them out for a public notice and comment, seeking from them examples of specific cases where they might see mine for abuse to make sure we're addressing those specific earnings. >> thank you, mr. chairman. ms. martin. >> i would agree with that. i would also add, it seems to me that this type of service is so new and rapidly evolving to regulatory scandals. where systems are more mature and bass track suits are established and that really hasn't happened yet. >> would need to start thinking about them. >> i do agree with that. >> thank you very much. i see that kind of fives. >> i would ask unanimous consent to answer the phone records from that cfpb i would like to recognize mr. bachus for five

minutes. >> thank you, not sure for calling this meeting. one of the things i want to add come the basic rules and are doing the topic is ensuring that consumers understand the product. i think that's important to understand the product. here she is using in the above become very import but the investment of technology we've seen security threats goes well when that comes to electronic payments, specifically an identification of as a real concern a lot of us. what recourse to consumers have when they encounter problems with unauthorized charges or the amount they are charged as inaccurate? is a common problem we had come especially to take advantage of a lot of our seniors and seniors are the one most vulnerable to this problem, even though they get involved in this technique i open up for either one of you to

respond. >> to the extent the mobile problem results in a debit to checking account for a church to a credit line recalled by efta or tijuana, does error resolution procedures with taken for consumers. >> how would they be performed because they would be covered but they want to recoup money and that's part of the problem. what is the time and the delay and the time they are time is reimbursed because a lot of them on fixed income. >> the existing for that efta and timeframe should be disclosed to consumers and disclosures as well. i believe the investigation within 10 days that the investigation is not concluded the consumer has to be reimbursed on the investigation

continues. but in many cases against concluded. >> will that be in form of the process of what's going on? >> if they don't know what are doing anything. >> consumer initiates the process. >> is should be in doing that as two different things. >> the other point i wanted to make if those laws -- it is not clear the laws apply in all cases where nonbank is involved. i do know that some nonbank payment providers have incorporated efta like error resolution procedures into their roles and user agreements. it's not quite the same thing as having apply to them by rule, that they are trying to use this procedure is within their own arrangements. >> okay. along the same lines, consumers sometimes find miscellaneous or added administrative charges tacked onto monthly bills.

we used to see this a lot with credit cards. this is a cause of a lot of consumers to dispute these charges. how consistent are the mobile payment dispute resolution policies of the various wireless providers, which is question number one, and should federal regulators pursue a minimum national standards? >> the wireless provider consumer dispute resolution process would be sent in a thing that the fcc would weigh in on. that is really outside my area of expertise or knowledge. i would have to do if you get billed on your phone bill for a payment issues and am that's wrong, what are your rights? i think that. i'm further investigation and fact-finding. >> consumers of the price concerned with practices -- my time has expired. i'm sorry.

>> you actually 58 seconds left, but we've just been called for a vote. i'm going to go to mr. leutkeeyer because he's the next boat. when you want to come back with two of those. >> thank you, madam chair and thank you for the briefing tonight on mobile payment systems. it is quite instructional and after that meeting at thomas.i'm going to get a rotary phone icu. so getting in the 21st century. thank you for being here this morning and just a quick couple follow-up questions with regard to my colleague, mr. canseco here asked a couple questions with regards to international standards and ms. martin made the comment you will wait until the market is mature before you get the regulatory promulgation here after the horses at the door if you take that approach. i would think you would want to

be working when those entities producing these new innovations and find ways to curtail abuses of those right after that. i was surprised at that comment. >> reminder market is directed specifically to his international standards. >> generali when we work on international standards and other contacts, and as when we have some rules in a thin place about how that market is regulated to your. all i am saying is i think we need to do further investigation domestically before we start talking internationally. >> are you familiar with the world still and international law transfer services? >> i didn't hear the first -- >> are you familiar with cfpb's proposed rules with international wire transfer services client's >> and somewhat with it.

>> are you for come against it? how will it affect mobile payments i guess is the question. >> that's a good question. a mashup is there's any mobile payment arrangements at this time. jenn come you can jump in here cometh the news for international remittances. >> actually, there are some services for which mobile payments are a part of that international remittance network as i've mentioned in my written testimony that are covered from regulatory framework and congressmen, just responding to your question, wanted to be at a rate that we at fincen backache is the risk of cross-border payment candidates for that purpose that although some of the regulations are subject to

threshold, activity task of any abilities transfer money in or out of the country for me $0 threshold automatically brings that payment mechanism, including the mobile phone network into regulatory framework and subject to all those controls. furthermore, one of the risks that we hide concerned with is that if we impose an important regulatory framework on the united states but do not do something with the ability of entities from outside the country to access, that would pose a vulnerability. so we specifically have also amended regulatory framework last year, taking advantage of the full authority congress gave to us to assert jurisdiction over foreign-based money transmitter providers to the extent that they are serving u.s. persons. that also should avoid regulatory arbitrage from people outside the united states. >> a couple cities have done

acknowledge the potential to facilitate money laundering. you know, swift recommends a proportionate approach that can be transferred, advanced inclusion and ensure soundness of financial services. what are your thoughts on those recommendations? are you aware of those? >> imm it's those considerations that we took into account in the promulgation of days final rule last year and we will continue to monitor. one thing i can say is something i instituted after joining the agency more than five years ago is a year after we promulgate our new rules we take a look at whether it's achieving it intended effect and then reconsider whether changes are made and something we will look at them certainly be doing in this area in a very rapidly evolving marketplace. >> thank you.

i yield back the balance of my time. >> kind of question is mr. scott and then we will the panel appeared with about 10 minutes westerville. >> thank you, mr. chairman. i may just ask you this. let's suppose what advice would you give the american people if one of them were to use their cell phone, their mobile phone, but should they do, especially regarding how they protect their vital information? what should they do if they left their cell phone? >> i would say two things. before you use your cell phone, make sure you have a password on it. >> i'm sick of me said password? spinet password-protected cell phone. i also think it's important for consumers to understand what is on their phones and who to call if they lose their phone. so to have that information

somewhere other than on your phone would be a very good step in helping you mitigate the problems that could occur if you lose your cell phone. >> on your side of things, what steps would you is regulators take to make sure consumers know how and when and where to complain, to call? what do you do quakes is good that they put their cell phone, their i.d. and password and all of that, but is there anything specifically they should do? if for example i lost my credit card, i'm going to call somebody and i'm going to say stop payment on that. so there are to be something for some procedure we can communicate to the consumer as to what you do particularly if the consumer may not have the password on it. or you have some scam artists out there now who are capable of doing a lot of things with this

advancing to elegy. so if we don't have a procedure and we got to get something out so consumers will no how, when, where and who to contact once they lose this precious instrument. >> sera, who you call might depend on what kind of mobile payment applications you have on your phone. if i had a mobile wallet with a credit card attached to it, which is the same thing is that i lost my plastic. i would call the credit card company. so i think many of the procedures you would or would he do if you lost your real wallet would be the same things you do if you asked your phone. >> okay. mr. freis, what advice would you give consumers? >> i think being aware of the risk is clear. one thing that must be said is part of the reason why these

payment products, prepaid whether through mobile phone or car to take an office because he do have recourse to your funds. unlike if you lost your wallet with cash in it, if you have lost a card, you do have the ability to contact the provider to shut down the old car to get your money back. it's not lost for good. it is exactly that but it's been a benefit to consumers. i agree with you it is important and her standee steps to take to follow to get funds back such as ms. martin described. >> thank you, mr. chairman. >> thank you without being about and no further questions the chair would note there is further questions on the panel which they may wish to submit in writing. without objection is your gourmet and open for 30 days to members to submit questions into place responses in the record. i appreciate the witnesses coming today. i never will have many more discussions on this is the

evolving technology brings different challenges, but also different opportunities. i appreciate that. with that, this hearing is completed -- adjourned. [inaudible conversations] >> harry truman goes to the white house insisted on our post about, can i pray for you? and she says no, we need to pray for you. >> there's a lot of promises made. they say we have to rent a very

large hall, larger than this one to get other people jack kennedy promised the vice presidency to that year that year. >> , glitch may have been deep in the last jeffersonian. a man who is president believes strongly enough in the limits of governmental power and particularly of federal power to resist the temptation to extend it. >> the purchasing power of gold is to find us weight unit of any currency was constant for a period of four centuries. it seems to me the record of the gold standard in psalm is a record, by large, outgrowths in

the macro sense and personal" accountability in the banking are micro sense. >> senate republicans called on president obama to put together a group of democrats and republicans who would find agitates to avoid sequestration. as rose of last year's compromises sequester woke will cut $1.2 trillion should the

federal budget includedg offic 500 billion from defense. mccai' from the senate floor today, fan here's arizona senator, john the mccain is concerned, and that is the looming process expect of sequestration -- prospect of sequestration. the secretary of defense has stated that sequestration would have a -- quote -- "devastating impact on our national security." we're talking about layoffs and some estimates are of as many as a million workers in the defense industry. we're looking at unknown effects of the strategic thinking that goes on as we plan to defend our nation's security. for example, our shift in emphasis from europe to asia-pacific, which requires significant air and naval assets, amongst other things. and i'd ask my colleague, i'm not sure that the american people are fully aware of the

effects of something that is supposed to take, as i understand it, beginning of the next fiscal year, which would be the beginning of october of 2012. is that a correct statement, i'd ask my colleague? mr. graham: yes, it is. mr. mccain: so we're asking the defense department to plan on what our force structure will be, what our mission will be, what our capabilities will be beginning the 1st of october, and all i can see so far is a total gridlock on this issue. now, if somebody wants to say that it's our fault because we refused to -- quote -- "raise revenues" -- or the other sides insistence on that and a resistance to spending cuts ... but i'd ask my colleague, i don't we owe it to them and

their families to stop sothing taphacll ofsgreelde it dd nn? an it t w y agtht'imsawn an started having serious negotiations, because there's no greater respoibily that the prtase t and the people' nd sitfs on no t tenro soara, be ask him to answer, traveled arnd his state, which i intend to do, to the various military ldpeitsut esio wre inou-reki ssboo of we'll be in doing the month of july -- we'll be in during the lyndba mofost of the month of dftoeper

ussk cagtay d. heuen tis v rt qioo colleague from south carolina. i have a recollection that during one of the hearings you specifically askedheecry ule, iale dtiese, i wo ieighaad mn:r.side y i ask unanimous consent that the senator from -- senator kyl be included in the colloquy. the esiding officer: without objection. mr. graham: well, one, i would hopehat mlesld caths ampntt we'rytondi w tg a. we're about $16 trillion in debt. there's probly n stronger fensupernhe cahanyl j hn mneeisr sh oar anybody inhis body --

probably better than most -- what happens in war. keetse a r ba peet dfi pcu war can fight it quickly, overwhelmingly win, andome me. w wngers ngutf d dseaw be'll ag t the pentagon h t reduce their spending, too. i think all of us,articularly setor mccain, believes there nt ta lfs t rmi t w t de itra,ngeh less. so count us all in, on the three of us, for reducing defense se't'otllto help gets out of

scotehaas asifti2l tron over a decade to help get us out of debt. that's a pretty small number, ca aheas a penaltyto provision in the law. and it saidha ave d2rinrelee de fws rt,0li ose thes toven if that penalty kicks in, then we willaveut $1 tllio o at sta pta say in he said, sign me up for $450

billion. i think we can gethere. wl le sapit w baysat c frandin ad ied,tfid $1ll oex de, if we overdoubled what you are trying to cut? he said, w would bot ouven h a a t mai aore c and when it comes to personnel costs, we'reucing the army by 80eopl r0il p oueqra sor in op oat'r aer,0pl of the army. under suestration, the navy 'd h tlly,2hi

smst f i elil b t 1he do you believe the world has gotten that much safer are that we don't need a navy gger tha ,enheeae' ngmrahino a? ounk i ge foou to basically disarm, given the threats we face from radical terrorism thugho theholelobe d cesaldeio neo oot ab a monplld loheobf w p these cuts in place and we would desty the defense industrial base that provides good jobs to de ivureou f no brn e e on gsmer killed in june in afghanistan. we've improved the national guard, but wn we first started

th, onrdts weea to heht wi iioqunt tn the defense department, we will desoy the finest litary i t hry t mett d ts. thou bhe the prize. so what senator mccain and kyl and myself are trying to do is rs tea senehe le cland shide be election, that's political malpractice. so senator mccain, senor kyl, thank you for your leadership. dothereef 'dik to add serm ps, w ha asla aer inithe ms ory

i aca w have issued a resolution about their concern about this issue. i wouldlso likotao m nd ales t meersmi,t t otu o init 2eath senator from michigan, also shares our conrn. ld lomfteeea- tssnaalnvd setyyrs on both sides of the aisle that we could reachome kind of an agreement. crese bad w fifa a tio jo,lve 5 of these reductions out of what is en,io n believe2%

ope. anneeroi if pdef un streon that the secretary of defense shares -- castrophic, impossible to plan on,o on t i w cle atyoenhi osetest searf dseas . ourgha it would be appropriate, and i would ncerely ask that per the pridenof t unite aisiorha uld resolve this. so far, the executive branc has not been involved in these efforts with the exception of leue y have to

plan. especially in national defense. what weapons you're going to procure, whathe number of opleou'r goi tain mar who ioreoio b ldbence in the pentagon as far as planning is concerned, cannot have a great deal of validity if we are in a sstonnd s,noe to f ueemha arrived on the floor. not to mention other attributes that we are lacking gr: ouik a thofoom os prit id--she c, heay t f a pem thoucrary of defense has said would be the most devastating thing possible t he swoility to defdurselv.

stict d ane'ehogay t mmr hintou t when your department secretary e and every general under your commands telng yound t 'tt gou o h enseal sta you're the commaer i chief, my friend. it is yourob to me sure tha ouilytt n igndte o wen on our j mrsf reoe c those who serve. so to our republican and do ode iheoreader, why d om uit ala t

at least one thing -- avoid the consequence of suestration for e me oset the13oe tok nondefense spendingut to the leaders, if you tnkhe res of us goioit t li aetsate ta un lucn besigreor t rehagiurde trent group tothero fix this. senator mccain, do you think that's a good idea or n? lyay woiow it'he asanssehe omness, snore corker -- -- shall e toroutaraker is wng sdro a

ebls f eut iea o anhe pde i possible, convene a group of senators, whether it includes us or not is iern siof ah s of colo s d es oo an ahi iilak rnsit f sete tshas necessary. but i will also say without qur ereedii, ilitary. iur i n't know of a greater responsibility that we hav ask the senator from new e idofr: - coed hhis ay: jit m ceha keeps me up at

night about sequestration because we cannot do thiso our natial securit and bo ses othelee eet sur hinsro o uso i i sitommandant of the marine corps what the impact of sequestration would be on the marines and you know what he told me? ue rnd ouarineorpsf t ronen a pngurnt dtiures situation where, unfortunately, there are still so many risks around the world that our country n t bete ul bbloeso ieorarn lrsp on this issue, and pticularly leadership from our commander in chief. ueurio put itn pit'sot j--s nus uld t thawoulde

enough to bring people to the table, but we are talking about jobs across this country. the national association of manufacturers has estimated it would be nearly a million jobs. , o m cagey, loguneust a pulling some states in terms of the estimates of job loss, 24,000 for alabama. when we look at a state like missouri, 31,000. when we lookter plelo, t tan of jobs -- 39,000 for florida. this is an issue that will hit every state in this nation, but most importantly what i'm concernedboutit ioi t hiur marn wt weakthhurro in fact, one general has said we would have to cut an additional 100,000roops from our army on top of the

reductions we're makgig %ldeom fhe guard and reserve. you think about the important function not only protecting our country, we could not have fought in afghanistan and ira without our guard and reserve. i'm the proud wife of someone who served in the iraq w,nd i t tts no ounnt gu a rvelaer of protecting us overseas, but they also perform a very important homeland function and every governor in this country will be deeply concerned if we're going toiminish our guard and reserve. l frdoorit my colleagues on this now. it cannot wait till a lame duck session. we cannot put our national security in the balance, and nearly a million jobst issue, till a le duces. omngul reeht a i apiay colleagues have come to the floor to talk about this issue today.

we must get this done on behalf of the american peoplend o >> defense secretary leon panetta held news briefing on the one-year anniversary of this appointment. he talked cuts on the pentagon budget and a varietyf ec. i jd b joint chiefs chairman, generalartin demps see. this is 35 minutes. >> good afternoon has >>on,s k was sworn in as secretary of defense. it truly has been an honor for me to lead the and

s pant and to do so during this time and i've been very fortunate to have an outstanding partner in al t c sce secretaries, and the combatant commanders and all of my civilian leadership. let me, if i can, recognize the highlights from the past year. ofomsheership o t pre q eedith the safe return of united states troops. we began a responsible drawdown of the u.s. military forces in trsionfg sitnde're making ch is ongoing. we concluded the nato mission in libya. with the fall of gadhafi.

fos iminal qae a relentless eved new defense strategy which reshapes the force to meet the challenges of the 21st cenry. with the focus o investing in s asia pacific and the middle east. we put forward a budget that implements this strategy and achies savings ofver 70 bonr neen s. taay here and improving business practices at the pentagon. we have eliminated another $60 billion in overhead spending over the next five years. accering auditable statements of

budgetary resources. we've affirmed our commitmento those who serve, maintained faith with them by protectg ynd befs,ct nd rros, ay improving emoyment opportunities for veterans and military spouses. and we implemented the repeal of "don't ask, don't tell." we'v als14 an waveutla enhanced measures to prevent sexual assault. this is clearly been an historic year for the department and for the country. in the past w i rtul'v bg e of all-volunteer force. i visited wounded warriors at brook army medical center?

san antonio this week. sharpening o focus the resstea to sci d e've been reaching out to those who work with our military families and who have continued to work on ways to try to boost veterans' hing. ere son itnt byilty lders by community groups, and by families, to ensure that service members have everything they need. after visiting these men and women w have comeom the's sll are eendillonnue to ed the years to come. but let me be frank. the biggest risk to everything i've talked about, tea ur f wbe of our service members and their

families, is the threat of the successster. anr0 biiorohesster will cut d om necity budget and do it in a way that threatening to hollow out or national defense. i've seen extraordinary examps of courage and sacrifice or e str. tenndome e zes in the wounded warriors that i've met here at home. ey are willing to put their lives on the line in order to protect our country. they dertehanhe re sequestration. too often today a nation's problems are held hostage to the unwillingness to find consensus and compromise.

grck,ifia devices like sequester are resorted to in order to somow force action. seesriouten thence ofn, very programs critical to our national security, both defense and domestic. let's not forget that sequester ullsoveraicuts omti pgrs, ah as 12% across the board, on vital programs that americans rely on. congress can't keep kicking the can down the road. or avoid wet deroblhat men and women of this department and their families, need to know

with certainty that we will meet our commitments to them. and to theiramies. er in tefse strynd employees, need to know that we are going to have the resources to implement the strategyhat we put forward, and that they are not going to face the tea of ffot. timately the success of all we do to try to protect america, the success of any defense strategy that w have tried to put in place, the success of a anomnion tiren li,n a political system prepared to make the decisions and the compromises necessary to govern the nation and protect our national security. biofur nion.

it is a time for our leaders and for every american to recognize that the blessgs of fedom th f ay of sacrifice, of courage, and of leadership. that legacy is now our responsibility to fulfill. fu.etteifefullyur childre thanks, mr. secretary. >> good afternoon, everybody. i share the secretary's perspective on the remarkable achievements of our men and women in uniform over this pt year. i was with some of them thi week,,usrn f a ip visiting our strategic command, where my wife and i participated in a town hall

meeting, although i'd prefer to call them family meetings with members of our joint mil dheec a el texas to chat with military kids and educators and wrapped up our trip discussing leadership wit soldiers and family members at fort hood. and at every sto i won't ri y tono ck bres pde ct. they're courageous, selfless, smart, dedicated, irrepressible, ey'll do anything to take care of this country. and i was also struck by the degree to which the budget iindtng tne ndhat mit f inednd interests but it's unfortunate it weighs to heavily on their minds. frankly they have enough to worry about. they have faith in us. they expect to us figure that out. climaveo c secreta had geer toreo

e board, unbalanced cut that could jeopardize our ability to deal with the very real and serious threats that we face. the chiefs and i hav no issue with military budgetsei acunonthchage mer theeedo m ug pgrns as we move ahead. that's why our strategy in the budget that supports it constitute a carefully balanced set of choices. these choic make sure we have the right talent and the right tools toeep ourouryun a balcedpproach is what the secretary and the joint chiefs and i seek and a sense of a way forward is what we expect. that's the only way we can honor our commitment to ourilitary family and to the american people he to roo,ha ee, is, america's sons and daughters who may be at the contemplating a military career, are also watching. also pleased to announce that

lite galnkssama has nomine an chief of the national guard bureau. lieutenant general grass is commander of the u.s. northern man. oug heedecessor has donen grdu, helping to make sure they're working with active duty personnel. so i'd like to congratulate both of them. thank you, and i look forwa to af t s t u.s. is considering transferring several taliban detainees from gitmo to afghanistan to be held in afghan control. cue -- can you c ohat d a aut jilr' ts week?

is it true the exercise has been rescheduled and will be held in october? theis itas sedhe sing the year, and collaboratively with the israelys w reschedul for october-november timeframe, and -- miller is not back yet so i don't know whathe final cision w, b iur th- ctio then the event will occur. >> wh regards to reconciliation, there continue to be discussions with regards to reconciliation. there are no specifi commitments that he b m with r pso anathis point. one thing will assure you is that any prisoner exchaes that i have to certify are going to abide by the law, and require that those individuals do not return back into theate.

>>t' id ais >> i think the discussions are going on generally but i haven't seen any specific proposal. >> thank you, sretary. mias medome at tkish itrare t borr with syria in response to the shooting down of the turkish aircraft. what's your message to turkey? are you concerned about an escalation? >> obviously continue to be nc autevelin ri y k secretary clinton is engaged in discussions with our allies to determine what theext step should be. we are in discussio. tusne ofur aiesatio diusons them. with regards to how we best approach the situation in syria.

they have maintained troops, is a understand it, along the muovent andn' r too ve bn pss >> i'd only add, did have a conversation with general ozell, the turkish chi of defense, aphohe itaking vyred ayi i ac secondly, to the issue of risk of escalation, anytime a nation's -- a nation loses, in this case two airme st,ill ofou increase the risk of escalation, but the movement, internal movement of their ground forces i wouldn't suggest -- i wouldn't read that as provocative in any way but you probablyav a eu eedm there

ekg be p >> secretary, you spoke with the ceos've a number of major defense firmsver the past week about the budget and seestration. at d you tak awaym coennd wou isr t ceos of the companies that i talked to all sha the same concern we do with regard toes so sue eyveonedut ctaveir companies and their employees. they face certain legal requirementsot e the worried.the cloud that sequester has over the defense department and over the future

of our whole modernization asreous t wreer one thingan wee ep t s concerns to capitol hill, and both the companies as well as the defenseepartment are making very clear to capol hill that this i a matter that ght n pon to doo sha sequester, a., will not happen, and, b., we will have some degree of assurance tha we can proceed with the budget as we faner ttas oos t ssyfnoer fense cut. >> are you concerned abo recent reports that russia air bombers that we cold war e caarnsre

red the air defense zone near alaska? are you seeing any rise in this? i undstand the last time it did so was while president obama was meeting president putin in mexico. ulyoderihe y lithelit russia has been reset? >> well, you know, i think we continue t to be able to work with the russians in a number of portant. rsone o wre inng wkh. we work with them on other issues. we maintain military-to-military relations with the russians. with regards to the planes tha tis pn the h, tot situation. we've often times seen their planes come into that area. and i don't thinke regard it

as anything that isrovocative at this p clnsp with canada in terms of our security to the north, and so from time to time we assess where we see this mass any way a change of some sort of han'ted wlde ki of a >> this morning in department made notification to japan abo ospreys. thor f w ts die down? >> we have had very good discussis with our japanese allies on this issue, and we the sethe ospreys but regards we felt it was important to

deploy these planes there and we will continue to brief them with regards to the operations of these planes. ctllyhi h heddis ad ere cce you indicate. i think we have been able to relieve their concerns with what we have presented to them but we're going to continue to wk with them. abityo dloyse fces ll ctas regards regards to our whole rebalancing of the asia-pacific region. >> a questn about iraq. the level of violence in iraq in june renhaly. ha bk i since the withdrawal last year and there was discussion of followup missions. what's happened to that? has there been any progress toward a followup mission? do either of you plan to visit iraq this year? dihe iqi

rar t the threat coming from aqi. we have seen increased vie liens, as -- violence as you pointed out and we share t concerns of thesh ar t t i en anke' inontieok w them to do what we can to improve their ability to be able to deal with those kinds of threats. this is something we obviously worked in greooperation on prioto o d. throrutw w think it's really important now that we try to bring that cooperation even closer together to make sure that these kinds of reats are dealt with directly. >>n terms of our eagt thheomnd had consultative talks and the

acting minister of defense was here to meat with the secretary last month, and what we're doing pont f exercises. the things we talk about at the closing ceremonies, if you will, and i am going back to iraq. i'm scheduled to visit iraq in august. i've chosen augt because it's eostab mth vether a so ac ao ara into the aor. >> mr. secretary, you mention as one of your accplicements of the past year implementing enhances measure in an effort to stop sexual assault in the milita ts wke hrdrom seal assault, even rape, agait young recruit when they're probably at their most vulnerable when they enter the service. first all, what was your personal reaction to that? an s ist mehater bngesen the way

the military pursues and prosecutes sexual assault in the military as some in congress have suggested? thept cf t was vy concernedy situation involving the air force, and these allegations of sexual assault. you know, this is a situation in which these youecs rabltha think it is -- it's absolutely essential that the leadership make sure that those who are responsible for these recruits don't take advanta ft rn,eed t m fully investigated. it is being investigated now. the air force is following through on the allegations that

are involved. i take sexual asslt we h titer wee reached out to bring women into the military. i'm vy proud of what we have been able to do. i'm very proud of what women have been able to do in the military. but we ven ri scnee, tns xussltoes not happen. for that reason we put in place a number of steps to try to make sure that we deal with these allegations, not at that level donvvenfen wr level so tt - influce within a unit. we have developed special victims units to try to directly deal with this. we asked for legislation to try to also help us in this eor chan onowave earo trs in this

department that this is intoll intolerable and has to be dealt with. we have absutan r fl a, dha mte i c aur you, is going to be fully investigated. >> mr. secretary, what do you tell the parents of these young women, the families who have turned over their children to be ptereaary, and expect tm o respected. >> you know what? what i tell the parentss that, as a parent, and as secretary of dense, i v a w w fervi in the military. and i want toake sure that we take every step possible to ensure that goodisciinnd

re adedy, w davnyto rasp for any kind of criminal action. they have my assurance, the assurance of the military leadership, that we are going to do everything possible to make sure that they have the oppounit they deserve to tha kindf reat >> i was struck by what you said about afghanistan and wanted to askou. seems like nobody reall talks na goal of withdrawing from afghanistan. could you, as secretary of defense, and mr.hairman, is that enough? what are your thohts about what it does to troop morale thatou have sur hw oopsiewav t g i n s facing the task and for them, it's not

about winning, it's about achievin the goal of withdrawal. >> yeah. i've recently bee to ch tay.dn' tnkt u'eeing a recognition as we have learned the lessons of the last ten years and of this kind of conflict, is that winning is define as -- in their terms. in other words, it ishe ghhatein t yoveeard u sy famously, you can't kill your way out of this kind of conflict. so this is about us empowering andnabling our afghan security neorna a,roviding tpa thio.t aha t'tflict. >> i mean, the mission in afghanistan is to establish a afghanistan that can govern and secure itsel

an sce o eort there will be determined by an afghanistathat can truly secure and govern itself, and that is the path we're on. that's the transition we're th pulion transitioned to afghan control and security. we're in the process of going to 75% of their population in the third area that's been annoued k nerall m v car we're on the right path towards achieving this goal that ts mission is all about, and most importantly, let me just say is hoals aaw a lot of wounded warriors.

and i asked them, i said, y what hped?eere you wounded? wo y f a t because they're the ones that probably can speak with a hell of a lot more authority about how things are going there than almost anybody else. weoiteeon i feel like security is much better. even though i got wounded, i think our unit was doing a good job, and i see things getting an i s them, i think your sacrifice is worthwhile because everything i see when i go there everything the chairn seize when he goes there, everytime we sit down with genera allen and clrhare inigihi

ctioere. this is tough. we've seen a spike in violence. we have seen an enemy that continues to be resilient. this is still a heavy fight. but we are on the right tck me cfinthat gng be able to achieve the mission that afghanistan is all about. >> can i follow up and ask you? when you sit down and talk to who t to know from you and what are you learning from them? >> well, i mean, first and ros ase wndn you walk tse warriors, you cannot help but be inspired by the spirit that they

as a result of the ieds. and yet they have a smile on their face, and they' going t no nloro butooo across the street to the intrepid center, where they are providing rehab to our wounded warriors, and they're togetr, be de. tngsrgh i mean, miracles are being produced every day with regards to these kids. and so what i get from them is a tremendous amount of inspiratio spy h tohttncdi what they say is that -- the

other thing is that most of them want to go back. most ofhem want to go become. -anto b weoi ught the mission was being performed. they felt very good about their unit, very good about the quality of colleagues they're fighting wh, and they feel good authe msion were so i gtiyd reports that they feel good about what they were being able to achieve. i think the one thinghat the want tee is't hisutha we continue the effort to make sure that this mission is accomplished. i think that's the message i get. >> could add -- you're asking, whenever we visit these wounded

warriors, wt do you lrn you lrn aut t rni ge eaheeaeang of ure, and if i'm strike by anything it's the degree to which they trust us, the senior adership of the armed forces, to take care of them. and that's both -- that's a ofru tndav k true veo l up to. >> anymore questions? >> two weeks ago you told congress it's cost $100 millionore to transrtoo aho vero o t.s.am lt. is there stalemate hanging on the question of u.s. installing you told congress there are other issues. can you talk about the other issues? >> tre continue t be coioenue lnhisrea. stis, to try to see if we can take steps to re-open the

talks and the good news is tt ther continueoe tse ises to resolve, but i think the important thing rightow is that both sides in good faith, keep working to see if wean inul y whis. nnute r pakistani in terms of them not being able to take action on the network. is that part of t discussion as well? >> it is. general allen met w ger on ts t about, and i think he made clearhat we have to -- both the united states and pakistan have to work together to deal with the tea he got a receptiveness that he

understand the concern. after all, theyave been the victim oferrim eyt aktas patrol to the ttp. and so every day they, too are the victims of terrorism. so we have a common emy. wld msee c rkogher cfront t coonne. >> one more? >> mr. secretary and mr. chairman, the joint staff recently put together a lengthy report on lessons fro the last decade of war. chce tev ao,aa atou there are many recommendations in there anything from creating a new isr strategy, to re-organizing the

agencies in the national security arena, and i wonder if any steps wille ten t enha >>het hn'ent tnd ius b to -- it's just beginning to -- >> i was going to say that. i'm glad marty knows. >> what we have discovered is -- i asked when i first came to the inf d a at tre.at s beene, what analysis and what findings and what recommendations? ere were approximately 47 significant studies done, and when you add up t findings, approximately 400, so i said that's also overwhelmingore. newnd a ied t j who now now is acally the proponent for joint lessons learned and to take this, within the staff, n toeoo genheew

strategy the secretary approved and the president, my strategic guidance to the force, and map those recommendations to those documents so that we have a coherentay ahead and we can decidehif tse mmda aost cind ued, wking on that. i think it's a very positive step, actually. >> an initial gut reaction to what you're reading? use, yeah, w did too many studies. that'salean. itn li tk >>pyth

>> if you want to subsidize house neglect country and the populace agrees it's something we should sub do is, then put it on the balance sheet and make it clear and make it expect make everybody awaref how much it's in the y div tgh e d- eeris fannie mae and freddie mac,

deliver the subsidy through a public company wit private shareholders and executives who can distract a lot over the subsidyor themselves, that is suizing home ownership. we have seen the end of the movie in 2008. >> more, sunday at 8:00 on q & a.

>>t i19 was called the bloodiest 47 acres in america >> at this hringity xpts tco ghis sve progress but they're not yet ready to operate without nato assistance. a full withdrawal of nato forces is scheduled for 2014. this house armed serces subcmittee hearing is an hour. [inaudible conversations]

>> going to call to order the house armed services subcommittee on oversht investatns. mo o subci nvesec of hearings related to the afghan national security forces and at this hearing we'll receive testimony from outside experts about the resources and strategy which the u.s. and nato are devoting to training tns t setysility to the ansf. our panel today includes max booth, mr. bt, welcome. foericofff uy, a michael ohanlon, director of research and senior fellow at the foreign policy program at the brookings instition. general keane, dr. ohanlon, thank you for joining us. we lwa y ises heee b

cepofgnian, and during my visit i had several opportunities to talk with folks in provincesnd met will local leaders, including the chiefs of police a had the opportunity to talk to military commanders 0 th gundroded thepronel of pp ttillde te sf-staining ansf. it's my hope that our witnesses today can provide us some further contexto these importan issues, and before i move on i want to take a moment to highlight the extraordinary efrts ouner th b momst conducting daily combat operations against the taliban, al qaeda, and associated terrorist networks, and earlier this month i saw their sacrifice apon t scend wan c m t, k ahe mi fhe svi sacrifice they provide to our nation. as administrative note, i recognize the members of other subcommittees have joined us.

mr. thornber, thanyou for ining ua res gnth after all members have had an opportunity to question the witnesses, and i'll now turn to mr. chris, our acting ranking member for any opening statement he may have. >>hank you m cirn. wto s ts coming forward as we move furford in the transition from afghanistan. we're trying to make sure we have as much information so we i can make the best decision for our country and our men and women in uniform and for afghanistan fheff mad th i yac >>ir. s. leghe ttiny he witnesses, mr. boot. >> thank you very much, theng cirman,orni stlht on t ta ich fear get

short shrift in our political cultural since the focus of the hearings is ansf, let me just say very briefly i think ansf bl ancasg we stxae w t a ttiee nsidabrtro american forces in terms of intelligence, med-evac, fire support, clearance packages, all sorts of other things, without which they would not be nearly as effective as they and chesecg 3llio peh a foe that's only going to grow to 350,000 in the course of this year. now, the council on found real estates issued a policy invation memo in which i ggteonet s sure the gai of our troops to whom we right hill bay tribute. the gained secured by the troops and by alis and afghan troops during the last couple of years

during the sge. i fearf dno ll tail l we p m of aurden on the afghan security force tops try to expand the tenuous security gains made. i realize our time is very limited so let me run down very briefl the seven step is think thend t mtorntis rucun sf hiaushe greest concern. the fact that currently the administration plans to reduce funding from $6 billion a year down to 4.1 bill a year aft 2014, which iesta a an bhoanie and lice it far from clear where these 120,000 could possibly find gainful and legal employment in afghanistan's economy. many wou no doubt wiped up working f drugor su i c l hsep ta. and i really do not see the

necessity of doing so when all we would be saving approximately $2 billion a year, which i realize in the real world is a lot of money but around here, is n a ifn he de b a aasee dav t bute the entire amount ourselves see. certainly do more to get our allies to pay but i think it's incumbent on u.s. not anuckoalnd short change the eecity. decd coen t reduce our forces precipitously. in september we'll have 58,000 troops in afghastan and unless they're a substantial improvement on the situation on the ground beten now and the end of 20 i recommend weee beehahe ts eneo don the last couple of years is to vastly improve the security situation in the south. we have not seen any such improvement in the east,y sank fr.s are a f hrs dve

iusitti leave behind which could destabilize and lead to the overthrow of the current government unless we do more to establish conditions of security which will be difficult enough to do with 68,000 troopand i fear impossible with go bow thr. alseed sur a reon w nd d make sure we don't precipitously cut our force levels after 2014. in some quarters of the town there's mical thinking going on that leaving a handful o ecl operators out the emlvanecfur testnianhi ev ife want to maintain the joint special operations command at their current or close to their current level of operations, it requires a vast infrastrture, forward operating bases, med-evac, a tonaou tenptfms mehepeals operations forces to be as effective as they're and if we get force

levels below 30,000, i fear we will not have the truck in place to carry outhe md a se salras toeerreed erms of other recommendations i will run through them very quickly. i think we need to go slow on peace talks. not try to force the karzai government into an ill advised deal with the taliban that would lead to aacklh om weddeynd ccsoro psi is d to leave offic in 2014. we need to end the u.s. subs dies for the pakistani air force which is subdiesing the other side and i think we need to launch drone andr scial tabaeadehiparts within pakistan. they cannot have impunity to operate whin afghanistan as hey have if we expect to be successfu in afgn. th conudyny, chrm th y yr ewts

anwe look foard to questioning. general keane? >> thank you for inviting me totive today. it's a pleasure always to be back in front of the hserm ee. so t autn bjhe afghanistan national security forces. i'm delighted to be up here with michael o'hanlonnd max boot and i truly admire thank them forheonu cnib as y km smission to the record, i've done four assessments in afghanistan in 18 months and theast one fossor general mus and generalllen coidabunfimape ceow alamp and the afghan national security forces who are their counterparts and i'll just say up front that we've had much success in the security

situation since we applied surge forces and inarticularly in the southhi h bun turn the momentum in the east. the frustration there is we don't have the fourth generation because of the pullout of our surge force wes had in the south and southwest. i think to be ableo achieve theame kindta hi ansf is a capable force and it's beginning to stand up to the task of taking over from the united states and nato forces. however, this are many challenges. trti ur u mis a major seecve a a st shatn political or economic side, there's been considerable less effort in a successful transition than there has been on the security side from mr. perspective. even though that was not the sety yeent o mesen in mu what is going on

around the security situation. i think there are four key decisions that are facing us in the next year, maybe a year and a half, that are goingo be serienenwill afghanistan. all four of them women impact on ansf success. dedecision one is the post surge u.s. forces. the 68,000 max mentioned. i totally agree we cannot b ifoe dveheis tms of 're trying to achieve in the east with the forces we have, and the side-by-side operations that are so critical the afghanistans and when they're training side-by-side with us, what they get out ofha in wnerrm hewtd epmenti as eye posed to just providing them advice because they see what right looks like every single day from sergeants, soldiers and officers, key decion number

two fns 20sost of $6 billion, largely provided by u.s. dollars. discussions are taking place as we know right now with options on the table to reduce that to a 20rce of 230,000 beginning k abo tt. mes how et ansf to protect the people with one-third less force only year after we almost zero out the u.s. nato force of 100,000 an the issue i aut onr. sper anves he tining eipnt and the ansf. by 2014, we will have the results of that investment, and ansf capable of protecting its people. so why, after all these years of investing, wouldeuha seri msion atk? in terms of the timetable, the ansf funding should remain

through 2020 in my view as part of the strategic partnership agreement, and as afghansre sh be eecay anve n torce in size prior to 2020 based on the conditions but let it be the conditions and not only an arbitrarily financial number. 230,000ansf fce beginning i imct me that force and i believe in and of itself almost certainly guarantees the return of taliban domination. third keyecision is the residual u.s. nat force st01 uleedor t co sceit sul an arbitrary number. those missions are counterterrorism, training assistance, security, those are forces to protect the force itself, wch would be lgely denselndouee

e ebls. th forces, for counterterrorism we need enablers. for training assistants and also need enablers f the international community residual forces and the ansf. hat areom ofhe ef tly needs? it's primarily army and when you look at the army on the battlefield today it's largely a maneuver force. so it needs mor functional support forome time bond aimse teice avon eineers and logistics to include medical evacuation. the intelligence function is almost exclusively human intelligence. they are good at it but they have n technology. lidece tonor ne communication and radios, and their aviation fleet, some of which is there, is mostly russian made and

italian made c27 and every one trtimut of those bke o t aircraft to u.s. helicopters and c130s as part of a long-term partnershipship with the afghans, some of which in time they will be able to pay for themlves thensfaseang ofn antiied package provided. if we shut down our intel systems, don't have antiied for them, andhey're left out there by themselves, their casualty ratel amc. lan fg anctuaries. we have want one at shaw and one -- and the way you should think about this, think of these sanctuaries as loosely knitt in bh.od

mmanndonol, intelligence, training, logistics to include family housing and bracks. at these bases leaders set the strategy, brief middle level foutonrovil tld anrs, train or refit fighters and bombers and provide resources and logistics. ...

in the same way we have had success against al qaeda leade in fata. what would be the result? look at what has happened to al qaeda th steaak edshdedbls e deivgati ctnd lr t control operations or project power outside of the. that would be an absolute game changer and afhanistan if we started to systematically change e behavior of the taliban thqqedrsp, also at meriden chartres. let me conclude by saying these decisions in front of us will determine ether we are successful in afghanistan or t. e c o a rtatinlnewar never have so usurper so long on

behalf of so many and more is fundentally a test o wills and that despite leadership is always at peiu et endyu support and thanks for continued leadership in support as we begin the right to final chapters. ryan crocker, who you all know well, are distinguishing capable ambassador in afghanistan and le wdt we lavedor in iraq an behind is far more import than how we began it. thank you and i look forward to your questions. >> thank you, generalka >>nk, chan pip o two-i. first of all i would like to underscore my concern about the project did intend she to downsize the afghan security forces after 2014 or 2016. aboun es cul way with the

mthe potential downsizing of forces and i want to give a quick and so based on my trips to have in a span of howthis concept of downsizing rapdly scon ie in ierd gsm uss the u.s. part of the training command,the united states initiated to discuss them might have to be in terms of sizing capability and costs. it dotkouat h ast e ti cpt t table. one of which was the famous option to go to 230,000 forces or in a suffiently precise formulation 228,500 afgh army po o th environment, a relatively favorable and because 220,500 is

a lot less than we have now. we have about 300,000 afghan forces in the field plnother wi o than 400,000 combined forces intended to go to 230,000. this is one of four scenarios, which the united states did not intend to be a prediction of where we should go, but theidea tt ncneo nixee ge pls that pantohve done a good job with a typical portfolio something to plan for nato allies. cohen is saying, can you please consider this to be a minimal requirement and pony p some thin eunt?en fortunately designed as an illustrative scenario and a way to go a list that has become the default plan. i don't quite know when or how that happened, but i think it's a bad id and we should just sendefrdtaee

50 nr yasthm l en otherwise. max's point is right that the $2 billion at issue while it is real money is that they can tear to the 100 billion per yea on her own operations in the field. 20o osafo nopsg instant shelley sized afghan for his that would consume all savings rate they are because of enormous sense of forces in the field. i like to add my voice and also asked land theenesis of what i it upd e ioeomesue srid o asme e ul plan. for more quick points ad i will be done. this is in the spirit of reminding some broader debate and discussion about good ws we awaref ban. . aatreed in rio, but the good news is to also be kept inmind and the general and

dr. boot has done a good job, and so with you about reminding the country and discussion of thme points. omk one and is appointed general allen has made another set the afghan forces are leading operations in this are typically easier ones. buea din afa nt th m dt io for example, april 15 artifacts handled by the afghan security forces manipulate those also the ca in the tric attacks last week at the hotel reso to toparol foc ecfo grego by all accounts and i think that is for. in mind as well. secondly, the afghan local police tend to make the news then they do something wrong or when somebody else, some militia gondetwogoce d

nding collaborative balance is doing extrmely well. there have been investigations that the alleged mistreatment of some individual unit and for those who are famili comest c-span viewers knowxact what th. wa organization with the american training and nonetheless different from the army or police and defend their communities. ald s,ee e been some cases o bsnt investigations that one or two were serious violations of proper procedure wardlaw by the afghan local police. overwhelmingly these forces are perang el thyae hitnumber of casualties percentagewise of any afghan force aneven when overmatched are holding their ground 80% of the time against insurgents, even when they don't have hope

quickly from the afghan army or theevet.y forces. e ee han ey gify ar careful in how we both do not. members of the committee are well aware of the fact. this is not an out not an out-of-control reincarnation of the afghan militia. we have america and other speclvruea wetirayieoe throughout missions. we have to bear in mind this will not be the siver bullet the sons of iraq to some extent ran and r province. wno tbi a rionascty third point, people talk about in very loose way of the afghan security forcear dominated by the tajiks or other minority groups and i is true that we ha thene jifcs ernts tfgscrres come up with the overall

composition of the afghan security forces almost exactly mirrors the degraphics of afghanistan and of course that is because the people a general call where aposanosr d ci ie an es min ratfo suhi s namyt t, ece the base behavior among m. and do some ethnic partiality and behavior ofafghan leaders. the afghan leaepina pe aep tm. ouw y recent trip and things i was told and i am a 50 afghan army leaders in the east of afghanistan have been replaced in t last year. this fte tan a af srtup c of command and general allen or someone else make us the general carini or president karzai and there is an exchange of views in the afghans uimately make the decion to control serity forc.

fiy e peoe tnk history aggressive in how he is a tajik nationalist of some type. but for th most part what appears to be the cses these inspiring ldersanr icprunds u replaced bethany and her rots, including number of his own tajiks. i see signs of hope for mr.he afghan security forces. there was about 55%: that is poof sh n >> oe l,haou mc. i want to go back to my question is in theater but general allen, ambassador crocker and assessment of where we are, bu e egic thethe eed going plan going forward as you know now we are in a situation of a force of 60 dozen at the end of

2012 and then making the decision through 2013 as to where we progressb2 em fi charges. if you look at those charges, and easier transition take lace up front and easier transition of points takepace in coritio ngn r r. you have les capability facing capability and not having a full complement in place ofan. myces t camaenn th anontoe e? gtt affair. they have proposed making changes in the difficult areas in making the transition into charge three, which is that they begin that effort now. that being said. soataif aac

fs to number of isaf forces after 2014 and a draw down said with ansf forces after the 350,000. mier o after 250,000 at the appointed time at the end of 2016 will leave a power vacuum in transition of 105,000 people into some productive elemenofociendot he mbcm te sucy there's a number of areas where it looks like some counterintuitive mess about the plan going forward. all ofou touched on certain parts of that. i want your thghts about one impact hth us he rnt rc ndh the contingency should be if these scenarios, as they are plan now, knowin what has been

proposed, what could the contingency fee if those elements oftepn or al with mr. boot. >> i would just reiterate what general keys that, which is bad all ofour decisions need to be conditions-base they should not be imposed based on a timine ctati hin n et sima washington for purely washington reasons. they are too concerned to the ground and is general can suggest it and a i as wa wn'ea pnle wnee vacuum. that could well be the result of the current trajectory we are wrong. we need to be careful, go slow and make sure we are no shrinking air force prence haotroa dl

there's been improvement in the last couple of years, but it's very anything, mostly focused on the south to east remains dangerous and still a native pacication. as my colleagusaidi o tndn-d approach. >> it is pretty interesting what happens. the administration at the beginning asked one of the generals, i will give you five giou rrc od th ca aeud' taken. 2009 to 14 is five years. what is the problem? the problem is right from the beginning we start tying our hands. first time as the hand was peus mhrys mmd nifoo whdihat do to us? they wanted simultaneous campaign in the soutand east to collapse the enemy and put as much pressure without the additional 10,000 could not do

it. whid h to do itsqll iccatievat lil a home. second problem we have. on other hnd have his petraeus wants to keep the surge frces at the president gave him. the 30,000,uongera h heve ey aonfohe i has where we are at the point of your question now. given those those dynamics of party been. there is pressure on the commanders to stay in a schedule thransitnobat ocn 3oalynt04 ofre by 2014. in my judgment, what happensto set that is far from commission-based. that is a tapeof the two and by god we are doing it. we should ke tree any av sth wnitt that is the major issue.

we have two major issues to answer your question in terms of contingency to slow down the transition of the commanders there have been problems with it, which i think ywl,rtarnteyrd eep the ansf at the resource level it should be up with its enablers. >> chairman, will put in these tes because i agreed with the colleagues have ad ereer he rsnt lenote w aith r gave field commanders time to execute over the next 19 months amount of keepg 50,000 troops come which is a good decision on his part, better than the intention to go small and gave times to figure out what theddnhold asectheredo dot the drawdown into the presidency. something similar is necessary and advisable with whoever's in the whte house come january. whoever does a policy review in thlateall, awnpey td cmas

an turstin my mind is as we do the transition to ask him late, we need to have substantial capability that we still retain to back them up as they getnto troublas they likely wil but iniipt ws ,0hrte fl nwe a review by the newly elected president, whether it's governor romney or president obama in early 2013 the president lrgely defers to field commanders and keeps most of8trogh 20f 'st o recommend. that is my instinct about where weo to address the problem you mention. >> i want to welcome ranng member mr. cooper and turned to him if he hasny openg atts inorn horeti sii li, ee defer to my colleague, mr. critz.

>> mr. crtz. >> thankou othem. k mhan. o'onnty e's an issue that was tajik and if you look at the entire forest, it's really demographically matches the country. as the leaderhip egapic? leshraalmo ihe way they set up then mybe we are looking at something further down the road that tajik southern command in areas than coder tribal areas have haoucnsm thy colleagues in no aspects better than i do to correct me if they see any place where i'm wrong. generally speaking i believed by many leaders of cour come from the northern a eastern pa of afghastan dloye throuth conrynd epeon thsncissues and

challenges. the other is it's hard to recruit southern pastor and from the provinces like kandahar and we haven't been able to do well with that evn when they try t caayth w o ta erod o time. there were challenges they don't want to trivialize that. sometimes when i commanders are recruits rther proud this to fill more of a given part of the south than we wouldlke. thhohentndve wthhohent bi. ou we have maybe we are lacking in passion commanders than? >> in certain parts of the forest, for example, the af cesoo h t mirythar 50% plus tajik led if i remember statistics correctly. that is not true of every, bu

that's oonempnd es scon. thisreveoo lance if you look at the forest. there is still 40% passion leadership out of the passion population of 45%. if you look nationwide against thzas soatsfxdan rrse ijire overrepresented in couple things that the military. >> mr. boot, he made a statement that pt of the sevenoints was that one of them was that we shlddsontinue pian military. what is your prediction as to what that would yield? >> i cannot say for certain what would happen if we nw'veetn bs dollars in subsidy.

>> if you make the statement you have to figure out if it has an impact. >> would have a say as we try to develop heavily subsidizing thabandbaca bbeam them away from emtclla members failed. at a starting point would need to recognize that is filled in the pakistan is your main two afghan and ecomy network as they were a decade ago. r soangoo ve tubesth pakistani military push in essence his indirectly subsidizing those kind personnel. i'm not saying cut of all. alato the military dominated isi dominated for the national security policy they pursue. if the grenade t recognize pakistan is not our friend here and giving further subsidies for e military would be his.

dnkhh nsncomopeach as itchy hottest tr because the pakistani military is still very good and internal control and will still be able to remain in power. the resources they choose in large part forsbsidizing n eparg wanstd ourselves and allies for the decrease. >> thank you. i have no further questions. prbohe m.brs. crz >>nk, mr. chairman. in return you written statements provided to our staff, one thing stands in particular by dr. hanlon. i do not believe it likelyta ces tes afisof cof il year and added another three to 5 billion annually in direct security and

economic support for the afghan government and people. he concludes his given american poticsnd budget oras, w btaee gbected decent things thebeen suggested. on the other hand, i look at other testimony of mr. boot and general keane. one wants is topride $6 bilon s-sierra for th afghan national secuty fces. 'vsoa euh ap t 5 billion annually for the united states support personnel with special operations forces. we have got the comment that it cost approximately 6 billion to operunens usseu oxly bhies in an as i reduction beginning in 2016. the snakes no sense quoting from some of theexcerpts of the se itsem

reality to the position the united states of america is in. when they see with the money is coming from mr. asking for it. we blew through the debt are. this year will go thugh weharensiv t s r agreforth one of the trillion dollars the year. we've seen what's going on in italy, greece and spain. they're on the verge of being bankruptcy, but for other communities urthre pet ennd ru. n'owan sar attthlpni states avoid insolvency and bankruptcy if we continue on this path. if we do continue there is one outcome of an outcome only and that is an ameican father yo th marrsl athich in unme all, even with sequestration, a tip of the iceberg kind of

situation. you're looking at laying off 700,000 amerin uniform rsonanr liod orrkorva raarfo uprt the geewhiz a weaponry that is so desired by other nations elsewhere, which gives our military capabilities be and th afghan economy, personally i don't didn't he economy in the next decade will be able to support their run defense needs, which means it h to be america asyu lkowend thnend your testimony. where do you think the money has to come from to pay for theons you suggest are desirable or needed to stabilize the afghan situation as we continue to draw down troops? if you want to cut others, if yowantcupors

entitlement programs? if so, which one? please give me ammunition are kind and i'm priority we can get financial house in order into which you want us to do. mr. bill first and then geleadr an. wiouut the dire state of our finances, but i don't agree defenses to contribute in factor to it are clearly as we know it's entitlement spendin defense is oy takng 4% of our grossgnti atthe ndfe et that is not depart for afghanistan. what would have what happens will dramatically reduce in afghanistan $100 billion down to some lesser level. even at the level that general ane and i recommd, y're tainoutwr ctof at on s ightawnt 30 billion -- 35 billion a year and that's a lot of money, but the question my mind is what is the alernative? if we are in fact trying to stabilize the situation in

paanuso ennb ao soow tfe veeni pakistan, which if i were to followed the ultimate nightmare and a nuclear armed state. we are able to prevent afghanistan from falling back under the control of the taliban and al qaeie 'mngtitctor paper is a national defense shouldn't take the hit and that's why voted against the control a data poses a sequestration. you mentioned time and spirit deeply about the lesser priority thentilic >>tintme e driving the out-of-control deficit spirits overdressed deficits need to go with the money is, which is entitlements, not defense. a ivanu,mr boot.el hasamre >> thank you, mr. brooks. i asked the witnesses that he

would provide your comments in writing back to the committe for mr. brooks questionably will go to mr. cooper. >> tnk you, mr. chairman. i ink the witnees. if you have a pendingvoteut e f e henelif ooo fe suppli through pakistan, particularly if you make a dramatic curtailment in aid to pakistan in second, legions of ansf troops, what isks do we face them a trainer f that could turn agasus? you epwib osess w b igro j in. obviously they've had a main supply of vene for a number of mentzer were able to sustain the force that w have. coicn eblhed. atin hrtd rf i think it's overstated dependent deaminase to plow route. certainly desirable because it easier to use and less costly although pakistanis don'twant phr tosfor

chalngesy ben i k ou llk the issue at the table in my judgment terms of a relationship with pakistan on this issue because we do have alternatives in most romntically, for sizes coming down sigilyere eret. his ie ansf clearly in terms of what we refer to as green on blue atrocities. there is no doubt tt the taliba have let khoo we t sf e r sof o aha been by and large on the road on foot pads uing explosive devices that we are painfully aware. the other strategy is infiltration intosecury forces tob ableoacs rcanakp. goewn'lk last night to general bolger and also to administer were back, who you

know is they believe they stop insiige wh ha hany vetting people better come et cetera. they are very much aware of the challenge we have and i thnk the way our forces look at it is as debilitating that is, it is otatlde y suge enemy is using an ied against us, they use that infiltration against her or says. it is frustrating for forces to deal with that, but at the sme timeour ols t thdootinth performance or the quality of that performance by the extraordinary morale be cut for all these years wiheasmeniratwesenerly aee

roupteand negotiations with pakistan is? there's not that significant of a worry of green on blue? >> i certainly agree ambtplacàisyspeaking we are in ki hen mry a iond diplomats developed the northern distribution network. it's an amazing alternative instilling crisis living comfortably ladimir putin comes exitmin naystill reqre h t e mbe ac green on blue situation is still very troubled son. i don't think the general trivialize either. it does run the risk of eroding our ability to cooperate well with that enforces. general aln was concerned when itin astfied in . concern. but i agree there's serious efforts undertaken to try to at least cap. that is not good enough, but that may be the best.

if i could briefly cment on to bee iesea fors lo esna sl t of this will turn on the 2014, which are crucial as we all recognize. i talked to a top agha generalist is a mt lette he said the 2014 election. we get the wrong person elected and all bets are ff. even though president karsay's been a sllar leader is a couple things he's done correctly thathe next leader nes toe virent o ahe eflyeof greater repute than khan, was of course the first vice president. the concept of having a tajik as the first vice president and maybe zara for whose bac is a solid concept that needs to be adopd. mieruy need

one in the top two positions as well. these are elements about the import and of course the president can't be more corrupt two hepe hadsly poiantrs wed ind a way quietly or explicitly to veto. that is the point in my testimony where i can imagine the congress speing five evorobti te for asking met inn ka regime. i think we need to send that message. usr e weendar n yove g rac avn ther much. mr. boot, and the last sentence of your testimony, you say most afghans have no desire to be ruled by thetaliban.

ai cli tos01 inivd mat ste. how committed to a more inclusive and moderate state do you think the karzai regime is enough guinness and? himireplais mie gd, problematic. there's obviously deep issues of corruption although it is possible to work within that space in see in the recent agreements reached the handover of th power one noesn aze t lot of elites in afghanistan are trying to get the most they can under the state a a lot of them are doing well with dubai bank accounts and so forth. we ar in a lot of wys colsa din ttg lisrdprture, which basically say get as much as you can now.

>> the other half of the argument is saying we will stay indefinitely and keep writing checks. isn't it encouraging that behavior? let me ask you this qetion. ioplet bius etension ofliban ru in any part of the country is wholly undesirable and the reason we are still bare. i am concerned for and i want to know if any of the witnesses are concerned that the prese regime ght find it qie pttebl hv written agreement, what they would stay in power, but they would in fact the parts of the country ruled by the taliban and into whatever they want. are we at risk but this regime with double bank eyes, preserve coy,ralnd lthhey e televangelists are part of the country and perhaps once again as the host of the al qaeda parasite? what is wrong with that hypothesis clinics ndy

goanand for that. you know, ryan crocker rethink his work -- you know how capable he is as an ambassador. best in the business and he i thise speculation as he know that karzai would finsome means to hang on here by constitutional reform. i don't think will get a transformationaleadeut wheaudaneieta cy the past and problems that has caused this country to try to make some incremental improvements, much more like the length of what we've seen take place in korea over a number of s. so anoa henhae gis g wre that and i clearly believee should be all in, hoping to influence the situation as

michael has suggested into a much better job of charitable dat. >>k arase tibum lyin honnt w the afghan interests are truly aligned with ours? into the extent they are not, what we do to influee the regime and become aligned and the speificiti' iesheib took control a square inch. i agree with that. they may see it as being somewhat embarrassed. how do we make sure interests are aligned? >> welshes penicia appeared is going gointo answer at wiwho would he willing to cede any of that country to the taliban. and for all the obvious rasons in turn of the trainable view of civirights and what that woul anidtecut

ul autno toleration for political leaders doing something like that in my view. you know, one of the most remarkable things that took place was the loya jirgbta spl tiiph itsas. participation that came from virtually every province in the country. >> by time is about to expire. then he osed by saying this. i sometimes thinkfr our majorityn yours enter the puan amoic mira wita mask in the wrong question, which is how confident are we transitioning er to afghan security? i think the question is how willing are they to accept it? and you know, our troops are ing afnastjbhr deryfi circumstances. i think these gentlemen have given us very safe i think these gentlemen have given us very safe i think these gentlemen have given us very safe and i

wonder if it given us very safe thd i wonder if it exist ee we appreciate that. gentleman can attend event for spend your time with this. as you can see we are the front end of the blue series know what to make sure we have an opportunity is there any questions that the panel ho ththat write in and ask that you deal to answer this the committee. with that, get thank you for appearing before us today. and with that, this hearing is adjourned. turinwe goldo

as the way unit defending national current the constant worry. but for centuries. spin magazines to me the record of the gold standard in some, is

orbyarogoh the macro sense and personal accountability in the banking or micro sense. >> at the close of the european euanmonkeay some ad ls dersthro aders from the 27 member states to create and bailout

funds for spain in the creation of the union for th racing countries by thend of the year ireld, ptuga gre n d use a t ths minutes. >> after the european council, which refe to the president of the european council, mr. herman > kuopy. mngodfnoon. i lost all time since the european council was about combining shorter action to stulusrowtd taze mretge wa -tvision on the way forward to strengthen the monetary union. the key short-term challenge across europe is to revve a acr th jobs.

it will mobilize for immediate investment, which will use the financing of the enomy and help createjobs. tecuresiio tahi o-t d r e area is a pressing priority. indeed, as has been pointed out, if you want investors to ne dend tlde nhere the euro zone stamp in 10 years time. yesterday, we discussed the report on the future of economic and monetary union and i presd earlier thisk e es teaf e gvme ne rt clerpion with the president of the european commission, the euro group in the european

central bank. as you know, thi prt inn itreed fiiaar ical matters and the economic policy. his steps forwards in these three areas must be accompanied by a east democratic and counbili h ding blocks. then mr. with the financial site to hear beyond general agreement on a longer-term way achieved the hugely important first result. st night we agreed that under certainicmsce nu aiconditions, dsm could recapitalize banks directly. the biggest and most important condition is setting up a single soup derisory mechanism of banks and the euro zone leders have d col or a e ota wn

rtsthd he year. this is in major breakthrough this night. it is a first step or so to baantsalya irious circle ewe result of common report. we said last week that the building block of banking integration is the most ace lt thehoe that we can faani he banking framework surveillance, and we are delivering already a fw hours afterw ntur rt tecdad ho ks the report, fiscal matters we all share the same analyses. the economic and monetary union

can only function if each and every country's budgetary and ducuharing a commonrestbl currency. we also took another important decision yserday during our tour is some discussin we founs hro ophepossibilities reentiantimetables to make use of te instrents coming to reassure and stabilize the markets. financial assistance to spain will be provided without seius e nagvde the european council agreed on a method to take forward our work on those four ilding blocks. president of the council has been invited to developtetimeade opioth pdent of the commission committee come

of your group and the central bank. meer states will be closely involved. there will also be consultations with the european parliamt and we will present the final report before the end ofteya,wi adfieo coder. i am happy to announce another breakthrough, an historic one after 30 years of discussion on the european agreement on the lastottin mier and i in the sense of compromise. but let's explain the major achievement through the prime minister of denmark. euanour coulded this erg sense the group of violencin syria, accounting for strong actions of two points. first you press the regime and support the political solution for the crisis. on iran's nuclearpora w

corueld ome y into this sunday as the e.u. oil embargo. unimaginably of good news for my macro european council has endorsed thedecisno afoohiry cnl,evfing christ says has been the european council's top concern for over two years now and would remain so in the near future, we must not lose sightof t orat fhe future. since this happens to be the first summit of my second maate, i shared with colleagues at work plan until the end of2 teo focus on specific themes, like innovation, industrial competitiveness,

trade. and so, it was a difficult european summit of theuo weee tfa ct treaty. we are achieving the first result of r dmu report and we have this historical breakthrough of the euroea n a-0. t s oyscnd mandate is a difficult one. but if you cannot b the politics hand for the upcoming ur prmiteyith haouy much. i would just like to highlight a few points of our agenda the president didn't go into so deeply. first of all, i'm extremely sewe had deced o h

mpforoanjb. e o doub we're not leaving the crisis behind us with this compact. but nevertheless, this position provides us with hoe, diction gr aewosre n and i think that on top of that we have the statement that came this morning. this concludes the meeting that has beendf, b whwen.inms secondly of course i would like to point out that after 30 years of negotiations, we now have an agreement of european businesses ind f plinbperience when w a athen y only one place and that is of course something that will be good for

grth and business in europe. the agreement follows the nt ini . wale first presidential court to come from the member state holstein central division. but there's also highly specialized nature of the ligation and that means we senseced tcrea t indod hee in munich. but the main in paris. am very happy and i want to use this opportunity to say that no one can do anything about him i bedig cmiioreciate h or come up with the polish presidency and of course also this is a very good example o how working ogether wecan agenge to ha thikindf is soismrh

of dh idcy. our presidency has always been about creating growth in jobsin europe. everyone knows that this is one of the biggest problems we hve. wehvpsh aon spec. create thousands of new jobs in europe and we have established a basis on the future negotiations of the e.u.bdew wee ke dbe t ro cil hwo hin te of crisis to show that e.u. is still capable of producing tangible results and takin decisions in a time of crisis. other very much oward o r wth reennd woch tppni t vr mu for the cooperation we've had over the last six months. it has been exemplary and i

think we can organize the decision from the treaty and how you can wor togher. ank u veuh adanntn, m gith w of things for a halla under excellent team. they have put an enormous amount of work in nt hnkth emgoorti personally than those in our team. i know that many people in the sun that were pleasantly surprised when they hear the news ths in bus hennc have developed better citizns, international partners and investors have been asking for. it has delivered a reverse that event there's is conveniently stitthens idce ie t'e o.

hag te short-term measures to support countries in the market pressure. following the presentation of the emu report, we have no clear wee eacmmitment thatlenking when the supervisory echanisms is established, it will be possible to direct capitazation banks and a very stri oitn d avagn waive seniority for spain's financial effect turkana recapitalization. so once again, we have decisions agat were unthinkabe months inivan wwo teel implementing over the coming weeks and months. we have now also the endorsement by the council of e specific

recommendation. joansor agreement for growthad lectinhe ncmmitment and it set up the formalizing funds. many of these ats when it was too impressionable to do so. osti thediapy e aunhi oect and direct been some structural funds. we now have full agreement on this. we oppose the recognition that we cannot separe growth f de ohede e progress achieves the bases orientation for further work. there were a lot of negotiations still ahead of us, but we are anisth pieto ve particularly.

we have to agree that a strengthening economic and monetary union following the report presented to the europea incju a tt prested,e have already clear commitment to send a five to baking union, that the commission has been calling for. in fact, the bankinguini min whall ece integrity of the ngle market. at the same time, recognize there are member states that do not want to participate in some areas that are predominately a link to the membership of the euro. evonreare t t leasthte o the european union peered over the summer and the commission put tother proposals to make this a reality and we need to go

her, butn a fiscal union pocanisoakinstepwa ilol eqe e feer integration to match our growing dependence on the need for financial stability. i would like particularly to highlight the agreement on the european council as a whole,supt an i, can the areas because they are extremely important following the report presented by the president of the european cncil close rporations at th oss a specific intent on roadmap for the achievement of the monetary union isow being considered, which will include a now a cetops seg- which lu the unity integrity of the market in financial services on

which will take into account the statement and the intention of the omiisoung of ry.clxx eyl inat be done within the current treatise on which require treaty change to ensure the member states will be csely associated to the cotast rea ad will aoe ia. i xrmemptat understand that we are just agreed. because in fact it is possible to agree on a single financial co asas,bey mecasm fot proposing to take this absolutely at the same time there will be a situation for all the european unions, the ofsnemkadin nri

ncon turn council a quote, welcomed the statement on the 39th of june 2012. so very good rogres ryryiprtpwr taken today and yesterday. >> thank you. time for some questions. yes, sir. please identify yourself. >> the german press agency. twoqn tetw ovghmr ducd would be a decision announced on new yorker president e. g you have any news aout this? secondly, what happened oer the last few hours hasbe ri by o nd enrse kof defeat for angela merkel. do you share this assessment? 's thank you.

>> just on the nomination, the appointments we ee mp aeurzoe it the end of our meeting at noon.

>> we have th trunprre intiude tit receivingrpr ndna. when we speak of capitalize saint of theb'se

only do direct capitalization. did you have an agency with the centralized surveillance. this is key. sorenliyfor free. always responsibility and solidarity. a balanced agreementrensts i negotiated with 17 and 27. >> they expect rceived correctstce, i can

yoartein question and those that are liable for the assistance? and the pre-represent supervisors don't generally do the bailout. will this work? >> i cannot go into detail. sedsn r 1274 a supervisory mechanism for them to do the rest of the wo b hatisacit of the psition of the bank's.

thref hong will ll buttons and this is down. and then on full conditionality. tibl ocnde te ag it has the necessary for further measures of direct capitalization.

the can eiw p for a fold technical briefing. but it with these matters we will have paid clearer idea on matters and on the proposal occluding prticle 1247 paragraph six >> d calionth bank's july 9 through the beginning of next year? >> on exe eiuaon to b.s. ick as possible for the results. >> it wa guaranteed with

the year pm th nal st te inctf n besil tit rarr with markets and investors is extremely important. to naloe with the spor riyal encourage the standing wa ita decision.lization and

>> thank you for your attention a. [inaudible conversations] >> this is the nversation we need t nod ll what role should government have? >> if you want to subsidize using and talk about it

d puc es ugon bceet evt mut whouivhr fannie mae and freddie mac a public company with private shareholders and executives can extract that for themselves that is not a good way to subsidize home ownership. wesa the en ht ie 08 ddddúú@d

>>

>> we will come to order. i will start with my oening stement. is as ia th future of money. in march it is served as a prim as mobile payments. earlier this week we had a nnt fod tff outcnol achievements in mobile it an exciting future.

i wish i had the brain depth to ient these things. we will learn about the payment structure and how mobile paymentfit it in. grth tt of dtremendous fle sy o au cat d no i years from now but we need to understand the rules. the regulatory structure provide for consumers? d precn neunng o ne t mk changes minor or major? the federal reserve has been e expert on the paymentstnd nt d

ofhpillf mobile payments. wall consumer protection duties were transferred it will continue to be an important player. as war in december forms of payment available including those tied to the phone bill may not fall under law currently. fiia unit may fight money-laundering and terrorism and can tell us of any new reforms of reemot fall within current spusivis the senior economist as warranting it is ado

follow the future of moday as tnsactio move toward onymity. want to thank both witnses thrky din y o welde hihe ct t this along this tenure of anybody that we know of. totety hshe is.e you ae [laughter] >> we had a democratic caucus >>o galme

>> eivreni the ranking member. >> thank you so mu. this is the third look at the issue of mobil payments and i have to commend the chair will then for holding this sers of hearings and ricoh hosted a dinner to look at and expose the technologyad rw is ie tweada pleased we're trying to get ahead of the issue instead of reacting. to be proactive i'd like to pumy opetn eod but hear the testimony today and ask questions of identity, security of

consumers. thank elac reenn rty anrcs th ovs.obal payments by the most significant moving away from checks and debit cards. anwe otoit um it is essential they will structure a regulatory framework to protect information but encourage st avn th itr

it irelent t mention of price-fixing with the regard is the exact opposite of what congress and regulators should be doing and i hope we learn from that mistake. i hope today's hearing helps to embrace innovation lead pr cru rarkta o everybodyinvolved i yield back. >> mrs. chairmen let me commend you forputting this time the hearing together. an e el ey trp advancement of technology. just as our mobile phones. were pleasantly captive

and we need to makesr t er pe adte 92 amen le use a mobile phone. the payphone is by the way and with that is the connected services. bank cntbi ttsthmo es cafoio pharmaceutical, prescription drug information on their phone. it is n intake grow part of our physical bei av obesr adequate protections are th phones are smart

phones. that can process mobil payments, a credit card payments if you look at the entire scope of the significant impact mobile phones aewiou is nanc accounts, who careimportant issues we make sure regulations are in place. ok oat hearing from the panel. >> opening statements are mpleted. please turn to the panel. and reversed gass is

director freis from the chairwoman capital and members of the subcommittee i am good director and i am here to discuss fcen efforts for mobile payments and other methods. anick or aill o o criminal advocate -- to dances as criminals look get innovative ways to move money. i would like to make a distinction between loal nkines union and direction direction, that global paymentsnvolve the directiono ode of

of bank account. let me emphasize are both relevant wh fcen regulations with the requirements on bankor money transmitters. gng ai pr f revised the regulations would year-ago specifically to cover a global payments. it is t be tenologically inro cuses on the underlying activity verses the vehicl if it is pers to person or crossing bordrs hn vim identify the

customeradeeecs and have procedures in place to report to fcen. and our regulation is clear acceptance of 1% and transmission to another constutes money transmission and and a person dong business enga irele olilak e inhe monday services business and then must rister and comply. paf en commitment we held town hall meetings it

has released guidance and ritaissipate it will be rtin was retorark r totihek fcen provides reference manuals for the payment chanisms with sc im neat premmnal we have seen an interesting trend where different communicion systems mrge and beomern. ster may choose to

givemnya physical location but then the payment is processed internally. the fundt goes to the mobile account. upon completion they receive a tax message to indicate the funds have been credited to their account it results chotst olw money trail and follw accounts associated. fcen rulation was designed to be flexibleteo'sto ptintimto such as the aspects of the scenarios described. the administration has madeert s

see r om n movin forward. ims. llhatowe y io you may have. >> we will have this stepniem mte subcommittee thank you for inviting me to talk before you today. the evolution of technology enables consumers t ouc liininexpanding affect tei

access to mainstream financial-services to the population that has no bank. but in the system regulators have two key concerns if consumers are protected and if it proescyd idaly for the personal information o consumers. at least some partsg rocan subject to the rules already in place. typically they are related to a consumer and debase

icn involve service providersh tial nn pant liheep cny at cldngthe legal protection depending on the details and rules. there is the legal framework for federal bank regulators who have the tools to insure th a consumerpio si a electronic fund transfer act. it is subject to rule-making of the conserfnia ctbu. it reviews day security protection ll as

compliance often security and prevention and money laundering. many questions have arisen to the nonbanks. those schaaee na onnser or a company that builds customers. des he obasrllitygra and provisions of the statute. it is difficult to may brought a general stations about mobileayments. e ad different

providers ada the i friday and banking and nonbanking laws. given recent developments in the order to ensure consumers are adequately protected, even if fast-paced nature of changes fact binding aids analysis and would be helpful that the proposals would not stifle innovation to benefit overall. ihtns y questions. >> we'll begin with my five minutes but like to make a

en at the dinner that we had last night we had five presenters witfor rd thing me pment met invating to sm. of oe s f t get to 1/2 advest curve with regulation and stifle innovation to cut off p sell the flight to the hearing but cogasell much more aer