>> this is one hour and a half. >> the committee on homeland security, it subcommittee on border and maritime security will come to order. we have a great lineup of witnesses today, but before we began talking but our border, i think it is appropriate for the subcommittee to acknowledge the extraordinary traditionalism and work that happened with the fbi and cia in regards to this recent bombing plot that was happening in yemen. i would say one thing. it is very clear to all of us is that the war on terror is not over. we have so many enemies of freedom that are bent on attacking this nation. i think that americans can be comforted by the fact that we have such a high vigilance and

semiprofessional folks in all of our agencies. and we are going to hear from a number of them today. they are working on the frontlines each and every day to protect us, protect americans against the enemies of freedom, and one of the things that is incumbent on us as a congress, is to make sure that we provide these individuals at the various agencies with the tools and resources they need and the training that they need to be able to stop a plot such as this as we saw here. it is becoming clear some of the various things that have happened. even in the detroit area with the underwear bomber all almost blew up about 300 people in my hometown's. on behalf of the committee and subcommittee, the entire committee, we are all very thankful that this plot was

stopped. today our subcommittee is going to be talking about the border patrol's new strategic plan. our witnesses today our chief michael fisher, québecor gambler -- rebecca gambler, and marc rosenblum. we welcome them all today and we will make the formal introductions after the opening statements. clearly along the enumerated congress provided by the defense, this committee has the authority to ensure that we do secure our nation's borders, and how we determine that or measure that and what a secure border looks like has been the subject of much of this subcommittee's work during this congress. the u.s. border patrol recently released an updated five-year strategic plan. it is the first updated strategy since 2004. this new plan is intended to mark the shift in focus from being resource-based to

risk-based. focusing resources on the greatest sporting threats that we face. principal themes for the new strategic plan is information and rapid response, which are very important aspects to consider as we work to secure the border. at the border patrol has to make the best use of resources that congress provides to it and be poised to respond quickly if conditions change, which they always are evolving and changing. i certainly want to say that i am very encouraged that the border patrol decided to update this strategy to reflect the reality that we face on the border today. i am a bit concerned that the 2012 to 2016 standards to measure our efforts on the border. we will be discussing that today. the new strategy is absent with an emphasis on proven techniques, such as in death, which makes use of checkpoints to deny successful immigration. yet, it is not mentioned at all

in this new strategic plan. i am sure there will be a question on why that is not included. patrolling and using the best until intelligence. the new strategy rightly focuses on using information to better secure our borders. intelligence is an imperfect tool, and some degree of randomness should be incorporated to keep drug cartels and what have you from finding holes in our defenses and watching and tracking our pattern. the most important question in many minds is how do we know this new strategy is working, and so how can we measure it. the border patrol's previous strategy, released in 20 oaf or that it indicated how much or how little of the border to border patrol could effectively control. however, it is clear that the department of homeland security is backing away from the use of that term, operational control, and the absence and strategy is

apparent. today we have not been supplied with an alternative measure to replace this operational control matrix. performance measures, such as the number of apprehensions as noted by the gao in their testimony, are really not adequate to mr. border patrol -- border security progress. i think as i have said and many members have said in the past, we are open to a new more robust standard, as it supplements operational control, and it better describes the level of security at the border. when we get terms that the border is secure more than ever, but how do you measure that? that is what we are really looking for. conditions along the border continue to evolve. it is clear that we need to have an agreed-upon measure to understand progress or lack thereof. the border is a much different place now than it was in 2004. congress, of course, is

investing in doubling the size of border patrol, building hundreds of miles of a system. utilizing uavs that the subcommittee has had many hearings about. however, is the gao has noted, all of these elements were prevalent in the 2004 strategy, so again, be interested in learning what is different or new in the 2012 plan. as mentioned in the strategic plan, the department is working on something called order conditions index, which is supposed to be an objective measure to inform the border security efforts. we have heard some report the anticipated new standard is running into some delays, maybe it is unworkable. again, we will be here to hear how that it's all happening. using apprehension is a measure of progress, it tells an incomplete story. there are a number of reasons why i think migration across the border is down. certainly, our efforts are one

of the components. but the economy is another. it has been weakened. drug cartels are trying to cross the border -- a dangerous endeavor. all of these things are critical elements that play a role in the reduced number of illegal aliens who are crossing the border or attempting to cross. i say that because i shall not take away from the work of the border patrol has done. i think our enhanced efforts and introduction of significant consequences, such as prosecution, has made a determine the difference. at the same time, i think that we cannot be complacent as the number of illegal aliens crossing in places such as the rio grande valley, the texas sector, which has increased, actually, and bucking the national trend. we have called upon the department of homeland security to produce a comprehensive strategy that informs the congress and the american people of the resources that are needed to make that a reality.

i certainly hope that the forthcoming implementation plan will indicate what a secure border looks like and provide us a pathway to get there. i also want to mention, it is the 87th anniversary of the founding of the u.s. border patrol. that is going to be later this month. over that time, the men and women in green have served our nation in such an extraordinary and remarkable and professionally great way. on behalf of the committee, i want to commend all of the men and women of the border patrol for the work that they have done over the last decade as well. the last 87 years -- but certainly, since 9/11 and since we have started to focus on our borders in a much more intense way. they have done an extraordinary and professional job for all of us. i look forward to hearing from the witnesses today on how this change in strategy will move the ball forward. to make for a more secure border. i recognize our ranking member,

the gentleman from texas. >> thank you so much, madam chair, for having this meeting. i am glad that we are here to examine the border patrol's strategic plan. i have long believed that this is a core element of the department of homeland security. after the terrorist attacks of september 11, 2001, congress provided the resources necessary to secure that. we have learned a lot from what happened on 9/11, and we want to make sure that we secure our land, air, marine, and maritime borders and make sure that that takes top priority for all of us. as a result the number of border patrol agents has doubled. last month, there were 21,000 agents. recently there were 1000 in a

graduating class. additional resources also love to be expanded in border infrastructure, such as technologies such as mobile surveillance units. u.s. border patrol refocused priorities in response to 9/11, while remaining committed to traditional duties of preventing the illicit traffic of people and contraband between our official ports of entry. to that end, the border patrol released its first national strategic plan in march of 2004. that plan provided the framework for the ongoing acquisition and employment of personal technology and infrastructure resources along our nation's border. the border patrol has recently began to level up its expansion. this is an appropriate time for the agency to set forth a new plan that seeks to ensure the new border patrol is as effective and efficient as possible. indeed, in order to best the utilized to border patrol's workforce, the agency has

developed a risk-based strategy, which again is something just like the chairwoman and i were interested in them. at the end of the day, we want to see if you put a certain amount of dollars into an agency, what are the results? how do you measure results? and this is something that we so need to do to work with all the folks here. we are trying to find the right results. it can be difficult, but we appreciate all the work you have all been doing to make sure that we focus on results. the new strategic plan is focused on identifying high-risk areas and are targeting the response to meet those threats. cooperations are also key to the 2012 strategy, they serve as a guide in the overall effort of cbp and other areas to make sure progress continues on our borders. the 2012 strategy also built on a strong relationship with mexico and canada, is related and relates to border management

and security. hopefully today's discussion will allow us to gain a better perspective, of not only where border patrol is, but also the future direction of the agency. i am interested in finding out how border patrol will continue to build on the strong relationship with state and local counterparts on the southern border. cheap, you and i have talked about the importance to make sure that all parts are working. we have to involve the state, and of course, the local governments. and i appreciate all the work you are doing in that effort. also, the firsthand knowledge is important. not just the tools to enhance border security, but also a plan to get us there. i am also interested about how they believe we can get to that point. i want to thank the chairman miller for having this meeting, and also for the field hearing in allowing us to be down there in my hometown of laredo.

congressman mike mccall was there. we got to see the work that was done. not only the ports of entry, but we got on the boat's and went up and down the rio grande. we want to thank you for the type of work you are doing down there. i want to thank all the witnesses for joining us today. for that, i yield back. thank you, madam chair. >> thank you, sir. we heard excellent reports. chairman michael mccaul and others as well. it is an excellent effort. we appreciate your service to do such a thing. the turnout recognizes the gentleman from mississippi. >> thank you very much, madam chairman. i welcome the witness and witnesses here. i am looking forward to your

testimony. i have long encouraged the department of homeland security to develop a comprehensive strategy for securing america's borders. it is still my hope that the department will do so. i am pleased that the u.s. border patrol has developed a new plan. the border patrol's strategic plan 2012 to 2016, to guide the agency over the next two years. over the next four years. with the support of congress, the border patrol has experienced unprecedented growth over the last decade in terms of both personnel and resources. it is the ranking member of the subcommittee has already indicated, the number of border patrol agents has more than doubled over the last decade. from over 10,000 in 2002 to .

with about 650 miles in place along the southwest border today. furthermore, dhs has deployed additional technologies and equipment to the borders, including mobile surveillance systems, cameras and uavs. given these sweeping changes, it seems necessary and appropriate for the border patrol to set forth the new strategies based on current realities. that said, the border patrol's strategic plan is a relatively brief document compared to the in-depth document of the mission of law enforcement agencies. i look forward to hearing more details today from chief fisher about the plan and how it will be implemented in the near term and in the coming year. i do have some initial thoughts on the plan, however. one of the concerns i have expressed during prior hearings on the rapid growth of border patrol, was the need to ensure

proper training and supervision of less experienced agents. i was pleased to see that the strategic plan gives consideration to supporting the men and women on the border patrol and ensuring that the agency matures as an organization. this plan also discusses the border conditions index, which is the border control -- in which the border patrol is developing to replace as a metric in measuring border security. we are told that the new bci is intended to capture a more comprehensive picture of border conditions, including border security, public safety, and quality of life. it is my hope that the bci will offer a better indicator of the situation along the border, and it's not just a case of finding a new one when you do not like the first measurement.

i look forward to hearing more detail about the bci and the new system that is being implemented. i think the witnesses for joining us today, and i yield back the balance of my time. >> i think the gentleman for his comments. other members are reminded that opening statements may be submitted for the record. first of all, michael fisher. chief fisher started his duty along the southwest border in 1987 in arizona. he successfully completed the selection process for the task force unit in 1990 and was selected as a field operations supervisor for the tactical unit. he was serving in the detroit sector, and as a assistant chief in the detroit area. rebecca gambler leads the gao's work on border security and immigration issues. she joined gao in 2002 and has

worked on a wide range of issues related to homeland security and justice, including border security, immigration, and dhs management and transformation. marc rosenblum is a specialist in immigration policy at the congressional research service and an associate professor of political science at the university of new orleans. doctor rosenblum is the author of immigration policy and the coeditor of the oxford handbook of immigration -- international migration. he has also published over 40 academic journal articles, book chapters and policy briefs on immigration in the u.s. and latin america relations. we welcome all the witnesses. we now recognize chief fisher. >> is indeed a privilege and an honor to appear before you today to discuss the work of u.s. customs and border protection and what we do in securing america's borders. may 28, 2012, will mark the birthday of the border patrol.

as the day approaches, i am reminded of how legal more to define the term writing for the brand. it is a compliment, for 80 years for men and women of the united states border patrol have been writing through a unique and particular brand. since the days of the borderlands of the southwest, the border patrol has done no less than protect and defend this country's borders. as was written, if a man did no. as was written, if a man did not like a branch or the way they conducted their affairs, he was free to quit. and many did. if he stayed on, he gave loyalty and expected it. for 80 years, the men and women have stayed on, giving their loyalty to their mission and this nation. since may 28, 1924, the u.s. border patrol has responded to an ever changing and maturing nation as it recognizes the need to curb the influx of people and contraband entering the borders. as the nation of all, so do the

job. during the prohibition era, inspectors pursued liquor smugglers and mountains of arizona. as world war ii raged, border patrol inspector is scanned the atlantic horizon for enemy submarines off the coast of florida. the cold weather.border patrol on domestic flights serving as air marshals. during the civil rights movement, the u.s. border patrol at joined u.s. marshals by protecting james bennett as he registered at the university of mississippi's first african-american student. in the wake of hurricane katrina, border patrol responded to victims plight and help restore order. during the wars of iraq and afghanistan, we brought security and support. when we are dealing with problems of illegal immigration or that the threat of international terrorism, agents have done their job with vigilance, integrity and pride. the threats have changed over

the years, but the basic mission remains unaltered. defending and protecting our nation's border is our brand. it is a brand that is as important today as it was in the past. this month as we take increased devotion from the pastor. her task of securing the borders, it is also fitting and proper that i'm here to discuss the border patrol's future for the 2012 and 2016 border patrol's strategic plan. the border is a very different environment today than when i began my career. i personally have witnessed the evolution of the border of the past 25 years. both in terms of additional resources applied against the threat, as well as the change and the adversary's tactics. the border patrol plan builds on a foundation the foundation of the 2004 national strategy. the 2004 strategy focused on getting the border patrol organize and resource through the deployment of personnel, technology and infrastructure. the 2012 to 2016 involves this

set of objectives, programs and initiatives that apply information, integration and rapid response to develop and deploy new and better tactics and techniques and procedures to achieve our objectives. the principal theme of our strategy is to use information, integration, and rapid response to meet all threats. these pillars are essential as we continue to build upon an approach that puts the border patrol's greatest capabilities in place to combat the greatest risks. first, information provides situational awareness and intelligence by blending things, such as reconnaissance, community engagement, tracking and technology to enable border patrol agents to get ahead of the threat. second, it notes are compensated planning and border security operations that leverages partnerships to ensure we bring all available capabilities and tools to bear addressing threats. at last, to rapid response, we will deploy capabilities timely and effectively to meet and

mitigate the risks we confront. put simply, rapid response means the border patrol and its partners can quickly and appropriately respond to dynamic threats. our strategy has two inter- related and interdependent goals. the first goal is to secure the borders. the border patrol will work to prevent terrorists and terrorist weapons from entering the united states, managing risk, disrupting integrating criminal organizations, employing a whole of government approach and increasing community engagement. first, the current risk environment is characterized by a variety of constantly evolving threats, and the border patrol must harness information and intelligence to ensure that operations are focused and targeted against potential terrorist threats and transnational terrorist organizations. the border patrol's ability to disrupt these threats is enhanced through increased information sharing and operational integration, planning, and execution without domestic and foreign partners.

likewise, developing the most prompt information is essential to risks. we must continue to adapt to ensure that resources are being used effectively and efficiently. for example, we are employing a tactical strategy which uses various techniques to gather information and low threat areas. it allows the border patrol to continue focusing other capabilities on areas where the highest risk exist, but ensures that any threat adaptation is identified quickly. in addition to assessing the threat and risk, the border patrol must continue to develop its mobile response capability to quickly redeploy scalable capabilities to the highest risk areas. through targeted enforcement against the highest priority threats, and the expansion of programs that aim to reduce smuggling and associated crimes, the border patrol will increase the ability to disrupt and degrade transnational criminal organizations along our borders.

our consequence delivery system is an example of our ability to apply targeted and effective strategies to guide management and agents to a standardized process designed to uniquely evaluate each subject and identify the ideal consequence that breaks the cycle. in order to maximize enforcement benefits from combined resources, we must move beyond collaboration towards integration. our border security mission involves a multitude of entities and the application of a whole of government approach, to ensure that we are working together in an integrated way. last, the border patrol would continue to engage in educating the public on issues to leverage the assistance of our border communities. active engagement by the border patrol with local law enforcement and the public can assist in lowering crime and reduce violence in border communities. go to is to mature, refine, and integrate the institutional capabilities and techniques. border patrol will achieve this by strengthening our investment in our people, supporting our

employees, preserving organizational integrity, improving our processes, systems, and doctrines in enhancing our efficiencies. at first, we must strengthen our investment in people to improve education, training and support of border patrol personnel. second, we must reinforce employee support initiatives and programs that continue to provide ways for border patrol employees to remain resilient in the performance of their day-to-day duties. third, the border patrol must address the organizational integrity and remain vigilant in training and promoting initiatives to combat corruption to ensure morale and mission a knockout mice. leaders must set an example of integrity to the border patrol to reduce the potential for corruption. the border patrol will grow and mature, and as it does so, it is necessary to develop a doctrine within the organization that will help execute a long-term strategic plan and enable the border patrol to seamlessly link the operational force to emerging tactics, techniques and procedures of our adversaries.

last, the border patrol has responsibly to ensure leaders, agents and support personnel are good stewards of the american tax dollars. as the border patrol progresses towards rigor and maturity, and the social element will be development and and continual refinement of competency, demanding and results driven performance measures that hold us to account. the strategic plan marks an important plan in the development of this and meeting the challenges of 21st century border against a variety of threats and adversaries. leveraging all available actions, programs and techniques encompassed within our strategic plan strength of the border patrol in turnley, increased capabilities and our operations, and enhance border security and also national security through the use of information, integration, and rapid response. again, they give you the opportunity to testify today. i look forward to working with you in the committee as we designed this strategic implementation plan. at this point, i welcome your

questions. >> thank you very much, chief fisher. at this point we welcome and recognize rebecca gambler for her testimony. >> i appreciate the invitation to testify today at a hearing to discuss gao's work on border security, programs and performance measurement, which could inform the border patrol's efforts as it transitions to its new strategic plan. the border patrol is the federal agency with primary responsibility for securing u.s. borders between ports of entry. fiscal year 2004 through 2011, the number of border patrol agents nearly doubled from about 10,800 to nearly 21,500. also, the department of homeland security has reported that since fiscal year 2006, about $4.4 billion has been invested in border technology and infrastructure. the border patrol is issuing a new strategic plan to guide border security efforts. according to the border patrol,

this plan will involve use of the risk based approach, based on the three key elements of information, integration, and rapid response. today i would like to focus my wrist marks on two key areas. i would like to highlight gao's prior work related to the border patrol's implementation of the 2004 national strategy. second, i would like to highlight gao's prior work reviewing performance measures for border security with regard to my first point, our work has shown that the border patrol and department of homeland security has made progress in developing and deploying capabilities related to the three key elements of the new strategic plan. specifically, the border patrol and the department have deployed capabilities to provide information and situational awareness for securing the border, to coordinate efforts with border security partners, and to provide mobile response. for example, the department has

deployed various technology systems to increase situational awareness, primarily along the southwest border's. further, the border patrol and its international and domestic law enforcement partners have established task forces for coordinating security activities along the northern borders. while these are positive developments, our work has identified key challenges facing the border patrol in the department of homeland security in implementing the border security strategy. consideration of these challenges could help as the new strategic plan is implemented. for example, what we have reported to better assess the benefits and performance of technology and infrastructure deployed along the southwest border to help provide situational awareness. we have also reported the need for the department to enhance oversight of task forces to help identify and reduce any potential duplication of effort. now turning to the issue of

performance performance measurement. the department of homeland security school and measure of operational control used in conjunction with the border patrol's 2004 strategy. operational control defined as the number of border miles for the border patrol had that ability to detect, respond, and interdict cross-border illegal activity. the department last reported the progress and status in achieving operational control of the borders in fiscal year 2010. at that time, the department reported achieving operational control so that 1100 miles or 13% of more than 8600 miles across the u.s. northern, southwest and coastal borders. on the southwest border, specifically, the border patrol reported achieving operational control of 873 miles, or 44%, of the nearly 2000 miles of u.s. border with mexico. department of homeland security and border patrol have several efforts underway to develop new measures or indicators for

border security programs. until these efforts are completed come department is using interim measures, such as the number of apprehensions on the southwest border. these measures provide some useful information but do not position the department to be able to report on how effective it efforts are at securing the border. in closing, as the border patrol transitions to new strategic plan, it will be critical for the border patrol itself in the department to provide effective direction and oversight of its implementation. it will also be important for the border patrol in the department to continue to develop performance measures that are linked to missions and goals, include targets and produce reliable results. this concludes my oral statement. i am pleased to answer any questions the members may have. >> thank you very much for that testimony, rebecca gambler. and we now recognize doctor rosenblum. >> chairman miller, and members of the subcommitteei am honored

to present testimony on because of the congressional research service. my testimony makes three observations. first, this is a very different place than it was in the mid- 90s when the core strategy was developed. second, the changes that the border has entailed, these observations lead to the third was is the new strategy comes at an appropriate time and raises important questions. in some ways, we are at a critical junction with how we define border security and how we understand risk and threat to the united states. let me begin with the changes of u.s. borders. the corcoran strategy since the mid- 1990s is prevention through deterrence. the idea that the concentration of personnel, infrastructure and surveillance technology along heavily trafficked regions of the border will discourage unauthorized aliens from attempting to enter the u.s. a new strategy was published in 2004 that continue to emphasize this along the border, and in

the post- 9/11 environment, it also focused on intelligence to assess risk and targeting enforcement through the greatest security threats, including terrorists. at the same time, dhs announced the secure border initiative, a national program emphasizing personal, surveillance technology and sensing, as well as interior enforcement and new removal practices. my written testimony includes several data points that show the plans have largely been implemented. one example is the growth in border patrol personnel. faster growth in the '90s, and even faster growth in the most recent decade. all concentrated merely on the southwest border. one portly, there is an increasing body of evidence suggesting that these investments have begun to pay off. as we have heard, apprehensions are at their lowest level in about 40 years. my written testimony includes several additional indicators that suggest falling illegal

immigration. several factors have contributed as the chairman of income including the u.s. economic downturn, crime and violence in northern mexico, mexico's strong economic recovery since 2010, demographic changes in mexico, but the data suggest that u.s. enforcement efforts are likely an important contributing factor behind declining migration. this figure illustrates one of the cause of dynamics. the figure shows to measures of the fees that migrants pay to be smuggled into united states. smuggling fees were flat during the 1980s and then rose sharply in the early '90s through the first half of the last decade. the figures suggested it was relatively easy to cross certain '80s, but became difficult to do so during the '90s, as enforcement intensified. these gains of the border have entailed costs. one way to think about cost is in terms of direct appropriations. my written testimony describes the dramatic growth in borders

and border spending. my written testimony also identifies a number of unintended consequences of border enforcement on migration flows, and the number of indirect costs on crime, migrant mortality, the environment, border communities, and u.s. foreign relations. border enforcement also entails opportunity cost. how does funding for enforcement between ports of entry compete with other dhs priorities and the priorities outside of dhs? for example, this figure compares resources that have gone to border security between ports of entry, to resources for inspection and enforcement at ports of entry. funding for enforcement between the ports has more than doubled since 2004, while funding at ports has increased by less than a third. fte full-time employment lines between the ports has increased 99%, while fte reports of increased 12%. we often think of border security in terms of how many

unauthorized migrants make it through the arizona desert. the 2012 strategy highlights the border patrol and dhs is broader approach to risk management. four types of transnational threats are especially important to consider. weapons of mass destruction, drugs and other contraband potential terrorist and other bad actors, and other migrants. these threats have different risk profiles. experts agree that wmd are high consequence, lowell threats. the entry of illegal drugs while somewhere in between on both of these dimensions. the threats also differ across border zones. the southwest border between ports of entry is a point of vulnerability with this respect to entry and marijuana smuggling. at the drugs and other drugs and other contraband, both are considered more likely to be

smuggled at ports of entry rather than smuggled across the border. the southwest border may also not be the greatest point of vulnerability with respect to other terrorist and other bad actors who are more likely to enter the united states from canada or at a coastal border. given the gains we have made at the border, the new border patrol strategy offers a moment to think about the broader context and bottom-line goals for u.s. border security. one of the most recent security threats confronted by the united states -- where are our greatest points of vulnerability? what policies will reduce risks to the united states? thank you for the opportunity to testify, and i look forward to your questions. >> thank you very much, doctor. i want to thank all of our witnesses for being here today. particularly you, chief fisher. you're the only person in uniform. we are all here in our constructively -- critical array of looking at all of this and the new strategic plan. i appreciate you articulating again the long and distinguished

history of the cbp. i also was taking notes as you were talking. i've been looking at your new strategic plan. as you mentioned, the information integration and rapid response, and also about the amount of $4 billion for the congress and american taxpayers have invested in technology and these kinds of things. with all the technology that we do need to utilize, obviously, for all of our borders, sometimes there is no second for human intel. as i mentioned with the outside of this, this bombing plot, much of that was human intel. the work of art intelligence community -- counter intelligence and counterterrorism and etc. the same thing applies for border security in many ways. it seems to me that a good way

to get that kind of intelligence -- you mentioned it in the strategic plan here, where you talk about increasing community engagement and these kinds of things. with all the various stakeholders at all of our borders, as well. we often have said that there is a force multiplier. you can get a lot more intel from the local law enforcement. sharing information, whether it is at the southern border or northern border or coastal border. one thing is that the street talk -- the street talks. your officers are trained to understand and to start to develop a threat assessment based on some of that intel. also, and i'm not sure if you have that in here, but i was recently -- of course, i am from the detroit sector. i was recently over on the

canadian side of the bluewater bridge, looking at what our canadian counterparts were doing. i had one of your officers with me. would they have more than anything? they had dogs. the dogs were sniffing. with all this technology, the dogs were sitting everything that went through, whether it was people are drugs. their ability for apprehension was nothing high-tech. particularly when you have all these military dogs and have had the ability to sniff with ied's and everything else -- and i know we talk about how that can be a layer of your strategic approach to security, but i mention that because when we talk about defense in depth, looking at ports of entry and making utilization of checkpoints and along the northern and southern borders, big part of what you were doing was going into the bus terminal, talking to folks, sometimes just a random approach the start picking up intel that is

incredibly important. i would first ask, are you still doing that? i'm not sure if you would still continue to do that. what is your thought about utilizing the community engagement etc. for intelligence gathering, which i think is certainly is critical of a component as uavs or anything else. >> with your first point, we are still doing checkpoints, although we are moving away from the term defense in depth. defense in depth from the previous strategy, really implies a strategic imperative, which was trained demaio. in that context, it makes sense to have some defense in depth like checkpoint operations where they were tactical or permanent. we will continue, and that is what we have asked the field chiefs to take a look at. just because it is not written in those few pages of the strategy, remember, the strategy is a broad framework of how we want the organization to start thinking. they're going to be things that even since 2004 we will continue to do, and if it makes sense, to

continue on that path forward come out we will do it. it is all about terminology and what we are trying to accomplish. with respect to community engagement, it will be critical for our leaders to understand the change from community relations towards community engagement. as you so artfully articulated, we have 21,370 border patrol agents. we also have 20,370 intelligence collectors, and we have to train the border patrol agents to recognize that every individual that they encounter is a potential source of information. when you say information, it is because we also don't want to discount open-source information. people don't live in the border communities quite frankly -- they have a lot of information that unless we asked them, they are going to be able to share that with us. that was some of the lessons learned in 2006 and into 2007 that the department of defense in shifting their thinking in terms of their strategies, and how they are going to actually

confront the threats that they were seeing overseas, the same broad approach that we are taking in recognizing that we have to make sure that we just don't have summary, hey, give us a call if you see something suspicious. to actually take the time to explain to them in their area, what is suspicious and why it is important for them to respond to the extent they are able to to provide information for us. that is a strategic shift as well in terms of what our expectations are in the community so that we serve. >> i appreciate you saying that. again, it is an example in the northern sector, and i think this is a pilot program. i'm not sure if you have plans to replicate along the northern tier as well as the operational integration center in michigan, where you literally have all of the various stakeholders. you mentioned the dod. really, the 9/11 commission recommendation that i always talk about -- i think it was one of the most important. we need to go from the need to know to the need to share.

in the case of where you have cbp and the coast guard, the royal mountain, we have the state police, the marine patrol, etc. the local city and village and police department and first responders, all of this information being analyzed by state-of-the-art data, you are using the computers to analyze the human intel they can assess the threat and then have a product that can be given to the men and women who are on the frontlines, whether it is that northern or southern tiers. you have had great success in a particular area. i know my time is running over, but i do have a question. what is new? what is new in this strategic plan? i'm looking at it, and everything here, i agree with everything, but it really wasn't something that grabbed me as being new. is there anything new in here as

he would highlight is a marquee component of this new plan? >> i will give you one example. actually, i will give you two quick examples. one is the change detection capability. change detection capability. the other one talks about optimizing capabilities. we weren't able to do that years ago because first we didn't have the level of resources, and two, we didn't have the technology that allowed us to work in areas like the northern borders or some very remote areas along the southern borders, because we weren't able to get into those locations -- road systems do not exist. the terrain is not lend itself to the terrain in that area. the system that the cbp has had over the last two years, gives us the ability to use synthetic aperture radar. to confirm or deny any threat in that environment or any entries, which over the course of two or

three weeks, we haven't seen in a grid that allows us to be able to use technology to understand where those threats are going to be evolving. those phrases, although they are somewhat new, it takes a whole new meaning on when you look at the implementation along our borders. >> do either of the witnesses have any comment as to what is new in the strategic plan as you review that? do have something else that caught your eye? >> i think from our perspective, some of the same elements are in the 2012 strategy as in the 2004 strategy. i think there is a different level of emphasis on some of the capabilities and a different way of thinking through how those might be implemented going forward. i think it isn't emphasis -- i think it is a difference of emphasis. >> it is clear evolution. when you look at the deterrence as it was described in the 1990s through the 2004 plan, there is a clear brand of border

patrol, describing adequate resources now, put in place at the border and thinking more strategically about how to deploy them and use them flexibly. >> thank you. the chair now recognizes the ranking member. >> thank you so much, madam chair. first of all, doctor, let me ask you -- let me just say thank you for the reports report to the defense, and also, members, if you haven't seen the congressional research report dated january 6 of this year called border security immigration enforcement between ports of entry, i would reference one of the charts you have there, i would appreciate the good work that you have done. i do appreciate it. let me ask you, since i passed along this -- you know if border patrol is under the umbrella -- have they appointed a

performance improvement enactment already? it is supposed to be under this point. >> i'm not certain. i don't know. >> okay. do not they started working on -- according to the law, priority goals? is that more under the homeland security? >> there are certain things there's must be doing under the law. i'm just asking if they have done that already. >> and i am not certain about that either. i know that they owe some reports to you guys and i have not seen them all as of yet. >> okay. chief fisher, do you know who your performance improvement officer is? or is that more under homeland security. >> it is a little bit of both. within the strategic policy and planning division, within the headquarters, we have border patrol agents that are assigned i don't mean to interrupt. i apologize. i really apologize.

under law, which is was to have a high ranking officer -- i don't know if it is under the umbrella, but do you know who your cheap improvement officer is? >> i don't know within the border patrol, it more likely it may would be within customs and border protection and a that this level. we do have border patrol agents were assigned to work on a continual basis to make sure that whatever we are reporting against the requirements each year, they are doing that both in concert with cbp and the department. >> are you familiar with the interagency performance improvement council? >> i am not, sir. >> i would ask the gentlemen and ladies behind you, if they would look at house resolution 2042. it came out over a year ago. agencies are supposed to be following certain things. it has to do with the performance measures and what the goals are.

i would ask you respectively, if the folks could take notes and look at that law and report back to us on that. and another reason i say that is because there are some changes. i appreciate all the work. for example, there are changes -- now we are moving away from operational control as of september 30. if you look at that definition, 80% of our borders were classified as managed. there is a definition for managed control as to operational control. basically, we have 12% of all the borders, northern, southern borders, that were under operation control from the rest were under managed control. is that correct, officer? >> again, there are definitions and you go through what managed and operational control means.

i think out of the southwest border, 2000 miles, 873 were under operational control. the northern border, i think out of all the miles you have, 69 miles where under operational control. and then under the coastal east and west, only 165 miles were under operational control. is that correct? >> yes, sir. >> and moving on -- the border patrol is now moving into another type of performance measure, and according to your report, since headquarters have not come up with a new performance measure or new goals, according to your report, different officers at different ports are using different measures -- reporting measures.

is that correct? >> that is what i understand. there are a number of additional measures that border patrol does track. including the estimates -- they track apprehensions, and we know something about that content that. what you are referring to is the time after someone crosses the border, a bunch of border patrol is able to apprehend them -- but the sector and station level, and i understand chief fisher to tell you about this, the stations also check their estimates of how many people get away and successfully enter the united states. how many are turned back. those are some of the kinds of things that could also be incorporated into our analysis of apprehension rate and illegal flows. >> under the 2012 border patrol

headquarters -- officials were working on developing security measures, having not given you a target timeframe as to when they will be implemented that? >> here we are talking about strategy. the first part is the strategy, but then we have to go into the goals and then we have to go into the measure -- you know, how do you measure results. you have an idea, and again, thank you. i appreciate the strategic issues which is the first point. but we have to go into the goals and measures. you have a timeframe we will have to that? >> yes, sir, we are looking at the beginning of the next calendar year. although i should also tension that we are not just erasing everything that we have done and trying to come up with new things. what we are trying to do is dovetail some of the things we have previously used. and also inform beyond some of the datasets. the one that comes to mind is

apprehensions. we are talking in the committee about apprehensions, in and of itself, the extent to which we are being successful and or levels of border security. what is interesting, what we are doing now is taking a look at those apprehensions, only as a start point to really delve down and understand the rate of recidivism and re-apprehension and doing comparatives to make sure that we are having a better sense of what is actually happening, not just independently trying to evaluate on whether apprehensions went up or down. it is a host of rethinking, and in some cases we're looking at new measures to include the effectiveness ratio. >> my time is up, but if i can finish with this, i would ask you again, chief fisher, to look at the requirements that are in the law already. i would ask you also to look at page 21 of appendix two of the

report, when it talks about performance measures, and i will just highlight them. performance measures should cover core productivity that the border patrol is expected to perform. the measure should cover cbp indigenous birdies. it should link with other components of successful levels so the measures should reflect quality, cost of service, what it costs to provide good there should be a local goal of significant producing the same results. i have to do it again, i appreciate the strategic plan, but we still have a lot of ways to go. the performance measures and goals -- the performance measures, so we know exactly what we are measuring. i appreciate all of the good men and women who work for you. it is a good one. i know it is very hard.

this is a very important parts we can look at efficiency, effectiveness, accountability to the taxpayers, especially since we we're putting so much money to homeland security. again, we look forward to working with you, chief fisher, and also the work with doctor rosenberg, and the requirements under this. >> thank you so much. >> the chair now recognizes the governor from mississippi, mr. thompson. >> thank you so much, madam chair. cheap fisher, one of the constants that this committee runs into, departments or agencies will come up with a new plan and strategy, but when you talk about who was involved in crafting the new plan a strategy, it ends up being just

a snapshot of the agency, rather than the agency as a whole. can you tell us, in developing this new strategy, where the third strategy that i have been a part of, did we involve other counterparts of cbp and putting it together, like the air birdies and other operations? tell us a little bit about that. >> yes, congressman. actually, a really good question. it has been in process -- the design and development of the strategic plan, for about 18 months. during that process, not only within cbp and the other operational offices, field operations and office of air marine, had opportunities to comment. we were developing this strategy throughout. we also had input from the department. even before that, as we were working with our field commanders and we had been

reaching out to the employees to understand and help develop the framework as well. we wanted to make sure that we harnessed the ideas from the field leadership, and then we took the opportunity and had about a dozen peer reviews. .. do you have any state or

local involvement in the preparation of the plan and was it strictly within cbp? >> i'm not really sure, congressmen as it was, but local level that's probably where they would have provided some of the draft and feedback whether it was to the sheriff for their input or the police departments. it wasn't am i direction for them to do so because a was a working draft and it was the broad strategy. when we designed the implementation plan clearly the steve locals are going to have to sit down and understand what it means to implement the strategy within their operational environment so that certainly would be done with a broad law enforcement as well. >> this may be a little premature but are we able to honor them is strategy is being put forth at this point would

that come a little later when? we talk about operational control and now there's some things we can manage. have we arrived at that point yet and are we still in the infancy of whom how we put that together? spec at this point the board of petro hasn't released performance goals and measures for assessing how effective it will be at implementing its new strategic plan and that's something that the border patrol will be focusing on going forward and has efforts underway right now to develop new or additional measures. i think you're raising an important point which is that in the interim the board of patrol is using the the number of apprehensions on the southwest border as its primary performance measure which is being reported out in the department's annual performance report. and as we've discussed, that kind of measure has useful information in that it's provided some insight into the activity levels of the border patrol how many apprehensions

they are making. but what's really important and going forward is for the border patrol and the department to move more toward outcome oriented measures that would allow the department, the congress and the public to get a sense of how effective the border patrol efforts are. >> you have comments on where we are at this point? >> well, yes, thank you, congressman. i think just to echo a couple of points that were made to both of your questions in terms of the sort of outcome measures i would just add that even as we await the new border commissions index there are important data sources

that exist that we should be looking at, for example with the data that the border patrol and dhs tracked with in addition to look looking at apprehensions, one of the things that the report looks at is unique apprehensions and that allows us to look at the recidivism rate and the apprehension rate which is something the border patrol is looking at, and those offered a lot of insight beyond simply apprehensions and allow us to just say quite a bit more about what we know about effectiveness and about the illegal flows coming and the cbp field operations also those tracking. they do sort of vague when sample of people who are admitted and don't go through primary don't get secondary, wouldn't normally receive secondary inspection the subject a sample of the secondary inspection and they can do an emphasis that way how many people appear to be going through and make an estimate of the legal migration through the

ports so there are some important data sources out there that aren't sort of systematically part of our conversation that probably could be and should be. so, i think that certainly when you compare overtime throughout dhs that collecting a lot more data and putting this in the position to say a lot more than historical and we have been able to say about what's happening in different sectors and different border zones and through the ports so i'm optimistic that they will continue to do a better job of tracking the information to the estimates before. i yield back madame chair. >> thank the gentleman now mr. duncan. stomachs before madame chairwoman. i want to piggyback on something you said earlier, the need to share that. dr. rosenblum, you mentioned the system for all integrated in this of the other agencies because we've heard some testimony about these of these

overstays and raised questions about whether the agencies are communicating about illegal entries or visa overstays or people at cdp see that there is a trend, and so i'm concerned 9/11 commission reports identify the agencies that aren't talking. this is very important to me. how integrated do you think that is? >> the agency people could give you an answer to that question understanding is it's currently part -- its outside -- it isn't part of cdp to be it's a separate office under the u.s. visit system, and there's a proposal to move it now into cdp and i.c.e.. my understanding is that all of the different dhs agencies have access to the database through the u.s. visit and that there is

extensive information sharing between the agencies like the dod and state taps into that process but i'm not sure i can give you an informed answer about house moved that integration is. >> i won't dwell on it and i would ask that your office contact my office with some information on how we are sharing some of that, because it's sort of off on a tangent from what we are talking about today. the lady mentioned earlier in the gao defines operation the extent of operational control was defined as a number of border miles where the border patrol had the ability to protect, respond to and interdict cross border electricity and that is a fairly defined metric. and then she goes on in her testimony to see however the performance measures that will be used to provide oversight and

accountability for the new strategic plan have not yet been established. i think the gentleman from texas was kind of going down that. how do we define the metrics, and so in our meeting chief fisher, you said you wanted to refrain the operational control in the strategy. can you elaborate really how you would do that? >> i would be happy to. and i think that your question was one of the things we were looking at two years ago certainly within the 2006 secure operational controls defined we had a technical definition of the border patrol keeps in the field were using to be able to report gao has their definition, everyone had a different understanding of operational control was coming and i will tell you is in the organization of the tactical level these worksheets to what report every year all of those miles that we were, you know, chalking up over the last few years. a tactical definition let's just

take for control and manage these are the technical definition start with the phrase it border is considered for a border zone will be considered patrolled when resources are at such a little back and then it kind of qualifies basically what that border zone activity levels or other things we would use. when you look at the definition if we didn't resources at the control or manage to level because those definitions started with that phrase the border patrol was not going to increase the effective control which by definition was either a controlled or managed level. so what we wanted to be able to do in framing that is to have a better understanding about not necessarily dependent on resources as much as it is about the intelligence. what are those threats on the border areas and the vulnerabilities which are not equal across the board. so instead of having the conversation about whether the

border is secure or not, to suggest somehow that is an either or proposition. my response would then be what section of the border are you talking about? we can talk about zone 21 in arizona or we can show you all the information and intelligence that we have in that border zone and we will show you what deployments we have and then be able to show you on a 24-hour cycle how many people came in and of that number how many people did we apprehend. at the broad end, we can talk a campaign level for instance our initiative in south texas for instance, the campaign. you want to have an assessment about what is the border security status in south texas. to me it's been more about in methodology not necessarily in metric and that is why when i taught that retraining the operational control it is to be consistent with the intent and the language within the 2006 secure defense act, and then talk about what it means to prevent all entries at what level, and where do we start and where do we need to end. >> i think the american people do want to have a conversation

about what level the border is secure and what we are doing. there has to be a measurable parameter that we can talk. i can talk with my constituents about the southern border. you can hold your people accountable to a standard or to an achievement. and i think there are three things that come to mind, you know, a dress made of the border for people trying to cross illegally, apprehensions in the homeland, interior where we've identified illegals that have made it through the web, and they are apprehended by maybe in another city, and then i think the standard that we don't talk about is what is the amount of drugs on the street because the illegal smuggling activity that comes into the country we don't hear that much but we need to lessen the amount of drugs on the street and i think that is a parameter that we can use to measure the performance. sophos that madame share i yield back. >> thank the gentleman and the the gentleman from texas.

>> thank you madam chair. thank you again for the field hearing in laredo. it's very productive. cheeks, thank you for being here and for your service. i always wanted to be colin something new every time i go down there. we know the task force, and they talk about in laredo the cartel activity going on between the cartel's and this was last week predicting the violence was going to go out, it's going to spike, and sure enough last friday 23 individuals were killed and laredo, hung over bridges, decapitated, just a reminder that the border is not a safe place, we do need to secure the border. the thing that keeps me about might the most would be the idea of the weapons-grade uranium being smuggled from a place like iran to venezuela, and then between the port of entry a

dirty bomb in a major city. that come to me is terrifying. and yet it's not farfetched. i think that's something that is very foreseeable. so operational control at the border is important. the last i looked it was 44%. under operational control, you know, we have a new strategy now that scraps operational control and now the gao has come in to testify that this new strategy does not have performance measures. can you -- i guess i'm a little confused. we are not talking about operational control anymore. taking them off the table, and now the new strategy has no performance measures at all. how can we possibly measure whether the border is secure or not. chief? >> yes, congressman. we have measures right now. in other words, we are not again going to dismiss all of the measures for the metrics or the

comparative statistics that we have done within the organization. those continue. what we are trying to do is match those now with a strategic objectives outlined in this particular strategy. when you look, the scenario that you outlined is one of the primary factors in our thinking about how we apply resources to the border command one instance in 2000 for quite frankly it was forced we realize we were getting more resources both in terms of border patrol agents from getting fences built, getting technology, and so the strategy really was to get everything forward. we wanted to stop the flow that was coming in. the scenario that you depict is very akin to being able to identify a needle in a haystack if you will. to extract the needle, and i will use this in terms of a particular threat that you just mentioned. there are two different general approaches you can do to get that needle. the first is having very specific intelligence information regarding the intent

and the capability of the opposition, the timing to be able to surgically going to that haystack and remove it. over the last ten years or so, that really didn't -- it wasn't applicable in the border scenario. we were not getting that level of intelligence to extract that way. so the other approach you can do to find the needle is to reduce the haystack so if you look at some of the shifts in our approach between the strategies, 2004 was built to be will to reduce the haystack. as we've done that and people coming across the border in terms of not just the apprehensions of the individuals, the unique individuals that make up a environment in which we operate has changed, so what we try to do is now leverage and try to figure out what is it going to take command of the new strategic approach, what then are those metrics that are going to continue to carry over that we have traditionally been reporting. in addition, what are the new metrics we have not been reporting that really talk to more about the risk along our

borders? that's why when i said earlier it's more of a methodology that a particular metric. we want to be able to come back to the committee either in an open or a closed hearing to be able to tell you about the information and the intelligence that we are hearing either for a tactically or in a broad sense talk about the capability that cdp has to be able to show you how we are assessing risk and how we are going to minimize that risk. >> i would r. dee much like to get that briefing. the one thing we learned also is that the human smuggling of the port of entry has gone way down. we saw 5,000 18-wheelers good on the port of entry, and they said that they rarely find cubans now in the cargo. it's mostly drugs coming through so that means they are coming through the ports of entry and while the apprehensions have long way down, the disturbing statistic is the rate has gone way out. now there's the mexicans. so, between the port of entry

where the scenario i out line is most likely to happen, i do think technology is going to be the solution to getting that secure triet can you tell me where you are with the latest advances in technology and what is your strategic plan to deliver technology to the border? >> the strategic plan really talks about optimizing capability. the first thing before we say we need more of these and 15 more of these is to take a look about what capability his been deployed over the last few years. one, are legalizing in the right combination. i will give you a quick example if you look at arizona, we have everything from unintended ground sensors that are implanted in the ground, mobile surveillance systems, integrated fixed powers, we have light and medium lift helicopters that are running the forward-looking infrared and those running payloads. that whole sweep of capability is something that this organization over the last few years is trying to figure out

how to deploy that in the theater of operation. they are not to politically because they have all different capabilities. so we have to understand organizationally and within the leadership how we maximize those capabilities and then how we shift and redeploy resources from areas that will once areas of high fred activity levels and redeploy those to the new areas where we have seen the displacement or the new emerging threats among our border. >> thank you, gentlemen i certainly want to thank all the witnesses for being here today and your testimony, and we are going to close the subcommittee. but i also wanted to mention to fall one something mr. mccaul said about operational control. i think there is a lot of consternation on behalf of the subcommittee on moving away from the operational -- the term operational control. again as i think we are all totally open to using the new term for the new metric if we

can understand exactly what all that is. i have a bill that actually passed the subcommittee, the full committee, and i am very, very optimistic it is going to have a floor action in front of the full house very shortly actually. it's a secure border act of 2011 and essentially what this requires is that this victory of homeland security support a comprehensive strategy to congress within 180 days to gain and maintain operational control of the border within five years, and we sort of anticipated perhaps the department moving away from the strategy of utilizing the term operational control. so if you use any other standard, but see we have another member. we will indulge her in her questioning. but if we use any other member of the secretary -- or any other term the operational control, the secretary is required to that the standard for a national laboratory that has prior

expertise on border security of which there's about half a dozen in the nation. also, the secretary would have to submit a measurement system to the committee within 180 days that analyzes the effectiveness of security at all of the land, air and sea ports of entry as well as mr. mccaul was mentioning about and you have to vet the african national laboratory with expertise and border security to evaluate the port of entry measurement. so i'm looking forward to the floor action on that particular piece of legislation. i know many things pass the house and never see the light of day in the senate however i think this particular piece may have some success as well. >> before you go -- >> yes, the gentleman from texas. >> i would ask to follow-up on what is it because i think that is correct chief fisher and by police for that they do for the greek words i appreciated. one of the things we did in texas when we went to the

performance measures and all that, we actually worked the agency would work with the members of the state legislatures on the definition, performance measures and goals. i guess washington does things a little different where you will go off and do your own and it's not only you, the other agencies and the exact branton doesn't matter democrats or republicans, but believe it or not, you've got a lot of folks here with experience here that could help you on some of those definitions the idea that chairwoman had come and some of the ideas that i had devotee of the members here, we could work with you and washington has done a little different of performance measures and objective goals and all that we could help, so any way we could help you come chief fisher, we would appreciate, and especially from the gao because i know you all were very, very

helpful and i apologize i was getting credit to dr. rosenberg on that on this report think you for the work you've done. >> the chair recognizes for five minutes the gentle lady from texas ms. jackson lee. >> what thank the committee for holding this hearing let me thank all the witnesses. we are marking up in another committee and very pleased to have the opportunity to raise some issues. first, chief fisher this is a straight question are you comfortable with the 2012 strategy that you've put forward? >> yes i am. >> what do you think is the most important element of that strategy? >> there is a common theme in that strategy that i certainly see as identifying, developing and training future leaders of this organization. >> do you see in the 2012 strategy and undermining of the national security of the united states of america? >> i do not. >> do you see in that strategy

that 2012 strategy undermining of the securing of the northern border? >> i do not to be a >> of the southern border? >> i do not. >> let me indicate that i have i think been somewhere affiliated in the border patrol customs and border protection from the entire time of my career in congress first on the judiciary committee, and then subsequently as the homeland security committee was designed in my original membership is this began to emerge you came under that umbrella. i remember after 2000 we worked very hard to secure night goggles, lab computers, vehicles and other necessities we felt were inherited for that intense work on the border of capturing those entering illegally. do you think you have enough of those resources now and are you able to maximize those resources to deal with the present

conditions of the southern border in particular? >> to the first part know, we probably don't have enough of those resources, and for the second part, i don't think that we are maximizing to the extent we need to all of those capabilities such as a common theme in the strategy now. >> so the strategy is going to utilize or improve on personal; is that correct? >> yes, ma'am. >> if we were to provide you with resources committee but add to the equipment, is that what i'm understanding? >> that is correct, yes. >> but you have a territorial range to be able to do your job? >> at this point that is a part of the plan. i'm asking the leaders to assess what they have based on these new objectives i think it's important and i'm glad you raised that point because i don't want more some of the reports that i've seen that suggest that strategy does not require additional resources. it made. but what we're doing now is taking a look at the resources

we do have. one, are we maximizing the capability of all of those resources, and number two, to the of the men the right locations against the emerging threats, and that is a process that we are looking at within the implementation, and it may be coming back to the committee to say here is the fact that media and technology, and it media and other resources we will continue to do as an evolution process like any other strategy. >> so we can expect a report forthcoming? as you analyze you will be reporting back to congress? >> we will be -- we are in the face right now and have been the last few months. we are transitioning from the strategic -- >> that's fine. >> the other thing i ask is that you have the regional territory you are working with now on the border. that's a territory that you feel comfortable working in? >> yes. >> let me just indicate that the chief has already said that he has strengthened relationships with federal, local, tribal and international partners, which i think is good, that's part of

your strategy. and i would hope as we listen to the chief going forward that we would be particularly sensitive on any attempt to expand the area of control in to federal land without listening to the work of the border security customs and the border security and others protection rather excuse me if are dealing with this i am quite concerned that we not listen to the reports that may be forthcoming. i think the strategy is effective in its collaborative efforts and its effective in its assessment efforts. i think it's important to do so, and i would ask the last question are you comfortable with the 2012 strategy from the perspective of assessment, and do you have any sense that there is a need to expand the range in

federal land for the border in the customs and border patrol? >> i think your question is getting at in part how well the border patrol coordinates with other agencies that have some border security responsibilities, and we have reported in the past that cbp in the department and border patrol have made progress in those coordinating mechanisms and in partnerships but that there was the need for some additional oversight including additional oversight and how the border patrol coordinates with agencies that do have some responsibilities for border security on federal land. >> let me conclude, thank you for the time and i would indicate at this point i would be quite concerned about any legislation suggesting it's countering the strategic plan and asking the congress to extend the jurisdiction of the border patrol's hundreds of

miles inland, and particularly suggesting that they would be in the federal land at this point without a complete strategic report and analysis by dhs and the border patrol customs and border protection and the united states thank you very much and i would yield back my time. >> thank the gentlelady and i want to think the witnesses for their testimony today. i think you've done a very informative hearing, and as has been said here, i think by all of the members we look forward to working with all of you. particularly you become a chief, with the unbelievable mission that we have tasked your agency with. we are operating in very tight constrained budget environment here but at the same time, border security is something that american people have made it very clear the of the political will to do so, so we appreciate all of you being here and appreciate all of the members that participate the

hearing record is going to be open for many of the members the gentle lady from texas. >> i would like to submit into the record an article from the houston chronicle by tony fremantle regarding border security. >> without the subcommittee will stand adjourned. thank you. >> [inaudible conversations]

[inaudible conversations] i thought it was important to write a book that took people seriousness of the movement the elected obama, how did they built over time, obama didn't come out of nowhere, to the sentry, 2004. also that the party movement

that seemed to come out of nowhere. how did the work to occupy wall street. i thought those were important things to take seriously to look at the social movement. we the people perspective. >> very significant this "new

york times" experts say of the most highly classified documents in the war. >> i didn't read the story but you mean that was leaked out of the pentagon? >> the medical study the was done for mcnamara and they carried on after he left by the peaceniks over there. this is a devastating security breach. [cheering] >> tonight senator richard lugar [inaudible] on the foreign relations committee. he spoke with reporters earlier tonight in indianapolis. [applause]

[chanting "lugar!"] >> thank you very much. let me just make this comment this evening the to the republican primary voters have chosen their candidates for the united states senate. i congratulate richard murdock on his victory in a hard-fought race. i want to see a republican in the white house. i want to see my friend mitch mcconnell have the republican majority in the senate. i hope that richard murdock prevails in november so he can contribute to that republican

minority in the seine at. i'm deeply fearful for the remarkable effort that thousands of volunteers who devoted countless hours to my campaign. the enthusiasm of good friends and loyal supporters over many months was tremendously encouraging, and i thank my campaign team who made enormous personal sacrifices and never stopped working hard or seeking a path to victory. most of all, i want to thank my loving wife. [applause] guinn. [applause] and

[applause] i want to the door for a remarkable sons, mark, john, paul and david and the entire family for their understanding of their support and their loved. my family has been indispensable to every aspect of my public service from the indianapolis school board on word and my public service is not concluded. i look forward to what can be achieved in the senate in the next eight months despite a very difficult national election atmosphere. first among the goals, passing a good farm bill that saves taxpayers billions and gives farmers the best chance to prosper. and i would also -- [applause]

i will also use this period to advance the work of the lugar program and other initiatives that benefit the united states national security. at the end of my term, and i will look forward to new opportunities to serve indiana, and to serve our nation. i will increase projects where i can deliver the most benefits. and i continue to support the nunn-lugar program in every way that i can. i also want to build on my work related to nutrition and energy issues both locally and globally. i have no regrets about running for reelection. all of us should believe in the nobility of standing before the public and asking for their vote. even if doing so can be a very

daunting task. i still counsel young citizens to consider elective public office, and i hope some listening to me tonight will do just that. serving the people of indiana in the united states senate and the greatest honor of my public life. hoosiers deserve the best representation possible. they deserve legislators who will listen to their entire spectrum of citizen views and work to achieve consensus. they deserve legislators who each day go to work thinking about how they can solve problems that matter to the hoosiers. and i am proud of the solutions we have brought to the problems over the years and the initiatives we have undertaken to build indiana and to protect our country. we are experiencing deep political divisions in our society right now.

and these divisions have stalemate progress in critical areas, but these visions are not insurmountable, and i agree that people of good will, regardless of the party can work together for the benefit of our country. [applause] [cheering] [applause] furthermore, i remain optimistic about the future of indiana and the united states of america. the news media and the political leaders spend a great deal of time talking about what is

broken in the country and to some degree this is the nature of their business but we should also have confidence that the unique american experience is alive and well in our political system still can work we possess the resources, the human talent, the entrepreneurial energy to sustain our status as the economic envy of the world, and our culture still is the global reference point for progress among modern societies. people from all over the world want to come here to study, to live and to invest and we still enjoy unprecedented freedoms that billions of people in our world can only dream about. the task before us is to come together as americans to sustain the american dream at home while protecting our security and advancing our leadership abroad.

i cherish the confidence that each of you has placed in me and i urge you to join me in the determination to continue to serve our country and our state. god bless each one of you and god bless america. [applause] [cheering] now to tonight's indiana primary

richard lugar [inaudible] [cheering] [cheering] [cheering]

[cheering] [cheering] >> thank you. [cheering] nine [cheering] ne

[cheering] i have a feeling you guys are looking to party tonight. you know, you get ready for a moment like this and over the last few weeks i've been trying to anticipate what this would be the cause of had a tremendous sense of momentum, and yet i have to say every time i would start to have that feeling we are going to be there and be victorious, i would remind myself that this hasn't been about me. it's all about you. [cheering] and now i get to totally ad lib because as you might expect the

excitement of the moment i walked off and left my speech. [laughter] but that's okay. i have worked for a couple of days trying to put together with the faults would become the and i do want to start with something very important. it was 442 days ago that about 200 of us and those can be easily spotted here in the crowd, the people wearing the red shirts with the blue pattern behind them. [laughter] 200 people gathering at the garden literally at the intersection of washington and illinois and we launched this campaign. and at the time we did, we did something that i know shocked a lot of you that were there and certainly stunned the news media. but that's not why we did what we did to be shocking and unusual or even unique. we did something that i put before all of you who were there to do as a promise to yourself and frankly i wanted to do it as

a vow to myself. and i said then that what we did that today we would do it again on may 8th, 2012 when this campaign for the primary end regardless. [cheering] and what we the did then we are going to do right now. i'm going to ask all of you will to join me in recognition of a truly great public servant, a great hoosier with a great american, someone who for almost half a century has given his life to public service and he is a man who deserves the respect of each and every one of us. would you please join me in a tremendous round of applause for senator lugar. [applause] [cheering]

when i began this campaign, senator lugar was not my enemy, he is not now my enemy, he will never be my enemy. he will simply over the last 15 months my opponent, and as i pulled so many people especially when i've had the chance to talk to people in the last 15 months this race is not about animosity, it's about ideas. it is about the direction of the republican party. it is about the direction of our

country. [applause] and i've been asked a lot today by the news media what symbol does this campaign -- what symbol does this victory sent to those around the state and even across the nation. and i think there are two messages that can be found today. number one, hoosier republicans want to see the republicans inside the united states senate taking more conservative track and we are looking for. [applause] number two, to those people but

conservatives who for the first time in their lives perhaps the last two or three years decided to step out of their comfort zone and start working interest in an mtv, devotee party and some of the conservative groups those around the country are wondering if they can do the impossible. my friends come tonight -- [applause] [cheering] i need -- yes, we did. that is correct. i need to say of course i political consultants told me we'd and say thank you to all the people so important. save that for the end because the national media wants to your the context of the speeches when going to do exactly the opposite. [applause]

to this group of people behind me are absolutely. we began this campaign with my friend, jim as the campaign manager, chris konar came on to do our media coming in the diane came on to begin organizing all of this grassroots effort. [applause] the first thing we did is put together a group of what we call five field directors around the state of indiana and to divide 92 counties five ways it means each of those people have a lot of area to cover, and they covered it tirelessly. so, somewhere behind me, laura miller, souci barnhart, cindy, christine, where is christy come and cheryl johnson, right behind me. thank you to those five people. [applause]

though i shouldn't do this just because there's been so many people that have volunteered so many hours on the campaign headquarters, the real hard core staff over the many months, i saw her somewhere. where did ashley go. ashley is our finance director. john ferguson, was an absolutely vital to us as well. we have j.t., easton, cody, who did leave out as are critical he might think i got everyone. madden who came off early. these folks got us here early. give us a round of applause. [applause] >> web and of course the most important person of all --

[laughter] [cheering] the meurlin was raised less than a mile from where we are right now, and if anyone had ever told that young girl growing up over here on grant street that one day she would be standing here next to a candidate for the united states senate i'm sure she would have never believed it. [laughter] but the truth is this is hard stuff.

you know, i have literally hundreds of people over the last 15 months that have come up to me and say the words that i appreciate more that i will hope for you, they are those words i will pray for you without exception. [applause] because you heard the fire those words right back to you i always say please include her because this is tougher on marilynn so thank you to those that have been doing it for her and for me. [applause] >> [inaudible] >> to night my friends it's time.

it's not just a slogan. i don't want to be just a slogan. i wanted to be something you remember from this day because it is time. we began this campaign with the idea and yes we want to move the senate to a more conservative place. but much more than that, we want to move this country to a better place. i began this race knowing the odds would be long coming in would be difficult, and by understood this from the outset a lot of the abundance wanted to deem this race mission impossible. but it became the inevitable conclusion, and it did so because so many of you came for word not to pick up the value that i had. i didn't when you to the full but because we share the same values, we share -- [applause] we share something more important than the value.

we share a dream. you know, it was ronald reagan who in his first inaugural address said we have every right to dream great dreams, because we are americans. and yet it is too what true that today across this state unfortunately and across the country as a whole there are more and more people who don't think that the dream as possible. this candidacy began with the idea that it could play a small part in helping the united states senate turn the direction to lead the country back to the fulfillment of the greatest dream of our founders. i can't give a speech without quoting abraham lincoln. obviously you know that well. [laughter] mr. lincoln once said this was the one nation on the face of the earth that had as its primary purpose the elevating of all men, the lifting of the artificial weight from the shoulders of all so that all

could stand in equal and unfettered chance in the race of life. in other times, america was unique because it was that one place where people have the right to rise, and why would abraham lincoln think in this country you had the right to rise? because for three years he basically grew up in spencer county indiana and eventually became president of the united states. today, sadly, young people wonder if there is a way to rise. they have a sense of expectations that isn't built on what necessarily they can do, what they can contribute, we can offer, but they think they have to be helped by others as opposed to having that fundamental american value of self-reliance. we need, my friends, to get this country back on a course where all can rise and all sense of the excitement of the dream that is america that they can rise to any level.

[applause] and yet today, we see the obama white house and we see the senate chaired by harry reid to the does everything it can. it's doing everything it can though perhaps not intentionally to turn our dreams for our great national hope and dream into the nightmare of every growing government to make us that western-style western european style nation and by the way did you notice yesterday, just yesterday, france elected a socialist there are those ensure in the administration and in the left side of the democratic party that were cheering that

but we are not in the stand and that in indiana because obama is not going to win. [applause] as we gather tonight somewhere across this town i'm sure the democrats are gathered around mr. donnelly about the potential he's going to bring about this race. mr. donnelly has been close to barack obama for the last several years and we are going to make that record clear and it's not going to be accepted by the voters of indiana. [cheering] let me tell you what we have in washington, d.c. today. sadly we have a nation that is on the brink of bankruptcy. we have a nation that thinks

there's nothing but gloom and doom ahead can be turned around but let me tell you why i think that. because i saw another turnaround. it started in the year 2004 when india was a bankrupt state and governor daniels came in and exerted republican leadership and turned what was being referred to as a bolt hole in the rust belt into the best fiscally managed state in the united states of america. [applause] i have been so incredibly proud over the last 15 months as i've traveled the state to have hoosiers tell me how proud they are to the hoosiers, to have been part of this remarkable

comeback that governor daniels has led to come in and you know what, the kind of leadership mitch daniels has taken to the indiana state house to change the state instead of having the barack obama demagoguery list of failures we need the mitch daniels types of accomplishments in washington, d.c.. [cheering] we need to see the kind of management that we have had in the indiana state house applied to the united states capital and that is what i intend to take their. [applause]

[cheering] ..

>> i will tell you, that a fellow who got a degree in biology finds it hard to believe, to. [laughter] [applause] >> my business career has spanned 31 years, and has prepared me for many things. but i never imagined it would be for this. i found out that it didn't prepare me. my time in serving with america's greatest governor in this great state administration, has prepared me as well. i came under the national spotlight a couple of years ago come and i have been fully vetted, i have been challenged, i have been busted by the national and local media. i look forward to working with them. not many candidates say that, but i do period. [laughter] [applause] i look forward to working with them because they have a difficult job and simply conveying the message of what a candidate says. that is why i am here to ask you for your help to do it again over the next six months what you have done so relentlessly

over last 15. if you can convince your neighbors of the rightness of the conservative message, if you can simply let them know that smaller government means greater freedoms, if you can convince them that murdoch is going to fight so they can keep more of their tax money in their pockets, if you can convince them that smaller government rolling back is redundant in indiana, it would be a wonderful thing on the national level. [cheers] [applause] and if you will share with them -- if you will share with them that joe donnelly is back on november 6, you know we are going to make the message that this state is going to in the right direction. we are going to elect a republican senator and president and governor, and we are going to do it with your help. thank you all. [cheers] [cheers]

[applause] [applause] [cheers] [cheers] >> thank you all. [applause] [applause]

next on c-span 2, housing and urban development secretary shaun donovan testifies at a senate hearing about the housing market. a conference committee works on the annual transportation bill, and senator tom harkin talks about student loans. on "washington journal" tomorrow morning, we will be joined by republican representative jim seals camp, a member of the budget committee. new york times columnist paul krugman will take your questions about his book. also, ben austin will discuss his article on public housing. "washington journal" is live on c-span everyday at 7:00 a.m. eastern.

this week, live from london. the ceremony and pageantry of the state opening of parliament. until recently, parliament's official opening was usually held towards the end of the year with changes to their election rules, it has now been moved to the spring. wednesday, queen elizabeth will formally outlined governments priorities for the upcoming year. live coverage starts at 5:30 a.m. eastern on c-span 2. >> housing and urban development secretary shaun donovan outlined in administrations plans to help homeowners refinance their mortgages. he testified before the senate banking housing and urban affairs committee hearing on the state of the housing market. the white house has proposed allowing universal refinancing of mortgages in covering closing costs for underwater homeowners who have refinanced. this is an hour and a half. >> this committee will come to

order. our housing market faces problems, continued lack and recovery, which is a great impediment to fixing this problem we need for large-scale long-term housing finance reform. while the committee continues to be concerned about the long-term structure of the housing finance system, today's hearing takes a closer look at one of the strategies to improve the struggling housing market. during our hearings on the state of the housing market, several witnesses, including secretary donovan, discussed the need to expand refinancing options for borrowers who were paying their mortgage. i would like to thank the secretary for coming back to discuss this topic in greater

detail. in january, the federal reserve released a white paper entitled the u.s. housing market, current conditions and policy considerations. in this paper, the fed stated that continued weakness in the housing market poses a significant barrier to a more vigorous economic recovery. one of the barriers identified in the white paper includes obstacles to refinancing at today's low interest rates. the administration housing plan also identifies removing barriers and expanding refinancing opportunities as part of the solution. while fhfa made some changes to the harp program last year at the urging of members of congress and the administration,

i continue to hear from constituents in the housing industry that more could be done to encourage competition in the refinancing market and give homeowners more options. during the hearing in the housing and transportation subcommittee two weeks ago, senator menendez outlined legislation he and senator boxer are working on to expand refinancing opportunities for borrowers with gse held loans. i look forward to this discussion of that legislation and any other proposal today. as i stated during her our state of the housing market hearings on this topic, i share the concern that ongoing challenges in the housing market are acting as a drag on economic recovery. as we have heard many times in this committee, there isn't a silver bullet solution that will save the housing market, but

several options implemented together could provide stability to the market. i hope that this committee can work in a bipartisan fashion to find practical solutions and help overcome the barriers that are weighing down our housing recovery. with that, i turn to senator shelby. thank you, mr. chairman. welcome again, secretary donovan. you have been up here a lot and i appreciate it. today the committee will consider ways to aid our troubled housing market by expanding refinancing opportunities. while this topic is timely, i think it is disappointing that for years after the burst of the housing bubble, the committee has still not produced comprehensive housing legislation. as a result, little has been done to address the serious problems in our housing market.

fha, for example, still needs to be reformed. foreclosures remain as the chairman mentioned, at record levels. millions of mortgages are underwater, and fannie and freddie continue to lose money at the expense of the american taxpayer. in fact, while the taxpayers have spent almost $190 billion bailing out the gse, the only product we received from the administration is a brief discussion piece that lists three policy options. but it does not make any recognition. meanwhile, millions of dollars have been spent on programs like camp solutions. t.a.r.p. has repeatedly noted that none of these programs have achieved their expected results. admittedly, the problems facing our housing market is very complex, as he reminded us. and they have no easy solutions.

finding answers will require a careful study and crafting legislation based on facts and rigorous analysis. unfortunately, rather than doing the hard work required to solve problems, some have chosen to create scapegoats, blaming certain regulators for not undertaking principal reductions that may make for a good news story. but it is not an effective means solving the problem plaiting housing market. plus, it using taxpayer dollars to write off mortgages it's just another ploy by wall street. given how the administration now praises t.a.r.p., maybe another bailout is just what it wants. the american people, however, are tired of this. it is time to take a more serious approach to fixing the housing market. as i have stated before, my republican colleagues and i are willing to work with the

committee to produce and craft effective legislation. the committee is the best form to facilitate careful to liberations and the needed compromises. in contrast, by bypassing the committee, will almost certainly result in partisan gridlock. the majority's decision about how to proceed within housing legislation will likely reveal whether the legislation has a serious effort or just highlighting differences at the expense of real compromise. i believe the american people have already waited four years for housing reform legislation. and i welcome this hearing, mr. secretary. only time will tell whether the american people will be made to wait even longer. thank you, mr. chairman.

>> thank you, senator shelby. are there any other members who wish to make a brief opening statement. >> thank you mr. chairman for holding the hearing. i have to go with what was said before, but i did want to commend the secretary put all his efforts. i would like to commend senator menendez for his thoughtful proposal. we have tried over the last several years to do many things to support and revitalize the housing market. i don't think there is one magic solution. it is many things. in that context, i am very pleased that the administration has finally taken interest in the reo to rental initiative. taking some of these properties on the books of banks and put them back in as rental

properties. also, in regards to project rebuild, i was pleased to work with you in this regard. i think it is important with the tools available and as quickly as possible, to deploy them to keep people in their homes. to minimize foreclosures. and to provide a floor of the housing market, and then hopefully be able to see appreciate in a measured way. mr. secretary, thank you for all of your efforts and your commitment, and thank you, mr. chairman. >> anybody else? senator menendez? >> thank you, mr. chairman for this important hearing. mr. secretary, thank you for joining us again. i appreciate when you came before the subcommittee recently. as i've said many times, we need to fix the housing market now to the broader economy moving and getting jobs. fixing the housing market must involve many strategies to

attack the problem for many angles. refinancing should be one of those strategies, particularly for borrowers who are making their payments but whose interest rates on their mortgages are above today's interest rates of four or 5%. that is why within the next few days, i will be introducing with senator boxer an important and widely supported bill called the responsible re-homeowner refinancing after 2012. it is supported by the ncrc, the national association of realtors, the national association of home builders, many lenders like quicken loans and some mortgage investors like certain securities. our bill would help 17.5 million borrowers who have anyway and freddie mac loans amah but who are trapped in interest rates above 5% because of barriers to refinancing. our bill would make it easier for homeowners to refinance and lower their mortgage payments, which is a popular and common sense way to help the housing market. along the homeowner to refinance a loan that is 6% interest or 4%

interest, for example, would save them hundreds of dollars a month in more money in their pockets, reducing defaults and foreclosures. i would also like to think senator franken. our bill does not include the administration's proposal to pay closing costs of borrowers who agreed to shorter loan terms, which i understand senators feinstein and berkeley are working on. finally, someone on all of the refinancing provisions were addressed in fhfa reportable a portable housing provisions, it doesn't apply to borrowers under 80% loan to value ratio. would should be able to

refinance it cannot. warranties, which lenders cite as an obstacle to refinance loans for same service and refinancing come up with h.a.r.p., too. but they did not scale back these for cases when a different service or was refinancing the loan, which has led to a lack among lenders that has resulted in higher interest rates for borrowers. we need to inject competition and market forces into this market, where services have an unfair monopoly of refinancing certain borrowers, who effectively have no choice but to use the original lender. there are some other obstacles that we had at the hearing, mr. chairman. finally, one of the best aspects of the boxster and menendez refinancing acts is that according to cbo estimates, it will stop bailiffs and save

money because fewer homeowners will default, and therefore, we have been told we don't even need to consider some of the points that we were going to add. this is a slamdunk for both homeowners and taxpayers. i look forward working with the chair as we move forward. >> are there any other members wishing to make a statement? >> i would like to remind my colleagues that the record will be open for seven days for any statements or any other matures you would like to submit. now, i would like to introduce someone who is no stranger to this committee. secretary shaun donovan is that 15 secretary of the department of housing and urban development. secretary donovan has served in this capacity since january 2009. secretary donovan, you may proceed with your testimony.

>> thank you, chairman johnson, ranking member shelby, members of the committee. thank you for the opportunity to testify that the administration's initiatives to help american homeowners to refinance and rebuild equity in their homes. mr. chairman, this comes at a moment in which our housing market appears to have turned a corner, following the best winter of home sales since the crisis began. indeed, with interest rates at historic lows, more than 14 million homeowners to refinance their mortgages, putting nearly $27 billion a year into the hands of american families and into our economy. because we have provided responsible opportunities for families to stay in their homes, more than 5.9 my vacations have been started in the last three years, and the number of families falling into foreclosure is half of what it was in 2009. because we helped struggling concentrated foreclosures, places with targeted investments have seen vacancies fall in home

prices rise. most important of all, our economy has added private sector jobs for 26 straight months, totaling 4.25 million jobs. this represents important progress. but to create an economy built to last, we need to do more. indeed, as i discussed before this committee in february, a range of barriers keeps struggling borrowers from getting the relief they need, and our economy needs at this pivotal moment. in particular, mr. chairman, barriers are preventing homeowners from taking advantage of interest rates that are at the lowest level since the 30 year mortgage was created. for instance, consider judy from tucson, arizona. judy had a 7% interest rate and cannot refinance, not because she has been late on a payment, but because her home is underwater. not being able to refinance normally prevents homeowners like judy who have done the right thing and are current on their mortgages and saving thousands of dollars each year, it also prevents lower interest

rates. that is why the president calls for us to take more aggressive steps last fall. within six weeks, we have identified barriers that were holding people with loans backed by the gse from refinancing. by the end of the year, servicers were ramping up operations for transport. just the four largest servicers report that they are processing applications from 750,000 homeowners. the equivalent of a good-sized tax cut. indeed, nationwide, refinancings were up over 100% in march, compared to a year earlier. in the hardest hit state like arizona and nevada where travel just last week, they have more than tripled. we expect these numbers to continue to rise when we dramatically cut the fha refinancing next month. mr. chairman, that is still not enough, and so today i want to discuss for legislative proposals supported by the menstruation to ensure that

every responsible borrower has the opportunity to refinance and rebuild equity. the first would provide borrowers whose loans are not guaranteed by fha when the gse access to simple, low cost refinancing. so long as they are current on their mortgage, meet a minimum credit score, have a loan with an fha conforming loan limits, and are currently employed. the program includes features to minimize program costs, including establishing loan to value limits. lenders interested in refinancing underwater loans would need to qualify, relieving the strain on the borrower and reducing risk on taxpayers. while this program would be run by fha, it would be financed from a completely separate account from fha. but by the source, we will eliminate any expect the cost to the taxpayer. i am pleased that senator feinstein has drafted this critical legislation.

the second proposal is developed by senator menendez and senator boxer, would allow us to clear it the remaining barriers for borrowers with gse and loans. while transport 2.0 have given people the opportunity to refinance, including those who have echoed in their home, and to ensure these families aren't left out, we support refinancing for all gse borrowers irrespective of their loan to ratio value. which will help responsible borrowers, who happen to live in slower markets. clearing these barriers will go along way toward further strengthening the gse's portfolios, and saving taxpayers money. of course, while refinancing is critical to reducing costs are homeowners, we also need to ensure borrowers have an opportunity to rebuild equity in their homes. savings in our homes is a single biggest source of how weak send our kids to college, it is how

most people get capital to start a small business, and how people save for for retirement. that's what at first were two proposals, which is being introduced today by senator merkley, would give all underwater homeowners who choose to dissipate the opportunity to apply savings from refinancing to rebuild equity in their homes. as an incentive, we are proposing the closing costs, about $3000 on average, we paid by the gse. and to be eligible, borrowers must finance of no more than 20 years, providing a path for our borrowers to get their heads above water faster than the second would be the product rebuild act, introduced by senator reed, which would further stabilize places where prices have dropped the most, and create 200,000 jobs. mr. chairman, we know that the second foreclosure sign goes up on your blog, your home value drops by as much as $10,000. homeowners that are in the hardest hit places often live

with a dozen or more homes with those signs. but as the neighborhood stabilization program has proven, we can help is in the hard-hit places. according to data hot off the press, three quarters of neighborhoods that received targeted investments through the first two rounds of nsp showed increased home prices. it largely as a result of improved vacancy rates. that is the kind of success project rebuild would build on, and that is why we believe it is not only a rebuild program, but also for the neighbors who live next door. that is who these proposals are about millions of families are playing by the rules and doing their fair share, in many cases, more than their fair share. these families have not walked away from their obligations and we can't walk away from ours. we need to make sure every responsible family in america, regardless of what kind of loan they have, has the opportunity to refinance. and rebuild equity not only in

their homes, but in the american dream. that is what these proposals are about. that is what it's going to take to create an economy built to last, and that is why i look forward to working with this committee and the congress to enact them. thank you. >> thank you for your testimony. as we begin questions, i will ask the court to put five minutes on the clock for each member. mr. secretary, pertaining to transport 2.0, fha made some changes to the h.a.r.p. program last fall, it including the loans that are eligible for refinancing and encouraging refinancing into shorter-term mortgages. those changes go far enough, and if not, what barriers still remain for borrowers?

>> as i said, about 750,000 applications just from the largest lenders that are being processed right now, the three key remaining barriers that we see, one is that we have many families who are above water on their first lien. in other words, the lcds are 80% or below. because they have second liens or other debts or for other reasons, they are being stopped from refinancing. extending h.a.r.p. 2.0 to include above water borrowers, those with equity in their homes, is a critical piece. second, while there were a number of important steps to increase competition among borrowers, right now that is one of the key barriers we have that servicers who don't currently have that loan or service not known are being discouraged from competing to refinance those loans. there are a number of changes we can make your period underwriting changes and others

that can help create more competition and lower the cost of refinancing. the third is that because there are certain markets where automated appraisals are hard to do, about 20% of borrowers, even those that would otherwise be eligible for h.a.r.p. 2.0, that have increased costs because they have to do a manual appraisal, we want to extend those automated appraisals to the remaining 20% of gse borrowers who are locked out because they just happen to be in a market where there are fewer sales to be able to construct those. given that risk is already there on the gse's balance sheet, we think these are prudent steps that most help families and also lower the risk of default on those loans. >> what are the most important steps that can be taken by federal agencies and regulators to facilitate refinancing under

current administrative artillery? >> i think that we have taken most of those steps. we believe that many of the steps that i have just described could actually be taken under existing authority, and we would urge that fhfa implement a number of them, even without the legislation being passed but we do think that there are some critical pieces were the legislative authority is required because of legal uncertainty. the legislation remains critical to be passed as quickly as possible. >> i have heard from constituents and many groups across the mortgage industry that the pushback risk, the risk that the gse's would return the loan to a bank's balance sheet, for cost of refinancing, is disabling competition between

lenders and creating barriers for community banks. what impact is this having on consumers, and how can this be addressed to encourage competition in the mortgage market? >> this is a very important piece. essentially, what is happening is that the regional servicer, who may have made that loan, if there were mistakes made in originating that loan, a new servicer is concerned about taking on this situation, even though they were not responsible for the original loan when it was made. what we have done through h.a.r.p. 2.0 is removed many of those barriers. however, there continued to be differences between the ways that fannie and freddie are implementing that, and also differences between how above water loans and underwater loans are treated. currently, we think it doesn't make a lot of sense that a

homeowner who has equity in their home, and, if anything, is a lower risk borrower, would have to pay more or be locked out of refinancing relative to those borrowers who may be underwater in the loans. we think this is both a matter of good economic case of doing this, but also a question of fairness to be able to make sure that these refinancing opportunities are available across the board. >> you previously stated the past way to protect the taxpayers are to ensure that fhfa loans continue to perform. how would these refinancing opportunities accomplish this? >> this is a critical point. this is something that economists across a broad spectrum -- i know you had

testimony from chris mayer, laurie goodman, and many others here recently to this committee about the importance of refinancing. the fed has spoken clearly about the ways that reductions in payments that average 2500 to $3000 a year boost consumer spending and are a net plus to the economy, in terms of the ripple effects that that spending has. i think the broad case has been made very clearly that this is good for the economy. what i would add to that is that for every point -- additional point of increase that we see in home prices, as the economy improves, as the number of foreclosures is reduced, we see a substantial benefit to fha and the gse, because not just defaults go down, but as home values rise, the recovery that we make on any foreclosure that

does go forward, are significantly lower. chris mayer, when he was here, estimated more than $20 billion benefit to the gse for the lower default rate. depending on the take-out, those may be the higher end of the range. clearly, there are significant benefits that come not just from the economy but directly to fha and the gse. and the housing market has improved overall. >> one last question. the administration's housing plan would approve fhfa financing to non-gse borrowers. during a previous hearing, you mentioned that several ways to protect the taxpayers on the potential risk associated with these loans. as part of the production, do you have more specific

recommendations for standards these loans would need to meet? >> absolutely. i would start, mr. chairman, by reiterating that these are homeowners that are currently paying. they must be current on their loans and have made every payment for the past six months, missed no mr. no more than one payment in the last 12 months, and so they are already relatively low risk loans. by lowering their payments, they are even lower risk. in addition, we have a number of criteria in terms of credit scores, employment, and others that we would put on top of that that would help to protect taxpayers. connecting to other things that are absolutely critical. one would be to create a completely separate fund, different from the mmi fund with a dedicated revenue source to offer any off any expected cost. perhaps most importantly, a

requirement that any deeply underwater loans, which all data shows would have the most risk of these loans, because of the greater likelihood of default overtime -- those loans would have to be written down to a loan value of 140% or lower in order to be refinanced. our numbers would show that those loans below 140 are likely -- much more likely to be sustained over time, and that by writing down any loans at the higher ltd, we are mitigating a substantial portion of any re-default risk on those loans that are higher ltd. >> senator shelby? >> thank you, mr. chairman. secretary donovan, following your testimony for this committee in february, i submitted a question for the record requesting additional data on the president's proposal to allow borrowers with private sector loans to refinance into

fha backed loans. yesterday i received a written response to this request, stating that hud does not have official estimates of default rates for participation rates or other performance parameters. since the administration admittedly did not have the key data, and it seems to me for evaluating the proposal, what is the basis for your support of this proposal, and without this data, how do you know if it presents any risk to taxpayers? that is our concern. >> absolutely, senator. one of the issues here, as i think we have talked about before, is that these are voluntary programs. we have a broad range of estimates. what i will say it would be happy to share and meet with you and share detailed -- anybody in the committee, of the specifics. our estimate is that there would

be with some of the restrictions that we have proposed, the upper end of potential costs is about $5 billion. we propose an offset that we meet that. we would also, though, be willing to work with the committee on refining, for example, the 140 loan to value criteria. the lower the take-out would be. certainly, the lower the costs. that $5 billion is an estimate based on that 140 ltb. but many of these criteria, we are working with senator feinstein on potential eligibility and the take-up of the costs. >> you share my concern about the sovereignty of the fha? >> i certainly continue to focus heavily come as we talked about the last hearing, and a whole series of steps we can take to strengthen the fund.

we recently announced substantial premium increases on a range of loans, as well as published a new rule on lender identification that is important in terms of protecting the fund. i do think we are taking a broad series of steps that are necessary and important to protect the fund. >> the latest actuarial report states that the fha capital ratio is 0.24%. mikey lowell. how quickly do you plan to increase fha's the fha's capital and when will it be above the statutory required to present. i think we have talked about this before. capital is the first and best way to ensure that fha does not need a bailout from the taxpayers. do you think that a 2% capital requirement is adequate? we are a long ways from 2% to protect the taxpayers from

bailing out fha in the future. >> the actuarial last year projected that the capital ratio would return the 2% by 2015. since that time, we have had recoveries in the mortgage settling market and i don't have a prediction beyond what was the actuarial report said. we have taken a number of steps since then that would accelerate the return to the 2% ratio. the other thing i would point out, cbo did score the projected receipt for fha and fannie mae, close to $10 million for $1.8 billion higher than the administration's estimates. clearly, the new loans that we are adding to our book are projected to increase that

capital. >> secretary, into a private mortgage insurers held only 2% capital, do you believe that would be adequately capitalized? >> i think that given the way that our reserves are projected, and also calculated, it is quite different from the way that the private sector does that. i don't think it is an apples to apples comparison. my sense, and we are evaluating this, and also the lessons we have learned through the crisis, it is something worth discussing with the committee and looking at whether it should be revised. but i do not think that we should make the mistake of comparing the 2%. it requires, for example, 30 years of projected losses, typically the reserves to the banks are holding against a much shorter window of losses. those are all difference is that

i think is important to look at when you are thinking about comparing the 2% to the way that stress tests and others are done. >> [inaudible question] >> absolutely. >> one more question, if i can. deborah lucas at mit in conjunction with the congressional budget office, released a paper in september of last year that models the effects of expanding large-scale mortgage refinancing programs. the paper discusses the negative economic impact that could result from losses taken by investors in mortgage-backed securities. are you familiar with this paper? >> yes. >> okay. you disputes findings? >> we clearly -- others who have looked at this to calculate the lost interest payments to investors as part of this. even though there are, as he

said, losses that would be taken by investors, there are significant net benefits overall to the economy from the savings. >> thank you. >> senator menendez. >> thank you, mr. secretary, for your service. you mentioned in your testimony that lenders in the h.a.r.p. report that the h.a.r.p. program, borrowers are saving as much as $2500 per year, which, as you pointed out, is the equivalent of a big tax cut for those borrowers. am i correct in saying that even that figure, it doesn't include the additional savings borrowers could get if we enacted the boxer-menendez draft bill and increased competition in the h.a.r.p. refinance market by making it easier for lenders who are currently servicing that loan to compete for the

business? >> there is no question that you would both increase the savings to families that are already planning to refinance, and you would make additional homeowners eligible for refinancing. it has both of those benefits. increasing the savings for those folks who are ardie refinancing, as well as expanding the pool of families we would expect to refinance. >> you have any sense of how many additional individuals borrowers could save? >> just looking at the appraisals, we are talking about hundreds of dollars for those borrowers on the refinancing costs. when you add to that some of the fees, for example, above water or owers who may already be refinancing, you are looking at

adding hundreds and in some cases as much as a thousand dollars a year, in potential savings. what i will tell you is what the reductions we have announced that go into effect on june 11 for fha borrowers, the fees alone we expect to be at about a thousand dollars a year in lower costs are you so that is absolutely critical. >> that is really significant. in talking about the route that is leaking in my home, i will now have a way to replace it. it is also german -- a tremendous ripple effect. am i correct in saying that the boxer-menendez discuss and draft would actually save the gse's money because of reduced defaults once homeowners mortgage payments are lowered? >> all of our modeling suggests that there would be significant savings to the gse in terms of lower default rates.

i think chris mayer, a professor at columbia, testified about pacific numbers he said exceeded $20 billion. our expectations are somewhat lower than his. but still, you are talking about substantial sums that could be saved from lower default. >> we had professor mayer at a subcommittee hearing a few weeks ago. the results were as much as 20.7 billion. whether it is your lower range or that range, you are talking about significant saving in taxpayers money and any fixable challenges in the future. the other question i have, do you believe that the h.a.r.p. 2.0 policy, implemented by the gse and the servicers themselves, reducing competition among banks and decreasing the

effect of h.a.r.p. 2.0 and 11 homeowners savings through lower interest rates? i think we try to address that based upon all the things we heard in the hearing, and i am wondering how you view those. >> there is no question that while many of those barriers were removed by h.a.r.p. 2.0, there were targets of the critical remaining barriers. i will give you an example of what is happening at this point. because servicers who currently service the loan already have all of the data through the gse system to be able to refinance, they only have to do, for example, a verbal confirmation of employment in order to proceed to refinance. other services who would want to compete to refinance the loan still have to go through a full underwriting in those systems, including, for example, getting

a full w-2 and the documentation around not only employment, but income. those are things that are given again, it risks risk art exists on the gse books. it just doesn't make sense there. because they have already been removed for the existing service or, we ought to go the next step and make sure that there is competition. i think laurie goodman estimated the potential was to save as much as $15,000 per borrower by increasing the competition on the refinancing of these loans. >> one final comment. we had about six witnesses representing a wide range of views, there was unanimity on the view that asking for all of that documentation, when in fact, the risk is already there, it was not necessary. it actually added an obstacle towards refinancing. it was interesting for me to hear some of the most conservative members of the

panel who had that view as well. i appreciate your response. thank you, mr. chairman. >> i think you for your testimony today. it was indicative of the secretary that i have grown to know and respect, and i appreciate the way you have common to talk about these bills and what you have. you might not agree with every comment, but i think you for the testimony. >> mr. chairman, i attended the subcommittee meeting that senator menendez had, and it was a good hearing. i thought we had some good witnesses. for what it is worth, i think there are some redeeming qualities to the boxer-menendez bill, also some things that i think certainly need to be changed. mr. chairman, what i am hearing -- i'm hearing rumors that some of these bills may go straight to the floor and not come through the committee. i think you can see by the committee attendance that people have come to think that not much is going to happen here a consequence. we haven't dealt with a technical corrections bill, which i think people on both

sides would like to see happen. in the dodd-frank bill, we certainly haven't dealt with the gse. i am pleading with you today to please not let a bill that candidly could receive some bipartisan support go to the floor and turned to something that is certainly not that. i hope that the chairman will not let the rumors that we are hearing become a reality -- any of these bills going directly to the floor and not to the committee. i do want to get back to the secretary. i know you spent time on the ag settlement. i think one of the things that is coming out right now, and i think that we saw this on the front end, the servicers, the big banks that so many folks in this country have been most upset with, including many in this administration, the big banks have the ability to get 45 cents in credit towards this $26 billion settlement for every dollar that they cram down the

throats of private investors, which i think that most senators understand, are people's four o. one kays and other types of investments and investment vehicles. a all of us want to see the private sector back in the business. but this ag settlement has fostered most of the people we talk with on the private side, again, they have no control. they have invested in these securities -- the servicers, which candidly did many of the not so good -- most of the not so good things in this arena. actually get credit by using someone else's money, and i wonder if you've had much pushback -- i'm sure you have from the private sector side. they said they didn't even have a seat at the table. especially, knowing your background, that surprised me a bit. >> look, there are key issues here, as we have said earlier, in terms of the complexity of

how you get progress on these loans. it is very important to us as we went through the settlement that we were clear that any of those write-downs that happened on private-label securities loans needed to be net present value positive. what that means in english, is that basically they would be a benefit -- [talking over each other] this is one of the points that we have been in discussions about. we did actually go back based on those concerns, and we got the servicers to agree to use a standard model. camp model for what we call to a m. p. -- it is substantially better than what we had before. but we continue to hear some specific concerns about that model, and so we are working with them to approve it. again, the fundamental idea here is i agree with you.

investors should not be taking the losses to the benefit of services. where there are net present value positive principle reductions that can happen, those should go forward. the other thing that has been key is on second liens. i agree that it is a fundamental problem that we have that second liens has stood in the way of the progress of these loans. we did require significant -- in fact, extinguishment of the liens at 180 days. we are talking with investors about whether there are further steps we can take to go beyond that. on the other hand, just with the refinancing issue, what i don't think we should do is allow second liens. there weren't really rules of the road -- there were no rules written and there should have been. investors will agree about how you handled the second liens. we have tried to create rules that would force the reduction of the second lien and keyer

with refinancing, we have lenders that holds the second liens, servicers common understanding in the way of refinancing on the first link, that would be good for the homeowner and the economy. one of the key provisions in the menendez and senator boxer bill would be to remove the final steps and final barriers for the second liens are providing. the problem is, in a world where there are not rules, how do we create rules after the fact? they are never going to be perfect. i can think that we can continue to revise this. what i don't think is acceptable is to say that we are not going to make progress and not make progress on those simply because perfect is the enemy of good. >> i understand that point. on the second lien portion, i look forward to looking at the part of the boxer-menendez bill, it seems that in many cases are the second lien holders. >> that's exactly what wright.

>> shouldn't the second lien be extinguished, why would we give any credit at all to a second lien when you are writing down any portion, even 1 penny of the first link? do you agree with that? >> there are cases where what you're talking about is a first lien that may be delinquent and a second lien that is current. neil: ideally speaking, lien priority would say that the second takes all of the loss on that. the problem is there is no law or requirement that says that. we can't, as the government, we can't impose that. i think the issue is, i agree that we are not in a perfect place. on the other hand, we can't wait for a perfect bill to make

progress. >> i appreciate your point of view. i would just say that senator menendez, i don't know i can talk directly to him -- >> you can always talk to me. >> thank you so much. i think this is something that we ought to look at. what is happening, the servicers, again, in many cases have a second lien. the mortgage holders are paying a much higher interest rate on the second lien and staying current -- you know? what we have really done as a nation is allow any home equity that used to exist, most of it is gone now, we used to use it as an atm machine. and we created a huge problem for people and i hope that in the boxer-menendez legislation, by the time he gets to the floor, that we will absolutely, totally extinguish 1000% any second mortgage before we allow 1 penny of first mortgage is to go away. that is the way a second lien works. i hope you will clarify that. again, this is to the benefit of

the services, which by the way, have helped create this. having the second lien in the way these things have been dealt with, it has created a problem. let me ask one last question. qualified mortgage. i know that has to be troubling -- the way to the consumer agency is looking at the qualified mortgage. and basically trying to determine whether there is going to be a safe harbor for people originating loans, if they checked all the boxes in the essence of making a valid loan -- they are looking at something called rebuttal presumption. it allows them to come back on originators. it seems that that is a huge problem down the road as it relates to getting credit to viable borrowers. is that something that troubles you? >> i will admit, senator, i am not an expert in the specifics

of the rebuttable presumption versus hard task for complete removal of any liability on a safe harbor. my understanding is, and i think this is true of a number of the lenders -- the clearinghouse banks and others that are looking at this, as important as a rebuttable presumption or a safe harbor, is how blind this is under a rebuttable assumption. if we could get to a standard where there is a clear, bright line under rebuttable presumption, that, i think would satisfy most of the concerns as to whether there would be liquidity available. it is not a standard is safe harbor, but it is as important if not more important of an initiative to be looking at as just the difference between a safe harbor between rebuttable presumption. >> thank you.

>> thank you, mr. chair, and thank you mr. secretary for your testimony, and more importantly, your work on these many strategies to try to help address the challenges for refinancing families under water. we appreciate your comments about the rebuilding equity strategy, the administration and the advocacy for the way that families can choose for refinancing to lower monthly costs or refinancing to get themselves out of the position of being underwater in an expedited manner. the statistics and analysis that shows have families sticking with the same payment at lower interest rate and shorter term would be out from under water in five years, it is a fairly powerful observation to bring to this. i am pleased to be able to introduce the rebuilding equity act in order to try to capture this concept and see if we can take this forward in the senate.

i want to turn to the non-fha am a non-gse challenge of families that are underwater. under the fha strategy, one of the challenges we have run into is the hundred and 15% loan to value restriction, and i am not sure if you are familiar or have observations on that, on the different ways we can overcome that hurdle. >> could you be more specific? the 115%? >> yes -- my understanding, and if i have this right, is that they are not allowed to extend government guarantee for loans that are more than 115% underwater. ..