thank you for the opportunity to speak to you today, and i ask that my written statement be added to the record. >> without objection. >> thank you very much for a very comprehensive statement. but me use my five minutes to try to pack in as much as i can. first let's get the issue of daniel who is a 23-year-old who apparently was forgotten in a holding cell in san diego after a decision was made not to discharge him.

has anybody been disciplined as a result of this? >> well, thank you for asking about that in that incident, mr. chairman. i am deeply troubled by the incident. the dea is deeply troubled by the incident. the incident was a mistake. it wasn't malicious and wasn't intentional and during our 39 years history as an agency we are not aware that anything like that has ever happened. the entire agency was shocked by what happened and no one is more shocked than the agents that were actually involved in the incident. immediately upon learning about the incident, i ordered a review of our detention policies. we are currently fully cooperating with the office of the inspector general for the department of justice and they are conducting the investigation

, but in the interim i ordered the assessment i felt compelled to send a management team from a neighboring field division, los angeles down to review what happened, and i've personally spoken with all 21 of our field division staff. we've entered in a discussion about how to make sure that this doesn't happen anyplace else. we have many different procedures in place already and all 21 have reviewed their policies and procedures. they've initiated changes to ensure that this never happens again. >> that's nice to know now. let's talk about the secret service has been very public in disciplining and in fact dismissing many of the agents who were involved in the prostitution scandal. have any of the agents involved

been disciplined klaxon >> let me say that this -- i am extremely disappointed by the conduct allegations in colombia. of these allegations are not representative of the 10,000 men and women that work for the dea. >> i will stipulate that. nor were the secret service agents who were involved in their end of the scandal indicative of the people who work for the secret service. most of them are dedicated, but the secret service move quickly. i haven't noticed that the dea has moved quickly tall to deal with this. >> i can assure you we moved immediately very quickly as soon as information was given to me by the directors of the secret service. i brought the agency question out and made them available to

the war oig. it's not being investigated because the oig has taken on the investigation. we are cooperating with them and making everybody available assisting them wherever possible. the action that i could take, however, was oddly curtailed the tours in colombia. they are presently unlimited while the investigation is taking place. oig is still completing interviews, so it's not really appropriate for me to prejudge the results, but i guarantee you that they will face if there was misconduct they will face our disciplinary process. >> have you investigated the elements related to a fast and furious? and if so what has been the result? >> i can tell you that too is still under review by the oig.

we are all interested in resolution so we can find out who knew what when and where. be retracted the statement, so we are waiting for the oig review. >> was the part of the statement that mr. colson said, quote, guns were actually getting into the hands of criminals a part of what he retract it? i believe he retractable with his statements. he said he was misquoted and retracted it. >> i'm thinking no other guns have been getting in the hands of criminals. let me say your answers have been an adequate in all three. oig works at its own pace. the secret service did take a

very quick action when the scandal came to light, and i will accept the suggestion that the ranking member of the full committee mr. conyers has made to have another hearing. the gentleman from virginia, mr. scott. if you research centers have indicated in the incarceration rate over 350 per 100,000 starts creating diminishing returns in over 500 per 100,000 becomes actually counterproductive you are adding to the crimes rather than. that is at 500 per 100,000 incarceration and the united states of 707 per some. they have some 4,000 per 100,000. what role does the dea policy

played in over incarceration and the racial disparity and what are they doing about it? >> thank you, ranking member. i can tell you that the majority of the administration, our mission is in the world's biggest and baddest drug traffickers. we spend our resources and work hours going after the largest and drug-traffickers. the sources of supply, the heads of organizations and the heads of drug cartels, transportation organizations, those that most impact the drug supply on the united states, for instance -- >> has any dea policy contributed to over incarceration and the racial disparity? >> there are federal drug laws

that the dea and forces. you set the law, reenforce the federal law. we go where our intelligence takes us and where the evidence takes us. >> what is the policy on the mandatory minimum studies found to be discriminatory and ineffective in reducing crime what is the policy on mandatory minimums? >> there is no policy for the dea minimum mandatory. we go where the evidence is. if someone is trafficking drugs, we investigate that and the organization. >> you don't have a position supporting the mandatory minimum as the crime fighting tool since they've been found to be discriminatory and a waste of money and ineffective in reducing crime you don't have a position on the mandatory minimums? >> we conduct our operations without regard to the consent. the department of justice --

>> the senate saying local, state and federal task forces there are allegations that some of the task force results have been referred to federal court and some have been referred to state court, federal court where you have the draconian federal court you have the mandatory minimums shown to have a discriminatory impact because all of the cases get sent to federal court where you can get five years mandatory minimum and met cases tend to be tried in state court they are not subject to those kind of mandatory minimums. is that dea policy? >> that is not dea policy. again, we bring the most significant cases to federal court. we bring the sources of supply and those responsible for the drug supply on the streets of the united states and much of the violence. >> so that is not the policy -- are you aware of that

allegation? >> i'm aware in the department of justice has taken the position on the affair sentencing and the recent change on crack versus power the department has been very supportive of that. to investigate and follow the evidence to go after the most extreme traffickers and that's what we do. islamic are you aware of the study that shows that you can reduce drug abuse by 1% with $35 million of treatment and to 50 and up for law enforcement. are you familiar with that study and if so how does that affect the strategy of the dea? >> i don't know if it is the same study i am familiar with studies that show the savings everything put into the demand reduction into treatment that's

why we're very supportive of the one the rebalanced drug strategy that we currently have in the united states. the president's drug strategy is very clear that you need the introduction you need prevention >> the same resources in both? >> i'm sorry? >> are you putting similar resources and move? >> actually the past year there is more money spent on the prevention and treatment than there was on domestic law enforcement. estimate the gentleman's time is expired. the gentleman from florida? >> thank you mr. chairman. let me go up for a couple of things early on. the issue with the san diego holding where this person was held as you know, but i just have a question. i listened to your answer. what was your current policy at the time this happened?

>> the policies are different in a different field divisions because they have different -- some don't only have a holding cell. but in santiago the standard policies that anybody then detained, and they are only detained in the field division for interviewing and processing in the group that brought that descendant in is responsible for him while he is there being processed and is responsible until he is either brought to jail or released. since this incident, that field division very quickly to put in a division order and policies and procedures that actually spell out what everyone's duty is coming and we shared that

with 20 other field division. >> so in other words, there was no one assigned to make sure that holding cell or wherever you want to call it was empty at the end of the days of that no one was left behind? >> it's on written that it's always a responsibility of the group supervisors, of the group responsible. estimate it's not written down and, therefore they didn't follow that type of procedure because it is apparent by what happened. as a former law enforcement officer i and so was founded and baffled by how this could happen to enter the 26 domestic offices and 21 field divisions in the u.s. and 85 foreign offices in the 65 countries. the field divisions are leaderless and have been pursuing several months for one

year in the caribbean. "the new york post" reported in april that the agency is having a significant impact on agent morrell. it there have been many others acting affects in these divisions. they may or may not feel in power to make the decisions needed or policy changes needed due to their acting status. and again, eni former deputy sheriff. knowing how important it is knowing that the need to have a direction, knowing there should be policies and procedures in place to and are you doing anything to fill these? and when will they be filled? >> think you for asking the question is this to the cut filling vacancies some are open for extended periods of time,

but when one is retire transferred there is someone put in charge. it's only recently been that we have had a confirmed administrator myself who rose up through the ranks and confirmed deputy that causes this domino effect. so as we move our chief of operations into the deputy position, now we are moving the pieces and putting people in place. all of the field divisions that have been vacant have had very strong and good leadership. >> so you are working to fill them? because i have a lot more questions. was san diego an issue with what happened? >> not at all. >> use if you have different policies for different areas wouldn't it have been easier to set up a major streamline policy for every one of your decisions

to follow and then those that have other things like if you hava holding cell you will make sure that before you close that office everyday you go through the holding cell to sweet any contraband before. i would say every time you put someone in before you put them in you make sure there's no contraband, and every time you take them out and do the exact same thing but when you leave every day there should not be anybody in there to be left behind to reduce too one other question i have before i run out of time is is it still the policy of not allowing any of our agents that are working with mexico let's say to the arm when across the border? and if so, why? because as we know we have lost one of our agents that did not and was not armed and was murdered. i just want to know if it is still the policy promoting that policy or are you trying to change that policy so our men and women can protect themselves

on detil? >> having been a former law enforcement officer it is more important than anything and on the safety i would happy to leave it out of the forum to talk about the safety issues and i'm hoping that you respect that and i would be glad to come and see you myself. >> and mr. conyers. >> thank you, transom sen. i appreciate you announcing that there will be continued hearings about the dea and its role. you will note, madam director

that i originally pointed out of my remarks that we spend huge amounts of resources, and the rate of illegal drug activity continues at about the same pace. have you been able to reflect on that in terms of how this keeps going on and what we might be able to do about it? >> thank you for the question. i think that there's a lot of misinformation and misperceptions about actually the drug situation, especially when it comes to teens, so i do want to tell you that 650,000 fewer teenagers who are using drugs today than a decade earlier, and that's a 15%

decline. the balanced drug strategy that we have has played a role. marijuana used by teams has dropped 17%. methamphetamine has plummeted 67%. ecstasy use has been slashed 42% and cocaine use is down 40% since 2006. that's even 50% since 2006. so we do see these drops in the team when drug use and we also see the same corresponding drops an adult drug use, so we are doing something correct with our drug strategy and we believe that it's the prevention, treatment enforcement we need all three, and that is one of the causes that we are seeing the changes in drug use.

obviously we are concerned with the uptick in the prescription drugs, legal drugs, but we have been able to change the drug use. we've also been able to change availability of drugs on the streets especially cocaine. and since 2006 the department with the culbert and administration in mexico we actually have had sustained increases in the price of cocaine coming into seen the plan that. >> this goes contrary your statement which is i'm happy to hear you are coming back before us so i will have a chance to check what you're telling me

against information that i have not validated yet, the statement that bothered me here was the drug addiction rate at currently 1.3% in this country are the same ratio as 1971 in the we spent over a trillion dollars in appropriations fighting the war and it's pretty stagnated. are we just citing different pieces of information to support our positions or is there some correctness in the citation that

i just gave few? >> the figures that i am using are from the monitoring the future study which has been used to get and to track trends in the teen drug use and it also comes from the statistics from the workplace drug testing and if you are using the year 1971 comparing it with this year, you have to remember the highest rates of drug use those years was 74, 75 and 76. they spiked significantly after 1971. it's undisputed that we actually are having the lowest rate of cocaine use in this country in 30 years. >> our gentleman's time has expired. >> thank you, gentlemen.

>> mr. chairman, can i just point out that i want to continue this discussion outside of the hearing room between now and the next time we have the distinguished witness. >> the statement will be in the record. the gentleman from puerto rico. >> good morning, administrator. thank you again for meeting with me in february to go over the public safety crisis on the u.s. virgin islands. you as much as any other official have an intimate understanding of how serious this problem is. the number of drug related homicide in recent years would be considered a national emergency if it were appearing in any state. that's not just my opinion. that's what senator rubio also stated during the hearing in december. since the meeting there's been

several important developments. first, the house approved the bill but that's the federal affairs on the southwest border have affected trafficking routes and crime rates in the caribbean and that under a plea to the attorney general to address these trends by allocating the necessary sources to you mr. sections in the caribbean and reporting back to congress on the specific steps that have been taken to get second, about two weeks ago the attorney general holder was sitting where you are now. i asked him why it wouldn't be appropriate for the doj to increase to puerto rico even if it is only a temporary surge just as the federal government did when there was a spike in violence on the u.s. side of the southwest border. i acknowledge the current budget constraints that set this is a matter of prioritizing limited resources making sure they are being allocated to the u.s. jurisdictions where the need is

the greatest. they responded that doj is starting to embrace the concept injecting agents and resources into what he called hot spots. that is areas that have seen a rise in violent crime. the attorney general says that puerto rico would certainly be a candidate for such a surge because of the islands of violent crime rate. i just hope that action follows those words. third, the homeland security committee just approved a bill today basically saying this was that we should have a counternarcotics strategy for the caribbean border just along the same lines as the ones we have for the southwest and the northern border areas.

that's great. i've been fighting for that, and it's about to happen. ondcp will be told to do this and to do it within 180 days from the time this appropriations bill becomes law. now, your men and women in puerto rico or doing terrific work. you know several weeks ago you had your agency led an operation for dozens of airline workers and puerto rico who were smuggling drugs on flights to the mainland u.s.. however, despite the recent staffing increases that you have raised when we met i remain absolutely convinced that the dea does not have enough agents in puerto rico. according to the data provided to my office, there are nearly three times as many agents assigned to the miami field office as there are two puerto rico. even though the island's population is 7.5 times greater

than miami and the drug-related violence is off the charts. i want to be clear i'm not saying miami doesn't have significant problems that you need to deal with. i'm just providing this comparison because it brings sharp -- you realize hollander resource puerto rico is when you see this, so i would like to hear your view in terms of what you can do or cannot in staffing the office in puerto rico to this mix before. we have met coming in you know that the caribbean regions of concern to the dea. when we moved resources in 2002 from our other fielder divisions down to the southwest border, we left the caribbean region alone because we knew if we were successful in the southwest

border that we would start singing pact so san juan, the surrounding division has been very important to us and i actually have increased their resources there. let me talk about those increases. in 2009, there were 83 agents assigned to san juan. ausley increased to 95. in fact, i've done what we can to make sure that agents graduating from the academy and senior agents rotating in from the foreign offices are assigned. we will continue to try to get as many resources to puerto rico as possible. on the surge, know before we your discussion with the attorney general about the searches that the dea actually was surging in the puerto rican of a couple years back when we

needed help with housing projects on the drug trafficking murder rate and violence. we responded by sending agents from around the country into puerto rico for the periods of time to help with that and we will continue even though we no longer have the program we will look for ways to assist our agents and our fellow law enforcement officers in puerto rico with an additional resource. islamic gentleman's time has expired. gentleman from virginia, mr. goodlatte. specs before mr. chairman, welcome. i wanted to ask you about reports that the dea field agents in arizona were aware of

the gun walking being done by atf. the dea agent in charge of southern arizona and fast and furious said that many field agents knew that the atf was walking guns to mexico but the supervisors told them to back off when they objected. have you investigated who knew what about cost and furious and why they did so little to stop the unlocking to mexico? >> thank you. as i mentioned earlier, the statement as i ever stand were actually recanted. he studied and has recanted that. we are very excited and waiting on these results from oig because prior to mr. with

colson's steegmans, we were not aware that the dea was aware of the agents in arizona were aware of the tactics that the atf was using when he said the investigation is being done by oig with that have made all our people available that should answer the question about who knew what from my agency. >> did he explain why he would recant -- why he made the statement in the first place if he later recanted them? >> i've not had any discussions with mr. colson. i just know that right after there was a reporting of what he had said he called a rare headquarters and said he recounted his statement.

>> i heard both. but hopefully the oig is going to interview him. >> so you are relying on the office of inspector general to investigate his statement and whether or not it is true that agents working under him were aware of the fact that gunrunning was taking place. in fact we know they were taking place. they might not know what is going on perhaps with 80 effective in the same region that the same time. the greatest concern is why supervisors may have told the agents to, quote, back off when they raised concerns about the wisdom of sending guns to drug dealers and others in mexico that ultimately resulted in the death of a border patrol agent.

we will report back to this committee wants to hear from the oig and let us know what actions have been taken to make sure that when people find out that wrongdoing is taking place and peter freely able to report it to their superiors and then have some interagency discussions between atf and the dea to see what are you doing here giving guns to people trying to stop smuggling drugs into the am i distance is not a good idea. >> perhaps with our folks new. the oig was given a unilateral authority to investigate. >> i want to get into another area of interest. what assistance to as the dea give to state and local law enforcement to combat synthetic drugs?

the synthetic drugs and the new emerging very troubling problem of i personally have been working with the chair of both of the national associations, but also they are the ones that first brought to my attention that synthetics is a problem, and so we have given considerable assistance both in training courses. we also offer our chemists -- >> what additional tools to you need that would make the d.a. better able to combat synthetic drug abuse? >> actually this committee does help, and that was the scheduling for many of those chemicals. that was number one. member to, you have given us the support. our funding agent work force and that has allowed us to teach our

agent work force about this new and emerging trend. it also allowed us to teach our state and local counterparts about the emerging trends come and we've been able to expand our investigations now internationally to go after the sources of supply directly supplying the chemicals showing up in our neighborhoods and then eventually being sold in k2. >> the gentleman from tennessee, mr. cohen. >> thank you mr. chairman. >> thank you ms. leonhart. what is your budget? approximately triet >> 2 million. >> i'm sorry, $2 billion -- >> about $2 billion.

and then we have additional with the account for the diversion program so the total budget -- >> over $2 billion. did you get any confiscation money? did you get any money for the confiscation of properties? >> more talking about the forfeiture? there is money that the department of justice gives. estimate how much money do you get from that? do you have any idea at all? >> if you give me a moment. >> what is your number one drug you are fighting what is your priority? >> our priority right now is pharmaceutical drugs. >> what is your second priority? >> we don't prioritize specific drugs because the organizations that we are going after or polydrug. stomachs and you're not going after the drugs for the harm

they do that because the affected has on these organizations and you're going after the organizations? is that right? >> we are going after the organizations that are having the most impact on our communities supplying the most drugs and the most violence. >> so it's the fact that nef or crack or heroin is causing the most damage to individuals. if that is not the number one choice of the crime syndicate it's not your number-one choice. you're number one choice is the crime syndicate not the fact that heroin and method and crack or destroying people's lives. >> not correct. the organization now is paul the drugs. so, for instance, the colombian cartels which are a pretty are the primary source for methamphetamines, cocaine, and a good amount of heroin on the streets. they are a pretty. is that that is the number one priority is going after that cartel? >> allain after the number one

priority, going after those that most impact the united states. it's cocaine, beth, heroin, marijuana. submit to you agree it causes more harm than math, crack, cocaine and heroin? >> as a former police officer, has a 32 year dj agent, i can tell you that i think marijuana is an insidious drug. >> does it cause less damage to the american society of the individuals senate, crack, cocaine and heroin? doesn't make people have to kill to get their fix? >> i can tell you that more teams enter treatment. >> can you answer my question crux answer my question, please. >> i'm trying to. it causes harm because it is

young people that are using it. if you're talking about -- >> you are trying to answer the question. i'm not senator sessions. does it cause more damage to society and cause does methamphetamines cause more deaths than marijuana? >> i don't have a breakdown of how many -- and as aspirin caused def? >> i'm talking about the illegal drugs don't of a breakdown for you on how many deaths are caused by cocaine. have you ever seen a person who had cancer and used marijuana to help them meet or relieve their conditions of suffering from terminal cancer? >> no i have not. >> if you have seen it helps them with their appetite and makes them smile would you agree that it has some benefit to

society for somebody that's by the media need the slow that spent his life defending this country and has 120 tons and marijuana is the only thing that makes him even smile according to his mother? is there not an efficacious situation there? >> that's between him and his doctor at. >> why does the dea take the position that medical marijuana is wrong. the publication in 2011 has the most insane. the movement is not simply a harmless academic exercise. the danger of thinking -- >> the time has expired. the gentlewoman from california, ms. chu. >> thank you mr. trippi that i represent a district in los angeles county where three years ago a young rising star and elected officials in my district

was murdered by the mexican drug cartel when he was visiting relatives there. this tragedy is why my colleague and i worked on legislation that would allow the u.s. law enforcement to more easily free is the proceeds of international criminal organizations and u.s. financial institutions in hopes of preserving those assets for future seizure. a collective a situation where the u.s. could only freeze assets of those engaged in criminal activity once a final decision was being made and our legislation which was signed into law allowed the u.s. courts to freeze assets once there was evidence of the criminal activity. so, what role has all been preserving the assets for forfeiture act played in assisting the dea financial investigations in the laundering operation? >> first, thank you for bringing

us that legislation. it has helped already. i'm aware that more than $50 million has been frozen because of that. so we want to thank you for it and know that the dea, especially the international investigation that regularly or conducted to our efforts that we have a way to freeze those assets in the middle of an investigation and during an investigation. we must be able to freeze the money for these foreign countries, and this has allowed us to get. >> thank you for that. i want to follow-up on your statement that cooperation between the united states and mexico is at an all-time high, and that in particular the dea is grateful for the extradition relationship that you have with

mexico, because it is important that criminals are brought to justice in that country. i wanted to know what you mean by the relationship is at an all-time high, and also, of the extradition of you talk about the extradition of 94 and 93 individuals from mexico in 2010 and in 2011 respectively. i wanted to know also with the status is of those that have been extradited. >> the relationship with mexico is at an all-time high, and i see that because we now are working investigations jointly. we are able to develop partners in mexico that we can share intelligence with and we can actually take action on that and vice versa. they developed intelligence and sharing it with us. we have representatives from the mexican federal police and from

the lpg car that or even sitting in our build process intelligence center. that is a true partnership. we, especially working the violators the cartel has that are most important in mexico, working with them we've doubled the number of targets they've been able to the rest by sharing this intelligence. on the extraditions, a member of these expeditions the folks have already been prosecuted in the surface sentences in the night it states. many significant sentences. the other thing that mexico has done the extraditing as those that cooperate after being incarcerated are really deutsch enough that clear picture answer to how the mexican cartels are operating and that has helped us in mexico because we share that

information to determine the best way to go after the cartel's. >> how many have been convicted and sentenced? >> i can get you those numbers. i don't know. many have pled guilty. so a good number of them have put guilty and many have been convicted. >> how has it impacting the drug traffic violence along the border? >> especially the high-value targets where the heads of the low tens of the cartel's that we have been able to learn to leave to incarcerate. it has helped mexico because they have been able to take the people that have been able to have the power to corrupt mexican officials are in jail cells in the united states and are no longer able to run their operations, so it is affected

the drug supply as well. together we've done such damage to the cartel that's where you see the durbin of the of cocaine on the streets of the united states and the price up and the purity down to it >> the gentleman's time has expired. from colorado, mr. pollis. >> i wanted to get a clear answer to make sure the drug administration and enforcement administration is aware of some of the evidence. is crack worse for a person than marijuana? >> i believe all the illegal drug -- >> is methamphetamine worse for some piece of than marijuana cox spent i don't think any illegal drug chu is sherwen worse for some oneself than marijuana?

amine caminhas camano khator i don't know. i mean, if you don't know, you can look this up to read you should notice as the chief administrator for the drug and for some of administrator to the time asking is heroin worse for someone's health than marijuana? >> all the illegal drugs are bad. >> does this mean you don't know? >> herron causes an addiction that causes many problems that's very hard to kick. >> does that mean that the health impact is worse than marijuana. is that what you're telling me? >> i think that you are asking a subjective question. >> it is subjective looking at the science on have read some of the studies and are aware but i'm asking you as an expert on the subject area, is heroin worse for someone's health than marijuana? >> financing as a police officer and a dea agent that these drugs are illegal because they are

dangerous, because they are addictive, the do heard a person's health. >> said iran is more addictive. is heroin more addictive than marijuana? >> the property of heroin, yes, more addictive. >> is methamphetamine more addictive than marijuana? >> both are addictive. >> is methamphetamine more highly addictive than marijuana? >> i think some people become addicted to marijuana and some people become addicted to that and that means. >> you mentioned your top priority you indicated is a prescription drug is one of the classifications of prescription drugs painkillers that you are concerned about? and or the pain killers addictive? >> yes, they are very addictive. some are they more addictive than marijuana? >> all the illegal drugs are in

schedule one are addictive. >> again this is a health this question, and i know you obviously haven't law enforcement that crumbling sure you are familiar given your position the science of the matter and i'm asking, again, clearly your agency has established it peter prescription drugs as a top priority is that there for an indication that prescription drugs are more addictive than marijuana? >> all the illegal drugs are addictive. >> okay, your agency has established abuse of prescription drugs as its top very you indicated as much to us. does that mean abuse of prescription drugs are greater threat to the public than marijuana? >> because it is an emerging threat, because people are turning to prescription drugs faster than any other drug that is why we prioritize its. speed in many states including my home state of colorado, we have a legalized and regulated

regime of medical marijuana coming and we have found a great degree of success in combating the abuse of prescription drugs by making sure the patients have access to medical marijuana which the science indicates, and i will certainly encourage you to look at the science as less addictive and less harmful to human health than some of the narcotic prescription drugs that are abused and also on label they can also be very harmful as well. would your agency consider supporting medical marijuana when it can be used in pursuit of your top priority which is reducing its use of prescription drugs. if it can be documented the use of medical marijuana helps reduce the abuse of prescription drugs is that something more willing to pursue? >> congress determined marijuana is a controlled substance and the dea is tasked with enforcing -- >> but you mentioned priorities he said top priority reducing

prescription drugs. one tactic to do that would be the use of medical marijuana, and i want to make sure again top priority in sood of the top priority argue willing to look at the use of medical marijuana as a way of reducing the abuse of prescription drugs? >> we will look at any options for reducing drugs, drug addiction. >> of the time of the gentleman has expired. gentleman from texas ms. jackson lee to be an estimate thank the chairman and ranking member. thank you for your appearance and having been in phoenix a couple weeks ago let me express my appreciation for the service for the drug enforcement agency officers and their professionalism and as well the work is done in houston texas where we are the center point if you will for a number of issues

dealing with gun trafficking, and as well the confluence of you will of money, drugs and guns, and so we are well aware of the importance of collaboration. embrey to ask a series of questions and appreciate helping me get as much on the record as it possibly can. what is the importance of collaboration between the major federal law enforcement? are used the example fbi atf and others along with those that i represent on the homeland security what is the importance of that? >> let me start by saying that state and local participation has been the dea bread and butter for the 39 years we've been an agency. you combine that partnership with the partnerships that we have developed with other federal agencies and i don't

think that there is anything stronger or anything more effective at attacking violent crime, attacking drug trafficking than having task forces. succumb to answer that especially -- >> my question is is the collaboration strong, positive, continuing in the administrators or the respective agencies we are collaborating now more than before. >> let me move to a brief question has there been a thorough investigation of dea contact or involvement by the oig? >> yes, we made in all of our employees in phoenix steel division -- >> any questions regarding the supervisor directions to say don't say anything, all that has been investigated is that correct?

the final report would be able to be accessed on that issue. skype we are all awaiting the oig finalizing of the investigation and the report. >> would you be able to submit that to this committee once it is finalized? >> i would have to refer to the inspector general, but usually the oig reports are made public. >> let me move forward and as i said, quick question. what is the extent of drug trafficking on tribal land? can i just get brief answers because i have a series. >> there is a serious substance abuse problem on tribal land. especially in the last five years. alcohol and methamphetamines more recently -- >> what are we doing does the dea have to focus on that?

>> we have a problem, i believe it is coming and do we have a focus on some of your -- >> absolutely. we have established a very good relationship with the other wall and for some agencies both the fbi and the bureau of affairs and other tribal law enforcement and have done joint investigations. we depend on them to tell us, you know, who are the traffickers, who are those most impact in the supply on indian land, and then jointly work with them sharing intelligence command we have had many successes on those lands. >> let me ask you -- there's been many requests by members. how has the republican budget, the budget the would cut resources, how devastating would that be, and let me follows a you can answer these questions. i'm very concerned. i know we talked about synthetic, but focus on about

salts and in particular th impact that it had in houston texas the story that i refer you to specifically talk about a incident with bath salts in an individual david peterson who died on a street found disoriented and in extreme physical deterioration and then i would appreciate your comment about the dea officers and physician officers and penn hills and whether or not the response is excess of and whether we are being fair to doctors on that investigation. >> you have all points of the multifaceted question. islamic the last question i had a hard time hearing stomach the efforts with officers dealing with physicians and pain pills has been a sort of surge of closing physician officers arresting them.

i'm wondering are we being excess of, are we being careful? because you are literally shutting down professionals who may be legitimate -- >> i will start with you asked about the budget. these are austere budget times and we will work within what money is given to us and we will prioritize accordingly as the synthetic drugs and i am glad you bring that up. it helps give us the biggest controlling some of those chemicals the substances. our agent has opened a number of investigations both on bath salts and they've been pretty

successful in assisting the city and local officers in the investigation as well. the third question about the physicians. houston was very troubling because they have a problem it's not like in florida where oxycontin come it is hydro cone that is the problem and we have many investigations come successful investigations, and we have arrested and prosecuted for very egregious doctors. when we say that the doctors that are affiliated and operating these mills working within the stilwell's they are not practicing medicine, they are not giving examinations to the patients.

the pell mills are open for distribution and those are the physicians, those are the clinics that we have targeted using their intelligence, using undercover investigations and they've been very successful in the scenario. spec the time has expired. let me think you for your courtesy but i would put a question on the record to be answered in writing. >> i am about ready to per pound. thank you, ms. leonhart for coming. we look forward to seeing you come back. you might look forward to seeing us again. thank you for your testimony today. i think it's been helpful to all of the members. without objection all members will have five legislative days to submit to the chair additional questions for the witnesses, which we will forward

and ask the witness to respond as promptly as they can sell their answers may be made a part of the record. without objection all members will have five legislative days to submit additional materials for inclusion into the record, and with that, again, i thank ms. leonhart and without objection, the hearing is adjourned. ..

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sites. >> pentagon officials today told congress that plans are on track for a handover of security responsibilities in afghanistan to afghan forces in 2014. they testified before a house armed services subcommittee, it was chaired by rob wittman of virginia. [inaudible conversations] [inaudible conversations] >> we come to order. this hearing is related to the afghan national security forces [inaudible] [inaudible] the events today are represented

by david sedney, deputy assistant secretary of central asia and pakistan and major general stephen townsend, director of the pakistan coordination. thank you for your service or a country. we look forward to your plans for equipping the afghan national security courts and details about the production size and rationale of the near-term and long-term. many of us have just returned from a congressional trip to afghanistan, during our visit, we traveled to several provinces and local leaders including the chiefs of police and the number of provinces. we also have the opportunity to talk about a military commander on the ground, those who provided their impressions of support that will be needed to create a self-sustaining ansf. it is my hope that my witnesses today can provide further contacts on these issues, and as

an administrative note, i recognize that the members of other subcommittees will join us in pursuing to the committee's rules from i will recognize these members after all oh and i subcommittee members have had a question to question the witnesses. we have with us in the stead of mr. cooper, ranking member, mr. andrews and would like to turn it over to him for any opening statement he may have. >> thank you, mr. chairman. i also appreciate the witnesses and the services to our country and i want to the record to show that i will never fill this or cooper's shoes. thank you for calling the hearing. a pivotal aspect of our country's strategy is for the afghans to be able to provide their own security. a pivotal aspect of that goal is the training of the security forces and we're that all stands. no reflection on today's witnesses, but one of the reasons that i think it is so timely that the chairman called this hearing is that frankly are two administrations, we have had

a long history of unfounded and inaccurate optimism on these questions. i know that the two witnesses are dedicated to telling the facts as they see them and i know the committee is dedicated to hearing the facts as they are. chairman, thank you for this opportunity and we think the witnesses for being here. >> thank you, mr. andrews, we appreciate your leadership on this issue as well. at this point i would like to ask unanimous consent that committee members. that they will be recognized for five minutes. with that, we will begin with their witnesses and with david sedney, mr. david sedney, the floor is yours. >> thank you very much, mr. chairman. thank you ranking member and acting ranking member. thank you for the opportunity to be here today.

the subject is the two of you have introduced it, we in the administration believe it is exactly on point. the key to success in afghanistan is the success of the afghan national security forces over the long-term. united states fundamental objectives our strategy, campaign plan in afghanistan have been consistent since president obama announced them in december of 2009. our goal remains to deny safe haven to al qaeda and overthrow the mesh their attempt to overthrow the afghan government. the afghan partners and people, we have taken enormous strides towards these objectives. to that end, u.s., afghan and coalition forces continue to work to drive down the taliban,

their insurgency and stronghold and build up the security forces and afghan government. our efforts remain on track to enable the afghans themselves to assume the lever security nationwide by the end of 2014. as we continue to ship shift more areas to afghan security needs, and by the end of this september, we pull out the final 23,000 search troops that will return at that time. american and coalition forces that remain on the ground after september will so take the continued transition of security to the afghan national army and afghan national police in accordance with the general allen's campaign plan. as he you said, as i mentioned, the teachers and the afghan

people in the security forces, the afghan national police are both on schedule to meet their size by or before october of this year. additionally, i would point out that the afghan security forces now participate in over 90% of all operations in afghanistan and on the lead for over of these missions. that rate of growth is on an upward trend. as general allen stated to the house and senate in march, asnr is better than what they thought they could be. this improved capacity is allowing the afghan national security forces to assume a good lead as. 50% of the population lives in areas where the afghan security forces are in the lead. that number will climb to 75%,

which we will begin to put into place this summer. it contains a number of contested areas from areas where the taliban is active. this fighting season that is coming up that we are already in this year will be the most significant challenge for the afghan security forces we have the ability to ensure their success. certainly, the insurgency will carry out complicated attacks. the recent attacks on selena was sophisticated and coordinated, but i point out that those attacks were tactical and operational failures, and the response in kabul, highlighted the increasing confidence of the purity forces, because of kabul,

they carried out the complete reaction of the attack. we have made achievements that have sent a strong signal to the afghan people and tell them people and people in in the region. first come at a strategic partnership agreement the president obama and president karzai signed in may, that obama subsequently made a speech in the nation from afghanistan, that showed united states and afghanistan are committed to a mutually beneficial relationship, not just until 2014, but beyond 2014. that strategic partnership extends for 10 years until 2024. secondly, the chicago summit, the nato summit in chicago earlier this month was a great success and demonstrated the continued dedication of over 50 nato and other partner countries to supporting stability and

security in afghanistan. in chicago, isaf members and partners reaffirm their commitment to the lisbon timeline to complete transition by the end of 2014, and also come a very importantly, to continue in engagement in afghanistan after 2014. as nato secretary put it, nato and the isaf partners will not leave that task undone. we will not let afghanistan slip back into the hands of militants, which the vast majority of afghan people utterly reject. we will finish the job to help create a secure afghanistan, it secured for our shared security. again, i will repeat that our goal is to ensure that afghanistan is never again a base from which attacks are launched on the united states, our allies and partners, and in chicagopartners acknowledge our shared goal. i also pointed to recent u.s. afghan collateral arrangements.

with special understanding. they preceded the strategic partnership agreement in those two are critical to demonstrating afghanistan sovereignty and they rely for their execution on the increased capacity of the afghan national security forces. while i have stressed the successes and the progress is, i also want to very directly acknowledge that we have serious challenges still ahead. limited government capacity continue to plague afghanistan. in the limit be effective governance that are necessary for full transition. additionally, as stated by general allen in his testimony and repeatedly in testimony by other witnesses from this administration and others, the taliban led insurgency continues to operate from safe havens in pakistan. although we have had indisputable successes against al qaeda, as i'm sure all of you are aware.

we continue to press the pakistanis on the need for them to take action against the taliban and affiliated groups which operate out of pakistan and carry out attacks on coalition and afghan forces in afghanistan. we will continue to work with our allies and partners in the pakistani and afghan governments , and our international partners to address these issues. we will keep congress informed about progress. as i close them i would like to thank the house armed services committee and this subcommittee for the opportunity to appear before you today, for your continued support for our men and women in uniform, and for your support of the afghan security forces. without your commitment to funding and resourcing the afghan forces, we could not achieve progress over the last three years that. i look forward to your questions and your insights. thank you. >> thank you, david sedney. thank you for your testimony. we now look forward to the testimony of stephen townsend.

>> chairman women, congressman andrews, they give you the opportunity to appear today and discuss how the afghan national security forces are doing. our bottom line up front is that we are on track to achieve our strategic objectives of afghanistan. a sustainable and sufficient transport is part of our mission. the ansf continues to grow and maintain on track by the end of 2014. 350,000, that come about as a mechanism for defeating the insurgency. the ansf continues to meet or exceed the recruiting objectives this year with army and the air force expected to meet the combined goals of 195,000 by the end of the summer. the police reaching their goal

of 157,000 by october. the ansf also faces some shortages. we have provided literacy programs to approximately 90,000 ansf at each day. this is going to make the ansf one of the most literate of the afghan society. attrition continues to be an issue as well. although attrition will not keep the nsf for meaning there goals, continues to hamper the long-term development of the ansf. we are combating attrition and attrition is going down at the last several months. one example is the recently approved stricter timelines which reduced aol awol.

the army and police are training and promoting these critical positions. they're taking the lead entering their own asses and their training programs, these afghan instructors are providing more basic and advanced bills training and at afghan led training centers everyday. operationally, the ansf's making progress as well. he currently rates 67% of the army units and the police units in the top two tiers or categories of operational effectiveness, that is effective with advisers and independent of advisors. from january to april, the percentage of afghan led partner got operations increased from 259%. afghan forces conduct partnered

up operations. the special operations forces also continue to grow and increase operational efficiency. for example, the ansf will continue to face challenges on the battlefield, but they will not face these challenges alone. the support of the ansf throughout transition, bear going with a security force model. i put a train and advise and assist role for bagram prison. during this transition. matt, we will still fight alongside our afghan partners were needed, but we will shift into a more supportable as the afghans move to the front.

ansf operational challenges include logistics, army and police and interoperability among others. the ansf's greatest challenge is one of competence. our agreement to stand with them beyond 2014 has been a tremendous boost her confidence. the wilberforce will strengthen as her leadership strengthens and capabilities improve. and as they continue to move more and more to the front. circling back to the bottom line, we assess that our security strategy, our security transition is on track to have a sufficient and sustainable ansf that is in full responsibility for security across afghanistan to the end of 2014. finally, thank you all for the work they do on behalf of our servicemen and women, as well as your efforts of their safety and

i stand ready to answer questions. >> thank you, we appreciate your testimony as well as mr. david sedney. we will begin now with questioning and i want to begin with mr. david sedney to get your perspective. you have spoken about transition another is a repositioning to put things into tranche three. if you do not achieve the desired results in this transition, whether it is tranche three, four or five, or their contingency plans -- alternative schedules and goals are met and transition doesn't take place smoothly and some of these more challenging areas within afghanistan on the can you give us your perspective is what you see as contingency scenarios and alternate

schedules? >> thank you very much. cumbersome, thank you and your colleagues for making the trip to afghanistan to speak with our commanders and troops and also our other partners. at the end of this fighting season when the forces return home at the end of september. general allen and his staff will review what happened over this year as i said in my testimony and as i mr. that you heard out there. this is going to be testing summer for the afghan security forces. they are going to be an elitist never before. we are going to have to evaluate them. at the same time, beginning in just a few weeks, the third

transition will start including some very difficult contested areas. general allen will have the summers expressed evaluate that. he will do that and he will submit a report up the chain of command, evaluating what he believes are with future requirements are. rather than developing a holistic contingency plan, what we are focusing on are making what we are now doing successful come and we have a review process in place where we evaluate those up the chain of command. to the secretary and to the president. that is the process that we are looking forward to it. i will say, that will be the case in about five days because i will be back myself, but is general allen said, in his testimony and as you may have heard when you're out there, we

are finding it the afghans rather less well than we better expected. there are some cases where they are not doing well and that is where we are able to give them and the additional help that they need. we have some very aggressive and i think very positive things -- afghan commanders who are pushing to do even more than sometimes we think they are ready to. that is a judgment that our commanders on field have to make every day about whether people are ready to do things, if you stretch too far, that can be dangerous, but if you don't stretch far enough, then you're not going to achieve your goal. we do have this review process we also have the composition of the afghan security forces, secretary panetta in his formal meetings are the afghan interior of defense ministers in april,

for a group that is called the security and consulting form, which we meet about a six-month review process to examine the performance of the afghan security forces to evaluate what additional inputs might be come a what changes might be needed we look forward to being able to come back and review your colleagues as the processes are completed. >> thank you, david sedney. we know right now, general counsel and that we know the efforts are on the lawns of stabilization operations. and most of that is being executed by the special operators. as we begin to draw down forces to the 68,000 by the end of the 2013, the question is that transition, will take place in a way that will support elements are in place to make sure our special operators continue to have what they need as they get

placed more and more out on an island and to pursue these operations. the concern is that if it isn't strategic in the way the drawdown is structured, but those special operators may not have what they need, whether it is their supporters other logistical support and might find themselves on an island. can he you speak to that issue and is the planning taking into account strategically where we will be in continuing to pursue this fight, especially along the lines of the village stabilization operations and those in those areas. >> yes, sir. as you might expect, we are planning for contingencies through now and beyond 2014. what we call our enduring presence. none of those plans have really firmed up yet, but the village stability operations and afghan local police the mentioned is a very high priority.

absolutely, i can assure you that the planning will allow for the proper support for those hardy folks, also out on the printer with a center out. the support they need will be there for them. even in our enduring presence for print, there will be support and support for those forces that are providing it. >> mr. secretary, you indicated that afghan security forces participated in 90% of operations. the lead of 40%. what is the difference between being the lead and the

participating? >> i'm going to call a little bit. i think one of the key thing is that i look at when i look at reports from colleagues on this, they will be executed according to plan, do they have the capability to after action review to see what went wrong, what went right and in order what to do it going forward and better. general, what would that look like? >> i use a simple analogy of a patrol. they meet together and when the afghans are in the lead, they are helping and advising.

just a short while ago, almost every mission in afghanistan would've been planned by an american surgeon or officer. out of the gate, who is in front and leading opposition. a short while ago, that would've been america. increasingly, actually the latest reports are more than 40%. they are in the mid- to high 50 percentage range. have the patrols are led by afghan leader with an american leader tagging along behind watching the afghan leader control the operations. what is predominant with the force is that 61% of the troops on a mission these days are afghans. that was not the case when i was there. a little over a year ago. on the objective, who is

controlling the soldiers as they move about the objective. that is sort of the difference between the two. >> i just want to jump into the next question. what is the difference between an independent advisor and an effective advisor. >> effective as an advisor is a matter of degree. if you are an effective advisor, you're getting a lot of advice. if you are independent as an advisor, you're giving much less device. big difference is who is generating the operations. if an afghan commander. they are generating the whole idea of the operation and that is how it works. >> this is not a trick question,

but is it possible for the afghan units not to be in the lead, but be independent with an advisor? or is that an oxymoron? >> i haven't really thought about this particular question. >> they may just be effective. >> are there any afghan units and we don't hit the top two categories? >> yes, there are. are you concerned that american troops might be under the command of the commanders and in an outfit that is not least effective. american troops are not under the command of the afghan leader there. >> they are partnered and on the battlefield together, but there is an american leader in charge? >> do we have any data on the attrition rates among the afghan security forces? >> are they up or are they down? >> yes, we do have data that we

are happy to provide the committee. the answer is that attrition is down -- we can pass the sake of you would like. >> in the case of the afghan national police, a year ago, attrition was ranging from 1.4% to 4.6% in the last six months, ranging from 3.4 in the most recent period, 0.5%. >> what is the main reason for attrition, why people leave? >> i'm going to differ a little bit of this. the attrition of people who have

entered and leave before their contracts are up, quite the most common reason is family reasons. he will have family problems at home and they feel they cancel them. >> i would be interested in that rates for afghan forces. i hope it is zero. god forbid, but what happens with the rates, are they going up or down or staying the same? >> i don't know which way they are trending, but i do know that their army loses about twice -- they have a casualty rate that is about twice that we do they are in this thing. >> i offer no plea with that statistic, but i just want to know what was. >> thank you, this is very helpful. >> thank you, mr. andrews, we will go to mr. conway. >> one of the things we were talking about the other day as chart one, trench too,

transferee. we need a better way of measuring progress. ineffective all the way to independent and advisor, whatever your skills are -- district by district basis, a way to communicate progress in the transition. in other words, because you said that after the first two, the 50% live in the control of the afghans. in both one and two, and maybe i just misunderstood either way would be helpful in that regard over the last week, we went down to a district and had a presentation on the afghan commander there on the operations of the best we were

asked by folks in uniforms that the sky is very present. maybe he was just an interpreter inuit to do. i suspect he was being interpreted correctly, but i came out of that meeting very impressed with this guy. general townsend, the arp, the numbers we are shown for post 2014, in terms of the numbers of security forces -- the money to pay the arp is an estimate of what the international community will have to come up with each year.

the taliban is threatening them, they are coming after them because they see them as a threat to their ability to operate. is there someone in the ministry of the interior is going to take ownership, but there has to be somebody in the afghan system that is going to share. would you like to enter either one of those? >> sure, i would first like to ask the thing you said about transitioning at the start. those measurements are there. they are measurements throughout all the stages of transition and answer your unasked questions about has anyplace completed it? none of the charge one or charge to districts profits providences

, some of them have entered stage three and some it stage four. having that information would be great. >> sure. on your question about the alp and the two numbers, is anyone going to take charge of that -- it is not in the end strength by design. the money is, we anticipate funding in the out years in international contributions. the mri, the ministry of interior already owns the program. in fact, there is a chain of command that runs from through the police chain of command and those alp forces are responsible to the district chief of police. the art is a training funding and equipping one line that comes down through the ministry of interior. >> i guess the question is, between the two of you, are you confident that the afghan's

sufficiently valued this program but they won't siphon off that and go somewhere else with it? >> we are confident in that because control that funding. that -- [talking over each other] >> post 2014, the program has been controversial in afghanistan. there is ownership within the ministry interior, as it proves its effectiveness. we are getting more support from the top level affect all invectives there. i think we are very much on track with that. but it is certainly no secret that a number of high-ranking afghans, people and parliament have been critical in the past with the alp program to get the buy-in that we are going to need at least another year or two of success as my colleague said,

yes there is a structure that governs the alp. right now that structure is very -- we have a lot of mentors in that process so we are building that capacity and we think we are on track to complete by 2014, but it is one of the things we are going to be having in that review process. >> thank you, gentlemen. >> thank you mr. conway. we now go to mr. critz. >> general, you mentioned something that i heard last year and the year before. the concerned for attrition and the lack of ncos. if you could, the secretary mentioned that the attrition had gone from 4.4 -- in a row range of 4.5 a year ago, i believe, ranging down to have a percent. just for comparison purposes, what is the u.s. military --

what is our attrition rate? >> congressman, i don't know the answer to that question. i can tell you this about the afghan attrition. for the last -- we have a goal of 1.4%. per month. they have the afghan army -- they are about at that goal now. it has been declining. the attrition has been declining for the last several months. the police are actually at that the police are actually at that goal the police are actually affect all come the police are actually at that goal, and in fact, i think below the goal -- to meeting the goal and exceeding the goal now. the army is not quite -- but it has been on steady improvement for the last several months. >> good, good. the police force was just what i was going to ask about macs as well -- can you explain, when you say there is an issue with ncos, what exactly do you mean? >> first of all, there is a shortage. about 17,000 ncos short in the army. and about 11,000 ncos short in

the police. >> 17,000 -- how many ncos who we have and how many does that mean debate that they need? >> 17,000 short of some number? >> i don't know that off the top of my head. >> third two issues. one is a cultural. they have not had a professional officer corps previously. we are trying to train the army and the senior leadership of the army to value noncommissioned officers. that is working and probably the brought thing that is going on. next, is to fill in their ranks, and then they have standards for the noncommissioned officers. they have to be able to read comes, so that is one shortfall there that we are working on. as these guys get recognized in the ranks, as high-performing soldiers, they have to be able

to read and go to an nco course and pass that, before they can be an nco. it is a work in progress, doing these lots. >> the reason i ask is, like i said, i had heard that issue in years past, i was in afghanistan two years ago and in afghanistan again, is that a constant percentage or number that has increased exponentially or are we seeing a sharp decline. i mean, we all know that you have to have insurgents on the ground because you're going to have some lack or approaching chaos if you don't have the amount of people that you need. as we transition here, i am trying to find out who we have the ncos needed to support the 352,000 level, or, as was discussed at the chicago summit in may, are we looking more at 200 30,000 number and where are

we going with this. >> we will have the ncos we need, because that is a focused area that we are trying to improve. we will look at the data and we will try to provide the answer before the hearing is over. if not, we will provide it for the record, the general population ncos. it will probably remain pretty constant, slightly improving because we have been growing. it is hard to meet the objective when you are adding requirements, which we have been doing. we will have the ncos we need to man and lead the 352,000 force. i will let mr. david sedney address where it goes from there. >> just two additional points, horseman. the first is as steve stated, the reason they don't have enough ncos to have to be a really effective nco coming have to have 10 or 15 years of

experience and this is an army that has less than five. they are going to grow into that. secondly, on filling the ncos through the process that general townsend described, because we will have reached the goals, the 352,000 by the end of the summer, that is going to give the afghan security forces two years from october 2012 to the end of 2014 to refine their qualities and build the nco course and will the process be finished, we and others will have to remain to train and advise and assist after that, but they will have the beginnings of what they need in terms of numbers, if not in quality by 2014, and and the next few years will be the time when we see the greatest progress. >> thank you. >> we now go to mr. coughman. >> thank you, mr. chairman. general townsend, and secretary

sedney. did you for your service to our country. a couple points. first of all, have a concern looking back at u.s. military history and our involvement in south vietnam, one of the issues i think that complicated the efforts of the army of south vietnam was that we gave them our doctrine, and it was of high mobility after we left vietnam. i was in afghanistan in november, and they took me up to see a training exercise, and it was for artillery. and it was were towed artillery. i'm thinking why on earth have we procured for them towed artillery instead of mortars.

when i press the isaf representatives he said well, sir, president karzai had insisted on heavier and more expensive that she wanted f-16s and this and that -- and it was a compromise. i'm wondering how many areas like that where we have given them weapons and tactics that don't fit -- that are not realistic as to their capabilities, to maintain that, after we are gone. general townsend, i'm wondering if you could reflect on that. >> yes, sir. i have actually seen that same towed artillery. i would point out that the u.s. army and marine corps is today have a lot of towed artillery and the afghans have had towed artillery for decades. towed artillery is nothing new and there's nothing out of character for the afghan army of the past where the president. now, did you have mortars as well, they have light mortars and medium caliber mortars, much like we do.

so they have, i think direct fire systems that they can have high mobility with what i have seen them attach those come until those -- >> i want to remind you that this is that the u.s. taxpayer's expense. borders don't require all of the support elements that towed artillery don't. let me talk with you. let me ask you about let me ask you about that cultural corruption in afghan national security forces, which is stunning. i press this under darrell issa to conduct an investigation into the conduct of afghan security forces and the lack of ovto the conduct of afghan security forces and the lack of oversight and the military hospital, where sons of military money has been missing and unaccounted for.

it was never transferred or relieved, where afghan soldiers were dying in the hospital from malnutrition and lack of medical care, because their the families couldn't come up with a necessary bribe. certainly, it speaks to a lack of oversight for isaf personnel. also, it speaks to not just the culture of corruption, but also, just the fact that -- to what extent have we formed a military organization, how capable are they when they would allow this to occur. i was wondering if you could reflect on that. >> who wants to start? >> if i could start, mr. representative, first of all, thank you for your concern and interest in this area. the situation that you mentioned at the military hospital is one, that we became aware of, began working with the afghans to take

collective action. they are currently investigations and correction of action under way. with that hospital. let me just go back to the words that you used, culture of corruption. there is, to be frank, not just hundreds, but thousands of years of history in afghanistan and surrounding regions. where corruption has been part of the fabric of life. it is not something that the afghan people want, it is not something that the majority of the afghan military officers and the leaders of the afghan military on themselves. from the ministers on down, i have seen a lot of leaders at the top and leaders in the middle and ordinary soldiers who are committed to not allowing corruption to destroy structures at the afghans need and that we are financing. yes, there are corruptions as i mentioned in my current

statement, corruption continues to be a problem. we have to work with the afghans to give them the ability to get rid of that corruption. that is a challenge because not only do you need to have the laws in place, you have to have effective structures in place, you have to have a judicial system, prosecutors, courts, a system and incarceration from all of these things come the afghans are building or in some cases rebuilding. it is a huge challenge. while recognizing the corruption is a problem, i would not agree that it is endemic to the point where our investments are not going to pay off. we have some really good partners in the afghan people and we have some corrupt ones that we are working to get rid of. i appreciate you making things that happen -- those kind of things in the hospital should

never happen to any human being anywhere. we are working with the afghans to correct them. >> thank you. i'm just concerned that issue at the hospital is something that very well could be represented throughout the afghan security forces. and i think we, in congress certainly need to get down to the bottom of it. thank you so much, i feel that. >> thank you, we will move to mr. johnson. >> thank you, mr. chairman for allowing me as a nonmember of the subcommittee to ask questions today. i appreciate it. greetings, gentlemen. mr. sedney, can you characterize for us the evolution of the afghan security forces, readiness over the last decade, and basically tell me when did they start turning the corner to

become a force to be reckoned with in afghanistan? >> i can, actually was on the ground in afghanistan, the deputy chief of in may 1 of 2002 in the first u.s. special forces arrived to begin training the afghan army. a little over 10 years ago. from that, very stark discovery, where we have not enough trainers or trainees, bombed out buildings what we have today, we have made incredible progress. i would also say that for too long, the effort in afghanistan was under resourced, both in terms of money but also in terms of the level of training and support that we were able to give them. the former chairman of the joint chiefs of staff, edward mullin, described that very graphically. [talking over each other]

>> the turning point, i would say really, was about three years ago following strategic review of president obama and members of this administration, which recognized we had not been doing in afghanistan where we had put the effort into building the afghan security forces into the size and capability that they're now showing. >> let me ask, because i've a few other questions -- so how many taliban forces are we fighting in afghanistan now? >> there are estimates from the intelligence committee, and it is a very hard figured, but how many. many who fight with the taliban are part-time taliban.

>> i think probably most of them would be part-timers. approximately how many to many to 20,000? >> last estimate that i recall seeing was 15 to 20,000. i'm not sure if you have a better year. >> okay. now, the commitment to withdrawing our forces by the end of 2014, does that include special operations forces? >> we have committed to drawing down our forces by the end of 2014, and ending an elite combat role, but we have committed to continuing a presence in afghanistan after 2014. the strategic partnership agreement that we signed with afghanistan last month, we

agreed to begin negotiations on a bilateral security agreement, which will set the parameters for without forces, including the participation of special forces after 2014. we are about to begin those negotiations to come up with how many special forces will be in afghanistan after 2014. >> all right, thank you. we are talking about 200 30,000 afghan national security forces by 2017. we would be drawn down about 120,000 at its maximum height. that is going to produce 120,000 jobless individuals who understand how to fight, and what we do do we do with those, and also, 200 30,000 on 20,000. how do we get to that 200 30,000

manpower figure? >> for 2017. >> that was exactly one of the subjects that secretary panetta discussed with the afghan minister of defense. they agreed to have a regular six-month review for the afghan security forces standing on her future plans are, and the securities and situation in afghanistan to see what pace that would allow the drawdown of afghan security forces to a long-term sustainable level. the goal is something in the neighborhood of 200 30,000 by 2017 is one we've probably agreed to. the actual pace and character and the way we get there is something we will be doing in the six-month reviews. in terms of what happens to those who might be immobilized, there is a certain level of

natural attrition, afghan security forces, army and police who sign on for three, four, and five year contracts and a lot of them leave -- 30 to 40% lead at the end of their contracts, that is normal, so that is a certain level of normal production forces. there is the possibility of such things as a reserve force. and we have had experience with afghanistan -- >> pardon? >> who would pay for those -- in terms of payment, we have worked on a future plan, a future plan of funding for afghanistan that would come from the united states and our international partners, but more and more from afghanistan itself with the goal of afghanistan paying for its own security forces by the year 2024. >> how did we arrive at the 200 30,000 mark?

for 2017, and is that still a reasonable estimate of the number of afghan security forces on the ground at that time? given the fact that 20,000 -- >> that figure certainly depends on the degrading of the taliban, as i said. our campaign plan has been to degrade the taliban, though that the afghan national security forces. in our reviews, we are going to check and see where that is actually happening. a much diminished taliban and much less a finish in turn affect the taliban will require less forces, and that is what that calculation is based on. we will look to see every six month if that is happening. >> thank you. >> thank you, we are going to start with the second round of questioning. there are some panel members yesterday that.

to follow up on mr. johnson's question, looking at the underlying assumptions on where we are going and transitioning with ansf as we spoke of, 352,000 structured by the end of 2012 and transitioning to 200 30,000 by the end of 2017. i guess my question is, what are the assumptions and analysis is that went into that to determine that that was a proper structure of that time, how does that coincide with the coincides of drawdown of american troops were isaf troops during that time. not? if you could lay out where the thought process has gone, where it has been, where we are today, how we came to that number -- 200 30,000. i know that there is obviously a resource element associated with that. also coming strategic element associated that i like to get your inflection on that. >> personal, 352,000 was a result of wargaming in that kind

of thing to allow us to allow the ansf to defeat the taliban. that is how we got to 352,000. there has been a decision in our government saying that your 2015, as you know. that is to get them through a year, more or less come after our drawdown and elections. how do you get to some number in the future and why 200 30,000? actually, isaf and nt na ran a number of excursions and 200 30,000 is just wonderful. quite honestly, it is one that we would probably pick for ourselves, that is a smaller force that is pretty well-equipped and capable. there were other courses of action, some were larger with less capability to have more

troops committee would have to have fewer trucks and helicopters and things like that. the 200 -- approximately 200 30,000 course of action is one that we agreed to with the afghans and our international partners. as you said, there is a resource, you know, that is the $4.1 billion course of action. these six months reviews that mr. sedney talked about, every six months we are going to reevaluate. still making sense to us based on the threat and what is going on in the world. the afghans, quite honestly would like to have a larger force and more capability. the world community is going to fund most of that, and there is a trade-off there. i think that as we go down the road, we will make these six months reviews and determine if 230 make sense or maybe something else makes sense. at some point in the near future

here, we are going to be asking the afghans to say, okay, give us your preferred course of action. because we have done a lot of that planning, and then blossomed into it. >> .jet. >> mr. sedney, speaking but the six-month reviews, i am assuming that they will also include isaf forces. you're looking at drawdown after 2015. also, isaf forces to the end of 2014 where we will be theoretically out. will those six-month evaluations also consider, if we have not reached an acceptable security condition with that transition, with isaf force presence after december 2014? ..

support and as they become more and more in the lead they will need less and less support, so we will be evaluating in the six month review looking primarily at the performance of the afghan security forces, and then if there are areas where the afghan security forces need additional training, advising,

existing areas where they are facing challenges, then the commander in the field i'm sure will recommend methods to do that. but, yes, it's very much joint -- it's very much a unitary process looking at the entire spectrum and the whole country of afghanistan. >> very good. thank you. mr. kaufman. >> thank you mr. chairman. >> i understand that president karzai redican steve coe constitution cannot run again, and there hasn't been a credible election yet and i know in iraq under general casey, the coalition forces are actively supported the independent commission in iraq to make sure that they were credible elections. what efforts are going to need made to make sure or to assist the afghan people there is a credible transition of power.

>> thank you very much. the elections and a transition of power. it will be an historic achievement and one that the afghan people are very much aware of. president karzai has pledged publicly and privately to the government that he plans to step down and facilitate the transfer of power. in terms of the department of defense and the military role and nato and isf will play those are the last two elections in 2004 to 2009 the actual security protection available in areas where the security had been achieved was led by the afghan forces particularly in 2009. the judgment of the commanders in the field is going to be doubled to be the case in 2014

as well. so in terms of the military role, we will be supporting the afghan security forces to the degree necessary in 2014 for those elections to carry out the security. the biggest challenge of course is having a credible and legitimate process that results in a transfer of power that the afghan people international community see as legitimate that there is a very active political dialogue in afghanistan already and that our colleagues of the state department and elsewhere are working to that end. we think the afghan security forces are going to be in good shape to take the lead and can be very effective at maintaining security during that election period. >> going forward, president karzai has come down on these night raids, which in terms of

my anderson of the very effective in terms of capturing the ki insurgents where are we have right now with the raids in terms of working with the karzai administration? >> quite honestly, congressman, the question has pretty much trumped and the pressure. it was highly pressurized few months ago and now it's dropped significantly because we have made this agreement on the night raids were the special operations with the government of afghanistan. and essentially, we are turning over the night raids and exhilarated pace to them and we have four of their own strike forces better during the raids side-by-side. there partnered with the americans with of the strike forces the a coalition force that is still operating each night. their partner roles with afghans

but it's the discussion we had earlier who is in the lady and who is participating. but because of that agreement, and because of the continuing success of these operations the pressure on that topic has dropped significantly with the government of the afghanistan. >> in terms of our ability to phasedown forces being able to redeploy them out of afghanistan , utilizing pakistan has become an issue in working with the pakistani government i wonder if you could reflect on where we are right now in that negotiation process. >> we have been talking with the pakistanis about reopening the ground lines communication. we continue those conversations i think people in my office has been involved in those discussions. my deputy was for about the last six or seven weeks carrying them

out. we've not -- we should get but we do find a great deal of willingness on the pakistan site with our partnership with a number of other countries to the north of afghanistan we have been able to continue operations without any interruption or any hindrance with our troops in afghanistan and partners at trips to afghanistan is higher now than it was before the pakistani ground plans communications closed the difficult areas of the transportation networks. but all of that said through some tremendous work by our colleagues of trance, and centcom and by a number of

civilian carriers we are actually in very good shape and we are able to move forces and equipment in and out of afghanistan as is necessary. what we don't want to be dependent on the north anymore than we want to be on pakistan. we were interested in having both groups open, both of the competition and a diversity of supply lines that we are strategically important. >> thank you. ausley yield back. >> we will move back to mr. johnson. >> thank you. the $4 billion, that is projected to be necessary to support that smaller force of 230,000 -- to enter the 30,000 ansf in 2017. that represents about 20% of the afghan current gdp.

if we assume afghanistan will experience economic growth and improvements in governance, maintaining that force will of course require substantial international contributions. what steps are not being taken to get commitments from international donors, and how much progress have we made? >> former secretary defense gates proposed in a publicly that isaf partners contributed 1 billion a year towards the future cost of the afghan security forces. since that time we have been working actively with our nato and other partners including the country's in the middle east and asia and i would say we are very, very close to that goal right now because some of these

discussions are still in the diplomatic channels not in the position to give the details now but very similar we have very positive response and countries are willing to make multi-year commitments each country is different budget process, different political process these, but the commitments that were made in chicago have been a very positive. at the same time as i mentioned before, the goal by 2020 force of the president karzai and endorsed by just about every afghan that i know is that afghanistan will be able to become self sustaining for its security forces. that is a research goal and it's going to require a huge growth in the afghan economy. there are other prospects in a number of areas, agriculture, transportation for that mittal depends on security latif khosa committee is in place, afghanistan has a lot of areas its economy can grow and meet that goal and that of course comes back to the afghan security forces but as i said

we've been pleased with the response from other countries and we look forward to giving more details of that once the discussions are completed. >> random stand also that it has been at the level of production has declined dramatically this growing season. what is the reason for that? >> the full evaluation of that is ongoing including by our intelligence agencies, and we should have that official report and a few weeks we understand it is a combination of factors involved. one of the largest is whether and other natural factors but we've also seen the decline in production particularly in areas where we have the most effective and our military counterinsurgency operations particularly the helmand province area where the combination of increased security and effective crop

substitution efforts as a whole government effort with a participation from our colleagues in the u.s. agency mission international development department of agriculture giving farmers the of what kennedy to grow something else but even though it might be less profitable in one sense it is much more secure because they don't have the risk of having the crop destroyed and having a legitimate outlet for not being preyed upon. we have seen that happening but i would say the largest reasons at least anecdotally that we can right now or natural but they're both natural and as a result of our policies. can you share a little bit with us about the afghan police forces that were also training and what would be our financial commitment if any for them after 2014? >> the financial commitment we talked about before was the security forces in putting the army and the police but the

uniformed police, the border police and the afghan local police as the german discussed before. the police as a whole and afghanistan as every other conflict and post conflict society behind. the police in afghanistan as the representative mentioned before the police very much higher casualty rate than the army. they tend to be in smaller groups often isolated and quite often the choice of targets for the insurgents. the combination has made it more challenging to build the police, however we see significant progress, the patrician figures mentioned before show that the policemen are staying in longer, becoming a part of the communities in an effective way. there are continuing problems with corruption as the

representative mentioned. it is a problem in the police forces in many areas of afghanistan that used to be addressed. i don't know if you have any comments about the experience. ischemic my experience of the last year, whether the police continue to improve, and this is most notable in the selection and promotion of police leadership i had when i first got there i had an afghan police general who was my partner, and when i heard word of his impending assignment i was quite nervous because he was not very corrupt, and i thought an honest guy trying to do right for his country i was very concerned, and in every case and incoming leader proved to be better than his predecessor so that was my experience. >> thank you. i yield back. >> i would like to thank the members of the committee and witnesses today for the testimony.

we appreciate the time, and with that, the hearing is adjourned. [inaudible conversations]

the supreme court in its current term next week to take a summer recess.

i think if the book interviews as gathering history. i think of interviewing when i am working for the news side as gathering contemporary information. i'm going to try to has best i can give people as full an understanding of what is happening in this campaign. it's not that difficult to put your biases to the side. >> how does it change it in your news information? >> twitter in particular is now a primary new source for anybody that covers politics and anybody that pays attention to politics. it didn't exist years ago for all practical purposes.

>> the federal reserve today announced it would extend its program of buying u.s. treasury bonds in an attempt to reduce interest rates. after a federal reserve meeting in washington, federal chairman ben bernanke spoke to reporters this afternoon. he said the fed forecast slower economic growth and an unemployment rate remaining around 8%. >> good afternoon. before we get to questions i will summarize today's policy action by the federal market committee and then place the committee's decision in the context of our economic outlook and collective judgment about the appropriate path of monetary policy. as indicated in a statement released earlier this afternoon,

the committee's maintaining a highly accommodative policy. we decided to keep the target range for the federal fund rate at 02 a quarter%. we continue to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal fund rate at least through late 2014. in addition the committee decided to continue through the end of the year our program of lengthening the luxury of the security holdings or rather than competing the program this month as previously scheduled. specifically the committee intends to purchase treasury securities with the remaining maturities of six years to 30 years of the current case and to sell or redeeming any amount of treasury securities with remaining maturities of approximately three years or less. the details of the plans for the security purchases and sales were described in an accompanying statement released today and can be found on the federal reserve bank of new york website. the continuation of the extension prevention put downward pressure on the longer-term interest rates and

make broad financial conditions more accommodative than they would otherwise be, thereby supporting economic recovery. in conjunction with today's meeting, the purpose of this, the seven board members and 12 reserve bank presidents submitted their individual economic projections and policy assessment for the years 2012, 2014 and over the longer run. these projections are important in the committee's deliberations incoming information suggested the economy continues to expand as a moderate pace in the face of head winds generated by the situation in europe but still depressed housing market, tight credit for some are worse and fiscal restraint at the federal, state and local levels. business and household spending are increasing at rates consistent with moderate economic growth though household spending appears to be rising at a somewhat slower pace than earlier this year. employment gains have been smaller in recent months of the unemployed and read of 8.2%

remains elevated. in light of these developments committee participants have generally marked on the projections for economic growth but most still see the economy is expanding at a moderate pace over the coming quarters and then picking up gradually. based on projections for economic growth the fomc participants receive slower progress in reducing unemployment than the debt in april to the committee put since projections to the unemployment rate in the fourth quarter of this year have a central tendency of 8.0 to 10.2%, declining to 7.0% to 7.7% in the fourth quarter of 2014. levels that would remain of participants estimates of the longer run normal rates of unemployment. in addition to protecting only slow progress in bringing down unemployment, most participants see the outlook leaning toward cilluffo deily kissell for growth and unemployment. in particular participants noted that strains in the global financial markets associated principally with the situation in europe continue to pose

significant risk to the recovery and to further improvement in labor market conditions. meanwhile, inflation declined recently primarily reflecting lower prices of crude oil and gasoline. one guard from inflation expectations have remained stable and the committee anticipates inflation over the medium run will run at or below the 2% rate that it judges most consistent with statutory mandates for the maximum employment and price stability. more specifically the projections of inflation have a central tendency of 1.2 to 1.7% for 2,012th and 1.5 to 2.0% for 2014. the economic projections submitted by the fomc participants are conditioned on the individual assessments of the appropriate path of monetary policy. as you can see from the charge of the committee participants have a range of views about when the initial increase in the federal fund rate is likely to be warranted. after a thorough discussion of those views and of the ongoing

uncertainty and risk surrounding the outlook, the fomc as i mentioned maintained its collective judgment of economic conditions likely to order and exceptionally low levels of the federal fund rate at least through late 2014 and to the degree to provide for their support to the economy by continuing the majority extension program. the committee is prepared to take further action as appropriate to promote a stronger economic recovery and sustained improvement in the labor market conditions in the context of the price stability. thank you. i would be glad to take your questions. >> looking to oppose the think it is fair to be bold and the same time holding. you did qe1 and of an operation twist and now you've extended it. how would you respond to several years from now a young graduate

student says you know the problem with the policy was during this period, it was too incremental, and the reason the economy underperformed was because of that infantilism. what you think the dangers are that today's action is also incremental? >> well, of course we cut the federal fund rate in a continuous fashion until december 2008. since then we've been operating with nonstandard monetary tools including asset purchases extension maturities. by the nature these tend to be lumpy. we haven't done them in a continuous way but our view of the effect of the programs on the economy is that the total stock of outstanding securities in the portfolio is what determines the level of accommodation the economy is receiving so in that respect it wouldn't be a start and stop. rather whatever we have stopped

purchasing, the local of accommodation was already in the system remains there until the conditions warrant further action. now, underlining all of this of course is the fact that the of the cast changed. like many other forecasters the federal reserve was too optimistic early in the recovery about the pace of recovery, and we have had to add additional accommodation wing forward as we have seen the headwinds have kept their recovery from being the strongest we would like. but by the nature of these unconventional tools, they are more discreet in their size but they continue to have accommodating affect some. we've taken a step today which is a substantive step which will provide additional accommodation for the economy and moreover we stated that we are prepared to take further steps if necessary

to promote sustainable growth and recovery in the labour market. so, we are prepared to do what is necessary. we are prepared to provide support for the economy. many characterize the staff has somewhat modest. you're own out what has a much lower gdp projection. the unemployment rate in your outlook is possibly no improvement at all in the on and penetrate through the end of this year. the program itself is smaller and the duration than the operation twist. given this outlook why such a modest program and when you say that you are prepared to take further action which is a stronger characterization does that mean you we're prepared to do a full one asset purchase program? >> there's been a great deal of

economic news since the last meeting. the incoming data were somewhat disappointing but not clear how to read them. we had issues with what the adjustment and other factors. meanwhile, europe has had additional problems we have seen some of those in the financial markets. so, i think that there is a case to be made for making additional judgments about where the economy is going to read that being said, the step we took, the extension of the program i think is a substantive steps and will provide additional support and yes additional asset purchases would be among the things we would consider if we need to take additional measures to strengthen the economy. >> mr. chairman i would like to ask you to respond to a different set of criticisms. this criticism that you hear from capitol hill and wall

street and different places is that the fed has already pushed interest rates to an extraordinarily low level and historical low level and there isn't anything more that the fed can do to help the recovery that the criticism is that the fed at this point should stand down and let congress or the white house attend to the economy all went or what market forces tend to the economy elements. what do you think of those arguments and how would you respond to them? >> as i've said many times more moderate policy is not a panacea, it isn't going to solve our economic problems. we welcome help and support from any other part of the government for many of the policymakers so collaboration would be great. i wouldn't accept the proposition that the fed has no more ammunition. i do think the tools while they are nonstandard still can create

more accommodative financial conditions and can still provide support for the economy and can still help us return to a more normal economic situation. that being said, again, any other support that is forthcoming or undertaking that are helpful in terms of making our economy stronger, or welcome. but i do think that monetary policy still does have some capacity to strengthen the economy by the financial conditions. >> thank you. ..

>> we think these programs can provide additional support the one to reiterate

the fed is non partisan and our decisions to not have political consideration and we'll continue to do that. >> mortgage rates are at historic lows how much more help and the extension of operation twist due to lower interest rates? >> they are quite low and also being pushed down with safe-haven. we could or them more but operation twist in particular by buying securities in the market essentially induces

investors to move into substitute securities. investor who sells the treasury securities made by the corporate bond which would lower the corporate bond rate and the spread. of bank having sold treasury securities may make a loan instead. but some of the bids through other asset prices to have a broader e use of petitions supportive to the economy. >> bloomberg news. given the projections with unemployment, icahn you look past 2014?

now six years past the top of the housing market? can this go on for a decade? what about a dozen years like the depression? >> it is our intention to make sure it does not go on indefinitely. unemployment is too high a it is still at 8%. it is too slow but it is going down. people are finding jobs but not at the rate we would like to see. if we don't see continued improvement we will take additional steps of appropriate. >> "new york times."

looking at the projections show unemployment is about 8.2% use said the defining factor is if unemployment came down. that is barely a decrease. why are you not doing more now as you said you would? >> we did take a step today by extending the maturity extension program to the end of the year. >> [inaudible] >> each individual has thrown path we will provide more informations in the minutes. we are prepared to do more with the state to of the economy but i would add if

they do come to that conviction they will take the additional steps. >> you said policy makers are the first line of defense under what to circumstances would they coordinate with the central bank? >> europeans are the first line. with adequate resources and are committed because keeping the eurozone together, the trading block

together is important. we leave them leadership. the federal reserve talks with european leaders frequently with sentral banks to provide whatever help and support began. we did coordinate earlier with the dollar swaps to reduce pressures in the market and let europeans lend in the u.s. dollar including far worse. week and sold frequently and prepared to work together if it is constructive. but we are mostly in consultation mode. >> fox news.

you talked about trying to get help from other branches of government talking about the fiscal cliff had uc the lack of progress on this issue has an impact on the economy right now? is it showing from last year with this debate and if not when might we start to see it hurt the economy? >> is surly but moving forward we anticipate the uncertainty with the fiscal cliff will have economic effects. we've heard it anecdote today about firms that were not sure if the contracts will be emplace in january with independent contractors.

financial markets to not like uncertainty certainly of this magnitude. that will be a negative. the most important is congress get their right. the three elements is to do no harm with the recovery and avoid the fiscal cliff. second, to maintain the effort to attain a fiscal path. third, of use fiscal policy effectively to have of better tax cut. if congress passes all those things the benefits are substantial. >> bloomberg television to follow-up on my colleague's question on the fiscal cliff, how beneficial did

the given the talk got capitol hill talked with fiscal cliff issues kick the can down the road deal with it sooner? would it limit to the uncertainty in the short-term benefit the economy? >> i am not sure. clarity would be helpful since people are uncertain about what would have been. investors like to see congress take action to put this on a sustainable path than kicking the can down the road with the vote -- down the road with no indication could be a negative because it may induce people to worry more about addressing fiscal issues. >> "the financial times."

mr. chairman tammet with the action over the last few years helps the wealthy, large businesses, while the impact on those with the cash straps families have been muted. can you address this with access to credit? >> that is a major issue. mortgage access is much tighter than it has been. even credit-card access is more restricted. it mutes the impact of the fed's actions. in is not accurate to say federal reserve policy does not help the broad public. many americans can take a

vantage of lower interest rates. others have taken out all loans that are cheap. there has been impact through lower interest rates. but more broadly, if a firm has a low cost of capital capital, and then they are more likely to expand to add products and consequently more likely to higher. and to which the payrolls have increased have been disappointing and the employment rate has come down. that is the broad impact on spending, investment and that affects the public more

directly for what people are producing. >> mcclatchy newspapers. to flush out word detailed where you think the chokepoints' are in the economy. yesterday the outlook blamed for percentage of the slowdown of the fiscal clip on europe that was bigger than anticipated. today they said it is not europe but this deal of boeing said we're already trimming jobs and cutting back. what to are you hearing? what is your sense of the chokepoints with hiring? >> i gave the list of

headwinds in my opening remarks spurred by the european situation is slowing economic growth. europe if not in a recession in every country but many which affects trade and demand for our products. the effects on the financial markets bring them out stock prices and have been a negative. and we have seen some slowing of cool economic growth including a shadow which has reduced our ability to export. also one is housing. it plays an important role of economic recovery through

the construction itself to promote consumer spending. it does seem to be doing someone better but nevertheless it is not what you get from a housing recovery. this goal happens at all different levels. notwithstanding programs moving forward we see fiscal consolidation wear tight budgets lead to layoffs and cancellations. these are necessary steps with states and localities. i am not criticizing but these contractions affect

the pace of growth with the broader akon emmy. those are the main things i would point* to with the economy that gross less quickly than it would following the magnitude that we saw. >> thank you. given the environment and the fact interest rates at historic lows would it be an option for the government to issue more long-term debt to take vantage of that? >> the government gradually increases the duration of its debt and has been for some time. the issue is what the fed is

doing with the maturity extension program is we take longer-term debt to of the market to induce investors. to the extent the treasury actively said it that duration get offset the policies. the treasury has the plan there for on the margin the fed actions can be felt. >> from the business report you are waiting on the labor market. what are you looking for? is there a rate of job growth? or are you waiting for

repurchase of bashan with all told negative stalled? [laughter] >> this is ultimately a committee decision. but they will review market indicators employment, participation and tried to get a sense is improving and a sustainable way. we have seen job gains but there will be statistical malaise and whether that causes the job gains to very. is that improvement sustainable long-lasting? but i cannot be more specific and that. >> market news

international. mr. chairman, when you speak of the fiscal with you don't differentiate between the automatic tax hike and spending cuts that gives the impression you give equal weight to both sides some say the tax breaks are more onerous. how you take those two aspects but also how will the fed conduct owe been market to operations by the end of the year with no short-term securities to use? >> on the fiscal clough the way the programs are set up of dollar amount set up

including the payroll tax cut, but i am not making to richmond about programs but to have a substantial withdrawal of income to affect spending for the economy in the short run. how to modify those changes would is the most efficient tax structure? those are tough decisions congress has to make. it is the total of spending cuts and tax increases that the cbo has identified as being a concern.

we can still do market to operations even if the short-term debt is low. over time as securities come close to maturation we will have others of short duration. >> american banker. questions have been raised if the broker herbal -- walbro would help jpmorgan. now examining what went wrong as a supervisor do you think it is the right time to pump the brakes to slow down the process far hasn't made the stronger case to proceed expeditiously and second made given that you suggested they may be late

on the rule could you give us a target when regulators are looking to release the rule? >> secondly, it is a five agency rules so cooperation is needed. 18,000 comment letters it is a big process with coordination. i do not have the date. the silver lining may be the things that we can learn to write to the rule how it would work. one aspect that would be important to this with the rule the bank is required to provide a plan in advance explaining how the hedge would be done, how what

would work, to have the auditing process that there is management and governance rules to oversee the process and that compensation involved is not as much to take proprietary positions. we still look at the situation, would be the control and governance aspect which would potentially change the outcome. >> bbc. how much is the situation in europe getting before it seriously stops recovery in

america to change the direction of the fed policy making? >> we hope it does not get worse. it is already one of the factors to be a drag on the u.s. economy. that has had any effect and if has to other countries as well that exports to europe. we are hopeful europe will take additional measures to do what is necessary to stabilize the situation and provide the basis for the ongoing stable structure that they inks and sovereigns have a program. that this quote arrangements

are cleared. we think the policy makers have been set -- have a strong incentive to get it right to and we are in close contact with them. but we need to be prepared for any further problems that might emerge. recently did the stress test of the large bank-holding companies with day european crisis. we monitored the exposures of banks to europe and monitoring the situation closely. we hope for the best and european policy makers will

stabilize the situation but we are prepared to protect u.s. economy and financial system. >> market watch. getting back to lending and credit, the u.k. started a program where the bank of lending as they lend to households. is that under consideration and? >> the details are not available. it should be noted joined with the british treasury. one question is there a fiscal component or subsidy? we look for new programs to

help the economy this will be on the list of things to look at. >> the economist. inflation and target of 2 percent but it shows below that. can you explain why? use fed the fed is prepared to do more but what action could it take but what about more maturity extension? >> on terms of the completion forecast, it should be said economic projections added uncertainty. we talk about that in the survey of economic projections. it should not take a false sense of precision but there

is an issue whether or not there is sufficient to stimulus in the economy. we are now at zero balance with those that are available we know less about them with various costs you may get a different amount to of accommodation in this regime as a just rates could be buried. but the large asset purchases increase the balance sheet large asset purchases means they own a

larger share of the asset with implications that affects the fed with an economy there are issues that are taken into account. any type of appropriate policy with the cost and risk associated that being said we still have steps to do more to see how things evolve looking primarily at the labor market is this respect what would be additional action. we are unlikely to do the maturity extension because

we take that to as far as we can. enough to add stimulus to the economy. >> good evening. i hear questions about liquidity in the u.s.. but if if that does the rub tout could the economy recover from here? >> the u.s. economy is in a situation where short-term interest rates are close at zero. they cannot have monetary accommodation end of the usual approach to cut rates. the theme of my own work including the bank of japan that central banks are not out of tools once the rate