quite impressive. >> on another matter, there is

another bit of legislation. estimates and in on germany to another piece of legislation. >> i don't know if we have a staff out, we do. we do. let's be clear, with the congress was asking in this highly partisan way attaching a provision of the keystone pipeline to the legislation that has nothing to do with it is basically asking the american people should be aware of this the united states congress, very important body takes american security and the sovereignty very seriously or should saying that we should in advance blind the pipeline proposal for which does not exist but we will prove it any way. the pipeline built by a foreign

company emanating from the u.s. to leave now, we love the canadians. they are very close allies. but there is a process in place for a reason is going through the state department that requires this kind of project because it crosses u.s. border with a foreign country to be reviewed and approved by this department in a very deliberately. when this company -- if this company and when the company submits a new route, a new proposal by the route of the pipeline, it will not simply be given unbiased inappropriate considerations in a proper way and in a way that has been done for decades under the administration's of both parties and decided in the manner that is always bend to be decided and partisan efforts that attach to something to say to the american people does it matter even though it's coming from a

foreign country and is built by a foreign company and crossing our borders with the prophet in advance. that is unacceptable to this president, and i would remind you that we are only in the situation because the congress did this once already and we have concerns originally and delayed the process because or a least in part because concerns raised about the original pipeline route by the governor of nebraska who was a member of the very same party as those who support this noxious amendment. >> on keystone, obviously keeping his options open on whether he ultimately will okay. spec he cannot okay a pipeline proposal which does not exist. he would be preemptive we sacrificing american sovereignty >> he hasn't indicated any willingness aside. i'm talking about rhetoric.

he has upset a number of groups from big oil to the parts of labor, the markets on both sides of the issue, canada. estimate are you making my case about why he's doing the right thing? >> it seems like the only folks that are happy to the are republicans. they keep pounding on the triet so how has it in literature meant -- detriment? >> i will leave it to the commentators, reporters and others, historians to decide that. what i know is that at the time that the delay was announced because the need to find an alternate route it was done because there were great concerns about the proposed route and the aquifer in nebraska. not at the time. >> [inaudible]

>> you just said, i'm sorry, where has it been submitted? nebraska, not to the state department which is where it has to be reviewed and maybe there will be submitted soon and a process will begin in existence with decades of precedent or administrations of both parties and we will be reviewed appropriately. but the route was changed and no small, how do i see this come in large part because the governor of nebraska asked it to be changed or asked it not to go through the aquifer and threatened potentially the water supply of the state. so, does it hurt us politically? i just don't know. i'm not a team of analysts to assess that. what i do know is this has to be judged on its merits. as the president said in oklahoma, the company is absolutely welcome to submit a

new pipeline proposal, and the process will begin again. >> on nasiriyah it seems it isn't working because the cease-fire going back for. there are some in parts that you are working on the plan be. if there is no plan be done which is it? >> when i was asked about syria, the secretary of state remarks we are very concerned about the blatant failure to fulfil its obligations under the annan plan and that the cease-fire is not holding this far from complete, and we will -- if it doesn't -- if there isn't a change in the behavior it is a cease-fire that doesn't take place and the other points of the plan not built.

we would continue to consult with our allies and partners as well as other members of the u.n. security council about next steps. what i don't have -- i didn't say -- we are continuing to consult and i sure there are -- >> it sounds like there will be plan b which means there isn't. >> it means that there is no need to announce that we are not prepared to announce an additional step or new step to be taken either by the united states by friends of syria or the united nations security council at the time, but you can be used sure that we are discussing the next steps and options with our allies and partners. >> last one. >> do you have the congressional budget office? >> i wait patiently for the latest, but i haven't seen it. >> i haven't had a chance

myself. as we have been sitting here throwing -- >> i haven't seen it, you haven't seen it. [laughter] >> the president's proposed budget would reduce economic output in some percentage reacting. >> i haven't seen a. i haven't heard this. i will check my and box. thanks guys. the schedule for the week of april 23rd 2012 and the time americans are engaging in holocaust days with remembrance, president obama will deliver remarks at the united states holocaust memorial museum in washington, d.c.. the president will also tour the museum with the introduced nobel peace prize laureate and holocaust survivor. on tuesday morning, the president will honor the 2012

national teacher of the year finalist at the white house thinking them for their hard work and dedication in the classroom. tuesday afternoon and wednesday the president will travel to north carolina, colorado and audio what to launch an effort to get congress to prevent interest rates on student loans from bubbling in july. on tuesday the president will visit the university of north carolina at chapel hill and the university of colorado at boulder. also on tuesday the president will host and all the record conference call with college and university student journalists. on wednesday the president will visit the university of iowa. at the that he will speak with students about the critical need of congress to act. thursday the president will attend meetings of the white house, and friday the president and the first lady will meet with troops, veterans and military families at fort stewart in hinesville georgia. thank you all very much. have a great weekend.

[inaudible conversations] president barack obama will call on congress next week to take action on student loan interest rates set to double in july. he will travel to universities and north carolina, colorado and iowa. at 3:45 eastern c-span will be live at the republican national committee state trans meeting in arizona. mitt romney will speak along with the chairman and the arizona senator john mccain. mitt romney's presidential campaign says it raised more than $12 million last month. president obama working with the democratic national committee raised $53 million in march. this is the first campaign fund raising of state since the super two

on wednesday state department counterterrorism coordinator daniel benjamin discussed her threats facing the u.s.. he spoke to a house foreign affairs subcommittee. they addressed north korea, the state's department budget and other policy issues. it's about an hour. >> this hearing will come to order. today we welcome ambassador benjamin back to the subcommittee for the look of

this department handling of counterterrorism issues, and while al qaeda has taken major blows in the past year, the terrorism threat itself remains real. last year the committee was notified that the office of the coordinator for counter terrorism, which has been in existence since 1972 would transform into the bureau of counterterrorism. according to the state department, this allegation was natural enzi office responsibilities that had outgrown the court a new title. when report to congress, this department noted that only existing funds would be required to create the bureau in any changes in personnel would be marginal. for this year the bureau is seeking to increase staffing by 17% which is a rather unorthodox definition of marginal. the state department would like for the new bureau to be headed

by an assistant secretary, and specifically by the ambassador just benjamin, the witness here. the department could have made this move on its own, but it chose to take the heads of its new energy and posed conflict secretaries instead and appoint them basically. making the choice facing a stitch recapped on the positions, the state department is seeking legislative relief to allow the counterterrorism bureau also to be headed by the assistant secretary. most members of congress probably think that the state department can be run quite well by the 24 assistant secretaries and the dozens of special envoys of already has. and that is why we've raised this before our suspicions about this and indeed have found ourselves in the same conundrum with circumventing the cap, but more critical than the title, it is the control of resources that

will seal the bureau's date when we have a few hundred million dollars and counterterrorism assistance money flowing through the state department, less than half of that amount was cut controlled by ambassador benjamin's bureau. the regional bureaus control the rest of the funds to the end of the bureau of counterterrorism can play a robust role as envisioned, and by the way, we on the subcommittee support that will come of that equation has got to change in terms of control of those funds. the counterterrorism landscape has changed substantially since the investors testimony one year ago, osama bin laden and anwar al-awlaki are now dead but the senior obama administration officials have gone so far to declare that the united states has i report the administration within the reach of the strategically defeating al qaeda. yet just weeks before bin

ladens's def we had testimony before this subcommittee ambassador benjamin mengin at time we continue to see a strong flow of recruits into many of the most dangerous terrorist organizations so we will hear it that is the case today. but a year has brought other changes as well. radical elements have egypt looking into the abyss. armed militia have them be and there are concerns over the fighters of syria. it's hard to see how some of these developments have not harmed u.s. counterterrorism efforts to free the other regions like africa and western hemisphere are concerned earlier this year. the subcommittee moved focused on iran's growing role in the western hemisphere. we have got groups which means education is sinful, carrying out attacks against nigeria,

creating mayhem. pakistan specifically the security services coming in with their backing of the ed gray of the groups is a perennial concern for us. the of the week the state department announced a reward for information leading the convention -- conviction of mohammed saw a need, the head of the army of the pure. that group was the opposite that carried out the attacks on mumbai to read this individual continues to operate freely to the inside pakistan is an indictment of the islamabad as a counterterrorism partner. unfortunately, there are many other such individuals that we

didn't come at that particular rampage, but planning the next one daughter of aiding and pakistan today as well. we look forward to discussing these and other issues with ambassador benjamin and i will turn to the ranking member sherman for an opening statement. >> thank you, chairman for holding this important hearing. in november, 2011 the congress was notified that the office of the coordinator for counterterrorism which as been in existence since 1972 would be updated to the bureau of counterterrorism july 4th, 2012, the new bureau was announced for fiscal year 2013 and the administration has requested to under $28 million to fund a series of anti-terrorism programs in the bureau. in fiscal year 2011 actual spending for the programs was $26 million in this year 2012 would be to 38 and is seeking a significant decrease in the

funds available for and tighter curbs on programs at the state department i'd like to hear from the witness of the transition from the office to the bureau has a debt our counterterrorism efforts and i would like to think the ambassador benjamin for his service and look forward to his continuing service and the difficult global environment. i have considerably less skeptical of the chairman of the bureau of counterterrorism being a bureau and not an office or even if the administration was seeking an increase in funding for the bureau given the importance of your work it appears from statistics island over what the administration has been able to function without seeking an increase. one program of particular importance is the counter and violent extremism cve program that aims to prevent of rescue from turning to terrorism, to

contest militant propaganda and persuade tourists to renounce violence and to renounce their affiliation with terrorist organizations. the state department has identified five priority countries, algeria, bangladesh and pakistan. especially i want to focus on pakistan where i think it's very important that we reach out to the voice of america not only in the language of other languages that are commonly spoken in pakistan. this should not be interpreted by the pakistan government has an effort toward separatism. if you are trying to sell products and los angeles you wouldn't dream of having your effort as a program being only one language. wal-mart is not trying into separate any part of california for the united states but they

are trying to sell a product to people that speak a variety of languages. we have kept order killed most of the world's dangers, many of the world's interest terrorists but we didn't been fully successful of the war of ideas and stemming recruitment. i know the creation of the program was a priority for the ambassador benjamin and i would like the ambassador to comment on the effectiveness of this program which is now a $15 million whether it needs to be expanded either in the amount spent in each country or to add more than five priority countries. to see terrorists long term we must take steps to reduce recruitment of young muslim men into extremist violence and islam organizations. i agree that one of the most important issues of counterterrorism will be to lead them to counter violent extremism by delegitimizing the

extremist narrative and developing positive alternatives to the young muslims as vulnerable to recruitment. now, i do have one here yet but i would like to differ from state department policy, and that is with regard to the mek and camp liberty. the u.s. court of appeals ruled in 2010 that the state department made procedural errors in classifying this group as a terrorist organization. the court's opinion said that the state department to accord the pomi required by law needs to review the status. we would like to see the state department that and i realize ambassador benjamin is not in full control of this entire process. to consider a mek and often

rendered by the court especially not by the foreign policy area the court has scheduled an oral argument from may, 2012. investor benjamin, your predecessor bill daley has recommended it be removed from the list of terrorist organizations. i am not aware, and i've got classified briefings of anything this group has done in the recent years that would justify and continue the designation. i would note leader in this excessively long opening statement that the haqqani group hasn't been designated, and one has little difficulty identifying act set the haqqani group has committed a that should justify putting them on the list of the foreign terrorist organizations. the state department should not list groups as terrorist organizations can't just leave them there. the purpose of the designation

is in part to force the organization to change its behavior and would never be your caused it to be listed, and even that is subject to a dispute no one asserts they have -- that they have taken action in recent years that would cause them to be put on the list. and of course, the contrast of the haqqani network is extensive. i of donilon along. i will make a few more opening comments, and called upon for questions and that means i will have even less time to hear from the witness which lies in been going to listen to him so intently during his opening statement

>> thank you mr. chairman. ambassador benjamin, it seems to me we still have a continuous problem. iraq doesn't want camp liberty to be a permanent camp for the mek residence. you can look at the camp and see that it is obvious. the conditions in my opinion are deplorable. rudy giuliani says it's not the campus a concentration camp. the residents who are all but forestalled of their homes in the camp don't want to be in the camp liberty for a long period of time either into the united states and don't believe either wants them to stay for a long period of time and risk possibly another consulted massacre by the iraqi government i think is an to the pressure. the problem we have is there is no evidence that the mek residents will have anywhere to go once they are determined to be political refugees of 1600 refugees in the case after four months and one transition process began, no one, not one person has been resettled to

afford a country or even been declared a political refugee. until people in the camps start being resettled to the countries, a third-party countries why should can't ashcroft residents view this as a temporary home. the center of this whole issue is the designation by our government specifically to the state department of the foreign terrorist organization at the mek. our country may be willing to take some of the refugees but as long as we call them terrorists we are not going to take them and third-party countries are not going to take them either. in fact, has -- the fact is, ambassador karan and correct me if i'm wrong, we know of no country as of today that has taken our willing to take mek residence. i believe it is all because of the designation. i hope you can explain why it is that a re-evaluation of the mek fto designation is taking so long. secretary clinton told us back in february that she has folks, quote, working around the clock

on this. and i admire if that is true and i believe it to be true but what's the holdup? is there new evidence that is to be considered, confusion about all is or are we worried about them a lot in iran and what they will think? was the problem? why is there no free evaluation? the fto designation isn't just a side issue. it is the one thing that affects the people in the camp. and progress being made to move those people to other countries in the world. i as the ranking member has said have seen all the evidence we can be given about the designation. it's not compelling that the mek should stay on the fto designation. i am willing to see any evidence. i suggest and strongly urge that the state department, the stone wall in this would show the evidence or deanne must this be freed.

that's what the need to do. we need to treat the people in the camp looking indians. they shouldn't be confined to a concentration camp else rudy giuliani has said. it is interesting to be heard in the four matters committee from the government officials with the private officials but north korea should be a fto designation. but they are not. the little fellow from the desert, mahmoud ahmadinejad, he should be designated a foreign terrorist organization but not the mek. show gup '04 de list the mek and i will have more questions leader. thank you for being here. i yield back. >> fto. we are joined today by ambassador daniel benjamin, state department coordinator counterterrorism and the head of the bureau of counterterrorism. ambassador benjamin has been a senior counterterrorism advisor to the secretary of state since 2009.

in the late nineties, mr. benjamin served on the national security council as director for counterterrorism in the office of transnational threats. before entering the government mr. benjamin was a foreign correspondent for "time" magazine and the "wall street journal." ambassador benjamin was the co-author of the age of secret terror, a book that won several awards. so we want to welcome you back to the committee. you're complete written testimony of course is going to be entered into the record. so, we would ask if you would give us a five minute summary if you could and then we will go to the questions. please, began. >> chairman, ranking member sherman, distinguished members of the committee, thank you again for the opportunity to appear before you today. and as you mentioned, i have submitted testimony for the record that provides additional details about the counterterrorism year those policies, programs and budget.

since i appeared before this committee the last time my office was upgraded to fall below status fulfilling one of the key recommendations of the quadrennial diplomacy review. the review will strengthen this the department of devotee to carry out its civilian counterterrorism mission and around the world. in coordination with the department leadership and national security staff and other u.s. government agencies, the bureau develops and implements the civilian counterterrorism strategies, policies, operations and programs we constitute what we refer to as a strategic counterterrorism. it is an approach to secretary has championed, and its basic premise is the united states efforts require the whole of government approach that must go beyond traditional intelligence, military and law enforcement functions to be as the national strategy for the turner was released last year makes it clear, we are engaged in a broad sustained and integrated campaign that harnesses every

tool of american power. civilian, military command the power of the values together with the concerted efforts of the allies, partners and multilateral institutions to address a short term and long-term challenge. the tactical ability identified by the extraordinary last year answer is critical national me that the only one part of our comprehensive strategy which also includes concerted action to reduce the radicalization, stop the flow of the new recruits and create an international environment that is inhospitable for all forms and support of an activity required to sustain international terrorist organizations including fund-raising recruitment, illicit travel and training and while these activities and not from the headlines their wise investments in the long term counterterrorism challenge. achieving these and this requires more power and integration of all foreign policy tools, diplomacy and to the limit with intelligence and law enforcement capabilities.

only this week and we empower our partners within their borders and the regions so they can address local and regional threats before they become global ones as a much more costly response. .. >> what sustains terror script is a steady flow of recruits

replaced terrorists were killed or captured. we must undercut the ideological and rhetorical underpinnings that make the violent extremist worldview attractive. while also addressing local drivers of extremism. to delegitimize the narrative of al qaeda, its affiliates and its adherents, the ct bureau helps stand of the center for strategic counterterrorism communications, an interagency body that works with communicators in the field to counterterrorist narratives and misinformation. it draws on the full range of intelligence information and analysis to provide context and feedback for commuters. the challenges extremist messages online and arabic and somalia on forums, blogs and social networking sites and also produces and disseminates targeted attributed videos. successful cd involves more than messaging. we're also developing programs to provide alternatives for at-risk youth comically social media programs to generate

constructive local initiatives. ever supporting skill building a youth leadership activities and mentoring efforts. let me turn finally to multilateral engagement, and in particular the global counterterrorism forum. strengthening partnerships is at the heart of our strategic counterterrorism efforts. one of our key initiatives is building the needed international architecture to address 21st century terrorism. and thereby to fill a critical gap. the lack of a nimble multilateral platform to allow counterterrorism, policymakers and practitioners to share expertise experiences, and lessons learned, and, of course, to mobilize resources and political will. to this in the. created the global counterterrorism forum. at its september launch secretary clinton was quite clear. we don't need another debating society, she said. we need a catalyst for action. in despair, to deliverable announcement launched demonstrate its action oriented

nature. the first was approximately $109 contributed by several members to develop rule of law institutions. united arab emirates announced its the second deliverable, its intention to host the first ever international center of excellence on countering violent extremism. which is slated to open an abu dhabi in the fall 2012. us and will initially support research dialogue and training to strengthen the emerging international cd community. i see i've already gone over my time, and so with that in mind i will now conclude my remarks and i look forward to your question. thank you very much. >> thank your i'm going to go to mr. sherman first for his questions. >> pick up where i left off, saying in the opening statement about foreign terrorist organization designation.

i've advocated for well over a decade that you and your predecessors, for any terrorist, list of terrorist organizations that evidence is a desire not to be on the list as the ira wants evidence such a desire. lay out what our expectations are of that organization, and if they do meet those conditions, to remove them from the terrorist list. i am concerned that the continued designation of the mek first doesn't meet that standard and that there aren't clear expectations that we have laid out for the mek, that they could meet and justify taking them off the list. the second concern i have is that maybe the process has been influenced by poorly conceived notion that will be nice to

tehran and tehran will be nice to us, and that therefore we will list the enemies that they seem to hate the most as a terrorist organization. and then finally, i think that the continued designation of the mek negatively influences the ability of the unhcr to promptly resettle people at -- of camp ashraf, and to prevent violent attacks on the. we've seen the iraqis justify the violent attacks on camp ashraf, because of any? designation. and we've seen individuals at that camp unable to get refugee status in europe, in part because of that designation. when reviewing potential fto targets, the state department considers terrorist attacks the groups have carried out, whether the group is engaged in planning

and preparations for possible future terrorism, and whether it retained the capacity and intent to carry out such attacks. and organizations activities must threaten the security of u.s. nationals, or our national security interest. there are times when perhaps we should add to the foreign terrorist list more quickly. we did not designate al qaeda the arabian peninsula until days before the attempted bombing of the airline in 2009 by one of its members. similarly, the attacker then dash of pakistan taliban was not designate until months after the attack on times square. and we have not yet designated the afghani caliban, and i had him cosponsored with mr. poe who is just year, a bill to designate the haqqani network, which i think the state

department should designate long before we get that bill passed. so ambassador benjamin, what can we do to make the designation process more nimble, better able to carry out its purposes and to act quickly to designate those organizations that are a real threat, and to remove those who either were never a threat, or have changed their behavior appropriately? >> ranking member sherman, we certainly agree with your desire to be more nimble, or at least to be able to work more quickly on designation. and i would like to point out in the last two years, the office, now the bureau, has done more designations than the previous eight years combined. and we've significantly stepped up the pace of work. mr. royce spoke before about additional staff.

we are trying to build our staff so that we can do more in this area. we consider a vital part of her business, and an essential part of international counterterrorism efforts. and i would add that the last year was, in fact, the most productive year we have ever had. but having said that, the law, nonetheless, and the practice that has been established by the department over the last, over recent decades, requires us to be extremely diligent, deliberative, and complete, comprehensive in our efforts here. and we've not yet found any shortcuts to compiling the kinds of baseline and now sees and inventory of information necessary both to list and delisted that a lot of people are working very, very hard on this, but we haven't yet found the workaround that will get us to an instant recognition of

with a group is on or off the list if we selected do the hard work. >> thank you. i know your folks are working hard. you have done a lot. appreciate your service. and at the same time, a list that would list the mek but not the haqqani network is hard to justify to my constituents, and i yield back. >> just for the record here, i mean, the overall question of elevating the bureau as you and i discussed, we supported a vision of bureau. the point was that the state department had the capacity to do that. the point was that what the state department seek to circumnavigate in the process is that there were actually three elevations, two bureaus, that they were intention to negotiate. they choose laws. so i the end of the day, despite assurances in terms of what the overall staff would be, you now

have more personnel over there as a consequence, including a 17% increase. so that was the issue at hand for us. it's the overall totality in terms of what the state department does with its personal positions, and its ever increasing size and scope. getting down to the issues at hand, what i want to ask you about was a quote from a columnist last week. i don't know the answer to this, but here's his question you can answer it. osama bin laden lived in five houses in pakistan and fathered four children there, kept three wives, had two children born in public hospitals. and through it all, the pakistani government did not know one single thing about his whereabouts. can this possibly be true he

asks. i don't know what the answer to that is, but i did want to ask, ambassador benjamin, for your judgment on that. >> mr. royce, if i may first very briefly, just on the 17% figure, i would like to underscore that that figure, that projection, had already been established well before the work to become a bureau -- >> ambassador, you and i don't really have an argument about that. it's the overall decision by the state department to not live within the constraints put by the congress in terms of the total number of bureaus. and easy way for them to get around it was not to elevate you to bureau status within existing, so i just want to explain that. we are good on that, but it's the agency, you know, it's the department that i think needs to play by the rules that are set

out. in terms of the constraints. but go ahead. >> with regard to the issue of bin laden's residence in pakistan during those years, i can only reiterate what you have heard from other officials. we do find it remarkable, but we still to this point do not have any evidence that suggests that the pakistani government, per se, had any knowledge of bin laden's whereabouts. and we have certainly look at this many different ways, and it is certainly the case that there were some people, i think as then cia director panetta said, there was undoubtedly the case that there were people in pakistan who knew where bin laden was, but we have no

conclusive evidence that the pakistani government knew where he was. >> let me ask you, in africa, if i could get your thought here, especially its relationship with al qaeda, as well as molly, the problems there. after the easter attacks on a number of churches in nigeria that left dozens of people dead, and we had a high ranking member of the state department say that religion is not driving extremist violence in nigeria. then you, following that, the recent military coup of molly. and islamist fighters have now

descended on the northern part of the country. top leaders of al qaeda's north african branch have been seen in the area, reportedly. so i would just ask you, what is the outlook there? i had a muslim governor of northern nigeria and province tell me that he was very, very concerned with the change in the indigenous islam of nigeria as imams were being imported, always with government, they bring a lot of money with them, but there was always and a mom from the gulf state who would then set up shop and begin expressing a different type of islam, then the indigenous islam that he had grown up with. and he was concerned for his safety, his security in northern

nigeria as a result. i would just like your insights >> thank you very much sir. we are deeply concerned by what is going on in nigeria, and while i would agree with, whomever made the remark that religion was not the principal driver, it is certainly the case that extremism in the north, and in nigeria, is being expressed in interreligious strife, and there have been lots of attacks on churches. that is obviously the case. we are deeply concerned about any connections that boko haram, which is a loosely organized organization. and that sort of a cluster of organizations. they have in particular with al

qaeda and the islamic maghreb. it seems there's some other tradecraft, some of their ability for terrorist attacks was learned from aqim. we continue to encourage the nigerian government that the phrase highest levels to also effectively engage communities, volvo to extremist violence by addressing the underlying political and socioeconomic problems in the north, and those problems are considerable. the department is going to work through, together with other relevant agencies, and the government of nigeria and international partners to deal ways we can't even capacity of boko haram to carry out terrorist attacks against the us, against us international targets as the u.n. compound that was bombed. and also to prevent attacks against our friends and their interest in niger as well. >> well, if i could interject here in terms of putting an end to that, the observations he

made to me, muslim governor of this northern state may to me, is that as long as you will have the importation of religious leaders, with the students, according to him, he'd been in this particular madrassa which was across the street where he was educated, but with a very, very different curriculum. he said the young men were wearing osama bin laden t-shirts. if you indoctrinate and raise a generation of young kids with that type of ideology, just same issue we're talking about with pakistan, as long as these schools come some six or of these particular schools continue to do that, in pakistan, now that they're doing it in nigeria, have been doing it for a while, you have got to expect problems from the graduating class. you talk a lot about, you know, addressing these different

factors. but to me it seems that the brainwashing and indoctrination of this type of ideology so early in life, when you're teaching people to commit jihad, and giving them that absolutist viewpoint, which at this particular boko haram wants to, you know, if it's education itself is a sin and the goal is simply to indoctrinate and brainwashed, without solving that problem, without shutting that down, the rest of it doesn't seem too persuasive to me. our inability to get the government in pakistan to shut down those 600 schools over the last generation is something that is beyond me. it's beyond what the pakistani government won't do it. and my concern today over what's happening in nigeria is the sa same. >> if i may, sir, the world of

islam is profoundly complex and there's no doubt that there are elements, there are groups, individual donors of the like to advocate believes that involve a strong anti-western sentiment of the kind you are describing who funding activities far from their own homes. and this is indeed a major problem. the ability to crowd out, or to combat, extremist ideologies will depend to some important extent on the ability of those come of countries and other donors to provide the social goods such as education, that will make those schools unattractive spent all right.

we are provide the schools of pakistan to do so. i went and visited some those goals the last time i went back. those schools have been blown up. ism by graduates of these other schools. so all i am saying is until those schools are shut down by the government, in pakistan, this is going to be a reoccurring problem. the pakistanis and four united states, and certainly for our troops in afghanistan, for people in southern russia, for people in mumbai, for people in the caucuses, for people in central asia. it is a problem that is getting exported today, and the problem is the brainwashing that goes on in those schools. in the effort to get the government to shut it down. >> if i may, sir, just one more point. and that is that we do approach other governments with

regularity, and intervene with him to tell them about individuals who are supporting extremism in ways that lead to violence, and acceptable outcomes that it brings with him. this is an activity that we embrace. and it goes on any number of different channels. it is clear something is going to keep us busy for quite some time to come. because of the considerable amount of churn that is going on out there in the world. and that is let to the kinds of rise and extremism that we've seen in some areas. but we also know that in particular there are socioeconomic grievances in places like northern nigeria that you need to be addressed at and as they are addressed, extremists will have much less opportunity to gain federal. now, i did also want to mention the issue that you raise regarding northern mali.

i think that it's important to recognize that northern mali has been a troubled area for many years. it has been a traditional safe haven of al qaeda in the islamic maghreb for never gives, really since that group was largely pushed out of its traditional region in algeria. and it is a very sparsely populated area, and was always only barely under the control of kashmir the u.s. government has invested significant resources in helping their neighbors reclaim that sanctuary, and extend the government there. unfortunately, those efforts are addie hall down because of the to. has not been a new influx of extreme into northern mali. weather has been is a soirée

rebellion, the latest in a long series going back over a century. and this has disrupted all of our ability to work against aqim in the region with our regional partners. and we have a lot of positive successes to report over the last few years in that collaboration. but we are deeply concerned about the situation in mali, and working in particular with others in africa to see to it that mali returns to democracy and we can return to our collaborative efforts to rid northern mali of aqim. >> i'm going to go to mr. poe, before i do, the profile, many of these extremes are engineers. they are people who are middle-class backgrounds come certainly bin laden is an example of that. muslim governor i know came up with 1/100th the budget of the one committee is not a radical.

what has created the radicalism is, in fact, that we have not stopped these particular people from and doctor nadine kids. and until that is done, the problem will expand. mr. poe. >> thank you, mr. chairman. mr. benjamin, we meet again. it's kind of like groundhog day every six months, a year, we come to the same part of down and discuss the same issues. my understanding is the foreign terrorist organization has got to do with several things to be a foreign terrorist organization. first, they must be a foreign terrorist organization. they must engage in some kind of terrorism or terrorist activity and have the capability to engage in that terrorist act. and they must threaten the security of the united states, or u.s. nationals. 2004, they gave up their weapons to the united states military.

since that time, name one terrorist act for any k. has committed since 2004. >> it is not our contention that the mek can be, has committed an act since the group was disarmed. >> excuse me. i only have limited time. so has not been an act of terrorism i mek against the united states since they gave up their weapons to us, is that rights because we do not allege there was such an act. >> do they have the capability today, 2012, to engage in some terrorist act against the united states?

>> we have not come to the conclusion on that. >> you don't know whether they -- you are the guy who's supposed to tell us about terrorism in the world. you don't know whether mek has the capability to commit a terrorist act against the united states? >> mr. poe, no one has been into, to inspect or otherwise investigate what is in camp ashraf right now. we also cannot rule out the possibility that the mek may have weaponry elsewhere. >> you don't know that. you don't have any evidence that the mek has a stockpile of weapons someplace. you have no evidence of that, do you? >> i can go into the intelligence record on this in the senate. >> well, let me ask you this. since i've seen all of the intelligence you have furnished this committee, myself, ranking member sherman and the others, is there any new evidence since the last briefing we got by your

department, cia? and if there is, are we going to get a briefing on it? >> we certainly would be happy to entertain a request for another briefing from the intelligence community. i think it's safe to say that there's always intelligence coming in. and, frankly, i don't know exactly what was in the briefing you got, which was quite some time ago, but i will say that this is a deliberative process and we are working hard on it. and we are not finished. but i do want to emphasize that, as the secretary has said, given the ongoing efforts to relocate the residence of camp ashraf, closure of camp ashraf, the nikkei's main paramilitary base will be a key factor in any decision regarding the mek's fto status. >> last year in may when you hear you told me that the state

department was come to make a decision within six month on whether to continue the designation or to the list them. we are a year later. how much longer is it going to be before you all are going to make a decision? >> well, i certainly regret the fact that my prediction on that was incorrect. i cannot give you a date. as you know, the parties are in court on that as well. we are working as fast as we can, and as i said before, it and as secretary has said, the closure of camp ashraf will be a key factor in any decision. spent without going into any classified information, had you received any new information in the last year about the mek's activities as a foreign terrorist organization? >> we have certain collected more information in the last year. and effect we received information from the mek itself,

i believe in june, that had an exchange between our attorneys and there's over this issue. >> so have you received any information that they are continuing, that they are a foreign terrorist organization? that's a specific question. not what you receive from them. have you gotten any information the last year that indicate it does have any weapons is a foreign terrorist organization? >> i cancer, that really does go to the question of intelligence which i just can't discuss in this setting. >> i am requesting a briefing the appropriate chairman that we have that confidential briefing. may i have unanimous consent for another minute? >> granted. >> thank you, mr. chairman. very quickly, when i was in iraq last you with other members of the committee we want to go see camp ashraf. one reason that maliki indignantly refused to allow us to go to the camp, and one reason he claimed he was treating the people in camp ashraf the way he was in a very

inhumane manner, in my opinion, was because united states continues to put them on the foreign terrorist organization. is the united states succumbing to pressure of maliki and having government, the mullahs specifically, to keep them on the fto organization list? >> absolutely not be our decision is entirely going to be on the merits of we're not keeping them on the list because it anyone else's concerns or views regarding the group. >> thank you, mr. chairman. >> thank you, mr. poen. fore i begin to i begin i ask unanimous consent my full statement the entered into the record? >> without objection. >> thank you, mr. chairman. welcome, ambassador benjamin. the arab spring, i just came back from both egypt and libya over the break, and have some views about what's happening in both of those countries. from the united states point of

view, does the arab spring and its outcome so far help or hurt, or have no impact, on antiterrorism counterterrorism policy and? >> well, it's an excellent question. let me frame it this way. the arab spring, the air the awakening presents everyone who opposes extremism with an extraordinary opportunity. and that is to build the democracies in those countries, countries where people were denied their legitimate rights, to build the kinds of democracies that would provide a place where people could express their dissent without turning to violence, where people would have a stake in society so they would not want to turn to violence -- >> mr. ambassador, i understand. my question is particular are there conventional governments in egypt and tunisia, do you

find cooperation is about the same, improved, or actually degrade? >> i would say the in the case of tunisia is undoubtedly improved, significant. and, in fact, my office will be conducting programs under the antiterrorism assistance program there. there's no question there's been an improvement. we have a better relationship with the tunisia ever. i would say we have a good but nascent relationship on counterterrorism with libya. and our counterterrorism of operation continues with egypt, which is obviously a state, a nation going through considerable, major events. but we continue to work closely with them, and we're optimistic that that cooperation will continue into the future. >> thank you mr. ambassador. with respect to pakistan i to question. first of all, is the united states going to be satisfied

that after the tragic incident on the border that we are back on track in terms of cooperation and collaboration with respect to counterterrorism? >> secretary clinton has said, this is a very complex relationship that we have with pakistan. and there's no question that there has been something of a pause caused by the tragic incident. we are hopeful now that pakistani parliament has concluded its deliberations, that we can continue to build the relationship and to get over the tensions of the past the we know this won't be easy. there's a lot of contentious issues, what we believe we are going again in the right direction spent are they cooperating? >> on, on a number of issues they certainly are. >> on april 12 you mentioned pakistan's parliament

unanimously demanded the end of all u.s. drone strikes in pakistani territory. what's the reaction and if there cooperate with us, how does, that seems to fly in the face of cooperation. >> we are still studying the resolution that impacts the parliament passed, and we are engaging in talks with the government to see what the implications of that are. and, of course, this is a program that we don't discuss in public so i'm afraid i can't really go beyond that. >> well, without discussing the program, let's just discuss the policy. wiwhen another legislative body unanimously does something, that would suggest that certainly at least in the legislative side of that government, they've taken a pretty firm position of noncooperation.

it's not a classified matter that the united states has deployed a drones both in pakistan and across the border. should the congress of the united states not read into that a resolve to end cooperation, at least with respect to the deployment of that technology? without getting into the deployment of that technology. >> my own view, sir, the thing to do is allow us to have our conversations with the pakistani government, and to see how it wishes to act on the basis of irresolution which i believe is nonbinding. >> mr. chairman, i know my time has ended, but if you think this is a very important development, and i understand the diplomatic nicety being expressed here by ambassador benjamin.

but i was have a say for the record that i think this is a great matter, and i think that while the ambassador plead for patience and he deserves patience, patience is wearing thin i think in the congress on both sides of the aisle. with that, i thank the chair for this time. >> take you. i had one last question for ambassador benjamin. and that, just going through your testimony last year before the committee you testified that we continue to see a strong flow of new recruits. i was going to ask you if that strong flow is still state of play, what do you see? >> it's hard to measure the flow of recruits, but we have a strong sense that in many different parts of the world,

that terrorist groups are indeed gaining strength. this is certainly the case in yemen, where aqap, al qaeda in the arabian peninsula, now holds territory as i mentioned in my statement, and where it has picked up membership. we have seen that what is going on admittedly not in an age affiliate but in boko haram which mention before suggests that group has grown in strength. we deeply that a.q. am and the islamic maghreb has also probably added some recruits to its ranks. the exception is probably al qaeda core in the federally administered tribal areas. that group is in particularly ethical circumstances, as i think is well-known to this subcommittee. but, you know, i believe that

our work in strategic counterterrorism and particularly countering violent extremism is as essential as ever, precisely because even though many of the peaks of this movement have been cut off and don't threaten us in the way they did before, there remains a large number of people out there who are committed to violence against the united states, its values and its friends. and that's why i believe that we need to do we can to cut off the flow of recruits to these organizations. >> one of the areas where counterterrorism has been pretty effective is with the philippines. do you see a continued joint special operations task force philippines, do you see that continuing as it has? >> sir, i think that is a question best for the department of defense, but i was certainly

agree with you that both on military side and on the civilian side, we have had very good, very good results in the philippines, and i think it demonstrates the kind of advance is you can make with a robust capacity building effort, and robust coordination between the two. our military and others, and when i look around the region, in particular of southeast asia, i think we have a strong model of what you can do with a robust engagement with these countries, whether it's the philippines, indonesia, or others. and i was certainly amend that to the attention of the committee. >> thank you. thank you very much, ambassador benjamin and thank you for your testimony here today. we stand adjourned. [inaudible conversations]

>> when i was embedded in eastern afghanistan, the soldier started telling me than the u.s. government was wasting tens of billions of dollars on totally mismanaged develop and logistics contracts. spent in funny the enemy, douglas wissing follows the money in afghanistan finds corruption right into the hands of the taliban. >> i was in one meeting where the brigade commander was in a kobe effective guy, this is not long after president obama took office, and the state department was out there saying, okay, we'll give you a whole bunch of development money. counterinsurgency, we would do this, when their hearts and minds, nation building.

and the colonel said don't send me any more money. send me contract officers that can oversee this stuff. i need people, i don't need more money. >> douglas wissing on bankrolling the enemy, sunday night at eight eastern on c-span's q&a. and on may 6, look for a q&a interview with robert care, but to coincide with the release of the passage of power, volume four in the years of lyndon johnson, his multivolume biography of the 36th president. >> senior irs officials described a $300 billion tax gap to a house oversight committee on thursday. blaming it on a lack of enforcement resources and taxpayers. they discuss identity theft and how processing refunds more slowly helps avoid fraudulent tax refunds. it's about an hour 45 minutes.

>> today saying of the subcommittee on government organization efficiency and financial management will come to order. we certainly thank everyone for being here today, the witnesses and guests and my ranking member, mr. towns, from new york. are here today focuses on two key issues at the internal revenue service. first, i will address the tax gap between what people all in federal taxes at what the irs ultimately collects. second, the hearing will review the increasing problem of identity theft related to tax fraud. federal taxes make up about 96% of the governments total revenues each year. because of this it is very important that the irs is able to effectively click taxes and enforce federal policy. the majority of americans pay their taxes voluntarily and on time. but every year there's a gap between the amount of federal taxes owed and the amount of irs

collects. earlier this year the irs releases most recent and also on the tax gap using data from 2006 tax year. that data shows $450 billion gap between taxes owed and taxes voluntarily paid. irs recovered approximately 65 billion, this amount of making the net tax gap 385 alien dollars. according to a national taxpayer advocate and the average household must pay approximately $3400 more for the government to raise the same revenue they would have collected if everyone paid their taxes in full. there are many causes of the tax cut, including intentional underreporting, failing to file taxes. because of this, we need to achieve an effective and appropriate response and to close the tax gap if using third party information to verify tax

returns could increase voluntary compliance. the treasury department has recommended increasing penalties for people purposely do not comply with the federal tax law, especially the egregious way, and more for repeatedly failing to comply. simple line but also help making easy to file taxes and reducing the opportunities of willful tax evasion but we'll hear more from our witness today about solutions, how it can close, how to close the tax gap and better served all of our taxpayers. this hearing will also address identity theft related tax fraud. identity theft affects thousands as we're learning, more and more, hundreds of thousands of taxpayers each year. and has a significant impact on its victim to identity these often steal personal information from taxpayers include name, social street numbers and addresses. with this information they can file fraudulent tax returns with the iran's and receive the refunds that owed to the legitimate taxpayer.

victims may not even know they have had their identity and tax returns to it until they go to file their own return and irs notifies them that someone has already filed on their behalf. fraudulently filed on their behalf. they can often take months for irs to resolve these cases. and issue refunds to the legitimate taxpayer, the victim of the crime. identity theft related tax fraud is serious and rapidly growing from that has been focused on two prior hearings of this subcommittee. while significant work is being done to address this problem, i certain committee iris for their efforts, we must do more to protect taxpayers from criminals who steal their identities and their refunds, and do harm, not just to the individual victim, but also to america and the hard earned tax dollars of lawful citizens. just this week authorities reported that a man working for health care nonprofit stole the identities of more than 50 brain injury patients, to steal funds

from the american people through fraudulent returns to the american people deserve a government that protects the taxes they pay, and fairly and equitably enforces the law. we need solutions to ensure that on his taxpayers are not unduly burdened because others do not pay their share. we must also work to reduce identity theft and prevent it before payments are issued to criminals. today, we're joined by four experts regarding these issues. does have extensive knowledge about the promise that exist within the federal tax system. i look forward to testimony of eyewitnesses, and to continuing to work with each of them, and all partners, including here within the subcommittee, to better prevent tax fraud, fairly administer the tax cut. with that i yield to the previous chairman of the full committee and the ranking member of the subcommittee, and previous chairman of the subcommittee, my good friend and colleague from new york, mr. towns, for purposes of an opening statement.

>> thank you very much, mr. chairman. let me thank eyewitnesses as well. i think this is a very timely hearing. this is the third hearing in a series held by this committee, how the irs handles the growing from of identity theft and tax fraud. as of march 3, 2012, the irs had already identified over 440,000 tax returns with two points 7 billion claims fraudulent refunds. fortunately, irs screening prevented 70 -- 97% of those fraudulent claims from being paid. today, the irs is doing a better job of protecting the taxpayers and the treasury from criminals than ever before, and we salute you for that. but more is required of us to stay ahead of the criminals. and to help the victims. one of the first priorities we must address is the quality.

given to taxpayers who were victimized by employment or tax refund fraud. the inspector general does not paint a pretty picture about the irs will be able to handle this problem going forward. it seems as if taxpayers will have fewer walking health centers, with shorter business hours, and longer hold time on the phone with irs agents. budget cuts are the primary reason, but i hope we can find alternate solutions to these issues. today, we will also focus on the $450 billion tax gap. this tax gap beaches nearly 20% of our forecasts deficit. for this fiscal year. we simply cannot afford to look the other way and just not do anything.

part of the tax gap is a result of tax cheats who simply refuse to comply with the law. which increases burden on the rest of us. but confusion and an intention errors as well. i am sure that we can all agree that the tax code is extremely complex. this complexity makes it hard for taxpayers who honestly want to pay their taxes, to figure out what they actually own. and as a result, they can accidentally overpaid or underpaid. we must do more to understand the sources of the tax gap, and compliance burden, so we can make progress in uncovering new creative solutions. we cannot close the tax gap by enforcement against the average americans who are doing their best to comply with the tax

laws. we all have to share the burden and do more. and let us work to reform our tax code in a way that will help us collect more of the taxes that are owed. but not a. and let us continue our work to make the tax code more fair and simple. in order to do that, we must work together. i thank eyewitnesses today, inspector general miller, for your adventure today. i think all of you for being here. and i look forward to the testimony with great anticipation. we need to make certain that people are protected an obligation and responsibility to do it, and i think they're working together, we can do a lot better than what we are doing. this is not a committee here to

blame you, and you blame us. this is a committee to come up with some solution. thank you so much, mr. chairman. >> thank the gentleman. and would echo your final comment there as well, that we're about working with you, and all, to solve problems, not to play gotcha. we appreciate eyewitnesses into today. we will keep the record open for seven days for any additional statements for extraneous materials to be submitted for the record. i would not be glad you are witnesses. we are honored to have four very dedicated public servants, day in and day out seek to serve the american people with great distinction and honor. and to bring great expertise to the benefit of subcommittee today. so we thank you for being here. we are honored to have mr. steven miller, deputy commissioner of service and enforcement at the internal revenue service. ms. nina olson, national taxpayer advocate, audible the j. russell george, inspector

general for the taxes ministration, and mr. james white, director of strategic issues at the unisys government accountability office. we thank each of you for being here. we have had a chance to review your written testimony, appreciate your submitted that at a time. it allows me to go through it, famous for my blue marker and taking notes of things i want to try to get you in the time we have dick we do appreciate having had in advance, and welcome your test went today. if we can try to stay to about five minute window, and that will hopefully allow us to get to all of your opening statements before running to the floor for votes and then coming back for question. commissioner miller, if you like to begin. i apologize. if i could ask all 40 to stand, pursued her committee rules, i will swear you win. if you could stand and raise your right hand. [witnesses were sworn in] >> thank you. you may be seated and let the record reflect all four witnesses affirmed the oath.

we will now begin with commissioner miller. >> chairman platts, ranking member towns, my name is steve miller. deputy commissioner of the internal revenue service. i appreciate the opportunity to testify on the tax gap today and also to update the subcommittee on our identity theft work this filing season. the tax gap is the difference between the amount of tax owed by taxpayers for a given you and the amount that is paid voluntarily and on time. the amount includes the complete spectrum of behavior from confusion to fraud. the tax gap analysis itself is best seen as a directional tool to provide insight into areas where noncompliance exists and the means by which we can impact compliance. that's better for him iran just like, our work shows compliance is most prevalent with is withholding and/or third party reporting. the irish recent received an updated tax gap study covering the tax year 2006, which shows the nation's compliance rate for the year is a little over 83%.

this is essentially unchanged for the last review covering tax year 2001. the report also showed a net tax gap in dollars for 2006 was $385 billion. the tax gap is comprised of three components. underreporting, nonviolent, and underpin. of which underreporting is by far the largest. as indicated, the largest parts of the underreporting category are where there's little withholding for third party reporting. in our view, many discussion on how to reduce the tax gap must consider three guiding principles. first, both unintentional taxpayer error and intentional taxpayer each nation must be addressed. both enforcement and service are necessary. second, different sources of noncompliance require different approaches. and third, any major attempt to address the tax gap by legislation, regulation, or through increased enforcement must be considered within the

context that fully recognizes taxpayer burden and taxpayer rights. in keeping with these principles are strategy involves not only increasing enforcement activities, but also educating taxpayers about their tax obligations, improving customer service in order to make it easier for individuals and businesses to get the help they need to meet their filing requirements, reducing opportunities for tax evasion, expanding compliance research, and improving information technology. with respect to enforcement of the iris is making significant headway in increasing tax compliance. over the last decade tax collections have gone up significantly, and audit rates have risen. some of these games are deteriorating as our budget atrophies. we would ask for use aboard for 2013 budget. we believe the best way to impact the tax gap is through a combination of responsible discussions on legislative change and responsible investments to the irs. turning now to identity theft.

in november i testified before the subcommittee and described our ongoing work. my written test went today i provided an update on irs actions. what you will see is that we've ever that the many initiatives we outlined in november. as before, our approach is to prompt. first we need to stop false refunds before they get out. second, we need to help those who have been the demise. we are, in fact, something much more refund fraud generally and identity that specifically. we have at various do identity theft screen filters in place to improve our ability to spot false returns before they are processed and before refund is issue. the numbers are in my testimony, and i am more than willing to discuss any questions that you have any particular area. on our work with victims we're trained 35,000 of our employees to recognize and be sensitive to identity theft. we have also expanded a program for personal identification numbers, or ip pittsburgh for

the 20 '05 season, we issued id pins to over 250,000 id theft victims which will allow unfettered filing for 2012 for those individuals. we continue to increase staffing to assist identity theft victims, and we are revising and streamlining our process to determine who the real taxpayer is when duplicate filings ocher. again, i will say that we are not done, but we have made real progress in the area. mr. chairman, this concludes my oral testimony. i would be more than happy to answer any questions. >> thank you, commissioner miller. ms. olson? >> chairman platts, ranking member towns and members of the subcommittee, thank you for inviting me to testify today about the subject of the tax gap and tax related identity theft. both of these issues present challenges to tax administration. regarding the tax gap, the irs recently released and that the tax gap of 385 net tax cut estimate of 385 billion in 2006,

and decisive this estimate is understandably attracted considerable attention. there are many causes of noncompliance including difficulty understanding and complying with the law, inability to pay due to financial hardship, and deliberate and sisters -- understatement of texter i believe the complexity of the tax code is responsible for considerable portion of noncompliance. as i've repeatedly recommended in my reports to congress, if you'll simplify the code, while you're working on that and i'm ever the optimist in that regard, that there are other steps that can be taken. first, the irs should be given the resources to substantially improve its taxpayers services. the percentage of calls the iris answers, known as the level of service, has been declining in recent years. for the year-to-date, about one out of every three calls seeking to reach an irs representative has not gotten through. when taxpayers have managed to get through, taxpayers have waited an average of about 14

minutes on hold. the irs is also behind and timely processing taxpayer correspondence with the percentage of letters classified as over age and a half of all correspondence by the end of fiscal year 2011. .. $2.4 trillion in tax revenue last year bringing in about $200 for every dollar invested.

yet the congressional budget rules generally require that the irs be funded like all other spending programs with no direct credit given for the funds the irs brings in. that makes little sense. in my view the tax code and puts taxpayer service and giving the virus sufficient funds to expand the programs in a proper way would go a long way towards maximizing the tax compliance. regarding tax related identity theft, the irs has made significant progress in this area in recent years including adopting many of my offices recommendation. notwithstanding its clear that identity theft continues to pose significant challenges for the irs and the particular emphasis. first, the ira's should continue to work with the social security administration to restrict public access to the master file. second, i am aware that some state and local law enforcement agencies would like access to

taxpayer return information to help combat identity theft. significant concerns about losing the taxpayer protection and believe this is an area we need to tread carefully but as i describe in my written statement of the irs is developing a procedure that would enable taxpayers the consent relief and appropriate circumstances. giving taxpayers a choice strikes the appropriate balance. last, i note that even as the irs is being urged to do more to combat identity theft, tax payers are clamoring to process returns and issue refunds more quickly. while there is still room to make improvement in those areas, the goals are fundamentally at odds. if our overriding goal is to process tax returns and deliver tax refunds as possible for the vast majority of persons who filed legitimate tax returns it is inevitable that some identity fees' will get away with refund

fraud and some taxpayers will be harmed. on the other hand, if we decide to place a greater value on protecting taxpayers against identity theft and the treasury against fraudulent refund claims the irs will need more time to review returns and roughly 110 million taxpayers who receive funds will have to wait longer to get them perhaps considerably longer. alternative they would require to larger staff to enable it to review questionable returns more quickly. there is no way around the tree all. i appreciate the opportunity to testify today and would be happy to answer questions. >> fto. inspector general george. >> fto, chairman platts, ranking member towns, mr. connolly, thinking for the opportunity to testify on the tax gaps and efforts by the service to enforce compliance with the tax code. my comments will address the identity theft and fraud. in january, 2010 the writer is released a bit of estimates over

the tax in 2006 that indicated that the nation's 83% voluntary compliance rate was essentially unchanged from prior estimates. the estimated that the tax get increase from 45 billion to four injured $50 billion as was indicated by mr. miller. my written statement has a table that shows the comparison between the prior and the current tax gap estimates. as also stated earlier the irs reports have been comprised of three primary components combined income of three injured $76 billion a number reporting of tax liabilities, $28 billion due to the mom filing of tax returns coming and $46 billion in underpayment of tax liabilities. the irs report of the growth in the tax gap from the tax year 2001 to 2006 was concentrated in the on reporting and the underpayment forms of

noncompliance which jointly account for more than nine out of ten tax cap dollars. the irs also reported the tax gap is caused by both an intentional tax payers whether it's due to the tax law complexity, confusion or carelessness and local tax evasion were cheating. it all irs needs to overcome institutional impediments to more effectively address the tax gap. these impediments refer to the established policies, practices, technology is our business requirements that ad and intended courts are no longer optimal given today's society. we tend to believe the current institutional impediments in the basis can bring deutsch improved opportunity. i addressed in compliance research car reassess insufficient compliance strategies, determine how best to fix in complete document matching programs to the

insufficient resources. every year more than one half of all taxpayers pay someone else to prepare their federal tax returns. third-party reporting and transparency is crucial to the high compliance among individual taxpayers and as a seat with of the buying and selling of securities with an area that needed third party reporting based on the studies that show low-level compliance and requirements are still awash in 2011 a stylish third-party reporting date on the business receipts for the first time. making it much easier to identify businesses that are either under reporting receipts or not reporting at all. globalization of the u.s. economy has been a major trend for many years. the scope and complexity of the international financial system creates significant challenges for the irs. the irs continues to be

challenged by lack of information reporting on the cross border transactions. the misclassification of millions of employees as independent contractors is a nationwide program that continues to grow and contribute to the 72 billion-dollar under reporting employment tax gap. it to identify more than 74,000 taxpayers who may have avoided paying approximately $26 million in social security and medicare taxes in 2008. they continued to assess the efforts to identify and prevent identity theft. on screen allows individuals are still in identities at alarming rates for submitting tax returns with false income and withholding documents. for processing year 2011 the virus reported that it detected 940,000 tax returns involving identity theft and prevented the issuance of the fraudulent tax refunds totaling $6.5 billion. the amount of fraudulent tax

refunds detect and prevent are substantial. the irs does not know how many identity feeds are filing fictitious tax returns and how much revenue was being lost resulting from the influence of the funds. we have found the issue of the free funds based on the documents presented by the irs and upcoming reports will provide further data to redox is the third party increment withholding information at the time tax returns are processed is the single most important tool the irs could have to prevent tax fraud. a german platts temerity member towns, thank you for the opportunity to share my views. >> fto, inspector general. chairman platts, a ranking member towns and members of the subcommittee i am pleased to be here to discuss the tax gap effect based fraud and help to

reduce them. summarized on pages three and five of my statement as you heard was recently estimated by the irs to be before injured $50 billion for tax year 2006. this is the amount the taxpayers should have paid but did not pay on time. note that this is the amount of unpaid for just one year. of this, the irs estimates as you heard that it will ultimately collect $65 billion from its enforcement actions and late payments by the taxpayers leading annette gap of 385 billion. one piece of context is that the tax gap is persistent at about the same level as a percentage of total tax liability for decades. this despite a myriad of congressional and irs efforts to reduce its. keefer thinking about how to reduce the tax cut is understanding its nature. the tax gap is spread across various types of taxes, tax payers and taxpayer behavior. most of the tax that is for the

individual income tax but the corporate income tax and employment tax were also significant contributors to read much of the tax gap is due to mis reporting of business income even for the individual income tax. but on business income also contributes to be even for certain category of taxpayers the is a variety of ms. reporting behavior. for example, in a recent report we found the sole proprietors ms report both the receipts and expenses and some of each is unintentional while some is intentional. at one level as you heard the cause of the tax gap is easy to understand. income subject to withholding and or information reporting by the irs by third parties such as employers are banks is low in the reporting. only about 1% of the legion come with withholding is this report it. on the other hand, 56% of the rent royalty ansel proprietary income with little or no information reporting business

reported. there are opportunities to reduce the tax gap. but because of the variety of noncompliance, multiple approaches will be needed. no single approach is likely to cost effectively address the casualty the tax gap. opportunities include more third-party information reporting. third-party reports to the irs by the taxpayers and, allow the irs to easily verified through computer matching and without an audit that the taxpayer's return is accurate. as already noted come compliance is high when income as reported by its third parties such as employers or banks. the challenge with increasing the reporting is identifying new ford parties. they must acknowledge the taxpayer's income or expenses and have tolerable reporting costs. also they must be able to enforce the reporting requirements, so for example, a small number of reporting entities like banks can be an advantage. the problems that most third parties that meet these requirements are already required to report.

another opportunity is improving the tax service to taxpayers. service is the kind. for example wheat time to get through to a telephone has been around 16 minutes this year. the model of human assistance responding to taxpayers may not be sustainable given its high cost to the different strategies for answering taxpayers questions such as on the irs website or through paid tax preparers or tax preparation software will be needed. another opportunity is additional resources. with tight budgets to innovate don't keep up with workload growth than the risk is that enforcement and with that voluntary compliance will go down. that could snowball. taxpayers lose faith in the fairness of the system become less willing to comply themselves. another opportunity is increasing the pre-refund compliance checks. during more computerized checks before the refunds are issued could reduce improper payments

and might also limit refund fraud based on theft. leveraging external resources. such resources include pete prepare is, tax software companies and whistle-blowers. we've made recommendations to help irs leverage all three to reduce the tax cap. modernized information. such systems can route phone calls to help taxpayers get the answers the need and support the staff with timely access to data. simplifying the tax code which has also been discussed some simplification committee easier for taxpayers who want to comply do so successfully and make it harder for those trying to evade their tax obligations. in closing i want to highlight the value of the research on the nature and the walls of the tax gap. such research is costly but without a compass and i are left struggling to reduce the tax gap without a fact based understanding of its cause.

mr. chairman, this concludes my statement and i would be happy to answer any questions. >> mek all four of you and perfect timing. i'm going to run over. mr. towns and mr. connally and i will return very quickly as soon as the vote is concluded and then get into questions. we appreciate your testimony. this hearing stands in recess to the call of the chair. [inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations] >> the hearing will come to order. i appreciate everyone's patience. we cleared the floor votes and we will move right into questions and i yield myself five minutes to began certainly the numbers are pretty staggering when you think of almost $400 billion even after

some of that recovery of taxes when we dhaka the taxpayer identity theft and fraud and the fact that we have hundreds and thousands of americans being victimized and billions of dollars at risk. so the issues we are trying to address today are real issues and try to protect the american people as well, are not paying $3,400 somebody else's tax bill or they are not victimized by criminals. starting with the area of the tax gap, commissioner miller, just kind of a structural question number remark, is the data that we are looking at 06 data, we are in 2012, and so i think prior to that it was 01, of years back before we get similar data.

one, is there a plan that this year you're going to update it again, five-year, six years to update the data about the tax gap and what is the difficulty in having it be more current because having six yield data certainly is helpful but it isn't as helpful if it were one or 2-year-old data. >> that's right mr. chair, the process has been to do examinations. so, for example, if we were to do the 2011 year, those returns are now coming in. it would be a while before we would do our -- statistical sample using the 1040 as an example we are doing 14,000 research audits per year to try to update this and it's a continuing path we are on. will be a welcome it would be a few years before we complete those audits before we are able to allow the information with

respect to this audit. 2006 is a long time ago but i'm not sure how much better we would be able to get. i think we would have an easier time going forward than we had in 2001 and 2006 with a better estimating models and we will get more current by don't think we are ever heard going to be -- we will never be the 2011 devotees as we set in 2012. >> i certainly don't expect in 2012 we could look and say in 2011 this is what the tax gap was that it is 6-year-old data that we are still using and especially with technology and i guess it concerns me a little bit that we are still doing audits and haven't really compiled the information from 06

well, 07 or 08 commesso four or five years back. i think that is one of the issues the inspector general raised in the ability to use the data that we have and it deals with identity theft and the tax gap. i understand that it costs money, but if we do it well and act on what you learned will save money and long run by helping us to close that gap in this case. so that is a concern that jumps out is that we are realizing on a 6-year-old data and need to make that more, and so we can be more effective in how we respond to that data tells us. >> mr. chairman, if i may add, these things the irs is doing with a role in the research studies they're going to be doing three years rolled up at a time, so you would be able even though you may be a bit behind, you would -- when 2006 is the renewed deutsch 20007, to the

sedate and tussaud's and meinhold together and moved one year on as you go along. to the point about how long it really does take, if you have even had 2006, some people are filing in october 15th and you may want those people in the sample because they may be complex returns see your waiting for those to go through dhaka processing and then the taxpayers have rights so even though 14,000 of its we have they might want to go to the appeals before they go to the tax court and is eager to the tax court let me take a year and a half before they are out of the tax court and we have to wait until we are final on poll issue and we don't know what is and to be in that 14,000 sample whether there are going to the tax court once or not. so i do think that the irs is told about the role of it really will work and will give us some years of flag it will give us a good data going forward. >> i certainly appreciate that some of these cases were going to be very complex especially

those that going to the tax court. but again, we don't need the data from all 14,000 to be able to assess what's working or not yet if we lost four toes and we had 10,000 to look at. but it's three-year-old data instead of six-year-old data and the would be more beneficial. >> i was just going to and there are certain segments of the tax gap the irs hasn't adequately addressed. for example, the international tax gap. our office invests in hundreds of billions of dollars per year that is due to the american taxpayer, the trajectory and it isn't being paid on time if all. so again, it is an enormous gaps and we pointed out the need additional resources but it's something that needs to be addressed the >> commissioner, do you to comment on that, because i know that is an area where we have from my understanding the most limited information regarding

what efforts are -- again i realize this is an issue of resources and i'm not an appropriate for although i want to look at how we can try to make the case and the documents were turned on investment investing taxpayer services and with a dramatic return and that is compared to enforcement and how we can try to help promote what your needs are. but when we are hundreds of zillions of dollars to needy we are not getting in that category, how can we do better. -- on international tax cut, i'm not familiar with the inspector general's numbers to be honest with you. synnott pages speak directly to that kid on international i can see to things. you are not looking at a single member, you are looking at different components. you are looking at, okay, what's cross border activities of large corporations, and that is one set of the documents that we would look at and we are doing

operational audits and we do is look at that and that is our window into that will treat the other is offshore accounts, which as you may be aware we've done a remarkably good job with 33,000 people that have come to us in the last two or three years with over $4.4 billion of declared money coming into the treasury has made a lot and attack bank secrecy jurisdiction to. tolino the total number with a full policy in either case? probably not. but we are on our way doing good things in both areas. >> i don't want to suggest we are not moving in the recollection, but i think the american people that are paying their taxes and doing their best to pay what is 5,000 or 3,000 or 10,000 then when they see numbers that are -- if it was even tens of billions, but it's hundreds of billions that we

need to do a better job out of fairness to those that are complying with the law and paying their fair share. let me -- one other question before yielding to the ranking member, one of the issues that you talk about is in the current system we use electronic system of collection especially for the withholding of the income taxes and employment taxes and have a mandatory 94% for the irs using electronic collections. can you expand -- the way that i understood your suggestion and recommendation is if we use the same approach to the estimated tax payments it wouldn't just help the taxpayer be more compliant but ultimately generate more collection if we took that approach. >> it's estimated we were very successful once the irs was given a little nudge as they

achieve this goal in the unemployment taxes and getting electronic payments to save the whole government money obviously because we are not processing checks but it also makes it easier for the tax payer after they get used to it. but we should apply that to estimated taxes. i think in some areas it's hard for the taxpayers to save up money to pay their taxes quarterly. so if the compute monthly like they pay other bills and most they pay lots of bills through their banks, bank accounts to setting up payments. if we don't have a good interface, so i think that if we could get some kind of nudge for the congress we have always responded well with that so the strategy then we would get the different parts of the treasury together to make a good user interface. >> it becomes the same argument on making it clear that agreements will achieve in a sense that same goal?

>> gandy that came from trading associations that met with me that said, for example hair salons, they do have an employee like receptionist said they are already in the payroll tax system and the people that cut here are independent contractors 19 booths from them but they get in trouble and then they move on because they don't pay estimated taxes tataris lummis sing if it entered an agreement where these are not our employees because they are renting but we are already in the system we will withhold a percentage and keep them in compliance we will have these people stay with us and we won't have so much of people and when we worked with council they said we don't have the legal authority to enter into those agreements the way that particular code section as written. >> the onerous general counsel, the need additional -- >> the need additional authority so this was a user from the tax payer proposal. >> something we are glad to look at as a committee and try to see

if we can work to allow that because i think it sounds like a win-win for the person that is the independent contractors working in their facilities they don't get the turnover and the independent contractors -- >> and it's not mandatory, it's totally voluntary. stan and ultimately if the taxes are owed and collected. i would yield to the ranking member for the purpose of questions. >> fto very much, mr. chairman. that we began your testimony indicates that the irs has institutional impediments that prevent them from effectively addressing the tax gap and of course you mention specifically that even when the irs examines a tax return that needs improvement, often there is no change made to the return, and this increases the burden called

compliant tax payers. would you just elaborate on this a little bit more? >> certainly, mr. towns. bup onerous -- the bottom line is that all irs has complete compliance research and specifically the irs does not know all the sources of noncompliance, so the irs resources cannot be targeted appropriately. the research that is needed is on the relationship between the taxpayer's burden and the compliance and on the impact on customer service and on voluntary compliance. these are furious studies that may have been engaged in the past but we don't believe they've done so adequately. additional research is also needed to measure how establishing benchmarks and other measures to assist the effectiveness of some of the efforts the irs has engaged in the past whether something is working more isn't working. so, for example we know for

affect that when they reach out to a taxpayer the initial relatively high response, that is a tax payer will either a acknowledge that he or she knows the tax off half the rate cut his tax and if the irs believes reaching out to the taxpayer, they don't have the exact numbers yet, the number of weeks or the number of days, we know that the response rate declines and so in a recent report we encourage the irs to increase the frequency which they communicate the tax payers, and the irs to my understanding has declined to do so citing the resources. but that is just one example. in complete compliance strategy the irs systems that identify

the returns for examinations need improvements to qaeda i potentially noncomplying and returns. the collection activity that extends for years has a lower. of the irs has something called the que which is a database in which tax returns for people the taxes which are not handled by irs revenue officers or any other and get it within the irs literally are put in line and that line contains millions of tax returns and keep in mind, there is a statute of limitations on when someone has to comply with their tax obligations. so, millions of dollars are potentially, and reality being lost because the irs hasn't simply addressed these. but one of the most

disconcerting aspect of all of this is that the irs has an incomplete document matching program so the irs does not have reliable third-party data for taxpayers for all taxpayer sectors, and most notably income earned by the self-employed. i carry this card with me and expect every opportunity i can because information that comes from the irs is very compelling with pitfalls. you heard today there's a correlation between the third-party reporting. the estimation of individuals whose wages are subject to withholding report 99% of allegis for tax purposes are estimated to report only 68% of their income for tax purposes of the most frightening numbers the

self-employed individuals who operate businesses on a cash basis are estimated to report on the 19% of their income so there is no question that if the irs would have to have authority from the congress were able to mandate third-party reporting akaka the compliance would go up astronomically i would tell you. as many women and to give mr. miller an opportunity to respond to some of that. >> fto. >> fto. >> there is a whole batch of disrupting to general george's comment. a few things i would like to clarify. one, the national research program that comes up with the tax gap is also used on an annual basis to improve the soldiers come as a weight has even if it to us to do these

things to improve our selection process because we have a living process that filters back in the results as a target our noncompliance. there's no doubt we can improve and we are increasing. the queue in the collection area exists in the cases go to the que when they are higher priority one because we think there are better dollar cases were number two because we don't have the resources to reach them at this point. we are doing a better job of selecting cases for collection. sob firstname first out. i want to make that clear it isn't based on the attributes of a given case. >> let me ask you this frequently. has anybody ever estimated the

fact that you did you have 35,000 employees of identity theft what would happen if you have 55 or 45. what the resources increase? i'm not sure that not having more stuff is an economical way to go. >> so mr. towns, i would agree with you. i think that others that he will have said we believe the irs is a good investment in the we are in essence the people who bring in over a trillion dollars and 90%, to 90% file every dollar that comes into the government, so i think that as we pull people in the and we have told many people to work on theft as we have to and as we should that does impact of their programs. >> if i might comment on some of the earlier points from the

inspector general, the irs does have a project right now that is looking into the impact of service on compliance my office is working closely with the office of research and the investment and we are doing a lot of surveys of taxpayers and will be very interesting what we find out, and this is constantly developing area. i have been very critical of the collection strategy and the use of automation and failure to pick up the phone and talk to the taxpayers because a team can get resolution, but the noticed stream where we set out are in the process and it's very effective but that leaves us with those taxpayers who are not going to willingly come forward and the need may be a little nudge and it's how you do the nudge. the main point of attack that is the incomplete document matching. we have been given significant

tools but he will just repealed the provision more information about purchases that the business is made, but the upshot and we criticize the provision because it has imposed so much burden on the businesses that are going to have to do reporting and i think that is a trade-off in the self-employed area the way that information reporting on the self-employed is to get the household to report on the person that is cutting their grass every week, and you're not going to get that done. that isn't something that we can impose on those tax holders. so, that is what that does is it risked audits and look at areas to think of alternative strategies. i'm not convinced that information reporting is the in all and be all for this tough area that we have got. >> just before you respond including whatever your response

is, getting back to the third party reporting, do you think that the irs is taking advantage of their party reporting now? >> let me start with a quick example that highlights the importance of research and i want to follow-up on mr. miller's's point. the reasons we enacted the basis reporting requirements for the financial and sections come financial securities, that policy proposal was based in significant part on research that was done using the compliance data that the irs developed the estimate the tax gap so that in a symbol of how you can use that data to make changes to reduce the tax gap. it's estimated of the first seven years of the basis reporting proposal brings in $7 billion. that's a reduction in the tax gap. in terms of information reporting, for third-party information reporting one of the ed vintage is there as i think has been discussed somewhat is

that all irs can match that information to the tax returns rather than having to do an audit. audits are labor intensive, jury costly and more importantly this is an alternative to the audits for enforcement process these. the difficulty is in identifying new information reporting sources. there are some that we have raised in recent reports. one is the service -- >> if i can ask you if you don't mind, mr. connolly we are going to come back to those examples of additional sources is that okay? >> i would ask unanimous consent

of my opening statement the would be entered into the record. i would request as to of calling the national treasury employees union statement also be entered into the record i mek the chair. i think you said $450 billion tax gap. >> gross, yes. >> this year? >> as of 2006. >> it's growing? >> yes it is and we believe it is a low figure and part of the discussion indicated that it is an ongoing review, so it doesn't include aspects such as the international tax gap. >> understood. do you think there could be a relationship between the growing gap and the 20% reduction since 1995 in the revenue offices? >> there is no question that if the irs has additional resources they would be able to collect additional.

>> , $450 billion in the money owed to the government we are not collecting, but to the tax gap is? >> roughly. >> is $4.5 trillion. now here we are chemical bigot 4 trillion, sweating the sequestration would be 1.2 trillion. this would be a big dent in the debt if we simply put their resources in the irs to collect the money that is owed. over and above that, this committee led by my colleagues, mr. platts and mr. towns has spent a lot of time on the issue of improper payments and mr. miller i think you were covering it in your testimony what is the estimate of annual improper payments? mistakes get made, refunds get sent to people who really didn't qualify them and the amounts are wrong or whatever it may be but what is the estimated annual

improper payment for the irs? >> just to give two examples. >> welcome know, is there a global figure, 450 billion of tax that was the comparable figure for the annual improper payments? >> let me respond by saying i can tell you definitively that under the additional child tax credit estimated at $4.2 billion a year although the irs to under an interpretation from treasury disputes whether or not that is a natural and proper payment. we don't believe that the congress authorizes the payment of the additional child tax credit to people who are not u.s. citizens and who don't have -- >> but we are trying to deal with global numbers. it would be useful to have a number to be the total amount estimated is $125 billion a year. >> and the year in income tax credit that is estimated about $15 billion a year but i do not have a global number.

>> the tax gap numbers say the tax credits as part of the number reporting that are about 28 billion at 450 or 6% of the tax gap, and so that includes a number of refundable tax credits. >> mr. miller? >> the only thing i would caution is there's a difference between the improper payment which is what went out that shouldn't have gone out and the tax includes all different -- >> i agree i making that distinction and trying to get what is the number. >> i don't have that number. we can come back because again if you set a goal of making it zero, understanding that is probably an impossible task but backing into that, what would be required, would be required to close at $460 million gap and better get a handle on the improper payments because, you know, we are making incredible

and in my opinion sometimes agree just policy decisions on the real damage to the united states of america we are cutting back on investments that are very important if we are going to stay competitive coming in here right in front of us is a source of revenue that we are owed, except this body isn't willing to make investments that we need to make to the and what is very clear from your testimony is for every dollar that we invest in the irs especially in terms of compliance, we have a big return without pain and suffering. and it puzzles one why congress wouldn't seize on that opportunity as one measure to put a dent in the debt without having to create mashing of teeth. let me ask a question mr. miller, if i minister german and then i promise.

you talked about offshore tax havens, is that correct? >> yes, sir. >> that's something every ordinary american taxpayer has, right? >> i hope not actually. >> what percentage of tax filers have offshore accounts crux >> we know the ones and i don't have the percentage with me but we know the ones who are declaring them on the es bar rules or the new rules that call for a check box on the 1040 and we will find out when they come in. >> that is a loophole into law that somebody can take advantage of. it is a permissible act. obviously we have made inroads on offshore and we also have the fact of the rules that are going to require banks to report to the united states does that have

foreign bank accounts. can't think of anybody that has those kind of accounts. according to one study the percentage of income paid and taxes, the top one-tenth of 1% of taxpayers, and that top bracket has declined from 70 to 40%, and if you look at the middle-income contel it is increased 14.9 to 20%. that suggests a rather dramatic regression in taxes paid in the tax code. would you comment? >> i really wouldn't be able to comment on that. >> are the numbers accurate? >> i would have to check. >> would you not agree to the top 1% to choose to pay 70% of the percentage of income paid in taxes is now 40% that's

certainly not progress, that's called regression. so that's outside of the deputy the internal revenue service would be speaking about, sir. >> as olson? >> i don't have those numbers. i would be glad to get back to you. >> would you agree that would suggest to the income tax in the country is becoming more regressive, not progressive. the top 1% is paying almost half of what it used to pay. >> on the middle we are paying more. >> the reason it's difficult to answer that question is that i've just been looking at historical data and it's not clear to me that the highest income tax payers are paying less than what they might have done is to replace a that is why i'm saying i'm going to look at what you are asking in the dhaka

the charts i've got and be able to answer for the record. >> i have to tell you the numbers available to me are quite clear. they are not ambiguous. the decline significantly in terms of the total percentage of income tax collected by the irs. i think you and i think you mr. towns. >> mek the gentleman. before coming back i would just as a seat myself with the gentleman's comments about the need to do a better job of making that investment with revenue officers to get the return on that investment for american taxpayers and similar to how the three of us worked together on the funding levels for the government accountability office and advocating to the appropriations committee members and staff on the return i think that primarily there was like $86 for every dollar spent at the gao. glad to work with you and

ms. towns something if that makes the case and advocates pretty well what the return on investment is. with that, back to mr. towns, and if it's okay mr. white if you wanted to include your referencing some examples of additional data collection that would be helpful. >> this would be additional information regarding the things we've recommended in recent reports. one is payment for services to corporations, not payments for goods but this would be purchases of services from perhaps contractors, outside contractors who may be incorporated. if you're incorporated that it does not have to be reported to irs. if you're not incorporated it does have to be reported. so, one suggestion for additional information reporting is to extend that to contractors who are incorporated. payments for services by owners are around the real estate is another area where we've

recommended increase reporting and then there are also cases where reporting is done now that additional information could be provided. one example was reporting on mortgages. currently the 1098 forms the report mortgage information do not include the address of the mortgage property and that creates problems for the irs in sorting out suspicious returns, correct returns because they are not easy to tell how many properties somebody owns. so there are both sorts of opportunities there. one other point i would mention is there's been quite a bit of discussion about return on investment. this is something in their recent work we highlighted the importance of doing more estimates of return on investment both for the proposed initiatives, which the surface is now doing. and then after the fact hall halt to measure the actual return for investment compliance initiatives so that the service

learns what's been effective, what's been more effective than they thought it would be in the less effective than they thought it would be and that raises the possibility of redirecting the resources to get the biggest bank for the buck. >> mr. george? >> just to touch on what mr. white discussed. in this discussion we talked about the need for the irs to receive additional information, free party information and how that would enhance revenue collection. but what is just as important as what the irs receives the information is what it does with it, and that is a problem that we have reported on before whether it is a 1099 or what have you. the irs will receive this information from an employer and yet and will receive a tax return seeking a refund and it

won't match the time to ensure the information is accurate. so if someone wants to commit tax fraud, you know, they are able to claim more refund than they are entitled to because the u.s. sitting on a timely basis compares the information and that is a major problem. it is resources derived in terms of computer systems are revenue officers or rather refer to mr. miller to how they handle that internally, but it is a significant problem. >> mr. miller? >> i agree with general george, it is a significant problem and it extends to a number of reasons, the key of which is timing. we don't have the 1099 or the w-2 win the return comes in for the refund. we do what we can but under the of current systems we don't have the information to match.

we've recently started talking to the community about being more real-time, which has in mind exactly what the general georgia is talking about, the most information we can have the time of that refund the better off we would all be. we should have the w-2, we should have the 1099 with respect to that person so we can validate number-one, that it is the person should be getting a refund coming in the number two, that the amount is correct. >> can we get there? >> so, we receive many 1099s or we do on march 30th and we already arbor 70 million into the refund stream by that time. >> what changes with -- this is why we are having this hearing come to see what we can correct. that's the purpose. so, what needs to be done? >> this is something that my

office has proposed several years ago and we did a study and looked at many different countries around the world. many countries -- and i alluded to this in my testimony a little bit -- they don't start filing -- they don't issue refunds until the filing season is closed and the it received all the returns and they've had a chance including information returns and they've had a chance to run everything against and to matching and then the issue of the refunds. in the united states people are showing up the first week of january to file their returns to get a refund and it's a major shock to the system. i do understand that some of the payroll processing companies have said it falling needed was a gross wages and withholding that they could provide us that intermission pa pa within the first couple of weeks of january all of the information

classifying the nontaxable health insurance and retirement plans that is what takes a little bit longer for them to process. so i think that dhaka irs is looking as commissioner miller said, engaging in conversations now the the information reporting sector to see what we can get early. i can also tell you that australia took a very interesting approach. some of the united states is doing. they sat down with major partners like the bank and some of the major employers and they said what information can you get us very quickly, and people voluntarily came in and said we can give you this very quickly, then they told the taxpayers if you wait until this date, filing season starts here but if you wait until this date, you can go online and you can see the information that we have come as a you can be sure about what you get, so they voluntarily ask taxpayers to sort of weight in the filing season, and because

they had a presold return so that taxpayers could just sort of download that information and fell in the rest of the stuff it was viewed as a very positive thing. now they are really getting about 40% of their tax payers are actually waiting in using the information that the agency is getting voluntarily come and they are getting to the point they might be able to say okay now we are changing deadlines because we are seeing people moved to a leader in the filing season and that's the approach we recommend it, use it voluntarily. tax payers will wait because they want the certainty. to negotiate with partners like the irs is beginning to do, and rather than bringing a huge shock to the system where the tax payers are desperately waiting for the refunds. >> just to get a little bit to this, a few other considerations in addition to the burden on a

fourth party changing the filing date for the information returned there does need to be enough time held for them to ensure that they are accurate. if they are not accurate or have errors and are much less useful for the irs because it means that they are finding false positives and at that point contacting taxpayers about a mismatched when there may not be a true mismatch one other point of the value of this kind of information returned matching early on before the refunds are issued is that it would to some extent be a long-term solution or at least a partial solution. the irs would be able to do more verification before issuing refunds and the legitimate claims >> you mentioned in terms of statute of limitation there's no statute of limitation on fraud.

>> that is correct. >> okay. >> but proving the fraud, i mean, which comes first, so it's in the queue. if it's there for five years, i believe that is the statute of limitation as far as one having to pay their tax obligations. if the irs hasn't gotten to it is out of the queue, that's my understanding and you can correct me if i'm wrong, commissioner, as if they haven't proven it by then how do they know that it was fraudulent. >> much of the tax gap is not in that que. and there are significant parts of the tax gap that the irs doesn't detect in applying the tax payers that owe that amount one of the issues here is that a significant portion of the tax gap is in very small amounts of

money is spread over millions of taxpayers' there's a lot of small businesses that have reporting problems, those intentional and unintentional, they are small by definition of the tax liabilities what they are small and it raises the question of whether it's worth going after because defining the unpaid taxes in any case you have to audit them and then another question is how intrusive you on the tax system to be to find those relatively small amounts spread over, again, millions of tax payers. >> if i could come just one connection to the general george. there is a tenure statute for us to collect the money and actually i think i would agree that the older and colder, the less likely it is we are going to collect just like any other. but, we do have offsets that occurred constantly and other liens and other tools that do make use of that data and they are collected on.

>> something that mr. white said, other than the direct enforcement that are very valuable tools, commissioner miller mentioned the refund office, a large percentage of collection occurs because the taxpayer has a debt with us but you're also getting a refund and a future year and that is the computer seeing the refund and grabbing it and it goes into the public treasury. but another thing of the irs is doing this year is be a modification if you will. we recommended years ago the sole proprietorship return that you break out the line for reporting income where you say curious and come from 1099 kutz reported on 1099, and here are other incomes. and i just know as a former prepare my clients would come in and show me their 1099 and i would say clearly i'm not going to audit the books but you have

more money than this the new firm and brought in and they say yeah, you know, $100 or something. if you force the taxpayers to have to articulate, they're going to look at this and put all their money in the 1099 and think the u.s. is going to audit me if i don't report some money on the other line, the 1099 in come. ..

and the issue that the ranking member and i have focused our time on with staff and both sides with subcommittee staff. certainly i want to commend the irs for the increased focus on this issue, and it's certainly a necessity as we see the numbers going up each year of those who are seeking to defraud the american people through identity theft related to tax refunds. i know one of the issues is the taxpayer protection unit that has been established as somebody who is a victim of identity theft or believed to have a designated unit. i think that's an important step. i will tell you one of the things that jumped out to me as a taxpayer advocates testimony that is just unacceptable is how i would say it, is the level of service and i understand that

the general goal this year was about 60-plus% level of service and get the taxpayer protection unit level of service in mid-march was under 12%, and even in this past week, the heaviest time was only at 35%. i look at that as saying we are going to create a special unit for those who have been victimized and i emphasize victimized by criminals because of identity theft and we set up a special unit for them to call and we are only helping not even two-thirds when we have the highest level of assistance dedicated to learn the systems and even those that do get through to get assistance, according to the advocates testimony, the average wait on hold was one hour and six minutes. that is not how we should be treating victims and it does to the discussions here that you

know we need to recognize this as a crime and there is a victim of crime. we set up a special unit is a good bang but if the unit can deliver to help the victims, that is not a good thing. and so, dropping the 60% level of service overall is of concern but dropping to 12% for those that are supposed to help those who have been victimized and even those who got help had to wait over an hour on hold. anybody in this room enjoy being on hold for over an hour? i don't think so. i am amazed that anybody stayed on hold for over an hour quite frankly. that is just not acceptable. that is not how you treat a victim of a crime. so i want to recognize that you are trying to do the right thing here, but we are far from where we need to be.

>> mr. chairman, just to make a clarification. the gannett that number went to is different from the unit where taxpayers who think that they have been identity theft victims calls the irs out of the blue. the unit that those statistics go to our a are a unit where the irs sends taxpayers letters and said, we think there is a question about your return and we are not going to hold it so i just wanted to make that clear. >> absolutely and if i didn't make it clear, where there is a belief there is identity theft here and so we set up a special unit for them to respond, and then we put them on hold for an hour if they get through and as the number show the majority do not. >> i agree mr. chairman. i was unaware that 35% was one of the earlier problems and i thought we had resolve that and had i known we would have added more staffing. >> not only do they not have

adequate staffing and extended wait times, if someone calls back to find out what the status is of the case, they are assigned to someone who may not have seen the case before and not handed to the same person who had the institutional knowledge of their case. in addition, time such as recently with the tax wiling deadline, people who are normally assigned to those types of cases are reassigned as a regular tax concern from other taxpayers who dialed the 800 number or who walk into taxpayer assistance centers so there is a way that the irs can certainly run the system a lot better than it does. >> general george you raise an important point in whether the irs has looked into this in the past are not especially when you set up a special unit to respond specifically and certainly at a fraction of the numbers here.

i would equate it to my office or ranking member towns' office. we open over 4000 new constituent cases a year as an office, and that is individuals. now if somebody calls in and the person they are working with is not in, and number of my staff can pull up their case to see if there has been anything but dated since they last talked to the staffer but there is a dedicated staff person that they are working with. and that does make a huge difference than to have to start over. so i don't know if that is anything that the irs has looked at doing so that when you call in, that once you make that contact, that you then -- here is your case manager that you should be dealing with so you're not starting over and having to reeducate. is that something that is being considered? >> it is considered and i don't know whether or woodwork here are not to be honest with you.

generally, and i think the taxpayer advocate and i may disagree on it. we don't necessarily have the resources to say this is your person. what we ought to be doing is to ensure that whoever does get on the phone with you has all the information in front of them and that is what we try to do. >> is that done through the case files and electronically, whoever helps you they then load the document and? >> that is our temp. are tempted to have and remember we are talking about, this is a microcosm of the way we are doing business generally for we can't necessarily come our systems are not permit a single person. we don't believe it's the most efficient way to do it and we can do a single number to a certain -- single person at this point. so we are looking at it and in a perfect world we would have ended individual who is assigned to an account and we have not been able to get there in terms of resources or assistance today. >> all i know is not just in identity theft but in correspondence and automated

collections one of the most significant and frequent complaints we get our taxpayers saying i have talked to four different people and i've had to explain my situation over and over again. i have looked at personally some of the notes people take and you cannot build a story from the notes. you don't know what the person before you did and to mr. white's point, this is where you go in for an internal investment. to do the analysis to say, by saving pennies, you know by having anybody answer the phone, whoever's the next available person, are you really saving money downstream where you get the wrong result and the taxpayer keeps calling back, and then you go take the taxpayer advocate service where there are two employees working the case and you go to appeals which is a higher grade employer and you go to tax court where you have the lawyers and the paralegals in the tax court ers now involved. can we really do a good return on investment with that? you're not saving money.

>> when you add to that the data that has been shared here today, that we know our best chances are looking at the tax gap is the voluntary compliance. the person who is calling and is trying to figure out -- i always use the example of the victim calling in that may have been to frauded or victimized or anybody calling in and the fact that they are calling and is a good thing. they are trying to resolve the case and we want to give them assistance they need and the data shows that. and that goes to that issue of taxpayer services, the return on investment versus enforcement so i think it is a penny saved and an ounce lost. i mean it doesn't seem to be a well thought out thing. in an issue where i acknowledge what i think is a very positive step if i understand this correctly, that something we raised in the first hearing on

identity theft last june i guess it was. and that is somebody files a return fraudulently and a legitimate taxpayer than finds out hey somebody filed and got a 4000-dollar refund and it's going to take a while for us to work through. but even when that happens, you know and working on shortening the timeframe for the victim, that in the past the victim couldn't get any information about the fraudulent conduct even though it was submitted in their name. as i understand your general counsel has issued an e-mail that says legitimate taxpayer has a right to that information of the fraudulent material that was submitted and they can authorize, i want that information and i want to be able to share it with law enforcement because i used the example of a couple of the citizens who testified last year. i guarantee you, they have been given it a year ago the

information, they would have flown to new york with the information, gone to the nypd and said listen, here's where the check went, let's go get the photos from the bank of who came in and collected that money if they have the information and at that point they are being told no. is that correct that it has been changed and they had a right to? >> it is correct mr. chairman that we have the opinion of counsel that we can share that information. it will require what we are doing as we speak, we are rolling out a bloke a law enforcement pilot. we cannot share this information with local law enforcement. >> the taxpayer cannot direct it to be shared, right? >> the taxpayer can authorize there a waiver were it to be shared and we are rolling that out as we speak. >> that is great to hear and in cases of tampa and local law enforcement in florida, with legitimate taxpayer can say hey i want to work with the local

police and give them everything i have. i think that is going to be an important step because i understand we are talking about the average of i think $3500 or $4000 in fraudulent return refund that from a prioritization of resources, the cost of the national level trying to go after those. but the local guys, that is what they do every day. that is what my local police are helping citizens every day is a smaller type of crime or fraudulent kind so i think that is a very positive step. while i am very displeased with the level of service on the tpu, taxpayer protection unit i do want to recognize that is a very important step in the right direction. maybe to other issues here before we wrap up and i appreciate the patience. the issue of social security and the fact that there is fraudulent conduct or those who want to commit fraudulent conduct. i know the irs, i believe the

position is to restrict access to that -- access to that. is that correct, that you would like legislative action to restrict who can access that information? >> i think we are working with the social security been straight in and the administrative more generally on legislation that would do that. >> so that is an ongoing effort but not ready yet, to say here is what we think is the right approach within the administration? >> i think that's right. i think your question would be very well answered to go to assess and have that discussion. they are actively engaged in talking to people about it as we speak. >> something that we ought to look at and how to do that because to me the fact that information is to freely shared sometimes for legitimate purposes shared, but it's too big a target for those who are committing identity theft. the other final issue is a more broad issue and that is the

bounce and if any of the four of you would like to comment, when it comes to fraudulent, this goes to the issue of timing of matching documentation with returns. and i know it's a balance between a quick refund, which those who are entitled to refunds wanted to be as quick as it can but i also say that most taxpayers don't have to wait for a refund if they want to adjust their filings and get the money in their paycheck. so they can get it in an instantaneous refund every paycheck rather than one lump sum or good human nature, you talk about human nature and behavioral management. i will admit, i am one that is kind of forced savings and i would rather get $1000 back then have to write a check for $1000. so i think the mental psyche of how you look at it, but it is a

choice. every taxpayer has to ensure that they don't have to get a refund. if they want they can owe money and come out ahead because they have the money to write a lump sum check. but given that, how do we find that quick refund against the risk and that we are not able to match? with electronic filings, the use of electronic filings more and more the norm, more and more the norm also is the ability to, the typical individual doesn't just have a computer but they have a printer that is also a scanner and that is the norm with printers today. they can scan, facts and print. if you look at filing electronically and baby does not all refunds for maybe a pilot to look at, you have to scan in your w-2's and so rather than wait for it to be mailed in her

match up with a third party, if you want an electronic return you scan in your w-2 so you electronically submit and especially when it is taxpayers. what is the percentage commissioner mella? is that 65% or higher that use it? beats about 60? >> i mean for those it would especially be, i guarantee you, if you are provider your ability to scan a document is a given. is that something we should consider? >> if i could start out, couple of things. i think two separate points altogether which is in four savings, think it is absolutely true for you and i but it's less true as you go down the income scale where you have the unearned income tax credit. it is a changing circumstance and for those -- >> i think that is a very valid point.

>> on the second piece i think we should look at everything we possibly can, and we need to get better at our screening and we need to get as much information as fast as we can to apply it to refunds as they come in. on the scanning item, we certainly should look at it. i think at this point, to be honest with you, we still got a lot of paper fraud and they have done made-up w-2's. i'm not sure that is of itself a piece of a larger strategy and absolutely we are looking at it but i am not sure in and of itself, that would ea game-changer for us. >> i agree. i have the same concern about the scanning that the i.d. thieves are making of w-2's and so getting one from the taxpayer doesn't guarantee that it's legitimate. what we need to do is get the information returned. the w-2 employers faster and that is where technology would

he help for a lot of the deadlines that mr. miller mentioned earlier for due dates for the information returned set many years ago and with more modern technology it may be possible for third party, partly certain kinds of information returns to submit them much earlier in the filing fees so that they could be matched to returns. there other things that need to be in place to make this work as well. the irs is modernizing its information system but obviously we need systems in place that can handle massive amounts of data. the irs gives billions of information returned teachers so you are talking about a lot of information that you would have to match very quickly so you are not making taxpayers wait for refunds. >> i would note certain software software -- do allow for people to download their w-2's electronically so it does exist but you are right, it's $65 to purchase that

package and some people don't want to make that expense. >> we have thought about behavioral modification. i think the demise of refund anticipation alone, you know, refund anticipation is you will get your tax return tomorrow so suddenly the irs giving you money. deposit -- direct deposit within 10 days looks like an enormously long time. i think we have to really think hard about messaging and communicating with taxpayers to talk to them about what is the reality of the filing season and that they actually really do want us to do these refund screens. and the first year depending on this money, like you have always, but if you can adjust your behavior, then you can depend on it in the future at the same time every year. the lower income use it for paying their heating bills, for

putting -- studies show they use it for things like lying refrigerators, buying school clothes and stuff like that. so i think we have to work with the larger community to get people used to it that i think the irs has to step up to that plate and really change expectations and behavior. >> mr. chairman? two final questions related to that. one is with the information that is provided with a provision on certified tax for -- repairs. when there is a professional page tax preparer, did they have to certify and then they sign when they prepare the document into the return? do they have to certify some way that they have seen the w-2 or the supporting documentation? is there an affirmation that

they have to make? >> i don't think the signature means that mr. chairman. i can get back to you on a moored detailed discussion on what exactly are they signing when they signed the return, but the due diligence that they are required to do i think is at a broader level than that. but i can come back with that. >> and finally, just looking at conduct and the type of fraud, are we able today -- we talked last year and it was about the issue of debit cards and what percentage of identity theft and fraud is paid out on debit cards versus deposited into a bank account? the ability for a criminal to go in and access money through the bank account, there is much more of a trail to be followed if we are going to pursue the criminal content, different than a debit card. >> i think i will have to come back to you without as well.

we have seen an increase in the use of debit cards and you are quite right,. >> i think that goes to the broader issue of the assessment of the information that we have and if we are identifying, say there are 400,000 possible cases of identity that if that were identified or stopped, what percentage of those are asking for refunds on debit cards and as to, she would be issuing debit cards? >> i'm not sure we know that. >> that is what i'm getting after. i think we need to know that. >> i think the debit card -- >> the financial management services and the treasury that is making the payment, uses an account number. whether it is said debit card or a bank are. that would be something that is done by the software providers. those are discussions that are ongoing.

i agree with you. >> when you hear the testimony with the information from tampa where they go in and a former drug dealer, they go in and have 50 debit cards with $4000 on each of them with fraudulent returns, it seems you know, some evidence that the criminals or the organized criminals doing this are using that method more likely than any other method. again, data analysis is what i'm after. >> i think one other point because there's no doubt we are seeing the same stories you are where there are rows of debit cards. i want to make it clear, if we have stopped the refund, the criminal won't have a debit card. there will be nothing loaded on it and when he or she goes to load, there will be nothing there. they will have to stop by us or by the debit card company

because it is finding fraud as well. those stats, i'm sure some of them have money, don't get me wrong but it shouldn't be assumed they all have money. >> 's via the final comment and then we need to wrap up. on the issue of -- identity theft i want to reemphasize and this is about the victims, legitimate taxpayers who are victimized by criminals and there is maybe no more egregious example then what i reported this week of a fallen hero of this nation who gave his life in defense of this nation and when is parents came to learn that not only did they lose their son but their deceased son gave his life for defense of this nation was victimized by identity theft related to taxpayer refund. that just epitomizes the type of victimization that has occurred and we need to do right by that family and every individual.

those legitimate, hard-working, law-abiding citizens are not victimized and if and when they are, that we can tighten this up. i know we can do a lot better in that regard. i wanted tango each of you for your testimony and i tango i thank the ranking member and hopefully -- we are trying to work through this issue with you and how can we help, whether it is the issue of adequate funding for the resources to make that investment and in the end of taxpayers come out ahead or the legislative authority you don't have the need to provide but on also aspects we want to work with you. do you have a final comment? >> i just wanted to clarify something in response to mr. town' comment about the statute of limitations. mr. miller was correct. there is no statute of limitations.

it is willful fraud but there is a three-year statute of limitations on the irs sing possibility to examine tax returns. that was something that needed to be clarified or i appreciate the clarification. mr. johnson did you want to make a closing remark? >> i want to associate myself with your remark and thank you for being here. if there is something we need to do on this side, you know, feel free to let us know because i just think the areas that need to be dealt with come and i think working together we can deal with it. i think -- thank you very much mr. chairman for for this hearing. >> again we will have the record open for seven days for the extraneous materials and responses to the question. appreciator witnesses testimony and this hearing stands adjourned.

[inaudible conversations] [inaudible conversations]

>> senate aging committee looked into long-term care for seniors on wednesday. senators discussed how best to finance care for those who need it there medicare and medicaid while addressing national debt and deficit. it's about an hour and 20 minutes. [inaudible conversations] >> good afternoon. thank you so much for being here. today we are looking at the question of how best to provide and finance long-term care services for the billions of americans who need them while

also balancing our debt, our deficits in our overall financial picture. as we look ahead we are going to have to do more with less. we all know that. in fact we must find better and more efficient ways to provide care because the money simply will not be there. today we are going -- we are here today to talk about some of the ways to save money without doing material damage to the long-term care. the cost of long-term care services, more than $300 billion a year, are already massive on taxpayers and families and left unchecked this burden will continue to grow as our rapidly aging population requires more long-term care. medicaid alone projects $1.9 trillion in long-term care costs over the next 10 years with an annual average cost increase of 6.6%. and we are seeing similar increasing cost trends for

medicare and in some sectors of the long-term care insurance industry. unfortunately, there is no easy answer. wyler two largest publicly financed health care programs, medicaid and medicare, currently pay for the bulk of long-term care, they are -- and private long-term care insurance has the potential to play a larger role. the market is facing challenges. some consumers have been skeptical about purchasing a policy that is both worth the cost and represents a secure and sound investment. to help us meet this challenge our witnesses will discuss a promising strategy for improving services while at the same time restraining costs. particularly i look forward to hearing about the savings we would achieve by reducing unnecessary hospitalizations, by delaying or avoiding institutionalization, and by

increasing the use of home and community-based services. as we would here today, these solutions have achieved some success and could be expanded across the country. as we work to develop policies that enable seniors of all incomes to plan for and access long-term care, we will need the best ideas and we will need to work together in a bipartisan manner. so we look forward to today's hearing, the testimony and the ideas that people here from our witnesses. and now the witnesses, mr. johnson of four is the director of health care and insurance for the u.s. office of personnel management where he oversees the federal employees health benefits programs and more importantly for this hearing, the federal long-term care insurance program. this program is the largest private long-term care insurance program in the country.

mr. loren colman as assistant commissioner of the minnesota department of human services. more than 25 years of experience facilities. mr. colman oversees a host of programs for older adults and is the leading force behind minnesota's transform 2010 program. it is designed to help as they prepare for retirement of the baby boomer generation. dr. holtz-eakin is president of the american action form. he was chief economist with the council economic advisers from 2001 to 2002 and he served as the director of the congressional budget office from 2003 to 2005. professor judy feder is a little long and distinguished academic career, serving as dean of the georgetown public policy institute in washington d.c. from 1999 to 2008.

today she is a professor at georgetown university, a fellow at the urban institute and an elected member of the institute for medicine. we also have dr. bruce chernof with us, the president and ceo of a foundation based in long beach california. an organization dedicated both to research and dissemination of knowledge that improves the health of older adults. dr. chernof also serves as director and chief medical officer for the los angeles county department of health services. we thank you for being here and before we go to your testimony, we will hear from the distinguished ranking member of this committee, senator corcoran. >> mr. chairman thank you. i know you have a conflict at 2:10. i came at the perfect time. i look forward to listening to our witnesses as thank you so much. much. i appreciate it. >> mr. o'brien.

>> chairman kohl, ranking member corker and members of the committee thank you for the opportunity to testify today on the long-term care insurance. the office of personnel management oversees numerous benefit programs including long-term cheap care insurance for federal employees and family members. long-term care is provided to people who need help with activities of daily living or need supervision due to severe cognitive impairment. it can be provided at home, and adult daycare center, assisted living facility or nursing home. most health insurance plans including the federal health benefits program did not provide coverage for long-term care services. this led to the creation of the federal long-term care insurance program. long-term care insurance is an important benefit because people are living longer and the likelihood of needing long-term care services increases with age. after 865 americans have a 76% chance of needing some form of long-term care. long-term care is provided to

people under age 65 who knows help teach -- taking care of themselves due to diseases chronic conditions injury development of disabilities or severe mental illness. long-term care insurance is also an important because services can be very expensive for the average american family. in 2011 the average cost of a semiprivate room and a nursing home was over $75,000 the average cost of home care is roughly $31,000. in 2000 congress passed the long-term care security act which authorized opm to contract with qualified carriers to provide long-term care coverage to federal employees, u.s. postal employees, members of the uniformed services and their qualified family members. in march 2002 opium introduce long-term care program to the federal workforce. this is a tent here for the program is the largest employer-sponsored long-term care program in the country. the long-term per care program is 100%, a one of% employee-based benefit.

the long-term care program both the federal government uses the levers lamarca placed to offer long-term care insurance to federal employees and certain qualified family members. the initial contract to provide long-term care insurance for federal employees was with long-term care partners, a joint venture of john hancock and metropolitan life but then it became available to federal employees in 2002 and by february 203187000 individuals were enrolled. by the end of the seven-year contract term, and roman increase to approximately 220 and 24,000 enrollees. at the end of the contract term in 2009 opm awarded a second contract to john hancock. is part of the new contract john hancock added a new benefit option would increased health care imburse meant, hiler daily benefit amounts and increase payment limit terms for care provided by family member. the long-term care program provides coverage for nursing homes, assisted living

facilities, hospice, home care and other services. in addition to federal civilian and uniformed service employers, other qualified family members who are eligible to apply for the coverage includes spouses, same-sex domestic partners, surviving spouses, members of the uniformed services, parents and adult children. although enrollees can customize the benefits the vast majority, over 99%, opt for one of four prepackaged options. their prepackaged plans offer variations in the daily benefit amount, the benefit period on the maximum lifetime benefit amount, waiting period and inflation protection option. the package includes a conference of care coordination, affordability and coverage international benefits with no exclusions and guaranteed readability. the enrollee king change their options as it needs change and a variety of payment options. since the new contract offered new covert options are were not previously available in 2011 opm held an open season for the

long-term care program. i should note an individual cannonball in the long-term care program at any time but outside of an open enrollment period or within 60 days of their hiring as an employee they are subject to full medical underwriting. what we referred to as open season allows employees and their spouses to apply with abbreviated underwriting which needs to answer your question about their medical history. i should also note during the 2011 open season same-sex partners of federal employees have the option to apply with an abbreviated underwriting. this inclusion follows president obama's june 2010 memorandum directing agencies to extend benefits to same-sex domestic partners of federal employees consistent with the existing law. educational efforts for the 2011 open season began in the fall of 2010. opium along with long-term care partners work to increase awareness about the benefits of long-term care insurance for the federal workforce. direct mail, e-mail campaigns,

workshops, webinars, advertisements, payroll notices and other tools educated the workforce about long-term care insurance. additional information is available on the federal long-term care web site including the ability to apply for coverage on line. clarity and transparency were top ironies of the educational campaign and care was taken to ensure the benefits of the long-term care products were clearly understood. the educational efforts were very successful in increasing awareness among the eligible population that the program is a valuable and cost effective way to protect against the high cost of long-term care. the success of the effort was worn out by the numbers. we received over 45,000 applications are in the 2011 open season and total program enrollment increased 20% from 224,000 to approximately 270,000 members. is long-term care insurance markets continue to evolve, we believe the federal long-term

care program is well-positioned to offer a variety of benefit choices with relatively low cost to enrollees. opium is working to maintain the long-term viability of the program by pursuing policies that will protect current and future enrollees. for example we are interested in pursuing participation in state long-term care partnership which provides asset protection. we are continuing to access benefit. long-term care insurance provides a cost-effective way for individuals making average incomes like most federal employees to protect themselves against the financial catastrophe that a long-term illness or injury can cause. long-term care insurance market is still relatively young and uncertain and opm will need to closely much of the market to make certain that program meets the current and future needs of the family. our goal is to provide enrollees with insurance protection at a potential cost for long-term

care services. thank you for the opportunity to testify today and i'm happy to address any questions you may have. >> thank you mr. o'brien. mr. colman. >> thank you mr. chair and members of the committee. on behalf of commissioner jess and thank you for the opportunity to share with the committee the efforts that minnesota is making to provide the best possible long-term care system for older adults and persons with disabilities. minnesota has a strong infrastructure built over many years of long-term care services and supports for older adults and people with disabilities. last fall we were very proud and gratified to see the quality of minnesota's long-term care system recognized by the aarp and the scan foundation. minnesota ranked number one among all states in the first-ever aarp score bard -- scoreboard with people with disabilities and family caregivers. the report validates the direction minnesota has been moving for the past 25 years.

to reduce reliance on institutional care and encourage access to services in home and community-based settings. technologist minnesota's effort in providing comprehensive phone and web aced information and referral sources for seniors and their families and people with disabilities as well as providing evidence-based support for family caregivers. not that long ago most people that were served by medicaid in minnesota receive long-term care services in an institution. over time we have developed the support needed to serve people in their own homes and communities. today, 63% of the older adults receiving medicaid, long-term care services, get that care in their home or community settings. 95% of persons with disabilities receiving medical assistance, long-term care services, are in community settings. we also proud are also proud of minnesota's nursing facilities. as a state and facility that it worked in partnership for an

improved quality and care. several years ago we launched a nursing facility report card. consumers and family members get access to comparative information on quality and consumer satisfaction. we have promoted innovation in care through performance incentive payments. the median length of stay in minnesota nursing facility is now less than 30 days and the services become rehabilitated the nature. successful collaboration with the industry have contributed to rightsizing the number and distribution of nursing facilities in the state. in minnesota healthy synergy results from having the policy areas for aging adult services, disability services, nursing facility rates and policies and the minnesota board on aging consolidated into the department of human services that i oversee. we have worked very hard over the years to ensure a solid alignment of services delivered

under medicaid and the older americans act. the services on a continuum become the critical safety net for seniors use as they become more frail. eye aligning them much more closely and how seniors transition among each service, we ensured the that the system works anymore cost conscious manner and delivers care better to seniors and their caregivers. the older american act as a critical resource in our long-term care system and support. the senior linkage phoneline which annually serves 89,000 older minnesotans and their families and the complementary disability linkage line and minnesota health .info web site are valuable foundations to our services. the service is services comprise of a statewide virtual call center that allows for a single toll-free access with routing to local communities. professionals answer questions from all types of insurance and medicare products, including our

state long-term care partnership policies and other long-term care options. they are well positioned to answer increase from people seeking to understand the basics and options about housing and other long-term care services as they age. under new legislation, the services are involved in expanding long-term care consultation that helps individuals considering assisted-living to become fully informed consumers. we have found good information as early as possible and also delays the need for more extensive services or the need to access medicaid. linkage line servers that service that expanded under lieutenant governor yvonne to be a one-stop shop for seniors and their families for direct contact with all state agencies on issues they may have within the area of our state government. similar to many states minnesota is significantly challenge the meeting be demand for long-term services and support, especially

as boomers age. we are currently working on a request for waiver that would redesign the probe and to offer benefits based on the need of the individual so as to get the right levels of services based on their need from lower need to hire need. we know the preference of most older minnesotans is to remain in their homes. we want to further empower older minnesotans to make those choices i'm making whom making homemade community-based services the norm in minnesota and institutional care the exceptions. as minnesota has worked successfully to rebalance our long-term care system we also have had our eye on -- and now we are on the verge of watching the own your future campaign in minnesota to encourage people, especially those in the 40 to 65-year-old range. we are building on what other states have done in partnership with the federal government and we are adding new elements. the public or in his campaign

that includes marketing via the web using the temporary messaging such as internet ads, development of more affordable products for middle-income people, better alignment of these incentives within medicaid to support private financing of long-term care. the long-term care partnership is a start but it's not the end. targeted outreach to employers is an incredible source of information about long-term care as financing options. employers benefit from offering workers a sense of control and peace of mind that a long-term care plan can provide. the minnesota business community has expressed a strong interest in working with us. our goal for own your future is not only to raise awareness of the financial risk of not preparing for long-term care needs. we want to improve the quality of life are minnesotans in their later years by increasing the number of those who have taken action to own their future and maintain choices. to provide more details on the

campaign if time allows today. thank you for the opportunities you testify. >> thank you mr. colman. >> ms. feder. >> i'm delighted to be here today to assess -- i am still delighted be with you today to discuss ways to improve the quality and efficiency of services for people who need long-term care. chairmanchairman kohl, you stary asking about ways can -- my we can reduce unnecessary hospitalization for those populations and that is the focus of my testimony. i specifically want to explain why it is so important that the medicare program is top rarity in delivering reform initiatives. two people, the end of fisheries who need long-term care and those initiatives extend kourtney to care beyond medicare to include the coronation of long-term care services. the data that i presented in my

testimony and support from the scan foundation will tell you why this is so important and i'm hoping you have my testimony in front of you. if you don't i'm going to tell you to look for in the data when you look at the picture. the first light we show you, figure 1, shows that despite the fact that we are focusing so much on people with chronic conditions as a source of rapid high medicare spending, when we look at the data it is not the people with chronic conditions alone who are driving high medicare spending. it is people whose chronic conditions create the need for long-term services and support. and in fact what we showed in the first figure is 15% of medicare beneficiaries with chronic conditions and long-term care needs who account for close to one third of all medicare spending. the second figure brings it down to per capita spending in the

fishery spending and i will explain, show how disproportionate that spending is. average per person spending for enrollees with chronic conditions and functional limitations, average spending is at least double the average for enrollees with chronic conditions only. medicare spends almost $16,000 per capita per beneficiary for impaired, functionally impaired beneficiaries and much less for everybody else. the third figure in my testimony shows this pattern for higher spending for chronically ill people who have functional limitations relative to people, chronically ill people who don't, hold true no matter how many chronic conditions people have. even the spending for people with -- per capita spending for people who have as many as five chronic conditions is lower than

for a beneficiary with only one chronic condition, but also long-term care needs. again is long-term care that is driving it. the result is beneficiaries with long-term care needs who rank among the highest medicare spenders. as you can see in figure 4. nearly half the beneficiaries in the top 20% of medicare spenders and 61% of the top 5% of spenders need long-term care along with having chronic conditions. now where is the extra spending going? it's going to take us to the hospitalizations. the data shows is enrollees who need long-term care are much more likely than other beneficiaries to be using hospitals and to have hospital stays and to use hospital emergency departments. we also find that it is higher

hospital and post hospital spending in skilled nursing facility short term spending in skilled nursing facilities by home health agencies that are the largest source of the extra spending that i described to you where people with long-term care needs. the good news is using new authorities in the affordable care act, the center for medicare and medicaid services is promoting deliver innovation through coordination aimed to reduce precisely this kind of excessive hospital and is post-hospital service used. past experience shows us without effective targeting to beneficiaries, most at risk of inappropriate and high hospital use such as the long-term care users i have been describing. the coordination is not likely to produce significant savings. that is why it's so important that medicare target its innovations to people with

chronic conditions and functional limitations and coordinate the full range of their service needs. although limited in number, programs that do this exist and have shown all around the country the smaller number and they have shown promise in reducing hospital use, nursing home admissions and costs for selected patients while improving the quality of care. oms can build on these organizations experiences by encouraging interventions that accommodate the various size and capacity of primary care physician practices and by improving upon that not replacing the fee-for-service payment system, paying monthly amounts for enrolled patients, sufficient support care coordination and other currently uncovered care management services and holding participating providers accountable for savings that offset the cost of coordination. dual eligibles, people served by

both medicare and medicaid, represent about half of the beneficiaries that i have been talking about. but despite the potential i have shown you for medicare savings from coordinating medicare with advanced care, today policymakers have focused overwhelmingly on medicaid rather than medicare as primarily responsible for improving care to dual eligibles. the absence of medicare leadership is particularly high given that 80% of the dollars better spent on dual eligibles and as you can see this as figure 7, 80% of the dollars spent on dual eligibles are federal dollars. more than two-thirds of it flows through medicare programs. to improve cost and reduce -- to improve care and reduce costs for medicare and medicaid beneficiaries, along with the roughly equal number of medicare only beneficiaries who need long-term care, it is essential

that medicare exert its leadership rather than shift responsibility to the state and a major way they can do that is as i described, to give priority and delivery reform to people who need long-term care and hoarding their long-term care as well as their medical services. thank you. >> thank you very much. dr. chernof. >> thank you chairman roe, ranking member corker for the opportunity to testify at this critical hearing today. my name is dr. bruce chernof and i'm the present ceo of the scan foundation independent nonprofit foundation devoted to creating a sustainable continuum of quality care for all seniors. is in a society where seniors receive integrated ethical care and supportive services in the setting most appropriate to their needs and the greatest like a the hood of contributing

to a healthy and independent life. americans today are living longer than in previous generations, often with chronic conditions and functional impairments which increases the number of people who will need long-term services and support. most americans are not aware of the high likelihood of needing long-term services and support at some point in their lives and have few tools to plan for this reality. the cost of this care is substantial, impacting both family financial resources and the ability for family caregivers to engage in the labor market. when individuals and families have exhausted their personal resources and can no longer shoulder these costs on their own, they have to depend on medicaid for help. those who qualify for medicaid long-term services and support generally need the assistance for the rest of their lives. medicaid is fundamental to the current financing and delivery of long-term services and support for low income americans. is the largest purchaser of long-term services and support

and it is the backdrop for all vulnerable older americans who need this level of care after spending their resources. medicaid has evolved over the years from being exclusively for nursing home care to funding critical services in the community that allow for low income individuals with substantial daily needs to live in a place that they call home. several states have taken or are currently taking strides to bolster their medicaid long-term services and support systems with the goal of providing high-quality, person focused and cost effective care to their residents, including states represented by members of this committee. so, for example, in our recent scorecard that be put together with the commonwealth fund and completed by aarp, comparing all states having high-performing, long-term services and support systems, wisconsin ranked fifth in nation. additionally funded technical

assistance in 21 states that seek to evolve their medicaid long-term services and support systems. tennessee is the front-runner in this group, given their experiences with the choices program. current regulations include -- including many positive provisions in the aca already exist, giving states the flexibility to upgrade their operations, create more integrated person-centric care with strong beneficiary protections. under these arrangements, states must increase the quality monitoring and oversight rules to ensure that individuals have a pro. access and quality protections are incorporated into purchasing contracts and are strictly upheld in practice. states seeking only to fight what they perceive as a cost problem medicaid without giving sufficient attention to improving person centered accessing care delivery have a great potential to create undue harm to some of the countries most vulnerable residents. we believe that more

person-centered care delivered and organize systems will generate savings in medicaid. the savings however are not -- are necessary but not sufficient given there will be a net increase in need. medicaid is poised to take on more long-term services and supports due to the trifecta of increasing life expectancy, increasing prevalence of chronic conditions and functional limitations of older ages and baby boomers. some states will experience the impact of these factors on their medicaid or grams faster than others. policy options are needed to minimize the disparity among states to absorb these costs are already constrained resources. those same the same resources that face potential cuts as part of entitlement reform discussions. one possibilities to provide enhanced support experience the most rapid patient aging. we also